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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
VIRAGEN, INC.
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(Name of Registrant as Specified in Its Charter)
James M. Schneider, Esq.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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VIRAGEN, INC.
865 S.W. 78TH AVENUE, SUITE 100
PLANTATION, FLORIDA 33324
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY , 1999
To the Stockholders of Viragen, Inc.
PLEASE TAKE NOTICE that a Special Meeting of Stockholders of Viragen, Inc.,
a Delaware corporation (the "Company"), will be held at The Signature Grand,
6900 State Road 84, Davie, Florida 33317 on May , 1999 at 10:00 A.M., Local
Time. The purpose of the Special Meeting is to authorize our Board of Directors
to file an Amendment to our Certificate of Incorporation for the purpose of
effecting up to a 1-for-4 Reverse Stock Split of the Company's outstanding
Common Stock.
The Proxy Statement dated April , 1999 is attached.
Our Board of Directors has fixed the close of business on April , 1999 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting. Stockholders who do not expect to be present at the
meeting are urged to complete, date, sign and return the enclosed proxy. No
postage is required if the enclosed envelope is used and mailed in the United
States.
By Order of the Board of Directors,
Dennis W. Healey, Secretary
Plantation, Florida
April , 1999
THIS IS AN IMPORTANT MEETING, AND ALL STOCKHOLDERS ARE INVITED TO ATTEND
THE MEETING IN PERSON. THOSE STOCKHOLDERS WHO ARE UNABLE TO ATTEND IN PERSON ARE
RESPECTFULLY URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD AT THEIR
EARLIEST CONVENIENCE. PROMPTNESS IN RETURNING THE EXECUTED PROXY CARD WILL BE
APPRECIATED. STOCKHOLDERS WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE
MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
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VIRAGEN, INC.
865 S.W. 78TH AVENUE, SUITE 100
PLANTATION, FLORIDA 33324
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
This Proxy Statement is being furnished to you in connection with the
solicitation by the Board of Directors of Viragen, Inc., a Delaware corporation
("Us" or "We"), of proxies for use at a Special Meeting of our Stockholders
("Special Meeting") to be held at The Signature Grand, 6900 State Road 84,
Davie, Florida 33317 on May , 1999 at 10:00 A.M., Local Time. We will pay the
cost of this solicitation. Our Directors, officers and employees may solicit
proxies by telephone, telegraph or personal interview. The date of mailing of
this Proxy Statement and form of Proxy is approximately April , 1999.
OUTSTANDING STOCK AND VOTING RIGHTS
In accordance with our By-Laws, our Board of Directors has fixed the close
of business on April , 1999 as the record date for determining the
stockholders entitled to notice of, and to vote at, the Special Meeting. Only
stockholders of record on that date will be entitled to vote. A stockholder who
submits a proxy on the accompanying form has the power to revoke it by notice of
revocation directed to the proxy holder at any time before it is voted. Unless
authority is withheld in writing, proxies which are properly executed will be
voted for the proposals thereon. Although a stockholder may have given a proxy,
such stockholder may nevertheless attend the meeting, revoke the proxy and vote
in person. The approval of the Amendment to our Certificate of Incorporation to
effect up to a 1-for-4 Reverse Stock Split of our outstanding Common Stock (the
"Amendment") will require the affirmative vote of a majority of the outstanding
shares of our Common Stock.
As of April , 1999, the record date for determining our stockholders
entitled to vote at the Special Meeting, approximately shares of the
Common Stock, $.01 par value ("Common Stock"), were issued, of which 606,277
shares are held as treasury stock. Each share of Common Stock outstanding
entitles the holder to one vote on all matters brought before the Special
Meeting. Abstentions and broker non-votes have the effect of the effect of a
negative vote on the Amendment.
