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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 27, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LANDEC CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
CALIFORNIA 94-3025618
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
3603 HAVEN AVENUE
MENLO PARK, CALIFORNIA 94025-1010
(650) 306-1650
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
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GARY T. STEELE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
LANDEC CORPORATION 3603 HAVEN AVENUE
MENLO PARK, CALIFORNIA 94025-1010
(650) 306-1650
(Name, Address Including Zip Code, and Telephone Number Including Area Code, of
Agent for Service)
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COPIES TO:
GEOFFREY P. LEONARD
ORRICK, HERRINGTON & SUTCLIFFE LLP
1020 MARSH ROAD
MENLO PARK, CALIFORNIA 94025
(650) 614-7400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please 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, check the following box. /X/
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. / /
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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. / /
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $0.001..... 2,562,503(2) 6.125 15,695,331 4,144.00
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee based on the average of the high and low price of the Common Stock as
reported on the Nasdaq National Market on January 21, 2000, pursuant to
Rule 457(c).
(2) Includes up to 1,666,670 shares of Common Stock to be issued upon conversion
of Series A Preferred Stock and an indeterminate number of additional shares
of Common Stock as may from time to time become issuable upon conversion of
the Preferred Stock to prevent dilution resulting from stock splits, stock
dividends or similar transactions, which shares are registered hereunder
pursuant to Rule 416.
------------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 27, 2000
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS DECLARED
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
2,562,503 SHARES
LANDEC CORPORATION
COMMON STOCK
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This prospectus is part of a registration statement that covers 2,562,503
shares of our common stock (the "Shares"). These Shares may be offered and sold
from time to time by certain of our stockholders (the "Selling Stockholders").
The Selling Stockholders may sell the Shares from time to time on the Nasdaq
National Market in regular brokerage transactions, in transactions directly with
market makers or in certain privately negotiated transactions. The Selling
Stockholders and any underwriters, dealers or agents who participate in the
distribution of the Shares may be deemed to be "underwriters" under the
Securities Act of 1933. See "Plan of Distribution."
We will not receive any proceeds from the sale of the Shares by the Selling
Stockholders. We will bear the costs and expenses of registering the Shares
offered by the Selling Stockholders. Selling commissions, brokerage fees and any
applicable stock transfer taxes are payable by the Selling Stockholders.
Our common stock is traded on the Nasdaq National Market under the symbol
"LNDC." On January 25, 2000, the last sale price of the Company's common stock
on the Nasdaq National Market was $6.5625 per share.
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 HEREIN.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus and in any accompanying prospectus supplement. No
one has been authorized to provide you with different information.
You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of such document.
<PAGE>
The date of this Prospectus is , 2000
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THE COMPANY
Landec Corporation and its subsidiaries ("Landec" or the "Company") design,
develop, manufacture and sell temperature-activated and other specialty polymer
products for a variety of food products, agricultural products, specialty
industrial and medical applications. This proprietary polymer technology is the
foundation, and a key differentiating advantage, upon which the Company has
built its business.
Landec's Food Products Technology business, operated through its wholly
owned subsidiary Apio, Inc., combines Landec's proprietary food packaging
technology with the capabilities of a large national food supplier and
value-added produce processor. This combination was consummated in
December 1999 when the Company acquired Apio, Inc. and certain related entities
(collectively "Apio").
The Company's Agricultural Seed Technology business, operated through its
wholly owned subsidiary Intellicoat Corporation ("Intellicoat"), combines
Landec's proprietary seed coating technology with the unique direct marketing,
telephone sales and e-commerce distribution capabilities of Fielder's Choice
Direct ("Fielder's Choice"). In September 1997, Intellicoat acquired Fielder's
Choice, a direct marketer of hybrid seed corn.
In addition to its two core businesses, the Company also operates a
Technology Licensing/Research and Development Business which licenses products
outside of Landec's core businesses to industry leaders such as Alcon
Laboratories, Inc. ("Alcon") and Hitachi Chemicals. It also engages in research
and development activities with companies such as ConvaTec, a division of
Bristol Myers Squibb.
To support the polymer manufacturing needs of the core businesses, Landec
has developed and acquired lab scale and pilot plant capabilities in Menlo Park,
California and scale-up and commercial manufacturing capabilities at its Dock
Resins Corporation subsidiary ("Dock Resins") in Linden, New Jersey. In
April 1997, Landec acquired Dock Resins, a manufacturer and marketer of
specialty acrylic and other polymers. In addition to providing manufacturing
capabilities, Dock Resins sells industrial specialty products under the
Doresco-TM- trademark which are used by more than 300 customers throughout the
United States in the coatings, printing inks, laminating and adhesives markets.
The Company's core polymer products are based on its patented proprietary
Intelimer-Registered Trademark- polymers, which differ from other polymers in
that they can be customized to abruptly change their physical characteristics
when heated or cooled through a pre-set temperature switch. For instance,
Intelimer polymers can change within the space of one or two degrees Celsius
from a slick, non-adhesive state to a highly tacky, adhesive state; from an
impermeable state to a highly permeable state; or from a solid state to a
viscous state. These abrupt changes are repeatedly reversible and can be
tailored by Landec to occur at specific temperatures, thereby offering
substantial competitive advantages in the Company's target markets.
The Company was incorporated in California on October 31, 1986. The Company
completed its initial public offering in 1996 and is listed on the Nasdaq
National Market under the symbol "LNDC." Our principal executive offices are
located at 3603 Haven Avenue, Menlo Park, California 94025 and our telephone
number is (650) 306-1650.
FORWARD LOOKING STATEMENTS
This prospectus contains so-called forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and the Company intends
that such forward-looking statements be subject to the safe harbor provisions
thereof. These include statements about our expectations, beliefs, intentions or
strategies for the future, which we indicate by words or phrases such as
"anticipate," "expect," "intend," "plan," "will," "we believe," "management
believes" and similar language. All forward-looking statements are based on our
current expectations and are subject to certain risks, uncertainties and
assumptions. Our actual results may differ materially from results anticipated
in these forward-looking
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statements. We base our forward-looking statements on information currently
available to us, and we assume no obligation to update them.
