SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 5)
(Rule 13d-101)
Under the Securities Exchange Act of 1934
PharmAthene, Inc.
(Name of Issuer)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
71714G102
(CUSIP NUMBER)
Phil Frohlich
1924 South Utica, Suite #1120
Tulsa, Oklahoma 74104-6429
(918) 747-3412
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
- with copies to -
Eliot D. Raffkind
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201-4618
(214) 969-2800
December 2, 2013
(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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the following box ¨.
The information required in 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, as amended (the “Act”), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act.
| CUSIP No. 71714G102 | 13D/A |
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PRESCOTT GROUP CAPITAL MANAGEMENT, L.L.C. | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS*
WC | |||||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Oklahoma | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER
5,244,835 | ||||
| 8 | SHARED VOTING POWER
0 | |||||
| 9 | SOLE DISPOSITIVE POWER
5,244,835 | |||||
| 10 | SHARED DISPOSITIVE POWER
0 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,244,835 | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0% | |||||
| 14 | TYPE OF REPORTING PERSON*
IA | |||||
| * | SEE INSTRUCTIONS BEFORE FILLING OUT |
| CUSIP No. 71714G102 | 13D/A |
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PRESCOTT GROUP AGGRESSIVE SMALL CAP, L.P. | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS*
WC | |||||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Oklahoma | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER
0 | ||||
| 8 | SHARED VOTING POWER
5,244,835 | |||||
| 9 | SOLE DISPOSITIVE POWER
0 | |||||
| 10 | SHARED DISPOSITIVE POWER
5,244,835 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,244,835 | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0% | |||||
| 14 | TYPE OF REPORTING PERSON*
PN | |||||
| * | SEE INSTRUCTIONS BEFORE FILLING OUT |
| CUSIP No. 71714G102 | 13D/A |
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PRESCOTT GROUP AGGRESSIVE SMALL CAP II, L.P. | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS*
WC | |||||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Oklahoma | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER
0 | ||||
| 8 | SHARED VOTING POWER
5,244,835 | |||||
| 9 | SOLE DISPOSITIVE POWER
0 | |||||
| 10 | SHARED DISPOSITIVE POWER
5,244,835 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,244,835 | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0% | |||||
| 14 | TYPE OF REPORTING PERSON*
PN | |||||
| * | SEE INSTRUCTIONS BEFORE FILLING OUT |
| CUSIP No. 71714G102 | 13D/A |
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PHIL FROHLICH | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS*
PF | |||||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. CITIZEN | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER
5,244,835 | ||||
| 8 | SHARED VOTING POWER
0 | |||||
| 9 | SOLE DISPOSITIVE POWER
5,244,835 | |||||
| 10 | SHARED DISPOSITIVE POWER
0 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,244,835 | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0% | |||||
| 14 | TYPE OF REPORTING PERSON*
IN | |||||
| * | SEE INSTRUCTIONS BEFORE FILLING OUT |
SCHEDULE 13D/A
This Amendment No. 5 (this “Amendment”) to the Schedule 13D (the “Schedule 13D”) is being filed on behalf of Prescott Group Capital Management, L.L.C., an Oklahoma limited liability company (“Prescott Capital”), Prescott Group Aggressive Small Cap, L.P., an Oklahoma limited partnership (“Prescott Small Cap”), Prescott Group Aggressive Small Cap II, L.P., an Oklahoma limited partnership (“Prescott Small Cap II” and, together with Prescott Small Cap, the “Small Cap Funds”), and Mr. Phil Frohlich, the principal of Prescott Capital, relating to shares of common stock of PharmAthene, Inc., a Delaware corporation (the “Issuer”).
This Amendment relates to shares of Common Stock, par value $0.0001 per share, of the Issuer (the “Common Stock”) purchased by the Small Cap Funds through the account of Prescott Group Aggressive Small Cap Master Fund, G.P., an Oklahoma general partnership (“Prescott Master Fund”), of which the Small Cap Funds are the general partners. Prescott Capital serves as the general partner of the Small Cap Funds and may direct the Small Cap Funds, the general partners of Prescott Master Fund, to direct the vote and disposition of the 5,244,835 shares of Common Stock held by the Prescott Master Fund. As the principal of Prescott Capital, Mr. Frohlich may direct the vote and disposition of the 5,244,835 shares of Common Stock held by Prescott Master Fund.
