form8k-eitf0705.htm
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): October 1, 2009
AEOLUS PHARMACEUTICALS,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation)
|
0-50481
|
|
56-1953785
|
|
(Commission
File Number)
|
|
(IRS
Employer Identification No.)
|
26361
Crown Valley Parkway, Suite 150
Mission
Viejo, California 92691
(Address
of Principal Executive Offices, Including Zip Code)
949-481-9825
(Registrant’s
Telephone Number, Including Area Code)
__________________
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
8.01 Other
Events.
In June
2008, the Financial Accounting Standards Board (“FASB”) ratified Emerging Issues
Task Force (“EITF”) Issue No. 07-5, “Determining Whether an Instrument (or
Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF 07-5”).
Equity-linked instruments (or embedded features) that otherwise meet the
definition of a derivative as outlined in Statement of Financial Accounting
Standards No. 133, “Accounting for Derivative Instruments and Hedging
Activities” (“SFAS 133”), are not accounted for as derivatives if certain
criteria are met, one of which is that the instrument (or embedded feature) must
be indexed to the entity’s own stock. EITF 07-5 provides guidance on how to
determine if equity-linked instruments (or embedded features) such as warrants
to purchase our stock and notes convertible into our common stock are considered
indexed to our stock. The Company adopted EITF 07-5, effective October 1, 2009,
and applied its provisions to outstanding instruments as of that
date. The fair value of the warrants to purchase common stock
affected by EITF 07-5 at the dates of issuance totaling $8,282,000 was initially
recorded as a component of additional paid-in capital. Upon adoption of EITF
07-5 on October 1, 2009, because the warrants were not considered indexed to the
Company’s stock for purposes of SFAS 133, the Company recorded a decrease to the
opening balance of additional-paid-in capital of $8,142,000 and recorded a
decrease to accumulated deficit totaling $4,353,000, representing the decrease
in the fair value of the warrants from the applicable date of issuance to
October 1, 2009. The fair value of the warrants at October 1, 2009 of
$3,789,000 was recorded as a current liability. Any future increase
or decrease in fair value of the warrants, which could be significant, will be
included as a component of other income in the accompanying statement of
operations for the respective period.
In
connection with a financing completed on October 6, 2009 and previously
disclosed on Form 8-K dated October 6, 2009, the Company issued warrants to
purchase up to an aggregate of 43,614,285 shares of its common stock and
cancelled warrants to purchase up to an aggregate of 17,542,857 shares of its
common stock. Based on EITF 07-5, this resulted in a charge to our
statement of operations of $6,213,000 and increased the liability for warrants
to $11,022,000.
As of
October 31, 2009, the liability for warrants increased to $17,272,000 resulting
in an additional charge to the statement of operations of $6,250,000. As
of November 30, 2009, the liability for warrants decreased to $15,389,000
resulting in a gain in the statement of operations of $1,882,000.
The
warrant liability and charges to the statement of operations have not and will
not have any impact on the Company’s working capital, liquidity, or business
operations. The Company’s outstanding warrants will continue to be
revalued at each balance sheet date, which could result in significant and
unpredictable changes to the liability and significant additional gains or
losses charged to the statement of operations for each period.
In
accordance with General Instruction B.2 of Form 8-K, the above information are
being furnished under Item 8.01 of Form 8-K and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, or
otherwise subject to the liabilities of that section, nor shall such information
and exhibit be incorporated by reference into any filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934 except as shall be expressly
set forth by specific reference in such a filing.
SIGNATURE
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.
AEOLUS PHARMACEUTICALS,
INC.
Date: December
28, 2009
/s/ Michael P.
McManus___________________
Michael
P. McManus
Chief
Financial Officer, Treasurer and Secretary