Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of
1934
Check
the
appropriate box:
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Preliminary
Information Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
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Definitive
Information Statement
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PIPEX
PHARMACEUTICALS, INC.
(Name
of
Registrant As Specified In Its Charter)
Payment
of Filing Fee (Check the Appropriate Box):
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No
fee required
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and
0-11
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1.
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Title
of each class of securities to which transaction
applies:
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2.
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Aggregate
number of securities to which transaction applies:
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3.
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11
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4.
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Proposed
maximum aggregate value of transaction
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5.
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Total
fee paid
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¨ Check
box
if any party of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form
or
Schedule and the date of its filing.
PIPEX
PHARMACEUTICALS, INC.
3985
Research Park Drive
Ann
Arbor, MI 48108
NOTICE
OF
STOCKHOLDER ACTION BY WRITTEN CONSENT
TO
ALL
STOCKHOLDERS OF PIPEX PHARMACEUTICALS, INC.:
The
purpose of this letter is to inform you that our stockholders have given our
board the authority to amend our articles of incorporation to effect a reverse
stock split of each share of common stock of Pipex Pharmaceuticals, Inc. (the
“Company”) at a ratio of one share for every three shares of shares of common
stock outstanding.
The
holders of shares representing 50.3% of our voting power have executed a written
consent giving our board the authority to amend our articles of incorporation
to
effect the reverse stock split. The reverse stock split is described in greater
detail in the information statement accompanying this notice. The consents
that
we have received constitute the only stockholder approval required to effect
the
reverse stock split under the Delaware Corporation Law and our articles of
incorporation and bylaws. We would not effect the reverse stock split before
April 25, 2007, and our board may elect to effect the reverse stock split or
may
elect not to take action.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
Because
the written consent of holders of a majority of our voting power satisfies
all
applicable stockholder voting requirements, we are not asking you for a proxy;
please do not send us one.
The
accompanying information statement is for information purposes only. Please
read
it carefully.
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March
26, 2007
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By
Order of the Board of Directors
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/s/
Steve H. Kanzer
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Steve
H. Kanzer
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Chief
Executive Officer and
Chairman
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PIPEX
PHARMACEUTICALS, INC.
3985
Research Park Drive
Ann
Arbor, MI 48108
INFORMATION
STATEMENT
March
26,
2007
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY.
This
information statement is being mailed on or about April 5, 2007, to the
stockholders of record of Pipex Pharmaceuticals, Inc. at the close of business
on March 6, 2007. This information statement is being sent to you for
information purposes only. No action is requested or required on your part.
This
information statement constitutes notice to our stockholders of corporate action
by stockholders without a meeting, as required by Section 228 of the Delaware
Corporation Law.
This
information statement is being furnished to you to inform you that holders
of
shares representing a majority of the voting power of shares of our common
stock, par value $0.001 per share, have adopted, by written consent, resolutions
authorizing us to effect a reverse stock split of each share of common stock
of
Pipex Pharmaceuticals, Inc. at a ratio of one share for every three shares
of
common stock outstanding.
As
of the
close of business on the record date, we had 100,000,000 shares of common stock
authorized, of which 50,979,171 shares were outstanding, and 10,000,000 shares
of preferred stock authorized, of which there were no shares outstanding. Each
outstanding share of common stock is entitled to one vote per
share.
The
approval of our class of common stock is required for us to be able to effect
the proposed reverse stock split. Under Delaware law and our organizational
documents, we are entitled to obtain that approval by written consent. We have
obtained written consents approving the proposed stock split from stockholders
holding approximately 50.3% of the voting power of our common
stock.
We
will
bear the expenses relating to this information statement, including expenses
in
connection with preparing and mailing this information statement and all
documents that now accompany or may in the future supplement it. We contemplate
that brokerage houses, custodians, nominees, and fiduciaries will forward this
information statement to the beneficial owners of our common stock held of
record by these persons and we will reimburse them for their reasonable expenses
incurred in this process.
Only
one
information statement is being delivered to multiple stockholders sharing an
address, unless we have received contrary instructions from one or more of
the
stockholders. We will undertake to deliver promptly upon written or oral request
a separate copy of the information statement to a stockholder at a shared
address to which a single copy of the information statement was delivered.
You
may make a written or oral request by sending a written notification to our
principal executive offices stating your name, your shared address, and the
address to which we should direct the additional copy of the information
statement or by calling our principal executive offices. If multiple
stockholders sharing an address have received one copy of this information
statement and would prefer us to mail each stockholder a separate copy of future
mailings, you may send notification to or call our principal executive offices.
