e424b5
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| PROSPECTUS SUPPLEMENT
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Filed pursuant to Rule 424(b)(5) |
| (To Prospectus dated May 11, 2004)
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Registration No. 333-114151 |
6,120,000 Shares
Genta Incorporated
Common Stock
We are offering 6,120,000 shares of common stock (including the related preferred
share purchase rights) in this offering.
Our common stock is quoted on the NASDAQ Global Market under the symbol “GNTA.” On February 8,
2008, the last reported sale price of our common stock was $0.70 per share.
Our business and an investment in our common shares involve significant risks. For a discussion of
these risks and uncertainties, please see the Company’s Annual Report on Form 10-K for 2006 and its
most recent quarterly report on Form 10-Q.
Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
We are offering these shares of common stock on a best efforts basis primarily to institutional
investors. We have retained Rodman & Renshaw, LLC to act as placement agent in connection with this
offering.
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Maximum Offering |
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Per Share |
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Amount |
Public offering price |
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$ |
0.500 |
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$ |
3,060,000 |
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Placement agent’s fees |
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$ |
0.025 |
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$ |
153,000 |
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Proceeds, before expenses, to us |
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$ |
0.475 |
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$ |
2,907,000 |
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We estimate the total expenses of this offering, excluding the placement agent’s fee, will be
approximately $50,000.
Rodman & Renshaw, LLC
February 8, 2008
TABLE OF CONTENTS
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Prospectus Supplement
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S-11 |
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Prospectus
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is a supplement to the accompanying prospectus that is also a part
of this document. This prospectus supplement and the accompanying prospectus are part of a shelf
registration statement that we filed with the Securities and Exchange Commission. Under the shelf
registration process, we may offer from time to time shares of our common stock up to an aggregate
amount of $141,600,000, of which this offering is a part. In the accompanying prospectus, we
provide you with a general description of the securities we may offer from time to time under our
shelf registration statement. In this prospectus supplement, we provide you with specific
information about the shares of our common stock that we are selling in this offering. This
prospectus supplement and the accompanying prospectus and the documents incorporated by reference
herein and therein include important information about us, our common stock being offered and other
information you should know before investing. This prospectus supplement also adds, updates and
changes information contained in the accompanying prospectus. You should read both this prospectus
supplement and the accompanying prospectus as well as the additional information described under
“Where You Can Find More Information” in the accompanying prospectus before investing in shares of
our common stock.
You should rely only on the information contained in this prospectus supplement, the
accompanying prospectus and the documents we incorporate by reference into the accompanying
prospectus and this prospectus supplement. We have not authorized anyone to provide you with
information that is different. We are offering to sell and seeking offers to buy shares of our
common stock only in jurisdictions where offers and sales are permitted. The information contained
in this prospectus supplement and the accompanying prospectus is accurate only as of their
respective dates, regardless of the time of delivery of this prospectus supplement and the
accompanying prospectus or of any sale of our common stock.
In this prospectus supplement, unless the context otherwise indicates, the terms “we,” “our,”
“us,” “the company” and “Genta” refer to Genta Incorporated.
S-1
INFORMATION INCORPORATED BY REFERENCE
The Securities and Exchange Commission, or the SEC, allows us to “incorporate by reference” the
information we file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is an important part of
this prospectus supplement and the accompanying prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate by reference the
documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until all of the securities that we may offer with
this prospectus supplement and the accompanying prospectus are sold:
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2006. |
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Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2007, June 30, 2007 and September 30, 2007. |
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Our Definitive Proxy Statement on Schedule 14A filed on April 14, 2007. |
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Our Current Reports on Form 8-K filed on February 2, 2007, February 6, 2007, February 23, 2007, March 8, 2007, March
14, 2007, March 15, 2007, March 26, 2007, April 4, 2007, April 18, 2007, April 30, 2007, May 7, 2007, May 29, 2007,
June 19, 2007, July 2, 2007, July 13, 2007, July 20, 2007, July 30, 2007, August 1, 2007, August 13, 2007, August 21,
2007, September 5, 2007, September 17, 2007, September 21, 2007, September 26, 2007, October 17, 2007, October 18,
2007, October 23, 2007, October 25, 2007, October 30, 2007, November 15, 2007, November 16, 2007, December 10, 2007, December 21, 2007, December 26, 2007, January 11, 2008, January 14, 2008 and January 16, 2008. |
You may request a copy of these filings at no cost, by writing to or telephoning Controller, Genta
Incorporated, Two Hundred Connell Drive, Berkeley Heights, NJ 07922, (908) 286-9800.
