SUMMARY
PROSPECTUS
This
summary highlights information contained elsewhere in this prospectus or
incorporated by reference herein. This summary is not complete and may not
contain all of the information that you should consider before deciding whether
or not you should purchase our common stock offered hereunder. You should read
the entire prospectus carefully, including the section entitled Risk Factors
beginning on page 4 of this prospectus and the section entitled Risk
Factors in our Annual Report on Form 10-K/A for the year ended June 30, 2010,
and all other information included or incorporated herein by reference in this
prospectus before you decide whether to purchase our common stock.
Our
Company
iBio,
Inc. is a biotechnology company focused on commercializing its proprietary
technology, the iBioLaunch™ platform, for the production of biologics including
vaccines and therapeutic proteins. Our strategy is to utilize our technology for
development and manufacture of our own product candidates and to work with both
corporate and government clients to reduce their costs during product
development and meet their needs for low cost, high quality biologics
manufacturing systems. Our near-term focus is to establish business arrangements
for use of our technology by licensees for the development and production of
products for both therapeutic and vaccine uses. Vaccine candidates presently
being advanced on our proprietary platform are applicable to H1N1 swine-like
influenza, H5N1 avian influenza, malaria, and yellow fever.
In order
to attract appropriate licensees and increase the value of our share of such
intended contractual arrangements, we engaged the Center for Molecular Biology
of Fraunhofer USA, Inc., or FhCMB, in 2003 to perform research and development
activities to apply the platform to create our first product candidate. We
selected a plant-based influenza vaccine for human use as the product candidate
to exemplify the value of the platform. Based on research conducted by FhCMB,
our proprietary technology is applicable to the production of vaccines for many
disease targets including any strain of influenza, such as the newly-emerged
strains of H1N1 swine-like influenza. A Phase 1 clinical trial of a vaccine
candidate for H1N1 influenza, based on iBios technology, was initiated in
September 2010.
In
connection with its research and development activities, FhCMB agreed to use its
best efforts to obtain grants from governmental and non-governmental entities to
fund additional development of our proprietary plant-based technology.
Consequently, in addition to the funding we have provided, FhCMB has received
funding from the Bill & Melinda Gates Foundation for development of various
vaccines based upon our proprietary technology including an experimental vaccine
for H5N1 avian influenza. A Phase 1 clinical trial of a vaccine candidate for
H5N1 influenza, based on iBios technology, was initiated in December
2010.
Our
Corporate Information
We are a
Delaware corporation. Our principal executive/administrative offices are located
at 9 Innovation Way, Suite 100, Newark, Delaware 19711, and our telephone number
is (302) 355-0650. Our website address is http://www.ibioinc.com. Information on
or accessed through our website is not incorporated into this prospectus and is
not a part of this prospectus. Our common stock is listed on the NYSE Amex
market under the symbol IBIO.
About
this Prospectus
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission, or the SEC, utilizing a shelf registration process.
Under the shelf registration process, we may offer shares of our common stock
and preferred stock, various series of debt securities, warrants to purchase any
of such securities, and units comprised of any such securities with a total
value of up to $100,000,000 from time to time under this prospectus at prices
and on terms to be determined by market conditions at the time of offering. This
prospectus provides you with a general description of the securities we may
offer. Each time we offer a type or series of securities, we will provide a
prospectus supplement that will describe the specific amounts, prices and other
important terms of the securities, including, to the extent
applicable:
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designation
or classification; |
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aggregate
principal amount or aggregate offering
price; |
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original
issue discount, if any; |
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rates
and times of payment of interest, dividends or other payments, if
any; |
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redemption,
conversion, exchange, settlement or sinking fund terms, if
any; |
1
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conversion,
exchange or settlement prices or rates, if any, and, if applicable, any
provisions for changes to or adjustments in the conversion, exchange or
settlement prices or rates and in the securities or other property
receivable upon conversion, exchange or
settlement; |
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restrictive
covenants, if any; |
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voting
or other rights, if any; and |
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important
federal income tax considerations. |
A
prospectus supplement may include a discussion of risks or other special
considerations applicable to us or the offered securities. A prospectus
supplement may also add, update or change information in this prospectus. If
there is any inconsistency between the information in this prospectus and any
applicable prospectus supplement, you must rely on the information in the
prospectus supplement. Please carefully read both this prospectus and any
applicable prospectus supplement together with the additional information
described under the heading Where You Can Find More Information.
The
registration statement containing this prospectus, including exhibits to the
registration statement, provides additional information about us and the
securities offered under this prospectus. The registration statement can be read
at the SECs website (www.sec.gov) or at the SECs Public Reference Room
mentioned under the heading Where You Can Find More Information.
We have
not authorized any broker-dealer, salesperson or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus and an accompanying supplement to
this prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or an accompanying
prospectus supplement. This prospectus and an accompanying supplement to this
prospectus do not constitute an offer to sell or the solicitation of an offer to
buy securities, nor do this prospectus and an accompanying supplement to this
prospectus constitute an offer to sell or the solicitation of an offer to buy
securities in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation. The information contained in this prospectus and an
accompanying prospectus supplement speaks only as of the date set forth on the
applicable cover page and may not reflect subsequent changes in our business,
financial condition, results of operations and prospects even though this
prospectus and any accompanying prospectus supplement is delivered or securities
are sold on a later date.
We may
sell the securities directly to or through underwriters, dealers or agents. We,
and our underwriters or agents, reserve the right to accept or reject all or
part of any proposed purchase of securities. If we do offer securities through
underwriters, dealers or agents, we will include in any applicable prospectus
supplement:
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the
names of those underwriters, dealers or
agents; |
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applicable
fees, discounts and commissions to be paid to
them; |
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details
regarding over-allotment options, if any;
and |
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the
net proceeds to us. |
Common
Stock
As
discussed below under the heading The Securities We May Offer, we may issue
shares of our common stock from time to time. Holders of our common stock are
entitled to one vote for each share held of record on all matters submitted to a
vote of stockholders. Stockholders do not have cumulative voting rights. Holders
of common stock have no preemptive, redemption or conversion rights and are not
subject to future calls or assessments. No sinking fund provisions apply to our
common stock. All outstanding shares are fully-paid and non-assessable. In the
event of our liquidation, dissolution or winding up, holders of common stock are
entitled to share ratably in assets available for distribution, subject to any
prior distribution rights of any preferred stock then outstanding. Holders of
common stock are entitled to receive proportionately any such dividends declared
by our board of directors, or our Board, out of legally available funds for
dividends, subject to any preferences that may be applicable to any shares of
preferred stock that may be outstanding at that time. The rights, preferences
and privileges of holders of common stock are set forth in our Amended and
Restated Articles of Incorporation, or the Charter, which may be amended by the
holders of a majority of the outstanding shares of common stock.
2
Preferred
Stock
As
discussed below under the heading The Securities We May Offer, we may issue
shares of our preferred stock from time to time, in one or more series. Under
our Charter, our Board has the authority, without further action by
stockholders, to designate up to 1,000,000 shares of preferred stock in one or
more series and to fix the designations, powers, preferences and the relative,
participating, optional or other special rights of the shares of each series and
any qualification, limitations and restrictions thereon, any or all of which may
be greater than the rights of our common stock.
If we
issue preferred stock, we will fix the designations, powers, preferences and the
relative, participating, optional or other special rights, and any
qualification, limitations and restrictions of the shares of each series that we
sell under this prospectus and applicable prospectus supplements in the
certificate of designations relating to that series. If we issue preferred
stock, we will incorporate by reference into the registration statement of which
this prospectus is a part the form of any certificate of designations that
describes the terms of such series of preferred stock before the issuance
thereof. We urge you to read any prospectus supplement related to any series of
preferred stock we may offer, as well as the complete certificate of
designations that contains the terms of the applicable series of preferred
stock.
Debt
Securities
As
discussed below under the heading The Securities We May Offer, we may issue
debt securities from time to time, in one or more series, as either senior or
subordinated debt or as senior or subordinated convertible debt. Unless we give
you different information in the applicable prospectus supplement, (i) the
debt securities will be unsecured, (ii) the senior debt securities will be
unsubordinated obligations and will rank equally with all of our other unsecured
and unsubordinated indebtedness, and (iii) the subordinated debt securities
will be subordinate and junior in right of payment, to the extent and in the
manner described in the instrument governing the debt, to all or some portion of
our indebtedness. Any convertible debt securities that we issue will be
convertible into or exchangeable for our common stock or other securities of
ours. Conversion may be mandatory or at your option and would be at prescribed
conversion rates.
If we
issue debt securities, they will be issued under one or more documents called
indentures, which are contracts between us and a trustee for the holders of the
debt securities. We urge you to read any prospectus supplement related to the
series of debt securities being offered, as well as the complete indenture that
contains the terms of the debt securities. If we issue debt securities,
indentures and forms of debt securities containing the terms of such debt
securities will be incorporated by reference into the registration statement of
which this prospectus is a part from other filings we would make with the
SEC.
Warrants
As
discussed below under the heading The Securities We May Offer, we may issue
warrants for the purchase of common stock, preferred stock, debt securities
and/or units (as described below) in one or more series, from time to time. We
may issue warrants independently or together with common stock, preferred stock
and/or debt securities, and the warrants may be attached to or separate from
those securities.
If we
issue warrants, they will be evidenced by warrant agreements or warrant
certificates issued under one or more warrant agreements, which are contracts
between us and an agent for the holders of the warrants. We urge you to read any
prospectus supplement related to any series of warrants we may offer, as well as
the complete warrant agreement and warrant certificate that contain the terms of
the warrants. If we issue warrants, forms of warrant agreements and warrant
certificates relating to such warrants will be incorporated by reference into
the registration statement of which this prospectus is a part from other filings
we would make with the SEC.
Units
As
discussed below under the heading The Securities We May Offer, we may issue
units comprised of shares of common stock, shares of preferred stock, debt
securities and warrants in any combination. We may issue units in such amounts
and in as many distinct series as we wish.
If we
issue units, they will be issued under one or more unit agreements to be entered
into between us and a bank or other financial institution, as unit agent. We
urge you to read any prospectus supplement related to any series of units we may
offer, as well as the complete unit agreement and unit certificate that contain
the terms of the units. If we issue units, forms of unit agreements and unit
certificates relating to such units will be incorporated by reference into the
registration statement of which this prospectus is a part from other filings we
would make with the
SEC.
3
RISK
FACTORS
Our
past experience may not be indicative of future performance, and as noted
elsewhere in this prospectus and documents incorporated by reference into this
prospectus, we have included forward-looking statements about our business,
plans and prospects that are subject to change. In addition to the
other risks or uncertainties contained in this prospectus and documents
incorporated by reference into this prospectus, the following risks may affect
our operating results, financial condition and cash flows. If any of
these risks occur, either alone or in combination with other factors, our
business, financial condition or operating results could be adversely
affected. Moreover, readers should note this is not an exhaustive
list of the risks we face; some risks are unknown or not quantifiable, and other
risks that we currently perceive as immaterial may ultimately prove more
significant than expected. Statements about plans, predictions or
expectations should not be construed to be assurances of performance or promises
to take a given course of action.
Risks
Relating to our Business
Our
plant-based technology platform has not previously been used by others to
successfully develop commercial products, and if we are not able to establish
licenses of the platform, we may not generate sufficient license revenues to
fulfill our business plan.
If we are
unable to convince others to adopt the use of the platform in addition to or
instead of other methods to produce vaccines and therapeutic proteins, we will
not generate the revenues presently contemplated by our business plan to support
our continuing operations.
The
majority of our product candidates are in the preclinical stage of development,
and if we or our licensees are not able to successfully develop and
commercialize them, we may not generate sufficient revenues to fulfill our
business plan.
We have
internal product candidates and believe our technology to be applicable to the
product candidates of other companies. Our success in establishing licenses to
our platform will substantially depend on our or our clients successful
completion of clinical trials, and obtaining required regulatory approvals for
our product candidates alone or with other persons. If the studies described
above or any further studies fail, if we do not obtain required regulatory
approvals, or if we fail to commercialize any of our product candidates alone or
with licensees, we may be unable to generate sufficient revenues to attain
profitability or continue our business operations, and our reputation in the
industry and in the investment community would likely be significantly damaged,
each of which would cause our stock price to decline and your holdings of our
stock to lose most, if not all, of their value.
Our
licensees will not be able to commercialize product candidates based on our
platform technology if preclinical studies do not produce successful results or
clinical trials do not demonstrate safety and efficacy in humans.
Preclinical
and clinical testing is expensive, difficult to design and implement, can take
many years to complete and has an uncertain outcome. Success in preclinical
testing and early clinical trials does not ensure that later clinical trials
will be successful, and interim results of a clinical trial do not necessarily
predict final results. Our licensees may experience numerous unforeseen events
during, or as a result of, preclinical testing and the clinical trial process
that could delay or prevent the commercialization of product candidates based on
our technology, including the following:
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Our
licensees preclinical or clinical trials may produce negative or
inconclusive results, which may require additional preclinical testing or
clinical trials or the abandonment of projects that we expect to be
promising. For example, promising animal data may be obtained about the
immunogenicity of a vaccine candidate and then human tests may result in
no or inadequate immune responses. In addition, unexpected safety concerns
may be encountered that would require further testing even if the vaccine
candidate produced a very significant immune response in human
subjects. |
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Initial
clinical results may not be supported by further or more extensive
clinical trials. For example, a licensee may obtain data that suggest a
desirable immune response from a vaccine candidate in a small human study,
but when tests are conducted on larger numbers of people, the same extent
of immune response may not occur. If the immune response generated by a
vaccine is too low or occurs in too few treated individuals, then the
vaccine will have no commercial
value. |
4
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Enrollment
in our licensees clinical trials may be slower than projected, resulting
in significant delays. The cost of conducting a clinical trial increases
as the time required to enroll adequate numbers of human subjects to
obtain meaningful results increases. Enrollment in a clinical trial can be
a slower-than-anticipated process because of competition from other
clinical trials, because the study is not of interest to qualified
subjects, or because the stringency of requirements for enrollment limits
the number of people who are eligible to participate in the clinical
trial. |
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Our
licensee might have to suspend or terminate clinical trials if the
participating patients are being exposed to unacceptable health risks.
