As filed
with the Securities and Exchange Commission on January 7, 2010
Registration
No. 333-128083
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 5
ON
FORM S-3
TO
FORM
S-2
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
BIOTIME,
INC.
(Exact name of Registrant as
specified in charter)
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California
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94-3127919
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification Number)
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Michael
D. West, Chief Executive Officer
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1301
Harbor Bay Parkway, Suite 100
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BioTime,
Inc.
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Alameda,
California 94502
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1301
Harbor Bay Parkway, Suite 100
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(510)
521-3390
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Alameda,
California 94502
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(Address,
including zip code,
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(510)
521-3390
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and
telephone number, including area code of Registrant’s principal executive
offices),
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(Name,
address, including zip code, and telephone number, including area code, of
agent for service)
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_________________________
Copies
of all communications, including all communications sent to the agent for
service, should be sent to:
RICHARD
S. SOROKO, ESQ.
Lippenberger,
Thompson, Welch, Soroko & Gilbert LLP
201
Tamal Vista Blvd.
Corte
Madera, California 94925
Tel.
(415) 927-5200
_________________________
Approximate
date of commencement of proposed sale to the public: As soon as
practicable 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 of the Securities Act of 1933, other than
securities offered only in connection with dividend or interest reinvestment
plans, check the following box. ¨
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 this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. ¨
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934. (Check
one):
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Large
accelerated filer ¨
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|
Accelerated
filer ¨
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Non-accelerated
filer ¨
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(Do
not check if a smaller reporting company)
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Smaller
reporting company x
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The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its Effective Date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
This
Registration Statement relates to the registration statements under Commission
file numbers 333-109442.
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 it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
Subject
to Completion, Dated January 7, 2010
PROSPECTUS
BIOTIME,
INC.
7,060,488
Warrants
7,060,488
Common Shares Issuable Upon Exercise of Warrants
2,694,282
Common Shares Held by Selling Security Holders
This
prospectus relates to 7,060,488 outstanding warrants, and the common shares that
may be issued upon the exercise of the warrants. The exercise price
of the warrants is $2.00 per share. The warrants will expire at 5:00
New York time on October 31, 2010 and may not be exercised after that
date.
We are
offering holders of those warrants the opportunity to exercise at least a
portion of their warrants at a discounted exercise price for a limited period of
time. Until 5:00 p.m. New York Standard Time on __________, 2010 (the
“Discount Offer Expiration Time”), we will allow up to 3,000,000 warrants to be
exercised at an exercise price of $1.70 per share (the “Discount
Offer”). This represents a discount of $0.30 per share from the
regular exercise price of $2.00 per share.
All
exercises of the warrants at the discounted exercise price will be subject to
proration if more than 3,000,000 warrants are exercised in the Discount
Offer. All warrants and exercise price funds received by the warrant
agent, American Stock Transfer & Trust Company, will be held until
approximately __ business days after the Discount Offer Expiration Time, at
which time the warrant agent will determine the total number of warrants
received that have been exercised properly in the Discount Offer. If
that number exceeds 3,000,000, the warrant agent will allocate common shares
among the warrant holders on a pro rata basis, based upon the number of warrants
exercised by each warrant holder and total number of warrants exercised by all
warrant holders in the Discount Offer. Any exercise
price funds received by the warrant agent in excess of the aggregate exercise
price of the common shares allocated to a warrant holder in the Discounted Offer
will be returned to the warrant holder without interest or
deduction.
If a
warrant holder exercises fewer than all of the warrants evidenced by their
warrant certificate, or if the exercise of their warrant is subject to
proration, the warrant agent will also deliver to the warrant holders a new
warrant certificate for the unexercised portion of their warrant
certificate. The warrant agent expects that certificates for shares
issued in the Discount Offer will be mailed to the exercising warrant holders
approximately ___ business days after the proration period.
During
and after the Discount Offer, warrant holders who desire to exercise their
warrants and receive common shares immediately, without proration, will be able
to exercise the warrants at the regular exercise price of $2.00 per
share.
This
warrants included in this prospectus include 3,963,140 warrants that we issued
in our subscription rights offers that were completed during January 2004 and
December 2005 and 3,097,348 warrants held by certain persons or affiliates of
persons who acted as “Guarantors” or “Participating Debenture Holders” in the
subscription rights offers. This prospectus also relates to 2,694,282
common shares held by the Guarantors and Participating Debenture
Holders.
The
common shares are quoted on the NYSE Amex under the symbol BTIM, and the
warrants are quoted on the NYSE Amex under the symbol BTIM.WS. The
closing price of the common shares on the NYSE Amex on December 10, 2009 was
$4.68, and the closing price of the warrants on the NYSE Amex on December 10,
2009 was $2.55.
We will
receive the exercise price of the warrants when those securities are
exercised. However, all of the net proceeds from the sale of
outstanding common shares and warrants will belong to the selling security
holders and not to us.
These
securities involve a high degree of risk and should be purchased only by persons
who can afford the loss of their entire investment. See ‘‘Risk
Factors’’ on page 11.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date
of this prospectus is January __, 2010
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[This
Page Intentionally Left Blank]
3
PROSPECTUS
SUMMARY
The
following summary explains only some of the information in this
prospectus. More detailed information and financial statements appear
elsewhere in this prospectus. Statements contained in this prospectus
that are not historical facts may constitute forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those discussed. Words such as “expects,”
“may,” “will,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” and similar expressions identify forward-looking statements. See
“Risk Factors.”
BioTime,
Inc.
Overview
We are a
biotechnology company engaged in two areas of biomedical research and product
development. The first product segment is blood plasma volume
expanders and related technology for use in surgery, emergency trauma treatment,
and other applications. Our lead blood plasma expander product,
Hextend®, is a
physiologically balanced intravenous solution used in the treatment of
hypovolemia. Hypovolemia is a condition caused by low blood volume,
often from blood loss during surgery or from injury. Hextend
maintains circulatory system fluid volume and blood pressure and keeps vital
organs perfused during surgery and trauma care.
Our
second product segment is regenerative medicine. Regenerative
medicine refers to therapies based on human embryonic stem (“hES”) cell
technology designed to rebuild cell and tissue function lost due to degenerative
disease or injury. These novel stem cells provide a means of
manufacturing every cell type in the human body and therefore show considerable
promise for the development of a number of new therapeutic products. We are
focusing our current efforts in the regenerative medicine field on the
development and sale of advanced human stem cell products and technology that
can be used by researchers at universities and other institutions, at companies
in the bioscience and biopharmaceutical industries, and at other companies that
provide research products to companies in those industries. These
research-only products generally can be marketed without regulatory (FDA)
approval, and are therefore relatively near-term business opportunities when
compared to therapeutic products. These products are currently being
marketed through our wholly owned subsidiary, Embryome Sciences,
Inc. We may also initiate development programs for human therapeutic
applications should it be determined that it is practical to raise the required
capital or to co-develop products with a third party on terms acceptable to
us. We recently were awarded a $4,721,706 grant from the California
Institute of Regenerative Medicine for a stem cell research project related to
our ACTCellerate™ embryonic stem cell technology that will address the need for
industrial scale production of purified therapeutic cells.
Our
operating revenues have been derived almost exclusively from royalties and
licensing fees related to the sale of our plasma volume expander products,
primarily Hextend. We began to make our first stem cell research
products available during 2008, but we have not yet generated significant
revenues in that business segment. Our ability to generate
substantial operating revenue depends upon our success in developing and
marketing or licensing our plasma volume expanders and stem cell products and
technology for medical and research use.
4
Plasma
Volume Expander Products
We
develop blood plasma volume expanders, blood replacement solutions for
hypothermic (low temperature) surgery, organ preservation solutions, and
technology for use in surgery, emergency trauma treatment, and other
applications. Our first product, Hextend®, is a
physiologically balanced blood plasma volume expander for the treatment of
hypovolemia. Hypovolemia is a condition caused by low blood volume,
often from blood loss during surgery or from injury. Hextend
maintains circulatory system fluid volume and blood pressure and keeps vital
organs perfused during surgery. Hextend, approved for use in major
surgery, is the only blood plasma volume expander that contains lactate,
multiple electrolytes, glucose, and a medically approved form of starch called
hetastarch. Hextend is designed to compete with and to replace
products that have been used to maintain fluid volume and blood pressure during
surgery.
Hextend
has become the standard plasma volume expander at a number of prominent teaching
hospitals and leading medical centers, and is part of the United States Armed
Forces Tactical Combat Casualty Care protocol. We believe that as
Hextend use proliferates within the leading U.S. hospitals, other smaller
hospitals will follow their lead, contributing to sales growth.
Hextend
is manufactured and distributed in the United States by Hospira, Inc.
(“Hospira”) and in South Korea by CJ CheilJedang Corp. (“CJ”) under license from
us. Summit Pharmaceuticals International Corporation (“Summit”) has a
license to develop Hextend and PentaLyte in Japan, the People’s Republic of
China, and Taiwan.
We have
completed a Phase II clinical trial of PentaLyte in which PentaLyte was used to
treat hypovolemia in cardiac surgery. Our ability to commence and
complete additional clinical studies of PentaLyte depends on our cash resources,
the costs involved, and licensing arrangements with a pharmaceutical company
capable of manufacturing and marketing PentaLyte. We are currently
seeking a licensee or co-developer to advance the commercialization of
PentaLyte.
Stem
Cells and Products for Regenerative Medicine Research
Regenerative
medicine refers to therapies based on human embryonic stem (“hES”) cell
technology that are designed to rebuild cell and tissue function lost due to
degenerative disease or injury. These hES cells are pluripotent,
meaning they have the potential to become any kind of cell found in the human
body. Since embryonic stem cells can now be derived in a
noncontroversial manner, they are increasingly likely to be utilized in a wide
array of future therapies to restore the function of organs damaged by
degenerative diseases such as heart failure, stroke, and diabetes.
We are
focusing our initial efforts in the regenerative medicine field on the
development and sale of advanced human stem cell products and technologies that
can be used by researchers at universities and other institutions, at companies
in the bioscience and biopharmaceutical industries, and at other companies that
provide research products to companies in those industries. These
products are currently being marketed through our wholly owned subsidiary,
Embryome Sciences, Inc. By focusing our resources on products and
technologies that will be used by researchers and drug developers at larger
institutions and corporations, we believe that we will able to commercialize
products more quickly, using less capital, than if we were developing
therapeutic products ourselves. We may also attempt to develop our
own human stem cell products for diagnostic and therapeutic uses in the future,
if we believe that we have sufficient resources to do so or if we can do so in
collaboration with other companies or institutions inside and outside the United
States.
