Registration
No. 333-171411
SECURITIES
AND EXCHANGE COMMISSION
AMENDMENT
NO. 1
TO
THE FORM S-3
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
OCULUS
INNOVATIVE SCIENCES, INC.
(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
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68-0423298
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(I.R.S.
Employer
Identification
Number)
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Petaluma,
California 94954
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s
Principal Executive Offices)
President
and Chief Executive Officer
Petaluma,
California 94954
(Name,
Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent
for Service)
Newton,
Massachusetts 02459
Approximate date of commencement of
proposed sale to the public: From time to time
after this registration statement becomes effective, as determined by market
conditions and other factors.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, check the following
box. ¨
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment 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. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. ¨
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. to register additional securities or additional classes
of securities pursuant to Rule 413(b) under the Securities Act, check the
following box ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act (Check
One):
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Large
Accelerated Filer ¨
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Accelerated
Filer ¨
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Non-Accelerated
Filer ¨
(Do
not check if a smaller
reporting
company)
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Smaller
Reporting
Company þ
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CALCULATION
OF REGISTRATION FEE
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Proposed maximum
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Title of securities to
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aggregate offering
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Amount of
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be registered (1)
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Price (2)(4)
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registration fee (3)
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Common
Stock, $0.0001 par value(4)
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Preferred
Stock, $0.0001 par value(4)
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Warrants(4)
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Units(4)
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Total
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$ |
75,000,000 |
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$ |
5,347.50 |
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(1)
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Any
securities registered hereunder may be sold separately or as units with
other securities registered
hereunder.
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(2)
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Such
indeterminate number or amount of common stock, preferred stock, warrants
and units to purchase any combination of the foregoing securities, as may
from time to time be issued at indeterminate prices, with an aggregate
initial offering price not to exceed $75,000,000 or the equivalent thereof
in one or more foreign currencies, foreign currency units or composite
currencies.
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(3)
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The
registration fee has been calculated in accordance with Rule 457(o) under
the Securities Act of 1933, as amended. Rule 457(o) permits the
registration fee to be calculated on the basis of the maximum offering
price of all of the securities listed and, therefore, the table does not
specify by each class information as to the amount registered, the
proposed maximum offering price per unit, or the proposed maximum
aggregate offering price.
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(4)
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Subject
to footnote (1), there is being registered hereunder such indeterminate
amount of common stock, preferred stock, warrants, and units as may from
time to time be issued by the registrant at indeterminate prices and as
may be issuable upon conversion, redemption, exchange, exercise or
settlement of any securities registered hereunder, including under any
applicable anti-dilution provisions. In no event will the aggregate
initial offering price of all securities issued from time to time pursuant
to this registration statement exceed
$75,000,000.
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The
registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said
Section 8(a), may determine.
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The
information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
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SUBJECT
TO COMPLETION, DATED FEBRUARY 18, 2011
OCULUS
INNOVATIVE SCIENCES, INC.
We may,
from time to time, offer and sell common stock, preferred stock or warrants,
either separately or in units, in one or more offerings. The preferred stock and
warrants may be convertible into or exercisable or exchangeable for common or
preferred stock. We will specify in the accompanying prospectus supplement more
specific information about any such offering. The aggregate initial offering
price of all securities sold under this prospectus will not exceed $75,000,000,
including the U.S. dollar equivalent if the public offering of any such
securities is denominated in one or more foreign currencies, foreign currency
units or composite currencies.
We may
offer these securities independently or together in any combination for sale
directly to investors or through underwriters, dealers or agents. We will set
forth the names of any underwriters, dealers or agents and their compensation in
the accompanying prospectus supplement.
This
prospectus may not be used to sell any of these securities unless accompanied by
a prospectus supplement.
Our
common stock is traded on the NASDAQ Global Market under the symbol “OCLS.” On
December 21, 2010, the closing price of our common stock on the NASDAQ Global
Market was $1.73 per share. The market value of our outstanding common equity
held by non-affiliates on December 21, 2010 was $38,439,866. We have sold
$664,475 of our securities pursuant to General Instruction I.B.6 of Form S-3
during the prior 12 calendar month period that ends on and includes the date of
this prospectus.
Investing
in our securities involves a high degree of risk. See the section entitled “Risk
Factors” beginning on page 3.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is February 18, 2011.
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Page
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About
This Prospectus
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2
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Our
Company
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2
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Risk
Factors
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3
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Forward-Looking
Statements
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15
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Use
of Proceeds
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15
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Description
of Common Stock
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15
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Description
of Preferred Stock
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17
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Description
of Warrants
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18
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Description
of Units
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18
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Plan
of Distribution
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19
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Legal
Matters
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19
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Experts
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Where
You Can Find More Information
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Incorporation
of Certain Documents by Reference
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20
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You
should rely only on the information incorporated by reference or provided in
this prospectus, any prospectus supplement and the registration statement. We
have not authorized anyone else to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell these securities in any state
where the offer or sale is not permitted. You should assume that the information
in this prospectus and any prospectus supplement, or incorporated by reference,
is accurate only as of the dates of those documents. Our business, financial
condition, results of operations and prospects may have changed since those
dates.
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this prospectus or
incorporated by reference. This summary does not contain all of the information
you should consider before buying shares of our common stock, preferred stock,
warrants, or units or any combination of these securities. You should read the
entire prospectus carefully, especially the risks of investing in our securities
that we describe under “Risk Factors” and our consolidated financial statements
appearing in our annual and periodic reports incorporated in this prospectus by
reference, before deciding to invest in our securities. Unless the context
requires otherwise, references to “Oculus,” “the Company,” “the Registrant,”
“we,” “our” and “us” refer to Oculus Innovative Sciences, Inc.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission, or SEC, using a “shelf” registration, or continuous
offering, process. Under this shelf registration process, we may, from time to
time, issue and sell any combination of preferred stock, common stock or
warrants, either separately or in units, in one or more offerings with a maximum
aggregate offering price of $75,000,000, including the U.S. dollar equivalent if
the public offering of any such securities is denominated in one or more foreign
currencies, foreign currency units or composite currencies.
This
prospectus provides you with 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 and the
offered securities. Any prospectus supplement may also add, update or change
information contained in this prospectus. Any statement that we make in this
prospectus will be modified or superseded by any inconsistent statement made by
us in a prospectus supplement. The registration statement we filed with the SEC
includes exhibits that provide more detail of the matters discussed in this
prospectus. You should read this prospectus and the related exhibits filed with
the SEC and any prospectus supplement, together with additional information
described under the heading “Where You Can Find More Information,” before making
your investment decision.
Investing
in our securities involves a high degree of risk. The prospectus supplement
relating to a particular offering will contain a discussion of risks applicable
to an investment in the securities offered. Prior to making a decision about
investing in our securities, you should carefully consider the specific factors
discussed under the heading “Risk Factors” in the applicable prospectus
supplement together with all of the other information contained in the
prospectus supplement or appearing or incorporated by reference in this
prospectus.
We
develop, manufacture and market a family of tissue care products that cure
infections and, through a separate mechanism of action, enhance healing while
reducing the need for antibiotics. Infection is a serious potential
complication in both chronic and acute wounds, and controlling infection is a
critical step in wound healing. Our platform technology, called Microcyn®, is a
proprietary solution of electrically charged oxychlorine small molecules
designed to treat a wide range of organisms that cause disease (pathogens).
These include viruses, fungi, spores and antibiotic-resistant strains of
bacteria, such as methicillin-resistant Staphylococcus aureus, or
MRSA, and vancomycin-resistant Enterococcus, or VRE, in
wounds, as well as Clostridium difficile, or C.
diff, a highly contagious bacteria spread by human contact.
We do not
have the necessary regulatory approvals to market Microcyn in the United States
as a drug. In the United States our product does, however, have six
clearances as a 510(k) medical device for the following summary indications:
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1)
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moistening and lubricating
absorbent wound dressings for traumatic wounds requiring a
prescription;
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moistening and debriding acute
and chronic dermal lesions requiring a
prescription;
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moistening absorbent wound
dressings and cleaning minor cuts as an over-the-counter
product;
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management of exuding wounds such
as leg ulcers, pressure ulcers and diabetic ulcers, and for the management
of mechanical or surgical debridement of wounds in a gel form and required
as a prescription;
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debridement of wounds, such as
stage I-IV pressure ulcers, diabetic foot ulcers, post surgical wounds,
first and second degree burns, grafted and donor sites as a preservative,
which can kill listed bacteria such as MRSA & VRE and required as
a prescription; and
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as a hydrogel, for management of
wounds including itch and pain relief associated with dermal irritation,
sores, injuries and ulcers of dermal tissue as a prescription. As an
over-the-counter product, the hydrogel is intended to relieve itch and
pain from minor skin irritations, lacerations, abrasions and minor burns.
It is also indicated for management of irritation and pain from minor
sunburn.
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We do not
have the necessary regulatory clearance or approval to market Microcyn in the
U.S. as a medical device for an antimicrobial or wound healing indication.
In the future we expect to apply to the FDA for clearance as an
antimicrobial in a liquid and a hydrogel form and as conducive to wound healing
via a 510(k) medical device clearance.
