As filed with the Securities and Exchange Commission on AprilMay 14, 2006.2010.
SECURITIES AND EXCHANGE COMMISSION
_______________
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
UNIGENE LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
_______________
| | | | |
Delaware | | 2833 | | 22-2328609 |
(State or Other Jurisdiction of Incorporation or Organization)
| | 2833 (Primary Standard Industrial Classification Code Number)
| | 22-2328609 (I.R.S. Employer Identification No.)
|
110 Little Falls Road
Fairfield,
81 Fulton Street
Boonton, New Jersey
0700407005
(Address, including zip code, and telephone number, including area code, of
registrant’sregistrant's principal executive offices)
_______________
President
and Chief Executive Officer
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield,
81 Fulton Street
Boonton, New Jersey
0700407005
(Name, address including zip code, and telephone number, including area code, of agent for service)
_______________
902 Carnegie Center, Suite 500
Princeton, NJ
08543-521808540-6531
_______________
Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: xþ If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box o¨ and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box o¨and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box o¨ and list the Securities Act registration number of the earlier effective registration statement for the same offering. If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o¨. CALCULATION OF REGISTRATION FEE
| | | | | | | | |
| Title of Securities to be Registered | | Amount to be Registered (2) | | Proposed
Maximum
Offering Price
Per Share | | Proposed
Maximum
Aggregate
Offering Price | | Amount of
Registration
Fee |
Common Stock, par value $.01 per share(1) | | 5,000,000 | | $3.395 | | $16,975,000 | | $1816.33 |
| Title of Securities to be Registered | | Amount to be Registered (2) | | Proposed Maximum Offering Price Per Share | | Proposed Maximum Aggregate Offering Price | | Amount of Registration Fee |
| Common Stock, par value $.01 per share(1) | | 43,914,719 | | $0.72 (3) | | $31,618,597 (3) | | $2,254.41 (4) |
| | | | | | | |
| (1) | Each share of Common Stockcommon stock includes a right to purchase one ten-thousandth of a share of Common Stock.common stock. |
| (2) | This Registration Statement registers the offer and sale of 5,000,00043,914,719 shares of common stock, par value $.01 per share of the registrant (the “Common Stock”).Registrant, of which 35,268,905 shares will be issuable upon the conversion of senior secured convertible notes previously issued by the Registrant. Pursuant to Rule 416 under the Securities Act of 1933, as amended, the number of shares registered hereby includes such additional number of shares of Common Stockcommon stock as are required to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
| (3) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) based on the average of the high and low prices of the Common Stockcommon stock reported on the OTC Bulletin Board on April 7, 2006.May 11, 2010. |
| (4) | Pursuant to Rule 457(p) under the Securities Act of 1933, as amended, $2,139.00 in fees from a prior registration statement of the registrant on Form S-3 (file number 333-163989) filed on December 23, 2009, were used to offset the registration fee associated with this filing. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant has filed a further amendment that specifically states that the Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statementRegistration Statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.
The information in this prospectus is not complete and may be changed. The selling stockholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.
Subject to completion, dated April [], 2006May 14, 2010
Prospectus
Prospectus
UNIGENE LABORATORIES, INC.
5,000,000
43,914,719 Shares of Common Stock
This prospectus relates to the sale of up to
5,000,00043,914,719 shares of Unigene Laboratories, Inc.
(the “Company”) common stock, par value $.01 per share, by the selling stockholder named in the “Selling Stockholder” section of this prospectus,
(the “Selling Stockholder”), of which
1,000,00035,268,905 shares
arewill be issuable upon the
exerciseconversion of
warrants of the Companysenior secured convertible notes held by the
Selling Stockholder.selling stockholder and the balance of which are currently held of record by the selling stockholder. The prices at which the
Selling Stockholderselling stockholder may sell the shares will be determined by the prevailing market price for the shares or in negotiated transactions. We will not receive
any proceeds from the sale of our shares by the
Selling Stockholder.selling stockholder. All costs, expenses and fees in connection with the registration of these shares will be borne by
the Company.us.
Our common stock is quoted in the OTC Bulletin Board under the symbol “UGNE.” On
April 12, 2006,May 13, 2010, the last reported closing price of our common stock was
$3.86$.80 per share.
These over-the-counter quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.Pursuant to an Amended and Restated Registration Rights Agreement, dated March 17, 2010 (the “Registration Rights Agreement”), between us and the selling stockholder, we agreed to file the registration statement of which this prospectus forms a part to cover the resale by the selling stockholder of the shares of our common stock registered hereunder, including those shares issuable from time to time upon the conversion of senior secured convertible notes (pursuant to the terms and conditions set forth in such notes) issued by us to the selling stockholder pursuant to an Amended and Restated Financing Agreement, dated March 16, 2010 (the “Restated Financing Agreement”), by and among Unigene and Victory Park Management, LLC, as administrative agent and collateral agent, and the selli ng stockholder.
You should read this prospectus carefully before you invest. Please refer to
“Risk“Risk Factors Related to our Business”Business” on page 26 of this prospectus for a discussion of the material risks involved in investing in the shares.The selling stockholder may be deemed to be an “underwriter” within the meaning of the Securities Act of 1933, as amended.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. THE SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is
[],
2006.2010.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the SEC. The selling stockholder may sell up to 43,914,719 shares of common stock described in this prospectus in one or more offerings. The exhibits to our registration statement contain the full text of certain contracts and other important documents we have summarized in this prospectus. Since these summaries may not contain all the information that you may find important in deciding whether to purchase the securities offered by the selling stockholder, you should review the full text of these documents. The registration statement and the exhibits can be obtained from the SEC as indicated under the heading “Where You Can Find More Information.”
This prospectus provides you with a general description of the offering of securities by the selling stockholder. Each time the selling stockholder offers to sell securities, we may provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus, the applicable prospectus supplement and the additional information described below under the heading “Where You Can Find More Information.”
You should rely only on the information contained or incorporated by reference in this prospectus and in any prospectus supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making offers to sell or solicitations to buy the securities in any jurisdiction in which an offer or solicitation is not authorized or in which the person making that offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation. You should not assume that the information in this prospectus or any prospectus supplement, as well as the information we previously filed with the SEC that we incorporate by reference in this prospectus or any prospectus supplement, is accurate as of any date other than its respective date. Our business, financial condition, results of operations and prospects may have changed since those dates.
In this prospectus, “Unigene,” “we,” “our,” “ours,” and “us” refer to Unigene Laboratories, Inc., which is a Delaware corporation headquartered in Boonton, New Jersey. Unless otherwise stated, the dollar amounts contained in this prospectus and any accompanying prospectus supplement are presented in U.S. dollars.
The following summary highlights information contained elsewhere in this prospectus. It may not contain all of the information that is important to you. You should read the entire prospectus carefully, especially the discussion regarding the risks of investing in Unigene common stock under the heading “Risk Factors,” before investing in Unigene common stock.
“Unigene®“Unigene®,”
“Forcaltonin®“Forcaltonin®,” and
“Fortical®“Fortical®” are registered trademarks of Unigene Laboratories, Inc.
We are a biopharmaceutical company engaged in the research, production and delivery of small proteins, referred to as peptides, that have demonstrated or may have potentialfor medical use. We have a patented manufacturing technology for producing many peptides cost-effectively. We also have patented oral and nasal delivery technologies that have been shown to deliver medically useful amounts of various peptides into the bloodstream. We have three operating locations: administrative and regulatory offices in Boonton, New Jersey; a laboratory research facility in Fairfield, New Jersey; and a pharmaceutical production facility in Boonton, New Jersey.
Our primary focus has been on the development of calcitonin and other peptide products for the treatment of osteoporosis and other indications.
We have licensed worldwide rights to our manufacturing and delivery technologies for oral parathyroid hormone, which we refer to as PTH, to GlaxoSmithKline, or GSK. We have also licensed in the U.S. our nasal calcitonin product, which we have trademarked as Fortical®, to Upsher-Smith Laboratories, Inc., or USL. Fortical was approved by the Food and Drug Administration, or FDA, in August 2005. This is our first product approval in the U.S. Both of these products are being developed for the treatment of osteoporosis. We have also licensed worldwide rights to our patented manufacturing technology for the production of calcitonin to Novartis Pharma AG, or Novartis. We have an injectable calcitonin product, Forcaltonin®, that is approved for sale in the European Union and in Switzerland for osteoporosis indications. This product has not generated significant revenue. Our peptide products other than Fortical in the United States will require clinical trials and/or approvals from regulatory agencies and all of our products will require acceptance in the marketplace. There are risks that these clinical trials will not be successful and that we will not receive FDA approval or significant sales for these products. We compete with specialized biotechnology companies, major pharmaceutical and chemical companies and universities and research institutions. Most of these competitors have substantially greater resources than we do.Among our major accomplishments are:
Development and Licensing of a Proprietary Peptide Production Process. One of our principal scientific accomplishments is our success in developing a highly efficient biotechnology-based peptide production process. Several patents relating to this process have issued. We believe that these proprietary processes are key steps in the more efficient and economical commercial production of medically useful peptides. Many of these peptides cannot be produced at a reasonable cost in sufficient quantities for human testing or commercial use by currently available production processes. We have constructed and are operating a manufacturing facility employing this process to produce PTH and calcitonin, and we have also produced laboratory-scale quantities of several other peptides. During 2004, we licensed worldwide rights to this technology to Novartis for their production of calcitonin.
Development and Licensing of Proprietary Technology for Oral Delivery. We have developed and patented an oral formulation that has successfully delivered therapeutically important quantities of calcitonin and PTH into the bloodstream of human subjects in studies performed by Unigene and our collaborators. We believe that the components of our patented oral product also can enable the delivery of other peptides and we have initiated studies to investigate this possibility internally and in collaboration with others. During 2001, we reported successful oral delivery in animal studies of various peptides including PTH for the treatment of osteoporosis and insulin for the treatment of diabetes. During 2002, we licensed rights to our manufacturing and delivery technologies for oral PTH to GSK. During 2004, GSK successfully completed a Phase I study for oral PTH.| · | Development, Licensing and Commercialization of a Nasal Calcitonin Product Using Our Proprietary Technology. We have developed and patented a nasal calcitonin product, which we have trademarked as Fortical®, that, in human studies, demonstrated similar blood levels to a competitor’s existing nasal calcitonin product and also demonstrated a comparable decrease in bone loss as measured by several industry-accepted blood markers, and a comparable increase in bone mineral density. During 2002, we licensed U.S. rights to Fortical to Upsher-Smith Laboratories, Inc., or USL. Fortical was approved by the Food and Drug Administration, or FDA, in 2005 for the treatment of osteoporosis. This was our first product approval in the United States. The launch of Fortical has resulted in sa les to, and royalty payments from, USL. |
Development and Licensing of Proprietary Technology for Nasal Delivery. We have developed and patented a nasal calcitonin formulation that, in human studies, demonstrated similar blood
| · | Development and Licensing of a Proprietary Peptide Production Process. One of our principal scientific accomplishments is our success in developing a highly efficient biotechnology-based peptide production process. Several patents relating to this process have issued. We believe that this proprietary process is a key step in the more efficient and economical commercial production of medically-useful peptides. Many of these peptides cannot be produced at a reasonable cost in sufficient quantities for human testing or commercial use by other currently available production processes. We have constructed and are operating a manufacturing facility employing this process to produce oral parathyroid hormone, or PTH, and calcitonin, and we have also produced laboratory-scale quantities of sev eral other peptides. In 2004, we licensed worldwide rights to our patented manufacturing technology for the production of calcitonin to Novartis Pharma AG, or Novartis, and we signed a supply agreement with Novartis in 2007 using this technology to manufacture peptide for a novel osteoporosis treatment. |
2
levels to an existing nasal calcitonin product and also demonstrated a comparable decrease in bone loss, as measured by several industry accepted blood markers, and a comparable increase in bone mineral density. During 2002, we licensed U.S. rights to our nasal calcitonin product, Fortical, to USL. We filed a new drug application, or NDA, for Fortical in March 2003 and Fortical was approved by the FDA in August 2005. This is our first product approval in the United States. This approval triggered the receipt of the final $4,000,000 milestone payment from USL and the launch of the product has resulted in sales and royalty payments from USL.
These patented manufacturing and delivery technologies form the basis of our business strategy. The potential pharmaceutical products that we are developing use one or, in most cases, two of these technologies. Our oral calcitonin and oral PTH products would utilize our peptide production process as well as our oral delivery system for peptides. These products are currently in development and, if approved, they most likely would be introduced into the market years from now.
| · | Development and Licensing of Phase III Oral Calcitonin Program. We licensed our Phase III oral calcitonin program in October 2009 to Tarsa Therapeutics, Inc., or Tarsa, a new company formed by a syndicate of three venture capital funds specializing in the life sciences. Unigene owns approximately 26% of Tarsa and will be eligible to receive milestone payments based on the achievement of certain sales benchmarks, as well as royalties on product sales. Going forward Tarsa will be solely responsible for the costs of the global Phase III clinical program that was initiated in 2009 and Tarsa paid us approximately $9,000,000 in October 2009 for certain of our Phase III expenditures. |
| · | Development and Licensing of Proprietary Technology for Oral Delivery. We have licensed worldwide rights to our manufacturing and delivery technologies for PTH for the treatment of osteoporosis to GlaxoSmithKline, or GSK. We have developed and patented an oral formulation that has successfully delivered therapeutically important quantities of calcitonin and PTH into the bloodstream of human subjects in studies performed by Unigene and our collaborators. We believe that the components of our patented oral product also can enable the delivery of other peptides, and we have initiated studies to investigate this possibility internally and in collaboration with others. During 2001, we reported successful oral delivery in animal studies of various peptides including PTH for the treatment of osteoporosis and insulin for the treatment of diabetes. During 2002, we licensed rights to our manufacturing and delivery technologies for oral PTH to GSK. |
| · | Other Potential Technology and Therapies. To expand our product pipeline we are developing our site-directed bone growth technology, or SDBG, in conjunction with Yale University, and we have in-licensed technology from Queen Mary, University of London related to potential therapies for inflammation and cardiovascular disease. We are also developing a novel peptide treatment for obesity. |
| · | Chinese Joint Venture. We have licensed to our Chinese joint venture certain proprietary technologies and know-how to support the research, development, and manufacturing of recombinant salmon calcitonin and non-oral PTH, as well as other possible products, in the People’s Republic of China. |
| · | Additional Feasibility Studies. In addition, we periodically perform feasibility studies for third parties, which could lead to licensing or other commercial opportunities for such products. |
Our business strategy is to develop proprietary products and processes with applications in human health care to generate revenues from license fees, royalties on third-party sales and direct sales of bulk or finished products. Generally, we fund our internal research activities and, due to our limited financial resources,
intend towe rely on licensees, which are likely to be established pharmaceutical companies, to provide development funding. We also generally expect to rely on these licensees to take responsibility for obtaining appropriate regulatory approvals, human testing, and marketing of products derived from our research activities. However, we may, in some cases, retain the responsibility for human testing and for obtaining the required regulatory approvals for a particular product.
Our patented manufacturing and delivery technologies provide the technological foundation for our business strategy. The potential pharmaceutical products that we are developing use one or, in some cases, two of these technologies. Our oral calcitonin and oral PTH products would utilize our peptide production process, as well as our oral delivery system for peptides. These products are currently in development and, if approved, they most likely would be introduced into the market years from now.
Our products, other than Fortical in the United States, will require clinical trials and/or approvals from regulatory agencies and all of our products will require acceptance in the marketplace. There are risks that these clinical trials will not be successful and that we will not receive regulatory approval or significant revenue for these products. We compete with specialized biotechnology companies, major pharmaceutical and chemical companies and universities and research institutions. Most of these competitors have substantially greater resources than we do.
