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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 1999
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BIGMAR, INC.
(EXACT NAME OF COMPANY AS SPECIFIED IN ITS CHARTER)
DELAWARE 31-1445779
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
9711 SPORTSMAN CLUB ROAD
JOHNSTOWN, OHIO 43031-9141
(740) 966-5800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
COMPANY'S PRINCIPAL EXECUTIVE OFFICES)
PHILIPPE ROHRER
SECRETARY, TREASURER AND CHIEF FINANCIAL OFFICER
BIGMAR, INC.
9711 SPORTSMAN CLUB ROAD
JOHNSTOWN, OHIO 43031-9141
(740) 966-5800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO: STEVEN R. KERBER, ESQ.
BRICKER & ECKLER LLP
100 SOUTH THIRD STREET
COLUMBUS, OHIO 43215-4291
(614) 227-2300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [__]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ 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: [___]
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [____]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_____]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF SHARES MAXIMUM MAXIMUM
TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED (1) PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE
---------- -------------- ------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock, $.001
par value 4,658,973 $2.57 $11,973,561 $3,161
</TABLE>
(1) In accordance with Rule 416 under the Securities Act of 1933, Common Stock
offered hereby shall also be deemed to cover additional securities to be
offered or issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c), based on the average of the high
and low reported price of the Company's Common Stock on December 3, 1999.
The Company hereby amends the Registration Statement on such date or dates as
may be necessary to delay its effective date until the Company shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(A) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(A),
may determine.
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
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SUBJECT TO COMPLETION, DATED DECEMBER 8, 1999
BIGMAR, INC.
4,658,973 SHARES OF
COMMON STOCK
($.001 PAR VALUE)
All of the shares of the Common Stock, par value $0.001 per share (the "Common
Stock"), of Bigmar, Inc., a Delaware corporation ("Bigmar" or the "Company"),
offered hereby (the "Shares") were issued by the Company in a series of private
placements to accredited investors identified under "Selling Stockholders." All
of the Shares are being offered by the Selling Stockholders or by pledgees,
donees, transferees or other successors in interest and permitted assigns of
such selling stockholders (the "Selling Stockholders"). The Company will not
receive any of the proceeds from the sale of the Shares by Selling Stockholders;
however, in consideration of issuing the Shares to the Selling Stockholders, the
Company received net proceeds of approximately $8.9 million which have been and
will continue to be used for working capital and other general corporate
purposes.
The Company has not made any underwriting arrangements with respect to the
Shares. The Company's Common Stock is quoted on the Nasdaq SmallCap
Market-SM- under the symbol "BGMR". On December 7, 1999, the last sale price
of the Company's Common Stock as reported by Nasdaq was $3.3125 per share.
This Prospectus is to be used in connection with the sale of the Shares from
time to time by the Selling Stockholders. The Shares may be sold from time to
time by the Selling Stockholders, directly or through underwriters, dealers or
agents, in market transactions, including block trades or ordinary brokers
transactions or in privately-negotiated transactions. The price at which any of
the Shares may be sold, and the commissions, if any, paid in connection with any
sale, may be privately negotiated, may be based on then prevailing market prices
and may vary from transaction to transaction and as a result are not currently
known. This Prospectus may be used by the Selling Stockholders or by any
broker-dealer who may participate in sales of securities covered hereby. See
"Plan of Distribution and Offering Price."
The Company will pay certain of the legal and other expenses of this offering
(estimated to be $29,161), except that the Selling Stockholders will bear the
cost of any brokerage commissions or discounts incurred in connection with the
sale of the Shares.
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
(SEE "RISK FACTORS" BEGINNING ON PAGE 7.)
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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.
The date of this Prospectus is December 8, 1999.
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained, or incorporated by
reference, in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company
or the Selling Stockholders. This Prospectus does not constitute an offer to
sell or the solicitation of any offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer in such jurisdiction. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date hereof or
that there has been no change in the affairs of the Company since such date.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations promulgated thereunder, and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission ("SEC" or the "Commission"). Reports, proxy statements and other
information filed by the Company may be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Regional Offices of the SEC at Seven World
Trade Center, Suite 1300, New York, New York and at Suite 1400, 500 West Madison
Street, Chicago, Illinois. Copies of such information can be obtained by mail
from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Additional information regarding the
operation of the public reference facilities may be obtained by calling the SEC
at 1-800-SEC-0330. Access to such information is also available on the Internet
from the SEC's "EDGAR" World Wide Web page, using a World Wide Web browser and
the address http://www.sec.gov.
Reports and other information concerning the Company can also be
inspected at the Nasdaq Stock Market, Inc., 1735 K Street, Washington, D.C.
20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act of 1933, as amended (the "Securities Act") with respect
to the Shares offered hereby. In accordance with the rules and regulations of
the Commission, this Prospectus omits certain of the information contained in
the Registration Statement. Reference is hereby made to the Registration
Statement and related exhibits and the documents incorporated herein by
reference for further information with respect to the Company and the Company's
Common Stock. Statements contained herein or incorporated herein by reference
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. The
Registration Statement, including the exhibits and schedules thereto, is also
available on the Commission's Web site at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The Company incorporates herein by reference the following documents it has
previously filed with the Commission (File No. 1-14416) pursuant to the Exchange
Act:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
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(b) the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1999;
(c) the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1999;
(d) the Company's Quarterly Report on Form 10-Q for fiscal quarter ended
March 31, 1999;
(e) the Company's Proxy Statement for the Annual Meeting of Stockholders
held on June 30, 1999, filed as of April 30, 1999; and
(f) the description of the Company's Common Stock contained in the Company's
Registration Statement on Form S-1, declared effective June 19, 1996.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Shares shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all the documents incorporated herein
by reference, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference in such documents, and any other
documents specifically identified herein as incorporated by reference into the
Registration Statement to which this Prospectus relates or into such other
documents. Requests should be addressed to: Investor Relations, Bigmar, Inc.,
9711 Sportsman Club Road, Johnstown, Ohio 43031-9141, Telephone: (740) 966-5800.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Some of the information presented in connection with this Prospectus,
including the information incorporated by reference, contains forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act, including statements regarding, among other things, (i)
the Company's growth strategies; (ii) anticipated trends in the Company's
business and demographics; (iii) the Company's ability to continue to control
costs and maintain quality of products; (iv) the Company's ability to respond to
changes in regulations; and (v) the Company's ability to enter into
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contracts with suppliers and customers. In addition, when used in this
Prospectus, the words "intends to," "believes," "anticipates," "expects" and
similar expressions are intended to identify forward-looking statements.
