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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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On March 9, 2010, Provectus
Pharmaceuticals, Inc. (the “Company”) entered into a Securities Purchase
Agreement (the “Purchase Agreement”) with certain accredited investors for the
issuance and sale in a private placement of an aggregate of 7,083,324 units (the
“Units”), at purchase price of $0.75 per Unit, each Unit consisting of one share
of 8% convertible preferred stock, par value $.001 per share (the “8%
Convertible Preferred Stock”) and a warrant to purchase one-half share of common
stock, par value $.001 per share (the “Common Stock”), with an exercise price of
$1.00 per share of Common Stock (the “Warrants,” and together with the Units,
the 8% Convertible Preferred Stock and the underlying Common Stock, the
“Securities”), for an aggregate amount of gross proceeds
of $5,312,499.
On March 10, 2009, the Company entered
into a Purchase Agreement with an institutional investor for the issuance and
sale in a private placement of an additional 3,500,000 Units for an additional
amount of gross proceeds of $2,625,000 on terms and under agreements identical
to the March 9 private placement.
On March 11, 2010, the Company
completed a closing of substantially all of the amounts in the March 9 and March
10 private placements (the “Private Placement”), pursuant to which the Company
sold and issued an aggregate of 9,979,992 Units for an aggregate amount of gross
proceeds of $7,484,999. The Company will use the net proceeds of the
Private Placement for working capital, FDA trials, securing licensing
partnerships, and general corporate purposes.
Maxim
Group LLC served as the placement agent for the Private Placement. In connection
therewith, the Company paid the placement agent a commission consisting of 10%
of the offering proceeds and a non-accountable expense allowance consisting of
3% of the offering proceeds, for a total of $973,021. Maxim Group LLC
received 997,999 shares of Common Stock, which represents 10% of the total
number of shares of 8% Convertible Preferred Stock issued in the Private
Placement.
Securities
Purchase Agreements
Pursuant
to the Purchase Agreements, each of the investors purchased and the Company sold
and issued the shares of 8% Convertible Preferred Stock and Warrants. Each of
the parties gave customary representations and warranties, and the investors
made certain representations and warranties concerning their suitability and
their status as accredited investors.
Additionally,
in accordance with the terms of the Purchase Agreements, the Company entered
into a Registration Rights Agreement with each of the investors at
closing. Under the Registration Rights Agreements, the investors have
piggy-back registration rights for Common Stock issued to the holders of shares
of 8% Convertible Preferred Stock upon their conversion or Warrants upon their
exercise.
8%
Convertible Preferred Stock
As provided in the Purchase Agreements,
the Company committed to issue an aggregate of 10,583,324 shares of 8%
Convertible Preferred Stock to the investors, of which 9,979,992 were issued on
March 11, 2010. The 8% Convertible Preferred Stock has the rights,
privileges, preferences and restrictions set forth in the Certificate of
Designation (the “Certificate of Designation”) filed with the Nevada Secretary
of State on March 5, 2010. The Certificate of Designation authorizes for
issuance up to 13,333,333 shares of 8% Convertible Preferred Stock.
Under the
Certificate of Designation, each share of 8% Convertible Preferred Stock is
convertible into one share of Common Stock, subject to adjustment, at the option
of the holder at any time, or at the option of the Company after such time that
the volume-weighted average price of Common Stock exceeds $2.25 and the average
daily trading volume exceeds 150,000 shares for 30 consecutive trading days. The
right of holders of 8% Convertible Preferred Stock to convert the 8% Convertible
Preferred Stock is subject to a 4.99% beneficial ownership limitation, which may
be increased to 9.99% after providing notice of such increase to the
Company.
Dividends
on the 8% Convertible Preferred Stock accrue at an annual rate of 8% of the
original issue price and are be payable on a quarterly basis. The Company may
elect to satisfy its obligation to pay quarterly dividends either in cash or by
distribution of Common Stock.
Holders
of the 8% Convertible Preferred Stock are entitled to vote together with the
holders of Common Stock, and not as a separate class, on an as-converted basis,
except as otherwise required by Nevada law and except for certain corporate
actions for which holders of the 8% Convertible Preferred Stock will vote as a
separate class.
