Company Update

Securities and Exchange Commission on January 9, 2008 (the “Initial Filing”), relating to the entry into and the completion of Access’ acquisition of Somanta Pharmaceuticals, Inc. (“Somanta”), Somanta Incorporated, a Delaware corporation and a wholly owned subsidiary of Somanta and Somanta Limited, a company organized under the laws of England and a wholly–owned subsidiary of Somanta.   This Amendment No. 1 to the Initial Filing on Form 8-K/A is being filed solely to amend and restated Item 9.01 of the Initial Filing to include Somanta’s financial statements and pro forma financial information required by Item 9.01 of Form 8-K.  The registrant has amended and restated the Initial Filing for the inclusion of the foregoing financial statements and pro forma financial statements. Except as set forth above, no other changes are being made to the Initial Filing. ITEM 9.01       FINANCIAL STATEMENTS AND EXHIBITS   (a) Financial Statements of Business Acquired Somanta Pharmaceuticals, Inc. audited consolidated financial statements are hereby incorporated by reference. The statements were audited by Stonefield Josephson, Inc. (b) Pro Forma Financial Information The following unaudited pro forma condensed combined financial statements apply to the merger between Somanta and Access, by which Somanta became a wholly owned subsidiary of Access, and are based upon the historical condensed consolidated financial statements and notes thereto (as applicable) of Access and Somanta, which are incorporated by reference into this Form 8K/A. The unaudited pro forma condensed combined balance sheet gives pro forma effect to the merger as if the merger had been completed on December 31, 2007 and combines Access’s December 31, 2007 audited consolidated balance sheet with Somanta’s January 4, 2008 unaudited consolidated balance sheet. The unaudited pro forma condensed combined statement of operations gives pro forma effect to the merger as if it had been completed on January 1, 2007 and combines Access’ audited consolidated statement of operations for the year ended December 31, 2007, with Somanta’s unaudited consolidated statement of operations for the nine months ended October 31, 2007.   The pro forma adjustments are based upon available information and certain assumptions that Access believes are reasonable under the circumstances. Total consideration paid in connection with the acquisition included: ·   Approximately 1.5 million shares of Access common stock was issued to the common and preferred shareholders of Somanta as consideration having a value of approximately $4,650,000 (the value was calculated using Access’ stock price on January 4, 2008 times the shares issued); ·   exchange all outstanding warrants for Somanta common stock for warrants to purchase 191,991 shares of Access common stock at exercise prices ranging between $18.55 and $69.57 per share. The warrants were valued at approximately $281,000. All of the warrants are exercisable immediately and expire approximately four years from date of issue. The weighted average fair value of the warrants was $1.46 per share on the date of the grant using the Black-Scholes pricing model with the following assumptions: expected dividend yield 0.0%, risk-free interest rate 3.26%, expected volatility 114% and an expected term of approximately 4 years; ·   an aggregate of $475,000 in direct transaction costs; and ·   cancelled receivable from Somanta of $931,000. Approximately $8,879,000 of the purchase price represents the estimated fair value of the acquired in-process research and development projects that have no alternative future use. Accordingly this amount was immediately expensed and for the purposes of this pro forma is included in additional paid-in capital.   The following table summarizes the initial fair values of the assets acquired and liabilities assumed at the date of the acquisition (in thousands) based on a preliminary valuation. Subsequent adjustments may be recorded upon the completion of the valuation and the final determination of the purchase price allocation. Cash                                                                  $          1 Prepaid expenses                                                            25 Office equipment, net                                                    14 Accounts payable                                                     (2,582) In-process research & development               8,879 $ 6,337   These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and related notes contained in the annual, quarterly and other reports filed by Access and Somanta with the Securities and Exchange Commission.     2   Pro Forma Condensed Combined Balance Sheet As of December 31, 2007 (Unaudited) Historical       Access     Somanta   Pro Forma Adjustments       Pro Forma  Combined   ASSETS                       Current assets                         Cash and cash equivalents   $ 159,000   $ 2,000             $ 161,000     Short term investments, at cost     6,762,000                     6,762,000     Receivables     35,000                     35,000     Receivables from Somanta     931,000           (931,000 ) (d)     -     Prepaid expenses and other current expenses     410,000     25,000             (410,000 ) (c)     25,000       Total current assets     8,297,000     27,000               6,983,000                                   Property and equipment, net     130,000     14,000               144,000   Patents net     710,000                     710,000   Other assets     12,000                     12,000       Total assets   $ 9,149,000   $ 41,000             $ 7,849,000                                   LIABILITIES AND STOCKHOLDERS’ DEFICIT                       Current liabilities                                 Accounts payable and accrued expenses   $ 1,796,000   $ 2,583,000     (410,000 ) (c)   $ 3,969,000     Accrued interest payable     130,000                     130,000     Current portion of deferred revenue     68,000                     68,000     Current portion of long-term debt net of discount     64,000     856,000     (856,000 ) (d)     64,000       Total current liabilities     2,058,000     3,439,000               4,231,000                                   Long-term deferred revenue      910,000                     