SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
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Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
Antares Pharma, Inc.
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(Name of Registrant as Specified in Its Charter)
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ANTARES PHARMA, INC.
707 Eagleview Boulevard, Suite 414
Exton, Pennsylvania 19341
Ph. (610) 458-6200
April 10, 2003
Dear Shareholder:
You are cordially invited to attend a special meeting of shareholders of Antares
Pharma, Inc. to be held at 10:00 a.m., local time, on Thursday, May 8, 2003, at
our corporate offices at 707 Eagleview Boulevard, Suite 414, Exton, Pennsylvania
19341.
At the special meeting, we will ask you to approve the issuance of shares of our
common stock issuable upon conversion and exercise of certain debentures and
warrants we recently sold and to approve an amendment to our Third Amended and
Restated Articles of Incorporation increasing the number of authorized shares of
our common stock from 30,000,000 to 100,000,000. The enclosed Notice of Special
Meeting and Proxy Statement describe these matters in greater detail. Our Board
of Directors unanimously recommends that you vote in favor of the proposals.
Only shareholders of record at the close of business on Friday, March 14, 2003
are entitled to notice of and to vote at the special meeting and any adjournment
thereof.
We hope you will join us at the special meeting, but we know that every
shareholder may not be able to do so. Whether or not you plan to attend, please
complete and return your signed proxy card as soon as possible.
Sincerely,
Roger G. Harrison, Ph.D.
Chief Executive Officer
ANTARES PHARMA, INC.
707 Eagleview Boulevard, Suite 414
Exton, Pennsylvania 19341
Ph. (610) 458-6200
NOTICE IS HEREBY GIVEN of a special meeting of shareholders of Antares Pharma,
Inc., a Minnesota corporation.
Date & Time: Thursday, May 8, 2003 at 10:00 a.m. local time
Place: Antares Pharma, Inc.
707 Eagleview Boulevard
Suite 414
Exton, Pennsylvania 19341
Ph. (610) 458-6200
Items of Business: 1. To approve the issuance of shares of our common
stock upon the conversion of our 8% Senior Secured
Convertible Debentures, our Amended and Restated 8%
Senior Secured Convertible Debentures, and the
exercise of warrants, each of which were recently
issued in a private transaction.
2. To approve the proposed amendment to our Third
Amended and Restated Articles of Incorporation to
increase the number of authorized shares of our
common stock from 30,000,000 to 100,000,000.
Record Date: All shareholders of record as of the close of
business on Friday, March 14, 2003, will be entitled
to vote at the special meeting.
Your attention is directed to the enclosed proxy statement. Whether or not you
intend to attend the special meeting, please complete, sign and return the proxy
card in the enclosed, postage prepaid and addressed envelope.
By order of the Board of Directors,
Lawrence M. Christian
Secretary
April 10, 2003
PROXY STATEMENT OF
ANTARES PHARMA, INC.
707 Eagleview Boulevard, Suite 414
Exton, Pennsylvania 19341
Ph. (610) 458-6200
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Special Meeting of Shareholders to be held
May 8, 2003
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Antares Pharma, Inc. to be used at a
special meeting of our shareholders to be held on Thursday, May 8, 2003. This
proxy statement is first being sent to shareholders on or about Thursday, April
10, 2003. Each shareholder who signs and returns a proxy card in the form
enclosed with this proxy statement may revoke the same at any time prior to use
by giving notice of such revocation to us in writing prior to the meeting or in
person at the special meeting. Unless so revoked, the shares represented by such
proxy will be voted at the special meeting and at any adjournment thereof in the
manner specified. Presence at the meeting of a shareholder who has signed a
proxy does not alone revoke the proxy. If no direction is made, the proxy will
be voted for the proposal to approve the issuance of common stock pursuant to
the conversion or exercise of the debentures and warrants and for the proposal
to increase the number of our authorized shares of common stock, both of which
proposals are discussed below. Only shareholders of record at the close of
business on Friday, March 14, 2003, will be entitled to vote at the special
meeting or any adjournment thereof.
Each item of business to be presented at the special meeting must be
approved by the affirmative vote of the holders of a majority of the shares
present, in person or by proxy, and entitled to vote on that item of business.
Votes cast by proxy or in person at the special meeting will be tabulated by the
election inspector appointed for the special meeting, and such inspector will
determine whether a quorum is present. The election inspector will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum and in tablulating votes cast on proposals
presented to shareholders for a vote, but as unvoted for purposes of determining
the approval of the matter from which the shareholder abstains. Consequently, an
abstention will have the same effect as a negative vote. If a broker indicates
on the proxy that it does not have discretionary authority as to certain shares
to vote on a particular matter, those shares will not be considered as present
and entitled to vote with respect to such matter.
