Filing Details

 

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No.     )

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(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(b) 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 ("Act") 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).

 

 

SCHEDULE 13D

 

CUSIP No.   88165U 109
	1	Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Hudson Bay Capital Management LP
	2	Check the Appropriate Box if a Member of a Group*
		(a)			o
		(b)			x
	3	SEC Use Only
	4	Source of Funds (See Instructions) AF
	5	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o
	6	Citizenship or Place of Organization Delaware
Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 0 (1)
			8	Shared Voting Power 0 (1)
			9	Sole Dispositive Power 0 (1)
			10	Shared Dispositive Power 0 (1)
	11	Aggregate Amount Beneficially Owned by Each Reporting Person 0 (1)
	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o
	13	Percent of Class Represented by Amount in Row (11) 0.0% (1), (2)
	14	Type of Reporting Person (See Instructions) PN

 

(1)   See Item 4.

(2)   The percent of class is calculated based on 24,769,083 shares of Common Stock issued and outstanding as of October 28, 2016 as reported in the Issuers Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016, and filed with the SEC on November 3, 2016.

 

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(1)   See Item 4.

(2)   The percent of class is calculated based on 24,769,083 shares of Common Stock issued and outstanding as of October 28, 2016 as reported in the Issuers Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016, and filed with the SEC on November 3, 2016.

 

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Item 1.   Security and Issuer.

 

The name of the issuer is TetraLogic Pharmaceuticals Corporation (the Issuer).  The address of the Issuers principal executive offices is P.O. Box 1305, Paoli, PA 19355.  This Schedule 13D relates to the Issuers Common Stock, $0.0001 par value per share (the Common Stock).

 

Item 2.       Identity and Background

 

(a)                                 This Schedule 13D is filed by Hudson Bay Capital Management LP (the Investment Manager) and Mr. Sander Gerber (Mr. Gerber).  Each of the foregoing is referred to as a Reporting Person and collectively as the Reporting Persons.  The Investment Manager, which serves as the investment manager to Hudson Bay Master Fund Ltd. (the HB Fund) in whose names the reported securities are held, may be deemed to be the beneficial owner of all Senior Notes (as defined in Item 4) held by the HB Fund.  Mr. Gerber serves as the managing member of Hudson Bay Capital GP LLC, which is the general partner of the Investment Manager.  Mr. Gerber disclaims beneficial ownership of these securities.  Any disclosures herein with respect to persons other than the Reporting Persons are made on information and belief after making inquiry to the appropriate party.

 

(b)                                 The principal business address of each of the Reporting Persons is 777 Third Avenue, 30th Floor, New York, NY 10017.

 

(c)                                  The principal business of the Reporting Persons is investment and/or investment management.

 

(d)                                 None of the Reporting Persons have, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

 

(e)                                  On September 16, 2013 the Investment Manager entered into a settled administrative proceeding with the SEC relating to alleged violations of Rule 105 of Regulation M under the Securities Exchange Act of 1934 without admitting or denying the SECs allegations (the Settlement).  Rule 105 generally prohibits purchasing an equity security from an underwriter, broker or dealer participating in a public offering if the purchaser sold short the security that is the subject of the offering during a restricted period (usually defined as five business days before the pricing of the offering), absent an exception.  Rule 105 applies irrespective of any intent to violate the Rule.  Pursuant to the Settlement, $665,674,96 in disgorgement, $11,661.31 in prejudgment interest and a civil penalty of $272,118, was borne by the Investment Manager, and not its investors.  The Settlement also requires the Investment Manager to cease and desist from committing or causing any violations and any future violations of Rule 105.  The Investment Manager cooperated with the SEC at all times during its investigation and has implemented procedures for ensuring compliance with Rule 105, as well as an internal training program to educate its employees further on its nuances.  The SEC order notes that in determining the size of the penalty portion, the SEC considered remedial acts promptly undertaken and cooperation afforded to Commission staff by the Investment Manager.  Except with respect to the matter described above, no Reporting Person has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding has been 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.

 

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(f)                                   The Investment Manager is a Delaware limited partnership.  HB Fund is a company organized under the laws of the Cayman Islands.  Mr. Gerber is a United States citizen.

 

Item 3.       Source and Amount of Funds or Other Considerations

 

The source of funding for the purchase of the Senior Notes (as defined in Item 4) held by the Reporting Person was the general working capital of HB Fund and the other respective purchasers.