The Amendment amends and restates in its entirety the Schedule 13D as set forth below.
| Item 1. | Security and Issuer |
Securities acquired: Shares of Common Stock, par value $0.0001 per share (the “Common Stock”).
| Issuer: | PharmAthene, Inc. One Park Place Suite 450 Annapolis, Maryland 21401 |
| Item 2. | Identity and Background |
(a) This Amendment is jointly filed by Prescott Capital, Prescott Small Cap, Prescott Small Cap II and Phil Frohlich. Because Phil Frohlich is the managing member of Prescott Capital, which is the general partner of the Small Cap Funds (with Phil Frohlich and Prescott Capital hereinafter referred to as the “Controlling Persons”), the Controlling Persons may be deemed, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Act”), to be the beneficial owners of all of the shares of Common Stock held by the Small Cap Funds. The Reporting Persons (as hereinafter defined) are filing this Amendment jointly, as they may be considered a “group” under Section 13(d)(3) of the Act. However, neither the fact of this filing nor anything contained herein shall be deemed to be an admission by the Reporting Persons that such a group exists.
(b) The principal place of business for each of the Reporting Persons is 1924 South Utica, Suite #1120, Tulsa, Oklahoma, 74104.
(c) The principal occupation of Phil Frohlich is serving as the managing member of Prescott Capital. The principal business of Prescott Capital is acting as the general partner of the Small Cap Funds. The principal business of the Small Cap Funds is investing in securities.
(d) During the last five years, none of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, none of the Reporting Persons have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding were or are 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.
(f) Prescott Capital and the Small Cap Funds are organized under the laws of the State of Oklahoma. Mr. Frohlich is a citizen of the United States of America.
| Item 3. | Source and Amount of Funds |
As of December 2, 2013, the Small Cap Funds had invested $9,477,260 (inclusive of brokerage commissions) in shares of Common Stock of the Issuer. The source of these funds was the working capital of the Small Cap Funds.
| Item 4. | Purpose of the Transaction |
The Small Cap Funds (together with Phil Frohlich and Prescott Capital, the “Reporting Persons”) purchased the Common Stock based on the belief that such securities, when purchased, were undervalued and represented an attractive investment opportunity. Although the Reporting Persons have no specific plan or proposal to acquire or dispose of the Common Stock, consistent with their investment purpose, the Reporting Persons at any time and from time to time may acquire additional Common Stock or dispose of any or all of their Common Stock depending upon an ongoing evaluation of the investment in the Common Stock, prevailing market conditions, other investment opportunities, liquidity requirements of the Reporting Persons and/or other investment considerations.
The purpose of the acquisition of the Common Stock was for investment, and the acquisitions of the Common Stock were made in the ordinary course of business and were not made for the purpose of acquiring control of the Issuer or in relation to a contested solicitation for the election of directors of the Issuer.
Also, consistent with the investment purpose, the Reporting Persons may engage in communications with one or more shareholders of the Issuer, one or more officers of the Issuer and/or one or more members of the board of directors of the Issuer and/or one or more representatives or regulators of the Issuer regarding the Issuer, including, but not limited to, its operations. The Reporting Persons may discuss ideas that, if effected, may result in any of the following: the acquisition by persons of additional Common Stock of the Issuer, an extraordinary corporate transaction involving the Issuer and/or changes in the board of directors or management of the Issuer.
On November 29, 2013, the Reporting Persons issued the press release attached hereto as Exhibit 99.5 regarding the Theraclone merger vote. In addition, as a result of the termination of the Theraclone merger transaction, on December 2, 2013, the Reporting Persons withdrew the complaint that was filed by the Reporting Persons on November 26, 2013 in the Court of Chancery of the State of Delaware naming certain directors of the Board of Directors of the Issuer as defendants.
Except to the extent the foregoing may be deemed a plan or proposal, the Reporting Persons have no plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of the Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.
| Item 5. | Interest in Securities of the Issuer |
(a) The aggregate percentage of shares of Common Stock reported to be owned by the Reporting Persons is based upon 52,310,913 shares outstanding, which is the total number of shares of Common Stock outstanding as of November 1, 2013 pursuant to the Issuer’s Form 10-Q filed with the Securities and Exchange Commission on November 7, 2013.
As of December 2, 2013, the Small Cap Funds beneficially owned 5,244,835 shares of Common Stock, representing approximately 10.0% of the issued and outstanding Common Stock of the Issuer.