Unigene is incorporated under the laws of the State of Delaware. Our executive offices are located at
110 Little Falls Road, Fairfield,81 Fulton Street, Boonton, New Jersey
07004,07005, and our telephone number at this location is (973)
882-0860.265-1100. The address of our
web sitewebsite is www.unigene.com. Information on our
web sitewebsite is not part of this prospectus.
Unigene common stock trades on the OTC Bulletin Board under the symbol “UGNE.”
The
On March 16, 2006,September 30, 2008, we entered into a common stock purchase agreementFinancing Agreement (the “Securities Purchase“Original Financing Agreement”) with an accredited institutional investor (the “Purchaser”Victory Park Management, LLC (“Victory Park”), as agent, and Victory Park Special Situations Master Fund, Ltd. ( “Special Situations Fund”) identified inand the Schedule of Buyers toselling stockholder (together, the Securities Purchase Agreement, in a private placement (the “Private Placement”“Funds”), pursuant to which the Purchaser agreed to purchase 4,000,000Funds purchased $20 million of three-year senior secured non-convertible term notes (the “Original Notes”) from us and we issued 1,500,000 shares of our Common Stock, and a common stock purchaseto the Funds at two closings (the “Shares”).
On October 19, 2009, in connection with the Omnibus Amendment Agreement that we entered into with the Funds, we issued 300,000 shares of common stock (the “Exchange Shares”) to Special Situations Fund in exchange for Special Situations Fund’s surrender of a warrant under which it may acquire an additionalto purchase 1,000,000 shares of common stock.stock pursuant to the terms of a Warrant Exchange Agreement. The Purchaser, the selling stockholder under this prospectus, is offering for sale up to 5,000,000Funds also had collectively purchased an aggregate of 6,845,814 shares of our common stock consistingin open market transactions and privately negotiated transactions (the “Other Shares”). In March 2010, Special Situations Fund sold and assigned to the selling stockholder all of 4,000,000its rights, title and interest in and to the Original Notes, the Shares, the Exchange Shares and the Other Shares.
On March 16, 2010, we entered into the Restated Financing Agreement with Victory Park, as administrative agent and collateral agent, and the selling stockholder, as lender, and, under that agreement, we issued three-year senior secured convertible notes in the aggregate principal amount of $33,000,000 due in March 2013 (the “Notes”), in exchange for the Original Notes in the outstanding aggregate principal amount of approximately $19,360,000 and by way of cash payment (before closing expenses) of approximately $13,640,000. In addition, pursuant to the Restated Financing Agreement, we may request that the selling stockholder purchase (which purchase shall be in its sole discretion) up to an additional $3 million aggregate principal amount of Notes at one subsequent closing, which shall be no lat er than March 17, 2012. The Notes will accrue interest at a rate per annum equal to the greater of (i) the prime rate plus 5% and (ii) 15%, which, in the absence of an Event of Default (as defined therein), shall be capitalized and added to the outstanding principal balance of such Notes on each anniversary of the date of issuance other than the maturity date.
The Notes will be convertible into shares of common stock (the “Conversion Shares”) at the holder’s option upon the earliest of (i) March 17, 2011, (ii) the earliest date on which we are required under the Notes to provide to the holder prior written notice of our intention to consummate, or the occurrence of, a Fundamental Transaction (as defined in the Notes), (c) our delivery of the redemption notice (described below) and (d) the occurrence of an Event of Default under the Restated Financing Agreement. The initial conversion rate, which is subject to adjustment as set forth in the Notes, is calculated by dividing the sum of the principal to be converted, plus all accrued and unpaid interest thereon, by $0.70 per share. If we subsequently make certain issuances of common stoc k or common stock equivalents at an effective purchase price less than the then-applicable conversion price, the conversion price of the Notes will be reduced to such lower price. After March 17, 2011, under certain circumstances, and subject to specified conditions, we have the right, at our option, by delivery of written notice, to redeem $13,642,472.50 of the Notes at a price equal to 110% of the unpaid outstanding principal amount of the Notes being redeemed plus accrued and unpaid interest with respect to such principal amount; provided, that the holder of the Notes may elect to convert all or any portion of such Notes that we are electing to redeem.
Assuming $36,000,000 aggregate principal amount of Notes together with accrued interest thereon is outstanding for the full three-year term of the Notes, and assuming a conversion price of $.70, the Notes will be convertible into approximately 79,000,000 Conversion Shares. Under the Registration Rights Agreement, we are required to file with the SEC a registration statement covering the resale of all of the Shares, the Exchange Shares, the Other Shares and the Conversion Shares. However, the number of our authorized shares of common stock is currently insufficient to cover all the Conversion Shares issuable if such Notes were converted in full. Accordingly, as required under the Restated Financing Agreement, we are seeking stockholder approval at our 2010 Annual Meeting of Stock holders to be held on June 15, 2010 to increase the number of authorized shares of common stock to a number that will be sufficient to cover the full number of Conversion Shares plus a buffer equal to an additional 50% of those shares. If stockholder approval is obtained, we intend to promptly file an amendment to our Certificate of Incorporation to effect such increase in the number of authorized shares of our common stock (the “Amendment”). If stockholder approval of the Amendment is not so obtained, we will be required to call a stockholders meeting every four (4) months to seek approval of the Amendment until the date on which such approval is obtained. Thereafter, we will be required to file with the SEC a new registration statement covering the resale of Conversion Shares not then covered by an effective registration statement for resales pursuant to Rule 415.
Currently, we have reserved for issuance and
adelivery, upon conversion of the Notes, 35,268,905 shares of authorized, unissued and otherwise unreserved common stock,
purchase warrant under which
it may acquire an additional 1,000,000are some of the shares
of our common stock. The five-year warrant, which is exercisable immediately at an exercise price of $4.25 per share, allows a cashless exercise and has certain anti-dilutive provisions.being offered by this prospectus.
As of March 31, 2006,May 6, 2010, there were 87,528,56592,193,551 shares of our common stock outstanding, including 4,000,000 shares issued to the Purchaser pursuant toShares, the Securities Purchase Agreement.Exchange Shares, and the Other Shares. The number of shares outstanding excludes andoes not include the additional 1,000,00035,268,905 shares of common stock being registered hereunder that the Purchaserselling stockholder may acquire pursuant to a common stock purchase warrant dated March 17, 2006.upon conversion of the Notes. The 5,000,00043,914,719 shares offered by this prospectus represent 5.6%approximately 34.5% of the total common stock outstanding as of March 31, 2006,May 6, 2010, assuming the issuance of these shares. This is our first financing transaction35,268,905 Conversion Shares.
The shares offered by this prospectus may be sold by the selling stockholder from time to time in the open market, through negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices. We will receive none of the proceeds from the sale of the shares by the selling stockholder. We will bear all expenses of registration incurred in connection with
this offering, but all selling and other expenses incurred by the
Purchaser.Risk Factors
selling stockholder will be borne by it.
RISK FACTORS
Our business is subject to the following
risk factors:Unigene’s operations for 2006 and future years are highly dependent on the successful marketing of Fortical.
Fortical was approved by the FDA on August 12, 2005 and launched by USL on August 16, 2005. Any factors that adversely impact the marketing of Fortical, including, but not limited to, competition, acceptance in the marketplace, or delays related to production and distribution or regulatory issues, will have a severe negative impact on our cash flow and operating results.
We have significant historical losses and may continue to incur losses in the future.
We have incurred annual losses since our inception. As a result, at December 31, 2005, we had an accumulated deficit of approximately $108,000,000. Our gross revenues for the years ended December 31, 2005, 2004 and 2003 were $14,276,000, $8,400,000 and $6,024,000, respectively. However, our revenues have not been sufficient to sustain our operations. Revenue for 2005 consists primarily of revenue generated from our agreement with USL for Fortical including sales, royalties and a milestone payment. Revenue for 2004 consisted primarily of milestone revenue from GSK and calcitonin sales to Novartis. Revenue for 2003 consisted primarily of milestone payments from USL and GSK and PTH sales to GSK. As of December 31, 2005, we had three material revenue generating license agreements. Our injectable calcitonin product has been approved for commercial sale in a number of European countries, but we do not anticipate that these sales will produce significant revenues. We believe that to achieve profitability we will require at least the successful commercialization of our nasal calcitonin or oral PTH products or another oral peptide product in the U.S. and abroad.
For 2005, we had operating income of $594,000 and during the years ended December 31, 2004 and 2003 we incurred losses from operations of $5,344,000 and $6,224,000, respectively. Our net losses for the years ended December 31, 2005, 2004 and 2003 were $496,000, $5,941,000 and $7,398,000, respectively. We might never be profitable.
Our independent registered public accounting firm has added an explanatory paragraph to their audit opinion issued in connection with the financial statements for each of the years ended December 31, 2005, 2004 and 2003 relative to the substantial doubt about our ability to continue as a going concern. Our ability to obtain additional funding will determine our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
risks:
We may require additional
fundingcash to sustain our operations and our ability to secure additional
financingcash is uncertain.
We had a cash flow deficit from operations of $2,675,000 for the three months ended March 31, 2010 and a cash flow deficit from operations of $11,291,000 for the year ended December 31, 2009. Notwithstanding our receipt in March 2010 of approximately $13,640,000 (before closing expenses) from the selling stockholder, we may eventually need additional sources of cash in order to maintain all of our future operations.
Our future capital requirements will depend on many factors, including:
| · | the level of Fortical sales, particularly in light of new and potential competition; |
| · | our ability to successfully defend our Fortical patent against Apotex, Inc. and Apotex Corporation’s abbreviated new drug application (“ANDA”); |
| · | the generation of revenue from our Tarsa, Novartis and GSK agreements; |
| · | continued scientific progress in our discovery and research programs; |
| · | progress with preclinical studies and clinical trials; |
| · | the magnitude and scope of our discovery, research and development programs; |
| · | our ability to maintain existing, and establish additional, corporate partnerships and licensing arrangements; |
| · | our partners’ ability to sell and market our products or their products utilizing our technologies; |
| · | the time and costs involved in obtaining regulatory approvals; |
| · | the time and costs involved in maintaining our production facility; |
| · | the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims including our current litigation regarding Apotex’s ANDA; and |
| · | the pharmaceutical industry’s need to acquire or license new technologies and products. |
We may be unable to raise on acceptable terms, if at all, the substantial capital resources necessary to continue to conduct our operations. The Restated Financing Agreement contains certain covenants that, among other things, restrict our ability to: sell common stock, preferred stock or other instruments or securities which are convertible into or exchangeable or exercisable for shares of common stock without using a portion of the proceeds therefrom toward mandatory repayment of the Notes; and, other than certain permitted amounts, incur additional indebtedness or engage in any sale and leaseback, synthetic lease or similar transaction and create liens. These restrictions could limit our ability to obtain future financing. In addition, until the maturity date of the Notes, it may b e difficult for us to raise funds through sales of our securities, to the extent they are permitted under the Restated Financing Agreement, since the ownership interests and proportionate voting power of existing and new stockholders (other than Victory Park) will be significantly diluted upon conversion of the Notes. If we are unable to raise the required capital, we may be forced to limit some or all of our research and development programs and related operations, curtail commercialization of our product candidates and, ultimately, cease operations. Our future
We have payments due beginning in 2010 under the Levy loans.
As of March 31, 2010, we owed Jean Levy and the Jaynjean Levy Family Limited Partnership principal outstanding and interest accrued on certain notes in the aggregate amount of $19,595,000. We made required repayments of $1,000,000 on those notes on May 10, 2010, and, subject to certain conditions, are required to repay an additional $500,000 on November 10, 2010 and $250,000 on May 10, 2011, with the balance of the outstanding principal and accrued interest payable thereunder on June 18, 2013. We may not be able to generate sufficient cash from operations or from other sources in order to make any or all of these required payments.
There are numerous default provisions under our Restated Financing Agreement with the selling stockholder.
Under the Restated Financing Agreement with Victory Park and the selling stockholder, so long as our outstanding note balance is at least $5,000,000, we must maintain a cash balance equal to at least $2,500,000 and our cash flow (as defined in the agreement) must be at least $2,000,000 in any fiscal quarter or $7,000,000 in any three consecutive quarters. The agreement specifies certain events of default including, without limitation: failure to pay principal or interest; filing for bankruptcy; breach of covenants, representations or warranties; the occurrence of a material adverse effect (as defined in the Restated Financing Agreement); a change in control (as defined in the Restated Financing Agreement); any material decline or depreciation in the value or market price of the collateral; the failure of any registra tion statement required to be filed to be declared effective by the SEC, and maintained effective pursuant to the terms of the Registration Rights Agreement; and a Conversion Failure (as defined in the Restated Financing Agreement). Upon any default, among other remedies, both principal and interest would be accelerated and additional charges would apply. There is no assurance that we will be able to maintain a minimum cash balance of $2,500,000, or maintain an adequate cash flow, in order to avoid default. In addition, there is no assurance that the Notes will be converted into common stock, in which case, we may not have sufficient cash from operations or from new financings to repay the Victory Park debt when it comes due in 2013, or that new financings will be available on favorable terms, if at all.
If our stockholders do not approve our amended certificate of incorporation, we may be in default under the terms of the Restated Financing Agreement.
At our Annual Meeting of stockholders scheduled to be held on June 15, 2010, we have requested that our stockholders approve the Amendment to increase the total number of authorized shares of common stock available for issuance from 135,000,000 to 275,000,000.
Under the Restated Financing Agreement, if stockholder approval of the Amendment is not obtained at the Annual Meeting, Unigene will be required to call a stockholders’ meeting every four (4) months to seek the approval of the Amendment until the date on which such approval is obtained. This undertaking will be costly and will distract management from the business of running Unigene.
In addition, in the event the Amendment is not approved by the stockholders, we will not have a sufficient number of shares of common stock authorized and available for issuance upon conversion of the Notes. Pursuant to the Restated Financing Agreement, if for any reason the holders have not received all of the Conversion Shares prior to the tenth (10th) business day after Unigene has received a notice for conversion of the Notes, such failure will result in an “Event of Default” under the Restated Financing Agreement. Upon such an Event of Default, the holders may require Unigene to redeem all or any portion of the Notes at the price equal to the greater of (i) an amount equal to the sum of one hundred fifteen percent (115%) of the outstanding principal amount of the Notes, plus acc rued and unpaid interest, plus accrued and unpaid late charges and (ii) an amount equal to the product of (A) the number of shares into which the principal amount and all accrued and unpaid interest outstanding under the Notes may be converted at the time of the default pursuant to the terms of the Notes, multiplied by (B) the market value per share of common stock as determined under the Restated Financing Agreement.
We have recommended that the stockholders vote in favor of the Amendment. However, we cannot guarantee if or when the Amendment will be approved by our stockholders. If such Amendment is not approved by our stockholders, we may be in default under the terms of the Restated Financing Agreement and the holders could require mandatory redemption as described above. Such a mandatory redemption would likely leave us with insufficient working capital
requirements will dependto operate our business and would likely force us to seek additional financing to fund that redemption and our operations on
many factors, including:USL’s ability to successfully market Fortical;
terms that could be unfavorable and that could materially and adversely affect the achievement of milestones in our Novartis and GSK agreements;
continued scientific progress in our discovery and research programs;
progress with preclinical studies and clinical trials;
the magnitude and scopeinterests of our discovery, researchstockholders. There can be no assurance given that we would have sufficient cash on hand or that we would be able to obtain such add itional financing (on any terms) to fund the mandatory redemption.
Our operations for future years are highly dependent on the successful marketing and development programs;sales of Fortical and could be further impacted by generic or other competition.
Fortical is our abilityonly product approved by the FDA. Any factors that adversely impact the marketing of Fortical including, but not limited to, maintain existing,competition, including generic competition, acceptance in the marketplace, or delays related to production and establish additional, corporate partnerships and licensing arrangements;
our partners’ ability to sell and market our products;
the time and costs involved in obtainingdistribution or regulatory approvals;
the time and costs involved in expanding and maintainingissues, will have a negative impact on our production facility;
the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims;
the potential need to develop, acquire or license new technologies and products; and
the continued ability to manage demand loans from Jay Levy.
