As filed with the Securities and Exchange Commission on May 24, 1996
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------
UNIGENE LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
-------------------------------
Delaware 22-2328609
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
-------------------------------
110 Little Falls Road
Fairfield, New Jersey 07004
(201) 882-0860
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
-------------------------------
Warren P. Levy, President
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, New Jersey 07004
(201) 882-0860
(Name, address, including zip code, telephone number, including
area code, of agent for service)
-------------------------------
Copy to:
D. Michael Lefever, Esq.
Covington & Burling
P.O. Box 7566, 1201 Pennsylvania Ave., N.W.
Washington, D.C. 20044-7566
-------------------------------
Approximate date of commencement of proposed sale to public:
From time to time after this Registration Statement becomes effective.
-------------------------------
<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [ X ]
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 offer. [ ]
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 on the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
-------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Amount to be Proposed maximum Proposed maximum Amount of
Title of each class of securities to registered offering price per aggregate offering registration fee
be registered share(1) price(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value) 9,000,000(2) $3.97 $35,730,000 $12,321
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, in accordance with Rule 457(c) under the Securities
Act of 1933, on the basis of the average of the high and low prices per
share of Common Stock of the Registrant on May 20, 1996 as reported on
the Nasdaq National Market.
(2) Plus such indeterminate number of additional shares of Common Stock,
par value $.01 per share, that may be issuable pursuant to certain
anti-dilution provisions or certain adjustment provisions under the
warrants, options and convertible securities described herein.
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.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Prospectus Subject to Completion
May 24, 1996
UNIGENE LABORATORIES, INC.
Common Stock
(par value $.01 per share)
---------------
This Prospectus relates to the resale of up to 7,692,201
shares of common stock, par value $.01 per share (the "Common Stock"), of
Unigene Laboratories, Inc., a Delaware corporation (the "Company") issued or
issuable to certain persons or entities (the "Selling Shareholders") in
connection with the transactions described herein. This Prospectus also relates
to an indeterminate number of additional shares of Common Stock that may be
issued to certain of the Selling Shareholders pursuant to anti-dilution
provisions or certain adjustment provisions contained in the warrants, options
and convertible debentures described herein. All of the shares offered hereby
will be offered and sold by the Selling Shareholders. See "Selling
Shareholders." The Company will not receive any proceeds from the sale of the
shares of Common Stock offered hereby.
The Common Stock is listed on the Nasdaq National Market under
the symbol UGNE. On May 20, 1996, the last sale price of the Common Stock, as
reported on the Nasdaq National Market, was $4.13 per share.
The Common Stock may be offered from time to time by the
Selling Shareholders to or through brokers, dealers or other agents or directly
to other purchasers in one or more market transactions, in one or more private
transactions or in a combination of such methods of sale, at prices then
prevailing, at prices related to such prices, or at negotiated prices. In
effecting sales, brokers, dealers or other agents engaged by the Selling
Shareholders may arrange for other brokers, dealers or agents to participate.
Such brokers, dealers or agents may receive commissions, discounts or
concessions from the Selling Shareholders in amounts to be negotiated. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any such commissions, discounts or
concessions may be deemed to be underwriting discounts or commissions under the
Securities Act.
Certain costs, expenses and fees in connection with the
registration of the Common Stock will be borne by the Company. Commissions,
discounts and transfer taxes, if any, attributable to the sales of the Common
Stock will be borne by the Selling Shareholders.
- 1 -
<PAGE>
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 4.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1996.
- 2 -
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFER MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING
SHAREHOLDER OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; and the public reference facilities
located at the regional offices of the Commission at the following addresses:
New York Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048 and Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661-2511. Copies of such material also can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 filed by the Company with the Commission under the Securities Act with
respect to the Common Stock being offered by this Prospectus. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information, reference is made to the
Registration Statement, and to the exhibits incorporated therein by reference or
filed as a part thereof. Any statements contained herein concerning the
provisions of any such exhibits are not necessarily complete and, in each
instance, reference is made to the copy of such exhibit filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference in this Prospectus:
1. The Annual Report of the Company on Form 10-K for the
year ended December 31, 1995 (the "1995 10-K").
2. The Annual Report of the Company on Form 10-K/A filed
April 29, 1996 amending the 1995 10-K.
3. The Quarterly Report of the Company on Form 10-Q for
the quarter ended March 31, 1996.
4. The description of the Company's Common Stock set
forth in the Company's Registration Statement on Form
8-A, filed with the Commission on August 4, 1987.
- 3 -
<PAGE>
All documents filed by the Company pursuant to section 13(a), 13(c), 14
or 15(d) of the Exchange Act, subsequent to the date of this Prospectus and
prior to the termination of the offerings to which this Prospectus relates shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded by this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge copies of all
documents incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in
such documents) to each person, including any beneficial owner, to whom a copy
of this Prospectus has been delivered on the written or oral request of such
person to: William Steinhauer, Controller, 110 Little Falls Road, Fairfield, New
Jersey 07004 (telephone number (201)882-0860).
RISK FACTORS
Prospective investors should consider carefully the following factors
concerning the Company and its business before purchasing securities offered by
this Prospectus.
Absence of Operating Revenues and Liquidity; History of Losses;
Auditors' Report - Going Concern Considerations. The Company has incurred annual
operating losses since its inception and, as a result, at March 31, 1996, had an
accumulated deficit of $35,700,000. The Company has not received any significant
operating revenues during the last five years.
In addition to operating its production facility and seeking approval
for its Calcitonin for human use, the Company intends to continue certain
internally funded research activities such as the development of a Calcitonin
pill, all of which will contribute to continuing losses from operations. All of
the Company's contracts to perform sponsored research have been completed or
cancelled and, at present, it has almost no operating revenues. It is unlikely
that the Company's operating results will improve unless it is able to license
its technology, obtain new projects, or successfully produce and sell its
products. The Company may continue to incur losses over the next several years.
The auditors' report for the fiscal year ended December 31, 1995 contains an
explanatory paragraph indicating there is substantial doubt about the Company's
ability to continue as a going concern.