Pursuant to a letter to the Xmark funds and SDS, dated January 29,
2003, Dr. Jacques Gonella, our principal shareholder, agreed to vote his shares
in favor of the proposal to approve the issuance of shares of our common stock
upon conversion and exercise of the debentures and warrants. Dr. Gonella
currently owns approximately 53% of our common stock. As of the close of
business on the record date, Friday, March 14, 2003, 11,877,506 shares of our
common stock were outstanding. Each share of common stock is entitled to one
vote. Cumulative voting is not permitted.
INTRODUCTION
The special meeting is being called to approve the issuance of shares
of our common stock upon the conversion of debentures and the exercise of
warrants we issued in a recent transaction and to approve an amendment to our
Third Amended and Restated Articles of Incorporation to increase the number of
authorized shares of our common stock from 30,000,000 to 100,000,000, both of
which are described below in greater detail.
PROPOSAL TO APPROVE THE ISSUANCE OF COMMON STOCK UPON
CONVERSION AND EXERCISE OF DEBENTURES AND WARRANTS
(Item 1 on proxy card)
APPROVAL OF THE ISSUANCE OF SHARES OF COMMON STOCK UPON CONVERSION OF
8% SENIOR SECURED CONVERTIBLE DEBENTURES AND AMENDED AND RESTATED 8%
SENIOR SECURED CONVERTIBLE DEBENTURES AND UPON EXERCISE OF WARRANTS
ISSUED WITH SUCH DEBENTURES PURSUANT TO NASD RULE 4350.
Summary of Sale of Convertible Debentures and Warrants
On February 7, 2003, we completed a restructuring of our 10% debentures
previously sold to four primary investors. Specifically, as part of this
restructuring, on January 24, 2003 and January 31, 2003, we borrowed an
aggregate of $621,024.92 from Xmark Fund, L.P. and Xmark Fund, Ltd. We used the
proceeds of these borrowings to repurchase $476,824.92 of the 10% debentures
previously sold to two of the original four primary holders, including accrued
interest, and to pay a repurchase premium of $144,200.00 to the holders of these
repurchased 10% debentures. Thereafter, in exchange for the surrender and
cancellation of the promissory notes we issued when we borrowed these funds, we
issued to the Xmark funds 8% Senior Secured Convertible Debentures in the same
principal amount as the promissory notes. We also issued Amended and Restated 8%
Senior Secured Convertible Debentures in the aggregate principal amount of
$992,230.37 to the Xmark funds and to SDS Merchant Fund, LP, another of the
original four primary holders of the 10% debentures, in exchange for the
surrender by them of their 10% debentures. All of the 8% debentures that we
issued in connection with this restructuring transaction contain identical
terms, provisions and conditions, and contain substantially the same terms as
the 10% debentures, except that the 8% debentures include a fixed conversion
price of $.50 per share (subject to customary anti-dilution provisions described
below) and an interest rate of 8% per annum. We granted a senior security
interest in substantially all of our assets to the holders of the 8% debentures.
In connection with this restructuring, we also issued to the Xmark
funds and SDS five-year warrants to purchase an aggregate of 2,932,500 shares of
our common stock at an exercise price of $.55 per share (subject to customary
anti-dilution provisions described below). Following the effective date of the
registration statement we are obligated to file to register the resale of the
shares of our common stock issuable upon exercise of the warrants, we may redeem
the warrants, in full but not in part, if the closing bid price of our common
stock has been greater than $3.50 for 30 consecutive trading days, and the
trading volume during such 30-day period is
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at least 1,200,000. In the event we redeem the warrants, we must pay to the
Xmark funds and SDS a price equal to the then-effective warrant price multiplied
by the number of shares of common stock for which the warrants are then
exercisable. We are required to give 30 days' notice of our intention to redeem,
during which period, the warrantholders will continue to have the right to
exercise the warrants.
We are also required to file a registration statement on Form S-3 with
the Securities and Exchange Commission to register the shares of our common
stock issuable upon conversion of the debentures. We filed this registration
statement on March 21, 2003.
Why We Need Shareholder Approval
Because our common stock is listed on the Nasdaq SmallCap Market, we
are subject to the Marketplace Rules of the National Association of Securities
Dealers, Inc. (NASD). Marketplace Rule 4350(i)(1)(D) requires shareholder
approval for any sale, issuance or potential issuance of our common stock (or
securities convertible into or exercisable for our common stock) at a price less
than the greater of book or market value where the amount of stock being issued
exceeds 20% of the common stock or 20% of the voting power outstanding before
the issuance. By their terms, the debentures and warrants are initially
convertible and exercisable into an aggregate of 6,159,011 shares of our common
stock, or approximately 52% of the total shares outstanding on the record date.
