-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WEt4cRDKp2tzpXiuZzlpeYdgaNbNtlcJMDyov5yacB9jZOwmu87k5HyXWVrriiZw v4RS+WrOxxNZAtljhclCEw== 0001047469-99-021540.txt : 19990520 0001047469-99-021540.hdr.sgml : 19990520 ACCESSION NUMBER: 0001047469-99-021540 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990518 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COCENSYS INC CENTRAL INDEX KEY: 0000895034 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 330538836 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20954 FILM NUMBER: 99630345 BUSINESS ADDRESS: STREET 1: 201 TECHNOLOGY DR CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 9497536100 MAIL ADDRESS: STREET 1: 201 TECHNOLOGY DRIVE STREET 2: 201 TECHNOLOGY DRIVE CITY: IRVINE STATE: CA ZIP: 92618 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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): MAY 18, 1999 ------------- COCENSYS, INC. -------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 0-20954 33-0538836 - -------- -------- ---------- (State or Other (Commission (IRS Employer Jurisdiction of File Number) Identification No.) Incorporation) 201 TECHNOLOGY DRIVE, IRVINE, CALIFORNIA 92618 - ---------------------------------------- ----- (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code: (949) 753-6100 -------------- Page 1 of 17 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On May 18, 1999, CoCensys sold to certain entities affiliated with Domain Associates, L.L.C., all of CoCensys' stockholdings in Cytovia, Inc., for an aggregate purchase price of $3,325,500. James C. Blair, Ph.D., a director of the Company, is a managing member of Domain Associates, L.L.C.; in addition, certain of the purchasing entities are current stockholders of CoCensys. Cytovia was formed in 1998 as a technology spin-off from CoCensys to commercialize apoptosis inhibitor and screening cell technology. Among other rights, CoCensys had retained an equity stake in Cytovia as part of the spin-off. CoCensys determined to sell its stockholdings in Cytovia to raise funds to repurchase shares of CoCensys' Series E Convertible Preferred Stock. Accordingly, CoCensys entered into an agreement dated May 6, 1999, to sell its stockholdings in Cytovia, subject to certain closing conditions. The purchase price for the Cytovia shares was established by negotiations between CoCensys and the purchasers, and approved by unanimous vote of the disinterested CoCensys directors. CoCensys originally issued and sold $8,000,000 (8,000 shares) of its Series E Preferred to three investors in a private placement transaction on June 8, 1998. By agreements dated April 30, 1999, CoCensys agreed to repurchase up to $3,180,000 (3,180 shares) of its Series E Convertible Preferred Stock from the three holders of the Series E Preferred, using the proceeds from its sale of the Cytovia shares. The repurchase price for each share of Series E Preferred equaled the face value ($1,000) plus accrued dividends at 7.5% per annum, plus a 5% premium. As part of the repurchase agreements with the holders of the Series E Preferred, the holders agreed not to convert additional shares of Series E Preferred prior to July 29, 1999, unless any of the following conditions are applicable: (i) CoCensys' common stock is trading above $1.00 per share or at least 120% of the then-applicable conversion price for the Series E Preferred; (ii) CoCensys' common stock no longer is trading on the Nasdaq National Market or Nasdaq SmallCap Market; (iii) CoCensys has announced that it is being sold pursuant to a merger or sale of all or substantially all of its assets; (iv) after a material adverse change in CoCensys' business; or (v) if the SEC does not declare effective by June 14, 1999, CoCensys' Registration Statement on Form S-3 filed with the SEC to register additional shares of common stock issuable on conversion of the Series E Preferred. Based on the anticipated receipt of proceeds from sale of CoCensys' Cytovia shares, CoCensys repurchased 1,154 Series E Preferred shares on April 30, 1999 for $1,295,000, and repurchased an additional 437 shares on May 6, 1999 for $491,000. On May 18, 1999, upon consummation of the sale of its Cytovia shares, CoCensys repurchased the additional 1,589 shares of its Series E Preferred for $1,790,000. Following completion of the repurchase of the 3,180 shares of Series E Preferred, and taking into account conversions of the Series E Preferred through May 17, 1999, $1,797,000 (including accrued dividends) of Series E Preferred remains outstanding. As of that date, CoCensys had 4,633,000 shares of common stock issued and outstanding. Page 2 of 17 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) EXHIBITS. The following exhibits are attached to this Current Report on Form 8-K:
