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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 14, 2000
REGISTRATION NO. 333-93629
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ORGANOGENESIS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2871690
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
PHILIP M. LAUGHLIN, CHIEF EXECUTIVE OFFICER
ORGANOGENESIS INC.
150 DAN ROAD
CANTON, MASSACHUSETTS 02021
(781) 575-0775
(Address, including zip code, and telephone, including area code, of
registrant's principal executive offices)
COPY TO:
NEIL H. ARONSON, ESQUIRE
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
(617) 542-6000
------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practical after this Registration Statement becomes effective.
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, 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 offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
__________
Calculation of Registration Fee
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of each offering aggregate Amount of
class of securities Amount to be price per offering registration
to be registered registered share price fee (1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share (3) (4) (4) $50,000,000 $13,200.00(5)
- -------------------------------------------------------------------------------------------------------------
Total Registration Fee $13,200.00
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(i) of the Securities Act of
1933. The aggregate initial public offering price of the securities
registered hereby will not exceed $50,000,000 in U.S. dollars or the U.S.
dollar equivalent in foreign currency or currency units. This registration
fee has been previously paid.
(2) May be issued at original issue discount.
(3) Includes associated Preferred Share Purchase Rights, which initially are
attached to and trade with the shares of Common Stock being registered
hereby. The value attributable to such Preferred Share Purchase Rights, if
any, is reflected in the market price of the Common Stock.
(4) The amount to be registered and the proposed maximum offering price have
been omitted pursuant to Rule 457(o) of the Securities Act of 1933.
(5) The registration fee has been calculated pursuant to Rule 457(o) under the
Securities Act of 1933.
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),
shall determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this Prospectus is not complete and may be changed. We may +
+not sell these securities until the Registration Statement filed with the +
+Securities and Exchange Commission is effective. This Prospectus is not an +
+offer to sell these securities and is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
Subject to Completion, dated February 14, 2000
ORGANOGENESIS INC.
3,000,000 Shares of
Common Stock
This Prospectus is part of a Registration Statement we filed with the
Securities and Exchange Commission using a "shelf" registration process. This
means:
. We may issue shares of
common stock from time to
time at an aggregate
initial public offering
price not to exceed
$50,000,000 and not to
exceed 3,000,000 shares
of our common stock.
-----------
. We will circulate a
Prospectus Supplement
each time we issue the
common stock.
This Investment Involves
A High Degree of Risk.
You Should Purchase Shares
Only If You Can Afford
. The Prospectus Supplement A Complete Loss.
will inform you about the
specific terms of that See "Risk Factors"
offering and also may Beginning on Page 4.
add, update or change
information contained in
this Prospectus.
-----------
. You should read this
Prospectus and any
Prospectus Supplement
carefully before you
invest.
Our Common Stock is traded on the American Stock Exchange under the symbol
"ORG".
On February 11, 2000, the last reported sale price for the Common Stock on
the American Stock Exchange was $10.4375 per share.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. It is illegal for any person to tell
you otherwise.
The information in this prospectus is not complete and may be changed. A
registration statement relating to these securities has been filed with the
Securities and Exchange commission. No one may sell these securities nor may
offers to buy be accepted until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer, solicitation or sale is not permitted.
The date of this Prospectus is February , 2000
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We have not authorized any other person to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of this
document.
CERTAIN PERSONS PARTICPATING IN AN OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
COMMON STOCK, AND THE IMPOSITION OF A PENALTY BID, AND BIDDING FOR AND
PURCHASING SHARES OF THE COMMON STOCK IN THE OPEN MARKET DURING AND AFTER AN
OFFERING.
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THE COMPANY
Organogenesis Inc. designs, develops and manufactures medical therapeutics
containing living cells and/or natural connective tissue. We were formed to
advance and apply the emerging field of tissue engineering to major medical
needs. We were organized as a Delaware corporation in 1985, with our principal
executive offices located at 150 Dan Road, Canton, Massachusetts 02021. Our
telephone number is 781-575-0775.
Tissue-engineered products typically include living cells and/or natural
connective tissue material such as collagen. Living cells can produce or remove
substances in response to their environment; connective tissue can provide
physical function while being converted to living tissue through the ingrowth
of a patient's cells and blood vessels. We have established expertise with both
human cells and natural connective tissue and select our product development
approach based upon medical applications. We target applications in which our
products have the potential to provide significant benefits over traditional
approaches and the ability to achieve the necessary economies of scale for
cost-effectiveness. Our product development program includes living tissue
replacements, cell-based organ assist devices such as our Bioartificial Liver,
and other tissue-engineered products such as our vascular graft product. Our
product pipeline includes both products which include living cells, and purely
acellular, connective tissue-based products. We are also exploring additional
opportunities relating to cell and gene therapy applications and to our
cryopreservation technology.
We have established expertise in procuring, culturing and optimizing human
cells to provide cell function in tissue-engineered products. Our lead product,
Apligraf(R)*, was launched in the United States--the world's largest healthcare
market--in June 1998. Apligraf is the only manufactured product containing
living human cells to show efficacy in a controlled study and to gain FDA PMA
approval. Apligraf is approved for use by the FDA in the treatment of venous
leg ulcers. In December 1999, the Company submitted an Apligraf PMA supplement
for diabetic foot ulcers.
Our strategy is to commercialize products either by ourselves or through
partners with an established marketing presence. For example, Novartis Pharma
AG has global marketing rights to Apligraf and is responsible for sales and
marketing costs. We have an active business development program related to
products and technologies in our pipeline.
- --------
* Apligraf(R) is a registered mark of Novartis Pharma AG.
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RISK FACTORS
Before you purchase our common stock, you should be aware that there are
risks, including those described below. You should consider carefully these
risk factors together with all of the other information contained elsewhere in
this prospectus or incorporated by reference before you decide to purchase our
common stock.
Our Company Has a History of Losses and We Expect to Continue to Incur Losses
Organogenesis Inc. was founded in 1985. We have incurred operating losses in
every year of our existence. We incurred net losses of $7,499,000 for the year
ended December 31, 1996, $19,807,000 for the year ended December 31, 1997,
$14,031,000 for the year ended December 31, 1998, and $19,996,000 for the nine
months ended September 30, 1999, which losses are continuing. As of September
30, 1999, we have an accumulated deficit of $121,013,000. We have not achieved
profitability and expect to continue to incur net losses. The extent of future
losses and the time required to achieve profitability is highly uncertain.
Moreover, although our business is not seasonal in nature, our revenues tend to
vary significantly from fiscal quarter to fiscal quarter.
In Order to Achieve Commercial Success, Our Products Must Gain Market
Acceptance
We manufacture and market one principal product: Apligraf. We have only
recently begun to market Apligraf through Novartis and to generate revenues
from the commercialization of this product. Products under development will
require additional research and development efforts, including clinical testing
and regulatory approval, prior to commercial use. Our potential products are
subject to the risks of failure inherent in the development of medical products
based on new technologies. These risks include the possibilities that:
. Our approach will not be successful;
. Our potential products will be found to be unsafe, ineffective or
otherwise will fail to meet applicable regulatory standards or
receive necessary regulatory clearances;
. The potential products, if safe and effective, will be difficult to
develop into commercially-viable products, will be difficult to
manufacture on a large scale, will be uneconomical to market, or will
fail to obtain acceptance by the medical community;
. Proprietary rights of third parties will preclude us from marketing
such products; or
. Third parties will market superior or equivalent products.
