Aastrom Biosciences, Inc.
AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 11, 2005
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AASTROM BIOSCIENCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
|
|
|
MICHIGAN
|
|
94-3096597 |
(State or Other Jurisdiction
|
|
(IRS Employer |
of Incorporation or Organization)
|
|
Identification Number) |
24 FRANK LLOYD WRIGHT DRIVE
P.O. BOX 376
ANN ARBOR, MICHIGAN 48106
(734) 930-5555
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrants Principal Executive Offices)
GERALD D. BRENNAN, JR.
VICE PRESIDENT,
ADMINISTRATIVE AND FINANCIAL OPERATIONS, CFO
AASTROM BIOSCIENCES, INC.
24 FRANK LLOYD WRIGHT DRIVE
P.O. BOX 376
ANN ARBOR, MICHIGAN 48106
(734) 930-5555
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
COPIES TO:
DOUGLAS J. REIN, ESQ.
DLA PIPER RUDNICK GRAY CARY US LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CA 92121-2133
TELEPHONE: (858) 677-1400
FACSIMILE: (858) 677-1477
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
If any of the securities being registered on this Form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the following box. þ
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. o
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. o
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the
following box. o
CALCULATION OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TITLE OF |
|
|
|
|
|
|
|
PROPOSED |
|
|
PROPOSED |
|
|
|
|
|
SECURITIES |
|
|
AMOUNT |
|
|
MAXIMUM |
|
|
MAXIMUM |
|
|
AMOUNT OF |
|
|
TO BE |
|
|
TO BE |
|
|
AGGREGATE |
|
|
AGGREGATE |
|
|
REGISTRATION |
|
|
REGISTERED(1) |
|
|
REGISTERED |
|
|
PRICE PER UNIT (2) |
|
|
OFFERING PRICE (2) |
|
|
FEE |
|
|
Debt Securities (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0
par value per share
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock, $0
par value per share
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants (6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units (7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
$ |
75,000,000 |
|
|
|
|
|
|
|
|
$ |
75,000,000 |
|
|
|
$ |
8,828 |
(8) |
|
|
|
|
|
(1) |
|
This Registration Statement also covers contracts which may be issued by the Registrant
under which the counterparty may be required to purchase Debt Securities, Common Stock, Preferred
Stock, or Warrants. |
|
(2) |
|
Not specified as to each class of securities to be registered hereunder pursuant to
General Instruction II.D. of Form S-3. In no event will the aggregate maximum offering price of all
securities registered under this Registration Statement exceed $75,000,000. Any securities
registered hereunder may be sold separately or as units with other securities registered hereunder. |
|
(3) |
|
Subject to footnote (2), there are being registered hereunder an indeterminate number of
Debt Securities as may be sold from time to time by Aastrom Biosciences, Inc. |
|
(4) |
|
Subject to footnote (2), there are being registered hereunder an indeterminate number of
shares of Common Stock as may be sold, from time to time, by Aastrom Biosciences, Inc. There is
also being registered hereunder an indeterminate number of shares of Common Stock that may be
issued upon conversion, as applicable, of Preferred Stock or Debt Securities registered hereunder
or upon exercise of Warrants registered hereunder, as the case may be. |
|
(5) |
|
Subject to footnote (2), there are being registered hereunder an indeterminate number of
shares of Preferred Stock, as may be sold, from time to time, by Aastrom Biosciences, Inc. or as
may be issued upon conversion of Debt Securities registered hereunder or upon the exercise of
Warrants registered hereunder, as the case may be. |
|
(6) |
|
Subject to footnote (2), there are being registered hereunder an indeterminate number of
Warrants representing rights to purchase Debt Securities, Preferred Stock or Common Stock (as shall
be designated by the Company at the time of any such offering) registered hereunder. |
|
(7) |
|
Units may consist of two or more of the securities listed in this table offered and sold
together. |
|
(8) |
|
Calculated pursuant to Rule 457(o) of the rules and regulations under the Securities Act
of 1933, as amended. A total of $5,885 was previously paid with the initial filing of this
registration statement. |
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.
SUBJECT
TO COMPLETION, DATED OCTOBER 11, 2005
The information in this prospectus is not complete and may be changed. We may not sell these
securities under this prospectus until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer to sell nor does it seek an
offer to buy these securities in any state where the offer and sale would not be permitted.
PROSPECTUS
$75,000,000
AASTROM BIOSCIENCES, INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
We may from time to time issue, in one or more series or classes, up to $75,000,000 in
aggregate principal amount of our common stock, preferred stock, debt securities and/or warrants.
We may offer these securities separately or together. We will specify in the accompanying
prospectus supplement the terms of the securities being offered. We may sell these securities to
or through underwriters and also to other purchasers or through agents. We will set forth the
names of any underwriters or agents, and any fees, conversions, or discount arrangements, in the
accompanying prospectus supplement. We may not sell any securities under this prospectus without
delivery of the applicable prospectus supplement.
You should read this document and any prospectus supplement or amendment carefully before you
invest.
Our
common stock is traded on the Nasdaq SmallCap Market under the symbol
ASTM. On October 10, 2005, the last reported sale price
for our common stock was $2.18 per share.
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE RISK FACTORS BEGINNING
ON PAGE 5 FOR A DISCUSSION OF MATERIAL RISKS YOU SHOULD CONSIDER BEFORE YOU INVEST IN OUR
SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE
DATE OF THIS PROSPECTUS IS October 11, 2005.
You should rely only on the information provided or incorporated by
reference in this prospectus. We have not authorized anyone to provide you
with additional or different information. This document may only be used where
it is legal to sell these securities. You should not assume that any
information in this prospectus is accurate as of any date other than the date
of this prospectus.
|
|
|
|
|
|
|
Page |
|
|
|
3 |
|
|
|
|
5 |
|
|
|
|
12 |
|
|
|
|
12 |
|
|
|
|
12 |
|
|
|
|
14 |
|
|
|
|
14 |
|
|
|
|
16 |
|
|
|
|
21 |
|
|
|
|
22 |
|
|
|
|
25 |
|
|
|
|
27 |
|
|
|
|
27 |
|
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements include statements regarding, among other things, (a) our
expectations about product development activities, (b) our growth strategies, (c) anticipated
trends in our industry, (d) our future financing plans, and (e) our anticipated needs for working
capital. Forward-looking statements, which involve assumptions and describe our future plans,
strategies, and expectations, are generally identifiable by use of the words may, will,
should, expect, anticipate, estimate, believe, intend, or project or the negative of
these words or other variations on these words or comparable terminology. This information may
involve known and unknown risks, uncertainties, and other factors that may cause our actual
results, performance, or achievements to be materially different from the future results,
performance, or achievements expressed or implied by any forward-looking statements. These
statements may be found under Managements Discussion and Analysis of Financial Condition and
Results of Operations and Business, in the Form 10-K and other reports that are incorporated by
reference into this prospectus as well as in this prospectus generally. Actual events or results
may differ materially from those discussed in forward-looking statements as a result of various
factors, including, without limitation, the risks outlined under Risk Factors and matters
described in this prospectus generally. In light of these risks and uncertainties, the events
anticipated in the forward-looking statements may not occur.
2
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus and in information
incorporated by reference. Because this is a summary, it does not contain all the information
about us that may be important to you. You should read this entire prospectus and the other
documents and the financial statements and related notes which are incorporated by reference in
this prospectus.
Our Business
We are a development stage company focused on the development of the ex vivo production and
sale of proprietary human cell products for use in cell therapy and tissue regeneration. Our
pre-clinical and clinical product development programs utilize bone marrow-derived adult stem and
progenitor cell mixtures being investigated for aiding in the growth of tissues such as bone,
vascular tissue and cartilage, as well as blood and immune system cells.
In the expanding fields of cell therapy and tissue regeneration, we are developing proprietary
adult bone marrow cell-based products, some of which are now in the clinical stage, for the
regenerative repair of damaged human tissues and other medical disorders. Our lead products contain
TRCs, which are a unique mixture of bone marrow-derived adult stem and progenitor cells, produced
outside of the body or ex vivo from a small amount of bone marrow taken from the patient. In
clinical trials involving approximately 200 patients, our TRCs have been demonstrated to be safe
and reliable, and appeared to regenerate certain normal healthy human tissues.
We have also developed our proprietary AastromReplicell System®, which is a patented,
integrated system of instrumentation and single-use consumable kits for the commercial production
of human cells. The AastromReplicell System was developed to provide a manufacturing platform for
our proprietary cell products, such as our TRCs. The AastromReplicell System technology
has also been applied to the production of dendritic cells and dendritic cell vaccines for third
parties requiring automated cell production supporting GMP (Good Manufacturing Practice)
compliance. Since this third-party development activity is minimal at present, active development
and marketing activities targeting developers of dendritic cells and dendritic cell vaccines have
been halted.
Our commercial production pathway for our TRC cell products is in part enabled through the
AastromReplicell System platform. This proprietary and automated clinical cell production system
combines patented GMP-compliant automated cell production with patented single-pass perfusion.
Single-pass perfusion is our technology for growing large quantities of highly robust human cells
outside the body. These cells include adult stem and progenitor cell mixtures, which are the cells
believed to be required for forming tissues such as bone, vascular, cartilage, blood, and immune
system cells.
Our primary business model is to establish a core infrastructure for the manufacturing and
distribution of TRC cell products for use in multiple medical indications. Initially, we intend to
pursue TRC based cell products for the following therapeutic areas:
|
|
|
Local bone regeneration such as is needed in fractures, spinal fusion, and
jaw bone reconstruction |
|
|
|
|
Vascular (blood vessel) regeneration in limb ischemia resulting from
diabetes and other diseases |
In the future, we may develop and/or support the development by third parties of products for
other areas such as cartilage regeneration, cardiac tissue regeneration, and dendritic cell based
vaccines.
We do not have the sales or marketing organization that would be needed to commercialize our
therapeutic products. We intend to seek partnerships with other companies who have this
capability, as well as to develop our own ability to either support these relationships and, if
necessary, to complete some pilot level of sales and marketing activity ourselves.
3
In the EU, our business development activities are aided through our small, wholly-owned
subsidiaries located in Dublin, Ireland and Berlin, Germany.
Since our inception, we have been in the development stage and engaged in research and product
development, conducted principally on our own behalf, but also in connection with various
collaborative research and development agreements with others. Our initial business plan was to
pursue the bone marrow transplantation markets. At approximately the same time (late fiscal year
1999) that we intended to commence our initial pilot-scale product launch in the EU of the
AastromReplicell System with the SC-I kit, data was released at international meetings that
resulted in the majority of the patients who would otherwise have been candidates for the SC-I
product, to no longer require the use of the product. This loss of market for the SC-I caused us
to reorganize our operations and suspend all external activities in October 1999, pending the
receipt of additional financing and the completion of the reorganization process. We expanded the
capabilities of the AastromReplicell System to include dendritic cell production and initiated
pilot marketing activities for the CE Marked DC-I, DCV-I and the DCV-II products. However, only
minimal and irregular revenue has been generated from these products, and as a result it is no
longer a priority area for us. Therefore, we plan to limit our marketing efforts promoting the
AastromReplicell System as a stand-alone product. Rather our focus is on utilizing the
AastromReplicell System technology in cell manufacturing facilities to support our TRC development
programs. At such time as we satisfy applicable regulatory approval requirements, we expect the
sales of our TRC and our related cell-based products will constitute nearly all of our product
sales revenues.
