The
information required to be disclosed in this Item 1.01 is incorporated
herein by
reference from Item 3.02.
Item
3.02
Unregistered
Sales of Equity Securities.
On
July
13, 2005, Xenomics, Inc. (the “Company”) closed a private placement of 277,100
shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”)
and 386,651 warrants to certain investors (the “Investors”) for aggregate gross
proceeds of $2,771,000 pursuant to a Securities Purchase Agreement
dated as of
July 13, 2005 (the “SPA”). The warrants are immediately exercisable at $3.25 per
share and are exercisable at any time within five years from the date
of
issuance. Pursuant to the SPA, the Company agreed that until January
9, 2006,
the Investors would have the right to participate in subsequent financings
up to
the lesser of $2,771,000 and the full amount of such subsequent financing.
In
addition, the Company agreed not to offer any of its securities for
sale prior
to the effectiveness date of its registration statement registering
the
securities purchased by the Investors (the “Registration Statement”), and the
Company agreed not to file a registration statement seeking to register
additional shares of common stock for resale until 180 days after the
effectiveness date of the Registration Statement. The Company
paid an
aggregate $277,100 and issued an aggregate 105,432 warrants to purchase
common
stock to certain selling agents. The warrants are immediately exercisable
at
$3.25 per share and will expire five years after issuance.
In
connection with the offer and sale of securities to the Investors and
the
selling agents, the Company relied on the exemption from registration
provided
by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 promulgated thereunder. The Company believes that the
Investors and the selling agents are “accredited investors”, as such term is
defined in Rule 501(a) promulgated under the Securities Act.
The
Investors also are parties to a Registration Rights Agreement, dated
as of July
13, 2005 (the “Registration Rights Agreement”), pursuant to which the Company
has agreed to file, within 30 days of closing, a registration statement
covering
the resale of the shares of common stock underlying the Series A Preferred
Stock
and Warrants issued to the Investors.
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The
Company’s
Articles of Incorporation have been amended to provide for the issuance
of
277,100 shares of Series A Preferred Stock pursuant to the Articles
of Amendment
to the Articles of Incorporation filed with the State of Florida on
July 13,
2005, which provides that:
Dividends.
Holders
shall be entitled to receive and the Company shall pay, cumulative
dividends at
the rate per share (as a percentage of the Stated Value per share of
$10) of 4%
per annum, payable quarterly on March 31, June 30, September 30 and
December 31,
beginning with September 30, 2005. If funds are legally available for
the
payment of dividends, dividends shall be payable, at the sole election
of the
Company, in cash or shares of Common Stock which shall be valued solely
for such
purpose at 90% of the average of the volume weighted average price
for the 20
days immediately prior to the Dividend Payment Date. If funds are not
legally
available for the payment of dividends then, at the election of such
Holder,
such dividends shall accrue to the next Dividend Payment Date or shall
be
accreted to the outstanding Stated Value. If at any time the Company
has the
right to pay dividends in cash or Common Stock, the Company must provide
the
Holder with at least 20 Trading Days’ notice of its election to pay a regularly
scheduled dividend in Common Stock. Dividends on the Series A Preferred
Stock
shall be calculated on the basis of a 360-day year, shall accrue daily
commencing on July 13, 2005, and shall be deemed to accrue from such
date
whether or not earned or declared and whether or not there are profits,
surplus
or other funds of the Company legally available for the payment of
dividends.
Notwithstanding the foregoing, the Company shall only be permitted
to make a
dividend payment in Common Stock provided that such shares of Common
Stock have
been registered under the Securities Act.
Voting
Rights. Except
as
otherwise provided herein and as otherwise required by law, the Series
A
Preferred Stock shall have no voting rights. However, so long as any
shares of
Series A Preferred Stock are outstanding, the Company shall not, without
the
affirmative vote of the Holders of the shares of the Series A Preferred
Stock
then outstanding, (a) alter or change adversely the powers, preferences
or
rights given to the Series A Preferred Stock or alter or amend these
Articles of
Amendment (whether by merger, consolidation or otherwise), (b) authorize
or
create any class of stock ranking as to dividends, redemption or distribution
of
assets upon a Liquidation senior to or otherwise pari passu with the
Series A
Preferred Stock, (c) amend its certificate of incorporation or other
charter
documents (whether by merger, consolidation or otherwise) so as to
affect
adversely any rights of the Holders, (d) increase the authorized number
of
shares of Series A Preferred Stock, or (e) enter into any agreement
with respect
to the foregoing.