5
Embryome
Sciences has already introduced its first stem cell research products, and is
implementing plans to develop additional research products over the next two
years. One of our first products is a relational database that will
permit researchers to chart the cell lineages of human development, the genes
expressed in those cell types, and antigens present on the cell surface of those
cells that can be used in purification. This database will provide
the first detailed map of the embryome and will aid researchers in navigating
the complexities of human development and in identifying the many hundreds of
cell types coming from embryonic stem cells. Our embryome map data
base is now available at our website Embryome.com.
When
Embryome Sciences acquired a license to use ACTCellerate™ technology, it also
acquired the rights to market approximately 100 progenitor cell types made using
ACTCellerateTM
technology. ACTCellerate™ technology allows the rapid isolation of
novel, highly-purified embryonic progenitor cells (“hEPCs”). These
hEPCs are intermediate in the developmental process between embryonic stem cells
and fully differentiated cells. hEPCs may possess the ability to
become a wide array of cell types with potential applications in research, drug
discovery, and human regenerative stem cell therapy.
Embryome
Sciences has entered into an agreement under which Millipore Corporation became
a worldwide distributor of ACTCellerate™ human progenitor cell
lines. Millipore’s initial offering of Embryome Sciences’ products
will include six novel progenitor cell lines and optimized ESpan™ growth media
for the in vitro
propagation of each progenitor cell line. The companies anticipate
jointly launching 35 cell lines and associated ESpan™ growth media within the
coming 12 months. The Embryome Sciences products distributed by
Millipore may also be purchased directly from Embryome Sciences at Embryome.com.
Embryome
Sciences also plans to offer for sale an array of hES cell lines carrying
inherited genetic diseases such as cystic fibrosis and muscular
dystrophy. When available, these hES products will also be sold
online at Embryome.com. Additional
new products that Embryome Sciences has targeted for development are ESpy™ cell
lines, which will be derivatives of hES cells that send beacons of light in
response to the activation of particular genes.
Embryome
Sciences also plans to bring to market other new growth and differentiation
factors that will permit researchers to manufacture specific cell types from
embryonic stem cells, and purification tools useful to researchers in quality
control of products for regenerative medicine. As new products are
developed, they will become available for purchase on Embryome.com.
6
We have
also announced that we are organizing a new subsidiary, BioTime Asia, Limited,
for the purpose of clinically developing and marketing therapeutic stem cell
products in the People’s Republic of China, and marketing stem cell research
products in China and other countries in Asia. BioTime Asia will
initially seek to develop the therapeutic products for the treatment of
ophthalmologic, skin, musculo-skeletal system, and hematologic diseases,
including the targeting of genetically modified stem cells to tumors as a novel
means of treating currently incurable forms of cancer.
We have
engaged the services of Dr. Daopei Lu to aid BioTime Asia in arranging and
managing clinical trials of therapeutic stem cell products. Dr. Lu is
a world-renowned hematologist and expert in the field of hematopoietic stem cell
transplants who pioneered the first successful syngeneic bone marrow stem cell
transplant in the People’s Republic of China to treat aplastic anemia and the
first allogeneic peripheral blood stem cell transplant to treat acute
leukemia. Nanshan Memorial Medical Institute Limited (“NMMI”), a
private Hong Kong company, has entered into an agreement with us under which
NMMI will become a minority shareholder in BioTime Asia and will provide BioTime
Asia with its initial laboratory facilities and an agreed number of research
personnel, and will arrange financing for clinical trials.
BioTime
and our subsidiary, Embryome Sciences, Inc., will license to the new venture the
rights to use certain stem cell technology, and will sell to the new venture
stem cell products for therapeutic use and for resale as research
products. To the extent permitted by law, BioTime Asia will license
back to us for use outside of China any new technology that BioTime Asia might
develop or acquire.
Our
obligations are subject to certain conditions and contingencies, including the
completion of feasibility studies for the venture. Either we or NMMI
may terminate the agreement if certain clinical trial milestones are not met,
including the commencement of the first clinical trial of a therapeutic stem
cell product within two years.
During
October 2009, we organized OncoCyte Corporation for the purpose of developing
novel therapeutics for the treatment of cancer based on stem cell
technology. We and Embryome Sciences will license certain technology
to OncoCyte restricted to the field of cell-based cancer therapies, including
early patent filings on targeting stem cells to malignant
tumors. OncoCyte’s new therapeutic strategy and goal will be to
utilize human embryonic stem cell technology to create genetically modified stem
cells capable of homing to specific malignant tumors while carrying genes that
can cause the destruction of the cancer cells.
There is
no assurance that BioTime Asia or OncoCyte will be successful in developing any
new technology or stem cell products, or that any technology or products that
they may develop will be proven safe and effective in treating cancer or other
diseases in humans, or will be successfully commercialized. Our
potential therapeutic products are at a very early stage of preclinical
development. Before any clinical trials can be conducted by BioTime
Asia or OncoCyte, they would have to compile sufficient laboratory test data
substantiating the characteristics and purity of the stem cells, conduct animal
studies, and then obtain all necessary regulatory and clinical trial site
approvals, and assemble a team of physicians and statisticians for the
trials.
7
On April
29, 2009, the California Institute of Regenerative Medicine (“CIRM”) awarded us
a $4,721,706 grant for a stem cell research project related to our ACTCellerate™
embryonic stem cell technology. Our grant project is titled
“Addressing the Cell Purity and Identity Bottleneck through Generation and
Expansion of Clonal Human Embryonic Progenitor Cell Lines.” In our
CIRM-funded research project we will work with hEPCs generated using our
ACTCellerate™ technology. The hEPCs are relatively easy to
manufacture on a large scale and in a purified state, which may make it
advantageous to work with these cells compared to the direct use of hES
cells. We will work on identifying antibodies and other cell
purification reagents that may be useful in the production of hEPCs that can be
used to develop pure therapeutic cells such as nerve, blood vessel, heart
muscle, and cartilage, as well as other cell types.
We intend
to use a substantial portion of any proceeds we receive from the exercise of the
warrants to finance our research and development programs. However,
we cannot predict in advance how many warrants will be exercised or when they
will be exercised. The amount and pace of research and development
work that we can do or sponsor, and our ability to commence and complete
clinical trials required to obtain FDA and foreign regulatory approval of
products, depends upon the amount of money we have. Future research
and clinical study costs are not presently determinable due to many factors,
including the inherent uncertainty of these costs and the uncertainty as to
timing, source, and amount of capital that will become available for these
projects. We have already curtailed the pace and scope of our plasma
volume expander development efforts due to the limited amount of funds
available, and we may have to postpone further laboratory and clinical studies,
unless our cash resources increase through growth in revenues, the completion of
licensing agreements, additional equity investment, borrowing, or third party
sponsorship.
Hextend® and
PentaLyte® are
registered trademarks of BioTime, Inc., and ESpanTM,
ReCyteTM, and
EspyTM are
trademarks of Embryome Sciences, Inc. ACTCellerate™ is a trademark
licensed to Embryome Sciences, Inc. by Advanced Cell Technology,
Inc.
Purpose
of the Discount Offer
We have
determined that it would be beneficial for us to raise additional capital at
this time to finance our operations, including:
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·
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Research
and development work by our subsidiary OncoCyte Corporation to develop
stem cell products for the treatment of
cancer;
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Continued
research and product development work by us and our subsidiary Embryome
Sciences; and
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8
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·
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General
and administrative expenses.
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We are
making the Discount Offer to raise additional capital without significant
dilution of the ownership interests of existing shareholders or warrant holders
since the exercise of warrants in the Discount Offer will not involve the
issuance of new warrants. Warrant holders who exercise their warrants
will be able to purchase shares at a price below market without incurring
broker’s commissions. Because participation in the Discount Offer is
optional, warrant holders may still elect to continue to hold their warrants
without exercising them at this time, or they may sell them on the NYSE Amex
from time to time.
Offering
Summary
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Discount
Offer
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Under
the Discount Offer, up to 3,000,000 warrants may be exercised at a price
of $1.70 until the Discount Offer Expiration
Time.
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Discount
Offer Expiration Time
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The
Discount Offer will expire at 5:00 p.m. Eastern Standard Time on
__________, 2010.
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How
to Exercise Warrants
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The
warrants are evidenced by warrant certificates. You may
exercise your warrants by completing the purchase form on the back of the
warrant certificate and delivering it, together with payment of the
exercise price, to the warrant agent, American Stock Transfer & Trust
Company, 59 Maiden Lane, New York, New York 10038. Your
signature on the purchase form must be guaranteed by a financial
institution that is a participant in a recognized signature guarantee
program. Payment of the exercise price of the warrants must be made in
cash or by certified or bank cashier’s check or by wire
transfer. During the Discount Offer only, you may also exercise
your warrants by notice of guaranteed delivery. See “The
Discount Offer and Description of the Warrants --Payment of Exercise
Price”. If your warrants are held in the name of Cede & Co.
as nominee for The Depository Trust Company, or in the name of any other
depository or nominee, you should contact your broker-dealer or other
financial institution that holds your warrants in order to exercise
them. You may not rescind an exercise of your
warrants.
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Amendment,
Extension, or
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Termination
of the Discount Offer
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BioTime
may, in its sole discretion: (a) terminate the Discount Offer; (b) extend
the expiration date of the Discount Offer to a later date; or (c) amend or
modify the terms of the Discount
Offer.
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9
Participation
by Directors
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and
their Affiliates
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The
members of our Board of Directors who own warrants or control warrants
through affiliates have agreed to give other warrant holders priority in
exercising warrants in the Discount Offer. If the warrant agent
receives more than 3,000,000 warrants for exercise in the Discount Offer,
common shares will first be allocated among the warrant holders who are
not directors or affiliates of our directors, so that our directors and
their affiliates will be allowed to exercise warrants in the Discount
Offer only to the extent that doing so does not reduce the number of
warrants that may be exercised by other warrant
holders.
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Other
Terms of Warrants:
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Each
warrant entitles the holder to purchase one common share at a price of
$2.00 per share, except for warrants exercised in the Discount
Offer.
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The
warrants will expire on October 31, 2010 and may not be exercised after that
date.
The
number of common shares and the exercise price will be proportionally adjusted
in the event of a stock split, stock dividend, combination, or similar
recapitalization of the common shares.
We may
redeem the warrants by paying $.05 per warrant if the closing price of the
common shares on the NYSE Amex exceeds 200% of the exercise price of the
warrants for any 20 consecutive trading days. We will give the
warrant holders 20 days written notice of the redemption, setting the redemption
date, and the warrant holders may exercise the warrants prior to the redemption
date. The warrants may not be exercised after the last business day
prior to the redemption date.
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Common
Shares Offered
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7,060,488
common shares are being offered by us upon the exercise of the
warrants.
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2,819,282
outstanding common shares are being offered by the selling
shareholders.