S-2
THE OFFERING
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Common stock offered by us:
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6,120,000 shares |
Common stock outstanding before the offering:
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30,620,558 shares |
Common stock to be outstanding after the offering:
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36,740,558 shares |
Use of proceeds:
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We currently anticipate
that the net proceeds
from the sale of the
common stock will be
used to secure a
revenue stream outside
the U.S. and to
diversify and develop
our product portfolio
and for general
corporate purposes. We
may also use such
proceeds for research
and development, for
commercialization
expenses and for
potential licenses and
acquisitions of
complementary products,
technologies or
businesses. See “Use of
Proceeds.” |
Nasdaq Global Market Symbol:
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GNTA |
The information above is based on 30,620,558 shares of our common stock outstanding as of
December 31, 2007 (which gives effect to our July 12, 2007 one-to-six reverse split of our common
stock). It does not include:
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2,328,272 shares of our common stock issuable upon the exercise of stock options outstanding as of
December 31, 2007 at a weighted average exercise price of $23.43 per share; |
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18,071 shares of our common stock issuable upon the conversion of Series A Preferred Stock; and |
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597,623 shares of our common stock reserved for future awards under our stock incentive plan
of December 31, 2007. |
S-3
GENTA INCORPORATED
This summary highlights information contained elsewhere in our filings with the Securities and
Exchange Commission. You should read the entire prospectus supplement, the accompanying prospectus
and all of our filings with the Securities and Exchange Commission carefully, including the “Risk
Factors” section included in this prospectus supplement, before making an investment decision.
We were incorporated in Delaware on February 4, 1988. We are a biopharmaceutical company
engaged in pharmaceutical (drug) research and development, its sole reportable segment. We are
dedicated to the identification, development and commercialization of novel drugs for the treatment
of cancer and related diseases. The Company’s research portfolio consists of two major programs:
“DNA/RNA Medicines” and “Small Molecules”. The Company has had recurring annual operating losses
since its inception and we expect to incur substantial operating losses due to continued
requirements for ongoing and planned research and development activities, pre-clinical and clinical
testing, manufacturing activities, regulatory activities and establishment of a sales and marketing
organization. From our inception to September 30, 2007, we have
incurred a cumulative net deficit of
$436.4 million. Management expects that such losses will continue at least until our lead
product, Genasense ® , receives approval from the FDA for commercial sale in one or more
indications. Achievement of profitability is dependent on the timing of Genasense ®
regulatory approvals in the U.S. and outside the U.S. We have experienced significant quarterly
fluctuations in operating results and we expect that these fluctuations in revenues, expenses and
losses will continue.
S-4
USE OF PROCEEDS
We currently anticipate that the net proceeds from the sale of the common stock will be used
to secure a revenue stream outside the U.S. and to diversify and develop our product portfolio and
for general corporate purposes. We may also use such proceeds for research and development, for
commercialization expenses and for potential licenses and acquisitions of complementary products,
technologies or businesses.
As of September 30, 2007, we had
cash, cash equivalents and marketable securities totaling
$15.5 million. Net cash used in operating activities during the first nine months of 2007 was
$23.7 million. Net proceeds received from this offering will be approximately
$2,857,000.
