SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF
FOREIGN ISSUER
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
For
the month of January 2007
Commission
File Number 000-51122
pSivida
Limited
(Translation
of registrant’s name into English)
Level
12
BGC Centre
28
The
Esplanade
Perth
WA
6000
(Address
of principal executive offices)
(Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F).
Form
20-F
ý Form
40-F o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1):
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7):
Indicate
by check mark whether the registrant by furnishing the information contained
in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes
o No
ý
If
"Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ___.
The
document attached as Exhibit 99.1 to this Report on Form 6-K is hereby
incorporated by reference herein and into the following registration statements:
(i) the Registrant's Registration Statement on Form F-3, Registration No.
333-132776; (ii) the Registrant's Registration Statement on Form F-3,
Registration No. 333-132777; and (iii) the Registrant's Registration Statement
on Form F-3, Registration No. 333-135428.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant,
pSivida Limited, has duly caused this report to be signed on its behalf by
the
undersigned, thereunto duly authorized.
Date:
January 23, 2007
pSivida
Limited
By:
/s/
Michael J.
Soja
Michael
J. Soja
Vice
President of Finance and Chief Financial Officer
EXHIBIT
INDEX
19
January, 2007
Dear
Shareholder
I
have
pleasure in enclosing our Notice of General Meeting (NoM) and Proxy Form. The
General Meeting will be held in Perth, Australia at 3:00pm WST on Tuesday,
20
February, 2007.
The
Company has made substantial progress since the Annual General Meeting held
in
November 2006. This was highlighted by the announcement after Christmas that
the
Company has entered into exclusive three month negotiations with a global
pharmaceutical company to license our drug delivery technologies in a
significant market opportunity. This announcement followed the successful
evaluation by that pharma of our technologies over the past 12
months.
The
NoM
provides alternatives for the future financing of the company. The Directors
will only complete those transactions that are in the best interests of the
Company and its existing shareholders. These resolutions are being put to
shareholders for approval in order to provide the Company with the maximum
flexibility in this regard, but will not necessarily involve all of these
initiatives proceeding.
The
Board
and I encourage you to approve the following resolutions:
| 1. |
Ratification
of Past Placement of Shares and Options
|
| 2. |
Ratification
of Past Issue of Warrants to Absolute Octane Fund and Australian IT
Investments
|
| 3. |
Ratification
of Past Issue of Warrants to Castlerigg
(Sandell)
|
| 4. |
Approval
of Proposed Issue of Warrants to Castlerigg
(Sandell)
|
| 5. |
Approval
of Proposed Issues of American Depository Shares and Warrants to Nordic
Biotech
|
| 6. |
Approval
of Possible Placements of Shares and Options
|
| 7. |
Approval
of Possible Placements of American Depository Shares and
Options
|
Your
Board believes that the considerable interest shown by large pharmaceutical
companies in our drug delivery technologies, as demonstrated by a number of
evaluation agreements over the past 12 months, will result in new licensing
deals in 2007. In combination with our technical advances and corporate changes
that have been made and continue to be made, together with the fundraising
initiatives the subject of the General Meeting, considerable growth in your
Company should result over the next 12 months.
I
look
forward to being able to advise you on further completion of milestones in
your
Company’s future developments and success, and urge you either to attend the
General Meeting or to send your completed proxy forms. I thank you for your
continued support as a shareholder.
Yours
sincerely
Dr
Roger Brimblecombe PhD, DSc, FRCPath, FIBiol
Acting
Chief Executive Officer & Executive Chairman
 |
pSivida
Limited
Level
12 BGC Centre, 28 The Esplanade, Perth
WA 6000 Australia
T
+61
8 9226 5099 F
+61
8 9226 5499
E
pSivida@pSivida.com W
www.pSivida.com
ABN
78 009 232 026
|
  |
PSIVIDA
LIMITED
ABN
78 009 232 026
NOTICE
OF GENERAL MEETING,
EXPLANATORY
MEMORANDUM
AND
PROXY FORM
Date
of Meeting:
Tuesday,
20 February 2007
Time
of Meeting:
3:00
pm
Place
of Meeting:
Level
2,
QV1 Building
250
St
George’s Terrace
Perth,
Western Australia
Australia
NOTICE
OF GENERAL MEETING
Notice
is
hereby given that a General Meeting of the shareholders of pSivida Limited
(pSivida
or
the
Company)
will be
held at Level
2, QV1 Building, 250 St George’s Terrace, Perth, Western
Australia
on
Tuesday,
20 February 2007
at
3:00pm
(Western
Daylight Saving Time).
In
accordance with Regulation 7.11.37 of the Corporations Act 2001, the directors
have determined that, for the purpose of voting at the meeting, members are
those persons who are the registered holders of Shares at 3:00pm (Western
Daylight Saving Time) on Sunday, 18 February 2007.
BUSINESS
| 1. |
Resolution
1 - Ratification of Past Placement of Shares and Options
|
To
consider and, if thought fit, pass the following as an ordinary
resolution:
“That,
for the purposes of Listing Rule 7.4 of the Listing Rules of ASX Limited, and
for all other purposes, the Company ratifies:
|
(a)
|
the
issue of a total of 14,330,768 fully paid ordinary shares in the
Company
at an issue price of A$0.26 per share to Australian and European
institutions and sophisticated investors on 4 January 2007;
and
|
|
(b)
|
the
issue of a total of 28,661,537 unquoted options to those institutions
and
investors over fully paid shares in the Company expiring 31 December
2010
at an exercise price of A$0.26 each.”
