sec document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 26, 2006
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CEPTOR CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 333-105793 11-2897392
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
200 International Circle, Suite 5100, Hunt Valley, Maryland 21030
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (410) 527-9998
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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))
ITEM 1.01. ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
On May 26, 2006, we entered into a placement agency agreement (the Placement
Agency Agreement") with Brookshire Securities Corporation (the "Placement
Agent") for a private offering of our one-year 6% convertible notes in an
aggregate principal amount of up to $6,000,000, but in no event less than
$1,500,000 (the "Notes").
We are offering the Notes on a "best efforts" basis only to "accredited
investors," as defined in Rule 501 (a) of Regulation D under Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"). We will offer the
Notes until June 30, 2006, unless we extend the offering period.
The principal of, and accrued interest on, the Notes is convertible into shares
of our common stock, par value $0.0001 (the "Common Stock"), at the option of
the holders of the Notes, at an initial conversion price per share of $0.15,
subject to adjustment for certain issuances or events that will result in
dilution (the "Fixed Conversion Price"). If the Notes have not been fully
converted or repurchased by us for 200% of their principal amount by September
30, 2006, then commencing on October 1, 2006, the conversion price will be the
lesser of the Fixed Conversion Price and the Floating Conversion Price. The
"Floating Conversion Price" is defined as 90% of the lowest closing price (or,
if no closing price is available, the average of closing bid and asked prices)
for the 20 trading days immediately preceding the date on which the notice of
conversion is sent to us. The following summary of the Placement Agency
Agreement is qualified in its entirety by the full text of that agreement which
has been filed as Exhibit 1.1 to this Current Report.
Placement Agent Compensation
We will pay a cash fee equal to 10% of the gross proceeds from the sale of the
Notes for purchasers obtained through the assistance of the Placement Agent, a
portion of which may be reallocated to other registered broker-dealers
participating in the offering, and reimburse the Placement Agent for $15,000 of
its legal expenses. We also will issue to the Placement Agent, or its
designee(s), at each closing, a five-year warrant to purchase such number of
shares of Common Stock at an exercise price of $0.15 per share equal to 10% of
such number of shares of Common Stock into which the Notes sold through the
Placement Agent at such closing are convertible. In addition, we have agreed to
reduce to $0.30 the per share exercise price of warrants to purchase shares of
our Common Stock issued to the Placement Agent previously, as placement agent
for our Preferred Stock. We also have agreed to indemnify the Placement Agent,
its selected dealers, agents and their respective officers, directors, employees
and controlling persons against liabilities incurred under the Securities Act,
as well as claims made against those persons for finder's or broker's fees, and
to reimburse those persons for expenses (including reasonable attorneys' fees)
incurred in investigating and defending against claims asserted against them, in
connection with the offer and sale of the Notes, except in certain
circumstances, and to the extent indemnification is not available, to contribute
to payments made by those persons.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit No. Description
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1.1 Placement Agency Agreement
4.1 Form of Subscription Agreement
4.2 Form of 6% Convertible Note
4.3 Form of Common Stock Purchase Warrant
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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.
CEPTOR CORPORATION
Date: June 1, 2006
By: /s/ William H. Pursley
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William H. Pursley
Chairman and Chief Executive Officer
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