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CUSIP
No. 563118207
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SCHEDULE
13D
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Page 1 of 12
Pages
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SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D/A
[Rule
13d-101]
INFORMATION
TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO §240.13d-1(a)
AND
AMENDMENTS THERETO FILED PURSUANT TO §240.13d-2(a)
(Amendment
No. 1)*
Manhattan
Pharmaceuticals, Inc.
(Name of
Issuer)
Common
Stock, par value $0.001 per share
(Title
of Class of Securities)
563118207
(CUSIP
Number)
James E.
Dawson, Esq., Nutter, McClennen & Fish LLP
155
Seaport Blvd, Boston, MA 02210
(Name,
Address and Telephone Number of Person Authorized to Receive Notices
and
Communications)
March 2,
2010
(Date
of Event Which Requires Filing of This Statement)
If the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box o.
Note: Schedules
filed in paper format shall include a signed original and five copies of the
schedule, including all exhibits. See §240.13d-7 for other parties to
whom copies are to be sent.
*The
remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934
or otherwise subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act (however, see the
Notes).
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(1)
Names of reporting persons
Nordic Biotech Venture Fund II
K/S
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(2)
Check the appropriate box if a member of a group (see
instructions)
(a) o
(b) o
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(3)
SEC use only
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(4)
Source of Funds (See Instructions)
00
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(5)
Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d)
or 2(e)
o
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(6)
Citizenship or place of organization
Denmark
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Number
of shares
beneficially
owned
by
each reporting
person
with:
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(7)
Sole voting power:
0
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(8)
Shared voting power:
216,666,666
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(9)
Sole dispositive power:
0
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(10)
Shared dispositive power:
216,666,666
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(11)
Aggregate amount beneficially owned by each reporting person:
216,666,666
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(12)
Check if the aggregate amount in Row (11) excludes certain shares (see
instructions)
o
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(13)
Percent of class represented by amount in Row 11:
65.5%
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(14)
Type of reporting person (see instructions):
PN
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2
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(1)
Names of reporting persons
Nordic Biotech General Partner
II
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(2)
Check the appropriate box if a member of a group (see
instructions)
(a) o
(b) o
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(3)
SEC use only
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(4)
Source of Funds (See Instructions)
00
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(5)
Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d)
or 2(e)
o
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(6)
Citizenship or place of organization
Denmark
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Number
of shares
beneficially
owned
by
each reporting
person
with:
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(7)
Sole voting power:
0
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(8)
Shared voting power:
216,666,666
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(9)
Sole dispositive power:
0
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(10)
Shared dispositive power:
216,666,666
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(11)
Aggregate amount beneficially owned by each reporting person:
216,666,666
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(12)
Check if the aggregate amount in Row (11) excludes certain shares (see
instructions)
o
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(13)
Percent of class represented by amount in Row 11:
65.5%
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(14)
Type of reporting person (see instructions):
PN
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3
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(1)
Names of reporting persons
Christian Hansen
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(2)
Check the appropriate box if a member of a group (see
instructions)
(a) o
(b) o
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(3)
SEC use only
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(4)
Source of Funds (See Instructions)
00
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(5)
Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d)
or 2(e)
o
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(6)
Citizenship or place of organization
Denmark
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Number
of shares
beneficially
owned
by
each reporting
person
with:
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(7)
Sole voting power:
0
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(8)
Shared voting power:
216,666,666
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(9)
Sole dispositive power:
0
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(10)
Shared dispositive power:
216,666,666
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(11)
Aggregate amount beneficially owned by each reporting person:
216,666,666
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(12)
Check if the aggregate amount in Row (11) excludes certain shares (see
instructions)
o
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(13)
Percent of class represented by amount in Row 11:
65.5%
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(14)
Type of reporting person (see instructions):
IN
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4
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(1)
Names of reporting persons
Florian Schönharting
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(2)
Check the appropriate box if a member of a group (see
instructions)
(a) o
(b) o
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(3)
SEC use only
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(4)
Source of Funds (See Instructions)
00
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(5)
Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d)
or 2(e)
o
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(6)
Citizenship or place of organization
Denmark
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Number
of shares
beneficially
owned
by
each reporting
person
with:
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(7)
Sole voting power:
0
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(8)
Shared voting power:
216,666,666
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(9)
Sole dispositive power:
0
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(10)
Shared dispositive power:
216,666,666
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(11)
Aggregate amount beneficially owned by each reporting person:
216,666,666
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(12)
Check if the aggregate amount in Row (11) excludes certain shares (see
instructions)
o
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(13)
Percent of class represented by amount in Row 11:
65.5%
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(14)
Type of reporting person (see instructions):
IN
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5
This Amendment No. 1 amends and
supplements, as set forth below, the information contained in Items 1, 2, 3, 5,
6 and 7 of the Schedule 13D that was originally filed with the
Securities and Exchange Commission (the “SEC”) by Nordic Biotech Venture Fund II
K/S (“Nordic”) on March 5, 2008 (the “Schedule 13D”). Capitalized terms used but
not otherwise defined in this Amendment No. 1 are used with the meanings
ascribed to them in the Schedule 13D. Except as amended by this Amendment No. 1,
all information contained in the Schedule 13D is, after reasonable inquiry and
to the best of Nordic’s knowledge and belief, true, complete and correct as of
the date of this Amendment No. 1.
