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): November 29, 2001
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DOR BioPharma, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-14778 41-1505029
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(Commission File Number) (I.R.S. Employer Identification No.)
28101 Ballard Drive, Suite F, Lake Forest, Illinois 60045
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Address of Principal Executive Offices) (Zip Code)
(847) 573-8990
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(Registrant's Telephone Number, Including Area Code)
Endorex Corporation
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(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets
On November 29, 2001, DOR BioPharma, formerly know as "Endorex
Corporation" ("DOR") acquired all of the outstanding capital stock of
Corporate Technology Development, Inc., a Delaware corporation
("CTD"), pursuant to an Agreement and Plan of Merger and
Reorganization dated as of July 31, 2001, as amended on November 29,
2001 (as amended, the "Merger Agreement"), by and among Endorex, CTD
and Roadrunner Acquisition, Inc., a wholly owned subsidiary of DOR
("Merger Sub"). Pursuant to the terms of the Merger Agreement, Merger
Sub was merged with and into CTD (the "Merger"), with CTD becoming a
wholly owned subsidiary of DOR. CTD is a development stage
pharmaceutical company which uses its tangible and intangible assets,
consisting primarily of intellectual property, licenses, and patents,
to develop, through its subsidiaries, new oral and mucosal
formulations and new therapeutic indications of drugs that previously
have been approved by the U.S. Food and Drug Administration for
marketing in the United States. Some of the assets of CTD consisted of
cash, a lease of real property and personal property used in CTD's
business. DOR intends to continue to use those assets in CTD's
business.
In consideration for the purchase of the outstanding securities of
CTD, DOR will issue (i) approximately 9,050,544 shares of its common
stock to holders of capital stock of CTD, (ii) options to purchase
approximately 359,042 shares of its common stock at an exercise price
of $0.74 per share to holders of options to acquire CTD common stock,
(iii) warrants to purchase approximately 207,070 shares of its common
stock at an exercise price of $8.10 per share to holders of warrants
to acquire CTD preferred stock, and (iv) approximately 383,334 shares
of its common stock as bonus payments to CTD employees. The
consideration paid was determined by arms-length negotiations.
Steve H. Kanzer is a director of DOR and was the President and Chief
Executive Officer and a director of CTD. As of October 15, 2001, Mr.
Kanzer beneficially owned 1.92% of Endorex's common stock and 21.0% of
CTD's common stock. Mr. Kanzer received a bonus payment of 250,000
shares of DOR common stock as an employee of CTD upon the closing of
the Merger. Mr. Kanzer serves on the board of directors of DOR as a
designee of Aries Select, Ltd. ("Aries") and Aries Select I LLC
("Aries I"), each of which is a principal stockholder of DOR. Aries
Select II LLC is also a stockholder of DOR ("Aries II").
Paramount Capital Asset Management, Inc. ("PCAM") is the investment
manager of Aries and the managing member of each of Aries I and Aries
II. Lindsay A. Rosenwald, M.D. is the Chairman and sole stockholder of
PCAM and Paramount Capital, Inc. ("Paramount"). As of October 15,
2001, Dr. Rosenwald beneficially owned 34.0% of Endorex's common
stock. Paramount has acted as a placement agent in connection with
certain private placements of DOR's common stock, as a finder in
connection with a private placement of DOR's common stock and
warrants, and as a financial advisor to DOR. In addition, certain
officers,
employees and associates of Paramount and its affiliates own
securities of DOR and a subsidiary of DOR.
Dr. Rosenwald is also the Chairman and sole stockholder of Huntington
Street Company ("Huntington") and June Street Company ("June Street"),
and is the sole member of Paramount Capital Drug Development Holdings
LLC ("Paramount Holdings"). Paramount Holdings and Dr. Rosenwald's
wife were principal stockholders of CTD. Dr. Rosenwald, Huntington and
June Street were also stockholders of CTD. In addition, certain
officers, employees and associates of Paramount and its affiliates
owned securities of CTD and subsidiaries of CTD. Paramount has also
acted as a placement agent in connection with certain private
placements of CTD's Series A preferred stock. As of October 15, 2001,
Dr. Rosenwald beneficially owned 56.5% of CTD's common stock and 6.0%
of CTD's Series A preferred stock. Additionally, as of October 15,
2001, Dr. Rosenwald's wife beneficially owned 8.9% of CTD's common
stock.
Mr. Peter Kash, an employee of Paramount who as of October 15, 2001
beneficially owned 5.0% of CTD's common stock and was a security
holder of DOR, and Mr. Martin Kratchman, an employee of Paramount who
was a security holder of both DOR and CTD, will receive options to
acquire an aggregate of 100,000 shares of common stock of DOR (the
"Options"). Mr. Kash and Mr. Kratchman are receiving the Options as
compensation for their financial advisory services to DOR in
connection with the Merger.