Our business results would be hurt if were unable to demonstrate to the
medical community the efficacy, relative safety and cost effectiveness of
treating patients with our products or if our products were not accepted as
alternatives to other existing or new therapies.
Our Markets Are Competitive and Our Competitors Could Develop More Effective
Products
We are engaged in the rapidly evolving and competitive field of tissue
engineering for the treatment of skin wounds and other medical needs. Our
competitors include tissue engineering companies, xenotransplant companies,
wound care divisions of major pharmaceutical companies and other
pharmaceutical, biotechnology and medical products companies using traditional
technologies to develop products for wound care. Some of these companies have
much greater resources, research and development staffs and facilities,
experience in conducting clinical trials and obtaining regulatory approvals and
experience in the manufacturing, marketing and distribution of products than we
do. Our competitive position is based upon our ability to:
. create and maintain scientifically-advanced technology and
proprietary products and processes;
. attract and retain qualified personnel;
. obtain patent or other protection for our products and processes;
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. obtain required government approvals on a timely basis;
. manufacture products on a cost-effective basis; and
. successfully market products.
If we are not successful in meeting these goals, our business could be hurt.
Similarly, our competitors may succeed in developing technologies, products or
procedures that are more effective than any that we are developing or that
would render our technology and products obsolete, noncompetitive or
uneconomical.
We Depend Upon Strategic Relationships to Market Our Products and Our
Distributors May Not Be Successful in Marketing Our Products
We have limited experience in sales, marketing and distribution. We will
need to develop long-term strategic relationships with partners, such as
Novartis, that have marketing and sales forces with technical expertise and
distribution capability. To the extent that we enter into such relationships,
our revenues will depend upon the efforts of third parties who may or may not
be successful. We may not be able to establish or maintain long-term strategic
relationships, and if we do, our collaborators may not be successful in gaining
market acceptance for our products. To the extent that we choose not to or are
unable to negotiate or maintain collaborations, we will need more capital and
resources to undertake a commercialization program at our own expense. In
addition, we may encounter significant delays in introducing our products into
certain markets or find that the commercialization of products in such markets
may be adversely affected by the absence of collaborative agreements. We are
dependent on Novartis for the successful marketing and selling of Apligraf
worldwide. If Novartis does not succeed in marketing and selling Apligraf or
gaining international approvals for the product or if we are unable to meet the
production demand of global commercialization, our operating results will
suffer.
Our Ability to Commercialize Our Products Depends Upon Our Compliance with
Government Regulations
Our present and proposed activities are subject to extensive and rigorous
regulation by governmental authorities in the US and other countries. To
clinically test, produce and market medical devices for human use, we must
satisfy mandatory procedural and safety and efficacy requirements established
by the FDA and comparable state and foreign regulatory agencies. Typically,
such rules require that products be approved by the government agency as safe
and effective for their intended use prior to being marketed. The approval
process is expensive, time consuming and subject to unanticipated delays. Our
product candidates may not be approved. In addition, our product approvals
could be withdrawn for failure to comply with regulatory standards or due to
unforeseen problems after the product's marketing approval.
Testing is necessary to determine safety and efficacy before a submission
may be filed with the FDA to obtain authorization to market regulated products.
In addition, the FDA imposes various requirements on manufacturers and sellers
of products under its jurisdiction, such as labeling, Good Manufacturing
Practices, record keeping and reporting requirements. The FDA also may require
post-marketing testing and surveillance programs to monitor a product's
effects. Furthermore, changes in existing regulations or the adoption of new
regulations could prevent us from obtaining, or affect the timing of, future
regulatory approvals or could negatively affect the marketing of our existing
products. We would not be able to commercialize our products as planned and our
operating results would be hurt if:
. the regulatory agencies find our testing protocols to be inadequate,
. the appropriate authorizations are not granted on a timely basis, or
at all,
. the process to obtain authorization takes longer than expected or we
have insufficient funds to pursue such approvals,
. we lose previously-received authorizations or
. we do not comply with regulatory requirements.
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Medical and biopharmaceutical research and development involves the
controlled use of hazardous materials, such as radioactive compounds and
chemical solvents. We are subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling and disposal of
such materials and waste products. In addition, we handle and dispose of human
tissue. Although we believe that our safety procedures for handling these
materials are adequate, if accidental contamination or injury were to occur, we
could be liable for damages.
We Rely Heavily Upon Our Patents and Proprietary Technology and Lay Claim that
Our Products Are Invalid Could Seriously Harm Our Business
We rely upon our portfolio of patent rights, patent applications and
exclusive licenses to patents and patent applications relating to living tissue
products, organ assist treatments and other aspects of tissue engineering. We
currently have 22 patents issued or allowed in the US, 11 pan-European patents
issued or granted and six patents issued in Japan. As part of our continuing
interest in protecting intellectual property rights, we have filed and are
prosecuting 16 other patent applications in the US. We also license some of our
technologies under an exclusive patent license agreement with the Massachusetts
Institute of Technology. The agreement with MIT covers certain US patents and
corresponding patents in Europe and Japan. Pursuant to the MIT agreement, we
have been granted an exclusive, worldwide license to make, use and sell the
products covered by the patents and to practice the procedures covered by the
patents. We are not currently a party in any infringement claim.
We expect to aggressively patent and protect our proprietary technologies.
However, we cannot be sure that any additional patents will be issued to us as
a result of our domestic or foreign patent applications or that any of our
patents will withstand challenges by others. Patents issued to or licensed by
us may be infringed or third parties may independently develop either the same
or similar technology. Similarly, our patents may not provide us with
meaningful protection from competitors, including those who may pursue patents
which may prevent, limit or interfere with our products or will require
licensing and the payment of significant fees or royalties by us to such third
parties in order to enable us to conduct our business. We may sue or be sued by
third parties regarding patents and other intellectual property rights. These
suits are costly and would divert funds and management and technical resources
from our operations.
We also rely upon unpatented proprietary technology, know-how and trade
secrets and seek to protect them through confidentiality agreements with
employees, consultants and advisors. We request that any corporate sponsor with
which we enter into a collaborative agreement do so as well. If these
confidentiality agreements are breached, we may not have adequate remedies for
the breach. In addition, others may independently develop or otherwise acquire
substantially the same proprietary technology as our technology and trade
secrets.
We have relationships with a number of academic consultants who are not
employed by us. Accordingly, we have limited control over their activities and
can expect only limited amounts of their time to be dedicated to our
activities. These persons may have consulting, employment or advisory
arrangements with other entities that may conflict with or compete with their
obligations to us. Our consultants typically sign agreements that provide for
confidentiality of our proprietary information and results of studies. However,
in connection with every relationship, we may not be able to maintain the
confidentiality of our technology, the dissemination of which could hurt our
competitive position and results of operations. To the extent that our
scientific consultants develop inventions or processes independently that may
be applicable to our proposed products, disputes may arise as to the ownership
of the proprietary rights to such information, and we may not win those
disputes.
We Must Be Able to Manufacture Our Products Successfully
The process of manufacturing our products is complex, requiring strict
adherence to manufacturing protocols. We have been producing our lead product,
Apligraf, for commercial sale since the second half of 1997 in adherence with
these manufacturing protocols. However, with increasing demand for Apligraf, we
must
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further transition from small-scale to full-scale production of our products.