We do not expect to generate positive cash flows from our consolidated operations for at least
the next several years and then only if more significant TRC cell product sales commence. Until
that time, we expect that our revenue sources will consist of only minor sales from our dendritic
cell kits to academic and commercial research centers, grant revenue and research funding, and
potential licensing fees, or other financial support from potential future corporate collaborators.
To date, we have financed our operations primarily through public and private sales of our equity
securities, and we expect to continue obtaining required capital in a similar manner. As a
development-stage company, we have never been profitable and do not anticipate having net income
unless and until significant product sales commence. This is not likely to occur until we obtain
significant additional funding and complete the required clinical trials for regulatory approvals,
and receive the necessary approvals to market our products. Through, June 30, 2005, we have
accumulated losses of approximately $125 million. We cannot provide any assurance that we will be
able to achieve profitability on a sustained basis, if at all, obtain the required funding, obtain
the required regulatory approvals, or complete additional corporate partnering or acquisition
transactions.
Our principal executive offices are located at 24 Frank Lloyd Wright Drive, P. O. Box 376, Ann
Arbor, MI 48106. Our telephone number is (734) 930-5555.
This Prospectus
This prospectus is part of a registration statement that we filed with the SEC utilizing a
shelf registration process. Under this shelf process, we may sell the securities described in
this prospectus in one or more offerings up to a total dollar amount of $75 million. We have
provided in this prospectus a general description of the securities we may offer. Each time we
sell securities, we will provide a prospectus supplement that will contain specific information
about the terms of that offering. We may also add, update or change in the prospectus supplement
any of the information contained in this prospectus. This prospectus, together with applicable
prospectus supplements, includes all material information relating to this offering. You should
read both this prospectus and any prospectus supplement together with the additional information
described under the heading Where You Can Find More Information.
Risk Factors
You should consider carefully all of the information contained in and incorporated by
reference in this prospectus, including the information set forth under the caption Risk Factors,
before making an investment in the securities offered.
4
RISK FACTORS
You should carefully consider the following risk factors before purchasing our common stock.
The risks and uncertainties described below are not the only ones we face. There may be additional
risks and uncertainties that are not known to us or that we do not consider to be material at this
time. If the events described in these risks occur, our business, financial condition and results
of operations would likely suffer. This prospectus contains forward-looking statements that involve
risks and uncertainties. Our actual results may differ significantly from the results discussed in
the forward-looking statements. This section discusses the risk factors that might cause those
differences. You should also consider the additional information set forth in our SEC reports on
Forms 10-K, 10-Q and 8-K and in the other documents considered a part of this prospectus. See
Where You Can Find More Information.
Our past losses and expected future losses cast doubt on our ability to operate profitably.
We were incorporated in 1989 and have experienced substantial operating losses since
inception. As of June 30, 2005, we have incurred cumulative net losses totaling approximately $125
million. These losses have resulted principally from costs incurred in the research and
development of our cell culture technologies and the AastromReplicell System, general and
administrative expenses, and the prosecution of patent applications. We expect to incur
significant operating losses at least until, and probably after, product sales increase, primarily
owing to our research and development programs, including pre-clinical studies and clinical trials,
and the establishment of marketing and distribution capabilities necessary to support
commercialization efforts for our products. We cannot predict with any certainty the amount of
future losses. Our ability to achieve profitability will depend, among other things, on
successfully completing the development of our product candidates, obtaining regulatory approvals,
establishing manufacturing, sales and marketing arrangements with third parties, maintaining
supplies of key manufacturing components, and raising sufficient funds to finance our activities.
We may not be able to achieve or sustain profitability.
Failure to obtain and maintain required regulatory approvals would severely limit our ability
to sell our products.
We must obtain the approval of the FDA before commercial sales of our cell product
candidates may commence in the U.S., which we believe will ultimately be the largest market for our
products. We will also be required to obtain additional approvals from various foreign regulatory
authorities to initiate sales activities of cell products, and continue or increase sale of
equipment, in those jurisdictions, such as the EU. If we cannot demonstrate the safety, reliability
and efficacy of our cell product candidates, or of the cells produced in our device products, we
may not be able to obtain required regulatory approvals. If we cannot demonstrate the safety or
efficacy of our technologies and product candidates, including long-term sustained engraftment, or
if one or more patients die or suffer severe complications, the FDA or other regulatory authorities
could delay or withhold regulatory approval of our product candidates.
Finally, even if we obtain regulatory approval of a product, that approval may be subject to
limitations on the indicated uses for which it may be marketed. Even after granting regulatory
approval, the FDA and regulatory agencies in other countries continue to review and inspect
marketed products, manufacturers and manufacturing facilities, which may create additional
regulatory burdens. Later discovery of previously unknown problems with a product, manufacturer or
facility, may result in restrictions on the product or manufacturer, including a withdrawal of the
product from the market. Further, regulatory agencies may establish additional regulations that
could prevent or delay regulatory approval of our products.
Any changes in the governmental regulatory classifications of our products could prevent,
limit or delay our ability to market or develop our products.
The FDA establishes regulatory requirements based on the classification of a product.
Although the AastromReplicell System is currently considered to be unregulated manufacturing
equipment in the U.S., the FDA may reconsider this and classify the System as a Class III medical
device, or may ultimately choose to regulate the AastromReplicell System under another category.
Because our product development programs are
5
designed to satisfy the standards applicable to medical devices and biological licensure for
our cellular products, any change in the regulatory classification or designation would affect our
ability to obtain FDA approval of our products. The AastromReplicell System is used to produce
different cell mixtures, and each of these cell mixtures (such as the Tissue Repair Cells) may,
under current regulations be regulated as a biologic product, which requires a Biologic License
Application (BLA).
The new EU Directives (laws) have become effective, and have influenced the requirements for
manufacturing cell products and the conduct of clinical trials. These changes have delayed or in
some cases temporarily halted clinical trials of cellular products in the EU. The recent changes to
the European Union Medicinal Products Prime Directive shifted patient-derived cells to the
medicinal products category, which will require license approvals in order to market and sell these
products. These new laws may delay some of our current planned clinical trials with Tissue Repair
Cells in the EU, and will require clinical trials with data submission and review by European
regulatory bodies. There is uncertainty as to the level of trials and data needed and because of
the recent nature of these regulations; there is no established precedent to understand the
timeline or other requirements for licensure.
Our inability to complete our product development activities successfully would severely limit our
ability to operate or finance operations.
Commercialization in the U.S. and the EU of our cell product candidates will require
completion of substantial clinical trials, and obtaining sufficient safety and efficacy results to
support required registration approval and market acceptance of our cell product candidates. We may
not be able to successfully complete development of our product candidates, or successfully market
our technologies or product candidates. We, and any of our potential collaborators, may encounter
problems and delays relating to research and development, regulatory approval and intellectual
property rights of our technologies and product candidates. Our research and development programs
may not be successful, and our cell culture technologies and product candidates may not facilitate
the production of cells outside the human body with the expected result. Our technologies and cell
product candidates may not prove to be safe and efficacious in clinical trials, and we may not
obtain the requisite regulatory approvals for our technologies or product candidates and the cells
produced in such products. If any of these events occur, we may not have adequate resources to
continue operations for the period required to resolve the issue delaying commercialization and we
may not be able to raise capital to finance our continued operation during the period required for
resolution of that issue.
We must successfully complete our clinical trials to be able to market certain of our
products.
To be able to market therapeutic cell products in the U.S. and in the EU, we must
demonstrate, through extensive preclinical studies and clinical trials, the safety and efficacy of
our processes and product candidates, for application in the treatment of humans. If our clinical
trials are not successful, our products may not be marketable.
Our ability to complete our clinical trials in a timely manner depends on many factors,
including the rate of patient enrollment. Patient enrollment can vary with the size of the patient
population, the proximity of suitable patients to clinical sites, perceptions of the utility of
cell therapy for the treatment of certain diseases and the eligibility criteria for the study. We
have experienced delays in patient accrual in our previous and current clinical trials. If we
experience future delays in patient accrual, we could experience increased costs and delays
associated with clinical trials, which would impair our product development programs and our
ability to market our products. Furthermore, the FDA monitors the progress of clinical trials and
it may suspend or terminate clinical trials at any time due to patient safety or other
considerations.
Our research programs are currently developing and evaluating new variations of TRCs that are
intended to improve the functionality for certain clinical indications, to improve shelf life, and
to decrease the cost of manufacturing our TRC products. These production process changes may alter
the functionality of our TRCs, and would require various levels of experimental and clinical
testing and evaluation. Any such testing or clinical study may affect regulatory review process and
lengthen the time before TRC products would be commercially available.
6
Even if successful clinical results are reported for a product from a completed clinical
trial, this does not mean that the results will be sustained over time, or are sufficient for a
marketable or regulatory approvable product.
Even if we obtain regulatory approvals to sell our products, lack of commercial acceptance
could impair our business.
We will be seeking to obtain regulatory approvals to market our TRC cell products for
tissue repair and regeneration treatments. Even if we obtain all required regulatory approvals, we
cannot be certain that our products and processes will be adopted at a level that would allow us to
operate profitably. Our TRCs will face competition from existing, and/or potential other new
treatments in the future which could limit revenue potential. It may be necessary to increase the
yield and/or cell type purity for certain of our AastromReplicell System cell processes to gain
commercial acceptance. Our technologies or product candidates may not be employed in all potential
applications being investigated, and any reduction in applications would limit the market
acceptance of our technologies and product candidates, and our potential revenues.
The market for our products will be heavily dependent on third party reimbursement policies.
Our ability to successfully commercialize our product candidates will depend on the
extent to which government healthcare programs, such as Medicare and Medicaid, as well as private
health insurers, health maintenance organizations and other third party payors will pay for our
products and related treatments. Reimbursement by third party payors depends on a number of
factors, including the payors determination that use of the product is safe and effective, not
experimental or investigational, medically necessary, appropriate for the specific patient and
cost-effective. Reimbursement in the U.S. or foreign countries may not be available or maintained
for any of our product candidates. If we do not obtain approvals for adequate third party
reimbursements, we may not be able to establish or maintain price levels sufficient to realize an
appropriate return on our investment in product development. Any limits on reimbursement available
from third party payors may reduce the demand for, or negatively affect the price of, our products.
For example, in the past, published studies have suggested that stem cell transplantation for
breast cancer, that constituted a significant portion of the overall stem cell therapy market, at
the time, may have limited clinical benefit. The lack of reimbursement for these procedures by
insurance payors would negatively affect the marketability of our products.
Use of animal-derived materials could harm our product development and commercialization
efforts.
Some of the compounds we use in, and are critical to, our TRC manufacturing processes
involve the use of animal-derived products, including fetal bovine serum. However, animal-derived
cells are not used as feeder cells in the growth of human TRCs. Suppliers or regulatory
authorities may limit or restrict the availability of such compounds for clinical and commercial
use. For example, the occurrence of so-called mad cow disease in the U.S. or in New Zealand may
lead to a restricted supply of the serum currently required for the TRC manufacturing process. Any
restrictions on these compounds would impose a potential competitive disadvantage for our products
or prevent our ability to manufacture TRC cell products. Regulatory authorities in the EU are
reviewing the safety issues related to the use of animal-derived materials, which we currently use
in our production process. It is unknown at this time what actions, if any, the authorities may
take as to animal derived materials specific to medicinal products distributed in the EU. Our
inability to develop or obtain alternative compounds would harm our product development and
commercialization efforts. There are certain limitations in the supply of certain animal-derived
materials, which may lead to delays in our ability to complete clinical trials or eventually to
meet the anticipated market demand for our cell products.
Given our limited internal manufacturing, sales, marketing and distribution capabilities, we
need to develop increased internal capability or collaborative relationships to manufacture, sell,
market and distribute our products.