We had cash flow deficitsand operating results. For the first quarter of 2010, compared to the first quarter of 2009, Fortical sales to USL decreased 2% and Fortical royalties decreased 41%. For 2009, compared to 2008, Fortical sales to USL decreased 41% while Fortical royalties decreased 23%. In December 2008, Apotex Inc. and Sandoz Pharmaceuticals launched nasal calcitonin products which are generic to Novartis’ nasal calcitonin product, but not to Fortical. In June 2009, Par Pharmaceutical Compan ies, Inc. also launched a product generic to Novartis’ nasal calcitonin product. We do not yet know the long-term effect on Fortical sales and royalties of the launch of these competing products. However, certain providers have substituted these products for Fortical, causing Fortical sales and royalties to decrease. Further decreases in Fortical sales or royalties could have a material adverse effect on our business, financial condition and results of operations. In addition, Apotex has a pending ANDA for a nasal calcitonin product that we claim infringes our Fortical patent. We have sued Apotex for infringement of our Fortical Patent and Apotex has been enjoined from conducting any activities which would infringe the patent. Apotex has appealed that decision and if we do not prevail in this litigation, then Apotex could be in a position to market its nasal calcitonin product if and when its pending ANDA receives FDA approval.
We have significant historical losses and may continue to incur losses in the future.
We have incurred annual losses since our inception. As a result, at March 31, 2010, we had an accumulated deficit of approximately $159,000,000. Our gross revenues for the quarter ended March 31, 2010 and the years ended December 31, 2009 and 2008 were $2,533,000, $12,792,000 and $19,229,000, respectively. Our revenues have not been sufficient to sustain our operations. Revenue for the first quarter of 2010 and 2009 and 2008 consisted primarily of Fortical sales and royalties. As of March 31, 2010, we had four material license agreements. We believe that to achieve profitability we will require the successful commercialization of at least one or more of our licensees’ oral or nasal calcitonin products, our oral PTH product, our SDBG or obesity programs or another peptide product in the U.S. and/or ab road.
For the quarter ended March 31, 2010 we had an operating loss of $2,801,000. For 2009 and 2008, we had losses from operations of
$1,500,000, $1,220,000$12,380,000 and
$4,632,000$4,950,000, respectively. Our net loss for the three months ended March 31, 2010 was $15,947,000. Our net losses for the years ended December 31,
2005, 20042009 and
2003,2008 were $13,380,000 and $6,078,000, respectively. We
believe that we will generate financial resources to apply toward funding our operations through sales of Fortical to USL, royalties from USL sales of Fortical, the achievement of milestones in the Novartis and GSK agreements and/or through the sale of PTH to GSK. However, if USL is unable to successfully market Fortical or if we are unable to achieve the milestones and sales on a timely basis, we would need additional funds to continue our operations.We may need additional funds from financing or other sources to fully implement our business, operating and development plans. We sold 2,123,142 shares of our common stock and a five-year common stock purchase warrant to purchase up to 1,061,571 shares of our common stock at an exercise price of $1.77 per share to Fusion Capital Fund II LLC, or Fusion, for gross proceeds of $3,000,000 in April 2005. On March 17, 2006, we completed the sale of a total of 4,000,000 shares of our common stock and a common stock warrant to purchase up to 1,000,000 shares of our common stock to the Purchaser pursuant to the Securities Purchase Agreement in the Private Placement. The five-year warrant is exercisable immediately at an exercise price per share of $4.25. We received gross proceeds of $13,000,000, before expenses of approximately $100,000. The sale of our common stock by Fusion or the Purchaser could cause the price of our common stock to decline. If our stock price declines, we maymight never be unable to raise additional funds through the sale of our common stock to others.
profitable.
We believe that satisfying our long-term capital requirements will require
at least the successful commercialization of
at least one
or more of our peptide products. However, our products may never become commercially successful.
Some of our officers have made loans to us, some of which are in default, and they are entitled to remedies available to a secured creditor, which gives them a priority over the holders of our common stock.
Some of our officers have made loans to us under promissory notes in the aggregate principal amount of $10,105,000, of which a total of $4,395,000, plus $5,067,000 in accrued interest, is in default as of December 31, 2005. We repaid an aggregate of $2,000,000 in principal on certain of these default loans on March 31, 2006. Our obligations under these promissory notes are secured by, among other things, mortgages upon all of the real property we own and pledges of substantially all of our assets. If we become insolvent or are liquidated, or if payment under the default promissory notes is accelerated, the holders of the promissory notes will be entitled to exercise the remedies available to a secured lender under applicable law which would entitle them to full repayment before any funds could be paid to our stockholders.
Most of our products are in early stages of development, and we
and our licensees may not be successful in
our efforts to develop a calcitonin, PTH or other peptide product that will produce revenues sufficient to sustain our operations.
Our success depends on our
and our licensees’ ability to commercialize a calcitonin, PTH or other peptide product that will produce revenues sufficient to sustain our operations. Except for
our Fortical,
product, most of our products are in early stages of development and we
and our licensees may never develop a calcitonin, PTH or other peptide product that makes us profitable. We have a
contractual joint venture
in China with
Shijiazhuang Pharmaceutical Group, or SPG
whichthat may never generate
significant profits. Our ability to achieve profitability is dependent on a number of factors, including our
and our licensees’ ability to complete development efforts, obtain regulatory approval for
ouradditional product candidates and
successfully commercialize
successfully those product candidates or our technologies. We believe that the development of more desirable formulations is essential to expand
consumerc onsumer acceptance of peptide pharmaceutical products. However, we may not be successful in our development efforts, or other companies may develop such products, or superior products, before we do.
We may not be successful in our efforts to gain regulatory approval for our products other than Fortical and, if approved, the approval may not be on a timely basis.
Even if we
or our licensees are successful in our development efforts, we may not be able to obtain the necessary regulatory approval for our products other than Fortical. The FDA must approve the commercial manufacture and sale of pharmaceutical products in the United States. Similar regulatory approvals are required for the sale of pharmaceutical products outside of the United States.
We entered into a contractual joint venture agreement in China with SPG. The contractualOur joint venture may not be able to obtain regulatory approval
of our products in China.
Although we have received regulatory approval in the European Union and Switzerland for the sale of our injectable calcitonin product, noneNone of our products other than Fortical has been approved for sale in the United States, and our other products may never receive the approvals necessary for commercialization. We must conduct further human testing on certain of our products before they can be approved for commercial
sale.sale and such testing requires the investment of significant r esources. Any delay in receiving, or failure to receive, these approvals would adversely affect our ability to generate product revenues.
We may not be successful in efficiently developing, manufacturing or commercializing our products.
Because of our limited clinical, manufacturing and regulatory experience and our lack of a marketing organization, we are likely to rely on licensees or other parties to perform one or more tasks for the commercialization of
our pharmaceutical products, such as USL to market and distribute Fortical in the U.S. If any of our products are approved for commercial sale, the product will need to be manufactured in commercial quantities at a reasonable cost in order for it to be a successful product that
willcan generate profits. We may incur additional costs and delays while working with these parties, and these parties may ultimately be unsuccessful in the commercialization of a product.
We have made a substantial investment in our production facility which we may need to upgrade or expand in order to manufacture some of our products in commercial quantities required by our corporate partners.
We have constructed and are operating a facility intended to produce Fortical, calcitonin, PTH and other peptides. This facility has been inspected by European regulatory authorities who have determined that we were in compliance with the then-current European good manufacturing practice guidelines for the manufacture of calcitonin for human use, and we have also passed a pre-approval inspection conducted by the FDA for Fortical. The risks associated with this facility include the failure to achieve targeted production and profitability goals, the development by others of superior processes and products, and the absence of a market for products produced by the facility. We upgraded our manufacturing facility in order to expand our fill line for Fortical. However, the successful commercialization of any of our other products may require us to make additional expenditures to expand or upgrade our manufacturing operations. We may be unable to make these capital expenditures when required.
Our success is dependent on our ability to establish and maintain commercial partnerships and currently we have only
threefour significant license agreements.
We do not currently have, nor do we expect to have in the near future, sufficient financial resources and personnel to develop and market
our products on our own. Accordingly, we expect to continue to depend on
large pharmaceutical companies for revenues from sales of products, research sponsorship and distribution of our products.
The process of establishing partnerships is difficult and time-consuming. Our discussions with potential partners may not lead to the establishment of new partnerships on favorable terms, if at all. If we successfully establish new partnerships, the partnerships may never result in the successful development of our product candidates or the generation of significant revenue. Management of our relationships with these partners would require:
significant time and effort from our management team;
coordination of our research with the research priorities of our corporate partners;| · | significant time and effort from our management team; |
effective allocation of our resources to multiple projects; and
an ability to attract and retain key management, scientific, production and other personnel.| · | coordination of our research with the research priorities of our corporate partners; |
| · | effective allocation of our resources to multiple projects; and |
| · | an ability to attract and retain key management, scientific, production and other personnel. |
We may not be able to manage these relationships successfully.
We currently have significant license agreements with Novartis worldwide for the production of calcitonin, with GSK worldwide for oral PTH,
and with USL in the United States for nasal
calcitonin and with Tarsa worldwide (except for China) for oral calcitonin. We are pursuing additional opportunities to license or enter into distribution arrangements for products that utilize our oral and nasal delivery technologies and/or our manufacturing
technology.technology, as well as our other technologies. However, we may not be successful in any of these efforts.
In June 2000, we entered into a joint venture agreement with SPG for the manufacture and distribution of injectable and nasal calcitonin products in China and possibly, with our approval, other selected Asian markets, for the treatment of osteoporosis. The contractual joint venture began operations in March 2002; sales of its injectable calcitonin product began in April 2002, using SPG’s existing license. Sales are being used by the contractual2002. This joint venture to offset startup costs. Therefore, the contractual joint venture’s initial net incomemay never generate revenue or loss will be immaterial to our overall results of operations. profits.
We
have entered into distribution agreements for our injectable formulation of calcitonin in the United Kingdom, Ireland and Israel. We also have entered into a license agreement in
GreeceIsrael for nasal calcitonin. To date, we have not received
material revenuesany revenue from
these agreementsthis agreement and may never do so.
Because we are a biopharmaceutical company, our operations are subject to extensive government regulation.
Our laboratory research, development and production activities, as well as those of our collaborators and licensees, are subject to significant regulation by federal, state, local and foreign governmental authorities. In addition to obtaining FDA approval and other regulatory approvals for our products, we must
obtainmaintain approvals for our manufacturing facility to produce calcitonin, PTH and other peptides for human use. The regulatory approval process for a pharmaceutical product requires substantial resources and may take many years.
In addition, in China, where we have signed a joint venture agreement, we are required to receive government approval in order to obtain a business license and obtain our official status as a Chinese joint venture. Our inability to obtain approvals or delays in obtaining approvals would adversely affect our ability to continue our development program, to manufacture and sell our products, and to receive revenue from milestone payments, product sales or royalties.
The FDA orand other regulatory agencies may audit our production facility at any time to ensure compliance with current Good Manufacturing Practices, or cGMP guidelines. These guidelines require that we conduct our production operation in strict compliance with our established rules for manufacturing and quality controls. Any of these agencies can suspend production operations and product sales if they find significant or repeated deviations from these guidelines. A suspension would likely cause us to incur additional costs or delays in productionproduct development.
In addition, we are subject to the U.S. Foreign Corrupt Practices Act, which prohibits corporations and
product development.individuals from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity. Generally speaking, it is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. Our present and future business is, and will continue to be, subject to various other laws, rules and/or regulations applicable to us as a result of our international business.
Fortical currently faces competition from large pharmaceutical companies and, if our other products receive regulatory approval, these other products would also face competition from large pharmaceutical companies with superior resources.
We are engaged in developing pharmaceutical products, which is a rapidly changing and highly competitive field. To date, we have concentrated our efforts primarily on products to treat one indication — osteoporosis. Like the market for any pharmaceutical product, the market for treating osteoporosis has the potential for rapid, unpredictable and significant technological change. Competition is intense from specialized biotechnology
and biopharmaceutical companies, major pharmaceutical and chemical companies and universities and research institutions.
In December 2008, Apotex and Sandoz launched nasal calcitonin products that are generic to Novartis’ nasal calcitonin product, but not to Fortical. In June 2009, Par also launched a product generic to Novartis’ nasal calcitonin product. We do not yet kn ow the long-term effect on Fortical sales and royalties of the launch of these competing products. However, certain providers have substituted these products for Fortical, causing Fortical sales and royalties to decrease. There could also be future competition from products that are generic to
Fortical, including Apotex’s product that is the subject of our
product or the innovator product.ANDA litigation. Fortical
currentlyalso faces competition from large pharmaceutical companies
whothat produce
other osteoporosis products, and, if any of our other products receive regulatory approval, these other products
likely would also face competition from large pharmaceutical companies with substantially greater financial resources, research and development staffs and facilities, and regulatory experience than we have. Major companies in the field of osteoporosis treatment include Novartis, Merck, Eli Lilly
Sanofi-Aventis and
Procter & Gamble. We believe that we should be able to compete with these companies due both to our partnerships with GSK and USL and to our patented technologies. However, oneSanofi-Aventis. One of these potential competitors could, at any time, develop products or a manufacturing process that could render
ourou r technology or products noncompetitive or obsolete.
Our success depends upon our ability to protect our intellectual property rights.
We filed applications for U.S. patents relating to proprietary peptide manufacturing technology and oral and nasal formulations that we have invented in the course of our research. Our most important U.S. manufacturing and delivery patents expire from
20162021 to
2021.2025, and we have applications pending that could extend that protection. To date,
nine13 U.S. patents have
been issued and other applications are pending. We have also made patent application filings in selected foreign countries, and
forty-six87 foreign patents have
been issued with other applications pending. We face the risk that any of our pending applications will not be issued as patents. In addition, our patents may be found to be invalid or
unenforceable.unenforceable, including in the pending ANDA litigation with Apotex. Our business also is subject to the risk that our issued patents
willwil l not provide us with significant competitive advantages if, for example, a competitor were to independently develop or obtain similar or superior technologies. To the extent we are unable to protect our patents and patent applications, our investment in those technologies may not yield the benefits that we expect.
We also rely on trade secrets to protect our inventions. Our policy is to include confidentiality obligations in all research contracts, joint development agreements and consulting relationships that provide access to our trade secrets and other know-how. However, parties with confidentiality obligations could breach their agreements causing us harm. If a secrecy obligation were to be breached, we may not have the financial resources necessary for a legal challenge. If licensees, consultants or other third parties use technological information independently developed by them or by others in the development of our products, disputes may arise from the use of this information and as to the ownership rights to products developed using this information. These disputes may not be resolved in our favor and could materially impact our business.
Our technology or products could give rise to product liability claims.
Our business exposes us to the risk of product liability claims from human testing, manufacturing and sale of pharmaceutical products. The administration of drugs to humans, whether in clinical trials or commercially, can result in product liability claims even if our products are not actually at fault for causing an injury. Furthermore, our products may cause, or may appear to cause, adverse side effects or potentially dangerous drug interactions that we may not learn about or understand fully until the drug is actually manufactured and sold. Product liability claims can be expensive to defend and may result in large judgments against us. Even if a product liability claim is not successful, the adverse publicity, time and expense involved in defending such a claim may interfere with our business. We may not have
sufficientsuf ficient resources to defend against or satisfy these claims. We currently maintain $10,000,000 in product liability insurance coverage. However, this amount may not be sufficient to protect us against losses or may be unavailable in the future on acceptable terms, if at all.
We have financial obligations under
the various agreements related to our
current joint venture
agreement in China.
An NDA for injectable and nasal calcitonin products was filed in China in the third quarter of 2003. The timing of the approval of our NDA in China is uncertain.
