e424b5
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PROSPECTUS SUPPLEMENT
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Filed pursuant to Rule 424(b)(5) |
(To Prospectus dated May 11, 2004)
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Registration No. 333-114151 |
20,000,000 Shares
Genta Incorporated
Common Stock
We are offering 20,000,000 shares of common stock (including the related preferred share
purchase rights) in this offering.
Our common stock is quoted on the NASDAQ Global Market under the symbol GNTA. On September
18, 2006, the last reported sale price of our common stock was $0.79 per share.
Our business and an investment in our common shares involve significant risks. For a
discussion of these risks and uncertainties, please see the risks described under the caption Risk Factors beginning on page 17 of the Companys Annual Report on Form 10-K
for the year ended December 31, 2005 and on page 28 of its most recent quarterly report on Form 10-Q for the quarter ended June 30, 2006.
Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
We are offering these shares of common stock on a best efforts basis primarily to
institutional investors. We have retained Rodman & Renshaw, LLC to act as placement agent in
connection with this offering.
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Per Share |
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Maximum Offering Amount |
Public offering price |
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0.79 |
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15,800,000 |
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Placement agents fees |
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$ |
0.04 |
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$ |
790,000 |
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Proceeds, before expenses, to us |
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$ |
0.75 |
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$ |
15,010,000 |
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We estimate the total expenses of this offering, excluding the placement agents fee, will be
approximately $110,000.
Rodman & Renshaw, LLC
September 19, 2006
TABLE OF CONTENTS
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Prospectus Supplement |
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S-3 |
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S-4 |
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S-6 |
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S-7 |
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S-10 |
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S-11 |
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S-11 |
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Prospectus |
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is a supplement to the accompanying prospectus that is also a part
of this document. This prospectus supplement and the accompanying prospectus are part of a shelf
registration statement that we filed with the Securities and Exchange Commission. Under the shelf
registration process, we may offer from time to time shares of our common stock up to an aggregate
amount of $141,600,000, of which this offering is a part. In the accompanying prospectus, we
provide you with a general description of the securities we may offer from time to time under our
shelf registration statement. In this prospectus supplement, we provide you with specific
information about the shares of our common stock that we are selling in this offering. This
prospectus supplement and the accompanying prospectus and the documents incorporated by reference
herein and therein include important information about us, our common stock being offered and other
information you should know before investing. This prospectus supplement also adds, updates and
changes information contained in the accompanying prospectus. You should read both this prospectus
supplement and the accompanying prospectus as well as the additional information described under
Where You Can Find More Information in the accompanying prospectus before investing in shares of
our common stock.
You should rely only on the information contained in this prospectus supplement, the
accompanying prospectus and the documents we incorporate by reference into the accompanying
prospectus and this prospectus supplement. We have not authorized anyone to provide you with
information that is different. We are offering to sell and seeking offers to buy shares of our
common stock only in jurisdictions where offers and sales are permitted. The information contained
in this prospectus supplement and the accompanying prospectus is accurate only as of their
respective dates, regardless of the time of delivery of this prospectus supplement and the
accompanying prospectus or of any sale of our common stock.
In this prospectus supplement, unless the context otherwise indicates, the terms we, our,
us, the company and Genta refer to Genta Incorporated.
S-1
INFORMATION INCORPORATED BY REFERENCE
The Securities and Exchange Commission, or the SEC, allows us to incorporate by reference the
information we file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is an important part
of this prospectus supplement and the accompanying prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until all of the securities that we may offer
with this prospectus supplement and the accompanying prospectus are sold:
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2005. |
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Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2006 and
June 30, 2006. |
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Our Definitive Proxy Statement on Schedule 14A filed on April 28, 2006. |
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Our Current Reports on Form 8-K filed on January 3, 2006, January 20, 2006, January
27, 2006, February 2, 2006, February 13, 2006, February 17, 2006, March 1, 2006, March
7, 2006, March 10, 2006, March 13, 2006, March 27, 2006, April 4, 2006, April 7, 2006,
June 5, 2006, June 20, 2006, July 21, 2006, July 26, 2006, July 27, 2006, August 2,
2006, August 21, 2006, September 5, 2006, September 7, 2006, September 15, 2006 and
September 19, 2006. |
You may request a copy of these filings at no cost, by writing to or telephoning Controller, Genta
Incorporated, Two Connell Drive, Berkeley Heights, NJ 07922, (908) 286-9800.