Warrants
Offered
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By
Selling Security Holders
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3,097,348
warrants are being offered by the selling warrant
holders
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Common
Shares Outstanding
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33,646,867
as of December 10, 2009.
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10
RISK
FACTORS
An
investment in our shares and warrants involves a high degree of
risk. You should purchase our shares and warrants only if you can
afford to lose your entire investment. Before deciding to purchase
any of the shares or warrants offered by this prospectus, you should consider
the following factors which could materially adversely affect our proposed
operations, our business prospects, and the value of an investment in our shares
or warrants. There may be other factors that are not mentioned here
or of which we are not presently aware that could also affect our
operations.
Risks
Related to Our Business Operations
We
have incurred operating losses since inception and we do not known if we will
attain profitability.
Our net
losses for the nine months ended September 30, 2009 and for the fiscal years
ended December 31, 2008 and 2007 were $6,564,339, $3,780,895 and $1,438,226,
respectively, and we had an accumulated deficit of $54,190,078, $47,625,392, and
$43,844,497 as of September 30, 2009, December 31, 2008, and December 31, 2007,
respectively. Since inception, we have primarily financed our
operations through the sale of equity securities, licensing fees, royalties on
product sales by our licensees, and borrowings. Also, we have
recently been awarded a research grant from the California Institute of
Regenerative Medicine for a particular project. Ultimately, our
ability to generate sufficient operating revenue to earn a profit depends upon
our success in developing and marketing or licensing our products and
technology.
Our
auditor’s report contains a qualification regarding our ability to continue as a
going concern.
The
report of our independent public accountants, who audited our financial
statements for the years ended December 31, 2008 and 2007, contains a paragraph
stating that our working capital deficit, shareholders’ deficit, and accumulated
deficit as reflected in those financial statements, among other conditions,
raise substantial doubt about our ability to continue as a going
concern.
Sales
of Hextend to date have not been sufficient to generate an amount of royalties
or licensing fees sufficient to cover our operating expenses
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·
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Hextend
is presently the only plasma expander product that we have on the market,
and it is being sold only in the United States and South
Korea. The royalty revenues that we have received from sales of
Hextend have not been sufficient to pay our operating
expenses. This means that we need to successfully develop and
market or license additional products and earn additional revenues in
sufficient amounts to meet our operating
expenses.
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11
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·
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We
will receive additional license fees and royalties if our licensees are
successful in marketing Hextend and PentaLyte in Japan, Taiwan, and China,
but they have not yet obtained the regulatory approvals required to begin
selling those products.
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·
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We
are also beginning to bring our first stem cell research products to the
market but there is no assurance that we will succeed in generating
significant revenues from the sale of those
products.
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We
may not succeed in marketing our plasma volume expander products due to the
availability of competing products
Factors
that affect the marketing of our products include the following:
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|
·
|
Hextend
and our other plasma expander products will compete with other products
that are commonly used in surgery and trauma care and sell at lower
prices.
|
|
|
·
|
In
order to compete with other products, particularly those that sell at
lower prices, our products will have to provide medically significant
advantages.
|
|
|
·
|
Physicians
and hospitals may be reluctant to try a new product due to the high degree
of risk associated with the application of new technologies and products
in the field of human medicine.
|
|
|
·
|
Competing
products are being manufactured and marketed by established pharmaceutical
companies. For example, B. Braun/McGaw presently markets
Hespan, an artificial plasma volume expander, and Hospira and Baxter
International, Inc. manufacture and sell a generic equivalent of
Hespan.
|
|
|
·
|
There
also is a risk that our competitors may succeed in developing safer or
more effective products that could render our products and technologies
obsolete or noncompetitive.
|
We
will spend a substantial amount of our capital on research and development but
we might not succeed in developing products and technologies that are useful in
medicine
|
|
·
|
We
are attempting to develop new medical products and
technologies.
|
|
|
·
|
Many
of our experimental products and technologies have not been applied in
human medicine and have only been used in laboratory studies on
animals. These new products and technologies might not prove to
be safe and efficacious in the human medical applications for which they
were developed.
|
|
|
·
|
The
experimentation we are doing is costly, time consuming, and uncertain as
to its results. We incurred research and development expenses
amounting to $1,909,619 during the nine months ended September 30, 2009,
$1,706,214 during the fiscal year ended December 31, 2008, and $967,864
during the fiscal year ended December 31,
2007.
|
12
|
|
·
|
If
we are successful in developing a new technology or product, refinement of
the new technology or product and definition of the practical applications
and limitations of the technology or product may take years and require
the expenditure of large sums of
money.
|
|
|
·
|
Future
clinical trials of new products such as PentaLyte may take longer and may
be more costly than our Hextend clinical trials. The FDA
permitted us to proceed directly into a Phase III clinical trial of
Hextend involving only 120 patients because the active ingredients in
Hextend had already been approved for use by the FDA in other
products. Because PentaLyte contains a starch that has not been
approved by the FDA for use in a plasma volume expander, we have had to
complete Phase I and Phase II clinical trials of PentaLyte, and we will
have to complete a Phase III trial that will involve more patients than
our Hextend trials. We do not yet know the scope or cost of the
Phase III clinical trials that the FDA will require for PentaLyte or the
other products we are developing.
|
Our
success depends in part on the growth of the stem cell industry, which is still
in its infancy, and its growth is uncertain
|
|
·
|
We
are developing and marketing products for use in stem cell research,
including products that we plan to sell to companies and institutions that
are seeking to develop human therapeutic stem cell
products.
|
|
|
·
|
The
success of our business depends on the growth of stem cell research,
without which there may be no market or only a very small market for our
products and technology. The likelihood that stem cell research
will grow depends upon the successful development of stem cell products
that can be used to treat disease or injuries in people or that can be
used to facilitate the development of other pharmaceutical
products. However, stem cells have not been used in human
medicine and have only been used in laboratory studies on
animals.
|
|
|
·
|
There
can be no assurance that any safe and efficacious human medical
applications will be developed using stem cells or related
technology.
|
|
|
·
|
Government-imposed
restrictions and religious, moral, and ethical concerns with respect to
use of embryos or human embryonic stem cells in research and development
could have a material adverse effect on the growth of the stem cell
industry even if research proves that useful medical products can be
developed using human embryonic stem
cells.
|
We
might need to issue additional equity or debt securities in order to raise
additional capital needed to pay our operating expenses
|
|
·
|
We
plan to continue to incur substantial research and product development
expenses, and we will need to raise additional capital to pay operating
expenses until we are able to generate sufficient revenues from product
sales, royalties, and license
fees.
|
13
|
|
·
|
It
is likely that additional sales of equity or debt securities will be
required to meet our short-term capital needs, unless a substantial
portion of the warrants are exercised, or we receive substantial revenues
from the sale of our new products, or we are successful in licensing or
sublicensing the technology that we develop or acquire from others and we
receive substantial licensing fees and
royalties.
|
|
|
·
|
Sales
of additional equity securities could result in the dilution of the
interests of present shareholders.
|
The
amount and pace of research and development work that we can do or sponsor, and
our ability to commence and complete clinical trials required to obtain FDA and
foreign regulatory approval of our pharmaceutical products, depends upon the
amount of money we have
|
|
·
|
We
intend to use a substantial portion of any proceeds we receive from the
exercise of the warrants to finance our research and development
programs. However, we cannot predict in advance how many
warrants will be exercised or when they will be
exercised.
|
|
|
·
|
Although
we were recently awarded a $4,721,706 grant for a stem cell research
project, and we recently received $8,000,000 through the sale of stock and
warrants, and our subsidiary OncoCyte Corporation has received $4,000,000
through the sale of stock, there can be no assurance that we will be able
to raise additional funds on favorable terms or at all, or that any funds
raised will be sufficient to permit us to develop and market our products
and technology. Unless we are able to generate sufficient
revenue or raise additional funds when needed, it is likely that we will
be unable to continue our planned activities, even if we make progress in
our research and development
projects.
|
|
|
·
|
We
have already curtailed the pace and scope of our plasma volume expander
development efforts due to the limited amount of funds available, and we
may have to postpone other laboratory research and development work unless
our cash resources increase through a growth in revenues or additional
equity investment or borrowing.
|
Our
business could be adversely affected if we lose the services of the key
personnel upon whom we depend
Our stem
cell research program is directed primarily by our Chief Executive Officer, Dr.
Michael West. The loss of Dr. West’s services could have a material
adverse effect on us.
14
Risks
Related to Our Industry
We will
face certain risks arising from regulatory, legal, and economic factors that
affect our business and the business of other pharmaceutical development
companies. Because we are a small company with limited revenues and
limited capital resources, we may be less able to bear the financial impact of
these risks than larger companies that have substantial income and available
capital.
If
we do not receive FDA and other regulatory approvals we will not be permitted to
sell our pharmaceutical products
The
pharmaceutical products that we develop cannot be sold until the FDA and
corresponding foreign regulatory authorities approve the products for medical
use. Hextend has been approved for use in the United States, Canada,
and Korea only. One of our licensees has been conducting a Phase III
equivalent clinical trial of Hextend in Japan. We have conducted a
Phase II clinical trial of PentaLyte as a plasma volume expander in surgery but
we do not have sufficient financing to commence a Phase III trial.