Under the terms of the various agreements related to our joint venture agreement in China, with SPG, we are obligated to contribute up to $405,000an aggregate of $2,250,000, of which $275,000 in cash after approval of its Chinese NDA and up to an additional $495,000 in cash within two years thereafter. However, these amounts may be reduced or offset by our share of the entity’s profits, if any. Ashas been directly paid as of March 31, 2006,2010. SPG has assigned its joint venture rights and obligations to its subsidiary, CPG, and CPG has agreed to lend us the current $1,975,000 balance of our initial cash contribution on an interest-free basis, due May 2010. The combined capital investment commitment of both parties for the joint venture is currently $15,000,000 (cash and technology). This investment is expected to increase to $25,000,000 and could, eventually, be higher. Failure to meet our capital contribution obligations when required could result in, among other things, a reduction in our equity ownership in the joint venture.
The global financial crisis may adversely affect our business and financial results.
The global credit crisis that began in 2007 was further exacerbated by events occurring in the financial markets in the fall of 2008 and continuing in 2009 and 2010. These events have negatively impacted the ability of corporations to raise capital through equity financings or borrowings. Depending on our future revenue, we
contributed $37,500believe our current cash should be sufficient to
the existing contractual joint venture.support our operations for one to two years. When we need additional cash, we may not be able to raise such capital on reasonable terms, if at all. If we are unable to raise required capital when needed, we may be forced to limit some or all of our research and development programs and related operations, curtail commercialization of our product candidates and, ultimately, cease operations. In addition, uncertainty about curren t and future global economic conditions may impact our ability to license our products and technologies to other companies and may cause consumers to defer purchases of prescription medicines, such as Fortical, in response to tighter credit, decreased cash availability and declining consumer confidence. Accordingly, future demand for our product could differ from our current expectations.
We may be unable to retain key employees or recruit additional qualified
personnel.personnel, including a new Chief Executive Officer.
Because of the specialized scientific nature of our business, we are highly dependent upon qualified scientific, technical, production and managerial personnel. There is intense competition for qualified personnel in our business. Therefore, we may not be able to attract and retain the qualified personnel necessary for the development of our business. The loss of the services of existing personnel, as well as the failure to recruit additional key scientific, technical, production and managerial personnel in a timely manner, would harm our research and development programs and our business.
Dr. Warren Levy and Dr. Ronald Levy have been our principal executive officers since our inception.
We relyIn connection with the closing under the Restated Financing Agreement, Dr. Ronald Levy resigned as Unigene’s Secretary and as a director. Dr. Ronald Levy continues to serve as Unigene’s Executive Vice President. Under the terms of the Restated Financing Agreement, we are obligated to use our reasonable best efforts to identify, interview and negotiate with candidates for, and, subject to the Board’s approval, to hire a new Chief Executive Officer as successor to Warren Levy as soon as reasonably practicable. Our inability to recruit a new qualified Chief Executive Officer on
them for their leadership and business direction. Each of them has entered into an agreement with us providing that he shall not engage in any other employment or businessa timely basis, as well as the time period required for the
period of his employment with us and will not engage in a competing business for one year following termination. However, each of them is only bound by his respective employment agreement to provide services for a one-year term. The loss of the services of either of these individualssubsequent transition from existing management, could significantly delay or
preventhamper the achievement of our scientific and business objectives.
The market price of our common stock is volatile.
The market price of our common stock has been, and we expect it to continue to be, highly unstable. Factors, including our announcement of technological improvements or announcements by other companies, regulatory matters, research and development activities, new or existing products or procedures, signing or termination of licensing agreements, concerns about
competition, sales, our financial condition, operating results, litigation, government regulation, developments or disputes relating to agreements, patents or proprietary rights, and public concern over the safety of activities or products have had a significant impact on the market price of our stock. We expect such factors to continue to impact our market price for the foreseeable future.
In addition, potential dilutive effects of future sales of shares of Unigene common stock by us or our stockholders, including sales by Fusion and/or the Purchaser in the Private Placement and by the exercise and subsequent sale of Unigene common stock by the holders of outstanding and future warrants and options, could have an adverse effect on the price of our stock.
Our common stock is classified as a “penny stock” under SEC rules, which may make it more difficult for our stockholders to resell our common stock.
Our common stock is traded on the OTC Bulletin Board. As a result, the holders of our common stock may find it more difficult to obtain accurate quotations concerning the market value of the stock. Stockholders also may experience greater difficulties in attempting to sell the stock than if it was listed on a stock
exchange or quoted on the Nasdaq National Market or the Nasdaq Small-Cap Market.exchange. Because Unigene common stock is not traded on a stock exchange
or on Nasdaq, and the market price of the common stock is less than $5.00 per share, the common stock is classified as a “penny stock.” Rule 15g-9 of the
Securities Exchange Act
of 1934, as amended, imposes additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as an “established customer” or an “accredited investor.” These include the requirement that a broker-dealer must make a determination that investments in penny stocks are suitable for the customer and must make special disclosures to the customer concerning the risks of penny stocks. Application of the penny stock rules to our common stock could adversely affect the market liquidity of the shares, which in turn may affect the ability of holders of our common stock to resell the stock.
The sale of the shares of common stock acquired by Fusion and the Purchaser in the Private Placement could cause the price of our common stock to decline.
The 2,123,142 shares of common stock sold to Fusion in April 2005 are freely tradeable and, upon the effectiveness of the registration statement of which this prospectus forms a part, the 4,000,000 shares sold to the Purchaser in March 2006 will be freely tradable. All other shares previously sold under the prior common stock purchase agreements with Fusion are also freely tradable. Fusion may sell none, some, or all of the shares of common stock purchased from us at any time. Following the effectiveness of the registrations statement of which this prospectus forms a part, the Purchaser will be able to sell none, some or all of the shares of common stock purchased from us. The sale of these shares could cause the price of our common stock to decline.
The exercise of warrants and options
and the conversion of the Notes, as well as other issuances of shares, will likely have a dilutive effect on our stock
price.price and could lead to a change in control.
As of March 31, 2006,2010, there were outstanding warrants to purchase 2,331,57160,000 shares of our common stock, all but 20,000 of which are currently exercisable, at an average exercise price of $2.74$2.13 per share. There arewere also outstanding stock options to purchase an aggregate of 3,320,2655,848,015 shares of common stock, at an average exercise price of $1.06,$1.28, of which 2,547,2123,288,514 are currently exercisable. TheIf our stock price should increase above the exercise price of warrants or optionsthese derivative securities, then such exercise at prices below the market price of our common stock followed by the sale of such shares could adversely affect the price of our common stock.
In March 2010, we issued to Victory Park $33,000,000 of Notes, which come due in 2013. The Notes are convertible into shares of common stock at the holder’s option upon the earliest of (a) March 17, 2011, (b) the earliest date on which we are required under the Notes to provide to the holder prior written notice of our intention to consummate, or the occurrence of, a fundamental transaction (as defined in the notes), (c) our delivery of a redemption notice and (d) the occurrence of an event of default under the Restated Financing Agreement. In addition, pursuant to the Restated Financing Agreement, we may request that Victory Park purchase (which purchase shall be in its sole discretion) up to an additional $3 million aggregate principal amount of Notes at one subsequent closing, which sha ll be no later than March 17, 2012. The Notes are not currently convertible. The initial conversion rate, which is subject to adjustment as set forth in the Notes, is calculated by dividing the sum of the principal to be converted, plus all accrued and unpaid interest thereon, by $0.70 per share. If we subsequently make certain issuances of common stock or common stock equivalents at an effective purchase price less than the then-applicable conversion price, the conversion price of the Notes will be reduced to such lower price. Assuming we do not redeem the Notes prior to their maturity date and $36,000,000 aggregate principal amount of Notes together with accrued interest thereon is outstanding for the full three-year term of the Notes, and assuming a conversion price of $.70 and no additional issuances of common stock, then, together with the shares and other securities owned by them, Victory Park and its affiliates would beneficially own in the aggregate approximately 49.4 % of our outstanding common stock (as diluted by outstanding options) calculated as of May 6, 2010.
Additional dilution may result from the issuance of shares of our common stock in connection with collaborations or licensing agreements or in connection with other financing efforts.
The issuance of additional shares, including upon conversion of the Notes, could have a depressive effect on the market price of our common stock by increasing the number of shares of common stock outstanding. Such downward pressure could encourage short sales by certain investors, which could place further downward pressure on the price of the common stock.
If provisions in our stockholder rights plan or Delaware law delay or prevent a change in control of Unigene, we may be unable to consummate a transaction that our stockholders consider favorable.
On
In December
20, 2002, we adopted a stockholder rights plan. This stockholder rights plan increases the costs that would be incurred by an unwanted third party acquirer if such party owns or announces its intent to commence a tender offer for more than 15% of our outstanding common stock. The plan is designed to assure our board of directors a full opportunity to review any proposal to acquire us. However, the plan could prolong the take-over process and, arguably, deter a potential bidder. These provisions apply even if the offer may be considered beneficial by some stockholders, and a takeover bid otherwise favored by a majority of our stockholders might be rejected by our board of directors. In addition, specific sections of Delaware law may also discourage, delay or prevent someone from acquiring or merging with us.
Accounting for our revenues and costs involves significant estimates which, if actual results differ from estimates, could have a material adverse effect on our financial position and results of operations.
As further described in “Summary of Critical Accounting Policies” under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on March 16, 2010, accounting for our contract related revenues and costs as well as other cost items requires management to make a variety of significant estimates and assumptions. Although we believe we have sufficient experience and processes in place to enable us to formulate appropriate assumptions and produce reliable estimates, these assumptions and estimates may change significantly in the future and these changes could have a material adverse effect on our financial position and the results of our operations.
FORWARD-LOOKING STATEMENTS
Various statements that we make in this prospectus under the captions “Prospectus Summary,” “Risk Factors” and elsewhere in this prospectus are “forward-looking statements” within the meaning of
Section 27A of the
Private Securities
Litigation Reform Act of
1933.1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors,
including those discussed in “Risk Factors” above, that may cause the actual results, performance or activities of our business, or industry results, to be materially different from any future results, performance or activities expressed or implied by the forward-looking statements. These factors include: general economic and business conditions, our financial condition,
the ability of our products to gain market acce ptance and increase market share, product sales and royalties, competition, our dependence on other companies to commercialize, manufacture and sell products using our technologies, the uncertainty of results of animal and human testing, the risk of product liability and liability for human trials, our dependence on patents and other proprietary rights
and the risks associated with patent litigation, dependence on key management officials, the availability and cost of capital, the availability of qualified personnel, changes in, or the failure to comply with, governmental regulations, the failure to obtain regulatory approvals for our products, litigation and other factors discussed in this prospectus.
The proceeds from the sale of the shares covered by this prospectus will be received by the selling stockholder. We will not receive any of the proceeds from the sales by the selling stockholder of the shares covered by this prospectus.
We will receive the exercise price of the warrants held byHowever, if the selling stockholder
if and when such warrants are exercised, assuming the exercise price of such warrants is paid in cash. If we realize proceeds from the exercise ofconverts all
or a portion of the
warrants, assuming they are exercised entirely for cash,Notes, this conversion will reduce our senior indebtedness to the
net proceeds to us would be approximately $4,250,000. We expect to use the proceeds of any such warrant exercises for general working capital purposesselling stockholder and
the repayment of debt.SELECTED FINANCIAL DATA
Item 6. Selected Financial Data.
STATEMENT OF OPERATIONS DATA
(In thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, | |
| | | 2005 | | | 2004 | | | 2003 | | | 2002 | | | 2001 | |
Revenue: | | | | | | | | | | | | | | | | | | | | |
Licensing, product sales and other revenue | | $ | 14,276 | | | $ | 8,400 | | | $ | 6,024 | | | $ | 2,658 | | | $ | 865 | |
Costs and expenses: | | | | | | | | | | | | | | | | | | | | |
Research & development expenses, inventory reserve and cost of goods sold | | | 9,042 | | | | 10,667 | | | | 9,361 | | | | 8,376 | | | | 9,122 | |
General and administrative | | | 4,640 | | | | 3,077 | | | | 2,877 | | | | 2,778 | | | | 2,700 | |
Net loss | | | (496 | ) | | | (5,941 | ) | | | (7,398 | ) | | | (6,337 | ) | | | (12,472 | ) |
Net loss per share, basic and diluted | | | (.01 | ) | | | (.08 | ) | | | (.11 | ) | | | (.11 | ) | | | (.26 | ) |
Weighted average number of shares outstanding | | | 81,482 | | | | 76,959 | | | | 65,598 | | | | 57,877 | | | | 47,483 | |
BALANCE SHEET DATA
(In thousands)
| | | | | | | | | | | | | | | | | | | | |
| | | December 31, | |
| | | 2005 | | | 2004 | | | 2003 | | | 2002 | | | 2001 | |
Cash and cash equivalents | | $ | 4,146 | | | $ | 4,236 | | | $ | 512 | | | $ | 2,224 | | | $ | 405 | |
Working capital deficiency | | | (10,974 | ) | | | (16,726 | ) | | | (18,666 | ) | | | (15,534 | ) | | | (21,684 | ) |
Total assets | | | 12,774 | | | | 10,138 | | | | 5,067 | | | | 7,064 | | | | 9,047 | |
Total long-term debt, obligations and deferred revenue, including current portion | | | 11,729 | | | | 13,519 | | | | 8,778 | | | | 8,706 | | | | 4,314 | |
Total liabilities | | | 29,281 | | | | 33,291 | | | | 26,454 | | | | 24,729 | | | | 22,459 | |
Total stockholders’ deficit | | | (16,507 | ) | | | (23,154 | ) | | | (21,387 | ) | | | (17,965 | ) | | | (15,840 | ) |
related payment obligations.
DESCRIPTION OF
CAPITAL STOCKSECURITIES TO BE REGISTERED
Capital Stock
General
Our authorized capital stock consists of 100,000,000135,000,000 shares of common stock, par value $0.01 per share. As of March 31, 2006May 6, 2010 there were 87,528,56592,193,551 shares of common stock outstanding and held of record by approximately 626 stockholders.610 stockholders.
Each holder of common stock is entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. There is no cumulative voting for the election of directors and, as a consequence, minority stockholders will not be able to elect directors on the basis of their votes alone. Holders of common stock are entitled to receive ratably dividends as may be declared by the board of directors out of funds legally available therefor. We have never paid and we do not anticipate declaring or paying any cash dividends on shares of our common stock in the foreseeable future. Upon our liquidation, dissolution or winding up, the holders of common stock then outstanding are entitled to share ratably in our assets remaining after the payment of liabilities. All shares of common stock outstanding
anda nd to be outstanding upon completion of this offering are and will be fully paid and nonassessable.
On December 30, 2002, pursuant to a rights agreement, we distributed common stock purchase rights to stockholders of record as a dividend at the rate of one right for each share of common stock.
Each share of common stock that we have issued since December 30, 2002 similarly has been accompanied by a common stock purchase right. Each right entitles the holder to purchase from us one ten-thousandth of a share of common stock at an exercise price of $4.00. Initially the rights are attached to the common stock and are not exercisable.
The rights become exercisable and will separate from the common stock:
ten calendar days after a person or group acquires beneficial ownership of fifteen percent or more of our common stock, or
ten business days (or a later date following such announcement as determined by our Board of Directors) after the announcement of a tender offer or an exchange offer to acquire fifteen percent or more of our outstanding common stock. | · | ten calendar days after a person or group acquires beneficial ownership of fifteen percent or more of our common stock, or |
| · | ten business days (or a later date following such announcement as determined by our Board of Directors) after the announcement of a tender offer or an exchange offer to acquire fifteen percent or more of our outstanding common stock. |
The rights are redeemable for $.00001 per right at the option of the Board of Directors at any time prior to the close of business on the tenth calendar day after a person or group acquires beneficial ownership of fifteen percent or more of our common stock. If not redeemed, the rights will expire on December 30, 2012. Prior to the date upon which the rights would become exercisable under the rights agreement, our outstanding stock certificates will represent both the shares of common stock and the rights, and the rights will trade only with the shares of common stock.