S-2
THE OFFERING
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Common stock offered by us:
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20,000,000 shares |
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Common stock outstanding before the offering:
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133,689,158 shares |
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Common stock to be outstanding after the offering:
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153,689,158 shares
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Use of proceeds:
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We currently
anticipate that the
net proceeds from
the sale of the
common stock will
be used to
prosecute our
pending regulatory
applications for
Genasense®, to
introduce new
products into
clinical
development, and
for general
corporate purposes.
We may also use
such proceeds for
research and
development, for
commercialization
expenses and for
potential licenses
and acquisitions of
complementary
products,
technologies or
businesses. See
Use of Proceeds. |
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NASDAQ
Global Market Symbol:
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GNTA |
The information above is based on 133,689,158 shares of our common stock outstanding as of August
4, 2006. It does not include:
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12,414,597 shares of our common stock issuable upon the exercise of stock options
outstanding as of June 30, 2006 at a weighted average exercise price of $4.67 per share; |
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296,260 shares of our common stock issuable upon the exercise of warrants outstanding as
of June 30, 2006 at a weighted average exercise price of $2.45 per share; |
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82,277 shares of our common stock issuable upon the conversion of Series A Preferred
Stock; and |
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5,196,158 shares of our common stock reserved for future awards under our stock
incentive plan and stock purchase plan as of June 30, 2006. |
S-3
GENTA INCORPORATED
This summary highlights information contained elsewhere in our filings with the Securities and
Exchange Commission. You should read the entire prospectus supplement, the accompanying prospectus
and all of our filings with the Securities and Exchange Commission carefully, including the Risk
Factors section included in the documents incorporated by
reference into this prospectus supplement, before making an investment decision.
We were incorporated in Delaware on February 4, 1988. We are a biopharmaceutical company
engaged in pharmaceutical (drug) research and development, its sole reportable segment. We are
dedicated to the identification, development and commercialization of novel drugs for the treatment
of cancer and related diseases. The Companys research portfolio consists of two major programs:
DNA/RNA Medicines and Small Molecules. The Company has had recurring annual operating losses
since its inception, and we expect to incur substantial operating losses due to continued
requirements for ongoing and planned research and development activities, pre-clinical and clinical
testing, manufacturing activities, regulatory activities and establishment of a sales and marketing
organization. From our inception to June 30, 2006, we have incurred a cumulative net loss of
$382.7 million. Management expects that such losses will continue at least until our lead product,
Genasense®,
receives approval from the U.S. Food and Drug Administration for commercial sale in one or more indications.
Achievement of profitability is dependent on the timing of Genasense® regulatory approvals in the
U.S. and outside the U.S. We have experienced significant quarterly fluctuations in operating
results, and we expect that these fluctuations in revenues, expenses and losses will continue.
S-4
USE OF PROCEEDS
We currently
anticipate that the net proceeds from the sale of our common stock will be used to
prosecute our pending regulatory applications for Genasense®, to introduce new products into
clinical development, and for general corporate purposes. We may also use such proceeds for
research and development, for commercialization expenses and for potential licenses and
acquisitions of complementary products, technologies or businesses.
S-5
DILUTION
The net tangible book value of our common stock on June 30, 2006 was approximately $30.5
million, or approximately $0.23 per share, based on 133,689,158 shares of our common stock
outstanding as of June 30, 2006. Net tangible book value per share represents the amount of our
total tangible assets, less our total tangible liabilities, divided by the total number of shares
of our common stock outstanding. Dilution in net tangible book value per share to new investors
represents the difference between the amount per share paid by purchasers of shares of our common
stock in this offering and the net tangible book value per share of our common stock immediately
afterwards. Without taking into account any other changes in net tangible book value after June 30,
2006, other than the sale of the 20,000,000 shares of common stock offered by us under this
prospectus supplement and the accompanying prospectus at a price of $0.79 per share and after
deducting the estimated placement agents fees and estimated offering expenses payable by us, our
net tangible book value at June 30, 2006 would have been approximately $45.4 million, or
approximately $0.30 per share. This represents an immediate increase in net tangible book value of
approximately $0.07 per share to existing stockholders and an immediate dilution in net tangible
book value of $(0.49) per share to investors in this offering. The following table illustrates this
per share dilution:
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Public offering price per share |
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$ |
0.79 |
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Net tangible book value per share as of June 30, 2006 |
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0.23 |
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Increase per share attributable to this offering |
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$ |
0.07 |
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As adjusted net tangible book value per share after this offering |
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0.30 |
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Dilution per share to investors in this offering |
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(0.49 |
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This table excludes shares of common stock issuable upon exercise of options, warrants
and other rights, and the effect of shares of common stock issued, except as indicated above, since
June 30, 2006.
