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As filed with the Securities and Exchange Commission on April 7, 2010 Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIBROCELL SCIENCE, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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2834
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87-0458888 |
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer Identification
Number) |
405 Eagleview Boulevard
Exton, Pennsylvania 19341
(484) 713-6000
(Address, including zip code, and telephone number, including
area code, of registrants principal executive offices)
Declan Daly
405 Eagleview Boulevard
Exton, Pennsylvania 19341
(484) 713-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Cavas S. Pavri, Esq.
Cozen OConnor
1900 Market Street
Philadelphia, PA 19103
Professional Corporation
(215) 665-5542
Facsimile: (215) 701-2478
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)
under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
Calculation of Registration Fee
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Proposed Maximum |
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Proposed Maximum |
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Title of each Class of |
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Amount being |
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Offering Price Per |
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Aggregate Offering |
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Amount of |
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Security being Registered |
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Registered (1) |
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Security(2) |
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Price(2) |
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Registration Fee |
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Common Stock, $0.001 par value |
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5,076,664 |
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$ |
1.00 |
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$ |
5,076,664 |
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$ |
361.97 |
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Common Stock, $0.001 par value (3) |
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5,482,797 |
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$ |
1.00 |
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$ |
5,482,797 |
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$ |
390.92 |
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Total |
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$ |
10,559,461 |
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$ |
752.89 |
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(1) |
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All of the shares are offered by the Selling Stockholders. Accordingly, this
registration statement includes an indeterminate number of additional shares of common stock
issuable for no additional consideration pursuant to any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of consideration, which
results in an increase in the number of outstanding shares of our common stock. In the event of a
stock split, stock dividend or similar transaction involving our common stock, in order to prevent
dilution, the number of shares registered shall be automatically increased to cover the additional
shares in accordance with Rule 416(a) under the Securities Act of 1933. |
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(2) |
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Estimated solely for purposes of determining the registration fee pursuant to Rule
457(c) under the Securities Act of 1933, using the average of the bid and asked prices as reported
on the OTC Bulletin Board on April 5, 2010, which was $1.00 per share. |
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(3) |
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Represents shares underlying certain warrants issued in connection with common
stock issued in the registrants March 2010 offering, and warrants issued to the placement agents
in such offering. |
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE
NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
This information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED APRIL 7, 2010
PROSPECTUS
FIBROCELL SCIENCE, INC.
10,559,461 Common Stock
This prospectus relates to the resale of our common stock by certain of our stockholders,
or Selling Stockholders, named in the section of this prospectus titled Selling Security Holders.
The following shares may be offered for resale under this prospectus: (a) 5,076,664 shares of
common stock issued pursuant to a securities purchase agreement, or the Securities Purchase
Agreement, with certain accredited investors, (b) 5,076,664 shares of common stock underlying
warrants issued pursuant to the Securities Purchase Agreement, and (c) 406,133 shares of
common stock underlying the warrants issued to the placement agents in the offering completed
pursuant to the Securities Purchase Agreement.
Although we will pay substantially all the expenses incident to the registration of the
shares, we will not receive any proceeds from the sales by the Selling Stockholders. We will,
however, to the extent the warrants are exercised for cash, as opposed to being exercised on a
cash-less basis as permitted in the warrants, receive proceeds from such exercises; to the extent
we receive such proceeds, they will be used for working capital purposes.
Our
common stock is presently quoted for trading under the symbol FCSC on the over the
counter bulletin board, or OTCBB. On April 1, 2010, the last sales price of the common stock, as
reported on the OTCBB was $1.04 per share.
Investing in our common stock is highly speculative and involves a high degree of risk. You
should purchase these securities only if you can afford a complete loss of your investment. You
should carefully consider the risks and uncertainties described under the heading Risk Factors
beginning on page 4 of this prospectus before making a decision to purchase our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2010
TABLE OF CONTENTS
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Page |
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PROSPECTUS SUMMARY |
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1 |
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RISK FACTORS |
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS |
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USE OF PROCEEDS |
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MARKET PRICE OF AND DIVIDENDS ON OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS |
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MANAGEMENT |
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RELATED PARTY TRANSACTIONS |
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PRINCIPAL STOCKHOLDERS |
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DESCRIPTION OF SECURITIES |
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SHARES ELIGIBLE FOR FUTURE SALE |
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SELLING SECURITY HOLDERS |
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PLAN OF DISTRIBUTION |
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE |
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EXPERTS |
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WHERE YOU CAN FIND MORE INFORMATION |
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PROSPECTUS SUMMARY
This summary highlights information set forth in greater detail elsewhere in this prospectus.
It may not contain all the information that may be important to you. You should read the following
summary together with the more detailed information regarding us and our common stock being sold in
this offering, including the information incorporated by reference into this prospectus. Unless the
context requires otherwise, references to the Company, Fibrocell, we, our, and us, refer
to Fibrocell Science, Inc. and its subsidiaries.
Our Company
We are an aesthetic and therapeutic development stage biotechnology company focused on
developing novel skin and tissue rejuvenation products. Our clinical development product candidates
are designed to improve the appearance of skin injured by the effects of aging, sun exposure, acne
and burn scars with a patients own, or autologous, fibroblast cells produced by our proprietary
Fibrocell process. Our clinical development programs encompass both aesthetic and therapeutic
indications. Our most advanced indication is for the treatment of nasolabial folds/wrinkles (United
States adopted name, or USAN, is azficel-T) and has completed Phase III clinical studies, and the
related Biologics License Application, or BLA, has been submitted to the Food and Drug
Administration, or FDA. In October 2009, the FDAs Cellular, Tissue and Gene Therapies Advisory
Committee reviewed this indication. On December 21, 2009, Fibrocell Science received a Complete
Response letter from the FDA related to the BLA for azficel-T. A Complete Response letter is issued
by the FDAs Center for Biologics Evaluation and Research (CBER) when the review of a file is
completed and additional data are needed prior to approval. The Complete Response letter requested
that we provide data from a histopathological study on biopsied tissue samples from patients
following injection of azficel-T. The letter also requested finalized Chemistry, Manufacturing and
Controls (CMC) information regarding the manufacture of azficel-T as follow-up to discussions that
occurred during the BLA review period, as well as revised policies and procedures regarding
shipping practices, and proposed labeling.
During 2009 we completed a Phase II/III study for the treatment of acne scars. During 2008 we
completed our open-label Phase II study related to full face rejuvenation.
We also develop and market an advanced skin care product line through our Agera subsidiary, in
which we acquired a 57% interest in August 2006.
Exit from Bankruptcy
On August 27, 2009, the United States Bankruptcy Court for the District of Delaware in
Wilmington entered an order, or Confirmation Order, confirming the Joint First Amended Plan of
Reorganization dated July 30, 2009, as supplemented by the Plan Supplement dated August 21, 2009,
or the Plan, of Isolagen, Inc. and Isolagens wholly owned subsidiary, Isolagen Technologies, Inc.
The effective date of the Plan was September 3, 2009.
Our officers and directors as of the effective date were all deemed to have resigned and a new
board of directors was appointed. As of the effective date, our initial board of directors
consisted of: David Pernock, Paul Hopper and Kelvin Moore. Dr. Robert Langer was appointed to the
Board in late September 2009. Declan Daly remained as chief operating officer and chief financial
officer of the reorganized company, and in November 2009, he was appointed to the Board of
Directors. Mr. Pernock became our chief executive officer in February 2010.
Pursuant to the Plan, all of our equity interests, including without limitation our common
stock, options and warrants outstanding as of the effective date were cancelled. On the effective
date, we completed an exit financing of common stock in the amount of $2 million, after which the
equity holders of our company were:
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7,320,000 shares, to our pre-bankruptcy lenders and the lenders that provided us our
debtor-in-possession facility, collectively; |
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3,960,000 shares, to the holders of our 3.5% convertible subordinated notes; |
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600,000 shares, to our management as of the effective date, which was our chief
operating officer; |
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120,000 shares, to the holders of our general unsecured claims; and |
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2,666,666 shares, to the purchasers of shares in the $2 million exit financing (our
pre-bankruptcy lenders, the lenders that provided us our debtor-in-possession facility
and the holders of our 3.5% convertible subordinated notes were permitted to
participate in our exit financing). |
In the Plan, in addition to the common stock set forth above, each holder of Isolagens 3.5%
convertible subordinated notes, due November 2024, in the approximate non-converted aggregate
principal amount of $81 million, received, in full and final satisfaction, settlement, release and
discharge of and in exchange for any and all claims arising out of the 3.5% convertible
subordinated notes, its pro rata share of an unsecured note in the principal amount of $6 million,
or the New Notes. The New Notes have the following features:
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12.5% interest payable quarterly in cash or, at our option, 15% payable in kind by
capitalizing such unpaid amount and adding it to the principal as of the date it was
due; |
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mature June 1, 2012; |
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at any time prior to the maturity date, we may redeem any portion of the outstanding
principal of the New Notes in cash at 125% of the stated face value of the New Notes;
provided that we will be obligated to redeem all outstanding New Notes upon the
following events: (a) we or our subsidiary, Fibrocell Technologies, Inc. (formerly,
Isolagen Technologies, Inc.) successfully complete a capital campaign raising in excess
of $10,000,000; or (b) we or our subsidiary, Fibrocell Technologies, Inc., are acquired
by, or sell a majority stake to, an outside party; |
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the New Notes contain customary representations, warranties and covenants, including
a covenant that we and our subsidiary, Fibrocell Technologies, Inc., shall be
prohibited from the incurrence of additional debt without obtaining the consent of 66
2/3% of the New Note holders. |
Recent Financing
On March 4, 2010 pursuant to a securities purchase agreement, we completed an offering,
referred to as the Private Offering, in which we issued to certain accredited investors in the
aggregate 5,076,664 shares of common stock at a purchase price of $0.75 per share. Each investor
also received a warrant to purchase the same number of shares of common stock acquired in the
Private Offering at an exercise price of $0.98 per share. The aggregate purchase price paid by the
investors for the common stock and the warrants was $3,807,500. The Company intends to use the
proceeds for working capital purposes.
Effect of Private Offering on Series A Preferred
With certain exceptions, the Certificate of Designation of the Series A Preferred provides
that if at any time while the Series A Preferred is outstanding, we sell or grant any option to
purchase or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
sale, grant or any option to purchase or other disposition), any common stock or common stock
equivalents at an effective price per share that is lower than the then conversion price of the
Series A Preferred, then the conversion price of the Series A Preferred will be reduced to equal
the lower price.
Consequently, as a result of the purchase price of the common stock sold in the Private
Offering, effective as of March 4, 2010, the conversion price of the Series A Preferred has been
reduced from $1.30 to $0.75.
Effect of Private Offering on Warrants
With certain exceptions, the Class A warrants, Class B warrants and placement agent warrants
provide that if at any time while the warrants are outstanding, we sell or grant any option to
purchase or sell or grant any right to
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reprice, or otherwise dispose of or issue (or announce any sale, grant or any option to
purchase or other disposition), any common stock or common stock equivalents at an effective price
per share that is lower than the then exercise price of the relevant warrant, then the exercise
price of such warrant will be reduced to equal the lower price and the number of shares issuable
thereunder will be increased such that the aggregate exercise price after the exercise price
adjustment will be equal to the aggregate exercise price prior to the adjustment.
Consequently, as a result of the purchase price of the common stock sold in the Private
Offering, effective as of March 4, 2010, (a) the exercise prices for the Class A, Class B and
placement agent warrants have been reduced from $1.62, $1.95 and $1.30 per share, respectively, to
$0.75 per share and (b) the numbers of shares underlying the Class A, Class B and placement agent
warrants have been increased to 1,083,331, 1,083,332 and 433,333 respectively.
Our Contact Information
Our corporate headquarters is located at 405 Eagleview Boulevard, Exton, Pennsylvania 19341.
Our phone number is (484) 713-6000. Our corporate website is www.fibrocellscience.com. Information
contained on our website or any other website does not constitute part of this prospectus.
Risks Related to Our Business
Our business is subject to a number of risks, which you should be aware of before making an
investment decision. These risks are discussed more fully under Item 1A. of our Annual Report on
Form 10-K for the fiscal year ended December 31, 2009, which is incorporated by reference in this
prospectus.
Securities Being Offered
The Selling Stockholders named in this prospectus may offer for resale the following
securities:
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up to 5,076,664 shares of common stock; and |
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up to 5,076,664 shares of common stock underlying the warrants issued in the Private
Offering and 406,133 shares of common stock underlying the warrants issued to the
placement agents in the Private Offering. |
Although we will pay substantially all the expenses incident to the registration of the
shares, we will not receive any proceeds from the sales by the Selling Stockholders. However, we
may receive proceeds of up to $5,373,141 (includes placement agent warrants) from the exercise of
the outstanding warrants (assuming the warrants are not exercised on a cash-less basis); if such
proceeds are received by us, they will be used for working capital purposes.