RISK FACTORS
Prospective purchasers of the common stock offered by this prospectus should
carefully consider the following risk factors. The Company's business, financial
condition and results of operations have been, and in the future may be,
affected by a variety of factors, including those set forth below or
incorporated by reference in this prospectus.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT.
The Company has incurred net losses in each fiscal year since its inception,
including a net loss of $2.8 million for fiscal year 1999. The Company's
accumulated deficit as of October 31, 1999 totaled $45.5 million. The Company
may incur additional losses in the future. The amount of future net profits, if
any, is highly uncertain and there can be no assurance that the Company will be
able to reach or sustain profitability for an entire fiscal year.
THE COMPANY'S SUBSTANTIAL INDEBTEDNESS COULD LIMIT ITS FINANCIAL AND OPERATING
FLEXIBILITY AND SUBJECT IT TO OTHER RISKS.
Upon the closing of the Apio acquisition, the Company's total debt,
including current maturities and capital lease obligations, increased to
approximately $22 million and the total debt to equity ratio was approximately
40%. This level of indebtedness could have significant consequences because:
- a substantial portion of the Company's net cash flow from operations must
be dedicated to debt service and will not be available for other purposes;
- the Company's ability to obtain additional debt financing in the future
for working capital, capital expenditures or acquisitions may be limited;
and
- the Company's level of indebtedness may limit its flexibility in reacting
to changes in the industry and economic conditions generally.
The Company's ability to service its indebtedness will depend on its future
performance, which will be affected by prevailing economic conditions and
financial, business and other factors, some of which are beyond the Company's
control. If the Company were unable to service its debt, it would be forced to
pursue one or more alternative strategies such as selling assets, restructuring
or refinancing its indebtedness or seeking additional equity capital, which
might not be successful and which could substantially dilute the ownership
interest of existing shareholders.
In addition, Apio is subject to various financial and operating covenants
under its term debt and line of credit facilities (the "loan agreement"),
including minimum levels of EBITDA, minimum fixed charge coverage ratio, minimum
current ratio, minimum adjusted net worth and maximum leverage ratios. These
requirements and ratios generally become more restrictive over time. The loan
agreement limits the ability of Apio to make cash payments to Landec until the
outstanding balance is reduced to an amount specified in the loan agreement. The
Company has pledged substantially all of Apio's assets to secure its bank debt.
The Company's failure to comply with the obligations under the loan agreement,
including maintenance of financial ratios, could result in an event of default,
which, if not cured or waived, would permit acceleration of the indebtedness due
under the loan agreement. Any such violations of its obligations under the loan
agreement could have a material adverse effect on the Company's business,
results of operations and financial condition.
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QUARTERLY FLUCTUATIONS IN OPERATING RESULTS.
In the past, the Company's results of operations have varied significantly
from quarter to quarter and such fluctuations are expected to continue in the
future. Historically, the Company's corn seed distributor, Fielder's Choice, has
been the primary source of these fluctuations, as its revenues and profits are
concentrated over a few months during the spring planting season (generally
during the Company's second quarter). In addition, Apio can be heavily affected
by seasonal and weather factors which could impact quarterly results. The
Company's earnings in its Food Products Technology business will be sensitive to
price fluctuations in the fresh vegetables and fruits markets. Excess supplies
can cause intense price competition. Other factors affecting the Company's food
and/or agricultural operations include the seasonality of its supplies, the
ability to process produce during critical harvest periods, the timing and
effects of ripening, the degree of perishability, the effectiveness of worldwide
distribution systems, the terms of various federal and state marketing orders,
total worldwide industry volumes, the seasonality of consumer demand, foreign
currency fluctuations, foreign importation restrictions and foreign political
risks. As a result of these and other factors, the Company expects to continue
to experience fluctuations in quarterly operating results, and there can be no
assurance that the Company will be able to reach or sustain profitability for an
entire fiscal year.
UNCERTAINTY RELATING TO INTEGRATION OF APIO AND OTHER NEW BUSINESS ACQUISITIONS.
The Company's acquisition of Apio involves the integration of Apio's
operations into the Company. The integration will require the dedication of
management resources in order to achieve the anticipated operating efficiencies
of the acquisition. No assurance can be given that difficulties encountered in
integrating the operations of Apio into the Company will be overcome or that the
benefits expected from such integration will be realized. The difficulties in
combining Apio and the Company's operations are exacerbated by the necessity of
coordinating geographically separate organizations, integrating personnel with
disparate business backgrounds and combining different corporate cultures. The
process of integrating operations could cause an interruption of, or loss of
momentum in, the activities of the combined company's business. Difficulties
encountered or additional costs incurred in connection with the acquisition and
the integration of the operations of Apio and the Company could have a material
adverse effect on the business, results of operations and financial condition of
the Company.
The successful integration of other new business acquisitions may require
substantial effort from the Company's management. The diversion of the attention
of management and any difficulties encountered in the transition process could
have a material adverse effect on the Company's ability to realize the
anticipated benefits of the acquisitions. The successful combination of new
businesses also requires coordination of research and development activities,
manufacturing, and sales and marketing efforts. In addition, the process of
combining organizations could cause the interruption of, or a loss of momentum
in, the Company's activities. There can be no assurance that the Company will be
able to retain key management, technical, sales and customer support personnel,
or that the Company will realize the anticipated benefits of the acquisitions,
and the failure to do so would have a material adverse effect on the Company's
business, results of operations and financial condition.
EARLY COMMERCIALIZATION OF CERTAIN PRODUCTS; DEPENDENCE ON NEW PRODUCTS AND
TECHNOLOGIES; UNCERTAINTY OF MARKET ACCEPTANCE.