Generally, if the rights become exercisable, then each stockholder, other than the stockholder whose acquisition has caused the rights to become exercisable, is entitled to purchase, for the exercise price, that number of shares of common stock that, at the time of the transaction, will have a market value of two times the exercise price of the rights. In addition, if, after the rights become exercisable, we are acquired in a merger or other business combination, or fifty percent or more of our assets, cash flow or earning power are sold, each right will entitle the holder to purchase, at the exercise price of the rights, that number of shares of common stock of the acquiring company that, at the time of the transaction, will have a market value of two times the exercise price of the rights.
In connection with the execution of the Restated Financing Agreement, the rights agreement was amended to render the rights inapplicable to the restructuring under the Restated Financing Agreement and the other transactions contemplated by or occurring concurrently with such restructuring.
The rights plan is intended to improve the ability of our Board of Directors to protect the interests of Unigene and our stockholders in the event of an unsolicited proposal to acquire a significant interest in Unigene.
PRIVATE PLACEMENT OF COMMON SHARES AND WARRANT
Common Stock Owned By the Selling Stockholder
On March 16, 2006,September 30, 2008, we entered into the Securities PurchaseFinancing Agreement with Victory Park and the Funds, pursuant to which the Company agreedFunds purchased $20 million of three-year senior secured non-convertible term notes from us and we issued the Shares. On October 19, 2009, in connection with the Omnibus Amendment Agreement that we entered into with the Funds, we issued the Exchange Shares to sell 4,000,000 sharesSpecial Situations Fund in exchange for Special Situations Fund’s surrender of Company common stock, par value $.01 per share, at a price of $3.25 per share, and a common stock warrant to purchase up to 1,000,000 shares of common stock pursuant to the terms of a Warrant Exchange Agreement. The Funds also had collectively purchased an aggregate of 6,845,814 Other Shares in open market transactions and privately negotiated transactions. In March 2010, Special Situations Fund sold and assigned to the selling stockholder a ll of its rights, title and interest in and to the Original Notes, the Shares, the Exchange Shares and the Other Shares.
Common Stock to be Issued to the Selling Stockholder upon Conversion of the Notes
On March 16, 2010, we entered into the Restated Financing Agreement with Victory Park, as administrative agent and collateral agent, and the selling stockholder, as lender, and, under that agreement, we issued three-year senior secured convertible notes in the aggregate principal amount of $33,000,000 due in March 2013, in exchange for the Original Notes in the outstanding aggregate principal amount of approximately $19,360,000 and by way of cash payment (before closing expenses) of approximately $13,640,000. In addition, pursuant to the Restated Financing Agreement, we may request that the selling stockholder purchase (which purchase shall be in its sole discretion) up to an additional $3 million aggregate principal amount of Notes at one subsequent closing, which shall be no later than March 17, 2012. 60; The Notes will accrue interest at a rate per annum equal to the greater of (i) the prime rate plus 5% and (ii) 15%, which, in the absence of an Event of Default (as defined therein), shall be capitalized and added to the outstanding principal balance of such Notes on each anniversary of the date of issuance other than the maturity date.
The Notes will be convertible into the Conversion Shares at the holder’s option upon the earliest of (i) March 17, 2011, (ii) the earliest date on which we are required under the Notes to provide to the holder prior written notice of our intention to consummate, or the occurrence of, a Fundamental Transaction (as defined in the Notes), (c) our delivery of the redemption notice (described below) and (d) the occurrence of an Event of Default under the Restated Financing Agreement. The initial conversion rate, which is subject to adjustment as set forth in the Notes, is calculated by dividing the sum of the principal to be converted, plus all accrued and unpaid interest thereon, by $0.70 per share. If we subsequently make certain issuances of common stock or common stock equivalents at an exerciseeff ective purchase price less than the then-applicable conversion price, the conversion price of $4.25 per share (the “Warrant”),the Notes will be reduced to the Purchaser. The Warrant is exercisable immediately and for a period of five years. The Warrant enables a cashless exercise and has certain anti-dilutive provisions. When we completed the sale onsuch lower price. After March 17, 2006,2011, under certain circumstances, and subject to specified conditions, we received gross proceedshave the right, at our option, by delivery of $13,000,000 before expenseswritten notice, to redeem $13,642,472.50 of the Notes at a price equal to 110% of the unpaid outstanding principal amount of the Notes being redeemed plus accrued and unpaid interest with respect to such principal amount; provided, that the holder of the Notes may elect to convert all or any portion of such Notes that we are electing to redeem.
Assuming $36,000,000 aggregate principal amount of Notes together with accrued interest thereon is outstanding for the full three-year term of the Notes, and assuming a conversion price of $.70, the Notes will be convertible into approximately
$100,000.SELLING STOCKHOLDER
We sold79,000,000 Conversion Shares. Under the Registration Rights Agreement, we are required to file with the SEC a totalregistration statement covering the resale of 4,000,000all of the Shares, the Exchange Shares, the Other Shares and the Conversion Shares. However, the number of our authorized shares of common stock is currently insufficient to cover all the Conversion Shares issuable if such Notes were converted in full. Accordingly, as required under the Restated Financing Agreement, we are seeking stockholder approval at our 2010 Annual Meeting of Stock holders to be held on June 15, 2010 to increase the number of authorized shares of common stock to a number that will be sufficient to cover the full number of Conversion Shares plus a buffer equal to an additional 50% of those shares. If stockholder approval is obtained, we intend to promptly file the Amendment to effect such increase in the number of authorized shares of our common stockstock. If stockholder approval of the Amendment is not so obtained, we will be required to call a stockholders meeting every four (4) months to seek approval of the Amendment until the date on which such approval is obtained. After approval and filing of the Amendment, we will be required to file with the SEC a warrantnew registration statement covering the resale of Conversion Shares not then covered by an effective registration statement for resales pursuant to purchase up to an aggregateRule 415.
Currently, we have reserved for issuance and delivery upon conversion of 1,000,000the Notes, 35,268,905 shares of ourauthorized, unissued and otherwise unreserved common stock, at an exercise price per sharewhich are some of $4.25the shares being offered by this prospectus.
SELLING STOCKHOLDER
The shares of common stock being offered by the selling stockholder are: (i) the Shares issued by us pursuant to the Original Financing Agreement; (ii) the Exchange Shares issued by us pursuant to the Warrant Exchange Agreement; (iii) the Other Shares acquired by the selling stockholder in open market transactions and privately negotiated transactions; and (iv) a portion of the Conversion Shares issuable to the selling stockholder
in a private placement pursuantupon conversion of the Notes (without regard to
aany limitations on conversion contained therein), up to the number of shares of common stock
purchase agreement for gross proceeds of $13,000,000 before expenses of approximately $100,000.that we have authorized, unissued and otherwise unreserved. We
agreed to file a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), providing for the resale of the purchased shares and warrant shares. Except for the ownership ofare registering the shares of common stock
and the warrant,in order to permit the selling stockholder
has not had any material relationship with us withinto offer the
past three years.We have filed a registration statement on Form S-1, of which this prospectus forms a part, to register the purchased shares and warrant shares for resale byfrom time to time. See the selling stockholder and to meet“Plan of Distribu tion” section of this obligation. Weprospectus, which follows. Under the terms of the Registration Rights Agreement, we have agreed to use our best efforts to maintain an effective registration statement for the period beginning with the effectiveness of the registration statement of which this prospectus forms a part and ending with the earlier of (i) the date as of which the selling stockholder may sell all of the purchase shares and warrant sharesRegistrable Securities (as defined in the Registration Rights Agreement) without restriction or condition pursuant to Rule 144(k)144 under the Securities Act of 1933, as amended (the “Securities Act”) (or successor thereto), or (ii) the date on which the selling stockholder or any transferees to whom the selling stockholder has assigned its rights under, and in accordance with the terms and conditions of, the Registration Rights Agreement, have sold all of the purchased sharesRegistrable Securities.
Except for (a) the transactions described in the Restated Financing Agreement and
warrant shares.the Registration Rights Agreement, including without limitation, the purchase of the Original Notes and the Notes, (b) the transactions described above under “About This Offering” and Victory Park’s resulting ownership of the Shares, the Exchange Shares and the Other Shares, (c) the appointment of Richard Levy, the managing principal and founder of Capital Advisors (defined below), as a member of the Board, Chairman of the Board and a member of the Company’s Nominating and Corporate Governance Committee in March 2010 and his service in such roles since that date, and (d) Victory Park’s right, pursuant to the Restated Financing Agreement, to designate, subject to certain conditions, an individual to fill the vacant seat on our Board, the selling stockholder has not had any material relationship with us within the past three years.
The following table sets forth certain information known to us regarding the shares of our common stock held and to be offered from time to time by the selling stockholder as of
April 3, 2006andMay 6, 2010 and as adjusted to give effect to the sale of
the purchased shares and warrantcertain shares offered hereby. The
following table statesinformation regarding shares owned both before and after the
maximumoffering assumes that: (i) the Amendment has not yet been approved by our stockholders to increase the number of shares
the selling stockholder may offer under this prospectus assumingof common stock that
(i) the selling stockholder chooseswe are authorized to
sell all of the purchased sharesissue; and (ii) the
selling stockholder exercises its entire warrantNotes are currently convertible into shares of our common stock at a conversion price of $.70 per share, but only with respect to that number of shares of common stock that we have authorized, unissued and
sellsotherwise unreserved (that is, the 35,268,905 shares of our common stock that we have registered under the r egistration statement of which this prospectus forms a part) (the “Authorized Conversion Shares”). The information regarding shares owned after the offering assumes the sale of all
of the warrant shares. Thethose shares
are being registered to permit public secondary trading of the shares, andoffered by the selling
stockholder may offer the shares for resale from time to time. See the “Plan of Distribution” section of this prospectus, which follows. Weshareholder and we cannot assure you that the selling stockholder will sell any or all of
those shares. Accordingly, the
shares.Underinformation included on the termsfollowing table is provided subject to these assumptions.
| | Ownership Before Offering | | |
Name of Selling Stockholder | | Common Shares that May Be Sold Pursuant to the Offering (2) | | Percent of Common Shares Held |
| Victory Park Credit Opportunities Master Fund, Ltd. (1) | 43,914,719 | 43,914,719 | 0 | 0% |
(1) Victory Park Capital Advisors, LLC (“Capital Advisors”) is the investment manager of the warrant, a selling stockholder and consequently may not exercisebe deemed to have the warrant,shared power to vote or direct the extent such exercise would cause suchvote of (and the shared power to dispose or direct the disposition of) the securities held by the selling stockholder. As the manager of Capital Advisors, Jacob Capital, L.L.C. (“Jacob Capital”) may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the securities held by the selling stockholder. By virtue of Richard Levy’s position as sole member of Jacob Capital, Richard Levy may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the securities held by the selling stockholder. Therefore, each of Capital Advisors, Jacob Capital and Richard Levy may be deemed to be the beneficial owner of the securities held by the selling stockholder.
The selling stockholder
togetherhas advised us that (i) it is not a registered broker-dealer, (ii) it does not control and is not controlled by a registered broker-dealer, (iii) it is an affiliate of a registered broker-dealer due solely to its being under common control with
its affiliates, to beneficially own a
number of shares of common stock which would exceed 4.99% of our then outstanding shares of common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exerciseregistered broker-dealer, (iv) the broker-dealer that is an affiliate of the
warrants which haveselling stockholder was not
been exercised. The numberinvolved in the purchase, and will not be involved in the ultimate sale, of
the shares, (v) it acquired the shares in the
second column doesordinary course of business, and (vi) at the time it acquired the shares, it was not
reflect this limitation. | | | | | | | | | | | | |
| | | Ownership Before Offering | | | Common Shares
that May Be Sold
Pursuant to the
Offering | | | Ownership After Offering (3) |
Name of Selling Stockholder | | Common
Shares | | Percent of
Common Shares
Held (2) | | | | Common
Shares | | Percent of
Common Shares
Held |
Magnetar Capital Master Fund, Ltd. (1) | | 5,000,000 | | 5.6 | % | | 5,000,000 | (4) | | 0 | | 0 |
(1) | Magnetar Financial LLC is the investment advisor of Magnetar Capital Master Fund, Ltd. (“Magnetar Master Fund”) and consequently has voting control and investment discretion over securities held by Magnetar Master Fund. Magnetar Financial LLC disclaims beneficial ownership of the securities held by Magnetar Master Fund. Alec Litowitz has voting control over Supernova Management LLC, which is the general partner of Magnetar Capital Partners LP, the sole managing member of Magnetar Financial LLC. As a result, Mr. Litowitz may be considered the beneficial owner of any shares deemed to be beneficially owned by Magnetar Financial LLC. Mr. Litowitz disclaims beneficial ownership of these shares. |
(2) | Both the numerator and the denominator of the fraction used to arrive at this percentage include the number of warrant shares held by the selling stockholder whose percent of common shares held is being calculated. |
(3) | These figures assume that all purchased shares and warrant shares have been sold. |
(4) | This number includes 4,000,000 purchased shares and 1,000,000 shares of our common stock issuable upon the exercise of the warrant. |
a party to any agreement or other understanding to distribute the shares, directly or indirectly.
(2) This figure includes the Shares, the Exchange Shares, the Other Shares, and the Authorized Conversion Shares.
As reported in the Schedule 13D filed on March 17, 2010 by the selling stockholder and certain of its affiliates, the 8,645,814 shares which the selling stockholder beneficially owned as of such filing (and described herein as the Shares, the Exchange Shares and the Other Shares) represented approximately 9.4% of the common stock outstanding as of March 16, 2010. Neither the selling stockholder nor any of its affiliates
has held a positionshould be deemed to be the current beneficial owner of any of the Conversion Shares (including the Authorized Conversion Shares) because the Notes are not currently convertible or
office with us.This is our first financing transaction withconvertible within 60 days. The Note will become convertible at such times and under such circumstances described above in the selling stockholder.
subsection entitled “Common Stock to be Issued to the Selling Stockholder upon C onversion of the Notes”.
We are registering the shares of common stock
previously issued and the shares of common stock issuable upon exercise of the warrant to permit the resale of these shares of common stock by the
holders of the common stock and warrantselling stockholder from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholder of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The
selling stockholder may sell all or a portion of the shares of common stock
coveredbeneficially owned by
this prospectusthem and
if applicable, any prospectus supplements, may be offered
and soldhereby from time to time
indirectly or through one or more
transactions byunderwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholder
which term includes its transferees, pledgeeswill be responsible for underwriting discounts or
doneescommissions or
other successors in interest. The selling stockholder will act independently of us in making decisions with respect to the timing, manner and size of each sale. The selling stockholder has represented that at no time prior to the date of the common stock purchase agreement has the selling stockholder engaged oreffected, in any manner whatsoever, directly or indirectly, any short sale of our common stock or hedging transaction, which establishes a net short position with respect to our common stock. We do not know of any arrangements by the selling stockholder for the sale of any of the shares.agent’s commissions. The shares of common stock may be sold byin one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected from time to time pursuant to one or more of the following means of distribution:
on any of the U.S. securities exchangesmethods, which may involve crosses or quotation services where shares of our common stock are listed or quoted at the time of sale, including the OTC Bulletin Board where our common stock is listed as of the date of this prospectus;block transactions:
in the over-the-counter market in accordance with the rules governing the NASDAQ Over The Counter Bulletin Board;
in transactions other than transactions on the exchanges or quotation services or in the over-the counter market described above;| · | on any national securities exchange or U.S. inter-dealer quotation system of a registered national securities association on which the securities may be listed or quoted at the time of sale; |
in negotiated transactions or otherwise, including an underwritten offering;
by pledge or by grant of a security interest in the shares to secure debts and other obligations;| · | in the over-the-counter market; |
through the writing of options, whether the options are listed on an options exchange or otherwise;
in connection with the writing of non-traded and exchange-traded call options or put options, in hedge transactions and in settlement of other transactions in standardized or over-the-counter options;| · | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
through the distribution
| · | through the writing of options, whether such options are listed on an options exchange or otherwise; |
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| · | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| · | an exchange distribution in accordance with the rules of the applicable exchange; |
| · | public or privately negotiated transactions; |
| · | sales pursuant to Rule 144; |
| · | broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share; |
| · | a combination of any such methods of sale; or |
| · | any other method permitted pursuant to applicable law. |
If the selling stockholder to its partners, members or stockholders;
a block trade in which the broker-dealer so engaged will attempt to sell shares of common stock as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
purchaseseffects such transactions by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to this prospectus;
short sales;
ordinary brokerage transactions and transactions in which the broker solicits purchasers;
a combination of any of the above transactions; or
any other method permitted pursuant to applicable law.