If we do not make the full transition successfully, we will not be able to
satisfy the demands for our products and our results of operations will be
hurt.
We are required to maintain a manufacturing facility in compliance with Good
Manufacturing Practices. Manufacturing facilities and processes pass an
inspection before the FDA issues any product licenses necessary to market
medical therapeutics and are subject to continual review and periodic
inspection. We may not be able to maintain the necessary regulatory approvals
for our manufacturing operations or manufacture our products in a cost-
effective manner. If we were unable to manufacture potential products
independently or obtain or retain third party manufacturing on commercially-
acceptable terms, the submission of products for final regulatory approval and
initiation of marketing would be delayed. This, in turn, may cause us to be
unable to commercialize product candidates as planned, on a timely basis or on
a profitable basis.
We Must Be Able to Obtain Adequate Sources of Supply
We manufacture Apligraf for commercial sale, as well as for use in clinical
trials, at our Canton, Massachusetts facility. Among the fundamental raw
materials needed to manufacture Apligraf are keratinocyte and fibroblast cells.
Because these cells are derived from donated infant foreskin, they may contain
human-borne pathogens. We perform extensive testing of the cells for pathogens,
including the HIV or "AIDS" virus. Our inability to obtain cells of adequate
purity, or cells that are pathogen-free, would limit our ability to manufacture
sufficient quantities of our products.
Another major material required to produce our products is collagen, a
protein obtained from animal source tissue. We have developed a proprietary
method of procuring our own collagen that we believe is superior in quality and
strength to collagen available from commercial sources. We currently obtain
animal source tissue from US suppliers only. We may not be able to obtain
adequate supplies of animal source tissue to meet our future needs or on a
cost-effective basis. The thermo-formed tray assembly that is used in the
manufacturing process of Apligraf is available to us under a supply arrangement
with only one manufacturing source. Because the FDA approval process requires
manufacturers to specify their proposed materials of certain components in
their applications, FDA approval of a new material would be required if a
currently-approved material became unavailable from a supplier. If we are
unable to obtain adequate supplies of thermo-formed tray assemblies to meet
future Apligraf manufacturing needs or if we cannot obtain such assemblies on a
cost-effective basis, our operations would be hurt.
Interruptions in our supply of materials may occur in the future or we may
have to obtain substitute vendors for these materials. Any significant supply
interruption would adversely affect the production of Apligraf. In addition, an
uncorrected impurity or a supplier's variation in a raw material, either
unknown to us or incompatible with our manufacturing process, could hurt our
ability to manufacture products.
The Retention of Key Personnel Is Important to Our Competitive Position
Because of the specialized nature of our business, our success will depend
upon our ability to attract and retain highly-qualified personnel and to
develop and maintain relationships with leading research institutions. The
competition for those relationships and for experienced personnel amongst the
biotechnology, pharmaceutical and healthcare companies, universities and non-
profit research institutions is intense. If we are unable to continue to
attract and retain such personnel or relationships, our competitive position
could be hurt.
We May Be Subject to Product Liability Suits; Our Insurance May Not Be
Sufficient to Cover Damages
Our business exposes us to potential liability risks that are inherent in
the testing, manufacturing, marketing and sale of medical products. The use of
our products and product candidates, whether for clinical trials or commercial
sale, may expose us to product liability claims or product recall and possible
adverse publicity. Although we have product liability insurance coverage, the
level or breadth of our coverage may not
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be adequate to fully cover potential liability claims. In addition, we may not
be able to obtain additional product liability coverage in the future at an
acceptable cost. A successful claim or series of claims brought against us in
excess of our insurance coverage and the effect of product liability litigation
upon the reputation and marketability of our technology and products, together
with the diversion of the attention of key personnel, could negatively affect
our business.
Our Business Is Subject to the Uncertainty of Third-Party Reimbursement and
Health Care Reform Measures Which May Limit Market Acceptance
In both domestic and foreign markets, our ability to commercialize our
product candidates will depend, in part, upon the availability of reimbursement
from third-party payors, such as government health administration authorities,
private health insurers and other organizations. Third-party payors are
increasingly challenging the price and cost-effectiveness of medical products.
If our products are not considered cost-effective, third-party payors may limit
reimbursement. Government and other third-party payors are increasingly
attempting to contain healthcare costs by limiting both coverage and the level
of reimbursement for new therapeutic products approved for marketing by the FDA
and by refusing, in some cases, to provide any coverage for uses of approved
products for disease indications for which the FDA has not granted marketing
approval. If government and third-party payors do not provide adequate coverage
and reimbursement levels for uses of our products, the market acceptance of our
products would be limited.
There have been a number of federal and state proposals during the last few
years to subject the pricing of pharmaceuticals to government control and to
make other changes to the health care system of the US. It is uncertain what
legislative proposals will be adopted or what actions federal, state or private
payors for health care goods and services may take in response to any health
care reform proposals or legislation. We cannot predict the effect health care
reforms may have on our business.
Our Stock Price Is Volatile and Can Fluctuate Significantly Based on Events In
Our Control and General Industry Conditions
The biotechnology sector seems particularly vulnerable to abrupt changes in
investor sentiment. Stock prices of companies in the biotechnology industry,
including ours, can swing dramatically, with little relationship to operating
performance. Our stock price may be affected by a number of factors including,
but not limited to:
. clinical trial results and other product development events,
. the outcome of litigation,
. decisions relating to intellectual property rights,
. the entrance of competitive products into our market,
. changes in reimbursement policies or other practices related to the
pharmaceutical industry or
. other industry and market changes or trends.
During the past three years, the price of our common stock has ranged from
$6.928 to $32.700 per share. These fluctuations can occur due to events within
our control, regulatory actions such as government approval of products or
reimbursements, and general market conditions affecting the biotechnology
sector or the stock market generally.
If We Are Unable to Raise Needed Funds, Your Investment Could Be Adversely
Affected
Based upon our current plans, we believe that existing working capital and
future funds from Novartis, including product and royalty revenue, will be
sufficient to finance operations into 2000. We will need additional capital
within the next year to continue under the current plan. However, this
statement is forward-
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looking and changes may occur that would significantly decrease available cash
before such time. Factors that may change our cash requirements include:
. Delays in obtaining regulatory approvals of products in different
countries, if needed, and subsequent timing of product launches;
. Delays in commercial acceptance and reimbursement when product
launches occur;
. Changes in the progress of research and development programs;
. Changes in the resources devoted to outside research collaborations
or projects, self-funded projects, proprietary manufacturing methods
and advanced technologies; and
. Acquisition of a second manufacturing plant.
Any of these events could adversely impact our capital resources, requiring
us to raise additional funds. Additional funds may not be available when
required on acceptable terms. If adequate funds are not available when needed,
we would need to delay, scale back or eliminate certain research and
development programs or license to third parties certain products or
technologies that we would otherwise undertake ourselves, resulting in a
potential material adverse effect on our financial condition and results of
operations.
Our Anti-Takeover Measures May Affect the Value of Our Stock
We, as a Delaware corporation, are subject to the General Corporation Law of
the State of Delaware, including Section 203, an anti-takeover law enacted in
1988. In general, Section 203 restricts the ability of a public Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder. As a result of the
application of Section 203 and certain provisions in our certificate of
incorporation and bylaws, potential acquirors may be discouraged from
attempting to acquire us, thereby possibly depriving our stockholders of
acquisition opportunities to sell or otherwise dispose our stock at above-
market prices typical of such acquisitions.
