Form 8-K
UNITED STATES
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): OCTOBER 13, 2009
FIBROCELL SCIENCE, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE
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001-31564
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87-0458888 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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405 EAGLEVIEW BLVD.,
EXTON, PA
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19341 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (484) 713-6000
ISOLAGEN, INC.
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement
Securities Purchase Agreement
On October 13, 2009, Fibrocell Science, Inc. (the Company) entered into a Securities Purchase
Agreement (the Purchase Agreement) with certain accredited investors (the Purchasers), pursuant
to which the Company agreed to sell to the Purchasers in the aggregate: (i) 3,250 shares of Series
A Convertible Preferred Stock, with a par value of $0.001 per share and a stated value of $1,000
per share (Series A Preferred), (ii) Class A warrants to purchase 501,543 shares of Company
common stock (Common Stock) at an exercise price of $1.62 per share (the Class A Warrants); and
(iii) Class B warrants to purchase 416,667 shares of Company common stock at an exercise price of
$1.95 per share (the Class B Warrants) (the Class A Warrants and Class B Warrants, the
Warrants). The closing of the Series A Preferred and the Warrants to the Purchasers (the
Transaction) will be consummated as soon as practicable.
The aggregate purchase price paid by the Purchasers for the Series A Preferred and the
Warrants was $3,250,000 (representing $1,000 for each share of Series A Preferred together with a
Class A Warrant and Class B Warrant). The Company intends to use the proceeds for working capital
purposes.
Viriathus Capital LLC and John Carris Investments LLC were co-placement agents for the
Transaction, and received cash compensation of $325,000 and warrants to purchase 250,000 shares of
Common Stock at an exercise price of $1.30 per share.
The form of the Purchase Agreement is attached hereto as Exhibit 10.1.
Terms of the Series A Preferred
To designate and establish the shares of Series A Preferred, the Companys Board of Directors
(the Board) approved, and on October 8, 2009, the Company filed with the Delaware Secretary of
State, a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible
Preferred Stock (the Certificate of Designation).
Dividends; Rank; Liquidation
Holders of the Series A Preferred are entitled to receive cumulative dividends at the rate per
share (as a percentage of the stated value per share) of 6% per annum (subject to increase in
certain circumstances), payable quarterly in arrears on January 15, April 15, July 15 and October
15, beginning on April 15, 2010. The dividends are payable in cash, or at the Companys option, in
duly authorized, validly issued, fully paid and non-assessable shares of Common Stock equal to 110%
of the cash dividend amount payable on the dividend payment date, or a combination thereof;
provided that the Company may not pay the dividends in shares of Common Stock unless the Company
meets certain conditions described in the Certificate of Designation, including that the resale of
the shares has been registered under the Securities Act of 1933, as amended (the Securities Act).
If the Company pays the dividend in shares of Common Stock, the Common Stock will be valued for
such purpose at 80% of the average of the volume weighted average price for the 10 consecutive
trading days ending on the trading day that is immediately prior to the dividend payment date.
The Series A Preferred ranks senior to all shares of Common Stock.
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary, the holders of the Series A Preferred shall be entitled to receive out of the assets,
whether capital or surplus, of the Company an amount equal to the stated value of the Common Stock,
plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and
owing thereon under the Certificate of Designation, for each share of Series A Preferred before any
distribution or payment shall be made to the holders of any junior securities, and if the assets of
the Company are insufficient to pay in full such amounts, then the entire assets to be distributed
to the holders of the Series A Preferred shall be ratably distributed among the holders in
accordance with the respective amounts that would be payable on such shares if all amounts payable
thereon were paid in full.
Conversion; Conversion Price; Forced Conversion; Optional Redemption
Each share of Series A Preferred is convertible into a number of shares of Common Stock equal
to (1) the stated value of the share ($1,000), divided by (2) $1.30, subject to adjustment as
discussed below (the Conversion Price).
With certain exceptions, if, at any time while the Series A Preferred is outstanding, the
Company sells or grants any option to purchase or sells or grants any right to reprice, or
otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other
disposition), any Common Stock or Common Stock equivalents at an effective price per share that is
lower than the then Conversion Price, then the Conversion Price will be reduced to equal the lower
price. The Conversion Price is also subject to proportional adjustment in the event of any stock
split, stock dividend, reclassification or similar event with respect to the Common Stock.
Commencing six months from the date of the Purchase Agreement, if the volume weighted average
price for each of any 20 consecutive trading days exceeds 200% of the then effective Conversion
Price and various other equity conditions are satisfied (including that the resale of the shares
underlying the Series A Preferred has been registered under the Securities Act), upon 30 days
notice, the Series A Preferred plus all accrued and unpaid dividends will automatically convert
into shares of Common Stock.
