View:
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDED SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 3)1
Siga Technologies, Inc.
---------------------------
(Name of Issuer)
Common Stock, par value $.0001 per share
----------------------------------------
(Title of Class of Securities)
82 6917-10-6
- ------------
(CUSIP Number)
Donald G. Drapkin
35 East 62nd Street
New York, NY 10021
(212) 872-0012
with a copy to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
Attn: Thomas E. Constance
(212) 715-9100
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
June 13, 2001
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [x]
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule
13d-7 for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 15 Pages)
- --------------------
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
- --------------------------------------------------------------------------------
13D Page 2 of 15 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Donald G. Drapkin
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF, OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,652,945 ** ***
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0 ***
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
747,313 ***
------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 ***
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,664,695 ** ***
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES* **
[x]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.75%** ***
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** Mr. Drapkin has entered into a Management Restructuring Agreement (see Item
4), pursuant to which, he will be granted proxies giving him voting power over
an aggregate of 905,632 shares of Common Stock.
*** Mr. Drapkin holds, inter alia, a warrant (an "Investor Warrant") to purchase
347,826 shares of Common Stock. However, the Investor Warrant provides that,
with certain limited exceptions, it is not exercisable if, as a result of such
exercise, the number of shares of Common Stock beneficially owned by Mr. Drapkin
and his affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised portion of such
Investor Warrant) would exceed 9.99% of the outstanding shares of Common Stock.
As a result of the restrictions described in the immediately preceding sentence
and the other securities which Mr. Drapkin may be deemed beneficially to own, as
of June 13, 2001, Mr. Drapkin's Investor Warrant is not presently exercisable.
- --------------------------------------------------------------------------------
13D Page 3 of 15 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Drapkin Family Charity Foundation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00 (see Item 2)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
13D Page 4 of 15 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Gabriel M. Cerrone
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF, OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 817,700 **
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
817,700 **
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
817,700 **
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** Mr. Cerrone, as the sole general partner of Panetta Partners Ltd., may be
deemed beneficially to own the securities held by Panetta.
- --------------------------------------------------------------------------------
13D Page 5 of 15 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Panetta Partners Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 817,700
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
817,700
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
817,700
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
13D Page 6 of 15 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Thomas E. Constance
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
13D Page 7 of 15 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Eric A. Rose, M.D.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 100,000
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
100,000
------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
SCHEDULE 13D
This Amendment No. 3 amends and supplements the Reporting Persons'
Statement on Schedule 13D, dated March 30, 2001, as amended to date
(the "Schedule"), in its entirety.
Item 1. Security and Issuer.
This Statement on Schedule 13D (the "Statement") relates to the
Common Stock, $.0001 par value per share, (the "Common Stock") of
Siga Technologies, Inc., a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 420
Lexington Avenue, Suite 620, New York, New York, 10170.
Item 2. Identity and Background.
(a) This statement is filed on behalf of Donald G. Drapkin, the
Drapkin Family Charity Foundation (the "Charity"), Gabriel M.
Cerrone, Panetta Partners Ltd. ("Panetta"), Thomas E.
Constance and Eric A. Rose, M.D. (collectively, the "Reporting
Persons"). See attached Exhibit A which is a copy of their
agreement in writing to file this statement jointly on behalf
of each of them. Each of the Reporting Persons has made, and
will continue to make, its own investment decisions with
respect to securities of the Issuer. Each Reporting Person
expressly disclaims membership in a "group" with any other
person within the meaning of Rule 13d-5(b)(1) of the
Securities Exchange Act of 1934, as amended.
(b) The business address of each of Mr. Drapkin and the Charity is
35 East 62nd Street, New York, New York, 10021. The business
address of each of Mr. Cerrone and Panetta is 265 East 66th
Street, Suite 16G, New York, New York, 10021. The business
address of Mr. Constance is 919 Third Avenue, 41st Floor, New
York, New York, 10022. The business address of Dr. Rose is 112
East 78th Street, New York, New York, 10021.
(c) Mr. Drapkin is a Director and Vice Chairman of MacAndrews &
Forbes Holdings Inc., a Delaware corporation having its
address at 35 East 62nd Street, New York, New York, 10021 and
is the sole Trustee of the Charity. The Charity is a
charitable trust, organized under the laws of New Jersey. Mr.