Item
1. Security and Issuer.
This
statement relates to the common stock, par value $0.0001 (the “Common Stock”),
of Manhattan Pharmaceuticals, Inc., a Delaware corporation (the
“Company”). The Company’s principal executive office is 48 Wall
Street, 11th Floor,
New York, NY 10005.
Item
2. Identity and Background.
(a) This
Schedule 13D/A is filed by the following persons (the “Reporting
Persons”)
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(i)
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Nordic
Biotech Venture Fund II K/S
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(ii)
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Nordic
Biotech General Partner II
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(iii)
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Christian
Hansen
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(iv)
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Florian
Schönharting
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(b) The
business address for each of the Reporting Persons is Ostergade 5, 3rd floor,
DK-1100, Copenhagen K, Denmark.
(c) Present
Principal occupation or employment:
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(i)
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Nordic
Biotech Venture Fund II K/S is in the business of investing in a number of
rapidly developing biotech companies with compounds in early, mid, and
late stage clinical development, and retains significant ownership stakes
in most of them.
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(ii)
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Nordic
Biotech General Partner II is the managing partner of Nordic Biotech
Venture Fund II K/S.
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(iii)
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Christian
Hansen is a principal of Nordic Biotech General Partner
II.
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(iv)
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Florian
Schönharting is a principal of Nordic Biotech General Partner
II.
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(d) During
the past five years, none of the Reporting Persons, nor, to the knowledge of any
of the Reporting Persons, any officer, director or control person of any of the
Reporting Persons, has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) During
the past five years, none of the Reporting Persons, nor, to the knowledge of any
of the Reporting Persons, any officer, director or control person of any of the
Reporting Persons, has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, pursuant to which such person,
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such
laws.
6
(f) See
Item 6 of the attached cover pages.
Item
3. Source and Amount of Funds or Other Consideration.
Nordic
and the Company entered into a Joint Venture Agreement dated January 31, 2008,
as amended on February 18, 2008 (the “Joint Venture Agreement”), pursuant to
which Nordic contributed capital and the Company contributed certain assets to
Hedrin Pharmaceuticals General Partner ApS, a Danish limited partnership (the
“Limited Partnership”). Nordic contributed $2.5 million in initial
funding to the Limited Partnership in exchange for a 50% equity interest in the
Limited Partnership. The Company contributed its North American
rights (under license) to its Hedrin product to the Limited Partnership in
return for $2.0 million in cash and a 50% equity interest in the Limited
Partnership.
Pursuant to the Joint Venture
Agreement, Nordic has an option to put all or part of its interest in the
Limited Partnership in exchange for shares of Common Stock of the Company (the
“Put Option”). The number of shares of Common Stock that Nordic may
receive upon exercise of the Put Option is determined by dividing the amount of
its investment in the Limited Partnership by an amount initially equal to $0.14,
as adjusted from time to time for stock splits and other specified events,
multiplied by a conversion factor, which is (i) 1.00 for so long as Nordic’s
distributions from the Limited Partnership are less than the amount of its
investment, (ii) 1.25 for so long as Nordic’s distributions from the Limited
Partnership are less than two times the amount of its investment, (iii) 1.50 for
so long as Nordic’s distributions from the Limited Partnership are less than
three times the amount of its investment, (iv) 2.00 for so long as Nordic’s
distributions from the Limited Partnership are less than four times the amount
of its investment and (v) 3.00 for so long as Nordic’s distributions from the
Limited Partnership are greater than or equal to four times the amount of its
investment. The Put Option is exercisable immediately and expires at
the earlier of ten years or when Nordic’s distributions from the Limited
Partnership exceed five times the amount Nordic has invested in the Limited
Partnership.
