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): January 20, 2017 (January 17, 2017)

 

Transgenomic, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware   001-36439   91-1789357

(State or Other Jurisdiction of

Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

12325 Emmet Street, Omaha, NE 68164

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (402) 452-5400

 

N/A

(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:

 

  ¨ 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 a Material Definitive Agreement.

 

As previously disclosed on January 6, 2017, Transgenomic, Inc. (the “Company”) previously entered into a series of Unsecured Convertible Promissory Notes with seven accredited investors (the “Investors”) in the principal amount of $925,000 (the “Notes”). Pursuant to the terms of the Notes, interest accrues at a rate of 6% per year and is due and payable by the Company on December 31, 2016 (the “Maturity Date”). The Company also issued, to its placement agent for the Notes, a convertible promissory note, upon the same terms and conditions as the Notes, in an aggregate principal amount equal to 5% of the proceeds received by the Company, or $46,250 (the “Agent Note”). The Notes are convertible into shares of the Company’s common stock at the option of the Investors and as of December 31, 2016 $400,000 of the aggregate principal amount of the Notes, and accrued interest thereon, has been converted into an aggregate of 281,023 shares of the Company’s common stock. On the Maturity Date, the then outstanding aggregate amount owed on the Notes and Agent Note of $638,016 ($571,250 in principal amount and $66,766 of accrued interest) became due. Pursuant to the terms of the Notes, the Company’s failure to pay any principal or interest within 10 days of the date such payment is due will constitute an event of default (the “Prospective Event of Default”). On January 10, 2017, the Investors executed a waiver of the Prospective Event of Default, pursuant to which, the Investors agreed to waive the Prospective Event of Default on the condition that the Company and the Investors enter into definitive documentation evidencing the terms for an extended Maturity Date of the Notes and the Agent Note on or before January 16, 2017 (the “Waiver Deadline”).

 

As previously disclosed on January 17, 2017, on January 13, 2017, all but one Investor exercised their conversion rights relating to their respective Notes, including the Agent Note, and agreed to convert an aggregate amount of $499,359 of principal and interest due under the Notes and Agent Note into 416,133 shares of the Company’s common stock. The Waiver Deadline has been extended with respect to the remaining Investor who has not exercised conversion rights (the “Non-Converting Investor”) so that the parties can continue to discuss a resolution of the Prospective Event of Default relating to such Non-Converting Investor’s Note with an outstanding amount due of $139,876 as of January 13, 2017 ($125,000 in principal amount and $14,876 of accrued interest).

 

On January 17, 2017, the Non-Converting Investor agreed to extend the Maturity Date of its Note pursuant to an amendment to the Note (the “Amendment”). The Amendment provides that two-thirds of the outstanding principal amount of the Note must be paid upon the earlier to occur of the close of the Company’s merger with Precipio Diagnostics, LLC or June 16, 2017 (such applicable date, the “Deferred Maturity Date”).  The remaining one-third of the principal amount outstanding on the Note must be paid on the six month anniversary of the Deferred Maturity Date (the “Extended Maturity Date”).

 

On the applicable Deferred Maturity Date, all accrued and unpaid interest on the Note as of the Deferred Maturity Date will be converted into shares of the Company’s common stock at a conversion price based on the average closing price of Company common stock on The NASDAQ Stock Market LLC (“NASDAQ”) for the 20 consecutive trading days immediately preceding the date of conversion, but in no event will the conversion price be less than $0.25 per share.  Interest that accrues on the remaining principal amount of the Note from the Deferred Maturity Date will be payable on the Extended Maturity Date, unless the Note is converted in which case such interest will be payable in shares of the Company’s common stock as part of the conversion.

 

In exchange for extending the Maturity Date of the Note, the Company will issue to the Non-Converting Investor on the applicable Deferred Maturity Date a warrant to purchase shares of the Company’s common stock having an aggregate value of $6,250 with an exercise price to be determined as of the date of issuance of the warrant based on the average closing price of Company common stock on NASDAQ for the 20 consecutive trading days immediately preceding the date of issuance of the warrant, subject to the approval of NASDAQ if necessary. The warrant will expire two years from the date of issuance.

 

The foregoing description is qualified by reference to the full text of the January 17, 2017 Note amendment, which is filed as Exhibit 10.1 to this Form 8-K.

 

Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

 

The information in Item 1.01 of this Current Report is incorporated herein by reference.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

The information in Item 1.01 of this Current Report is incorporated herein by reference.

  

 

 

 

Certain statements in this Current Report on Form 8-K constitute “forward-looking statements” of the Company within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. The known risks, uncertainties and other factors affecting these forward-looking statements are described from time to time in the Company’s filings with the SEC, including in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on April 14, 2016, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the SEC on November 14, 2016. Any change in such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. Accordingly, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 with respect to all statements contained in this Current Report on Form 8-K. All information in this Current Report on Form 8-K is as of the date of this report and the Company does not undertake any duty to update this information, including any forward-looking statements, unless required by law.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits:

 

10.1 First Amendment to Unsecured Convertible Promissory Note by and among Transgenomic, Inc. and MAZ Partners LP, dated as of January 17, 2017.