The Company has sufficient financial resources to sustain its
operations at the current level through approximately the third quarter of 1996.
To continue its operations beyond that time will require that the Company enter
into additional financing transactions or marketing, joint venture or licensing
agreements. There can be no assurance that any such financings will occur or
that any such agreements will be entered into by the Company.
- 4 -
<PAGE>
Transition to Production; Possibility of Delays or Inability to
Manufacture and Market Products. The Company is currently undergoing a
transition from its historical research orientation toward a business with a
pharmaceutical production focus. Accordingly, the Company is likely to incur the
problems, delays, expenses and difficulties typically encountered by enterprises
in the Company's stage of transition, many of which may be beyond the Company's
control.
No product of the Company has been commercialized for human
pharmaceutical use. The commercial manufacture and sale of any such product will
require the approval of the U.S. Food and Drug Administration ("FDA") and by
comparable regulatory authorities outside of the United States. See "Risk
Factors - Government Regulation." There can be no assurance that clinical
testing will be successful or that the clinical results will be adequate to
support regulatory submissions. Furthermore, there can be no assurance that the
Company's products will be demonstrated to be safe and effective or that they
will be approved by the appropriate regulatory authorities. Even if any such
products are approved, there is no assurance that they can be manufactured in
commercial quantities at reasonable costs. Due to the Company's limited
clinical, manufacturing and regulatory experience and the absence of a marketing
organization, it may be necessary for the Company to rely on sponsors or other
parties to perform such tasks for the commercialization of pharmaceutical-grade
products. See "Risk Factors - Dependence on Large Pharmaceutical Companies."
Expanded consumer acceptance of pharmaceutical-grade Calcitonin may be
dependent on development of a consumer acceptable delivery system. The Company
and others are conducting research on new delivery systems for Calcitonin
including oral technology. There can be no assurance that the Company will
develop suitable oral delivery systems or that governmental approval of any such
delivery system will be obtained. There can also be no assurance that others
will not develop oral or other delivery systems that could compete with or
surpass any oral delivery system developed by the Company. Moreover, there are
non-Calcitonin products currently being marketed for osteoporosis treatment and
other non- Calcitonin products in development that will compete with Calcitonin
products. See "Risk Factors - Technological Change and Competition."
There can be no assurance that the Company will have sufficient
financial resources to fund its operations until such time as it is able to
generate revenues that are sufficient to sustain its operations. See "Risk
Factors - Absence of Operating Revenues and Liquidity; History of Losses;
Auditors' Report - Going Concern Considerations."
New Production Facility. During 1994, the Company completed
construction of a facility for the production of pharmaceutical-grade Calcitonin
and other peptide hormones. The Company is leasing the facility under a 10-year
agreement which began in February 1994. The Company has two 10-year renewal
options as well as an option to purchase the facility. The Company is
undertaking steps to secure FDA validation of the facility which would allow it
to manufacture Calcitonin for human pharmaceutical use. The facility has begun
producing Calcitonin in accordance with current Good Manufacturing Practice
("cGMP") regulations, but there is no assurance that the facility will be
approved by the FDA. Furthermore, there can be no assurance that the facility
will be able to achieve its production goals, that production at this facility
will be profitable to the Company, that others will not develop processes and
products superior to, or otherwise precluding the Company from commercial
utilization of this facility, that there will be a market for the Company's
- 5 -
<PAGE>
products produced by the facility, or that sufficient funds will be available
for the Company to complete the pre-production process or to produce and market
its products from the facility.
Dependence on Large Pharmaceutical Companies. The Company has been and
expects to continue to be dependent on large pharmaceutical companies for
revenues from sales of product, research sponsorship, joint ventures and
licensing arrangements. During the 1987 to 1990 period, the Company's operating
revenues resulted primarily from research which was totally or substantially
funded by pharmaceutical companies. The Company currently has no sponsored
research projects. There is no assurance that the Company will be successful in
its efforts to enter into new research or licensing agreements or other revenue
producing arrangements.
The Company's past contracts with certain pharmaceutical company
sponsors provide for payment of royalties to the Company on commercial sales of
the products of sponsored research projects. However, there can be no assurance
that such sponsors will successfully commercialize any product based on the
Company's technology. It currently is unlikely that the Company will receive any
material royalties under such past agreements.
In June 1995, the Company entered into a joint venture agreement with
the Qingdao General Pharmaceutical Company and its Huanghai factory for the
production and marketing of Calcitonin in China. Under the agreement, the
Chinese partners will finance the project, including the construction and
operation of a dedicated manufacturing facility in China which will utilize the
Company's propriety production technology. The Company will provide the joint
venture with technology and training as well as the Company's proprietary enzyme
at a discounted price. The Company will receive a combination of fixed fees and
minimum annual royalties based upon sales of the end product. There is no
assurance that this joint venture will be successful or that the Company will
receive significant income from the joint venture.
Risks of International Operations. The Company's potential major
customers, partners and licensees include foreign companies or companies with
significant international business. The business operations of such companies
and their ability to pay license fees, royalties and other amounts due and
otherwise to perform their obligations to the Company under agreements with the
Company may be subject to approval or regulation by foreign governments. There
can be no assurance that required approvals will be received. The failure to
receive required approvals, governmental regulations and other risks, including
political and foreign currency risks, could affect the ability of the Company to
earn or receive payments pursuant to such agreements and, in such event, may
have a material adverse effect on the Company's future operations.
Technological Change and Competition. The Company has concentrated most
of its efforts on one product - the use of Calcitonin for the treatment of
osteoporosis. The market for this treatment of osteoporosis is subject to rapid,
unpredictable and significant technological change. Competition from specialized
biotechnology companies, major pharmaceutical and chemical companies and
universities and research institutions is intense. Most of the competitors of
the Company have substantially greater financial and other resources than does
the Company. There can be no assurance that developments by others, including
alternative chemical means of amidation, alternative processes which eliminate
the need for amidation, and new delivery systems and other osteoporsis
treatments, will not render the Company's technologies and products derived
therefrom obsolete or noncompetitive.