Cerrone is an investment banker, consultant and stock broker,
and the sole general partner of Panetta, a Colorado limited
partnership the principal business of which is delivering
consulting services. Mr. Constance is a Senior Partner of
Kramer Levin Naftalis & Frankel LLP, a law firm in New York
City. Dr. Rose is Chairman of the Department of Surgery and
Surgeon-in-Chief of the Columbia Presbyterian Center of New
York Presbyterian Hospital.
(d) The Reporting Persons and their respective managing members,
officers, directors, general partners, investment managers,
and trustees have not, during the five years prior to the date
hereof, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) The Reporting Persons and their respective managing members,
officers, directors, general partners, investment managers,
and trustees have not, during the five years prior to the date
hereof, been party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, as a result of
which such person was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
(f) Mr. Drapkin, Mr. Cerrone, Mr. Constance and Dr. Rose are
citizens of the United States.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to a Securities Purchase Agreement between Mr. Drapkin and
the Issuer, dated as of January 31, 2000, (the "Purchase Agreement")
a copy of which is filed as Exhibit B hereto, Mr. Drapkin purchased
(i) $500,000 principal amount of 6% Convertible Debentures due
January 31, 2002 of the Issuer ("Debentures"), a copy of which is
filed as Exhibit C hereto, with $500,000 of his personal funds, and
(ii) a warrant (an "Investor Warrant"), a copy of which is filed as
Exhibit D hereto, to purchase up to 347,826 shares of Common Stock
at
an exercise price of $3.4059 per share, with $17,391.30 of his
personal funds. The principal amount of, and accrued interest on,
the Debentures were convertible into Common Stock at the option of
the holder at any time prior to the maturity date, at a conversion
price of $1.4375 per share. Pursuant to the Conversion Agreement (as
defined below), Mr. Drapkin converted his Debentures into 373,913
shares of Preferred Stock (as defined below) of the Issuer (see Item
4).
Pursuant to a Distributor's Agreement between Fahnestock & Co. Inc.
and the Issuer, dated as of January 27, 2000, and in connection with
the Issuer's private placement of Debentures, Fahnestock designated
Mr. Cerrone to receive, and he was issued, a warrant (the
"Distributor Warrant"), a copy of which is filed as Exhibit E
hereto, to purchase up to 210,000 shares of Common Stock at an
exercise price of $1.45 per share. Mr. Cerrone then assigned the
Distributor Warrant to Panetta. Pursuant to a Consulting Agreement
between Fahnestock & Co. Inc. and the Issuer, dated as of October
31, 2000, Fahnestock & Co. Inc. designated Panetta to receive, and
Panetta was issued a warrant (the "Consulting Warrant" and, together
with the Investor Warrant and the Distributor Warrant, the
"Warrants") to purchase up to 303,200 shares of Common Stock at an
exercise price of $2.00 per share, a copy of which is attached
hereto as Exhibit F. The Consulting Warrant was issued to Panetta
partially in consideration for the cancellation of a warrant to
purchase 303,200 shares of Common Stock at an exercise price of
$5.00 per share, a copy of which is filed as Exhibit G hereto, that
had been issued to Mr. Cerrone in connection with the Issuer's March
2000 equity financing. The Distributor Warrant and the Consulting
Warrant each contain provisions granting the holder certain
registration rights.
Each Warrant provides that, with certain limited exceptions, it is
not exercisable if, as a result of such exercise, the number of
shares of Common Stock beneficially owned by the holder thereof and
its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised
portion of such Warrant) would exceed 9.99% of the outstanding
shares of Common Stock. As a result of the restrictions described in
the immediately preceding sentence (the "9.99% Limit") and the other
securities which Mr. Drapkin may be deemed beneficially to own, as
of June 13, 2001, Mr. Drapkin's Investor Warrant is not presently
exercisable. The Issuer may require the Investor Warrant to be
exercised (subject to the same 9.99% Limit) within five days if both
(i) the registration statement with respect to the shares of Common
Stock issuable thereupon is effective and (ii) the closing bid price
for the Common Stock for each of any 15 consecutive trading days is
at least 200% of the exercise price of the Investor Warrant at such
time. Exceptions to the 9.99% Limit include the existence of a
tender offer for the Issuer's common stock.