PROPOSAL TO AUTHORIZE OUR BOARD OF DIRECTORS TO EFFECT UP TO A 1-FOR-4 REVERSE
STOCK SPLIT OF OUR OUTSTANDING COMMON STOCK, DEPENDING UPON A DETERMINATION BY
OUR BOARD THAT A REVERSE STOCK SPLIT IS IN OUR BEST INTEREST AND OUR
STOCKHOLDERS.
On March , 1999, our Board of Directors voted unanimously to authorize
and recommend that our stockholders approve a proposal to effect up to a 1-for-4
reverse stock split (the "Reverse Stock Split") of our Common Stock that may be
effected by our Board depending on market conditions. Pursuant to the Reverse
Stock Split, each four (or such lesser number as our Board of Directors deems
appropriate) of the outstanding shares of our Common Stock on the date of the
Reverse Stock Split (the "Old Shares") will be automatically converted into one
share of our Common Stock (the "New Shares"). The Reverse Stock Split will not
alter the number of shares of our Common Stock we are authorized to issue, but
will simply reduce the number of shares of our Common Stock issued and
outstanding. Notwithstanding the Reverse Stock Split, our authorized Common
Stock will remain at 75,0000,000 shares of Common Stock, and our Amendment will
reflect this amount of authorized Common Stock. The Reverse Stock Split, if
authorized by our stockholders, will be effected only upon a determination by
our Board of Directors to such effect, which in our Board's judgment will result
in the greatest marketability and liquidity of our Common Stock, based upon the
prevailing market conditions, the likely effect on the market price of our
Common Stock and other relevant factors. The Reverse Stock Split will become
effective upon filing of the Amendment to our Certificate of Incorporation with
the Delaware Secretary of State, but our Board of Directors reserves the right
not to make such filing if it deems it appropriate not to do so.
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PURPOSE AND EFFECT OF PROPOSED REVERSE STOCK SPLIT
The Board believes the Reverse Stock Split is desirable because it will
assist us in continuing to meet the requirements for continued listing on the
Nasdaq Stock Market's National Market ("Nasdaq") by helping to raise the trading
price of our Common Stock. One of the key requirements for continued listing on
Nasdaq is that our Common Stock must maintain a minimum bid price above $1.00
per share. We were notified by Nasdaq that we were not in compliance with the
listing rules because the closing minimum bid price per share of our Common
Stock has remained below $1.00 for 30 consecutive business days. While we had
anticipated that with the elimination of the overhand represented by the
existence of shares of convertible preferred stock would improve the price level
of our Common Stock, our Common Stock price level has still not recovered
sufficiently in the near term. Accordingly, we believe that the Reverse Stock
Split will improve the price level of our Common Stock so that we are able to
maintain compliance with the Nasdaq listing standards. In addition our Board
also believes that the higher share price which should result from the Reverse
Stock Split will help generate interest in us among investors.
The effect of the Reverse Stock Split upon the market price for our Common
Stock cannot be predicted. There can be no assurance that the market price per
New Share of our Common Stock after the Reverse Stock Split will rise in
proportion to the reduction in the number of Old Shares of our Common Stock
outstanding resulting from the Reverse Stock Split, or that such price will
either exceed or remain in excess of the $1.00 minimum bid price as required by
Nasdaq. The market price of our Common Stock may also be based on our
performance and other factors, some of which may be unrelated to the number of
shares outstanding.
The Reverse Stock Split will effect all of our stockholders uniformly and
will not affect any stockholder's percentage ownership interests in us or
proportionate voting power, except to the extent that the Reverse Stock Split
results in any of our stockholders owning a fractional share. In lieu of issuing
fractional shares, we will issue any stockholder who otherwise would have been
entitled to receive a fractional share as a result of the Reverse Stock Split
one Share of our Common Stock.
The Reverse Stock Split would have the following effects upon the number of
shares of our Common Stock outstanding and the number of authorized and unissued
shares of our Common Stock.