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RISK FACTORS
You should consider the Risk Factors included under Item 1A. of our Annual Report on Form
10-K for the fiscal year ended December 31, 2009, which is incorporated by reference in this
prospectus. The market or trading price of our securities could decline due to any of these risks.
In addition, please read Information Regarding Forward-Looking Statements in this prospectus,
where we describe additional uncertainties associated with our business and the forward-looking
statements included or incorporated by reference in this prospectus. Please note that additional
risks not currently known to us or that we currently deem immaterial may also impair our business
and operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents we incorporate by reference, contains certain
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as well as information
relating to Fibrocell that is based on managements exercise of business judgment and assumptions
made by and information currently available to management. When used in this document and other
documents, releases and reports released by us, the words anticipate, believe, estimate,
expect, intend, the facts suggest and words of similar import, are intended to identify any
forward-looking statements. You should not place undue reliance on these forward-looking
statements. These statements reflect our current view of future events and are subject to certain
risks and uncertainties as noted below. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, our actual results could differ
materially from those anticipated in these forward-looking statements. Actual events, transactions
and results may materially differ from the anticipated events, transactions or results described in
such statements. Although we believe that our expectations are based on reasonable assumptions, we
can give no assurance that our expectations will materialize. Many factors could cause actual
results to differ materially from our forward looking statements. Several of these factors include,
without limitation:
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our ability to finance our business and continue in operations; |
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whether the results of our full Phase III pivotal study and our BLA filing will
result in approval of our product candidate, and whether any approval will occur on a
timely basis; |
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our ability to meet requisite regulations or receive regulatory approvals in the
United States, Europe, Asia and the Americas, and our ability to retain any regulatory
approvals that we may obtain; and the absence of adverse regulatory developments in the
United States, Europe, Asia and the Americas or any other country where we plan to
conduct commercial operations; |
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whether our clinical human trials relating to the use of autologous cellular therapy
applications, and such other indications as we may identify and pursue can be conducted
within the timeframe that we expect, whether such trials will yield positive results,
or whether additional applications for the commercialization of autologous cellular
therapy can be identified by us and advanced into human clinical trials; |
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our ability to develop autologous cellular therapies that have specific applications
in cosmetic dermatology, and our ability to explore (and possibly develop) applications
for periodontal disease, reconstructive dentistry, treatment of restrictive scars and
burns and other health-related markets; |
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our ability to decrease our manufacturing costs for our Fibrocell Therapy product
candidates through the improvement of our manufacturing process, and our ability to
validate any such improvements with the relevant regulatory agencies; |
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our ability to reduce our need for fetal bovine calf serum by improved use of less
expensive media combinations and different media alternatives; |
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continued availability of supplies at satisfactory prices; |
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new entrance of competitive products or further penetration of existing products in
our markets; |
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the effect on us from adverse publicity related to our products or the company
itself; |
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any adverse claims relating to our intellectual property; |
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the adoption of new, or changes in, accounting principles; |
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our issuance of certain rights to our shareholders that may have anti-takeover
effects; |
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our dependence on physicians to correctly follow our established protocols for the
safe administration of our Fibrocell Therapy; and |
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other risks referenced from time to time elsewhere in this prospectus and in our
filings with the SEC. |
These factors are not necessarily all of the important factors that could cause actual results
of operations to differ materially from those expressed in these forward-looking statements. Other
unknown or unpredictable factors also could have material adverse effects on our future results. We
undertake no obligation and do not intend to update, revise or otherwise publicly release any
revisions to these forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of any unanticipated events. We cannot assure you that
projected results will be achieved.
USE OF PROCEEDS
This prospectus relates to the resale of shares of our common stock issued pursuant to a
securities purchase agreement with certain accredited investors and share of our common stock to be
issued to persons who exercise warrants issued to them pursuant to the securities purchase
agreement. We will not receive any proceeds from the sale of shares of common stock in this
offering. However, to the extent the warrants are exercised for cash, as opposed to being exercised
on a cash-less basis as permitted in the warrants, we will receive proceeds from the exercise of
any warrants, up to a maximum amount of $5,373,141 (includes placement agent warrants) (assuming
the warrants are not exercised on a cash-less basis), and we will use any such proceeds for working
capital purposes.
MARKET PRICE OF AND DIVIDENDS ON OUR COMMON STOCK
AND RELATED STOCKHOLDER MATTERS
Market Information
On October 21, 2009, our common stock became available for trading OTCBB under the symbol
FCSC. Currently, there is only a limited, sporadic and volatile market for our stock on the
OTCBB. The table below presents the high and low bid price for our common stock each quarter during
the past two years and reflects inter-dealer prices, without retail markup, markdown, or
commission, and may not represent actual transactions.
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December 31, 2009 |
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High |
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Fourth Quarter (from October 21, 2009)
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2.40 |
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0.50 |
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The common stock of our predecessor company, Isolagen, Inc., traded on the NYSE Amex under the
symbol ILE. The common stock ceased trading on the NYSE Amex on May 6, 2009 and in June 2009 the
NYSE Amex delisted the common stock from listing on the NYSE Amex. Upon the effective date of our
bankruptcy plan,
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the outstanding common stock of Isolagen was cancelled. Consequently, the stockholders of
Isolagen prior to the effective date of the bankruptcy plan no longer have any interest as
stockholders of Fibrocell by virtue of their ownership of Isolagens common stock prior to the
emergence from bankruptcy.
As of April 5, 2010, there were 19,768,676 shares of our common stock outstanding and held by
203 stockholders of record. As of April 5, 2010, there were 3,250 shares of Series A Preferred
issued and outstanding.
On April 1, 2010 the last sale price of our common stock as reported on the OTCBB was $1.04
per share.
Dividends
We have never paid any cash dividends on our common stock and our board of directors does not
intend to do so in the foreseeable future. The declaration and payment of dividends in the future,
of which there can be no assurance, will be determined by the board of directors in light of
conditions then existing, including earnings, financial condition, capital requirements and other
factors.
Holders of the Series A Preferred are entitled to receive cumulative dividends at the rate per
share (as a percentage of the stated value per share) of 6% per annum (subject to increase in
certain circumstances), payable quarterly in arrears on January 15, April 15, July 15 and October
15, beginning on April 15, 2010. The dividends are payable in cash, or at our option, in duly
authorized, validly issued, fully paid and non-assessable shares of common stock equal to 110% of
the cash dividend amount payable on the dividend payment date, or a combination thereof; provided
that we may not pay the dividends in shares of common stock unless we meet certain conditions
described in the Certificate of Designation. If we pay the dividend in shares of common stock, the
common stock will be valued for such purpose at 80% of the average of the volume weighted average
price for the 10 consecutive trading days ending on the trading day that is immediately prior to
the dividend payment date.
Shares of common stock issued as dividends on the Series A Preferred are not being registered
under this prospectus. Such shares are deemed to be restricted securities under Rule 144 of the
Securities Act and may only be sold in compliance with Rule 144.
Penny Stock
The SEC has adopted rules that regulate broker-dealer practices in connection with
transactions in penny stocks. Our stock is currently a penny stock. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities registered on certain
national securities exchanges. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the SEC, which: (a) contains a description of the nature and level
of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains
a description of the brokers or dealers duties to the customer and of the rights and remedies
available to the customer with respect to a violation to such duties or other requirements of
securities laws; (c) contains a brief, clear, narrative description of a dealer market, including
bid and ask prices for penny stocks and significance of the spread between the bid and ask price;
(d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f)
contains such other information and is in such form as the SEC shall require by rule or regulation.
The broker-dealer also must provide to the customer, prior to effecting any transaction in a penny
stock, (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer
and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices
apply, or other comparable information relating to the depth and liquidity of the market for such
stock; and (d) monthly account statements showing the market value of each penny stock held in the
customers account. In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser and receive the
purchasers written acknowledgment of the receipt of a risk disclosure statement, a written
agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably
statement.
6
These disclosure requirements may have the effect of reducing the trading activity in the
secondary market for our stock if it becomes subject to these penny stock rules.
MANAGEMENT
The following table sets forth the names and ages of all of our directors and executive
officers as of April 1, 2010. Our officers are appointed by, and serve at the pleasure of, the
Board of Directors.
|
|
|
|
|
|
|
Name |
|
Title |
|
Age |
David Pernock
|
|
Director and Chief Executive Officer
|
|
|
55 |
|
|
|
|
|
|
|
|
Declan Daly
|
|
Chief Operating Officer and Chief
Financial Officer
|
|
|
47 |
|
|
|
|
|
|
|
|
Paul Hopper
|
|
Director
|
|
|
53 |
|
|
|
|
|
|
|
|
Kelvin Moore
|
|
Director
|
|
|
60 |
|
|
|
|
|
|
|
|
Robert Langer
|
|
Director
|
|
|
61 |
|
|
|
|
|
|
|
|
Marc Mazur
|
|
Director
|
|
|
51 |
|
Biographical information with respect to our directors and executive officers is provided
below. There are no family relationships between any of our executive officers or directors.
David Pernock. Mr. Pernock has served as a chairman of the board of Fibrocell since September
2009 and as our Chief Executive Officer since February 2010. From December 1993 until November
2009, Mr. Pernock held various positions at GlaxoSmithKline, eventually serving as Senior Vice
President of Pharmaceuticals, Vaccines (Biologics), Oncology, Acute Care, and HIV Divisions. Mr.
Pernock is a director of Martek Biosciences Corporation. Mr. Pernock holds a B.S. in Business
Administration from Arizona State University.
Declan Daly. Mr. Daly has served as Fibrocells Chief Operating Officer and Chief Financial
Officer since September 2009, and as a director of Fibrocell since November 2009. Mr. Daly served
as Isolagens Chief Executive Officer and President from January 2008 until September 3, 2009, as
Chief Financial Officer from June 2006 until March 2008, and as Chief Operating Officer from June
2007 until January 2008. Mr. Daly was elected to the Board of Directors of Isolagen in June 2008.
Mr. Daly served as Executive Vice President and Chief Financial Officer of Inamed Corp. from
November 2004 until March 2006, prior to which he served as Inameds Senior Vice President since
September 2002 and as the Corporate Controller and Principal Accounting Officer since March 2002.
He was previously Vice President of Finance & Administration for Inamed International Corp. from
1998 to 2002. From 1996 to 1998, Mr. Daly was a Senior Manager with BDO Simpson Xavier, Chartered
Accountants or BDO, in Dublin. Prior to joining BDO, he worked with PricewaterhouseCoopers in
Dublin and London. Mr. Daly holds a B.A. in Management Science and Industrial Systems Studies from
Trinity College, Dublin and he is also a Fellow of the Institute of Chartered Accountants in
Ireland.
Paul Hopper. Mr. Hopper has served as a director of Fibrocell since September 2009. Mr. Hopper
has served as Managing Director of Cappello Group, Inc, an investment bank based in Los Angeles,
since November 2005. From September 2003 to February 2005, Mr. Hopper served as Managing Director
of Australian Cancer Technology Ltd, an oncology biotechnology company. Mr. Hopper is also a
Director of Somnomed Ltd, Viralytics Ltd, and pSivida Corp.
Kelvin Moore. Mr. Moore has served as a director of Fibrocell since September 2009. Since
March 2009, Mr. Moore has served as the consultant sales director for the UK based Seaborne Group
developing their business in building constructions from converting shipping sea containers. Since
July 2008, Mr. Moore has been a director of Acorn Cultural Developments Limited which is developing
a social networking site. Between June 2004 and May 2008, Mr. Moore was a senior advisor with exit
strategy planning dealing with the sale of businesses. Mr. Moore holds a London University Degree
in Geography and Pure Mathematics.
7
Robert Langer. Dr. Langer has served as a director of Fibrocell since September 2009. Dr.
Langer was named an Institute Professor at Massachusetts Institute of Technology in 2006 and has
been on the faculty of Massachusetts Institute of Technology since 1978. Dr. Langer is also a
Director of Alseres Pharmaceuticals, Inc. and Echo Therapeutics, Inc. Dr. Langer received his
Bachelors Degree from Cornell University in 1970 and his Sc.D. from the Massachusetts Institute of
Technology in 1974, both in Chemical Engineering.
Marc B. Mazur. Mr. Mazur has served as a director of Fibrocell since April 2010. Since
May 2009, Mr. Mazur has served as the Chairman of Elsworthy Capital Management Ltd., a
London-based European equity hedge fund. From October 2006 until December 2009, Mr.
Mazur served as the CEO of Brevan Howard U.S. Asset Management, the U.S. arm of London-based
Brevan Howard. In 2001 Mr. Mazur founded Ambassador Capital Group, a privately held
investment and advisory entity providing capital, business development and strategic planning
advice to companies in the healthcare, financial services and real estate fields. Mr. Mazur
received his B.A. in political science from Columbia University in 1981 and a J.D. from
Villanova University in 1984.