These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, some of
which are beyond the Company's control. Actual results could differ
materially from these forward-looking statements as a result of the factors
described in "Risk Factors" including, among others (a) changes in the
industry as a result of political, economic or regulatory influences; (b)
changes in regulations governing the industry, and (c) changes in the
competitive marketplace. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained in this
Prospectus will in fact transpire.
THE COMPANY
The Company is currently engaged in manufacturing various
pharmaceutical products in Europe and marketing them in Europe and the other
countries including the United States. Its strategy is to supply world markets
with a full line of high quality, affordably priced generic pharmaceutical
products, focusing on oncology products. The Company manufactures, in its
Switzerland facilities, off-patent generic oncology drugs and additional
oncology drugs as their patents expire. It then markets these products through
pharmaceutical company partners. The Company currently has distribution rights
to more than 20 generic oncology products.
The Company's executive offices are located at 9711 Sportsman Club Road,
Johnstown, Ohio 43031-9141. The Company's telephone number is (740) 966-5800.
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be carefully considered in evaluating an investment in the Shares
offered by this Prospectus:
DEVELOPMENT STAGE; HISTORY OF LOSSES. The Company was incorporated in
September l995 and was a development stage company until it effectuated a
stock-for-stock exchange on April 8, 1996, whereby Bigmar Pharmaceuticals SA
("Bigmar Pharmaceuticals") and Bioren SA ("Bioren") became subsidiaries of the
Company. In addition, the Company and its subsidiaries have incurred net losses
in the past. For the year ended December 31, 1995, the Company (which includes
the results of operations of Bioren from July 1, 1995) incurred a net loss of
approximately $97,000. For the year ended December 31, 1996, the Company
incurred a net loss of $1,639,544. For the year ended December 31, 1997, the
Company incurred a net loss of $7,378,024. For the year ended December 31, 1998,
the Company incurred a net loss of $7,221,702. There can be no assurance that
the Company's operations will achieve profitability at any time in the future
or, if achieved, that such profitability will be sustained.
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EXPANSION OF OFFERED PRODUCTS. The Company's business strategy relies
primarily on its success in manufacturing and marketing oncological products.
The success of its business strategy should be considered in light of the risks,
expenses and difficulties frequently encountered in entering into industries
characterized by intense competition; completing product development; obtaining
regulatory approvals in certain European countries, the United States and
elsewhere for its products; gaining market acceptance of the Company's products;
entering into new collaborative agreements and maintaining existing
collaborative arrangements. There can be no assurance that the Company will be
able to continue to manufacture or market its products and proposed products or
maintain or expand its market share in the future. Some of the foregoing factors
are not within the Company's control and there can be no assurance that the
Company will be able to implement its business strategy or that its business
strategy will result in profitability.
RELIANCE ON PLM. In March 1995, Bioren entered into an agreement with
PLM Langeskov A/S ("PLM") pursuant to which Bioren acquired the exclusive right
to purchase intravenous solution containers from PLM and to package and
distribute intravenous infusion solutions ("IV Solutions") in these containers
in Switzerland and Liechtenstein ("PLM Agreement"). Under the terms of the PLM
Agreement, PLM is entitled to terminate the exclusivity portion of the agreement
if, among other things, Bioren does not purchase a minimum number of intravenous
solution containers each year. The PLM Agreement expires in the year 2005,
unless it is earlier terminated. In addition, the PLM Agreement may be
terminated by either party upon the occurrence of certain specified conditions,
including if the products or their production infringe, or are alleged to
infringe, the intellectual property rights of third parties. The termination of
the PLM Agreement would have a material adverse effect on the Company.
RELIANCE ON NETWORK OF PHARMACEUTICAL COMPANIES FOR MARKETING;
DEPENDENCE ON ADDITIONAL COLLABORATIVE ARRANGEMENTS. The Company has granted
certain companies the exclusive right to market and distribute, in certain
territories, selected oncological products of the Company and the right of first
refusal to market and distribute, in specified areas, certain of the Company's
proposed products. As a result, the Company may not independently market
products or proposed products that are covered by those agreements and may not
enter into strategic alliances or collaborative arrangements with others
relating to any products covered by (i) an exclusivity arrangement or (ii) a
right of first refusal (without in the latter instance first offering such right
to the holders). Restrictions regarding exclusivity and rights of first refusal
limit the Company's ability to pursue and negotiate collaborative arrangements
with other entities on terms which may be more favorable to the Company. In
addition, the amount of resources and the level of effort that any of these
collaborators devote towards marketing the Company's products or proposed
products are not within the Company's control. There can be no assurance that
any marketing, sales or other efforts undertaken by the Company or its
collaborators will be successful. Each of the agreements terminates under
certain specified circumstances and any termination would have a material
adverse effect on the Company. Consistent with its business strategy, the
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Company intends to pursue additional collaborative arrangements with third
parties. There can be no assurance, however, that the Company will be able to
find additional collaborators or negotiate additional collaborative arrangements
on terms acceptable to the Company, if at all, that the collaborative
arrangements with the Company will be successful or, that collaborators will
devote sufficient resources to the Company's products, proposed products or
technologies. In addition, there can be no assurance that future collaborative
arrangements will not allow others to enter into arrangements with the Company's
collaborators for the commercialization of the same product or that
collaborators will not pursue alternative products either on their own or in
collaboration with others, including the Company's competitors.