S-6
DESCRIPTION OF CAPITAL STOCK
General
Our authorized capital stock consists of 250,000,000 shares of common stock and 5,000,000
shares of preferred stock.
The following descriptions are summaries of the material terms of our restated certificate of
incorporation and bylaws. Reference is made to the more detailed provisions of, and the
descriptions are qualified in their entirety by reference to, the restated certificate of
incorporation and bylaws and applicable law. Our restated certificate of incorporation, as amended
and our amended and restated bylaws are incorporated by reference and copies are available upon
request. See Where You Can Find More Information in the accompanying prospectus.
Common Stock
Except as required by law or by the restated certificate of incorporation, holders of common
stock are entitled to one vote for each share held of record on all matters submitted to a vote of
the stockholders. Subject to preferences that may be applicable to any then outstanding preferred
stock, holders of common stock are entitled to receive ratably such dividends as may be declared by
the Board of Directors out of funds legally available therefor. In the event of a liquidation,
dissolution or winding up of Genta, holders of the common stock and the preferred stock are
entitled to share ratably on an as-converted basis in all assets remaining after payment of
liabilities and the liquidation preference of any then outstanding preferred stock. Holders of
common stock have no right to convert their common stock into any other securities. There are no
redemption or sinking fund provisions applicable to the common stock. All outstanding shares of
common stock are fully paid and non-assessable.
In September 2005, the Board of Directors adopted a Stockholder Rights Plan and declared a
dividend of one preferred stock purchase right, or Right, for each outstanding share of our common
stock, payable to holders of record as of the close of business on September 27, 2005. In
addition, Rights shall be issued in respect of all shares of common stock issued after such date,
including the shares issued hereunder, pursuant to the Plan. Generally, the rights become
exercisable upon the earlier of the close of business on the tenth business day following the first
public announcement that any person or group has become a beneficial owner of 15% or more of our
common stock and the close of business on the tenth business day after the date of the commencement
of a tender or exchange offer by any person which would, if consummated, result in such person
becoming a beneficial owner of 15% or more of the our common stock. Each Right shall be exercisable
to purchase, for $25.00, subject to adjustment, one one-hundredth of a newly registered share of
Series G Participating Cumulative Preferred Stock, par value $0.001 per share of the Company. The
terms and conditions of the Rights are set forth in a Rights Agreement dated September 20, 2005
between the Company and Mellon Investor Services, LLC, as Rights Agent.
Preferred Stock
The Board of Directors has the authority, without further action by the stockholders, to issue
up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences and the number of shares constituting any series or
the designation of such series. The issuance of preferred stock could adversely affect the voting
power of holders of common stock and could have the effect of delaying, deferring or preventing a
change in control of Genta without further action by the stockholders and may adversely affect the
voting and other rights of the holders of our common stock.
S-7
Series A Convertible Preferred Stock
General
We are authorized to issue 600,000 shares of Series A Convertible Preferred Stock. At
December 31, 2005 and December 31, 2004, we had 9,700 shares of Series A Convertible Preferred
Stock issued and outstanding.
Each share of Series A Convertible Preferred Stock is immediately convertible, into shares of
our common stock, at a rate determined by dividing the aggregate liquidation preference of the
series A convertible preferred stock by the conversion price. The conversion price is subject to
adjustment for antidilution.
In the event of a liquidation of Genta, the holders of Series A Convertible Preferred Stock
are entitled to a liquidation preference equal to $50.00 per share.
Series G Preferred Stock
We have authorized 5.0 million shares of preferred stock of which 2.0 million shares have been
designated Series G Participating Cumulative Preferred.
