SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 9, 1998
PROCEPT, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21134 04-2893483
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
840 Memorial Drive, Cambridge, Massachusetts 02139
(Address of principal executive offices and zip code)
(617) 491-1100
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
------------
On April 9, 1998, pursuant to a Confidential Term Sheet and Subscription
Agreements between Procept, Inc. ("Procept") and investors meeting certain
qualifications, Procept conducted a final closing (the "Final Closing") of an
aggregate of 98.025 units (the "Units"), each Unit consisting of 200,000 shares
of Common Stock, $0.01 par value (the "Common Stock"), and warrants to purchase
200,000 shares of Common Stock at an exercise price of $0.50 per share, for
$100,000 per Unit representing aggregate gross proceeds to Procept of $9,802,500
(including an aggregate of $175,000 representing settlement of past
liabilities). As part of the Final Closing, The Aries Fund and the Aries
Domestic Fund, L.P. exchanged an aggregate of 30,060 shares of Series A
Convertible Preferred Stock, $0.01 par value per share, and warrants to purchase
an aggregate of 3,283,132 shares of Procept Common Stock for an aggregate of
42.084 Units (i.e., 8,416,800 shares of Procept Common Stock and warrants to
purchase 8,416,800 shares of Procept Common Stock at an exercise price of $0.50
per share).
This Current Report on Form 8-K is being filed to provide pro forma
financial information of Procept at February 28, 1998, adjusted to reflect (i)
the above transaction and (ii) the merger of VacTex, Inc. ("VacTex") into a
subsidiary of Aquila Biopharmaceuticals, Inc. ("Aquila") and the issuance of
Aquila common stock and debentures in exchange for VacTex common stock, which
occurred on April 13, 1998, in each case as if it had occurred as of February
28, 1998.
Procept is in compliance with the criteria for continued listing in The
Nasdaq SmallCap Market (other than the minimum bid price requirement, for which
it has an exception) as set forth in the Nasdaq Marketplace Rules.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
-------------------------------------------------------------------
(c) Exhibits.
99.1 Pro forma balance sheet of Procept at February 28, 1998. Filed
herewith.
99.2 Press release dated April 14, 1998. Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 14, 1998 PROCEPT, INC.
By: /s/ John F. Dee
-------------------------
John F. Dee
President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
99.1 Pro forma balance sheet of Procept at February 28, 1998.
Filed herewith.
99.2 Press release dated April 14, 1998. Filed herewith.
PROCEPT, INC.
BALANCE SHEETS
(unaudited)
----------------
<TABLE>
<CAPTION>
ASSETS February 28, 1998 Pro-Forma (*)
----------------- -------------
<S> <C> <C>>
Current assets:
Cash and cash equivalents $2,592,026 $7,930,368
Prepaid expenses and other current assets 28,933 28,933
---------- ---------
Total current assets 2,620,959 7,959,301
Property and equipment, net 769,291 769,291
Deferred financing charges 97,346 --
Deposits 250,615 250,615
Investment in VacTex/Aquila 300,000 775,022
Other assets 6,411 6,411
---------- ----------
Total assets $4,044,622 $9,760,640
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,128,329 $1,078,329
Accrued compensation 406,593 406,593
Other current liabilities 126,065 166,065
Current portion of capital lease obligations 6,791 6,791
---------- ----------
Total current liabilities 1,667,778 1,657,778
Deferred rent 249,187 249,187
Other noncurrent liabilities 96,875 96,875
Commitments and contingencies
Shareholders' equity:
Preferred stock 301 --
Common stock 88,070 299,838
Additional paid-in capital 61,040,030 66,079,559
Accumulated deficit (59,085,762) (59,085,762)
Unrealized gain on securities available for sale --- 475,022
Treasury stock (11,857) (11,857)
---------- ----------
Total shareholders' equity 2,030,782 7,756,800
---------- ----------
Total liabilities and shareholders' equity $4,044,622 $9,760,640
========== ==========
</TABLE>
(*) Adjusted for transactions detailed in Note B.
<PAGE>
NOTES TO BALANCE SHEETS
A. Basis of Presentation
The accompanying balance sheet and Pro-Forma balance sheet as of February
28, 1998 are unaudited and have been prepared by Procept, Inc. (the
"Company") in accordance with generally accepted accounting principles.
The balance sheets, in the opinion of management, reflect all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation. These balance sheets should be read in conjunction with the
audited financial statements for the year ended December 31, 1997, which
are contained in the Company's 1997 Annual Report on Form 10-K.
B. Pro-Forma Presentation
As part of a unit offering, the Company sold an aggregate of 12,760,000
shares of Common Stock on April 9, 1998, together with five-year warrants
to purchase 12,760,000 shares of Common Stock at an exercise price of
$0.50 per share. This transaction has been reflected on the balance
sheets under the heading "Pro-Forma." These securities were sold for
gross proceeds of $6,380,000. After expenses the Company received cash of
$5,338,342. Expenses included settlement of a $50,000 accounts payable
balance in exchange for 0.5 units and the payment of $991,658 in
underwriting fees. The Pro-Forma amounts have also been adjusted to
reflect legal and accounting fees of $40,000 and deferred financing costs
of $97,346, all of which have been charged to additional paid-in capital.
