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): February 4, 2005
Neurologix, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 0-13347 06-1582875
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
ONE BRIDGE PLAZA, FORT LEE, NEW JERSEY 07024
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(Address of principal executive offices) (Zip Code)
(201) 592-6451
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(Registrant's telephone number,
including area code)
None
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(Former name, former address and former fiscal year,
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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] 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
On February 4, 2005, Neurologix, Inc. (the "Company") issued and sold
769,300 shares of its common stock, par value $0.001 per share (the "Common
Stock"), and 192,325 warrants to purchase shares of Common Stock to Merlin
Biomed Long Term Appreciation Fund LP, a Delaware limited partnership
("Appreciation Fund"), and Merlin Biomed Offshore Master Fund LP, a Cayman
Islands limited partnership ("Master Fund", and together with Appreciation
Fund, the "Lead Purchasers"), pursuant to a Stock Purchase Agreement, dated as
of February 4, 2005 (the "Stock Purchase Agreement"), a form of warrant
certificate (the "Warrant") and a Registration Rights Agreement, dated as of
February 4, 2005 (the "Registration Rights Agreement"). On February 9, 2005,
the Company entered into Amendment No. 1 to the Stock Purchase Agreement (the
"Amendment") with Copper Spire Fund Portfolio, an entity organized under the
laws of Ireland, and issued and sold 335,000 shares of Common Stock and
warrants to purchase 83,750 shares of Common Stock to Copper Spire Fund
Portfolio.
The following is a brief summary of the transaction. This summary is
qualified in its entirety by reference to the full text of the Stock Purchase
Agreement, the Warrant and the Registration Rights Agreement and the Amendment,
which are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively.
Stock Purchase Agreement
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Pursuant to the Stock Purchase Agreement, as amended, the Company has
issued and sold an aggregate of 1,104,300 shares of Common Stock for a price of
$1.30 per share or an aggregate price of $1,435,590. In addition, the Company
issued warrants to purchase a total of 276,075 shares of Common Stock, pursuant
to the terms of the Warrant (See "Warrant" below).
Although executed among the Company and the Lead Purchasers, the
Company may amend the Stock Purchase Agreement at any time prior to April 15,
2005 to add additional purchasers (the "Additional Purchasers"). The Additional
Purchasers will have the same rights and obligations as the Lead Purchasers.
The Additional Purchasers and the Lead Purchasers are hereinafter collectively
referred to as the "Purchasers".
The Stock Purchase Agreement provides that the Purchasers may transfer
the Common Stock only in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and that shares of Common Stock shall bear an
appropriate legend regarding the restriction on transferability.
The Stock Purchase Agreement also provides that, for so long as either
Lead Purchaser remains a stockholder of the Company, the Lead Purchasers shall
have the right to nominate Dr. Jeffery Reich as a Class I director of the
Company. Dr. Reich's term is scheduled to expire in 2007, and the Company
generally may not cause the term to expire earlier. Effective as of February 9,
2005, the size of the Company's board of directors was increased to 7 directors
and Mr. Reich became a Class I director of the Company.
Registration Rights Agreement
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The Registration Rights Agreement provides for registration rights to
the holders (the "Holders") of Common Stock and Warrants purchased pursuant to
the Stock Purchase Agreement and the shares of Common Stock underlying the
Warrants (collectively, the "Registrable Securities"). If the Company registers
any equity securities for sale to the public on any form which permits the
inclusion of securities held by the Holders, the Holders may request their
Registrable Securities to be included in such registration.
The Registration Rights Agreement provides that the Company shall
become listed on The Nasdaq Smallcap Market or another nationally-recognized
exchange or quotation system as soon as it is eligible to do so. As soon as the
Company becomes eligible to file a shelf registration statement on Form S-3,
the Company shall provide notice to the Holders. The Company shall file a shelf
registration statement within 30 days of a written request by a Holder to do
so, and generally keep such registration statement effective for a two year
period.