Upon the effectiveness of the Reverse Stock Split, the number of shares
owned by each holder of Common Stock will be reduced by the ratio of 4 to 1 (or
such lesser ratio as the Board of Directors deems appropriate) shares of Common
Stock he or she owned immediately prior to the Reverse Stock Split which will
reduce the number of shares of our Common Stock outstanding but not the number
of shares of Common Stock we are authorized to issue which will remain at
75,000,000. The per share loss and net book value of our Common Stock will be
increased because there will be fewer shares of our Common Stock outstanding.
Assuming a 1-for-4 Reverse Stock Split, the principal effect of the Reverse
Stock Split will be that (i) the number of shares of Common Stock issued and
outstanding will be reduced from shares to approximately
shares, (ii) all outstanding shares of Series A Preferred Stock, Series H
Preferred Stock and Series I Preferred Stock entitling holders thereof to
receive, upon conversion, shares of Common Stock will enable such holders to
receive, upon conversion thereof, the same percentage of outstanding shares of
Common Stock which such holders would have received upon conversion thereof
immediately preceding the Reverse Stock Split, (iii) all outstanding options
entitling the holders thereof to purchase shares of Common Stock will enable
such holders to purchase, upon exercise of their options, one-fourth of the
number of shares of Common Stock which such holders would have been able to
purchase upon exercise of their options immediately preceding the Reverse Stock
Split at the same aggregate price required to be paid therefor upon exercise
thereof immediately preceding the Reverse Stock Split, and (iv) the number of
shares included in the our 1997 Amended Stock Option Plan and 1995 Amended Stock
Option Plan will be reduced to 1/4 of the number of shares currently included in
such Stock Option Plans.
Pursuant to the Reverse Stock Split, the par value of the Common Stock will
remain $.01 per share. As a result, on the effective date of the Reverse Stock
Split, the stated capital on our balance sheet attributable to the Common Stock
will be reduced to 1/4th of its present amount (assuming a 1-for-4 Reverse Stock
Split),
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and the additional paid-in capital account shall be credited with the amount by
which the stated capital is reduced.
MANNER OF EFFECTING THE REVERSE STOCK SPLIT AND EXCHANGE STOCK CERTIFICATES
In the event our stockholders approve the Reverse Stock Split and following
the determination by our Board of whether or not the Reverse Stock Split should
be effected, the Reverse Stock Split will be effected by the filing of the
Amendment with the Secretary of the State of Delaware. The Reverse Stock Split
will become effective on the date of filing the Amendment unless we specify
otherwise (the "Effective Date"). As soon as practicable after the Effective
Date, we will send a letter of transmittal to each holder of record of the Old
Shares outstanding on the Effective Date. The letter of transmittal will contain
instructions for the surrender of the certificates representing the Old Shares.
Upon proper completion and execution of the letter of transmittal and return
thereof, together with certificates representing the Old Shares, a stockholder
will be entitled to receive a certificate representing the number of New Shares
into which his or her Old Shares have been reclassified as a result of the
Reverse Stock Split. Stockholders should not submit any certificates until
requested to do so. No new certificate will be issued to a stockholder until
such stockholder has surrendered his or her outstanding certificates together
with the properly completed and executed letter of transmittal. Until so
surrendered, each outstanding certificate representing the Old Shares will be
deemed for all corporate purposes after the Effective Date to evidence ownership
of the New Shares in the appropriately reduced number.
NO RIGHTS OF APPRAISAL
Under the Delaware General Corporation Law, our dissenting stockholders are
not entitled to appraisal rights with respect to our proposed amendment to our
Certificate of Incorporation to effect the Reverse Stock Split, and we will not
independently provide our stockholders with any such right.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
We believe that the federal income tax consequences of the Reverse Stock
Split to holders of Old Shares and holders of New Shares will be as follows:
1. Except as set forth in (5) below, no gain or loss will be
recognized by a stockholder on the surrender of the Old Shares or receipt
of a certificate representing New Shares.
2. Except as set forth in (5) below, the aggregate tax basis of the
New Shares will equal the aggregate tax basis of the Old Shares exchanged
therefor.