Animal tests do not always adequately predict potential safety risks to
human subjects. The risk of any candidate product is unknown until it is
tested in human subjects, and if subjects experience adverse events during
the clinical trial, the trial may have to be suspended and modified or
terminated entirely. |
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Regulators
or institutional review boards may suspend or terminate clinical research
for various reasons, including noncompliance with regulatory
requirements. |
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Any
regulatory approval ultimately obtained may be limited or subject to
restrictions or post-approval commitments that render the product not
commercially viable. |
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The
effects of our licensees product candidates may not be the desired
effects or may include undesirable side
effects. |
Significant
clinical trial delays could allow our competitors to bring products to market
before our licensees do and impair our ability to commercialize our technology
platform or products or product candidates based on our technology platform.
Poor clinical trial results or delays may make it impossible to license a
product or so reduce its attractiveness to a licensing partner that we will be
unable to successfully commercialize a product.
We
will need substantial additional funding to shepherd our product candidates
through the clinical testing process and may be unable to raise capital when
needed, which would force us to delay, reduce or eliminate our product
development programs or commercialization efforts.
Our
research and development expenses may increase in connection with our ongoing
activities, particularly if the scope of the clinical trials that we are
conducting expands. In addition, if we choose to bring forward any of our
product candidates without funding from collaborators, we expect to incur
significant commercialization expenses for product sales, marketing,
manufacturing and distribution. We would need substantial additional funding and
might be unable to raise capital when needed or might be unable to raise capital
on attractive terms, which would force us to delay, reduce or eliminate our
research and development programs or commercialization efforts.
We
believe that our existing cash resources of $3.8 million as of March 31, 2011
will be sufficient to meet our projected operating requirements through January
2012 without an equity or debt offering. Our future funding requirements will
depend on many factors, including:
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the
scope and results of our clinical
trials; |
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our
ability to advance additional product candidates into
development; |
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the
success of our anticipated commercial agreements with pharmaceutical
companies; |
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our
ability to establish and maintain additional development agreements or
other alternative arrangements; |
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the
timing of, and the costs involved in, obtaining regulatory
approvals; |
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the
cost of manufacturing activities; |
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the
cost of commercialization activities, including product marketing, sales
and distribution; |
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the
costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims and other patent-related costs, including, if
necessary, litigation costs and the results of such litigation;
and |
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potential
acquisition or in-licensing of other products or
technologies. |
If we are
unsuccessful in raising additional capital or other alternative financing, we
might have to defer or abandon our efforts to commercialize our intellectual
property and decrease or even cease operations.
5
We
have a limited operating history which may limit the ability of investors to
make an informed investment decision.
We are a
clinical stage biotechnology company. To date, we have not commercialized any of
our technologies or received any FDA or other approval to market any product.
The successful commercialization of our technologies will require us to perform
a variety of functions, including:
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continuing
to undertake preclinical development and clinical
trials; |
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participating
in regulatory approval processes; |
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formulating
and manufacturing products; and |
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conducting
sales and marketing activities. |
Our
operations have been limited to organizing and staffing our company, acquiring,
developing and securing our proprietary technology and undertaking, through
third parties, preclinical trials and clinical trials of our technologies. To
date, we have commenced only a Phase 1 clinical trial of a vaccine candidate for
H1N1 influenza. These operations provide a limited basis for investors to assess
our ability to commercialize our technologies and whether to invest in
us.
Our
product development and commercialization involve a number of uncertainties, and
we may never generate sufficient revenues from the sale of potential products to
become profitable.
We have
generated no significant revenues to date. To generate revenue and to achieve
profitability, we must successfully develop licenses for our platform and/or
clinically test, market and sell our potential products. Even if we generate
revenue and successfully achieve profitability, we cannot predict the level of
that profitability or whether it will be sustainable. We expect that our
operating results will fluctuate from period to period as a result of
differences in when we incur expenses and receive revenues from sales of our
potential products, business arrangements and other sources. Some of these
fluctuations may be significant.
Until we
can generate a sufficient amount of license and/or product revenue, if ever, we
expect to finance future cash needs through public or private equity offerings,
debt financings and corporate product or technology development agreements and
licensing arrangements. If we raise additional funds by issuing equity
securities, our stockholders may experience dilution. Debt financing, if
available, may involve restrictive covenants. Any debt financing or additional
equity that we raise may contain terms, such as liquidation and other
preferences that are not favorable to us or our stockholders. If we raise
additional funds through development and licensing arrangements with third
parties, it will be necessary to relinquish valuable rights to our technologies,
research programs or product candidates or grant licenses on terms that may not
be favorable to us.
Even
if we or our potential licensees successfully complete clinical trials for our
product candidates, there are no assurances that we will be able to submit, or
obtain FDA approval of, a new drug application or biologics license
application.
There can
be no assurance that, if clinical trials for any product candidates are
successfully completed, either we or our licensees will be able to submit a
biologics license application (BLA), to the FDA or that any BLA submitted will
be approved by the FDA in a timely manner, if at all. After completing clinical
trials for a product candidate in humans, a dossier is prepared and submitted to
the FDA as a BLA, and includes all preclinical and clinical trial data that
clearly establish both short-term and long-term safety for a product candidate,
and data that establishes the statistically significant efficacy of a product
candidate, in order to allow the FDA to review such dossier and to consider a
product candidate for approval for commercialization in the United States. If we
are unable to submit a BLA with respect to any of our product candidates, or if
any BLA we submit is not approved by the FDA, we will be unable to commercialize
that product. The FDA can and does reject BLAs and requires additional clinical
trials, even when product candidates perform well or achieve favorable results
in large-scale Phase 3 clinical trials. If we or our licensees fail to
commercialize any product candidates based on our technology, we may be unable
to generate sufficient revenues to continue operations or attain profitability
and our reputation in the industry and in the investment community would likely
be damaged, each of which would cause our stock price to significantly
decrease.
6
We
face competition from many different sources, including pharmaceutical and
biotechnology enterprises, academic institutions, government agencies and
private and public research institutions, and such competition may adversely
affect our ability to generate revenue from our products.
Many of
our competitors have significantly greater financial resources and expertise in
research and development, manufacturing, preclinical testing, clinical trials,
regulatory approvals and marketing approved products than we do.
Other
companies may also prove to be significant competitors, particularly through
arrangements with large and established companies, and this may reduce the value
of our platform technology for the purposes of establishing license agreements.
For example, Novavax is developing vaccines for influenza, based on the use of
cultured insect cells. Its candidate products are more advanced in development
than ours are and have already demonstrated positive results in human clinical
trials. Similarly, Medicago has announced preclinical experiments to produce
influenza vaccines in green plants. Other companies, such as Vical, are
attempting to develop vaccines based on the use of nucleic acids rather than
proteins. If these efforts are successful in clinical trials, nucleic acid based
vaccine technology may compete effectively against our technology platform and
may potentially prevent us from being able to obtain commercial agreements or
partnerships.
There are
currently approved therapies for the diseases and conditions addressed by our
vaccine and antibody candidates that are undergoing clinical trials and for the
diseases and conditions that are subjects of our preclinical development
program. Our commercial opportunities will be reduced or eliminated if our
competitors develop and commercialize products based on other technology
platforms that are safer, more effective, have fewer side effects or are less
expensive than any products that we or our licensees may develop.
Finally,
these third parties compete with us in recruiting and retaining qualified
scientific and management personnel, establishing clinical trial sites and
patient registration for clinical trials, as well as in acquiring technologies
and technology licenses complementary to our programs or advantageous to our
business.
We
will depend significantly on arrangements with third parties to develop and
commercialize our product candidates.
A key
element of our business strategy is to establish arrangements with licensees to
develop and commercialize product candidates. We and FhCMB currently are working
within our business structure, which includes non-commercial arrangements as
described above, to apply further our plant-based platform technology. Delays,
withdrawals or other adverse changes to the current participants in our business
structure might adversely affect our ability to develop and commercialize our
product candidates.
We expect
to rely upon our future business arrangements for support in advancing certain
of our drug candidates and intend to rely on additional work under current and
future arrangements during our efforts to commercialize our product candidates.
Our contractors may be conducting multiple product development efforts within
the same disease areas that are the subjects of their agreements with us. Our
agreements might not preclude them from pursuing development efforts using a different approach
from that which is the subject of our agreement with them. Any of our drug
candidates, therefore, may be subject to competition with a drug candidate under
development by a contractor.
The
success of our business arrangements will depend heavily on the efforts and
activities of the organizations which are party to these arrangements. Our
future contractual arrangements may provide significant discretion in
determining the efforts and resources available to these programs. The risks
that we face in connection with these arrangements, and that we anticipate being
subject to in future arrangements, include the following:
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Future
agreements may be for fixed terms and subject to termination under various
circumstances, including, in some cases, on short notice without
cause. |
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Our
future licensees may develop and commercialize, either alone or with
others, products and services that are similar to or competitive with the
products that are the subject of the agreement with
us. |
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Our
future licensees may underfund or not commit sufficient resources to the
testing, marketing, distribution or other development of our
products. |
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Our
future licensees may not properly maintain or defend our intellectual
property rights, or they may utilize our proprietary information in such a
way as to invite litigation that could jeopardize or invalidate our
proprietary information or expose us to potential
liability. |
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Our
future licensees may change the focus of their development and
commercialization efforts. Pharmaceutical and biotechnology companies
historically have re-evaluated their priorities from time to time,
including following mergers and consolidations, which have been common in
recent years in these industries. The ability of our product candidates
and products to reach their potential could be limited if our licensees or
customers decrease or fail to increase spending relating to such
products. |
7
Business
arrangements with pharmaceutical companies and other third parties often are
terminated or allowed to expire by the other party. Such terminations or
expirations would adversely affect us financially and could harm our business
reputation.
We
have no experience in the sales, marketing and distribution of pharmaceutical
products or in commercial technology transfer operations.
If we fail to establish commercial
licenses for our platform technology or fail to enter into arrangements with
partners with respect to the sales and marketing of any of our future potential
product candidates, we might need to develop a sales and marketing organization
with supporting distribution capability in order to directly market our
technology and/or related products. Significant additional
expenditures would be required for us to develop such an in-house sales and
marketing organization.
We
may not be successful in establishing additional arrangements with third
parties, which could adversely affect our ability to discover, develop and
commercialize products.
We
engaged FhCMB to perform research and development activities to apply our
platform technology to create product candidates. We currently do not have other
similar agreements with third parties. If we are able to obtain such agreements,
however, these arrangements may not be scientifically or commercially
successful. If we are unable to reach new agreements with suitable third
parties, we may fail to meet our business objectives for the affected product or
program. We face significant competition in seeking appropriate companies with
which to create additional similar business structures. Moreover, these
arrangements are complex to negotiate and time-consuming to document. We may not
be successful in our efforts to establish additional alternative arrangements.
The terms of any additional arrangements that we establish may not be favorable
to us. Moreover, these arrangements may not be successful.
If
third parties on whom we or our licensees will rely for clinical trials do not
perform as contractually required or as we expect, we may not be able to obtain
regulatory approval for or commercialize our product candidates, and our
business may suffer.
We do not
have the ability to independently conduct the clinical trials required to obtain
regulatory approval for our products. We have not yet contracted with any third
parties to conduct our clinical trials. We will depend on licensees or on
independent clinical investigators, contract research organizations and other
third party service providers to conduct the clinical trials of our product
candidates and expect to continue to do so. We will rely heavily on these
parties for successful execution of our clinical trials but will not control
many aspects of their activities. For example, the investigators may not be our
employees. However, we will be responsible for ensuring that each of our
clinical trials is conducted in accordance with the general investigational plan
and protocols for the trial. Third parties may not complete activities on
schedule, or may not conduct our clinical trials in accordance with regulatory
requirements or our stated protocols. The failure of these third parties to
carry out their obligations could delay or prevent the development, approval and
commercialization of our product candidates.
We
face substantial uncertainty in our ability to protect our patents and
proprietary technology.
Our
ability to commercialize our products will depend, in part, on our ability to
obtain patents, to enforce those patents and preserve trade secrets, and to
operate without infringing on the proprietary rights of others.
The
patent positions of biotechnology companies like us are highly uncertain and
involve complex legal and factual questions.
We currently hold four U.S. patents and
one international patent. Additionally, we have twelve U.S. and seventy-one
international patent applications pending. The latter includes numerous foreign
countries including Australia, Brazil, Canada, China, Hong Kong, India, Japan,
New Zealand, and several
countries in Europe. We continue to prepare patent applications relating to our
expanding technology in the U.S. and abroad.
8
There can
be no assurance that:
|
· |
Patent
applications owned by or licensed to us will result in issued
patents; |
|
· |
Patent
protection will be secured for any particular
technology; |
|
· |
Any
patents that have been or may be issued to us will be valid or
enforceable; |
|
· |
Any
patents will provide meaningful protection to
us; |
|
· |
Others
will not be able to design around the patents;
or |
|
· |
Our
patents will provide a competitive advantage or have commercial
application. |
The
failure to obtain and maintain adequate patent protection could have a material
adverse effect on us and may adversely affect our ability to enter into, or
affect the terms of, any arrangement for the marketing of any
product.
We
cannot assure you that our patents will not be challenged by
others.
There can
be no assurance that patents owned by or licensed to us will not be challenged
by others. We currently hold one issued U.S. patent for methods of inducing gene
silencing in plants and one U.S. patent application for which we have received a
notice of allowance, describing systems for expression of vaccine antigens in
plants. We could incur substantial costs in proceedings, including interference
proceedings before the United States Patent and Trademark Office and comparable
proceedings before similar agencies in other countries in connection with any
claims that may arise in the future. These proceedings could result in adverse
decisions about the patentability of our inventions and products, as well as
about the enforceability, validity or scope of protection afforded by the
patents. Any adverse decisions about the patentability of our product candidates
could cause us to either lose rights to develop and commercialize our product
candidates or to license such rights at substantial cost to us. In addition,
even if we were successful in such proceedings, the cost and delay of such
proceedings would most likely have a material adverse effect on our business.