We have also adopted a shareholder rights plan which gives holders of common
stock the right to purchase shares of our Series B Junior Participating
Preferred Stock if a potential acquiror purchases or plans to make a tender
offer to purchase 15% or more of our outstanding common stock. The existence of
this plan may make it more difficult for a third party to acquire control of
us.
We are authorized to issue up to 1,000,000 shares of preferred stock, $.01
par value per share and to determine the price, privileges and other terms of
such shares. The issuance of any preferred stock with superior rights to the
common stocks could reduce the value of the common stock. In particular,
specific rights granted to future holders of preferred stock could be used to
restrict our ability to merge with or sell our assets to a third party, thereby
preserving control of Organogenesis by present owners and management and
preventing our holders of common stock from realizing a premium on their
shares.
The Value Of Your Securities May Decrease If Other Security Holders Exercise
Their Options and Warrants or Convert Their Debt Into Common Stock or If Other
Stockholders Sell Their Stock
As of December 20, 1999, 30,689,019 shares of our common stock are
outstanding (excluding 60,000 treasury shares). We have reserved an additional
12,312,475 shares of common stock for future issuance upon exercise or
conversion of options, warrants, the Series C convertible preferred stock and
the convertible debentures. We plan to issue additional options and warrants in
the future. If any of these securities are exercised or converted, you may
experience significant dilution in the market value and earnings per share of
the common stock into which your securities are convertible.
In March 1998, we completed a $20 million convertible preferred stock and
warrant financing with two institutional investors. The Series C preferred
stock pay no dividends, have no voting rights, and are
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convertible into common stock over two years based on the then current market
price at time of conversion (up to $28.80 per share) except that the investors,
in the aggregate, may not convert the Series C preferred stock into common
stock in excess of 1,136,364 shares (or an average exercise price of $17.60 per
share). We may call for conversion of all or part of the shares of Series C
preferred stock under certain conditions based on continued improvement in the
price of our common stock. Conversions by the investors are subject to certain
limits; no limits exist for conversions on redemption or upon a major
transaction. Mandatory conversion is March 26, 2000, at which time we have the
option to redeem any outstanding Series C preferred shares in cash or by
issuing common stock. In addition, the investors received three-year warrants
to purchase an aggregate of 200,000 shares of common stock at $31.20 per share.
The warrants may be exercised at any time prior to April 2001. In July 1998,
the investors exercised their right to receive additional warrants to purchase
150,000 shares of common stock at $17.45 per share with an expiration date of
March 26, 2001. We also issued a warrant to purchase an aggregate of 50,000
shares of common stock at $28.80 per share to the placement agent that expires
March 25, 2001. No further warrants may be issued under the Series C preferred
stock placement. In April 1998, we filed a registration statement for 1,800,000
shares of common stock, the maximum number of shares that may be acquired
relating to this transaction; except for mandatory conversion where the common
share limit does not apply. All shares have been reserved for issuance. The SEC
declared this registration statement effective in May 1998. In May, September
and November 1998, an aggregate of $13,800,000 face amount of the Series C
preferred stock was converted into common stock resulting in the issuance of
approximately 1,136,000 shares of common stock.
We closed a $20 million convertible debt and warrant financing at the end of
March 1999. The convertible debt accrues interest at 7% annually and is
convertible into common stock at a fixed price of $14.50 per share at any time
after March 30, 2000 and through March 29, 2004. Subject to meeting specified
conditions, at our option, any time on or after March 30, 2002, we may prepay
all of the outstanding principal by converting the outstanding principal to
common stock at $14.50 per share and we may pay accrued interest on the debt by
paying cash or by converting the outstanding interest into shares of common
stock at the average trading price for our common stock for the twenty trading
days preceding the interest payment date. In addition, the purchasers of the
convertible debt received five-year warrants to purchase up to 400,000 shares
of common stock at $21.75 per share. The warrants may be exercised upon 75
days' prior written notice at any time prior to March 29, 2004. In May 1999, we
filed a registration statement for 2,096,333 shares of Common Stock issuable as
follows: (1) 1,646,333 shares of Common Stock which may become issuable by
reason of the conversion of the convertible debt, and accrued interest, (2)
400,000 shares which may become issuable upon the exercise of the warrants
issued in the financing, and (3) 50,000 shares issued in connection with an
asset purchase transaction. In May 1999, the SEC declared this registration
statement effective.
If our stockholders sell substantial amounts of our common stock in the
public market following this offering, the market price of our common stock
could fall. Such sales also might make it more difficult for us to sell equity
or equity-related securities in the future at a price we deem appropriate.
We Have No Intention to Pay Dividends
We have never paid any cash dividends on our common stock. We currently
intend to retain all future earnings, if any, for use in our business and do
not expect to pay any dividends in the foreseeable future. As a result, an
investor will only recognize an economic gain on an investment in our stock
from an appreciation in the price of our stock.
Our Business Is Exposed to the Risk of System Failure from the Year 2000
Problem
The Year 2000 issue ("Y2K") refers to potential problems with computer
systems or any equipment with computer chips or software that use dates where
the year has been stored as just two digits (e.g., 98 for 1998). On January 1,
2000, any clock or date recording mechanism incorporating date sensitive
software which uses two digits to represent the year may recognize a date using
00 as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of operations, including, among
other things, a temporary inability to manufacture product or process
transactions, send invoices or engage in similar
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business activities. We have not experienced any disruptions or problems with
our computer systems arising from Y2K issues.
In order to address this situation, we conducted an assessment to identify
and determine the Y2K readiness of our systems. This assessment program focused
on three main functional areas, including:
. Information technology which addresses data, phone and administrative
systems;
. Embedded chip technology which addresses manufacturing systems,
laboratory instruments and plant maintenance systems with
programmable logic controllers with date functions; and
. Material suppliers, vendors and other third parties that address
areas that are critical to the manufacturing process, distribution of
product or other business processes.
The task of assessment from a Y2K readiness perspective is 100% complete and
remedial action for noncompliant systems is complete. In addition to the
assessment of systems, key vendors, suppliers and other third parties were
identified and a survey form was sent to each of these business entities to
determine if their systems are Y2K compliant. We have received responses from
all of our critical vendors, suppliers, and other third parties. Y2K issues
with our vendors, suppliers or other third parties could delay the shipment and
receipt of critical supplies, potentially impacting production and operations.
We proactively addressed the Y2K issue with vendors, suppliers and other third
parties to minimize risk from these external factors.
Our Y2K project is complete and the costs associated with the Y2K issue was
about $250,000, which included the use of internal resources. Working capital
was used to fund these costs. Costs consisted primarily of payroll costs for
existing employees, including the information technology group, which are not
separately tracked, as well as certain hardware and software upgrades and
training costs. If we or key third parties such as suppliers and customers are
not Y2K ready, there could be an adverse effect on our business, results of
operations and financial condition. We believe that with the implementation of
the Y2K program the risk of significant interruptions of normal operations is
reduced. We have developed certain contingency plan to address a situation in
which Y2K problems do cause an interruption in normal business activities.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any document we file at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
request copies of these documents by writing to the SEC and paying a fee for
the copying cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference room. Our SEC filings are also
available to the public at the SEC's web site at "http://www.sec.gov." In
addition, our stock is listed for trading on the American Stock Exchange. You
can read and copy reports and other information concerning us at the offices of
the American Stock Exchange located at 86 Trinity Place, New York, New York
10006-1881.