Delaware Anti-Takeover Law
Under Section 203 of the Delaware General Corporation Law certain business combinations
between a Delaware corporation, whose stock generally is publicly traded or held of record by more
than 2,000 stockholders, and an interested stockholder are prohibited for a three-year period
following the date that such stockholder became an interested stockholder, unless:
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the corporation has elected in its certificate of incorporation not to be
governed by Section 203 (we have not made such an election); |
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either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder was approved by the board of
directors of the corporation before the other party to the business combination
became an interested stockholder; |
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upon consummation of the transaction that made it an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction excluding voting stock owned by
directors who are also officers or held in employee benefit plans in which the
employees do not have the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer; |
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on or subsequent to such date the business combination is approved by the board
of directors and authorized at an annual or special meeting of stockholders by the
affirmative vote of at least 66-2/3% of the outstanding voting stock which is not
owned by the interested stockholder. |
The three-year prohibition also does not apply to certain business combinations proposed by an
interested stockholder following the announcement or notification of certain extraordinary
transactions involving the corporation and a person who had not been an interested stockholder
during the previous three years or who became an interested stockholder with the approval of a
majority of the corporations directors. A business combination is defined to include mergers,
asset sales and other transactions resulting in financial benefit to a stockholder. In general, an
interested stockholder is a person who, together with affiliates and associates, owns (or within
three years, did own) 15% or more of a corporations voting stock.
The statute could prohibit or delay mergers or other takeover or change in control attempts
with respect to us and, accordingly, may discourage attempts to acquire us even though such a
transaction may offer our stockholders the opportunity to sell their stock at a price above the
prevailing market price.
S-8
Advance Notice Requirements for Stockholder Proposals
Our amended and restated bylaws provide that stockholders seeking to bring business before an
annual meeting of stockholders, or to nominate candidates for election as directors at an annual
meeting of stockholders, must provide timely notice thereof in writing. To be timely, a
stockholders notice must be delivered to the secretary at our principal executive offices not less
than 50 calendar days nor more than 75 calendar days prior to the meeting; provided, that if less
than 65 days notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later than the close of
business on the 15th day following the day on which notice of the date of the annual meeting was
mailed or such public disclosure was made. Our amended and restated bylaws also specify
requirements as to the form and content of a stockholders notice. These provisions may discourage
stockholders from bringing matters before an annual meeting of stockholders or from making
nominations for directors at an annual meeting of stockholders.
Limits on Special Meetings
Our restated certificate of incorporation, as amended, and our amended and restated bylaws
provide that special meetings of our stockholders may be called only by our Chairman of the Board
or our Chief Executive Officer or by a resolution adopted by the affirmative vote of a majority of
the Board of Directors.
Super-majority Requirements
We have specified provisions in our restated certificate of incorporation, as amended and our
amended and restated bylaws that require a super-majority vote of our stockholders to amend, revise
or appeal provisions that may have an anti-takeover effect.
Listing
Our common stock is listed on the NASDAQ Global Market under the symbol GNTA.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the common stock is Mellon Investor Services, LLC.
S-9
PLAN OF DISTRIBUTION
We are offering our common stock through a placement agent. Subject to the terms and
conditions contained in the placement agent agreement dated September 19, 2006, Rodman & Renshaw,
LLC has agreed to act as the placement agent for the sale of up to 20,000,000 shares of common
stock. The placement agent is not purchasing or selling any shares by this prospectus supplement or
accompanying base prospectus, nor is it required to arrange for the purchase or sale of any
specific number or dollar amount of shares, but have agreed to use best efforts to arrange for the
sale of all 20,000,000 shares.
The placement agent agreement provides that the obligations of the placement agent and the
investors are subject to certain conditions precedent, including the absence of any material
adverse change in our business and the receipt of certain opinions, letters and certificates from
our counsel and us.
This prospectus supplement and the accompanying prospectus will be distributed to all investors who agree to
purchase the common stock, informing investors of the closing date as to such shares. We currently
anticipate that closing of the sale of 20,000,000 shares of common stock will take place on or
about September 22, 2006. Investors will also be informed of the date and manner in which they
must transmit the purchase price for their shares.
On the scheduled closing date, the following will occur:
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we will receive funds in the amount of the aggregate purchase price; and |
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Rodman & Renshaw, LLC will receive the placement agents fee in accordance with
the terms of the placement agent agreement. |
We will pay the placement agent a commission equal to 5.0% of the gross proceeds of the sale
of common stock in the offering. We may also reimburse the placement agent for certain legal
expenses incurred by it. The estimated offering expenses payable by us, in addition to the
placement agents fee of $790,000, are approximately $110,000, which includes legal, accounting and
printing costs and various other fees associated with registering and listing the common stock.
After deducting certain fees due to the placement agent and our estimated offering expenses, we
expect the net proceeds from this offering to be up to approximately $14,900,000.