Sequential Exhibit Description Page Start ------- ----------- ---------- 99.1 Stock Purchase Agreement dated May 6, 1999, among CoCensys and the purchasers set forth therein. 4 99.2 Agreement dated April 30, 1999, between CoCensys and RGC International Investors, LDC 10 99.3 Agreement dated April 30, 1999, among CoCensys, Heracles Fund and Themis Parnters L.P. 12 99.4 Press Release entitled "CoCensys, Inc. Agrees to Sell Its Holdings in Cytovia, Inc." dated May 11, 1999 14 99.5 Press Release entitled "CoCensys, Inc. Completes Sale of Holdings in Cytovia, Inc. and Partial Repurchase of its Series E Preferred Stock" dated May 18, 1999 17
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. COCENSYS, INC. -------------- (Registrant) Date: May 18, 1999 By: /s/ Robert R. Holmen ---------------------------------------- Vice President and General Counsel Page 3 of 17 EX-99.1 2 EXHIBIT 99.1 STOCK PURCHASE AGREEMENT EXHIBIT 99.1 THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of May 6, 1999 by and between COCENSYS, INC., a Delaware corporation (the "Company") and the purchasers set forth on the signature pages of this Agreement (collectively, the "Purchaser"). 1. PURCHASE AND SALE 1.1 PURCHASE AND SALE. Subject to the terms and conditions set forth herein, and in reliance on the representations, warranties and agreements set forth in Sections 2 and 3 hereof, the Company hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase from the Company, Four Hundred Fifty Thousand (450,000) shares (the "Shares") of Series A-1 Junior Preferred Stock of Cytovia, Inc. ("Cytovia"), for $7.39 per share, or an aggregate total of $3,325,500 (the "Purchase Price"). 1.2 CLOSING. The consummation of the purchase and sale of the Shares (the "Closing") shall take place on the second business day following satisfaction of all conditions to close set forth below, or such other date as the Company and Purchaser shall agree (the "Closing Date"). At the Closing, the Company will deliver to Purchaser a certificate or certificates for the Shares, with the endorsement(s) on the reverse thereof, or an assignment separate from certificate, duly completed and executed, and Purchaser shall pay the Purchaser Price by wire transfer pursuant to the Company's instructions. 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to Purchaser as follows: 2.1 INTEREST IN SHARES. The Company is the record owner of the Shares and, subject to satisfaction of the conditions set forth in Section 4.1 hereof, has the power to transfer its right, title and interest in the Shares to Purchaser. 2.2 AUTHORIZATION. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement, the performance of all the Company's obligations hereunder and thereunder, and for the sale and delivery of the Shares has been taken or will be taken prior to the Closing. This Agreement, when executed and delivered, shall constitute a valid and legally binding obligation of the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors. 2.3 NO SOLICITATION. The Company knows the Purchaser personally. The Company has made no general solicitation in connection with the Shares and has not offered the Shares to anyone other than Purchaser. Page 4 of 17 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER Purchaser hereby represents and warrants to the Company as follows: 3.1 LEGAL POWER. Purchaser has the requisite legal power to enter into this Agreement, to purchase the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement. 3.2 AUTHORIZATION. This Agreement has been duly authorized, executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of it. 3.3 INVESTMENT REPRESENTATIONS. (a) Purchaser is an "accredited investor," as that term is defined in Regulation D of the Securities Act of 1933, as amended (the "Securities Act"). (b) Purchaser is acquiring the Shares solely for its own account for investment and not with a view to or for sale or distribution of the Shares or any part thereof. The entire legal and beneficial interests of the Shares Purchaser is acquiring is being acquired for, and will be held for, Purchaser's account only. (c) Purchaser understands that the Shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), on the basis that no distribution or public offering of the Shares is to be effected. Purchaser realizes that the basis for the exemption may not be present if, notwithstanding the undersigned's representations, the undersigned has in mind merely acquiring the Shares for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise. Purchaser has no such intention. (d) Purchaser recognizes that the Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser recognizes that Cytovia has no obligation to register the