The Company is in the early stage of product commercialization of certain
Intellipac breathable membrane, Intellicoat seed coating and Intelimer polymer
systems products and many of its potential products are in development. The
Company believes that its future growth will depend in large part on its ability
to develop and market new products in its target markets and in new markets. In
particular, the Company expects that its ability to compete effectively with
existing food products, agricultural, industrial and medical companies will
depend substantially on successfully developing, commercializing,
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<PAGE>
achieving market acceptance of and reducing the cost of producing the Company's
products. In addition, commercial applications of the Company's temperature
switch polymer technology are relatively new and evolving. There can be no
assurance that the Company will be able to successfully develop, commercialize,
achieve market acceptance of or reduce the costs of producing the Company's new
products, or that the Company's competitors will not develop competing
technologies that are less expensive or otherwise superior to those of the
Company. There can be no assurance that the Company will be able to develop and
introduce new products and technologies in a timely manner or that new products
and technologies will gain market acceptance. The failure to develop and
successfully market new products would have a material adverse effect on the
Company's business, results of operations and financial condition.
The success of the Company in generating significant sales of its products
will depend in part on the ability of the Company and its partners and licensees
to achieve market acceptance of the Company's new products and technology. The
extent to which, and rate at which, market acceptance and penetration are
achieved by the Company's current and future products are a function of many
variables including, but not limited to, price, safety, efficacy, reliability,
conversion costs and marketing and sales efforts, as well as general economic
conditions affecting purchasing patterns. There can be no assurance that markets
for the Company's new products will develop or that the Company's new products
and technology will be accepted and adopted. The failure of the Company's new
products to achieve market acceptance would have a material adverse effect on
the Company's business, results of operations and financial condition.
COMPETITION AND TECHNOLOGICAL CHANGE.
The Company operates in highly competitive and rapidly evolving fields, and
new developments are expected to continue at a rapid pace. Competition from
large food products, agricultural, industrial and medical companies is expected
to be intense. In addition, the nature of the Company's collaborative
arrangements may result in its corporate partners and licensees becoming
competitors of the Company. Many of these competitors have substantially greater
financial and technical resources and production and marketing capabilities than
the Company, and may have substantially greater experience in conducting
clinical and field trials, obtaining regulatory approvals and manufacturing and
marketing commercial products. There can be no assurance that these competitors
will not succeed in developing alternative technologies and products that are
more effective, easier to use or less expensive than those which have been or
are being developed by the Company or that would render the Company's technology
and products obsolete and non-competitive.
LIMITED MANUFACTURING EXPERIENCE; DEPENDENCE ON THIRD PARTIES.
The Company's success is dependent in part upon its ability to manufacture
its products in commercial quantities in compliance with regulatory requirements
and at acceptable costs. There can be no assurance that the Company will be able
to achieve this.
Although the Company believes Dock Resins will provide Landec with practical
knowledge in the scale-up of Intelimer polymer products, production in
commercial-scale quantities may involve technical challenges for the Company.
The Company anticipates that a portion of the Company's products will be
manufactured in the Linden, New Jersey facility acquired in the purchase of Dock
Resins. The Company's reliance on this facility involves a number of potential
risks, including the unavailability of, or interruption in access to, certain
process technologies and reduced control over delivery schedules, and low
manufacturing yields and high manufacturing costs. The Company may also need to
consider seeking collaborative arrangements with other companies to manufacture
certain of its products. If the Company becomes dependent upon third parties for
the manufacture of its products, then the Company's profit margins and its
ability to develop and deliver such products on a timely basis may be adversely
affected. Moreover, there can be no assurance that such parties will adequately
perform and
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any failures by third parties may impair the Company's ability to deliver
products on a timely basis, impair the Company's competitive position, or may
delay the submission of products for regulatory approval. In late fiscal 1999,
in an effort to reduce reliance on third party manufacturers, the Company began
the set up of a manufacturing operation at its facility in Menlo Park,
California, for the production of Intellipac breathable membrane products. There
can be no assurance that the Company can successfully operate a manufacturing
operation at acceptable costs, with acceptable yields, and retain adequately
trained personnel. The occurrence of any of these factors could have a material
adverse effect on the Company's business, results of operations and financial
condition.
DEPENDENCE ON SINGLE SOURCE SUPPLIERS.
Many of the raw materials used in manufacturing certain of the Company's
products are currently purchased from a single source, including certain
monomers used to synthesize Intelimer polymers and substrate materials for the
Company's breathable membrane products. In addition, virtually all of the hybrid
corn varieties sold by Fielder's Choice are purchased from a single source. Upon
manufacturing scale-up and as hybrid corn sales increase, the Company may enter
into alternative supply arrangements. Although to date the Company has not
experienced difficulty acquiring materials for the manufacture of its products
nor has Fielder's Choice experienced difficulty in acquiring hybrid corn
varieties, no assurance can be given that interruptions in supplies will not
occur in the future, that the Company will be able to obtain substitute vendors,
or that the Company will be able to procure comparable materials or hybrid corn
varieties at similar prices and terms within a reasonable time. Any such
interruption of supply could have a material adverse effect on the Company's
ability to manufacture and distribute its products and, consequently, could
materially and adversely affect the Company's business, results of operations
and financial condition.
PATENTS AND PROPRIETARY RIGHTS.
The Company's success depends in large part on its ability to obtain
patents, maintain trade secret protection and operate without infringing on the
proprietary rights of third parties. There can be no assurance that any pending
patent applications will be approved, that the Company will develop additional
proprietary products that are patentable, that any patents issued to the Company
will provide the Company with competitive advantages or will not be challenged
by any third parties or that the patents of others will not prevent the
commercialization of products incorporating the Company's technology.
Furthermore, there can be no assurance that others will not independently
develop similar products, duplicate any of the Company's products or design
around the Company's patents. The Company has received, and may in the future
receive, from third parties, including some of its competitors, notices claiming
that it is infringing third party patents or other proprietary rights. If the
Company were determined to be infringing any third-party patent, the Company
could be required to pay damages, alter its products or processes, obtain
licenses or cease certain activities. If the Company is required to obtain any
licenses, there can be no assurance that the Company will be able to do so on
commercially favorable terms, if at all. Litigation, which could result in
substantial costs to and diversion of effort by the Company, may also be
necessary to enforce any patents issued or licensed to the Company or to
determine the scope and validity of third-party proprietary rights. Any such
litigation or interference proceeding, regardless of outcome, could be expensive
and time consuming and could subject the Company to significant liabilities to
third parties, require disputed rights to be licensed from third parties or
require the Company to cease using such technology and, consequently, could have
a material adverse effect on the Company's business, results of operations and
financial condition.