|
| 2. |
Resolution
2 - Ratification of Past Issue of Warrants to Absolute Octane Fund
and
Australian IT Investments
Limited
|
To
consider and, if thought fit, pass the following as an ordinary
resolution:
“That,
for the purposes of Listing Rule 7.4 of the Listing Rules of ASX Limited, and
for all other purposes, the Company ratifies the issue of warrants over 500,000
American Depositary Shares expiring 29 September 2011 at an exercise price
of
US$2.00 each to Absolute Octane Fund and Australian IT Investments Limited
on
29 September 2006.”
| 3. |
Resolution
3 - Ratification of Past Issue of Warrants to
Castlerigg
|
To
consider and, if thought fit, pass the following as an ordinary
resolution:
“That,
for the purposes of Listing Rule 7.4 of the Listing Rules of ASX Limited, and
for all other purposes, the Company ratifies the issue of warrants over
1,500,000 American Depositary Shares expiring 29 December 2011 at an exercise
price of US$2.00 each to Castlerigg Master Investments Ltd on 29 December
2006.”
| 4. |
Resolution
4 - Approval of Proposed Issue of Warrants to
Castlerigg
|
To
consider and, if thought fit, pass the following as an ordinary
resolution:
“That,
for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limited,
and for all other purposes, the Company approves the issue of warrants over
4,000,000 American Depositary Shares expiring 5 years from the date of issue
at
an exercise price of US$2.00 on each to Castlerigg Master Investments Ltd.”
2
NOTICE
OF GENERAL MEETING
| 5. |
Resolution
5 - Approval of Proposed Issues of ADSs and Warrants to Nordic
Biotech
|
To
consider and, if thought fit, pass the following as an ordinary
resolution:
“That,
for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limited, and
for all other purposes, the Company approves:
| (a) |
the
issue to Nordic of warrants over up to 1,000,000 American Depositary
Shares expiring 5 years from the date of issue at an exercise price
of
US$2.00 each in connection with the closing of the SPV
Investment;
|
| (b) |
the
issue to Nordic of an option to subscribe for American Depositary
Shares
at a conversion price of US$2.00 each (or ordinary shares at an issue
price of US$0.20 each) i by means of a conversion of the participation
interest purchased in the SPV Investment;
and
|
| (c) |
the
issue to Nordic of redeemable preference shares, for a total subscription
amount of US $4,000,000, convertible into American Depositary
Shares.
|
| 6. |
Resolution
6 - Approval of Possible Placements of Shares and
Options
|
To
consider and, if thought fit, pass the following as an ordinary
resolution:
“That,
for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limited, and
for all other purposes, the Company approves the issue, within 3 months after
the date of this meeting (or a longer period as may be approved by ASX), at
the
sole discretion of the Directors of the Company:
| a) |
the
issue of up to an aggregate of 50,000,000 fully paid ordinary shares
in
the Company, at an issue price being no lower than a 10% discount
to the 5
day volume weighted average market price on ASX of the Company's
shares
prior to their allotment; and
|
| b) |
the
issue to the subscribers for such shares of up to an aggregate of
100,000,000 unquoted options over fully paid shares in the Company
expiring 5 years from the date of issue at an exercise price of no
lower
than a 10% discount to the 5 day volume weighted average market price
on
ASX of the Company's shares prior to their
allotment”.
|
| 7. |
Resolution
7 - Approval of Possible Placements of ADSs and
Warrants
|
To
consider and, if thought fit, pass the following as an ordinary
resolution:
“That,
for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limited, and
for all other purposes, the Company approves the issue, within 3 months after
the date of this meeting (or a longer period as may be approved by ASX), at
the
sole discretion of the Directors of the Company:
|
a)
|
the
issue of up to an aggregate of 15,000,000 American Depositary Shares
in
the Company, at an issue price being no lower than a 20% discount
to the 5
day volume weighted average market price on Nasdaq of the Company's
American Depositary Shares prior to their allotment;
and
|
|
b)
|
the
issue to the subscribers for such American Depositary Shares of up
to an
aggregate of 7,500,000 unquoted warrants over American Depositary
Shares
in the Company expiring 5 years from the date of issue at an exercise
price of no lower than a 20% discount to the 5 day volume weighted
average
market price on Nasdaq of the Company's American Depositary Shares
prior
to their allotment.”
|
3
NOTICE
OF GENERAL MEETING
| 8. |
Other
Business
|
To
consider any other business brought forward in accordance with the Company’s
constitution or the law.
By
order
of the Board
AARON
FINLAY
Company
Secretary
19
January 2007
4
NOTES
The
accompanying Explanatory Memorandum forms part of this Notice of General Meeting
and should be read in conjunction with it. Terms defined in the Explanatory
Memorandum have the same meaning where used in this Notice of General
Meeting.
Voting
exclusion statements
The
Company will disregard any votes cast on the resolutions by the following
persons:
|
Resolutions
|
Persons
|
|
1 Ratification
of Past Placement of Shares and Options
2 Ratification
of Past Issue of Warrants to Absolute
Octane Fund and Australian IT Investments
3 Ratification
of Past Issue of Warrants to Castlerigg
|
Any
person who participated in the issue and any person who may obtain
a
benefit (except a benefit solely in the capacity of a holder of ordinary
securities) and any associates of those persons.
|
|
4 Approval
of Proposed Issue of Warrants
5 Approval
of Proposed Issue of ADSs and Warrants to Nordic Biotech
6 Approval
of Possible Placements of Shares and Options
7 Approval
of Possible Placements of ADSs and Warrants
|
Any
person who may participate in the proposed issue and any person who
may
obtain a benefit (except a benefit solely in the capacity of a holder
of
ordinary securities) and any associates of those
persons.
|
Unless:
| · |
the
vote is cast as a proxy for a person who is entitled to vote, in
accordance with the directions on the proxy form specifying how the
proxy
is to vote; or
|
| · |
the
vote is cast by the Chairman as proxy for a person who is entitled
to
vote, in accordance with a direction on the proxy form to vote as
the
proxy decides.
|
Use
of Technology
It
is
proposed that Dr Roger Aston the Meeting in Perth with other directors in
attendance using video conference technology where possible.
EXPLANATORY
MEMORANDUM
| 1. |
Introduction
|
This
Explanatory Memorandum forms part of the Notice of General Meeting of pSivida
Limited and has been prepared to provide the shareholders of pSivida Limited
(pSivida
or
the
Company)
with
information in connection with the General Meeting of the Company to be held
at
Level 2, QV1 Building, 250 St George’s Terrace, Perth, Western Australia at
3:00pm (Western Daylight Saving Time) on 20 February 2007.