Between June 26, 2000 and December 22, 2000, Mr. Drapkin engaged in
open market transactions through which he acquired a net 373,400
shares of Common Stock. On November 9, 2000, the Charity purchased
11,750 shares of Common Stock on the open market. Between February
9, 2000 and March 13, 2000, Mr. Cerrone purchased 61,500 shares of
Common Stock on the open market. Mr. Cerrone then assigned such
shares to Panetta. Mr. Drapkin, the Charity and Mr. Cerrone used
their respective general funds for such purchases.
Mr. Drapkin made the following purchases:
Date No. of Shares Purchase Price
---- ------------- --------------
6/26/2000 31,500 $4.037
6/27/2000 2,000 $3.977
6/29/2000 5,000 $4.037
7/6/2000 2,500 $4.54
7/27/2000 4,000 $4.049
8/2/2000 20,500 $3.947
8/3/2000 1,600 $3.906
8/4/2000 4,000 $3.747
8/7/2000 500 $3.812
8/8/2000 2,500 $3.581
8/10/2000 5,000 $3.532
8/11/2000 6,000 $4.122
8/11/2000 50,000 $4.065
8/14/2000 50,000 $4.399
8/15/2000 1,100 $3.906
8/16/2000 2,000 $3.967
8/24/2000 12,500 $3.30
8/25/2000 17,500 $3.406
Date No. of Shares Purchase Price
---- ------------- --------------
8/28/2000 11,000 $3.457
8/29/2000 7,500 $3.195
8/31/2000 10,000 $3.084
9/14/2000 4,100 $3.004
9/25/2000 20,500 $3.498
9/27/2000 100 $2.906
9/29/2000 40,000 $4.039
11/3/2000 2,500 $4.175
11/30/2000 20,500 $4.047
12/1/2000 4,000 $3.852
12/5/2000 40,000 $4.508
12/22/2000 10,000 $3.026
Mr. Drapkin made the following sale:
Date No. of Shares Sales Price
---- ------------- -----------
9/19/2000 15,000 $3.386
The Charity made the following purchase:
Date No. of Shares Purchase Price
---- ------------- --------------
11/9/2000 11,750 $4.932
6/13/2001 50 $4.08
The Charity made the following sale:
Date No. of Shares Sales Price
---- ------------- -----------
6/12/2001 11,800 $4.048
Mr. Cerrone made the following purchases:
Date No. of Shares Purchase Price
---- ------------- --------------
2/9/2000 16,100 $4.589
2/10/2000 3,900 $4.551
2/11/2000 10,500 $4.560
2/18/2000 12,100 $5.308
2/22/2000 2,400 $5.369
2/23/2000 12,500 $5.406
3/2/2000 2,500 $5.986
3/13/2000 1,500 $9.158
In connection with the Management Restructuring Agreement (as
defined in Item 4, below), each of Judson A. Cooper and Joshua D.
Schein, Ph.D. agreed to grant an irrevocable proxy (collectively,
the "Proxies") to Mr. Drapkin on the Effective Date (as defined in
the Management Restructuring Agreement) giving Mr. Drapkin voting
power over an aggregate of 905,632 shares of Common Stock owned by
such parties (the "Proxy Shares") together with any shares of
capital stock of the Issuer that such parties may acquire subsequent
to the date of the Proxies (including, without limitation, upon the
exercise of options held by Mr. Cooper and Mr. Schein, to purchase
up to an aggregate of 1,400,002 shares of Common Stock).
Pursuant to separate Common Stock and Warrant Purchase Agreements
between the Issuer and each of Panetta and Dr. Rose, dated as of May
8, 2001, (the "May 2001 Purchase Agreements") the form of which is
Exhibit K hereto: (i) Panetta purchased, with $180,000 of its
general funds, 90,000 shares of Common
Stock and a warrant (a "May 2001 Investor Warrant"), the form of
which is Exhibit L hereto, to purchase up to 90,000 shares of Common
Stock; and Dr. Rose purchased, with $100,000 of his personal funds,
50,000 shares of Common Stock and a May 2001 Investor Warrant to
purchase up to 50,000 shares of Common Stock. The May 2001 Investor
Warrants are exercisable for a period of seven years at an exercise
price of $2.94 per share and contain provisions analogous to the
9.99% Limit described above.