Confidentiality
agreements with employees and others may not adequately prevent disclosure of
trade secrets and other proprietary information, may not adequately protect our
intellectual property, and will not prevent third parties from independently
discovering technology similar to or in competition with our intellectual
property.
We rely
on trade secrets and other unpatented proprietary information in our product
development activities. To the extent we rely on trade secrets and unpatented
know-how to maintain our competitive technological position, there can be no
assurance that others may not independently develop the same or similar
technologies. We seek to protect trade secrets and proprietary knowledge, in
part, through confidentiality agreements with our employees, consultants,
advisors, collaborators and contractors. Nevertheless, these agreements may not
effectively prevent disclosure of our confidential information and may not
provide us with an adequate remedy in the event of unauthorized disclosure of
such information. If our employees, scientific consultants, advisors,
collaborators or contractors develop inventions or processes independently that
may be applicable to our technologies, product candidates or products, disputes
may arise about ownership of proprietary rights to those inventions and
processes. Such inventions and processes will not necessarily become our
property, but may remain the property of those persons or their employers.
Protracted and costly litigation could be necessary to enforce and determine the
scope of our proprietary rights. If we fail to obtain or maintain trade secret
protection for any reason, the competition we face could increase, reducing our
potential revenues and adversely affecting our ability to attain or maintain
profitability.
If
we infringe or are alleged to infringe intellectual property rights of third
parties, it will adversely affect our business.
Our
research, development and commercialization activities, as well as any product
candidates or products resulting from these activities, may infringe or be
claimed to infringe patents or patent applications under which we do not hold
licenses or other rights. Third parties may own or control these patents and
patent applications in the United States and abroad. These third parties could
bring claims against us or our customers, collaborators or licensees that would
cause us to incur substantial expenses and, if successful against us, could
cause us to pay substantial damages. Further, if a patent infringement suit were
brought against us or our collaborators, we or they could be forced to stop or
delay research, development, manufacturing or sales of the product or product
candidate that is the subject of the suit.
As a
result of patent infringement claims, or in order to avoid potential claims, we
or our customers, collaborators or licensees may choose to seek, or be required
to seek, a license from the third party and would most likely be required to pay
license fees or royalties or both. These licenses may not be available on
acceptable terms, or at all. Even if we or our customers, collaborators or
licensees were able to obtain a license, the rights may be nonexclusive, which
would give our competitors access to the same intellectual property. Ultimately,
we could be prevented from commercializing a product, or be forced to cease some
aspect of our business operations if, as a result of actual or threatened patent
infringement claims, we or our customers, collaborators or licensees are unable
to enter into licenses on acceptable terms. This could harm our business
significantly.
9
There
have been substantial litigation and other proceedings regarding patent and
other intellectual property rights in the pharmaceutical and biotechnology
industries. In addition to infringement claims against us, we may become a party
to other patent litigation and other proceedings, including interference
proceedings declared by the United States Patent and Trademark Office and
opposition proceedings in the European Patent Office, regarding intellectual
property rights with respect to our products and technology. The cost to us of
any patent litigation or other proceeding, even if resolved in our favor, could
be substantial. Some of our competitors may be able to sustain the costs of such
litigation or proceedings more effectively than we can because of their
substantially greater financial resources. Uncertainties resulting from the
initiation and continuation of patent litigation or other proceedings could have
a material adverse effect on our ability to compete in the marketplace. Patent
litigation and other proceedings may also absorb significant management
time.
There
is a substantial risk of product liability claims in our business. If we are
unable to obtain sufficient insurance, a product liability claim against us
could adversely affect our business.
Clinical
trial and product liability insurance is volatile and may become increasingly
expensive. As a result, we may be unable to obtain sufficient insurance or
increase our existing coverage at a reasonable cost to protect us against losses
that could have a material adverse effect on our business. An individual may
bring a product liability claim against us if one of our products or product
candidates causes, or is claimed to have caused, an injury or is found to be
unsuitable for consumer use. Any product liability claim brought against us,
with or without merit, could result in:
|
· |
Liabilities
that substantially exceed our product liability insurance, which we would
then be required to pay from other sources, if
available; |
|
· |
An
increase of our product liability insurance rates or the inability to
maintain insurance coverage in the future on acceptable terms, or at
all; |
|
· |
Withdrawal
of clinical trial volunteers or
patients; |
|
· |
Damage
to our reputation and the reputation of our products, resulting in lower
sales of any future commercialized product which we may
have; |
|
· |
Regulatory
investigations that could require costly recalls or product
modifications; |
|
· |
The
diversion of managements attention from managing our
business. |
Our inability to obtain adequate
insurance coverage at an acceptable cost could prevent or inhibit the
commercialization of our products. If third parties were to bring a successful
product liability claim or
series of claims against us for uninsured liabilities or in excess of insured
liability limits, our business, financial condition and results of operations
could be materially harmed.
If
we acquire companies, products or technologies, we may face integration risks
and costs associated with those acquisitions that could negatively impact our
business, results from operations and financial condition.
If we are
presented with appropriate opportunities, we may acquire or make investments in
complementary companies, products or technologies. We may not realize the
anticipated benefit of any acquisition or investment. If we acquire companies or
technologies, we will face risks, uncertainties and disruptions associated with
the integration process, including difficulties in the integration of the
operations of an acquired company, integration of acquired technology with our
products, diversion of our managements attention from other business concerns,
the potential loss of key employees or customers of the acquired business and
impairment charges if future acquisitions are not as successful as we originally
anticipate. In addition, our operating results may suffer because of
acquisition-related costs or amortization expenses or charges relating to
acquired intangible assets. Any failure to successfully integrate other
companies, products or technologies that we may acquire may have a material
adverse effect on our business and results of operations. Furthermore, we may
have to incur debt or issue equity securities to pay for any additional future
acquisitions or investments, the issuance of which could be dilutive to our
existing stockholders.
10
The
agreements we entered into with Integrated BioPharma in connection with the
distribution could restrict our operations.
In
connection with the August 2008 spin-off transaction that resulted in our
becoming a separate, publicly-traded company, we and our former parent,
Integrated BioPharma, entered into a number of agreements that govern the
spin-off and our future relationship. Each of these agreements were entered into
in the context of our relationship to Integrated BioPharma as a subsidiary and
our spin-off from Integrated BioPharma and, accordingly, the terms and
provisions of these agreements may be less favorable to us than terms and
provisions we could have obtained in arms-length negotiations with unaffiliated
third parties. These agreements commit us to take actions, observe commitments
and accept terms and conditions that are or may be advantageous to Integrated
BioPharma but are or may be disadvantageous to us.
The terms of these agreements include
obligations and restrictive provisions include, but are not limited to,
agreement to indemnify Integrated BioPharma, its affiliates, and each of their
respective directors, officers, employees, agents and representatives from
certain liabilities arising out of any litigation we are involved in and all
liabilities that arise from our breach of, or performance under, the agreements
we are entered into with Integrated BioPharma in connection with the
distribution and for any of our liabilities.
Current
economic conditions may cause a decline in business spending which could
adversely affect our business and financial performance.
Our
operating results are impacted by the health of the North American economies.
Our business and financial performance, including collection of our accounts
receivable, recoverability of assets including investments, may be adversely
affected by current and future economic conditions, such as a reduction in the
availability of credit, financial market volatility and recession. Additionally,
we may experience difficulties in scaling our operations to react to economic
pressures in the U.S.
Our
independent registered public accounting firm identified a material weakness in
our internal control over financial reporting.
Our
independent public accounting firm, J.H. Cohn LLP, communicated to our audit
committee on May 16, 2011 that a material weakness existed in our internal
control over financial reporting. This weakness was comprised of financial
accounting and disclosure deficiencies and financial reporting deficiencies for
non-routine, complex transactions. This weakness resulted in additions and
corrections to disclosures in Quarterly Report on Form 10-Q for the quarter
ended March 31, 2011 prior to filing in connection with implementation of the
guidance in ASC 815-40, Derivative and Hedging – Contracts in an Entitys Own
Equity. We had previously restated our Quarterly Report on Form 10-Q for the
three months ended September 30, 2009, also in connection with similar
derivatives accounting disclosure issues.
Failure
in the remediation of this weakness could diminish our ability to meet our
financial reporting obligations in an accurate and timely manner.
Risks
Relating to our Common Stock
We
have a history of losses and may not be able to generate sufficient revenue
and/or obtain adequate amounts of financing in the future to support operations
and/or achieve profitability.
We have
incurred losses since inception. To date, our expenses have primarily consisted
of research and development and general and administrative expenses related to
the development and commercialization of our proprietary technology. Our
financial statements have been prepared assuming that we will continue as a
going concern.
We intend
to continue to finance the development and commercialization of our proprietary
technology through revenue generated from licensing fees and services provided
to our clients and collaborators and/or raise additional funds.
If we are
unable to generate revenues and/or raise funds when required or on acceptable
terms, we may have to: a) Significantly delay, scale back, or discontinue the
development and/or commercialization of one or more product candidates; b) Seek
collaborators for product candidates at an earlier stage than would otherwise be
desirable and/or on terms that are less favorable than might otherwise be
available; or c) Relinquish or otherwise dispose of rights to technologies,
product candidates, or products that we would otherwise seek to develop or
commercialize ourselves and/or cease operations.
11
Our
operating results may vary significantly in the future which may adversely
affect the price of our common stock.
It is
possible that our operating results may vary significantly in the future and
that period-to-period comparisons of our operating results are not necessarily
meaningful indicators of the future. You should not rely on the results of one
quarter as an indication of our future performance. It is also possible that in
some future quarters, our operating results will fall below our expectations or
the expectations of market analysts and investors. If we do not meet these
expectations, the price of our common stock may decline
significantly.
Provisions
in our charter documents and under Delaware law could discourage a takeover that
stockholders may consider favorable.
Provisions
of our certificate of incorporation, bylaws and provisions of applicable
Delaware law may discourage, delay or prevent a merger or other change in
control that a stockholder may consider favorable. Pursuant to our certificate
of incorporation, our board of directors may issue additional shares of common
or preferred stock. Any additional issuance of common stock could have the
effect of impeding or discouraging the acquisition of control of us by means of
a merger, tender offer, proxy contest or otherwise, including a transaction in
which our stockholders would receive a premium over the market price for their
shares, and thereby protects the continuity of our management. Specifically, if
in the due exercise of his/her or its fiduciary obligations, the board of
directors were to determine that a takeover proposal was not in our best
interest, shares could be issued by our board of directors without stockholder
approval in one or more transactions that might prevent or render more difficult
or costly the completion of the takeover by:
|
· |
Diluting
the voting or other rights of the proposed acquirer or insurgent
stockholder group, |
|
· |
Putting
a substantial voting block in institutional or other hands that might
undertake to support the incumbent board of directors,
or |
|
· |
Effecting
an acquisition that might complicate or preclude the
takeover. |
Our
certificate of incorporation also allows our board of directors to fix the
number of directors in the by-laws. Cumulative voting in the election of
directors is specifically denied in our certificate of incorporation. The effect
of these provisions may be to delay or prevent a tender offer or takeover
attempt that a stockholder may determine to be in his, her or its best interest,
including attempts that might result in a premium over the market price for the
shares held by the stockholders.
We also are subject to Section 203 of
the Delaware General Corporation Law. In general, these provisions prohibit a
Delaware corporation from engaging in any business combination with any
interested stockholder for a period of three years following the date that the
stockholder became an interested stockholder, unless the transaction in which
the person became an interested stockholder is approved in a manner presented in
Section 203 of the Delaware General Corporation Law. Generally, a business
combination is defined to include mergers, asset sales and other transactions
resulting in financial benefit to a stockholder. In general, an interested
stockholder is a person who, together with affiliates and associates, owns, or
within three years, did own, 15% or more of a corporations voting stock. This statute could
prohibit or delay mergers or other takeover or change in control attempts and,
accordingly, may discourage attempts to acquire us.
We
do not anticipate paying cash dividends for the foreseeable future, and
therefore investors should not buy our stock if they wish to receive cash
dividends.
We have
never declared or paid any cash dividends or distributions on our capital stock.
We currently intend to retain our future earnings to support operations and to
finance expansion and therefore we do not anticipate paying any cash dividends
on our common stock in the foreseeable future.
The
sale of our common stock through current or future equity offerings may cause
dilution and could cause the price of our common stock to decline.
We are
entitled under our Charter to issue up to 100,000,000 shares of common stock,
par value $.001 per share, and 1,000,000 shares of preferred stock, par value
$.001 per share. As of March 31, 2011, we had issued and outstanding 32,382,095
shares of common stock. We had 4,130,000 and 7,948,607 options and
warrants, respectively, outstanding to purchase common stock and 5,870,000
shares of common stock are reserved for issuance of additional grants under
our 2008 Omnibus Equity Incentive Plan. Accordingly, we will be able to issue up
to 55,539,298 additional shares of common stock and 1,000,000 shares of
preferred stock. Sales of our common stock offered through current or future
equity offerings, including sales of our securities under this prospectus, may
result in substantial dilution to our stockholders. The sale of a substantial
number of shares of our common stock to investors, or anticipation of such
sales, could make it more difficult for us to sell equity or equity-related
securities in the future at a time and at a price that we might otherwise wish
to effect sales.
12
The
issuance of preferred stock or additional shares of common stock could adversely
affect the rights of the holders of shares of our common stock.
Our Board
of Directors is authorized to issue up to 1,000,000 shares of preferred stock
without any further action on the part of our stockholders. Our Board of
Directors has the authority to fix and determine the voting rights, rights of
redemption and other rights and preferences of preferred stock. Currently, we
have no shares of preferred stock outstanding. Our Board of
Directors may, at any time, authorize the issuance of a series of preferred
stock that would grant to holders the preferred right to our assets upon
liquidation, the right to receive dividend payments before dividends are
distributed to the holders of common stock and the right to the redemption of
the shares, together with a premium, before the redemption of our common stock,
which may have a material adverse effect on the rights of the holders of our
common stock. In addition, our Board of Directors, without further stockholder
approval, may, at any time, issue large blocks of preferred stock. In addition,
the ability of our Board of Directors to issue shares of preferred stock without
any further action on the part of our stockholders may impede a takeover of our
company and may prevent a transaction that is favorable to our
stockholders.