Additionally, if current stockholders with a shared address received multiple
copies of this information statement and would prefer us to mail one copy of
future mailings to stockholders at the shared address, notification of that
request may also be made by mail or telephone call to our principal executive
offices.
TABLE
OF CONTENTS
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VOTING
SECURITIES
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3
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DISSENTERS’
RIGHT OF APPRAISAL
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3
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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3
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STOCKHOLDER
AUTHORIZATION —REVERSE STOCK SPLIT
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5
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BOARD
OF DIRECTORS’ RECOMMENDATION AND STOCKHOLDER APPROVAL
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7
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INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
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FORWARD-LOOKING
STATEMENTS
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7
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WHERE
YOU CAN FIND MORE INFORMATION
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INCORPORATION
OF FINANCIAL INFORMATION
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8
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VOTING
SECURITIES
Pursuant
to Pipex’s Bylaws and the Delaware General Corporation Law, a vote by the
holders of at least a majority of the Company’s outstanding capital stock is
required to effect the action described herein. The Company’s articles of
incorporation does not authorize cumulative voting. As of the record date,
the
Company had 50,979,171 voting shares of common stock issued and outstanding
of
which 25,489,585 shares are required to pass any stockholder resolutions. The
consenting stockholders are the record and beneficial owners of 25,622,324
shares of the Company’s common stock as of March 6, 2007, which represents 50.3%
of the issued and outstanding shares of the Company’s Common Stock. Pursuant to
Section 228 of the Delaware General Corporation Laws, the consenting
stockholders voted in favor of the actions described herein in a unanimous
written consent, dated March 14, 2007. No consideration was paid for the
consent.
DISSENTERS’
RIGHT OF APPRAISAL
Under
Delaware law and our articles of incorporation and bylaws, no stockholder has
any right to dissent to the proposed reverse stock split and is not entitled
to
appraisal of or payment for their shares of our stock.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial
ownership is determined in accordance with SEC rules and generally includes
voting or investment power with respect to securities. The principal address
of
each of the stockholders listed below except as indicated is c/o Pipex
Pharmaceuticals, Inc., 3985 Research Park Drive, Ann Arbor, MI 48108. We believe
that all persons named in the table have sole voting and investment power with
respect to shares beneficially owned by them. All share ownership figures
include shares issuable upon exercise of options or warrants exercisable within
60 days of March 7, 2007, which are deemed outstanding and beneficially owned
by
such person for purposes of computing his or her percentage ownership, but
not
for purposes of computing the percentage ownership of any other
person.
Principal
Stockholders Table
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Name
of Owner
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Shares
Owned
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Percentage
of Shares
Outstanding
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Accredited
Venture Capital, LLC
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23,756,955(1)
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44.42
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%
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Steve
H. Kanzer
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25,172,274(2)
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45.84
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%
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Ridgeback
Capital Investment Ltd.
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5,569,686(3)
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10.54
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%
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Firebird
Capital
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4,459,648(4)
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8.5
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%
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Nicholas
Stergis
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5,105,131(5)
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9.81
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%
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Charles
Bisgaier, Ph.D.
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778,091(6)
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1.60
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%
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Jeffrey
J. Kraws
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457,547(7)
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*
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A.
Joseph Rudick, M.D.
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569,375(8)
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1.11
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%
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Jeffrey
Wolf, Esq.
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75,000(9)
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*
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Daniel
J. Dorman
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2,358,574(10)
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4.55
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%
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James
S. Kuo
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75,000(11)
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*
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All
officers and directors as a group (8 persons)
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34,410,166
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67.5
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%
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*
represents less than 1% of our common stock
(1)
Consists of 21,259,138 shares of common stock and warrants to purchase 2,497,817
shares of common stock.
(2)
Consists
of the 21,259,138 shares of common stock and 2,497,817 warrants registered
in the name of Accredited Venture Capital, LLC, and 195,238 common shares,
1,039,255 warrants to purchase common stock and 180,826 options to purchase
common stock held directly by Mr. Kanzer. Pharmainvestors, LLC is the managing
member of Accredited Venture Capital, LLC. Mr. Kanzer is the managing member
of
Pharmainvestors, LLC. As such, Mr. Kanzer may be considered to have control
over
the voting and disposition of the shares registered in the name of Accredited
Venure Capital, LLC. Mr. Kanzer disclaims beneficial ownership of those shares,
except to the extent of his pecuniary interest. Excludes 542,477 options
which
will vest annually over two years.