On May 31, 2001, the Issuer consummated another closing of its
private placement pursuant to May 2001 Purchase Agreements in which
closing Panetta purchased, with $63,000 of its general funds, 31,500
shares of Common Stock and a May 2001 Investor Warrant to purchase
up to 31,500 shares of Common Stock.
Each Reporting Person disclaims beneficial ownership of all the
Common Stock except Common Stock held by such Reporting Person that
were purchased on the open market or pursuant to the May 2001
Purchase Agreement (collectively, the "Purchased Common"). Each
Reporting Person disclaims beneficial ownership of the securities
held by any other party.
Item 4. Purpose of Transaction.
Each Reporting Person which acquired securities of the Issuer did so
as an investment in the Issuer. Except as indicated in this Schedule
13D, no Reporting Person currently has any plans or proposals that
relate to, or would result in, any of the matters described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
In connection with the Purchase Agreement, Mr. Drapkin entered into
a Registration Rights Agreement with the Issuer, dated as of January
31, 2000, ("Registration Rights Agreement"), a copy of which is
filed as Exhibit H hereto. Pursuant to the Registration Rights
Agreement, the Issuer agreed: (i) to file no later than 30 days
after the Closing Date (as used in the Purchase Agreement), a
Registration Statement under the Securities Act of 1933, as amended,
(the "Required Registration Statement") covering the resale of the
shares of Common Stock issuable upon conversion of principal and
interest of the Debentures and upon exercise of the Warrant; and
(ii) to use its reasonable best efforts to cause such Registration
Statement to be declared effective no later than the earlier of (x)
five days after notice by the Securities and Exchange Commission
that it may be declared effective and (y) 90 days after the Closing
Date. On May 10, 2000, the Issuer filed the Required Registration
Statement and, on May 24, 2000, it was declared effective. The
shares of Common Stock issuable upon exercise of the Distributor
Warrant were also included in the Required Registration Statement.
Pursuant to a letter agreement, dated as of March 30, 2001, among
Mr. Drapkin, the Issuer, Mr. Cerrone, Mr. Constance, Dr. Rose,
Judson A. Cooper and Joshua D. Schein, Ph.D. (the "Management
Restructuring Agreement"), a copy of which is filed as Exhibit I
hereto, Mr. Drapkin had the right to be and to have his designees
elected to the Board of Directors of the Issuer (the "Board") on the
Effective Date. The Management Restructuring Agreement also provides
that the members of the Board at such time would be caused to resign
from the Board and from any and all offices held with the Issuer.
Pursuant to the Management Restructuring Agreement, Judson A. Cooper
and Joshua D. Schein have agreed to resign from the Board of the
Issuer, and from all other offices held with the Issuer, effective
as of the Effective Date. Mr. Drapkin has designated Mr. Cerrone,
Mr. Constance and Dr. Rose for election to the Board in accordance
with the Management Restructuring Agreement. As of April 19, 2001,
Mr. Drapkin, Mr. Cerrone, Mr. Constance and Dr. Rose were appointed
to the Board and each of the Issuer's remaining other directors
resigned from the Board as contemplated by the Management
Restructuring Agreement. Thereafter, the Board filled the vacancies
on the Board that resulted from such resignations.
On May 3, 2001, the Issuer's Board of Directors made grants (the
"Conditional Grants") of options to certain officers, directors and
advisors of the Issuer, subject to approval of an Amendment and
Restatement of the Issuer's Amended and Restated 1996 Incentive and
Non-Qualified Stock Option Plan. Dr. Rose, Mr. Drapkin, Mr.
Constance and Mr. Cerrone received Conditional Grants of options to
purchase up to 1,125,000, 600,000, 225,000 and 1,075,000 shares of
Common Stock, respectively. The Conditional Grants were made subject
to stockholder approval, and at present no Reporting Person
beneficially owns any Common Stock issuable upon conversion of the
options constituting such Conditional Grants.
In connection with the May 2001 Purchase Agreement, Panetta and Dr.