S-5
DILUTION
The net tangible book value of our common stock on December 31, 2007 was approximately
$1.3 million, or approximately $0.04 per share, based on 30,620,558 shares of our
common stock outstanding as of December 31, 2007(which give effect to our July 12, 2007 one-to-six
reverse split of our common stock). Net tangible book value per share represents the amount of our
total tangible assets, less our total tangible liabilities, divided by the total number of shares
of our common stock outstanding. Dilution in net tangible book value per share to new investors
represents the difference between the amount per share paid by purchasers of shares of our common
stock in this offering and the net tangible book value per share of our common stock immediately
afterwards. Without taking into account any other changes in net tangible book value after
December 31, 2007, other than the sale of the 6,120,000 shares of common stock offered by us
under this prospectus supplement and the accompanying prospectus at a price of $0.50 per
share and after deducting the placement agent’s fees and estimated offering expenses
payable by us, our net tangible book value at December 31, 2007 would have been approximately
$4.1 million, or approximately $0.11 per share. This represents an immediate
increase in net tangible book value of approximately $0.07 per share to existing
stockholders and an immediate dilution in net tangible book value of $(0.39) per share to
investors in this offering. The following table illustrates this per share dilution:
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Public offering price per share |
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$ |
0.50 |
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Net tangible book value per share as of December 31, 2007 |
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$ |
0.04 |
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Increase per share attributable to this offering |
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$ |
0.07 |
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As adjusted net tangible book value per share after this offering |
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$ |
0.11 |
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Dilution per share to investors in this offering |
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$ |
(0.39 |
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This table excludes shares of common stock issuable upon exercise of options,
warrants, convertible stock and other rights, and the effect of shares of common stock issued,
except as indicated above, since December 31, 2007.
S-6
DESCRIPTION OF CAPITAL STOCK
General
Our authorized capital stock consists of 250,000,000 shares of common stock and 5,000,000
shares of preferred stock.
The following descriptions are summaries of the material terms of our restated certificate of
incorporation and bylaws. Reference is made to the more detailed provisions of, and the
descriptions are qualified in their entirety by reference to, the restated certificate of
incorporation and bylaws and applicable law. Our restated certificate of incorporation, as amended
and our amended and restated bylaws are incorporated by reference and copies are available upon
request. See “Where You Can Find More Information” in the accompanying prospectus.
Common Stock
Except as required by law or by the restated certificate of incorporation, holders of common
stock are entitled to one vote for each share held of record on all matters submitted to a vote of
the stockholders. Subject to preferences that may be applicable to any then outstanding preferred
stock, holders of common stock are entitled to receive ratably such dividends as may be declared by
the Board of Directors out of funds legally available therefor. In the event of a liquidation,
dissolution or winding up of Genta, holders of the common stock and the preferred stock are
entitled to share ratably on an as-converted basis in all assets remaining after payment of
liabilities and the liquidation preference of any then outstanding preferred stock. Holders of
common stock have no right to convert their common stock into any other securities. There are no
redemption or sinking fund provisions applicable to the common stock. All outstanding shares of
common stock are fully paid and non-assessable.
In September 2005, the Board of Directors adopted a Stockholder Rights Plan and declared a
dividend of one preferred stock purchase right, or Right, for each outstanding share of our common
stock, payable to holders of record as of the close of business on September 27, 2005. In addition,
Rights shall be issued in respect of all shares of common stock issued after such date, including
the shares issued hereunder, pursuant to the Plan. Generally, the rights become exercisable upon
the earlier of the close of business on the tenth business day following the first public
announcement that any person or group has become a beneficial owner of 15% or more of our common
stock and the close of business on the tenth business day after the date of the commencement of a
tender or exchange offer by any person which would, if consummated, result in such person becoming
a beneficial owner of 15% or more of the our common stock. Each Right shall be exercisable to
purchase, for $25.00, subject to adjustment, one one-hundredth of a newly registered share of
Series G Participating Cumulative Preferred Stock, par value $0.001 per share of the Company. The
terms and conditions of the Rights are set forth in a Rights Agreement dated September 20, 2005
between the Company and Mellon Investor Services, LLC, as Rights Agent.