ENVIRONMENTAL REGULATIONS
Federal, state and local regulations impose various environmental controls
on the use, storage, discharge or disposal of toxic, volatile or otherwise
hazardous chemicals and gases used in certain
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manufacturing processes, including those utilized by Dock Resins. As a result of
historic off-site disposal practices, Dock Resins was recently involved in two
actions seeking to compel the generators of hazardous waste to remediate
hazardous waste sites. Dock Resins has been informed by its counsel that it was
a DE MINIMISgenerator to these sites, and these actions have been settled
without the payment of any material amount by the Company. In addition, the New
Jersey Industrial Site Recovery Act ("ISRA") requires an investigation and
remediation of any industrial establishment, like Dock Resins, which changes
ownership. This statute was activated by the Company's acquisition of Dock
Resins. Dock Resins has completed its investigation of the site, delineated the
limited areas of concern on the site, and completed the bulk of the active
remediation required under the statute. The costs associated with this effort
are being borne by the former owner of Dock Resins, and counsel has advised Dock
Resins and the Company that funds of the former owner required by ISRA to be set
aside for this effort are sufficient to pay for the successful completion of
remedial activities at the site. In most cases, the Company believes its
liability will be limited to sharing clean-up or other remedial costs with other
potentially responsible parties. Any failure by the Company to control the use
of, or to restrict adequately the discharge of, hazardous substances under
present or future regulations could subject it to substantial liability or could
cause its manufacturing operations to be suspended and could have a material
adverse effect on the Company's business, operating results and financial
condition. There can be no assurance that changes in environmental regulations
will not impose the need for additional capital equipment or other requirements.
The Company's agricultural operations are subject to a variety of
environmental laws including the Food Quality Protection Act of 1966, the Clean
Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the
Federal Insecticide, Fungicide and Rodenticide Act and the Comprehensive
Environmental Response, Compensation and Liability Act. Compliance with these
laws and related regulations is an ongoing process. Environmental concerns are,
however, inherent in most agricultural operations, including those conducted by
the Company, and there can be no assurance that the cost of compliance with
environmental laws and regulations will not be material. Moreover, it is
possible that future developments, such as increasingly strict environmental
laws and enforcement policies thereunder, and further restrictions on the use of
manufacturing chemicals could result in increased compliance costs.
ADVERSE GROWING CONDITIONS.
The Company's Food Products and Agricultural Seed Technology businesses are
subject to weather conditions that affect commodity prices, crop yields, and
decisions by growers regarding crops to be planted. Crop diseases and severe
conditions, particularly weather conditions such as floods, droughts, frosts,
windstorms and hurricanes may adversely affect the supply of vegetables and
fruits used in the Company's business, reduce the sales volumes and increase the
unit production costs. Because a significant portion of the costs are fixed and
contracted in advance of each operating year, volume declines due to production
interruptions or other factors could result in increases in unit production
costs which could result in substantial losses and weaken the Company's
financial condition. If the supply of any of the Company's products is adversely
affected by the adverse conditions, there can be no assurance that the Company
will be able to obtain sufficient supplies from alternative sources.
LIMITED SALES AND MARKETING EXPERIENCE.
The Company has only limited experience marketing and selling its Intelimer
polymer products. While Dock Resins will provide consultation and in some cases
direct marketing support for Landec's Intelimer polymer products, establishing
sufficient marketing and sales capability will require significant resources.
The Company intends to distribute certain of its products through its corporate
partners and other distributors and to sell certain other products through a
direct sales force. There can be no
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assurance that the Company will be able to recruit and retain skilled sales
management, direct salespersons or distributors, or that the Company's sales and
marketing efforts will be successful. To the extent that the Company has entered
into or will enter into distribution or other collaborative arrangements for the
sale of its products, the Company will be dependent on the efforts of third
parties. There can be no assurance that such sales and marketing efforts will be
successful and any failure in such efforts could have a material adverse effect
on the Company's business, operating results and financial condition.
DEPENDENCE ON COLLABORATIVE PARTNERS AND LICENSEES.
For certain of its current and future products, the Company's strategy for
development, clinical and field testing, manufacture, commercialization and
marketing includes entering into various collaborations with corporate partners,
licensees and others. The Company is dependent on its corporate partners to
develop, test, manufacture and/or market certain of its products. Although the
Company believes that its partners in these collaborations have an economic
motivation to succeed in performing their contractual responsibilities, the
amount and timing of resources to be devoted to these activities are not within
the control of the Company. There can be no assurance that such partners will
perform their obligations as expected or that the Company will derive any
additional revenue from such arrangements. There can be no assurance that the
Company's partners will pay any additional option or license fees to the Company
or that they will develop, market or pay any royalty fees related to products
under the agreements. Moreover, certain of the collaborative agreements provide
that they may be terminated at the discretion of the corporate partner, and
certain of the collaborative agreements provide for termination under certain
other circumstances. In addition, there can be no assurance as to the amount of
royalties, if any, on future sales of QuickCast and PORT products as the Company
no longer has control over the sales of such products since the sale of
QuickCast and the license of the PORT product lines. There can be no assurance
that the Company's partners will not pursue existing or alternative technologies
in preference to the Company's technology. Furthermore, there can be no
assurance that the Company will be able to negotiate additional collaborative
arrangements in the future on acceptable terms, if at all, or that such
collaborative arrangements will be successful.
