Item
1.01 Entry into a Material Definitive Agreement
On April
28, 2008 (the “Closing
Date”), Neurologix, Inc. (the “Company”) issued and
sold 142,857 shares of Series D Convertible Preferred Stock (the “Series D Stock”), par
value $0.10 per share, and warrants (the “Warrants”) to
purchase approximately 1,077,586 shares of the Company’s common stock, par value
$0.001 per share (the “Common Stock”), to
Corriente Master Fund, L.P. (“Corriente”), pursuant
to a Stock and Warrant Subscription Agreement (the “Subscription
Agreement”), dated as of April 28, 2008, by and between the Company,
Corriente and, solely with respect to Article V thereof, General Electric
Pension Trust (“GE”). The
Series D Stock was issued and sold at a price of $35 per share for an aggregate
consideration of $5,000,000.
On April
28, 2008, the Company also entered into an Amendment (the “Amendment”) to the
Registration Rights Agreement (the “Registration Rights
Agreement”), dated as of November 19, 2007, by and among the Company,
Corriente, GE, Chrysler LLC Master Retirement Trust (“Chrysler”) and
certain funds managed by ProMed Asset Management LLC (collectively, “ProMed”, and together
with Corriente, GE and Chrysler, the “Investors”), which
provides certain additional demand registration rights to holders of the Series
D Stock with respect to the shares of Common Stock underlying the securities of
the Company owned by them.
The
following is a brief summary of the material documents. This summary
is qualified in its entirety by reference to the full text of the documents and
agreements which are set forth as Exhibits to this Form 8-K.
Subscription
Agreement
Pursuant
to the Subscription Agreement, the Company issued and sold 142,857 shares of
Series D Stock and Warrants to purchase approximately 1,077,586 shares of Common
Stock to Corriente. Each share of Series D Stock is presently
convertible into 30.17 shares of Common Stock. A complete description
of the terms of the Series D Stock is provided in Item 5.03 of the Company’s
Form 8-K filed November 21, 2007 and is incorporated herein by
reference.
Under the
terms of the Subscription Agreement, transfers of the Series D Stock are
required to be in compliance with the Securities Act of 1933, as amended (the
“Securities
Act”), and all shares of Series D Stock must bear an appropriate legend
regarding restrictions on transferability. The Subscription Agreement
grants Corriente tag-along rights with respect to private sales of securities by
certain principal stockholders of the Company. Under the Subscription Agreement,
Corriente is indemnified against certain losses, liabilities and costs relating
to matters with respect to such Agreement, including breaches of
representations, warranties and covenants of the Company.
The full
text of the Subscription Agreement is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Amendment to Registration
Rights Agreement
The
Amendment provides the Investors with certain additional registration rights for
the shares of Common Stock underlying the Series D Stock and the
Warrants.
Until the
Company is eligible to file a shelf registration statement on Form S-3, during
the Special Registration Period (as defined in the Amendment), an Investor
holding at least five percent (5%) of the outstanding shares of Series D Stock
may request, in writing, the Company to register under the Securities Act, all
or any portion of the Registrable Securities (as defined in the Registration
Rights Agreement) held by such requesting Investor, provided that the reasonably
anticipated aggregate price thereof exceeds $1,000,000. During the
Special Registration Period, the Company shall not be required to effect more
than one registration statement pursuant to a request under the terms of the
Amendment, except that, the Company may be required to effect one additional
registration statement on Form S-1 if the number of shares requested by certain
Investors had been reduced by an aggregate of 25%, or more, by the underwriters
in a registration statement requested pursuant to certain terms of the
Amendment. If the Company fails to have such registration statement
declared effective, it may be subject to certain penalties or
obligations. The demand rights set forth in the Amendment are in
addition to the demand rights set forth in the Registration Rights
Agreement.
The full
text of the Registration Rights Agreement is attached as Exhibit 10.2 of the
Company’s Form 8-K filed November 21, 2007 and is incorporated herein by
reference.
The full
text of the Amendment is attached hereto as Exhibit 10.2 and is incorporated
herein by reference.
Warrants
As
described above, the Company has issued Warrants to purchase an aggregate of
approximately 1,077,586 shares of Common Stock. The per share
exercise price of the Warrants is $1.39, subject to adjustment as provided
therein. The Warrants are exercisable at the option of the holder
thereof, at any time and from time to time, prior to their expiration date which
is the seventh anniversary of their issuance. The Warrants provide
for a cashless exercise and also provide for an automatic exercise at the end of
their term if they are in the money. The Warrants are subject to
weighted average anti-dilution protection.
The full
text of the form of warrant certificate is attached hereto as Exhibit 10.3 and
is incorporated herein by reference.
Item
3.02 Unregistered Sales of Equity Securities
As
disclosed under Item 1.01 hereof, the Company, on April 28, 2008 sold 142,857
shares of Series D Stock and Warrants to purchase approximately 1,077,586 shares
of Common Stock pursuant to the Subscription Agreement. The aggregate
consideration received by the Company in connection with this transaction was
$5,000,000. The sale of shares of Series D Stock was exempt from
registration under Section 4(2) of the Securities Act and Rule 506 of Regulation
D promulgated thereunder. The Company relied, as applicable, upon the
representations made by the Investors in determining that such exemptions were
available.
The
holders of the Series D Stock have the right, at any time or from time to time,
to convert their shares into shares of Common Stock at the applicable conversion
prices set forth in the Series D Certificate. Currently, each share
of Series D Stock is convertible into 30.17 shares of Common
Stock. In addition, Series D Stock is automatically converted into
Common Stock if there is a consummated public offering of the Common Stock for
at least $50,000,000, at a per share price of $3.48 (in accordance with the
Series D Certificate), or if 70% of the Investors agree to effect such a
conversion.
The
Warrants are exercisable as more fully described under the heading, “Warrant”
set forth in Item 1.01 above, which is incorporated herein by
reference.
The full
terms of the Series D Stock are set forth in the Series D Certificate filed as
Exhibit 3.2 of the Company’s Form 8-K filed November 21, 2007 and is
incorporated herein by reference.
Item
3.03 Material Modification of Rights of Security Holders
The
information disclosed in Item 1.01 of this Form 8-K is incorporated herein by
reference.
Item
9.01 Financial Statements and Exhibits
(c) Exhibits.
See
Exhibit Index below.
EXHIBIT
INDEX
|
Number
|
Title
|
| |
|
|
10.1
|
Stock
and Warrant Subscription Agreement, dated as of April 28, 2008, by and
between the Company, Corriente Master Fund, L.P. and, solely with respect
to Article V thereof, General Electric Pension
Trust.
|
|
10.2
|
Amendment
to Registration Rights Agreement, dated as of April 28, 2008, by and among
the Company, General Electric Pension Trust, Chrysler LLC Master
Retirement Trust, certain funds managed by ProMed Asset Management LLC and
Corriente Master Fund, L.P.
|
|
10.3
|
Form
of Warrant Certificate.
|
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.