FORWARD-LOOKING
STATEMENTS
This
prospectus contains or incorporates by reference forward-looking statements that
involve risks and uncertainties. These forward-looking statements are not
historical facts but rather are plans and predictions based on current
expectations, estimates and projections about our industry, our beliefs and
assumptions. We use words such as anticipate, expect, intend, plan,
believe, seek, estimate and variations of these words and similar
expressions to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and other factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed
or forecasted in the forward-looking statements. These risks and uncertainties
include those described in the section above entitled Risk Factors. You should
not place undue reliance on these forward-looking statements, which reflect our
view only as of the date of this prospectus.
USE
OF PROCEEDS
We cannot
guarantee that we will receive any proceeds in connection with this offering
because we may be unable or choose not to issue and sell any securities covered
by this prospectus.
Unless
otherwise provided in a supplement or amendment to this prospectus, we intend to
use any net proceeds from this offering, together with other available funds,
for operating costs, including continuing to conduct our clinical development
programs and working capital needs and for other general corporate
purposes.
We have
not specifically identified the precise amounts we will spend on each of these
areas or the timing of these expenditures. The amounts actually expended for
each purpose may vary significantly depending upon numerous factors, including
the amount and timing of the proceeds from this offering and progress with
clinical trials. In addition, expenditures may also depend on the establishment
of new collaborative arrangements with other companies, the availability of
other financing, and other factors.
We will
be required to raise substantial additional capital to continue to fund our
continued activities. We may raise additional capital through additional public
or private financings, as well as collaborative relationships, incurring debt
and other available sources. Please see the discussion of the risks associated
with our liquidity in the section Risk Factors.
PLAN
OF DISTRIBUTION
The
securities being offered may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected at various times in one or
more of the following transactions, or in other kinds of
transactions:
|
· |
through
underwriters for resale to the public or
investors; |
13
|
· |
transactions
on the NYSE Amex market or on any national securities exchange or U.S.
inter-dealer system of a registered national securities association on
which our common stock may be listed or quoted at the time of
sale; |
|
· |
in
the over-the-counter market; |
|
· |
in
private transactions and transactions otherwise than on these exchanges or
systems; |
|
· |
in
at the market offerings, within the meaning of Rule 415(a)(4) of
the Securities Act of 1933, as amended, or the Securities Act, to or
through a market maker or into an existing trading market, on an exchange
or otherwise; |
|
· |
in
connection with short sales of the
shares; |
|
· |
by
pledge to secure debt and other
obligations; |
|
· |
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, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter
options; |
|
· |
through
a combination of any of the above transactions;
or |
|
· |
any
other method permitted by law. |
We may
sell our securities directly to one or more purchasers, or to or through
underwriters, dealers or agents or through a combination of those methods. The
related prospectus supplement will set forth the terms of each offering,
including:
|
· |
the
name or names of any agents, dealers, underwriters or investors who
purchase the securities; |
|
· |
the
purchase price of the securities being offered and the proceeds we will
receive from the sale; |
|
· |
the
amount of any compensation, discounts commissions or fees to be received
by the underwriters, dealer or
agents; |
|
· |
any
over-allotment options under which underwriters may purchase additional
securities from us; |
|
· |
any
discounts or concessions allowed or reallowed or paid to
dealers; |
|
· |
any
securities exchanges on which such securities may be
listed; |
|
· |
the
terms of any indemnification provisions, including indemnification from
liabilities under the federal securities laws;
and |
|
· |
the
nature of any transaction by an underwriter, dealer or agent during the
offering that is intended to stabilize or maintain the market price of the
securities. |
In
addition, any securities covered by this prospectus that qualify for sale
pursuant to Regulation S may be sold pursuant to Regulation S rather
than pursuant to this prospectus.
In
connection with the sale of our securities, underwriters may receive
compensation from us or from purchasers of our securities in the form of
discounts, concessions or commissions. Underwriters, dealers and agents that
participate in the distribution of our securities may be deemed to be
underwriters. Discounts or commissions they receive and any profit on their
resale of our securities may be considered underwriting discounts and
commissions under the Securities Act.
In
compliance with the guidelines of the Financial Industry Regulatory Authority,
or FINRA, the maximum consideration or discount to be received by any FINRA
member or independent broker dealer may not exceed 8.0% of the aggregate amount
of the securities offered to this prospectus.
14
We may
agree to indemnify underwriters, dealers and agents who participate in the
distribution of our securities against various liabilities, including
liabilities under the Securities Act. We may also agree to contribute to
payments that the underwriters, dealers or agents may be required to make in
respect of these liabilities. We may authorize dealers or other persons who act
as our agents to solicit offers by various institutions to purchase our
securities from us under contracts that provide for payment and delivery on a
future date. We may enter into these contracts with commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others. If we enter into these agreements concerning
any series of our securities, we will indicate that in the prospectus supplement
or amendment.
In
connection with an offering of our securities, underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of our
securities. Specifically, underwriters may over-allot in connection with the
offering, creating a syndicate short position in our securities for their own
account. In addition, underwriters may bid for, and purchase, our securities in
the open market to cover short positions or to stabilize the price of our
securities. Finally, underwriters may reclaim selling concessions allowed for
distributing our securities in the offering if the underwriters repurchase
previously distributed securities in transactions to cover short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of our securities above independent market levels.
Underwriters are not required to engage in any of these activities and may end
any of these activities at any time. Agents and underwriters may engage in
transactions with, or perform services for, us and our affiliates in the
ordinary course of business.
CERTAIN
PROVISIONS OF DELAWARE LAW AND OF OUR CHARTER AND BYLAWS; TRANSFER
AGENT
AND
REGISTRAR
Provisions
of our Charter, bylaws and provisions of applicable Delaware law may discourage,
delay or prevent a merger or other change in control that a stockholder may
consider favorable. Pursuant to our Charter, our board of directors may issue
additional shares of common or preferred stock. Any additional issuance of
common stock could have the effect of impeding or discouraging the acquisition
of control of us by means of a merger, tender offer, proxy contest or otherwise,
including a transaction in which our stockholders would receive a premium over
the market price for their shares, and thereby protects the continuity of our
management. Specifically, if in the due exercise of his/her or its fiduciary
obligations, the board of directors were to determine that a takeover proposal
was not in our best interest, shares could be issued by our board of directors
without stockholder approval in one or more transactions that might prevent or
render more difficult or costly the completion of the takeover by:
|
· |
diluting
the voting or other rights of the proposed acquirer or insurgent
stockholder group, |
|
· |
putting
a substantial voting bloc in institutional or other hands that might
undertake to support the incumbent board of directors,
or |
|
· |
effecting
an acquisition that might complicate or preclude the
takeover. |
Our
Charter also allows our board of directors to fix the number of directors in the
by-laws. Cumulative voting in the election of directors is specifically denied
in our Charter. The effect of these provisions may be to delay or prevent a
tender offer or takeover attempt that a stockholder may determine to be in his,
her or its best interest, including attempts that might result in a premium over
the market price for the shares held by the stockholders.
We also
are subject to Section 203 of the Delaware General Corporation Law. In general,
these provisions prohibit a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years
following the date that the stockholder became an interested stockholder, unless
the transaction in which the person became an interested stockholder is approved
in a manner presented in Section 203 of the Delaware General Corporation Law.
Generally, a business combination is defined to include mergers, asset sales
and other transactions resulting in financial benefit to a stockholder. In
general, an interested stockholder is a person who, together with affiliates
and associates, owns, or within three years, did own, 15% or more of a
corporations voting stock. This statute could prohibit or delay mergers or
other takeover or change in control attempts and, accordingly, may discourage
attempts to acquire us.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Continental Stock Transfer
& Trust Company.
15
THE
SECURITIES WE MAY OFFER
The
descriptions of the securities contained in this prospectus, together with the
applicable prospectus supplements, summarize all the material terms and
provisions of the various types of securities that we may offer. We will
describe in the applicable prospectus supplement the particular terms of the
securities offered by that prospectus supplement. If we so indicate in the
applicable prospectus supplement, the terms of the securities may differ from
the terms we have summarized below. We will also include in the prospectus
supplement information, where applicable, about material United States federal
income tax considerations relating to the securities and the securities
exchange, if any, on which the securities will be listed.
Description
of Capital Stock
The
following description of our capital stock and certain provisions of our Charter
and our amended and restated bylaws, or Bylaws, is a summary and is qualified in
its entirety by the provisions of our Charter and Bylaws.
Our
authorized capital stock consists of 100,000,000 shares of common stock, par
value $.001 per share, and 1,000,000 shares of preferred stock, par value $.001
per share. Please see Certain Provisions of Delaware Law and of Our Charter and
Bylaws; Transfer Agent and Registrar for a description of those provisions in
our Charter and Bylaws that would have an effect of delaying, deferring or
preventing a change in control of iBio and that would operate only with respect
to an extraordinary corporate transaction involving us or our
subsidiaries.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held of record on
all matters submitted to a vote of stockholders. Stockholders do not have
cumulative voting rights. Holders of common stock have no preemptive, redemption
or conversion rights and are not subject to future calls or assessments. No
sinking fund provisions apply to our common stock. All outstanding shares are
fully-paid and non-assessable. In the event of our liquidation, dissolution or
winding up, holders of common stock are entitled to share ratably in assets
available for distribution, subject to any prior distribution rights of any
preferred stock then outstanding. Holders of common stock are entitled to
receive proportionately any such dividends declared by our Board, out of legally
available funds for dividends, subject to any preferences that may be applicable
to any shares of preferred stock that may be outstanding at that time. The
rights, preferences and privileges of holders of common stock are set forth in
our Charter, which may be amended by the holders of a majority of the
outstanding shares of common stock.
Preferred
Stock
Our Board
is authorized to issue up to 1,000,000 shares of preferred stock in one or more
series without stockholder approval. Our Board may determine the rights,
preferences, privileges and restrictions, including voting rights, dividend
rights, conversion rights, redemption privileges and liquidation preferences, of
each series of preferred stock.
The
purpose of authorizing our Board to issue preferred stock in one or more series
and determine the number of shares in the series and its rights and preferences
is to eliminate delays associated with a stockholder vote on specific issuances.
Examples of rights and preferences that the Board may fix are:
|
· |
terms
of redemption, and |
|
· |
liquidation
preferences. |
The
issuance of preferred stock, while providing desirable flexibility in connection
with possible acquisitions and other corporate purposes, could make it more
difficult for a third party to acquire, or could discourage a third party from
acquiring, a majority of our outstanding voting stock. The rights of holders of
our common stock described above, will be subject to, and may be adversely
affected by, the rights of any preferred stock that we may designate and issue
in the future.
16
We will
incorporate by reference as an exhibit to the registration statement, which
includes this prospectus, the form of any certificate of designation that
describes the terms of the series of preferred stock we are offering. This
description and the applicable prospectus supplement will include:
|
· |
the
title and stated value; |
|
· |
the
number of shares authorized; |
|
· |
the
liquidation preference per share; |
|
· |
the
dividend rate, period and payment date, and method of calculation for
dividends; |
|
· |
whether
dividends will be cumulative or non-cumulative and, if cumulative, the
date from which dividends will
accumulate; |
|
· |
the
procedures for any auction and remarketing, if
any; |
|
· |
the
provisions for a sinking fund, if
any; |
|
· |
the
provisions for redemption or repurchase, if applicable, and any
restrictions on our ability to exercise those redemption and repurchase
rights; |
|
· |
any
listing of the preferred stock on any securities exchange or
market; |
|
· |
whether
the preferred stock will be convertible into our common stock, and, if
applicable, the conversion price, or how it will be calculated, and the
conversion period; |
|
· |
whether
the preferred stock will be exchangeable into debt securities, and, if
applicable, the exchange price, or how it will be calculated, and the
exchange period; |
|
· |
voting
rights, if any, of the preferred
stock; |
|
· |
preemptive
rights, if any; |
|
· |
restrictions
on transfer, sale or other assignment, if
any; |
|
· |
whether
interests in the preferred stock will be represented by depositary
shares; |
|
· |
a
discussion of any material United States federal income tax considerations
applicable to the preferred stock; |
|
· |
the
relative ranking and preferences of the preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our
affairs; |
|
· |
any
limitations on issuance of any class or series of preferred stock ranking
senior to or on a parity with the series of preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our affairs;
and |
|
· |
any
other specific terms, preferences, rights or limitations of, or
restrictions on, the preferred
stock. |
When we
issue shares of preferred stock under this prospectus, the shares will fully be
paid and nonassessable and will not have, or be subject to, any preemptive or
similar rights.
17
Description
of Debt Securities
The
paragraphs below describe the general terms and provisions of the debt
securities we may issue. When we offer to sell a particular series of debt
securities, we will describe the specific terms of the securities in a
supplement to this prospectus, including any additional covenants or changes to
existing covenants relating to such series. The prospectus supplement also will
indicate whether the general terms and provisions described in this prospectus
apply to a particular series of debt securities. You should read the actual
indenture if you do not fully understand a term or the way we use it in this
prospectus.
We may offer senior or subordinated debt
securities. Each series of debt securities may have different terms. The senior
debt securities will be issued under one or more senior indentures, dated as of
a date prior to such issuance, between us and the trustee identified in the
applicable prospectus supplement, as amended or supplemented from time to time.
We will refer to any such indenture throughout this prospectus as the senior
indenture. Any subordinated debt securities will be issued under one or more
separate indentures, dated as of a date prior to such issuance, between us and
the trustee identified in the applicable prospectus supplement, as amended or
supplemented from time to time. We will refer to any such indenture throughout
this prospectus as the subordinated indenture and to the trustee under the
senior or subordinated indenture as the trustee. The senior indenture and the
subordinated indenture are sometimes collectively referred to in this prospectus
as the indentures. The indentures will be subject to and governed by the Trust
Indenture Act of 1939, as amended. We included copies of the forms of the
indentures as exhibits to our registration statement and they are incorporated
into this prospectus by reference.