GOVERNMENT REGULATION
The Company's products and operations are subject to governmental regulation
in the United States and foreign countries. The manufacture of the Company's
products is subject to periodic inspection by regulatory authorities. There can
be no assurance that the Company will be able to obtain necessary regulatory
approvals on a timely basis or at all. Delays in receipt of or failure to
receive such approvals or loss of previously received approvals would have a
material adverse effect on the Company's business, financial condition and
results of operations. Although Landec has no reason to believe that it will not
be able to comply with all applicable regulations regarding the manufacture and
sale of its products and polymer materials, such regulations are always subject
to change and depend heavily on administrative interpretations and the country
in which the products are sold. There can be no assurance that future changes in
regulations or interpretations relating to such matters as safe working
conditions, laboratory and manufacturing practices, environmental controls, and
disposal of hazardous or potentially hazardous substances will not adversely
affect the Company's business. There can be no assurance that the Company will
not be required to incur significant costs to comply with such laws and
regulations in the future, or that such laws or regulations will not have a
material adverse effect on the Company's business, operating results and
financial condition. As a result of the Apio acquisition, the Company is subject
to USDA rules and regulations concerning the safety of the food products handled
and sold by Apio, and the facilities in which they are packed and processed.
Failure to comply with the applicable regulatory requirements can, among other
things, result in fines, injunctions, civil penalties,
8
<PAGE>
suspensions or withdrawal of regulatory approvals, product recalls, product
seizures, including cessation of manufacturing and sales, operating restrictions
and criminal prosecution.
INTERNATIONAL OPERATIONS AND SALES.
In fiscal years 1999 and 1998, approximately 3% of the Company's total
revenues were derived from product sales to and collaborative agreements with
international customers. The Company expects that with the acquisition of Apio
and its export business, international revenues will become an important
component of its total revenues. A number of risks are inherent in international
transactions. International sales and operations may be limited or disrupted by
the regulatory approval process, government controls, export license
requirements, political instability, price controls, trade restrictions, changes
in tariffs or difficulties in staffing and managing international operations.
Foreign regulatory agencies have or may establish product standards different
from those in the United States, and any inability to obtain foreign regulatory
approvals on a timely basis could have a material adverse effect on the
Company's international business and its financial condition and results of
operations. While the Company's foreign sales are currently priced in dollars,
fluctuations in currency exchange rates, such as those recently experienced in
many Asian countries which comprise a part of the territories of certain of the
Company's collaborative partners and Apio's export business, may reduce the
demand for the Company's products by increasing the price of the Company's
products in the currency of the countries to which the products are sold. There
can be no assurance that regulatory, geopolitical and other factors will not
adversely impact the Company's operations in the future or require the Company
to modify its current business practices.
CUSTOMER CONCENTRATION.
For fiscal year 1999, sales to the Company's top five customers accounted
for approximately 28% of the Company's product sales with the top customer
accounting for 10% of the Company's product sales. The Company expects that for
the foreseeable future a limited number of customers may continue to account for
a substantial portion of its net revenues. The Company may experience changes in
the composition of its customer base, as Apio, Dock Resins and Fielder's Choice
have experienced in the past. The Company does not have long-term purchase
agreements with any of its customers. The reduction, delay or cancellation of
orders from one or more major customers for any reason or the loss of one or
more of such major customers could materially and adversely affect the Company's
business, operating results and financial condition. In addition, since certain
products manufactured in the Linden, New Jersey facility or processed by Apio at
its Guadalupe, California facility are often sole sourced to its customers, the
Company's operating results could be adversely affected if one or more of its
major customers were to develop other sources of supply. There can be no
assurance that the Company's current customers will continue to place orders,
that orders by existing customers will not be canceled or will continue at the
levels of previous periods or that the Company will be able to obtain orders
from new customers.
PRODUCT LIABILITY EXPOSURE AND AVAILABILITY OF INSURANCE.
The testing, manufacturing, marketing, and sale of the products being
developed by the Company involve an inherent risk of allegations of product
liability. While no product liability claims have been made against the Company
to date, if any such claims were made and adverse judgments obtained, they could
have a material adverse effect on the Company's business, operating results and
financial condition. Although the Company has taken and intends to continue to
take what it believes are appropriate precautions to minimize exposure to
product liability claims, there can be no assurance that it will avoid
significant liability. The Company currently maintains medical and non-medical
product liability insurance with limits in the amount of $4.0 million per
occurrence and $5.0 million in the annual aggregate. In addition, Apio has
product liability insurance with limits in the amount of $41.0 million
9
<PAGE>
per occurrence and $42.0 million in the annual aggregate. There can be no
assurance that such coverage is adequate or will continue to be available at an
acceptable cost, if at all. A product liability claim, product recall or other
claim with respect to uninsured liabilities or in excess of insured liabilities
could have a material adverse effect on the Company's business, operating
results and financial condition.
POSSIBLE VOLATILITY OF STOCK PRICE.
Factors such as announcements of technological innovations, the attainment
of (or failure to attain) milestones in the commercialization of the Company's
technology, new products, new patents or changes in existing patents, the
acquisition of new businesses or the sale or disposal of a part of the Company's
businesses, or development of new collaborative arrangements by the Company, its
competitors or other parties, as well as government regulations, investor
perception of the Company, fluctuations in the Company's operating results and
general market conditions in the industry may cause the market price of the
Company's common stock to fluctuate significantly. In addition, the stock market
in general has recently experienced extreme price and volume fluctuations, which
have particularly affected the market prices of technology companies and which
have been unrelated to the operating performance of such companies. These broad
fluctuations may adversely affect the market price of the Company's common
stock.
FINANCIAL AND ACCOUNTING CHANGES.
In order to address certain deficiencies in Apio's management information
systems and accounting systems, Apio has restructured its financial and
accounting department, including hiring a chief financial officer and a new
controller, and retained consultants who have worked with Apio to improve
accounting processes and procedures. Apio management believes that such changes
will improve its managing of operations, including delivering complete and
accurate financial statements to Landec's corporate offices in a more timely
manner. However, the Company can give no assurances that it will be able to
effect such changes in the management information systems and accounting systems
in a timely manner or that any delay will not have a material adverse effect on
the Company's business, financial condition and results of operations.
INTRODUCTION OF THE EURO.