The need
to obtain regulatory approval to market a new product means that:
|
|
·
|
We
will have to conduct expensive and time consuming clinical trials of new
products. The full cost of completing a Phase III clinical trial of
PentaLyte necessary to obtain FDA approval cannot be presently determined
but exceeds our current financial
resources.
|
|
|
·
|
We
will incur the expense and delay inherent in seeking FDA and foreign
regulatory approval of new products. For example, 12 months
elapsed between the date we filed our application to market Hextend in the
United States and the date on which our application was
approved. Approximately 36 months elapsed between the date we
filed our application for approval to market Hextend in Canada, and the
date on which our application was approved, even though we did not have to
conduct any additional clinical
trials.
|
|
|
·
|
A
product that is approved may be subject to restrictions on
use.
|
|
|
·
|
The
FDA can recall or withdraw approval of a product if problems
arise.
|
|
|
·
|
We
will face similar regulatory issues in foreign
countries.
|
Government
imposed restrictions and religious, moral, and ethical concerns on the use of
hES cells could prevent us from developing and successfully marketing stem cell
products
|
|
·
|
Government-imposed
restrictions with respect to the use of embryos or human embryonic stem
cells in research and development could limit our ability to conduct
research and develop new
products.
|
15
|
|
·
|
Government-imposed
restrictions on the use of embryos or hES cells in the United States and
abroad could generally constrain stem cell research, thereby limiting the
market and demand for our products. During March 2009,
President Obama lifted certain restrictions on federal funding of research
involving the use of hES cells, and in accordance with President Obama’s
executive order, the National Institutes of Health has adopted new
guidelines for determining the eligibility of hES cell lines for use in
federally funded research. The central focus of the proposed
guidelines is to assure that hES cells used in federally funded research
were derived from human embryos that were created for reproductive
purposes, were no longer needed for this purpose, and were voluntarily
donated for research purposes with the informed written consent of the
donors. The hES cells that were derived from embryos created
for research purposes rather than reproductive purposes, and other hES
cells that were not derived in compliance with the guidelines, are not
eligible for use in federally funded
research.
|
|
|
·
|
California
law requires that stem cell research be conducted under the oversight of a
stem cell research oversight (“SCRO”) committee. Many kinds of
stem cell research, including the derivation of new hES cell lines, may
only be conducted in California with the prior written approval of the
SCRO. A SCRO could prohibit or impose restrictions on the
research that we plan to do.
|
|
|
·
|
The
use of hES cells gives rise to religious, moral, and ethical issues
regarding the appropriate means of obtaining the cells and the appropriate
use and disposal of the cells. These considerations could lead to more
restrictive government regulations or could generally constrain stem cell
research, thereby limiting the market and demand for our
products.
|
If
we are unable to obtain and enforce patents and to protect our trade secrets,
others could use our technology to compete with us, which could limit
opportunities for us to generate revenues by licensing our technology and
selling products
|
|
·
|
Our
success will depend in part on our ability to obtain and enforce patents
and maintain trade secrets in the United States and in other
countries. If we are unsuccessful in obtaining and enforcing
patents, our competitors could use our technology and create products that
compete with our products, without paying license fees or royalties to
us.
|
|
|
·
|
The
preparation, filing, and prosecution of patent applications can be costly
and time consuming. Our limited financial resources may not
permit us to pursue patent protection of all of our technology and
products throughout the world.
|
|
|
·
|
Even
if we are able to obtain issued patents covering our technology or
products, we may have to incur substantial legal fees and other expenses
to enforce our patent rights in order to protect our technology and
products from infringing uses. We may not have the financial
resources to finance the litigation required to preserve our patent and
trade secret rights.
|
16
There
is no certainty that our pending or future patent applications will result in
the issuance of patents
|
|
·
|
We
have filed patent applications for technology that we have developed, and
we have obtained licenses for a number of patent applications covering
technology developed by others, that we believe will be useful in
producing new products, and which we believe may be of commercial interest
to other companies that may be willing to sublicense the technology for
fees or royalty payments. We may also file additional new
patent applications in the future seeking patent protection for new
technology or products that we develop ourselves or jointly with
others. However, there is no assurance that any of our licensed
patent applications, or any patent applications that we have filed or that
we may file in the future covering our own technology, in the United
States or abroad will result in the issuance of
patents.
|
|
|
·
|
In
Europe, the European Patent Convention prohibits the granting of European
patents for inventions that concern “uses of human embryos for industrial
or commercial purposes.” The European Patent Office is
presently interpreting this prohibition broadly, and is applying it to
reject patent claims that pertain to human embryonic stem
cells. However, this broad interpretation is being challenged
through the European Patent Office appeals system. As a result,
we do not yet know whether or to what extent we will be able to obtain
patent protection for our human embryonic stem cell technologies in
Europe.
|
The
process of applying for and obtaining patents can be expensive and
slow
|
|
·
|
The
preparation and filing of patent applications, and the maintenance of
patents that are issued, may require substantial time and
money.
|
|
|
·
|
A
patent interference proceeding may be instituted with the U.S. Patent and
Trademark Office (the “PTO”) when more than one person files a patent
application covering the same technology, or if someone wishes to
challenge the validity of an issued patent. At the completion
of the interference proceeding, the PTO will determine which competing
applicant is entitled to the patent, or whether an issued patent is
valid. Patent interference proceedings are complex, highly
contested legal proceedings, and the PTO’s decision is subject to
appeal. This means that if an interference proceeding arises
with respect to any of our patent applications, we may experience
significant expenses and delay in obtaining a patent, and if the outcome
of the proceeding is unfavorable to us, the patent could be issued to a
competitor rather than to us.
|
|
|
·
|
Oppositions
to the issuance of patents may be filed under European patent law and the
patent laws of certain other countries. Like US PTO
interference proceedings, these foreign proceedings can be very expensive
to contest and can result in significant delays in obtaining a patent or
can result in a denial of a patent
application.
|
17
Our
patents may not protect our products from competition
We have
patents in the United States, Canada, the European Union countries, Australia,
Israel, Russia, South Africa, South Korea, Japan, Hong Kong, and Singapore, and
have filed patent applications in other foreign countries for our plasma volume
expander products.
|
|
·
|
We
might not be able to obtain any additional patents, and any patents that
we do obtain might not be comprehensive enough to provide us with
meaningful patent protection.
|
|
|
·
|
There
will always be a risk that our competitors might be able to successfully
challenge the validity or enforceability of any patent issued to
us.
|
|
|
·
|
In
addition to interference proceedings, the U.S. PTO can reexamine issued
patents at the request of a third party seeking to have the patent
invalidated. This means that patents owned or licensed by us
may be subject to reexamination and may be lost if the outcome of the
reexamination is unfavorable to us.
|
If
we fail to meet our obligations under license agreements, we may lose our rights
to key technologies on which our business depends
Our
business depends on several critical technologies that are based in part on
technology licensed from third parties. Those third-party license
agreements impose obligations on us, including payment obligations and
obligations to pursue development of commercial products under the licensed
patents or technology. If a licensor believes that we have failed to
meet our obligations under a license agreement, the licensor could seek to limit
or terminate our license rights, which could lead to costly and time-consuming
litigation and, potentially, a loss of the licensed rights. During
the period of any such litigation our ability to carry out the development and
commercialization of potential products could be significantly and negatively
affected. If our license rights were restricted or ultimately lost,
we would not be able to continue to use the licensed technology in our
business.
The
price and sale of our products may be limited by health insurance coverage and
government regulation
Success
in selling our pharmaceutical products may depend in part on the extent to which
health insurance companies, HMOs, and government health administration
authorities such as Medicare and Medicaid will pay for the cost of the products
and related treatment. Presently, most health insurance plans and HMOs
will pay for Hextend when it is used in a surgical procedure that is covered by
the plan. However, until we actually introduce a new product into the
medical market place we will not know with certainty whether adequate health
insurance, HMO, and government coverage will be available to permit the product
to be sold at a price high enough for us to generate a profit. In
some foreign countries, pricing or profitability of health care products is
subject to government control which may result in low prices for our
products. In the United States, there have been a number of federal
and state proposals to implement similar government controls, and new proposals
are likely to be made in the future.
18
Risks
Pertaining to Our Common Shares and Warrants
Before
purchasing our common shares or warrants, investors should consider the price
volatility of our shares and warrants and the fact that we do not pay
dividends.
Because
we are engaged in the development of pharmaceutical and stem cell research
products, the price of our stock may rise and fall rapidly
|
|
·
|
The
market price of our shares and warrants, like that of the shares of many
biotechnology companies, has been highly
volatile.
|
|
|
·
|
The
price of our shares and warrants may rise rapidly in response to certain
events, such as the commencement of clinical trials of an experimental new
drug, even though the outcome of those trials and the likelihood of
ultimate FDA approval remain
uncertain.
|
|
|
·
|
Similarly,
prices of our shares and warrants may fall rapidly in response to certain
events such as unfavorable results of clinical trials or a delay or
failure to obtain FDA approval.
|
|
|
·
|
The
failure of our earnings to meet analysts’ expectations could result in a
significant rapid decline in the market price of our common shares and
warrants.
|
Current
economic and stock market conditions may adversely affect the price of our
common shares and warrants
The stock
market has been experiencing extreme price and volume fluctuations which have
affected the market price of the equity securities without regard to the
operating performance of the issuing companies. Broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the common shares and
warrants.
Because
we do not pay dividends, our stock may not be a suitable investment for anyone
who needs to earn dividend income
We do not
pay cash dividends on our common shares. For the foreseeable future
we anticipate that any earnings generated in our business will be used to
finance the growth of our business and will not be paid out as dividends to our
shareholders. This means that our stock may not be a suitable
investment for anyone who needs to earn income from their
investments.
The
warrants cannot be exercised unless a registration statement is in effect under
federal securities laws
A
registration statement as defined under the Securities Act of 1933, as amended
(the “Securities Act”), must be in effect in order for warrant holders to
exercise their warrants. This means that we will have to periodically
update our registration statement and prospectus by filing reports under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or by filing
post-effective amendments to the registration statement of which this prospectus
is a part. We intend to use our best efforts to keep our registration
statement effective. However, if we are unable to do so for any
reason, warrant holders will not be able to exercise their warrants, even if the
market price of our common shares is then greater than the exercise
price.
19
As long
as our common shares are listed on the NYSE Amex, they will be exempt from
registration or qualification under state securities laws. If our
common shares are not exempt from state registration or qualification, most
states will require us to obtain a permit, issued through an application for
registration or qualification, and to maintain that permit in effect in order
for warrant holders in the state to exercise their warrants. Many
states will only issue a permit if their securities regulatory agency determines
that the securities are a suitable investment for public investors in their
state, considering a variety of factors, including the financial performance and
financial condition of the company issuing the securities. Because we
have a history of operating losses, some or all of those states may decline to
issue the permit required to permit warrant holders in those states to exercise
their warrants.
Securities
analysts may not initiate coverage or continue to cover our common stock, and
this may have a negative impact on our market price.
The
trading market for our common shares will depend, in part, on the research and
reports that securities analysts publish about our business and our common
shares. We do not have any control over these
analysts. There is no guarantee that securities analysts will cover
our common shares. If securities analysts do not cover our common
shares, the lack of research coverage may adversely affect the market price of
those shares. If securities analysts do cover our shares, they could
issue reports or recommendations that are unfavorable to the price of our
shares, and they could downgrade a previously favorable report or
recommendation, and in either case our share price could decline as a result of
the report. If one or more of these analysts ceases to cover our
shares or fails to publish regular reports on our business, we could lose
visibility in the financial markets, which could cause our share price or
trading volume to decline.
You
may experience dilution of your ownership interests because of the future
issuance of additional shares of our common shares and our preferred
stock.
