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) May
15, 2006
Interpharm
Holdings, Inc.
(Exact
name of Registrant as specified in charter)
Delaware
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0-22710
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13-3673965
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(State
or other jurisdic-
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(Commission
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(IRS
Employer
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tion
of incorporation)
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File
Number)
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Identification
No.)
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75
Adams Avenue, Hauppauge, New York
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11788
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(Address
of principal executive
offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (631)
952 0214
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:
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
o
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
May
15, 2006, Interpharm Holdings Inc. (the “Company”) entered into a Securities
Purchase Agreement (the “Agreement”) with Tullis-Dickerson Capital Focus III,
L.P. (the “Buyer”).
Under
the
Agreement, the Company agreed to issue and sell to the Buyer, and the Buyer
agreed to purchase from the Company, for a purchase price of $10 million, an
aggregate of 10,000 shares of a newly designated series of the Company’s
preferred stock (the “Preferred Stock”), together with 2,296,889 warrants to
purchase shares of common stock of the Company with an exercise price of $1.628.
The warrants have a five year term.
The
Preferred Stock will be accounted for in the financial statements of the Company
as temporary equity rather than permanent equity.
The
Preferred Stock will, among other things, accrue dividends at the rate of 8.25%
per annum, be convertible at any time at the option of the holder into common
stock of the Company and, at any time after March 31, 2007, be convertible
into
common stock of the Company, at the option of the Company, provided that certain
conditions have been satisfied. The Preferred Stock is convertible into
approximately 6.5 million shares of common stock. The Preferred Stock shall
also
be entitled to voting rights on all matters on an as-converted-to-common-stock
basis, with the holders of the Preferred Stock and common stock voting as a
single class. The holders of the Preferred Stock shall also have the right
upon
the occurrence of certain events to require the Company to redeem such stock
for
a redemption price calculated in accordance with an agreed upon
formula.
So
long
as the Buyer holds at least 25% of the shares of Preferred Stock issued at
the
initial closing, in addition to any other rights provided by law, without first
obtaining the affirmative vote at a meeting duly called for such purpose or
the
written consent of the holders of a majority of the outstanding shares of
Preferred Stock, voting together as a single class, the Company shall not,
among
other things:
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issue
any shares of Common Stock, stock appreciation rights, stock options
or
other equity securities to officers, directors or employees of, or
consultants (that are affiliates of the Company) to, the Company
in excess
of 2% of the fully diluted number of shares of Common Stock on the
initial
closing date;
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· |
issue
any shares of Common Stock, stock appreciation rights, stock options
or
other equity securities to independent third parties (e.g., investment
banks, investor relations firms, consultants that are not affiliates
of
the Company) in excess of 2% of the fully diluted number of shares
of
Common Stock on the initial closing
date;
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· |
pay
dividends or make any other distribution on the capital stock of
the
Company other than (i) dividends on the Preferred Stock or (ii) the
stated
dividends on the shares of Series A-1 Preferred
Stock;
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· |
issue
any Common Stock or any securities convertible into or exchangeable
for
Common Stock at a price per share of Common Stock less than the purchase
price per share of Preferred Stock;
and
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· |
issue
any indebtedness that creates an obligation for the Company to
repay in
the aggregate more than $50 million in principal and
interest.
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As
a
condition to closing the sale of the Preferred Stock and warrants, the Company
will also enter into a registration rights agreement with the Buyer, to register
under the Securities Act of 1933, the resale by the Buyer of shares of the
Company’s common stock which may be acquired by the Buyer upon conversion of the
Preferred Stock, upon exercise of the warrants, or in lieu of cash dividends
on
the Preferred Stock.
The
obligation of the Company and the Buyer to consummate the Agreement is subject
to the satisfaction of a number of conditions, including, among other things:
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The
execution and delivery by each party to the other party of specified
closing documents;
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That
the representations and warranties of the parties shall be true and
correct in all material respects as of the date when made and as
of the
closing date;
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Payment
of the purchase price for the securities by the
Buyer;
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That
the Company’s common stock be listed for trading on the American Stock
Exchange;
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· |
Receipt
of all regulatory or third party consents and approvals, if any,
necessary
for the sale of the securities under the Agreement;
and
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· |
The
conversion of all outstanding shares of the Company’s Series K Convertible
Preferred Stock into common stock (the outstanding shares of Series
K
Convertible Preferred Stock are convertible into an aggregate of
31,373,877 shares of common stock).
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The
Company and the Buyer also have agreed that subject to the satisfaction of
certain closing conditions, not later than July 15, 2006, the Company may issue
and sell to additional investors who may enter into the Agreement additional
shares of Preferred Stock and warrants for a purchase price of up to $5
million.
The
foregoing description of the Agreement is qualified, in its entirety, by the
text of the Agreement itself which is annexed hereto as Exhibit
99.1.
On
May
19, 2006 the Company issued a press release announcing its entry into the
Agreement. A copy of the press release is attached hereto as Exhibit 99.2 and
incorporated herein by reference.
Item
9.01 |
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Financial Statements and
Exhibits |
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Exhibit 99.1 |
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Securities Purchase Agreement dated
May 15,
2006 between Interpharm Holdings Inc. and Tullis-Dickerson Capital
Focus
III, L.P. |
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Exhibit 99.2 |
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Press release, dated May 19,
2006. |
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.
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INTERPHARM
HOLDINGS, INC. |
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Date: May
19,
2006 |
By: |
/s/ George
Aronson |
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George Aronson
Chief Financial Officer
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