On January 1, 1999, certain member states of the European Economic Community
fixed their respective currencies to a new currency, commonly known as the
"Euro". During the three years beginning on January 1, 1999, business in these
countries will be conducted both in the existing national currency, as well as
the Euro. Companies operating in or conducting business in these countries will
need to ensure that their financial and other software systems are capable of
processing transactions and properly handling the existing currencies and the
Euro. Based on the current level of direct European business conducted by the
Company, and also because the Company expects that any transactions in Europe in
the near future will be priced in U.S. dollars, the Company does not expect that
introduction and use of the Euro will materially affect the Company's business.
The Company will continue to evaluate the impact over time of the introduction
of the Euro. However, if the Company encounters unexpected opportunities or
difficulties in Europe, the Company's business could be adversely affected,
including the inability to bill customers and to pay suppliers for transactions
denominated in the Euro and the inability to properly record transactions
denominated in the Euro in the Company's financial statements.
IMPACT OF YEAR 2000.
The Year 2000 issue concerns the potential inability of computer
applications, other information technology systems, and certain software-based
"embedded" control systems to recognize and process properly, date-sensitive
information in the Year 2000 and beyond. The Company could suffer material
10
<PAGE>
adverse impacts on its operations and financial results if the applications and
systems used by the Company, or by third parties with whom the Company does
business, do not accurately or adequately process or manage dates or other
information as a result of the Year 2000 issue.
The Company has certain key relationships with customers, vendors and
outside service providers. The Company is primarily relying upon the voluntary
disclosures from third parties for this review of their Year 2000 readiness.
Failure by the Company's key customers, vendors and outside service providers to
adequately address the Year 2000 issue could have a material adverse impact on
the Company's operations and financial results.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the Shares by the Selling
Stockholders in the offering; all net proceeds will go to the Selling
Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information as of January 24, 2000
with respect to the Selling Stockholders. The following table assumes that the
Selling Stockholders sell all of the shares offered by this prospectus. We are
unable to determine the exact number of shares that actually will be sold.
The number and percentage of shares of Common Stock beneficially owned is
based on 15,923,962 shares outstanding at January 24, 2000 determined in
accordance with Rule 13d-3 of the Exchange Act, plus in the case of Frederick
Frank, the shares issuable upon conversion of the Series A Preferred Stock. The
information is not necessarily indicative of beneficial ownership for any other
purpose. Under Rule 13d-3, beneficial ownership includes any shares as to which
an individual has sole or shared voting power or investment power, and also
includes shares which an individual has the right to acquire within 60 days of
January 24, 2000 through the exercise of any stock option or other right. Unless
otherwise indicated in the footnotes, each person has sole voting and investment
power (or shares such powers with his or her spouse) with respect to the shares
shown as beneficially owned.
<TABLE>
<CAPTION>
COMMON SHARES COMMON SHARES
BENEFICIALLY OWNED PRIOR BENEFICIALLY OWNED AFTER
TO OFFERING NUMBER OF OFFERING
------------------------ COMMON SHARES ------------------------
BENEFICIAL OWNERS NUMBER PERCENTAGE BEING OFFERED NUMBER PERCENTAGE
----------------- ----------- ---------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Frederick Frank(1)................... 1,666,670 9.47% 1,666,670 0 0%
Nicholas Tompkins(2)................. 416,666 2.62 138,889 277,777 1.74
Kathleen Tompkins.................... 416,667 2.62 138,889 277,778 1.74
Timothy Murphy....................... 833,333 5.23 277,777 555,556 3.49
John Maulhardt....................... 208,333 1.31 69,444 138,889 *
Roy Killgore......................... 208,334 1.31 69,445 138,889 *
The Edward W. Silva Jr. Revocable
Trust dated August 6, 1989......... 208,333 1.31 69,444 138,889 *
The Larry J. Silva Revocable Trust
Dated July 31, 1990................ 208,334 1.31 69,445 138,889 *
Lehman Brothers Inc.................. 62,500 * 62,500 0 0%
</TABLE>
- ------------------------
* Less than one percent.
(1) Frederick Frank is a Director of Landec. His shares consist of 166,667
shares of Series A Preferred Stock that are convertible into 1,666,670
shares of Common Stock.
11
<PAGE>
(2) Nicholas Tompkins is the Senior Vice President of Landec.
Pursuant to a Series A Preferred Stock Purchase Agreement (the "Purchase
Agreement") dated November 19, 1999, by and among the Company and Frederick
Frank, the Company completed a financing that raised approximately
$10.0 million, through a private placement of its Series A-1 Preferred Stock and
Series A-2 Preferred Stock (the "Preferred Stock"). Pursuant to the Purchase
Agreement, the Company issued 166,667 shares of Preferred Stock of the Company
at $60.00 per share (representing 1,666,670 shares of common stock on an
as-converted basis). Frederick Frank was elected as a director of the Company in
December 1999. In accordance with the Purchase Agreement, the 1,666,670 shares
of common stock issuable upon conversion of the Preferred Stock owned by
Frederick Frank are being registered hereby.
On December 2, 1999, Landec acquired Apio, Inc., a California corporation
("Apio"), by the statutory merger of Apio with and into Bush Acquisition
Corporation, a Delaware corporation ("BAC") and a wholly owned subsidiary of the
Company (the "Merger"). The Company also acquired all of the outstanding shares
and partnership interests of South Coast Paper Company, Inc., Pacific West
Produce Marketing, Inc., Cal Ex Trading Company, and Apio Produce Sales (the
"Related Entities"). The acquisitions were accomplished pursuant to an Agreement
and Plan of Merger and Purchase Agreement (the "Agreement") dated as of
November 29, 1999 among the Company, BAC, Apio, the Related Entities and the
stockholders and partners of the Related Entities (the "Stockholders"). Upon the
closing, the Company paid $8.9 million in cash and issued 2,500,000 shares of
the Company's common stock to the Stockholders. In addition, the Agreement
provides for future payments to the Stockholders of up to $16.75 million, with
$10.0 million of that amount based on Apio achieving certain performance
milestones. In accordance with the Agreement, 833,333 shares of the common stock
are being registered hereby for the Stockholders who received the common stock
as part of the consideration for the Merger.