 

Item 4.       Purpose of Transaction

 

As of November 2, 2016, Whitebox Relative Value Partners L.P, Whitebox Multi-Strategy Partners L.P., Pandora Select Partners, L.P., Whitebox GT Fund L.P., Lazard Asset Management LLC, Linden Advisors LP, Nomura Securities International, Inc., Telemetry Securities LLC, Geode Diversified Fund, Hudson Bay Capital Management LP (on behalf of the HB Fund), Highbridge International LLC, Highbridge Tactical Credit & Convertible Master Fund, L.P., and State of New Jersey Common Pension Fund D (together, the Noteholders) held 100% of the Issuers 8% Convertible Senior Notes due 2019 outstanding (the Senior Notes), in an aggregate principal amount of $43,750,000.  Under the Indenture, dated as of June 23, 2014 between the Issuer, and U.S. Bank National Association, a national banking association, as trustee (the Indenture), prior to February 15, 2019, the Senior Notes are convertible into shares of Common Stock at the option of the holder only upon the satisfaction of certain conditions precedent, including, without limitation if a transaction or event that would, if consummated, constitute a Fundamental Change occurs prior to February 15, 2019.  A Fundamental Change includes, among other things, the sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Issuer and its subsidiaries, taken as a whole.  The Senior Notes convert into Common Stock at a conversion rate of 148.3019 shares of Common Stock per $1,000 in aggregate principal amount of Senior Notes, subject to adjustment as set forth in the Indenture.

 

On November 2, 2016, the Issuer and its wholly-owned subsidiary, TetraLogic Research and Development Corporation, entered into a definitive asset purchase agreement (the APA) to, subject to closing conditions, sell the Business (as defined below) (the Asset Sale) to Medivir AB, a publicly traded Swedish company (Nasdaq Stockholm: MVIR) ( Medivir). Under the APA, the Issuer agreed to sell substantially all of the assets relating to the research, development, manufacture and commercialization of SMAC mimetics and HDAC inhibitors, including birinapant and SHP-141 (the Business) to Medivir for a purchase price of (i) $12 million payable in cash at closing plus an amount equal to the aggregate expense payable to INC Research, LLC to complete the SHAPE CTCL Phase II ongoing trial currently estimated to be $275,000 (the Closing Payment), plus (ii) milestone payments and earn-out payments, subject to the satisfaction of certain contingencies, as further described in the APA.

 

The Asset Sale, if consummated, would constitute a Fundamental Change under the Indenture.  On November 2, 2016, the Senior Notes held by the Reporting Persons as of November 2, 2016, in an aggregate principal amount of $1,000,000 became convertible, at the option of the Reporting Persons, into 148,301 shares of Common Stock, representing 0.6% of the Common Stock of the Issuer.  The percent of class is calculated based on 24,769,083 shares of Common Stock issued and outstanding as of October 28, 2016 as reported in the Issuers Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016.

 

On November 2, 2016, the Issuer entered into a binding letter agreement (the Debt Exchange Term Sheet) with the Noteholders pursuant to which the Issuer and the Noteholders agreed to enter into an Exchange and Consent Agreement (the Exchange Agreement and together with the Debt Exchange Term Sheet, the Exchange Documents) to exchange $2.2 million in aggregate principal amount of the

 

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Senior Notes for 12,222,225 shares of newly issued series A convertible participating preferred stock of the Issuer (the Preferred Stock). Following the consummation of the Note Exchange, approximately $41,550,000 in aggregate principal amount of the Senior Notes (the Remaining Senior Notes) will remain outstanding.

 

On November 14, 2016, the Issuer and each of the Noteholders entered into Exchange Agreements to effect the note exchange described in the preceding paragraph (the Note Exchange).  The Note Exchange is expected to be consummated within three business days of the effective date of the Exchange Agreement.  Under the Exchange Agreement, the Reporting Persons have agreed to exchange $50,286 in aggregate principal amount of Senior Notes for 279,367 shares of Preferred Stock in the Note Exchange.

 

In accordance with the terms of the Certificate of Designations for the Preferred Stock, the Preferred Stock is convertible into Common Stock, at the option of the holder during the period commencing on the business day immediately following the later of the date upon which (i) the shares of Common Stock have been deregistered under the Act, and (ii) the Company receives a milestone or earn-out payment pursuant to Section 3.2 or Section 3.3 of the APA (or other payment in lieu thereof).