If we
issue debt securities at a discount from their principal amount, then, for
purposes of calculating the aggregate initial offering price of the offered
securities issued under this prospectus, we will include only the initial
offering price of the debt securities and not the principal amount of the debt
securities.
We have
summarized below the material provisions of the indentures and the debt
securities, or indicated which material provisions will be described in the
related prospectus supplement. The prospectus supplement relating to any
particular securities offered will describe the specific terms of the
securities, which may be in addition to or different from the general terms
summarized in this prospectus. Because the summary in this prospectus and in any
prospectus supplement does not contain all of the information that you may find
useful, you should read the documents relating to the securities that are
described in this prospectus or in any applicable prospectus supplement. Please
read Where You Can Find More Information to find out how you can obtain a copy
of those documents. Except as otherwise indicated, the terms of the indentures
are identical. As used under this caption, the term debt securities includes
the debt securities being offered by this prospectus and all other debt
securities issued by us under the indentures.
General
The
indentures:
|
· |
do
not limit the amount of debt securities that we may
issue; |
|
· |
allow
us to issue debt securities in one or more
series; |
|
· |
do
not require us to issue all of the debt securities of a series at the same
time; |
|
· |
allow
us to reopen a series to issue additional debt securities without the
consent of the holders of the debt securities of such series;
and |
|
· |
provide
that the debt securities will be unsecured, except as may be set forth in
the applicable prospectus
supplement. |
Unless we
give you different information in the applicable prospectus supplement, the
senior debt securities will be unsubordinated obligations and will rank equally
with all of our other unsecured and unsubordinated indebtedness. Payments on the
subordinated debt securities will be subordinated to the prior payment in full
of all of our senior indebtedness, as described under Description of Debt
Securities—Subordination and in the applicable prospectus
supplement.
Each
indenture provides that we may, but need not, designate more than one trustee
under an indenture. Any trustee under an indenture may resign or be removed and
a successor trustee may be appointed to act with respect to the series of debt
securities administered by the resigning or removed trustee. If two or more
persons are acting as trustee with respect to different series of debt
securities, each trustee shall be a trustee of a trust under the applicable
indenture separate and apart from the trust administered by any other trustee.
Except as otherwise indicated in this prospectus, any action described in this
prospectus to be taken by each trustee may be taken by each trustee with respect
to, and only with respect to, the one or more series of debt securities for
which it is trustee under the applicable indenture.
18
The
prospectus supplement for each offering will provide the following terms, where
applicable:
|
· |
the
title of the debt securities and whether they are senior or
subordinated; |
|
· |
the
aggregate principal amount of the debt securities being offered, the
aggregate principal amount of the debt securities outstanding as of the
most recent practicable date and any limit on their aggregate principal
amount, including the aggregate principal amount of debt securities
authorized; |
|
· |
the
price at which the debt securities will be issued, expressed as a
percentage of the principal and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity thereof or, if applicable, the
portion of the principal amount of such debt securities that is
convertible into common stock or other securities of iBio or the method by
which any such portion shall be
determined; |
|
· |
if
convertible, the terms on which such debt securities are convertible,
including the initial conversion price or rate and the conversion period
and any applicable limitations on the ownership or transferability of
common stock or other securities of iBio received on
conversion; |
|
· |
the
date or dates, or the method for determining the date or dates, on which
the principal of the debt securities will be
payable; |
|
· |
the
fixed or variable interest rate or rates of the debt securities, or the
method by which the interest rate or rates is
determined; |
|
· |
the
date or dates, or the method for determining the date or dates, from which
interest will accrue; |
|
· |
the
dates on which interest will be
payable; |
|
· |
the
record dates for interest payment dates, or the method by which such dates
will be determine; |
|
· |
the
persons to whom interest will be
payable; |
|
· |
the
basis upon which interest will be calculated if other than that of a
360-day year of twelve 30-day
months; |
|
· |
any
make-whole amount, which is the amount in addition to principal and
interest that is required to be paid to the holder of a debt security as a
result of any optional redemption or accelerated payment of such debt
security, or the method for determining the make-whole
amount; |
|
· |
the
place or places where the principal of, and any premium or make-whole
amount, and interest on, the debt securities will be
payable; |
|
· |
where
the debt securities may be surrendered for registration of transfer or
conversion or exchange; |
|
· |
where
notices or demands to or upon us in respect of the debt securities and the
applicable indenture may be served; |
|
· |
the
times, prices and other terms and conditions upon which we may redeem the
debt securities; |
|
· |
any
obligation we have to redeem, repay or purchase the debt securities
pursuant to any sinking fund or analogous provision or at the option of
holders of the debt securities, and the times and prices at which we must
redeem, repay or purchase the debt securities as a result of such
obligation; |
|
· |
the
currency or currencies in which the debt securities are denominated and
payable if other than United States dollars, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies and the terms and conditions relating thereto, and
the manner of determining the equivalent of such foreign currency in
United States dollars; |
19
|
· |
whether
the principal of, and any premium or make-whole amount, or interest on,
the debt securities of the series are to be payable, at our election or at
the election of a holder, in a currency or currencies other than that in
which the debt securities are denominated or stated to be payable, and
other related terms and conditions; |
|
· |
whether
the amount of payments of principal of, and any premium or make-whole
amount, or interest on, the debt securities may be determined according to
an index, formula or other method and how such amounts will be
determined; |
|
· |
whether
the debt securities will be in registered form, bearer form or both and
(i) if in registered form, the person to whom any interest shall be
payable, if other than the person in whose name the security is registered
at the close of business on the regular record date for such interest, or
(ii) if in bearer form, the manner in which, or the person to whom,
any interest on the security shall be payable if otherwise than upon
presentation and surrender upon
maturity; |
|
· |
any
restrictions applicable to the offer, sale or delivery of securities in
bearer form and the terms upon which securities in bearer form of the
series may be exchanged for securities in registered form of the series
and vice versa, if permitted by applicable laws and
regulations; |
|
· |
whether
any debt securities of the series are to be issuable initially in
temporary global form and whether any debt securities of the series are to
be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global
security may, or shall be required to, exchange their interests for other
debt securities of the series, and the manner in which interest shall be
paid; |
|
· |
the
identity of the depositary for securities in registered form, if such
series are to be issuable as a global
security; |
|
· |
the
date as of which any debt securities in bearer form or in temporary global
form shall be dated if other than the original issuance date of the first
security of the series to be
issued; |
|
· |
the
applicability, if any, of the defeasance and covenant defeasance
provisions described in this prospectus or in the applicable
indenture; |
|
· |
whether
and under what circumstances we will pay any additional amounts on the
debt securities in respect of any tax, assessment or governmental charge
and, if so, whether we will have the option to redeem the debt securities
in lieu of making such a payment; |
|
· |
whether
and under what circumstances the debt securities being offered are
convertible into common stock or other securities of iBio, as the case may
be, including the conversion price or rate and the manner or calculation
thereof; |
|
· |
the
circumstances, if any, specified in the applicable prospectus supplement,
under which beneficial owners of interests in the global security may
obtain definitive debt securities and the manner in which payments on a
permanent global debt security will be made if any debt securities are
issuable in temporary or permanent global
form; |
|
· |
any
provisions granting special rights to holders of securities upon the
occurrence of such events as specified in the applicable prospectus
supplement; |
|
· |
if
the debt securities of such series are to be issuable in definitive form
only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or
conditions; |
|
· |
the
name of the applicable trustee and the nature of any material relationship
with us or any of our affiliates, and the percentage of debt securities of
the class necessary to require the trustee to take
action; |
20
|
· |
any
deletions from, modifications of or additions to our events of default or
covenants with regard to such debt securities and any change in the right
of any trustee or any of the holders to declare the principal amount of
any of such debt securities due and
payable; |
|
· |
applicable
CUSIP numbers; and |
|
· |
any
other terms of such debt securities not inconsistent with the provisions
of the applicable indenture. |
We may
issue debt securities that provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity of the
debt securities. We refer to any such debt securities throughout this prospectus
as original issue discount securities. The applicable prospectus supplement
will describe the United States federal income tax consequences and other
relevant considerations applicable to original issue discount securities.
We also
may issue indexed debt securities. Payments of principal of, and premium and
interest on, indexed debt securities are determined with reference to the rate
of exchange between the currency or currency unit in which the debt security is
denominated and any other currency or currency unit specified by us, to the
relationship between two or more currencies or currency units or by other
similar methods or formulas specified in the prospectus supplement.
Except as
described under —Merger, Consolidation or Sale of Assets or as may be set
forth in any prospectus supplement, the debt securities will not contain any
provisions that (i) would limit our ability to incur indebtedness or
(ii) would afford holders of debt securities protection in the event of
(a) a highly leveraged or similar transaction involving us, or (b) a
change of control or reorganization, restructuring, merger or similar
transaction involving us that may adversely affect the holders of the debt
securities. In the future, we may enter into transactions, such as the sale of
all or substantially all of our assets or a merger or consolidation that may
have an adverse effect on our ability to service our indebtedness, including the
debt securities, by, among other things, substantially reducing or eliminating
our assets.
Neither
the Delaware General Corporate Law nor our governing instruments define the term
substantially all as it relates to the sale of assets. Additionally, Delaware
cases interpreting the term substantially all rely upon the facts and
circumstances of each particular case. Consequently, to determine whether a sale
of substantially all of our assets has occurred, a holder of debt securities
must review the financial and other information that we have disclosed to the
public.
We will
provide you with more information in the applicable prospectus supplement
regarding any deletions, modifications, or additions to the events of default or
covenants that are described below, including any addition of a covenant or
other provision providing event risk or similar protection.
Payment
Unless we
give you different information in the applicable prospectus supplement, the
principal of, and any premium or make-whole amount, and interest on, any series
of the debt securities will be payable at the corporate trust office of the
trustee. We will provide you with the address of the trustee in the applicable
prospectus supplement. We may also pay interest by mailing a check to the
address of the person entitled to it as it appears in the applicable register
for the debt securities or by wire transfer of funds to that person at an
account maintained within the United States.
All
monies that we pay to a paying agent or a trustee for the payment of the
principal of, and any premium or make-whole amount, or interest on, any debt
security will be repaid to us if unclaimed at the end of two years after the
obligation underlying payment becomes due and payable. After funds have been
returned to us, the holder of the debt security may look only to us for payment,
without payment of interest for the period which we hold the funds.
Denomination,
Interest, Registration and Transfer
Unless
otherwise described in the applicable prospectus supplement, the debt securities
of any series will be issuable in denominations of $1,000 and integral multiples
of $1,000.
21
Subject
to the limitations imposed upon debt securities that are evidenced by a
computerized entry in the records of a depository company rather than by
physical delivery of a note, a holder of debt securities of any series
may:
|
· |
exchange
them for any authorized denomination of other debt securities of the same
series and of a like aggregate principal amount and kind upon surrender of
such debt securities at the corporate trust office of the applicable
trustee or at the office of any transfer agent that we designate for such
purpose; and |
|
· |
surrender
them for registration of transfer or exchange at the corporate trust
office of the applicable trustee or at the office of any transfer agent
that we designate for such purpose. |
Every
debt security surrendered for registration of transfer or exchange must be duly
endorsed or accompanied by a written instrument of transfer satisfactory to the
applicable trustee or transfer agent. Payment of a service charge will not be
required for any registration of transfer or exchange of any debt securities,
but we or the trustee may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith. If in addition to
the applicable trustee, the applicable prospectus supplement refers to any
transfer agent initially designated by us for any series of debt securities, we
may at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, except that
we will be required to maintain a transfer agent in each place of payment for
such series. We may at any time designate additional transfer agents for any
series of debt securities.
Neither
we, nor any trustee, will be required to:
|
· |
issue,
register the transfer of or exchange debt securities of any series during
a period beginning at the opening of business 15 days before the day
that the notice of redemption of any debt securities selected for
redemption is mailed and ending at the close of business on the day of
such mailing; |
|
· |
register
the transfer of or exchange any debt security, or portion thereof, so
selected for redemption, in whole or in part, except the unredeemed
portion of any debt security being redeemed in part;
and |
|
· |
issue,
register the transfer of or exchange any debt security that has been
surrendered for repayment at the option of the holder, except the portion,
if any, of such debt security not to be so
repaid. |
Merger,
Consolidation or Sale of Assets
The
indentures provide that we may, without the consent of the holders of any
outstanding debt securities, (i) consolidate with, (ii) sell, lease or
convey all or substantially all of our assets to, or (iii) merge with or
into, any other entity provided that:
|
· |
either
we are the continuing entity, or the successor entity, if other than us,
assumes the obligations (a) to pay the principal of, and any premium
or make-whole amount, and interest on, all of the debt securities and
(b) to duly perform and observe all of the covenants and conditions
contained in each indenture; |
|
· |
after
giving effect to the transaction, there is no event of default under the
indentures and no event which, after notice or the lapse of time, or both,
would become such an event of default, occurs and continues;
and |
|
· |
an
officers certificate and legal opinion covering such conditions are
delivered to each applicable
trustee. |
Covenants
Existence. Except as
described under —Merger, Consolidation or Sale of Assets, the indentures
require us to do or cause to be done all things necessary to preserve and keep
in full force and effect our existence, rights and franchises. However, the
indentures do not require us to preserve any right or franchise if we determine
that any right or franchise is no longer desirable in the conduct of our
business.
Payment of taxes and other
claims. The indentures require us to pay, discharge or cause to be paid
or discharged, before they become delinquent (i) all taxes, assessments and
governmental charges levied or imposed on us, our subsidiaries or our or our
subsidiaries income, profits or property, and (ii) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
our property or the property of our subsidiaries. However, we will not be
required to pay, discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
22
Provision of financial
information. The indentures require us to (i) within 15 days of
each of the respective dates by which we are required to file our annual
reports, quarterly reports and other documents with the SEC, file with the
trustee copies of the annual report, quarterly report and other documents that
we file with the SEC under Section 13 or 15(d) of the Exchange Act, (ii)
file with the trustee and the SEC any additional information, documents and
reports regarding compliance by us with the conditions and covenants of the
indentures, as required, (iii) within 30 days after the filing with the
trustee, mail to all holders of debt securities, as their names and addresses
appear in the applicable register for such debt securities, without cost to such
holders, summaries of any documents and reports required to be filed by us
pursuant to (i) and (ii) above, and (iv) supply, promptly upon
written request and payment of the reasonable cost of duplication and delivery,
copies of such documents to any prospective holder.