Preferred Stock
The Board of Directors has the authority, without further action by the stockholders, to issue
up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences and the number of shares constituting any series or
the designation of such series. The issuance of preferred stock could adversely affect the voting
power of holders of common stock and could have the effect of delaying, deferring or preventing a
change in control of Genta without further action by the stockholders and may adversely affect the
voting and other rights of the holders of our common stock.
Series A Convertible Preferred Stock
General
We are authorized to issue 600,000 shares of Series A Convertible Preferred Stock. At
December 31, 2007, we had 7,700 shares of Series A Convertible Preferred Stock issued and
outstanding.
Each share of Series A Convertible Preferred Stock is immediately convertible, into shares of
our common stock, at a rate determined by dividing the aggregate liquidation preference of the
series A convertible preferred stock by the conversion price. The conversion price is subject to
adjustment for antidilution.
S-7
In the event of a liquidation of Genta, the holders of Series A Convertible
Preferred Stock are entitled to a liquidation preference equal to $50.00 per share.
Series G Preferred Stock
We have authorized 5.0 million shares of preferred stock of which 2.0 million shares have been
designated Series G Participating Cumulative Preferred.
Delaware Anti-Takeover Law
Under Section 203 of the Delaware General Corporation Law certain “business combinations”
between a Delaware corporation, whose stock generally is publicly traded or held of record by more
than 2,000 stockholders, and an “interested stockholder” are prohibited for a three-year period
following the date that such stockholder became an interested stockholder, unless:
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the corporation has elected in its certificate of
incorporation not to be governed by Section 203 (we have
not made such an election); |
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either the business combination or the transaction which
resulted in the stockholder becoming an interested
stockholder was approved by the board of directors of the
corporation before the other party to the business
combination became an interested stockholder; |
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upon consummation of the transaction that made it an
interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction
excluding voting stock owned by directors who are also
officers or held in employee benefit plans in which the
employees do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in
a tender or exchange offer; |
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on or subsequent to such date the business combination is
approved by the board of directors and authorized at an
annual or special meeting of stockholders by the
affirmative vote of at least 66-2/3% of the outstanding
voting stock which is not owned by the interested
stockholder. |
The three-year prohibition also does not apply to certain business combinations proposed by an
interested stockholder following the announcement or notification of certain extraordinary
transactions involving the corporation and a person who had not been an interested stockholder
during the previous three years or who became an interested stockholder with the approval of a
majority of the corporation’s directors. A “business combination” is defined to include mergers,
asset sales and other transactions resulting in financial benefit to a stockholder. In general, an
“interested stockholder” is a person who, together with affiliates and associates, owns (or within
three years, did own) 15% or more of a corporation’s voting stock.
The statute could prohibit or delay mergers or other takeover or change in control attempts
with respect to us and, accordingly, may discourage attempts to acquire us even though such a
transaction may offer our stockholders the opportunity to sell their stock at a price above the
prevailing market price.
Advance Notice Requirements for Stockholder Proposals
Our amended and restated bylaws provide that stockholders seeking to bring business before an
annual meeting of stockholders, or to nominate candidates for election as directors at an annual
meeting of stockholders, must provide timely notice thereof in writing. To be timely, a
stockholder’s notice must be delivered to the secretary at our principal executive offices not less
than 50 calendar days nor more than 75 calendar days prior to the meeting; provided, that if less
than 65 days’ notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later than the close of
business on the 15th day following the day on which notice of the date of the annual meeting was
mailed or such public disclosure was made. Our amended and restated bylaws also specify
requirements as to the form and content of a stockholder’s notice. These provisions may discourage
stockholders from bringing matters before an annual meeting of stockholders or from making
nominations for directors at an annual meeting of stockholders.
S-8
Limits on Special Meetings
Our restated certificate of incorporation, as amended, and our amended and restated bylaws
provide that special meetings of our stockholders may be called only by our Chairman of the Board
or our Chief Executive Officer or by a resolution adopted by the affirmative vote of a majority of
the Board of Directors.