We have agreed to indemnify the placement agent against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and liabilities arising from breaches of
representations and warranties contained in the placement agent agreement. We have also agreed to
contribute to payments the placement agent may be required to make in respect of such liabilities.
The placement agent agreement is included as an exhibit to our Current Report on Form 8-K that
will be filed with the Securities and Exchange Commission in connection with the consummation of
this offering.
S-10
LEGAL MATTERS
Certain legal matters in connection with the legality of the offering of the common stock
hereby will be passed upon for us by Morgan, Lewis & Bockius LLP, Princeton, New Jersey. The
placement agent is being represented in connection with this offering by Feldman, Weinstein & Smith
LLP, New York, New York.
EXPERTS
The consolidated financial statements incorporated in this prospectus by reference from the
Companys Annual Report on Form 10-K for the year ended December 31, 2005, and managements report
on the effectiveness of internal control over financial reporting incorporated in this prospectus
by reference from the Companys Annual Report on Form 10-K for the year ended December 31, 2005,
have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their reports, which are incorporated herein by reference (which reports (1) express an
unqualified opinion on the consolidated financial statements, (2) express an unqualified opinion on
managements assessment regarding the effectiveness of internal control over financial reporting,
and (3) express an unqualified opinion on the effectiveness of internal control over financial reporting),
and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts
in accounting and auditing.
S-11
PROSPECTUS
15,000,000 Shares
GENTA INCORPORATED
COMMON STOCK
We may offer from time to time common stock. Specific terms of these securities will be
provided in supplements to this prospectus. You should read this prospectus and any supplement
carefully before you invest.
Our common stock is listed on the Nasdaq National Market under the symbol GNTA.
Investing in our common stock involves certain risks, which we describe in our periodic
reports and which we will describe in supplements to this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved these securities, or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is May 11, 2004
You should rely only on the information contained in or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with different information. We are not
making an offer of these securities in any state where the offer is not permitted. You should not
assume that the information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus. The terms Genta,
we, us, and our refer to Genta Incorporated.
TABLE OF CONTENTS
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The Company |
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Where You Can Find More Information |
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Special Note on Forward-Looking Statements |
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Use of Proceeds |
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Description of Capital Stock |
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Plan of Distribution |
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Validity of Common Stock |
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Experts |
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THE COMPANY
Genta is a biopharmaceutical company dedicated to the identification, development and
commercialization of novel drugs for cancer and related diseases. Our research portfolio consists
of two major areas of focus:
DNA/RNA Medicines, which are drugs based on chemical modifications of either
deoxyribonucleic acid, or DNA, or ribonucleic acid, or RNA; and
Small Molecules.
We began marketing our first commercial product, Ganite, which is part of our Small Molecule
program, in October 2003. Ganite has been approved by the U.S. Food and Drug Administration, or
FDA, for treatment of
cancer-related hypercalcemia that is resistant to hydration. The drug is being marketed and
sold exclusively by
Genta in the United States by our dedicated sales force.
Our lead investigational antisense drug is called Genasense (oblimersen sodium), a molecule
that is designed to block the production of a protein known as Bcl-2. Current science suggests that
Bcl-2 is a fundamental (although
not sole) cause of the inherent resistance of cancer cells to current anticancer treatments,
such as chemotherapy, radiation, or monoclonal antibodies. While Genasense has displayed some
anticancer activity when used by itself,
we are developing the drug solely as a means of amplifying the effects of other anticancer
therapy by pre-treating patients with Genasense.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You may
read and copy any document that we file at the Public Reference Room of the SEC at 450 Fifth
Street, NW, Washington, D.C. 20549. You may obtain information on the operation of the Public
Reference Room by calling
the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site at
http://www.sec.gov, from which interested persons can electronically access the registration
statement including the exhibits and schedules thereto.
The SEC allows us to incorporate by reference the information we file with them, which means
that we can disclose important information to you by referring you to those documents. The
information incorporated by
reference is an important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by reference the
documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until
all of the securities offered by this prospectus have been sold:
Annual Report on Form 10-K for the year ended December 31, 2003.
