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
October 1, 2001
Date of Report (Date of earliest event reported)
Discovery Laboratories, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 000-26422 94-3171943
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
350 Main Street, Suite 307
Doylestown, Pennsylvania 18901
(Address of principal executive offices)
(215) 340-4699
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Item 5. Other Events
On October 2, 2001, Registrant issued a press release to announce
the completion of a private placement on October 1, 2001, in which Registrant
raised approximately $7.7 million in gross proceeds. Pursuant to the offering,
Registrant issued units consisting of an aggregate of approximately 3.5 million
shares of common stock, par value $.001 per share ("Common Stock"), and Class F
Warrants to purchase an aggregate of approximately 700,000 shares of Common
Stock with an initial exercise price of $2.365 per share of Common Stock. In
addition, Registrant will pay Jesup & Lamont Securities Corp., the placement
agent, a fee consisting of $359,940 and warrants to purchase 164,911 shares of
Common Stock with an exercise price of $2.394 per share of Common Stock.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(c) Exhibits:
4.1 Class F Warrant
99.1 Press Release dated October 2, 2001.
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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.
Discovery Laboratories, Inc.
By: /s/ Robert J. Capetola
----------------------------------------
Name: Robert J. Capetola, Ph.D.
Title: President and Chief Executive Officer
Date: October 5, 2001
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Exhibit 4.1
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. NEITHER SUCH WARRANTS NOR SUCH
SECURITIES MAY BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT
SUCH REGISTRATION, EXCEPT UPON DELIVERY TO THE COMPANY OF SUCH EVIDENCE AS MAY
BE SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER
SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
DISCOVERY LABORATORIES, INC.
Class F Warrant for the Purchase
of Shares of Common Stock
FOR VALUE RECEIVED, DISCOVERY LABORATORIES, INC., a Delaware
corporation (the "Company"), hereby certifies that [ ] (the "Holder"), its
designee or its permitted assigns is entitled to purchase from the Company, at
any time or from time to time commencing on __________, 2001 and prior to 5:00
P.M., New York City time, on ________, 2006 up to [ ] ([ ]) fully paid and
non-assessable shares of Common Stock (subject to adjustment), $.001 par value
per share, of the Company for $[ ] per share (subject to adjustment as
provided herein) and an aggregate purchase price of $[ ]. (Hereinafter, (i)
said common stock, $.001 par value per share, of the Company, is referred to as
the "Common Stock," (ii) the shares of the Common Stock purchasable hereunder or
under any other Warrant (as hereinafter defined) are referred to as the "Warrant
Shares," (iii) the aggregate purchase price payable for the Warrant Shares
purchasable hereunder is referred to as the "Aggregate Warrant Price," (iv) the
price payable for each of the Warrant Shares is referred to as the "Per Share
Warrant Price," (v) this Warrant, all similar Warrants issued on the date hereof
and all warrants hereafter issued in exchange or substitution for this Warrant
or such similar Warrants are referred to as the "Warrants," and (vi) the holder
of this Warrant is referred to as the "Holder" and the holder of this Warrant
and all other Warrants and Warrant Shares are referred to as the "Holders" and
Holders of more than 50% of the outstanding Warrants and Warrant Shares are
referred to as the "Majority of the Holders"). The Aggregate Warrant Price is
not subject to adjustment.
By acceptance of this Warrant, the Holder agrees to comply with all
applicable provisions of this Warrant and the Stock and Warrant Purchase
Agreement entered into between Holder and the Company (the "Purchase Agreement")
to the same extent as if it were a party thereto.
1. Exercise of Warrant. (a) This Warrant may be exercised in whole
at any time, or in part from time to time, commencing on _______, 2001 and prior
to 5:00 P.M., Eastern Standard Time, on ________, 2006 by the Holder by the
surrender of this Warrant (with the
subscription form at the end hereof duly executed) at the address set forth in
Section 10(a) hereof, together with proper payment of the Aggregate Warrant
Price, or the proportionate part thereof if this Warrant is exercised in part,
with payment for the Warrant Shares made by certified or official bank check
payable to the order of the Company; or
(b) If this Warrant is exercised in part, this Warrant must be
exercised for a number of whole shares of the Common Stock and the Holder is
entitled to receive a new Warrant covering the Warrant Shares that have not been
exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares.