At any time following August 4, 2005, (i) the Lead Purchasers or (ii)
the Holders of a majority of the Registrable Securities may request in writing
that the Company effect the registration of all of their Registrable
Securities. The Company will be required to effect up to two such
registrations, and the second registration generally may not be requested until
six (6) months after the first registration becomes effective. No such request
for registration may be made after a shelf registration statement becomes
effective.
The Registration Rights Agreement also provides that the Company will
not grant to any other person or entity registration rights more favorable than
the rights granted to the Holders.
Each Additional Purchaser shall become party to the Registration
Rights Agreement, and receive the rights and be subject to the obligations as
the other Holders thereunder.
Warrants
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As described above, pursuant to the Stock Purchase Agreement, the
Company has issued a total of Warrants to purchase 276,075 shares of Common
Stock substantially in the form attached hereto as Exhibit 10.2. The Warrants
may be exercised, in full or in part, at any time prior to the fifth
anniversary of their issuance, at an exercise price of $1.625 per share of
Common Stock underlying the Warrants (the "Warrant Shares"). The Company has
the option to call the Warrants following the thirtieth month after the date of
issuance, provided that there will be a shelf registration statement effective
for at least six months. If the holder does not exercise the Warrants, the
Company may redeem the warrants at a price of $0.01 per Warrant Share.
The Warrants and the underlying Common Stock may not be transferred by
the holder thereof, except pursuant to the Securities Act. The underlying
Common Stock, when issued, must bear a legend reflecting this restriction on
transfer.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
As described under Item 1.01 hereof, on February 4, 2005, the Company
issued and sold 769,300 shares of Common Stock, and 192,325 Warrants to the
Lead Purchasers and on February 9, 2005, the Company issued and sold 335,000
shares of Common Stock and 83,750 Warrants to Copper Spire Fund Portfolio. The
aggregate consideration received by the Company in connection with these
transactions was $1,435,590. No underwriting discounts or commissions were paid
by the Company in connection with these transactions. The transactions were
exempt from registration under Section 4(2) of the Securities Act of 1933, as
amended, and Section 506 of Regulation D promulgated thereunder. The Company
relied upon the representations made by the Purchasers pursuant to the Stock
Purchase Agreement, as amended, in determining that such exemptions were
available.
The description of the Warrants set forth in Item 1.01 above is
incorporated by reference herein.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
The Stock Purchase Agreement provides that, for so long as either Lead
Purchaser remains a stockholder of the Company, the Lead Purchasers shall have
the right to nominate Dr. Jeffery Reich as a Class I director of the Company.
Dr. Reich is a principal of Merlin Biomed Group. Effective as of February 9,
2005, the size of the Company's board of directors was increased to 7 directors
and Dr. Reich became a Class I director of the Company. Dr. Reich's term is
scheduled to expire in 2007, and the Company generally may not cause the term
to expire earlier. Except as described in Item 1.01 hereof, the Company has no
knowledge of any transaction with respect to Dr. Reich required to be disclosed
under Item 404(a) of Regulation S-B.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
See exhibit index below.
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.
NEUROLOGIX, INC.
Date: February 10, 2005 By: /s/ Mark S. Hoffman
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Name: Mark S. Hoffman
Title: Secretary and Treasurer
EXHIBIT INDEX
Number Title
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10.1 Stock Purchase Agreement, dated as of February 4, 2005, by and
among Neurologix, Inc, Merlin Biomed Long Term Appreciation Fund
LP and Merlin Biomed Offshore Master Fund LP.
10.2. Form of Warrant Certificate
10.3 Registration Rights Agreement, dated as of February 4, 2005, by
and among Neurologix, Inc, Merlin Biomed Long Term Appreciation
Fund LP and Merlin Biomed Offshore Master Fund LP.
10.4 Amendment No. 1 to the Stock Purchase Agreement, dated as of
February 9, 2005, by and between Neurologix, Inc. and Copper
Spire Fund Portfolio.