7
We have only limited internal manufacturing, sales, marketing and distribution
capabilities. As market needs develop, we intend to establish and operate commercial-scale
manufacturing facilities, which
will need to comply with all applicable regulatory requirements. We expect to develop new
configurations of the AastromReplicell System for these centralized facilities to enable process
and cost efficiencies associated with large-scale manufacturing. Establishing these facilities
will require significant capital and expertise. Any delay in establishing, or difficulties in
operating, these facilities will limit our ability to meet the anticipated market demand for our
cell products. We intend to get assistance to market our future cell products through
collaborative relationships with companies with established sales, marketing and distribution
capabilities. Our inability to develop and maintain those relationships would limit our ability to
market, sell and distribute our products. Our inability to enter into successful, long-term
relationships could require us to develop alternate arrangements at a time when we need sales,
marketing or distribution capabilities to meet existing demand. We may market our TRCs through
our own sales force. Our inability to develop and retain a qualified sales force could limit our
ability to market, sell and distribute our cell products.
We may not be able to raise the required capital to conduct our operations and develop our
products.
We will require substantial capital resources in order to conduct our operations and develop
our products and cell manufacturing facilities. We expect that our available cash and interest
income, including that raised in the recent sale of common stock, described above, will be
sufficient to finance currently planned activities beyond the end of fiscal year 2006 (ending June
30, 2006). However, in order to grow and expand our business, and to introduce our new product
candidates into the marketplace, following sale of all of the securities offered hereby, we will
raise additional capital. We will also need additional funds or a collaborative partner, or both,
to finance the research and development activities of our product candidates for the expansion of
additional cell types. Accordingly, we are continuing to pursue additional sources of financing.
Our future capital requirements will depend upon many factors, including:
|
|
|
continued scientific progress in our research, clinical and development programs; |
|
|
|
|
costs and timing of conducting clinical trials and seeking regulatory approvals; |
|
|
|
|
competing technological and market developments; |
|
|
|
|
our ability to establish additional collaborative relationships; and |
|
|
|
|
the effect of commercialization activities and facility expansions if and as required. |
Because of our long-term funding requirements, we intend to access the public or private
equity markets if conditions are favorable to complete a financing, even if we do not have an
immediate need for additional capital at that time, or whenever we require additional operating
capital. This additional funding may not be available to us on reasonable terms, or at all. If
adequate funds are not available in the future, we may be required to further delay or terminate
research and development programs, curtail capital expenditures, and reduce business development
and other operating activities.
The issuance of additional common stock for funding has the potential for substantial
dilution.
As noted above, we will need additional equity funding to provide us with the capital to
reach our objectives. At such time, we may enter into financing transactions at prices, which are
at a substantial discount to market. Such an equity issuance would cause a substantially larger
number of shares to be outstanding and would dilute the ownership interest of existing
stockholders.
Our stock price has been volatile and future sales of substantial numbers of our shares could
have an adverse affect on the market price of our shares.
The market price of shares of our common stock has been volatile, ranging in closing
price between $0.63 and $4.05 during the twelve month period ended June 30, 2005. The price of our
common stock may continue to fluctuate in response to a number of events and factors, such as:
|
|
|
clinical trial results |
|
|
|
|
the amount of our cash resources and our ability to obtain additional funding
announcements of research activities, business developments, technological
innovations or new products by us or our competitors
entering into or terminating strategic relationships |
8
|
|
|
changes in government regulation |
|
|
|
|
disputes concerning patents or proprietary rights |
|
|
|
|
changes in our revenues or expense levels
public concern regarding the safety, efficacy or other aspects of the products or
methodologies we are developing
news or reports from other stem cell, cell therapy or tissue engineering companies |
|
|
|
|
reports by securities analysts |
|
|
|
|
status of the investment markets |
Any of these events may cause the price of our shares to fall, which may adversely affect our
business and financing opportunities. In addition, the stock market in general and the market
prices for biotechnology companies in particular have experienced significant volatility that often
has been unrelated to the operating performance or financial conditions of such companies. These
broad market and industry fluctuations may adversely affect the trading price of our stock,
regardless of our operating performance or prospects.
Our stock may be delisted from Nasdaq, which could affect its market price and liquidity.
We are required to meet certain qualitative and financial tests (including a minimum bid
price for our common stock of $1.00) to maintain the listing of our common stock on the Nasdaq
Stock Market. In May 2003, and July 2004, we received notification from Nasdaq of potential
delisting as a result of our stock trading below $1.00 for more than thirty consecutive business
days. While in each case our stock price recovered within the permitted grace periods and Nasdaq
notified us that we were again in full compliance, we cannot provide any assurance that our stock
price would again recover within the specified times if future closing bid prices below $1.00
triggered another potential delisting. The qualitative tests we must meet address various
corporate governance matters, including Audit Committee and Board composition. We have experienced
recent director resignations and are devoting increased resources to Board member recruitment and
retention. If we do not maintain compliance with the Nasdaq requirements within specified periods
and subject to permitted extensions, our common stock may be recommended for delisting (subject to
any appeal we would file). If our common stock were delisted, it could be more difficult to buy or
sell our common stock and to obtain accurate quotations, and the price of our stock could suffer a
material decline. Delisting would also impair our ability to raise capital.
Failure of third parties to manufacture component parts or provide limited source supplies,
or imposition of additional regulation, would impair our new product development and our sales
activities.
We rely solely on third parties such as Astro, Moll, Cambrex and Amgen to manufacture or
supply certain of our component parts, growth factors and other materials used in the cell product
manufacturing process. We would not be able to obtain alternate sources of supply for many of these
items on a short-term basis. If any of our key manufacturers or suppliers fail to perform their
respective obligations or if our supply of growth factors, components or other materials is limited
or interrupted, we would not be able to conduct clinical trials or market our product candidates on
a timely and cost-competitive basis, if at all.
Finally, we may not be able to continue our present arrangements with our suppliers,
supplement existing relationships, establish new relationships or be able to identify and obtain
the ancillary materials that are necessary to develop our product candidates in the future. Our
dependence upon third parties for the supply and manufacture of these items could adversely affect
our ability to develop and deliver commercially feasible products on a timely and competitive
basis.
If we do not keep pace with our competitors and with technological and market changes, our
products may become obsolete and our business may suffer.
9
The markets for our products are very competitive, subject to rapid technological
changes, and vary for different candidates and processes that directly compete with our products.
Our competitors may have
developed, or could in the future develop, new technologies that compete with our products or
even render our products obsolete. As an example, in the past, published studies have suggested
that hematopoietic stem cell therapy use for bone marrow transplantation, following marrow ablation
due to chemotherapy, may have limited clinical benefit in the treatment of breast cancer, which was
a significant portion of the overall hematopoietic stem cell transplant market. This resulted in
the practical elimination of this market for our cell-based product for this application.
Our products are designed to improve and automate the processes for producing cells used in
therapeutic procedures. Even if we are able to demonstrate improved or equivalent results, the
cost or process of treatment and other factors may cause researchers and practitioners to not use
our products and we could suffer a competitive disadvantage. As a result, we may be unable to
recover the net book value of our inventories. Finally, to the extent that others develop new
technologies that address the targeted application for our products, our business will suffer.
If we cannot attract and retain key personnel, then our business will suffer.
Our success depends in large part upon our ability to attract and retain highly qualified
scientific and management personnel. We face competition for such personnel from other companies,
research and academic institutions and other entities. Further, in an effort to conserve financial
resources, we have implemented reductions in our work force on two separate occasions. As a result
of these and other factors, we may not be successful in hiring or retaining key personnel. The
Company has a key man life insurance policy for R. Douglas Armstrong, Chief Executive Officer and
Chairman of Aastrom. Our inability to replace any lost key employee could harm our operations.
If our patents and proprietary rights do not provide substantial protection, then our
business and competitive position will suffer.
Our success depends in large part on our ability to develop or license and protect
proprietary products and technologies. However, patents may not be granted on any of our pending or
future patent applications. Also, the scope of any of our issued patents may not be sufficiently
broad to offer meaningful protection. In addition, our issued patents or patents licensed to us
could be successfully challenged, invalidated or circumvented so that our patent rights would not
create an effective competitive barrier. Furthermore, we rely on exclusive, world-wide licenses
relating to the production of human cells granted to us by the University of Michigan for certain
of our patent rights. If we materially breach such agreements or otherwise fail to materially
comply with such agreements, or if such agreements expire or are otherwise terminated by us, we may
lose our rights under the patents held by the University of Michigan. At the latest, these
licenses will terminate when the patent underlying the license expires. The first of these
underlying patents will expire on March 21, 2012. We also rely on trade secrets and unpatentable
know-how that we seek to protect, in part, by confidentiality agreements with our employees,
consultants, suppliers and licensees. These agreements may be breached, and we might not have
adequate remedies for any breach. If this were to occur, our business and competitive position
would suffer.
Intellectual property litigation could harm our business.
Our success will also depend in part on our ability to develop commercially viable
products without infringing the proprietary rights of others. Although we have not been subject to
any filed infringement claims, other patents could exist or could be filed which would prohibit or
limit our ability to market our products or maintain our competitive position. In the event of an
intellectual property dispute, we may be forced to litigate. Intellectual property litigation would
divert managements attention from developing our products and would force us to incur substantial
costs regardless of whether we are successful. An adverse outcome could subject us to significant
liabilities to third parties, and force us to curtail or cease the development and sale of our
products and processes.
10
The government maintains certain rights in technology that we develop using government grant
money and we may lose the revenues from such technology if we do not commercialize and utilize the
technology pursuant to established government guidelines.
Certain of our and our licensors research have been or are being funded in part by
government grants. As a result of such funding, the U.S. Government has established guidelines and
have certain rights in the technology developed with the grant. If we fail to meet these
guidelines, we would lose our exclusive rights to these products, and we would lose potential
revenue derived from the sale of these products.
Potential product liability claims could affect our earnings and financial condition.
We face an inherent business risk of exposure to product liability claims in the event
that the use of the AastromReplicell System during research and development efforts, including
clinical trials, or after commercialization, results in adverse affects. As a result, we may incur
significant product liability exposure, which could exceed existing insurance coverage. We may not
be able to maintain adequate levels of insurance at reasonable cost and/or reasonable terms.
Excessive insurance costs or uninsured claims would increase our operating loss and affect our
financial condition.
Our corporate documents and Michigan law contain provisions that may make it more difficult
for us to be acquired.
Our Board of Directors has the authority, without shareholder approval, to issue
additional shares of preferred stock and to fix the rights, preferences, privileges and
restrictions of these shares without any further vote or action by our shareholders. This
authority, together with certain provisions of our charter documents, may have the affect of making
it more difficult for a third party to acquire, or of discouraging a third party from attempting to
acquire control of our company. This affect could occur even if our shareholders consider the
change in control to be in their best interest.
We are required to evaluate our internal control over financial reporting under Section 404
of the Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could have a
negative market reaction.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish a
report by our management on our internal control over financial reporting. That report must
contain, among other matters, an assessment of the effectiveness of our internal control over
financial reporting as of the end of the fiscal year, including a statement as to whether or not
our internal control over financial reporting is effective. This assessment must include disclosure
of any material weaknesses in our internal control over financial reporting identified by
management. That report must also contain a statement that our independent registered public
accounting firm has issued an attestation report on managements assessment of such internal
controls. If in the future we are unable to assert that our internal control over financial
reporting is effective as of the end of the then current fiscal year (or, if our independent
registered public accounting firm are unable to attest that our managements report is fairly
stated or they are unable to express an opinion on the effectiveness of our internal controls), we
could lose investor confidence in the accuracy and completeness of our financial reports, which
would have a negative effect on our stock price and our ability to raise capital.