Outside
the United States, our product has a CE Mark device approval in Europe for
debriding, irrigating and moistening acute and chronic wounds in comprehensive
wound treatment by reducing microbial load and creating a moist environment. In
Mexico, we are approved as a drug for antiseptic treatment of wounds and
infected areas. In India, our technology has a drug license for cleaning and
debriding in wound management while in China there is a medical device approval
by the State Food and Drug Administration for reducing the propagation of
microbes in wounds and creating a moist environment for wound
healing.
While in
the U.S. we do not have the necessary regulatory clearance for an antimicrobial
or wound healing indication, clinical and laboratory testing we conducted in
connection with our submissions to the FDA, as well as physician clinical
studies and scientific papers, suggest that our Microcyn Technology may help
reduce a wide range of pathogens from acute and chronic wounds while curing or
improving infection and concurrently enhancing wound healing through modes of
action unrelated to the treatment of infection. These physician clinical studies
suggest that our Microcyn is safe, easy to use and complementary to many
existing treatment methods in wound care. Physician clinical studies and usage
in the United States suggest that our 510(k) cleared products may shorten
hospital stays, lower aggregate patient care costs and, in certain cases, reduce
the need for systemic antibiotics. We are also pursuing the use of our Microcyn
platform technology in other markets outside of wound and skin care, including
the respiratory, ophthalmology, dental, dermatology, animal healthcare and
industrial markets.
We
incorporated under the laws of the State of California in April 1999 as Micromed
Laboratories, Inc. In August 2001, we changed our name to Oculus Innovative
Sciences, Inc. In December 2006, we reincorporated under the laws of the State
of Delaware. Our principal executive offices are located at
1129 N. McDowell Blvd., Petaluma, California, 94954, and our telephone
number is (707) 782-0792. We have two principal subsidiaries: Oculus
Technologies of Mexico, S.A. de C.V., organized in Mexico, and Oculus Innovative
Sciences Netherlands, B.V., organized in the Netherlands. On January 20,
2009, we dissolved our subsidiary, Oculus Innovative Sciences Japan, KK., which
was organized under Japanese law. Our fiscal year end is March 31. Our
website is www.oculusis.com. Information
contained on our website does not constitute part of this
prospectus.
Risks
Related to Our Business
We have a history
of losses, we expect to continue to incur losses and we may
never achieve
profitability.
We
incurred net losses of $8,232,000 and $17,656,000 for the years ended
March 31, 2010 and 2009, respectively. At March 31, 2010, our
accumulated deficit amounted to $117,037,000. During the year ended
March 31, 2010, net cash used in operating activities amounted to
$6,639,000. At March 31, 2010, our working capital amounted to $6,315,000.
We expect to continue incurring losses for the foreseeable future and may raise
additional capital to pursue product development initiatives, penetrate markets
for the sale of our products and continue as a going concern. We believe that we
have access to capital resources through possible public or private equity
offerings, debt financings, corporate collaborations or other means. If the
economic climate in the U.S. does not improve or continues to deteriorate,
our ability to raise additional capital could be negatively impacted. If we are
unable to secure additional capital, we may be required to curtail our research
and development initiatives and take additional measures to reduce costs in
order to conserve our cash in amounts sufficient to sustain operations and meet
our obligations. These measures could cause significant delays in our efforts to
commercialize our products in the U.S., which are critical to the realization of
our business plan and to future operations.
Declining general
economic or business conditions may have a negative impact on
our business.
Concerns
over inflation, energy costs, geopolitical issues, the availability and cost of
credit, the U.S. mortgage market and a declining real estate market in the
U.S. have contributed to increased volatility and diminished expectations
for the global economy and expectations of slower global economic growth going
forward. These factors, combined with volatile oil prices, declining business
and consumer confidence and increased unemployment, have precipitated a global
economic slowdown. If the economic climate in the U.S. does not improve or
continues to deteriorate, our business, including our patient population, our
suppliers and our third-party payors, could be negatively affected, resulting in
a negative impact on our business.
Our inability to
raise additional capital on acceptable terms in the future may
cause us to curtail
certain operational activities, including regulatory trials, sales
and marketing, and
international operations, in order to reduce costs and sustain
the business, and
would have a material adverse effect on our business and
financial condition.
We expect
capital outlays and operating expenditures to increase over the next several
years as we work to conduct regulatory trials, commercialize our products and
expand our infrastructure. We may need to raise additional capital to, among
other things:
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fund our clinical trials and
preclinical studies;
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sustain commercialization of our
current products or new
products;
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expand our manufacturing
capabilities;
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increase our sales and marketing
efforts to drive market adoption and address competitive
developments;
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acquire or license
technologies; and
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finance capital expenditures and
our general and administrative
expenses.
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Our
present and future funding requirements will depend on many factors, including
but not limited to:
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the progress and timing of our
clinical trials;
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the level of research and
development investment required to maintain and improve our technology
position;
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the costs of filing, prosecuting, defending and
enforcing patent claims and other intellectual property
rights;
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our efforts to acquire or license
complementary technologies or acquire complementary
businesses;
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changes in product development
plans needed to address any difficulties in
commercialization;
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competing technological and
market
developments; and
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changes in regulatory policies or
laws that affect our
operations.
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If we
raise additional funds by issuing equity securities, dilution to our
stockholders could result. Any equity securities issued may also provide for
rights, preferences or privileges senior to those of holders of our common
stock. If we raise additional funds by issuing debt securities, these debt
securities would have rights, preferences and privileges senior to those of
holders of our common stock, and the terms of the debt securities issued could
impose significant restrictions on our operations. If we raise additional funds
through collaborations or licensing arrangements, we might be required to
relinquish significant rights to our technologies or products, or grant licenses
on terms that are not favorable to us. A failure to obtain adequate funds may
cause us to curtail certain operational activities, including regulatory trials,
sales and marketing, and international operations, in order to reduce costs and
sustain the business, and would have a material adverse effect on our business
and financial condition.
We do not have
the necessary regulatory approvals to market Microcyn as a drug in
the United
States.
We have
obtained six 510(k) clearances in the United States that permit us to sell
Microcyn-based products as medical devices. Before we are permitted to sell
Microcyn as a drug in the United States, we must, among other things,
successfully complete additional preclinical studies and well-controlled
clinical trials, submit a new drug application to the FDA and obtain FDA
approval.
The FDA
approval process is expensive and uncertain, requires detailed and comprehensive
scientific and other data and generally takes several years. Despite the time
and expense exerted, approval is never guaranteed. Even if we obtain FDA
approval to sell Microcyn as a drug, we may not be able to successfully
commercialize Microcyn as a drug in the United States and may never recover the
substantial costs we have invested in the development of our Microcyn-based
products.
Delays or adverse
results in clinical trials could result in increased costs to
us and could delay
our ability to generate revenue.
Clinical
trials can be long and expensive, and the outcome of clinical trials is
uncertain and subject to delays. It may take several years to complete clinical
trials, if at all, and a product candidate may fail at any stage of the clinical
trial process. The length of time required varies substantially according to the
type, complexity, novelty and intended use of the product candidate. Interim
results of a preclinical study or clinical trial do not necessarily predict
final results, and acceptable results in preclinical studies or early clinical
trials may not be repeatable in later subsequent clinical trials. The
commencement or completion of any of our clinical trials may be delayed or
halted for a variety of reasons, including the following:
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insufficient funds to continue
our clinical trials;
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changes in the FDA requirements
for approval, including requirements for testing efficacy or
safety;
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lack of FDA or other regulatory
authority approvals of a clinical trial
protocol;
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patients not enrolling in
clinical trials at the rate we
expect;
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delays in reaching agreement on
acceptable clinical trial agreement terms with prospective
sites;
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delays in obtaining institutional
review board approval to conduct a study at a prospective
site;
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third party clinical
investigators not performing our clinical trials on our anticipated
schedule or consistent with the clinical trial protocol and good clinical
practices, or the third party organizations not performing data collection
and analysis in a timely or accurate
manner; and
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changes in governmental
regulations or administrative
actions.
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We do not
know whether future clinical trials will demonstrate safety and efficacy
sufficiently to result in additional FDA approvals. While a number of physicians
have conducted clinical studies assessing the safety and efficacy of Microcyn
for various indications, the data from these studies are not sufficient to
support approval of Microcyn as a drug in the United States.
The FDA
and other regulatory bodies may also change standards and acceptable trial
procedures required for a showing of safety and efficacy. For example, until
recently, the FDA accepted non-inferiority clinical trials, or clinical trials
that show that a new treatment is equivalent to standard treatment, as the
standard for anti-infective drug approvals. On October 12, 2007, the FDA
released draft guidance entitled Antibacterial Drug Products: Use of
Non-inferiority Studies to Support Approval. This new agency guidance requires
either placebo-controlled or superiority trial designs, which are designed to
test whether, and to what extent, a new treatment is better than the placebo.
The uncertainty of clinical trial protocols and changes within FDA guidelines
could have a negative impact on the timelines and milestones for our clinical
program.
If we fail to
obtain, or experience significant
delays in obtaining
additional regulatory
clearances or approvals to market our current or
future products, we may be unable to
commercialize these products.