The
Certificate of Designation contains customary anti-dilution protection. In
addition, for a period of five years after the first issuance of the 8%
Convertible Preferred Stock, if the Company issues or is deemed to have issued
additional shares of Common Stock without consideration or for a consideration
per share less than the applicable conversion price, which is initially $0.75
per share, then the conversion price of the 8% Convertible Preferred Stock will
be reduced, concurrently with such issue, to the consideration per share
received by the Company for such issue or deemed issue of the additional shares
of Common Stock.
The
holders of 8% Convertible Preferred Stock are also entitled to a liquidation
preference.
The 8%
Convertible Preferred Stock is redeemable at the option of the Company at a
price equal to the original price for each share of 8% Convertible Preferred
Stock being redeemed, plus all dividends accrued and unpaid thereon to the date
fixed for redemption after such time that the volume-weighted average price of
Common Stock exceeds $2.25 and the average daily trading volume exceeds 150,000
shares for 30 consecutive trading days.
Warrants
Pursuant to the Purchase Agreements,
the Company committed to issue an aggregate of 4,989,989 Warrants to the
investors, of which 4,989,989 were issued on March 11, 2010. Each Warrant
is exercisable for one share of Common Stock at an exercise price of $1.00 per
share. The Warrants contain a cashless exercise provision and are immediately
exercisable and will expire on the fifth anniversary of their issuance. The
right of holders of Warrants to exercise Warrants for Common Stock are subject
to a 4.99% beneficial ownership limitation, which may be increased to 9.99%
after providing notice of such increase to the Company.
The
Warrants contain customary anti-dilution protection. In addition, for a period
of five years after the first issuance of 8% Convertible Preferred Stock, if the
Company issues or is deemed to have issued additional rights, options or
warrants to subscribe for, purchase or otherwise acquire Common Stock or
convertible securities without consideration or for a consideration per share
less than the applicable exercise price, which is initially $1.00 per share,
then the exercise price of the Warrants will be reduced, concurrently with such
issue, to the consideration per share received by the Company for such issue or
deemed issue of the additional rights, options or warrants.
The foregoing descriptions of the
transaction agreements, the Securities, the Certificate of Designation and the
transactions contemplated therein are qualified in their entirety by reference
to the full text of such agreements and instruments, which are filed as exhibits
hereto and are incorporated herein by reference. Such agreements and instruments
have been included to provide investors and security holders with information
regarding their terms. They are not intended to provide any other factual
information about the Company. The transaction documents contain certain
representations, warranties and indemnifications resulting from any breach of
such representations or warranties. Investors and security holders should not
rely on the representations and warranties as characterizations of the actual
state of facts because they were made only as of the respective dates of such
documents. In addition, information concerning the subject matter of the
representations and warranties may change after the respective dates of such
documents, and such subsequent information may not be fully reflected in the
Company’s public disclosures.
This Current Report on Form 8-K shall
not be deemed an offer to sell or a solicitation of an offer to buy any
securities of the Company, nor shall there be any sale of these securities in
any state or jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state or jurisdiction.
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Item
3.02.
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Unregistered
Sale of Equity Securities.
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The
information set forth under Item 1.01 is incorporated by reference into this
Item 3.02. All of the investors represented that they were “accredited
investors,” as that term is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the “Securities Act”). The
Company’s issuance of the Securities pursuant to the Purchase Agreement was made
in reliance on Section 4(2) of the Securities Act and Regulation D thereunder as
a transaction not involving a public offering. No advertising or
general solicitation was employed in the Private Placement, and the Securities
may not be offered or sold in the United States in the absence of an effective
registration statement or an exemption from the registration requirements under
the Securities Act. An appropriate “restricted securities” legend was placed on
the Securities issued pursuant to the Purchase Agreement.
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Item
3.03.
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Material
Modification to Rights of Security
Holders.
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In connection with the Private
Placement, on March 5, 2010, the Board of Directors authorized and approved the
Certificate of Designation setting forth the voting powers, designations,
preferences, limitations, restrictions and relative rights of the 8% Convertible
Preferred Stock. The Certificate of Designation was filed with the Secretary of
State of the State of Nevada, effective as of March 5, 2010, as described under
Item 1.01 above, which description is hereby incorporated by reference into this
Item 3.03.
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The
information set forth under Item 1.01 is incorporated by reference into this
Item 5.03.
Item
8.01. Other
Events.
On March 9, 2010, the Company issued a
press release regarding the March 9 private placement, a copy of which is
attached hereto as Exhibit 99.1.
On March 11, 2010, the Company issued a
press release regarding the closing of the Private Placement, a copy of which is
attached hereto as Exhibit 99.2.