(c) Upon surrender of this Warrant, the Company will (i) issue a
certificate or certificates in the name of the Holder, or its nominee, for the
largest number of whole shares of the Common Stock to which the Holder shall be
entitled and, if this Warrant is exercised in whole, in lieu of any fractional
share of the Common Stock to which the Holder shall be entitled, pay to the
Holder cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
(the "Board") shall determine), and (ii) deliver the other securities and
properties receivable upon the exercise of this Warrant, or the proportionate
part thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant.
2. Reservation of Warrant Shares; Listing. The Company agrees and
covenants that, prior to the expiration of this Warrant, the Company shall at
all times (i) have authorized and in reserve, and shall keep available, solely
for issuance and delivery upon the exercise of this Warrant, the shares of the
Common Stock and other securities and properties receivable upon the exercise of
this Warrant and shall be validly issued and non-assessable free and clear of
all restrictions on sale or transfer, other than under Federal or state
securities or blue sky laws, and free and clear of all preemptive rights and
rights of first refusal and (ii) use its best efforts to keep the Warrant Shares
authorized for listing on the Nasdaq National Market (the "National Market"),
the Nasdaq SmallCap Market (the "SmallCap Market") or any national securities
exchange on which the Company's Common Stock is traded.
3. Protection Against Dilution.
(a) In the case the Company shall at any time after the date
of this Warrant (i) declare a dividend, or make a distribution, on the
outstanding Common Stock in shares of its Common Stock (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock by
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation), then, in each case, the Per Share Warrant Price, and the number
and kind of shares of Common Stock receivable upon exercise of this Warrant, in
effect as the time of the record date for such dividend or distribution or of
the effective date of such subdivision, combination, or reclassification, shall
be proportionately adjusted so that the Holder after such time shall be entitled
to receive the aggregate number and kind of shares which if such Warrant had
been exercised immediately prior to such time, it would have owned upon such
exercise and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification.
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(b) Intentionally Omitted.
(c) No adjustment in the Per Share Warrant Price shall be
required in the case of the issuance by the Company of Common Stock (i) pursuant
to the exercise of any warrant; or (ii) pursuant to the exercise of any stock
options or warrants currently outstanding or securities issued after the date
hereof, which may be approved by the Board pursuant to any Company benefit plan
or exercised, under any employee benefit plan of the Company to officers,
directors, consultants or employees.
(d) In case of any capital reorganization or reclassification,
or any consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the continuing corporation, or
in case of any sale or conveyance to another entity of the property of the
Company as an entirety or substantially as a entirety, or in the case of any
statutory exchange of securities with another corporation (including any
exchange effected in connection with a merger of a third corporation into the
Company), the Holder of this Warrant shall have the right thereafter to receive
upon the exercise of this Warrant the kind and amount of securities, cash or
other property which the Holder would have owned or have been entitled to
receive immediately after such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance had this Warrant been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with respect to the
rights and interests thereafter of the Holder of this Warrant to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant. The above provisions of this Section 3(d) shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers,
statutory exchanges, sales or conveyances. The Company shall use its reasonable
best efforts to require the issuer of any shares of stock or other securities or
property thereafter deliverable on the exercise of this Warrant to be
responsible for all of the agreements and obligations of the Company hereunder.
Notice of any such reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance and of said provisions so proposed to be
made, shall be mailed to the Holders of the Warrants not less than ten (10) days
prior to such event. A sale of all or substantially all of the assets of the
Company for consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(e) No adjustment in the Per Share Warrant Price shall be
required unless such adjustment would require an increase or decrease of at
least $0.05 per share of Common Stock; provided, however, that any adjustments
which by reason of this Subsection 3(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment; provided,
further, however, that adjustments shall be required and made in accordance with
the provisions of this Section 3 (other than this Subsection 3(e)) not later
than such time as may be required in order to preserve the tax-free nature of a
distribution to the Holder of this Warrant or Common Stock
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issuable upon the exercise hereof. All calculations under this Section 3 shall
be made to the nearest cent or to the nearest 1/100th of a share, as the case
may be. Anything in this Section 3 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Per Share Warrant Price, in
addition to those required by this Section 3, as it in its discretion shall deem
to be advisable in order that any stock dividend, subdivision of shares or
distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.