 

 

 

 



 

 

 

  

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.

 

  Transgenomic, Inc.  
       
       
Date: January 20, 2017 By: /s/ Paul Kinnon  
    Paul Kinnon  
    President and Chief Executive Officer  

 

 

 

 

EXHIBIT INDEX

 

Exhibit
Number
Description
   
10.1 First Amendment to Unsecured Convertible Promissory Note by and among Transgenomic, Inc. and MAZ Partners LP, dated as of January 17, 2017.

 

 

 

 

 

Exhibit 10.1

 

FIRST AMENDMENT TO UNSECURED CONVERTIBLE PROMISSORY NOTE

 

THIS FIRST AMENDMENT TO UNSECURED CONVERTIBLE PROMISSORY NOTE (this “ Amendment ”), is dated as of January 17, 2017 (the “ Amendment Effective Date ”), by and between MAZ Partners LP (“ Holder ”), and Transgenomic, Inc. (the “ Company ”).

 

WHEREAS , Holder is the holder of an Unsecured Convertible Promissory Note (the “ Note ”) dated January 20, 2015, in the principal amount of One Hundred Twenty Five Thousand Dollars ($125,000), made by the Company. Holder and the Company have agreed to amend the Note as more particularly described herein. Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the Note.

 

WHEREAS , the Note has an original Maturity Date of December 31, 2016 (the “ Maturity Date ”) and the Company failed to pay the outstanding aggregate amount due on the Note of $139,876.71 (representing $125,000 in aggregate principal amount and $14,876.71 of aggregate accrued interest) on the Maturity Date, which failure would have constituted an Event of Default pursuant to Section 4(v) of the Note if such required amounts were not paid to Holder on January 10, 2017 (the “ Payment Event of Default ”);

 

WHEREAS , on January 10, 2017, Holder agreed to temporarily waive the Payment Event of Default for a period to expire on January 16, 2017 to give the Company and Holder time to discuss an extension of the Maturity Date as well as modify certain other terms of the Note in connection with such Maturity Date extension;

 

WHEREAS , the Company has requested that Holder extend the Maturity Date of the Note and Holder has agreed to do so to the extent and on the terms set forth in this Amendment.

 

NOW, THEREFORE , for and in consideration of the premises and other good and valuable consideration, and the mutual promises made herein, the parties, intending to be legally bound, agree as follows:

 

1.        Amendment .

 

(a)       As of the Amendment Effective Date, Section 2 of the Note is hereby amended and restated in its entirety to read as follows:

 

“2.       PAYMENT

 

“(a)         Principal . If not otherwise repaid pursuant to Section 2(e) below or converted pursuant to Section 3 below, (i) two-thirds of the outstanding principal amount of this Note shall be due and payable on the first to occur of (1) the effective date of the merger contemplated by that certain Agreement and Plan of Merger, dated as of October 12, 2016, by and between the Company, New Haven Labs Inc. and Precipio Diagnostics, LLC or (2) June 16, 2017 (such applicable date, the “ Deferred Maturity Date ”) and (ii) the remaining one-third of the outstanding principal amount of this Note shall be due and payable on the sixth month anniversary of the Deferred Maturity Date (the “ Extended Maturity Date ”).

 

(b)         Interest .

 

(i)        Conversion of Deferred Date Interest . On the applicable Deferred Maturity Date, all interest accrued on this Note and unpaid as of the applicable Deferred Maturity Date (the “ Deferred Date Interest ”) shall be converted into validly issued, fully paid and non-assessable shares of common stock of the Company, par value $0.01 per share (“ Common Stock ”). The number of shares of Common Stock issuable upon conversion of the Deferred Date Interest shall equal the Deferred Date Interest divided by the greater of (a) the average closing price of the Common Stock on The Nasdaq Stock Market LLC (“ NASDAQ” ) (or if NASDAQ is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded) for the 20 consecutive trading days immediately preceding the applicable Deferred Maturity Date or (b) $0.25.

 

(ii)        Accrued Interest From Defered Maturity Date . All accrued and unpaid interest on the remaining outstanding principal amount of this Note accruing from the applicable Deferred Maturity Date shall be due and immediately payable on the first to occur of (1) the Extended Maturity Date or (2) upon the conversion of this Note in accordance with the terms of Section 3 below, in which case such interest shall be payable solely in shares of Common Stock.

 

 

 

 

(c)         Upon Default . Upon the occurrence or existence of any Event of Default (as defined below), Holder may, by written notice to the Company, declare the then-outstanding principal and accrued interest under this Note to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived.

 

(d)        Manner of Payment . All payments shall be made in lawful money of the United States of America at the address for notice to Holder provided in Section 7 below (or such other address as requested in writing by Holder in accordance with Section 7 below). Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal.