5
The
purpose of this Explanatory Memorandum is to provide shareholders with
information that the Board of directors of the Company (Board)
believes to be material to shareholders in deciding whether or not to approve
the resolutions. At the General Meeting, shareholders will be asked to consider
resolutions approving:
| 1. |
Ratification
of past placement of shares and
options;
|
| 2. |
Ratification
of past issues of warrants;
|
| 3. |
Approval
of proposed issue of warrants;
|
| 4. |
Approval
of proposed issue of ADSs and warrants to Nordic
Biotech;
|
| 5. |
Approval
of possible placements of shares (or ADSs) and
options.
|
The
proposed capital raisings referred to above (see Resolutions 4-7 discussed
below) may not all occur. They have been put to Shareholders for advance
approval in order to maximise the Company's ability to progress the capital
raising(s) that are considered by the Board to be in the Company's best
interests. If those resolutions are passed at the General Meeting, the Company
should be able to complete those capital raisings without further need to revert
to Shareholders and without incurring the expense of convening further general
meetings.
Each
of
the resolutions is an ordinary resolution requiring it to be passed by a simple
majority of votes cast by shareholders entitled to vote on the resolution.
Further information regarding each of these resolutions is set out
below.
This
Explanatory Memorandum is an important document, and should be read in its
entirety by all shareholders.
| 2. |
Resolution
1 - Ratification of Past Placement of Shares and
Options
|
On
20
December 2006, the Company advised ASX of the placement (Placement)
of a
total of 14,330,768 fully paid ordinary shares (Placement Shares)
at an
issue price of A$0.26 per share to raise A$3,726,000 before transaction costs
of
approximately A$120,000.
The
Placement Shares were issued to Australian and European institutional and
sophisticated investors on 4 January 2007. Those investors did not require
the
issue of a disclosure document in order to subscribe for the Placement
Shares.
The
Placement Shares were offered with free attaching options to be issued on a
ratio of two options for every one Placement Share issued. A total of 28,661,537
unquoted options over ordinary shares were issued with an expiry date of 31
December 2010 and exercisable at A$0.26 each. A summary of the terms and
conditions of these options is attached as Appendix A to this Explanatory
Memorandum.
From
their date of issue, the Placement Shares ranked equally in all respects with
the Company’s then existing fully paid Ordinary Shares.
Resolution
1 seeks shareholder approval under ASX Listing Rule 7.4 to ratify the Placement.
The effect of such ratification will be that the Placement Shares and the
Ordinary Shares arising from an exercise of those options will not be counted
as
reducing the number of securities which the Company can issue in the future
without shareholder approval under the 15% limit imposed by ASX Listing Rule
7.1
(i.e. the 15% limit is “renewed” to the extent of the
ratification).
The
purpose of the Placement was to raise funds for the Company’s working capital
requirements and is an interim financing measure prior to the expected closing
of the funding transaction with Nordic Biotech II K/S and its co-investors
(Nordic)
for an
investment related to the Company's MedidurTM
product
(refer to Resolution 5 below).
6
The
Directors of the Company believe the resolution is in the best interests of
the
Company and its shareholders and unanimously recommend that shareholders vote
in
favour of it.
| 3. |
Resolution
2 - Ratification of Past Issue of Warrants to Absolute Octane Fund
and
Australian IT Investments
Limited
|
On
29
September 2006, the Company advised ASX that it had issued warrants to
purchase 500,000 ADSs (equivalent to 5,000,000 Ordinary Shares) expiring 29
September 2011 with an exercise price of US$2.00 per ADS or US$0.20 per Share
(Purchase
Price).
Those
warrants were issued on terms substantially the same as the Series C Warrants
discussed in relation to Resolution 3 below. A summary of the terms of the
Series C Warrants is attached as Appendix B to this Explanatory
Memorandum.
No funds
were raised by the issue of the warrants.
The
warrants were issued in accordance with the terms of a consulting agreement
entered into by the Company with Navigator Asset Management Limited
(NAMAL)
which
provided for the issue of the warrants to NAMAL on the successful completion
of
the agreements with the Absolute Europe Catalyst Fund, Absolute Octane Fund
and
Australian IT Investments Limited to purchase US$6.5m (A$8.5m) of Subordinated
Convertible Debentures convertible into ADSs which was announced to ASX on
27
September 2006. After entering into the consulting agreement, NAMAL assigned
its
right to receive the warrants to Absolute Octane Fund and Australian IT
Investments Limited.
Resolution
2 seeks shareholder approval under ASX Listing Rule 7.4 to ratify the issue
of
the warrants. The effect of such ratification will be that any Shares issued
upon exercise of the warrants will not be counted as reducing the number of
securities which the Company can issue in the future without shareholder
approval under the 15% limit imposed by ASX Listing Rule 7.1 (i.e. the 15%
limit
is “renewed” to the extent of the ratification).
The
Directors believe that Resolution 2 is in the best interests of the Company
and
its shareholders and unanimously recommend shareholders vote in favour of
it.