In connection with our emergence from bankruptcy, our plan of reorganization provided that our
directors prior to our emergence from bankruptcy were all deemed to have resigned, and a new board
of directors was appointed as of the effective date of our emergence from bankruptcy. Pursuant to
the plan of reorganization, the new board of directors was determined by the lenders that provided
us debtor-in-possession while we were in bankruptcy and the investors that provided us exit
financing. The members of our board of directors that were designated in our plan of reorganization
are David Pernock, Paul Hopper and Kelvin Moore.
No director is related to any other director or executive officer of our company or our
subsidiaries, and, subject to the above paragraph, there are no arrangements or understandings
between a director and any other person pursuant to which such person was elected as director.
Our Certificate of Incorporation, as amended, provides that the Board of Directors be divided
into three classes. Each director serves a term of three years. At each annual meeting, the
stockholders elect directors for a full term or the remainder thereof, as the case may be, to
succeed those whose terms have expired. Each director holds office for the term for which elected
or until his or her successor is duly elected.
No director or officer of our company has, during the last five years: (i) been convicted of
any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party
to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, United States federal or state
securities laws or finding any violations with respect to such laws.
Board Committees
We do not currently have an audit committee, compensation committee or nominating committee.
Our full board currently performs the duties and responsibilities of such committees.
Executive Officer Compensation
The following table sets forth information regarding compensation with respect to the fiscal
years ended December 31, 2009 and 2008 paid or accrued by us to or on behalf of those persons who,
during the fiscal year ended December 31, 2009, served as our Chief Executive Officer or Chief
Financial Officer, as well as our most highly compensated key employees as of December 31, 2009
(the named executive officers).
Summary Compensation Table 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
Option |
|
All Other |
|
|
|
|
|
|
|
|
Salary |
|
Bonus |
|
Awards |
|
Awards |
|
Compensation |
|
Total |
Name and Principal Position |
|
Year |
|
($) |
|
($) |
|
($) (1) |
|
($) (1) |
|
($) |
|
($) |
Declan Daly,
Chief Financial Officer and |
|
|
2009 |
|
|
|
403,538 |
|
|
|
100,000 |
|
|
|
288,000 |
(3) |
|
|
17,908 |
(4) |
|
|
|
|
|
|
809,446 |
|
Chief Operating Officer (2) |
|
|
2008 |
|
|
|
427,635 |
|
|
|
25,000 |
|
|
|
|
|
|
|
|
(5) |
|
|
|
|
|
|
452,635 |
|
Todd Greenspan, |
|
|
2009 |
|
|
|
176,308 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
226,308 |
|
Former Chief Financial
Officer (6) |
|
|
2008 |
|
|
|
231,385 |
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
231,385 |
|
John Maslowski,
Vice President of Operations |
|
|
2009 |
|
|
|
149,279 |
|
|
|
|
|
|
|
|
|
|
|
16,117 |
(8) |
|
|
|
|
|
|
165,396 |
|
Karen Donhauser,
Vice President of Quality |
|
|
2009 |
|
|
|
110,936 |
|
|
|
|
|
|
|
|
|
|
|
9,670 |
(9) |
|
|
|
|
|
|
120,606 |
|
8
|
|
|
(1) |
|
Except as disclosed in footnotes (8) and (9), represents the full grant date fair value of
the stock award or option grant, as applicable, calculated in accordance with FASB ASC Topic
718. For the purposes of making the stock award calculation, an assumed value of $0.48 per
share was utilized. For the purposes of making the option calculation, the following
assumptions were made: (a) expected life (years) 3.5 (for the options issued to Mr.
Maslowski and Ms. Donhauser); expected life (years) 2.5 (for the options issued to Mr.
Daly); (b) volatility 65.87%; (c) dividend yield none; and (d) discount rate 1.64%
(for the options issued to Mr. Maslowski and Ms. Donhauser); discount rate 0.99% (for the
options issued to Mr. Daly). We excluded the assumed forfeiture rate for the purposes of the
calculations in the table. |
|
(2) |
|
Mr. Daly served as our Chief Executive Officer during 2009. Mr. Daly is currently our Chief
Financial Officer and Chief Operating Officer. |
|
(3) |
|
Pursuant to our bankruptcy plan, our management was granted shares of our common stock. Mr.
Daly received 600,000 shares of common stock, of which 300,000 shares vested immediately and
150,000 shares vest on each successive one-year anniversary; provided that if we do not renew
Mr. Dalys employment agreement at the end of its term or in the event of a change of control,
any unvested shares will automatically vest. |
|
(4) |
|
Consists of an option issued in connection with Mr. Daly joining our board of directors in
November 2009 to purchase 50,000 shares of common stock at an exercise price of $0.75 per
share. |
|
(5) |
|
During 2008, Mr. Daly was granted options to purchase 450,000 shares of common stock.
These options were terminated in our bankruptcy and are no longer outstanding. |
|
(6) |
|
Mr. Greenspan served as our Chief Financial Officer until September 2009. |
|
(7) |
|
During 2008, Mr. Greenspan was granted options to purchase 200,000 shares of common stock.
These options were terminated in our bankruptcy and are no longer outstanding. |
|
(8) |
|
Consists of an option to purchase 100,000 shares of common stock at an exercise price of
$0.75 per share of which 50,000 shares vest on October 6, 2010 and 50,000 shares vest if our
BLA is approved by the FDA. The grant date fair value in the table above excludes the 50,000
shares that would vest if our BLA is approved by the FDA as that portion of the option is
subject to performance conditions and is not considered to be probable pursuant to FASB ASC
Topic 718. The full grant date fair value of the option assuming the performance conditions
are met is $32,234. |
|
(9) |
|
Consists of an option to purchase 60,000 shares of common stock at an exercise price of
$0.75 per share of which 30,000 shares vest on October 6, 2010 and 30,000 shares vest if our
BLA is approved by the FDA. The grant date fair value in the table above excludes the 30,000
shares that would vest if our BLA is approved by the FDA as that portion of the option is
subject to performance conditions and is not considered to be probable pursuant to FASB ASC
Topic 718. The full grant date fair value of the option assuming the performance conditions
are met is $19,341. |
Equity Awards
The following table sets forth certain information concerning our outstanding options for our
named executive officers at December 31, 2009.
9
Outstanding Equity Awards At Fiscal Year-End2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Number of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying |
|
Underlying |
|
|
|
|
|
|
|
|
|
Number of |
|
Market value of |
|
|
Unexercised |
|
Unexercised |
|
|
|
|
|
|
|
|
|
shares of stock |
|
shares of stock |
|
|
Options |
|
Options |
|
Option Exercise |
|
|
|
|
|
that have not |
|
that have not |
|
|
(#) |
|
(#) |
|
Price |
|
Option Expiration |
|
vested |
|
vested |
Name |
|
Exercisable |
|
Unexercisable |
|
($) |
|
Date |
|
(#) |
|
($) |
Declan Daly |
|
|
50,000 |
|
|
|
|
|
|
|
0.75 |
|
|
|
11/20/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 |
|
|
|
345,000 |
(1) |
Todd Greenspan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Maslowski |
|
|
|
|
|
|
100,000 |
(2) |
|
|
0.75 |
|
|
|
10/6/2014 |
|
|
|
|
|
|
|
|
|
Karen Donhauser |
|
|
|
|
|
|
60,000 |
(3) |
|
|
0.75 |
|
|
|
10/6/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Based on the closing price of our common stock of $1.15 on December 31, 2009. |
|
(2) |
|
Consists of an option to purchase 100,000 shares of common stock at an exercise price of
$0.75 per share of which 50,000 shares vest on October 6, 2010 and 50,000 shares vest if our
BLA is approved by the FDA. |
|
(3) |
|
Consists of an option to purchase 60,000 shares of common stock at an exercise price of $0.75
per share of which 30,000 shares vest on October 6, 2010 and 30,000 shares vest if our BLA is
approved by the FDA. |
None of our named executive officers has exercised any options.
Pension Benefits
None of our named executives participate in or have account balances in qualified or
non-qualified defined benefit plans sponsored by us.
Nonqualified Deferred Compensation
None of our named executives participate in or have account balances in non-qualified defined
contribution plans or other deferred compensation plans maintained by us.
Director Compensation
In September 2009, our board of directors approved a compensation plan for its non-executive
directors pursuant to which each such director will receive an annual fee of $50,000, payable in
monthly installments, and upon appointment to the board of directors will receive an initial option
grant to purchase 200,000 shares of Company common stock at the fair market value of the Company on
the date of issuance. On September 30, 2009, the board of directors agreed to provide Mr. David
Pernock, the Chairman of the Board, with the above cash compensation, as well as an option to
purchase 450,000 shares of Company common stock at the fair market value of the Company on the date
of issuance, of which 300,000 shares vest immediately and 150,000 shares vest in 12 months,
provided Mr. Pernock is Chairman of the Board on such date.
Director Compensation Table2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid |
|
|
|
|
|
All other |
|
|
|
|
in Cash |
|
Option Awards |
|
compensation |
|
Total |
Name |
|
($) |
|
($) (1) |
|
($) |
|
($) |
Post-bankruptcy directors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Pernock |
|
|
12,639 |
|
|
|
151,537 |
(2) |
|
|
15,000 |
(3) |
|
|
179,176 |
|
Paul Hopper |
|
|
16,250 |
|
|
|
61,866 |
(4) |
|
|
|
|
|
|
78,116 |
|
Robert Langer |
|
|
13,333 |
|
|
|
61,866 |
(4) |
|
|
16,667 |
(3) |
|
|
91,866 |
|
Kelvin Moore |
|
|
16,250 |
|
|
|
61,866 |
(4) |
|
|
|
|
|
|
78,116 |
|
Declan Daly |
|
|
|
(5) |
|
|
|
(5) |
|
|
|
|
|
|
|
(5) |
Pre-bankruptcy directors (6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid |
|
|
|
|
|
All other |
|
|
|
|
in Cash |
|
Option Awards |
|
compensation |
|
Total |
Name |
|
($) |
|
($)(1) |
|
($) |
|
($) |
Steven Morrell |
|
|
29,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth A. Selzer |
|
|
28,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas L. Teti |
|
|
95,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Y.L. Toh |
|
|
29,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry E. Vandewarker |
|
|
37,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Marshall G. Webb |
|
|
35,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the full grant date fair value of the option grant calculated in accordance
with FASB ASC Topic 718. For the purposes of making the option calculation, the following
assumptions were made: (a) expected life (years) 2.5 (for the options issued to Messrs.
Hopper, Langer and Moore); expected life (years) 3.0 (for the options issued to Mr.
Pernock); (b) volatility 66.75%; (c) dividend yield none; and (d) discount rate 1.36%
(for the options issued to Messrs. Hopper, Langer and Moore); discount rate 1.45% (for the
options issued to Mr. Pernock). |
|
(2) |
|
As of December 31, 2009, Mr. Pernock held options to purchase an aggregate of 450,000
shares of our common stock with an exercise price of $0.75 per share. |
|
(3) |
|
Consists of consulting fees. |
|
(4) |
|
As of December 31, 2009, Messrs. Hopper, Langer and Moore each held an option to purchase
200,000 shares of our common stock with an exercise price of $0.75 per share. |
|
(5) |
|
See Executive Officer Compensation Summary Compensation Table 2009. |
|
(6) |
|
All options issued to our pre-bankruptcy directors were terminated in the bankruptcy and
are no longer outstanding. No options were issued to these directors in 2009. |
Equity Incentive Plan
We currently have an outstanding equity incentive plan, the Fibrocell Science, Inc. 2009
Equity Incentive Plan, or Incentive Plan, that permits us to grant awards in the form of incentive
stock options, as defined in Section 422 of the Internal Revenue Code, or Code, as well as options
which do not so qualify, called non-qualified stock options, stock units, stock awards, stock
appreciation rights, and other stock-based awards. The purpose of the plan is to promote the
interests of Fibrocell, and to motivate, attract and retain the services of the people upon whose
efforts and contributions our success depends.
The three outstanding stock option plans we had prior to our reorganization, (a) our 2001
Stock Option and Appreciation Rights Plan reserving 5,000,000 shares of common stock for the
issuance of options to employees, directors and consultants, (b) our 2003 Stock Option and
Appreciation Rights Plan reserving 2,250,000 shares of common stock for the issuance of options to
employees, directors and consultants, and (c) our 2005 Equity Incentive Plan reserving 2,100,000
shares of common stock for the issuance of options to employees, directors and consultants,
terminated as of the effective date of our reorganization and all outstanding options issued
pursuant to the plans were cancelled.