Liquidation.
Upon
any liquidation, dissolution or winding-up of the Company, whether
voluntary or
involuntary (a “Liquidation”), the Holders shall be entitled to receive out of
the assets of the Company, whether such assets are capital or surplus,
for each
share of Series A Preferred Stock an amount equal to the Stated Value
per share
plus any accrued and unpaid dividends thereon and any other fees or
liquidated
damages owing thereon before any distribution or payment shall be made
to the
holders of any junior securities, and if the assets of the Company
shall be
insufficient to pay in full such amounts, then the entire assets to
be
distributed to the Holders shall be distributed among the Holders ratably
in
accordance with the respective amounts that would be payable on such
shares if
all amounts payable thereon were paid in full.
Conversion.
Conversions
at Option of Holder.
Each
share of Series A Preferred Stock shall be convertible into that number
of
shares of Common Stock determined by dividing the Stated Value of such
share of
Series A Preferred Stock by $2.15 (the “Conversion Price”), at the option of the
Holder, at any time and from time to time from and after July 13,
2005.
Automatic
Conversion.
Beginning July 13, 2006, provided certain conditions are satisfied,
if the
volume weighted average price of the Common Stock equals $4.30 (subject
to
adjustment for stock splits, reclassifications, combinations and similar
adjustments) per share for the 20 consecutive Trading Days immediately
prior to
the Automatic Conversion Notice Date (as defined below), and an average
of
50,000 shares of Common Stock per day shall have been traded during
such 20
Trading Days, unless the Holder is prohibited from converting the Series
A
Preferred Stock pursuant to certain limitations, the Company shall
have the
right to deliver a notice to the Holder (an “Automatic
Conversion Notice”
and the
date such notice is received by the Holder, the “Automatic
Conversion Notice Date”),
to
convert any portion of the shares of Series A Preferred Stock then
held by the
Holder into shares of Common Stock at the then-effective Conversion
Price.
Subsequent
Equity Sales.
Other
than pursuant to certain issuances, for the twelve (12) month period
beginning
on the effective date of the Registration Statement registering the
resale of
the shares of Common Stock underlying the Series A Preferred Stock
by the
Holder, if the Company at any time while Series A Preferred Stock is
outstanding, shall sell or grant any option to purchase or otherwise
dispose of
or issue any Common Stock or common stock equivalents entitling any
Person to
acquire shares of Common Stock, at an effective price per share less
than the
then Conversion Price (such lower price, the “Base
Conversion Price”
and
such issuances individually and collectively, a “Dilutive
Issuance”),
as
adjusted hereunder (if the holder of the Common Stock or common stock
equivalents so issued shall at any time, whether by operation of
purchase
price adjustments, reset provisions, floating conversion, exercise
or exchange
prices or otherwise, or due to warrants, options or rights per share
which is
issued in connection with such issuance, be entitled to receive shares
of Common
Stock at an effective price per share which is less than the Conversion
Price,
such issuance shall be deemed to have occurred for less than the Conversion
Price), then, the Conversion Price shall be reduced by multiplying
the
Conversion Price by a fraction, the numerator of which is the number
of shares
of Common Stock issued and outstanding immediately prior to the Dilutive
Issuance plus the number of shares of Common Stock and common stock
equivalents
which the aggregate consideration received or receivable by the Company
in
connection with such Dilutive Issuance would purchase at the then effective
Conversion Price, and the denominator of which shall be the sum of
the number of
shares of Common Stock issued and outstanding immediately prior to
the Dilutive
Issuance plus the number of shares of Common Stock and common stock
equivalents
so issued or assumable in connection with the Dilutive Issuance.
A
copy of the Articles of Amendment to the Articles of Incorporation,
as filed
with the Secretary of State of the State of Florida, is attached as
Exhibit 3.1
to this Current Report on Form 8-K, and is incorporated herein by reference.