(3)
Consists of 3,713,129 of shares of common stock and 1,856,564 warrants to
purchase common stock issued to Ridgeback Capital Investment Ltd. Ridgeback
Capital Investment Ltd.’s address is 430 Park Avenue, 12 th Floor,
New York, New York 10022.
(4)
Consists of 1,486,549 of shares of common stock and 743,275 warrants to purchase
common stock issued to Firebird Global Master Fund, Ltd and 1,486,549 of
shares
of common stock and 743,275 warrants to purchase common stock issued to Firebird
Global Master Fund II, Ltd. Firebird’s address is 152 West 57 th Street,
24 th Floor,
New York, New York 10019.
(5)
Consists of 4,065,876 shares of common stock, and a warrant to
purchase 1,039,255 shares
of
common stock, issued to Mr. Stergis. Mr. Stergis’s business address is 801
Brickell Avenue, 9th Floor, Miami, Florida 33131.
(6)
Consists of 332,126 vested options to purchase common stock, 148,655 shares
of
common stock and 74,327 warrants to purchase common stock issued to Bisgaier
Family LLC, a company of which Dr. Bisgaier is the managing member; 148,655
shares of common stock and 74,327 warrants to purchase common stock issued
to
two trusts for which Dr. Bisgaier has control of. Excludes 1,660,618 unvested
options
to purchase common stock vesting over three years.
(7)
Assumes the exercise of a vested option to purchase 343,160 shares of our
common
stock. This option is exercisable within 60 days of the date of this filing.
Excludes an unvested option to purchase 228,773 shares of common stock which
will vest annually over two years. Mr. Kraws’s business address is 800 Third
Avenue, 17 th Fl.,
New
York, NY 10022.
(8) Consists
of 90,483 shares of common stock, an
option
to purchase 149,180 shares
of
common stock and a warrant to purchase 329,712 shares
of
common stock. Dr. Rudick’s business address is 150 Broadway, Suite 1800, New
York, NY 10128.
(9)
Assumes the exercise of an option to purchase 75,000 shares of our common
stock.
Mr. Wolf’s business address is c/o Seed-One Ventures, LLC, 1205 Lincoln Road,
Suite 216, Miami Beach, Florida 33139.
(10)
Consists of 37,131 shares of common stock registered in the name of red Metal
Capital,LLC, of which Mr. Dorman is the Managing Member, 1,285,251 shares
of
common stock registered in the name of AFA Private Equity Fund I, of which
Mr.
Dorman is a partner, 18,566 warrants to purchase
(11)
Consists of 75,000 options to purchase common stock.
STOCKHOLDER
AUTHORIZATION—
REVERSE
STOCK SPLIT
As
of
March 14, 2007, our board of directors and stockholders holding a majority
of
our voting power voted to authorize our board of directors, at its discretion,
to effect a reverse stock split of our outstanding common stock at a ratio
of
one share for every three shares of common stock outstanding. Should the board
of directors elect to effect it, this reverse stock split would take effect
no
sooner than April 18, 2007, for shareholders of record of our company as of
the
close of business on the date of the reverse stock split.
Purpose
During
early January 2007, we applied to have our common stock listed on the American
Stock Exchange (“AMEX”). Based on dialogue with the listings qualifications
committee at the AMEX and after review of the initial listing requirements,
we
are required to have a minimum bid price for our common stock of at least $2.00
per share. We propose to effect the reverse stock split in the hope that it
will
have the effect of increasing our common stock per share price so as to better
enable us to meet the minimum share price listing requirement of the American
Stock Exchange.
Our
board
of directors believes that the reverse stock split is in the best interest
of
our company and its stockholders. We can give no assurances, however, that
the
reverse stock split would have the desired benefits. Our board of directors
reserves the right to elect not to effect the reverse stock split.
Effect
on Authorized and Outstanding Shares
Immediately
following effectiveness of the reverse stock split, assuming that it is at
a
ratio of one share for every three shares of common stock outstanding, there
would be approximately 16,993,057 shares of our common stock outstanding.
With
the
exception of the number of shares of common stock outstanding, the rights and
preferences of shares of our common stock prior and subsequent to the reverse
stock split would remain the same. We do not anticipate that our financial
condition, the percentage of our stock owned by management, the number of our
stockholders, or any aspect of our current business would materially change
as a
result of the reverse stock split.