| 4. |
Resolution
3 - Ratification of Past Issue of Warrants to
Castlerigg
|
On
2
January 2007, the Company advised ASX that it had entered into an agreement
with
its principal institutional lender, being Castlerigg Master Investments Ltd
(Lender),
with
effect from 29 December 2006
under
which the Lender has agreed to a general forbearance with respect to any
defaults (other than defaults related to any bankruptcy filing by the Company)
through to and including the earlier of the closing of a financing transaction
with Nordic (refer to Resolution 5 below) and 31 March 2007. In
addition, subject to the satisfaction of closing conditions, the Lender agreed
as follows:
| · |
The
Lender agreed to allow the Company to transfer or grant security
interests
in the Company’s MedidurTM
and Mifepristone assets which would be necessary to complete specified
financing transactions with Nordic;
|
| · |
The
Lender agreed to forego the interest payment due on 2 January 2007
in
favour of adding approximately US$306,391 (A$388,000) to the principal
amount of the loan (representing the approximate value of the American
Depositary Shares (ADSs)
with which the Company would have issued to satisfy the payment had
it met
certain conditions allowing it to pay with
ADSs);
|
| · |
The
Lender agreed to defer the Company’s scheduled payment of US$800,000
(A$1m) for prior registration delay penalties until the earlier of
the
closing of the Nordic transaction and 31 March
2007;
|
7
| · |
The
Lender agreed to forgive US$770,000 (A$973,000) of additional registration
delay penalties accruing through the earlier of the closing of the
Nordic
transaction and 31 March 2007;
|
| · |
The
Lender agreed to amend the Company’s loan covenants to release it from the
obligation to satisfy a minimum cash balance test of 30% of the
outstanding principal until 31 March 2007; and
|
| · |
The
Lender agreed that the Company would have until ten days after the
earlier
of the closing of the Nordic transaction and 31 March 2007 to file
a
registration statement with respect to securities issuable on exercise
of
the Lender’s warrants.
|
In
partial consideration for the concessions granted by the Lender as set out
above, the Company has issued to the Lender warrants (Series
C Warrants)
to
purchase 1,500,000 ADSs (equivalent to 15,000,000 Ordinary Shares) expiring
29
December 2011 with an exercise price of US$2.00 per ADS or US$0.20 per Ordinary
Share (Purchase
Price).
A
summary of the terms of the Series C Warrants is attached as Appendix B to
this Explanatory Memorandum.
No funds
were raised by the issue of the warrants.
Resolution
3 seeks shareholder approval under ASX Listing Rule 7.4 to ratify the issue
of
the Series C Warrants. The effect of such ratification will be that any Shares
issued upon exercise of the Series C Warrants will not be counted as reducing
the number of securities which the Company can issue in the future without
shareholder approval under the 15% limit imposed by ASX Listing Rule 7.1 (i.e.
the 15% limit is “renewed” to the extent of the ratification).
The
Directors believe that Resolution 3 is in the best interests of the Company
and
its shareholders and unanimously recommend shareholders vote in favour of
it.
| 5. |
Resolution
4 - Approval of Proposed Issue of
Warrants
|
On
2
January 2007, the Company advised ASX that it had entered into an agreement
with
its principal institutional lender, being Castlerigg Master Investments Ltd,
with effect from 29 December 2006
whereby
the Lender has agreed to a general forbearance (refer to Resolution 3 above
for further details) with respect to any defaults (other than defaults related
to any bankruptcy filing by the Company) through to and including the earlier
of
the closing of a financing transaction with Nordic (refer to Resolution 5
below) and 31 March 2007.
In
addition to the issue of the Series C Warrants, being the subject of Resolution
3 of the General Meeting, the Company has agreed, subject to approval by the
Company's shareholders, to issue a further 4,000,000 warrants (Series
D Warrants)
over
ADSs expiring five years from the date of issue with an exercise price equal
to
the Purchase Price. If Shareholders do not approve the issue of the Series
D
Warrants, then the Company shall cause an additional general meeting to be
held
each twelve month period thereafter until such approval is obtained; provided
that if the Board of Directors of the Company does not recommend to the
Shareholders that they approve such resolutions at any such general meeting
and
the approval is not obtained, the Company shall cause an additional general
meeting to be held each calendar quarter thereafter until such approval is
obtained. No funds will be raised by the issue of the Series D Warrants. Those
warrants would be issued as soon as practicable, and in any event not later
than
3 months after the General Meeting. A summary of the terms of the Series D
Warrants is attached as Appendix B to this Explanatory
Memorandum.
Resolution
4 seeks shareholder approval under ASX Listing Rule 7.1 for the issue of the
Series D Warrants. The effect of such approval will be that any Shares issued
upon exercise of the Series D Warrants will not be counted as reducing the
number of Securities which the Company can issue in the future without
shareholder approval under the 15% limit imposed by ASX Listing Rule 7.1
(ie the 15% limit is "renewed" to the extent of the approval).
The
Directors believe that Resolution 4 is in the best interests of the Company
and
its shareholders and unanimously recommend shareholders vote in favour of
it.
| 6. |
Resolution
5 - Approval of Issues of ADSs and Warrants to Nordic
Biotech
|
The
Company expects to close definitive documents with Nordic Biotech Advisors
and
Co-investors (Nordic)
for a
US$4.0m (A$5.1m) corporate investment in the Company and a US$22.0m (A$27.8m)
investment (SPV
Investment)
over
time in a special purpose vehicle (SPV)
to fund
the Company’s portion of costs to develop MedidurTM
for the
treatment of the chronic eye disease diabetic macular edema (DME).
Terms
of Nordic Investment
At
closing of the transaction with Nordic, which is expected to occur in April
2007, subject to completion of due diligence by Nordic and final
documentation:
|
(a)
|
Nordic
will make a US$4.0m (A$5.0m) investment in new convertible redeemable
preference shares to be issued by the Company (Preferred
Stock);
|
|
(b)
|
Nordic
will make a US$3.5m (A$4.4m) payment comprising the first tranche
of its
SPV Investment;
|
|
(c)
|
Nordic
will be committed to make the further US$18.5m (A$23.6m) payments
comprising the balance of the SPV Investment in regular instalments
up to
15 January 2010; and
|
|
(d)
|
Nordic
will be entitled to appoint a director to the Board of the
Company.
|
SPV
Investment
The
Company and Alimera Sciences Inc are currently co-funding the development,
and
will co-share in the profits of, Medidur
TM
for DME,
which is currently in Phase III Multi-Clinical Trials. In exchange for
making the US$22.0m SPV Investment, Nordic will be granted a participation
interest in the SPV, according to which the SPV will distribute a portion of
the
Company's profit share revenues under the Alimera Co-Development Agreement.
