Financing agreement. The PR associated with this 8-K doesn't mention the upfront fee paid in stock:
>>On October 21, 2005, GlycoGenesys, Inc. (the Company) entered into a Common Stock Purchase Agreement (the Purchase Agreement) with Fusion Capital Fund II, LLC (Fusion Capital). Pursuant to the terms of the Purchase Agreement, Fusion Capital has agreed to purchase from the Company up to $20,000,000 of its common stock over a period of up to 25 months, subject to earlier termination at the Company's discretion. Pursuant to the terms of a Registration Rights Agreement, dated as of October 21, 2005, the Company has agreed to file a registration statement with the U.S. Securities and Exchange Commission covering shares that may be sold to Fusion Capital under the Purchase Agreement.
Once the Registration Statement has been declared effective and other standard conditions are met, each trading day during the term of the Purchase Agreement the Company has the right to sell to Fusion Capital up to $40,000 of the Company's common stock at a purchase price based upon the recent market price of the Companys common stock at the time of sale. The amount sold to Fusion Capital may be increased by the Company based upon increases in the price of the Companys common stock. The Company has the right to control the timing and amount of shares sold to Fusion Capital. The Company also has the right to terminate the Purchase Agreement at any time without cost. Fusion Capital does not have the right or the obligation to purchase shares of the Company's common stock in the event that the price of the common stock is less than $0.25 per share. Under the Purchase Agreement, Fusion Capital is prohibited from engaging in any direct or indirect short selling or hedging resulting in a net short position.
The Company anticipates using the proceeds from this financing for, among other things, funding the enrollment of its Phase I/II multiple myeloma and chronic lymphocytic leukemia dose escalation trials for GCS-100 and general corporate purposes.
The foregoing description of the Purchase Agreement and Registration Rights Agreement is qualified in its entirety by reference to the full text of both the Purchase Agreement and Registration Rights Agreement, a copy of each of which is attached hereto as Exhibit 10.1 and 10.2, respectively, and each of which is incorporated herein in its entirety by reference. A copy of the press release announcing the transaction is also attached as Exhibit 99.1.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES
In connection with entering into the Purchase Agreement, the Company issued as a commitment fee to Fusion Capital 338,819 shares of its common stock having a value of $350,000, which shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. <<
Cheers, Tuck |