To the extent required, this prospectus may be amended and/or supplemented from time to time to describe a specific plan of distribution. In addition, any shares of common stock that qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.
In effecting sales, underwriters, broker-dealers or agents engaged by the selling stockholder may arrange for other underwriters, broker-dealers or agents to participate. The selling stockholder and any underwriters, broker-dealers or agents who participate in the distribution of these shares may be deemed to be “underwriters” under the Securities Act. The selling stockholder will be subject to the prospectus delivery requirements of the Securities Act unless an exemption therefrom is available.
The selling stockholder may sell its shares at market prices prevailing at the time of sale, at varying prices at the time of sale, at negotiated prices or at fixed prices. The selling stockholder reserves the right to accept and, together with its agents from time to time, to reject, in whole or in part, any proposed purchase of the shares of common stock to be made directly or through agents.
The selling stockholder may sell its shares directly to purchasers or may use underwriters, broker-dealers or agents, to sell its shares. Underwriters,such underwriters, broker-dealers or agents who sell the shares may receive compensationcommissions in the form of discounts, concessions or commissions from the selling stockholder or they may receive compensationcommissions from purchasers of the shares of common stock for whom they actedmay act as agentsagent or to whom they sold the sharesmay sell as principal (which discounts, concessions or both. The selling stockholder does not expect these commissions and discountsas to exceed what isparticular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved.
Broker-dealers may agreeinvolved). In connection with the selling stockholder to sell a specified number of shares at a stipulated price per share. To the extent that these broker-dealers are unable to do so acting as agent for the selling stockholder, they may purchase as principals any unsold shares at the price required to fulfill the broker-dealers’ commitment to the selling stockholder. Broker-dealers who acquire shares as principals may thereafter resell these shares from time to time in transactions on anysales of the U.S. securities exchanges or quotation services where ourshares of common stock is listed or quoted, in the over-the counter market, in negotiated transactions or by a combination of these methods of sale or otherwise. These transactions may involve crosses and block transactions and may involve sales to and through other broker-dealers, including transactions of the nature described above. Moreover, these transactions may be at market prices prevailing at the time of sale or at negotiated prices and, in connection with these resales, these broker-dealers may pay to or receive from the purchasers of these shares commissions as described above.
From time to time,otherwise, the selling stockholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholder may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions, and to return borrowed shares in connection with such short sales, provided that the short sales are made after the registration statement is declared effective. The selling stockholder may also loan or pledge hypothecateshares of common stock to broker-dealers in connection with bona fide margin accounts secured by the shares of common stock, which shares broker-dealers could in turn sell if the selling stockholder defaults in the performance of its secured obligations.
The selling stockholder may pledge or grant a security interest in some or all of the shares
of common stock owned by
it. Theit and, if it defaults in the performance of its secured obligations, the pledgees
or secured parties
or persons to whommay offer and sell the shares
have been hypothecated will, upon foreclosure in the event of
default, be deemed to be selling stockholders. The number of the selling stockholder’s shares offered under this prospectus will decrease as and when the selling stockholder takes such actions. The plan of distribution for the selling stockholder’s shares will otherwise remain unchanged. In addition, the selling stockholder may,common stock from time to time
sell the shares short, and, in those instances,pursuant to this prospectus
may be delivered in connection with the short sales and the shares offered underor any amendment to this prospectus
may be used to cover short sales.The selling stockholder may enter into hedging transactions with broker-dealersunder Rule 424(b)(3) or other financial institutions, andapplicable provision of the broker-dealersSecurities Act, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other financial institutions may engagesuccessors in short sales of the shares in the course of hedging the positions they assume with theinterest as selling stockholder, including, without limitation, in connection with distributions of the shares by those broker-dealers or other financial institutions. The selling stockholder may enter into options or other transactions with broker-dealers or other financial institutions that involve the delivery of the shares offered hereby to the broker-dealers or other financial institutions, who may then resell or otherwise transfer those shares pursuant tostockholders under this prospectus. The selling stockholder also may loantransfer and donate the shares of common stock in other circumstances in which case the transferees, donees or pledgeother successors in interest will be the securitiesselling beneficial owners for purposes of this pro spectus.
The selling stockholder and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed that will set forth the aggregate amount of shares of common stock being offered hereby to a broker-dealer, and the broker-dealer may sellterms of the loaned shares offered hereby pursuantoffering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholder and any discounts, commissions or concessions allow ed or reallowed or paid to this prospectus or upon a default may sell or otherwise transfer the pledged shares offered hereby pursuant to this prospectus. In addition, underbroker-dealers.
Under the securities laws of some states, the shares of common stock may be sold in
thesesuch states only through registered or licensed brokers or dealers.
We In addition, in some states the shares of common stock may not be sold unless such shares have agreed to indemnifybeen registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance that the selling stockholder and its members, officers, directors, partners, employees, agents and representativeswill sell any or any affiliate or person, if any, who controlsall of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.
The selling stockholder against specified liabilities, including liabilities under the Securities Act orand any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholder and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respec t to the shares of common stock.
We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that the selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholder against liabilities, including liabilities under the Securities Act, in accordance with the registration rights agreement, or the selling stockholder will be entitled to contribution. We may be indemnified by the selling stockholder against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights
agreements,agreement, or we may be entitled to contribution.
We have agreed to maintain the effectiveness of the registration statement until the earliest of the following registration termination dates:
| • | the date 24 months after the 17th of March, 2006; |
the time that all of the shares of common stock covered by this registration statement are sold; or
the time that all of the shares of common stock covered by this registration statement may be sold without restriction pursuant to Rule 144(k) of the Securities Act.
We have agreed to pay all reasonable expenses (other than sales or brokerage commissions and legal fees and disbursements of counsel to the selling stockholder), incurred in connection with preparing and filing the registration statement, any amendments to the registration statement, this prospectus and any prospectus supplements as well as with filings or qualifications relating to such registration statement.
In addition, we have agreed that we will provide to the selling stockholder an amendment or supplement to the registration statement, if necessary.
The selling stockholder and any other person participating in such distribution will be subject to the applicable provisions of the Exchange Act including, without limitation, Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the shares offered by this prospectus and the ability of any person or entity to engage in market making activities with respect to the shares of common stock.
We cannot assure you that the selling stockholder will sell all or any of the common stock offered under the registration statement.
Once sold under the registration statement of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.
Any shares covered by this prospectus that qualify for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144, rather than pursuant to this prospectus.
The validity of the Unigene common stock offered by this prospectus will be passed upon for Unigene by Dechert LLP, Princeton, New Jersey.
The financial statements
as of December 31, 2005 and
2004 and for eachmanagement’s assessment of the
yearseffectiveness of internal control over financial reporting incorporated by reference in this prospectus and elsewhere in the
three year period ended December 31, 2005registration statement have been audited by Grant Thornton LLP,
an independent registered public
accounting firm,accountants, as
statedindicated in their
reportreports with respect thereto, and are
incorporated by referenceincluded herein
and in the registration statement in reliance upon the authority of
Grant Thornton LLPsaid firm as experts in accounting and
auditing. The audit report of Grant Thornton LLP covering the December 31, 2005 financial statements contains an explanatory paragraph that states that the Company’s recurring losses from operations and working capital deficiency raise substantial doubt about the entity’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of that uncertainty.auditing in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
The SEC allows us to “incorporate by reference” certain information we have filed with them, which means that we can disclose important information to you by referring you to documents we have filed with the SEC. The information incorporated by reference is considered to be part of
thisthe registration statement. We incorporate by reference the documents listed below:
Annual Report on Form 10-K for the fiscal year ended December 31, 2005 filed on March 16, 2006;
Current Report on Form 8-K filed on March 22, 2006; and| · | Our Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed on March 16, 2010; |
Current Report on Form 8-K filed on April 6, 2006.
| · | Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2010 filed on May 10, 2010; |
| · | Our Definitive Proxy Statement on Schedule 14A and the Additional Definitive Proxy Soliciting Materials filed on April 29, 2010; and |
| · | Our Current Report on Form 8-K filed on March 17, 2010. |
We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports or documents that have been incorporated by reference in this prospectus but not delivered with the prospectus. We will provide these reports or documents upon written or oral request, at no cost to the requester. Request for these reports or documents may be made to William Steinhauer, Vice President of Finance, Unigene Laboratories, Inc.,
110 Little Falls Road, Fairfield, NJ 07004,81 Fulton Street, Boonton, New Jersey 07005, (973)
882-0860,265-1100, wsteinhauer@unigene.com. These reports and documents also may be accessed at our website: www.unigene.com.
Federal securities law requires us to file information with the SEC concerning our business and operations. We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read and copy these documents at the public reference room maintained by the SEC at 100 F Street, NE, Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public on the
SEC’sSEC's web site at http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-1 to register the stock to be sold in connection with this prospectus. As permitted by the rules and regulations of the SEC, this prospectus, which forms a part of the registration statement, does not contain all of the information included in the registration statement. For further information pertaining to us and the securities offered under this prospectus, reference is made to the registration statement and the attached exhibits and schedule. Although required material information has been presented in this prospectus, statements contained in this prospectus as to the contents or provisions of any contract or other document referred to in this prospectus may be summary in nature and in each instance reference is made to the copy of this contract or
otheroth er document filed as an exhibit to the registration statement and each statement is qualified in all respects by this reference, including the exhibits and schedule filed therewith. You should rely only on the information incorporated by reference or provided in this prospectus or any supplement to this prospectus. We have not authorized anyone else to provide you with different information. The selling stockholder should not make an offer of these securities
pursuant to this prospectus in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any supplement to this prospectus is accurate as of any date other than the date on the cover page of this prospectus or any supplement. Our business, financial condition, results of operations and prospectus may have changed since that date.You should rely only on the information contained in this prospectus and those documents incorporated by reference. We have not authorized anyone to provide you with information that is different.
You should not assume that the information in this prospectus is accurate as of any date other than the date on the front cover of this prospectus. This prospectus is not an offer to sell nor is it seeking an offer to buy any securities in any state where the offer or sale is not permitted.
Since December 31,
2005,2009, there have been no material changes in our affairs which have not been described in our Annual Report on Form 10-K
filed on March 16, 2010, our Quarterly Report on Form 10-Q filed on May 10, 2010, our Definitive Proxy Statement on Schedule 14A and the Additional Definitive Proxy Soliciting Materials filed on April 29, 2010, our Current
ReportsReport on Form 8-K filed on March
22, 2006 and April 6, 200617, 2010 or this prospectus.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the “Act”) may be permitted to directors, officers or persons controlling
the registrantUnigene pursuant to the foregoing provisions,
the registrantUnigene has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
DEALER PROSPECTUS DELIVERY OBLIGATION
Until [, 2006], all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The expenses payable by
the RegistrantUnigene in connection with the issuance and distribution of the securities being registered (other than underwriting discounts and commissions, if any) are set forth below. Each item listed is estimated, except for the Securities and Exchange Commission registration fee.
| | | |
Securities and Exchange Commission registration fee | | $ | 1,816.33 |
Blue Sky fees and expenses | | | 100 |
Accounting fees and expenses | | | 7,500 |
Legal fees and expenses | | | 75,000 |
Registrar and transfer agent’s fees and expenses | | | 500 |
Printing and engraving expenses | | | 0 |
Miscellaneous | | | 500 |
| | | |
Total expenses | | $ | 85,416.33 |
| | | |
| Securities and Exchange Commission registration fee | | $ | 2,254 | |
| Blue Sky fees and expenses | | | 30,000 | |
| Accounting fees and expenses | | | 7,500 | |
| Legal fees and expenses | | | 45,000 | |
| Registrar and transfer agent's fees and expenses | | | 500 | |
| Printing and engraving expenses | | | 0 | |
| Miscellaneous | | | 500 | |
| Total expenses | | $ | 85,754 | |
All costs, expenses and fees in connection with the registration of these shares will be borne by the Company.Unigene.
Item 14. Indemnification of Directors and Officers.
Unigene is incorporated under the laws of the State of Delaware. Section 145 (“Section 145”) of Title 8 of the Delaware Code gives a corporation power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including
attorneys’attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonablyreasona bly incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the
person’sperson's conduct was unlawful.
Section 145 also gives a corporation power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including
attorneys’attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. Section 145 further provides that, to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any such action, suit or proceeding, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including
attorneys’attorneys' fees) actually and reasonably incurred by such person in connection therewith.
Section 145 also authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.
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Unigene’s
Unigene currently maintains directors and officers liability insurance on behalf of and covering its officers and all members of its board of directors against expenses, liabilities or losses asserted against or incurred by any such individual in such capacity or arising out of such individual’s status as an officer or member of the board of directors, subject to customary exclusions.
Unigene's Certificate of Incorporation provides that no director shall be liable to Unigene or its stockholders for monetary damages for breach of his fiduciary duty as a director. However, a director will be liable for any breach of his duty of loyalty to Unigene or its stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law, any transaction from which the director derived an improper personal benefit, or payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware law.
Item 15. Recent Sales of Unregistered Securities.
Since
AprilMay 1,
2003, the Company2007, Unigene has made the following sales of securities that were not registered under the Securities
Act of 1933, as amended (the “Securities Act”):Act:
(1) On December 29May 10, 2008, Unigene entered into a common stock purchase agreement pursuant to which Unigene sold 1,080,000 shares of common stock for an aggregate purchase price of $2,008,800 to Tin Lon Investment Limited, a Hong Kong limited liability company, in a private placement. Unigene issued these securities in an offshore transaction not involving a public offering in reliance on the exemption provided by Section 4(2) of the Securities Act and Regulation S promulgated thereunder.
(2) On September 30, 2004,2008, Unigene entered into a Financing Agreement with Victory Park, as agent, and Special Situations Fund and the Company sold 1,302,140selling stockholder, pursuant to which Special Situations Fund purchased $20 million of three-year senior secured non-convertible term notes from Unigene. Pursuant to the Financing Agreement and in connection with the sale of the notes, and as an inducement to the Funds to purchase the notes, Unigene issued 1,500,000 shares of common stock to Fusion Capital Fund II, LLC (“Fusion”) for gross proceeds of $2,500,002. All of such shares werethe Funds at two closings. Unigene issued bythese securities pursuant to an exemption from the Company without registration in reliance on an exemptionrequirements under Section 4(2) of the Securities Act becauseand the offer and sale was made to a limited number of investorsrules promulgated thereunder for transactions by an issuer not involving any public offering.
(3) On October 19, 2009, in
a private transaction.(2) On April 7, 2005, we completedconnection with the sale of a total of 2,123,142Omnibus Amendment Agreement that Unigene entered into with the Funds, Unigene issued 300,000 shares of our common stock andto Special Situations Fund in exchange for Special Situations Fund’s surrender of a common stock purchase warrant to purchase 1,000,000 shares of common stock pursuant to the terms of a Warrant Exchange Agreement. Unigene issued these securities in exchange for the warrant pursuant to an exemption from the registration requirements under Section 3(a)(9) of the Securities Act and the rules promulgated thereunder for certain exchange offers.