Shares or to comply with any exemption from such registration. (e) Purchaser is aware that the Shares may not be sold pursuant to Rule 144 adopted under the Securities Act ("Rule 144") unless certain conditions are met and until Purchaser has held the Shares for at least one year. Among the conditions for use of the rule is the availability of current information to the public about Cytovia. The undersigned understands that Cytovia has not made such information available and has no present plans to do so. (f) Purchaser further agrees not to make any disposition of all or any part of the Shares in any event unless and until: Page 5 of 17 (i) the Shares are transferred pursuant to Rule 144, and Cytovia shall have received from documentation acceptable to it that a sale of the Shares has occurred in accordance with all of the provisions of Rule 144; or (ii) Cytovia shall have received a letter secured by Purchaser from the Securities and Exchange Commission stating that no action will be recommended to the Commission with respect to the proposed disposition; or (iii) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or (iv) (x) Purchaser shall have notified Cytovia of the proposed disposition and shall have furnished Cytovia with a detailed statement of the circumstances surrounding the proposed disposition, (y) Purchaser shall have furnished Cytovia with an opinion of counsel for Purchaser to the effect that such disposition will not require registration of such Shares under the Securities Act, and (z) such opinion of counsel for Purchaser shall have been concurred in by Cytovia's counsel. (g) Purchaser agrees to be bound by any and all restrictions and obligations with respect to the Shares as may be set forth in any stock purchase, stock registration, co-sale, investors' rights agreement or any bylaw or other agreement or document relating to the Shares. (h) Purchaser understands and agrees that all certificates evidencing the Shares may bear the following legend: "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED." 4. CONDITIONS TO CLOSING 4.1 CONDITIONS TO OBLIGATIONS OF PURCHASER. Purchaser's obligation to purchase the Shares is subject to the fulfillment, at or prior to the Closing, of all of the following conditions, any of which may be waived by Purchaser: (a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS. The representations and warranties made by the Company in Section 2 hereof shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date; and the Company shall have performed all obligations and conditions herein required to be performed by it on or prior to the Closing. Page 6 of 17 (b) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful sale and issuance of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective on and as of the Closing. No stop order or other order in joining the sale of the Shares shall have been issued and no proceedings for such purpose shall be pending or, to the knowledge of the Company, threatened by the SEC or any commissioner of corporations or similar officer of any other state having jurisdiction over this transaction. At the time of the Closing, the sale of the Shares shall be legally permitted by all laws and regulations to which Purchaser and the Company are subject. (c) WAIVER OF RIGHT OF FIRST REFUSAL. Cytovia shall have waived in writing the right of first refusal set forth in Article XIV, Section 46, of its bylaws, or such right shall be deemed not to apply by virtue of subsection (f)(3) thereof. 4.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's obligation to sell the Shares at the Closing is subject to the fulfillment to the Company's satisfaction, at or prior to the Closing, of the following conditions, any of which may be waived by the Company: (a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties made by Purchaser in Section 3 hereof shall be true and correct at the Closing Date, with the same force and effect as if they had been made on and as of said date. (b) PERFORMANCE OF OBLIGATIONS. Purchaser shall have performed and complied with all agreements and conditions herein required to be performed or complied with by it on or before the Closing. (c) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful sale and issuance of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective on and as of the Closing. No stop order or other order enjoining the sale of the Shares shall have been issued and no proceedings for such purpose shall be pending or, to the knowledge of the Company, threatened by the SEC or any commissioner of corporations or similar officer of any state having jurisdiction over this transaction. At the time of the Closing, the sale and issuance of the Shares shall be legally permitted by all laws and regulations to which Purchaser and the Company are subject. (d) WAIVER OF CO-SALE RIGHTS. The rights of co-sale set forth in Section 5.1 of that certain Investor Rights Agreement, dated March 27, 1998, by and among Cytovia and the Founders and Investors named therein, shall have been waived in writing by each of the Investors. Page 7 of 17 5. GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of Delaware. 