Management Agreements
Effective upon our exit from bankruptcy on September 3, 2009, we entered into an employment
agreement, pursuant to which Mr. Daly agreed to serve as our chief operating officer until December
31, 2011, subject to the automatic renewal of the agreement for an additional one-year term unless
we notify Mr. Daly prior to the expiration of the agreement of our intention not to renew the
agreement. Notwithstanding the foregoing, if a change of control occurs during the term of the
agreement, we may not terminate the agreement for a period of two years after such change of
control. The agreement provides Mr. Daly with an annual base salary of $300,000, which will be
periodically reviewed and may be increased at the Boards discretion. Mr. Daly received a one-time
signing bonus payment in the amount of $100,000. Mr. Daly is entitled to receive an annual bonus,
payable each year subsequent
11
to the issuance of final audited financial statements, but in no case later than 120 days
after the end of our most recently completed fiscal year. The final determination on the amount of
the annual bonus will be made by the Compensation Committee of the Board of Directors, based
primarily on criteria mutually agreed upon with Mr. Daly. The targeted amount of the annual bonus
shall be 50% of Mr. Dalys base salary. The actual annual bonus for any given period may be higher
or lower than 50%. For any fiscal year in which Mr. Daly is employed for less than the full year
(other than for 2009), he shall receive a bonus which is prorated based on the number of full
months in the year which are worked. Mr. Daly is entitled to a bonus of $50,000 if we are able to
complete a capital raise or series of capital raises in excess of $6.0 million, provided Mr. Daly
is our chief operating officer at such time. Mr. Daly is entitled to a bonus of $50,000 if our BLA
is approved by the FDA, provided Mr. Daly is our chief operating officer at such time.
If we terminate the employment agreement without cause or if Mr. Daly dies or become disabled,
we will continue to pay Mr. Daly (or his heirs) his base salary at such time for the longer of the
remainder of the term of the employment agreement or 12 months from the date of termination. If we
terminate the employment agreement without cause following a change of control or if Mr. Daly
terminates the employment agreement for good reason, we must pay Mr. Daly, within 30 days of
termination, a cash payment equal to the amounts payable for the greater of the remainder of the
term of the employment agreement or 12 months from the date of termination.
Pursuant to the employment agreement and as provided in our bankruptcy reorganization plan,
Mr. Daly received a grant of 600,000 shares of common stock, of which 300,000 shares vested
immediately and 150,000 shares vest on each successive one-year anniversary; provided that if we do
not renew the employment agreement at the end of the term or in the event of a change of control,
any unvested shares will automatically vest. We have agreed to make a tax gross-up payment with
respect to the equity grant.
Mr. Daly has agreed that during his employment and for a period of 12 months after termination
or expiration of his employment agreement he will not compete with us, solicit our employees, or
attempt to divert or take away our customers and clients.
Effective upon our exit from bankruptcy on September 3, 2009, we entered into a consultant
agreement, pursuant to which Dr. Langer agreed to provide consulting services to us, including
serving a scientific advisor. The agreement has a one year term, provided that either party may
terminate the agreement on 30 days notice. The agreement provides Dr. Langer annual compensation of
$50,000.
On February 1, 2010, the Company entered into an employment agreement with Mr. Pernock
pursuant to which Mr. Pernock agreed to serve as Chief Executive Officer of the Company for an
initial term ending February 1, 2013, which may be renewed for an additional one-year term by
mutual agreement. The agreement provides for an annual salary of $450,000. Mr. Pernock is entitled
to receive an annual bonus each year, payable subsequent to the issuance of the Companys final
audited financial statements, but in no case later than 120 days after the end of its most recently
completed fiscal year. The final determination on the amount of the annual bonus will be made by
the Board of Directors (or the Compensation Committee of the Board of Directors, if such committee
has been formed), based on criteria established by the Board of Directors (or the Compensation
Committee of the Board of Directors, if such committee has been formed). The targeted amount of the
annual bonus shall be 60% of Mr. Pernocks base salary, although the actual bonus may be higher or
lower.
Under the agreement, Mr. Pernock was granted a ten-year option to purchase 1,650,000 shares at
an exercise price per share equal to the closing price of the Companys common stock on the date of
execution of the agreement, or February 1, 2010. The options vest as follows: (i) 250,000 shares
upon execution of the agreement; (ii) 100,000 shares upon the closing of a strategic partnership or
licensing deal with a major partner that enables the Company to significantly improve and/or
accelerate its capabilities in such areas as research, production, marketing and/or sales and
enable the Company to reach or exceed its major business milestones within the Companys strategic
and operational plans, provided Mr. Pernock is the CEO on the closing date of such partnership or
licensing deal (the determination of whether any partnership or licensing deal meets the foregoing
criteria will be made in good faith by the Board upon the closing of such partnership or licensing
deal); and (iii) 1,300,000 shares in equal 1/36th installments (or 36,111 shares per installment)
monthly over a three-year period, provided Executive is the CEO on each vesting date. The vesting
of all options set forth above shall accelerate upon a change in control as
12
defined in the agreement, provided Mr. Pernock is employed by the Company within 60 days prior
to the date of such change in control.
If Mr. Pernocks employment is terminated at the Companys election at any time, for reasons
other than death, disability, cause (as defined in the agreement) or a voluntary resignation, or by
Mr. Pernock for good reason (as defined in the agreement), Mr. Pernock shall be entitled to receive
severance payments equal to twelve months of Mr. Pernocks base salary and of the premiums
associated with continuation of Mr. Pernocks benefits pursuant to COBRA to the extent that he is
eligible for them following the termination of his employment; provided that if anytime within
eighteen months after a change in control either (i) Mr. Pernock is terminated, at the Companys
election at any time, for reasons other than death, disability, cause or voluntary resignation, or
(ii) Mr. Pernock terminates the agreement for good reason, Mr. Pernock shall be entitled to receive
severance payments equal to: (1) two years of Mr. Pernocks base salary, (2) Mr. Pernocks most
recent annual bonus payment, and (3) the premiums associated with continuation of Mr. Pernocks
benefits pursuant to COBRA to the extent that he is eligible for them following the termination of
his employment for a period of one year after termination. All severance payments shall be made in
a lump sum within ten business days of Mr. Pernocks execution and delivery of a general release of
the Company, its parents, subsidiaries and affiliates and each of its officers, directors,
employees, agents, successors and assigns in a form acceptable to the Company. If severance
payments are being made, Mr. Pernock has agreed not to compete with the Company until twelve months
after the termination of his employment.
RELATED PARTY TRANSACTIONS
Review and Approval Policies and Procedures for Related Party Transactions
Pursuant to Board policy, our executive officers and directors, and principal stockholders,
including their immediate family members and affiliates, are not permitted to enter into a related
party transaction with us without the prior consent of our audit committee, or other independent
committee of our board of directors in the case it is inappropriate for our audit committee to
review such transaction due to a conflict of interest. Any request for us to enter into a
transaction with an executive officer, director, principal stockholder, or any of such persons
immediate family members or affiliates, in which the amount involved exceeds $120,000 must first be
presented to our audit committee for review, consideration and approval. All of our directors,
executive officers and employees are required to report to our audit committee any such related
party transaction. In approving or rejecting the proposed agreement, our audit committee shall
consider the relevant facts and circumstances available and deemed relevant to the audit committee.
Our audit committee shall approve only those agreements that, in light of known circumstances, are
in, or are not inconsistent with, our best interests, as our audit committee determines in the good
faith exercise of its discretion. We do not currently have an audit committee and our full board
currently performs the duties and responsibilities of the audit committee.
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our common
stock as of April 5, 2010 by:
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each person known by us to be the beneficial owner of more than 5% of our
outstanding shares of common stock; |
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each of our named executive officers and directors; and |
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all of our officers and directors as a group. |
Unless otherwise indicated, we believe that all persons named in the table have sole voting
and investment power with respect to all shares of common stock beneficially owned by them. Unless
otherwise indicated, the address for our named executive officers and directors is c/o Fibrocell
Science Inc., 405 Eagleview Boulevard, Exton, Pennsylvania 19341.
13
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Common stock |
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Beneficially |
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Percent of |
Name of Beneficial Owner |
|
Owned(1) |
|
Class(2) |
Declan Daly |
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650,000 |
(3) |
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3.3 |
% |
David Pernock |
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694,444 |
(4) |
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3.4 |
% |
Paul Hopper |
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|
200,000 |
(5) |
|
|
1.0 |
% |
Kelvin Moore |
|
|
200,000 |
(5) |
|
|
1.0 |
% |
Robert Langer |
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|
200,000 |
(5) |
|
|
1.0 |
% |
Marc Mazur |
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100,000 |
(6) |
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* |
|
John Maslowski |
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100,000 |
(7) |
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* |
|
Karen Donhauser |
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60,000 |
(8) |
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* |
|
Todd Greenspan (9) |
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All Executive Officers and Directors as a Group (5 persons) |
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2,204,444 |
(10) |
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10.3 |
% |
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Five percent or more of shareholders |
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James E. Flynn (11) |
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2,000,000 |
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10.1 |
% |
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(1) |
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Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act.
Unless otherwise noted, all listed shares of common stock are owned of record by each person or
entity named as beneficial owner and that person or entity has sole voting and dispositive power
with respect to the shares of common stock owned by each of them. As to each person or entity named
as beneficial owners, that persons or entitys percentage of ownership is determined based on the
assumption that any options or convertible securities held by such person or entity which are
exercisable or convertible within 60 days of the date of this report have been exercised or
converted, as the case may be. |
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(2) |
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Based upon 19,768,676 shares of common stock outstanding as of April 5, 2010. |
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(3) |
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Includes 50,000 shares underlying an option exercisable at $0.75 per share. |
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(4) |
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Includes: (i) 300,000 shares underlying an option exercisable at $0.75 per
share; and (ii) 394,444 shares underlying an option exercisable at $1.08 per share (which
represents the vested portion, plus the shares that will vest within 60 days of the date of this
filing, of an option to purchase 1,650,000 shares issued in connection with Mr. Pernocks
employment agreement). In addition, Mr. Pernock holds an option to purchase 150,000 shares at $0.75
per share, which is exercisable in September 2010. |
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(5) |
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Consists of 200,000 shares underlying an option exercisable at $0.75 per share. |
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(6) |
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Consists of 100,000 shares underlying an option exercisable at $1.04 per share. In
addition, Mr. Mazur holds an option to purchase 100,000 shares at $1.04 per share, which is
exercisable in April 2011. |
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(7) |
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Consists of 100,000 shares underlying an option exercisable at $0.75 per share. |
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(8) |
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Consists of 60,000 shares underlying an option exercisable at $0.75 per share. |
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(9) |
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Mr. Greenspan ceased providing services to the company on the effective date of
the bankruptcy in September 2009. |
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(10) |
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Includes options to purchase 1,604,444 shares of common stock. |
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(11) |
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Reflects the beneficial ownership of the reported entities and their affiliates as
reported in the Schedule 13G filed March 2, 2010. The business address for James E. Flynn,
Deerfield Capital, L.P., Deerfield |
14
Special Situations Fund, L.P., and Deerfield Management Company, L.P. is 780 Third Avenue,
37th Floor, New York, NY 10017. The business address for Deerfield Special Situations Fund
International Limited is c/o Bisys Management, Bison Court, Columbus Centre, P.O. Box 3460, Road
Town, Tortola, British Virgin Islands. Deerfield Capital, L.P. and Deerfield Special Situations
Fund, L.P. have shared investment discretion over 708,000 shares. Deerfield Management Company,
L.P. and Deerfield Special Situations Fund International Limited have shared investment discretion
over 1,292,000 shares. James E. Flynn has shared investment discretion over 2,000,000 shares.
DESCRIPTION OF SECURITIES
General
We are authorized to issue 250,000,000 shares of common stock and 5,000,000 shares of
preferred stock. As of April 5, 2010, we had 19,768,676 shares of common stock outstanding and
3,250 shares of Series A Preferred outstanding. In addition, as of such date we had:
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4,457,000 shares of common stock issuable upon the exercise of options issued
pursuant to our current stock option plan and outside our stock option plan; |
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543,000 shares of common stock available for issuance upon the exercise of options
available for future grant under our stock option plan; |
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4,766,667 shares of common stock issuable upon the conversion of the Series A
Preferred; |
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1,083,331 shares of common stock for issuance upon exercise of the Class A warrants;
1,083,332 shares of common stock for issuance upon exercise of the Class B warrants;
and 433,333 shares of common stock for issuance upon exercise of the warrants issued to
the placement agents for our Series A Preferred offering; and |
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5,076,664 shares of common stock issuable upon exercise of common stock purchase
warrants issued in the March 2010 offering and 406,133 shares of common stock
underlying the warrants issued to the placement agents in such offering. |
Common Stock
Subject to preferences that may be applicable to any preferred stock outstanding at the time,
the holders of our common stock are entitled to receive dividends out of legally available assets
at such times and in such amounts as our Board of Directors may from time to time determine. Each
stockholder is entitled to one vote for each share of common stock held on all matters submitted to
a vote of stockholders. Cumulative voting for the election of directors is not authorized.