Each of the debentures and warrants contain customary anti-dilution provisions,
which could result in the issuance of additional shares of our common stock. If
we obtain shareholder approval, there is no limit on the number of shares that
could be issued upon conversion of the debentures or exercise of the warrants,
and such issuance of shares of common stock will no longer be subject to
shareholder approval under Rule 4350.
Conversion and Exercise
The holders of the debentures and the warrants are entitled to convert
or exercise their debentures or warrants into shares of common stock at any
time. To the extent the debentures or warrants are converted into or exercised
to purchase shares of common stock, the total number of our outstanding shares
would increase, and the sale of these shares could decrease the price of our
common stock.
Effect of Merger, Consolidation, Disposition of Assets, Recapitalization or
Reorganization
In the event we sell, convey or dispose of all or substantially all of
our assets or effect a merger transaction in which we are not the survivor, or
we complete any exchange of shares, recapitalization or reorganization, the
holders of the debentures will have the right to receive, upon conversion of the
debentures, such stock, securities or assets they would have been entitled to
receive had they fully converted the debentures immediately prior to the
transaction. Additionally, in effecting any such transaction, we must make
provisions to ensure that all of the provisions of the debentures (including
provisions regarding adjustment of the conversion price and of the number of
shares of common stock issuable upon conversion of the debentures) continue to
apply following any such transaction. Before effecting any such transaction, we
must give to the debenture holders 30 days prior written notice, to the extent
practicable (but in
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no event less that 15 days prior written notice), of the special meeting of
shareholders being called to approve the transaction. Additionally, the
successor or acquiring entity in any such transaction must agree in writing to
assume the obligations described in this paragraph.
Anti-Dilution Provisions
During the time the debentures and warrants are outstanding, if we
issue or sell any shares of our common stock for a per share consideration that
is less than the debenture conversion price or warrant exercise price then in
effect, such issuance will act to immediately reduce the conversion price and
warrant exercise price to such lower per share price.
Events of Default
The following constitute events of default under the debentures:
o our failure to pay principal or interest when due
o our failure to issue shares of common stock upon receipt of a
notice of conversion by the holders of the debentures
o our failure to file a registration statement registering the
shares of common stock issuable upon conversion of the
debentures and exercise of the warrants within 30 days
following the close of the sale of the debentures and
warrants, or our failure to use our best efforts to obtain
effectiveness of such registration statement (the 30-day
filing requirement was subsequently waived by the Xmark funds
and SDS, provided that we file the registration statement by
March 21, 2003)
o our breach of selected material covenants or material terms of
the debentures or the purchase agreement related to the
debentures
o our breach of any representation or warranty made by us in
connection with the issuance of the debentures
o we make an assignment for the benefit of creditors or apply
for or consent to the appointment of a receiver or trustee for
a substantial part of our property or business
o any money judgment is entered against us for more than $50,000
and remains unvacated, unbonded or unstayed for a period of 20
days
o bankruptcy, insolvency, reorganization or liquidation
proceedings are instituted by or against us
o our common stock is delisted (on November 29, 2002, we
received a notice from Nasdaq that our stock will be delisted
from the Nasdaq SmallCap Market if our stock price does not
exceed $1.00 per share for ten consecutive trading days prior
to May 28, 2003; and on March 24, 2003, we received a notice
from Nasdaq that we do not meet Nasdaq's continued listing
requirements and our stock will be delisted if we do not
submit to Nasdaq by April 7, 2003 an acceptable plan to regain
compliance with continued listing requirements)
o we default on any indebtedness in excess of $25,000 to a third
party
Upon the occurrence of any of the above events of default, at the option of the
debenture holders (except in the event of bankruptcy or receivership, in which
case the debentures automatically
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become due and payable), the debentures become immediately due and payable. In
such event, we must pay an amount equal to 130% of the sum of the outstanding
principal amount plus accrued and unpaid interest. If we fail to pay this amount
within five business days of written notice from the debenture holders, the
debenture holders may require us to issue to them the number of shares of our
common stock equal to default amount owed to them divided by the then existing
conversion price.
Maturity
The debentures mature on March 31, 2004.
Voting Rights
Other than as required by law, the holders of the debentures have no
voting rights until they convert, whereupon they will have the same rights as
all other holders of our common stock.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE ISSUANCE
OF SHARES OF COMMON STOCK UPON CONVERSION OF 8% SENIOR SECURED
CONVERTIBLE DEBENTURES AND AMENDED AND RESTATED 8% SENIOR SECURED
CONVERTIBLE DEBENTURES AND UPON EXERCISE OF WARRANTS ISSUED WITH SUCH
DEBENTURES PURSUANT TO NASD RULE 4350.