(f) Whenever the Per Share Warrant Price is adjusted as
provided in this Section 3 and upon any modification of the rights of a Holder
of Warrants in accordance with this Section 3, the Company shall promptly
prepare a brief statement of the facts requiring such adjustment or modification
and the manner of computing the same and cause copies of such certificate to be
mailed to the Holders of the Warrants. The Company may, but shall not be
obligated to unless requested by a Majority of the Holders, obtain, at its
expense, a certificate of a firm of independent public accountants of recognized
standing selected by the Board of Directors (who may be the regular auditors of
the Company) setting forth the Per Share Warrant Price and the number of Warrant
Shares in effect after such adjustment or the effect of such modification, a
brief statement of the facts requiring such adjustment or modification and the
manner of computing the same and cause copies of such certificate to be mailed
to the Holders of record of the Warrants.
(g) If the Board of Directors of the Company shall declare any
dividend or other distribution with respect to the Common Stock other than a
cash distribution out of earned surplus, the Company shall mail notice thereof
to the Holders of the Warrants not less than ten (10) days prior to the record
date fixed for determining stockholders entitled to participate in such dividend
or other distribution.
(h) If, as a result of an adjustment made pursuant to this
Section 3, the Holder of any Warrant thereafter surrendered for exercise shall
become entitled to receive shares of two or more classes of capital stock or
shares of Common Stock and other capital stock of the Company, the Board of
Directors (whose determination shall be conclusive and shall be described in a
written notice to the Holder of any Warrant promptly after such adjustment)
shall, in good faith, determine the allocation of the adjusted Per Share Warrant
Price between or among shares or such classes of capital stock or shares of
Common Stock and other capital stock.
(i) Upon the expiration of any rights, options, warrants or
conversion privileges with respect to the issuance of which an adjustment to the
Per Share Warrant Price had been made, if such shall not have been exercised,
the number of Warrant Shares purchasable upon exercise of this Warrant, to the
extent this Warrant has not then been exercised, shall, upon such expiration, be
readjusted and shall thereafter be such as they would have been had they been
originally adjusted (or had the original adjustment not been required, as the
case may be) on the basis of (A) the fact that Common Stock, if any, actually
issued or sold upon the exercise of such rights, options, warrants or conversion
privileges, and (B) the fact that such shares of Common Stock, if any, were
issued or sold for the consideration actually received by the Company upon such
exercise plus the consideration, if any, actually received by the Company for
the issuance, sale or grant of all
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such rights, options, warrants or conversion privileges whether or not
exercised; provided, however, that no such readjustment shall have the effect of
decreasing the number of Warrant Shares purchasable upon exercise of this
Warrant by an amount in excess of the amount of the adjustment initially made in
respect of the issuance, sale or grant of such rights, options, warrants or
conversion privileges.
(j) In case any event shall occur as to which the other
provisions of this Section 3 are not strictly applicable but as to which the
failure to make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles hereof then, in each such case, the Board of Directors of the Company
shall in good faith determine the adjustment, if any, on a basis consistent with
the essential intent and principles established herein, necessary to preserve
the purchase rights represented by the Warrants. Upon such determination, the
Company will promptly mail a copy thereof to the Holder of this Warrant and
shall make the adjustments described therein.
4. Fully Paid Stock; Taxes. The Warrant Shares delivered upon the
exercise of this Warrant shall at the time of such delivery, be duly authorized,
validly issued and outstanding, fully paid and non-assessable, and not subject
to preemptive rights or rights of first refusal, and the Company will take all
such actions as may be necessary to assure that the par value, if any, per
Warrant Shares is at all times equal to or less than the then Per Share Warrant
Price. The Company shall pay all documentary, stamp or similar taxes and other
similar governmental charges that may be imposed with respect to the issuance or
delivery of any Warrant Shares (other than income taxes); provided, however,
that if the Warrant Shares are to be delivered in a name other than the name of
the Holder, no such delivery shall be made unless the person requesting the same
has paid to the Company the amount of transfer taxes or charges incident
thereto, if any.
5. Registration Under Securities Act of 1933. (a) The Holder shall
have the right to participate in the registration rights granted to Holders of
Registrable Securities (as defined in the Purchase Agreement) with respect to
the Warrant Shares.
(b) Until all of the Warrant Shares have been sold under a
registration statement declared effective by the Securities and Exchange
Commission or pursuant to Rule 144, the Company shall use its best efforts to
file with the Securities and Exchange Commission all current reports and the
information as may be necessary to enable the Holder to effect sales of its
shares in reliance upon Rule 144 promulgated under the Securities Act of 1933
(the "Act").
