IPIX Corporation 8-K 06/15/06
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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): June
23, 2006
IPIX
CORPORATION
(Exact
name of registrant as specified in its charter)
|
DELAWARE
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000-26363
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52-2213841
|
|
(State
or other
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(Commission
|
(IRS
Employer
|
|
Jurisdiction
of incorporation)
|
File
Number)
|
Identification
Number)
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12120
SUNSET HILLS ROAD, SUITE 410 RESTON, VIRGINIA 20910
(Address
of principal executive offices) (Zip
Code)
Registrant's
telephone number, including area code: (703)
674-4100
N/A
(Former
name or former address, 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
June
26, 2006 (the “Closing Date”), the registrant, IPIX Corporation, a Delaware
corporation (the “Company”), completed a private placement (the “Transaction”)
pursuant to Regulation D under the Securities Act of 1933 (the “Securities
Act”), which generated total gross proceeds of $5,000,000. The proceeds will be
used to fund the Company's operations.
As
part
of the private placement, the Company entered into a Securities Purchase
Agreement (the “Agreement”) with several institutional and accredited investors
(the “Purchasers”) to sell Senior Amortizing Convertible Notes due June 26, 2011
(the “Senior Notes”), which are convertible into 5,208,333 shares of the
Company's common stock, par value $.001 (the “Common Stock”), five-year
warrants, which vest immediately, to purchase 1,822,916 shares of Common
Stock at an exercise price of $1.06 (the “Warrant A”), warrants, which vest
immediately, to purchase 2,604,167 shares of Common Stock at an exercise price
of $.96 for 90 days from the date the Registration Statement is declared
effective (the “Warrant B”). Upon exercise of any or all of Warrant B, the
Company will issue additional warrants, which vest immediately, to purchase
shares of Common Stock equal to thirty five percent of the Warrant B exercised
at an exercise price of $1.06 (the "Additional Warrant") (collectively, the
"Warrants").
Beginning four
months after the original issuance date, interest shall be payable monthly
in
arrears at a rate, which is the greater of (i) 7% per annum or (ii) LIBOR plus
200 basis points; provided at no time shall the interest rate exceed 10% per
annum. The first twenty-six monthly payments will amortize 75% of the
Senior Notes. The Company may pay interest or principal on the Senior Notes
in
(i) cash or (ii) shares of Common Stock. If the Company elects to repay the
Senior Notes in shares of Common Stock, a 10% discount to the volume weighted
average trading price for the prior twenty-day trading period will be applied.
At
any
time following the 30 month anniversary of the original issue date, the holders
have the right to require the Company to redeem all or any portion of the
outstanding principal of the Senior Notes, plus all accrued but unpaid interest.
Furthermore, at any time following an event of default, the holders have the
right to require the Company to repurchase all or any portion of the outstanding
Senior Notes at price equal to the greater of (i) 115% of the outstanding
principal amount, plus all accrued but unpaid interest, or (ii) 115% of the
average of the closing prices for the five trading days preceding the notice
of
default.
At
any
time and from time to time, the holders of the Senior Notes have the right
to
convert all or any portion of the outstanding balance of the Senior Notes into
Common Stock. Provided, that unless the Company obtains prior shareholder
approval, the number of shares issued in the Transaction shall not equal 19.99%
of the outstanding shares of Common Stock immediately preceding the Closing
Date. The principal and any accrued but unpaid interest of the Senior Notes
are
convertible into the Company's common stock at a conversion price of $1.02
per
share, subject to anti-dilution protections.
The
Senior Notes are secured by a first priority security interest in and a lien
upon all of the Company’s right, title and interests in, to and under all
personal property and assets of the Company, whether now owned or hereafter
acquired. As such, the Company entered into a Security Agreement (the "Security
Agreement") with the Purchasers and Iroquois Master Fund Ltd., as agent for
the
Purchasers. Additionally, the Senior Notes contain restrictive covenants
which, among other things, restrict the Company's ability to incur additional
indebtedness, grant security interests on its assets or make distributions
on or
repurchase its common stock.
Under
the
Agreement, the Company has agreed that until the date the Registration Statement
covering the shares issuable upon conversion of the Senior Notes and exercise
of
the Warrants is declared effective, it will not, directly or indirectly, offer,
sell grant any option to purchase, or otherwise dispose of (or announce any
offer, sale, grant or any option to purchase or other disposition of) any of
its
or its Subsidiaries' equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that may
be
convertible into or exchangeable or exercisable for Common Stock.
The
discussion in this Current Report is only a summary and is qualified in its
entirety by reference to the Agreement, form of note, form of Warrant A
and form of Warrant B, which are included as Exhibits 10.1, 10.2, 4.1,
4.2, and 4.3, respectively, to this current report on Form 8-K and are
incorporated herein by reference in this Current Report.
ITEM
2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The
disclosures under Item 1.01 are incorporated in this Item 2.03 by reference.
ITEM
3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The
disclosures under Item 1.01 are incorporated in this Item 3.02 by reference.
The
Senior Notes and Warrants described herein were offered and sold to the
Purchasers in a private placement transaction made in reliance upon exemptions
from registration pursuant to Section 4(2) under the Securities and Rule 506
promulgated thereunder.
The
Senior Notes and Warrants have not been registered under the Securities Act,
as
amended or applicable state securities laws and may not be offered or sold
in
the United States absent registration under the Securities Act and applicable
state securities laws or an applicable exemption from registration requirements.
In
connection with the Transaction, the Company paid underwriting fees of three
hundred fifty thousand dollars.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c)
Exhibits.
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Exhibit No.
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Description
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4.1
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Form
of Note, dated as of June 26, 2006, by and among IPIX Corporation
and the
Purchasers.
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4.2
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Form
of Warrant A, dated as of June 26, 2006, by and among IPIX Corporation
and
the Purchasers.
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4.3
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Form
of Warrant B, dated as of June 26, 2006, by and among IPIX Corporation
and
the Purchasers.
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10.1
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Securities
Purchase Agreement, dated as of June 23, 2006, by and among IPIX
Corporation and the Purchasers.
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| 10.2 |
Security
Agreement, dated as of June 23, 2006, by and among IPIX Corporation,
the
Purchasers and Iroquois Master Fund Ltd., as agent for the
Purchasers
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| 99.1 |
Press
Release dated June 26, 2006
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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 hereunto
duly authorized.
IPIX
CORPORATION
Dated:
June 26, 2006
/s/
Clara
M. Conti
Clara
M.
Conti
Chief
Executive Officer