Super-majority Requirements
We have specified provisions in our restated certificate of incorporation, as amended and our
amended and restated bylaws that require a super-majority vote of our stockholders to amend, revise
or appeal provisions that may have an anti-takeover effect.
Listing
Our common stock is listed on the NASDAQ Global Market under the symbol “GNTA.”
Transfer Agent and Registrar
The Transfer Agent and Registrar for the common stock is Mellon Investor Services, LLC.
S-9
PLAN OF DISTRIBUTION
We are offering our common stock through a placement agent. Subject to the terms and
conditions contained in the placement agent agreement dated February 8, 2008, Rodman & Renshaw,
LLC has agreed to act as the placement agent for the sale of up to 6,120,000 shares of common
stock. The placement agent is not purchasing or selling any shares by this prospectus supplement
or accompanying base prospectus, nor is it required to arrange for the purchase or sale of any
specific number or dollar amount of shares, but have agreed to use reasonable best efforts to
arrange for the sale of all 6,120,000 shares.
The placement agent agreement provides that the obligations of the placement agent and the
investors are subject to certain conditions precedent, including the absence of any material
adverse change in our business and the receipt of certain opinions, letters and certificates from
our counsel, our independent auditors and us.
Confirmations and definitive prospectuses will be distributed to all investors who agree to
purchase the common stock, informing investors of the closing date as to such shares. We currently
anticipate that closing of the sale of 6,120,000 shares of common stock will take place on or
about February 13, 2008. Investors will also be informed of the date and manner in which they must
transmit the purchase price for their shares.
On the scheduled closing date, the following will occur:
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we will receive funds in the amount of the aggregate purchase price; and |
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Rodman & Renshaw, LLC will receive the placement agent’s fee in
accordance with the terms of the placement agent agreement. |
We will pay the placement agent a commission equal to 5% of the gross proceeds of the sale of
common stock in the offering. We will also reimburse the placement agent for certain accountable
expenses incurred by it up to a maximum of $50,000. Under no circumstances will the fee, commission
or discount received by the placement agent or any other NASD member or independent broker-dealer
exceed eight percent of the gross proceeds to us in this offering or any other offering in the
United States pursuant the Base Prospectus.
The estimated offering expenses payable by us, in addition to the placement agent’s fee of $153,000,
are approximately $50,000, which includes legal, accounting and printing costs and
various other fees associated with registering and listing the common stock. After deducting
certain fees due to the placement agent and our estimated offering expenses, we expect the net
proceeds from this offering to be up to approximately $2,857,000.
We have agreed to indemnify the placement agent against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and liabilities arising from breaches of
representations and warranties contained in the placement agent agreement. We have also agreed to
contribute to payments the placement agent may be required to make in respect of such liabilities.
The placement agent agreement is included as an exhibit to our Current Report on Form 8-K that
will be filed with the Securities and Exchange Commission in connection with the consummation of
this offering.
S-10
LEGAL MATTERS
Certain legal matters in connection with the legality of the offering of the common stock
hereby will be passed upon for us by Morgan, Lewis & Bockius LLP, Princeton, New Jersey. The
placement agent is being represented in connection with this offering by Feldman, Weinstein & Smith
LLP, New York, New York.
EXPERTS
The
consolidated financial statements and management’s report
on the effectiveness of internal control over financial reporting incorporated in this prospectus
by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2006,
have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their reports, which are incorporated herein by reference (which reports (1) express an
unqualified opinion on the consolidated financial statements and include an explanatory paragraph
referring to the
Company’s adoption of Statement of Financial Accounting
Standards No. 123 (Revised 2004), “Share-Based
Payment”, effective January 1, 2006, as discussed in Notes
2 and 14 to the consolidated financial statements,
(2) express an unqualified opinion on management’s assessment regarding the effectiveness of
internal control over financial reporting, and (3) express an unqualified opinion on the
effectiveness of internal control over financial reporting), and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in accounting and
auditing.