6. Investment Intent; Limited Transferability. (a) The Holder
represents, by accepting this Warrant, that it understands that this Warrant and
any securities obtainable upon exercise of this Warrant have not been registered
for sale under Federal or state securities or blue sky laws and are being
offered and sold to the Holder pursuant to one or more exemptions from the
registration requirements of such securities laws. In the absence of an
effective registration of such securities or an exemption therefrom, any
certificates for such securities shall bear the legend set forth on the first
page hereof. The Holder understands that it must bear the economic risk of its
investment in this Warrant and any securities obtainable upon exercise of this
Warrant for an
8
indefinite period of time, as this Warrant and such securities have not been
registered under Federal or state securities or blue sky laws and therefore
cannot be sold unless subsequently registered under such laws, unless an
exemption from such registration is available.
(b) The Holder agrees and acknowledges that this Warrant and any
such securities will not be sold or otherwise transferred unless (i) a
registration statement with respect to such transfer is effective under the Act
and any applicable state securities or blue sky laws or (ii) such sale or
transfer is made pursuant to one or more exemptions from the Act.
(c) The Holder agrees and acknowledges that in addition to the
limitations set forth in the Purchase Agreement with respect to Registrable
Securities, this Warrant may not be sold, transferred, assigned or hypothecated
by the Holder except in compliance with the provisions of the Act and the
applicable state securities or blue sky laws, and is so transferable only upon
the books of the Company which it shall cause to be maintained for such purpose.
The Company may treat the registered Holder of this Warrant as it appears on the
Company's books at any time as the Holder for all purposes. The Company shall
permit any Holder of a Warrant or its duly authorized attorney, upon written
request during ordinary business hours, to inspect and copy or make extracts
from its books showing the registered holders of Warrants. All Warrants issued
upon the transfer or assignment of this Warrant will be dated the same date as
this Warrant, and all rights of the holder thereof shall be identical to those
of the Holder.
(d) The Holder represents that it has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the Warrants or the exercise of the Warrants and the finance operations and
business of the Company; and (ii) the opportunity to request such additional
information which the Company possesses or can acquire without unreasonable
effort or expense. Nothing contained in this Section 6(d) shall alter, amend or
change Holder's reliance on the representations, covenants or warranties
contained herein.
(e) The Holder represents that it did not (i) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit, or generally available; or (ii) attend any seminar, meeting or
investor or other conference whose attendees were, to such Holder's knowledge,
invited by any general solicitation or general advertising.
(f) The Holder represents that it is an "accredited investor" within
the meaning of Regulation D promulgated under the Act. Such Holder is acquiring
the Warrants for its own account and not with a present view to, or for sale in
connection with, any distribution thereof in violation of the registration
requirements of the Act, without prejudice, however, to such Holder's right,
subject to the provisions of the Purchase Agreement and this Warrant, at all
times to sell or otherwise dispose of all or any part of the Warrants and
Warrant Shares.
(g) The Holder represents that it, either by reason of such Holder's
business or financial experience or the business or financial experience of its
professional advisors (who are
9
unaffiliated with and who are not compensated by the Company or any affiliate,
finder or selling agent of the Company, directly or indirectly), has such
sophistication, knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of its investment in the Company
and the capacity to protect such Holder's interests in connection with the
transactions contemplated by this Warrant and the Purchase Agreement.
(h) The Holder represents that it has the ability to bear the
economic risks of its investment for an indefinite period of time and could
afford a complete loss of its investment.
(i) The Holder agrees and acknowledges that the representations made
by the Holder in this Section 6 are conditions to the exercise of the Warrant.
7. Optional Redemption. In the event that the reported average
closing sales price of the Common Stock on the SmallCap Market at 4PM for any 20
trading days in any 30 consecutive trading-day-period is at least 300% of the
Per Share Warrant Price, the Company shall be entitled to redeem the Warrants,
or any of them, at a per Warrant redemption price of $0.001 (the "Redemption
Price"), upon 20 business-days' written notice to the Holder. Upon the
expiration of such 30 business-day-period, all Warrants noticed for redemption
that have not theretofore been exercised by the Holder shall, upon payment of
the aggregate Redemption Price therefore, cease to represent the right to
purchase any shares of Common Stock and shall be deemed cancelled and void and
of no further force or effect without any further act or deed on the part of the
Company. The Holder undertakes to return the certificate representing any
redeemed Warrants to the Company upon their redemption and to indemnify the
Company with respect to any losses, claims, damages or liabilities arising from
the Holder's failure to return such certificate. In the event the certificate so
returned represents a number of Warrants in excess of the number being redeemed,
the Company shall as promptly as practicable issue to the Holder a new
certificate for the number of unredeemed Warrants.
8. Loss, etc., of Warrant. Upon receipt of evidence satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant, and
of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like date,
tenor and denomination.