Forward-looking statements
This registration statement contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These
forward-looking statements include statements regarding:
|
|
|
potential strategic collaborations with others |
|
|
|
|
future capital needs |
|
|
|
|
adequacy of existing capital to support operations for a specified time |
|
|
|
|
product development and marketing plans |
|
|
|
|
clinical trial plans and anticipated results |
|
|
|
|
anticipation of future losses |
|
|
|
|
replacement of manufacturing sources |
|
|
|
|
commercialization plans |
|
|
|
|
revenue expectations and operating results |
These statements are subject to risks and uncertainties, including those set forth in this
Risk Factors section and in the materials incorporated by reference into this prospectus, and
actual results could differ materially from those expressed or implied in these statements. In
some cases, you can identify these statements by our use of forward-looking words such as may,
will, should, anticipate, expect, estimate, plan, believe, potential, or intend.
All forward-looking statements included in this registration statement or in any prospectus
supplement are made as of the date hereof or thereof. We assume no obligation to update any such
forward-looking statement or to update any reason why actual results might differ.
11
RATIO OF EARNINGS TO FIXED CHARGES (1)
The following table sets forth ratios of earnings to fixed charges for the periods shown.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
June 30 |
|
|
June 30 |
|
|
June 30 |
|
|
June 30 |
|
|
June 30 |
|
|
|
2005 |
|
|
2004 |
|
|
2003 |
|
|
2002 |
|
|
2001 |
|
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
|
|
N/A |
(2) |
|
|
N/A |
(2) |
|
|
N/A |
(2) |
|
|
|
(1) |
|
The ratio of earnings to fixed charges was computed by dividing earnings by fixed charges.
For this purpose, earnings consist of net loss before fixed charges. Fixed charges consist of
interest expense plus the interest factor in lease expenses. During the fiscal years covered by
this table, we did not have any material fixed charges or preferred stock dividends. However, our
total lease expenses, which comprised most of our total commitments, were $626,000, $616,000,
$602,000, $547,000 and $495,000 for the twelve months ended June 30, 2005, 2004, 2003, 2002 and
2001. |
|
(2) |
|
Earnings have been inadequate to cover fixed charges and total commitments. The dollar
amount of the coverage deficiency was approximately $11.8 million, $10.5 million, $9.6 million,
$7.9 million and $5.9 million for the twelve months ended June 30, 2005, 2004, 2003, 2002 and 2001. |
USE OF PROCEEDS
We cannot guarantee that we will receive any proceeds in connection with this offering because
we may choose not to issue any securities covered by this prospectus.
Unless otherwise provided in a supplement or amendment to this prospectus, we intend to use
any net proceeds from this offering, together with other available funds, for operating costs,
capital expenditures and working capital needs and for other general corporate purposes.
We have not specifically identified the precise amounts we will spend on each of these areas
or the timing of these expenditures. The amounts actually expended for each purpose may vary
significantly depending upon numerous factors, including the amount and timing of the proceeds from
this offering, progress with clinical product development and other cell therapy application
programs. In addition, expenditures may also depend on the establishment of new collaborative
arrangements with other companies, the availability of other financing, and other factors.
We anticipate that we will be required to raise substantial additional capital to continue to
fund the clinical development of our cell therapy applications. We may raise additional capital
through additional public or private financing, as well as collaborative relationships, incurring
debt and other available sources.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any document we file at the SECs public reference rooms located at 100
F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our filings with the SEC are also available to the
public on the SECs Internet web site at http://www.sec.gov. We also provide information on our
website: http//www.aastrom.com/.
12
The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this prospectus, and information
that we file with the SEC later will
automatically update and supersede the information in this prospectus or incorporated by
reference. The following documents filed by us and any future filings made by us with the SEC
under Sections 13(a), 13(c) 14 or 15(d) of the Securities Exchange Act of 1934, until we sell all
of the common stock offered hereby, are incorporated by reference in this prospectus:
|
1. |
|
Our Annual Report on Form 10-K for the fiscal year ended June 30, 2005; |
|
|
2. |
|
Our Current Reports on Form 8-K, as amended, originally filed with SEC on
July 5, 2005; August 2, 2005 (and the amendment thereto filed on September 8, 2005);
August 25, 2005; September 8, 2005 (relating to the resignation of a director);
September 30, 2005; and October 11, 2005; and the amendment filed on September 8,
2005 to the 8-K originally filed on June 20, 2005; |
|
|
3. |
|
The description of our common stock set forth in our Registration Statement
on Form 8-A filed with the SEC on April 11, 1997, as amended (Commission File No.:
000-22025). |
YOU MAY REQUEST A COPY OF THESE FILINGS, AT NO COST, BY WRITING OR TELEPHONING US AT AASTROM
BIOSCIENCES, INC., 24 FRANK LLOYD WRIGHT DRIVE, P.O. BOX 376, ANN ARBOR, MICHIGAN 48106, TELEPHONE
NUMBER (734) 930-5555, ATTENTION: CHIEF FINANCIAL OFFICER.
13
THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus, together with the applicable
prospectus supplements, summarize all the material terms and provisions of the various types of
securities that we may offer. We will describe in the applicable prospectus supplement the
particular terms of the securities offered by that prospectus supplement. If we indicate in the
applicable prospectus supplement, the terms of the securities may differ from the terms we have
summarized below. We will also include in the prospectus supplement information, where applicable,
about material United States federal income tax considerations relating to the securities, and the
securities exchange, if any, on which the securities will be listed.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock and certain provisions of our articles of
incorporation and bylaws is a summary and is qualified in its entirety by the provisions of our
articles of incorporation and bylaws.
Our authorized capital stock consists of 200,000,000 shares of common stock, no par value per
share, and 5,000,000 shares of preferred stock, no par value per share.
Common Stock
Holders of our common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of shareholders and do not have cumulative voting rights. Holders of
common stock have no preemptive, redemption or conversion rights and are not subject to future
calls or assessments. No sinking fund provisions apply to our common stock. All outstanding
shares are fully-paid and non-assessable. In the event of our liquidation, dissolution or winding
up, holders of common stock are entitled to share ratably in assets available for distribution,
subject to prior distribution rights of any preferred stock then outstanding. Holders of common
stock are entitled to receive proportionately any such dividends declared by the board of
directors, out of legally available funds for dividends, subject to any preferences that may be
applicable to any shares of preferred stock that may be outstanding at that time. The rights,
preferences and privileges of holders of common stock are set forth in our restated articles of
incorporation, which may be amended by the holders of at least two-thirds of the outstanding shares
of common stock.
Preferred Stock
Our Board of Directors is authorized to issue up to 5,000,000 shares of preferred stock in one
or more series without shareholder approval. Our Board of Directors may determine the rights,
preferences, privileges and restrictions, including voting rights, dividend rights, conversion
rights, redemption privileges and liquidation preferences of each series of preferred stock.
The purpose of authorizing our Board of Directors to issue preferred stock in one or more
series and determine the number of shares in the series and its rights and preferences is to
eliminate delays associated with a shareholder vote on specific issuances. Examples of rights and
preferences that the Board of Directors may fix are: (1) dividend rights, (2) dividend rates, (3)
conversion rights, (4) voting rights, (5) terms of redemption, and (6) liquidation preferences.
The issuance of preferred stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could make it more difficult for a third party to
acquire, or could discourage a third party from acquiring, a majority of our outstanding voting
stock. The rights of holders of our common stock described above, will be subject to, and may be
adversely affected by, the rights of any preferred stock that we may designate and issue in the
future.
14
We will incorporate by reference as an exhibit to the registration statement which includes
this prospectus the form of any certificate of designation which describes the terms of the series
of preferred stock we are offering. This description and the applicable prospectus supplement will
include:
|
|
|
the title and stated value; |
|
|
|
|
the number of shares authorized; |
|
|
|
|
the liquidation preference per share; |
|
|
|
|
the purchase price; |
|
|
|
|
the dividend rate, period and payment date, and method of calculation for dividends; |
|
|
|
|
whether dividends will be cumulative or non-cumulative and, if cumulative, the date
from which dividends will accumulate; |
|
|
|
|
the procedures for any auction and remarketing, if any; |
|
|
|
|
the provisions for a sinking fund, if any; |
|
|
|
|
the provisions for redemption or repurchase, if applicable, and any restrictions on
our ability to exercise those redemption and repurchase rights; |
|
|
|
|
any listing of the preferred stock on any securities exchange or market; |
|
|
|
|
whether the preferred stock will be convertible into our common stock, and, if
applicable, the conversion price, or how it will be calculated, and the conversion
period; |
|
|
|
|
whether the preferred stock will be exchangeable into debt securities, and, if
applicable, the exchange price, or how it will be calculated, and the exchange period; |
|
|
|
|
voting rights, if any, of the preferred stock; |
|
|
|
|
preemptive rights, if any; |
|
|
|
|
restrictions on transfer, sale or other assignment, if any; |
|
|
|
|
whether interests in the preferred stock will be represented by depositary shares; |
|
|
|
|
a discussion of any material United States federal income tax considerations
applicable to the preferred stock; |
|
|
|
|
the relative ranking and preferences of the preferred stock as to dividend rights
and rights if we liquidate, dissolve or wind up our affairs; |
|
|
|
|
any limitations on issuance of any class or series of preferred stock ranking
senior to or on a parity with the series of preferred stock as to dividend rights and
rights if we liquidate, dissolve or wind up our affairs; and |
|
|
|
|
any other specific terms, preferences, rights or limitations of, or restrictions
on, the preferred stock. |
When we issues share of preferred stock under this prospectus, the shares will fully be paid
and nonassessable and will not have, or be subject to, any preemptive or similar rights.
The Michigan Business Corporation Act provides that the holders of preferred stock will have
the right to vote separately as a class on any proposal involving an increase or decrease in the
authorized number of shares of that class, or changes in the powers, preferences or special rights
of holders of that preferred stock so as to affect the class adversely. This right is in addition
to any voting rights that may be provided for in the applicable certificate of designation.
Michigan Law and Certain Charter and By-Law Provisions
We are subject to certain anti-takeover provisions of the Michigan Business Corporation Act
(the MBCA) which could delay or make more difficult a merger or tender offer involving Aastrom.
Chapter 7A of the MBCA prevents, in general, an interested shareholder (defined generally as a
person owning 10% or more of a corporations outstanding voting shares) from engaging in a
business combination (as defined therein) with a Michigan corporation unless: (a) the Board of
Directors issues an advisory statement, holders of 90% of the shares of each class of stock
entitled to vote approve the transaction, and holders of two-thirds of the disinterested shares
of each class of stock approve the transaction; or (b) the interested shareholder has been an
interested shareholder for at least five years and has not acquired beneficial ownership of any
additional shares of the corporation subsequent to the transaction which resulted in such
shareholder being classified as an interested shareholder, and meets certain requirements,
including provisions relating to the fairness of the price and the form of consideration paid; or
(c) the Board of Directors, by resolution, exempts a particular interested shareholder from these
provisions prior to the interested shareholder becoming an
interested shareholder. The MBCA also contains certain other provisions which could have
anti-takeover effects.
15
Our bylaws provide that the Board of Directors is divided into three classes of directors,
with each class serving a staggered three-year term. The classification system of electing
directors may tend to discourage a third party from making a tender offer or otherwise attempting
to obtain control of Aastrom and may maintain the incumbency of the Board of Directors, as it
generally makes it more difficult for shareholders to replace a majority of the directors. Our
restated articles of incorporation eliminate the right of shareholders to act without a meeting and
do not provide for cumulative voting in the election of directors. The amendment of any of these
provisions would require approval by holders of at least two-thirds of the shares of outstanding
common stock.