6. FURTHER EXECUTION. The parties agree to execute such further instruments and to take such further action as reasonably may be necessary to carry out the intent of this Agreement. 7. NOTICES. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or three (3) days following mailing by registered or certified mail, postage and fees prepaid, addressed to the parties at the address set forth in the signature block below. 8. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit of the successors and assigns of Company and Purchaser, to the extent permitted under rules, regulations and agreements governing transfer of the Shares. 9. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire agreement between the parties with respect to the sale to Purchaser or any entity affiliated with Purchaser of the Shares, or any other shares of Cytovia stock now or heretofore held by the Company, and supersedes and merges all prior agreements or understandings, whether written or oral. This Agreement may not be amended, modified or revoked, in whole or in part, except by an agreement in writing signed by each of the parties hereto. 10. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Page 8 of 17 This Agreement is hereby executed as of the date above first written. COCENSYS, INC. By: /s/ -------------------------------------- Address for notices: F. Richard Nichol, Ph.D. CoCensys, Inc. Chairman of the Board, President & CEO 201 Technology Drive Irvine, CA 92618 PURCHASER DOMAIN PARTNERS III, L.P. No. of Shares: 113,500 Dollar Amount: $838,765.00 By: One Palmer Square Associates III, L.P., Its General Partner Address for notices: C/o Domain Associates, L.L.C. By: /s/ One Palmer Square --------------------------------- Princeton, NJ 08542 Kathleen K. Schoemaker General Partner DP III ASSOCIATES, L.P. No. of Shares: 8,990 Dollar Amount: $66,436.10 By: One Palmer Square Associates III, L.P., Its General Partner Address for notices: C/o Domain Associates, L.L.C. By: /s/ One Palmer Square --------------------------------- Princeton, NJ 08542 Kathleen K. Schoemaker General Partner DOMAIN PARTNERS IV, L.P. No. of Shares: 324,790 Dollar Amount: $2,400,198.10 By: One Palmer Square Associates IV, L.L.C., Its General Partner Address for notices: C/o Domain Associates, L.L.C. By: /s/ One Palmer Square --------------------------------- Princeton, NJ 08542 Kathleen K. Schoemaker Managing Member DP IV ASSOCIATES, L.P. No. of Shares: 2,720 Dollar Amount: $20,100.80 By: One Palmer Square Associates IV, L.L.C., Its General Partner Address for notices: C/o Domain Associates, L.L.C. By: /s/ One Palmer Square --------------------------------- Princeton, NJ 08542 Kathleen K. Schoemaker Managing Member Page 9 of 17 EX-99.2 3 EXHIBIT 99.2 AGREEMENT EXIHBIT 99.2 The undersigned parties hereby agree as follows: 1) RGC International Investors, LDC, the holder of 3,655 outstanding shares (the "Shares") of Series E Convertible Preferred Stock of CoCensys, Inc. (the "Company") hereby agrees to sell to the Company the number of shares set forth below for a price equal to 105% of the sum of the par value thereof plus all accrued dividends thereon through the redemption date: RGC International Investors, LDC - 2,308 2) 50% of the Shares to be sold (the "First Tranche") shall be acquired by the Company on April 30, 1999 and the remaining 50% of the Shares to be sold (the "Second Tranche") shall be acquired not later than May 20, 1999; provided however, that the Second Tranche shall be cut back by the dollar value of co-sale rights exercised in connection with the sale of the Company's holdings in Cytovia, Inc. 3) On the closing date for each tranche the Company shall wire transfer to the account of the selling holder the amount to be paid for the Shares being sold, and the selling holder shall deliver the certificates representing such Shares (with any excess Shares to be reissued by new certificate). 4) The Company shall continue to use its best efforts to remain listed on NASDAQ and to gain effectiveness of a Registration Statement covering all of the common stock issuable upon conversion of the outstanding Shares and warrants issued in connection therewith, to the extent not currently registered. 