The
developing, testing, manufacturing, marketing and selling of medical technology
products are subject to extensive regulation by numerous governmental
authorities in the United States and other countries. The process of obtaining
regulatory clearance and approval of medical technology products is costly and
time consuming. Even though the underlying product formulation may be the same
or similar, our products are subject to different regulations and approval
processes depending upon their intended use.
To obtain
regulatory approval of our products as drugs in the United States, we must first
show that our products are safe and effective for target indications through
preclinical studies (laboratory and animal testing) and clinical trials (human
testing). The FDA generally clears marketing of a medical device through the
510(k) pre-market clearance process if it is demonstrated that the new product
has the same intended use and the same or similar technological characteristics
as another legally marketed Class II device, such as a device already
cleared by the FDA through the 510(k) premarket notification process, and
otherwise meets the FDA’s requirements. Product modifications, including
labeling the product for a new intended use, may require the submission of a new
510(k) clearance and FDA approval before the modified product can be
marketed.
The
outcomes of clinical trials are inherently uncertain. In addition, we do not
know whether the necessary approvals or clearances will be granted or delayed
for future products. The FDA could request additional information, changes to
formulation or clinical testing that could adversely affect the time to market
and sale of products as drugs. If we do not obtain the requisite regulatory
clearances and approvals, we will be unable to commercialize our products as
drugs or devices and may never recover any of the substantial costs we have
invested in the development of Microcyn.
Distribution
of our products outside the United States is subject to extensive government
regulation. These regulations, including the requirements for approvals or
clearance to market, the time required for regulatory review and the sanctions
imposed for violations, vary from country to country. We do not know whether we
will obtain regulatory approvals in such countries or that we will not be
required to incur significant costs in obtaining or maintaining these regulatory
approvals. In addition, the export by us of certain of our products that have
not yet been cleared for domestic commercial distribution may be subject to FDA
export restrictions. Failure to obtain necessary regulatory approvals, the
restriction, suspension or revocation of existing approvals or any other failure
to comply with regulatory requirements would have a material adverse effect on
our future business, financial condition, and results of
operations.
If our products
do not gain market acceptance, our business will suffer because
we might not be able
to fund future operations.
A number
of factors may affect the market acceptance of our products or any other
products we develop or acquire, including, among others:
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the price of our products
relative to other treatments for the same or similar
treatments;
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the perception by patients,
physicians and other members of the health care community of the
effectiveness and safety of our products for their indicated applications
and treatments;
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our ability to fund our sales and
marketing efforts; and
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the effectiveness of our sales
and marketing efforts.
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If our
products do not gain market acceptance, we may not be able to fund future
operations, including developing, testing and obtaining regulatory approval for
new product candidates and expanding our sales and marketing efforts for our
approved products, which would cause our business to suffer.
If our
competitors develop products similar to Microcyn, we may need to modify
or alter our
business strategy, which may delay the achievement of our
goals.
Competitors
may develop products with similar characteristics to Microcyn. Such similar
products marketed by larger competitors can hinder our efforts to penetrate the
market. As a result, we may be forced to modify or alter our business and
regulatory strategy and sales and marketing plans, as a response to changes in
the market, competition and technology limitations, among others. Such
modifications may pose additional delays in achieving our goals.
We intend to
license or collaborate with third parties in various potential
markets, and events
involving these strategic partners or any future collaboration
could delay or prevent
us from developing or commercializing products.
Our
business strategy and our short- and long-term operating results will depend in
part on our ability to execute on existing strategic collaborations and to
license or partner with new strategic partners. We believe collaborations allow
us to leverage our resources and technologies and to access markets that are
compatible with our own core areas of expertise while avoiding the cost of
establishing or maintaining a direct sales force in each market. We may incur
significant costs in the use of third parties to identify and assist in
establishing relationships with potential collaborators.
To
penetrate our target markets, we may need to enter into additional collaborative
agreements to assist in the development and commercialization of products. For
example, depending upon our analysis of the time and expense involved in
obtaining FDA approval to sell a product to treat open wounds, we may choose to
license our technology to a third party as opposed to pursuing commercialization
ourselves. Establishing strategic collaborations is difficult and
time-consuming. Potential collaborators may reject collaborations based upon
their assessment of our financial, regulatory or intellectual property position
and our internal capabilities. Our discussions with potential collaborators may
not lead to the establishment of new collaborations on favorable terms and may
have the potential to provide collaborators with access to our key intellectual
property filings and next generation formations. We have limited control over
the amount and timing of resources that our current collaborators or any future
collaborators devote to our collaborations or potential products. These
collaborators may breach or terminate their agreements with us or otherwise fail
to conduct their collaborative activities successfully and in a timely manner.
Further, our collaborators may not develop or commercialize products that arise
out of our collaborative arrangements or devote sufficient resources to the
development, manufacture, marketing or sale of these products. By entering into
collaboration, we may preclude opportunities to collaborate with other third
parties who do not wish to associate with our existing third party strategic
partners. Moreover, in the event of termination of a collaboration agreement,
termination negotiations may result in less favorable terms.
If we are unable
to expand our direct domestic sales force, we may not be able
to successfully sell
our products in the United States.
We have
very limited commercialization capability and make Microcyn-based products
available primarily through our website and several regional distributors. We
plan for a more aggressive commercialization and product launch in the event we
obtain drug approval from the FDA or obtain other clearance or approval with
wound healing claims. Developing a sales force is expensive and time consuming,
and the lack of qualified sales personnel could delay or limit the success of
our product launch. Our domestic sales force, if established, will be competing
with the sales operations of our competitors, which are better funded and more
experienced. We may not be able to develop domestic sales capacity on a timely
basis or at all.
Our dependence on
a commission-based sales force and distributors for sales could limit or prevent
us from selling our products and from
realizing long-term revenue growth.
We
currently depend on a commission-based sales force and distributors to sell
Microcyn in the United States, Europe and other countries and intend to continue
to sell our products primarily through a commission-based sales force and
distributors in Europe and the United States for the foreseeable future. If we
are unable to expand our direct sales force, we will continue to rely on a
commission-based sales force and distributors to sell Microcyn. Our existing
commission-based sales force and distribution agreements are generally
short-term in duration and we may need to pursue alternate partners if the other
parties to these agreements terminate or elect not to renew their agreements. If
we are unable to retain our current commission-based sales force and
distributors for any reason, we must replace them with alternate salespeople and
distributors experienced in supplying the wound care market, which could be
time-consuming and divert management’s attention from other operational matters.
In addition, we will need to attract additional distributors to expand the
geographic areas in which we sell Microcyn. Distributors may not commit the
necessary resources to market and sell our products at the level of our
expectations, which could harm our ability to generate revenues. In addition,
some of our distributors may also sell products that compete with ours. In some
countries, regulatory licenses must be held by residents of the country. For
example, the regulatory approval for one product in India is owned and held by
our Indian distributor. If the licenses are not in our name or under our
control, we might not have the power to ensure their ongoing effectiveness and
use by us. If current or future distributors do not perform adequately, or we
are unable to locate distributors in particular geographic areas, we may not
realize long-term revenue growth.
If we fail to
comply with ongoing regulatory requirements, or if we
experience unanticipated
problems with our products, these products could be subject to restrictions or
withdrawal from the market.
Regulatory
approvals or clearances that we currently have and that we may receive in the
future are subject to limitations on the indicated uses for which the products
may be marketed, and any future approvals could contain requirements for
potentially costly post-marketing follow-up studies. If the FDA determines that
our promotional materials or activities constitute promotion of an unapproved
use or we otherwise fail to comply with FDA regulations, we may be subject to
regulatory enforcement actions, including a warning letter, injunction, seizure,
civil fines or criminal penalty. In addition, the manufacturing, labeling,
packaging, adverse event reporting, storing, advertising, promoting,
distributing and record-keeping for approved products are subject to extensive
regulation. Our manufacturing facilities, processes and specifications are
subject to periodic inspection by the FDA, European and other regulatory
authorities and from time to time, we may receive notices of deficiencies from
these agencies as a result of such inspections. Our failure to continue to meet
regulatory standards or to remedy any deficiencies could result in restrictions
being imposed on our products or manufacturing processes, fines, suspension or
loss of regulatory approvals or clearances, product recalls, termination of
distribution, product seizures or the need to invest substantial resources
to comply with various existing and new requirements. In the more egregious
cases, criminal sanctions, civil penalties, disgorgement of profits or closure
of our manufacturing facilities are possible. The subsequent discovery of
previously unknown problems with Microcyn, including adverse events of
unanticipated severity or frequency, may result in restrictions on the marketing
of our products, and could include voluntary or mandatory recall or withdrawal
of products from the market.
New
government regulations may be enacted and changes in FDA policies and
regulations and, their interpretation and enforcement, could prevent or delay
regulatory approval of our products. We cannot predict the likelihood, nature or
extent of adverse government regulation that may arise from future legislation
or administrative action, either in the United States or abroad. Therefore, we
do not know whether we will be able to continue to comply with any regulations
or that the costs of such compliance will not have a material adverse effect on
our future business, financial condition, and results of operations. If we are
not able to maintain regulatory compliance, we will not be permitted to market
our products and our business would suffer.