(4) On March 16, 2010, Unigene entered into the Restated Financing Agreement with Victory Park, as administrative agent and collateral agent, and the selling stockholder, pursuant to which Unigene issued three-year senior secured convertible notes in the aggregate principal amount of $33,000,000 due in 2013 in exchange for three-year senior secured non-convertible term notes in the outstanding aggregate principal amount of approximately $19,360,000 and by way of cash payment of approximately $13,640,000 to Unigene. In addition, pursuant to the Restated Financing Agreement, Unigene may request that the selling stockholder purchase (which purchase shall be in its sole discretion) up to
1,061,571an additional $3 million aggregate principal amount of Notes at one subsequent closing, which shall be no later than March 1 7, 2012. The Notes will accrue interest at a rate per annum equal to the greater of (i) the prime rate plus 5% and (ii) 15%, which, in the absence of an Event of Default (as defined therein), shall be capitalized and added to the outstanding principal balance of such Notes on each anniversary of the date of issuance other than the maturity date. The Notes are convertible into shares of
our common stock,
at an exercise price per sharewhich will be registered from time to time in accordance with the terms of
$1.77 to Fusion in a private placementthe Registration Rights Agreement. Unigene issued these securities pursuant to
a common stock purchase agreement for gross proceeds to us of $3 million. These securities were issued byan exemption from the
Company without registration
in reliance on an exemptionrequirements under Section 4(2) of the Securities Act
because the offer and
sale was made to a limited numberRule 506 of
investors in a private transaction.(3) On March 17, 2006 we completed the sale of a total of 4,000,000 shares of our common stock and a common stock purchase warrant to purchase up to 1,000,000 shares of our common stock atRegulation D promulgated thereunder for transactions by an exercise price per share of $4.25 to an institutional accredited investor in a private placement pursuant to a common stock purchase agreement for gross proceeds to us of $13,000,000 before expenses of approximately $100,000. These securities were issued by the Company without registration in reliance on an exemption under Section 4(2) of the Securities Act, because the offer and sale was made to a limited number of investors in a private transaction.
issuer not involving any public offering.
Item 16. Exhibits and Financial Statement Schedules.
| | |
Exhibit
Number | | Description |
| | |
| 3.1 | | Certificate of Incorporation of Unigene Laboratories, Inc., dated October 31, 1980, as filed with the RegistrantSecretary of State in the State of Delaware on November 3, 1980, and Amendmentsall amendments thereto to July 1, 1986 (incorporated by reference tofrom Exhibit 3.1 to the Registrant’s Registration Statement No. 33-6877 on Form S-1, filed July 1, 1986). |
| |
3.1.1 | | Certificate of Amendments of Certificate of Incorporation filed July 29, 1986 and May 22, 1987 (incorporated by reference to Exhibit 3.1.1 to the Registrant’s Registration Statement No. 33-6877 on Form S-1, filed July 1, 1986). |
| |
3.1.2 | | Certificate of Amendments of Certificate of Incorporation filed August 22, 1997 (incorporated by reference to Exhibit 3.1.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1997). |
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| | |
3.1.3 | | Amendment to Certificate of Incorporation filed July 18, 2001 (incorporated by reference to Exhibit 3.1.3 of Post-Effective Amendment No. 2 to Registrant’s Registration Statement No. 333-04557 on Form S-1, filed December 12, 2001)2006). |
| |
| 3.2 | | Amended By-Laws of the RegistrantUnigene Laboratories, Inc. (incorporated by reference tofrom Exhibit 3.2 ofto the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004). |
| |
| 4.1 | | Rights Agreement between Unigene Laboratories, Inc. and Registrar and Transfer Company, dated December 20, 2002 (incorporated by reference tofrom Exhibit 4.1 to the Registrant’s Current Report on Form 8-K datedfiled December 23, 2002). |
| |
| 4.2 | | Amendment to Rights Agreement between Unigene Laboratories, Inc. and Registrar and Transfer Company, dated March 16, 2010 (incorporated by reference from Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
| |
| 4.3 | | Specimen Certificate for Common Stock, par value $.01 per share (incorporated by reference tofrom Exhibit 3.1.1 to the Registrant’s Registration Statement No. 33-6877 on Form S-1, filed July 1, 1986). |
| | |
| 5.1 | | Opinion and Consent of Dechert LLP.***LLP as to the legality of the securities being registered. |
| |
| 10.1 | | Lease agreement between the RegistrantUnigene Laboratories, Inc. and Fulton Street Associates, dated May 20, 1993 (incorporated by reference tofrom Exhibit 10.1 ofto the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 0-16005))1992). |
| |
| 10.2 | | First Amendment to lease agreement between Unigene Laboratories, Inc. and Fulton Street Associates, dated May 20, 1993 (incorporated by reference from Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007). |
| |
| 10.3 | | Second Amendment to Lease between Fulton Street Associates and Unigene Laboratories, Inc., dated as of May 15, 2003 (incorporated by reference from Exhibit 10.48 to Post-Effective Amendment No. 1 to Registrant’s Registration Statement No. 333-75960, filed August 1, 2003). |
| |
| 10.4 | | 1994 Employee Stock Option Plan (incorporated by reference tofrom the Registrant’s Definitive Proxy Statement dated April 28, 1994, which is set forth as Appendix A to Exhibit 28 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 0-16005))1993). |
| |
10.310.5 | | Directors Stock Option Plan (incorporated by reference tofrom Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 0-16005)).** |
| |
10.4 | | Mortgage and Security Agreement between the Registrant and Jean Levy dated February 10, 1995 (incorporated by reference to Exhibit 10.4 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1994). |
| |
10.5 | | Loan and Security Agreement between the Registrant and Jay Levy, Warren P. Levy and Ronald S. Levy dated March 2, 1995 (incorporated by reference to Exhibit 10.5 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1994). |
| |
10.6 | | Employment Agreement between the Registrant and Warren P. Levy, dated January 1, 2000 (incorporated by reference to Exhibit 10.6 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999).** |
| |
10.7 | | Employment Agreement between the Registrant and Ronald S. Levy, dated January 1, 2000 (incorporated by reference to Exhibit 10.7 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999).** |
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| | |
10.8 | | Employment Agreement between the Registrant and Jay Levy, dated January 1, 2000 (incorporated by reference to Exhibit 10.8 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999).** |
| |
10.12 | | Amendment to Loan Agreement and Security Agreement between the Registrant and Jay Levy, Warren P. Levy and Ronald S. Levy, dated March 20, 1995 (incorporated by reference to Exhibit 10.12 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1994). |
| |
10.14 | | Amendment to Loan and Security Agreement between the Registrant and Jay Levy, Warren P. Levy and Ronald S. Levy, dated June 29, 1995 (incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1995). |
| |
10.15 | | Promissory Note between the Registrant and Jay Levy, Warren P. Levy and Ronald S. Levy, dated June 29, 1995 (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1995). |
| |
10.17 | | License Agreement, dated as of July 15, 1997, between the Registrant and Warner-Lambert Company (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, dated July 15, 1997).* |
| |
10.19 | | Purchase Agreement, dated June 29, 1998, between the Registrant and The Tail Wind Fund, Ltd. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). |
| |
10.21 | | Form of Promissory Note between the Registrant and Jay Levy (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999). |
| |
10.2210.6 | | Form of Promissory Note between the Registrant and Warren Levy and Ronald LevyAmendment to Directors Stock Option Plan (incorporated by reference tofrom Exhibit 10.210.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999)2009). |
| |
10.2310.7 | | Amendment to Loan Agreement and Security Agreement between the Registrant and Jay Levy, Warren Levy and Ronald Levy, dated June 25, 19992000 Stock Option Plan (incorporated by reference from Attachment A to the Registrant’s Schedule 14A, filed April 28, 2000, containing the Registrant’s Definitive Proxy Statement for its 2000 Annual Meeting of Stockholders). |
| 10.8 | | Unigene Laboratories, Inc. 2006 Stock-Based Incentive Compensation Plan, as amended (incorporated by reference from Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009). |
| |
| 10.9 | | Form of Incentive Stock Option Agreement under 2006 Stock-Based Incentive Compensation Plan (incorporated by reference from Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007). |
| |
| 10.10 | | Form of Non-qualified Stock Option Agreement under 2006 Stock-Based Incentive Compensation Plan (incorporated by reference from Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007). |
| |
| 10.11 | | Form of Restricted Stock Agreement under 2006 Stock-Based Incentive Compensation Plan (incorporated by reference from Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009). |
| |
| 10.12 | | Employment Agreement between Unigene Laboratories, Inc. and Warren P. Levy, dated January 1, 2000 (incorporated by reference from Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999). |
| |
10.2410.13 | | AmendedFirst Amendment to Employment Agreement between Unigene Laboratories, Inc. and Restated Secured Note between the Registrant and JayWarren P. Levy, dated July 13, 1999December 22, 2008 (incorporated by reference from Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008). |
| | |
| 10.14 | | Second Amendment to Employment Agreement between Unigene Laboratories, Inc. and Warren P. Levy, dated March 17, 2010 (incorporated by reference from Exhibit 10.110.11 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999)March 31, 2010). |
| |
10.2510.15 | | Amended and Restated SecurityEmployment Agreement between the Registrant and Jay Levy, Warren P. LevyUnigene Laboratories, Inc. and Ronald S. Levy, dated July 13, 1999January 1, 2000 (incorporated by reference from Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999). |
| |
| 10.16 | | First Amendment to Employment Agreement between Unigene Laboratories, Inc. and Ronald S. Levy, dated December 22, 2008 (incorporated by reference from Exhibit 10.210.14 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008). |
| |
| 10.17 | | Second Amendment to Employment Agreement between Unigene Laboratories, Inc. and Ronald S. Levy, dated March 17, 2010 (incorporated by reference from Exhibit 10.12 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999)March 31, 2010). |
| |
10.26 | | Subordination |
| 10.18 | | Employment Agreement between the RegistrantUnigene Laboratories, Inc. and Jay Levy, Warren P. Levy and Ronald S. Levy, dated July 13, 1999January 1, 2000 (incorporated by reference from Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999). |
| 10.19 | | First Amendment to Employment Agreement between Unigene Laboratories, Inc. and Jay Levy, dated December 22, 2008 (incorporated by reference from Exhibit 10.310.15.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008). |
| | |
| 10.20 | | Separation Agreement between Unigene Laboratories, Inc. and Jay Levy, dated March 16, 2010 (incorporated by reference from Exhibit 10.13 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999)March 31, 2010). |
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| |
| 10.21 | | Summary of Deferred Compensation Plan between Unigene Laboratories, Inc. and Dr. Warren P. Levy and Dr. Ronald S. Levy, dated December 14, 2005 (incorporated by reference from Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed December 20, 2005). |
| |
| 10.22 | | Non-qualified Deferred Compensation Agreement between Unigene Laboratories, Inc. and Dr. Warren P. Levy, dated February 1, 2006 (incorporated by reference from Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008). |
| |
| 10.23 | | Non-qualified Deferred Compensation Agreement between Unigene Laboratories, Inc. and Dr. Ronald S. Levy, dated February 1, 2006 (incorporated by reference from Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008). |
| |
| 10.24 | | Amendment to Non-qualified Deferred Compensation Agreement between Unigene Laboratories, Inc. and Dr. Warren P. Levy, dated December 19, 2008 (incorporated by reference from Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008). |
| |
| 10.25 | | Amendment to Non-qualified Deferred Compensation Agreement between Unigene Laboratories, Inc. and Dr. Ronald S. Levy, dated December 22, 2008 (incorporated by reference from Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008). |
| |
| 10.26 | | Form of Amended and Restated Change in Control Agreement, by and between Unigene Laboratories, Inc. and the vice president named therein (incorporated by reference from Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
| |
| 10.27 | | MortgageAmended and SecurityRestated Change in Control Agreement, by and between Unigene Laboratories, Inc. and Dr. James P. Gilligan, dated July 13, 1999, between the Registrant and Jay LevyApril 5, 2010 (incorporated by reference tofrom Exhibit 10.410.15 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999)March 31, 2010). |
| |
| 10.28 | | $70,000 Secured NoteDirector Stock Option Agreement between the RegistrantAllen Bloom and Jay LevyUnigene Laboratories, Inc., dated July 30, 1999December 5, 2001 (incorporated by reference from Exhibit 10.45 to Exhibit 10.5 to the Registrant’s QuarterlyAnnual Report on Form 10-Q10-K for the quarteryear ended September 30, 1999)December 31, 2002). |
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| 10.29 | | $200,000 Secured Note between the Registrant and Jay Levy dated August 5, 1999 (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999). |
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10.30 | | Modification of Mortgage and Security Agreement between the Registrant and Jay Levy dated August 5, 1999 (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999). |
| |
10.31 | | Amendment to Security Agreement and Subordination Agreement between the Registrant and Jay Levy, Warren Levy and Ronald Levy, dated August 5, 1999 (incorporated by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999). |
| |
10.32 | | Joint Venture Contract between Shijiazhuang Pharmaceutical Group Company, Ltd., and Unigene Laboratories, Inc., dated June 15, 2000 (incorporated by reference tofrom Exhibit 10.1 to the Registrant’s Amended Quarterly Report on Form 10-Q10-Q/A, filed April 2, 2008, for the quarter ended June 30, 2000.)* |
| |
10.3310.30 | | Articles of Association of Shijiazhuang-Unigene Pharmaceutical Corporation Limited, dated June 15, 2000 (incorporated by reference from Exhibit 10.2 to the Registrant’s Amended Quarterly Report on Form 10-Q/A, filed April 2, 2008 for the quarter ended June 30, 2000.) |
| |
| 10.31 | | Agreement by and between Shijiazhuang Pharmaceutical Group Company, Ltd. and Unigene Laboratories, Inc., dated April 23, 2008 (incorporated by reference from Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.)2008).* |
| |
| 10.32 | | Technology Transfer Agreement by and between Shijiazhuang Pharmaceutical Group Corporation and Unigene Laboratories, Inc., dated April 23, 2008 (incorporated by reference from Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).* |
| |
| 10.33 | | Agreement of Assignment among Shijiazhuang Pharmaceutical Group Corporation, Unigene Laboratories Inc., and China Pharmaceutical Group Limited, dated April 23, 2008 (incorporated by reference from Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008). |
| |
| 10.34 | | 2000 Stock Option Plan (incorporated by reference to Attachment A to the Registrant’s Schedule 14A, dated April 28, 2000, containing the Registrant’s Definitive Proxy Statement for its 2000 Annual Meeting of Stockholders (File No. 0-16005)). ** |
| |
10.35 | | Common Stock Purchase Agreement, dated as of May 9, 2001,10, 2008, between the RegistrantUnigene Laboratories, Inc. and Fusion Capital Fund II, LLCTin Lon Investment Limited (incorporated by reference tofrom Exhibit 10.3510.1 to the Registrant’s Registration Statement No. 333-60642Current Report on Form S-1,8-K filed May 10, 2001)12, 2008). |
| |
10.37 | | Warrant, dated March 30, 2001, between the Registrant and Fusion Capital Fund II, LLC (incorporated by reference to Exhibit 10.37 to the Registrant’s Registration Statement No. 333-60642 on Form S-1, filed May 10, 2001). |
| |
10.38 | | Patent Security Agreement, dated March 13, 2001, between the Registrant and Jay Levy (incorporated by reference to Exhibit 10.38 of Amendment No. 2 to Registrant’s Registration Statement No. 333-04557 on Form S-1, filed December 12, 2001). |
| |
10.39 | | First Amendment to Patent Security Agreement, dated May 29, 2001, between the Registrant and Jay Levy (incorporated by reference to Exhibit 10.39 of Amendment No. 2 to Registrant’s Registration Statement No. 333-04557 on Form S-1, filed December 12, 2001). |
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| | |
10.4210.35 | | License agreement between Unigene Laboratories, Inc. and SmithKline Beecham Corporation, dated April 13, 2002 (incorporated by reference tofrom Exhibit 10.1 ofto Registrant’s CurrentQuarterly Report on Form 8-K, dated April 26, 2002)10-Q for the quarter ended March 31, 2005). * |
| |