These and other provisions of our restated articles of incorporation could have the effect of
deterring certain takeovers or delaying or preventing certain changes in control or management of
Aastrom, including transactions in which shareholders might otherwise receive a premium for their
shares over then-current market prices.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Continental Stock Transfer & Trust
Company.
DESCRIPTION OF DEBT SECURITIES
The following description, together with the additional information we include in any
applicable prospectus supplements, summarizes the material terms and provisions of the debt
securities that we may offer under this prospectus. While the terms we have summarized below will
apply generally to any future debt securities we may offer, we will describe the particular terms
of any debt securities that we may offer in more detail in the applicable prospectus supplement.
If we indicate in a prospectus supplement, the terms of any debt securities we offer under that
prospectus supplement may differ from the terms we describe below.
We will issue any senior notes under the senior indenture which we will enter into with a
trustee to be named in the senior indenture. We will issue any subordinated notes under the
subordinated indenture which we will enter into with a trustee to be named in the subordinated
indenture. We have filed forms of these documents as exhibits to the registration statement which
includes this prospectus. We use the term indentures to refer to both the senior indenture and
the subordinated indenture. The indentures will be qualified under the Trust Indenture Act. We
use the term debenture trustee to refer to either the senior trustee or the subordinated trustee,
as applicable.
The following summaries of material provisions of the senior notes, the subordinated notes and
the indentures are subject to, and qualified in their entirety by reference to, all the provisions
of the indenture applicable to a particular series of debt securities. Except as we may otherwise
indicate, the terms of the senior indenture and the subordinated indenture are identical.
We conduct some of our operations through a subsidiary formed under the laws of Germany. Our
rights and the rights of our creditors, including holders of debt securities, to the assets of any
subsidiary of ours upon that subsidiarys liquidation or reorganization or otherwise would be
subject to the prior claims of that subsidiarys creditors, except to the extent that we may be a
creditor with recognized claims against the subsidiary. Our subsidiarys creditors would include
trade creditors, debt holders, secured creditors and taxing authorities. Except as we may provide
in a prospectus supplement, neither the debt securities nor the indentures restrict us or our
subsidiary from incurring indebtedness.
16
General
We will describe in each prospectus supplement the following terms relating to a series of notes:
|
|
|
the title; |
|
|
|
|
any limit on the amount that may be issued; |
|
|
|
|
whether or not we will issue the series of notes in global form, the terms and who
the depository will be; |
|
|
|
|
the maturity date; |
|
|
|
|
the annual interest rate, which may be fixed or variable, or the method for
determining the rate; |
|
|
|
|
the date interest will begin to accrue, the dates interest will be payable and the
regular record dates for interest payment dates or the method for determining such
dates; |
|
|
|
|
whether or not the notes will be secured or unsecured, and the terms of any security; |
|
|
|
|
the terms of the subordination of any series of subordinated debt; |
|
|
|
|
the place where payments will be payable; |
|
|
|
|
our right, if any, to defer payment of interest and the maximum length of any such
deferral period; |
|
|
|
|
the date, if any, after which, and the price at which, we may, at our option,
redeem the series of notes pursuant to any optional redemption provisions; |
|
|
|
|
the date, if any, on which, and the price at which we are obligated, pursuant to
any mandatory sinking fund provisions or otherwise, to redeem, or at the holders
option to purchase, all or a portion of the series of notes; |
|
|
|
|
whether the indenture will restrict our ability to pay dividends, or will require
us to maintain any asset ratios or reserves; |
|
|
|
|
whether we will be restricted from incurring any additional indebtedness; |
|
|
|
|
a discussion of any material United States federal income tax considerations
applicable to the notes; |
|
|
|
|
the denominations in which we will issue the series of notes, if other than
denominations of $1,000 and any integral multiple thereof; and |
|
|
|
|
any other specific terms, preferences, rights or limitations of, or restrictions
on, the debt securities. |
Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms on which a series of notes may be
convertible into or exchangeable for common stock or other securities of ours. We will include in
that prospectus supplement provisions as to whether conversion or exchange is mandatory, at the
option of the holder or at our option. We may include provisions pursuant to which the number of
shares of common stock or other securities of ours that the holders of the series of notes receive
would be subject to adjustment.
Consolidation, Merger or Sale
The indentures do not contain any covenant which restricts our ability to merge or
consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our
assets. However, any successor to or acquirer of such assets must assume all of our obligations
under the indentures or the notes, as appropriate.
Events of Default Under the Indenture
The following are events of default under the indentures with respect to any series of notes
that we may issue:
|
|
|
if we fail to pay interest when due and our failure continues for 60 days and the
time for payment has not been extended or deferred; |
17
|
|
|
if we fail to pay the principal, or premium, if any, when due and the time for
payment has not been extended or delayed; |
|
|
|
|
if we fail to observe or perform any other covenant contained in the notes or the
indentures, other than a covenant specifically relating to another series of notes,
and our failure continues for 60 days after we receive notice from the debenture
trustee or holders of at least 50% in aggregate principal amount of the outstanding
notes of the applicable series; and |
|
|
|
|
if specified events of bankruptcy, insolvency or reorganization occur as to us. |
If an event of default with respect to notes of any series occurs and is continuing, the
debenture trustee or the holders of at least 50% in aggregate principal amount of the outstanding
notes of that series, by notice to us in writing, and to the debenture trustee if notice is given
by such holders, may declare the unpaid principal of, premium, if any, and accrued interest, if
any, due and payable immediately.
The holders of a majority in principal amount of the outstanding notes of an affected series
may waive any default or event of default with respect to the series and its consequences, except
defaults or events of default regarding payment of principal, premium, if any, or interest, unless
we have cured the default or event of default in accordance with the indenture. Any waiver shall
cure the default or event of default.
Subject to the terms of the indentures, if an event of default under an indenture shall occur
and be continuing, the debenture trustee will be under no obligation to exercise any of its rights
or powers under such indenture at the request or direction of any of the holders of the applicable
series of notes, unless such holders have offered the debenture trustee reasonable indemnity. The
holders of a majority in principal amount of the outstanding notes of any series will have the
right to direct the time, method and place of conducting any proceeding for any remedy available to
the debenture trustee, or exercising any trust or power conferred on the debenture trustee, with
respect to the notes of that series, provided that:
|
|
|
the direction so given by the holder is not in conflict with any law or the
applicable indenture; and |
|
|
|
|
subject to its duties under the Trust Indenture Act, the debenture trustee need not
take any action that might involve it in personal liability or might be unduly
prejudicial to the holders not involved in the proceeding. |
|
|
|
|
a holder of the notes of any series will only have the right to institute a
proceeding under the indentures or to appoint a receiver or trustee, or to seek other
remedies if: |
|
|
|
the holder has given written notice to the debenture trustee of a continuing
event of default with respect to that series; |
|
|
|
|
the holders of at least 50% in aggregate principal amount of the outstanding
notes of that series have made written request, and such holders have offered
reasonable indemnity to the debenture trustee to institute the proceeding as
trustee; and |
|
|
|
|
the debenture trustee does not institute the proceeding, and does not
receive from the holders of a majority in aggregate principal amount of the
outstanding notes of that series other conflicting directions within 60 days
after the notice, request and offer. |
These limitations do not apply to a suit instituted by a holder of notes if we default in the
payment of the principal, premium, if any, or interest on, the notes.
We will periodically file statements with the debenture trustee regarding our compliance with
specified covenants in the indentures.
18
Modification of Indenture; Waiver
We and the debenture trustee may change an indenture without the consent of any holders with
respect to specific matters, including:
|
|
|
to fix any ambiguity, defect or inconsistency in the indenture; and |
|
|
|
|
to change anything that does not materially adversely affect the interests of any
holder of notes of any series. |
In addition, under the indentures, the rights of holders of a series of notes may be changed
by us and the debenture trustee with the written consent of the holders of at least a majority in
aggregate principal amount of the outstanding notes of each series that is affected. However, we
and the debenture trustee may only make the following changes with the consent of each holder of
any outstanding notes affected:
|
|
|
extending the fixed maturity of the series of notes; |
|
|
|
|
reducing the principal amount, reducing the rate of or extending the time of
payment of interest, or any premium payable upon the redemption of any notes; or |
|
|
|
|
reducing the percentage of notes, the holders of which are required to consent to
any amendment. |
Discharge
Each indenture provides that we can elect to be discharged from our obligations with respect
to one or more series of debt securities, except for obligations to:
|
|
|
register the transfer or exchange of debt securities of the series; |
|
|
|
|
replace stolen, lost or mutilated debt securities of the series; |
|
|
|
|
maintain paying agencies; |
|
|
|
|
hold monies for payment in trust; |
|
|
|
|
compensate and indemnify the trustee; and |
|
|
|
|
appoint any successor trustee. |
In order to exercise our rights to be discharged, we must deposit with the debenture trustee
money or government obligations sufficient to pay all the principal of, any premium, if any, and
interest on, the debt securities of the series on the dates payments are due.
Form, Exchange, and Transfer
We will issue the notes of each series only in fully registered form without coupons and,
unless we otherwise specify in the applicable prospectus supplement, in denominations of $1,000 and
any integral multiple thereof. The indentures provide that we may issue notes of a series in
temporary or permanent global form and as book-entry securities that will be deposited with, or on
behalf of, The Depository Trust Company or another depository named by us and identified in a
prospectus supplement with respect to that series. See Legal Ownership of Securities for a
further description of the terms relating to any book-entry securities.
At the option of the holder, subject to the terms of the indentures and the limitations
applicable to global securities described in the applicable prospectus supplement, the holder of
the notes of any series can
exchange the notes for other notes of the same series, in any authorized denomination and of
like tenor and aggregate principal amount.
19
Subject to the terms of the indentures and the limitations applicable to global securities set
forth in the applicable prospectus supplement, holders of the notes may present the notes for
exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed if so required by us or the security registrar, at the office of the security
registrar or at the office of any transfer agent designated by us for this purpose. Unless
otherwise provided in the notes that the holder presents for transfer or exchange, we will make no
service charge for any registration of transfer or exchange, but we may require payment of any
taxes or other governmental charges.
We will name in the applicable prospectus supplement the security registrar, and any transfer
agent in addition to the security registrar, that we initially designate for any notes. We may at
any time designate additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except that we will be
required to maintain a transfer agent in each place of payment for the notes of each series.
If we elect to redeem the notes of any series, we will not be required to:
|
|
|
issue, register the transfer of, or exchange any notes of that series during a
period beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of any notes that may be selected for redemption and ending at
the close of business on the day of the mailing; or |
|
|
|
|
register the transfer of or exchange any notes so selected for redemption, in whole
or in part, except the unredeemed portion of any notes we are redeeming in part. |
Information Concerning the Debenture Trustee
The debenture trustee, other than during the occurrence and continuance of an event of default
under an indenture, undertakes to perform only those duties as are specifically set forth in the
applicable indenture. Upon an event of default under an indenture, the debenture trustee must use
the same degree of care as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the debenture trustee is under no obligation to exercise any
of the powers given it by the indentures at the request of any holder of notes unless it is offered
reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of
the interest on any notes on any interest payment date to the person in whose name the notes, or
one or more predecessor securities, are registered at the close of business on the regular record
date for the interest.