 

(e)         Prepayment . Prior to the Extended Maturity Date and upon at least five calendar days advance written notice to Holder, the Company may prepay this Note plus accrued and unpaid interest, in whole or in part, without any premium or penalty; provided that, upon receipt by Holder of notice of prepayment by the Company, and prior to any such prepayment by the Company, Holder may elect to convert any or all of the outstanding and unpaid principal amount of this Note into shares of Common Stock in accordance with Section 3 below; and, provided further, that Holder provides notice to the Company of its election to so convert within three business days of receipt of the Company’s notice of prepayment. Any prepayment shall be credited first to the accrued interest then due and payable and the remainder applied to principal.”

 

(b)       As of the Amendment Effective Date, Section 4 of the Note is hereby amended and restated in its entirety to read as follows:

 

“4.       EVENTS OF DEFAULT . Notwithstanding the foregoing, upon the occurrence or existence of any of the following events, Holder may, by written notice to the Company, declare the then-outstanding principal and accrued interest under this Note to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived (each, an “ Event of Default ”): (i) the Company commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any federal or state bankruptcy laws; (ii) the Company makes a general assignment for the benefit of the Company’s creditors; (iii) the Company files, or a third party files against the Company, a petition in bankruptcy or any petition for relief under the federal or state bankruptcy laws and (in the case of an involuntary petition) such petition is not dismissed or discharged within 90 days of such filing; (iv) the Company applies for or consents to the appointment of a receiver, trustee or similar person to take possession of all or a substantial part of the property or assets of the Company or a receiver, trustee or similar person is appointed and not discharged within 90 days; (v) the Company fails to timely make any payment (whether principal, interest or otherwise) under this Note within ten days of when due, whether upon demand or otherwise; (vi) the Company files a certificate of dissolution under applicable state law, otherwise liquidates, dissolves or winds-up the Company, or commences or has commenced against it any action or proceeding for the dissolution, winding-up or liquidation of the Company, or takes any corporate action in furtherance thereof; or (vii) there is, under any agreement to which the Company is a party with a third party or parties, any default by the Company that occurs after January 16, 2017 and results in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any material Indebtedness. For purposes of subsection (vii) “Indebtedness” shall mean (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit and (b) obligations evidenced by notes, bonds, debentures or similar instruments. The Company shall promptly notify Holder in writing of any Event of Default or the occurrence of any event that is reasonably likely to result in an Event of Default.”

 

2.        Warrant .

 

(a)       To induce the Holder to enter into this Amendment, the Company shall issue to Holder a Warrant (the “ Warrant ”) to purchase shares of the Company’s common stock having an aggregate value of $15,000 (representing 5% of the value of the outstanding principal amount of this Note). The Warrant shall be issued on the applicable Deferred Maturity Date and shall have the terms and conditions set forth in the form of Warrant attached hereto as Exhibit A.

 

 

 

 

(b)       The Company’s obligation to issue the Warrant to Holder on the applicable Deferred Maturity Date is subject to the fulfillment to the satisfaction of the Company, on or prior to the applicable Deferred Maturity Date, of the following conditions:

 

(i)       Holder shall have furnished to the Company on the date hereof the Investor Questionnaire attached hereto as Exhibit B and such representations, warranties and certifications made therein shall be true and correct as of the date of the applicable Deferred Maturity Date as though made on and as of the applicable Deferred Maturity Date; and

 

(ii)       To the extent the Company’s outside counsel deems advisable, the Warrant shall be provided to The NASDAQ Stock Market LLC (“ NASDAQ ”) for prior approval. In such case, the Company shall promptly furnish to NASDAQ the form of Warrant set forth on Exhibit A for its review following the date of this Amendment and shall use its commercially reasonable efforts to obtain NASDAQ’s approval of the Warrant prior to the applicable Deferred Maturity Date.

 

3.        Full Force and Effect; Ratification . Except as expressly modified herein, the Note shall remain in full force and effect pursuant to its terms. The Company hereby ratifies and reaffirms its indebtedness, duties and obligations under the Note, as modified or amended herein.

 

4.        Counterparts . This Amendment may be executed in two or more counterparts which, when taken together, shall constitute but one and the same document.

 

5.        Governing Law . This Amendment shall be enforced, governed and construed in all respects in accordance with the laws of the State of New York, as such laws are applied by the New York courts to agreements entered into and to be performed in New York by and between residents of New York.

 

 

 

 

 

 

IN WITNESS WHEREOF , Holder and the Company have caused this Amendment to be executed as of the Amendment Effective Date.

 

  MAZ Partners LP
         
         
  By: /s/ Walter Schenker  
    Name: Walter Schenker  
    Title: Principal  
         
  TRANSGENOMIC, INC.  
         
         
  By: /s/ Paul Kinnon  
    Name: Paul Kinnon  
    Title: President and Chief Executive Officer