S-11
PROSPECTUS
15,000,000 Shares
GENTA INCORPORATED
We may offer from time to time common stock. Specific terms of these securities will
be provided in supplements to this prospectus. You should read this prospectus and any supplement
carefully before you invest.
Our common stock is listed on the Nasdaq National Market under the symbol “GNTA”.
Investing in our common stock involves certain risks, which we describe in our periodic
reports and which we will describe in supplements to this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission
has approved or disapproved these securities, or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is May 11, 2004
You should rely only on the information contained in or incorporated by reference in
this prospectus. We have not authorized anyone to provide you with different information. We are
not making an offer of these securities in any state where the offer is not permitted. You should
not assume that the information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus. The terms “Genta,”
“we,” “us,” and “our” refer to Genta Incorporated.
TABLE OF CONTENTS
THE COMPANY
Genta is a biopharmaceutical company dedicated to the identification, development and
commercialization of novel drugs for cancer and related diseases. Our research portfolio consists
of two major areas of focus:
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DNA/RNA Medicines, which are drugs based on chemical modifications of either deoxyribonucleic acid, or DNA, or ribonucleic acid, or RNA; and |
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Small Molecules. |
We began marketing our first commercial product, Ganite, which is part of our Small Molecule
program, in October 2003. Ganite has been approved by the U.S. Food and Drug Administration, or
FDA, for treatment of cancer-related hypercalcemia that is resistant to hydration. The drug is
being marketed and sold exclusively by Genta in the United States by our dedicated sales force.
Our lead investigational antisense drug is called Genasense (oblimersen sodium), a molecule
that is designed to block the production of a protein known as Bcl-2. Current science suggests that
Bcl-2 is a fundamental (although not sole) cause of the inherent resistance of cancer cells to
current anticancer treatments, such as chemotherapy, radiation, or monoclonal antibodies. While
Genasense has displayed some anticancer activity when used by itself, we are developing the drug
solely as a means of amplifying the effects of other anticancer therapy by pre-treating patients
with Genasense.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any document that we file at the Public Reference Room of the SEC at 450
Fifth Street, NW, Washington, D.C. 20549. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
site at http://www.sec.gov, from which interested persons can electronically access the
registration statement including the exhibits and schedules thereto.
The SEC allows us to “incorporate by reference” the information we file with them, which means
that we can disclose important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus, and information that
we file later with the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we make with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until all of the securities
offered by this prospectus have been sold:
Annual Report on Form 10-K for the year ended December 31, 2003.
You may request a copy of these filings at no cost, by writing or telephoning Controller,
Genta Incorporated, Two Connell Drive, Berkeley Heights, NJ 07922, (908) 286-9800.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these forward-looking
statements on our current expectations and projections about future events. These forward-looking
statements are subject to risks, uncertainties, and assumptions about our business, including,
among other things:
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FDA approval or failure to approve Genasense; |
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our ability to develop, manufacture and sell our products or enter
into collaborative arrangements with third parties to manufacture
or sell our products; |
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the safety and efficacy of our products; |
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the commencement and completion of pre-clinical and clinical trials; |
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our ability to obtain necessary regulatory approvals; |
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our contractual collaborative arrangements; |
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the adequacy of our capital resources; |
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the ability to obtain sufficient financing to maintain our planned operations; |
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the possibility and effect of patent infringement claims; and |
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the impact of competitive products and market conditions. |
We have no obligation to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or risks. New information, future events or risks may
cause the forward-looking events we discuss in this prospectus not to occur.
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USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, the net proceeds from the sale of the
common stock will be used for research and development, for commercialization expenses, for
potential licenses and acquisitions of complementary products, technologies or businesses and for
general corporate purposes.
4
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 120,000,000 shares of common stock, par value $.001
per share, and 5,000,000 shares of preferred stock, par value $.001 per share.