This prospectus is only part of a Registration Statement on Form S-3 that we
have filed with the SEC under the Securities Act of 1933 and therefore omits
certain information contained in the Registration Statement. We have also filed
exhibits and schedules with the Registration Statement that are excluded from
this prospectus, and you should refer to the applicable exhibit or schedule for
a complete description of any statement referring to any contract or other
document. You may:
. inspect a copy of the Registration Statement, including the exhibits
and schedules, without charge at the public reference room or
. obtain a copy from the SEC upon payment of the fees prescribed by the
SEC.
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INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until all of the shares of common stock are sold. The documents we are
incorporating by reference are:
. Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998, filed on March 31, 1999 (File No. 1-09898);
. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999, and September 30, 1999 filed on May 14, 1999,
August 16, 1999, and November 15, 1999, respectively;
. Our Proxy Statement, filed on April 21, 1999; and
. The description of our capital stock contained in our registration
statements on Form 8-A under the 1934 Act (File No. 1-09898),
including amendments or reports filed for the purpose of updating
that description.
You may request a copy of these filings at no cost by writing or telephoning
our Director of Investor and Public Relations at the following address and
phone number:
Organogenesis Inc.
150 Dan Road
Canton, Massachusetts 02021
(781) 575-0775
This prospectus is part of a Registration Statement that we filed with the
SEC. You should rely only on the information incorporated by reference in or
provided in this prospectus and the Registration Statement.
This prospectus and the documents incorporated by reference contain forward-
looking statements. These statements can be identified by the use of forward-
looking terminology such as "may," "will," "could," "expect," "anticipate,"
"estimate," "continue" or other similar words. These statements discuss future
expectations, contain projections of results of operations or of financial
condition or state other forward-looking information. Examples of forward-
looking statements can be found in the discussion set forth under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
our Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and
under "Business" in the Form 10-K, incorporated in this prospectus by
reference. Such statements are based on current expectations that involve a
number of uncertainties including those set forth in the risk factors below.
When considering forward-looking statements, you should keep in mind that the
risk factors noted below and other factors noted throughout this prospectus or
incorporated by reference could cause our actual results to differ
significantly from those contained in any forward-looking statement. You should
read the entire prospectus carefully, including the "Risk Factors" section, and
you must consult the more detailed financial statements, and notes to financial
statements, incorporated by reference in this prospectus.
USE OF PROCEEDS
We plan to use the net proceeds from the sale of the common stock for
general corporate purposes, including working capital, capital expenditures and
acquisitions. Each time we sell the common stock, we will provide a Prospectus
Supplement that will contain information about how we intend to use the net
proceeds from the Securities.
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PLAN OF DISTRIBUTION
We may offer our common stock directly to purchasers, to or through
underwriters, through dealers or agents, or through a combination of such
methods.
If underwriters are used in an offering of our common stock, we will execute
an underwriting agreement with such underwriters and will set out the name of
each underwriter and the terms of the transaction, including any underwriting
discounts and other terms constituting compensation of the underwriters and any
dealers in a Prospectus Supplement. If an underwriting syndicate is used, the
managing underwriter(s) will be set forth on the cover of a Prospectus
Supplement. Common stock will be acquired by the underwriters for their own
accounts and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Any public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers are used in an offering of our common stock, we will sell the
common stock to the dealers as principals. The dealers then may resell such
shares of common stock to the public at varying prices which they determine at
the time of resale. The names of the dealers and the terms of the transaction
will be set forth in a Prospectus Supplement.
If agents are used in an offering of our common stock, the names of the
agents and the terms of the agency will be set forth in a Prospectus
supplement. Unless otherwise indicated in a Prospectus Supplement, the agents
will act on a best-efforts basis for the period of their appointment.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act of 1933) of the
Securities described therein. Underwriters, dealers and agents, may be entitled
to indemnification by us against certain liabilities (including liabilities
under the Securities Act of 1933) under underwriting or other agreements. The
terms of any indemnification provisions will be set forth in a Prospectus
Supplement.
We may solicit offers to purchase our common stock from, and sell common
stock directly to, institutional investors or others who may be deemed to be
underwriters within the meaning of the Securities Act of 1933 with respect to
any resales thereof. The terms of any offer will be set forth in a Prospectus
Supplement.
Certain underwriters, dealers or agents and their associates may engage in
transactions with, and perform services for us in the ordinary course of
business, including refinancing of our indebtedness.
If so indicated in a Prospectus Supplement, we will authorize underwriters
or other persons acting as our agents to solicit offers by institutional
investors to purchase our common stock pursuant to contracts providing for
payment and delivery on a future date. We may enter contracts with commercial
and savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutional investors. The
obligations of any institutional investor will be subject to the condition that
its purchase of our common stock will not be illegal, at the time of delivery.
The underwriters and other agents will not be responsible for the validity or
performance of contracts.
To facilitate an offering of our common stock, certain persons participating
in the offering may engage in transactions that stabilize, maintain or
otherwise affect the price of our common stock. This may include over-
allotments of the common stock. Over-allotments involve the sale by persons
participating in the offering of more common stock than we have sold to them.
In such circumstances, these persons would cover over-allotments by purchasing
our common stock in the open market or by exercising their over-allotment
options. In addition, such persons may stabilize or maintain the price of our
common stock by bidding for or purchasing our common stock in the open market
or by imposing penalty bids, whereby selling concessions allowed to dealers
participating in any such offering may be reclaimed if common stock they sell
are repurchased in connection with stabilization transactions. The effect of
these transactions may be to stabilize or maintain the
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market price of our common stock at a level above that which might otherwise
prevail in the open market. These transactions, if commenced, may discontinue
at any time.
DESCRIPTION OF SECURITIES
Authorized and Outstanding Capital Stock
Pursuant to our Certificate of Incorporation, as amended, we are authorized
to issue up to 80,000,000 shares of our common stock, $.01 par value per share.
We are authorized to issue up to 1,000,000 shares of preferred stock, $1.00 par
value per share.
As of December 31, 1999, there were issued and outstanding 30,689,019 shares
of our common stock (excluding 85,000 treasury shares). The table below sets
forth for each of our stock option plans, as of December 20, 1999, (a) the
number of shares of common stock reserved for issuance under each option plan
and (b) of the shares of common stock reserved for issuance, (1) the number of
shares issued pursuant to the exercise of granted options, (2) the number of
shares still available for issuance and (3) the number of shares available for
issuance or no longer available for issuance.
<TABLE>
<CAPTION>
Shares Subject to Issued Available No Longer
Reserved Outstanding Pursuant to for Available
For Option Exercised Future for Future
Issuance Grants Options Issuance Issuance
--------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
1986 Stock Option Plan.. 4,882,812 2,290,392 2,353,073 -- 239,347
1995 Stock Option Plan.. 5,000,000 3,359,151 161,189 1,479,660 --
1991 Directors' Stock
Option Plan............ 244,141 73,246 36,623 -- 134,272
1994 Directors' Stock
Option Plan............ 488,281 277,546 46,388 164,347 --
1999 Non-Qualified Stock
Option Plan............ 1,000,000 450,000 -- 550,000 --
Officer Stock Option
Agreement.............. 732,423 732,423 -- -- --
</TABLE>
In addition, 366,211 shares of our common stock are reserved for issuance
under our 1991 Employee Stock Purchase Plan. 51,597 of these shares have been
issued at December 31, 1999 and 314,614 are still available for future
issuance.