We may experience
difficulties in manufacturing Microcyn, which could prevent us
from commercializing
one or more of our products.
The
machines used to manufacture our Microcyn-based products are complex, use
complicated software and must be monitored by highly trained engineers. Slight
deviations anywhere in our manufacturing process, including quality control,
labeling and packaging, could lead to a failure to meet the specifications
required by the FDA, the Environmental Protection Agency, European notified
bodies, Mexican regulatory agencies and other foreign regulatory bodies, which
may result in lot failures or product recalls. If we are unable to obtain
quality internal and external components, mechanical and electrical parts, if
our software contains defects or is corrupted, or if we are unable to attract
and retain qualified technicians to manufacture our products, our manufacturing
output of Microcyn, or any other product candidate based on our platform that we
may develop, could fail to meet required standards, our regulatory approvals
could be delayed, denied or revoked, and commercialization of one or more of our
Microcyn-based products may be delayed or foregone. Manufacturing processes that
are used to produce the smaller quantities of Microcyn needed for clinical tests
and current commercial sales may not be successfully scaled up to allow
production of significant commercial quantities. Any failure to manufacture our
products to required standards on a commercial scale could result in reduced
revenues, delays in generating revenue and increased costs.
Our competitive
position depends on our ability to protect our intellectual
property and our
proprietary technologies.
Our
ability to compete and to achieve and maintain profitability depends on our
ability to protect our intellectual property and proprietary technologies. We
currently rely on a combination of patents, patent applications, trademarks,
trade secret laws, confidentiality agreements, license agreements and invention
assignment agreements to protect our intellectual property rights. We also rely
upon unpatented know-how and continuing technological innovation to develop and
maintain our competitive position. These measures may not be adequate to
safeguard our Microcyn Technology. In addition, we granted a security interest
in our assets, excluding our intellectual property under certain circumstances,
under a loan and security agreement. If we do not protect our rights adequately,
third parties could use our technology, and our ability to compete in the market
would be reduced.
Although
we have filed U.S. and foreign patent applications related to our
Microcyn-based products, the manufacturing technology for making the products,
and their uses, to date only two U.S. patents have been issued from these
applications.
Our
pending patent applications and any patent applications we may file in the
future may not result in issued patents, and we do not know whether any of our
in-licensed patents or any additional patents that might ultimately be issued by
the U.S. Patent and Trademark Office or foreign regulatory body will
protect our Microcyn technology. Any claims that are issued may not be
sufficiently broad to prevent third parties from producing competing substitutes
and may be infringed, designed around, or invalidated by third parties. Even
issued patents may later be found to be invalid, or may be modified or revoked
in proceedings instituted by third parties before various patent offices or in
courts. For example, our European patent that was issued on May 30, 2007, was
revoked by the Opposition Division of the European Patent Office in December,
2009 following opposition proceedings instituted by a competitor.
The
degree of future protection for our proprietary rights is more uncertain in part
because legal means afford only limited protection and may not adequately
protect our rights, and we will not be able to ensure that:
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we were the first to invent the
inventions described in patent
applications;
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we were the first to file patent
applications for
inventions;
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others will not independently
develop similar or alternative technologies or duplicate our products
without infringing our intellectual property
rights;
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any patents licensed or issued to
us will provide us with any competitive
advantages;
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we will develop proprietary
technologies that are
patentable; or
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the patents of others will not
have an adverse effect on our ability to do
business.
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The
policies we use to protect our trade secrets may not be effective in preventing
misappropriation of our trade secrets by others. In addition, confidentiality
and invention assignment agreements executed by our employees, consultants and
advisors may not be enforceable or may not provide meaningful protection for our
trade secrets or other proprietary information in the event of unauthorized use
or disclosures. We cannot be certain that the steps we have taken will prevent
the misappropriation and use of our intellectual property in the United States,
or in foreign countries where the laws may not protect our proprietary rights as
fully as in the United States.
We may face
intellectual property infringement claims that could be
time-consuming, costly to defend
and could result in our loss of significant rights and, in the
case of patent
infringement claims, the assessment of treble damages.
On
occasion, we may receive notices of claims of infringement, misappropriation or
misuse of other parties’ proprietary rights. We may have disputes regarding
intellectual property rights with the parties that have licensed those rights to
us. We may also initiate claims to defend our intellectual property.
Intellectual property litigation, regardless of its outcome, is expensive and
time-consuming, could divert management’s attention from our business and have a
material negative effect on our business, operating results or financial
condition. In addition, the outcome of such litigation may be unpredictable. If
there is a successful claim of infringement against us, we may be required to
pay substantial damages (including treble damages if we were to be found to have
willfully infringed a third party’s patent) to the party claiming infringement,
develop non-infringing technology, stop selling our products or using technology
that contains the allegedly infringing intellectual property or enter into
royalty or license agreements that may not be available on acceptable or
commercially practical terms, if at all. Our failure to develop non-infringing
technologies or license the proprietary rights on a timely basis could harm our
business. In addition, modifying our products to exclude infringing technologies
could require us to seek re-approval or clearance from various regulatory bodies
for our products, which would be costly and time consuming. Also, we may be
unaware of pending patent applications that relate to our technology. Parties
making infringement claims on future issued patents may be able to obtain an
injunction that would prevent us from selling our products or using technology
that contains the allegedly infringing intellectual property, which could harm
our business.
Our ability to
generate revenue will be diminished if we are unable to obtain acceptable prices
or an adequate level of reimbursement from third-party payors
of healthcare
costs.
The
continuing efforts of governmental and other third-party payors, including
managed care organizations such as health maintenance organizations, or HMOs, to
contain or reduce costs of health care may affect our future revenue and
profitability, and the future revenue and profitability of our potential
customers, suppliers and collaborative or license partners and the availability
of capital. For example, in certain foreign markets, pricing or profitability of
prescription pharmaceuticals is subject to government control. In the United
States, governmental and private payors have limited the growth of health care
costs through price regulation or controls, competitive pricing programs and
drug rebate programs. Our ability to commercialize our products successfully
will depend in part on the extent to which appropriate coverage and
reimbursement levels for the cost of our Microcyn products and related treatment
are obtained from governmental authorities, private health insurers and other
organizations, such as HMOs.
There is
significant uncertainty concerning third-party coverage and reimbursement of
newly approved medical products and drugs. Third-party payors are increasingly
challenging the prices charged for medical products and services. Also, the
trend toward managed healthcare in the United States and the concurrent growth
of organizations such as HMOs, as well as legislative proposals to reform
healthcare or reduce government insurance programs, may result in lower prices
for or rejection of our products. The cost containment measures that health care
payors and providers are instituting and the effect of any health care reform
could materially and adversely affect our ability to generate
revenues.
In
addition, given ongoing federal and state government initiatives directed at
lowering the total cost of health care, the United States Congress and state
legislatures will likely continue to focus on health care reform, the cost of
prescription pharmaceuticals and the reform of the Medicare and Medicaid payment
systems. While we cannot predict whether any proposed cost-containment measures
will be adopted, the announcement or adoption of these proposals could reduce
the price that we receive for our Microcyn products in the
future.
We could be
required to indemnify third parties for alleged infringement, which
could cause us to incur
significant costs.
Some of
our distribution agreements contain commitments to indemnify our distributors
against liability arising from infringement of third party intellectual property
such as patents. We may be required to indemnify our customers for claims made
against them or license fees they are required to pay. If we are forced to
indemnify for claims or to pay license fees, our business and financial
condition could be substantially harmed.
A significant
part of our business is conducted outside of the United
States, exposing us to
additional risks that may not exist in the United States, which
in turn could cause
our business and operating results to suffer.
We have
international operations in Mexico and Europe. During the year ended
March 31, 2010 approximately 69% of our total revenues were generated from
sales outside of the United States and during the year ended March 31, 2009,
approximately 76% of our total revenues were generated from sales outside of the
United States. Our business is highly regulated for the use, marketing and
manufacturing of our Microcyn-based products both domestically and
internationally. Our international operations are subject to risks,
including:
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local political or economic
instability;
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changes in governmental
regulation;
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changes in import/export
duties;
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lack of experience in foreign
markets;
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difficulties and costs of
staffing and managing operations in certain foreign
countries;
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work stoppages or other changes
in labor conditions;
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difficulties in collecting
accounts receivables on a timely basis or at
all; and
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adverse tax consequences or
overlapping tax structures.
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We plan
to continue to market and sell our products internationally to respond to
customer requirements and market opportunities. We currently have international
manufacturing facilities in Mexico and the United States. Establishing
operations in any foreign country or region presents risks such as those
described above as well as risks specific to the particular country or region.
In addition, until a payment history is established over time with customers in
a new geographical area or region, the likelihood of collecting receivables
generated by such operations could be lower than our expectations. As a
result, there is a greater risk that reserves set with respect to the collection
of such receivables may be inadequate. If our operations in any foreign
country are unsuccessful, we could incur significant losses and we may not
achieve profitability.