Additional covenants. The
applicable prospectus supplement will set forth any additional covenants of iBio
relating to any series of debt securities.
Events
of Default, Notice and Waiver
Unless
the applicable prospectus supplement states otherwise, when we refer to events
of default as defined in the indentures with respect to any series of debt
securities, we mean:
|
· |
default
in the payment of any installment of interest on any debt security of such
series continuing for 30 days; |
|
· |
default
in the payment of principal of, or any premium or make-whole amount on,
any debt security of such series for five business days at its stated
maturity; |
|
· |
default
in making any sinking fund payment as required for any debt security of
such series for five business days; |
|
· |
default
in the performance or breach of any covenant or warranty in the debt
securities or in the indenture by iBio continuing for 60 days after
written notice as provided in the applicable indenture, but not of a
covenant added to the indenture solely for the benefit of a series of debt
securities issued thereunder other than such
series; |
|
· |
a
default under any bond, debenture, note, mortgage, indenture or
instrument: |
(i) having
an aggregate principal amount of at least $30,000,000; or
(ii) under
which there may be issued, secured or evidenced any existing or later created
indebtedness for money borrowed by us or our subsidiaries, if we are directly
responsible or liable as obligor or guarantor,
if the
default results in the indebtedness becoming or being declared due and payable
prior to the date it otherwise would have, without such indebtedness having been
discharged, or such acceleration having been rescinded or annulled, within
30 days after notice to the issuing company specifying such default. Such
notice shall be given to us by the trustee, or to us and the trustee by the
holders of at least 10% in principal amount of the outstanding debt securities
of that series. The written notice shall specify such default and require us to
cause such indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and shall state that such notice is a Notice of Default
under such indenture;
|
· |
bankruptcy,
insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of iBio or any significant subsidiary of iBio;
and |
|
· |
any
other event of default provided with respect to a particular series of
debt securities. |
When we
use the term significant subsidiary, we refer to the meaning ascribed to such
term in Rule 1-02 of Regulation S-X promulgated under the Securities
Act.
23
If an
event of default occurs and is continuing with respect to debt securities of any
series outstanding, then the applicable trustee or the holders of 25% or more in
principal amount of the debt securities of that series will have the right to
declare the principal amount of all the debt securities of that series to be due
and payable. If the debt securities of that series are original issue discount
securities or indexed securities, then the applicable trustee or the holders of
25% or more in principal amount of the debt securities of that series will have
the right to declare the portion of the principal amount as may be specified in
the terms thereof to be due and payable. However, at any time after such a
declaration of acceleration has been made, but before a judgment or decree for
payment of the money due has been obtained by the applicable trustee, the
holders of at least a majority in principal amount of outstanding debt
securities of such series or of all debt securities then outstanding under the
applicable indenture may rescind and annul such declaration and its consequences
if:
|
· |
we
have deposited with the applicable trustee all required payments of the
principal, any premium or make-whole amount, interest and, to the extent
permitted by law, interest on overdue installment of interest, plus
applicable fees, expenses, disbursements and advances of the applicable
trustee; and |
|
· |
all
events of default, other than the non-payment of accelerated principal, or
a specified portion thereof, and any premium or make-whole amount, have
been cured or waived. |
The
indentures also provide that the holders of at least a majority in principal
amount of the outstanding debt securities of any series or of all debt
securities then outstanding under the applicable indenture may, on behalf of all
holders, waive any past default with respect to such series and its
consequences, except a default:
|
· |
in
the payment of the principal, any premium or make-whole amount, or
interest; |
|
· |
in
respect of a covenant or provision contained in the applicable indenture
that cannot be modified or amended without the consent of the holders of
the outstanding debt security that is affected by the default;
or |
|
· |
in
respect of a covenant or provision for the benefit or protection of the
trustee, without its express written
consent. |
The
indentures require each trustee to give notice to the holders of debt securities
within 90 days of a default unless such default has been cured or waived.
However, the trustee may withhold notice if specified persons of such trustee
consider such withholding to be in the interest of the holders of debt
securities. The trustee may not withhold notice of a default in the payment of
principal, any premium or interest on any debt security of such series or in the
payment of any sinking fund installment in respect of any debt security of such
series.
The
indentures provide that holders of debt securities of any series may not
institute any proceedings, judicial or otherwise, with respect to such indenture
or for any remedy under the indenture, unless the trustee fails to act for a
period of 60 days after the trustee has received a written request to
institute proceedings in respect of an event of default from the holders of 25%
or more in principal amount of the outstanding debt securities of such series,
as well as an offer of indemnity reasonably satisfactory to the trustee.
However, this provision will not prevent any holder of debt securities from
instituting suit for the enforcement of payment of the principal of, and any
premium or make-whole amount, and interest on, such debt securities at the
respective due dates thereof.
The
indentures provide that, subject to provisions in each indenture relating to its
duties in the case of a default, a trustee has no obligation to exercise any of
its rights or powers at the request or direction of any holders of any series of
debt securities then outstanding under the indenture, unless the holders have
offered to the trustee reasonable security or indemnity. The holders of at least
a majority in principal amount of the outstanding debt securities of any series
or of all debt securities then outstanding under an indenture shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the applicable trustee, or of exercising any trust or power
conferred upon such trustee. However, a trustee may refuse to follow any
direction which:
|
· |
is
in conflict with any law or the applicable
indenture; |
|
· |
may
involve the trustee in personal liability;
or |
|
· |
may
be unduly prejudicial to the holders of debt securities of the series not
joining the proceeding. |
Within
120 days after the close of each fiscal year, we will be required to
deliver to each trustee a certificate, signed by one of our several specified
officers, stating whether or not that officer has knowledge of any default under
the applicable indenture. If the officer has knowledge of any default, the
notice must specify the nature and status of the default.
24
Modification
of the Indentures
The
indentures provide that modifications and amendments may be made only with the
consent of the affected holders of at least a majority in principal amount of
all outstanding debt securities issued under that indenture. However, no such
modification or amendment may, without the consent of the holders of the debt
securities affected by the modification or amendment:
|
· |
change
the stated maturity of the principal of, or any premium or make-whole
amount on, or any installment of principal of or interest on, any such
debt security; |
|
· |
reduce
the principal amount of, the rate or amount of interest on, or any premium
or make-whole amount payable on redemption of, any such debt
security; |
|
· |
reduce
the amount of principal of an original issue discount security that would
be due and payable upon declaration of acceleration of the maturity
thereof or would be provable in bankruptcy, or adversely affect any right
of repayment of the holder of any such debt
security; |
|
· |
change
the place of payment or the coin or currency for payment of principal of,
or any premium or make-whole amount, or interest on, any such debt
security; |
|
· |
impair
the right to institute suit for the enforcement of any payment on or with
respect to any such debt security; |
|
· |
reduce
the percentage in principal amount of any outstanding debt securities
necessary to modify or amend the applicable indenture with respect to such
debt securities, to waive compliance with particular provisions thereof or
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the applicable indenture;
and |
|
· |
modify
any of the foregoing provisions or any of the provisions relating to the
waiver of particular past defaults or covenants, except to increase the
required percentage to effect such action or to provide that some of the
other provisions may not be modified or waived without the consent of the
holder of such debt security. |
The
holders of a majority in aggregate principal amount of the outstanding debt
securities of each series may, on behalf of all holders of debt securities of
that series, waive, insofar as that series is concerned, our compliance with
material restrictive covenants of the applicable indenture.
We and
our respective trustee may make modifications and amendments of an indenture
without the consent of any holder of debt securities for any of the following
purposes:
|
· |
to
evidence the succession of another person to us as obligor under such
indenture; |
|
· |
to
add to our covenants for the benefit of the holders of all or any series
of debt securities or to surrender any right or power conferred upon us in
such indenture; |
|
· |
to
add events of default for the benefit of the holders of all or any series
of debt securities; |
|
· |
to
add or change any provisions of an indenture (i) to change or
eliminate restrictions on the payment of principal of, or premium or
make-whole amount, or interest on, debt securities in bearer form, or
(ii) to permit or facilitate the issuance of debt securities in
certificated form, provided that such action shall not adversely affect
the interests of the holders of the debt securities of any series in any
material respect; |
|
· |
to
change or eliminate any provisions of an indenture, provided that any such
change or elimination shall become effective only when there are no debt
securities outstanding of any series created prior thereto which are
entitled to the benefit of such
provision; |
|
· |
to
secure the debt securities; |
|
· |
to
establish the form or terms of debt securities of any
series; |
25
|
· |
to
provide for the acceptance of appointment by a successor trustee or
facilitate the administration of the trusts under an indenture by more
than one trustee; |
|
· |
to
cure any ambiguity, defect or inconsistency in an indenture, provided that
such action shall not adversely affect the interests of holders of debt
securities of any series issued under such indenture;
and |
|
· |
to
supplement any of the provisions of an indenture to the extent necessary
to permit or facilitate defeasance and discharge of any series of such
debt securities, provided that such action shall not adversely affect the
interests of the holders of the outstanding debt securities of any
series. |
Voting
The
indentures provide that in determining whether the holders of the requisite
principal amount of outstanding debt securities of a series have given any
request, demand, authorization, direction, notice, consent or waiver under the
indentures or whether a quorum is present at a meeting of holders of debt
securities:
|
· |
the
principal amount of an original issue discount security that shall be
deemed to be outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity
thereof; |
|
· |
the
principal amount of any debt security denominated in a foreign currency
that shall be deemed outstanding shall be the United States dollar
equivalent, determined on the issue date for such debt security, of the
principal amount or, in the case of an original issue discount security,
the United States dollar equivalent on the issue date of such debt
security of the amount determined as provided in the preceding bullet
point; |
|
· |
the
principal amount of an indexed security that shall be deemed outstanding
shall be the principal face amount of such indexed security at original
issuance, unless otherwise provided for such indexed security under such
indenture; and |
|
· |
debt
securities owned by us or any other obligor upon the debt securities or by
any affiliate of ours or of such other obligor shall be
disregarded. |
The
indentures contain provisions for convening meetings of the holders of debt
securities of a series. A meeting will be permitted to be called at any time by
the applicable trustee, and also, upon request, by us or the holders of at least
25% in principal amount of the outstanding debt securities of such series, in
any such case upon notice given as provided in such indenture. Except for any
consent that must be given by the holder of each debt security affected by the
modifications and amendments of an indenture described above, any resolution
presented at a meeting or adjourned meeting duly reconvened at which a quorum is
present may be adopted by the affirmative vote of the holders of a majority of
the aggregate principal amount of the outstanding debt securities of that series
represented at such meeting.
Notwithstanding
the preceding paragraph, except as referred to above, any resolution relating to
a request, demand, authorization, direction, notice, consent, waiver or other
action that may be made, given or taken by the holders of a specified
percentage, which is less than a majority of the aggregate principal amount of
the outstanding debt securities of a series, may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of such specified percentage.
Any
resolution passed or decision taken at any properly held meeting of holders of
debt securities of any series will be binding on all holders of such series. The
quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be persons holding or representing a majority in principal amount
of the outstanding debt securities of a series. However, if any action is to be
taken relating to a consent or waiver which may be given by the holders of at
least a specified percentage in principal amount of the outstanding debt
securities of a series, the persons holding such percentage will constitute a
quorum.
Notwithstanding
the foregoing provisions, the indentures provide that if any action is to be
taken at a meeting with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that such indenture expressly
provides may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding debt securities affected by such action, or
of the holders of such series and one or more additional series:
|
· |
there
shall be no minimum quorum requirement for such meeting;
and |
|
· |
the
principal amount of the outstanding debt securities of such series that
vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken account in determining
whether such request, demand, authorization, direction, notice, consent,
waiver or other action has been made, given or taken under such
indenture. |
Subordination
Unless
otherwise provided in the applicable prospectus supplement, subordinated debt
securities will be subject to the following subordination
provisions.
Upon any distribution to our creditors in a
liquidation, dissolution or reorganization, the payment of the principal of and
interest on any subordinated debt securities will be subordinated to the extent
provided in the applicable indenture in right of payment to the prior payment in
full of all senior debt. However, our obligation to make payments of the
principal of and interest on such subordinated debt securities otherwise will
not be affected. No payment of principal or interest will be permitted to be
made on subordinated debt securities at any time if a default on senior debt
exists that permits the holders of such senior debt to accelerate its maturity
and the default is the subject of judicial proceedings or we receive notice of
the default. After all senior debt is paid in full and until the subordinated
debt securities are paid in full, holders of subordinated debt securities will
be subrogated to the rights of holders of senior debt to the extent that
distributions otherwise payable to holders of subordinated debt securities have
been applied to the payment of senior debt. The subordinated indenture will not
restrict the amount of senior debt or other indebtedness of iBio and its
subsidiaries. As a result of these subordination provisions, in the event of a
distribution of assets upon insolvency, holders of subordinated debt securities
may recover less, ratably, than our general creditors.
The term
senior debt will be defined in the applicable indenture as the principal of
and interest on, or substantially similar payments to be made by us in respect
of, other outstanding indebtedness, whether outstanding at the date of execution
of the applicable indenture or subsequently incurred, created or assumed. The
prospectus supplement may include a description of additional terms implementing
the subordination feature.
No
restrictions will be included in any indenture relating to subordinated debt
securities upon the creation of additional senior debt.
If this
prospectus is being delivered in connection with the offering of a series of
subordinated debt securities, the accompanying prospectus supplement or the
information incorporated in this prospectus by reference will set forth the
approximate amount of senior debt outstanding as of the end of our most recent
fiscal quarter.