PROPOSAL TO AMEND OUR THIRD AMENDED AND RESTATED
ARTICLES OF INCORPORATION
(Item 2 on proxy card)
APPROVAL OF THE PROPOSED AMENDMENT TO OUR THIRD AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF OUR COMMON STOCK FROM 30,000,000 TO 100,000,000.
Our Third Amended and Restated Articles of Incorporation authorize the
issuance of 30,000,000 shares of common stock, $.01 par value, and 3,000,000
shares of preferred stock. As of March 14, 2003, there were 11,877,506 shares of
our common stock issued and outstanding and 1,350 shares of preferred stock
issued and outstanding. Additionally, as of March 14, 2003, there were
24,096,996 shares of our common stock reserved for issuance pursuant to our
stock option plans, outstanding warrants and debentures, committed grants of
stock and the conversion of the Series A Preferred Stock.
The proposed amendment to Article 3 of our Third Amended and Restated
Articles of Incorporation recommended by our Board of Directors, would increase
the number of shares of common stock that we are authorized to issue from
30,000,000 to 100,000,000. If the amendment is approved by the shareholders,
section 1 of Article 3 of our Third Amended and Restated Articles of
Incorporation, as amended, would read as follows:
"The total number of shares of capital stock which the corporation is
authorized to issue shall be 103,000,000 shares, consisting of
100,000,000 shares of common
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stock, par value $.01 per share ("Common Stock"), and 3,000,000 shares
of preferred stock, par value $.01 per share ("Preferred Stock")."
Our Board of Directors desires to increase the authorized number of
shares of common stock to enhance our flexibility in connection with possible
future actions, such as equity financings, mergers, acquisitions of property,
stock splits, stock dividends, use in employee benefit plans, or other corporate
purposes. Having such authorized shares available for issuance would allow
shares of common stock to be issued without the expense and delay of a special
shareholders' meeting. The additional shares of common stock would be part of
the existing class of common stock and, if and when issued, would have the same
rights and privileges as the shares of common stock currently outstanding and
would result in considerable dilution to existing shareholders.
If the proposed amendment is approved, the additional shares of common
stock would be available for issuance without further action by the
shareholders, unless such action is required by applicable law, the rules of the
National Association of Securities Dealers, Inc., or any stock exchange on which
our securities may be listed.
At the date of this proxy statement, except as described herein under
"Proposal to Approve the Issuance of Common Stock Upon Conversion and Exercise
of Debentures and Warrants," our Board of Directors has not authorized the
issuance of any additional shares of our common stock, and we have no agreements
or commitments with respect to the sale or issuance of any shares of our common
stock beyond the number currently authorized. However, we are currently in
discussions with several third parties regarding potential transactions which,
if consummated, would result in us issuing a substantial number of additional
shares of our common stock. Additionally, we are continually reviewing
opportunities to raise additional capital, and such transactions generally
involve the issuance of our common stock. The proposal to increase the
authorized number of shares of common stock may be considered as having the
effect of discouraging attempts to takeover control of our company and issuances
of additional shares could have the effect of diluting per share earnings and
book value of existing shares.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED
AMENDMENT TO OUR THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK FROM
30,000,000 TO 100,000,000.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information concerning beneficial
ownership of our common stock as of March 14, 2003, with respect to (i) all
persons known to be the beneficial owners of more than 5% of the outstanding
shares of such stock, (ii) each of our directors, (iii) each of our executive
officers, and (iv) all directors and executive officers as a group.
Shares Percentage Outstanding
Beneficially of Outstanding Options &
Name of Beneficial Owner Owned(1) Shares Warrants (2)
Dr. Jacques Gonella (3) (4) 3,364,886 28.3% 25,000
Permatec Holding AG (3) (5) 2,900,000 24.4% --
Franklin Pass, M. D. (4) 174,217 1.4% 169,017
Dr. Roger Harrison (4) 105,406 1.0% 5,625
James Clark (4) 22,000 * 25,000
Dr. Philippe Dro (4) 20,000 * 25,000
John Gogol (4) 20,000 * 25,000
Jacques Rejeange (4) 20,000 * 25,000
Lawrence Christian (4) 68,375 1.0% 58,500
Dr. Dario Carrara (4) 42,675 * 67,500
Dr. Peter Sadowski (4) 84,382 1.0% 105,907
All directors and executive officers
as a group (11 persons) (3) 6,821,942 55.4% 531,550
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* Less than 1%.
