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
November
9, 2005
Date
of
Report (Date of earliest event reported)
___________________________________________________________
ACURA
PHARMACEUTICALS, INC.
(Exact
Name of Registrant as Specified in Charter)
___________________________________________________________
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State
of New York
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1-10113
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11-0853640
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(State
of Other Jurisdiction
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(Commission
File Number)
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(I.R.S.
Employer
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of
Incorporation)
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Identification
Number)
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616
N. North Court, Suite 120
Palatine,
Illinois 60067
(Address
of principal executive offices) (Zip Code)
(847)
705-7709
(Registrant’s
telephone number, including area code)
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):
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17CFR240.14d- 2(b))
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| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17CFR
240.13e- 4(c))
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Item
1.01 Entry
Into a Material Definitive Agreement
On
November 9, 2005, Acura Pharmaceuticals, Inc. (the "Company") entered into
a
Loan Agreement (the “Loan Agreement”) with Essex
Woodlands Health Venture V, L.P., Care Capital Investments II, L.P., Care
Capital Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P. and the additional
lenders that may become a party thereto in accordance with the terms of the
Loan
Agreement (collectively, the “Bridge Lenders”) . Pursuant
to the initial Closing of the Loan Agreement, the Bridge Lenders extended
bridge
financing to the Company in the principal amount of $800,000. The Loan Agreement
also permits additional loan advances to the Company by Bridge Lenders that
become a party to the Loan Agreement in accordance with its terms. No assurance
can be given, however, that any additional bridge loans will be made to the
Company by the Bridge Lenders. The
net
proceeds from loans advanced pursuant to the Loan Agreement (collectively,
the
“Bridge Loan”), after the satisfaction of related, expenses, will be used by the
Company to continue the development of its AversionTM
Technology and to fund operating expenses.
The
Bridge Loan bears interest at the rate of ten percent (10%) per annum and
matures on June 1, 2006. The Bridge Loan is secured by a lien on all of the
Company’s and its subsidiaries’ assets, senior in right of payment and lien
priority to all other indebtedness of the Company. The Bridge Loan is subject
to
mandatory pre-payment by the Company upon the Company’s completion of equity or
debt financing or any sale, transfer, license or similar arrangement pursuant
to
which the Company or any of its subsidiaries sells, licenses or otherwise
grants
rights in any material portion of the Company’s intellectual property to any
third party, provided that the consummation of any such transaction results
in
cash proceeds to the Company, net of all costs and expenses, of at least
the sum
of (i) $4.0 million, plus (ii) the aggregate principal amount of the Bridge
Loan. The Bridge Loan also contains normal and customary affirmative and
negative covenants, including restrictions on the Company’s ability to incur
additional debt, or grant any lien on the assets of the Company or its
Subsidiaries, subject to certain permitted exclusions.
Item
2.02 Results
of Operations and Financial Condition
On
November 10, 2005, Acura Pharmaceuticals, Inc. (the "Company") issued a press
release disclosing, among other things, the financial results for its third
quarter ended September 30, 2005. A copy of the Company's press release is
attached as Exhibit 99.1 hereto.
Item
3.02 Unregistered
Sales of Equity Securities.
Effective
November 10, 2005, all of the issued and outstanding preferred shares of
the
Company were automatically and mandatorily converted into the Company’s common
stock, $.01 par value per share (the “Common Stock”) in accordance with the
terms of the Company’s Restated Certification of Incorporation (the “Preferred
Stock Conversion”). In accordance with the conversion provisions contained in
the Restated Certificate of Incorporation, all issued and outstanding shares
of
the Company’s Series A Preferred Stock, Series B Preferred Stock, Series C-1
Preferred Stock, Series C-2 Preferred Stock and Series C-3 Preferred Stock
(collectively, the “Preferred Stock”) are converted automatically into the
Company’s Common Stock upon the Company’s receipt of the written consent to the
Preferred Stock Conversion from the holders of at least 51% of the shares
of the
Company’s Series A Preferred Stock.
On
November 10, 2005, the Company received the consent to the Preferred Stock
Conversion from GCE Holdings LLC (the assignee of all Preferred Stock formerly
held by each of Care Capital Investments II, LP, Care Capital Offshore
Investments II, LP, Essex Woodlands Health Ventures V, L.P., Galen Partners
International III, L.P., Galen Partners III, L.P. and Galen Employee Fund
III,
L.P.), such entity holding in the aggregate in excess of 51% of the issued
and
outstanding shares of the Company’s Series A Preferred Stock. In accordance with
the terms of the Company’s Restated Certificate of Incorporation, all shares of
the Company’s Preferred Stock were automatically converted into an aggregate of
approximately 305.4 million shares of the Company’s Common Stock.
After
giving effect to the Preferred Stock Conversion, effective November 10, 2005
the
Company has an aggregate of approximately 329.0 million shares of Common
Stock
issued and outstanding.
The
Company issued the Common Stock in reliance upon the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended and/or
Regulation D promulgated under the Securities Act of 1933. At the time of
acquisition of the Preferred Stock, the holders of the Preferred Stock
represented to the Company that each of such shareholder was an accredited
investor as defined in Rule 501(a) of the Securities Act of 1933 and that
the
Preferred Stock was being acquired for investment purposes.
Item
5.01 Changes
in Control of Registrant.
Prior
to
the Preferred Stock Conversion (as described in Item 3.02 above) each of
Care
Capital Investments II, LP, Care Capital Offshore Investments II, LP
(collectively, “Care Capital”), Essex Woodlands Health Ventures V, L.P.