- 6 -
<PAGE>
Product Liability. Product liability claims relating to the Company's
technology or products may be asserted against the Company. There can be no
assurance that the Company will have sufficient resources to defend against or
satisfy any such liability. Although the Company has recently obtained product
liability insurance coverage, product liability or other judgments against the
Company in excess of insurance limits could have a material adverse effect upon
the Company's business and financial condition.
Patents and Proprietary Technology. The Company has filed applications
for U.S. patents relating to the proprietary amidation and immunization
processes and Calcitonin pill invented in the course of its research. To date,
the following two patents have issued: Immunization By Immunogenic Implant, a
process patent, and Alpha-Amidation Enzyme, a process and product patent. Other
applications are pending. Filings related to the amidation process have also
been made in selected foreign countries and nine such foreign patents have
issued. There can be no assurance that any of the Company's pending applications
will issue as patents or that the Company's issued patents will provide the
Company with significant competitive advantages. Furthermore, there can be no
assurance that competitors will not independently develop or obtain similar or
superior technologies. Although the Company believes its patents and patent
applications are valid, the invalidation of its Alpha-Amidation Enzyme patent or
the failure of certain of its pending Alpha-Amidation Enzyme-related
applications to issue as patents could have a material adverse effect upon the
Company's business. Difficulties in detecting and proving infringement are
generally greater with process patents than with product patents. In addition,
the value of a process patent may be reduced if the products that can be
produced using such process have been patented by others. Under such
circumstances, the cooperation of these patent holders or their sublicensees
would be needed for the commercialization of the aforementioned patented
products in countries where these companies hold valid patents.
In some cases, the Company relies on trade secrets to protect its
inventions. It is the policy of the Company to include in all research
contracts, joint development agreements and consulting relationships that
provide access to the Company's trade secrets and other know-how confidentiality
obligations binding on the parties involved. However, there can be no assurance
that these secrecy obligations will not be breached to the detriment of the
Company. To the extent sponsors, consultants or other third parties apply
technological information independently developed by them or by others to
Company projects, disputes may arise as to the proprietary rights to such
information which may not be resolved in favor of the Company.
Government Regulation. The laboratory research activities of the
Company and its sponsors, collaborators and licensees, and the processes and
products which may be developed by them and the new production facility, are
subject to significant regulation by numerous federal, state, local and foreign
governmental authorities. In addition to obtaining the FDA's validation of the
new facility, it is necessary to obtain FDA approval for human use of the
Calcitonin to be produced in the facility. This will require various human and
animal studies. The Company will then apply to the FDA for approval of the
Company's Calcitonin for human use. The regulatory process for a pharmaceutical
product may take a number of years and requires substantial resources. In the
case of the regulatory process for the Company's Calcitonin products, the
Company believes that it may be possible to abbreviate the process. However,
there can be no assurance that regulatory approval will be obtained for the new
facility or any of the Company's products. The inability to obtain, or delays in
- 7 -
<PAGE>
obtaining, such approvals would adversely affect the Company's ability to
continue to fund its programs, produce marketable products, or to receive
revenue from product sales or royalties. Furthermore, the extent of any adverse
governmental regulation that may arise from future legislative and
administrative action cannot be predicted.
Dependence on Key Executives. Drs. Warren and Ronald Levy have been the
principal executive officers of the Company since its inception. The Company
relies on them for their leadership and scientific direction. Neither Dr. Warren
P. Levy nor Dr. Ronald S. Levy has an employment agreement with the Company.
Each of them has entered into an agreement with the Company providing that he
shall not engage in any other employment or business for the period of his
employment with the Company. At the present time, the loss of the services of
either of these individuals could have a material adverse impact on the
Company's business.
Attraction and Retention of Key Personnel. The Company's ability to
obtain required governmental approvals, produce its products, obtain research
contracts and develop new technologies will depend in part on its ability to
attract and retain highly qualified scientific personnel. Competition for such
personnel is intense. There can be no assurance that the Company will be able to
attract and retain such personnel.
Shares Eligible For Future Sale; Outstanding Convertible Securities,
Warrants And Options. Other than the issued or to be issued shares of Common
Stock to which this Prospectus relates, there are 6,708,408 shares of Common
Stock that are registered under the Securities Act and are issuable upon
exercise of its publicly traded Class B Warrants at an exercise price of $4.1694
per share as of May 13, 1996; 4,540,000 shares of Common Stock that are issuable
upon conversion of the Company's 10% convertible debentures; and 917,215 shares
issuable under purchase options exercisable at prices ranging from $1.00 to
$3.00 per share. In addition, 4,138,350 outstanding shares of Common Stock are
"restricted securities" as that term is defined by Rule 144 promulgated under
the Securities Act. Such restricted securities may be sold only in compliance
with Rule 144, or pursuant to registration under the Securities Act or pursuant
to another exemption therefrom. The Company may issue additional convertible
securities, options, warrants and shares in the future. Transactions by the
Company, or the occurrence of certain other future events, may require
adjustment of the exercise or conversion price and other terms of the Company's
convertible securities, options and warrants including, in some circumstances,
an increase in the number of shares issuable thereunder.
The Company cannot predict the adverse effect that market sales of
Common Stock, the conversion of such convertible securities, the exercise of
such options or warrants, or the availability of Common Stock for sale will have
on the market price of the Common Stock prevailing from time to time, although
it is likely that sales of a large number of securities would depress such
market price. The Company also cannot predict the adverse effect, if any, that
such convertible securities, options, warrants and shares available for sale
will have on the ability of the Company to obtain additional capital or the
terms and conditions thereof.
Possible Volatility of Securities Prices. The market prices of the
Company's securities may be highly volatile. Factors such as announcements by
the Company or others of technological innovations, regulatory matters, new
products or procedures, proposed government regulations, developments or
disputes relating to patents or proprietary rights, and public concern over the
- 8 -
<PAGE>
safety of activities or products may have a significant impact on the market
price of the Company's securities. In addition, future sales of shares of Common
Stock by shareholders and by the holders of convertible securities, warrants and
options could have an adverse effect on the prices of the Company's securities.