In
addition, changes in policies or laws of the United States or foreign
governments resulting in, among other things, changes in regulations and the
approval process, higher taxation, currency conversion limitations, restrictions
on fund transfers or the expropriation of private enterprises, could reduce the
anticipated benefits of our international expansion. If we fail to realize the
anticipated revenue growth of our future international operations, our business
and operating results could suffer.
Our sales in
international markets subject us to foreign currency exchange and
other risks and costs
which could harm our business.
A
substantial portion of our revenues are derived from outside the United States;
primarily from Mexico. We anticipate that revenues from international customers
will continue to represent a substantial portion of our revenues for the
foreseeable future. Because we generate revenues in foreign currencies, we are
subject to the effects of exchange rate fluctuations. The functional currency of
our Mexican subsidiary is the Mexican Peso. For the preparation of our
consolidated financial statements, the financial results of our foreign
subsidiaries are translated into U.S. dollars on average exchange rates
during the applicable period. If the U.S. dollar appreciates against the
Mexican Peso or the Euro, as applicable, the revenues we recognize from sales by
our subsidiaries will be adversely impacted. Foreign exchange gains or losses as
a result of exchange rate fluctuations in any given period could harm our
operating results and negatively impact our revenues. Additionally, if the
effective price of our products were to increase as a result of fluctuations in
foreign currency exchange rates, demand for our products could decline and
adversely affect our results of operations and financial
condition.
We
rely on a number of key customers who may not consistently purchase our products
in the future and if we lose any one of these customers, our revenues may
decline.
Although
we have a significant number of customers in each of the geographic markets that
we operate in, we rely on certain key customers for a significant portion of our
sales. During the year ended March 31, 2010 three customers
represented 23% of sales, and during the year ended March 31, 2009, three
customers represented 21% of sales. In the future, a small number of
customers may continue to represent a significant portion of our total revenues
in any given period. These customers may not consistently purchase our products
at a particular rate over any subsequent period. A loss of any of these
customers could adversely affect our revenues.
Negative
economic conditions increase the risk that we could suffer unrecoverable losses
on our customers’ accounts receivable which would adversely affect our financial
results.
We grant
credit to our business customers, which are primarily located in Mexico, Europe
and the United States. Collateral is generally not required for trade
receivables. We maintain allowances for potential credit losses. Three
customers represented a total of 42% of our net accounts receivable balance at
March 31, 2010, and two customers represented 29% of our net accounts receivable
balance at March 31, 2009. While we believe we have a varied customer
base and have experienced strong collections in the past, if current economic
conditions disproportionately impact any one of our key customers, including
reductions in their purchasing commitments to us or their ability to pay their
obligations, it could have a material adverse effect on our revenues and
liquidity. We have not purchased insurance on our accounts receivable
balances.
The loss of key
members of our senior management team, one of our directors or
our inability to
retain highly skilled scientists, technicians and salespeople
could adversely affect
our business.
Our
success depends largely on the skills, experience and performance of key members
of our executive management team, including Hojabr Alimi, our Chief Executive
Officer and Robert Northey, our Director of Research and Development. The
efforts of these people will be critical to us as we continue to develop our
products and attempt to commercialize products in the wound and skin care
markets. If we were to lose one or more of these individuals, we may experience
difficulties in competing effectively, developing our technologies and
implementing our business strategies.
Our
research and development programs depend on our ability to attract and retain
highly skilled scientists and technicians. We may not be able to attract or
retain qualified scientists and technicians in the future due to the intense
competition for qualified personnel among medical technology businesses,
particularly in the San Francisco Bay Area. We also face competition from
universities and public and private research institutions in recruiting and
retaining highly qualified personnel. In addition, our success depends on our
ability to attract and retain salespeople with extensive experience in wound
care and close relationships with the medical community, including physicians
and other medical staff. We may have difficulties locating, recruiting or
retaining qualified salespeople, which could cause a delay or decline in the
rate of adoption of our products. If we are not able to attract and retain the
necessary personnel to accomplish our business objectives, we may experience
constraints that will adversely affect our ability to support our research,
development and sales programs.
We
maintain key-person life insurance only on Mr. Alimi. We may discontinue
this insurance in the future, it may not continue to be available on
commercially reasonable terms or, if continued, it may prove inadequate to
compensate us for the loss of Mr. Alimi’s
services.
The wound care
industry is highly competitive and subject to rapid
technological change. If our
competitors are better able to develop and market products that
are less expensive or
more effective than any products that we may develop, our commercial
opportunity will be reduced or eliminated.
Our
success depends, in part, upon our ability to stay at the forefront of
technological change and maintain a competitive position. We compete with large
healthcare, pharmaceutical and biotechnology companies, along with smaller or
early-stage companies that have collaborative arrangements with larger
pharmaceutical companies, academic institutions, government agencies and other
public and private research organizations. Many of our competitors have
significantly greater financial resources and expertise in research and
development, manufacturing, pre-clinical testing, conducting clinical trials,
obtaining regulatory approvals and marketing approved products than we do. Our
competitors may:
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develop and patent processes or
products earlier than we
will;
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develop and commercialize
products that are less expensive or more efficient than any products that
we may develop;
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obtain regulatory approvals for
competing products more rapidly than we
will; and
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improve upon existing
technological approaches or develop new or different approaches that
render our technology or products obsolete or
non-competitive.
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As a
result, we may not be able to successfully commercialize any future
products.
The success of
our research and development efforts may depend on our ability to
find suitable
collaborators to fully exploit our capabilities. If we are unable
to establish
collaborations or if these future collaborations are unsuccessful,
our research and
development efforts may be unsuccessful, which could adversely
affect our results of
operations and financial condition.
An
important element of our business strategy will be to enter into collaborative
or license arrangements under which we license our Microcyn Technology to other
parties for development and commercialization. We expect that while we may
initially seek to conduct initial clinical trials on our drug candidates, we may
need to seek collaborators for our drug candidates and for a number of our
potential products because of the expense, effort and expertise required to
conduct additional clinical trials and further develop those potential product
candidates. Because collaboration arrangements are complex to negotiate, we may
not be successful in our attempts to establish these arrangements. If we need
third party assistance in identifying and negotiating one or more acceptable
arrangements, it might be costly. Also, we may not have products that are
desirable to other parties, or we may be unwilling to license a potential
product because the party interested in it is a competitor. The terms of any
arrangements that we establish may not be favorable to us. Alternatively,
potential collaborators may decide against entering into an agreement with us
because of our financial, regulatory or intellectual property position or for
scientific, commercial or other reasons. If we are not able to establish
collaborative agreements, we may not be able to develop and commercialize new
products, which would adversely affect our business and our
revenues.
In order
for any of these collaboration or license arrangements to be successful, we must
first identify potential collaborators or licensees whose capabilities
complement and integrate well with ours. We may rely on these arrangements for
not only financial resources, but also for expertise or economies of scale that
we expect to need in the future relating to clinical trials, manufacturing,
sales and marketing, and for licenses to technology rights. However, it is
likely that we will not be able to control the amount and timing or resources
that our collaborators or licensees devote to our programs or potential
products. If our collaborators or licensees prove difficult to work with, are
less skilled than we originally expected, or do not devote adequate resources to
the program, the relationship will not be successful. If a business combination
involving a collaborator or licensee and a third party were to occur, the effect
could be to diminish, terminate or cause delays in development of a potential
product.
If we are unable
to comply with broad and complex federal and state fraud and
abuse laws, including
state and federal anti-kickback laws, we could face
substantial penalties and our
products could be excluded from government healthcare
programs.
We are
subject to various federal and state laws pertaining to healthcare fraud and
abuse, which include, among other things, “anti-kickback” laws that prohibit
payments to induce the referral of products and services, and “false claims”
statutes that prohibit the fraudulent billing of federal healthcare programs.
Our operations are subject to the Federal Anti-Kickback Statute, a criminal
statute that, subject to certain statutory exceptions, prohibits any person from
knowingly and willfully offering, paying, soliciting or receiving remuneration,
directly or indirectly, to induce or reward a person either (i) for
referring an individual for the furnishing of items or services for which
payment may be made in whole or in part by a government healthcare program such
as Medicare or Medicaid, or (ii) for purchasing, leasing, ordering or
arranging for or recommending the purchasing, leasing or ordering of an item or
service for which payment may be made under a government healthcare program.
Because of the breadth of the federal anti-kickback statute, the Office of
Inspector General of the U.S. Department of Health and Human Services, was
authorized to adopt regulations setting forth additional exceptions to the
prohibitions of the statute commonly known as “safe harbors.” If all of the
elements of an applicable safe harbor are fully satisfied, an arrangement will
not be subject to prosecution under the federal anti-kickback
statute.
In
addition, if there is a change in law, regulation or administrative or judicial
interpretations of these laws, we may have to change our business practices or
our existing business practices could be challenged as unlawful, which could
have a negative effect on our business, financial condition and results of
operations.
Healthcare
fraud and abuse laws are complex, and even minor, inadvertent irregularities can
potentially give rise to claims that a statute or regulation has been violated.