DEPENDENCE ON KEY SUPPLIERS. The majority of raw materials needed to
manufacture the Company's products and proposed products generally are not
readily available and must be purchased from limited sources. In addition, the
Company obtains containers for IV Solutions from a sole supplier. See "Reliance
on PLM". The Company's reliance on a sole or limited number of suppliers
involves several risks, including obtaining an adequate supply of raw materials
and components in order to manufacture or market products or proposed products,
increased raw material or component costs and reduced control over pricing,
quality and timely delivery. Any interruption in the supply of raw materials or
components could have a material adverse effect on the Company. In addition,
obtaining raw materials from a new source may require regulatory approval.
Furthermore, certain potential alternative suppliers may have pre-existing
exclusive relationships with competitors of the Company and others which may
preclude the Company from manufacturing certain of its proposed products.
NO ASSURANCE OF SUCCESSFUL PRODUCT DEVELOPMENT; UNCERTAINTY OF MARKET
ACCEPTANCE OF CERTAIN PROPOSED PRODUCTS. The Company currently manufactures and
markets certain oncological products. Any unexpected developmental, regulatory
or manufacturing problems could delay the commercialization of the Company's
current or proposed products and have a material adverse effect on the Company
and its prospects. In addition, the market acceptance of any of the Company's
current or proposed products will be substantially dependent on the ability of
the Company's collaborators to demonstrate to the medical and healthcare
communities the capabilities and perceived benefits of the Company's current or
proposed products as well as sell commercial quantities of the current or
proposed products at acceptable costs. There can be no assurance that the
Company will be able to ultimately successfully develop its current or proposed
products or that it will be able to gain market acceptance for such products.
NEED FOR ADDITIONAL FINANCING. The Company will need to raise
substantial additional funds to continue to fund operating expenses or its
expansion strategy during the next 12 months. There can be no assurance that
additional financing will be available, or, if available, that such financing
will be on terms favorable to the Company. Failure to obtain such additional
financing would have a material adverse effect on the Company.
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COMPETITION AND RAPID TECHNOLOGICAL CHANGE. The pharmaceutical industry
is subject to intense competition and rapid and significant technological
change. The Company faces competition from other pharmaceutical companies,
particularly regarding its generic products, many of which companies have
substantially greater financial and other resources than the Company and,
therefore, are able to spend more than the Company in areas such as product
development, manufacturing and marketing. Although a company with greater
resources will not necessarily receive regulatory approval for a particular
generic drug before its smaller competitors, substantial resources enable a
company to support many regulatory applications simultaneously, thereby
improving the likelihood of at least some of its generic drugs being among the
first to receive regulatory approval. Drug companies have also increasingly
introduced generic versions of their own proprietary products prior to the
expiration of the patents for those drugs in efforts to obtain greater market
share following expiration of the applicable patents. In addition, the market
for the Company's products and proposed products is characterized by frequent
product improvements and evolving technology. The Company's revenues and
profitability could be adversely affected by technological change. Competitors
may develop products which may render the Company's products or proposed
products uneconomical or result in products being commercialized that may be
superior to the Company's products. In addition, alternative treatments for
cancer could be developed, which would have a material adverse effect on the
Company.
UNCERTAIN PROTECTION OF PATENTS AND PROPRIETARY RIGHTS. Patents
concerning pharmaceutical products generally are highly uncertain, involve
complex legal, scientific and factual questions and have recently been the
subject of much litigation. To date, no consistent policy has emerged regarding
the breadth of claims allowed or the degree of protection afforded under these
patents. Although the Company is not aware of any claim against it for
infringement, the Company's ability to commercialize its products and proposed
products depends on not infringing the proprietary rights of competitors. Laws
regarding the enforceability of intellectual property vary from country to
country. Therefore, there can be no assurance that intellectual property issues
will be uniformly resolved, or that local laws will provide the Company with
consistent rights and benefits. In addition, there can be no assurance that
competitors will not be issued patents which may prevent the manufacturing or
marketing of the Company's products or proposed products or require licensing
and the payment of fees or royalties by the Company in order for the Company to
be able to manufacture or market certain products.
FDA, INTERNATIONAL AND OTHER GOVERNMENTAL REGULATORS. The development,
manufacturing and marketing of the Company's products and proposed products is
or may be subject to extensive and rigorous governmental regulations in the
United States and other countries. The process of obtaining and maintaining
required regulatory approvals is lengthy, expensive, and uncertain. In the
United States, the United States Food and Drug Administration ("FDA")
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regulates, where applicable, the development, testing, labeling,
manufacturing, registration, notification, clearance or approval, marketing,
distribution, recordkeeping, and reporting requirements for drugs. The
Company has received FDA approval to market seven of its products or proposed
products in the United States. The Company has submitted abbreviated new drug
applications ("ANDAs") to the FDA for additional generic oncological
products. The average time for obtaining FDA approval for ANDAs is one to
three years. However, due to management's prior experience in submitting
ANDAs to the FDA, the Company believes it will be able to obtain FDA approval
of these ANDAs in approximately one to two years from the date of the
submission of the applications. There can be no assurance, however, that any
of the Company's ANDAs will obtain regulatory approval in the time periods
indicated or will ever obtain the regulatory clearance or approval required
for marketing in the United States. Delays in any part of the approval
process or the inability of the Company to obtain regulatory approval of its
products, proposed products or facilities could adversely affect the Company.