Revenues distributed by the SPV will initially be apportioned 75% to Nordic
and
25% to the Company, subject to certain adjustments. After cumulative revenues
paid to Nordic equal 4 times its investment in the SPV, the Company's share
of the SPV's revenue will increase to 50% and Nordic's share will reduce to
50%.
After cumulative revenues paid to Nordic equal 8 times their investment in
the SPV, the Company's share of the SPV's revenues will increase to 80% and
Nordic's share will be reduced to 20%.
9
Preferred
Stock
The
Preferred Stock will be issued to Nordic in the form of redeemable preference
shares issued by the Company on customary terms in accordance with the Company's
Constitution and the Listing Rules and will include permissible anti-dilution
protection. The Preferred Stock will automatically convert into ADSs or Ordinary
Shares on the earliest of:
|
(a)
|
termination
or conversion of all outstanding convertible debt of the Company
and the
entering into a financing, equity investment, strategic relationship,
licensing agreement, collaboration agreement or other similar transaction
(Transaction)
or a series of Transactions over a certain period which results in
at
least US$20.0m in aggregate proceeds (in any form, including but
not
limited to licensing fees, purchase price, milestone payments, or
other
payments) to the Company; and
|
|
(b)
|
a
majority vote of the holders of the Preferred
Stock.
|
The
Preferred Stock will convert into ADSs at the Purchase Price. If Shares (or
securities convertible into Shares) are issued by the Company after the issue
of
the Preferred Stock for an issue price less than the Purchase Price, the price
at which the Preferred Stock is convertible into ADSs will be reduced to match
the price of that subsequent issue. Subject to the Listing Rules, the conversion
price will also be adjusted to reflect any re-organisations of the Company's
share capital including bonus issues, stock splits or
consolidations.
The
remaining terms of the Preferred Stock are still to be negotiated between the
Company and Nordic prior to closing of the transaction but will be consistent
with the Company's Constitution, which restricts the permissible terms for
the
issue of preference shares.
Option
to exchange SPV Investment for ADSs
Subject
to approval of shareholders at the General Meeting, the Company proposes to
grant Nordic an option to exchange its revenue sharing rights arising from
the
SPV Investment for the issue by the Company of ADSs or Ordinary Shares
(Exchange
Right).
If
Shareholder approval is not obtained in respect of the Exchange Right, then
Nordic can elect to cease making further payments for the SPV Investment, with
the consequence that the Company could lose the benefit of the unpaid balance
of
the US$22.0m SPV Investment.
Subject
to permissible anti-dilution adjustments (which are likely to be equivalent
to
the adjustments to the conversion price of the Preferred Stock discussed above),
SPV Investment would be exchangeable, by Nordic exercising its option, at the
Purchase Price. If the entire US$22.0m SPV Investment has not been provided
to
the SPV at the date of the proposed exchange, Nordic must provide to the SPV
the
difference between the amount committed and the amount already funded prior
to
that exchange.
On
the
basis of the Company's undiluted share capital as at the date of this
Explanatory Memorandum (namely, 414,570,275 Ordinary Shares), if the entire
SPV
Investment were to be exchanged for ADSs at the Purchase Price, those ADSs
would
represent approximately 20.97% of the total undiluted capital of the Company
following the exchange. The option may be exercised at any time, provided Nordic
has first made all payments for its US$22.0 million SPV Investment.
10
Closing
Warrants
At
the
closing of the transaction with Nordic, the Company will issue to Nordic
warrants to purchase (Closing
Warrants)
that
number of Ordinary Shares or ADSs which is equal to half of Nordic's investment
in Preferred Stock divided by the Purchase Price. The Closing Warrants will
be
exercisable at the Purchase Price and will expire 5 years from the date of
their issue and will contain customary terms including permissible anti-dilution
protection. On the basis of the proposed corporate investment amount of US$4.0m,
Nordic would be issued Closing Warrants that are exercisable at the Purchase
Price in respect of up to 1000,000 ADSs.
If
any of
the various issues of securities that are convertible into Ordinary Shares
or
ADSs and which are contemplated by the transaction with Nordic do not for any
reason occur within 3 months of the General Meeting, further Shareholder
approval may be required.
The
Directors believe that Resolution 5 is in the best interests of the Company
and
its shareholders and unanimously recommend shareholders vote in favour of
it.
| 7. |
Resolution
6 - Approval of Possible Placements of Shares and Options to New
Investors
|
Resolution
6 seeks approval to issue up to an aggregate of 50,000,000 Ordinary Shares
(Future
Placement Shares)
to
clients of international fund managers and broker dealers within 3 months of
the
date of the General Meeting. Those investors will be selected on the basis
of
their experience with, and commitment to, the bio-nanotechnology sector and
their willingness to provide financing on terms proposed by the
Company.
The
issue
price for the Future Placement Shares will be determined by the Board in its
discretion, but will be no lower than a 10% discount to the 5 day volume
weighted average market price prior to allotment. By way of example, if the
maximum aggregate number of 50,000,000 Future Placement Shares were issued
to
clients of European and Australian or US based funds managers and broker dealers
at an issue price of A$0.30 each, the placement would raise A$15,000,000 before
costs and the Future Placement Shares issued would represent approximately
10.76% of the total undiluted capital of the Company as at the date of this
Explanatory Memorandum plus the 50,000,000 Future Placement Shares (ie
464,570,275 Ordinary Shares).
Any
Future Placement Shares issued following this resolution may be accompanied
by
the issue of free attaching options on a ratio which will be determined by
the
Board in its discretion, but will not exceed two options for every one Share
issued. Options will be issued with an expiry date of four years from the date
of their issue with an exercise price not less than a 10% discount to the
5 day volume weighted average market price prior to allotment.
