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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): September 4, 2013

 

 

 

ADVAXIS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware 00028489 02-0563870
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

 

 

305 College Road East  
Princeton, New Jersey 08540
(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code: (609) 452-9813

  

 

 

 

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 a Material Definitive Agreement.

 

On September 4, 2013, we entered into a securities purchase agreement with JMJ Financial pursuant to which we issued JMJ Financial, in a private placement, an $800,000 convertible promissory note and 19,231 restricted shares of our common stock as a $50,000 origination fee for the note.

 

The face amount of the note reflects an aggregate principal amount of $800,000 for total consideration of $720,000 (or a 10% original issue discount). However, we have currently only borrowed $500,000 from JMJ Financial under this convertible promissory note, all of which JMJ Financial paid us in cash. JMJ Financial has no obligation to lend us the remaining $220,000 of available principal amount under the note and may never do so. We have no obligation to pay JMJ Financial any amounts on the unfunded portion of the note. We may not prepay any portion of the note without JMJ Financial’s consent.

 

The convertible promissory note matures September 4, 2014 and, in addition to the 10% original issue discount, provides for payment of a one time interest charge of 5% on funded amounts. The convertible promissory note is convertible at any time, in whole or in part, at JMJ Financial’s option into shares of our common stock at the lesser of $2.65 or 70% of the average of the lowest two closing prices in the 20-day pricing period preceding a conversion. However, at no time will JMJ Financial be entitled to convert any portion of the note to the extent that after such conversion, JMJ Financial (together with its affiliates) would beneficially own more than 4.99% of our outstanding shares common stock as of such date. We agreed to reserve at least 2,000,000 shares of our common stock for conversion of the note. The note also provides for penalties and rescission rights if we do not deliver shares of our common stock upon conversion with the require timeframes.

 

The convertible promissory note includes customary event of default provisions, and provides for a default rate of the lesser of 18% or the maximum permitted by law. Upon the occurrence of an event of default, the lender may require us to pay in cash the “Mandatory Default Amount,” which is defined in the note to mean the greater of (i) the outstanding principal amount of the note plus all interest, liquidated damages and other amounts owing under the note, divided by the conversion price on the date payment of such amount is demanded or paid in full, whichever is lower, multipled by the volume-weighted-average price, or VWAP, on the date payment of such amount is demanded or paid in full, whichever has a higher VWAP, or (ii) 150% of the outstanding principal amount of the note plus 100% of all interest, liquidated damages and other amounts owing under the note.

 

If we complete a public offering of $5,000,000 or more, JMJ Financial has the right, at its election, to require us to repay the note, in whole or in part, in amount equal to 125% of the sum of the funded principal amount being repaid plus all accrued and unpaid interest liquidated damages, fees, and other amounts due on such principal amount. The securities agreement provides that we will “true up” JMJ Financial by issuing additional shares of our common stock if JMJ Financial does not receive at least $50,000 of net proceeds from the sale of such shares of common stock when, and if, it disposes of such shares.

 

The foregoing summary of the terms of the securities purchase agreement and convertible promissory note are qualified in their entirety by the full text of the agreement and the note, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.

 

 
 

 

In addition, on September 4, 2013, we amended the terms of our April 26, 2013 convertible promissory note issued to JMJ Financial to remove JMJ Financial’s right to participate in the next public offering of our securities, and lower the threshold for JMJ Financial’s to require us to redeem the note. As amended, JMJ Financial no longer has the right to participate in the next public offering of our securities. In addition, as amended, if we complete a public offering of $5,000,000 or more (lowered from $10,000,000), JMJ Financial has the right, at its election, to require us to repay the note, in whole or in part, in amount equal to 125% of the sum of the funded principal amount being repaid plus all accrued and unpaid interest liquidated damages, fees, and other amounts due on such principal amount.

 

The foregoing summary of the terms of the amendment of the April 26, 2013 convertible promissory note is qualified in its entirety by the full text of the amendment, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated by reference herein.

 

Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The disclosure in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item.

   
Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
10.1   Securities Purchase Agreement dated September 4, 2013.
10.2   Convertible Promissory Note dated September 4, 2013.
10.3  

Amendment No. 1 dated September 4, 2013 to Convertible Promissory Note dated April 26, 2013.

 

 
 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

       
  ADVAXIS, INC.  
       