See "Risk Factors - Shares Eligible for Future Sale; Outstanding Convertible
Securities, Warrants and Options."
Voting Control. Warren P. Levy, Ronald S. Levy and Jay Levy, founders
of the Company, beneficially own, approximately 16% of the outstanding Common
Stock (assuming that outstanding convertible securities, warrants and options
held by others are not converted or exercised) and, thus, effectively may have
the ability to elect the entire Board of Directors and control the affairs of
the Company.
Dividends. The Company has not paid any cash dividends on its Common
Stock since its inception and anticipates that, for the foreseeable future, it
will not pay any cash dividends.
Limitation of Marketability of Company Securities. The Common Stock
currently is traded on the Nasdaq National Market. In order for the Common Stock
to continue to qualify for inclusion on the Nasdaq National Market, among other
requirements, the Company must have net tangible assets of at least $4.0
million. As of March 31, 1996 the amount of the Company's net tangible assets
was approximately $3.0 million. See "Risk Factors - Absence of Operating
Revenues and Liquidity; History of Losses; Auditors' Report - Going Concern
Considerations." If the Company is unable to develop a plan satisfactory to
Nasdaq by which it will be able to restore and maintain compliance with the
Nasdaq National Market listing requirements it is likely that the Common Stock
will be removed from trading on the Nasdaq National Market. Among the actions
that could restore an adequate level of net tangible assets is the conversion of
the Company's outstanding convertible securities. While the Company believes
that such conversions are likely, there is no assurance that the extent or
timing of such conversions will prevent the removal of the Common Stock from the
Nasdaq National Market. Likewise, there is no assurance that the Company will be
successful in any other actions that it might take to prevent a removal of the
Common Stock from the Nasdaq National Market or that the Company will continue
to meet all other requirements for continued trading on the Nasdaq National
Market. If the Company's fails to meet the requirements for trading on the
Nasdaq National Market and does not otherwise qualify for inclusion in the
Nasdaq Small-Cap Market, the holders of Common Stock may find it difficult to
obtain accurate quotations as to the market value of the Common Stock and may
experience greater difficulties in attempting to sell the Common Stock than if
it were listed on a stock exchange or quoted on the Nasdaq National Market or
the Nasdaq Small-Cap Market.
If the Common Stock is not traded on the Nasdaq National Market or the
Nasdaq Small-Cap Market, and the market price of the Common Stock is less than
$5.00 per share, the Common Stock would be classified as a "penny stock." As
such the Common Stock would be subject to Rule 15g-9 under the Exchange Act,
which imposes additional sales practice requirements on broker-dealers that
recommend the purchase or sale of such securities to persons other than a person
who qualifies as an "established customer" or an "accredited investor." Among
these requirements is that a broker-dealer must make a determination that
investments in penny stocks are suitable for the customer and must make certain
special disclosures to the customer concerning the risks of penny stocks.
Application of the penny stock rules to the Common Stock could adversely affect
the market liquidity of such securities, which in turn may affect the ability of
the holders of the Common Stock to resell the securities.
- 9 -
<PAGE>
THE COMPANY
Unigene Laboratories, Inc. is a health-care oriented biotechnology
company which is engaged in research and production of cGMP Calcitonin and is
planning to engage in the production and marketing in bulk of pharmaceutical
grade Calcitonin. The Company's current business focus has shifted toward
pharmaceutical production from its historical research orientation. The Company
has succeeded in combining its proprietary amidation process with bacterial
recombinant DNA technology to develop a peptide hormone production process. The
Company believes that its proprietary amidation process will be a key step in
the more efficient and economical commercial production of certain peptide
hormones with diverse therapeutic applications. Many of these hormones cannot be
produced at a reasonable cost in sufficient quantities for clinical testing or
commercial use by currently available production processes. Using its
proprietary process, the Company has produced laboratory-scale quantities of
seven such peptide hormones: human Calcitonin, salmon Calcitonin, human Growth
Hormone Releasing Factor, human Calcitonin Gene-Related Peptide, human
Corticotropin Releasing Factor, human Amylin and a human Magainin. During 1991,
a study commissioned by the Company was prepared by a professor of chemical
engineering at the Massachusetts Institute of Technology. The study evaluated
the economics for producing multi-kilogram quantities of Calcitonin and
indicated that the Company's process for producing Calcitonin should reduce the
cost and time required for commercial production by up to 95%.
The Company's strategy is to develop proprietary products and processes
with applications in human health-care, independently or in conjunction with
pharmaceutical and chemical companies, in order to generate revenues from
license fees, royalties and product sales in bulk. Generally, the Company seeks
sponsors and licensees to provide research funding and assume responsibility for
obtaining appropriate regulatory approvals, clinical testing, production and
marketing of products derived from the Company's research activities. It has
concentrated most of its efforts on one product - Calcitonin for the treatment
of osteoporosis. The Company has built a production facility and plans to
undertake production of pharmaceutical grade Calcitonin and will assume
responsibility for the clinical testing and/or applying for regulatory approval
for certain Calcitonin products.
Since 1992, the Company has been producing and from time to time
selling small quantities of research-grade salmon Calcitonin. During 1993, the
Company began construction of a cGMP facility for the production of
pharmaceutical-grade Calcitonin in leased premises located in Boonton, New
Jersey which was mechanically completed during the fourth quarter of 1994. The
facility will also produce the Company's proprietary amidating enzyme for use in
producing Calcitonin. The initial production capacity of the facility is
expected to be between 0.5-1.0 kilograms of bulk Calcitonin per year,
representing approximately 10% of the current estimated world supply for this
leading osteoporosis drug.