5) Subject to the exception set forth in the immediately following sentence, from the closing of the First Tranche until 90 days thereafter, the holders will not effect any conversions of the outstanding Shares. The preceding restrictions will be exclusive of conversions that occur (A) on any day the Stock trades at a price greater than or equal to (1) 120% of the then applicable Market Price or (2) $1.00; (B) after a public announcement by the Issuer that it is being sold pursuant to a merger or sale of all or substantially all of its assets, etc.; (C) after a material adverse change in the Issuer's business; (D) after a NASDAQ delisting; or (E) after 45 days from the closing of the First Tranche, if the Registration Statement referred to above is not declared effective. Page 10 of 17 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed on the 30th day of April, 1999. COCENSYS, INC. By: /s/ ---------------------------------------- F. Richard Nichol, Ph.D. President and Chief Executive Officer RGC INTERNATIONAL INVESTORS, LDC By: Rose Glen Capital Management, L.P., Investment Manager By: RGC General Partner Corp., as General Partner By: /s/ ---------------------------------------- Gary S. Kaminsky Managing Director Page 11 of 17 EX-99.3 4 EXHIBIT 99.3 AGREEMENT EXIHBIT 99.3 The undersigned parties hereby agree as follows: 1) Themis Partners L.P. and Heracles Fund, holders of the outstanding shares (the "Shares") of Series E Convertible Preferred Stock of CoCensys, Inc. (the "Company"), hereby agree to sell to the Company the number of shares set forth below for a price equal to 105% of the sum of the par value thereof plus all accrued dividends thereon through the redemption date: Themis Partners L.P. - 349 Heracles Fund - 523 2) 50% of the Shares to be sold (the "First Tranche) shall be acquired by the Company on May 6, 1999 and the remaining 50% of the Shares to be sold (the "Second Tranche")shall be acquired not later than May 20, 1999; provided however, that the Second Tranche shall be cut back by the dollar value of co-sale rights exercised in connection with the sale of the Company's holdings in Cytovia, Inc. 3) On the closing date for each tranche the Company shall wire transfer to the account of the selling holder the amount to be paid for the Shares being sold, with corresponding debits to the Company's ledger of Shares held by each of Themis Partners L.P. and Heracles Fund. 4) The Company shall continue to use its best efforts to remain listed on NASDAQ and to gain effectiveness of a Registration Statement covering all of the common stock issuable upon conversion of the outstanding Shares and warrants issued in connection therewith, to the extent not currently registered. Penalties related to listing and effectiveness of the Registration Statement remain in full force and effect in accordance with the "Series E Documents" (as defined below). 5) Subject to the exception set forth in the immediately following sentence, from the closing of the First Tranche until 84 calendar days thereafter, the holders will not effect any conversions of the outstanding Shares. The preceding restrictions will be exclusive of conversions that occur (A) on any day the Stock trades at a price greater than or equal to (1) 120% of the then applicable Market Price (as defined in the Certificate of Powers, Designation, Preferences, Rights and Limitations of Series E Convertible Preferred Stock dated June 8, 1998 (the "Series E Certificate") inclusive of any accrued penalties) or (2) $1.00; (B) after a public announcement by the Issuer that it is being sold pursuant to a merger or sale of all or substantially all of its assets, etc.; (C) after a material adverse change in the Issuer's business; (D) after a NASDAQ delisting; or (E) after 39 calendar days from the closing of the First Tranche, if the Registration Statement referred to above is not declared effective. Page 12 of 17 6) Except as expressly set forth in Paragraph 5 of this Agreement, the parties agree that the Securities Purchase Agreement dated June 8, 1998, the Series E Certificate and the Registration Rights Agreement dated June 8, 1998 (collectively, the "Series E Documents") remain in full force and effect without amendment or modification, and each party hereto retains all of its respective rights and obligations thereunder with respect to the outstanding Shares, including, but not limited to, any redemption rights currently or hereafter available to Themis Partners L.P. and Heracles Fund. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed effective April 30, 1999. COCENSYS, INC. By: /s/ ---------------------------------------- Robert R. Holmen Vice President and General Counsel THEMIS PARTNERS L.P. By: Promethean Investment Group L.L.C. Its: General Partner By: /s/ ---------------------------------------- James F. O'Brien, Jr. Managing Member HERACLES FUND By: Promethean Investment Group L.L.C. Its: Investment Advisor By: /s/ ---------------------------------------- James F. O'Brien, Jr. Managing Member Page 13 of 17 EX-99.4 5 EXHIBIT 99.4 EXHIBIT 99.4 Contact: F. Richard Nichol, Ph.D. Robert R. Holmen CHAIRMAN OF THE BOARD VICE PRESIDENT AND GENERAL COUNSEL PRESIDENT AND CHIEF EXECUTIVE OFFICER Donna D. Slade ASSISTANT DIRECTOR, INVESTOR RELATIONS/PUBLIC RELATIONS 949/753-6110 COCENSYS, INC. AGREES TO SELL ITS HOLDINGS IN CYTOVIA, INC. COMPANY USING PROCEEDS TO REPURCHASE SHARES OF ITS SERIES E PREFERRED STOCK IRVINE, CALIFORNIA/PR NEWSWIRE/MAY 11, 1999 - CoCensys, Inc. (Nasdaq: COCND) today announced that it has entered into an agreement to sell all of its stockholdings in Cytovia, Inc., for an aggregate purchase price of $3.3 million. Consummation of this transaction is subject to certain conditions; however, CoCensys anticipates closing the transaction in May 1999. Cytovia was formed in 1998 as a technology spin-off from CoCensys to commercialize apoptosis inhibitor and screening cell technology; among other rights, CoCensys had retained an equity stake in Cytovia as part of the spin-off. The purchasers consist of entities affiliated with Domain Associates, L.L.C., a venture capital management company. One of the directors of CoCensys is also a managing member of Domain Associates, L.L.C., and certain of the entities purchasing shares of Cytovia from CoCensys currently are stockholders in either or both of CoCensys and Cytovia. CoCensys has also entered into agreements with holders of its Series E Convertible Preferred Stock to repurchase up to 3,180 shares ($3.18 million face value) of its Series E Preferred Stock, using proceeds from its sale of the Cytovia shares. The repurchase price for each share equals the face value ($1,000) plus accrued dividends at 7.5% per annum, plus a 5% premium. "We are pleased to have the opportunity to realize substantial value from our holdings in Cytovia so soon after forming that entity; it is tribute to the early success that Cytovia has achieved under the guidance of Eckard Weber, M.D.," said F. Richard Nichol, Ph.D., Chairman of the Board, President and Chief Executive Officer of CoCensys. "We believe that our shareholders will benefit from reducing the amount of outstanding Series E Preferred Stock, and the holders of that Series E Preferred Stock have been very cooperative in working with CoCensys to complete this repurchase." As part of the repurchase agreements, the holders agreed not to convert additional shares of Series E Preferred Stock prior to July 29, 1999; however, the holders are entitled to convert if certain conditions apply, including the following: (i) CoCensys' common stock is trading above $1.00 per share or at least 120% of the then-applicable conversion price for the Series E Preferred Stock; (ii) CoCensys' common stock no longer is trading on the Nasdaq National Page 14 of 17 Market or Nasdaq SmallCap Market; or (iii) CoCensys has announced that it is being sold pursuant to a merger or sale of all or substantially all of its assets. Based on the anticipated receipt of proceeds from the sale of the Cytovia shares, CoCensys has completed repurchase of $1.59 million of Series E Preferred Stock in exchange for payments totaling $1.8 million. CoCensys is obligated to purchase an additional $1.59 million of Series E Preferred Stock on or before May 20, 1999, upon consummation of sale of its Cytovia shares. Based on the shares repurchased to date, as of May 7, 1999, $3.44 million of Series E Preferred Stock remain outstanding; if CoCensys is able to repurchase the additional $1.59 million, $1.86 million of Series E Preferred Stock will remain outstanding at that time. NASDAQ LISTING As previously reported, Nasdaq notified CoCensys by letter dated December 1, 1998, that it was not in compliance with the $1.00 minimum closing bid price requirement for the continued listing of CoCensys' common stock. A hearing on this issue was held April 29, 1999. As of May 10, 1999, Nasdaq had not delisted CoCensys' common stock nor notified CoCensys of the results of the hearing. As of May 10, 1999, the minimum closing bid price for CoCensys' common stock remains below $1.00 per share, and the market value of CoCensys' common stock held by non-affiliates has fallen below the $5 million minimum requirement to remain listed on the Nasdaq National Market. Based on the outcome of the hearing, CoCensys' shares may continue to trade on the Nasdaq National Market, CoCensys may be granted a further temporary stay of delisting, CoCensys' shares may be moved temporarily or permanently to the Nasdaq SmallCap Market or the shares may be delisted from Nasdaq. If the shares are delisted, they likely would