In the
future, we may issue our authorized but previously unissued equity securities,
resulting in the dilution of the ownership interests of our present
shareholders. We are currently authorized to issue an aggregate of 76,000,000
shares of capital stock consisting of 75,000,000 common shares and 1,000,000
“blank check” preferred shares. As of December 10, 2009, there were:
33,646,867 common shares outstanding, 3,477,000 common shares reserved for
issuance upon the exercise of outstanding options under our employee stock
option plans, 125,000 common shares reserved for issuance upon the exercise of
options issued outside of our employee stock option plan, 7,060,488 common
shares reserved for issuance upon the exercise of the warrants described in this
prospectus, and 5,224,649 common shares reserved for issuance upon the exercise
of other warrants that were privately placed. We intend to register
the privately placed warrants under the Securities Act and to apply to list
those warrants (except for 100,000 warrants exercisable at a price of $0.68 per
share) on the NYSE Amex. No preferred shares are presently
outstanding.
20
We may
issue additional common shares or other securities that are convertible into or
exercisable for common shares in order to raise additional capital, or in
connection with hiring or retaining employees or consultants, or in connection
with future acquisitions of licenses to technology or rights to acquire products
in connection with future business acquisitions, or for other business
purposes. The future issuance of any such additional common shares or
other securities may create downward pressure on the trading price of our common
shares.
We may
also issue preferred shares having rights, preferences, and privileges senior to
the rights of our common shares with respect to dividends, rights to share in
distributions of our assets if we liquidate our company, or voting
rights. Any preferred shares may also be convertible into common
shares on terms that would be dilutive to holders of common shares.
MARKET
FOR OUR COMMON EQUITY AND WARRANTS
BioTime
common shares and warrants have been traded on the NYSE Amex since October 30,
2009 under the symbols, BTIM and BTIM.WS, respectively. From July 15,
2005 until October 30, 2009, our common shares and warrants were traded on the
OTC Bulletin Board (“OTCBB”).
The
following table sets forth the range of high and low closing prices for the
common shares for the fiscal years ended December 31, 2008 and 2009, based on
transaction data as reported by the OTCBB:
|
Quarter Ended
|
High
|
Low
|
|||||||
|
March
31, 2008
|
0.40 | 0.27 | |||||||
|
June
30, 2008
|
0.60 | 0.29 | |||||||
|
September
30, 2008
|
1.80 | 0.55 | |||||||
|
December
31, 2008
|
2.30 | 0.95 | |||||||
|
March
31, 2009
|
2.55 | 1.25 | |||||||
|
June
30, 2009
|
3.00 | 1.57 | |||||||
|
September
30, 2009
|
6.40 | 2.30 | |||||||
|
December
31, 2009
|
6.35 | 3.59 | |||||||
The
following table sets forth the range of high and low closing prices for the
warrants for the fiscal years ended December 31, 2008 and 2009, based on
transaction data as reported by the OTCBB:
|
Quarter Ended
|
High
|
Low
|
|||||||
|
March
31, 2008
|
0.08 | 0.06 | |||||||
|
June
30, 2008
|
0.07 | 0.06 | |||||||
|
September
30, 2008
|
0.55 | 0.07 | |||||||
|
December
31, 2008
|
0.51 | 0.23 | |||||||
|
March
31, 2009
|
0.68 | 0.30 | |||||||
|
June
30, 2009
|
0.90 | 0.30 | |||||||
|
September
30, 2009
|
4.29 | 0.65 | |||||||
|
December
31, 2009
|
4.36 | 1.695 | |||||||
21
Over-the-counter
market quotations may reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not necessarily represent actual
transactions.
USE
OF PROCEEDS
The cash
proceeds receivable from the exercise of the warrants included in this
prospectus will be $13,220,976, if 3,000,000 warrants are exercised in the
Discount Offer at $1.70 per share, and the remaining 4,060,488 warrants are
exercised at the regular exercise price of $2.00 per share. We intend
to use the proceeds from the exercise of the warrants as shown in the following
table.
|
Application
|
Estimated
Amount
|
Percent
of Total
|
||||||
|
Research
and Development
|
$ | 8,500,000 | 64 | % | ||||
|
Working
Capital
|
$ | 4,720,976 | 36 | % | ||||
|
Total
|
$ | 13,220,976 | 100 | % | ||||
Research and
Development. We plan to contribute at least $2,250,000 of the
proceeds to our subsidiary OncoCyte Corporation for use in its cancer therapy
stem cell research program. Other proceeds allocated to research and
development may be used to develop other new stem cell products and technology
and to acquire new stem cell products and technology through licenses or similar
agreements from other companies. We may also use proceeds for
additional clinical trials of PentaLyte and to fund the cost of seeking
regulatory approval of PentaLyte. We are also considering a number of
opportunities to enter new market segments that may complement our current
product develop programs, and a portion of the proceeds may be used for those
purposes.
Working
Capital. We intend to apply the balance of the proceeds from
the exercise of the warrants to working capital and general corporate
purposes. We will have broad discretion with respect to the use of
proceeds retained as working capital. The proceeds may be used to
defray overhead expenses and for future opportunities and contingencies that may
arise. We expect that our general and administrative expenses will
increase as we achieve progress in developing products and bringing them to
market. For example, a portion of the proceeds allocated to working
capital may be used to pay the salaries, benefits, and fees to employees and
consultants who assist in the development of new products or the preparation of
applications to the FDA and foreign regulatory agencies and patent
applications. Proceeds allocated to working capital also may be
reallocated to research and development and may be used to pay the costs of
developing new products, obtaining new technology, or conducting clinical trials
of our products.
22
The
preceding table represents only an estimate of the allocation of the net
proceeds of the exercise of the warrants based upon the current state of our
product development program. The development of new medical products
and technologies often involves complications, delays, and costs that cannot be
predicted, and may cause us to make a reallocation of proceeds among the
categories shown above or to other uses. We may need to raise
additional capital to pay operating expenses until such time as we are able to
generate sufficient revenues from product sales, royalties, and license
fees.
Until
used, the net proceeds from the exercise of the warrants will be invested in
certificates of deposit, United States government securities, or other high
quality, short-term, interest-bearing investments.
Warrants
As of
December 10, 2009, 12,185,137 warrants were issued and outstanding, of which
7,060,488 are covered by this prospectus, and 5,224,649 were privately
placed. The privately placed warrants include 5,124,649 which are
exercisable at a price of $2.00 per share and will expire on October 31, 2010
and 100,000 which are exercisable at a price of $0.68 per share and will expire
on July 30, 2013. The privately placed warrants are not covered by
this prospectus and may not be exercised in the Discount
Offer. However, we plan to register the privately placed warrants
under the Securities Act at a future date and we plan to apply to list those
warrants (except for 100,000 warrants exercisable at a price of $0.68 per share)
on the NYSE Amex.
Each full
warrant entitles the holder to purchase one common share at a price of $2.00 per
share. The number of common shares and exercise price will be
proportionally adjusted in the event of a stock split, stock dividend,
combination, or similar recapitalization of the common shares. The
warrants will expire on October 31, 2010 and may not be exercised after that
date.
THE
DISCOUNT OFFER AND DESCRIPTION OF THE WARRANTS
Discount
Offer
We are
offering holders of those warrants the opportunity to exercise at least a
portion of their warrants at a discounted exercise price for a limited period of
time. Until the Discount Offer Expiration Time, we will allow up to
3,000,000 warrants to be exercised at an exercise price of $1.70 per
share. This represents a discount of $0.30 per share from the regular
exercise price of $2.00 per share. The Discount Offer Expiration Time
is 5:00 p.m., New York time, on _________, 2010.
All
exercises of the warrants at the discounted exercise price will be subject to
proration if more than 3,000,000 warrants are exercised in the Discount
Offer. All warrants and exercise price funds received by the warrant
agent, American Stock Transfer & Trust Company, will be held until
approximately __ business days after the Discount Offer Expiration Time, at
which time the warrant agent will determine the total number of warrants
received that have been exercised properly in the Discount Offer. If
that number exceeds 3,000,000, the warrant agent will allocate common shares
among the warrant holders on a pro rata basis, based upon the total number of
properly executed warrants received by the warrant agent for exercise in the
Discount Offer.
23
The
warrant agent will deposit all checks and other funds received by it for the
exercise of warrants in the Discount Offer into a segregated interest-bearing
account of BioTime pending proration and distribution of common
shares. The interest earned on the account will belong to
BioTime. Any exercise price funds received by the warrant agent in
excess of the aggregate exercise price of the common shares allocated to a
warrant holder in the Discounted Offer will be returned to the warrant holder
without interest or deduction.
The
members of our Board of Directors who own warrants or control warrants through
affiliates have agreed to give the other warrant holders priority in exercising
warrants in the Discount Offer. If the warrant agent receives more
than 3,000,000 warrants for exercise in the Discount Offer, common shares will
first be allocated among the warrant holders who are not directors or affiliates
of our directors, so that our directors and their affiliates will be allowed to
exercise warrants in the Discount Offer only to the extent that doing so does
not reduce the number of warrants that may be exercised by other warrant
holders.
If a
warrant holder exercises fewer than all of the warrants evidenced by their
warrant certificate, or if the exercise of their warrant is subject to
proration, the warrant agent will also deliver to the warrant holder a new
warrant certificate for the unexercised portion of their warrant
certificate. The warrant agent expects that certificates for shares
issued in the Discount Offer will be mailed to the exercising warrant holders
approximately ___ business days after the proration period.
In our
sole discretion, we may: (a) terminate the Discount Offer; (b) extend the
Discount Offer Expiration Time to a later date and time; or (c) amend or modify
the terms of the Discount Offer.
During
and after the Discount Offer, warrant holders who desire to exercise their
warrants and receive common shares immediately, without proration, will be able
to exercise their warrants at the regular exercise price of $2.00 per
share.
How
to Exercise Warrants
In order
to exercise your warrants you must do all of the following:
24
· Fill
in and sign the purchase form that appears on the reverse side of the warrant
certificate;
· Deliver
the completed and signed warrant certificate to the warrant agent with your
payment in full for the common shares you wish to purchase.
· The
method of making payment for your shares is described below under ‘‘Payment for
Shares.’’
· In
order to participate in the Discount Offer, properly completed and executed
warrant certificates must be received by the warrant agent at the address set
forth below prior to the Discount Offer Expiration Time. Otherwise,
warrants may be exercised at the regular exercise price of $2.00 per share until
the warrants expire on October 31, 2010.
· Warrants
may also be exercised through a broker, who may charge you a servicing
fee.
You
should send your warrant certificate, with the purchase form completed and
signed, accompanied by payment of the exercise price, to American Stock Transfer
& Trust Company, the warrant agent, by one of the methods described
below:
(1) By hand:
American
Stock Transfer & Trust Company
59Maiden
Lane, Plaza Level
New York,
New York 10038
(2) By mail, express mail or overnight
courier:
American
Stock Transfer & Trust Company
Exchanges
and Tenders
59 Maiden
Lane
New York,
New York 10038
Do
not send warrant certificates to BioTime.