The Company is following conventional procedures in order to secure the
validation of the facility by the FDA in order to allow the Company to provide
its Calcitonin for human use. Although the facility was inspected by an
independent consultant and found to be in compliance with cGMP guidelines, there
can be no assurance that FDA validation will occur. In addition there is no
assurance that the facility production goals will be achieved, that there will
be a market for the Company's products, that such production will be profitable
to the Company, that others will not develop processes and products superior to,
- 10 -
<PAGE>
or otherwise precluding the commercial utilization of, the processes or products
developed by the Company. The design of the facility is intended to allow for
substantial increases in Calcitonin production utilizing the existing equipment
with no additional capital expenditures or personnel. Although the facility will
initially be exclusively devoted to Calcitonin production, it would be suitable
for producing other peptide hormone products in the future. There can be no
assurance that there will be sufficient acceptance of the Company's products in
the marketplace for successful commercialization. See "Risk Factors - New
Production Facility."
In addition to obtaining the FDA's validation of the new facility, it
is necessary to obtain FDA approval for human use of the salmon Calcitonin to be
produced in the facility. This will require various human and animal studies.
The Company will then apply to the FDA for approval of the Company's Calcitonin
for human use. The Company expects that the requirements for such approval will
be abbreviated. However, there can be no assurance that such requirements will
be abbreviated or that the necessary governmental approvals will be obtained as
projected. Expanded consumer acceptance of pharmaceutical-grade Calcitonin may
be dependent on development of a consumer acceptable delivery system. A major
pharmaceutical company received FDA approval during 1995 for the marketing of a
nasal spray delivery system for Calcitonin, which could enlarge the market for
Calcitonin. The Company and others are conducting research on oral delivery
systems for Calcitonin. There can be no assurance that suitable delivery systems
will be developed or that governmental approval of such delivery systems will be
obtained.
The Company is continuing its efforts to develop a Calcitonin pill. In
December, 1995 and January, 1996, the Company successfully tested its
proprietary Calcitonin pill in Phase I clinical trials in the United Kingdom.
These studies indicated that the majority of those who received the pill showed
levels of the hormone in blood samples taken during the trial. The Company
believes that this is the first time significant blood levels of Calcitonin have
been observed in humans following oral administration of the hormone. Results of
a third Phase I trial showed that blood levels of the drug were obtained in all
of the recipients. However, there is no assurance that these results will be
replicated in further studies. The Company has recently filed a patent
application for its oral formulation with the U.S. Patent and Trademark Office
and plans to file an Investigational New Drug (IND) application with the FDA.
There can be no assurance that either application will be approved as projected
or that the Company will be successful in marketing its products.
The planned activities of the Company are all subject to obtaining
adequate financing. There can be no assurance that the Company will have
sufficient resources to complete the preproduction process, to produce and
market its products and to carry on its other projects. See "Risk Factors -
Absence of Operating Revenues and Liquidity; History of Losses; Auditors' Report
- - Going Concern Considerations."
The Company is currently engaged in two collaborative research
programs. One, with Rutgers University College of Pharmacy, seeks to develop an
oral drug delivery system for Calcitonin. The second collaboration, performed in
conjunction with Yale University, is investigating novel applications for
certain amidated peptide hormones, including CGRP, Calcitonin gene-related
peptide.
- 11 -
<PAGE>
At present, the Company has no third party sponsored research
agreements in effect. The Company is currently conducting discussions with major
pharmaceutical companies regarding licensing and/or research agreements. There
can be no assurance that such discussions will result in new research or
licensing agreements or that the Company will be able to obtain adequate funding
for its current or new projects. The Company is dependent on large
pharmaceutical companies, having much greater resources than the Company, for
revenues from sales of product, research sponsorship, joint ventures and
licensing arrangements. See "Risk Factors - Dependence on Large Pharmaceutical
Companies" and "Risk Factors - Risks of International Operations."
The Company has established a multi-disciplinary research team to adapt
current genetic engineering technologies to the development of proprietary
products and processes. The Company, at May 1, 1996, had 60 full-time employees,
including 25 research and development personnel and 24 pre-production personnel.
10 employees have Ph.D. degrees in the fields of molecular biology,
microbiology, biochemistry, pharmacology or organic chemistry. The Company's
employees have expertise in molecular biology, including DNA cloning, synthesis,
sequencing and expression; protein chemistry, including purification, amino acid
analysis, synthesis and sequencing proteins; immunology, including tissue
culture, monoclonal and polyclonal antibody production and immunoassay
development; chemical engineering; pharmaceutical production; quality assurance;
and quality control. None of the Company's employees is covered by a collective
bargaining agreement.
The Company was incorporated under the laws of the State of Delaware in
November 1980. Its executive offices and laboratory facilities are located at
110 Little Falls Road, Fairfield, New Jersey, 07004, and its telephone number is
(201)882-0860.
SELLING SHAREHOLDERS
2,869,565 of the shares of Common Stock offered hereby were issued or
are issuable by the Company to holders (the "Debenture Holders") of $3,300,000
aggregate principal amount of the Company's 9.5% Senior Secured Convertible
Debentures (the "Debentures") upon conversion of the Debentures. The Debentures
were issued by the Company in a private transaction on March 6, 1996 and
initially are convertible into Common Stock at a conversion rate of $1.15 per
share that is subject to a downward adjustment upon the occurrence of certain
events. The Debentures also contain certain anti-dilution provisions which may
require the Company to issue additional shares of Common Stock upon conversion
thereof. In connection with the issuance of the Debentures, the Company agreed
to register the Common Stock into which the Debentures are convertible under the
Securities Act and to keep such registration effective for a period ending on
the earlier of (i) February 28, 1999 and (ii) the date upon which the Debenture
Holders are able to resell all of the Common Stock into which the Debentures are
convertible without registration under the Securities Act. An additional 225,000
of the shares of Common Stock offered hereby were issued or are issuable by the
Company to the Debenture Holders upon exercise of certain of the Company's
warrants held by the Debenture Holders. The Debenture Holders purchased such
warrants in November 1995 from a holder who received warrants from the Company
in connection with a loan by such holder to the Company. The warrants held by
the Debenture Holders initially are exercisable at a price of $1.375 per share
that is subject to a downward adjustment upon the occurrence of certain events.