The Company is subject to the FDA's current good manufacturing
practices ("cGMP"), current good laboratory practices ("cGLP") and extensive
record keeping and reporting requirements for manufacturing products for sale in
the United States. As a result, the Company's manufacturing facilities are
subject to periodic inspections by the FDA and other United States federal
agencies when the Company's products are offered for sale in the United States.
There can be no assurance such facilities will pass any subsequent inspections
by the FDA. The Company has retained independent consultants to assist it in
complying with FDA standards including the cGMP requirements. Failure to comply
with applicable regulatory requirements can result in, among other things,
import detentions, fines, civil penalties, suspensions or losses of approvals,
recalls or seizures of products, operating restrictions and criminal
prosecutions.
To date, substantially all of the Company's revenues have been derived
from the sales of its products in Switzerland and Germany. The distribution of
the Company's products and proposed products outside the United States is
subject to extensive governmental regulations. These regulations, including the
requirements of inspections and approvals to market, the time required for
regulatory review and the sanctions imposed for violations, vary from country to
country. There can be no assurance that the Company will pass any such
inspections, that the Company or its collaborators will obtain or maintain the
required regulatory approvals in any particular country or that the Company will
not be required to incur significant costs in obtaining or maintaining its
regulatory approvals. Failure to obtain necessary regulatory approvals, the
restriction, suspension or revocation of existing approvals or any other failure
to comply with regulatory requirements would have a material adverse effect on
the Company.
Because the Company's products are currently being sold primarily in
Switzerland and Germany, the Company is subject to regulation by these
countries, and the European Medicines Evaluation Agency ("EMEA") of the European
Union ("EU"). In Germany, drugs for human use may be sold only if they are
approved in advance by either the German regulatory authority or the EU after a
review of all applicable safety, quality and
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effectiveness data. Clinical trials in Germany are monitored by the state
authorities and must comply with those portions of the EU good clinical
practices recommendation that have been adopted into German law. In practice,
it takes the German authority generally three to five years to approve drugs
for use on humans, although the Company believes it will receive regulatory
approval for certain of its proposed products earlier.
In Switzerland, approval of the production and sale of drugs for human
use is regulated on a cantonal level rather than a federal level. The cantons of
Switzerland have organized the Intercantonal Office for the Control of
Medications ("IKS") as an authority for the approval of pharmaceuticals. Based
on approval by the IKS, the cantons then grant permission for the production and
sale of such approved pharmaceuticals, although each canton is still entitled to
deny approval of a particular medication.
The IKS reviews all applicable safety, quality and efficacy data as
well as data relating to the cost effectiveness of a particular product. To
obtain approval from the IKS, the manufacturer must submit analytical, chemical,
pharmacological and toxicological data based on animal trials and human clinical
studies. The IKS also will inspect the manufacturing facility to determine if
the manufacturer is complying with good manufacturing practices before approval
is granted to produce the drug product. For generic products, pharmacological
and toxicological data is not required to be submitted to the IKS. To date, all
of the Company's pharmaceutical products which have been approved by the IKS are
generic products. There can be no assurance, however, that the Company will
maintain the required regulatory approvals to market its proposed products in
Switzerland.
RESTRICTIONS ON RETAINED EARNINGS. The Company is a Delaware
corporation which owns 100% of the capital stock of two Swiss corporations. The
Swiss Federal Code of Obligation provides that at least 5% of a Swiss company's
net income each year must be appropriated to a legal reserve until such time as
the reserve equals 20% of the company's paid-in share capital. In addition, 10%
of any distribution made by a company in excess of a 5% dividend also must be
appropriated to the Company's legal reserve. The reserve of up to 50% of the
share capital is not available for distribution to stockholders. These
requirements may adversely impact the amount of dividends to be issued by the
Company through its subsidiaries and may limit cash flow.
ENVIRONMENTAL MATTERS. As an enterprise engaged in the pharmaceutical
business in Switzerland, the Company's facilities are or will be subject to
comprehensive environmental laws and regulations governing, among other things,
air emissions, waste water discharge and solid and hazardous waste disposal.
Although there can be no assurance, the Company believes its current facilities
are in compliance in all material respects with applicable Swiss environmental
laws. However, environmental laws have changed in recent years and the Company
may become subject to increasingly stringent environmental standards in the
future. While the Company anticipates that from time to time it will incur
capital expenditures in connection with environmental matters, it is unable to
predict the extent or timing of future expenditures which may be required in
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connection with complying with environmental laws. There can be no assurance
that future developments, administrative actions or liabilities arising from
environmental matters will not have a material adverse effect on the Company.
DEPENDENT ON THIRD-PARTY REIMBURSEMENT; PRICE CONTROLS; HEALTH CARE
REFORM MEASURES. The Company's success in generating revenues from the sale of
certain products may depend on the extent to which reimbursement for the costs
of such products and related treatments will be available from third-party
payors such as government health administration authorities, private insurance
companies, self-insured employers, health maintenance organizations and other
organizations. The level of revenues and profitability of the Company, like
those of other companies in the pharmaceutical industry, are affected by the
continuing efforts of third-party payors to contain or reduce the costs of
health care by lowering reimbursement or payment rates, increasing case
management review of services and negotiating reduced contract pricing and
reimbursement caps.
In some markets outside of the United States, such as Germany,
government reimbursement is generally available for the purchase of the
Company's products and proposed products, subject to constraints such as
reimbursement limitations. In addition, third-party payors may refuse to provide
reimbursement in cases where drugs such as oncological drugs, are used for
unapproved uses. Approximately 70% of the drugs sold in Germany are subject to
maximum reimbursement. To date, no oncological products have been affected by a
maximum reimbursement limitation, although there can be no assurance that the
Company's oncological products or proposed products will not be affected by a
maximum reimbursement limitation in the future. Although a manufacturer may sell
its products at prices that are higher than the maximum reimbursement rate,
patients are required to pay any difference between that price and the maximum
reimbursement rate. If the products of the Company become subject to a maximum
reimbursement rate, this may adversely affect the prices the Company will be
able to charge.
