Current Report — Form 8-K Filing Table of Contents
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Liquidation or Succession
(Former
name or former address, if changed since last report)
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appropriate box below if the Form 8-K filing is intended to simultaneously
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Instruction A.2. below):
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TABLE
OF CONTENTS
Item 1.01
Entry into a Material Definitive Agreement
Item 1.01
Entry into a Material Definitive Agreement.
On
August15, 2007, SMI Products, Inc. (the “Company”) entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with Nile Therapeutics, Inc., a Delaware
corporation (“Nile”) and the Company’s wholly-owned subsidiary, Nile Merger Sub,
Inc., a Delaware corporation (“Nile Merger Sub”),
pursuant to which Nile will complete an
acquisition and recapitalization
transaction (the “Merger”) with the Company.
Nile is
a development-stage biopharmaceutical company that develops and commercializes
innovative products for the treatment of cardiovascular and metabolic disease.
The Merger is subject to customary conditions of closing, including a financing
requirement regarding Nile. However, there can be no assurance that the
conditions to closing will be fulfilled or that the Merger will ultimately
be
consummated.
At
the
effective time of the Merger, each of the then issued and outstanding shares
of
common
stock, $0.001 par value per share (Nile “Common
Stock”)
of
Nile
will be
automatically converted into such number of shares of the Company’s common stock
par value $0.001 per share (the “SMI Common Stock”) determined by dividing (x)
23,750,000 by (y) the aggregate number of shares of Nile
Common
Stock issued and outstanding immediately prior to the effective time, on a
fully
diluted basis, after giving effect to the conversion, exchange and exercise
of
all securities (including rights, warrants and options) directly or indirectly
convertible for Nile
Common
Stock whether or not such securities are presently convertible, exchangeable
or
exercisable) (the “Exchange Ratio”), so that, after giving effect to such
Merger, the holders of Nile Common Stock, on a fully-diluted basis, will hold
approximately 95% of the issued and outstanding shares of SMI Common Stock.
All
outstanding warrants, options and other rights to purchase or acquire shares
of
Nile
Common
Stock outstanding immediately prior to the Merger shall convert into the right
to purchase that number of shares of SMI Common Stock based upon and at exercise
prices adjusted by the Exchange Ratio.
At
the
effective time of the Merger, the stockholders of the Company immediately prior
to the Merger will hold 1,250,000 shares of SMI Common Stock, which shall
represent approximately 5% of the outstanding shares of SMI Common Stock on
a
fully-diluted basis immediately following the effective time. At June 30, 2007the Company was indebted to Fountainhead Capital Partners Limited,
a
shareholder holding approximately 73.5% of the Company’s Common Stock, in the
amount of $165,901, comprised of (i) six (6) convertible promissory notes
aggregating a principal balance of $92,558 due and payable on August 11, 2008;
(ii) a convertible promissory note with a principal balance of $31,637 due
on
September 30, 2007, (iii) a convertible promissory note with a principal balance
of $8,116 due on March 31, 2008 and (iv) a convertible promissory note with
a
principal balance of $33,590 due on June 30, 2008 (together, the “SMI Notes”).
As a condition to the closing of the Merger, the principal balance of the SMI
Notes and all accrued interest thereunder shall be converted into a number
of
shares of SMI Common Stock, which when aggregated with shares of SMI Common
Stock presently held by all holders of SMI Common Stock shall be equal to
1,250,000 shares of SMI Common Stock.
1
Upon
completion of the Merger, the Company will adopt and continue implementing
Nile’s business plan. Further, upon completion of the Merger, the current
officers and directors of the Company will resign and the current officers
and
directors of Nile will be appointed officers and directors of the Company.
For
accounting purposes, the Merger is
expected to
be
accounted for as a reverse acquisition with Nile as the accounting acquiror
(legal acquiree) and the Company as the accounting acquiree (legal acquiror).
Pursuant
to the terms of the Merger Agreement, the Merger shall close on or before August31, 2007, although Nile has the right to extend the closing for up
to
an
additional 30 day period.
The
foregoing description of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the Agreement and Plan of
Merger and the schedules attached thereto, copies of which are filed as exhibits
to this report and incorporated herein by reference. The Merger Agreement has
been filed in order to provide information regarding the terms and conditions
thereof in accordance with applicable rules and regulations of the Securities
and Exchange Commission (“SEC”). Pursuant to the Merger Agreement, each of Nile,
the Company and Nile Merger Sub made certain representations, warranties and
covenants. The representations, warranties and covenants were made by the
parties to and solely for the benefit of each other in the context of all of
the
terms and conditions of the Merger Agreement and in the context of the specific
relationship between such parties. Accordingly, investors and stockholders
should not rely on the representations, warranties and covenants. Furthermore,
investors and stockholders should not rely on the representations, warranties
and covenants as characterizations of the actual state of facts or continuing
intentions of the parties, since they were only made as of the date of the
Merger Agreement. Information concerning the subject matter of such
representations, warranties and covenants may change after the date of the
Merger Agreement, which subsequent information may or may not be fully reflected
in the Company’s reports or other filings with the SEC.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number
Description
2.1
Agreement
and Plan of Merger between SMI Products, Inc., a Delaware corporation,
Nile Therapeutics, Inc., a Delaware corporation and Nile Merger Sub,
Inc.,
dated as of August 15, 2007
To
the
extent that statements in this Current Report on Form 8-K are not strictly
historical, including statements as to business strategy, outlook, objectives,
future milestones, plans, intentions, goals, future financial conditions, future
collaboration agreements, the success of the Company’s product development or
otherwise as to future events, such statements are forward-looking, and are
made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements contained in this Current
Report are subject to certain risks and uncertainties that could cause actual
results to differ materially from the statements made. Such risks and others
are
further described in the Company’s filings with the SEC including the most
recent reports on Forms 10-KSB, 10-QSB and 8-K, and any amendments
thereto.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
duly
caused this Report to be signed on its behalf by the undersigned hereto duly
authorized.