The Company also has an option to call
all or a portion of Nordic’s equity interest in the Limited Partnership in
exchange for Common Stock of the Company (the “Call Option”). The
Call Option is only exercisable by the Company if the price of Common Stock has
closed at or above $1.40 per share for 30 consecutive trading
days. During the first 30 consecutive trading days in which Common
Stock closes at or above $1.40 per share, the Company can exercise up to 25% of
the Call Option. During the second 30 consecutive trading days in
which Common Stock closes at or above $1.40 per share, the Company can exercise
up to 50% of the Call Option on a cumulative basis. During the third
consecutive 30 trading days in which Common Stock closes at or above $1.40 per
share, the Company can exercise up to 75% of the Call Option on a cumulative
basis. During the fourth consecutive 30 days in which Common Stock
closes at or above $1.40 per share, the Company can exercise up to 100% of the
Call Option on a cumulative basis. Upon exercise of the Call Option,
the number of shares of Common Stock that Nordic shall receive shall be
calculated by multiplying the portion of Nordic’s investment in the Limited
Partnership that the Company calls by the dollar amount of Nordic’s investment
to date in the Limited Partnership, initially divided by $0.14, as adjusted from
time to time for stock splits and other specified events. Nordic may
refuse the call, either by paying $1.5 million multiplied by the percentage of
Nordic’s investment being called or forfeiting an equivalent portion of the Put
Option.
7
In connection with the Joint Venture
Agreement, on February 25, 2008, Nordic paid the Company a non-refundable
fee of $150,000 in exchange for the right to receive a warrant to purchase up to
7,142,857 shares of common stock at $0.14 per share, as adjusted from time
to time for stock splits and other specified events, if Nordic did not exercise
all or part of its put right on or before April 30, 2008 (the “Warrant”).
As of April 30, 2008, Nordic had not exercised all or any portion of its put
right and the Company issued the warrant to Nordic.
Under the Joint Venture Agreement,
Nordic has the right to nominate one person for election or appointment to the
Company's Board of Directors.
In connection with the Joint Venture
Agreement, the Company and Nordic entered into a Registration Rights Agreement
dated February 25, 2008 (the "Registration Rights Agreement") pursuant to which
the Company agreed to file with the Securities and Exchange Commission (the
"SEC") an initial registration statement and additional registration statements,
as necessary, registering the sale by Nordic of any shares of Common Stock of
the Company acquired by Nordic through the exercise of the Warrant, the Put
Option or the Call Option. The initial registration statement filed by the
Company with the SEC and declared effective by the SEC registered the resale by
Nordic of 33,928,571 shares of Common Stock. The Company also agreed in the
Registration Rights Agreement to file with the SEC any additional registration
statements which were necessary to register additional shares of Common Stock
beneficially owned by Nordic. In the event that the Company does not
diligently pursue registration with the SEC under the terms of the Registration
Rights Agreement, the Company will be required to pay as partial liquidated
damages and not as a penalty, to the holder of the shares to be registered, an
amount equal to one-half percent of the amount invested pursuant to the Joint
Venture Agreement; provided, however, that in no event shall the aggregate
amount payable by the Company exceed nine percent of the amount invested under
the Joint Venture Agreement.
On or
around June 30, 2008, in accordance with the terms of the Joint Venture
Agreement, Nordic contributed an additional $1.25 million in cash to the Limited
Partnership, $1.0 million of which was distributed to the Company, and equity in
the Limited Partnership was distributed to each of the Company and Nordic
sufficient to maintain the respective ownership interests of each at 50%.
Following the additional $1.25 million investment by Nordic, Nordic acquired the
right to purchase an additional 13,888,889 shares of Common Stock of the Company
upon exercise of the Put Option.
The Joint
Venture Agreement also provided that upon the classification by the U.S. Food
and Drug Administration (the “FDA”) of Hedrin as a Class II or Class III medical
device, Nordic was required to contribute to the Limited Partnership an
additional $1.25 million in cash, $0.5 million of which was to be distributed to
the Company and equity in the Limited Partnership was to be distributed to each
of the Company and Nordic sufficient to maintain the respective ownership
interests at 50%. In February 2009, the FDA notified the Limited
Partnership that Hedrin has been classified as a Class III medical
device. Pursuant to the Joint Venture Agreement, in February 2009,
Nordic made an additional $1.25 million investment in the Limited Partnership,
the Limited Partnership made a $0.5 million milestone payment to the Company and
equity in the Limited Partnership was distributed to the Company and Nordic
sufficient to maintain the respective ownership interests at 50%. Following the
additional $1.25 million investment by Nordic as the result of the
classification of Hedrin as a Class III Medical device, Nordic acquired the
right to purchase an additional 8,928,571 shares of Common Stock of the Company
upon exercise of the Put Option.