By
way of
example, in the event that the maximum aggregate number of Future Placement
Shares is issued by the Company, the maximum aggregate number of options that
may be issued by the Company in accordance with this resolution would be
100,000,000. If all those options were to be exercised at an exercise price
of
A$0.26 per Share, the proceeds from the exercise of those options would be
A$26.0m (in addition to the A$15.0m raised by the issue of the Future Placement
Shares) representing approximately 17.71% of the Company's share capital (as
at
the date of this Explanatory Memorandum plus the 50,000,000 Future Placement
Shares plus the 100,000,000 Ordinary Shares arising from the exercise of those
options). The key terms and conditions of these proposed options are expected
to
be substantially the same as are attached as Appendix A to this Explanatory
Memorandum.
11
The
Future Placement Shares and options may be issued in one or more placements
(and
in any event within 3 months) after the date of the General Meeting. Any Future
Placement Shares will rank equally in all respects with all other fully paid
ordinary shares in the Company then on issue.
Funds
raised by the issue of any Future Placement Shares will be used for general
corporate purposes, including the development of products in clinical
trial.
Resolution
6 seeks shareholder approval under ASX Listing Rule 7.1 for the issue of
Future Placement Shares and any attaching options as described above. The effect
of such approval will be that any Future Placement Shares and any Shares issued
upon exercise of those options will not be counted as reducing the number of
securities which the Company can issue in the future without shareholder
approval under the 15% limit imposed by ASX Listing Rule 7.1 (ie the 15% limit
is "renewed" to the extent of the approval).
The
Directors believe that Resolution 6 is in the best interests of the Company
and its shareholders and unanimously recommend shareholders vote in favour
of
it.
| 8. |
Resolution
7 - Approval of Possible Placements of ADSs and Warrants to New
Investors
|
Resolution
7 seeks approval to issue up to an aggregate of 15,000,000 ADSs (Future
Placement ADSs)
to
clients of international fund managers and broker dealers within 3 months of
the
date of the General Meeting.
The
issue
price for the Future Placement ADSs will be determined by the Board in its
discretion, but will be no lower than a 20% discount to the 5 day volume
weighted average market price prior to allotment. By way of example, if the
maximum aggregate number of 15,000,000 Future Placement ADSs were issued to
clients of US based funds managers and broker dealers at an issue price of
A$3.00 each, the placement would raise A$45.0m before costs and the Future
Placement ADSs issued would represent approximately 26.57% of the total
undiluted capital of the Company as at the date of this Explanatory Memorandum
plus the 15,000,000 Future Placement ADSs (ie 564,570,275 Ordinary
Shares).
Any
Future Placement ADSs issued following this resolution may be accompanied by
the
issue of free attaching warrants over ADSs on a ratio which will be determined
by the Board in its discretion, but will not exceed one warrant for every two
ADSs issued. Warrants will be issued with an expiry date of four years from
the
date of their issue with an exercise price not less than a 20% discount to
the 5
day volume weighted average market price prior to allotment. By way of example,
in the event that the maximum aggregate number of Future Placement ADSs is
issued by the Company, the maximum aggregate number of warrants that may be
issued by the Company in accordance with this resolution would be 7,500,000.
If
all those warrants were to be exercised at an exercise price of A$2.60 per
ADS,
the proceeds would be A$19.5m representing approximately 11.73% of the Company's
share capital (as at the date of this Explanatory Memorandum plus the 15,000,000
Future Placement ADSs plus the 7,500,000 ADSs arising from the exercise of
those
warrants). The key terms and conditions of these proposed warrants are expected
to be substantially the same as are attached as Appendix B to this Explanatory
Memorandum.
The
Future Placement ADSs and warrants may be issued in one or more placements
(and
in any event within 3 months) after the date of the General Meeting. Any Future
Placement ADSs will rank equally in all respects with all other ADSs in the
Company then on issue.
Funds
raised by the issue of any Future Placement ADSs will be used to:
12
| · |
retire
certain existing debt in the form of outstanding convertible notes.
These
convertible notes, which are currently on issue to Castlerigg Master
Investments Limited, have a face value of US$12,563,711 (including
accrued
but unpaid interest added to the principal amount) and may be redeemed
by
the Company at 108% of their face value and the concurrent issue
of
warrants with a face value equal to 30% of the amount of debt being
redeemed; and
|
| · |
further
progress research and development with regard to evaluation agreements
that the Company currently has in place with large pharmaceutical
companies.
|
Resolution
7 seeks shareholder approval under ASX Listing Rule 7.1 for the issue of
Future Placement ADSs and any attaching warrants as described above. The effect
of such approval will be that any Future Placement ADSs and any ADSs issued
upon
exercise of those warrants will not be counted as reducing the number of
securities which the Company can issue in the future without shareholder
approval under the 15% limit imposed by ASX Listing Rule 7.1 (ie the 15% limit
is "renewed" to the extent of the approval).
The
Directors believe that Resolution 7 is in the best interests of the Company
and its shareholders and unanimously recommend shareholders vote in favour
of
it.
| 9. |
Undirected
Proxies
|
The
Chairman of the meeting intends to use any undirected proxies held by him to
vote at the meeting in favour of each of the resolutions referred to
above.
| 10. |
Definitions
|
ADS
means
American Depositary Share (each ADS represents 10 Shares).
ASX
means
the Australian Securities Exchange operated by ASX Limited.
Board
means
the board of directors of the Company.
Company
means
pSivida Limited, ABN 78 009 232 026.
DME
means
diabetic macular edema.
Listing
Rules
means
the Listing Rules of ASX.
Nordic
means
Nordic Biotech II K/S and its co-investors.
Options
means
options to subscribe for Shares.
Ordinary
Shares or
Shares
means
fully paid ordinary shares in the Company.
Purchase
Price
means
US$2.00
per ADS or US$0.20 per Share.
SPV
means
the special purpose vehicle to be established by pSivida Inc and Nordic to
facilitate the ongoing funding of the development of MedidurTM.
Warrants
means
warrants to subscribe for Shares and/or ADSs.