The frequency of suits to enforce these laws has increased significantly in
recent years and has increased the risk that a healthcare company will have to
defend a false claim action, pay fines or be excluded from the Medicare,
Medicaid or other federal and state healthcare programs as a result of an
investigation arising out of such action. We cannot assure you that we will not
become subject to such litigation. Any violations of these laws, or any action
against us for violation of these laws, even if we successfully defend against
it, could harm our reputation, be costly to defend and divert management’s
attention from other aspects of our business. Similarly, if the physicians or
other providers or entities with which we do business are found to have violated
abuse laws, they may be subject to sanctions, which could also have a negative
impact on us.
Our efforts to
discover and develop potential products may not lead to the
discovery, development,
commercialization or marketing of actual drug products.
We are
currently engaged in a number of different approaches to discover and develop
new product applications and product candidates. At the present time, we have
one Microcyn-based drug candidate in clinical trials. We also have a
non-Microcyn-based compound in the research and development phase. We believe
this compound has potential applications in oncology. Discovery and development
of potential drug candidates are expensive and time-consuming, and we do not
know if our efforts will lead to discovery of any drug candidates that can be
successfully developed and marketed. If our efforts do not lead to the discovery
of a suitable drug candidate, we may be unable to grow our clinical pipeline or
we may be unable to enter into agreements with collaborators who are willing to
develop our drug candidates.
We must maintain
expensive finance and accounting systems, procedures and controls
to accommodate
growth of our business and organization and to satisfy public
company reporting
requirements, which will increase our costs and require
additional management
resources.
As a
public reporting company, we are required to comply with the Sarbanes-Oxley Act
of 2002 and the related rules and regulations of the Securities and Exchange
Commission. Section 404 of the Sarbanes-Oxley Act of 2002, or
Section 404, requires our management to perform an annual assessment of our
internal control over financial reporting. Compliance with Section 404 and
other requirements of doing business as a public company have increased and will
continue to increase our costs and require additional management resources to
implement an ongoing program to perform system and process evaluation and
testing of our internal controls. In the past, we entered into transactions that
resulted in accounting consequences that we did not identify at the time of the
transactions. As a result, our prior independent auditors informed us that we
did not have the appropriate financial management and reporting structure in
place to meet the demands of a public company and that our accounting and
financial personnel lacked the appropriate level of accounting knowledge,
experience and training. In calendar year 2006, our current independent auditors
recommended certain changes which, in addition to other changes in our financial
reporting and management structure, have been implemented at additional cost. We
have upgraded our accounting systems, procedures and controls and will need to
continue to implement additional finance and accounting systems, procedures and
controls as we grow our business and organization, enter into complex business
transactions and take actions designed to satisfy reporting requirements. Our
management has concluded that our internal controls are adequate to meet the
required Section 404 assessment. If we are unable to complete the required
Section 404 assessment as to adequacy of our internal control over
financial reporting in future Form 10-K filings, our ability to obtain
additional financing could be impaired. In addition, investors could lose
confidence in the reliability of our internal control over financial reporting
and in the accuracy of our periodic reports filed under the Securities Exchange
Act of 1934. A lack of investor confidence in the reliability and accuracy of
our public reporting could cause our stock price to decline.
We may not be
able to maintain sufficient product liability insurance to cover
claims against
us.
Product
liability insurance for the healthcare industry is generally expensive to the
extent it is available at all. We may not be able to maintain such insurance on
acceptable terms or be able to secure increased coverage if the
commercialization of our products progresses, nor can we be sure that existing
or future claims against us will be covered by our product liability insurance.
Moreover, the existing coverage of our insurance policy or any rights of
indemnification and contribution that we may have may not be sufficient to
offset existing or future claims. A successful claim against us with respect to
uninsured liabilities or in excess of insurance coverage and not subject to any
indemnification or contribution could have a material adverse effect on our
future business, financial condition, and results of
operations.
Risks
Related to Our Common Stock
Our
operating results may fluctuate, which could cause our stock price to
decrease.
Fluctuations
in our operating results may lead to fluctuations, including declines, in our
share price. Our operating results and our share price may fluctuate from period
to period due to a variety of factors, including:
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demand by physicians, other
medical staff and patients for our Microcyn-based
products;
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reimbursement decisions by
third-party payors and announcements of those
decisions;
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clinical trial results and
publication of results in peer-reviewed journals or the presentation at
medical conferences;
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the inclusion or exclusion of our
Microcyn-based products in large clinical trials conducted by
others;
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actual and anticipated
fluctuations in our quarterly financial and operating
results;
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developments or disputes
concerning our intellectual property or other proprietary
rights;
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issues in manufacturing our
product candidates or
products;
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new or less expensive products
and services or new technology introduced or offered by our competitors or
us;
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the development and
commercialization of product
enhancements;
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changes in the regulatory
environment;
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delays in establishing new
strategic relationships;
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costs associated with
collaborations and new product
candidates;
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introduction of technological
innovations or new commercial products by us or our
competitors;
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litigation or public concern
about the safety of our product candidates or
products;
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changes in recommendations of
securities analysts or lack of analyst
coverage;
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failure to meet analyst
expectations regarding our operating
results;
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additions or departures of key
personnel; and
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general market
conditions.
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Variations
in the timing of our future revenues and expenses could also cause significant
fluctuations in our operating results from period to period and may result in
unanticipated earning shortfalls or losses. In addition, the NASDAQ Capital
Market, in general, and the market for life sciences companies, in particular,
have experienced significant price and volume fluctuations that have often been
unrelated or disproportionate to the operating performance of those
companies.
If an active,
liquid trading market for our common stock does not develop, you
may not be able to
sell your shares quickly or at or above the price you paid for
it.
Although
our common stock is listed on the NASDAQ Capital Market, an active and liquid
trading market for our common stock has not yet and may not ever develop or be
sustained. You may not be able to sell your shares quickly or at or above the
price you paid for our stock if trading in our stock is not
active.
Anti-takeover
provisions in our charter and by-laws and under Delaware law may
make it more difficult
for stockholders to change our management and may also make a takeover
difficult.
Our
corporate documents and Delaware law contain provisions that limit the ability
of stockholders to change our management and may also enable our management to
resist a takeover. These provisions include:
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the ability of our board of
directors to issue and designate the rights of, without stockholder
approval, up to 5,000,000 shares of convertible preferred stock,
which rights could be senior to those of common
stock;
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limitations on persons authorized
to call a special meeting of
stockholders; and
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advance notice procedures
required for stockholders to make nominations of candidates for election
as directors or to bring matters before meetings of
stockholders.
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These
provisions might discourage, delay or prevent a change of control in our
management. These provisions could also discourage proxy contests and make it
more difficult for you and other stockholders to elect directors and cause us to
take other corporate actions. In addition, the existence of these provisions,
together with Delaware law, might hinder or delay an attempted takeover other
than through negotiations with our board of directors.
Our stockholders
may experience substantial dilution in the value of their
investment if we issue
additional shares of our capital stock or other securities convertible into
common stock.
Our
charter allows us to issue up to 100,000,000 shares of our common stock and
to issue and designate the rights of, without stockholder approval, up to
5,000,000 shares of convertible preferred stock. In the event we issue
additional shares of our capital stock, dilution to our stockholders could
result. In addition, if we issue and designate a class of convertible preferred
stock, these securities may provide for rights, preferences or privileges senior
to those of holders of our common stock.
FORWARD-LOOKING
STATEMENTS
When used
in this prospectus, the words “expects,” “believes,” “anticipates,” “estimates,”
“may,” “could,” “intends,” and similar expressions are intended to identify
forward-looking statements. These statements are subject to known and unknown
risks and uncertainties that could cause actual results to differ materially
from those projected or otherwise implied by the forward-looking statements.
These forward-looking statements speak only as of the date of this prospectus.
Given these risks and uncertainties, you should not place undue reliance on
these forward-looking statements. We have discussed many of these risks and
uncertainties in greater detail in any prospectus supplement under the heading
“Risk Factors.” Additional cautionary statements or discussions of risks and
uncertainties that could affect our results or the achievement of the
expectations described in forward-looking statements may also be contained in
the documents we incorporate by reference into this
prospectus.
These
forward-looking statements speak only as of the date of this prospectus. We
expressly disclaim any obligation or undertaking to release publicly any updates
or revisions to any forward-looking statements contained herein to reflect any
change in our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based. You should,
however, review additional disclosures we make in our Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K filed with the
SEC.
USE
OF PROCEEDS
Unless we
state otherwise in the accompanying prospectus supplement, we intend to use the
net proceeds from the sale of the securities offered by this prospectus for
general corporate purposes. General corporate purposes may include clinical
trials, additions to working capital, research and development, financing of
capital expenditures, repayment or redemption of existing indebtedness, and
future acquisitions and strategic investment opportunities. Pending the
application of net proceeds, we expect to invest the net proceeds in
interest-bearing securities.
DESCRIPTION
OF COMMON STOCK
This
section describes the general terms and provisions of the shares of our common
stock, par value $0.0001 per share. This description is only a summary and is
qualified in its entirety by reference to the description of our common stock
incorporated by reference in this prospectus. Our Restated Certificate of
Incorporation and our Amended and Restated Bylaws, as Amended have been filed as
exhibits to our periodic reports filed with the SEC, which are incorporated by
reference in this prospectus. You should read our Restated Certificate of
Incorporation and our Amended and Restated Bylaws, as Amended for additional
information before you buy any of our common stock or other securities. See
“Where You Can Find More Information.”