In Switzerland, reimbursement for pharmaceutical products is regulated
on the federal level. There are two categories of drugs subject to
reimbursement. The first category consists of medications which are required to
be reimbursed by private health insurers. The second category contains
medications for which reimbursement by health insurers is recommended. Private
health insurers generally provide reimbursement for products on the recommended
list. There can be no assurance that payments under governmental and third-party
payor programs will remain at levels comparable to present levels or will, in
the future, be sufficient to cover the costs allocable to patients eligible for
reimbursement pursuant to such programs.
From time to time, the Clinton Administration, the U.S. Congress and
legislators of certain foreign governments have proposed or are considering a
variety of reforms to the health care systems. The Company cannot predict what
health care reform legislation, if any, will be enacted in the United States or
elsewhere. Changes in the health care system in the United States or elsewhere
could have a significant impact on the manner
13
<PAGE>
in which the Company conducts its business and may impose additional
regulations governing the conduct of the Company's business. These changes
could have a material adverse effect on the Company.
POTENTIAL PRODUCT LIABILITY; AVAILABILITY OF INSURANCE; RISK OF PRODUCT
RECALL. The testing, clinical trials, manufacturing, and marketing of the
Company's products and proposed products involve the inherent risks of product
liability claims or similar legal theories against the Company, some of which
may cause the Company to incur significant defense costs. Although the Company
currently maintains product liability insurance coverage which it believes is
adequate, there can be no assurance that the coverage limits of its insurance
are adequate or that all such claims will be covered by insurance. In addition,
these policies generally must be renewed every two years. While the Company has
been able to obtain product liability insurance in the past, there can be no
assurance it will be able to obtain insurance in the future on its products or
proposed products. Product liability insurance varies in cost, is difficult to
obtain and may not be available in the future on terms acceptable to the
Company, if it is available at all. A successful product liability claim or
other judgment against the Company in excess of its insurance coverage could
have a material adverse effect upon the Company or its reputation. Certain of
the Company's collaborative arrangements contain cross indemnification
provisions with respect to product liability claims concerning products covered
by the arrangements. The Company may be required to make payments, which in some
cases could be substantial, under these arrangements. In addition, products such
as those sold or proposed to be sold by the Company may be subject to recall for
unforeseen reasons. Such a recall could have a material adverse effect on the
Company and its reputation. In Germany, an injured party may recover for damages
on a strict liability basis without having to prove negligence on the part of
the manufacturer or distributor. In Switzerland, there is no special product
liability law for pharmaceuticals. The Swiss federal product liability law,
which covers drug products, provides that manufacturers are subject to strict
liability for injuries caused by defective products.
UNCERTAINTY OF CURRENCY FLUCTUATIONS. All of the Company's revenues for
fiscal years through December 31, 1998, were derived from sales outside of the
United States. Because the Company's international operations are conducted in
various foreign currencies, it may be materially and adversely affected by
fluctuations in currency exchange rates. As a result, the Company will be
exposed to foreign currency exchange risks due to fluctuations in the exchange
rates between the foreign currencies and the U.S. dollar. If the Company
executes hedging transactions, there can be no assurance that the Company will
be successful in these activities.
DEPENDENCE ON KEY PERSONNEL. The Company is dependent on the
experience, abilities and continued services of John G. Tramontana, its Chairman
of the Board, President and Chief Executive Officer. The Company has entered
into a five-year employment agreement with Mr. Tramontana which expires in 2001
and has obtained a $2,000,000 key man life insurance policy on the life of Mr.
Tramontana, for
14
<PAGE>
the benefit of the Company. The loss or reduction of services of Mr.
Tramontana or any other key employee could have a material adverse effect on
the Company. In addition, the Company's future success depends in large part
upon its ability to attract and retain highly qualified personnel, including
experienced manufacturing personnel. The Company faces competition for such
personnel from other companies and organizations, many of which have
significantly greater resources than the Company. There can be no assurance
that the Company will be able to attract and retain the necessary personnel
on acceptable terms or at all.
CONTROL OF COMPANY. The Company's directors and executive officers
beneficially own, in the aggregate, approximately 6,142,800 shares of the
outstanding Common Stock, representing approximately 68% of the issued and
outstanding Common Stock. Accordingly, these persons will be in a position to
control the management and policies of the Company in general, and can determine
the outcome of many corporate transactions or other matters submitted to the
Company's stockholders for approval.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST THE COMPANY. Substantially
all of the assets of the Company are located outside of the United States. As a
result, it may be difficult for investors to enforce judgments against the
Company obtained in United States courts including judgments predicated on the
civil liability provisions of the United States securities laws. The United
States does not currently have a treaty providing for reciprocal recognition and
enforcement of judgments in civil and commercial matters with Switzerland or
Germany and there is doubt whether (i) a final judgment for the payment of money
rendered by a Federal or state court in the United States based on civil
liability, whether or not predicated solely upon the civil liability provisions
of the United States securities laws, would be enforceable in Switzerland or
Germany against the Company and (ii) an action could be brought in Switzerland
or Germany against the Company in the first instance on the basis of liability
predicated solely upon the provisions of the United States securities laws.
CONTINUED QUOTATION ON THE NASDAQ SMALLCAP MARKET-SM- The Company's
Common Stock is quoted on the Nasdaq SmallCap Market-SM-. However, there can
be no assurance that it will be able to satisfy the criteria for continued
quotation on the Nasdaq SmallCap Market-SM-. Failure to meet the maintenance
criteria in the future may result in the Common Stock not being eligible for
quotation on the Nasdaq SmallCap Market-SM- or otherwise. In such event, an
investor may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Common Stock.