Rose each entered into a Registration Rights Agreement with the
Issuer, dated as of May 8, 2001, (the "May 2001 Registration Rights
Agreements"), the form of which is Exhibit M hereto. Pursuant to the
May 2001 Registration Rights Agreement, the Issuer agreed: (i) to
file no later than 60 days after the Closing Date (as used in the
May 2001 Purchase Agreement), a Registration Statement under the
Securities Act of 1933, as amended,
(the "2001 Required Registration Statement") covering the resale of
the shares of Common Stock issued pursuant to the May 2001 Purchase
Agreements and the shares of Common Stock issuable upon exercise of
the May 2001 Investor Warrants; and (ii) to use its reasonable best
efforts to cause such Registration Statement to be declared
effective no later than the earlier of (x) five days after notice by
the Securities and Exchange Commission that it may be declared
effective and (y) 180 days after the Closing Date.
Pursuant to a Conversion Agreement among the Issuer and holders of
Debentures (the "Conversion Agreement"), the form of which is
attached hereto as Exhibit N, Mr. Drapkin agreed to convert the
outstanding principal and accrued interest on his Debentures, into
373,913 shares of Series A Convertible Preferred Stock of the Issuer
(the "Preferred Stock"), the form of the Certificate of Designations
for which is attached hereto as Exhibit O, representing at a
conversion price of $1.4375 per share of Preferred Stock. The
Preferred Stock has a cumulative dividend of 6% per annum payable in
cash or additional shares of Preferred Stock at the Issuer's
discretion. The Preferred Stock is convertible into Common Stock an
initial conversion rate of one-to-one, and each holder of Preferred
Stock is entitled to the number of votes equal to the number of
whole shares of Common Stock into which the shares of Preferred
Stock held by such holder are then convertible. The Preferred Stock
is not subject to the 9.99% Limit.
Each Reporting Person may from time to time acquire, or dispose of,
Common Stock and/or other securities of the Issuer if and when it
deems it appropriate. Each Reporting Person may formulate other
purposes, plans or proposals relating to any securities of the
Issuer to the extent deemed advisable in light of market conditions,
investment policies and other factors.
Item 5. Interest in Securities of Issuer.
(a) As of June 13, 2001: Mr. Drapkin, as the holder of securities
of the Issuer and as proxyholder under the Proxies may be
deemed beneficially to own 1,652,945 shares of Common Stock or
20.75% of the outstanding shares, and, if not for the 9.99%
Limit, Mr. Drapkin could be deemed to beneficially own
2,000,771 shares of Common Stock or 23.06% of the outstanding
shares; Mr. Cerrone, as the sole general partner of Panetta,
may be deemed beneficially to own 817,700 shares of Common
Stock or 9.5% of the outstanding shares; and each of the
Charity, Panetta, Mr. Constance and Dr. Rose may be deemed
beneficially to own the respective numbers of shares of Common
Stock set forth below:
Charity 0
Panetta 817,700
Mr. Constance 0
Dr. Rose 100,000
Pursuant to Rule 13d-4 promulgated under the Securities
Exchange Act of 1934, as amended, each Reporting Person
disclaims beneficial ownership of all the Common Stock except
the Purchased Common Stock, if any, held by such Reporting
Person. Pursuant to Rule 13d-4 promulgated under the
Securities Exchange Act of 1934, as amended, each Reporting
Person disclaims beneficial ownership of the securities held
by any other person.
(b) Mr. Drapkin has the sole power to vote or to direct the vote
and to dispose or to direct the disposition of the shares that
he owns. Mr. Drapkin has the sole power to vote or to direct
the vote of the Proxy Shares. Mr. Cerrone and Panetta share
the power to vote or to direct the vote and to dispose or to
direct the disposition of the shares owned by Panetta. Dr.
Rose has the sole power to vote or to direct the vote and to
dispose or to direct the disposition of the shares that he
owns. Mr. Constance does not beneficially own any shares of
Common Stock.
(c) Other than entering into the Conversion Agreement and
receiving Conditional Grants (to the extent that any of the
above may be deemed a transaction in the Common Stock), and
purchasing Common Stock pursuant to the May 2001 Purchase
Agreements, and the June 13 final disposition of all the
common stock of the Issuer held by the Charity, no Reporting
Person has engaged in any transactions in the Common Stock of
the Issuer in the past 60 days.