- 12 -
<PAGE>
Such warrants also contain certain anti-dilution provisions which may require
the Company to adjust the exercise price and to issue additional shares of
Common Stock upon the exercise thereof. The Company agreed to register the
Common Stock for which such warrants are exercisable under the Securities Act.
The table below sets forth the name of each Debenture Holder and certain
information with respect to the beneficial ownership of Common Stock and number
of shares of Common Stock offered by each Debenture Holder.
3,456,536 of the shares of Common Stock offered hereby were issued or
are issuable by the Company to holders (the "Warrantholders") upon exercise of
warrants of the Company (the "Warrants"). The Warrants were issued by the
Company between October 1994 and April 1996 in consideration of certain
financial and consulting services performed for the Company or in connection
with loans to the Company. The Warrants initially are exercisable at prices
ranging from $1.375 to $3 per share. Certain of the Warrants contain adjustment
provisions which may result in a downward adjustment in the exercise price upon
the occurrence of certain events. Certain of the Warrants also contain certain
anti-dilution provisions which may require the Company to adjust the exercise
price and to issue additional shares of Common Stock upon the exercise thereof.
In connection with the issuance of the Warrants, the Company agreed to register
the Common Stock for which the Warrants are exercisable under the Securities
Act. The table below sets forth the name of each Warrantholder and certain
information with respect to the beneficial ownership of Common Stock and number
of shares of Common Stock offered by each Warrantholder.
115,000 of the shares of Common Stock offered hereby were issued or are
issuable by the Company to holders (the "Optionholders") upon exercise of
options granted by the Company (the "Options"). The Options were granted by the
Company between January 1993 and April 1996 in consideration of certain
consulting services performed for the Company by the holders thereof. The
Options are exercisable at prices ranging from $1.4375 to $4.5625 per share. The
Options also contain certain anti-dilution provisions which may require the
Company to issue additional shares of Common Stock upon the exercise thereof.
The Company agreed to register the Common Stock for which the Options are
exercisable under the Securities Act. The table below sets forth the name of
each Optionholder and certain information with respect to the beneficial
ownership of Common Stock and number of shares of Common Stock offered by each
Optionholder.
826,000 of the shares of Common Stock offered hereby were issued by the
Company to certain stockholders (the "Private Placement Stockholders") in a
private placement completed February 1996. In connection with the private
placement, the Company agreed to register the Common Stock issued in the private
placement under the Securities Act. The table below sets forth the name of each
Private Placement Stockholder and certain information with respect to the
beneficial ownership of Common Stock and number of shares of Common Stock
offered by each Private Placement Stockholder.
200,100 of the shares of Common Stock offered hereby were or will be
issued by the Company to certain other holders (the "Other Holders"). 10,000 of
such shares of Common Stock will be issued to Kien-Tsai Chen in consideration
for services performed for the Company. Certain of the Other Holders received
shares of Common Stock in connection with such Other Holders' exercise, between
June 1994 and January 1995, of options purchased from persons who received such
options from the Company in connection with certain loans made to the Company in
1985. One of the Other Holders, Jay Levy, is one of the founders of the Company
- 13 -
<PAGE>
and currently serves as the Chairman of the Board of Directors and Treasurer of
the Company. Mr. Levy acquired the 109,350 shares of Common Stock offered hereby
on June 21, 1994 for $150,000 upon the exercise of a stock option which was
granted to him in connection with a loan by him to the Company in 1984. The
table below sets forth certain information with respect to the beneficial
ownership of Common Stock and number of shares of Common Stock offered by each
Other Holder.
This Prospectus covers any additional shares of Common Stock that are
issued pursuant to the conversion of the Debentures or the exercise of the
Warrants, the Options the other outstanding warrants described herein by reason
of the anti-dilution provisions thereof.
Other than as described above, none of the Selling Shareholders has had
any position, office or other material relationship with the Company or any of
its predecessors or affiliates within the past three years. The following table
sets forth as of May 15, 1996, with respect to each Selling Shareholder: name,
number of shares of Common Stock beneficially owned (including any shares into
which the Debentures are immediately convertible and for which the Warrants,
Options and other outstanding warrants are immediately exercisable), number of
shares of Common Stock to be offered and number of shares of Common Stock to be
held following the offering, assuming the sale of all of the Common Stock
offered hereby. The Company may amend or supplement this Prospectus from time to
time to update the disclosure set forth herein or to disclose the names and
relationships to the Company of additional Selling Shareholders (including
persons or entities who may be transferees of the Selling Shareholders named
below) and the holdings of Common Stock of such additional Selling Shareholders.