910,000   Long-term debt     5,500,000                     5,500,000       Total liabilities     8,468,000     3,439,000               10,641,000                                   Stockholders’ equity (deficit)                                 Preferred stock     -     -               -     Common stock       36,000       15,000       15,000 (15,000   ) (a) (b)     51,000       Additional paid-in capital       116,018,000       7,615,000        4,756,000 (7,615,000 ) (a) (b)     120,774,000        Notes receivable from stockholders     (1,045,000 )                   (1,045,000 )   Treasury stock, at cost     (4,000 )                   (4,000 )   Accumulated deficit     (114,324,000 )   (11,028,000 )   (4,771,000 ) (a)     (122,568,000 )                   (3,398,000 11,028,000 (75,000 )    ) (b) (b) (d)             Total stockholders’ equity (deficit)     681,000     (3,398,000 )             (2,792,000 )     Total liabilities and stockholders’ equity (deficit)   $ 9,149,000   $ 41,000             $ 7,849,000     See accompanying Notes to Pro Forma Condensed Combined Balance Sheet   3   Notes to Pro Forma Condensed Combined Balance Sheet     Note 1: The above statement gives effect to the following pro forma adjustments necessary to reflect the merger of Access and Somanta, as if the transaction had occurred January 1, 2007. Somanta statements used were as of January 4, 2008 (unaudited).   a)   To record the exchange, for accounting purposes, by Somanta shareholders of their preferred and common stock (valued at $4,650,000) for 1,500,000 shares of Access (or 1,500,000 shares valued at the stock price of $3.10 per share) and record the exchange of Somanta warrants for Access warrants valued at a fair value of $281,000. The value placed on the shares was determined based on the Access stock price at January 4, 2008, the date of the acquisition.   b)   To eliminate the shareholders equity section and warrant liabilities of Somanta in connection with the merger and credit the net equity to combined deficit. c)   Accrual of $410,000 of legal, accounting and other professional fees relating to the merger. d)   Eliminate intercompany notes receivable and payable of $856,000 and other Somanta costs of $75,000 totaling $931,000. After the consummation of the transactions described herein, Access had 100,000,000 common shares authorized, approximately 5,085,023 common shares issued and outstanding, 2,000,000 preferred shares authorized with approximately 3,227.3617 shares of Series A cumulative Convertible Preferred Stock issued and outstanding.     4     Pro Forma Condensed Combined Statement of Operations For the Twelve Months Ended December 31, 2007 (Unaudited) Historical         Access     Somanta   Pro Forma Combined                   Revenues   $ 57,000   $ 1,000   $ 58,000                         Expenses                       Research and development     2,602,000     445,000     3,047,000     General and administrative     4,076,000     1,889,000     5,965,000     Depreciation and amortization     279,000     -     279,000       Total expenses     6,957,000     2,334,000     9,791,000                         Profit/(Loss) from operations     (6,900,000 )   (2,333,000 )   (9,233,000 )                       Interest and miscellaneous income     125,000     (3,000 )    122,000   Interest and other expenses     (3,514,000 )   (27,000 )    (3,541,000 ) Loss on extinguishment of debt     (11,628,000 )   -     (11,628,000 ) Change in fair value of warrant liabilities     -     5,119,000     5,119,000   Currency translation loss     -     (1,000 )   (1,000 )       (15,017,000 )   5,088,000     (9,929,000 ) Profit/(Loss) before discontinued operations and   before income tax benefit     (21,917,000 )   2,755,000     (19,162,000 ) Income tax benefit     61,000     (5,000 )   56,000   Profit/(Loss) from continuing operations     (21,856,000 )   2,750,000     (19,106,000 )                       Less preferred stock dividends     (14,908,000 )   -     (14,908,000 ) Loss from continuing operations allocable   to common stockholders     (36,764,000 )   2,750,000     (34,014,000 ) Discontinued operations, net of taxes of $61,000     112,000      -     112,000   Net profit/(loss) allocable to common stockholders   $ (36,652,000 ) $ 2,750,000   $ (33,902,000 )                       Basic and diluted loss per common share   Profit/(Loss) from continuing operations allocable to     all common stockholders   Discontinued operations     Net (loss) allocable to common stockholders   $   $ (10.35               0.03 (10.32 )   ) $   $ 0.19                     - 0.19   $   $ (6.73              0.02 (6.71 )   )                       Weighted average basic and diluted common shares outstanding     3,552,006     14,630,402     5,052,006   Notes to Pro Forma Condensed Combined Statement of Operations Note 1: The above statement gives effect to the merger of Access and Somanta, as if the merger had occurred on January 1, 2006. Somanta statements used were for the nine months ended October 31, 2007. Note 2: The pro forma combined-weighted average number of common outstanding shares is based on the weighted average number of shares of common stock of Access during the period plus those shares to be issued in conjunction with the merger. A reconciliation between Access' historical weighted average shares outstanding and pro forma weighted average shares outstanding and pro forma weighted average shares outstanding is as follows:      Historical                                       3,552,006  Somanta equivalent shares giving effect to the merger    1,500,000  Total     5,052,006 (c) Exhibits   Number   Title 23.1   Consent of Independent Registered Public Accounting Firm 99.1   Press Release dated January 7, 2008 entitled “Access Pharmaceuticals Closes Acquisition of Somanta Pharmaceuticals”           5   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.     By: Stephen B. Thompson   Vice President, Chief Financial Officer Date:  June 16, 2008       6   Exhibit Index     Exhibit No.                              Description   23.1                                           Consent of Independent Registered Public Accounting Firm 99.1                                           Press release issued by Access Pharmaceuticals, Inc. dated January 7, 2008.           7