We will pay principal of and any premium and interest on the notes of a particular series at
the office of the paying agents designated by us, except that unless we otherwise indicate in the
applicable prospectus supplement, will we make interest payments by check which we will mail to the
holder. Unless we otherwise indicate in a prospectus supplement, we will designate the corporate
trust office of the debenture trustee in the City of New York as our sole paying agent for payments
with respect to notes of each series. We will name in the applicable prospectus supplement any
other paying agents that we initially designate for the notes of a particular series. We will
maintain a paying agent in each place of payment for the notes of a particular series.
All money we pay to a paying agent or the debenture trustee for the payment of the principal
of or any premium or interest on any notes which remains unclaimed at the end of two years after
such principal, premium or interest has become due and payable will be repaid to us, and the holder
of the security thereafter may look only to us for payment of those amounts.
20
Governing Law
The indentures and the notes will be governed by and construed in accordance with the laws of
the State of New York, except to the extent that the Trust Indenture Act is applicable.
Subordination of Subordinated Notes
The subordinated notes will be unsecured and will be subordinate and junior in priority of
payment to some or all of our other indebtedness to the extent described in a prospectus
supplement. The subordinated indenture does not limit the amount of subordinated notes which we
may issue. It also does not limit us from issuing any other secured or unsecured debt.
DESCRIPTION OF WARRANTS
The following description, together with the additional information we may include in any
applicable prospectus supplements, summarizes the material terms and provisions of the warrants
that we may offer under this prospectus and the related warrant agreements and warrant
certificates. While the terms summarized below will apply generally to any warrants that we may
offer, we will describe the particular terms of any series of warrants in more detail in the
applicable prospectus supplement. If we indicate in the prospectus supplement, the terms of any
warrants offered under that prospectus supplement may differ from the terms described below.
Specific warrant agreements will contain additional important terms and provisions and will be
incorporated by reference as an exhibit to the registration statement which includes this
prospectus.
General
We may issue warrants for the purchase of common stock, preferred stock and/or debt securities
in one or more series. We may issue warrants independently or together with common stock,
preferred stock and/or debt securities, and the warrants may be attached to or separate from these
securities.
We will evidence each series of warrants by warrant certificates that we will issue under a
separate warrant agreement. We will enter into the warrant agreement with a warrant agent. Each
warrant agent will be a bank that we select which has its principal office in the United States and
a combined capital and surplus of at least $50,000,000. We will indicate the name and address of
the warrant agent in the applicable prospectus supplement relating to a particular series of
warrants.
We will describe in the applicable prospectus supplement the terms of the series of warrants,
including:
|
|
|
the offering price and aggregate number of warrants offered; |
|
|
|
|
the currency for which the warrants may be purchased; |
|
|
|
|
if applicable, the designation and terms of the securities with which the warrants
are issued and the number of warrants issued with each such security or each principal
amount of such security; |
|
|
|
|
if applicable, the date on and after which the warrants and the related securities
will be separately transferable; |
|
|
|
|
in the case of warrants to purchase debt securities, the principal amount of debt
securities purchasable upon exercise of one warrant and the price at, and currency in
which, this principal amount of debt securities may be purchased upon such exercise; |
|
|
|
|
in the case of warrants to purchase common stock or preferred stock, the number of
shares of common stock or preferred stock, as the case may be, purchasable upon the
exercise of one warrant and the price at which these shares may be purchased upon such
exercise; |
|
|
|
|
the effect of any merger, consolidation, sale or other disposition of our business
on the warrant agreement and the warrants; |
|
|
|
|
the terms of any rights to redeem or call the warrants; |
|
|
|
|
any provisions for changes to or adjustments in the exercise price or number of
securities issuable upon exercise of the warrants; |
21
|
|
|
the dates on which the right to exercise the warrants will commence and expire; |
|
|
|
|
the manner in which the warrant agreement and warrants may be modified; |
|
|
|
|
federal income tax consequences of holding or exercising the warrants; |
|
|
|
|
the terms of the securities issuable upon exercise of the warrants; and |
|
|
|
|
any other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before exercising their warrants, holders of warrants will not have any of the rights of
holders of the securities purchasable upon such exercise, including:
|
|
|
in the case of warrants to purchase debt securities, the right to receive payments
of principal of, or any premium or interest on, the debt securities purchasable upon
exercise or to enforce covenants in the applicable indenture; or |
|
|
|
|
in the case of warrants to purchase common stock or preferred stock, the right to
receive any dividends or payments upon our liquidation, dissolution or winding up or
to exercise any voting rights. |
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the
applicable prospectus supplement at the exercise price that we describe in the applicable
prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement,
holders of the warrants may exercise the warrants at any time up to 5:00 P.M. New York time on the
expiration date that we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the warrant certificate
representing the warrants to be exercised together with specified information, and paying the
required amount to the warrant agent in immediately available funds, as provided in the applicable
prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the
applicable prospectus supplement the information that the holder of the warrant will be required to
deliver to the warrant agent upon exercise.
Upon receipt of the required payment and the warrant certificate properly completed and duly
executed at the corporate trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement, we will issue and deliver the securities purchasable upon such
exercise. If fewer than all of the warrants represented by the warrant certificate are exercised,
then we will issue a new warrant certificate for the remaining amount of warrants. If we so
indicate in the applicable prospectus supplement, holders of the warrants may surrender securities
as all or part of the exercise price for warrants.
Enforceability of Rights By Holders of Warrants
Each warrant agent will act solely as our agent under the applicable warrant agreement and
will not assume any obligation or relationship of agency or trust with any holder of any warrant.
A single bank or trust company may act as warrant agent for more than one issue or series of
warrants. A warrant agent will have no duty or responsibility in case of any default by us under
the applicable warrant agreement or warrant, including any duty or responsibility to initiate any
proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may,
without the consent of the related warrant agent or the holder of any other warrant, enforce by
appropriate legal action its right to exercise, and receive the securities purchasable upon
exercise of, its warrants.
LEGAL OWNERSHIP OF SECURITIES
We can issue securities in registered form or in the form of one or more global securities.
We describe global securities in greater detail below. We refer to those persons who have
securities registered in their own names on the books that we or any applicable trustee maintain
for this purpose as the holders of those securities. These persons are the legal holders of the
securities. We refer to those persons who,
indirectly through others, own beneficial interests in securities that are not registered in
their own names, as indirect holders of those securities. As we discuss below, indirect holders
are not legal holders, and investors in securities issued in book-entry form or in street name will
be indirect holders.
22
Book-Entry Holders
We may issue securities in book-entry form only, as we will specify in the applicable
prospectus supplement. This means securities may be represented by one or more global securities
registered in the name of a financial institution that holds them as depositary on behalf of other
financial institutions that participate in the depositarys book-entry system. These participating
institutions, which are referred to as participants, in turn, hold beneficial interests in the
securities on behalf of themselves or their customers.
Only the person in whose name a security is registered is recognized as the holder of that
security. Securities issued in global form will be registered in the name of the depositary or its
participants. Consequently, for securities issued in global form, we will recognize only the
depositary as the holder of the securities, and we will make all payments on the securities to the
depositary. The depositary passes along the payments it receives to its participants, which in
turn pass the payments along to their customers who are the beneficial owners. The depositary and
its participants do so under agreements they have made with one another or with their customers;
they are not obligated to do so under the terms of the securities.
As a result, investors in a book-entry security will not own securities directly. Instead,
they will own beneficial interests in a global security, through a bank, broker or other financial
institution that participates in the depositarys book-entry system or holds an interest through a
participant. As long as the securities are issued in global form, investors will be indirect
holders, and not holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities in non-global form. In these cases,
investors may choose to hold their securities in their own names or in street name. Securities
held by an investor in street name would be registered in the name of a bank, broker or other
financial institution that the investor chooses, and the investor would hold only a beneficial
interest in those securities through an account he or she maintains at that institution.
For securities held in street name, we will recognize only the banks, brokers and other
financial institutions in whose names the securities are registered as the holders of those
securities, and we will make all payments on those securities to them. These institutions pass
along the payments they receive to their customers who are the beneficial owners, but only because
they agree to do so in their customer agreements or because they are legally required to do so.
Investors who hold securities in street name will be indirect holders, not holders, of those
securities.
Legal Holders
Our obligations, as well as the obligations of any applicable trustee and of any third parties
employed by us or a trustee, run only to the holders of the securities. We do not have obligations
to investors who hold beneficial interests in global securities, in street name or by any other
indirect means. This will be the case whether an investor chooses to be an indirect holder of a
security or has no choice because we are issuing the securities only in global form.
For example, once we make a payment or give a notice to the holder, we have no further
responsibility for the payment or notice even if that holder is required, under agreements with
depositary participants or customers or by law, to pass the payment or notice along to the indirect
holders but does not do so. Similarly, we may want to obtain the approval of the holders to amend
an indenture, such as to relieve us of the consequences of a default or of our obligation to comply
with a particular provision of the indenture or for other purposes. In such an event, we would
seek approval only from the holders, and not the indirect holders, of the securities. Whether and
how the holders contact the indirect holders is up to the holders.
23
Special Considerations for Indirect Holders
If you hold securities through a bank, broker or other financial institution, either in
book-entry form or in street name, you should check with your own institution to find out:
|
|
|
how it handles securities payments and notices; |
|
|
|
|
whether it imposes fees or charges; |
|
|
|
|
how it would handle a request for the holders consent, if ever required; |
|
|
|
|
whether and how you can instruct it to send you securities registered in your own
name so you can be a holder, if that is permitted in the future; |
|
|
|
|
how it would exercise rights under the securities if there were a default or other
event triggering the need for holders to act to protect their interests; and |
|
|
|
|
if the securities are in book-entry form, how the depositarys rules and procedures
will affect these matters. |
Global Securities
A global security is a security held by a depositary which represents one or more individual
securities. Generally, all securities represented by the same global securities will have the same
terms.
Each security issued in book-entry form will be represented by a global security that we
deposit with and register in the name of a financial institution or its nominee that we select.
The financial institution that we select for this purpose is called the depositary. Unless we
specify otherwise in the applicable prospectus supplement, The Depository Trust Company, New York,
New York, known as DTC, will be the depositary for all securities issued in book-entry form.
A global security may not be transferred to or registered in the name of anyone other than the
depositary, its nominee or a successor depositary, unless special termination situations arise. We
describe those situations below under Special Situations When a Global Security Will Be
Terminated. As a result of these arrangements, the depositary, or its nominee, will be the sole
registered owner and holder of all securities represented by a global security, and investors will
be permitted to own only beneficial interests in a global security. Beneficial interests must be
held by means of an account with a broker, bank or other financial institution that in turn has an
account with the depositary or with another institution that does. Thus, an investor whose
security is represented by a global security will not be a holder of the security, but only an
indirect holder of a beneficial interest in the global security.
If the prospectus supplement for a particular security indicates that the security will be
issued in global form only, then the security will be represented by a global security at all times
unless and until the global security is terminated. If termination occurs, we may issue the
securities through another book-entry clearing system or decide that the securities may no longer
be held through any book-entry clearing system.
Special Considerations for Global Securities
As an indirect holder, an investors rights relating to a global security will be governed by
the account rules of the investors financial institution and of the depositary, as well as general
laws relating to securities transfers. We do not recognize an indirect holder as a holder of
securities and instead deal only with the depositary that holds the global security.