8
The Put Option and Warrant were issued
at a value of $0.14 per share and were issued with anti-dilution rights. The
issuance of any securities at a value of less than $0.14 per share activates
Nordic’s anti-dilution rights. The Joint Venture Agreement between Nordic and
the Company governs the antidilution protection to Nordic. Section 5.1 of
the Joint Venture Agreement states that “[i]f shares of Common Stock or Common
Stock Equivalents are issued or sold together with other stock or securities or
other assets of MHA (Manhattan) for a consideration which covers both, the
effective price per share shall be computed with regard to the portion of the
consideration so received that may reasonably be determined in good faith by the
Board of Directors, to be allocable to such Common Stock or Common Stock
Equivalent.”
The Company reported in its Annual
Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the
Securities and Exchange Commission on March 31, 2010 (the “2009 10-K”) that in
February 2009, the Company completed a financing transaction in which the
Company sold 12% senior secured notes (the “12% Secured Notes”) and issued
warrants to the investors to purchase 57.5 million shares of the Company’s
Common Stock at $.09 per share. Pursuant to the anti-dilution provisions of the
Joint Venture Agreement, the issuance to the investors of warrants to purchase
shares of the Company’s Common Stock at $0.09 per share changed the number of
shares represented by the Put Option and the number of shares that could be
purchased under and exercise price of the Warrant. As a result of the sale
of the 12% Secured Notes and the issuance of the related warrants, the exercise
price of the Put Option and the Warrant were reduced to a price of $0.09 per
share. Following the sale of the 12% Secured Notes and the issuance of the
related warrants, Nordic beneficially owned 66,666,667 shares of
Common Stock of the Company, of which 55,555,556 shares were issuable upon
exercise of the Put Option and 11,111,111 shares were issuable upon exercise of
the Warrant.
In January 2010, Nordic made an
additional capital contribution to the Limited Partnership of $500,000.
The Company did not have sufficient funds to make such a capital contribution
within the required time prescribed in the Limited Partnership
Agreement. Following the additional $500,000 investment by Nordic,
Nordic acquired the right to purchase an additional 5,555,556 shares of Common
Stock of the Company upon exercise of the Put Option.
The Company reported in the 2009 10-K
that on March 2, 2010, pursuant to a private placement of its securities (the
“March Private Placement”), the Company had issued units (the “Units”), each for
a purchase price of $25,000 per Unit, consisting of (i) 357,143 shares of Common
Stock of the Company and (ii) a warrant to purchase 535,714 shares of Common
Stock exercisable for a period of five years at an exercise price of $0.08 per
share. The issuance of Common Stock and warrants to purchase Common Stock at a
price per share less than $0.09 triggered the anti-dilution provisions in the
Joint Venture Agreement.
On March 2, 2010, the Company notified
Nordic that the March Private Placement had “a value of $.07 per common share”
and that the shares of Common Stock that could be acquired by Nordic under the
Put Option increased from 55,555,556 to 71,428,571 and under the Warrant
increased from 11,111,111 to 14,285,714.
9
On March 19, 2010, Nordic notified the
Company in an email, a copy of which is attached as an exhibit to this filing,
that Nordic believed that the Company’s determination was in error and
questioned whether the Board’s determination was made in good
faith. Nordic also asked the Company for evidence of Board’s
determination of the allocation of the consideration received in the
financing and an explanation of such determination. Nordic has
not received a response from the Company on this request.
The
Company reaffirmed its March 2, 2010 determination in the 2009 10-K by reporting
with respect to the March Private Placement that the “good faith
determination of the effective price per share was $0.07 for each share of
common stock sold and a de minimus value to the warrants.”
Nordic believes that the Company’s
March 2, 2010 determination was neither reasonable nor made in good
faith. Nordic believes that the base share price of the Common Stock
issued in the March Private Placement is $.03 per share, based upon its
estimates as noted in the March 19, 2010 email to the
Company. Therefore, Nordic believes that the shares of Common Stock
that could be acquired by Nordic under the Put Option increased from 61,111,111
to 183,333,333 and under the Warrant increased from 11,111,111 to
33,333,333.
Item
5. Interest in Securities of the Issuer.
(a) Assuming
that the base share price of the Common Stock issued in the March Private
Placement was $.03, each of the Reporting Persons beneficially owns an aggregate
of 216,666,6661
shares of Common Stock of the Company, representing 65.5%2 of the total issued and
outstanding shares of Common Stock.