Commencing two years from the date of the Purchase Agreement, upon 30 days notice and provided
various other equity conditions are satisfied (including that the resale of the shares underlying
the Series A Preferred has been registered under the Securities Act), the Company may redeem some
or all of the then outstanding Series A Preferred for cash in an amount equal to the 150% of the
stated value of the Series A Preferred.
Voting
The holders of the Series A Preferred have no voting rights except with respect to specified
matters affecting the rights of the Series A Preferred.
Negative Covenants
As long as any shares of Series A Preferred are outstanding, the Company may not, directly or
indirectly: (a) amend its charter documents in any manner that materially and adversely affects any
rights of the holders of the Series A Preferred; (b) pay cash dividends or distributions on junior
securities of the Company (including the Common Stock); or (c) enter into any transaction with any
affiliate of the Company which would be required to be disclosed in any public filing, unless such
transaction is made on an arms-length basis and expressly approved by a majority of the
disinterested directors of the Company.
Triggering Events
In the event of a Triggering Event (as defined in the Certificate of Designation and described
below), any holder of Series A Preferred may require the Company to redeem all of its Series A
Preferred, at a redemption price equal to the greater of (a) 130% of the stated value and (b) the
product of (i) the volume weighted average price on the trading day immediately preceding the date
of the Triggering Event and (ii) the stated value divided by the then Conversion Price, plus all
accrued but unpaid dividends thereon and all liquidated damages and other costs, expenses or
amounts due in respect of the Series A Preferred. Triggering Events include, among other things,
bankruptcy related events, change of control transactions (as defined in the Certificate of
Designation), and various types of failures to perform under, and breaches of, the transaction
documents.
The form of Certificate of Designation is attached hereto as Exhibit 3.1.
Warrants
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of the Warrants is exercisable upon issuance and has a five-year term. The
initial exercise price of the Class A Warrants is $1.62 per share and the initial exercise price of
the Class B Warrants is $1.95 per share. With certain exceptions, if, at any time while the
Warrants are outstanding, the Company sells or grants any option to purchase or sells or grants any
right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to
purchase or other disposition), any Common Stock or Common Stock equivalents at an effective price
per share that is lower than the then exercise price of the relevant Warrant, then the exercise
prie of such Warrant will be reduced to equal the lower price.
The form of Warrants is attached hereto as Exhibit 4.1.
Registration Rights Agreement
In connection with the Purchase Agreement, the Company also entered into Registration Rights
Agreements with the Purchasers, which requires the Company to register the resale of the 110% of
the shares of Common Stock underlying the Series A Preferred Stock, the shares of Common Stock
underlying the Warrants and all shares of Common Stock issuable as dividends on the Series A
Preferred assuming all dividend payments are made in shares of Common Stock and the Series A
Preferred is held for at least 3 years. The Company is required to file the registration statement
within 45 days of the date of execution of the Purchase Agreement and the registration statement
must be declared effective within 90 days of the date of the agreement (120 days if the
registration statement is fully reviewed by the SEC), or the Company will be required to pay
liquidated damages as set forth in the agreement.
The form of the Registration Rights Agreement is attached hereto as Exhibit 10.2.
The above description of the material terms of the Transactions is qualified in its entirety
by reference to the documents attached hereto as Exhibits 3.1, 4.1, 10.1, and 10.2, which are
incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities
The information contained in Item 1.01 is hereby incorporated by reference. The Series A
Preferred and the Warrants were sold in a transaction exempt from registration under the Securities
Act of 1933, in reliance on Section 4(2) thereof and Rule 506 of Regulation D thereunder. Each
Purchaser represented that it was an accredited investor as defined in Regulation D.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year
The information contained in Item 1.01 is hereby incorporated by reference. The Certificate of
Designation, which authorizes a total of 9,000 shares of Series A Preferred, was filed with the
Delaware Secretary of State on October 8, 2009 and was effective upon filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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Exhibit No. |
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Exhibit |
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3.1 |
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Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible
Preferred Stock, dated October 8, 2009. |
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4.1 |
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Form of Class A/B Common Stock Purchase Warrant. |
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10.1 |
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Securities Purchase Agreement dated October 13, 2009. |
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10.2 |
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Form of Registration Rights Agreement. |
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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FIBROCELL SCIENCE, INC.
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Date: October 13, 2009 |
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/s/ Declan Daly
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Declan Daly, |
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Chief Operating Officer |
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EXHIBIT INDEX
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Exhibit No. |
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Exhibit |
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3.1 |
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Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible
Preferred Stock, dated October 8, 2009. |
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4.1 |
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Form of Class A/B Common Stock Purchase Warrant. |
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10.1 |
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Securities
Purchase Agreement dated October 13, 2009. |
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10.2 |
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Form of Registration Rights Agreement. |