13
APPENDIX
A
SUMMARY
OF TERMS AND CONDITIONS OF OPTIONS
| 1. |
The
Options are exercisable by notice in writing to the Company accompanied
by
payment of the exercise price.
|
| 2. |
All
Shares issued on the exercise of the Options will rank equally in
all
respects with the Company's then existing fully paid ordinary
Shares.
|
| 3. |
The
Options are transferable, and will not be quoted on ASX. If the Company's
ordinary Shares have been admitted to quotation by ASX, the Company
must
apply to ASX within 10 business days after the date of issue for
all
Shares issued pursuant to the exercise of Options to be admitted
to
quotation.
|
| 4. |
Holders
may only participate in new issues of securities to holders of ordinary
Shares in the Company if an Option has been exercised and Shares
issued in
respect of the Option before the record date for determining entitlements
to the issue. The Company must give at least 9 business days' notice
to
holders of any new issue before the record date for determining
entitlements to that issue in accordance with the Listing
Rules.
|
| 5. |
If,
after the vesting period and before the end of the Option period
the
Company gives holders of Shares the right (pro rata with existing
shareholdings) to subscribe for additional securities and the Option
is
not exercised in time to enable the holder to obtain the Share issued
on
exercise of the Option with the right to subscribe for additional
securities, the exercise price of an Option after the issue of those
securities is adjusted in accordance with the formula set out
below.
|
O1
= O - E
[P
-
(S + D)]
N
+ 1
Where:
|
O1
=
|
The
new exercise price of the Option.
|
|
O
=
|
The
old exercise price of the Option.
|
|
E
=
|
The
number of Shares into which an Option is
exercisable.
|
|
P
=
|
The
average closing price (excluding special crossings, overnight sales
and
exchange traded option exercises) on the Stock Exchange Automated
Trading
System provided for the trading of securities on ASX of Shares (weighted
by reference to volume) during the 5 trading days before the ex rights
date or ex entitlements date.
|
|
S
=
|
The
subscription price for one security under the renounceable rights
or
entitlements issue.
|
|
D
=
|
The
dividend due but not yet paid on existing Shares (except those to
be
issued under the renounceable rights issue or entitlements
issue).
|
|
N
=
|
Number
of Shares with rights or entitlements required to be held to receive
a
right to one new security.
|
However,
if O1
under
this formula is less than the Minimum Price (under the Listing Rules), the
new
exercise price of the Option is to be equal to the Minimum Price (under the
Listing Rules).
| 6. |
If
there is a bonus issue to the holders of Ordinary Shares in the Company,
the number of Shares over which an Option is exercisable will be
increased
by the number of Shares which the holder would have received if the
Option
had been exercised before the record date for the bonus
issue.
|
| 7. |
If,
prior to the expiry of any Options, there is a reorganisation of
the
issued capital of the Company, Options are to be treated in the manner
set
out in the Listing Rules applying to reorganisations of capital at
that
time.
|
14
APPENDIX
B
TERMS
OF THE SERIES C AND SERIES D WARRANTS
(ADDITIONAL
WARRANTS)
| 1. |
The
Additional Warrants are freely transferable (subject to restrictions
imposed by U.S. securities laws), but the Company does not intend
to apply
for quotation of the Additional Warrants on ASX, NASDAQ or any other
exchange.
|
| 2. |
The
Shares to be issued on the exercise of an Additional Warrant will
be
subject to an agreement with the Company's Depositary in respect
of
restricted ADSs and will rank equally in all respects with the Company's
then existing Shares issued under the same agreement or similar
agreements. The Company must apply for quotation of the Ordinary
Shares
underlying the ADSs issuable on
exercise.
|
| 3. |
The
Additional Warrants constitute options to acquire ADSs at any time
on or
before the fifth anniversary of the issue of the Additional
Warrants.
|
| 4. |
There
is a limit of 4.99% in respect of the holder of the Additional Warrants
and its affiliates’ beneficial ownership in Shares, which may prevent the
holder from exercise of part of the Additional Warrant (this limit
may be
changed by the holder of the Additional Warrants but cannot exceed
9.99%).
|
| 5. |
The
exercise price may be adjusted in accordance with a formula which
is
substantially the same as the formula contained in ASX Listing Rule
6.22.2, if there is a pro rata issue to holders of
Shares.
|
| 6. |
Subject
to the Listing Rules, other adjustments may be made upon a bonus
issue to
holders of Shares or the reorganisation of the capital of the
Company.
|
| 7. |
If
there is a fundamental transaction (such as a transaction which involves
a
change in control of the Company or a transfer of substantially all
of its
assets) the Company will use its best endeavours to procure that
the
successor entity assumes all of the obligations of the Company under
the
Additional Warrants.
|
| 8. |
In
the event that the Company issues warrants to Nordic on terms more
favourable than those disclosed to the holder of the Additional Warrants,
then the exercise price and number of ADSs the subject of the
Series D Warrants will be increased to preserve the ratio of the
value of the Series D Warrants as against the value of the warrants
issued to Nordic.
|
15
PSIVIDA
LIMITED
ABN
78 009 232 026
PROXY
FORM
|
Name
and address of member or joint members
____________________________________________________
____________________________________________________
____________________________________________________
|
|
Appointment
of proxy
_________________________
Name
of proxy (please print)
I/We,
being a member/s of pSivida Limited and entitled to attend and vote,
appoint
Or
failing that person or, if no person is named, the Chairman of the
meeting
to attend, act generally and vote as directed below, or, if no directions
are given, as the proxy or the Chairman sees fit, at the General
Meeting
of the Company to be held on Tuesday,
20 February 2007
at
3:00pm
(Western Daylight Saving Time)
and at any adjournment.
|
||||
|
Appointing
a second proxy
_____________________________
%
_____________________________
If
appointing a second proxy, state the percentage of your
voting
rights applicable to the proxy appointed by this form.
|
||||
|
Voting
directions to your proxy - please mark x
to indicate your directions
Business
|
||||
|
Ordinary
Resolutions
|
For
|
Against
|
Abstain*
|
|
|
1.
Ratification of Past Placement of Shares and Options
|
o
|
o
|
o
|
|
|
2.
Ratification of Past Issue of Warrants to Absolute Octane Fund
and Australian IT Investments
|
o
|
o
|
o
|
|
|
3.