Our common stock is not subject to conversion or redemption and holders of our common stock
are not entitled to preemptive rights. Upon the liquidation, dissolution or winding up of our
company, the remaining assets legally available for distribution to stockholders, after payment of
claims or creditors and payment of liquidation preferences, if any, on outstanding preferred stock,
are distributable ratably among the holders of our common stock and any participating preferred
stock outstanding at that time. Each outstanding share of common stock is fully paid and
nonassessable.
Preferred Stock
Our Board of Directors has the authority, without action by our stockholders, to designate and
issue preferred stock in one or more series. Our Board of Directors may also designate the rights,
preferences and privileges of each series of preferred stock, any or all of which may be greater
than the rights of the common stock. It is not possible to state the actual effect of the issuance
of any shares of preferred stock on the rights of holders of the common stock until our Board of
Directors determines the specific rights of the holders of the preferred stock.
15
However, these effects might include: (a) restricting dividends on the common stock; (b)
diluting the voting power of the common stock; (c) impairing the liquidation rights of the common
stock; and (d) delaying or preventing a change in control of our company without further action by
our stockholders.
As of the date of this prospectus, we have authorized two classes of preferred stock, Series A
Convertible Preferred Stock, or Series A Preferred and Series C Junior Participating Preferred
Stock, or Series C Preferred. As of April 5, 2010, there were 3,250 shares of Series A Preferred
outstanding and no shares of Series C Preferred outstanding.
Series A Preferred
The Series A Preferred shares were issued in October 2009 pursuant to an agreement between us
and certain accredited investors. To designate and establish the shares of Series A Preferred, our
board approved, and on October 8, 2009, we filed with the Delaware Secretary of State, a
Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred
Stock, or Certificate of Designation.
Dividends; Rank; Liquidation
Holders of the Series A Preferred are entitled to receive cumulative dividends at the rate per
share (as a percentage of the stated value per share) of 6% per annum (subject to increase in
certain circumstances), payable quarterly in arrears on January 15, April 15, July 15 and October
15, beginning on April 15, 2010. The dividends are payable in cash, or at our option, in duly
authorized, validly issued, fully paid and non-assessable shares of common stock equal to 110% of
the cash dividend amount payable on the dividend payment date, or a combination thereof; provided
that we may not pay the dividends in shares of common stock unless we meet certain conditions
described in the Certificate of Designation. If we pay the dividend in shares of common stock, the
common stock will be valued for such purpose at 80% of the average of the volume weighted average
price for the 10 consecutive trading days ending on the trading day that is immediately prior to
the dividend payment date.
Shares of common stock issued as dividends on the Series A Preferred are not being registered
under this prospectus. Such shares are deemed to be restricted securities under Rule 144 of the
Securities Act and may only be sold in compliance with Rule 144.
The Series A Preferred ranks senior to all shares of common stock.
Upon our liquidation, dissolution or winding-up, whether voluntary or involuntary, the holders
of the Series A Preferred shall be entitled to receive out of our assets, whether capital or
surplus, an amount equal to the stated value of the common stock, plus any accrued and unpaid
dividends thereon and any other fees or liquidated damages then due and owing thereon under the
Certificate of Designation, for each share of Series A Preferred before any distribution or payment
shall be made to the holders of any junior securities, and if our assets are insufficient to pay in
full such amounts, then the entire assets to be distributed to the holders of the Series A
Preferred shall be ratably distributed among the holders in accordance with the respective amounts
that would be payable on such shares if all amounts payable thereon were paid in full.
Conversion; Conversion Price; Forced Conversion; Optional Redemption
Each share of Series A Preferred is convertible into a number of shares of common stock equal
to (1) the stated value of the share ($1,000), divided by (2) the conversion price, which is
currently $0.75, but is subject to adjustment as discussed below. We refer to this price as the
Conversion Price.
With certain exceptions, if, at any time while the Series A Preferred is outstanding, we sell
or grant any option to purchase or sell or grant any right to reprice, or otherwise dispose of or
issue (or announce any sale, grant or any option to purchase or other disposition), any common
stock or common stock equivalents at an effective price per share that is lower than the then
Conversion Price, then the Conversion Price will be reduced to equal the lower price. The
Conversion Price is also subject to proportional adjustment in the event of any stock split, stock
dividend, reclassification or similar event with respect to the common stock.
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Commencing six months from the date of the agreement pursuant to which we issued the Series A
Preferred, if the volume weighted average price for each of any 20 consecutive trading days exceeds
200% of the then effective Conversion Price and various other equity conditions are satisfied
(including that the resale of the shares underlying the Series A Preferred has been registered
under the Securities Act), upon 30 days notice, the Series A Preferred plus all accrued and unpaid
dividends will automatically convert into shares of common stock.
Commencing two years from the date of the agreement pursuant to which we issued the Series A
Preferred, upon 30 days notice and provided various other equity conditions are satisfied
(including that the resale of the shares underlying the Series A Preferred has been registered
under the Securities Act), we may redeem some or all of the then outstanding Series A Preferred for
cash in an amount equal to the 150% of the stated value of the Series A Preferred.
Voting
The holders of the Series A Preferred have no voting rights except with respect to specified
matters affecting the rights of the Series A Preferred.
Negative Covenants
As long as any shares of Series A Preferred are outstanding, we may not, directly or
indirectly: (a) amend our charter documents in any manner that materially and adversely affects any
rights of the holders of the Series A Preferred; (b) pay cash dividends or distributions on our
junior securities (including the common stock); or (c) enter into any transaction with any
affiliate of ours which would be required to be disclosed in any public filing, unless such
transaction is made on an arms-length basis and expressly approved by a majority of our
disinterested directors.
Triggering Events
In the event of a Triggering Event (as defined in the Certificate of Designation and described
below), any holder of Series A Preferred may require us to redeem all of its Series A Preferred, at
a redemption price equal to the greater of (a) 130% of the stated value and (b) the product of (i)
the volume weighted average price on the trading day immediately preceding the date of the
Triggering Event and (ii) the stated value divided by the then Conversion Price, plus all accrued
but unpaid dividends thereon and all liquidated damages and other costs, expenses or amounts due in
respect of the Series A Preferred. Triggering Events include, among other things, bankruptcy
related events, change of control transactions (as defined in the Certificate of Designation), and
various types of failures to perform under, and breaches of, the transaction documents.
Series C Preferred
In 2006, our Board of Directors declared a dividend distribution of one right for each
outstanding share of common stock to stockholders of record at the close of business on May 22,
2006, the record date. Each right entitles the registered holder to purchase from us a unit
consisting of one ten-thousandth of a share of Series C Preferred at a purchase price of $35.00 per
unit, subject to adjustment. The rights are not exercisable until the distribution date and will
expire at 5:00 P.M. (New York City time) on May 12, 2016, unless such date is extended or the
rights are earlier redeemed or exchanged by us. The distribution date occurs upon the earlier of:
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ten business days following a public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of 15% or more of
our outstanding common stock (20%, in the case of certain institutional investors)
other than as a result of repurchases of stock by us or certain inadvertent actions by
institutional or certain other stockholders; or |
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ten business days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a person or group
becoming an acquiring person. |
17
Warrants
Class A Warrants, Class B Warrants and Placement Agent Warrants
Pursuant to, and contemporaneous with the execution of, the agreement in which we issued the
Series A Preferred, we issued Class A warrants to purchase 501,542 shares of common stock and Class
B warrants to purchase 416,666 shares of common stock to the investors that purchased our Series A
Preferred pursuant to the agreement in which we issued the Series A Preferred. At the same time we
also issued warrants to purchase 250,000 shares of common stock to the placement agents for the
Series A Preferred. Each of the warrants is exercisable upon issuance and has a five-year term. The
initial exercise price of the Class A warrants was $1.62 per share, the initial exercise price of
the Class B warrants was $1.95 per share, and the initial exercise price of the warrants issued to
the placement agents was $1.30 per share.
With certain exceptions, the Class A warrants, Class B warrants and placement agent warrants
provide that if at any time while the warrants are outstanding, we sell or grant any option to
purchase or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
sale, grant or any option to purchase or other disposition), any common stock or common stock
equivalents at an effective price per share that is lower than the then exercise price of the
relevant warrant, then the exercise price of such warrant will be reduced to equal the lower price
and the number of shares issuable thereunder will be increased such that the aggregate exercise
price after the exercise price adjustment will be equal to the aggregate exercise price prior to
the adjustment.
On March 4, 2010 pursuant to a securities purchase agreement, we completed an offering,
referred to as the Private Offering, in which we issued to certain accredited investors shares of
common stock at a purchase price of $0.75 per share. Consequently, as a result of the purchase
price of the common stock sold in the Private Offering, effective as of March 4, 2010, (a) the
conversion price of the Series A Preferred has been reduced from $1.30 to $0.75, (b) the exercise
prices for the Class A, Class B and placement agent warrants have been reduced from $1.62, $1.95
and $1.30 per share, respectively, to $0.75 per share and (c) the numbers of shares underlying the
Class A, Class B and placement agent warrants have been increased to 1,083,331, 1,083,332 and
433,333 respectively.
March 2010 Private Offering Warrants
We entered a securities purchase agreement dated March 4, 2010 with certain accredited
investors pursuant to which the Company agreed to sell in the aggregate 5,076,664 shares of our
common stock. In addition to the common stock purchased, each investor received a warrant to
purchase the same number of shares of common stock acquired in the offering at an exercise price of
$0.98 per share. Each of the warrants was exercisable immediately and has a five-year term. The
warrants may be exercised on a cash-less basis and are non-redeemable.
With certain exceptions, the warrants provide that if, at any time while the warrants are
outstanding, we sell or grant any option to purchase or sell or grant any right to reprice, or
otherwise dispose of or issue (or announce any sale, grant or any option to purchase or other
disposition), any common stock or common stock equivalents at an effective price per share that is
lower than the then exercise price of the relevant warrant, then the exercise price of such warrant
will be reduced to equal the lower price and the number of shares issuable thereunder will be
increased such that the aggregate exercise price after the exercise price adjustment will be equal
to the aggregate exercise price prior to the adjustment.. If we enter into a fundamental
transaction (which term is defined in the warrants), then at the warrant holders option,
exercisable at any time concurrently with, or within 30 days after, the announcement of a
fundamental transaction, we must redeem all or any portion of the warrant from the holder by paying
to the holder an amount of cash equal to the Black Scholes value of the remaining unexercised
portion of this warrant on or prior to the date of the consummation of such fundamental
transaction. Any cash payments to be made pursuant to the preceding sentence shall have priority to
payments to holders of common stock in connection with a fundamental transaction. The assumptions
to be used in calculating the Black Scholes value are set forth in Schedule 1 to the warrant.
Registration Rights
In connection with the Series A Preferred purchase agreement, we also entered into a
Registration Rights Agreements with the purchasers of the Series A Preferred, which requires us to
register the resale of the 110% of the
18
shares of common stock underlying the Series A Preferred and the shares of common stock
underlying the Class A warrants, Class B warrants and placement agent warrant. We are required to
file the registration statement within 45 days of the date of execution of the purchase agreement
and the registration statement must be declared effective within 90 days of the date of the
agreement (or 120 days if the registration statement is fully reviewed by the SEC), or we will be
required to pay liquidated damages as set forth in the agreement.
In connection with the March 4, 2010 securities purchase agreement, we also entered into
registration rights agreements with the purchasers of the common stock, which requires us to
register the resale of the shares of common stock issued and the shares of common stock underlying
the warrants issued.
12.5% Notes
In our bankruptcy reorganization plan, each holder of Isolagens 3.5% convertible subordinated
notes, due November 2024, in the approximate non-converted aggregate principal amount of $81
million, received, in full and final satisfaction, settlement, release and discharge of and in
exchange for any and all claims arising out of the 3.5% convertible subordinated notes, its pro
rata share of an unsecured note in the principal amount of $6 million, or the New Notes. The New
Notes have the following features:
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12.5% interest payable quarterly in cash or, at our option, 15% payable in kind by
capitalizing such unpaid amount and adding it to the principal as of the date it was
due; |
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mature June 1, 2012; |
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at any time prior to the maturity date, we may redeem any portion of the outstanding
principal of the New Notes in cash at 125% of the stated face value of the New Notes;
provided that we will be obligated to redeem all outstanding New Notes upon the
following events: (a) we or our subsidiary, Fibrocell Technologies, Inc. (formerly,
Isolagen Technologies, Inc.) successfully complete a capital campaign raising in excess
of $10,000,000; or (b) we or our subsidiary, Fibrocell Technologies, Inc., are acquired
by, or sell a majority stake to, an outside party; |
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the New Notes contain customary representations, warranties and covenants, including
a covenant that we and our subsidiary, Fibrocell Technologies, Inc., shall be
prohibited from the incurrence of additional debt without obtaining the consent of 66
2/3% of the New Note holders. |
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Anti-Takeover Effects of Provisions of Delaware Law |
Provisions of Delaware law and our Certificate of Incorporation, as amended, and Bylaws could
make the acquisition of our company through a tender offer, a proxy contest or other means more
difficult and could make the removal of incumbent officers and directors more difficult. We expect
these provisions to discourage coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control of our company to first negotiate with our Board of
Directors. We believe that the benefits provided by our ability to negotiate with the proponent of
an unfriendly or unsolicited proposal outweigh the disadvantages of discouraging these proposals.