POSSIBLE ADVERSE EFFECTS OF ISSUANCE OF PREFERRED STOCK; ANTI-TAKEOVER
PROVISIONS. The Company's Restated and Amended Certificate of Incorporation
("Restated Certificate") authorizes the issuance of a maximum of 5,000,000
shares of preferred stock, par value $.001 per share ("Preferred Stock"), with
designations, rights and preferences as determined from time to time by the
Board of
15
<PAGE>
Directors. As a result of the foregoing the Board of Directors can
issue, without further stockholder approval, Preferred Stock with dividend,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of the Common Stock. The issuance of
Preferred Stock could, under certain circumstances, discourage, delay or prevent
a change in control of the Company. In addition, the issuance of Preferred Stock
could dilute the rights of holders of the Common Stock and the market price of
the Common Stock. There can be no assurance that the Company will not issue
Preferred Stock at some future date. The Company is subject to Delaware General
Corporation Law ("DGCL") provisions that prohibit the Company from entering into
certain business combinations without the approval of its Board of Directors
and, as such, could prohibit or delay mergers or other transactions or changes
in control with respect to the Company. Such provisions, accordingly, may
discourage attempts to acquire the Company.
SHARES ELIGIBLE FOR FUTURE SALE; EXERCISE OF REGISTRATION RIGHTS. In
May, 1998, the Company signed an agreement with Jericho II L.L.C. ("Jericho")
regarding the terms on which Jericho will guarantee a line of credit from a
commercial institution to the Company in an amount up to $6.0 million. In
consideration of the guarantee, the Company issued warrants to Jericho to
purchase 1,000,000 shares of convertible preferred stock (the "Preferred Stock")
at a price per share equal to $2.5625 and having a term of 10 years (the
"Warrants"). The Preferred Stock is convertible to Common Stock on a one-to-one
basis, with such conversion rate to adjust to reflect any diluting issuance of
equity securities by the Company and also to adjust for stock splits, dividends,
combinations and similar events. The Preferred Stock is entitled to five votes
per share in addition to having certain special approval rights. The Preferred
Stock has a liquidation preference equal to the purchase price per share. The
Warrants include a net exercise clause (to permit the conversion of the Warrants
into shares having a fair market value equal to the spread between the exercise
price and the then fair market value) and the shares issuable on exercise are
entitled to piggyback registration rights, subject to standard underwriter's
cutback. John G. Tramontana, Chairman of the Board, President and Chief
Executive Officer of the Company, has a 50% ownership interest in Jericho.
Cynthia R. May, a director and Vice President - Administration of the Company,
is the managing member of Jericho. In addition, the Company has granted
outstanding warrants to purchase shares of Common Stock as follows: LT Lawrence
Co., Inc., the underwriter for the Company's initial public offering and
individuals then associated therewith (167,000 shares), Jericho (500,000
shares), and The Equity Group, Inc. (45,000 shares). All of these warrants (the
"Other Warrants") contain anti-dilution provisions providing for an adjustment
of the exercise price and proportionate adjustment in the number of shares
issuable upon the occurrence of certain events. In addition, the holders of some
of these Other Warrants have been granted certain registration rights upon
exercise of the Other Warrants. The sale, or availability for sale, of the
Common Stock underlying the Warrants and the Other Warrants in the public market
could adversely effect the prevailing market price of the Common Stock and could
impair the Company's ability to raise additional capital.
16
<PAGE>
SELLING STOCKHOLDERS
In October 1998, the Company issued 3,692,308 shares of Common Stock to
Jericho for $1.625 per share pursuant to a Stock Purchase Agreement. The Stock
Purchase Agreement granted "piggyback" registration rights to Jericho with
respect to such shares.
From February 1999 through August 1999, in private placement
transactions exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933 and Rule 506 of Regulation D, the Company issued 966,665 shares of
Common Stock to accredited investors for $3.00 per share (except for 10,000
shares sold at $2.00 per share). The purchase agreements in such private
placement transactions obligated the Company to file a registration statement
covering the resale of such shares by December 15, 1999.
The following table sets forth the name of each Selling Stockholder,
the aggregate number of shares of Common Stock identified by such Selling
Stockholder as being beneficially owned thereby, and the aggregate number of
Shares that may be sold thereby hereunder.
<TABLE>
<CAPTION>
NUMBER OF
MAXIMUM SHARES
NUMBER OF SHARES NUMBER OF BENEFICIALLY PERCENT
SELLING BENEFICIALLY OWNED PERCENT OF SHARES OWNED AFTER OF
STOCKHOLDER PRIOR TO OFFERING (1) OUTSTANDING OFFERED (1) OFFERING OUTSTANDING
<S> <C> <C> <C> <C> <C>
Jericho II, L.L.C. (2) 6,607,805 (3) 63% 3,692,308 2,915,497 27.8%
Patrick G. Wolgast 10,000 * 10,000 0 ---
GRQ, LLC (4) 184,266 2% 166,666 17,600 *
Tietje Bros. 54,000 * 40,000 14,000 *
John A. Horner 20,000 * 20,000 0 ---
JJS Wolf Realty, LLC 10,000 * 10,000 0 ---
Leif H. Perkhild 250,000 2.8% 250,000 0 ---
John S. Hodgson 43,333 * 33,333 10,000 *
Banca del Gottardo 1,597,605(5) 15.5% 70,000 1,527,605 14.9%
17
<PAGE>
Robert Goldstein (6) & 78,333(7) * 33,333 45,000 *
Judy Goldstein
Janet A. Baldauf (8) 333,333 3.7% 333,333 0 ---
</TABLE>
* Less than one percent (1%).
(1) The shares to be sold shall include, in addition to the numbers
indicated, any additional shares of Common Stock of the Company that
become issuable in connection with the Shares by reason of any stock
dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration that results in an
increase in the number of outstanding shares of the Company's Common
Stock.