In addition, 1,800,000 shares have been reserved for issuance upon
conversion of the Series C Preferred Stock and exercise of the Warrants issued
in a private placement of our securities in March 1998 and 50,000 shares have
been reserved for issuance upon the exercise of warrants issued to Reedland
Capital Partners. Pursuant to our issuance of convertible notes and warrants in
March 1999, an additional 2,046,333 shares of our common stock have been
reserved for issuance upon (i) the conversion of convertible notes into common
stock, (ii) the payment of accrued interest on the convertible notes in common
stock, and (iii) the exercise of warrants issued in the financing.
Pursuant to an asset purchase transaction with Baxter Healthcare
Corporation, an additional 50,000 shares of our common stock have been reserved
for issuance and were issued as of April 30, 1999.
Common Stock
The holders of Common Stock are entitled to one vote per share for each
share held of record on all matters submitted to a vote of stockholders and are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the company, holders of Common Stock
have the right to a ratable portion of assets remaining after payment of
liabilities and the liquidation preferences of any outstanding Preferred Stock.
The holders of Common Stock have no preemptive rights or rights to convert
their Common Stock into any other securities and are not subject to future
calls or assessments by the company. All outstanding shares of Common Stock are
fully paid and non-assessable.
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Shareholder Rights
In August 1995, the Board of Directors adopted a Stockholder Rights Plan and
declared a dividend of one right for each outstanding share of common stock to
stockholders of record on September 1, 1995. After adjusting for two one- for-
four stock dividends distributed during 1997 and one one-for-four stock
dividend distributed during 1998, there is approximately .51 of a right for
each outstanding share of common stock. Each right only becomes exercisable and
transferable apart from the common stock at the earlier of: (1) ten days after
a person or group acquires beneficial ownership of 15% or more of outstanding
common stock; or (2) ten business days following an announcement of a tender or
exchange offer of 30% or more of outstanding stock.
Initially, each right, upon becoming exercisable, would entitle the holder
to purchase one-thousandth of a share of Series B Junior participating
preferred stock at an exercise price of $85, subject to adjustment. If a person
or group acquires beneficial ownership of 15% or more of the outstanding shares
of common stock, then each holder of a right (other than rights held by the
acquiring person or group) would have the right to receive that number of
shares of common stock which equals the exercise price of the right divided by
one-half of the current market price of the common stock.
The rights may be redeemed for $0.01 per right at any time until the tenth
day following the stock acquisition date. The rights will expire on September
1, 2005.
Delaware Law and Our Charter and By-law Provisions; Anti-takeover Effects
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law statute. Section 203 prohibits a publicly held Delaware
corporation from engaging in a business combination with an interested
stockholder for a period of three years after the person becomes an interested
stockholder, unless the business combination is approved in a prescribed
manner. A business combination includes mergers, asset sales and other
transactions resulting in a financial benefit to the interested stockholder.
Subject to certain exceptions, an interested stockholder is a person who,
together with affiliates and associates, owns, or within three years did own,
15% or more of the corporation's voting stock.
Under the by-laws, any vacancy on our board of directors, including a
vacancy resulting from an enlargement of our board of directors, may only be
filled by vote of a majority of the directors then in office, making it more
difficult for a third party to acquire, or discourage a third party from
acquiring, control of our company.
Our stockholders must comply with advance notice and information disclosure
requirements in order for any matter to be considered "properly brought" before
a meeting. Stockholders must deliver written notice to us between 60 and 90
days prior to the meeting. If we give less than 70 days' notice or prior public
disclosure of the meeting date, stockholders must deliver written notice to us
within ten days following the date upon which the notice of the meeting was
mailed or such public disclosure was made, whichever occurs first. If the
matter relates to the election of directors, the notice must set forth specific
information regarding each nominee and the nominating stockholder. For any
other matter, the notice must set forth a brief description of the proposed
matter and certain information regarding the proponent stockholder. These
provisions could delay until the next stockholders' meeting proposed actions
which are favored by the holders of a majority of our outstanding voting
securities. These provisions could also discourage a third party from making a
tender offer for our common stock, because even if it acquired a majority of
the outstanding voting securities, the third party would be able to take action
as a stockholder only at a duly called stockholders' meeting, and not by
written consent.
Our certificate of incorporation contains certain provisions permitted under
the Delaware General Corporation Law statute relating to the limitation of
liability of directors. These provisions eliminate a director's liability for
monetary damages for a breach of fiduciary duty, except in certain
circumstances involving wrongful acts, such as the breach of a director's duty
of loyalty or acts or omissions which involve
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intentional misconduct or a knowing violation of law. Further, the certificate
of incorporation contains provisions to indemnify our directors and officers to
the fullest extent permitted by the Delaware General Corporation Law statute.
We believe that these provisions will assist us in attracting and retaining
qualified individuals to serve as our directors.
Preferred Stock
The Board of Directors may, without further action of our stockholders,
issue preferred stock in one or more series and fix the rights and preferences
thereof, including dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption (including sinking fund provisions), redemption
price or prices, liquidation preferences and the number of shares constituting
any series or the designation of such series.
We have authorized 1,000,000 shares of preferred stock at August 10, 1999,
of which 250,000 shares are designated as Series A convertible preferred stock,
50,000 shares are designated as Series B junior participating preferred stock
and 200 shares are designated as Series C convertible preferred stock. The
250,000 shares of Series A convertible preferred stock that were previously
issued were subsequently converted into 312,500 shares of common stock in
October 1995. No shares of Series A or Series B preferred stock are issued and
outstanding as of the date of this prospectus or were issued and outstanding as
of December 31, 1996, 1997 or 1998.
In March 1998, we completed a placement of 200 shares of Series C
convertible preferred stock and warrant financing with two institutional
investors. The Series C preferred stock pay no dividends, have no voting
rights, and are convertible into common stock on a scheduled basis over two
years based on market price at time of conversion. The conversion price per
share is to be the lower of (a) $28.80 and (b) the average of the closing bid
prices of our common stock for any three trading days selected by the investors
during the 20 consecutive trading days immediately prior to the date of
conversion, in each case, subject to adjustment for subsequent dilutive
financings or if we declare a dividend or make a distribution in shares of
common stock, subdivide or reclassify the outstanding shares of common stock
into a greater number of shares, or combine or reclassify our outstanding
common stock into a smaller number of shares. The investors, in the aggregate,
may not convert preferred stock into common stock in excess of 1,136,364
shares. However, no limits exist for conversions upon redemption or upon a
major transaction, such as a consolidation or merger, the sale or transfer of
substantially all of our assets, or a purchase, tender or exchange offer for
more than 50% of our outstanding shares of common stock that is accepted by the
holders of common stock. In addition, the investors are not entitled to convert
Series C preferred stock in excess of that number of Series C preferred stock
shares that, upon giving effect to the conversion, would cause the aggregate
number of shares of common stock beneficially owned by that investor and its
affiliates to exceed 4.9% of our outstanding shares of common stock following
the conversion. We may call for conversion of all or part of the shares of
Series C preferred stock under certain conditions based on continued
improvement in the price of our common stock. If any Series C preferred stock
remains outstanding on the mandatory conversion date of March 26, 2000, we have
the option of redeeming any such outstanding Series C preferred stock by: (1)
paying cash equal to the product of the number of Series C preferred stock
outstanding multiplied by the stated value of $100,000 per share; (2) issuing
common stock equal to 1.15 of the stated value divided by the average of the
closing bid prices for the 20 consecutive trading days prior to the mandatory
conversion date; or (3) any combination of these methods. In addition, the
investors received three-year warrants to purchase an aggregate of 200,000
shares of common stock at $31.20 per share. The warrants may be exercised at
any time prior to April 2001. In July 1998, the investors exercised their right
to receive additional warrants to purchase 150,000 shares of common stock at
$17.45 per share with an expiration date of March 26, 2001. We also issued a
warrant to purchase an aggregate of 50,000 shares of common stock at $28.80 per
share to the placement agent that expires March 25, 2001. No further warrants
may be issued under the Series C preferred stock placement.