Pursuant to the Escrow Agreement dated November 29, 2001, as amended
on November 29, 2001 (as amended, the "Escrow Agreement"), by and
among DOR, certain stockholders of CTD, Mr. Peter Kliem, as the
representative of such certain CTD stockholders, and Wells Fargo Bank
Minnesota, National Association, as escrow agent, 1,350,000 shares of
DOR common stock to be issued to the stockholders of CTD in the Merger
were deposited into an escrow fund to indemnify DOR for any losses or
damages resulting from breaches of the merger agreement by CTD and for
other matters specified in the Merger Agreement. Except in limited
circumstances, the escrow shares are DOR's exclusive remedy for claims
for indemnification and DOR will receive compensation only if its
aggregate damages exceed $100,000. On each of March 31, 2002,
September 30, 2002 and March 31, 2003, 674,975, 337,502 and 337,523
shares of DOR common stock, respectively, less any shares subject to
an indemnification claim or which have been distributed to DOR
pursuant to indemnification claims, shall be distributed to the CTD
stockholders from the escrow.
Each affiliate of CTD has entered into an agreement (collectively, the
"Affiliate Agreements") with DOR pursuant to which they each agreed
not to sell, assign or transfer their DOR common stock, options and
warrants received in connection with the Merger until the date upon
which Endorex shall have filed two reports on either Form 10-QSB or
10-KSB with the SEC for any two reporting periods subsequent to the
effective date of the merger and thereafter only pursuant to an
effective registration statement or an exemption under the Securities
Act of 1933, as amended.
The foregoing descriptions of the Merger Agreement, the Escrow
Agreement, the Affiliate Agreements and the transactions contemplated
thereby are qualified by reference to such agreements, which are filed
as exhibits hereto.
A copy of DOR's press release dated December 3, 2001, regarding the
consummation of the Merger is attached hereto as Exhibit 99.1 and is
incorporated herein by reference in its entirety.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Businesses Acquired.
The financial statements required by this item have been
previously reported by Endorex and are included in the Joint
Proxy Statement/Prospectus that forms a part of the Registration
Statement on Form S-4 of DOR, as filed with the Securities and
Exchange Commission and declared effective on October 23, 2001
and are incorporated by reference herein.
(b) Pro Forma Financial Information.
The financial statements required by this item have been
previously reported by Endorex and are included in the Joint
Proxy Statement/Prospectus that forms a part of the Registration
Statement on Form S-4 of DOR, as filed with the Securities and
Exchange Commission and declared effective on October 23, 2001
and are incorporated by reference herein.
(c) Exhibits
2.1 Agreement and Plan of Merger and Reorganization dated as of
July 31, 2001 by and among DOR BioPharma, Inc. ("DOR"),
Roadrunner Acquisition, Inc. ("Roadrunner") and Corporate
Technology Development, Inc. ("CTD") - Incorporated by
reference from our Quarterly Report on Form 10-QSB for the
fiscal quarter ended June 30, 2001.
2.2 Amendment No. 1 to Agreement and Plan of Merger and
Reorganization dated as of November 29, 2001 by and among
DOR, Roadrunner and CTD.
10.1 Escrow Agreement dated November 29, 2001 by and among DOR,
certain stockholders of CTD, Peter O. Kliem and Wells Fargo
Bank Minnesota, National Association ("Wells Fargo").
10.2 Amendment No. 1 to Escrow Agreement dated November 29, 2001
by and among DOR, Paramount Capital Drug Development
Holdings LLC, Peter O. Kliem and Wells Fargo.
10.3 Form of Affiliate Agreement dated as of August 15, 2001 by
and between DOR and the affiliates of CTD - Incorporated by
reference from our Registration Statement on Form S-4, as
amended (File No. 333-70750).
23.1 Consent of Richard A. Eisner & Company, LLP.
99.1 Press Release dated December 3, 2001.
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.
DOR BioPharma, Inc.
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(Registrant)
By: /s/ Colin Bier
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Name: Colin Bier
Title: Chief Executive Officer
Dated: December 14, 2001
EXHIBIT INDEX
Exhibit No. Description
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2.1 Agreement and Plan of Merger and Reorganization dated as of July
31, 2001 by and among DOR BioPharma, Inc. ("DOR"), Roadrunner
Acquisition, Inc. ("Roadrunner") and Corporate Technology
Development, Inc. ("CTD") - Incorporated by reference from our
Quarterly Report on Form 10-QSB for the fiscal quarter ended June
30, 2001.
2.2 Amendment No. 1 to Agreement and Plan of Merger and
Reorganization dated as of November 29, 2001 by and among DOR,
Roadrunner and CTD.
10.1 Escrow Agreement dated November 29, 2001 by and among DOR,
certain stockholders of CTD, Peter O. Kliem and Wells Fargo Bank
Minnesota, National Association ("Wells Fargo").
10.2 Amendment No. 1 to Escrow Agreement dated November 29, 2001 by
and among DOR, Paramount Capital Drug Development Holdings LLC,
Peter O. Kliem and Wells Fargo.
10.3 Form of Affiliate Agreement dated as of August 15, 2001 by and
between DOR and the affiliates of CTD - Incorporated by reference
from our Registration Statement on Form S-4, as amended (File No.
333-70750).
23.1 Consent of Richard A. Eisner & Company, LLP.
99.1 Press Release dated December 3, 2001.