If your
warrants are held in the name of Cede & Co. as nominee for The Depository
Trust Company, or in the name of any other depository or nominee, you should
contact your broker-dealer or other financial institution that holds your
warrants in order to exercise your warrants.
A warrant
will be deemed exercised, subject to proration, by the warrant agent when
payment, together with a properly completed and executed warrant certificate, is
received by the warrant agent at its Exchanges and Tenders
Department.
If you do
not indicate the number of common shares you are purchasing through the exercise
of your warrants, then you will be deemed to have exercised your warrants to
purchase the maximum number of common shares determined by dividing the total
exercise price you paid by the exercise price per share, but not in excess of
the maximum number of warrants you deliver to the warrant
agent.
25
All
questions concerning the timeliness, validity, form and eligibility of any
exercise of warrants will be determined by BioTime. Our determination
will be final and binding. We, in our sole discretion, may waive any
defect or irregularity, or may permit any defect or irregularity to be
corrected, within such time as we may determine. Neither BioTime nor
the warrant agent will be under any duty or obligation to give any notification
or to permit the cure of any defect or irregularity in connection with the
submission of any warrant certificate, the exercise or attempt to exercise any
warrant, or the payment of the exercise price prior to the Discount Offer
Expiration Time or the expiration of the warrant, as the case may
be. Warrants will not be deemed to have been exercised until all
defects in the exercise have been waived or cured to our satisfaction, by the
time we determine, and in our discretion.
Payment
of the Exercise Price
If you
wish to exercise your warrants you may choose between the following methods of
payment:
1. You
may send to the warrant agent full payment for all of the shares you wish to
acquire through the exercise of your warrants. Make sure that your
payment is accompanied by your warrant certificate with the purchase form
completed and signed. The payment and properly completed and executed
warrant certificate must be received by the warrant agent no later than (a) the
Discount Offer Expiration Time in order for you to purchase common shares in the
Discount Offer, or (b) 5:00 p.m., New York City time, on October 31, 2010 in
order for you to purchase common shares prior to the expiration of your warrants
otherwise than in the Discount Offer.
To
be accepted, a payment pursuant to this method must be made in the following
manner:
· The
payment must be in U.S. dollars;
· The
payment must be by wire transfer, money order, or check drawn on a bank located
in the United States;
· The
payment must be payable to the warrant agent, American Stock Transfer &
Trust Company; and
· The
payment must accompany a properly completed and executed warrant
certificate.
Wire
transfers should be directed to American Stock Transfer & Trust Company,
Warrant agent, JP Morgan Chase Bank WIRE CLEARING ACCOUNT ABA #021000021,
Account 323005225, Attention: Reorg. Dept.
26
2.
Alternatively, for purposes of
the Discount Offer only, an exercise will be accepted by the warrant
agent if, prior to the Discount Offer Expiration Time, the warrant agent has
received a notice of guaranteed delivery by facsimile telecopy or otherwise from
a bank, a trust company, or a New York Stock Exchange member guaranteeing
delivery of (1) payment of the exercise price for the shares for which the
warrant is being exercised, and (2) a properly completed and executed warrant
certificate. The notice of guaranteed delivery must be received by
the warrant agent before the Discount Offer Expiration Time. The
warrant agent will not honor a notice of guaranteed delivery unless a properly
completed and executed warrant certificate and full payment for the shares is
received by the warrant agent by the close of business on the third business day
after the Discount Offer Expiration Time.
The
warrant agent will deposit all checks received by it for the purchase of shares
in the Discount Offer into a segregated interest-bearing account of BioTime
pending proration and distribution of shares. The interest earned on
the account will belong to BioTime.
You will
not be allowed to rescind your purchase after the warrant agent has received
payment either by means of a notice of guaranteed delivery or a wire transfer,
check or money order.
Nominees,
such as brokers, trustees or depositories for securities, who hold warrants for
the account of others should notify the respective beneficial owners of the
warrants as soon as possible to ascertain the beneficial owners’ intentions and
to obtain instructions with respect to the warrants during the Discount
Offer. If the beneficial owner so instructs, the nominee should
complete the warrant certificate and submit it to the warrant agent with the
proper payment. In addition, beneficial owners of warrants held
through a nominee should contact the nominee and request the nominee to effect
transactions in accordance with the beneficial owner’s
instructions.
Redemption
Provisions
We may
redeem the warrants by paying $.05 per warrant if the closing price of the
common shares on the NYSE Amex or any other national securities exchange or the
Nasdaq Stock Market exceeds 200% of the exercise price of the warrants for any
20 consecutive trading days before we send a notice of redemption to the warrant
holders (the “Trigger Period”). We will give the warrant holders at
least 20 days written notice of the redemption, setting the redemption date, and
the warrant holders may exercise the warrants prior to the redemption
date. The warrants may not be exercised after the last business day
prior to the redemption date.
The
redemption date will abate, and the notice of redemption will be of no effect,
if the closing price or average bid price of our common shares does not equal or
exceed 120% of the exercise price of the warrants on the redemption date and
each of the five trading days immediately preceding the redemption
date. However, we will have the right to redeem the warrants at a
future date if the market price of the common shares again exceeds 200% of the
exercise price for 20 consecutive trading days, as described
above. In addition, we may not redeem the warrants unless a
registration statement with respect to the warrants and underlying common shares
is effective under the Securities Act during the Trigger Period and during the
20 day period ending on the redemption date.
27
Transfer
Agent, warrant agent, and Registrar
The
transfer agent, warrant agent, and registrar for the common shares and warrants
is American Stock Transfer and Trust Company, 59 Maiden Lane, New York, New York
10038.
DESCRIPTION
OF COMMON SHARES AND PREFERRED SHARES
Common
Shares
Our
Articles of Incorporation currently authorize the issuance of up to 75,000,000
common shares, no par value, of which 33,646,867 shares were outstanding at
December 10, 2009. As of December 2, 2009 our common shares were held
by approximately 8,981 persons based upon the share position
listings. Each holder of record is entitled to one vote for each
outstanding common share owned by him on every matter properly submitted to the
shareholders for their vote.
Subject
to the dividend rights of holders of any of the preferred shares that may be
issued from time to time, holders of common shares are entitled to any dividend
declared by the Board of Directors out of funds legally available for that
purpose. We have not paid any cash dividends on our common shares,
and it is unlikely that any cash dividends will be declared or paid on any
common shares in the foreseeable future. Instead, we plan to retain
our cash for use in financing our future operations and growth.
Subject
to the prior payment of the liquidation preference to holders of any preferred
shares that may be issued, holders of common shares are entitled to receive on a
pro rata basis all of our remaining assets available for distribution to the
holders of common shares in the event of the liquidation, dissolution, or
winding up of our operations. Holders of common shares do not have
any preemptive rights to become subscribers or purchasers of additional shares
of any class of our capital stock.
Preferred
Shares
Our
Articles of Incorporation currently authorize the issuance of up to 1,000,000
preferred shares, no par value. We may issue preferred shares in one
or more series, at any time, with such rights, preferences, privileges, and
restrictions as the Board of Directors may determine, all without further action
of our shareholders. Any series of preferred shares which may be
authorized by the Board of Directors in the future may be senior to and have
greater rights and preferences than the common shares. There are no
preferred shares presently outstanding, and we have no present plan,
arrangement, or commitment to issue any preferred shares.
28
RESALE
OF SHARES AND WARRANTS
This
prospectus relates to 3,963,140 warrants, and common shares that may be issued
upon the exercise of the warrants, that we issued in our subscription rights
offers that were completed during January 2004 and December 2005, and 2,694,282
common shares and 3,097,348 warrants held by certain persons or affiliates of
persons who acted as “Guarantors” or “Participating Debenture Holders” in the
subscription rights offers. The Guarantors and Participating
Debenture Holders for whose account warrants or common shares are being
registered through this prospectus are sometimes referred to in this prospectus
as “selling security holders.”
Guarantors
and Participating Debenture Holders
During
December 2005, we completed a subscription rights offer through which we sold
4,467,863 common shares and warrants to persons who exercised subscription
rights and to certain persons who acted as Guarantors under a Standby Purchase
Agreement. We also issued 600,000 warrants to the Guarantors in
consideration of their agreement to acquire the units that remained unsold at
the conclusion of the rights offer, excluding units reserved to fill
over-subscriptions.
During
January 2004, we completed a subscription rights offer through which we sold
2,560,303 common shares and 1,280,073 warrants to persons who exercised
subscription rights. Following the completion of the 2004 rights
offer, we sold an additional 428,571 common shares and 214,284 warrants under a
Standby Purchase Agreement to certain persons who acted as Guarantors of the
rights offer or who were assignees of one of the Guarantors. We also
issued 250,000 warrants to the Guarantors and 500,000 warrants to person who
acted as Participating Debenture Holders under the Standby Purchase Agreement in
consideration of their agreement to acquire any units that might remain unsold
at the conclusion of the rights offer, excluding units reserved to fill
over-subscriptions.
During
February 2004, we issued a total of 1,071,428 common shares and 535,712 warrants
in exchange for $1,500,000 of debentures held by certain persons who acted as
Participating Debenture Holders under the Standby Purchase Agreement for the
2004 rights offer.
Plan
of Distribution
The
selling security holders have advised us that they may hold their warrants and
common shares for investment purposes, or they may sell warrants and common
shares from time to time on the NYSE Amex at prevailing market prices, or at
prices related to the prevailing market price, or in privately negotiated
transactions. The selling security holders also may sell common
shares acquired through the exercise of their warrants, or they may hold those
shares for investment purposes and sell them at later date.
29
The
selling security holders will bear all broker-dealer commissions payable in
connection with the sale of their common shares or
warrants. Broker-dealers who acquire common shares or warrants from
the selling security holders as principals may resell the shares and warrants
from time to time in transactions on the NYSE Amex, or may resell the shares and
warrants in negotiated transactions at prevailing market prices or at negotiated
prices, and may receive usual and customary commissions from the purchasers of
the shares and warrants.
The
selling security holders have advised us that during the time that they may be
engaged in a distribution of their common shares and warrants they will (a) not
engage in any stabilization activity in connection with our securities, (b)
cause to be furnished to each broker through whom their shares or warrants may
be offered the number of copies of this prospectus required by the broker, and
(c) not bid for or purchase any of our securities or rights to acquire our
securities, or attempt to induce any person do so, other than as permitted under
the Exchange Act. The selling security holders and any broker-dealers
who participate in the sale of their common shares and warrants may be deemed to
be “underwriters” as defined in the Securities Act. Any commissions
paid or any discounts or concessions allowed to any broker-dealers in connection
with the sale of the common shares and warrants, and any profits received on the
resale of any shares and warrants purchased by broker-dealers as principals, may
be deemed to be underwriting discounts and commissions under the Securities
Act.