       
  By: /s/ Mark Rosenblum  
    Name: Mark Rosenblum  
    Title: Chief Financial Officer  

Date: September 10, 2013

      

 

 

 

  

EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

DOCUMENT SPA-08282013

 

This Securities Purchase Agreement (this “Agreement”) dated as of September 4, 2013, is by and between Advaxis, Inc., a Delaware corporation (the “Company”) and JMJ Financial (the “Purchaser”) (referred to collectively herein as the “Parties”).

 

WHEREAS, the Company desires to sell and the Purchaser desires to purchase a $800,000 Promissory Note in the form of Exhibit A attached hereto (the “Note”) and $50,000 worth of shares of common stock of the Company (the “Origination Shares,” and, together with the Note, the “Securities”) as set forth below;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Company and the Purchaser agree as follows:

 

1. Purchase and Sale. Upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser agrees to purchase, the Securities for US $500,000 (the “Purchase Price”). The Company agrees that the Purchase Price is good and valuable consideration for the purchase of the Note and the Origination Shares.

 

2. Delivery of the Purchase Price. The Purchaser shall deliver the Purchaser Price to the Company on the Effective Date by wire transfer of immediately available funds.

 

3. Delivery of the Note. The Company shall deliver to the Purchaser on or before the Effective Date a pdf copy of the Note executed by the Company. The Purchaser shall countersign the Note and send a pdf copy of the fully executed Note to the Company on the Effective Date.

 

4. Delivery of Origination Shares. The Company shall deliver to the Purchaser, within five business days after the Effective Date of this Agreement, such number of duly and validly issued, fully-paid and non-assessable shares of common stock of the Company as equals $50,000 divided by the lowest trade price of the Company’s common stock during the ten trading day period ending on the date of this Agreement (the “Original Origination Shares”). Within five business days after the Purchaser disposes of the last of the Original Origination Shares, the Purchaser shall notify the Company whether it received $50,000 of net proceeds from the sale of the Original Origination Shares and, if the Purchaser did not receive $50,000 of net proceeds and the Purchaser so requests, the Company shall deliver to the Purchaser, within three business days after receipt of such request from the Purchaser, such additional number of duly and validly issued, fully-paid and non-assessable shares of common stock of the Company (“Additional Origination Shares”) as equals (a) $50,000 minus the net proceeds the Purchaser received from sale of the Original Origination Shares, divided by (b) the lowest trade price of the Company’s common stock during the ten trading days prior to the Purchaser’s request for delivery of Additional Origination Shares (It is the Company’s and the Purchaser’s expectation that the issuance of such Additional Origination Shares will tack back to the Effective Date of this Agreement such that the Additional Origination Shares can be issued free trading and free of any restrictive legend).

 

5. TA Letter. The Company shall deliver to the Purchaser a letter addressed to the Company’s transfer agent in the form of Exhibit B attached hereto (the “TA Letter”) executed by the Company and the Company’s transfer agent.

 

6. Effective Date. This Agreement will become effective only upon occurrence of the two following events: execution of this Agreement, the Note, and the TA Letter by both the Company and the Purchaser (and, in the case of the TA Letter, by the Company’s transfer agent), and delivery of $500,000 by the Purchaser to the Company.

 

7. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of this Agreement may be effected by email.

 

1
 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this 4th day of September, 2013.

 

 

  COMPANY:  
       
  ADVAXIS, INC.  
       
       
  By: /s/ DANIEL J. O’CONNOR  
    Daniel J. O’Connor  
    Chief Executive Officer  
       
       
       
  By: /s/ MARK ROSENBLUM  
    Mark Rosenblum  
    Chief Financial Officer  
       
       
       
  PURCHASER:  
       
       
       
     
  JMJ Financial / Its Principal  

 

  

[Securities Purchase Agreement Signature Page]

 

2

 

EXHIBIT 10.2

 

ADXS $800,000 PROMISSORY NOTE  

 

FOR VALUE RECEIVED, Advaxis, Inc., a Delaware corporation (the “Borrower”) with at least 4,800,000 common shares issued and outstanding, promises to pay to JMJ Financial or its Assignees (the “Lender”) the Principal Sum along with the Interest Rate and any other fees according to the terms herein. This Note will become effective only upon execution by both parties and delivery of the first payment of Consideration by the Lender (the “Effective Date”).