The
reverse stock split would affect all of our stockholders uniformly and would
not
affect any stockholder’s percentage ownership interests in our company, except
to the extent that the reverse stock split results in any of our stockholders
owning a fractional share. See “Exchange of Certificate and Elimination of
Fractional Share Interests.” The common stock issued and outstanding after the
reverse stock split would remain fully paid and non-assessable.
Our
common stock is currently registered under Section 12(g) of the Securities
Exchange Act of 1934, and as a result we are subject to periodic reporting
and
other requirements. The proposed reverse stock split would not affect the
registration of our common stock under the Exchange Act.
Effect
on Market Price
The
reverse stock split may cause an increase in the market price of our common
stock, but we cannot predict the actual effect of the reverse stock split on
the
market price. If the market price of our common stock does increase, it may
not
increase in proportion to the reduction in the number of shares outstanding
as a
result of the reverse stock split. Furthermore, the reverse stock split may
not
lead to a sustained increase in the market price of our common stock. The market
price of our common stock may also change as a result of other unrelated
factors, including our operating performance and other factors related to our
business, as well as general market conditions.
5
Accounting
Matters
The
reverse stock split would not affect the par value of our common stock. As
a
result, on the effective date of the reverse stock split the stated par value
capital on our balance sheet attributable to our common stock would be reduced
and the additional paid-in capital account would be credited with the amount
by
which the stated capital is reduced. The per-share net income or loss and net
book value per share of our common stock would be increased because there would
be fewer shares of our common stock outstanding.
We
present earnings per share (“EPS”) in accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 128, “Earnings per Share,” and we will comply
with the requirements of SFAS No. 128 with respect to reverse stock splits.
In pertinent part, SFAS No. 128 says as follows: “If the number of common
shares outstanding decreases as a result of a reverse stock split, the
computations of basic and diluted EPS shall be adjusted retroactively for all
periods presented to reflect that change in capital structure. If changes in
common stock resulting from reverse stock splits occur after the close of the
period but before issuance of the financial statements, the per-share
computations for those and any prior-period financial statements presented
shall
be based on the new number of shares. If any per-share computations reflect
such
changes in the number of shares, that fact shall be disclosed.”
Exchange
of Certificate and Elimination of Fractional Share
Interests
On
the
date of the reverse stock split, each lot of a given number of shares of our
common stock—the number would depend on the ratio selected by our board of
directors—would automatically be changed into one share of common stock. No
additional action on the part of any stockholder would be required in order
to
effect the reverse stock split. Stockholders would not be required to exchange
their certificates representing shares of common stock held prior to the reverse
stock split for new certificates representing shares of common stock; please
do
not send us your stock certificates.
In
the
reverse stock split, no certificate representing any fractional share interest
in our post-split shares would be issued. Instead, all fractional shares would
be rounded up, so that a holder of pre-split shares would receive, in lieu
of
any fraction of a post-split share to which the holder would otherwise be
entitled, an entire post-split share. No cash payment would be made to reduce
or
eliminate any fractional share interest. The result of this “rounding-up”
process would increase slightly the holdings of those stockholders who currently
hold a number of pre-split shares that would otherwise result in a fractional
share after consummating the reverse stock split.
Federal
Income Tax Consequences
The
following description of federal income tax consequences of the reverse stock
split is based on the Internal Revenue Code of 1986, as amended, the applicable
Treasury Regulations promulgated thereunder, judicial authority, and current
administrative rulings and practices as in effect on the date of this
information statement. The discussion is for general information only and does
not cover any consequences that apply for special classes of taxpayers (e.g.,
non-resident aliens, broker-dealers or insurance companies). We urge all
stockholders to consult their own tax advisers to determine the particular
consequences to each of them of the reverse stock split.
We
have
not sought and will not seek an opinion of counsel or a ruling from the Internal
Revenue Service regarding the federal income tax consequences of the reverse
stock split. We believe, however, that because the reverse stock split is not
part of a plan to periodically increase or decrease any stockholder’s
proportionate interest in the assets or earnings and profits of our company,
the
reverse stock split would have the federal income tax effects described
below:
The
exchange of pre-split shares for post-split shares should not result in
recognition of gain or loss for federal income tax purposes. In the aggregate,
a
stockholder’s basis in the post-split shares would equal that stockholder’s
basis in the pre-split shares. A stockholder’s holding period for the post-split
shares would be the same as the holding period for the pre-split shares
exchanged therefor. Provided that a stockholder held the pre-split shares as
a
capital asset, the post-split shares received in exchange therefor would also
be
held as a capital asset.