9. Warrant Holder Not Stockholder. This Warrant does not confer upon
the Holder any right to vote on or consent to or receive notice as a stockholder
of the Company, as such, in respect of any matters whatsoever, nor any other
rights or liabilities as a stockholder, prior to the exercise hereof; this
Warrant does, however, require certain notices to Holders as set forth herein.
10. Communication. No notice or other communication under this
Warrant shall be effective unless, but any notice or other communication shall
be effective and shall be deemed to have been given if, the same is in writing
and is mailed by first-class mail, postage prepaid, addressed to:
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(a) the Company at Discovery Laboratories, Inc., 350 South Main
Street, Suite 307, Doylestown, Pennsylvania 18901, Attn: [Evan
Myrianthopoulos, Vice President of Finance] or such other address as
the Company has designated in writing to the Holder, or
(b) the Holder at [ ], Attn: [ ] or other such address
as the Holder has designated in writing to the Company.
11. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
12. Applicable Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
the principles of conflicts of law thereof.
13. Amendment, Waiver, etc. Except as expressly provided herein,
neither this Warrant nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided, however, that any provisions hereof may be amended, waived, discharged
or terminated upon the written consent of the Company and the Majority of the
Holders.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed this [ ] day of [ ], 2001.
DISCOVERY LABORATORIES, INC.
By:
--------------------------------
Name: Robert J. Capetola, Ph.D.
Title: President and
Chief Executive Officer
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(NOT PERMITTED UNTIL VESTING DATE)
SUBSCRIPTION
The undersigned, ___________________, pursuant to the provisions of
the foregoing Warrant, hereby elects to exercise such Warrant by agreeing to
subscribe for and purchase ____________________ shares (the "Warrant Shares") of
Common Stock, par value $.001 per share, of Discovery Laboratories, Inc. (the
"Company"), and hereby makes payment of $___________ by certified or official
bank check in payment of the exercise price therefor.
As a condition to this subscription, the undersigned hereby
represents and warrants to the Company that the representations and warranties
of Section 6 of the Warrant are true and correct as of the date hereof as if
they had been made on such date with respect to the Warrant Shares. The
undersigned further acknowledges that the sale, transfer, assignment or
hypothecation of the Warrant Shares to be issued upon exercise of this Warrant
is subject to the terms and conditions contained in Sections 1 and 6 of this
Warrant.
Dated:_______________ Signature:____________________
Address:______________________
______________________
ASSIGNMENT
FOR VALUE RECEIVED _______________ hereby sells, assigns and
transfers unto ____________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
_____________________, attorney, to transfer said Warrant on the books of
Discovery Laboratories, Inc. (the "Company"). As a condition to this assignment,
the Holder acknowledges that its assignee must deliver a written instrument to
the Company that the representations and warranties of Section 6 of the Warrant
are true and correct as of the date hereof as if they had been made by such
assignee on such date with respect to the Warrants.
Dated:_______________ Signature:____________________
Address:______________________
______________________
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PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _______________ hereby assigns and transfers unto
____________________ the right to purchase _______ shares of the Common Stock,
par value $.001 per share, of Discovery Laboratories, Inc. (the "Company"), as
set forth in the foregoing Warrant, and a proportionate part of said Warrant and
the rights evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer that part of said Warrant on the
books of the Company. As a condition to this assignment, the Holder acknowledges
that its assignee must deliver a written instrument to the Company that the
representations and warranties of Section 6 of the Warrant are true and correct
as of the date hereof as if they had been made by such assignee on such date
with respect to the Warrants.
Dated:_______________ Signature:____________________
Address:______________________
______________________
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Exhibit 99.1
Contacts: Evan Myrianthopoulos
Vice President of Finance
Discovery Laboratories, Inc.
215.340.4699 ext. 113
Brad Miles
BMC Communications Group
212.477.9007 ext. 17
DISCOVERY LABORATORIES COMPLETES $7.7 MILLION
PRIVATE PLACEMENT
Financing allows Discovery to begin Surfaxin(R) - Based
Respiratory Drug Delivery Program
Doylestown, PA, October 2, 2001 -- Discovery Laboratories, Inc. (NASDAQ: DSCO)
announced today the completion of a private placement in which the company
raised approximately $7.7 million in gross proceeds. Pursuant to the offering,
the Company sold units consisting of an aggregate of approximately 3.5 million
shares of common stock, and warrants to purchase approximately 700,000 shares of
common stock. The offering price per unit of $2.175 represented an "at market"
price per common share based on the average of the daily closing bid price of
the common stock for the five trading days immediately preceding the closing
date of the offering plus a nominal price per warrant. The warrants are
exercisable for five years from the date of issuance at an exercise price of
$2.365 per share of common stock.