We have
100,000,000 shares of authorized common stock. As of December 21, 2010,
there were 26,463,726 shares of common stock issued and outstanding. Each
holder of common stock is entitled to one vote for each share of common stock
held on all matters submitted to a vote of stockholders. We have not provided
for cumulative voting for the election of directors in our Restated Certificate
of Incorporation. This means that the holders of a majority of the shares voted
can elect all of the directors then standing for election. Subject to
preferences that may apply to shares of preferred stock outstanding at the time,
the holders of outstanding shares of our common stock are entitled to receive
dividends out of assets legally available at the times and in the amounts that
our board of directors may determine from time to time. Upon our liquidation,
dissolution or winding-up, the holders of common stock are entitled to
share ratably in all assets remaining after payment of all liabilities and the
liquidation preferences of any outstanding preferred stock. Holders of common
stock have no preemptive or conversion rights or other subscription rights.
There are no redemption or sinking fund provisions applicable to the common
stock. All outstanding shares of common stock are fully paid and nonassessable,
and the shares of common stock offered, when issued, will be fully paid and
nonassessable.
Certain
Provisions of Delaware Law and of the Charter and Bylaws
The
provisions of Delaware law, our Restated Certificate of Incorporation and our
Amended and Restated Bylaws, as Amended described below may have the effect of
delaying, deferring or discouraging another party from acquiring control of
us.
Delaware Law. We
are subject to the provisions of Section 203 of the Delaware General
Corporation Law regulating corporate takeovers. In general, those provisions
prohibit a Delaware corporation from engaging in any business combination with
any interested stockholder for a period of three years following the date that
the stockholder became an interested stockholder, unless:
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the
transaction is approved by the board before the date the interested
stockholder attained that status;
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upon
consummation of the transaction that resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85%
of the voting stock of the corporation outstanding at the time the
transaction commenced; or
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on
or after the date the business combination is approved by the board and
authorized at a meeting of stockholders by at least two-thirds of the
outstanding voting stock that is not owned by the interested
stockholder.
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Section 203
defines “business combination” to include the following:
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any
merger or consolidation involving the corporation and the interested
stockholder;
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any
sale, transfer, pledge or other disposition of 10% or more of the assets
of the corporation involving the interested
stockholder;
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subject
to certain exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the
interested stockholder;
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any
transaction involving the corporation that has the effect of increasing
the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested
stockholder; or
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the
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation.
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In
general, Section 203 defines an interested stockholder as any entity or
person beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by any of these entities or persons.
A
Delaware corporation may opt out of these provisions either with an express
provision in its original certificate of incorporation or in an amendment to its
certificate of incorporation or bylaws approved by its stockholders. However, we
have not opted out, and do not currently intend to opt out of, these provisions.
The statute could prohibit or delay mergers or other takeover or change in
control attempts and, accordingly, may discourage attempts to acquire
us.
Charter and
Bylaws. Our Restated Certificate of Incorporation and Amended
and Restated Bylaws, as Amended provide that:
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our
bylaws may be amended or repealed only by a two-thirds vote of our board
of directors or a two-thirds stockholder
vote;
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no
action can be taken by stockholders except at an annual or special meeting
of the stockholders called in accordance with our bylaws, and stockholders
may not act by written consent;
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stockholders
may not call special meetings of the stockholders or fill vacancies on the
board;
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the
approval of holders of two-thirds of the shares entitled to vote at an
election of directors is required to amend or repeal the provisions of our
Restated Certificate of Incorporation regarding the inability of
stockholders to take action by written
consent;
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our
board of directors is authorized to issue preferred stock without
stockholder approval; and
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we
will indemnify officers and directors against losses that they may incur
in investigations and legal proceedings resulting from their services to
us, which may include services in connection with takeover defense
measures.
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DESCRIPTION
OF PREFERRED STOCK
As of
December 23, 2010, our authorized preferred stock, par value $0.0001 per share,
was 5,000,000 shares, none of which were issued and outstanding. We may
issue preferred stock, in series, with such designations, powers, preferences
and other rights and qualifications, limitations or restrictions as our board of
directors may authorize, without further action by our stockholders,
including:
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the
distinctive designation of each series and the number of shares that will
constitute the series;
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the
voting rights, if any, of shares of the series and the terms and
conditions of the voting rights;
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the
dividend rate on the shares of the series, the dates on which dividends
are payable, any restriction, limitation or condition upon the payment of
dividends, whether dividends will be cumulative, and the dates from and
after which dividends shall
accumulate;
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the
prices at which, and the terms and conditions on which, the shares of the
series may be redeemed, if the shares are
redeemable;
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the
terms and conditions of a sinking or purchase fund for the purchase or
redemption of shares of the series, if such a fund is
provided;
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any
preferential amount payable upon shares of the series in the event of the
liquidation, dissolution or winding up of, or upon the distribution of any
of our assets; and
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the
prices or rates of conversion or exchange at which, and the terms and
conditions on which, the shares of the series may be converted or
exchanged into other securities, if the shares are convertible or
exchangeable.
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The
particular terms of any series of preferred stock, and the transfer agent and
registrar for that series, will be described in a prospectus supplement. All
preferred stock offered, when issued, will be fully paid and nonassessable.
Any material United States federal income tax consequences and other
special considerations with respect to any preferred stock offered under this
prospectus will also be described in the applicable prospectus
supplement.
We may
issue warrants for the purchase of preferred stock, common stock, or any
combination thereof. We may issue warrants independently or together with any
other securities offered by any prospectus supplement and may be attached to or
separate from the other offered securities. Each series of warrants will be
issued under a separate warrant agreement to be entered into by us with a
warrant agent. The warrant agent will act solely as our agent in connection with
the warrants and will not assume any obligation or relationship of agency or
trust for or with any holders or beneficial owners of warrants. Further terms of
the warrants and the applicable warrant agreements will be set forth in the
applicable prospectus supplement.
The
applicable prospectus supplement relating to any particular issue of warrants
will describe the terms of the warrants, including, as applicable, the
following:
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the
title of the warrants;
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the
aggregate number of the warrants;
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the
price or prices at which the warrants will be
issued;
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the
designation, terms and number of shares of preferred stock or common stock
purchasable upon exercise of the
warrants;
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the
designation and terms of the offered securities, if any, with which the
warrants are issued and the number of the warrants issued with each
offered security;
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the
date, if any, on and after which the warrants and the related preferred
stock or common stock will be separately
transferable;
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the
price at which each share of preferred stock or common stock purchasable
upon exercise of the warrants may be
purchased;
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the
date on which the right to exercise the warrants shall commence and the
date on which that right shall
expire;
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the
minimum or maximum amount of the warrants which may be exercised at any
one time;
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information
with respect to book-entry procedures, if
any;
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a
discussion of certain federal income tax considerations;
and
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any
other terms of the warrants, including terms, procedures and limitations
relating to the exchange and exercise of the
warrants.
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We and
the warrant agent may amend or supplement the warrant agreement for a series of
warrants without the consent of the holders of the warrants issued thereunder to
effect changes that are not inconsistent with the provisions of the warrants and
that do not materially and adversely affect the interests of the holders of the
warrants.
DESCRIPTION
OF UNITS
As
specified in the applicable prospectus supplement, we may issue units consisting
of one or more shares of common stock or preferred stock, warrants or any
combination of such securities. In addition, the prospectus supplement relating
to units will describe the terms of any units we issue, including as
applicable:
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the
designation and terms of the units and the securities included in the
units;
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any
provision for the issuance, payment, settlement, transfer or exchange of
the units;
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the
date, if any, on and after which the units may be transferable
separately;
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whether
we will apply to have the units traded on a securities exchange or
securities quotation system;
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any
material United States federal income tax consequences;
and
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how,
for United States federal income tax purposes, the purchase price paid for
the units is to be allocated among the component
securities.
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We may
sell the securities offered by this prospectus to one or more underwriters or
dealers for public offering and sale by them or to investors directly or through
agents. The accompanying prospectus supplement will set forth the terms of the
offering and the method of distribution and will identify any firms acting as
underwriters, dealers or agents in connection with the offering,
including:
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the
name or names of any underwriters, dealers or
agents;
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the
purchase price of the securities and the proceeds to us from the
sale;
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any
underwriting discounts and other items constituting compensation to
underwriters, dealers or agents;
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any
public offering price;
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any
discounts or concessions allowed or re-allowed or paid to
dealers; and
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any
securities exchange or market on which the securities offered in the
prospectus supplement may be
listed.
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Only
those underwriters identified in such prospectus supplement are deemed to be
underwriters in connection with the securities offered in the prospectus
supplement.
The
distribution of the securities may be effected from time to time in one or more
transactions at a fixed price or prices, which may be changed, or at prices
determined as the applicable prospectus supplement specifies. The securities may
be sold through a rights offering, forward contracts or similar arrangements. In
connection with the sale of the securities, underwriters, dealers or agents may
be deemed to have received compensation from us in the form of underwriting
discounts or commissions and also may receive commissions from securities
purchasers for whom they may act as agent. Underwriters may sell the securities
to or through dealers, and the dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they may act as agent. Some of the underwriters, dealers
or agents who participate in the securities distribution may engage in other
transactions with, and perform other services for, us or our subsidiaries in the
ordinary course of business.