24
If securities are issued only in the form of a global security, an investor should be aware of
the following:
|
|
|
An investor cannot cause the securities to be registered in his or her name, and
cannot obtain non-global certificates for his or her interest in the securities,
except in the special situations we describe below; |
|
|
|
|
An investor will be an indirect holder and must look to his or her own bank or
broker for payments on the securities and protection of his or her legal rights
relating to the securities, as we describe under this section; |
|
|
|
|
An investor may not be able to sell interests in the securities to some insurance
companies and to other institutions that are required by law to own their securities
in non-book-entry form; |
|
|
|
|
An investor may not be able to pledge his or her interest in a global security in
circumstances where certificates representing the securities must be delivered to the
lender or other beneficiary of the pledge in order for the pledge to be effective; |
|
|
|
|
The depositarys policies, which may change from time to time, will govern
payments, transfers, exchanges and other matters relating to an investors interest in
a global security. We and any applicable trustee have no responsibility for any
aspect of the depositarys actions or for its records of ownership interests in a
global security. We and the trustee also do not supervise the depositary in any way; |
|
|
|
|
The depositary may, and we understand that DTC will, require that those who
purchase and sell interests in a global security within its book- entry system use
immediately available funds, and your broker or bank may require you to do so as well;
and |
|
|
|
|
Financial institutions that participate in the depositarys book-entry system, and
through which an investor holds its interest in a global security, may also have their
own policies affecting payments, notices and other matters relating to the securities.
There may be more than one financial intermediary in the chain of ownership for an
investor. We do not monitor and are not responsible for the actions of any of those
intermediaries. |
Special Situations When a Global Security will be Terminated
In a few special situations described below, the global security will terminate and interests
in it will be exchanged for physical certificates representing those interests. After that
exchange, the choice of whether to hold securities directly or in street name will be up to the
investor. Investors must consult their own banks or brokers to find out how to have their
interests in securities transferred to their own name, so that they will be direct holders. We
have described the rights of holders and street name investors above.
The global security will terminate when the following special situations occur:
|
|
|
if the depositary notifies us that it is unwilling, unable or no longer qualified
to continue as depositary for that global security and we do not appoint another
institution to act as depositary within 90 days; |
|
|
|
|
if we notify any applicable trustee that we wish to terminate that global security;
or |
|
|
|
|
if an event of default has occurred with regard to securities represented by that
global security and has not been cured or waived. |
The prospectus supplement may also list additional situations for terminating a global
security that would apply only to the particular series of securities covered by the prospectus
supplement. When a global security terminates, the depositary, and not we or any applicable
trustee, is responsible for deciding the names of the institutions that will be the initial direct
holders.
PLAN OF DISTRIBUTION
The securities being offered may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at prices related to the prevailing market prices, at
varying prices determined
25
at the time of sale, or at negotiated prices. These sales may be effected at various times in
one or more of the following transactions, or in other kinds of transactions:
|
|
|
through underwriters for resale to the public or investors: |
|
|
|
|
transactions on the Nasdaq Stock Market or on any national securities exchange or
U.S. inter-dealer system of a registered national securities association on which our
common stock may be listed or quoted at the time of sale; |
|
|
|
|
in the over-the-counter market; |
|
|
|
|
in private transactions and transactions otherwise than on these exchanges or
systems or in the over-the-counter market; |
|
|
|
|
in connection with short sales of the shares; |
|
|
|
|
by pledge to secure debt and other obligations; |
|
|
|
|
through the writing of options, whether the options are listed on an options
exchange or otherwise; |
|
|
|
|
in connection with the writing of non-traded and exchange-traded call options, in
hedge transactions and in settlement of other transactions in standardized or
over-the-counter options; |
|
|
|
|
through a combination of any of the above transactions; or |
|
|
|
|
any other method permitted by law. |
We may sell our securities directly to one or more purchasers, or to or through underwriters,
dealers or agents or through a combination of those methods. The related prospectus supplement
will set forth the terms of each offering, including:
|
|
|
the name or names of any agents, dealers, underwriters or investors who purchase
the securities; |
|
|
|
|
the purchase price of the securities being offered and the proceeds we will receive
from the sale; |
|
|
|
|
the amount of any compensation, discounts commissions or fees to be received by the
underwriters, dealer or agents; |
|
|
|
|
any over-allotment options under which underwriters may purchase additional
securities from us; |
|
|
|
|
any discounts or concessions allowed or reallowed or paid to dealers; |
|
|
|
|
any securities exchanges on which such securities may be listed. |
|
|
|
|
the terms of any indemnification provisions, including indemnification from
liabilities under the federal securities laws; and |
|
|
|
|
the nature of any transaction by an underwriter, dealer or agent during the
offering that is intended to stabilize or maintain the market price of the securities. |
In addition, any securities covered by this prospectus which qualify for sale pursuant to
Regulation S, may be sold pursuant to Regulation S rather than pursuant to this prospectus.
In connection with the sale of our common stock, underwriters may receive compensation from us
or from purchasers of our common stock in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of our common stock may be
deemed to be underwriters. Discounts or commissions they receive and any profit on their resale of
our common stock may be considered underwriting discounts and commissions under the Securities Act
of 1933.
We may agree to indemnify underwriters, dealers and agents who participate in the distribution
of our common stock against various liabilities, including liabilities under the Securities Act of
1933. We may also agree to contribute to payments which the underwriters, dealers or agents may be
required to make in respect of these liabilities. We may authorize dealers or other persons who act
as our agents to solicit offers by various institutions to purchase our common stock from us under
contracts which provide for payment and delivery on a future date. We may enter into these
contracts with commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others. If we enter into these agreements
concerning any series of our common stock, we will indicate that in the prospectus supplement or
amendment.
26
In connection with an offering of our common stock, underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of our common stock. Specifically,
underwriters may over-allot in connection with the offering, creating a syndicate short position in
our common stock for their own account. In addition, underwriters may bid for, and purchase, our
common stock in the open market to cover short positions or to stabilize the price of our common
stock. Finally, underwriters may reclaim selling concessions allowed for distributing our common
stock in the offering if the underwriters repurchase previously distributed common stock in
transactions to cover short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of our common stock above independent market
levels. Underwriters are not required to engage in any of these activities and may end any of these
activities at any time. Agents and underwriters may engage in transactions with, or perform
services for, us and our affiliates in the ordinary course of business.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for Aastrom by Dykema
Gossett PLLC, Ann Arbor, Michigan acting as special counsel to Aastrom. DLA Piper Rudnick Gray
Cary US LLP, San Diego, California, has acted as counsel to Aastrom in connection with this
offering.
EXPERTS
The financial statements and managements assessment of the effectiveness of internal control
over financial reporting (which is included in Managements Report on Internal Control over
Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended June 30, 2005, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Other expenses in connection with the registration of the common stock hereunder will be
substantially as follows (all expenses other than the SEC Registration Fee are estimates):
|
|
|
|
|
|
|
Company |
|
Item |
|
Expense |
|
SEC Registration Fee |
|
$ |
8,828 |
|
Blue Sky fees and expenses |
|
$ |
5,000 |
|
Printing and engraving expenses |
|
$ |
15,000 |
|
Legal fees and expenses |
|
$ |
30,000 |
|
Accounting fees and expenses |
|
$ |
20,000 |
|
Nasdaq Filing Fees |
|
$ |
22,500 |
|
Miscellaneous |
|
$ |
8,672 |
|
|
|
|
|
|
Total |
|
$ |
110,000 |
|
|
|
|
|
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 1561 through 1571 of the Michigan Business Corporation Act (the MBCA) authorize a
corporation to grant or a court to award indemnity to directors, officers, employees and agents in
terms sufficiently broad to permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities Act of 1933.
The Bylaws of the Registrant, provide that the Registrant shall, to the fullest extent
authorized or permitted by the MBCA, or other applicable law, indemnify a director or officer who
was or is a party or is threatened to be made a party to any proceeding by or in the right of the
Registrant to procure a judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the Registrant, against expenses, including actual and
reasonable attorneys fees, and amounts paid in settlement incurred in connection with the action
or suit, if the indemnitee acted in good faith and in a manner the person reasonably believed to be
in, or not opposed to, the best interests of the Registrant or its shareholders. This section also
authorizes the Registrant to advance expenses incurred by any agent of the Registrant in defending
any proceeding prior to the final disposition of such proceeding upon receipt of an undertaking by
or on behalf of the agent to repay such amount unless it shall be determined ultimately that the
agent is entitled to be indemnified.
The Bylaws also authorize the Registrant to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Registrant against any liability
asserted against or incurred by such person in such capacity or arising out of such persons status
as such, regardless of whether the Registrant would have the power to indemnify such person against
such liability under the provisions of the MBCA.
The Registrant has entered into an indemnification agreement with certain of its directors,
officers and other key personnel, which contains provisions that may in some respects be broader
than the specific indemnification provisions contained under applicable law. The indemnification
agreement may require the Registrant, among other things, to indemnify such directors, officers and
key personnel against certain liabilities that may arise by reason of their status or service as
directors, officers or employees of the Registrant, to advance the expenses incurred by such
parties as a result of any threatened claims or proceedings brought against them as to which they
could be indemnified and, to the maximum extent that insurance coverage of such directors, officers
and key employees under the Registrants directors and officers liability insurance policies is
maintained.
II-1
Section 1209 of the MBCA permits a Michigan corporation to include in its Articles of
Incorporation a provision eliminating or limiting a directors liability to a corporation or its
shareholders for monetary damages for any action taken or any failure to take any action as a
director. The enabling statute provides, however, that liability for (i) the amount of a financial
benefit received by a director to which he or she is not entitled; (ii) intentional infliction of
harm on the corporation or the shareholders; (iii) a violation of Section 551 of the MBCA, or (iv)
an intentional criminal act cannot be eliminated or limited in this manner. The Registrants
Restated Articles of Incorporation include a provision which eliminates, to the fullest extent
permitted by the MBCA, director liability for monetary damages.
ITEM 16. EXHIBITS.
|
|
|
EXHIBIT |
|
|
NUMBER |
|
DESCRIPTION OF DOCUMENT |
1.1
|
|
Form of Underwriting Agreement* |
|
|
|
4.1
|
|
Form of Senior Indenture to be entered into with a trustee to be named** |
|
|
|
4.2
|
|
Form of Subordinated Indenture to be entered into with a trustee to be named** |
|
|
|
4.3
|
|
Certificate of Designation of Preferred Stock* |
|
|
|
4.4
|
|
Form of Warrant Agreement* |
|
|
|
5.1
|
|
Consent and Opinion of Dykema Gossett PLLC |
|
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm |
|
|
|
23.2
|
|
Consent of DLA Piper Rudnick Gray Cary US LLP** |
|
|
|
23.3
|
|
Consent of Dykema Gossett PLLC (included in Exhibit 5.1) |
|
|
|
24.1
|
|
Power of Attorney (see Signature page) |
|
|
|
* |
|
To be filed by amendment or incorporated by reference from a Current Report on Form 8-K |
|
** |
|
Previously filed |
ITEM 17. UNDERTAKING.
The undersigned Registrant hereby undertakes:
|
(1) |
|
To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: |
|
|
(2) |
|
To include any prospectus required by section 10(a)(3) of the Securities Act
of 1933 (the Securities Act); |
|
|
(3) |
|
To reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in
the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration statement; |
|
|
(4) |
|
To include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material change to such
information in the registration statement; provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement. |
II-2
|
(5) |
|
That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof. |
|
|
(6) |
|
To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering. |
The undersigned Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of the Registrants annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers, and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
For the purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement
as of the time it was declared effective.
For the purposes of determining any liability under the Securities Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements of filing on Form S-3 and has duly caused
this amendment to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Ann Arbor, State of
Michigan, on October 11, 2005.