(2) Jericho is a privately-owned company involved in investment
activities. Cynthia R. May, a Director of the Company, is the managing
member of Jericho with sole voting and investment power with respect to
the Shares of Common Stock held thereby. John G. Tramontana, Chairman
and Chief Executive Officer of the Company, is also a member of
Jericho, which is the Company's largest stockholder.
(3) Includes (i) 500,000 shares of Common Stock issuable upon exercise
of warrants, (ii) 1,000,000 shares of Common Stock issuable upon
exercise and conversion of Preferred Stock warrants, and (iii) 184,266
shares owned by GRQ, LLC (see Note (4)).
(4) GRQ, LLC is a privately-owned company involved in investment
activities. Cynthia R. May is also the managing member of GRQ, LLC with
sole voting and investment power with respect to the shares of Common
Stock held thereby.
(5) Includes (i) 761,905 shares of Common Stock issuable upon
conversion of convertible notes issued in August, 1997, and (ii)
528,000 shares of Common Stock issuable upon conversion of convertible
notes issued in November, 1999.
(6) Mr. Goldstein is a principal of The Equity Group Inc., which has
been engaged by the Company since 1996 to provide public relations and
investor relations services.
(7) Includes 45,000 shares issuable upon exercise of warrants held by
The Equity Group, Inc.
(8) Ms Baldauf is the mother of Cynthia R. May. Ms. May disclaims
beneficial ownership of the shares of Common Stock held by Ms. Baldauf.
18
<PAGE>
PLAN OF DISTRIBUTION AND OFFERING PRICE
The Shares may be sold from time to time by the Selling Stockholders,
or by their respective pledgees, donees, transferees or other successors in
interest. Such sales may be made on one or more exchanges or in the
over-the-counter market, or otherwise at prices and at terms then prevailing or
at prices related to the then current market price or in negotiated
transactions. The Shares may be sold by any one or more of the following: (a) a
block trade in which the broker or dealer so engaged will attempt to sell the
Shares as agent but may purchase and resell a portion of the block as principal
to facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this Prospectus;
(c) an exchange distribution in accordance with the rules of such exchange; and
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Stockholders may arrange for other brokers or dealers to participate.
Brokers and dealers will receive commissions or discounts from the Selling
Stockholders in amounts to be negotiated prior to the sale. The Selling
Stockholders and any brokers or dealers participating in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act in connection with such sales, and any commissions received by such
broker-dealers and any profits realized on the resale of Shares by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Selling Stockholders may agree to indemnify such broker-dealers with respect
to the Shares offered hereby against certain liabilities, including certain
liabilities under the Securities Act. Any underwriters, brokers, dealers and
agents who participate in any such sale may also be customers of, engage in
transactions with or perform services for the Company or the Selling
Stockholders in the ordinary course of business.
There can be no assurance that any of the Shares will be sold by the
Selling Stockholders. To the extent required, (i) the Shares to be sold hereby,
(ii) the name of the Selling Stockholders, (iii) the purchase price, (iv) the
name of any such agent, dealer or underwriter, (v) any applicable commissions,
discounts or other terms constituting compensation with respect to a particular
offer, (vi) disclosure that such broker or dealer did not conduct any
investigation to verify information set out or incorporated by reference in this
Prospectus and (vii) other facts material to the transaction will be set forth
in an accompanying Prospectus Supplement.
The Company will pay the registration expenses incident to the offering
and sale of the Shares to the public. Such expenses (estimated to be
$29,161) include legal and accounting expenses, filing fees payable to the
Commission and Nasdaq, applicable state "blue sky" filing fees and printing
expenses. The Company, however, will not pay for any expenses, commissions or
discounts of underwriters, dealers or agents for the Selling Stockholders.
The Company's Common Stock is currently traded on the NASDAQ SmallCap
MarketSM. The public offering price for any Shares that are sold will be
determined by the
19
<PAGE>
price indicated on such system at the time such sale occurs, or at such price
as shall be determined through private negotiations between the buyer and the
Selling Stockholders or its agent.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities in connection with this registration, including liabilities
under the Securities Act.
In order to comply with certain states' securities laws, if applicable,
the Common Stock will not be sold in a particular state unless such securities
have been registered or qualified for sale in such state or any exemption from
registration or qualification is available and complied with.
VALIDITY OF STOCK
Certain legal matters with respect to the validity of the Shares will
be passed upon for the Company by Bricker & Eckler LLP, Columbus, Ohio.
EXPERTS
The consolidated financial statements as of December 31, 1998 and 1997,
and for each of the years in the three-year period ended December 31, 1998,
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, have been incorporated by reference in this Prospectus and
Registration Statement on Form S-3 in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
report of KPMG LLP contains an explanatory paragraph that states the Company has
suffered recurring losses from operations, and anticipates it will require
additional financing in order to fund its operations during 1999. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that might result from the outcome of that uncertainty.
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the sale and distribution of the securities
being registered, other than underwriting compensation, are set forth in the
following table. All amounts are estimated except the Securities and Exchange
Commission registration fee.
<TABLE>
<S> <C>
SEC Filing Fee for Registration
Statement..................................... $ 3,161.00
Accounting Fees and Expenses ................. $ 3,500.00
Legal Fees and Expenses ...................... $20,000.00
Miscellaneous ................................ $ 2,500.00
----------
TOTAL ...................... $29,161.00
----------
</TABLE>
All of the expenses listed above will be borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has included in its Restated Certificate provisions to
indemnify its directors and officers to the fullest extent permitted by Delaware
law. The Company's Restated Certificate also includes provisions to eliminate
the personal liability of the Company's directors and officers to the fullest
extent permitted by Delaware law. Under current law, such exculpation would
extend to an officer's or director's breaches of fiduciary duty, except for (i)
breaches of such person's duty of loyalty, (ii) those instances where such
person is found not to have acted in good faith and (iii) those instances where
such person received an improper personal benefit as the result of such breach.
