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
Date of Report: January 27, 2005
LIFELINE THERAPEUTICS, INC.
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(Exact name of registrant as specified in its charter)
Colorado 000-30489 84-1097796
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
6400 South Fiddler's Green Circle, Suite 1750, Englewood, CO 80111
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(New address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (720) 488-1711
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):
|_| Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
None
Item 1.02 Termination of a Material Definitive Agreement
None
Item 1.03 Bankruptcy or Receivership
None
Section 2 - Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets
None
Item 2.02 Results of Operations and Financial Condition
None
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant
None
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation Under and Off-Balance Sheet Arrangement
None
Item 2.05 Costs Associated with Exit or Disposal Activities
None
Item 2.06 Material Impairments
None
Section 3 - Securities Trading Markets
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
None
Item 3.02 - Unregistered Sales of Equity Securities
During the period from October 26, 2004 through January 31, 2005, Lifeline
Therapeutics ("Lifeline") has received $1,585,000 in bridge loan financing from
accredited investors. The bridge loans mature the earlier of six months from
issuance or the first closing of the private placement ("Placement"). In
connection with the bridge loan financing, the investors will be issued
three-year warrants to purchase shares of Lifeline restricted common stock equal
to one-half of the principal amount of the bridge loan. The warrants will be
exercisable at a price of $2.00 per share. At the option of investors, the
principal and interest under the bridge loan may be converted into units in a
private placement which units, priced at $20,000, will consist of 10,000 shares
of Lifeline common stock and 10,000 three year warrants exercisable at $2.50 per
share.
The notes and warrants to be issued under bridge loan financing have not
been and will not be registered under the Securities Act of 1933 (the "Act") or
under the securities laws of any state. The notes and warrants will be
"restricted securities" as defined in Rule 144 under the Act. These securities
will be offered pursuant to an exemption from registration and may not be
reoffered or sold in the United States absent registration or an applicable
exemption from the registration requirements
By agreement with the most recent bridge loan investors, Lifeline agreed to
establish and delegate certain authority to an executive committee of the board
of directors. The executive committee currently consists of two directors,
William Driscoll and Leigh Severence. The board delegated to the executive
committee the right to hire and terminate executive officers, to determine the
terms of all employment agreements and any agreements with investor relations or
public relations firms, the hiring of any family member of an executive officer
to a management position, and any changes in the compensation or bonuses payable
to executive officers. The executive committee must also approve any deviations
in the board-approved use of proceeds from the bridge loan and the Placement.
Lifeline also committed to certain investors in the bridge loans to appoint
a board consisting of a majority of independent directors. The additional
directors have not yet been identified. When appointed, Lifeline anticipates
that the board will then create audit, nominating and compensation committees.
Item 3.03 Material Modification to Rights of Security Holders
None
Section 4 - Matters Related to Accountants and Financial Statements
Item 4.01 Changes in Registrant's Certifying Accountants
None
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review
None
Section 5 - Corporate Governance and Management
Item 5.01 Changes in Control of Registrant
None
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers
(a) None
(b) None
(c) None
(d) On January 27, 2005, the Board of Directors appointed H. Leigh Severence as
a member of the Board of Directors. Pursuant to Lifeline's agreement with
certain bridge loan investors, the finder for certain of the bridge loan
financing, has the right to select one outside, non-management director of
Lifeline's board. The finder (a licensed broker-dealer) has initially selected
Mr. Severence. Mr. Severence has been the president of Severence Capital
Management, Greenwood Village, Colorado, since founding the firm in 1983.
Severence Capital Management is a provider of investment management and research
services to partnerships and individual investors. Prior to founding Severence
Capital Management, Mr. Severence was a portfolio management with J.M. Hartwell
& Co., Founders Growth Fund, and Cambiar Investors. Mr. Severence is also a
member of the board of directors of Ikonics, Inc., a public company located in
Duluth, Minnesota, that files reports under the Securities Exchange Act of 1934.
Mr. Severence was also appointed to Lifeline's Executive Committee, which
was created by Board resolution on January 27, 2005. In addition, once Lifeline
creates a Nominating Committee, Mr. Severence also shall serve on that
committee.
Mr. Severence is a bridge loan investor in Lifeline and, except as set
forth herein, Lifeline has had no material relationships with Mr. Severence.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
None.
Item 5.04 Temporary Suspension of Trading Under Registrant's Employee Benefit
Plans
None
Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a Provi-
sion of the Code of Ethics.
None
Section 6 - [Reserved]
Section 7 - Regulation FD
Item 7.01 Regulation FD Disclosure
Following the closing of the bridge loan financing, Lifeline's board has
approved the Placement, which will be a private placement of its securities, on
a best efforts, minimum-maximum basis, to raise from $5,000,000 to $8,000,000.
The Placement will offer units, priced at $20,000, consisting of 10,000 shares
of common stock and 10,000 three-year warrants to purchase common stock at $2.50
per share ("Units"). The proceeds of the Placement will be used for repayment of
debt (if necessary), research and development, working capital, and other
corporate purposes. There is no assurance that the minimum amount under the
Placement will be raised.
As discussed above, investors in the bridge loan financing may convert their
loan principal and interest into Units. Through January 31, 2005 Lifeline has
issued bridge loans with an aggregate principal balance of $2,144,000, including
$559,000 in bridge loans prior to the reorganization and assumed by Lifeline in
conjunction with the reorganization. In connection with the bridge loan
financing, the investors will be issued three-year warrants to purchase shares
of Lifeline restricted common stock equal to one-half of the principal amount of
the bridge loan. The warrants will be exercisable at a price of $2.00 per share.
At the option of investors, the principal and interest under the bridge loan may
be converted into units in the Placement, which units, priced at $20,000, will
consist of 10,000 shares of Lifeline common stock and 10,000 three year warrants
exercisable at $2.50 per share.
Pursuant to agreements made before the completion of the October 26, 2004,
reorganization, Lifeline's predecessor issued convertible notes with an
aggregate principal balance of $240,000 which Lifeline assumed in the
reorganization. At the option of the holder, the principal and interest on the
convertible notes may be converted to shares of common stock at $.50 per share.
There are no warrants associated with these convertible notes.
The Units offered will not be registered under the Securities Act of 1933 (the
"Act") or under the securities laws of any state. The Units and the shares and
warrants included within the Units will be "restricted securities" as defined in
Rule 144 under the Act. These securities will be offered pursuant to an
exemption from registration and may not be reoffered or sold in the United
States absent registration or an applicable exemption from the registration
requirements.
Section 8 - Other Events
Item 8.01 Other Events
None.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
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 thereunto duly authorized.
Date: February 3, 2005
LIFELINE THERAPEUTICS, INC.
By: /s/ William J. Driscoll
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William J. Driscoll, CEO/President