The lead investor in the offering was SAFECO through its Growth Opportunities
and RST Growth Opportunities Funds for an aggregate investment of $3.75 million.
Other investors included Ursus Capital LP; Ursus Offshore Ltd.; Deutsche Bank
Securities; and Valor Capital Management, LP. Jesup and Lamont Securities
Corporation acted as the placement agent for the financing.
The proceeds from the offering will be used for (i) the funding of development
programs using Surfaxin(R) as a respiratory drug delivery vehicle and as an
aerosol formulation for new therapeutic indications including severe, acute
asthma, and (ii) for other working capital and general corporate purposes.
Discovery has engaged Dr. Ralph Niven, an expert in the respiratory drug
delivery field, to manage the program. Dr. Niven was formerly Vice President of
Development at Advanced Inhalation Research. He also held drug delivery
development positions at Amgen and Valentis. He will be responsible for
establishing and running Discovery's drug delivery operations on the West Coast.
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"We are very pleased with the confidence and strong interest shown by investors
in Discovery in this difficult market environment," commented Robert J.
Capetola, Ph.D., President and Chief Executive Officer of Discovery. "This
offering allows us to proceed with development work on Surfaxin(R) for pulmonary
drug delivery and asthma. We believe that Surfaxin(R) can make an excellent drug
delivery vehicle for pharmaceutical products due to its potentially superior
surface active properties and its ability to penetrate deep in the lung."
Discovery is a Pennsylvania-based bio-pharmaceutical company whose mission is to
develop and commercialize medically novel therapeutics for critical care.
Presently, Discovery has four late stage clinical trials of Surfaxin(R)
underway. Surfaxin(R) is the subject of a landmark Phase 3 pivotal clinical
trial in idiopathic respiratory distress syndrome (IRDS) in pre-mature newborns
as well as a second supportive Phase B trial. Surfaxin(R) is also the subject of
a pivotal Phase 3 clinical trial in meconium aspiration syndrome (MAS) in
full-term newborns. In addition, Discovery is running a Phase 2 clinical trial
in acute respiratory distress syndrome (ARDS) in adults in the United States.
MAS and ARDS are diseases for which there are no approved therapies anywhere in
the world. Discovery is also currently establishing a development strategy for
its second product, SuperVent(TM), to treat certain inflammatory respiratory
diseases such as cystic fibrosis and chronic bronchitis. The Company has been
awarded an Orphan Products Development Grant for MAS and has received Fast Track
designation for Surfaxin(R) from the FDA for MAS and ARDS. The Company has
previously been granted Orphan Drug Status for Surfaxin(R) from the FDA for MAS,
IRDS and ARDS, and has recently received Orphan Product Status from the European
Medicines Evaluation Agency (EMEA) for MAS. Surfaxin(R) was invented and
initially developed at The Scripps Research Institute. More information about
Discovery is available on the company's web site at: www.discoverylabs.com. The
shares of common stock issued in the private placement have not been registered
under the Securities Act of 1933 and may not be reoffered or sold in the United
States absent registration or an applicable exemption for the registration
requirements of such Act. This press release shall not constitute an offer to
sell or a solicitation of an offer to buy any securities of the Company. The
Company plans to file a registration statement covering such shares, as well as
the shares issuable upon exercise of the warrants and the placement warrants,
within 30 days.
To the extent that statements in this press release are not strictly historical,
including statements as to the Company's business strategy, outlook, objectives,
plans intentions, goals, future financial conditions, future collaboration
agreements, the success of the Company's product development, or otherwise as to
future events, such statements are forward-looking, and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
The forward-looking statements contained in this release are subject to certain
risks and uncertainties that could cause actual results to differ materially
from the statements made. Among the factors which could affect the Company's
actual results and could cause results to differ from those contained in the
forward-looking statements contained herein are the risk that financial
conditions may change, the risk that the Company will not be able to raise
additional capital or enter into additional collaboration agreements, risks
relating to the progress of the Company's research and development and the
development of competing therapies and/or technologies by other companies. Those
associated risks and others are further described in the Company's periodic
filings with the Securities and Exchange Commission including the most recent
reports on Form 10-KSB, 8-K and 10-QSB, and amendments thereto.
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