- 14 -
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership of Shares of Common Beneficial Ownership of
Common Stock Prior to Stock Being Common Stock After
Offering Offered Offering
Name Number Percent Number Number Percent
- ---- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Debenture Holders:
Nelson Partners(1) 2,397,391 8.8 2,397,391 0 *
Olympus Securities, Ltd.(2) 697,174 2.7 697,174 0 *
Warrantholders:
DeJufra, Inc. 123,536 * 123,536 0 *
Patrick Tedesco 224,000 * 224,000 0 *
Paul Weber 217,500 * 217,500 0 *
Bishop Rosen & Co., Inc. 107,500 * 107,500 0 *
Annette North 84,000 * 84,000 0 *
Richard Kripaitis 101,000 * 101,000 0 *
Cornerstone Capital, Inc. 70,000 * 70,000 0 *
Thomas Redington 400,000 1.6 400,000 0 *
Michael C. Kendrick 184,750 * 184,750 0 *
P. Bradford Hathorn 20,000 * 20,000 0 *
Lance T. Bury 20,000 * 20,000 0 *
Gerald D. Harris 5,000 * 5,000 0 *
Enigma Investments Limited 12,500 * 12,500 0 *
Charles Krusen 17,000 * 17,000 0 *
Eric S. Swartz 184,750 * 184,750 0 *
David K. Peteler 5,000 * 5,000 0 *
Dwight B. Bronnum 2,500 * 2,500 0 *
Robert L. Hopkins 2,500 * 2,500 0 *
MicroCap Fund, Inc. 675,000 2.7 675,000 0 *
Reseau de Voyages Sterling, Inc. 1,000,000 3.9 1,000,000 0 *
Optionholders:
Agnes Vignery, M.D.(3) 110,000 * 110,000 0 *
Marvin Moser 5,000 * 5,000 0 *
- 15 -
<PAGE>
<CAPTION>
Beneficial Ownership of Shares of Common Beneficial Ownership of
Common Stock Prior to Stock Being Common Stock After
Offering Offered Offering
Name Number Percent Number Number Percent
- ---- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Private Placement Stockholders:
H.T. Ardinger, Jr. 250,000 1.0 250,000 0 *
Jerome Berkowitz 40,000 * 40,000 0 *
James Sanderson 50,000 * 50,000 0 *
Richard Garrett 10,000 * 10,000 0 *
Stanley Aber 12,000 * 6,000 6,000 *
Michael Samuel 14,565 * 5,000 9,565 *
Sylvia Bond 25,000 * 25,000 0 *
Leonard Leff 48,500 * 25,000 23,500 *
Herb Fisher Trust 150,000 * 50,000 100,000 *
Richard Scagnelli 5,000 * 5,000 0 *
Richard & Vilma Scagnelli (Jt. Ten.) 30,000 * 5,000 25,000 *
Hamdi A. Al-Alami 100,000 * 100,000 0 *
Manny Siegman 50,000 * 50,000 0 *
Raymond Sales 267,000 1.1 55,000 212,000 *
Benedict Morelli 165,000 * 20,000 145,000 *
Charles A. Barnes, Jr. Trust 76,300 * 20,000 56,300 *
Douglas Tygielski 119,800 * 110,000 9,800 *
Other Holders:
Kien-Tsai Chen 10,000 * 10,000 0 *
Jay Levy(4) 439,950 1.8 109,350 330,600 1.3
A. Martin Randall 50,000 * 20,000 30,000 *
Mario Taverna 334,250 1.3 60,750 273,500 1.1
</TABLE>
- --------------------
* Less than one percent.
(1) Includes 2,217,391 shares immediately issuable upon conversion of
Debentures and 180,000 shares immediately issuable upon exercise of
outstanding warrants.
(2) Includes 652,174 shares immediately issuable upon conversion of Debentures
and 45,000 shares immediately issuable upon exercise of outstanding
warrants.
(3) Includes 100,000 shares issuable to Dr. Vignery upon satisfaction of
certain conditions.
(4) Does not include 200,000 shares of Common Stock held by a trust in which
Mr. Levy has a pecuniary interest.
- 16 -
<PAGE>
PLAN OF DISTRIBUTION
The purpose of this Prospectus is to permit the Selling Shareholders,
if they desire, to dispose of some or all of the shares at such times and at
such prices as they choose. Whether sales of shares will be made, and the timing
and amount of any sale made, is within the sole discretion of the Selling
Shareholders.
The Common Stock covered by this Prospectus may be offered for sale
from time to time by the Selling Shareholders to or through underwriters or
directly to other purchasers or through agents in one or more market
transactions, in one or more private transactions or in a combination of such
methods of sale, at prices then prevailing, at prices related to such prices or
at negotiated prices. Such methods of distribution may include, without
limitation: (a) a block trade in which the broker-dealer so engaged will attempt
to sell the Common Stock as agent but may position and resell a portion of the
block as a principal to facilitate the transaction; (b) purchases by a
broker-dealer as a principal and resale by such broker-dealer for its own
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) face-to-face
transactions between sellers and purchasers without a broker or dealer. This
Prospectus may be amended and supplemented from time to time to describe a
specific plan of distribution.
In connection with distributions of the Common Stock or otherwise, the
Selling Shareholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of
Common Stock in the course of hedging the positions they assume with Selling
Shareholders. The Selling Shareholders may also sell Common Stock short and
redeliver the shares to close out such short positions. The Selling Shareholders
may also enter into options or other transactions with broker-dealers or other
financial institutions which require the delivery to such broker-dealer or
financial institution of the Common Stock offered hereby, which Common Stock
such broker-dealer or other financial institutions may resell pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). The Selling
Shareholders may also pledge the shares registered hereunder to a broker-dealer
or other financial institution and, upon a default, such broker-dealer or other
financial institution may effect sales of the pledged Common Stock pursuant to
this Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Common Stock covered by this Prospectus that qualifies for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than pursuant to this Prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Shareholders in amounts to be
negotiated in connection with sales pursuant hereto. Such brokers or dealers and
any other participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act, in connection with such sales and any
such commission, discount or concession may be deemed to be underwriting
discounts or commissions under the Securities Act.
Certain costs, expenses and fees in connection with the registration of
the Common Stock will be borne by the Company. Commissions, discounts and
transfer taxes, if any, attributable to the sales of the Common Stock will be
borne by the Selling Shareholders. The Selling Shareholders have agreed or may
- 17 -
<PAGE>
agree to indemnify the Company or any underwriter, as the case may be, and any
of their respective affiliates, directors, officers and controlling persons,
against certain liabilities in connection with the offering of the Common Stock
pursuant to this Prospectus, including liabilities arising under the Securities
Act. In addition, the Company has in some cases agreed to indemnify the Selling
Shareholders or any underwriter, as the case may be, and any of their respective
affiliates, directors, officers and controlling persons, against certain
liabilities in connection with the offering of the Common Stock pursuant to this
Prospectus, including liabilities arising under the Securities Act.
The Company has agreed to supply the Selling Shareholders with such
number of copies of this Prospectus as they may reasonably request. The Selling
Shareholders will in all cases be responsible for complying with the prospectus
delivery requirements of Section 5(b)(2) of the Securities Act in connection
with the offering and sale of the shares.
LEGAL MATTERS
Certain legal matters in connection with the securities offered hereby
are being passed upon for the Company by Covington & Burling, Washington, D.C.
and by Becker Ross Stone DeStefano & Klein, New York, N.Y. The wife of James J.
