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
July
17, 2009
Date of Report (Date of earliest event
reported)
___________________________________________________________
SAFESTITCH
MEDICAL, INC.
(Exact
Name of Registrant as Specified in Charter)
___________________________________________________________
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Delaware
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0-19437
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11-2962080
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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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4400
Biscayne Boulevard, Suite A-100, Miami, Florida 33137
(Address
of principal executive offices) (Zip
Code)
(305)
575-6000
(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):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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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
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Entry
Into a Material Definitive
Agreement.
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Item
3.02
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Unregistered
Sales of Equity Securities.
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Item
3.03
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Material
Modification to Rights of Security
Holders.
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Item
5.03
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Amendment
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
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On July
21, 2009, SafeStitch Medical, Inc., a Delaware corporation (the “Company”),
entered into a securities purchase agreement (the “Current Purchase Agreement”)
with a private investor (the “Current Investor”), pursuant to which the Current
Investor agreed to purchase an aggregate of up to 2,000,000 shares (the “Current
Shares”) of the Company’s newly-designated 10.0% Series A Cumulative Convertible
Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”), at a
purchase price of $1.00 per share. On July 22, 2009, the Company
closed on the issuance of 2,000,000 Current Shares under the Current Purchase
Agreement for aggregate consideration of $2.0 million.
The
Company issued the Current Shares in reliance upon the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended (the
“Act”). The Current Investor represented to the Company that such
person was an “accredited investor” as defined in Rule 501(a) of the Act and
that the Current Shares were being acquired for investment
purposes. The Current Shares have not been registered under the Act
and are “restricted securities” as that term is defined by Rule 144 under the
Act. The Company has not undertaken to register the Current Shares,
and no registration rights have been granted to the Current Investor in respect
of the Current Shares.
Additionally,
on July 21, 2009, the Company entered into a second securities purchase
agreement (the “Future Purchase Agreement”) with certain other private investors
(the “Future Investors”), pursuant to which the Future Investors agreed to
purchase an aggregate of up to 2,000,000 shares of Series A Preferred Stock (the
“Future Shares”) at a purchase price of $1.00 per share. The Company
is not obligated to consummate the sale of the Future Shares under the Future
Purchase Agreement, and the Company may elect, in its sole discretion, to
consummate such sale on any date on or prior to June 30, 2010, subject to
providing the Future Investors ten days written notice of such closing
date. Among the Future Investors who have obligated themselves to
potentially acquire a portion of the Future Shares are Hsu Gamma Investment,
L.P., an entity of which Dr. Jane Hsiao, the Company’s Chairman of the Board, is
general partner, Jeffrey G. Spragens, the Company’s Chief Executive Officer,
President and a director, and Frost Gamma Investments Trust, a trust controlled
by Dr. Phillip Frost, who is the largest beneficial owner of the Company’s
outstanding common stock (collectively, the “Related Party
Investors”). Each of the Related Party Investors is the beneficial
owner of more than 10% of the Company’s common stock.
On July
17, 2009, the Company filed with the Secretary of State of the State of Delaware
a Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 10.0% Series A Cumulative
Convertible Preferred Stock, and Qualifications, Limitations and Restrictions
Thereof (the “Certificate of Designation”). A summary of the
Certificate of Designation is set forth below:
Dividends
Holders
of the Series A Preferred Stock are entitled to receive, when, as and if
declared by the Company’s Board of Directors, dividends on each share of Series
A Preferred Stock at a rate per annum equal to 10.0% of the sum of (a) $1.00,
plus (b) any and all declared and unpaid and accrued dividends thereon, subject
to adjustment for any stock split, combination, recapitalization or other
similar corporate action (the “Liquidation Amount”).
Voting
The
Holders of Series A Preferred Stock have the right to receive notice of any
meeting of holders of the Company’s common stock, par value $0.001 per share
(“Common Stock”), or Series A Preferred Stock and to vote (on an as-converted
into Common Stock basis) upon any matter submitted to a vote of the holders of
Common Stock or Series A Preferred Stock. Except as otherwise
expressly set forth in the Company’s Restated Certificate of Incorporation, as
amended from time to time, the holders of Series A Preferred Stock will vote on
each matter submitted to them with the holders of Common Stock and all other
classes and series of the Company’s capital stock entitled to vote on such
matter, taken together as a single class.