In April 1998, we filed a registration statement for 1,800,000 shares of
common stock, the maximum number of shares that may be acquired relating to
this transaction; except for mandatory conversion where the common share limit
does not apply. All shares have been reserved for issuance. The SEC declared
this
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registration statement effective in May 1998. In May, September and November
1998, an aggregate of $13,800,000 face amount of the Series C preferred stock
was converted into common stock resulting in the issuance of approximately
1,136,000 shares of common stock. As of the date of this prospectus, we have 62
shares of Series C convertible preferred stock outstanding.
In the event of any liquidation, dissolution or winding up of the company,
the holders of the Series C preferred stock will be entitled to receive an
amount per Series C preferred stock share equal to the stated value, before any
amount shall be paid to the holders of any of our capital stock of any class
junior in rank to the Series C preferred stock. As long as the initially issued
shares of Series C preferred stock remain outstanding, then without the prior
express written consent of the holders of not less than two-thirds ( 2/3) of
the then outstanding Series C preferred stock, we may not authorize or issue
additional or other capital stock that is of senior rank to the Series C
preferred stock in respect of the preferences as to distributions and payments
upon the liquidation, dissolution and winding up of the company. Until all of
the Series C preferred stock has been converted or redeemed, we may not redeem
or declare or pay any cash dividend or distribution on our common stock or any
other series of our preferred stock without the prior express written consent
of the holders of not less than two-thirds ( 2/3) of the then outstanding
Series C preferred stock.
Additional shares of authorized preferred stock may be issued without
stockholder approval, subject to the rights of any holders of outstanding
Series C preferred stock. The Board of Directors is authorized to issue such
shares in one or more series and to fix the rights, preferences, privileges,
qualifications, limitations and restrictions thereof, including dividend rights
and rates, conversion rights, voting rights, terms of redemption, redemption
prices, liquidation preferences and the number of shares constituting any
series or the designation of such series, without any vote or action by the
holders of common stock. Any preferred stock to be issued could rank prior to
the common stock with respect to dividend rights and rights on liquidation. The
Board of Directors, without approval of the holders of common stock, may issue
preferred stock with voting and conversion rights that could adversely affect
the voting power of holders of common stock or create impediments to persons
seeking to gain control of the company.
The rights of the holders of common stock as described above will be subject
to, and may be adversely affected by, the rights of holders of the Series C
preferred stock and any preferred stock that may be issued in the future.
Issuance of preferred stock, while providing desirable flexibility in
connection with possible acquisitions, and other corporate purposes, could have
the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, a majority of our outstanding voting
stock. See "Description of Securities"--Shareholder Rights."
Convertible Debt
On March 31, 1999, we completed a financing of $20,000,000 through the
private placement of five year convertible debentures and 400,000 warrants to
purchase common stock. The debentures are convertible at a fixed price of
$14.50 per share any time on or after March 30, 2000. Interest on the
debentures accrues at 7% annually, payable in cash, common stock (at the
average trading price for the twenty trading days preceding the due date) or
any combination thereof, at our option, semi-annually on September 30 and March
31 or on the date any of the principal outstanding under the notes has been
converted into common stock. At our option, at any time on or after March 30,
2002, the debentures may be prepaid by conversion of the principal into common
stock at the conversion price of $14.50, cash or any combination thereof and
payment of any accrued interest as described above, provided that the average
per share market value for the twenty consecutive trading days immediately
preceding the date of prepayment equals or exceeds $38.67 per share. The
debentures mature on March 29, 2004 and are payable in cash upon maturity.
Warrants
In connection with our issuance of $20 million of 7% convertible debt in
March 1999, each purchaser of the convertible debt received one warrant for
each $50.00 in face value of the convertible debt purchased,
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for an aggregate issuance of 400,000 warrants. Each warrant grants the right to
purchase one share of common stock at an exercise price of $21.75 at any time
on or before March 29, 2004. The warrants are exercisable upon 75 days' prior
written notice by the registered holder of the warrant, except upon certain
conditions. The exercise price and the number of shares of common stock
issuable upon exercise of each warrant are subject to adjustment from time to
time upon any stock dividend or other distribution upon shares of capital
stock, stock split, subdivision, combination or reclassification of the
outstanding shares of common stock and consolidation, merger or transfer of all
or substantially all of our assets.
Treasury Stock
In September 1998, the Board of Directors authorized a common stock
repurchase program. Repurchases are allowed through open-market transactions
for up to 500,000 shares that will provide us with treasury shares for general
corporate purposes. At December 31, 1999, we had in treasury 85,000 shares of
common stock for an aggregate purchase price of $804,000. The stock repurchase
program may be discontinued at any time.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
LEGALITY OF COMMON STOCK AND WARRANTS
The validity of the securities offered in this prospectus is being passed
upon for us by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston,
Massachusetts.
EXPERTS
The financial statements incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the fiscal year ended December 31, 1998 have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
INDEMNIFICATION
Section 145 of the General Corporation Law of the State of Delaware provides
that we have the power to indemnify our directors, officers, employees or
agents and certain other persons serving at our request in related capacities
against amounts paid and expenses incurred in connection with an action or
proceeding to which he or she is or is threatened to be made a party by reason
of such position, if such person shall have acted in good faith and in a manner
he reasonably believed to be in or not opposed to our best interests, and, in
any criminal proceeding, if such person had no reasonable cause to believe his
conduct was unlawful, provided that, in the case of actions brought by or on
behalf of us, no indemnification shall be made with respect to any matter as to
which such person shall have been adjudged to be liable to us unless and only
to the extent that the adjudicating court determines that such indemnification
is proper under the circumstances.
Section 102(b)(7) of the Delaware General Corporation Law permits us to
provide in our certificate of incorporation that our directors shall not be
personally liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
18
<PAGE>
Our Restated Certificate of Incorporation provides for indemnification to
the fullest extent permitted by law and that we may advance litigation expenses
to an officer or director prior to the final disposition of an action.
Our Restated Certificate of Incorporation also provides, as permitted by
Delaware law, that directors shall not be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of a director's duty of loyalty to the
company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violations of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
We have a Directors and Officers liability insurance policy that insures our
officers and directors against certain liabilities.
Commission Policy
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling us, we have been
informed that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
19
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell and seeking offers to
buy our Securities only in jurisdictions where offers and sales are permitted.