Prescott Capital, as the general partner, of the Small Cap Funds may also be deemed to beneficially own the 5,244,835 shares of Common Stock held by the Small Cap Funds, representing approximately 10.0% of the issued and outstanding Common Stock of the Issuer.
In addition, Phil Frohlich, as managing member of Prescott Capital, the general partner of the Small Cap Funds, may also be deemed to beneficially own the 5,244,835 shares of Common Stock beneficially owned by the Small Cap Funds, representing approximately 10.0% of the issued and outstanding Common Stock of the Issuer.
Prescott Capital and Mr. Frohlich disclaim beneficial ownership of the shares of Common Stock held by the Small Cap Funds except to the extent of their pecuniary interest therein.
(b) By virtue of his position with Prescott Capital and the Small Cap Funds, Phil Frohlich has the sole power to vote and dispose of the shares of Common Stock owned by the Small Cap Funds reported in this Amendment.
The filing of this Amendment on Schedule 13D shall not be construed as admission that Prescott Capital or Mr. Frohlich is for the purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended, the beneficial owner of any of the 5,244,835 shares of Common Stock owned by the Small Cap Funds. Pursuant to Rule 13d-4, Prescott Capital and Mr. Frohlich disclaim all such beneficial ownership.
(c) There have been no transactions in the Issuer’s Common Stock since the most recent filing of Schedule 13D.
(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the shares of Common Stock.
(e) Not applicable.
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer |
The responses to Item 4 are incorporated herein by reference.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
| Item 7. | Material to be Filed as Exhibits |
Exhibit 99.5 Press Release issued by the Reporting Persons dated November 29, 2013.
Signatures
After reasonable inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: December 2, 2013
| Prescott Group Capital Management, L.L.C. | ||
| By: | /s/ Phil Frohlich | |
| Phil Frohlich, Managing Member | ||
| Prescott Group Aggressive Small Cap, L.P. | ||
| By: Prescott Group Capital Management, L.L.C., its general partner | ||
| By: | /s/ Phil Frohlich | |
| Phil Frohlich, Managing Member | ||
| Prescott Group Aggressive Small Cap II, L.P. | ||
| By: Prescott Group Capital Management, L.L.C., its general partner | ||
| By: | /s/ Phil Frohlich | |
| Phil Frohlich, Managing Member | ||
| Phil Frohlich | ||
| By: | /s/ Phil Frohlich | |
| Phil Frohlich | ||
Exhibit 99.5
Prescott Group Capital Management, a greater than 10% shareholder of PharmAthene, Inc. (NYSE MKT: PIP), who has previously urged shareholders to vote against the Theraclone merger based largely on the lack of proper disclosures, now questions the quality of due diligence performed by PharmAthene’s Board of Directors after Theraclone announced on November 27, 2013 that:
“Theraclone Sciences, Inc., a therapeutic antibody discovery and development company, today announced that it has received notification from the Biomedical Advanced Research and Development Authority (BARDA) informing the Company that their proposal, “Broad spectrum anti influenza A M2e fully human monoclonal antibody TCN 032: Determination of efficacy in serious influenza disease,” was not selected for funding under the current proposal.”
Prescott’s concerns are heightened by disclosures made in an August 1, 2013 investor presentation, which indicate that TCN 032 has the largest market potential of all the drugs presented for Theraclone’s clinical pipeline.
Prescott believes this BARDA funding denial calls into question two critical components used by PharmAthene’s Board to help justify the merger: (1) access to non-dilutive government funding; and (2) a significant worldwide market opportunity for one of Theraclone’s most developed drugs.
Given the apparent importance of TCN 032 funding to the value of Theraclone, and by extension the entire “merger of equals” concept, Prescott reiterates its opinion that all shareholders should vote AGAINST all five proposals being submitted to a vote of PharmAthene stockholders at the scheduled December 3rd special meeting.
PharmAthene’s merger presentation can be found here:
- http://www.sec.gov/Archives/edgar/data/1326190/000114420413042546/v351583_ex99-2.htm
Prescott’s prior materials discussing these points in greater detail can be found here:
- http://www.sec.gov/Archives/edgar/data/1166152/000119312513440396/d628479dsc13da.htm
- http://www.sec.gov/Archives/edgar/data/1166152/000119312513395909/d611354dsc13da.htm
- http://www.sec.gov/Archives/edgar/data/1166152/000119312513453083/d634390dsc13da.htm