The
following table shows the number of our common shares beneficially owned by the
selling security holders prior to this offering, the maximum number of common
shares that may be sold by them through this prospectus, and the amount and
percentage of the outstanding common shares that will be owned by them after the
completion of this offering assuming all of the shares covered by this
prospectus are sold.
|
Name
|
Shares
Owned(1)
|
Shares
Offered(1)
|
Shares
Owned After Offering(1)
|
Percentage
of Outstanding Common Shares Owned After Offering(1)
|
|||||||||||||
|
Broadwood
Partners, L.P.
|
4,669,249 | (2) | 1,103,635 | 3,565,614 | (2) | 10.60 | % | ||||||||||
|
Goren
Brothers, L.P.
|
349,484 | 97,402 | 252,082 | * | |||||||||||||
|
Alfred
D. Kingsley
|
4,953,432 | (3) | 1,190,305 | 3,763,127 | (3) | 11.18 | % | ||||||||||
|
Greenway
Partners, LP
|
550,287 | (4) | 302,940 | 247,347 | (4) | * | |||||||||||
_________________________
* Less
than 1%
(1) Does
not include shares issuable upon the exercise of the warrants offered by this
prospectus.
(2) Does
not include shares that may be acquired upon the exercise of warrants owned by
Broadwood Partners, L.P. Does not include shares owned or that may be acquired
upon the exercise of certain warrants and options owned by Neal C.
Bradsher. Broadwood Capital, Inc. is the general partner of Broadwood
Partners, L.P., and Neal C. Bradsher is the President of Broadwood Capital,
Inc. Mr. Bradsher and Broadwood Capital, Inc. may be deemed to
beneficially own the shares that Broadwood Partners, L.P. owns.
30
(3) Does
not include shares that may be acquired upon the exercise of certain options and
warrants owned solely by Mr. Kingsley, or shares owned or that may be acquired
upon the exercise of warrants by Greenbelt Corp. and Greenway Partners,
L.P.
(4) Does
not include shares that may be acquired upon the exercise of certain warrants
owned solely by Greenway Partners, LP. Does not include shares owned
or that may be acquired upon the exercise of warrants owned by Alfred D.
Kingsley, Greenbelt Corp., or Gary K. Duberstein.
The
following table shows the number of warrants beneficially owned by the selling
security holders prior to this offering, the maximum number of warrants that may
be sold by them through this prospectus, and the amount and percentage of the
outstanding warrants that will be owned by them after the completion of this
offering assuming all of the warrants covered by this prospectus are
sold.
|
Name
|
Warrants
Owned
|
Warrants Offered
|
Warrants
Owned After Offering
|
Percentage
of Outstanding Warrants Owned After
Offering
|
|||||||||||||
|
Broadwood
Partners, LP
|
1,377,393 | (1) | 1,263,808 | 113,585 | (1) | 1.61 | % | ||||||||||
|
Cyndel
& Co.
|
89,999 | 89,999 | 0 | 0 | % | ||||||||||||
|
Goren
Brothers, L.P.
|
103,530 | 94,155 | 9,375 | * | |||||||||||||
|
Greenway
Partners, L.P.
|
347,580 | (2) | 304,951 | 42,629 | (2) | * | |||||||||||
|
Alfred
D. Kingsley
|
2,270,689 | (4) | 1,344,435 | 926,254 | (4) | 13.12 | % | ||||||||||
_______________________________
*Less
than 1%.
(1) Does
not include 5,550 warrants owned by Neal Bradsher. Broadwood Capital,
Inc. is the general partner of Broadwood Partners, L.P., and Neal C. Bradsher is
the President of Broadwood Capital, Inc. Mr. Bradsher and Broadwood
Capital, Inc. may be deemed to beneficially own the shares that Broadwood
Partners, L.P. owns.
(2) Does
not include warrants owned by Alfred D. Kingsley or Greenbelt
Corp.
(3) Includes
only the ILC Warrant.
(4) Does
not include warrants owned by Greenbelt Corp. or Greenway Partners,
LP.
31
LEGAL
MATTERS
The
validity of the rights, common shares, and warrants will be passed upon for
BioTime by Lippenberger, Thompson, Welch, Soroko & Gilbert LLP, San
Francisco and Corte Madera, California. A member of Lippenberger,
Thompson, Welch, Soroko & Gilbert LLP holds an option to purchase 20,000
BioTime common shares.
EXPERTS
The
financial statements incorporated in this prospectus by reference from BioTime’s
Annual Report on Form 10-K for the years ended December 31, 2008 and 2007 have
been audited by Rothstein, Kass & Company, P.C. independent registered
public accounting firm, to the extent and for the periods set forth in their
report incorporated herein by reference, and are incorporated herein in reliance
upon such report given upon the authority of said firm as experts in accounting
and auditing.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008,
Quarterly Reports on Form 10-Q for the periods ended March 31, 2009, June 30,
2009, and September 30, 2009, Current Reports on Form 8-K filed by us with the
Commission on March 30, 2009; April 17, 2009; April 30, 2009; May 8, 2009; May
14, 2009; July 7, 2009; July 9, 2009; July 13, 2009; August 5, 2009; August 17,
2009; August 25, 2009; September 23, 2009; October 16, 2009; October 20, 2009;
October 23, 2009; and November 25, 2009 are hereby incorporated into this
prospectus by reference. All other documents subsequently filed by us
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
of 1934, as amended, prior to the termination of the offering covered by this
prospectus shall be deemed incorporated into this prospectus by
reference. A description of the common shares and warrants contained
in a Registration Statement on Form 8-A filed under the Securities Exchange Act
of 1934, as amended, is also incorporated into this prospectus by
reference. We will provide without charge to each person, including
any beneficial owner, to whom a prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
incorporated by reference but not delivered with this
prospectus. Such requests may be addressed to the Secretary of
BioTime at 1301 Harbor Bay Parkway, Suite 100, California 94502;
Telephone: (510) 521-3390.
WHERE
YOU CAN FIND MORE INFORMATION
We are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and in accordance therewith file quarterly, annual, and
current reports and proxy statements and other information with the Securities
and Exchange Commission. The public may read and copy any materials
we file with the Securities and Exchange Commission at the Commission’s Public
Reference Room at 100 F Street N.E., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330.
32
The
Commission maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Commission. The address of such site is http://www.sec.gov.
We make
available free of charge on or through our Internet website www.biotimeinc.com
our annual report on Form 10–K, quarterly reports on Form 10–Q, current reports
on Form 8–K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the
Commission.
We have
filed with the Securities and Exchange Commission, 100 F Street N.E.,
Washington, D.C. a registration statement on Form S-3 for the registration of
the shares and warrants offered by this prospectus. This prospectus,
which is part of the registration statement, does not contain all of the
information contained in the registration statement. For further
information with respect to us and the securities offered by this prospectus,
you should refer to the registration statement, including the exhibits thereto,
which may be inspected, without charge, at the Office of the Securities and
Exchange Commission, or copies of which may be obtained from the Commission in
Washington, D.C. upon payment of the requisite fees. Statements
contained in this prospectus as to the content of any contract or other document
referred to are not necessarily complete. In each instance reference
is made to the copy of the contract or other document filed as an exhibit to the
registration statement, and each such statement is qualified in all respects by
reference to the exhibit.
33
|
No
dealer, salesperson or other person has been authorized in connection with
this offering to give any information or to make any representations other
than those contained in this Prospectus. This Prospectus does
not constitute an offer or a solicitation in any jurisdiction to any
person to whom it is unlawful to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create an implication
that there has been no change in the circumstances of BioTime or the facts
herein set forth since the date hereof.
|
|
||||
 |
|||||
|
7,060,488
Warrants
|
|||||
|
TABLE
OF CONTENTS
|
7,060,488
Common Shares Issuable Upon Exercise of Warrants
|
||||
|
Prospectus
Summary
|
4
|
2,694,282
Common Shares
|
|||
|
Risk
Factors
|
11 | ||||
|
Market
For Our Common Equity And Warrants
|
21 | ||||
|
Use
of Proceeds
|
22 | ||||
|
The
Discount Offer and Description of the Warrant
|
23 | ||||
|
Description
of Common Shares and Preferred Shares
|
28 | ||||
|
Resale
of Shares and Warrants
|
29 | ||||
|
Legal
Matters
|
32 | ||||
|
Experts
|
32
|
PROSPECTUS
|
|||
|
Where
You Can Find More Information
|
32 | ||||
|
January
__, 2010
|
|||||
34
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
15. Indemnification of Directors and Officers.
Section
317 of the California Corporations Code permits indemnification of directors,
officers, employees, and other agents of corporations under certain conditions
and subject to certain limitations. In addition, Section 204(a)(10)
of the California Corporations Code permits a corporation to provide, in its
articles of incorporation, that directors shall not have liability to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty, subject to certain prescribed exceptions. Article Four of the
Articles of Incorporation of the Registrant contains provisions for the
indemnification of directors, officers, employees and other agents within the
limitations permitted by Section 317 and for the limitation on the personal
liability of directors permitted by Section 204(b)(10), subject to the
exceptions required thereby.
Item
16. Exhibits and Financial Statement Schedules.
Exhibit
|
Numbers
|
Description
|
|
4.1
|
Specimen
of Common Share Certificate+
|
|
4.2
|
Form
of Warrant Agreement between BioTime, Inc. and American Stock Transfer
& Trust Company++
|
|
4.3
|
Form
of Amendment to Warrant Agreement between BioTime, Inc. and American Stock
Transfer & Trust Company. +++
|
|
Form
of Amendment to Warrant Agreement between BioTime, Inc. and American Stock
Transfer & Trust Company.*
|
|
4.5
|
Form
of Warrant+++
|
|
5.1
|
Opinion
of Counsel§
|
|
Consent
of Rothstein, Kass & Company,
P.C.*
|
+
Incorporated by reference to Registration Statement on Form S-1, File Number
33-44549 filed with the Securities and Exchange Commission on December 18, 1991,
and Amendment No. 1 and Amendment No. 2 thereto filed with the Securities and
Exchange Commission on February 6, 1992 and March 7, 1992,
respectively.
II-1
++
Incorporated by reference to Registration Statement on Form S-2, File Number
333-109442, filed with the Securities and Exchange Commission on October 3,
2003, and Amendment No.1 thereto filed with the Securities and Exchange
Commission on November 13, 2003.
+++Incorporated
by reference to Registration Statement on Form S-2, File Number 333-128083,
filed with the Securities and Exchange Commission on September 2,
2005.
§
Previously filed.
* Filed
herewith.
Item
17. Undertakings.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers, and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the Registrant
of expenses incurred or paid by a director, officer, or controlling person of
the Registrant in the successful defense of any action, suit, or proceeding) is
asserted by such director, officer, or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by final
adjudication of such issue.