Discharge,
Defeasance and Covenant Defeasance
Unless
otherwise indicated in the applicable prospectus supplement, the indentures
allow us to discharge our obligations to holders of any series of debt
securities issued under any indenture when:
|
· |
either
(i) all securities of such series have already been delivered to the
applicable trustee for cancellation; or (ii) all securities of such
series have not already been delivered to the applicable trustee for
cancellation but (a) have become due and payable, (b) will
become due and payable within one year, or (c) if redeemable at our
option, are to be redeemed within one year, and we have irrevocably
deposited with the applicable trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in
which such debt securities are payable, an amount sufficient to pay the
entire indebtedness on such debt securities in respect of principal and
any premium or make-whole amount, and interest to the date of such deposit
if such debt securities have become due and payable or, if they have not,
to the stated maturity or redemption
date; |
|
· |
we
have paid or caused to be paid all other sums payable;
and |
|
· |
an
officers certificate and an opinion of counsel stating the conditions to
discharging the debt securities have been satisfied has been delivered to
the trustee. |
27
Unless
otherwise indicated in the applicable prospectus supplement, the indentures
provide that, upon our irrevocable deposit with the applicable trustee, in
trust, of an amount, in such currency or currencies, currency unit or units or
composite currency or currencies in which such debt securities are payable at
stated maturity, or government obligations, or both, applicable to such debt
securities, which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of, and any premium or make-whole amount, and interest on, such
debt securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor, the issuing company may elect
either:
|
· |
to
defease and be discharged from any and all obligations with respect to
such debt securities; or |
|
· |
to
be released from its obligations with respect to such debt securities
under the applicable indenture or, if provided in the applicable
prospectus supplement, its obligations with respect to any other covenant,
and any omission to comply with such obligations shall not constitute an
event of default with respect to such debt
securities. |
Notwithstanding
the above, we may not elect to defease and be discharged from the obligation to
pay any additional amounts upon the occurrence of particular events of tax,
assessment or governmental charge with respect to payments on such debt
securities and the obligations to register the transfer or exchange of such debt
securities, to replace temporary or mutilated, destroyed, lost or stolen debt
securities, to maintain an office or agency in respect of such debt securities,
or to hold monies for payment in trust.
The
indentures only permit us to establish the trust described in the paragraph
above if, among other things, we have delivered to the applicable trustee an
opinion of counsel to the effect that the holders of such debt securities will
not recognize income, gain or loss for United States federal income tax purposes
as a result of such defeasance or covenant defeasance and will be subject to
United States federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance or covenant
defeasance had not occurred. Such opinion of counsel, in the case of defeasance,
will be required to refer to and be based upon a ruling received from or
published by the Internal Revenue Service or a change in applicable United
States federal income tax law occurring after the date of the indenture. In the
event of such defeasance, the holders of such debt securities would be able to
look only to such trust fund for payment of principal, any premium or make-whole
amount, and interest.
When we
use the term government obligations, we mean securities that are:
|
· |
direct
obligations of the United States or the government that issued the foreign
currency in which the debt securities of a particular series are payable,
for the payment of which its full faith and credit is pledged;
or |
|
· |
obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States or other government that issued the
foreign currency in which the debt securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States or such other government, which are
not callable or redeemable at the option of the issuer thereof and shall
also include a depository receipt issued by a bank or trust company as
custodian with respect to any such government obligation or a specific
payment of interest on or principal of any such government obligation held
by such custodian for the account of the holder of a depository receipt.
However, except as required by law, such custodian is not authorized to
make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of
the government obligation or the specific payment of interest on or
principal of the government obligation evidenced by such depository
receipt. |
Unless
otherwise provided in the applicable prospectus supplement, if after we have
deposited funds and/or government obligations to effect defeasance or covenant
defeasance with respect to debt securities of any series, (i) the holder of
a debt security of such series is entitled to, and does, elect under the terms
of the applicable indenture or the terms of such debt security to receive
payment in a currency, currency unit or composite currency other than that in
which such deposit has been made in respect of such debt security, or
(ii) a conversion event occurs in respect of the currency, currency unit or
composite currency in which such deposit has been made, the indebtedness
represented by such debt security will be deemed to have been, and will be,
fully discharged and satisfied through the payment of the principal of, and
premium or make-whole amount, and interest on, such debt security as they become
due out of the proceeds yielded by converting the amount so deposited in respect
of such debt security into the currency, currency unit or composite currency in
which such debt security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate.
28
When we
use the term conversion event, we mean the cessation of use of:
|
· |
a
currency, currency unit or composite currency both by the government of
the country that issued such currency and for the settlement of
transactions by a central bank or other public institutions of or within
the international banking
community; |
|
· |
the
European Currency Unit both within the European Monetary System and for
the settlement of transactions by public institutions of or within the
European Communities; or |
|
· |
any
currency unit or composite currency other than the European Currency Unit
for the purposes for which it was
established. |
Unless
otherwise provided in the applicable prospectus supplement, all payments of
principal of, and any premium or make-whole amount, and interest on, any debt
security that is payable in a foreign currency that ceases to be used by its
government of issuance shall be made in United States dollars.
In the
event that (i) we effect covenant defeasance with respect to any debt
securities and (ii) those debt securities are declared due and payable
because of the occurrence of any event of default, the amount in the currency,
currency unit or composite currency in which such debt securities are payable,
and government obligations on deposit with the applicable trustee, will be
sufficient to pay amounts due on such debt securities at the time of their
stated maturity but may not be sufficient to pay amounts due on such debt
securities at the time of the acceleration resulting from such event of default.
However, the issuing company would remain liable to make payments of any amounts
due at the time of acceleration.
The
applicable prospectus supplement may further describe the provisions, if any,
permitting such defeasance or covenant defeasance, including any modifications
to the provisions described above, with respect to the debt securities of or
within a particular series.
Conversion
Rights
The terms
and conditions, if any, upon which the debt securities are convertible into
common stock or other securities of iBio will be set forth in the applicable
prospectus supplement. The terms will include whether the debt securities are
convertible into shares of common stock or other securities of iBio, the
conversion price, or manner of calculation thereof, the conversion period,
provisions as to whether conversion will be at the issuing companys option or
the option of the holders, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of the
debt securities and any restrictions on conversion.
Global
Securities
The debt
securities of a series may be issued in whole or in part in the form of one or
more global securities that will be deposited with, or on behalf of, a
depository identified in the applicable prospectus supplement relating to such
series. Global securities, if any, issued in the United States are expected to
be deposited with The Depository Trust Company, or DTC, as depository. We may
issue global securities in either registered or bearer form and in either
temporary or permanent form. We will describe the specific terms of the
depository arrangement with respect to a series of debt securities in the
applicable prospectus supplement relating to such series. We expect that unless
the applicable prospectus supplement provides otherwise, the following
provisions will apply to depository arrangements.
Once a
global security is issued, the depository for such global security or its
nominee will credit on its book-entry registration and transfer system the
respective principal amounts of the individual debt securities represented by
such global security to the accounts of participants that have accounts with
such depository. Such accounts shall be designated by the underwriters, dealers
or agents with respect to such debt securities or by us if we offer such debt
securities directly. Ownership of beneficial interests in such global security
will be limited to participants with the depository or persons that may hold
interests through those participants.
We expect
that, under procedures established by DTC, ownership of beneficial interests in
any global security for which DTC is the depository will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
DTC or its nominee, with respect to beneficial interests of participants with
the depository, and records of participants, with respect to beneficial
interests of persons who hold through participants with the depository. Neither
we nor the trustee will have any responsibility or liability for any aspect of
the records of DTC or for maintaining, supervising or reviewing any records of
DTC or any of its participants relating to beneficial ownership interests in the
debt securities. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and laws may impair the ability to own, pledge or transfer beneficial
interest in a global security.
29
So long
as the depository for a global security or its nominee is the registered owner
of such global security, such depository or such nominee, as the case may be,
will be considered the sole owner or holder of the debt securities represented
by the global security for all purposes under the applicable indenture. Except
as described below or in the applicable prospectus supplement, owners of
beneficial interest in a global security will not be entitled to have any of the
individual debt securities represented by such global security registered in
their names, will not receive or be entitled to receive physical delivery of any
such debt securities in definitive form and will not be considered the owners or
holders thereof under the applicable indenture. Beneficial owners of debt
securities evidenced by a global security will not be considered the owners or
holders thereof under the applicable indenture for any purpose, including with
respect to the giving of any direction, instructions or approvals to the trustee
under the indenture. Accordingly, each person owning a beneficial interest in a
global security with respect to which DTC is the depository must rely on the
procedures of DTC and, if such person is not a participant with the depository,
on the procedures of the participant through which such person owns its
interests, to exercise any rights of a holder under the applicable indenture. We
understand that, under existing industry practice, if DTC requests any action of
holders or if an owner of a beneficial interest in a global security desires to
give or take any action which a holder is entitled to give or take under the
applicable indenture, DTC would authorize the participants holding the relevant
beneficial interest to give or take such action, and such participants would
authorize beneficial owners through such participants to give or take such
actions or would otherwise act upon the instructions of beneficial owners
holding through them.
Payments
of principal of, and any premium or make-whole amount, and interest on,
individual debt securities represented by a global security registered in the
name of a depository or its nominee will be made to or at the direction of the
depository or its nominee, as the case may be, as the registered owner of the
global security under the applicable indenture. Under the terms of the
applicable indenture, we and the trustee may treat the persons in whose name
debt securities, including a global security, are registered as the owners
thereof for the purpose of receiving such payments. Consequently, neither we nor
the trustee have or will have any responsibility or liability for the payment of
such amounts to beneficial owners of debt securities including principal, any
premium or make-whole amount, or interest. We believe, however, that it is
currently the policy of DTC to immediately credit the accounts of relevant
participants with such payments, in amounts proportionate to their respective
holdings of beneficial interests in the relevant global security as shown on the
records of DTC or its nominee. We also expect that payments by participants to
owners of beneficial interests in such global security held through such
participants will be governed by standing instructions and customary practices,
as is the case with securities held for the account of customers in bearer form
or registered in street name, and will be the responsibility of such
participants. Redemption notices with respect to any debt securities represented
by a global security will be sent to the depository or its nominee. If less than
all of the debt securities of any series are to be redeemed, we expect the
depository to determine the amount of the interest of each participant in such
debt securities to be redeemed to be determined by lot. Neither we, the trustee,
any paying agent nor the security registrar for such debt securities will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global
security for such debt securities or for maintaining any records with respect
thereto.
Neither
we nor the trustee will be liable for any delay by the holders of a global
security or the depository in identifying the beneficial owners of debt
securities, and we and the trustee may conclusively rely on, and will be
protected in relying on, instructions from the holder of a global security or
the depository for all purposes. The rules applicable to DTC and its
participants are on file with the SEC.
If a
depository for any debt securities is at any time unwilling, unable or
ineligible to continue as depository and we do not appoint a successor
depository within 90 days, we will issue individual debt securities in
exchange for the global security representing such debt securities. In addition,
we may at any time and our sole discretion, subject to any limitations described
in the applicable prospectus supplement relating to such debt securities,
determine not to have any of such debt securities represented by one or more
global securities and in such event will issue individual debt securities in
exchange for the global security or securities representing such debt
securities. Individual debt securities so issued will be issued in denominations
of $1,000 and integral multiples of $1,000.
The debt
securities of a series may also be issued in whole or in part in the form of one
or more bearer global securities that will be deposited with a depository, or
with a nominee for such depository, identified in the applicable prospectus
supplement. Any such bearer global securities may be issued in temporary or
permanent form. The specific terms and procedures, including the specific terms
of the depositary arrangement, with respect to any portion of a series of debt
securities to be represented by one or more bearer global securities will be
described in the applicable prospectus supplement.
30
No
Recourse
There is
no recourse under any obligation, covenant or agreement in the applicable
indenture or with respect to any security against any of our or our successors
past, present or future stockholders, employees, officers or
directors.
Description
of Warrants
The
following description, together with the additional information we may include
in any applicable prospectus supplements, summarizes the material terms and
provisions of the warrants that we may offer under this prospectus and the
related warrant agreements and warrant certificates. While the terms summarized
below will apply generally to any warrants that we may offer, we will describe
the particular terms of any series of warrants in more detail in the applicable
prospectus supplement. If we indicate in the prospectus supplement, the terms of
any warrants offered under that prospectus supplement may differ from the terms
described below. Specific warrant agreements will contain additional important
terms and provisions and will be incorporated by reference as an exhibit to the
registration statement, which includes this prospectus.
General
We may
issue warrants for the purchase of common stock, preferred stock and/or debt
securities in one or more series. We may issue warrants independently or
together with common stock, preferred stock and/or debt securities, and the
warrants may be attached to or separate from these securities.
We will
evidence each series of warrants by warrant certificates that we will issue
under a separate warrant agreement. We will enter into the warrant agreement
with a warrant agent. We will indicate the name and address of the warrant agent
in the applicable prospectus supplement relating to a particular series of
warrants.
We will
describe in the applicable prospectus supplement the terms of the series of
warrants, including:
|
· |
the
offering price and aggregate number of warrants
offered; |
|
· |
the
currency for which the warrants may be
purchased; |
|
· |
if
applicable, the designation and terms of the securities with which the
warrants are issued and the number of warrants issued with each such
security or each principal amount of such
security; |
|
· |
if
applicable, the date on and after which the warrants and the related
securities will be separately
transferable; |
|
· |
in
the case of warrants to purchase debt securities, the principal amount of
debt securities purchasable upon exercise of one warrant and the price at,
and currency in which, this principal amount of debt securities may be
purchased upon such exercise; |
|
· |
in
the case of warrants to purchase common stock or preferred stock, the
number of shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of one warrant and the price at which these
shares may be purchased upon such
exercise; |
|
· |
the
effect of any merger, consolidation, sale or other disposition of our
business on the warrant agreement and the
warrants; |
|
· |
the
terms of any rights to redeem or call the
warrants; |
|
· |
any
provisions for changes to or adjustments in the exercise price or number
of securities issuable upon exercise of the
warrants; |
|
· |
the
dates on which the right to exercise the warrants will commence and
expire; |
31
|
· |
the
manner in which the warrant agreement and warrants may be
modified; |
|
· |
federal
income tax consequences of holding or exercising the
warrants; |
|
· |
the
terms of the securities issuable upon exercise of the warrants;
and |
|
· |
any
other specific terms, preferences, rights or limitations of or
restrictions on the warrants. |
Before
exercising their warrants, holders of warrants will not have any of the rights
of holders of the securities purchasable upon such exercise,
including:
|
· |
in
the case of warrants to purchase debt securities, the right to receive
payments of principal of, or any premium or interest on, the debt
securities purchasable upon exercise or to enforce covenants in the
applicable indenture; or |
|
· |
in
the case of warrants to purchase common stock or preferred stock, the
right to receive any dividends or payments upon our liquidation,
dissolution or winding up or to exercise any voting
rights. |
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in
the applicable prospectus supplement at the exercise price that we describe in
the applicable prospectus supplement. Unless we otherwise specify in the
applicable prospectus supplement, holders of the warrants may exercise the
warrants at any time up to 5:00 P.M. New York time on the expiration date that
we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become
void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate
representing the warrants to be exercised together with specified information,
and paying the required amount to the warrant agent in immediately available
funds, as provided in the applicable prospectus supplement. We will set forth on
the reverse side of the warrant certificate and in the applicable prospectus
supplement the information that the holder of the warrant will be required to
deliver to the warrant agent upon exercise.