As compensation for services rendered by Lehman Brothers Inc. in connection
with the closing of the Merger, the Company issued 62,500 shares of common stock
to Lehman Brothers Inc. and agreed to register such shares hereunder. From time
to time, Lehman Brothers Inc. or its affiliates have provided, and may continue
to provide, investment banking services to the Company, for which they received
or will receive customary fees.
PLAN OF DISTRIBUTION
Resales of the Shares by the Selling Stockholders may be made on the Nasdaq
National Market, in the over-the-counter market or in private transactions. The
shares will be offered for sale on terms to be determined when the agreement to
sell is made or at the time of sale, as the case may be. The Selling
Stockholders may sell some or all of the Shares in transactions involving
broker-dealers who may act solely as agent and or may acquire shares as
principal. Broker-dealers participating in such transactions as agent may
receive commissions from the Selling Stockholders (and, if they act as agent for
the purchaser of such shares, from such purchaser), such commissions computed in
appropriate cases in accordance with the applicable rules of NASDAQ, which
commissions may be at negotiated rates where permissible under such rules.
Participating broker-dealers may agree with the Selling Stockholders to sell a
specific number of shares at a stipulated price per share and, to the extent
such broker-dealer is unable to do so acting as agent, for the Selling
Stockholders to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer's commitment to the Selling Stockholders. Any such
sales may be by block trade.
The Selling Stockholders and any underwriters, dealers or agents who
participate in the distribution of the Shares may be deemed to be "underwriters"
under the Securities Act of 1933. Any discount, commission or concession
received by such persons might be deemed to be an underwriting discount or
12
<PAGE>
commission under the Securities Act. We have agreed to indemnify the Selling
Stockholders against certain liabilities arising under the Securities Act.
The Selling Stockholders will pay selling commissions or brokerage fees, if
any, with respect to the sale of the common stock offered by this prospectus in
amounts customary for this type of transaction. Each Selling Stockholder will
also pay all applicable transfer taxes and fees for its legal counsel incurred
in connection with the sale of the Shares, except that the Company has agreed to
pay the reasonable legal fees of counsel to Frederick Frank.
The anti-manipulation rules under the Securities Exchange Act of 1934 may
apply to sales of the shares offered by this prospectus in the market.
We have agreed to maintain the effectiveness of this registration statement
until the sale of all the Shares offered by this prospectus, but in no event
after first anniversary of the effective date of the Registration Statement. No
sales may be made pursuant to this prospectus after the expiration date unless
we amend or supplement this prospectus to indicate that we have agreed to extend
the period of effectiveness. The Selling Stockholders may sell all, some or none
of the Shares offered by this prospectus.
From time to time, Lehman Brothers Inc. or its affiliates have provided, and
may continue to provide, investment banking services to the Company, for which
they received or will receive customary fees.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby will be
passed upon by Orrick, Herrington & Sutcliffe LLP, Menlo Park, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended October 31, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedule are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the
U.S. Securities and Exchange Commission (the "SEC"). You may read and copy any
document that we have filed at the SEC's public reference rooms located at 450
Fifth Street N.W., Room 1024, Washington, D.C. 20549, and at the SEC's regional
offices located at World Trade Center, 13th Floor, New York, New York 10048 and
at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Please call the SEC at 1-800-732-0330 for more information about
the Public Reference Room facilities. Our SEC filings are also available to you
free of charge at the SEC's website at http://www.sec.gov.
Our common stock is quoted on the Nasdaq National Market under the symbol
"LNDC." Copies of publicly available documents that have been filed with the SEC
can be inspected and copied at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
We have filed a registration statement on Form S-3 with the SEC that covers
the securities offered hereby. This prospectus is part of the registration
statement, however, the prospectus does not include all of the information
included in the registration statement and its exhibits. As a result, you should
13
<PAGE>
refer to the registration statement for additional information about us and the
common stock offered under this prospectus. Statements that we make in this
prospectus relating to any documents filed as an exhibit to the registration
statement or any document incorporated by reference into the registration
statement are not necessarily complete and you should review the referenced
document itself for a complete understanding of its terms.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the SEC
will automatically update and supersede previously filed information, including
information contained in this document.
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until this offering has been completed.
(a) Our Annual Report on Form 10-K, for the year ended October 31,1999;
(b) Our Current Report on Form 8-K filed with the SEC on December 17, 1999;
and
(c) The description of our Common Stock contained in our Registration
Statement on Form 8-A filed with the SEC on December 21, 1995.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the termination of the
offering, shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing such documents.
You may request free copies of these filings by writing or telephoning us at
the following address: Gregory Skinner, Chief Financial Officer, Landec
Corporation, 3603 Haven Avenue, Menlo Park, California 94025-1010
(650) 306-1650.
14
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE PROSPECTUS IN CONNECTION WITH
THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY SELLING STOCKHOLDER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO TO ANYONE TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
The Company........................... 2
Risk Factors.......................... 3
Use Of Proceeds....................... 11
Selling Stockholders.................. 11
Plan Of Distribution.................. 12
Legal Matters......................... 13
Experts............................... 13
Where You Can Find More Information... 13
</TABLE>
2,562,503 SHARES
LANDEC CORPORATION
COMMON STOCK
---------------------
PROSPECTUS
---------------------
_________, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the
Registrant in connection with the distribution of the Common Stock being
registered. All amounts are estimated, except the SEC registration fee, and the
Nasdaq listing fee:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 4,144
Accounting fees and expenses................................ $ 3,000
Legal fees and expenses..................................... $25,000
Miscellaneous............................................... $ 856
-------
Total..................................................... $33,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Articles of Incorporation reduce the liability of a
director to the corporation or its shareholders for monetary damages for
breaches of his or her fiduciary duty of care to the fullest extent permissible
under California law. The Bylaws of the Registrant further provide for
indemnification of corporate agents to the maximum extent permitted by the
California Corporations Code. In addition, the Registrant has entered into
Indemnification Agreements with its officers and directors.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<C> <S>
2.1 Form of Agreement and Plan of Merger and Purchase Agreement
by and among the Registrant, Bush Acquisition Corporation, a
wholly-owned subsidiary of the Registrant, Apio, Inc., South
Coast Paper Company, Inc., Pacific West Produce Marketing,
Inc., CalEx Trading Company, Apio Produce Sales, and each of
the respective shareholders of Apio, Inc., South Coast Paper
Company, Inc., Pacific West Produce Marketing, Inc., and
CalEx Trading Company, and the constituent partners of Apio
Produce Sales, dated November 29, 1999 (incorporated by
reference to exhibit 2.1 to the Registrant's current report
on Form 8-K filed on Dec. 17, 1999, Commission File No.
