Zila Inc - Current report filing (8-K)
June 06 2008 - 5:21PM
Edgar (US Regulatory)
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 3, 2008
ZILA, INC.
(Exact Name of Registrant as Specified in Charter)
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Delaware
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0-17521
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86-0619668
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(State or Other Jurisdiction
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(Commission File
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(I.R.S. Employer
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of Incorporation)
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Number)
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Identification No.)
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5227 North 7th Street, Phoenix, Arizona 85014-2800
(Address of Principal Executive Offices)
(602) 266-6700
(Registrant’s telephone number, including area code)
Not Applicable
(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):
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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 (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed by Zila, Inc. (the “Company”) in reports filed by the Company with the
Securities and Exchange Commission, the Company consummated two private placements (the “Private
Placements”) in 2006, pursuant to which certain securities of the Company, including shares of the
Company’s common stock, warrants to purchase shares of the Company’s common stock, and unsecured
and secured convertible notes (collectively, the “Securities”), were issued.
On August 13, 2007, the Company entered into an Amendment Agreement (the “Amendment
Agreement”) with certain investors pursuant to which it repurchased certain of the Securities
(including shares of common stock and warrants to purchase common stock) issued in the Private
Placements and amended the notes issued in the Private Placements (as amended, the “Amended and
Restated Secured Notes”).
On June 3, 2008, the Company entered into a Second Amendment Agreement (the “Second Amendment
Agreement”) with Visium Balanced Offshore Fund, Ltd., Visium Balanced Fund, LP, Visium Long Bias
Offshore Fund, Ltd., Visium Long Bias Fund, LP, Atlas Master Fund, Ltd. and Balyasny Asset
Management, L.P. (collectively, the “Investors”). Pursuant to the Second Amendment Agreement, the
Company obtained relief with respect to the free cash and EBITDA covenants contained in the Amended
and Restated Secured Notes (as amended, the “Second Amended and Restated Secured Notes”).
Specifically, the Second Amended and Restated Secured Notes provide that the Company must:
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maintain, as of the end of each fiscal quarter commencing with the fiscal quarter
ending July 31, 2007, free cash in an amount not less than $1,000,000; and
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achieve EBITDA (as defined in the Second Amended and Restated
Secured Notes) of at least $1 for at least one fiscal quarter ending on or prior to
July 31, 2009.
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The Second Amended and Restated Secured Notes are in the same aggregate principal amount as
the Amended and Restated Secured Notes, or $12,000,001.20, and continue to be due July 31, 2010.
Interest is payable on the Second Amended and Restated Secured Notes quarterly at 7% in cash or, at
the option of the Company, at 8% in shares of the Company’s common stock at a price equal to 90% of
the average closing bid price of the Company’s common stock for the ten trading days immediately
prior to the relevant interest payment date. The Second Amended and Restated Secured Notes are
convertible into shares of the Company’s common stock at the option of the holders thereof at a
conversion rate $2.20 per share, which, if fully converted and assuming no adjustments to the
conversion price, could result in the issuance of 5,454,546 shares of common stock.
The Second Amendment Agreement also provided for:
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the Investors’ surrender to the Company of warrants to purchase an aggregate of
3,396,100 shares of the Company’s common stock;
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a requirement that the Company enter into customary deposit account control
agreements with each depository institution holding funds of the Company; and
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the Company’s payment of a $1,200,000 amendment fee, which the Company paid by
issuing 4,626,595 shares of its Common Stock (the “Second Amendment Shares”) to the
Investors on June 4, 2008.
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Also on June 3, 2008, the Company and the Investors entered into a Registration Rights
Agreement (the “Registration Rights Agreement”), under which the Company agreed to file a resale
registration statement covering the Second Amendment Shares within 30 days after the execution date
of the Second Amendment Agreement. The Company is obligated to use its best efforts to have the
registration statement declared effective as soon as practicable, and to use commercially
reasonable efforts to maintain the effectiveness of the registration statement until the earlier of
the date on which all of the Second Amendment Shares (i) have been sold or (ii) can be sold
pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended. The Company will
become obligated to pay the Investors liquidated damages equal to 1% of the aggregate market value
of the Second Amendment Shares if it fails to file the registration statement within the timeframe
described above.
Copies of the form of Second Amended and Restated Secured Note, Registration Rights Agreement,
Second Amendment Agreement and a press release discussing the transactions described above and
information concerning forward-looking statements and factors that may affect the Company’s future
results, are attached hereto as Exhibits 4.1, 4.2, 10.1 and 99.1, respectively, and are
incorporated herein by this reference.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 above is incorporated into this Item 1.02 by this
reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information regarding the transactions contemplated under the Second Amendment Agreement
as set forth in Item 1.01 above is incorporated into this Item 2.03 by this reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information regarding the transactions contemplated under the Second Amendment Agreement,
including the Company’s issuance of the Second Amendment Shares, as set forth in Item 1.01 above,
is incorporated into this Item 3.02 by this reference. The issuance of the Second Amendment Shares
was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
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4.1
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Form of Second Amended and Restated Senior Secured Convertible
Note due July 2010
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4.2
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Registration Rights Agreement, dated June 3, 2008, by and
among Zila, Inc., Visium Balanced Offshore Fund, Ltd., Visium
Balanced Fund, LP, Visium Long Bias Offshore Fund, Ltd.,
Visium Long Bias Fund, LP, and Atlas Master Fund, Ltd.
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10.1
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Second Amendment Agreement, dated June 3, 2008, by and among
Zila, Inc., Visium Balanced Offshore Fund, Ltd., Visium
Balanced Fund, LP, Visium Long Bias Offshore Fund, Ltd.,
Visium Long Bias Fund, LP, and Atlas Master Fund, Ltd.
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99.1
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Press release, dated June 4, 2008, entitled “Zila Takes Steps
to Clear Path for Growth and Financial Stability”
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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.
Dated: June 6, 2008
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ZILA, INC.
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/s/ Gary V. Klinefelter
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By: Gary V. Klinefelter
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Vice President and General Counsel
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Exhibit Index
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Exhibit No.
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Description
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4.1
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Form of Second Amended and Restated Senior Secured Convertible
Note due July 2010
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4.2
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Registration Rights Agreement, dated June 3, 2008, by and
among Zila, Inc., Visium Balanced Offshore Fund, Ltd., Visium
Balanced Fund, LP, Visium Long Bias Offshore Fund, Ltd.,
Visium Long Bias Fund, LP, and Atlas Master Fund, Ltd.
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10.1
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Second Amendment Agreement, dated June 3, 2008, by and among
Zila, Inc., Visium Balanced Offshore Fund, Ltd., Visium
Balanced Fund, LP, Visium Long Bias Offshore Fund, Ltd.,
Visium Long Bias Fund, LP, and Atlas Master Fund, Ltd.
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99.1
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Press release, dated June 4, 2008, entitled “Zila Takes Steps
to Clear Path for Growth and Financial Stability”
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