Also on April 9, 1998, The Aries Fund and the Aries Domestic Fund, L.P.
exchanged an aggregate of 30,060 shares of Series A Convertible Preferred
Stock, representing all outstanding shares, and warrants for 8,416,800
shares of Common Stock together with five-year warrants to purchase
8,416,800 shares of Common Stock at an exercise price of $0.50 per share.
On April 13, 1998, VacTex, Inc. ("VacTex") was acquired by Aquila
Biopharmaceuticals, Inc. ("Aquila"). The Company's investment in VacTex
of 300,000 shares of common stock was converted to 113,674 shares of
Aquila common stock and $128,501 of 7% debentures. As a result, the
Company is accounting for its investment under Statement of Financial
Accounting Standards No. 115 "Accounting for Certain Investments in Debt
and Equity Securities" as an available for sale security and marked it to
market by recording an unrealized gain of $475,022 as part of
Stockholders' Equity.
Contacts: John F. Dee Mary Ann Dunnell
President and CEO Senior Vice President
Procept, Inc. Robinson Lerer & Montgomery
617-491-1100 212-484-7797
[email protected] [email protected]
For Immediate Release
PROCEPT RAISES $9.6 MILLION
IN PRIVATE PLACEMENT OF EQUITY SECURITIES
Funds to be Used to Further Development of PRO 2000 Gel and
To In-license New Development Stage Technologies
Cambridge, MA, April 14, 1998 -- Procept, Inc. (Nasdaq SmallCap: PRCTC) today
announced that it has raised gross proceeds of $9.6 million through a private
placement of unit shares of common stock and common stock warrants. The
offering, originally intended to raise $6 million, was increased to meet
investor demand. Paramount Capital, Inc., a New York based investment bank,
acted as placement agent for the offering. The gross proceeds include
approximately $3.4 million that the Company earlier reported having raised by
February 26, 1998.
"The completion of this private placement is a significant milestone for
Procept," said John F. Dee, President and Chief Executive Officer of Procept.
"The proceeds from the private placement will help us to achieve our near-term
goals for PRO 2000 Gel - the filing of an Investigational New Drug (IND)
application with the FDA and the initiation of further clinical trials."
PRO 2000 Gel is a vaginal, topical microbicide providing protection against
transmission of HIV and other sexually transmitted diseases such as herpes
simplex type 2 and chlamydia trachomatis. PRO 2000 would potentially offer the
first female-controlled protection against the AIDS virus. Since more than 70%
of HIV-1 infections worldwide are contracted through heterosexual contact, PRO
2000 addresses an urgent unmet need that has been targeted as a priority by
federal and international agencies. In addition, the Centers for Disease Control
reported that 12 million new cases of sexually transmitted diseases are reported
to the center each year. Procept has been working in close cooperation with the
U.S. National Institutes of Health (NIH) and the British Medical Research
Council (MRC) to help speed the clinical development of this compound.
Mr. Dee also noted, "The proceeds will also help in our search to in-license new
development stage technologies." In addition to maintaining PRO 2000's
developmental momentum, Procept will proactively seek opportunities to acquire
additional novel technologies that address key unmet healthcare needs. "We are
most interested in acquiring technologies that have reached the early stages of
human clinical trials, but will be `opportunistic' in our search," Mr. Dee
concluded. Procept would seek to further advance these compounds through the
clinical trial process and then bring them to market via corporate partnerships,
thereby focusing its resources on development rather than research programs.
Each unit sold via the private placement consists of 200,000 shares of Procept
Common Stock together with five year warrants to purchase an equal number of
shares of Procept Common Stock. The unit price was $100,000, and the warrants
are exercisable at $0.50 per share.
As part of the final closing, The Aries Fund and The Aries Domestic Fund, L.P.
exchanged an aggregate of 30,060 shares of Series A Convertible Preferred Stock
and related warrants for 8,416,800 shares of Procept Common Stock and five year
warrants to purchase an additional 8,416,800 shares of Procept Common Stock at
an exercise price of $0.50 per share. After giving effect to the private
placement closings and the previously mentioned exchange of shares, there are
29,984,235 shares of Procept Common Stock outstanding.
Procept, Inc., located in Cambridge, MA, is engaged in the development of novel
drugs for the prevention of HIV and other infectious diseases through its lead
product, PRO 2000 Gel. The Company is also seeking to acquire drug development
candidates that would benefit from Procept's expertise in various therapeutic
areas.
Certain statements in this press release constitute "forward-looking statements"
which involve risks and uncertainties, including those arising under the
Company's business strategy; the success of the Company in financing efforts;
the pursuit of collaborative arrangements for the research and development of
product candidates, as well as the pursuit of joint development or licensing
arrangements with pharmaceutical, diagnostic or instrumentation companies; the
research or development of particular products, compounds or technologies; the
uncertainty of the results of such development activities and related clinical
trials or of required regulatory approvals; and the reliance on collaborative
partners for development, regulatory or marketing activities.
