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 13, 2011
Capstone Therapeutics
(Exact name of registrant as specified in its charter)
Delaware |
000-21214 |
86-0585310 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
1275 West Washington Street, Suite 101, Tempe, Arizona |
85281 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (602) 286-5520
OrthoLogic Corp.
(Former name or former address, if changed since last report)
| 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 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 13, 2011, the Company's Board of Directors (the "Board") adopted a plan to preserve cash during ongoing partnering efforts. Included in the actions taken was the termination of the employment of John M. Holliman, III, Executive Chairman, Randolph C. Steer, MD, Ph.D., President and Dana B. Shinbaum, Vice President, Business Development. Each of these individuals will continue in their prior roles as consultants, rather than as employees, at consulting rates which would equate to approximately $100,000 per year for Mr. Holliman and $120,000 per year for Dr. Steer and Mr. Shinbaum. As employees, their base compensation had been $200,000 for Mr. Holliman, $325,000 for Dr. Steer and $242,000 for Mr. Shinbaum. Les M. Taeger, Chief Financial Officer and Senior Vice President will continue as an employee, but his base compensation has been reduced from $242,000 per year to $120,000 per year. All of these officers had also been eligible for an annual bonus based on individual and Company performance goals of up to 40% of their base compensation. The Board's actions included cancellation of the Company's bonus plan. It is expected that vested outstanding stock options held by each executive will continue to be exercisable while such executive is serving as a consultant to the Company. The above changes in employment and compensation trigger severance clauses in the executives' employment agreements that entitle each executive to a payment equal to one year of base salary.
Item 7.01. Regulation FD Disclosure.
The information in this Current Report, including the accompanying exhibit, is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing. On October 14, 2011, Capstone Therapeutics Corp. issued a press release announcing a plan to preserve cash during ongoing partnering efforts and a reduction from eighteen full time employees to four full time employees. A copy of the press release is furnished as Exhibit 99.1.
Item 8.01. Other Events.
On October 13, 2011, the Board adopted a plan to preserve cash during ongoing partnering efforts and a reduction from eighteen full time employees to four full time employees. Severance payments authorized by the Board related to this action totaled approximately $1,700,000 of which approximately $1,362,000 were required by employment agreements. Most severance payments will occur in the fourth quarter of 2011.
Item 9.01. Financial Statements and Exhibits.
Exhibit No.
Description
99.1
Press Release dated October 14, 2011
SIGNATURE
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.
| Capstone Therapeutics
(Registrant) |
||
| October 14, 2011
(Date) |
/s/ JOHN M. HOLLIMAN, III
John M. Holliman, III Executive Chairman |
EXHIBIT 99.1
TEMPE, Ariz., Oct. 14, 2011 (GLOBE NEWSWIRE) -- Capstone Therapeutics (Nasdaq:CAPS) (the "Company") announced today its plan to preserve cash during ongoing discussions with potential partners regarding AZX100 in dermal scarring. The Company will reduce staff from its current 18 full-time employees to a core of four individuals covering required regulatory and financial functions at substantially reduced compensation.
"Capstone is observing its commitment to stockholders to preserve cash by moving into a 'hibernation' mode," said Jock Holliman, Executive Chairman. "We promised we would pursue - for a reasonable period of time - a joint development alliance for AZX100. The AZX100 program in dermal scarring has, in fact, generated genuine interest in the marketplace. However, there remains uncertainty regarding the timing of such an alliance, and there are no guarantees that a partnering deal can be consummated in what we consider to be a timely manner. This cash-preservation plan will allow the Company to reduce costs, operate 'virtually' and continue partnering discussions and negotiations in an efficient fashion. Should an alliance be secured, we will reexamine our structure accordingly."
About Capstone Therapeutics
Capstone Therapeutics is a biotechnology company involved in the development of novel therapeutic peptides aimed at helping patients with under-served medical conditions. The Company is focused on development and commercialization of two product platforms: AZX100 and Chrysalin (rusalatide acetate or TP508).
AZX100 is a novel synthetic 24-amino acid peptide, one of a new class of compounds in the field of smooth muscle relaxation and fibrosis. Based on its demonstrated safety and signals of efficacy in Phase 2 clinical trials, as well as its safety and effectiveness in pre-clinical models, AZX100 is currently being evaluated for commercially significant medical applications such as the prevention or reduction of hypertrophic and keloid scarring and treatment of pulmonary fibrosis. Capstone has an exclusive worldwide license to AZX100.
Chrysalin, the Company's novel synthetic 23-amino acid peptide, has been proven in multiple pre-clinical and clinical models to stimulate cellular events leading to angiogenesis, revascularization, and repair of dermal and musculoskeletal tissues. It is currently being evaluated in disorders that involve vascular endothelial dysfunction, such as acute myocardial infarction and chronic myocardial ischemia. The Company owns certain worldwide rights to Chrysalin.
Capstone's corporate headquarters are in Tempe, Arizona. For more information, please visit the Company's website: www.capstonethx.com.
The Capstone Therapeutics logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5429
Statements in this press release or otherwise attributable to Capstone regarding our business that are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include the timing and acceptability of FDA filings and the efficacy and marketability of potential products, involve risks and uncertainties that could cause actual results to differ materially from predicted results. These risks include: inability to successfully arrange development agreements, particularly for AZX100; delays in obtaining or inability to obtain FDA, institutional review board or other regulatory approvals of pre-clinical or clinical testing; unfavorable outcomes in pre-clinical and clinical testing; the development by others of competing technologies and therapeutics that may have greater efficacy or lower cost; delays in obtaining or inability to obtain FDA or other necessary regulatory approval of our products; our inability to successfully and cost-effectively develop or outsource manufacturing and marketing of any products we are able to bring to market; changes in FDA or other regulations that affect our ability to obtain regulatory approval of our products, increase our manufacturing costs or limit our ability to market our product; effects of the ongoing qui tam litigation on our stock price, liquidity or our ability to continue operations; our need for additional capital in the future to fund the continued development of our product candidates; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2010, and other documents we file with the U.S. Securities and Exchange Commission.
Editor's Note: This press release is also available under the Investors section of the Company's website at www.capstonethx.com.
CONTACT: Karen Struck, Investor Relations
(602) 286-5250
kstruck@capstonethx.com
Lauren Glaser - The Trout Group
(415) 392-3310
lglaser@troutgroup.com