The information contained in this prospectus is accurate only as of February
, 2000. You should not assume that this prospectus is accurate as of any other
date.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Company................................................................ 3
Risk Factors............................................................... 4
Where You Can Find More Information........................................ 11
Incorporation of Documents By Reference.................................... 12
Use of Proceeds............................................................ 12
Plan of Distribution....................................................... 13
Description of Securities.................................................. 14
Transfer Agent and Registrar............................................... 18
Legality of Common Stock and Warrants...................................... 18
Experts.................................................................... 18
Indemnification............................................................ 18
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3,000,000 Shares of Common Stock
ORGANOGENESIS INC.
---------------
PROSPECTUS
---------------
February , 2000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The table sets forth our estimates (other than the SEC and AMEX Filing
Fees) of our expenses in connection with the issuance and distribution of the
Securities being registered. Other than the SEC registration fee, the amounts
stated are estimates.
<TABLE>
<CAPTION>
Item Amount
- ---- ------
<S> <C>
SEC registration fee....................................................................... $ 13,200.00
AMEX listing fee........................................................................... 17,500.00
Legal fees and expenses.................................................................... 25,000.00
Accounting fees and expenses............................................................... 10,000.00
Miscellaneous fees and expenses............................................................ $ 10,000.00
-----------
Total...................................................................................... $ 75,700.00
-----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
See "Indemnification" contained in Part I hereof, which is incorporated herein
by reference.
We shall indemnify and hold harmless persons who serve at our express written
request as directors or officers of another organization in which we own shares
or of which we are a creditor.
In addition, the Registration Rights Agreements, filed as Exhibit 99c and 99d
hereto, contain provisions for indemnification by the parties to those
agreements and their officers, directors, and controlling persons against
certain liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------
4.1 The Restated Certificate of Incorporation of the Registrant
(previously filed with the Commission on August 16, 1999 as Exhibit
3(I) to the Registrant's Form 10-Q for the quarter ended June 30,
1999, and incorporated herein by reference).
4.2 Form of Common Stock Certificate (previously filed as Exhibit No. 4c
to the Registrant's Registration Statement on Form S-1, File No. 33-
48340, and incorporated herein by reference).
4.3 Bylaws (previously filed as Exhibit No. 4b to the Registrant's
Registration Statement on Form S-1, File No. 33-48340, and
incorporated herein by reference).
5* Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with
respect to the legality of the securities being registered.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included in Exhibit 5).
24 Power of Attorney (filed in Part II of this Registration Statement).
- ------------
* Filed as part of this Amendment Number 2 to this Registration Statement.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
A. Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(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)(sec.230.424(b) of this
chapter) 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) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the 1934 Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. Filings Incorporating Subsequent Exchange Act Documents by Reference
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.
C. Incorporated Annual and Quarterly Reports.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-2
<PAGE>
D. Request for Acceleration of Effective Date or Filing of Registration
Statement on Form S-8
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 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 Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
this registration statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Canton, Commonwealth of
Massachusetts, on February 14, 2000.
ORGANOGENESIS INC.
By: /s/ Philip M. Laughlin
-------------------------------------------
Philip M. Laughlin, Chief Executive Officer
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Philip M. Laughlin President, February 14, 2000
- --------------------------
Philip M. Laughlin Chief Executive Officer
/s/ Donna Abelli Lopolito Vice President, February 14, 2000
- --------------------------
Donna Abelli Lopolito Chief Financial Officer,
Treasurer and Secretary
(principal financial officer
and principal accounting officer)
/s/ Richard S. Cresse Director February 14, 2000
- --------------------------
Richard S. Cresse
/s/ Albert Erani Director February 14, 2000
- --------------------------
Albert Erani
/s/ David A. Gardner Director February 14, 2000
- --------------------------
David A. Gardner
/s/ Bernard A. Marden Director February 14, 2000
- --------------------------
Bernard A. Marden
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Bjorn R. Olsen Director February 14, 2000
- --------------------------
Bjorn R. Olsen
/s/ Marguerite A. Piret Director February 14, 2000
- --------------------------
Marguerite A. Piret
/s/ Anton E. Schrafl Director February 14, 2000
- --------------------------
Anton E. Schrafl
/s/ Herbert M. Stein Director February 14, 2000
- --------------------------
Herbert M. Stein
</TABLE>
II-5
<PAGE>
ORGANOGENESIS INC.
INDEX TO EXHIBITS FILED WITH
FORM S-3 REGISTRATION STATEMENT
EXHIBIT
NUMBER DESCRIPTION
- ------ ----------------------------------------------------------------------
4.1 The Restated Certificate of Incorporation of the Registrant
(previously filed with the Commission on August 16, 1999 as Exhibit
3(I) to the Registrant's Form 10-Q for the quarter ended June 30,
1999, and incorporated herein by reference).
4.2 Form of Common Stock Certificate (previously filed as Exhibit No. 4c
to the Registrant's Registration Statement on Form S-1, File No. 33-
48340, and incorporated herein by reference).
4.3 Bylaws (previously filed as Exhibit No. 4b to the Registrant's
Registration Statement on Form S-1, File No. 33-48340, and
incorporated herein by reference).
5 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with
respect to the legality of the securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included in Exhibit 5)
24 Power of Attorney (filed in Part II of the Registration Statement as
filed with the Commission on December 27, 1999).
<PAGE>
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
617 542 6000
617 542 2241 fax
February 14, 2000
Organogenesis Inc.
150 Dan Road
Canton, Massachusetts 02021
Ladies and Gentlemen:
We have acted as counsel to Organogenesis Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission of a Registration Statement on Form S-3
(the "Registration Statement"), pursuant to which the Company is registering
under the Secfurities Act of 1933, as amended, a total of up to 3,000,000
shares (the "Shares") of its common stock, $.01 par value per share (the "Common
Stock"), for resale to the public. This opinion is being rendered in connection
with the filing of the Registration Statement.
In connection with this opinion, we have examined the Company's
Certificate of Incorporation and By-Laws, both as currently in effect; such
other records of the corporate proceedings of the Company and certificates of
the Company's officers as we have deemed relevant; and the Registration
Statement and the exhibits thereto.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that (i) the Shares have
been duly and validly authorized by the Company and (ii) the Shares, when sold,
will have been duly and validly issued, fully paid and non-assessable shares of
the Common Stock, free of preemptive rights.
Our opinion is limited to the federal securities laws of the United
States, the laws of the Commonwealth of Massachusetts and the corporate laws of
the State of Delaware, and we express no opinion with respect to the laws of any
other jurisdiction. No opinion is expressed hereein with respect to the
Boston Washington Reston New York
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
February 14, 2000
Page 2
qualification of the Shares under the securities or blue sky laws of any
state or any foreign jurisdiction.
We understand that you wish to file this opinion as an exhibit to
the Registration Statement, and we hereby consent thereto. We hereby
further consent to the reference to us under the caption "Legality of
Common Stock" in the prospectus included in the Registration Statement.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky And Popeo, P.C.
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY and POPEO, P.C.
cc: Board of Directors
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of Organogenesis Inc. of our report dated March 30, 1999
relating to the consolidated financial statements which appears in the Annual
Report to Shareholders, which is incorporated by reference in Annual Report on
Form 10-K for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
February 14, 2000