The following descriptions are summaries of the material terms of our restated certificate of
incorporation and bylaws. Reference is made to the more detailed provisions of, and the
descriptions are qualified in their entirety by reference to, the restated certificate of
incorporation and bylaws and applicable law. Our restated certificate of incorporation and bylaws
are incorporated by reference and copies are available upon request. See “Where You Can Find More
Information.”
General
The authorized capital stock of Genta consists of 120,000,000 shares of common stock and
5,000,000 shares of preferred stock.
Common Stock
Except as required by law or by the restated certificate of incorporation, holders of common
stock are entitled to one vote for each share held of record on all matters submitted to a vote of
the stockholders. Subject to preferences that may be applicable to any then outstanding preferred
stock, holders of common stock are entitled to receive ratably such dividends as may be declared by
the Board of Directors out of funds legally available therefor. In the event of a liquidation,
dissolution or winding up of Genta, holders of the common stock and the preferred stock are
entitled to share ratably on an as-converted basis in all assets remaining after payment of
liabilities and the liquidation preference of any then outstanding preferred stock. Holders of
common stock have no right to convert their common stock into any other securities. There are no
redemption or sinking fund provisions applicable to the common stock. All outstanding shares of
common stock are fully paid and non-assessable.
Preferred Stock
The Board of Directors has the authority, without further action by the stockholders, to issue
up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences and the number of shares constituting any series or
the designation of such series. The issuance of preferred stock could adversely affect the voting
power of holders of common stock and could have the effect of delaying, deferring or preventing a
change in control of Genta without further action by the stockholders and may adversely affect the
voting and other rights of the holders of our common stock.
Series A Convertible Preferred Stock
General
We are authorized to issue 600,000 shares of series A convertible preferred stock.
Each share of series A convertible preferred stock is immediately convertible, into shares of
our common stock, at a rate determined by dividing the aggregate liquidation preference of the
series A convertible preferred stock by the conversion price. The conversion price is subject to
adjustment for antidilution.
In the event of a liquidation of Genta, the holders of series A convertible preferred stock
are entitled to a liquidation preference equal to $50 per share.
Delaware Anti-Takeover Law
Under Section 203 of the Delaware General Corporation Law certain “business combinations”
between a Delaware corporation, whose stock generally is publicly traded or held of record by more
than 2,000 stockholders, and an “interested stockholder” are prohibited for a three-year period
following the date that such stockholder became an interested stockholder, unless:
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the corporation has elected in its certificate of
incorporation not to be governed by Section 203 (we have
not made such an election); |
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the business combination was approved by the board of
directors of the corporation before the other party to the
business combination became an interested stockholder; |
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upon consummation of the transaction that made it an
interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction
(excluding voting stock owned by directors who are also
officers or held in employee benefit plans in which the
employees do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in
a tender or exchange offer; or |
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on or subsequent to such date the business combination is
approved by the board of directors and authorized at an
annual or special meeting of stockholders by the
affirmative vote of at least 66% of the outstanding voting
stock which is not owned by the interested stockholder. The
three-year prohibition also does not apply to certain
business combinations proposed by an interested stockholder
following the announcement or notification of certain
extraordinary transactions involving the corporation and a
person who had not been an interested stockholder during
the previous three years or who became an interested
stockholder with the approval of a majority of the
corporation’s directors. A “business combination” is
defined to include mergers, asset sales and other
transactions resulting in financial benefit to a
stockholder. In general, an “interested stockholder” is a
person who, together with affiliates and associates, owns
(or within three years, did own) 15% or more of a
corporation’s voting stock. The statute could prohibit or
delay mergers or other takeover or change in control
attempts with respect to Genta and, accordingly, may
discourage attempts to acquire Genta even though such a
transaction may offer Genta’s stockholders the opportunity
to sell their stock at a price above the prevailing market
price. |
Advance Notice Requirements for Stockholder Proposals
The bylaws provide that stockholders seeking to bring business before an annual meeting of
stockholders, or to nominate candidates for election as directors at an annual meeting of
stockholders, must provide timely notice thereof in writing. To be timely, a stockholder’s notice
must be delivered to the secretary at our principal executive offices not less than 50 calendar
days nor more than 75 calendar days prior to the meeting; provided, that if less than 65 days’
notice or prior public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be received not later than the close of business on the
15th day following the day on which notice of the date of the annual meeting was mailed or such
public disclosure was made. The bylaws also specify requirements as to the form and content of a
stockholder’s notice. These provisions may discourage stockholders from bringing matters before an
annual meeting of stockholders or from making nominations for directors at an annual meeting of
stockholders.