0-27446).
4.1 Series A Preferred Stock Purchase Agreement between the
Registrant and Frederick Frank, dated as of November 19,
1999 (incorporated by reference to exhibit 4.1 to the
Registrant's current report on Form 8-K filed on Dec. 17,
1999, Commission File No. 0-27446).
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP as to legality
of the shares of Common Stock.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP (See
Exhibit 5.1).
24.1 Powers of Attorney (see Page II-4).
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
A. 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
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(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 (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment to
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(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.
B. The undersigned 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 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 offering therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the provisions described in
Item 15 above, 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 of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Menlo Park, State of California, on this 26th day of
January, 2000.
<TABLE>
<S> <C> <C>
LANDEC CORPORATION
By: /s/ GARY T. STEELE
-----------------------------------------
Gary T. Steele
CHIEF EXECUTIVE OFFICER AND PRESIDENT
</TABLE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Gary T. Steele and Gregory S. Skinner and each of
them, his attorney-in-fact, with the power of substitution, to sign any
amendments to this Registration Statement (including post-effective amendments),
and to file same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-fact, or his substitute, may do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>
Chief Executive Officer,
/s/ GARY T. STEELE President and Director
------------------------------------------- (Principal Executive January 26, 2000
Gary T. Steele Officer)
Vice President and Chief
/s/ GREGORY S. SKINNER Financial Officer
------------------------------------------- (Principal Financial January 26, 2000
Gregory S. Skinner Officer and Principal
Accounting Officer)
/s/ STEPHEN E. HALPRIN
------------------------------------------- Director January 26, 2000
Stephen E. Halprin
/s/ KIRBY L. CRAMER
------------------------------------------- Director January 26, 2000
Kirby L. Cramer
/s/ RICHARD S. SCHNEIDER, PH.D.
------------------------------------------- Director January 26, 2000
Richard S. Schneider, Ph.D.
/s/ RICHARD DULUDE
------------------------------------------- Director January 26, 2000
Richard Dulude
/s/ DAMION E. WICKER, M.D.
------------------------------------------- Director January 26, 2000
Damion E. Wicker, M.D.
/s/ FREDERICK FRANK
------------------------------------------- Director January 26, 2000
Frederick Frank
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<C> <S>
2.1 Form of Agreement and Plan of Merger and Purchase Agreement
by and among the Registrant, Bush Acquisition Corporation, a
wholly-owned subsidiary of the Registrant, Apio, Inc., South
Coast Paper Company, Inc., Pacific West Produce Marketing,
Inc., CalEx Trading Company, Apio Produce Sales, and each of
the respective shareholders of Apio, Inc., South Coast Paper
Company, Inc., Pacific West Produce Marketing, Inc., and
CalEx Trading Company, and the constituent partners of Apio
Produce Sales, dated November 29, 1999 (incorporated by
reference to exhibit 2.1 to the Registrant's current report
on Form 8-K filed on Dec. 17, 1999, Commission File No.
0-27446).
4.1 Series A Preferred Stock Purchase Agreement between the
Registrant and Frederick Frank, dated as of November 19,
1999 (incorporated by reference to exhibit 4.1 to the
Registrant's current report on Form 8-K filed on Dec. 17,
1999, Commission File No. 0-27446).
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP as to legality
of the shares of Common Stock.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP (See Exhibit
5.1).
24.1 Powers of Attorney (see Page II-4).
</TABLE>
<PAGE>
[ORRICK, HERRINGTON & SUTCLIFFE LLP LETTERHEAD]
EXHIBIT 5.1
January 27, 2000
Landec Corporation
3603 Haven Avenue
Menlo Park, California 94025-1010
Re: Landec Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection with a proposed
sale of up to 895,833 shares (the "Common Shares") of common stock, $0.001 par
value by certain stockholders of Landec Corporation, a California corporation
(the "Company") and the proposed sale of up to 1,666,670 shares of Common Stock
(the "Conversion Shares") upon the conversion of the Company's Series A
Preferred Stock, pursuant to a Registration Statement on Form S-3.
We have examined instruments, documents, and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; and (c) the truth,
accuracy, and completeness of the information, representations, and warranties
contained in the records, documents, instruments, and certificates we have
reviewed.
Based on such examination, we are of the opinion that the Common Shares are
legally issued, fully paid and nonassessable, and the Conversion Shares have
been duly authorized and when issued by the Company upon conversion of the
Series A Preferred Stock, will be legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement and to the use of our name wherever it
appears in said Registration Statement, including the Prospectus constituting a
part thereof, as originally filed or as subsequently amended or supplemented. In
giving such consent, we do not consider that we are "experts" within the meaning
of such term as used in the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission issued thereunder, with
respect to any part of the Registration Statement, including this opinion as an
exhibit or otherwise.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT ACCOUNTANT'S CONSENT
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Landec Corporation
for the registration of 2,562,503 shares of its common stock and to the
incorporation by reference therein of our report dated December 6, 1999, with
respect to the consolidated financial statements and schedule of Landec
Corporation included in its Annual Report (Form 10-K) for the year ended
October 31, 1999, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
January 27, 2000
San Francisco, California