(“Essex”), Galen Partners III, L.P., Galen Partners International III, L.P. and
Galen Employee Fund III, L.P. (collectively, “Galen”) assigned and conveyed
to GCE
Holdings LLC (“GCE Holdings”) all of their respective shares of the Company’s
Preferred Stock. Prior to such conveyance, the Preferred Stock holdings of
Care
Capital, Essex and Galen represented 14.6%, 17.1% and 46.2%, respectively,
of
the Company’s outstanding voting securities. After giving effect to the
conveyance by Care Capital, Essex and Galen of their respective Preferred
Stock
to GCE Holdings and the Preferred Stock Conversion, GCE Holdings holds an
aggregate of approximately 258.2 million shares, or 78.5% of the Company’s
issued and outstanding Common Stock. As a result, in view of its ownership
percentage of the Company, GCE Holdings will be able to control or significantly
influence all matters requiring approval of the Company’s shareholders,
including the approval of mergers or other business combination transactions.
In
addition, pursuant to the terms of the Amended and Restated Voting Agreement,
dated February 6, 2004, as amended, between the Company and the former holders
of the Company’s Preferred Stock, all of such shareholders have agreed that the
Board of Directors shall be comprised of not more than 7 members, 4 of whom
shall be the designees of GCE Holdings (as
the
assignee of the Preferred Stock of Care Capital, Essex and Galen). As such,
in
view of its controlling position on the Board of Directors, GCE Holdings
will be
able to control or significantly influence matters to be determined by the
Board
of Directors.
Item
9.01 Financial
Statements and Exhibits
| Exhibit
Number |
Description
|
| 10.1 |
Joinder
and Amendment to Amended and Restated Voting Agreement dated November
9,
2005 between the Company, GCE Holdings, Care Capital, Essex and
Galen.
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| 10.2 |
Loan
Agreement by and among Acura Pharmaceuticals, Inc. Essex Woodlands
Health
Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore
Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P., and
the Additional
Lenders that become a party thereto dated November 9, 2005.
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| 10.3 |
Form
of Secured Promissory Note of Acura Pharmaceuticals,
Inc.
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| 10.4 |
Subordination
Agreement by and among Essex
Woodlands Health Venture V, L.P., Care Capital Investments
II, L.P., Care
Capital Offshore Investments II, L.P., Galen Partners III,
L.P., Galen
Partners International III, L.P., and Galen Employee Fund III,
L.P., dated
November 9, 2005.
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| 10.5 |
Company
General Security Agreement by and between Acura Pharmaceuticals,
Inc. and
Galen Partners III, L.P., as Agent, dated November 9,
2005
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| 10.6 |
Guaranty
of Axiom Pharmaceutical Corporation, dated November 9,
2005
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| 10.7 |
Guaranty
of Acura Pharmaceutical Technologies, Inc., dated November
9,
2005
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| 10.8 |
Guarantors
Security Agreement by and among Axiom Pharmaceutical Corporation,
Acura
Pharmaceutical Technologies, Inc. and Galen Partners III, L.P.,
as Agent,
dated November 9, 2005
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| 10.9 |
Stock
Pledge Agreement by and between Acura Pharmaceuticals, Inc.
and Galen
Partners III, L.P., as Agent, dated November 9,
2005
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| 99.1 |
Press
Release dated November 10, 2005 Announcing Financial Results for
Third
Quarter 2005, Receipt of Interim Funding, Conversion of Preferred
Shares
and Update on OxyADFTM
Tablet Development and Cash Reserves
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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 thereunto
duly authorized.
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ACURA
PHARMACEUTICALS, INC. |
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By: |
/s/ Peter
A. Clemens |
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Peter
A. Clemens
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Senior
Vice President & Chief Financial
Officer |
Date: November
10, 2005
Exhibit
Index
| Exhibit
Number |
Description
|
| 10.1 |
Joinder
and Amendment to Amended and Restated Voting Agreement dated November
9,
2005 between the Company, GCE Holdings, Care Capital, Essex and
Galen.
|
| 10.2 |
Loan
Agreement by and among Acura Pharmaceuticals, Inc. Essex Woodlands
Health
Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore
Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P., and
the Additional
Lenders that become a party thereto dated November 9, 2005.
|
| 10.3 |
Form
of Secured Promissory Note of Acura Pharmaceuticals,
Inc.
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| 10.4 |
Subordination
Agreement by and among Essex
Woodlands Health Venture V, L.P., Care Capital Investments
II, L.P., Care
Capital Offshore Investments II, L.P., Galen Partners III,
L.P., Galen
Partners International III, L.P., and Galen Employee Fund III,
L.P., dated
November 9, 2005.
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| 10.5 |
Company
General Security Agreement by and between Acura Pharmaceuticals,
Inc. and
Galen Partners III, L.P., as Agent, dated November 9,
2005
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| 10.6 |
Guaranty
of Axiom Pharmaceutical Corporation, dated November 9,
2005
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| 10.7 |
Guaranty
of Acura Pharmaceutical Technologies, Inc., dated November
9,
2005
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| 10.8 |
Guarantors
Security Agreement by and among Axiom Pharmaceutical Corporation,
Acura
Pharmaceutical Technologies, Inc. and Galen Partners III, L.P.,
as Agent,
dated November 9, 2005
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| 10.9 |
Stock
Pledge Agreement by and between Acura Pharmaceuticals, Inc.
and Galen
Partners III, L.P., as Agent, dated November 9,
2005
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| 99.1 |
Press
Release dated November 10, 2005 Announcing Financial Results for
Third
Quarter 2005, Receipt of Interim Funding, Conversion of Preferred
Shares
and Update on OxyADFTM
Tablet Development and Cash Reserves
|