AASTROM BIOSCIENCES, INC.
|
|
|
|
|
|
|
By: /s/ R. Douglas Armstrong, Ph.D. |
|
|
|
R. Douglas Armstrong, Ph.D. |
|
|
|
Chairman and Chief Executive
Officer
(Principal Executive Officer) |
|
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints R. Douglas Armstrong and Gerald D. Brennan, Jr., as his or her
attorney-in-fact, with full power of substitution for him or her in any and all capacities, to sign
any and all amendments to this registration statement, including, but not limited to,
post-effective amendments and any and all new registration statements filed pursuant to Rule 462
under the Securities Act of 1933 in connection with or related to the offer contemplated by this
registration statement, as amended, and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorney to said registration statement
and any and all amendment thereto.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been
signed below by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
/s/ R. Douglas Armstrong, Ph.D.
R. Douglas Armstrong, Ph.D. |
|
Chairman and Chief Executive Officer,
(Principal Executive Officer)
|
|
October 11, 2005 |
/s/ Gerald D. Brennan, Jr.
Gerald D. Brennan, Jr.
|
|
Vice President, Administrative
and Financial Operations, Chief Financial
Officer (Principal Financial and
Accounting Officer)
|
|
October 11, 2005
|
/s/ Timothy M. Mayleben
Timothy M. Mayleben |
|
Director
|
|
October 11, 2005 |
/s/ Alan L. Rubino
Alan L. Rubino |
|
Director
|
|
October 11, 2005 |
/s/ Stephen G. Sudovar
Stephen G. Sudovar |
|
Director
|
|
October 11, 2005 |
/s/ Susan L. Wyant
Susan L. Wyant |
|
Director
|
|
October 11, 2005 |
II-4
Exhibit 5.1
Exhibit 5.1
October 11, 2005
Aastrom Biosciences, Inc.
24 Frank Lloyd Wright Dr.
Ann Arbor, Michigan 48105
|
|
|
Re: Aastrom Biosciences, Inc. Registration Statement on Form S-3 |
Ladies and Gentlemen:
We have acted as special counsel to Aastrom Biosciences, Inc., a Michigan corporation (the
Company), in connection with the filing with the Securities and Exchange Commission (the
Commission) of a registration statement (the Registration Statement) of the Company on Form S-3
under the Securities Act of 1933, as amended (the Act). The Registration Statement relates to
the Companys:
|
(i) |
|
common stock, no par value per share (the Common Stock); |
|
|
(ii) |
|
preferred stock, no par value per share (the Preferred
Stock); |
|
|
(iii) |
|
senior debt securities (the Senior Debt Securities); |
|
|
(iv) |
|
subordinated debt securities (the Subordinated Debt
Securities and, together with the Senior Debt Securities, the Debt
Securities); and |
|
|
(iv) |
|
warrants representing rights to purchase, Common Stock,
Preferred Stock or Debt Securities (the Warrants); |
(collectively, the Common Stock, the Preferred Stock, the Debt Securities and the Warrants are
referred to herein as the Securities); all of which may be issued from time to time on a delayed
or continuous basis pursuant to Rule 415 under the Act at an aggregate initial offering price not
to exceed $75,000,000.
We have been advised by the Company that:
|
A. |
|
The rights, preferences, privileges and restrictions, including voting rights,
dividend rights, conversion rights, redemption privileges and liquidation privileges of
each series of Preferred Stock will be set forth in a certificate of designation to be
approved by the Companys Board of Directors, or in an amendment to the Companys
Restated Articles of Incorporation to be approved by the Companys Board of Directors
and shareholders, and that one or both of these documents will be filed either as an
exhibit to an amendment to the Registration Statement to be filed after the date of
this opinion or as an exhibit to a Current Report on Form 8-K to be filed after the
Registration Statement has become effective; |
|
|
B. |
|
The Senior Debt Securities may be issued pursuant to an Indenture between the
Company and a trustee to be named in such Indenture, which Indenture will be filed
either as an exhibit to an amendment to the Registration Statement to be filed after
the date of this opinion or as an exhibit to a Current Report on Form 8-K to be filed
after the Registration Statement has become effective; |
|
|
C. |
|
The Subordinated Debt Securities may be issued pursuant to an Indenture
between the Company and a trustee to be named in such Indenture, which Indenture will
be filed either as an exhibit to an amendment to the Registration Statement to be
filed after the date of this opinion or as an exhibit to a Current Report on Form 8-K
to be filed after the Registration Statement has become effective; |
|
|
D. |
|
The particular terms of any Debt Securities will be set forth in a supplement
to the prospectus forming a part of the Registration Statement; and |
|
E. |
|
Warrants may be issued pursuant to a warrant agreement to be entered into
between the Company and a bank as warrant agent (the Warrant Agreement). The
Warrant Agreement will be filed either as an exhibit to an amendment to the
Registration Statement to be filed after the date of this opinion or as an exhibit to
a Current Report on Form 8-K to be filed after the Registration Statement has become
effective and the particular terms of any series of Warrants will be set forth in a
supplement to the prospectus forming a part of the Registration Statement. |
In rendering the opinions set forth below, we have assumed that (i) all information contained
in all documents reviewed by us is true and correct; (ii) all signatures on all documents examined
by us are genuine; (iii) all documents submitted to us as originals are authentic and all documents
submitted to us as copies conform to the originals of those documents; (iv) each natural person
signing any document reviewed by us had the legal capacity to do so; (v) the Registration
Statement, and any amendments thereto (including post-effective amendments) will have become
effective and comply with all applicable laws; (vi) a prospectus supplement will have been prepared
and filed with the Commission describing the Securities offered thereby; (vii) all Securities will
be issued and sold in compliance with applicable federal and state securities laws and in the
manner stated in the Registration Statement and the applicable prospectus supplement; (viii) a
definitive purchase, underwriting or similar agreement with respect to any Securities offered will
have been duly authorized and validly executed and delivered by the Company and the other parties
thereto; (ix) the Company has reserved from its authorized but unissued and unreserved shares of
stock a number sufficient to issue all Securities; (x) the certificates representing the Securities
will be duly executed and delivered; and (xi) if the holders of the Debt Securities are granted
rights to inspect corporate books and records and to vote in the election of directors or any
matters on which shareholders of the Company may vote, such rights are set forth in the Companys
Restated Articles of Incorporation or the Restated Articled of Incorporation grant to the Companys
Board of Directors the power to confer such voting or inspection rights and the Companys Board of
Directors has conferred such rights.
We have examined the Registration Statement, including the exhibits thereto, and such other
documents, corporate records, and instruments and have examined such laws and regulations as we
have deemed necessary for purposes of rendering the opinions set forth herein. Based upon such
examination and subject to the further provisions hereof, we are of the following opinion:
1. The Common Stock will be validly issued, fully paid and nonassessable, provided that (i)
the Companys Board of Directors or an authorized committee thereof has specifically authorized the
issuance of such Common Stock in exchange for a consideration that the Board of Directors or such
committee determines as adequate (Authorizing Resolutions), (ii) the terms of the offer and sale
of the Common Stock have been duly established in conformity with the Companys Restated Articles
of Incorporation and By-laws and do not violate any applicable law or result in a default under or
breach of any agreement or instrument binding on the Company and comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over the Company and
(iii) the Company has received the consideration provided for in the applicable Authorizing
Resolutions.
2. The Preferred Stock will be validly issued, fully paid and nonassessable, provided that (i)
such Preferred Stock is specifically authorized for issuance by Authorizing Resolutions, (ii) the
rights, preferences, privileges and restrictions of the Preferred Stock have been established in
conformity with applicable law, (iii) an appropriate certificate of designation approved by the
Companys Board of Directors, or an amendment to the Companys Restated Articles of Incorporation
approved by the Companys Board of Directors and shareholders, has been filed with the Department
of Labor and Economic Growth, Bureau of Commercial Services, of the State of Michigan, (iv) the
terms of the offer, issuance and sale of shares of such class or series of Preferred Stock have
been duly established in conformity with the Companys Restated Articles of Incorporation and
By-laws and do not violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the Company, and (v) the Company
has received the consideration provided for in the applicable Authorizing Resolutions.
3. The Debt Securities will constitute valid and legally binding obligations of the Company,
provided that (i) such Debt Securities are specifically authorized for issuance by Authorizing
Resolutions, (ii) the applicable Indenture conforms with applicable law and is enforceable in
accordance with its terms, (iii) the
terms of the Debt Securities and of their issue and sale have been duly established in
conformity with the applicable Indenture, the Companys Restated Articles of Incorporation and
Authorizing Resolutions and do not violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Company and comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over the Company, (iv)
such Debt Securities have been duly executed and authenticated in accordance with the applicable
Indenture and offered, issued and sold as contemplated in the Registration Statement, and (v) the
Company has received the consideration provided for in the applicable Authorizing Resolutions.
4. The Warrants will constitute valid and legally binding obligations of the Company, provided
that (i) such Warrants are specifically authorized for issuance by Authorizing Resolutions which
include the terms upon which the Warrants are to be issued, their form and content and the
consideration for which shares are to be issued upon exercise of the Warrants, (ii) the Warrant
Agreement relating to the Warrants has been duly authorized, executed and delivered and is
enforceable in accordance with its terms, (iii) the terms of the of the offer, issuance and sale of
such Warrants have been duly established in conformity with the Warrant Agreement, (iv) the Warrant
Agreement and the offer, issuance and sale of the Warrants do not violate any applicable law or
result in a default under or breach of any agreement or instrument binding upon the Company and
comply with any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company, (v) such Warrants have been duly executed and countersigned in
accordance with the Warrant Agreement and offered, issued and sold as contemplated in the
Registration Statement, the applicable Authorizing Resolutions and the Warrant Agreement, and (vi)
the Company has received the consideration provided for in the applicable Authorizing Resolutions.
The foregoing opinions are qualified to the extent that the enforceability of any document,
instrument or Securities may be limited by or subject to bankruptcy, insolvency, fraudulent
transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting
creditors rights generally, and general equitable or public policy principles.
We express no opinions concerning (i) the validity or enforceability of any provisions
contained in Indentures that purport to waive or not give effect to rights to notices, defenses,
subrogation or other rights or benefits that cannot be effectively waived under applicable law;
(ii) the validity or enforceability of any provisions contained in Warrant Agreement that purport
to waive or not give effect to rights to notices, defenses, subrogation or other rights or benefits
that cannot be effectively waived under applicable law; or (iii) any securities into which the
Preferred Stock, Debt Securities and the Warrants may be convertible or exercisable.
We have relied as to certain matters on information obtained from public officials and
officers of the Company.
It is understood that this opinion is to be used only in connection with the offer and sale of
Common Stock, Preferred Stock, Debt Securities and Warrants while the Registration Statement is in
effect.
Please note that we are opining only as to the matters expressly set forth herein, and no
opinion should be inferred as to any other matters. This opinion is based upon currently existing
statutes, rules, regulations and judicial decisions, and we disclaim any obligation to update this
opinion or otherwise advise you of any change in any of these sources of law or subsequent legal or
factual developments which might affect any matters or opinions set forth herein.
We hereby consent to the reference to our firm under the caption Legal Matters in the
Registration Statement and to the filing of this opinion as an exhibit to the Registration
Statement. Such consent does not constitute a consent under Section 7 of the Act, because we have
not certified any part of such Registration Statement and do not otherwise come within the
categories of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
Dykema Gossett pllc
Exhibit 23.1
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of
our report dated September 9, 2005, relating to the financial statements, financial statement
schedule, managements assessment of the effectiveness of internal control over financial reporting
and the effectiveness of internal control over financial reporting, which appears in Aastrom
Biosciences, Inc.s Annual Report on Form 10-K for the year ended June 30, 2005. We also consent to
the reference to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Minneapolis, Minnesota
October 10, 2005