We believe the negotiation of an unfriendly or unsolicited proposal could result in an improvement
of its terms.
Anti-Takeover Effects of Provisions of Our Charter Documents
Our Certificate of Incorporation, as amended, provides for our Board of Directors to be
divided into three classes serving staggered terms. Approximately one-third of the Board of
Directors will be elected each year. The provision for a classified board could prevent a party who
acquires control of a majority of the outstanding voting stock from obtaining control of the Board
of Directors until the second annual stockholders meeting following the date the acquirer obtains
the controlling stock interest. The classified board provision could discourage a potential
acquirer from making a tender offer or otherwise attempting to obtain control of our company and
could increase the likelihood that incumbent directors will retain their positions.
19
Our Bylaws do not permit stockholders to call a special meeting of stockholders. Our Bylaws
provide that special meetings of the stockholders may be called only by a majority of the members
of our Board of Directors, our Chairman of the Board of Directors, our Chief Executive Officer or
our President. Our Bylaws require that all stockholder actions be taken by a vote of the
stockholders at an annual or special meeting, and do not permit our stockholders to act by written
consent without a meeting. Our Bylaws provide for an advance notice procedure for stockholder
proposals to be brought before an annual meeting of our stockholders, including proposed
nominations of persons for election to the Board of Directors. At an annual meeting, stockholders
may only consider proposals or nominations specified in the notice of meeting or brought before the
meeting by or at the direction of the Board of Directors. Stockholders may also consider a proposal
or nomination by a person who was a stockholder of record on the record date for the meeting, who
is entitled to vote at the meeting and who has given to our Secretary timely written notice, in
proper form, of his, her or its intention to bring that business before the meeting. The Bylaws do
not give our Board of Directors the power to approve or disapprove stockholder nominations of
candidates or proposals regarding other business to be conducted at a special or annual meeting of
the stockholders. However, our Bylaws may have the effect of precluding the conduct of business at
a meeting if the proper procedures are not followed. These provisions may also discourage or deter
a potential acquirer from conducting a solicitation of proxies to elect the acquirers own slate of
directors or otherwise attempting to obtain control of our company.
Listing
Our common stock is listed on the OTCBB under the symbol FCSC.
Transfer Agent
The transfer agent for our common stock is American Stock Transfer & Trust Company located at
59 Maiden Lane, New York, New York 11038.
SHARES ELIGIBLE FOR FUTURE SALE
As of April 5, 2010, there were approximately 19,768,676 shares of our common stock
outstanding.
Future sales of a substantial number of shares of our common stock in the public market could
adversely affect market prices prevailing from time to time. Under the terms of this prospectus,
the shares of common stock underlying the Series A Preferred and the warrants may be resold without
restriction or further registration under the Securities Act, except that any shares offered by our
affiliates, as that term is defined under the Securities Act, may generally only be sold in
compliance with Rule 144 under the Securities Act.
Shares Covered by this Prospectus
The following shares may be offered for resale under this prospectus:
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up to 5,076,664 shares of common stock issued in our March 4, 2010 Private Offering;
and |
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up to 5,076,664 shares of common stock underlying common stock purchase warrants
issued in our March 4, 2010 Private Offering and up to 406,133 shares of common
stock underlying the warrants issued to the placement agents in such offering. |
All of the shares being registered in this offering may be resold by the investors without
restriction under the Securities Act.
Rule 144
The SEC adopted amendments to Rule 144 which became effective on February 15, 2008, and apply
to securities acquired both before and after that date. Under these amendments, a person who has
beneficially owned restricted shares of our common stock for at least six months would be entitled
to sell their securities provided that (i) such person is not deemed to have been one of our
affiliates at the time of, or at any time during the three months
20
preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements
for at least three months before the sale.
Of the 19,768,676 shares of our common stock issued and outstanding as of April 5, 2010, a
total of 600,000 shares are deemed control securities, within the meaning of Rule 144. Absent
registration under the Securities Act, the sale of such shares is subject to Rule 144, as
promulgated under the Securities Act. Similarly, any shares we issue as dividends on the Series A
Preferred are deemed restricted securities under Rule 144 and may only be sold in compliance with
Rule 144. The remainder of our outstanding shares may be sold without limitation or restriction.
Sales under Rule 144 by Affiliates
Persons who have beneficially owned restricted shares of our common stock for at least six
months but who are our affiliates at the time of, or at any time during the three months preceding,
a sale, would be subject to additional restrictions, by which such person would be entitled to sell
within any three-month period only a number of securities that does not exceed the greater of
either of the following:
(a) 1% of the number of shares of common stock then outstanding, which will equal 197,657
shares as of the date of this prospectus; or
(b) if the common stock is listed on a national securities exchange, the average weekly
trading volume of the common stock during the four calendar weeks preceding the filing of a notice
on Form 144 with respect to the sale.
However, since our shares are quoted on the OTCBB, our stockholders will not be able to rely
on the market-based volume limitation described in the second bullet above. If, in the future, our
securities are listed on an exchange, then our stockholders would be able to rely on the
market-based volume limitation. Unless and until our stock is so listed or quoted, our stockholders
can only rely on the percentage based volume limitation described in the first bullet above.
Such sales by affiliates must also comply with the manner of sale, current public information
and notice provisions of Rule 144. The selling stockholders will not be governed by the foregoing
restrictions when selling their shares pursuant to this prospectus.
Sales Under Rule 144 by Non-Affiliates
Under Rule 144, a person who is not deemed to have been one of our affiliates at the time of
or at any time during the three months preceding a sale, and who has beneficially owned their
shares proposed to be sold for at least six months, including the holding period of any prior owner
other than an affiliate, is entitled to sell their shares without complying with the manner of sale
and volume limitation or notice provisions of Rule 144. We must be current in our public reporting
if the non-affiliate is seeking to sell under Rule 144 after holding his shares between six months
and one year. After one year, non-affiliates do not have to comply with any other Rule 144
requirements.
The possibility that substantial amounts of our common stock may be sold under Rule 144 into
the public market may adversely affect prevailing market prices for the common stock and could
impair our ability to raise capital in the future through the sale of equity securities.
21
SELLING SECURITY HOLDERS
The following table presents information regarding the Selling Stockholders. The percentage of
outstanding shares beneficially owned is based on 19,768,676 shares of common stock issued and
outstanding on April 5, 2010. Beneficial ownership is determined in accordance with Rule 13d-3
under the Exchange Act. As to each person or entity named as beneficial owners, that persons or
entitys percentage of ownership is determined based on the assumption that any warrants or
convertible securities held by such person or entity which are exercisable or convertible within
60 days of the date of this report have been exercised or converted, as the case may be.
The warrants issued in the March 2010 offering each provide that at no time may a holder
exercise the warrants if the number of shares of common stock to be issued pursuant to such
exercise would exceed, when aggregated with all other shares of common stock owned by such holder
at such time, the number of shares of common stock which would result in such holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules
thereunder) in excess of 9.98% of the then issued and outstanding shares of our common stock;
provided, however, that upon the holder providing us with 61 days notice that such holder would
like to waive this provision then this provision will be of no force or effect; provided, further,
that this provision will be of no force or effect during the 61 days immediately preceding the
expiration of the warrants.
Except as may be otherwise described below, to the best of our knowledge, the named Selling
Stockholder beneficially owns and has sole voting and investment authority as to all of the shares
set forth opposite his name, none of the selling stockholders is known to us to be a registered
broker-dealer or an affiliate of a registered broker-dealer, and none of the Selling Stockholders
has not held any position or office, or has had any material relationship with us or any of our
affiliates within the past three years. Each of the Selling Stockholders has acquired his, her or
its shares solely for investment and not with a view to or for resale or distribution of such
securities.
Information with respect to beneficial ownership is based upon information provided to us by
the Selling Stockholders. For purposes of presentation, we have assumed that the Selling
Stockholders will sell all shares offered hereby, including the shares issuable on the exercise of
warrants.
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Approximate |
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No. of Shares |
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Percentage of |
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Issuable Upon |
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Issued and |
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No. of Shares of |
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Exercise of the |
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Outstanding Shares |
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Number of Shares |
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Number Of Shares To |
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Approximate |
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Common Stock Owned |
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Warrants Owned |
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Beneficially Owned |
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Registered and To |
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Be Beneficially |
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Percentage of |
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Name of Selling |
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Prior to the |
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Prior to the |
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Prior to the |
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Be Sold In This |
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Owned After The |
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Shares To Be Owned |
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Stockholders |
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Offering (1) |
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Offering |
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Offering |
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Offering |
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Offering |
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After the Offering |
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Straus Healthcare
Partners, L.P. |
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931,623 |
(2) |
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560,666 |
(2) |
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7.18 |
% |
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666,666 |
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825,623 |
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4.04 |
% |
Margus Ehatamm &
Sarah Ehatamm |
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20,000 |
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20,000 |
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* |
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40,000 |
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Deerfield Special
Situations Fund, LP (3) |
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708,000 |
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708,000 |
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6.92 |
% |
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1,416,000 |
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Deerfield Special
Situations Fund
Intl (3) |
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1,292,000 |
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1,292,000 |
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9.98 |
%(3) |
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2,584,000 |
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22
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Approximate |
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No. of Shares |
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Percentage of |
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Issuable Upon |
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Issued and |
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No. of Shares of |
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Exercise of the |
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Outstanding Shares |
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Number of Shares |
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Number Of Shares To |
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Approximate |
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Common Stock Owned |
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Warrants Owned |
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Beneficially Owned |
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Registered and To |
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Be Beneficially |
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Percentage of |
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Name of Selling |
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Prior to the |
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Prior to the |
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Prior to the |
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Be Sold In This |
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Owned After The |
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Shares To Be Owned |
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Stockholders |
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Offering (1) |
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Offering |
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Offering |
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Offering |
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Offering |
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After the Offering |
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MOG Capital, LLC (4) |
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2,000,000 |
(5) |
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1,333,333 |
(5) |
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9.98 |
%(3) |
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1,333,334 |
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1,999,333 |
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9.19 |
% |
Robert Sagarino |
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165,333 |
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165,333 |
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1.66 |
% |
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330,666 |
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Stephen M. Karlya |
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6,100 |
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6,100 |
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| * |
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12,200 |
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Fergus McGovern |
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768,628 |
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333,333 |
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5.48 |
% |
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666,666 |
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435,295 |
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2.20 |
% |
Robert Siegal |
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33,333 |
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33,333 |
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| * |
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66,666 |
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Peter Bowden |
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697,752 |
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200,000 |
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4.50 |
% |
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400,000 |
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497,752 |
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2.52 |
% |
Denis Bowden |
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688,589 |
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200,000 |
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4.45 |
% |
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400,000 |
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488,589 |
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2.47 |
% |
Jerry and Janet
Magro |
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19,700 |
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14,000 |
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| * |
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28,000 |
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5,700 |
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| * |
Raymond Cincotti |
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14,000 |
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14,000 |
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| * |
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28,000 |
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David Boral |
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12,567 |
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269,128 |
(6) |
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1.41 |
% |
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73,362 |
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208,333 |
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1.04 |
% |
David Batista |
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33,333 |
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696,505 |
(7) |
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3.57 |
% |
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221,505 |
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508,333 |
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2.51 |
% |
George Carris |
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33,333 |
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953,066 |
(8) |
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4.76 |
% |
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269,732 |
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716,667 |
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3.50 |
% |
Jane Scotti |
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200,000 |
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200,000 |
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2.00 |
% |
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400,000 |
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Bowden
Transportation
Services Ltd. (9) |
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1,151,548 |
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133,333 |
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6.46 |
% |
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266,666 |
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1,018,215 |
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5.15 |
% |
Anthony V. Milone |
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73,333 |
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73,333 |
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| * |
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146,666 |
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David Speciale |
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6,667 |
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6,667 |
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| * |
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13,334 |
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Margery Scotti |
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266,666 |
(10) |
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200,001 |
(10) |
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2.32 |
% |
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266,666 |
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200,001 |
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1.00 |
% |
Gavin Scotti |
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133,333 |
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133,333 |
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1.34 |
% |
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266,666 |
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Super-Tek, Inc. |
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271,333 |
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271,333 |
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2.71 |
% |
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542,666 |
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Anthony Milone
Profit Sharing Plan |
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60,000 |
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60,000 |
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| * |
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120,000 |
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* |
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Stockholder owns less than 1% |
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(1) |
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The Selling Stockholders and any broker-dealers or agents that are involved in selling these
shares are deemed to be underwriters within the meaning of the Securities Act for such sales. An
underwriter is a person who has purchased shares from an issuer with a view towards distributing
the shares to the public. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares purchased by them may be considered to be underwriting
commissions or discounts under the Securities Act. |
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(2) |
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The number of shares listed consists of (i) 476,956 shares of common stock (including 333,333
shares of common stock that were acquired in our March 4, 2010 Private Offering being registered in
this prospectus), and (ii) 454,667 shares underlying our Series A Preferred stock. The number of
warrants listed consists of (i) warrants to purchase 333,333 shares of common stock that were
acquired in our March 4, 2010 Private Offering being registered in this prospectus, and (ii)
warrants to purchase 227,333 shares acquired in our Series A Preferred stock offering. Ravinder
Holder, general partner of the selling stockholder, holds voting and dispositive power over the
securities held by the selling stockholder. |
23
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(3) |
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James E. Flynn exercises voting and dispositive power over the securities held by Deerfield Special Situations Fund, L.P. and Deerfield Special Situations Fund International, Limited. The warrants issued in the March 2010 offering provide that at no time may a holder exercise
the warrants if the number of shares of common stock to be issued pursuant to such exercise would
exceed, when aggregated with all other shares of common stock owned by such holder at such time,
the number of shares of common stock which would result in such holder beneficially owning (as
determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess
of 9.98% of the then issued and outstanding shares of our common stock; provided, however, that
upon the holder providing us with 61 days notice that such holder would like to waive this
provision then this provision will be of no force or effect; provided, further, that this provision
will be of no force or effect during the 61 days immediately preceding the expiration of the
warrants. |
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(4) |
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MOG Capital, LLC is a registered broker dealer. The registrable securities were acquired in
the ordinary course of business and not as compensation for investment banking services.