Upon
receipt of the required payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the warrant agent or any
other office indicated in the applicable prospectus supplement, we will issue
and deliver the securities purchasable upon such exercise. If fewer than all of
the warrants represented by the warrant certificate are exercised, then we will
issue a new warrant certificate for the remaining amount of warrants. If we so
indicate in the applicable prospectus supplement, holders of the warrants may
surrender securities as all or part of the exercise price for
warrants.
Enforceability
of Rights By Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable warrant
agreement and will not assume any obligation or relationship of agency or trust
with any holder of any warrant. A single bank or trust company may act as
warrant agent for more than one issue or series of warrants. A warrant agent
will have no duty or responsibility in case of any default by us under the
applicable warrant agreement or warrant, including any duty or responsibility to
initiate any proceedings at law or otherwise, or to make any demand upon us. Any
holder of a warrant may, without the consent of the related warrant agent or the
holder of any other warrant, enforce by appropriate legal action its right to
exercise, and receive the securities purchasable upon exercise of, its
warrants.
Description
of Units
We may
issue units comprised of shares of common stock, shares of preferred stock, debt
securities and warrants in any combination. We may issue units in such amounts
and in as many distinct series as we wish. This section outlines certain
provisions of the units that we may issue. If we issue units, they will be
issued under one or more unit agreements to be entered into between us and a
bank or other financial institution, as unit agent. The information described in
this section may not be complete in all respects and is qualified entirely by
reference to the unit agreement with respect to the units of any particular
series. The specific terms of any series of units offered will be described in
the applicable prospectus supplement. If so described in a particular
supplement, the specific terms of any series of units may differ from the
general description of terms presented below. We urge you to read any prospectus
supplement related to any series of units we may offer, as well as the complete
unit agreement and unit certificate that contain the terms of the units. If we
issue units, forms of unit agreements and unit certificates relating to such
units will be incorporated by reference as exhibits to the registration
statement, which includes this prospectus.
32
Each unit
that we may issue will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder of a unit will
have the rights and obligations of a holder of each included security. The unit
agreement under which a unit is issued may provide that the securities included
in the unit may not be held or transferred separately, at any time or at any
time before a specified date. The applicable prospectus supplement may
describe:
|
· |
the
designation and terms of the units and of the securities comprising the
units, including whether and under what circumstances those securities may
be held or transferred separately; |
|
· |
any
provisions of the governing unit
agreement; |
|
· |
the
price or prices at which such units will be
issued; |
|
· |
the
applicable United States federal income tax considerations relating to the
units; |
|
· |
any
provisions for the issuance, payment, settlement, transfer or exchange of
the units or of the securities comprising the units;
and |
|
· |
any
other terms of the units and of the securities comprising the
units. |
The
provisions described in this section, as well as those described under
Description of Capital Stock, Description of Debt Securities and
Description of Warrants will apply to the securities included in each unit, to
the extent relevant and as may be updated in any prospectus
supplements.
Issuance
in Series
We may
issue units in such amounts and in as many distinct series as we wish. This
section summarizes terms of the units that apply generally to all series. Most
of the financial and other specific terms of your series will be described in
the applicable prospectus supplement.
Unit
Agreements
We will
issue the units under one or more unit agreements to be entered into between us
and a bank or other financial institution, as unit agent. We may add, replace or
terminate unit agents from time to time. We will identify the unit agreement
under which each series of units will be issued and the unit agent under that
agreement in the applicable prospectus supplement.
The
following provisions will generally apply to all unit agreements unless
otherwise stated in the applicable prospectus supplement.
Modification
without Consent
We and
the applicable unit agent may amend any unit or unit agreement without the
consent of any holder:
|
· |
to
cure any ambiguity; any provisions of the governing unit agreement that
differ from those described below; |
|
· |
to
correct or supplement any defective or inconsistent provision;
or |
|
· |
to
make any other change that we believe is necessary or desirable and will
not adversely affect the interests of the affected holders in any material
respect. |
33
We do not
need any approval to make changes that affect only units to be issued after the
changes take effect. We may also make changes that do not adversely affect a
particular unit in any material respect, even if they adversely affect other
units in a material respect. In those cases, we do not need to obtain the
approval of the holder of the unaffected unit; we need only obtain any required
approvals from the holders of the affected units.
Modification
with Consent
We may
not amend any particular unit or a unit agreement with respect to any particular
unit unless we obtain the consent of the holder of that unit, if the amendment
would:
|
· |
impair
any right of the holder to exercise or enforce any right under a security
included in the unit if the terms of that security require the consent of
the holder to any changes that would impair the exercise or enforcement of
that right; or |
|
· |
reduce
the percentage of outstanding units or any series or class the consent of
whose holders is required to amend that series or class, or the applicable
unit agreement with respect to that series or class, as described
below. |
Any other
change to a particular unit agreement and the units issued under that agreement
would require the following approval:
|
· |
If
the change affects only the units of a particular series issued under that
agreement, the change must be approved by the holders of a majority of the
outstanding units of that series;
or |
|
· |
If
the change affects the units of more than one series issued under that
agreement, it must be approved by the holders of a majority of all
outstanding units of all series affected by the change, with the units of
all the affected series voting together as one class for this
purpose. |
These
provisions regarding changes with majority approval also apply to changes
affecting any securities issued under a unit agreement, as the governing
document.
In each
case, the required approval must be given by written consent.
Unit
Agreements Will Not Be Qualified under Trust Indenture Act
No unit
agreement will be qualified as an indenture, and no unit agent will be required
to qualify as a trustee, under the Trust Indenture Act. Therefore, holders of
units issued under unit agreements will not have the protections of the Trust
Indenture Act with respect to their units.
Mergers
and Similar Transactions Permitted; No Restrictive Covenants or Events of
Default
The unit
agreements will not restrict our ability to merge or consolidate with, or sell
our assets to, another corporation or other entity or to engage in any other
transactions. If at any time we merge or consolidate with, or sell our assets
substantially as an entirety to, another corporation or other entity, the
successor entity will succeed to and assume our obligations under the unit
agreements. We will then be relieved of any further obligation under these
agreements.
The unit
agreements will not include any restrictions on our ability to put liens on our
assets, including our interests in our subsidiaries, nor will they restrict our
ability to sell our assets. The unit agreements also will not provide for any
events of default or remedies upon the occurrence of any events of
default.
Governing
Law
The unit
agreements and the units will be governed by Delaware law.
Form,
Exchange and Transfer
We will
issue each unit in global—i.e., book-entry—form only. Units in book-entry form
will be represented by a global security registered in the name of a depositary,
which will be the holder of all the units represented by the global security.
Those who own beneficial interests in a unit will do so through participants in
the depositarys system, and the rights of these indirect owners will be
governed solely by the applicable procedures of the depositary and its
participants. We will describe book-entry securities, and other terms regarding
the issuance and registration of the units in the applicable prospectus
supplement.
34
Each unit
and all securities comprising the unit will be issued in the same
form.
If we
issue any units in registered, non-global form, the following will apply to
them.
The units
will be issued in the denominations stated in the applicable prospectus
supplement. Holders may exchange their units for units of smaller denominations
or combined into fewer units of larger denominations, as long as the total
amount is not changed.
Holders
may exchange or transfer their units at the office of the unit agent. Holders
may also replace lost, stolen, destroyed or mutilated units at that office. We
may appoint another entity to perform these functions or perform them
ourselves.
Holders
will not be required to pay a service charge to transfer or exchange their
units, but they may be required to pay for any tax or other governmental charge
associated with the transfer or exchange. The transfer or exchange, and any
replacement, will be made only if our transfer agent is satisfied with the
holders proof of legal ownership. The transfer agent may also require an
indemnity before replacing any units.
If we
have the right to redeem, accelerate or settle any units before their maturity,
and we exercise our right as to less than all those units or other securities,
we may block the exchange or transfer of those units during the period beginning
15 days before the day we mail the notice of exercise and ending on the day
of that mailing, in order to freeze the list of holders to prepare the mailing.
We may also refuse to register transfers of or exchange any unit selected for
early settlement, except that we will continue to permit transfers and exchanges
of the unsettled portion of any unit being partially settled. We may also block
the transfer or exchange of any unit in this manner if the unit includes
securities that are or may be selected for early settlement.
Only the
depositary will be entitled to transfer or exchange a unit in global form, since
it will be the sole holder of the unit.
Payments
and Notices
In making
payments and giving notices with respect to our units, we will follow the
procedures as described in the applicable prospectus supplement.
LEGAL
MATTERS
The
legality of the securities offered hereby has been passed on for us by Andrew
Abramowitz, PLLC, New York, New York.
EXPERTS
The
financial statements of iBio, Inc. as of June 30, 2010 and for the year then
ended have been audited by J.H. Cohn LLP, independent registered public
accounting firm, as set forth in their report incorporated by reference herein,
and are included in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
The
financial statements of iBio, Inc. as of June 30, 2009 and for the year then
ended have been audited by Amper, Politziner & Mattia, LLP, independent
registered public accounting firm, as set forth in their report incorporated by
reference herein, and are included in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We are
subject to the information requirements of the Exchange Act and, in accordance
therewith, file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
You may call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. These documents also may be accessed through the
SECs electronic data gathering, analysis and retrieval system, or EDGAR, via
electronic means, including the SECs home page on the Internet
(www.sec.gov).
35
We have
the authority to designate and issue more than one class or series of stock
having various preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption. See Description of Capital Stock. We will furnish a
full statement of the relative rights and preferences of each class or series of
our stock which has been so designated and any restrictions on the ownership or
transfer of our stock to any shareholder upon request and without charge.
Written requests for such copies should be directed to iBio, Inc., 9 Innovation
Way, Suite 100, Newark, Delaware 19711, attention: Investor Relations or by
telephone request to (302) 355-0650. Our website is located at
http://www.ibioinc.com. Information contained on our website is not incorporated
by reference into this prospectus and, therefore, is not part of this prospectus
or any accompanying prospectus supplement.
INFORMATION
INCORPORATED BY REFERENCE
We
disclose important information to you by referring you to documents that we have
previously filed with the SEC or documents that we will file with the SEC in the
future. The information incorporated by reference is considered to be part of
this prospectus. Information in documents that we file later with the
SEC will automatically update and supersede information in this prospectus. We
hereby incorporate by reference into this prospectus the documents listed below,
and any future filings made by us with the SEC under Section 13(a), 13(c),
14, or 15(d) or the Exchange Act until we close this offering, including all
filings made after the date of the registration statement. We hereby incorporate
by reference the following documents; provided, however, that we are not
incorporating any information contained in any Current Report on Form 8-K that
is furnished but not filed with the SEC:
|
1. |
Our
Annual Report on Form 10-K for the year ended June 30, 2010 filed with the
SEC on October 13, 2010 (as amended on November 24,
2010). |
|
2. |
Our
Definitive Proxy Statement on Schedule 14A filed on November 10,
2010. |
|
3. |
Our
Quarterly Reports on Form 10-Q , for the quarter ended September 30, 2010
filed with the SEC on November 15, 2010, for the quarter ended December
31, 2010 filed with the SEC on February 14, 2011, and for the quarter
ended March 31, 2011 filed with the SEC on May 18,
2011. |
|
4. |
Our
Current Reports on Form 8-K filed on October 29, 2010, November 3, 2010,
December 15, 2010, May 4, 2011 and June 23,
2011. |
|
5. |
All
documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act prior to the termination of this
offering. |
Any
statement contained in a document incorporated or deemed to be incorporated by
reference in this prospectus is modified or superseded for purposes of the
prospectus to the extent that a statement contained in this prospectus or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.
We will
provide without charge to each person, including any beneficial owner, to whom
this prospectus is delivered, upon written or oral request, a copy of any or all
of the foregoing documents incorporated herein by reference (other than exhibits
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such documents should be made to us at the following
address or telephone number:
iBio,
Inc.
9
Innovation Way, Suite 100
Newark,
Delaware 19711
(302)
355-0650
Attention:
Corporate Secretary
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Our
Charter will provide for indemnification of our officers and directors to the
extent permitted by Delaware law, which generally permits indemnification for
actions taken by officers or directors as our representatives if the officer or
director acted in good faith and in a manner he or she reasonably believed to be
in the best interest of the corporation.
36
As
permitted under Delaware law, our By-laws contain a provision indemnifying
directors against expenses (including attorneys fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by them in
connection with an action, suit or proceeding if they acted in good faith and in
a manner they reasonably believed to be in or not opposed to the best interests
of our company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful.
The
separation and distribution agreement that we have entered into with Integrated
BioPharma provides for indemnification by us of Integrated BioPharma and its
directors, officers and employees for some liabilities, including liabilities
under the Securities Act and the Securities Exchange Act of 1934 in connection
with the distribution, and a mutual indemnification of each other for product
liability claims arising from their respective businesses, and also requires
that we indemnify Integrated BioPharma for various liabilities of iBio, and for
any tax that may be imposed with respect to the distribution and which result
from our actions or omissions in that regard.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, or otherwise, we have 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.
37
$10,000,000
Common Stock
Donjon
Group
February 1, 2013