II-2
The
undersigned undertakes:
(1) To
file during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(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.
(2) That
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(5) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser each prospectus filed pursuant to Rule 424(b) shall be deemed to be
part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
(6) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the
securities:
The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
II-3
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
II-4
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 Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Alameda, State of California on January 6,
2010.
|
BIOTIME,
INC.
|
|||
|
By
|
Michael D. West
|
||
|
Chief
Executive Officer
|
|||
Pursuant
to the requirements of the Securities Act of 1933, this Post-Effective Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
|
Signature
|
Title
|
Date
|
||
|
/s/ Michael D. West
|
Chief
Executive Officer and
|
January
6, 2010
|
||
|
MICHAEL
D. WEST
|
Director (Principal Executive Officer) | |||
|
/s/ Steven Seinberg
|
Chief
Financial Officer (Principal
|
January
6, 2010
|
||
|
STEVEN
SEINBERG
|
Financial and Accounting Officer) | |||
| /s/ Neal C. Bradsher |
Director
|
January
6, 2010
|
||
|
NEAL
C. BRADSHER
|
|
|
||
|
Director
|
January
__, 2010
|
|||
|
ARNOLD
I. BURNS
|
|
|
||
|
Director
|
January
__, 2010
|
|||
|
ROBERT
N. BUTLER, MD
|
|
|
||
|
Director
|
January
__, 2010
|
|||
|
ABRAHAM
E. COHEN
|
|
|
||
| /s/ Valeta Gregg |
Director
|
January
6, 2010
|
||
|
VALETA
GREGG
|
|
|
||
| /s/ Alfred D. Kingsley |
Director
|
January
6, 2010
|
||
|
ALFRED
D. KINGSLEY
|
|
|
||
| /s/ Pedro Lichtinger |
Director
|
January
6, 2010
|
||
|
PEDRO
LICHTINGER
|
|
|
||
|
/s/ Judith Segall
|
Director
|
January
6, 2010
|
||
|
JUDITH
SEGALL
|
II-5
Exhibit
4.4
_______________
Amendment
of Warrant Agreement
Dated as
of ______________, 2010
_______________
THIS
AMENDMENT OF WARRANT AGREEMENT (“Amendment”), dated as of ______________, 2010,
between BioTime, Inc., a California corporation (the “Company”), and American
Stock Transfer & Trust Company (“Warrant Agent”), for the benefit of each
Holder, amends that certain Warrant Agreement dated December 9, 2003, as amended
by that certain Amendment of Warrant Agreement dated October 27, 2005 (the
“Agreement”).
The
Company proposes to permit Holders to exercise up to 3,000,000 Warrants, in the
aggregate, at a discounted exercise price of $1.70 per Warrant Share until 5:00
p.m. on _________, 2010.
In
consideration of the foregoing and for the purpose of defining the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company and each Holder, the Company agrees that the Agreement is amended
by as follows:
Section
1.
Definitions. Unless
otherwise defined in this Amendment, all capitalized terms have the meaning
ascribed to them in the Agreement.
(a) “Discount
Offer” means the Company’s offer to permit up to 3,000,000 Warrants to be
exercised by Holders at the Discount Offer Warrant Price during the Discount
Offer Period.
(b) "Discount
Offer Expiration Date" means __________, 2010 or such other date as the Company
may determine.
(c) "Discount
Offer Period" means the period commencing on _______, 2010 and ending at 5:00
p.m. New York time on the Discount Offer Expiration Date.
(d) “Discount
Offer Warrant Price” means $1.70 per Warrant Share.
(e) "Prospectus"
means the Company's prospectus, dated _________, 2010, pertaining to the
Warrants, as the same may from time to time be supplemented or
amended.
Section
2.
Discount
Offer. The following provisions shall apply with respect to
the exercise of Warrants during the Discount Offer Period only.
(a) Discount Offer Warrant
Price. Subject to any adjustments required by Section 10,
during the Discount Offer Period the Warrant Price shall be the Discount Offer
Warrant Price.
(b) Maximum Number of Warrant
Shares Issuable at Discount Warrant Price; Proration. During
the Discount Offer Period, Holders may exercise, in the aggregate, up to a total
of 3,000,000 Warrants to purchase, in the aggregate, up to 3,000,000 Warrant
Shares, at the Discount Offer Warrant Price. All exercises of the
Warrants at the Discount Offer Warrant Price will be subject to proration if
more than 3,000,000 Warrants are exercised in the Discount Offer. All
Warrants received by the Warrant Agent for exercise in the Discount Offer will
be held by the Warrant Agent until the Warrant Agent determines the total number
of Warrants received that have been exercised properly in the Discount Offer
Period. If the total number of Warrants that have been exercised
properly in the Discount Offer Period exceeds 3,000,000, the Warrant Agent will
allocate 3,000,000 Warrant Shares among the Holders who properly exercised
Warrants in the Discount Offer. Such allocation shall be made on a
pro rata basis, based upon the number of Warrants properly exercised by each
Holder and the total number of Warrants properly exercised by all Holders in the
Discount Offer. The Warrant Agent will deposit all checks and other
funds received by it for the payment of the Discount Offer Warrant Price in the
Discount Offer into a segregated interest-bearing account of the Company pending
proration and distribution of Warrant Shares. The interest earned on
the account will belong to the Company. Any funds received by the
Warrant Agent from a Holder in excess of the aggregate Discount Offer Warrant
Price payable for the Warrants Shares allocated to the Holder in the Discount
Offer will be returned to the Holder without interest or
deduction.
(c) Notice of Guaranteed
Delivery. A Warrant will be accepted for exercise during the Discount
Offer Period if prior to 5:00 p.m. New York City time on the Discount Offer
Expiration Date the Warrant Agent has received a notice of guaranteed delivery
by facsimile (telecopy) or otherwise from a bank, trust company, or New York
Stock Exchange member guaranteeing delivery of (i) payment of the full Discount
Offer Warrant Price for the Warrant Shares to be purchased through exercise of
the Warrants, and (ii) a properly completed and executed Warrant
Certificate. The Warrant Agent will not honor a notice of guaranteed
delivery unless a properly completed and executed Warrant Certificate and full
payment for the Warrant Shares is received by the Warrant Agent by the close of
business on the third business day after the Discount Offer Expiration
Date.
(d) Number of Warrants Deemed
Exercised. If during the Discount Offer Period a Holder does
not indicate the number of Warrant Shares being purchased through the exercise
of Warrants, or does not deliver full payment of the Discount Offer Warrant
Price for the number of Warrant Shares indicated as being purchased through the
exercise of Warrants, then such Holder will be deemed to have exercised Warrants
to purchase the maximum number of Warrant Shares determined by dividing (x) the
total Discount Offer Warrant Price so paid, by (y) the Discount Offer Warrant
Price per Warrant Share; provided, that such number shall not exceed the maximum
number of Warrant Shares that may be purchased through the exercise of the
Warrant Certificate delivered to the Warrant Agent.
(e) Payment by Wire
Transfer. The Warrant Agent may accept payment by wire
transfer if arrangements satisfactory to the Warrant Agent and the Company are
made by the Holder.
(f)
Termination;
Extension; Modification of Discount Offer. The Company may, in
its sole discretion, upon notice to the Warrant Agent: (a) terminate the
Discount Offer; (b) extend the Discount Offer Expiration Date to a later date;
or (c) amend or modify the terms of the Discount Offer.
Section
3. Delivery of Prospectus and
Other Documents. The Warrant Agent shall deliver a Prospectus,
a letter from the President of the Company to the Holders, a return envelope
addressed to the Warrant Agent, and such other documents and information as the
Company may provide concerning the Discount Offer. The Warrant Agent
shall also provide copies of the Prospectus and other documents prepared by the
Company to Holders and other persons upon request.
(a) The
Company will provide the Warrant Agent with a sufficient number of Prospectuses
as the Warrant Agent may require.
2
(b) The
Company has provided to the Warrant Agent the following documents that the
Warrant Agent shall deliver to brokers, dealers, commercial banks, trust
companies and other nominee holders of Warrants: (i) a letter to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees; (ii) a letter to
the clients of nominee holders described in clause (i); and (iii) a Notice of
Guaranteed Delivery.
Section
4. Notices; Principal
Office. Any notice pursuant to the Agreement, as amended
hereby, by the Company or by any Holder to the Warrant Agent, or by the Warrant
Agent or by any Holder to the Company, shall be in writing and shall be
delivered in person, or mailed first class, postage prepaid (a) to the Company,
at its office, Attention: Secretary or (b) to the Warrant Agent, at its offices
as designated at the time the Warrant Agent is appointed. The address
of the principal office of the Company is 1301 Harbor Bay Parkway, Suite 100,
Alameda, California 94502. Any notice mailed pursuant to the
Agreement, as amended hereby, by the Company or the Warrant Agent to the Holders
shall be in writing and shall be mailed first class, postage prepaid, or
otherwise delivered, to such Holders at their respective addresses on the books
of the Company or the Warrant Agent, as the case may be. Each party
hereto and any Holder may from time to time change the address to which notices
to it are to be delivered or mailed hereunder by notice to the other
party.
Section
5. Effect of
Amendment. Except as amended hereby, all provisions of the
Agreement shall remain in full force and effect.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed, all as of the day and year first above written.
|
BIOTIME,
INC.
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
Attest:
|
By:
|
||
|
Name:
Judith Segall
|
||
|
Title:
Secretary
|
|
AMERICAN
STOCK TRANSFER & TRUST COMPANY
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
3
Exhibit 23.1
|
Certified
Public
Accountants
|
Rothstein,
Kass & Company, P.C.
4
Becker Farm Road
Roseland,
NJ 07068
tel
973.994.6666
fax
973.994.0337
www.rkco.com
|
Beverly
Hills
Dallas
Denver
Grand
Cayman
Irvine
New
York
Roseland
San
Francisco
Walnut
Creek
|
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby
consent to the incorporation by reference in Post Effective Amendment No. 5 to
Registration Statement on Form S-3 to Form S-2, (Registration Nos.333-128083 and
333-109442), of BioTime, Inc. and Subsidiary, (collectively, the “Company”) and
of: (i) our report dated March 17, 2009, with respect to the audit of the
consolidated balance sheets of the Company as of December 31, 2008 and 2007, and
the related consolidated statements of operations, stockholders deficit, and
cash flows for the years then ended, which report appears in the Annual Report
on Form 10-K of the Company for the year ended December 31, 2008, and (ii) to
the reference to our firm under the caption “Experts” in the
prospectus.
|
/s/
Rothstein, Kass & Company, P.C.
|
Roseland,
New Jersey
January
6, 2010