You may request a copy of these filings at no cost, by writing or telephoning Controller,
Genta Incorporated,
Two Connell Drive, Berkeley Heights, NJ 07922, (908) 286-9800.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these forward-looking
statements on our current expectations and projections about future events. These forward-looking
statements are subject to risks, uncertainties, and assumptions about our business, including,
among other things:
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FDA approval or failure to approve Genasense; |
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our ability to develop, manufacture and sell our products or enter into collaborative
arrangements with third parties to manufacture or sell our products; |
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the safety and efficacy of our products; |
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the commencement and completion of pre-clinical and clinical trials; |
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our ability to obtain necessary regulatory approvals; |
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our contractual collaborative arrangements; |
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the adequacy of our capital resources; |
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the ability to obtain sufficient financing to maintain our planned operations; |
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the possibility and effect of patent infringement claims; and |
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the impact of competitive products and market conditions. |
We have no obligation to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or risks. New information, future events or risks may
cause the forward-looking events
we discuss in this prospectus not to occur.
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USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, the net proceeds from the sale of the
common stock will
be used for research and development, for commercialization expenses, for potential licenses
and acquisitions of complementary products, technologies or businesses and for general corporate
purposes.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 120,000,000 shares of common stock, par value $.001
per share, and 5,000,000 shares of preferred stock, par value $.001 per share.
The following descriptions are summaries of the material terms of our restated certificate of
incorporation and bylaws. Reference is made to the more detailed provisions of, and the
descriptions are qualified in their entirety by reference to, the restated certificate of
incorporation and bylaws and applicable law. Our restated certificate of incorporation and bylaws
are incorporated by reference and copies are available upon request. See Where You Can Find More
Information.
General
The authorized capital stock of Genta consists of 120,000,000 shares of common stock and
5,000,000 shares of preferred stock.
Common Stock
Except as required by law or by the restated certificate of incorporation, holders of common
stock are entitled to one vote for each share held of record on all matters submitted to a vote of
the stockholders. Subject to preferences
that may be applicable to any then outstanding preferred stock, holders of common stock are
entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds legally
available therefor. In the
event of a liquidation, dissolution or winding up of Genta, holders of the common stock and
the preferred stock are entitled to share ratably on an as-converted basis in all assets remaining
after payment of liabilities and the
liquidation preference of any then outstanding preferred stock. Holders of common stock have
no right to convert
their common stock into any other securities. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common stock are fully paid
and non-assessable.
Preferred Stock
The Board of Directors has the authority, without further action by the stockholders, to issue
up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences and the
number of shares constituting any series or the designation of such series. The issuance of
preferred stock could adversely affect the voting power of holders of common stock and could have
the effect of delaying, deferring or preventing a change in control of Genta without further action
by the stockholders and may adversely affect the
voting and other rights of the holders of our common stock.
Series A Convertible Preferred Stock
General
We are authorized to issue 600,000 shares of series A convertible preferred stock.
Each share of series A convertible preferred stock is immediately convertible, into shares of
our common stock,
at a rate determined by dividing the aggregate liquidation preference of the series A
convertible preferred stock by
the conversion price. The conversion price is subject to adjustment for antidilution.
In the event of a liquidation of Genta, the holders of series A convertible preferred stock
are entitled to a liquidation preference equal to $50 per share.
Delaware Anti-Takeover Law
Under Section 203 of the Delaware General Corporation Law certain business combinations
between a Delaware corporation, whose stock generally is publicly traded or held of record by more
than 2,000 stockholders,
and an interested stockholder are prohibited for a three-year period following the date that
such stockholder
became an interested stockholder, unless:
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the corporation has elected in its certificate of incorporation not to be governed by
Section 203 (we have
not made such an election); |
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the business combination was approved by the board of directors of the corporation before the other party
to the business combination became an interested stockholder; |
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upon consummation of the transaction that made it an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the commencement of the
transaction (excluding voting stock owned by directors who are also officers or held in employee benefit
plans in which the employees do not have the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer; or |
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on or subsequent to such date the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders by the affirmative vote of at
least 66% of the outstanding voting stock which is not owned by the interested stockholder.
The three-year prohibition also does not apply to certain business combinations proposed by
an interested stockholder following the announcement or notification of certain
extraordinary transactions involving the corporation and a person
who had not been an interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of the corporations directors. A
business combination is
defined to include mergers, asset sales and other transactions resulting in financial
benefit to a stockholder.