3. Except as set forth in (5) below, the holding period of the New
Share will include the holding period of the Old Shares if such Old Shares
were held as capital assets.
4. The conversion of the Old Shares into the New Shares will produce
no gain or loss to us.
5. The federal income tax consequences of the receipt of an additional
share in lieu of a fractional interest is not clear but may result in tax
liabilities which should not be material in amount in view of the low value
of the fractional interest.
Our beliefs regarding the tax consequence of the Reverse Stock Split are
not binding upon the Internal Revenue Service or the courts, and there can be no
assurance that the Internal Revenue Service or the courts will accept the
positions expressed above.
This summary does not purport to be complete and does not address the tax
consequences to our stockholders that are subject to special tax rules, such as
bank, insurance companies, regulated investment companies, personal holding
companies, foreign entities, nonresident foreign individuals, broker-dealers and
tax exempt entities.
The state and local tax consequences of the Reverse Stock Split may vary
significantly as to each stockholder, depending upon the state in which he
resides.
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The foregoing summary is included for general information only.
Accordingly, stockholders are urged to consult their own tax advisors with
respect to the federal, state and local tax consequences of the Reverse Stock
Split.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors will offer the following resolutions at the Special
Meeting:
RESOLVED, that the Board of Directors is empowered in their discretion
without further action of the stockholders of the Company, to file an
amendment to the Certificate of Incorporation of the Company to effect up
to a 1-for-4 reverse stock split of the Company's outstanding shares of
common stock, par value $.01, and that the President, Secretary, or other
officer designated by the President, and each of them be, and hereby are
empowered to take any and all action necessary to effectuate the foregoing.
Approval of the Reverse Stock Split will require the affirmative vote of a
majority of the outstanding shares of our Common Stock.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
REVERSE STOCK SPLIT.
INTEREST OF CERTAIN PERSONS IN
OPPOSITION TO MATTERS TO BE ACTED UPON
We are not aware of any substantial interest, direct or indirect, by
securities holdings or otherwise of any officer, director, or associate of the
foregoing persons in any matter to be acted on, as described herein, other than
elections to offices.
By Order of the Board of Directors
Dennis W. Healey, Secretary
Plantation, Florida
April , 1999
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THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
VIRAGEN, INC.
PROXY -- SPECIAL MEETING OF STOCKHOLDERS -- MAY , 1999
The undersigned, revoking all previous proxies, hereby appoint(s) Gerald
Smith as Proxy, with full power of substitution, to represent and to vote all
Common Stock of Viragen, Inc. owned by the undersigned at the Special Meeting of
our Stockholders to be held in Davie, Florida on May , 1999, including any
original or subsequent adjournment thereof, with respect to the proposals set
forth in the Notice of Special Meeting and Proxy Statement dated _________. No
business other than matters described below is expected to come before the
meeting, but should any other matter requiring a vote of our stockholders arise,
the person named herein will vote thereon in accordance with his best judgment.
All powers may be exercised by said Proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING.
To authorize our Board of Directors to file an Amendment to our
Certificate of Incorporation for the purpose of effecting up to a 1-for-4
Reverse Stock Split of the Company's outstanding Common Stock;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
SPECIFIC DIRECTION IS GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR THE PROPOSAL.
The undersigned stockholder hereby acknowledges receipt of the Notice of
Special Meeting of Stockholders and Proxy Statement and hereby revokes any proxy
or proxies heretofore given. This proxy may be revoked at any time prior to the
Special Meeting. If you received more than one proxy card, please date, sign and
return all cards in the accompanying envelope.
Please sign below exactly as name appears on your common stock
certificates. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation or other entity, please sign in the
corporate name by President or other authorized officer or person. If a
partnership, please sign in partnership name by authorized person.
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Signature
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Signature If Held Jointly
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(Please Print Name)
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Number of Shares Subject to Proxy
DATED: , 1999
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