 

The Principal Sum is $800,000 (eight hundred thousand) plus accrued and unpaid interest and any other fees. The Consideration is $720,000 (seven hundred twenty thousand) payable by wire (there exists an $80,000 original issue discount (the “OID”)). The Lender shall pay $500,000 of Consideration upon closing of this Note as the Purchase Price under the Securities Purchase Agreement Document SPA-08282013 of even date herewith between the Borrower and the Lender. The Lender may pay up to an additional $220,000 of Consideration to the Borrower in such amounts and at such dates as Lender may choose in its sole discretion. The Principal Sum due to Lender shall be prorated based on the Consideration actually paid by Lender (plus an approximate 10% original issue discount that is prorated based on the Consideration actually paid by the Lender as well as any other interest or fees) such that the Borrower is only required to repay the amount funded and the Borrower is not required to repay any unfunded portion of this Note. The Maturity Date is one year from the Effective Date of each payment (the “Maturity Date”) and is the date upon which the Principal Sum of this Note, as well as any unpaid interest and other fees, shall be due and payable. The Conversion Price is the lesser of $2.65 or 70% of the average of the two lowest closing prices in the 20 trading days previous to the conversion (In the case that conversion shares are not deliverable by DWAC an additional 10% discount will apply; and if the shares are ineligible for deposit into the DTC system and only eligible for Xclearing deposit an additional 5% discount shall apply; in the case of both an additional cumulative 15% discount shall apply). Unless otherwise agreed in writing by both parties, at no time will the Lender convert any amount of the Note into common stock that would result in the Lender owning more than 4.99% of the common stock outstanding.

 

1. Prepayment and Interest. A one-time interest charge of 5% shall be applied to the Principal Sum. The interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by Borrower. The Borrower may not prepay this Note without written approval from the Lender.

 

2. Conversion. The Lender has the right, at any time after the Effective Date, at its election, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Borrower as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. Conversions may be delivered to Borrower by method of Lender’s choice (including but not limited to email, facsimile, mail, overnight courier, or personal delivery), and all conversions shall be cashless and not require further payment from the Lender. If no objection is delivered from Borrower to Lender regarding any variable or calculation of the conversion notice within 24 hours of delivery of the conversion notice, the Borrower shall have been thereafter deemed to have irrevocably confirmed and irrevocably ratified such notice of conversion and waived any objection thereto. The Borrower shall deliver the shares from any conversion to Lender (in any name directed by Lender) within 3 (three) business days of conversion notice delivery.

 

3. Conversion Delays. If Borrower fails to deliver shares in accordance with the timeframe stated in Section 2, Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower (under Lender’s and Borrower’s expectations that any returned conversion amounts will tack back to the original date of the Note). In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $2,000 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made; and such penalty will be added to the Principal Sum of the Note (under Lender’s and Borrower’s expectations that any penalty amounts will tack back to the original date of the Note).

 

 
 

 

4. Reservation of Shares. At all times during which this Note is convertible, the Borrower will reserve from its authorized and unissued Common Stock to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower will at all times reserve at least 2,000,000 shares of Common Stock for conversion.

 

5. This Section 5 intentionally left blank.

 

6. Repayment. If the Borrower completes a public offering of $5,000,000 or more, the Lender shall have the right, at its election, to have the Borrower repay this Note, in whole or in part, in an amount equal to 125% of the sum of the funded principal amount being repaid plus all accrued and unpaid interest, liquidated damages, fees, and other amounts due on such principal amount.

 

7. Default. The following are events of default under this Note: (i) the Borrower shall fail to pay any principal under the Note when due and payable (or payable by conversion) thereunder; or (ii) the Borrower shall fail to pay any interest or any other amount under the Note when due and payable (or payable by conversion) thereunder; or (iii) a receiver, trustee or other similar official shall be appointed over the Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or (iv) the Borrower shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or (v) the Borrower shall make a general assignment for the benefit of creditors; or (vi) the Borrower shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or (vii) an involuntary proceeding shall be commenced or filed against the Borrower; or (viii) the Borrower shall lose its status as “DTC Eligible” or the borrower’s shareholders shall lose the ability to deposit (either electronically or by physical certificates, or otherwise) shares into the DTC System; or (ix) the Borrower shall become delinquent in its filing requirements as a fully-reporting issuer registered with the SEC.