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes generally voting power
and/or investment power with respect to securities. Shares of common
stock subject to options or warrants currently exercisable or
exercisable within 60 days of March 14, 2003, are deemed outstanding
for computing the percentage of the person holding such options or
warrants but are not deemed outstanding for computing the percentage of
any other person. Except as indicated by footnote, we believe that the
persons named in this table, based on information provided by such
persons, have sole voting and investment power with respect to the
shares of common stock indicated.
(2) Shares of our common stock issuable upon the exercise of outstanding
options and warrants.
(3) Dr. Gonella owns a controlling interest in Permatec Holding AG and,
therefore, exercises voting and investment control for the entity.
(4) The director's or officer's address is 707 Eagleview Boulevard, Suite
414, Exton, PA 19341.
(5) The address of Permatec Holding AG is Hauptstrasse 16, 4132 Muttenz,
Switzerland.
OTHER MATTERS
Solicitation
We will bear the cost of preparing, assembling and mailing the proxy
card and proxy statement to our shareholders in connection with this
solicitation. Brokerage houses and other custodians, nominees and fiduciaries
may be requested to forward soliciting material to the beneficial owners of
stock, in which case they will be reimbursed by us for their expenses in doing
so. Proxies are being solicited primarily by mail, but our officers and
directors may solicit
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proxies personally by telephone or special letter, but such persons will not
receive compensation from us for doing so.
Shareholder Proposals
The proxy rules of the Securities and Exchange Commission permit
shareholders, after timely notice to issuers, to present proposals for
shareholder action in issuer proxy statements where such proposals are
consistent with applicable law, pertain to matters appropriate for shareholder
action, and are not properly omitted by company action in accordance with proxy
rules. Shareholder proposals for our 2004 annual meeting must be prepared in
accordance with the proxy rules and received by us on or before December 16,
2003, in order to be eligible for inclusion in our proxy materials.
Other Matters
Our Board of Directors does not intend to present at the special
meeting any matter not referred to above and does not presently know of any
matters that may be presented to the special meeting by others. However, if
other matters come before the special meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the proxy in accordance with
their best judgment. Our accountants will not be present at the special meeting
and, therefore, will not be available to answer questions.
Incorporation by Reference
This proxy statement incorporates by reference our Form 10-K for the
year ended December 31, 2002, filed with the Securities and Exchange Commission
on March 21, 2003 and enclosed herewith, which includes an audited consolidated
balance sheet as of that date and related consolidated statements of operations,
shareholders' equity (deficit) and comprehensive loss and consolidated
statements of cash flows, as well as other financial information relating to our
operations.
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Antares Pharma, Inc. Proxy
707 Eagleview Boulevard
Suite 414
Exton, Pennsylvania 19341
ANTARES PHARMA, INC.
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 8, 2003
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, having duly received the Notice of Special Meeting of
Shareholders and Proxy Statement, each dated April 10, 2003, hereby appoints Dr.
Roger G. Harrison and Lawrence M. Christian as proxy (each with the power to act
alone and with the power of substitution and revocation), to represent the
undersigned and to vote, as designated below, all shares of common stock of
Antares Pharma, Inc. held of record by the undersigned on the record date at the
Special Meeting of Shareholders to be held on May 8, 2003 at 707 Eagleview
Boulevard, Suite 414, Exton, Pennsylvania 19341 at 10:00 a.m. local time and any
adjournment or postponement thereof.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY BY MAY 2, 2003
USING THE ENCLOSED ENVELOPE OR VIA FACSIMILE AT (610) 458-0756
The Board of Directors Recommend a Vote "For" Proposals 1 and 2.
1. To consider and vote upon a proposal to
issue shares of common stock upon conversion
of 8% Senior Secured Convertible Debentures
and Amended and Restated 8% Senior Secured
Convertible Debenture and upon exercise of
warrants issued with such debentures
pursuant to NASD Rule 4350 [_] For [_] Against [_] Abstain
2. To consider and vote upon a proposal to
amend the Company's Third Amended and
Restated Articles of Incorporation to
increase the number of authorized shares of
the Company's common stock from 30,000,000
to 100,000,000 [_] For [_] Against [_] Abstain
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED "FOR" PROPOSALS 1 AND 2. THE PROXIES ARE
AUTHORIZED TO VOTE IN THEIR DISCRETION WITH RESPECT TO OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING.
Address Change? Mark Box [_] Indicate changes below:
Dated: , 2003
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Signature(s) in Box
Please sign exactly as your name appears on
Proxy. If held in joint tenancy, all persons
must sign. Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the Proxy.
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