 

Pursuant to the Exchange Documents, the Noteholders agreed to: (i) the Exchange as set forth in the Exchange Agreement, (ii) the consummation of the Asset Sale (including voting their shares of Preferred Stock in favor of such Asset Sale), and (iii) the Issuers use of $12 million of the Closing Payment to pay the outstanding amounts due under the Remaining Senior Notes in the first instance.

 

Pursuant to the Exchange Documents, the Noteholders also agreed (i) to waive any put right for their Senior Notes related to the Asset Sale or a suspension of trading and delisting of the Common Stock from The Nasdaq Global Market as well as any right to receive cash payments of the interest on the Senior Notes, and agreed instead that such interest will continue to accrue until paid and (ii) to extend the maturity date of the Remaining Senior Notes until June 15, 2024. These waivers and extension will automatically terminate and be of no further force and effect as if they had never been provided if the APA is terminated or the Asset Sale is not completed for any reason.

 

Pursuant to the Exchange Agreements, each Noteholder also agreed waive its right to convert any of the principal amount of the Senior Notes into shares of Common Stock pursuant to Article 11 of the Indenture unless and until the date upon which the Company receives a milestone or earn-out payment pursuant to Section 3.2 or Section 3.3 of the APA (or other payment in lieu thereof.)

 

Upon the closing of the Asset Sale, the Noteholders and the Issuer will enter into a supplemental indenture to permanently waive or otherwise amend the indenture for the Senior Notes to reflect these waivers and extension.

 

The summaries of the Exchange Documents are not complete, and are qualified in their entirety by reference to the texts of the agreements, which are referenced as Exhibits to this Schedule 13D.

 

Item 5.       Interest in Securities of the Issuer

 

(a)                                 Shares held by the Reporting Persons

 

On November 2, 2016, the Reporting Person may have been deemed to be the beneficial owner of 148,301 shares of Common Stock issuable upon the conversion of $1,000,000 in aggregate amount of Senior Notes held by the Reporting Person, constituting 0.6% of the shares of Common Stock of the Issuer.

 

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As a result of waiving the conversion rights with respect to the Senior Notes pursuant to the Exchange Agreement on November 14, 2016, the Reporting Person is no longer deemed to be the beneficial owner of any shares of Common Stock.

 

The percent of class is calculated based on 24,769,083 shares of Common Stock issued and outstanding as of October 28, 2016 as reported in the Issuers Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016 and filed with the SEC on November 3, 2016.

 

Shares held by the Other Parties

 

As a result of entering into the Debt Exchange Term Sheet, the Reporting Persons may be deemed to have formed a group with each the other Noteholders and/or certain affiliates of each of such parties (the Other Parties and together with the Reporting Persons, the Parties) for purposes of Section 13(d) of the Exchange Act and Rule 13d thereunder.

 

On November 2, 2016, the Other Parties may have been deemed to be the beneficial owners of an aggregate of 6,339,906 shares of Common Stock issuable upon the conversion of $42,750,000 in aggregate amount of Senior Notes held by the Other Parties, constituting 20.4% of the shares of Common Stock of the Issuer.

 

If the Reporting Person were deemed to have formed a group with each of the Other Parties for purposes of Section 13(d) of the Act, and Rule 13d thereunder, on November 2, 2016, the Reporting Person may have been deemed to be the beneficial owner of the shares of Common Stock held by the Other Parties, and may have been deemed to be the beneficial owner of the shares of Common Stock issuable upon the conversion of the Senior Notes held by the Other Parties.  As a result, if the Reporting Person were deemed to have formed a group with each of the Other Parties for purposes of Section 13(d) of the Act, and Rule 13d thereunder, on November 2, 2016, the Reporting Persons may have been deemed to be the beneficial owners of an aggregate of 6,488,208 shares of Common Stock issuable upon conversion of the Senior Notes in an aggregate principal amount of $43,750,000 held by the Noteholders, constituting 20.8% of the Common Stock of the Issuer.  The Reporting Persons expressly disclaim beneficial ownership of the shares of Common Stock referred to in this Schedule 13D (other than the Reporting Persons shares as described in this Schedule 13D), and the inclusion of the Other Parties shares in this Schedule 13D shall not be deemed to be an admission of beneficial ownership of such reported shares for purposes of Section 13(d) of the Act or for any other purpose.