 

8. Remedies. In the event of any default, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages, fees and other amounts owing in respect thereof through the date of acceleration, shall become, at the Lender’s election, immediately due and payable in cash at the Mandatory Default Amount. The Mandatory Default Amount means the greater of (i) the outstanding principal amount of this Note, plus all accrued and unpaid interest, liquidated damages, fees and other amounts hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either demanded or paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either demanded or paid in full, whichever has a higher VWAP, or (ii) 150% of the outstanding principal amount of this Note, plus 100% of accrued and unpaid interest, liquidated damages, fees and other amounts hereon. Commencing five (5) days after the occurrence of any event of default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the Lender need not provide, and the Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and the Lender may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and the Lender shall have all rights as a holder of the note until such time, if any, as the Lender receives full payment pursuant to this Section 8. No such rescission or annulment shall affect any subsequent event of default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Borrower’s failure to timely deliver certificates representing shares of Common Stock upon conversion of the Note as required pursuant to the terms hereof.

 

9. No Shorting. Lender agrees that so long as this Note from Borrower to Lender remains outstanding, Lender will not enter into or effect “short sales” of the Common Stock or hedging transaction which establishes a net short position with respect to the Common Stock of Borrower. Borrower acknowledges and agrees that upon delivery of a conversion notice by Lender, Lender immediately owns the shares of Common Stock described in the conversion notice and any sale of those shares issuable under such conversion notice would not be considered short sales.

 

10. Assignability. The Borrower may not assign this Note. This Note will be binding upon the Borrower and its successors and will inure to the benefit of the Lender and its successors and assigns and may be assigned by the Lender to anyone of its choosing without Borrower’s approval.

 

 
 

 

11. Governing Law. This Note will be governed by, and construed and enforced in accordance with, the laws of the State of Florida, without regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in Miami-Dade County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts.

 

12. Delivery of Process by Lender to Borrower. In the event of any action or proceeding by Lender against Borrower, and only by Lender against Borrower, service of copies of summons and/or complaint and/or any other process which may be served in any such action or proceeding may be made by Lender via U.S. Mail, overnight delivery service such as FedEx or UPS, email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Borrower at its last known attorney as set forth in its most recent SEC filing.

 

13. Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys' fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.

 

14. Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to have any such opinion provided by its counsel. Lender also has the right to have any such opinion provided by Borrower’s counsel.

 

15. Notices. Any notice required or permitted hereunder (including Conversion Notices) must be in writing and either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.

  

 

Borrower:   Lender:  
       
       
/s/ DANIEL J. O’CONNOR    
Daniel J. O’Connor   JMJ Financial  
Advaxis, Inc.   Its Principal  
Chief Executive Officer      
       
Date:               9/4/13   Date:   
       
       
       
/s/ MARK ROSENBLUM      
Mark Rosenblum      
Advaxis, Inc.      
Chief Financial Officer      
       
Date:               9/4/13      

 

 

 

EXHIBIT 10.3

 

AMENDMENT

TO THE $800,000 PROMISSORY NOTE DATED APRIL 26, 2013

 

 

The parties agree that the $800,000 Promissory Note dated April 26, 2013 by and between Advaxis, Inc. and JMJ Financial (the “Note”) is hereby amended as follows:

 

1.Future Financings. Section 6 of the Note shall be amended and replaced with the following:

 

“6.        Repayment. If the Borrower completes a public offering of $5,000,000 or more, the Lender shall have the right, at its election, to have the Borrower repay this Note, in whole or in part, in an amount equal to 125% of the sum of the funded principal amount being repaid plus all accrued and unpaid interest, liquidated damages, fees, and other amounts due on such principal amount.”

 

 

ALL OTHER TERMS AND CONDITIONS OF THE $800,000 PROMISSORY NOTE REMAIN IN FULL FORCE AND EFFECT.

 

Please indicate acceptance and approval of this amendment dated September 4, 2013 by signing below:

 

 

 

/s/ DANIEL J. O’CONNOR    
Daniel J. O’Connor   JMJ Financial  
Advaxis, Inc.   Its Principal  
Chief Executive Officer      
       
       
       
/s/ MARK ROSENBLUM      
Mark Rosenblum      
Advaxis, Inc.      
Chief Financial Officer