Accordingly, the selling security holder is an underwriter within the meaning of Section 2(a)(11)
of the Securities Act under the interpretations of the SEC. Jason Adler, in his capacity as
managing member of MOG Capital, LLC has voting and dispositive power over the securities held by
MOG Capital, LLC. Mr. Adler disclaims beneficial ownership of such securities. |
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(5) |
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The number of shares listed consists of (i) 666,667 shares of common stock that were acquired
in our March 4, 2010 Private Offering being registered in this prospectus, and (ii) 1,333,333
shares underlying our Series A Preferred stock. The number of warrants listed consists of (i)
warrants to purchase 666,667 shares of common stock that were acquired in our March 4, 2010 Private
Offering being registered in this prospectus, and (ii) warrants to purchase 666,666 shares acquired
in our Series A Preferred stock offering. |
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(6) |
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Consists of (i) warrants to purchase 12,567 shares of common stock that were acquired in our
March 4, 2010 Private Offering being registered in this prospectus, (ii) warrants to purchase
48,228 shares of common stock being registered in this prospectus, (iii) an option to purchase
100,000 shares of common stock at $0.75 per share, and (iv) warrants to purchase 108,333 shares of
common stock. The warrants set forth in (ii) were issued by us to our placement agent in
connection with the March 2010 offering. Mr. Boral is an affiliate of the placement agent. |
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(7) |
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Consists of (i) warrants to purchase 33,333 shares of common stock that were acquired in our
March 4, 2010 Private Offering being registered in this prospectus, (ii) warrants to purchase
154,839 shares of common stock being registered in this prospectus, (iii) an option to purchase
400,000 shares of common stock at $0.75 per share, and (iv) warrants to purchase 108,333 shares of
common stock. The warrants set forth in (ii) were issued by us to our placement agent in
connection with the March 2010 offering. Mr. Batista is an affiliate of the placement agent. |
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(8) |
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Consists of (i) warrants to purchase 33,333 shares of common stock that were acquired in our
March 4, 2010 Private Offering being registered in this prospectus, (ii) warrants to purchase
203,066 shares of common stock being registered in this prospectus, (iii) an option to purchase
500,000 shares of common stock at $0.75 per share, and (iv) warrants to purchase 216,667 shares of
common stock. The warrants set forth in (ii) were issued by us to our placement agent in
connection with the March 2010 offering. Mr. Carris is an affiliate of the placement agent. |
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(9) |
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Peter Bowden holds voting and dispositive power over the securities held by the selling
stockholder. |
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(10) |
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The number of shares listed consists of (i) 133,333 shares of common stock that were acquired
in our March 4, 2010 Private Offering being registered in this prospectus, and (ii) 133,333 shares
underlying our Series A Preferred stock. The number of warrants listed consists of (i) warrants to
purchase 133,333 shares of common stock that were acquired in our March 4, 2010 Private Offering
being registered in this prospectus, and (ii) warrants to purchase 66,668 shares acquired in our
Series A Preferred stock offering. |
We may require the Selling Stockholders to suspend the sales of the securities offered by this
prospectus upon the occurrence of any event that makes any statement in this prospectus or the
related registration statement untrue in any material respect or that requires the changing of
statements in these documents in order to make statements in those documents not misleading.
PLAN OF DISTRIBUTION
24
Each Selling Stockholder of the common stock and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares of common stock
covered hereby on the principal trading market or any other stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. A Selling Stockholder may use any one or more of the following methods when
selling shares:
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ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers; |
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block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to facilitate the
transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer
for its account; |
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an exchange distribution in accordance with the rules of the applicable
exchange; |
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privately negotiated transactions; |
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settlement of short sales entered into after the effective date of the registration
statement of which this prospectus is a part; |
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in transactions through broker-dealers that agree with the Selling
Stockholders to sell a specified number of such shares at a stipulated price per share; |
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through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise; |
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a combination of any such methods of sale; or |
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any other method permitted pursuant to applicable law. |
The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission
in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with FINRA IM-2440.
In connection with the sale of the common stock or interests therein, the Selling Stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The Selling Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common stock to broker-dealers
that in turn may sell these securities. The Selling Stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or create one or more
derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be underwriters within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it
does not have any written or oral agreement or understanding,
25
directly or indirectly, with any
person to distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed 8%.
The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.
Because Selling Stockholders may be deemed to be underwriters within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act
including Rule 172 thereunder. The Selling Stockholders have advised us that there is no
underwriter or coordinating broker acting in connection with the proposed sale of the resale shares
by the Selling Stockholders.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and without regard to any
volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company
to be in compliance with the current public information under Rule 144 under the Securities Act or
any other rule of similar effect or (ii) all of the shares have been sold pursuant to this
prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale
shares will be sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale shares of Common Stock
covered hereby may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification requirement is available
and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to the common stock for the applicable restricted period, as defined in Regulation M, prior
to the commencement of the distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of the common stock by
the Selling Stockholders or any other person. We will make copies of this prospectus available to
the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to
each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the
Securities Act).
26
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We incorporate information into this prospectus by reference, which means that we
disclose important information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this prospectus, except
to the extent superseded by information contained herein. We incorporate by reference the documents
listed below that have been previously filed with the SEC:
|
|
|
our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which we
filed with the SEC on March 31, 2010; and |
|
|
|
|
our Current Reports on Form 8-K, which we filed with the SEC on February 1, 2010 and
March 3, 2010. |
We do not incorporate by reference documents or information furnished to, but not filed with,
the SEC.
We will provide to each person, including any beneficial owner, to whom a prospectus is
delivered, upon written or oral request, a copy of the reports and documents that have been
incorporated by reference in this prospectus, at no cost. Any such request may be made by writing
or telephoning us at the following address or phone number:
Fibrocell Science, Inc.
405 Eagleview Boulevard
Exton, Pennsylvania 19341
(484) 713-6000
Attention: Corporate Secretary
These documents can also be requested through, and are available in, the Investors section
of our website, which is located at www.fibrocellscience.com, or as described under Where You Can
Find More Information below. The information and other content contained on or linked from our
internet website are not part of this prospectus.
EXPERTS
The financial statements as of December 31, 2009 (Successor) and 2008 (Predecessor as
described in Note 1 of the notes to the consolidated financial statements incorporated herein by
reference) and for the year ended December 31, 2008 (Predecessor), for the period from January 1,
2009 to August 31, 2009 (Predecessor) and for the period from the Successors inception
(September 1, 2009) through December 31, 2009 and included in this Prospectus and in the
Registration Statement have been so included in reliance on the report of BDO Seidman, LLP, an
independent registered public accounting firm, the report on the financial statements contains an
explanatory paragraph regarding the Companys ability to continue as a going concern, appearing
elsewhere herein and in the Registration Statement, given on the authority of said firm as experts
in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with
respect to the common stock offered in this offering. This prospectus does not contain all of the
information set forth in the registration statement. For further information with respect to us and
the common stock offered in this offering, we refer you to the registration statement and to the
attached exhibits. With respect to each such document filed as an exhibit to the registration
statement, we refer you to the exhibit for a more complete description of the matters involved.
You may inspect our registration statement and the attached exhibits and schedules without
charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington,
D.C. 20549. You may obtain
27
copies of all or any part of our registration statement from the SEC
upon payment of prescribed fees. You may obtain information on the operation of the public
reference room by calling the SEC at 1-800-SEC-0330.
Our SEC filings, including the registration statement and the exhibits filed with the registration
statement, are also available from the SECs website at www.sec.gov, which contains reports, proxy
and information statements and other information regarding issuers that file electronically with
the SEC.
28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than underwriting discounts,
payable by the registrant in connection with the sale of the shares of common stock being
registered. All amounts are estimates except the fees payable to the SEC.
|
|
|
|
|
SEC Registration Fee |
|
$ |
752.89 |
|
Accounting Fees and Expenses* |
|
$ |
| * |
Legal Fees and Expenses* |
|
$ |
| * |
Miscellaneous* |
|
$ |
| * |
Total |
|
$ |
|
* |
|
|
|
* |
|
To be completed by amendment |
Item 14. Indemnification of Directors and Officers
Fibrocells Certificate of Incorporation and Bylaws authorize it to indemnify directors,
officers, employees and agents of Fibrocell against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement, actually and reasonably incurred in connection
with any action, suit or proceeding, if the party to be indemnified acted in good faith and in a
manner that he reasonably believed to be in or not opposed to the best interests of Fibrocell, and,
with respect to any criminal action or proceeding, such party had no reasonable cause to believe
his conduct was unlawful. The Certificate of Incorporation and the Bylaws of Fibrocell also
authorize it to indemnify directors, officers, employees and agents of Fibrocell who are or were a
party to or threatened to be a party to, any threatened, pending, or completed action or suit by or
in the right of Fibrocell to procure a judgment in its favor by reason of the fact the he was a
director, officer, employee or agent of Fibrocell or of another entity at the request of Fibrocell,
against expenses (including reasonable attorneys fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of Fibrocell, except
that no indemnification shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged liable to Fibrocell unless and to the extent that the court in
which such suit or action was brought shall determine on application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
The Bylaws also permit Fibrocell to enter into indemnity agreements with individual directors,
officers, employees, and other agents. Fibrocell reserves the right to enter into such agreements
with its directors and executive officers effective upon the closing of this offering. These
agreements, together with the Bylaws and Certificate of Incorporation, may require Fibrocell, among
other things, to indemnify directors or officers against certain liabilities that may arise by
reason of their status or service as directors (other than liabilities resulting from willful
misconduct of a culpable nature), to advance expenses to them as they are incurred, provided that
they undertake to repay the amount advanced if it is ultimately determined by a court that they are
not entitled to indemnification, and to obtain and maintain directors and officers insurance if
available on reasonable terms.
Fibrocells Certificate of Incorporation provides that directors shall have no personal
liability to Fibrocell or its stockholders for monetary damages for breach of fiduciary duty as a
director, except (i) for any breach of a directors duty of loyalty to Fibrocell or its
stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under section 174 of the General Corporation Law of Delaware
as it may from time to time be amended or any successor provision thereto, or (iv) for any
transaction from which a director derived an improper personal benefit.
Fibrocell currently has directors and officers liability insurance. Delaware General
Corporation Law, Section 145, and the Certificate of Incorporation and Bylaws of Fibrocell provide
for the indemnification of officers, directors and other corporate agents in terms sufficiently
broad to indemnify such persons, under certain circumstances, for liabilities (including
reimbursement of expenses incurred) arising under the Securities Act. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and
controlling persons pursuant to the foregoing provisions, or
II-1
otherwise, Fibrocell has been advised
that in the opinion of the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Item 15. Recent Sales of Unregistered Securities
On August 27, 2009, the United States Bankruptcy Court for the District of Delaware in
Wilmington entered an order, or Confirmation Order, confirming the Joint First Amended Plan of
Reorganization dated July 30, 2009, as supplemented by the Plan Supplement dated August 21, 2009,
or the Plan, of Isolagen, Inc. and Isolagens wholly owned subsidiary, Isolagen Technologies, Inc.