6
As
stockholders are not receiving cash in lieu of any fractional share interest,
but instead fractional shares are being rounded up to the next whole share,
it
is unlikely that stockholders would be treated as if our company had redeemed
any fractional share interest. It is therefore unlikely that rounding up
fractional shares would result in any gain or loss recognition by
stockholders.
Our
company should not recognize gain or loss as a result of the reverse stock
split.
Potential
Anti-Takeover Effect
Although
the increased proportion of unissued authorized shares to issued shares could,
under certain circumstances, have an anti-takeover effect (for example, by
permitting issuances that would dilute the stock ownership of a person seeking
to effect a change in the composition of our board of directors or contemplating
a tender offer or other transaction for the combination of our company with
another company), we are not proposing the reverse stock split in response
to
any effort of which we are aware to accumulate any of our shares or obtain
control of our company. Our board of directors does not currently contemplate
recommending the adoption of any other proposals that could be construed to
affect the ability of anyone to take over or change the control of our
company.
AND
STOCKHOLDER APPROVAL
As
of
March 14, 2007, our board of directors and stockholders holding a majority
of
our voting power voted to authorize our board of directors to effect the reverse
stock split. In the absence of a meeting, the affirmative consent of holders
of
a majority of the vote represented by our outstanding shares of common stock
was
required to approve the reverse stock split. Because holders of approximately
50.3% of our voting power signed a written consent in favor of the reverse
stock
split, we are authorized to effect the reverse stock split.
The
information contained in this information statement constitutes the only notice
we will be providing stockholders.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except
in
their capacity as shareholders, none of our officers, directors or any of their
respective affiliates has any interest in the reverse stock split.
FORWARD-LOOKING
STATEMENTS
This
information statement may contain certain “forward-looking” statements (as that
term is defined in the Private Securities Litigation Reform Act of 1995 or
by
the U.S. Securities and Exchange Commission in its rules, regulations and
releases) representing our expectations or beliefs regarding our company. These
forward-looking statements include, but are not limited to, statements
concerning our operations, economic performance, financial condition, and
prospects and opportunities. For this purpose, any statements contained herein
that are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the generality of the foregoing, words such as
“may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,”
“might,” or “continue” or the negative or other variations thereof or comparable
terminology are intended to identify forward-looking statements. These
statements, by their nature, involve substantial risks and uncertainties,
certain of which are beyond our control, and actual results may differ
materially depending on a variety of important factors, including uncertainty
inherent in developing, manufacturing and conducting preclinical and clinical
trials of new pharmaceuticals, and obtaining regulatory approvals, and any
other
factors discussed in this and other of our filings with the U.S. Securities
and
Exchange Commission.
7
WHERE
YOU CAN FIND MORE INFORMATION
We
are
subject to the information and reporting requirements of the Securities Exchange
Act of 1934, as amended, and in accordance with the Securities Exchange Act,
we
file periodic reports, documents, and other information with the Securities
and
Exchange Commission relating to our business, financial statements, and other
matters. These reports and other information may be inspected and are available
for copying at the offices of the Securities and Exchange Commission, 100 F
Street, N.E., Washington, DC 20549. Our SEC filings are also available to the
public on the SEC’s website at http://www.sec.gov.
INCORPORATION
OF FINANCIAL INFORMATION
We
“incorporate by reference” into this proxy statement the information in certain
documents we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. We incorporate by
reference into this information statement the following documents we have
previously filed with the SEC: our annual report on Form 10-KSB for the fiscal
year ended December 31, 2005, and our quarterly report on Form 10-Q for the
quarterly period ended September 30, 2006. You may request a copy of these
filings at no cost, by writing or telephoning us at the following
address:
Pipex
Pharmaceuticals, Inc.
3985
Research Park Drive
Ann
Arbor, MI 48108
Telephone
(734) 332-7800
Facsimile:
(734) 332-7878
As
we
obtained the requisite stockholder vote for the reverse stock split described
in
this information statement upon delivery of written consents from the holders
of
a majority of our outstanding shares of common stock, WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
This
information statement is for informational purposes only. Please read this
information statement carefully.
8