Rank
With
respect to dividend distributions and distributions upon liquidation, winding up
or dissolution of the Company, the Series A Preferred Stock ranks senior to all
classes of Common Stock and to each other class of the Company’s capital stock
existing now or hereafter created that are not specifically designated as
ranking senior to or pari
passu with the Series A Preferred Stock. The Company may not
issue any capital stock that is senior to or pari passu with the Series A
Preferred Stock unless such issuance is approved by the holders of at least 66
2/3% of the issued and outstanding Series A Preferred Stock voting separately as
a class.
Liquidation
Preference
Upon the
occurrence of a Liquidation Event (as defined in the Certificate of
Designation), holders of Series A Preferred Stock are entitled to be paid,
subject to applicable law, out of the assets of the Company available for
distribution to its stockholders, an amount in cash (the “Liquidation Payment”)
for each share of Series A Preferred Stock equal to the greater of (x) the
Liquidation Amount for each share of Series A Preferred Stock outstanding, or
(y) the amount for each share of Series A Preferred Stock the holders would be
entitled to receive pursuant to the Liquidation Event if all of the shares of
Series A Preferred Stock had been converted into Common Stock as of the date
immediately prior to the date fixed for determination of stockholders entitled
to receive a distribution in such Liquidation Event. Such Liquidation
Payment will be paid before any cash distribution will be made or any other
assets distributed in respect of any class of securities junior to the Series A
Preferred Stock, including, without limitation, Common Stock.
Conversion
The
holder of any share of Series A Preferred Stock may at any time and from time to
time convert such share into such number of fully paid and nonassessable shares
of Common Stock as is determined by dividing (A) the Liquidation Amount of the
share by (B) the conversion price, which is initially $1.00, subject to
adjustment as provided in the Certificate of Designation.
Redemption
To the
extent it is lawfully able to do so, the Company may redeem all of the then
outstanding shares of Series A Preferred Stock by paying in cash an amount per
share equal to $1.00 plus all declared or accrued unpaid dividends on such
shares, subject to adjustment for any stock dividends or distributions, splits,
subdivisions, combinations, reclassifications, stock issuances or similar events
with respect to the Common Stock.
The
foregoing description of the Current Purchase Agreement, Future Purchase
Agreement and the Certificate of Designation is only a summary and is qualified
in its entirety by reference to the full text of the form of Current Purchase
Agreement, the form of Future Purchase Agreement and the Certificate of
Designation, which are filed as Exhibit 10.1, Exhibit 10.2 and Exhibit 3.1,
respectively, to this Current Report on Form 8-K, and each of which is
incorporated herein by reference.
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Item
7.01
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Regulation
FD Disclosure
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On July 23, 2009, the Company issued a
press release announcing the entry into the Current Purchase Agreement and the
Future Purchase Agreement and the issuance of the Current Shares. A
copy of the press release is furnished as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated by reference in this Item 7.01.
The press release attached as an
exhibit to this report contains various “forward looking statements” within the
meaning of Section 27A of the Act, and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), which represent the Company’s
expectations or beliefs concerning future events. When used in
the press release and this report, the terms “anticipate,” “believe,”
“estimate,” “expect” and “intend” and words or phrases of similar import, as
they relate to the Company or its subsidiaries or its management, are intended
to identify forward-looking statements. These forward-looking
statements are further qualified by important factors that could cause actual
results to differ materially from those in the forward-looking
statements. These factors include, without limitation, the Company’s
ability to protect its intellectual property, dedication of substantial
resources towards research and development efforts, product liability risks and
the effects of governmental regulation. Results actually achieved may
differ materially from expected results included in these statements as a
result of these or other factors, including those factors discussed under “Risk
Factors” set forth in Item 1A to the Company’s Annual Report on Form 10-K, as
amended, for the year ended December 31, 2008. The Company undertakes
no obligation to update, and the Company does not have a policy of updating or
revising, these forward-looking statements.
The information in this report will
not be deemed an admission as to the materiality of any information required to
be disclosed solely to satisfy the requirements of Regulation FD. The
furnishing of this information is not intended to, and does not, constitute a
determination or admission by the Company that such information is material or
complete, or that investors should consider this information before making
an investment decision with respect to any security of the Company.
The information contained in Item
7.01 to this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall
not be deemed “filed” for purposes of Section 18 of the Exchange Act, or
otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing by the Company under the
Act.