 

As a result of waiving their conversion rights with respect to the Senior Notes pursuant to the Exchange Agreement on November 14, 2016, the Other Parties are no longer deemed to be the beneficial owners of any shares of Common Stock.

 

The percent of class is calculated based on 24,769,083 shares of Common Stock issued and outstanding as of October 28, 2016 as reported in the Issuers Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016 and filed with the SEC on November 3, 2016.

 

Information with respect to the beneficial ownership of shares of Common Stock by the Other Parties, the identity and background of each of the Other Parties and persons related to them and related information should be contained in Schedules 13D, filed by each of the Other Parties. The Reporting Persons have no responsibility for the accuracy or completeness of any information given with respect to any other person or entity, including, without

 

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limitation, each of the Other Parties. Any disclosures made herein with respect to any person or entity other than the Reporting Persons are made on information and belief.

 

(b)                                 Shares held by Reporting Persons

 

The Reporting Persons do not have the sole or shared power to vote or direct the vote of or to dispose of or to direct the disposition of any shares of Common Stock.  See Item 5(a).

 

Shares held by the Other Parties

 

The Other Parties do not have the sole or shared power to vote or direct the vote of or to dispose of or to direct the disposition of any shares of Common Stock.  See Item 5(a).

 

(c)                                  On November 14, 2016, pursuant to the Exchange Agreement, the Reporting Persons have agreed to exchange $50,286 in aggregate principal amount of the Senior Notes for 279,367 shares of Preferred Stock, as described below:

 

Name of Reporting Person		Aggregate Amount of Senior Notes Converted			Number of Shares of Preferred Stock		Amount of Remaining Senior Notes
Hudson Bay Capital Management LP		$	50,286		279,367		$	949,714

 

As a result of waiving the conversion rights with respect to the Senior Notes pursuant to the Exchange Agreement on November 14, 2016, Senior Notes and the Preferred Stock are not currently convertible at the option of the Reporting Persons into shares of Common Stock.   See Item 4.

 

All transactions effected by the Other Parties during the past 60 days should be contained in Schedules 13D, as amended (as applicable), filed by each of the Other Parties. The Reporting Persons have no responsibility for the accuracy or completeness of any information given with respect to any other person or entity, including, without limitation, the Other Parties. Any disclosure made herein with respect to any person or entity other than the Reporting Persons are made on information and belief.

 

(d)         No person other than the Reporting Persons and their clients 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 held by such client accounts.

 

(e)          On November 14, 2016, the Parties ceased to beneficially own any shares of Common Stock and as a result, any group that may have deemed to have been formed on November 2, 2016, among the Parties for purposes of purposes of Section 13(d) of the Act, and Rule 13d thereunder was ceased on November 14, 2016.

 

Item 6.                     Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

Except as described in Items 1 through 7 of this Schedule 13D, to the best knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise),

 

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including, but not limited to, transfer or voting of any of the securities, finders fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, between the Reporting Persons and any other person with respect to the Common Stock or any securities of the Issuer.

 

Item 7.       Material to Be Filed as Exhibits

 

Exhibit A:  Joint Filing Agreement of the Reporting Persons

 

Exhibit B: Debt Exchange Agreement, dated November 2, 2016 (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by TetraLogic Pharmaceuticals Corporation on November 2, 2016)

 

Exhibit C:  Exchange Agreement, dated November 14, 2016 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by TetraLogic Pharmaceuticals Corporation on November 14, 2016)

 

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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.

 

Date: November 14, 2016	Hudson Bay Capital Management LP
	By:	/s/ Sander Gerber
	Name:	Sander Gerber
	Title:	Authorized Signatory
	/s/ Sander Gerber
	Sander Gerber

 

Attention:  Intentional misstatements or omissions of fact constitute Federal criminal violations (see 18 U.S.C. 1001).

 

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Exhibit A

 

AGREEMENT

 

The undersigned agree that this Schedule 13D, dated November 14, 2016, relating to the Common Stock, $0.0001 par value of TetraLogic Pharmaceuticals Corporation shall be filed on behalf of the undersigned.

 

Date: November 14, 2016	Hudson Bay Capital Management LP
	By:	/s/ Sander Gerber
	Name:	Sander Gerber
	Title:	Authorized Signatory
	/s/ Sander Gerber
	Sander Gerber

 

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