The effective date of the Plan was September 3, 2009.
Pursuant to the Plan, all Isolagen equity interests, including without limitation its common
stock, options and warrants outstanding as of the effective date were cancelled. On the effective
date, Fibrocell completed an exit financing of common stock in the amount of $2 million. Fibrocell
issued the following shares of common stock pursuant to the Plan:
|
|
|
7,320,000 shares, to its pre-bankruptcy lenders and the lenders that provided its
debtor-in-possession facility, collectively; |
|
|
|
|
3,960,000 shares, to the holders of the 3.5% convertible subordinated notes issued
by Isolagen; |
|
|
|
|
600,000 shares, to its management as of the effective date, which was its chief
operating officer; |
|
|
|
|
120,000 shares, to the holders of its general unsecured claims; and |
|
|
|
|
2,666,666 shares, to the purchasers of shares in the exit financing (its
pre-bankruptcy lenders, the lenders that provided the debtor-in-possession facility and the
holders of the 3.5% convertible subordinated notes were permitted to participate in the exit
financing). |
The common stock issued pursuant to the Plan was issued pursuant to Section 1145 of the United
States Bankruptcy Code, which exempts the issuance of securities from the registration requirements
of the Securities Act of 1933, as amended (Securities Act).
A condition precedent to Fibrocells exit from bankruptcy was that it execute an investment
banking agreement with John Carris Investments LLC and Viriathus Capital LLC. In connection with
this agreement, Fibrocell was required to pay a retainer, which consisted in part of the issuance
of options to purchase an aggregate of 1,000,000 shares of common stock at $0.75 per share. These
securities were issued pursuant to the exemption from registration permitted under Section 4(2) of
the Securities Act.
In October 2009, the Series A Preferred and the Class A and Class B warrants were sold in a
transaction exempt from registration under the Securities Act, in reliance on Section 4(2) thereof
and Rule 506 of Regulation D thereunder. Each purchaser represented that it was an accredited
investor as defined in Regulation D.
In October 2009, Fibrocell entered into two consulting agreements with two individuals.
Fibrocell issued the two consultants options to purchase 200,000 shares and 150,000 shares,
respectively. The options have an expiration date five years from the date of issuance and an
exercise price of $0.75 per share. The options were issued in a transaction exempt from
registration under the Securities Act of 1933, in reliance on Section 4(2) thereof.
In March 2010, Fibrocell sold the common stock and warrant being registered in this
registration statement in a transaction exempt from registration under the Securities Act, in
reliance on Section 4(2) thereof and Rule 506 of Regulation D thereunder. Each purchaser
represented that it was an accredited investor as defined in Regulation D.
Item 16. Exhibits and Financial Statement Schedules
II-2
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|
|
Exhibit |
|
|
Number |
|
Description |
2.1
|
|
Debtors First Amended Joint Plan of Reorganization dated July 30,
2009 and Disclosure Statement (filed as Exhibit 10.2 to the
Companys Form 10-Q for quarter ended June 30, 2009, filed on
August 12, 2009 and as Exhibit 99.1 to our Form 8-K filed
September 2, 2009) |
|
|
|
3.1
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|
Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to our Form 8-K filed September 2, 2009) |
|
|
|
3.2
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|
Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 to our Form 8-K filed September 2, 2009) |
|
|
|
3.3
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|
Certificate of Designation of Preferences, Rights and Limitations
of Series A 6% Convertible Preferred Stock (incorporated by
reference to Exhibit 3.1 to our Form 8-K filed October 14, 2009) |
|
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|
4.1
|
|
Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to our Form 10-Q filed November 23, 2009) |
|
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|
4.2
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|
Form of Class A/B Common Stock Purchase Warrant (incorporated by
reference to Exhibit 4.1 to our Form 8-K filed October 14, 2009) |
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4.3
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|
Form of 12.5% Promissory Note (incorporated by reference to
Exhibit 10.1 to our Form 8-K filed September 10, 2009) |
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4.4
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|
Form of Placement Agent Warrant (incorporated by reference to
Exhibit 4.2 to our Form 10-Q filed November 23, 2009) |
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4.5
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|
Common Stock Purchase Warrant issued in March 2010 offering
(incorporated by reference to Exhibit 4.1 to our Form 8-K filed
March 3, 2010) |
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|
|
5
|
|
Opinion of Cozen OConnor |
|
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|
10.1
|
|
Securities Purchase Agreement dated October 13, 2009 between the
Company and the Series A Preferred Stock Purchasers (incorporated
by reference to Exhibit 10.1 to our Form 8-K filed October 14, 2009) |
|
|
|
10.2
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|
Employment Agreement between the Company and Declan Daly
(incorporated by reference to Exhibit 10.1 to our Form 10-Q filed
November 23, 2009) |
|
|
|
10.3
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|
Consulting Agreement between the Company and Robert Langer
(incorporated by reference to Exhibit 10.2 to our Form 10-Q filed
November 23, 2009) |
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|
|
10.4
|
|
2009 Equity Incentive Plan (incorporated by reference to
Exhibit 10.3 to our Form 10-Q filed November 23, 2009) |
|
|
|
10.5
|
|
Lease Agreement between Isolagen, Inc and The Hankin Group dates
April 7, 2005 (previously filed as an exhibit to the companys
Form 8-K, filed on April 12, 2005) |
|
|
|
10.6
|
|
Purchase Option Agreement between Isolagen, Inc and 405 Eagleview
Associates dated April 7, 2005 (previously filed as an exhibit to
the companys Form 8-K, filed on April 12, 2005) |
|
|
|
10.7
|
|
Intellectual Property Purchase Agreement between Isolagen
Technologies, Inc., Gregory M. Keller, and PacGen Partners
(previously filed as an exhibit to the companys amended Form S-1,
as filed on October 24, 2003) |
|
|
|
10.8
|
|
Employment Agreement between the Company and David Pernock
(incorporated by reference to Exhibit 10.1 to our Form 8-K filed
February 1, 2010) |
|
|
|
10.9
|
|
Registration Rights Agreement between the Company and the Series A
Preferred Stock Purchasers, dated October 13, 2009 (incorporated
by reference to Exhibit 10.2 to our Form 8-K filed October 14,
2009) |
|
|
|
10.10
|
|
Securities Purchase Agreement dated March 2, 2010 (incorporated by
reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) |
|
|
|
10.11
|
|
Registration Rights Agreement dated March 2, 2010 (incorporated by
reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) |
II-3
|
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|
Exhibit |
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|
Number |
|
Description |
21
|
|
List of Subsidiaries (previously filed as an exhibit to the
companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2006) |
|
|
|
*23.1
|
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Consent of BDO Seidman, LLP |
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23.2
|
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Consent of Cozen OConnor (included in Exhibit 5) |
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24.1
|
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Power of Attorney (included on signature page) |
Item 17. Undertakings
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
i. To include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
ii. To reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the effective registration statement.
iii. To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such
information in the registration statement;
Provided however, That:
A. Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the
registration statement is on Form S-3 or Form F-3 and the information required to be
included in a post-effective amendment by those paragraphs is contained in reports filed
with or furnished to the Commission by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant to Rule
424(b) that is part of the registration statement.
2. That, for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
4. That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
i. If the registrant is relying on Rule 430B:
A. Each prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be
deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and
B. Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule
II-4
415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act of 1933
shall be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or the
date of the first contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new
effective date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus that
is part of the registration statement will, as to a purchaser with a time of contract
of sale prior to such effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective date; or
ii. If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it
is first used after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
5. That, for the purpose of determining liability of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or on behalf of
the undersigned registrant or used or referred to by the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
6. The undersigned registrant hereby undertakes to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
7. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
II-5
person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Exton, Commonwealth of Pennsylvania, on April 7, 2010.
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FIBROCELL SCIENCE, INC.
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By: |
/s/ David Pernock
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Name: |
David Pernock |
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Title: |
Chief Executive Officer |
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KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Declan Daly, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments) to this
Registration Statement, and any subsequent registration statements pursuant to Rule 462 of the
Securities Act of 1933 and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
each of said attorney-in-fact or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated:
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Signature |
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Title |
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Date |
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/s/ David Pernock
David Pernock
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Chairman of the Board and Chief
Executive Officer
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April 7, 2010 |
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/s/ Declan Daly
Declan Daly
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|
Director, Chief Financial Officer,
Chief Operating Officer and
Controller
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|
April 7, 2010 |
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/s/ Paul Hopper
Paul Hopper
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Director
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|
April 7, 2010 |
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|
/s/ Kelvin Moore
Kelvin Moore
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Director
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April 7, 2010 |
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/s/ Robert Langer
Robert Langer
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Director
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April 7, 2010 |
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II-7
EXHIBIT INDEX
|
|
|
Exhibit |
|
|
Number |
|
Description |
2.1
|
|
Debtors First Amended Joint Plan of Reorganization dated July 30,
2009 and Disclosure Statement (filed as Exhibit 10.2 to the
Companys Form 10-Q for quarter ended June 30, 2009, filed on
August 12, 2009 and as Exhibit 99.1 to our Form 8-K filed
September 2, 2009) |
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to our Form 8-K filed September 2, 2009) |
|
|
|
3.2
|
|
Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 to our Form 8-K filed September 2, 2009) |
|
|
|
3.3
|
|
Certificate of Designation of Preferences, Rights and Limitations
of Series A 6% Convertible Preferred Stock (incorporated by
reference to Exhibit 3.1 to our Form 8-K filed October 14, 2009) |
|
|
|
4.1
|
|
Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to our Form 10-Q filed November 23, 2009) |
|
|
|
4.2
|
|
Form of Class A/B Common Stock Purchase Warrant (incorporated by
reference to Exhibit 4.1 to our Form 8-K filed October 14, 2009) |
|
|
|
4.3
|
|
Form of 12.5% Promissory Note (incorporated by reference to
Exhibit 10.1 to our Form 8-K filed September 10, 2009) |
|
|
|
4.4
|
|
Form of Placement Agent Warrant (incorporated by reference to
Exhibit 4.2 to our Form 10-Q filed November 23, 2009) |
|
|
|
4.5
|
|
Common Stock Purchase Warrant issued in March 2010 offering
(incorporated by reference to Exhibit 4.1 to our Form 8-K filed
March 3, 2010) |
|
|
|
5
|
|
Opinion of Cozen OConnor |
|
|
|
10.1
|
|
Securities Purchase Agreement dated October 13, 2009 between the
Company and the Series A Preferred Stock Purchasers (incorporated
by reference to Exhibit 10.1 to our Form 8-K filed October 14,
2009) |
|
|
|
10.2
|
|
Employment Agreement between the Company and Declan Daly
(incorporated by reference to Exhibit 10.1 to our Form 10-Q filed
November 23, 2009) |
|
|
|
10.3
|
|
Consulting Agreement between the Company and Robert Langer
(incorporated by reference to Exhibit 10.2 to our Form 10-Q filed
November 23, 2009) |
|
|
|
10.4
|
|
2009 Equity Incentive Plan (incorporated by reference to
Exhibit 10.3 to our Form 10-Q filed November 23, 2009) |
|
|
|
10.5
|
|
Lease Agreement between Isolagen, Inc and The Hankin Group dates
April 7, 2005 (previously filed as an exhibit to the companys
Form 8-K, filed on April 12, 2005) |
|
|
|
10.6
|
|
Purchase Option Agreement between Isolagen, Inc and 405 Eagleview
Associates dated April 7, 2005 (previously filed as an exhibit to
the companys Form 8-K, filed on April 12, 2005) |
|
|
|
10.7
|
|
Intellectual Property Purchase Agreement between Isolagen
Technologies, Inc., Gregory M. Keller, and PacGen Partners
(previously filed as an exhibit to the companys amended Form S-1,
as filed on October 24, 2003) |
|
|
|
10.8
|
|
Employment Agreement between the Company and David Pernock
(incorporated by reference to Exhibit 10.1 to our Form 8-K filed
February 1, 2010) |
|
|
|
10.9
|
|
Registration Rights Agreement between the Company and the Series A
Preferred Stock Purchasers, dated October 13, 2009 (incorporated
by reference to Exhibit 10.2 to our Form 8-K filed October 14,
2009) |
II-8
|
|
|
Exhibit |
|
|
Number |
|
Description |
10.10
|
|
Securities Purchase Agreement dated March 2, 2010 (incorporated by
reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) |
|
|
|
10.11
|
|
Registration Rights Agreement dated March 2, 2010 (incorporated by
reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) |
|
|
|
21
|
|
List of Subsidiaries (previously filed as an exhibit to the
companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2006) |
|
|
|
*23.1
|
|
Consent of BDO Seidman, LLP |
|
|
|
23.2
|
|
Consent of Cozen OConnor (included in Exhibit 5) |
|
|
|
24.1
|
|
Power of Attorney (included on signature page) |
II-9