Item 1.01 Entry into a Material Definitive Agreement.
On July 2, 2009, Somaxon Pharmaceuticals, Inc. (the "Company") entered into a
securities purchase agreement (the "Purchase Agreement") with various accredited
investors, pursuant to which the Company agreed to sell and issue in a private
placement an aggregate of 5,106,375 shares of its common stock (the "Shares")
and warrants (the "Warrants") to purchase up to an aggregate of 5,106,375 shares
of common stock (the "Warrant Shares"). The Company received gross proceeds of
approximately $6 million, before offering expenses. The purchase price for each
Share was $1.05, which is equal to the consolidated closing bid price on the
NASDAQ Capital Market on the day of pricing, July 2, 2009. The purchase price
for each Warrant was equal to $0.125 for each Warrant Share, consistent with
NASDAQ Stock Market requirements for an "at the market" offering. The Shares and
the Warrants were issued on July 8, 2009, and the Warrants are exercisable until
July 8, 2016 at an exercise price $1.155 per share payable in cash or by net
exercise. Several of the Company's existing investors participated in the
financing, including investors affiliated with three directors of the Company.
The Shares and the Warrants were issued in a private placement pursuant to
Rule 506 of the Securities Act of 1933, as amended (the "Securities Act"), and
thus have not been registered under the Securities Act. The securities may not
be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act.
In connection with the private placement, pursuant to the Purchase Agreement,
the Company has agreed to register for resale under the Securities Act both the
Shares and the Warrant Shares. Under the terms of the Purchase Agreement, the
Company is required to file a registration statement with the Securities and
Exchange Commission (the "SEC") on or before August 7, 2009. The Company also
agreed to other customary obligations regarding registration, including matters
relating to indemnification, maintenance of the registration statement and
payment of expenses.
The Company may be liable for liquidated damages to holders of the Shares and
the Warrant Shares if the registration statement is not declared effective by
October 6, 2009 (if it does not become subject to review by the SEC) or by
November 5, 2009 (if it becomes subject to review by the SEC). The amount of the
liquidated damages is one percent per month, subject to an aggregate cap of
eight percent per calendar year, of the aggregate purchase price of the Shares
then held by each investor that are registrable securities.
The Company may also be liable for liquidated damages if the Company does not
maintain the effectiveness of the registration statement or the listing of the
common stock on the Nasdaq Capital Market, the Nasdaq Global Market, the New
York Stock Exchange or the American Stock Exchange, in each case for a period of
ten consecutive days or for more than thirty days in any 365-day period. The
amount of the liquidated damages is one percent per applicable ten or thirty day
period, subject to an aggregate cap of eight percent per calendar year, of the
aggregate purchase price of the Shares then held by each investor that are
registrable securities.
The above description, which summarizes the material terms of the Purchase
Agreement and the Warrants, is not complete and is qualified in its entirety by
reference to the full text of the Purchase Agreement, which is attached hereto
as Exhibit 10.1, and the Form of Warrant, which is attached hereto as
Exhibit 4.1, each of which is incorporated herein by reference.
Item 3.02 Unregistered Sale of Equity Securities.
The information set forth in Item 1.01 is hereby incorporated into this
Item 3.02 by reference.
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Item 7.01. Regulation FD Disclosure.
On July 7, 2009, the Company issued a press release relating to certain of
the foregoing matters, which press release is filed herewith as Exhibit 99.1. On
July 8, 2009, the Company issued another press release relating to certain of
the foregoing matters, which press release is filed herewith as Exhibit 99.2.
The information contained in Exhibits 99.1 and 99.2 is being furnished
pursuant to this Item 7.01 and shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, and it shall not
be deemed incorporated by reference in any filing under the Securities Act or
under the Exchange Act, whether made before or after the date hereof, except as
expressly set forth by specific reference in such filing to such exhibit.
Item 8.01. Other Events.
On July 7, 2009, the Company announced that the U.S. Food and Drug
Administration (the "FDA") has accepted the Company's resubmission of its New
Drug Application for Silenor® (doxepin) for the treatment of insomnia that was
filed on June 4, 2009. The FDA indicated that the review cycle for the
resubmission will be six months, resulting in an action date of December 4,
2009.
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