(d)&(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Pursuant to the Proxies, Mr. Drapkin was appointed proxyholder
with respect to certain securities held by Mr. Cooper and Mr.
Schein (see Item 3). A form of the Proxies is attached to the
Management Restructuring Agreement that is filed as Exhibit I
hereto. The Management Restructuring Agreement includes
provisions restricting the abilities of the parties thereto to
transfer their respective securities of the Issuer.
Additionally, Mr. Drapkin has entered into a Lock-Up Agreement
with Vincent Fischetti, a copy of which is filed as Exhibit J
hereto, pursuant to which Mr. Fischetti is restricted in
transferring his securities of the Issuer without Mr.
Drapkin's prior written consent.
On May 3, 2001, the Issuer's Board of Directors made
Conditional Grants to certain of the Reporting Persons in
their respective capacities as officers and directors of the
Issuer (see Item 4).
Except as indicated in this Schedule 13D and the exhibits
hereto, there is no contract, arrangement, understanding or
relationship between the Reporting Person and any other
person, with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Agreement of Joint Filing of Schedule 13D, dated as of
April 6, 2001.
Exhibit B: Securities Purchase Agreement between Mr. Drapkin and the
Issuer, dated as of January 31, 2000.
Exhibit C: 6% Convertible Debenture due January 31, 2002 of the
Issuer in the principal amount of $500,000 issued to Mr.
Drapkin, dated as of January 31, 2000.
Exhibit D: Common Stock Purchase Warrant to purchase 347,826 shares
of Common Stock issued to Mr. Drapkin, dated as of
January 31, 2000.
Exhibit E: Common Stock Purchase Warrant to purchase 210,000 shares
of Common Stock issued to Mr. Cerrone, dated as of
January 31, 2000.
Exhibit F: Common Stock Purchase Warrant to purchase 303,200 shares
of Common Stock, issued to Panetta, dated as of November
10, 2000.
Exhibit G: Cancelled Common Stock Purchase Warrant to purchase
303,200 shares of Common Stock, issued to Mr. Cerrone,
dated as of May 1, 2000.
Exhibit H: Registration Rights Agreement between the Issuer and Mr.
Drapkin dated as of January 31, 2000.
Exhibit I: Letter Agreement, dated as of March 30, 2001, among Mr.
Drapkin, the Issuer, Mr. Cerrone, Mr. Constance, Dr.
Rose, Judson A. Cooper and Joshua D. Schein, Ph.D.
Exhibit J: Lock-Up Agreement between Mr. Drapkin and Vincent
Fischetti.
Exhibit K: Form of Common Stock and Warrant Purchase Agreements
between the Issuer and each Buyer (as defined therein),
dated as of May 8, 2001.
Exhibit L: Form of Common Stock Purchase Warrants to purchase shares
of Common Stock issued to each Buyer, dated as of May 8,
2001.
Exhibit M: Form of Registration Rights Agreements between the Issuer
and each Buyer, dated as of May 8, 2001.
Exhibit N: Form of Conversion Agreement among the Issuer and holders
of Debentures
Exhibit O: Form of Certificate of Designation of Series A
Convertible Preferred Stock of the Issuer
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of each of
the undersigned, each of the undersigned certifies that the information set
forth in this statement with respect to such undersigned is true, complete and
correct.
Dated: June 20, 2001 /s/ Donald G. Drapkin
------------------------------
Donald G. Drapkin
DRAPKIN FAMILY CHARITY FOUNDATION
Dated: June 20, 2001 By /s/ Donald G. Drapkin
--------------------------
Name: Donald G. Drapkin
Title: Trustee
Dated: June 20, 2001 /s/ Gabriel M. Cerrone
------------------------------
Gabriel M. Cerrone
PANETTA PARTNERS LTD.
Dated: June 20, 2001 By /s/ Gabriel M. Cerrone
--------------------------
Name: Gabriel M. Cerrone
Title: General Partner
Dated: June 21, 2001 /s/ Thomas E. Constance
------------------------------
Thomas E. Constance
Dated: June 21, 2001 /s/ Eric A. Rose, M.D.
------------------------------
Eric A. Rose, M.D.