Limits on Special Meetings
Genta’s restated certificate of incorporation and bylaws provide that special meetings of the
stockholders of Genta may be called only by the Chairman of the Board or the Chief Executive
Officer of Genta or by a resolution adopted by the affirmative vote of a majority of the Board of
Directors.
Super-majority Requirements
We have specified provisions in our restated certificate of incorporation and bylaws that
require a super- majority vote of the stockholders to amend, revise or appeal provisions that may
have an anti-takeover effect.
Listing
Our common stock is listed on the Nasdaq National Market under the symbol “GNTA”.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the common stock is Mellon Investor Services.
6
PLAN OF DISTRIBUTION
We may sell the common stock in any of three ways (or in any combination):
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through underwriters or dealers; |
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directly to a limited number of purchasers or to a single purchaser; or |
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through agents. |
The prospectus supplement will set forth the terms of the offering of such common stock,
including
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the name or names of any underwriters, dealers or agents and the
amounts of common stock underwritten or purchased by each of
them, |
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the initial public offering price of the common stock and the
proceeds to us and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, and |
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any securities exchanges on which the common stock may be listed. |
Any initial public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
If underwriters are used in the sale of any common stock, the common stock will be acquired by
the underwriters for their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of sale. The common stock may be either offered to the public through
underwriting syndicates represented by managing underwriters, or directly by underwriters.
Generally, the underwriters’ obligations to purchase the common stock will be subject to certain
conditions precedent. The underwriters will be obligated to purchase all of the common stock if
they purchase any of the common stock. Such underwriters may include, among others, Goldman, Sachs
& Co.
We may sell the common stock through agents from time to time. The prospectus supplement will
name any agent involved in the offer or sale of the common stock and any commissions we pay to
them. Generally, any agent will be acting on a best efforts basis for the period of its
appointment.
We may authorize underwriters, dealers or agents to solicit offers by certain purchasers to
purchase the common stock from us at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified
date in the future. The contracts will be subject only to those conditions set forth in the
prospectus supplement, and the prospectus supplement will set forth any commissions we pay for
solicitation of these contracts.
Agents and underwriters may be entitled to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, or to contribution with respect to
payments which the agents or underwriters may be required to make in respect thereof. Agents and
underwriters may be customers of, engage in transactions with, or perform services for us in the
ordinary course of business.
We may enter into derivative transactions with third parties, or sell common stock not covered
by this prospectus to third parties in privately negotiated transactions. If the applicable
prospectus supplement indicates, in connection with those derivatives, the third parties may sell
common stock covered by this prospectus and the applicable prospectus supplement, including in
short sale transactions. If so, the third party may use common stock pledged by us or borrowed from
us or others to settle those sales or to close out any related open borrowings of stock, and may
use common stock received from us in settlement of those derivatives to close out any related open
borrowings of stock. The third party in such sale transactions will be an underwriter and, if not
identified in this prospectus, will be identified in the applicable prospectus supplement (or a
post-effective amendment).
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VALIDITY OF COMMON STOCK
The validity of the common stock in respect of which this prospectus is being delivered will
be passed on for us by Davis Polk & Wardwell.
EXPERTS
The consolidated financial statements incorporated in this prospectus by reference from the
Company’s Annual Report on Form 10-K for the year ended December 31, 2003 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
8
6,120,000 Shares
Genta Incorporated
Common Stock
Rodman & Renshaw, LLC
February
8, 2008