10.4310.36 | | Amendment No. 1 to License Agreement dated as of April 13, 2002 by and between Unigene Laboratories, Inc. and SmithKline Beechman Corporation, dated January 16, 2003 (incorporated by reference from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).* |
| |
| 10.37 | | Amendment No. 2 to License Agreement dated as of April 13, 2002 by and between Unigene Laboratories, Inc. and SmithKline Beecham Corporation, dated October 14, 2003 (incorporated by reference from Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).* |
| 10.38 | | Amendment No. 3 to License Agreement dated as of April 13, 2002 by and between Unigene Laboratories, Inc. and SmithKline Beecham Corporation, dated September 23, 2004 (incorporated by reference from Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).* |
| |
| 10.39 | | Amendment No. 4 to License Agreement dated as of April 13, 2002 by and between Unigene Laboratories, Inc. and SmithKline Beecham Corporation, dated May 27, 2004 (incorporated by reference from Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).* |
| |
| 10.40 | | Amendment No. 5 to License Agreement dated as of April 13, 2002 by and between Unigene Laboratories, Inc. and SmithKline Beecham Corporation, dated January 24, 2007 (incorporated by reference from Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).* |
| |
| 10.41 | | Amendment No. 6 to License Agreement dated as of April 13, 2002 by and between Unigene Laboratories, Inc. and SmithKline Beecham Corporation, dated April 9, 2008 (incorporated by reference from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).* |
| |
| 10.42 | | License and development agreement between Upsher-Smith Laboratories, Inc. and Unigene Laboratories, Inc., dated November 26, 2002 (incorporated by reference tofrom Exhibit 10.1 ofto Registrant’s Current Report on form 8-K, dated January 9, 2003)Form 8-K/A, filed October 16, 2007). * |
| |
10.44 | | Settlement agreement between The Tail Wind Fund, Ltd. and Unigene Laboratories, Inc., dated April 9, 2002 (incorporated by reference to Exhibit 10.42 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002). |
| |
10.45 | | Director Stock Option Agreement between Allen Bloom and Unigene Laboratories, Inc., dated December 5, 2001 (incorporated by reference to Exhibit 10.45 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002).** |
| |
10.46 | | Director Stock Option Agreement between J. Thomas August and Unigene Laboratories, Inc., dated December 5, 2001 (incorporated by reference to Exhibit 10.46 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002).** |
| |
10.48 | | Second Amendment to Lease between Fulton Street Associates and Unigene Laboratories, Inc. dated as of May 15, 2003 (incorporated by reference to Exhibit 10.48 to Post-Effective Amendment No. 1 to Registrant’s Registration Statement No. 333-75960, filed August 1, 2003). |
| |
10.49 | | Common Stock Purchase Agreement, dated October 9, 2003, between the Registrant and Fusion Capital Fund II, LLC (incorporated by reference to Exhibit 10.49 to Registrant’s Registration Statement No. 333-109655, filed October 10, 2003). |
| |
10.51 | | Amendment No. 1 to Common Stock Purchase Agreement, dated October 9, 2003, between the Registrant and Fusion Capital Fund II, LLC (incorporated by reference to Exhibit 10.51 to Amendment No. 1 to Registrant’s Registration Statement No. 333-109655, filed November 7, 2003). |
| |
10.52 | | Settlement Agreement dated December 18, 2003 between Covington and Burling and Unigene Laboratories, Inc. (incorporated by reference to Exhibit 10.52 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003). |
| |
10.5310.43 | | License Agreement, dated April 7, 2004, between Unigene Laboratories, Inc. and Novartis Pharma AG (incorporated by reference tofrom Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended JuneSeptember 30, 2004)2007).* |
| |
10.5410.44 | | Form ofCommon Stock OptionPurchase Agreement, under 2000 Stock Option Plandated April 7, 2005, between Unigene Laboratories, Inc. and Fusion Capital Fund II, LLC (incorporated by reference from Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed April 13, 2005). |
| |
| 10.45 | | Registration Rights Agreement, dated April 7, 2005, between Unigene Laboratories, Inc. and Fusion Capital Fund II, LLC (incorporated by reference from Exhibit 10.5410.2 to Registrant’s Current Report on Form 8-K filed April 13, 2005). |
| |
| 10.46 | | Securities Purchase Agreement between Unigene Laboratories, Inc. and the Buyers listed therein, dated March 16, 2006 (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 22, 2006). |
| |
| 10.47 | | Registration Right Agreement between Unigene Laboratories, Inc. and the Buyers listed therein, dated March 17, 2006 (incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed March 22, 2006). |
| |
| 10.48 | | Warrant to Purchase Common Stock of Unigene Laboratories, Inc., for the benefit of Magnetar Capital Master Fund, Ltd., dated March 17, 2006 (incorporated by reference from Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed March 22, 2006). |
| 10.49 | | Supply Agreement, dated January 22, 2007, by and between Unigene Laboratories, Inc. and Novartis Pharma AG (incorporated by reference from Exhibit 10.1 to the Registrant’s Amended Quarterly Report on Form 10-Q/A filed March 20, 2008, for the quarter ended March 31, 2007). * |
| |
| 10.50 | | Amended and Restated Security Agreement, dated May 10, 2007, by and between Unigene Laboratories, Inc. and Jay Levy (incorporated by reference from Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed May 16, 2007). * |
| |
| 10.51 | | Patent Security Agreement, dated March 13, 2001, between Unigene Laboratories, Inc. and Jay Levy (incorporated by reference from Exhibit 10.38 to Amendment No. 2 to Registrant’s Registration Statement No. 333-04557 on Form S-1, filed December 12, 2001). |
| |
| 10.52 | | First Amendment to Patent Security Agreement, dated May 29, 2001, between Unigene Laboratories, Inc. and Jay Levy (incorporated by reference from Exhibit 10.39 to Amendment No. 2 to Registrant’s Registration Statement No. 333-04557 on Form S-1, filed December 12, 2001). |
| |
| 10.53 | | Second Amendment to Patent Security Agreement, dated November 26, 2002, by and between Unigene Laboratories, Inc. and Jay Levy (incorporated by reference from Exhibit 10.33 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004)2007).** |
| |
10.5510.54 | | Common Stock PurchaseThird Amendment to Patent Security Agreement, dated April 7, 2005,May 10, 2007, by and between Unigene Laboratories, Inc. and Fusion Capital Fund II, LLCthe Jaynjean Family Limited Partnership (incorporated by reference tofrom Exhibit 10.1 of10.4 to Registrant’s Current Report on Form 8-K filed May 16, 2007).* |
| | |
| 10.55 | | Mortgage and Security Agreement, dated AprilJuly 13, 2005)1999, by and between Unigene Laboratories, Inc. and Jay Levy (incorporated by reference from Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999). |
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| 10.56 | | Registration RightsModification of Mortgage and Security Agreement, dated April 7, 2005,August 5, 1999, by and between Unigene Laboratories, Inc. and Fusion Capital Fund II, LLCJay Levy (incorporated by reference from Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999). |
| |
| 10.57 | | Modification of Mortgage and Security Agreement, dated May 10, 2007, by and between Unigene Laboratories, Inc. and Jay Levy (incorporated by reference from Exhibit 10.2 of10.5 to Registrant’s Current Report on Form 8-K dated April 13, 2005)filed May 16, 2007). |
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10.57 | | Summary of Deferred Compensation Plan between the Registrant and Dr. Warren P. Levy and Dr. Ronald S. Levy, dated December 14, 2005 (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K, dated December 14, 2005).** |
| |
| 10.58 | | Securities PurchaseThird Modification of Mortgage and Security Agreement, dated March 16, 2006,September 30, 2008, by and between Unigene Laboratories, Inc. and Magnetar Capital
Master Fund, Ltd.Jay Levy (incorporated by reference tofrom Exhibit 10.1 of Registrant’s Current Report on Form 8-K, dated March 22, 2006).
|
| |
10.59 | | Registration Rights Agreement, dated March 17, 2006, between Unigene and Magnetar Capital Master Fund Ltd. (incorporated by reference10.8 to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K dated March 22, 2006)filed on October 6, 2008). |
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| 10.59 | | Assignment of Mortgage by Jay Levy to Jean Levy, dated February 25, 2010 (incorporated by reference from Exhibit 10.56 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009). |
| | |
| 10.60 | | Warrant to Purchase Common Stock,Fourth Modification of Mortgage and Security Agreement, dated March 17, 2006,2010, by and between Unigene Laboratories, Inc. and Magnetar CapitalJean Levy (incorporated by reference from Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010). |
| |
| 10.61 | | Amended and Restated Financing Agreement, dated as of March 16, 2010 (the “Restated Financing Agreement”), by and among Unigene Laboratories, Inc., Victory Park Credit Opportunities Master Fund, Ltd. and Victory Park Management, LLC, as agent (incorporated by reference tofrom Exhibit 10.3 of10.1 to the Registrant’s Current Report on Form 8-K datedfiled March 22, 2006)17, 2010). |
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10.6110.62 | | FormPledge and Security Agreement, dated as of Promissory Note betweenSeptember 30, 2008, by and among Unigene Laboratories, Inc., Victory Park Management, LLC, as agent, and the Registrant and Jay LevySecured Parties (incorporated by reference tofrom Exhibit 10.1 of10.3 to the Registrant’s Current Report on Form 8-K filed October 6, 2008)). * |
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| 10.63 | | Amended and Restated Registration Rights Agreement, dated April 6, 2006)as of March 17, 2010, by and between Unigene Laboratories, Inc. and the Lenders signatory to the Restated Financing Agreement (incorporated by reference from Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
| |
| 10.64 | | Affiliate Subordination Agreement, dated as of September 30, 2008, by and among Unigene Laboratories, Inc., Jay Levy, Jaynjean Levy Family Limited Partnership and Victory Park Management, LLC, as agent for the Lenders signatory to the Financing Agreement, dated as of September 30, 2008 (the “Original Financing Agreement”), by and among Unigene Laboratories, Inc., the Lenders and Victory Park Management, LLC, as agent (incorporated by reference from Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed October 6, 2008)). |
| |
| 10.65 | | Assignment and Assumption Agreement, dated January 11, 2010, by and between Jay Levy and Jean Levy (incorporated by reference from Exhibit 10.64 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009). |
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| 10.66 | | Amended and Restated Secured Promissory Note, dated March 17, 2010, issued by Unigene Laboratories, Inc. in favor of Jean Levy (incorporated by reference from Exhibit 10.8 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010). |
| 10.67 | | Amended and Restated Secured Promissory Note, dated March 17, 2010, issued by Unigene Laboratories, Inc. in favor of the Jaynjean Levy Family Limited Partnership (incorporated by reference from Exhibit 10.9 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010). |
| | |
| 10.68 | | Lock-Up Agreement, dated as of September 30, 2008, by and among Unigene Laboratories, Inc. and the Lenders signatory to the Original Financing Agreement (incorporated by reference from Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed October 6, 2008)). |
| |
| 10.69 | | License Agreement, dated October 19, 2009, by and between Unigene Laboratories, Inc. and Tarsa Therapeutics, Inc. (incorporated by reference from Exhibit 10.67 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009).* |
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| 10.70 | | Amendment to License Agreement, dated January 15, 2010, by and among Unigene Laboratories, Inc. and Tarsa Therapeutics, Inc. (incorporated by reference from Exhibit 10.68 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009).* |
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| 10.71 | | Omnibus Amendment Agreement, dated October 19, 2009, by and among Unigene Laboratories, Inc., Victory Park Management, LLC, as agent, and the holders signatory thereto (incorporated by reference from Exhibit 10.69 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009). |
| |
| 10.72 | | Collateral Assignment Agreement, dated October 19, 2009, by and between Unigene Laboratories, Inc. and Victory Park Management, LLC, as agent (incorporated by reference from Exhibit 10.70 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009). |
| | |
| 10.73 | | Warrant Exchange Agreement, dated October 19, 2009, by and between Unigene Laboratories, Inc. and Victory Park Special Situations Master Fund, Ltd. (incorporated by reference from Exhibit 10.71 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009). |
| | |
| 10.74 | | Master Reaffirmation and Amendment to Transaction Documents, by and among Unigene Laboratories, Inc., the Lenders signatory to the Restated Financing Agreement and Victory Park Management, LLC, as agent (incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
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| 10.75 | | Senior Secured Convertible Term Note, dated March 17, 2010, issued by Unigene Laboratories, Inc. in favor of Victory Park Credit Opportunities Master Fund, Ltd. (incorporated by reference from Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
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| 10.76 | | Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing, dated as of September 30, 2008, by Unigene Laboratories, Inc. in favor of Victory Park Management, LLC (incorporated by reference from Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
| 10.77 | | First Amendment to Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing, dated as of March 17, 2010, by and between Unigene Laboratories, Inc. and Victory Park Management, LLC (incorporated by reference from Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
| | |
| 10.78 | | Reaffirmation of Affiliate Subordination Agreement, dated as of March 17, 2010, by and among Unigene Laboratories, Inc., Jay Levy, Jaynjean Levy Family Limited Partnership and Victory Park Management, LLC, as agent for the Lenders signatory to the Restated Financing Agreement (incorporated by reference from Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed March 17, 2010). |
| | |
| 23.1 | | Consent of Dechert LLP (included in Exhibit 5.1). |
| | |
| 23.2 | | Consent of Grant Thornton LLP. *** |
| | |
| 23.3 | | Consent of Ernst & Young LLP. |
| | |
| 24.1 | | Power of Attorney (included on signature pages to the Registration Statement). |
| * | Portions of the exhibit have been omitted pursuant to a request for confidential treatment. |
** | Management contract or compensatory plan. |
| (b) | Financial Statement Schedules |
| | No financial statement schedules are required. |
Item 17. Undertakings.
| (a) | The undersigned registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:Registration Statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;Act; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statementRegistration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the |
II-7
| estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b), if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statementRegistration Statement or any material change to such information in the registration statement.Registration Statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act, of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (b) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a courtco urt of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
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SIGNATURES
SIGNATURESPursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Fairfield,Boonton, New Jersey, on this 14th14th day of April, 2006.
May, 2010. | | |
| UNIGENE LABORATORIES, INC. |
| |
By: | | | |
| By: | /s/ Warren P. Levy | |
| | Warren P. Levy | |
| | President and Chief Executive Officer | |
| | | |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Warren P. Levy and William J. Steinhauer, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to the Registration Statement and sign any registration statement for the same offering covered by the Registration Statement that is to be effective upon filing pursuant to Rule 462 promulgated under the Securities Act of 1933, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-f act and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed on this 14th14th day of April, 2006May, 2010 by the persons and in the capacities indicated below. | | |
Signature | | Title |
| | |
/s/ Warren P. Levy | | |
| Warren P. Levy | | President and Chief Executive Officer (principal executive officer) and Director |
| |
/s/ Jay Levy
Jay Levy
| | Treasurer and Director |
| |
/s/ Ronald S. Levy
Ronald S. Levy
| | Secretary and Director |
| |
/s/ J. Thomas August | | |
| J. Thomas August | | Director |
| | |
/s/ Allen Bloom | | |
| Allen Bloom | | Director |
| | |
/s/ Robert F. Hendrickson Robert F. Hendrickson
Zvi Eiref | | |
| Zvi Eiref | | Director |
| | |
/s/ Marvin L. Miller | | |
| Marvin L. Miller | | Director |
| | |
/s/ Bruce Morra Bruce Morra
Richard. Levy | | |
| Richard Levy | | Director |
| | |
/s/ Peter Slusser Peter Slusser
Bruce Morra | | |
| Bruce Morra | | Director |
| | |
/s/ Peter Slusser | | |
| Peter Slusser | | Director |
| | |
| /s/ William J. Steinhauer | | |
| William J. Steinhauer | | Principal FinancialVice President of Finance (principal financial and Accounting Officeraccounting officer) |
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S - 1