Ross, an attorney who is of counsel to Becker Ross Stone DeStefano & Klein,
holds a one-third interest in a family partnership which is the beneficial owner
of 18,225 shares of the Company's Common Stock.
EXPERTS
The audited financial statements of Unigene Laboratories, Inc. as of
December 31, 1995 and 1994 and for each of the years in the three year period
ended December 31, 1995 incorporated by reference in this Prospectus have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
- 18 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution*
The expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered hereby (other than
underwriting discounts and commissions) are set forth below:
Securities and Exchange Commission Registration Fee.................. $ 12,312
Nasdaq Listing Fee................................................... 34,020
Blue Sky Fees and Expenses........................................... 0
Accounting Fees and Expenses......................................... 2,000
Legal Fees and Expenses.............................................. 35,000
Registrar and Transfer Agent's Fees and Expenses..................... 0
Miscellaneous Expenses............................................... 1,000
Printing Costs....................................................... 0
Total ............................................ $ 84,332
- ----------------------------------
*Except for the Securities and Exchange Commission registration fee and the
Nasdaq listing fee all expenses are estimated.
Item 15. Indemnification of Directors and Officers
Article VI of the Company's By-Laws requires the Company to indemnify
each of its directors and officers to the extent permitted by the Delaware
General Corporation Law (the "DGCL"). Section 145 of the DGCL provides that a
corporation may indemnify any person, including any officer or director, who was
or is a party or who is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation),
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by such person, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. In any threatened pending or completed action
by or in the right of the corporation, a corporation also may indemnify any
director, officer, employee or agent for costs actually and reasonably incurred
by him in connection with the defense or settlement of the action, if he acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation; however, no indemnification may be made with
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that a
court shall determine that such indemnity is proper. Where a director, officer,
II-1
<PAGE>
employee or agent is successful on the merits or otherwise in the defense of any
action referred to above, the corporation is required to indemnify such person
against the expenses (including attorneys' fees) actually and reasonably
incurred.
The Company's Certificate of Incorporation provides that its directors
shall not be liable for monetary damages to the Company or its stockholders for
breach of the directors' fiduciary duty as directors. However, each director is
subject to liability for breach of the director's duty of loyalty to the Company
or its stockholders, for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, for actions leading to
improper personal benefit to the director, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law.
Item 16. Exhibits
4.1 Certificate of Incorporation and Amendments to Certificate of
Incorporation (incorporated by reference to Exhibits 3.1 and 3.1.1 to
Company's Registration Statement No. 33-6877 on Form S-1).
4.2 By-Laws.* (incorporated by reference to Exhibit 3.2 to Company's
Registration Statement No. 33-6877 on Form S-1).
5.1 Opinion of Covington & Burling as to the legality of certain of the
shares being registered.*
5.2 Opinion of Becker Ross Stone DeStefano & Klein as to the legality of
certain of the shares being registered.*
23.1 Consent of Independent Certified Public Accountants.
23.2 Consent of Covington & Burling (included in opinion filed as Exhibit
5.1).
23.3 Consent of Becker Ross Stone DeStefano & Klein (included in opinion
filed as Exhibit 5.2).
24.1 Powers of Attorney of Directors of Unigene Laboratories, Inc. (included
on page II-6).
- ----------------------------------
* To be filed by amendment.
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 the Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
II-2
<PAGE>
(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 a 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 paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic 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.
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("Act") may be permitted to directors, officers or controlling
persons of the Registrant by charter, by-law, contract, statute 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 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-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in Fairfield, New Jersey, on the 24th day of May, 1996.
UNIGENE LABORATORIES, INC.
By /s/ WARREN P. LEVY
----------------------------
Warren P. Levy, President
KNOW ALL MEN BY THESE PRESENTS that each of the undersigned officers
and directors of the Registrant hereby constitutes and appoints Warren P. Levy
and Ronald S. Levy or any of them (with full power to each of them to act
alone), his true and lawful attorneys-in-fact and agents, with full power of
substitution, for him and on his behalf and in his name, place and stead, in any
and all capacities, to execute and file any or all amendments to this
Registration Statement (including, without limitation, post-effective amendments
and any amendment or amendments increasing the amount of securities for which
registration is being sought) with all exhibits and any and all documents
required to be filed with respect thereto, with the Securities and Exchange
Commission or any regulatory authority, granting unto such 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
in order to effectuate the same as fully to all intents and purposes as he
himself might or could do if personally present, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or any of them, or their substitute
or substitutes, may lawfully do or cause be done.
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Signature
- ---------
Title
- -----
Date
- ----
/s/ WARREN P. LEVY
- ----------------------------------
Warren P. Levy
Director, President
(principal executive officer)
May 24, 1996
/s/ RONALD S. LEVY
- ----------------------------------
Ronald S. Levy
Director, Vice President
May 24, 1996
/s/ JAY LEVY
- ----------------------------------
Jay Levy
Chairman of the Board of Directors,
Treasurer (principal financial and
accounting officer)
May 24, 1996
/s/ ROBERT RUARK
- ----------------------------------
Robert Ruark
Director
May 24, 1996
/s/ GEORGE M. WEIMER
- ----------------------------------
George M. Weimer
Director
May 24, 1996
II-6
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Unigene Laboratories, Inc.:
We consent to the incorporation by reference in this Registration
Statement on Form S-3 of Unigene Laboratories, Inc. of our report dated March
22, 1996, relating to the balance sheets of Unigene Laboratories, Inc. as of
December 31, 1995 and 1994 and the related statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended Decenber 31, 1995 which reports appear in the December 31, 1995
annual report on Form 10-K of Unigene Laboratories, Inc. which is incorporated
herein by reference and to the reference to our firm under the heading "Experts"
in the Prospectus.
Our report dated March 22, 1996 contains an explanatory paragraph that
states that the Company has suffered recurring losses from operations and has a
net working capital deficiency, which raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustment that might result from the outcome of this uncertainty.
KPMG PEAT MARWICK LLP
New York, New York
May 24, 1996