(b) Each
of the Reporting Persons has or will have the shared power to vote or to direct
the vote, and shared power to dispose or direct the disposition of the shares of
Common Stock of the Company referred to in Item 5(a).
(c) None
of the Reporting Persons has effected any transaction in the Common Stock of the
Company in the past 60 days.
(d) No
other person is known to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of the shares owned by
it individually.
(e) Not
applicable.
1 Nordic
Biotech General Partner II (the “General Partner”) is the managing partner of
Nordic Biotech Venture Fund II K/S (the “Fund”), and by reasons of the
provisions of Rule 16a-1 under the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the shares held by the Fund. The
General Partner disclaims beneficial ownership of the securities held by the
Fund, except to the extent of its pecuniary interest therein. Each of Christian
Hansen and Florian Schönharting is a principal of the Fund and of the General
Partner. Each of Messrs. Hansen and Schönharting disclaim beneficial ownership
of the securities held by the Fund except to the extent of their pecuniary
interest therein.
10
Item
6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
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The
information contained in Item 3 is incorporated herein by
reference.
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Item
7. Material to be Filed as Exhibits.
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The
following document is filed as an
exhibit:
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Exhibit
1
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Email
from Nordic to the Company, dated March 19,
2010.
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11
SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete, and
correct.
Dated: April
28, 2010
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NORDIC
BIOTECH VENTURE FUND II K/S
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By:
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/s/
Christian Hansen*
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Name:
Christian Hansen
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Title:
Principal
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By:
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/s/
Florian Schönharting*
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Name:
Florian Schönharting
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Title:
Principal
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NORDIC
BIOTECH GENERAL PARTNER II
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By:
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/s/
Christian Hansen*
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Name:
Christian Hansen
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Title:
Principal
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By:
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/s/
Florian Schönharting*
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Name:
Florian Schönharting
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Title:
Principal
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/s/
Christian Hansen*
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Christian
Hansen
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/s/
Florian Schönharting*
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Florian
Schönharting
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*
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By:
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/s/
James E. Dawson
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James
E. Dawson, as attorney-in-fact
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12
Exhibit
1
March 18,
2010
To the
Board of Directors of Manhattan Pharmaceuticals, Inc.:
Congratulations
on your recent financing. In connection with such financing, please
note the following:
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1.
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We
received an email from Mike McGuinness on March 2, 2010 in conjunction
with your recent financing. See copy below. Although
not stated, the email implies a revised conversion price for our Put
rights of $0.07 per share and a revised strike price for our Warrant of
$0.07 per share.
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2.
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We
are concerned that Manhattan Pharmaceuticals, Inc., (the “Company”) has
not properly calculated Nordic’s new conversion and strike prices. The JV
and Warrant agreements require the Board of the Company to allocate in
good faith an appropriate portion of the consideration received by the
Company in a financing transaction where both warrants and shares of stock
are issued. See further below the copy of the applicable section from the
JV agreement.
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3.
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Investors
in your recent financing received warrants on 1.5 shares of stock, plus
one share of stock for each $0.07 invested. Investors received the
economic benefit on the upside with respect to 2.5 shares for each $0.07.
That would imply a price per share of the common stock of approximately
$0.028 per share ($0.07 divided by
2.5).
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4.
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Clearly
the consideration paid for the stock alone is somewhere between $0.028 and
$0.07, likely closer to the former and the value of the warrant on 1.5
shares is somewhere between 0 and $0.042, likely closer to the
latter. A Black Scholes computation on such warrants
would apparently value such warrants at approximately $0.04
each.
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5.
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The
email from Mr. McGuinness implies that a warrant on 1.5 shares of stock is
worth zero. That is surely not a good faith estimate by the
Board of Directors.
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6.
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If
the Board of the Company did make a good faith determination of the
allocation of the consideration received in the financing between the
shares and the warrants issued supporting Nordic’s new conversion price,
please provide us with Board minutes or other evidence of that
determination and an explanation of the
determination.
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7.
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If
as we suspect an error was made in the allocation of the consideration
received in the financing, please promptly correct the error and provide
Nordic with both the new allocation and Nordic’s new conversion and strike
prices.
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8.
|
Please
provide us with the information we have requested as promptly as possible,
because we need to file an amendment to our Schedule 13D with the
Securities and Exchange Commission reflecting Nordic’s change in
ownership.
|
Thank you
very much
/s/ John
M. Barberich
John M.
Barberich
On behalf
of Nordic Biotech