In general, an interested stockholder is a person who, together with affiliates and
associates, owns (or
within three years, did own) 15% or more of a corporations voting stock. The statute could
prohibit or
delay mergers or other takeover or change in control attempts with respect to Genta and,
accordingly, may discourage attempts to acquire Genta even though such a transaction may
offer Gentas stockholders the opportunity to sell their stock at a price above the
prevailing market price. |
Advance Notice Requirements for Stockholder Proposals
The bylaws provide that stockholders seeking to bring business before an annual meeting of
stockholders, or to nominate candidates for election as directors at an annual meeting of
stockholders, must provide timely notice
thereof in writing. To be timely, a stockholders notice must be delivered to the secretary at
our principal executive offices not less than 50 calendar days nor more than 75 calendar days prior
to the meeting; provided, that if less than
65 days notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later than the close of
business on the 15th day following the day on which notice of the date of the annual meeting was
mailed or such public disclosure was made. The bylaws also
specify requirements as to the form and content of a stockholders notice. These provisions
may discourage stockholders from bringing matters before an annual meeting of stockholders or from
making nominations for
directors at an annual meeting of stockholders.
Limits on Special Meetings
Gentas restated certificate of incorporation and bylaws provide that special meetings of the
stockholders of
Genta may be called only by the Chairman of the Board or the Chief Executive Officer of Genta
or by a resolution adopted by the affirmative vote of a majority of the Board of Directors.
Super-majority Requirements
We have specified provisions in our restated certificate of incorporation and bylaws that
require a super-
majority vote of the stockholders to amend, revise or appeal provisions that may have an
anti-takeover effect.
Listing
Our common stock is listed on the Nasdaq National Market under the symbol GNTA.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the common stock is Mellon Investor Services.
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PLAN OF DISTRIBUTION
We may sell the common stock in any of three ways (or in any combination):
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through underwriters or dealers; |
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directly to a limited number of purchasers or to a single purchaser; or |
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through agents. |
The prospectus supplement will set forth the terms of the offering of such common stock,
including
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the name or names of any underwriters, dealers or agents and the
amounts of common stock underwritten or purchased by each of them, |
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the initial public offering price of the common stock and the proceeds
to us and any discounts, commissions or concessions allowed or
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any securities exchanges on which the common stock may be listed. |
Any initial public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may
be changed from time to time.
If underwriters are used in the sale of any common stock, the common stock will be acquired by
the underwriters for their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of sale. The
common stock may be either offered to the public through underwriting syndicates represented
by managing underwriters, or directly by underwriters. Generally, the underwriters obligations to
purchase the common stock
will be subject to certain conditions precedent. The underwriters will be obligated to
purchase all of the common
stock if they purchase any of the common stock. Such underwriters may include, among others,
Goldman, Sachs & Co.
We may sell the common stock through agents from time to time. The prospectus supplement will
name any
agent involved in the offer or sale of the common stock and any commissions we pay to them.
Generally, any agent
will be acting on a best efforts basis for the period of its appointment.
We may authorize underwriters, dealers or agents to solicit offers by certain purchasers to
purchase the common stock from us at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future. The contracts
will be subject only to those conditions set forth in the prospectus supplement, and the prospectus
supplement will set forth any
commissions we pay for solicitation of these contracts.
Agents and underwriters may be entitled to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, or to contribution with respect to
payments which the agents or underwriters may
be required to make in respect thereof. Agents and underwriters may be customers of, engage in
transactions with,
or perform services for us in the ordinary course of business.
We may enter into derivative transactions with third parties, or sell common stock not covered
by this
prospectus to third parties in privately negotiated transactions. If the applicable prospectus
supplement indicates, in connection with those derivatives, the third parties may sell common stock
covered by this prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third party may use common stock pledged by us or borrowed from us or
others to settle those sales or to close out any related open borrowings of
stock, and may use common stock received from us in settlement of those derivatives to close
out any related open borrowings of stock. The third party in such sale transactions will be an
underwriter and, if not identified in this prospectus, will be identified in the applicable
prospectus supplement (or a post-effective amendment).
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VALIDITY OF COMMON STOCK
The validity of the common stock in respect of which this prospectus is being delivered will
be passed on for us
by Davis Polk & Wardwell.
EXPERTS
The consolidated financial statements incorporated in this prospectus by reference from the
Companys Annual Report on Form 10-K for the year ended December 31, 2003 have been audited by
Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by reference,
and have been so
incorporated in reliance upon the report of such firm given upon their authority as experts in
accounting and
auditing.
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20,000,000 Shares
Genta Incorporated
Common Stock
PROSPECTUS
SUPPLEMENT
Rodman & Renshaw, LLC
September 19, 2006