We will
provide in the applicable prospectus supplement information regarding any
underwriting discounts or other compensation that we pay to underwriters or
agents in connection with the securities offering, and any discounts,
concessions or commissions which underwriters allow to dealers. Underwriters,
dealers and agents participating in the securities distribution may be deemed to
be underwriters, and any discounts and commissions they receive and any profit
they realize on the resale of the securities may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933. Underwriters and
their controlling persons, dealers and agents may be entitled, under agreements
entered into with us, to indemnification against and contribution toward
specific civil liabilities, including liabilities under the Securities
Act.
The
securities may or may not be listed on a national securities exchange. In
connection with an offering, the underwriters may purchase and sell securities
in the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short
sales involve the sale by the underwriters of a greater number of securities
than they are required to purchase in an offering. Stabilizing transactions
consist of bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the securities while an offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a particular
underwriter repays to the underwriters a portion of the underwriting discount
received by it because the underwriters have repurchased securities sold by or
for the account of that underwriter in stabilizing or short-covering
transactions. These activities by the underwriters may stabilize, maintain or
otherwise affect the market price of the securities. As a result, the price of
the securities may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be discontinued by the
underwriters at any time.
The
validity of any securities offered by this prospectus will be passed upon for us
by Trombly Business Law, PC.
The
consolidated financial statements of Oculus Innovative Sciences, Inc and
Subsidiaries. appearing in Oculus Innovative Sciences, Inc.’s Annual Report
on Form 10-K for the year ended March 31, 2010, have been
audited by Marcum LLP, an independent registered public accounting firm, as set
forth in their report included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We file
reports, proxy statements and other documents with the SEC. You may read and
copy any document we file at the SEC’s public reference room at 100 F Street,
N.E., Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the public reference room. Our SEC filings are also available to
you on the SEC’s Internet site at http://www.sec.gov.
This
prospectus is part of a Registration Statement that we filed with the SEC. The
Registration Statement contains more information than this prospectus regarding
us and our common stock, including certain exhibits and schedules. You can
obtain a copy of the Registration Statement from the SEC at the address listed
above or from the SEC’s Internet site.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC
requires us to “incorporate by reference” the information contained in documents
we file with the SEC. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus. Information contained in this prospectus and
information that we file with the SEC in the future and incorporate by reference
in this prospectus automatically updates and supersedes previously filed
information. We incorporate by reference the documents listed below and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, prior to the sale of all the
shares covered by this prospectus:
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our
Annual Report on Form 10-K for the year ended
March 31, 2010, filed on June 8,
2010;
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our
Quarterly Reports on Form 10-Q for the quarter ended
June 30, 2010, filed on August 5, 2010, the quarter ended
September 30, 2010, filed on November 4, 2010, and the quarter ended
December 31, 2010, filed February 4,
2011;
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our
Current Reports on Form 8-K, filed on April 2, 2010, May 6,
2010, September 17, 2010, and February 18,
2011;
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our
Proxy Statement on Schedule 14A filed on July 29,
2010; and
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the
description of our common stock contained in our Registration Statement
on Form 8-A filed on December 15, 2006, including any
amendment or report filed for the purpose of updating such
description.
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In
addition, all documents that we file with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of
1934, as amended, after the date of the initial registration statement of which
this prospectus is a part and prior to the effectiveness of the registration
statement as well as all such documents that we file with the SEC after the date
of this prospectus and before the termination of the offering of our securities
shall be deemed incorporated by reference into this prospectus and to be a part
of this prospectus from the respective dates of filing such documents. Unless
specifically stated to the contrary, none of the information that we disclose
under Items 2.02 or 7.01 of any Current Report on Form 8-K that we may from time
to time furnish to the SEC will be incorporated by reference into, or
otherwise included in, this prospectus.
You may
request a copy of any or all of the documents incorporated by reference but not
delivered with this prospectus, at no cost, by writing or telephoning us at the
following address and number: Investor Relations, Oculus Innovative Sciences,
Inc., 1129 N. McDowell Blvd., Petaluma, California 94954,
telephone (707) 782-0792. We will not, however, send exhibits to
those documents, unless the exhibits are specifically incorporated by reference
in those documents.
Information
Not Required In Prospectus
Item
14. Other Expenses of Issuance and Distribution
The
following is a statement of estimated expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commission.
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SEC
Registration Fee
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$ |
5,348 |
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Transfer
Agent and Registrar and Depositary Fees*
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3,000 |
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Printing
Expenses*
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2,000 |
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Legal
Fees and Expenses*
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10,000 |
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Accounting
Fees and Expenses*
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4,000 |
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Miscellaneous*
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652 |
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$ |
25,000 |
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* Estimated.
Item
15. Indemnification of Directors and Officers.
Section 145
of the Delaware General Corporation Law, as amended, authorizes a court to award
or a corporation’s board of directors to grant indemnification to directors and
officers 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. Article VIII of our Restated
Certificate of Incorporation (Exhibit 3.1(i) to our Annual
Report on Form 10-K for the year ended March 31, 2007) and Article 6
of our Amended and Restated Bylaws, as Amended (Exhibit 3.3 our
Quarterly Report on Form 10-Q, filed November 4, 2010) provide for
indemnification of our directors, officers, employees and other agents to the
extent and under the circumstances permitted by the Delaware General Corporation
Law.
We have
entered into Indemnification Agreements (Exhibit 10.1 to our
Registration Statement on Form S-1 (file No. 333 - 135584)) with our officers
and directors that will require us to, among other things, indemnify them
against certain liabilities that may arise by reason of their status or service
as directors or officers to the fullest extent not prohibited by
law.
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. 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
Securities and Exchange Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective registration
statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
Provided,
however, that paragraphs (i), (ii) and (iii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Securities and
Exchange Commission 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, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of this registration
statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(5) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B relating to
an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the
purpose of providing the information required by Section 10(a) of the Securities
Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of sale of securities in
the offering described in the prospectus. As provided in Rule 430B,
for liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such effective date.
(6) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
Item 512(b) of
Regulation S-K. The Registrant hereby
undertakes that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant’s annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Item 512(h) of
Regulation S-K. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such
issue.
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement on Form S-3 to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Petaluma, State of
California, on February 18, 2011.
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OCULUS
INNOVATIVE SCIENCES, INC.
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By:
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/s/ Hojabr
Alimi
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Hojabr
Alimi,
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President
and Chief Executive Officer
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(Principal
Executive Officer)
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KNOW ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
severally constitutes and appoints Hojabr Alimi and James Schutz, and each of
them individually, with full power of substitution and resubstitution, his or
her true and lawful attorney-in-fact and agent, with full powers to each of them
to sign for us, in our names and in the capacities indicated below, the
Registration Statement on Form S-3 filed with the Securities and
Exchange Commission, and any and all amendments to said Registration Statement
(including post-effective amendments), and any registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, in connection
with the registration under the Securities Act of 1933, of securities of the
Registrant, and to file or cause to be filed the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as each of them might or could do in person, and hereby
ratifying and confirming all that said attorneys-in-fact and agents, and each of
them, or their substitute or substitutes, shall do or cause to be done by virtue
of this Power of Attorney. This Power of Attorney may be executed in
counterparts and all capacities to sign any and all
amendments.
Pursuant
to the requirements of the Securities Act of 1933, as amended, the Registration
Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Hojabr
Alimi
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President,
Chief Executive Officer and
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February
18, 2011
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Hojabr
Alimi
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Chairman
of the Board
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(Principal
Executive Officer)
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/s/ Robert E.
Miller
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Chief
Financial Officer
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Robert
E. Miller
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(Principal
Financial Officer and
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Principal
Accounting Officer)
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*
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Director
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February
18, 2011
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Gregg
Alton
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*
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Director
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February
18, 2011
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Jay
Edward Birnbaum
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*
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Director
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February
18, 2011
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Richard
Conley
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*
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Director
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February
18, 2011
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Gregory
M. French
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/s/ James
Schutz
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Director
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James
Schutz
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* Power of Attorney
Exhibits
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exhibit
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number
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description
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3.1(i)
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Restated
Certificate of Incorporation of Registrant (incorporated by reference to
the exhibit of the same number filed with the Registrant’s Annual Report
on Form 10-K for the year ended March 31,
2007).
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3.1(ii)
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Amended
and Restated Bylaws of Registrant, as amended effective on June 11,
2008 (incorporated by reference Exhibit 3.3 filed with the Registrant’s
Quarterly Report on Form 10-Q for the quarter ended September 30,
2010, filed on November 4, 2010).
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4.1
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Specimen
Common Stock Certificate (incorporated by reference to the exhibit of the
same number filed with Registration Statement on Form S-1 (File
No. 333-135584), as amended, declared effective on January 24,
2007).
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5.1
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Opinion
of Trombly Business Law, PC.
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23.1
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Consent
of Marcum LLP.
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23.2
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Consent
of Trombly Business Law, PC, included in Exhibit 5.1 filed contained
herewithin.
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