be quoted in the "pink sheets" maintained by the National Quotation Bureau, Inc., or the NASD Electronic Bulletin Board. CoCensys is a biopharmaceutical company that discovers and develops products for the treatment of neurological and psychiatric disorders. CoCensys' product development programs focus on novel small molecule compounds for the treatment of epilepsy, anxiety, Parkinson's and other neurodegenerative diseases, neuropathic pain, migraine, insomnia and stroke. CoCensys has development programs with the Wyeth-Ayerst Laboratories Division of American Home Products Corporation to develop analogs of naturally-occurring neuroactive compounds, "epalons," for the treatment of anxiety, with Parke-Davis, a division of Warner-Lambert Company, to identify and develop subtype-selective NMDA receptor antagonists for the treatment of a variety of neurological and psychiatric diseases, and with Senju Pharmaceutical and Parke-Davis for the exploration of ophthalmic indications of CoCensys' glutamate receptor antagonist compounds. More information about CoCensys is available on its web site at www.cocensys.com. This press release includes forward looking statements that involve a high degree of financial, technological, regulatory and competitive risks and uncertainties inherent to early stage Page 15 of 17 biopharmaceutical companies. These forward looking statements include the anticipated consummation of the sale of CoCensys' holdings in Cytovia, the benefit to shareholders of the repurchase of Series E Preferred Stock and the actions that Nasdaq may take with respect to trading in and the listing of CoCensys common stock. Actual results may differ due to a number of factors, including the following: closing of sale of CoCensys' holdings in Cytovia remains subject to conditions not completely within the control of CoCensys; Nasdaq rules, regulations and procedures may vary or be interpreted differently in the future; no assurances can be made that the minimum bid price for CoCensys' common stock will reach or exceed $1.00 per share or that CoCensys will continue to meet the other requirements to maintain listing of its common stock on the Nasdaq National Market; and such other factors as discussed in CoCensys' most recent Form 10-K and Form 10-Q. Page 16 of 17 EX-99.5 6 EXHIBIT 99.5 EXHIBIT 99.5 Contact: F. Richard Nichol, Ph.D. Robert R. Holmen CHAIRMAN OF THE BOARD VICE PRESIDENT AND GENERAL COUNSEL PRESIDENT AND CHIEF EXECUTIVE OFFICER Donna D. Slade ASSISTANT DIRECTOR, INVESTOR RELATIONS/PUBLIC RELATIONS 949/753-6110 COCENSYS, INC. COMPLETES SALE OF HOLDINGS IN CYTOVIA, INC. AND PARTIAL REPURCHASE OF ITS SERIES E PREFERRED STOCK IRVINE, CALIFORNIA/PR NEWSWIRE/MAY 18, 1999 - CoCensys, Inc. (Nasdaq: COCN) today announced that it has completed sale of its stockholdings in Cytovia, Inc., for an aggregate purchase price of $3.3 million. With the proceeds of the sale, CoCensys completed its repurchase of an aggregate of 3,180 shares ($3.18 million face value) of its Series E Convertible Preferred Stock. As previously reported, CoCensys had entered into an agreement to sell its stockholdings in Cytovia, a technology spin-off from CoCensys formed in 1998, and into agreements with the holders of its Series E Preferred Stock to repurchase shares of that Series. Consummation of each agreement was subject to certain conditions, which have now been satisfied. Following the repurchase, and taking into account recent conversions of the Series E Preferred Stock, as of May 17, 1999, $1.8 million (including accrued dividends) of Series E Preferred Stock remains outstanding. As of that date, CoCensys had 4.6 million shares of common stock issued and outstanding. CoCensys is a biopharmaceutical company that discovers and develops products for the treatment of neurological and psychiatric disorders. CoCensys' product development programs focus on novel small molecule compounds for the treatment of epilepsy, anxiety, Parkinson's and other neurodegenerative diseases, neuropathic pain, migraine, insomnia and stroke. CoCensys has development programs with the Wyeth-Ayerst Laboratories Division of American Home Products Corporation to develop analogs of naturally-occurring neuroactive compounds, "epalons," for the treatment of anxiety, with Parke-Davis, a division of Warner-Lambert Company, to identify and develop subtype-selective NMDA receptor antagonists for the treatment of a variety of neurological and psychiatric diseases, and with Senju Pharmaceutical and Parke-Davis for the exploration of ophthalmic indications of CoCensys' glutamate receptor antagonist compounds. More information about CoCensys is available on its web site at www.cocensys.com. ### Page 17 of 17 -----END PRIVACY-ENHANCED MESSAGE-----