Ratification of Past Issue of Warrants to Castlerigg
|
o
|
o
|
o
|
|
|
4.
Approval of Proposed Issue of Warrants to Castlerigg
|
o
|
o
|
o
|
|
|
5.
Approval of Proposed Issues of ADSs and Warrants to Nordic
Biotech
|
o
|
o
|
o
|
|
|
6.
Approval of possible Placements of Shares and Options to New
Investors
|
o
|
o
|
o
|
|
|
7.
Approval of possible Placements of ADSs and Options to New
Investors
|
o
|
o
|
o
|
|
|
*
If
you mark the Abstain box for a particular item of business, you are
directing your proxy not to vote on that item on a show of
hands or on a poll and your shares will not be counted in computing
the
required majority on a poll.
|
||||
If you appoint the Chairman of the meeting as your proxy, and you do not direct him how to vote on any of the items, the Chairman will vote in favour of the relevant item.
If
you
appoint the Chairman of the meeting as your proxy and you do not wish to direct
the Chairman how to vote in relation to any item, please mark x
in this
box. o
By
marking this box, you acknowledge that the Chairman may vote as your proxy
even
if he has an interest in the outcome of the relevant item and votes cast by
him
other than as a proxy will be disregarded because of that interest.
If
you do
not direct the Chairman how to vote and do not place a mark in this box any
votes cast by the Chairman as your proxy in relation to the relevant item will,
where any voting exclusion applies to the resolution, be
disregarded.
Signatures
of individual member, joint individual member, attorney or company
member
|
Member,
Attorney or Joint Member
|
||||
|
|
||||
|
Sole
director and sole company secretary
|
Director
|
Director/Company
secretary (delete one)
|
||
|
/
/
|
||||
|
Contact
name
|
Contact
daytime telephone
|
Date
|
Instructions
for completion of Proxy Form
Your
name and address
This
is
your name and address as it appears on the register of members of the Company.
If this information is incorrect, please make the correction on the Proxy Form.
Members sponsored by a broker should advise their broker of any
changes.
Please note that you cannot change ownership of your shares using this Proxy
Form.
Appointment
of proxy
If
you
are entitled to vote at the meeting, you have a right to appoint a proxy and
should use this Proxy Form. The proxy need not be a member of the Company and
can be an individual or body corporate.
A
body
corporate appointed as a member's proxy may appoint a representative to exercise
any of the powers that the body may exercise as a proxy at the meeting. The
representative should bring to the meeting evidence of his or her appointment,
including any authority under which the appointment is signed, unless it has
been previously given to the Company.
If
you
wish to appoint someone other than the Chairman of the meeting as your proxy,
please write the name of that person in the appropriate box. Members cannot
appoint themselves. If you leave the box blank, or your named proxy does not
attend the meeting, the Chairman of the meeting will be your proxy and vote
on
your behalf.
Your
proxy's authority to speak and vote for you at the meeting is suspended if
you
are present at the meeting.
Voting
directions to your proxy
You
may
direct your proxy how to vote by marking x
in 1 of
the 3 boxes opposite each item of business. All your votes will be cast in
accordance with your direction, unless you indicate only a portion of votes
are
to be cast on any item by inserting the percentage of your voting rights
applicable to the proxy appointed by this Proxy Form in the appropriate box.
If
you do not mark any of the boxes relating to the items of business, your proxy
will vote as he or she chooses. If you mark more than 1 box relating to the
same
item of business any vote by your proxy on that item will be
invalid.
Appointing
a second proxy
If
you
are entitled to cast 2 or more votes you may appoint 2 proxies and may specify
the proportion or number of votes each proxy is appointed to exercise. If you
wish to appoint a second proxy, an additional Proxy Form may be obtained by
telephoning the Company's share registry, Computershare Investor Services Pty
Limited (Computershare +61 8 9323 2000), or the Company or you may copy this
form. Both Proxy Forms should be lodged together.
If
you
appoint 2 proxies and the appointment does not specify the proportion or number
of your votes each proxy may exercise, each proxy may exercise half of the
votes
(ignoring fractions).
If
you
appoint 2 proxies, neither proxy will have a right to vote on a show of
hands.
If
you
appoint another member as your proxy, that person will have only 1 vote on
a
show of hands and does not have to vote on a show of hands in accordance with
any direction by you.
Signing
instructions
This
Proxy Form must be signed and dated by the member or the member's attorney.
Any
joint member may sign.
If
this
form is signed by an attorney and you have not previously lodged the power
of
attorney with Computershare or the Company for
notation, please attach a certified copy of the power of attorney to this form
when you return it.
If
the
member is a company that has a sole director or a sole director who is also
the
sole company secretary, this form must be signed by that person. Otherwise,
this
form must be signed by 2 directors or 1 director and a company secretary. Please
indicate the office held by signing in the appropriate place.
Lodgement
of Proxy Form
Proxy
Forms and the original or a certified copy of the power of attorney (if the
Proxy Form is signed by an attorney) must be received not later than 48
hours
before the time of the meeting (ie. before 3:00pm
(Western Daylight Saving Time) on Sunday, 18 February 2007,
and may
be lodged:
by
post, delivery or fax to the Company:
Company
Secretary
pSivida
Limited
Level
12,
BGC Centre
28
The
Esplanade
Perth
Western Australia 6000
Australia
Fax:
61 8
9226 5499
Documents
received after 3:00pm
(Western Daylight Saving Time) on Sunday, 18 February 2007
will not
be valid for the purposes of the meeting.
Privacy
Chapter
2C of the Corporations
Act 2001
(Cth)
requires information about you (including your name, address and details of
the
shares you hold) to be included in the Company's public register of members.
This information must continue to be included in the public register if you
cease to hold shares. These statutory obligations are not altered by the
Privacy
Amendment (Private Sector) Act
2000
(Cth).
Information is collected to administer your shareholding which may not be
possible if some or all of the information is not collected. Your information
is
collected by Computershare on behalf of the Company.