The Company's Restated By-Laws ("By-Laws") provide that the Company may
indemnify any person, including officers and directors, with regard to any
action or proceeding to the fullest extent permitted by Delaware law.
The Company has entered into an indemnification agreement
("Indemnification Agreement") with each of its directors and officers. Each
Indemnification Agreement provides that the Company will indemnify the
indemnitee against expenses, including reasonable attorneys' fees, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any civil or criminal action or
21
<PAGE>
administrative proceeding arising out of his performance of his duties as a
director or officer, other than an action instituted by the director or
officer. Such indemnification is available if the indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal action, had
no reasonable cause to believe his conduct was unlawful. Each Indemnification
Agreement also requires that the Company indemnify the director or other
party thereto in all cases to the fullest extent permitted by applicable law.
The term of each Indemnification Agreement is the later of (i) 10 years after
the date that the indemnitee ceases to serve as a director or officer of the
Company, or (ii) the final termination of all proceedings, as defined in the
Indemnification Agreement, in which the indemnitee is granted rights of
indemnification.
Each Indemnification Agreement permits the indemnitee to bring suit to
seek recovery of amounts due under such Indemnification Agreement and requires
that the Company indemnify the director or other party thereto in all cases to
the fullest extent permitted by applicable law.
It is the position of the Commission that insofar as the Company's
Restated Certificate, By-Laws or any Indemnification Agreement may be invoked by
any director, officer or stockholder as a means of indemnifying them against
liabilities arising under the Securities Act, that such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
ITEM 16. EXHIBITS
(a) Exhibits:
4.1 Restated and Amended Certificate of Incorporation (1)
4.1(a) Certificate of Correction to Restated and Amended Certificate of
Incorporation (1)
4.2 Restated By-Laws (1)
4.2(a) Amendment to Restated By-Laws (1)
5.1 Opinion of Bricker & Eckler LLP regarding the legality of the
securities being registered
23.1 Consent of KPMG LLP
23.2 Consent of Bricker & Eckler LLP (included in Exhibit 5.1)
24 Power of Attorney
22
<PAGE>
(1) Incorporated by reference from the Company's Form 10-K Annual Report for
the fiscal year ended December 31, 1998 (File No. 1-14416).
ITEM 17. UNDERTAKINGS.
(a) The undersigned Company 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;
(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 by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Company
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 herein, 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 Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Company'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 offered therein, and
the
23
<PAGE>
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for the
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or
controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
24
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY
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 COUVET, COUNTRY OF SWITZERLAND, ON DECEMBER 8,
1999.
BIGMAR, INC.
BY: /s/ PHILIPPE ROHRER
-------------------------------------
PHILIPPE ROHRER
TREASURER, SECRETARY, CHIEF FINANCIAL
OFFICER AND CHIEF ACCOUNTING OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
Chairman of the Board of Directors, December 8, 1999
President and Chief Executive Officer
/s/ JOHN G. TRAMONTANA (Principal Executive Officer)
- ----------------------
JOHN G. TRAMONTANA
Treasurer, Secretary and
Chief Financial Officer December 8, 1999
(Principal Financial and Accounting
/s/ PHILIPPE ROHRER Officer), and Director
- ----------------------
PHILIPPE ROHRER
/s/ CYNTHIA R. MAY Director December 8, 1999
- ----------------------
CYNTHIA R. MAY
Director December 8, 1999
/s/ BERNARD KRAMER
- ----------------------
BERNARD KRAMER
/s/ MASSIMO PEDRANI Director December 8, 1999
- ----------------------
MASSIMO PEDRANI
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO. IN THIS FILING
<S> <C> <C>
4.1 Restated and Amended Certificate of Incorporation Incorporated by Reference
4.1 (a) Certificate of Correction to Restated and Amended Incorporated by Reference
Certificate of Incorporation
4.2 Restated By-Laws Incorporated by Reference
4.2 (a) Amendment to Restated By-Laws Incorporated by Reference
5.1 Opinion of Bricker & Eckler LLP
23.1 Consent of KPMG LLP
23.2 Consent of Bricker & Eckler LLP Included in Exhibit 5.1
24 Power of Attorney
</TABLE>
<PAGE>
EXHIBIT 5.1
December 8, 1999
Board of Directors
Bigmar, Inc.
9711 Sportsman Club Road
Johnstown, Ohio 43031-9141
Gentlemen:
Reference is made to the filing by Bigmar, Inc., a Delaware corporation (the
"Company"), of a Registration statement on Form S-3 (the "Registration
Statement") with the Securities and Exchange Commission pursuant to the
provisions of the Securities Act of 1933, as amended, covering the registration
of 4,658,973 shares of the Company's Common Stock, $.001 par value per share
(the "Common Stock").
We have examined the Company's corporate records, including its Restated and
Amended Certificate of Incorporation, as amended, Restated By-Laws, as amended,
its corporate minutes, the form of its Common Stock certificates and such other
documents and information as we have deemed necessary or relevant under the
circumstances.
Based upon the foregoing, we are of the opinion that the Company is a duly
incorporated and legally existing corporation under the laws of the State of
Delaware. We are also of the opinion, based on the foregoing and assuming
compliance with applicable federal and state securities laws, that the Common
Stock is validly issued and outstanding, fully paid and non-assessable.
We hereby consent to be named in the Registration Statement and in the
Prospectus which constitutes a part thereof as counsel of the Company, and we
hereby consent to the filing of the opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
/s/ BRICKER & ECKLER LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the use of our report incorporated herein by
reference and to the reference of our firm under the heading "Experts"
in the Prospectus and Registration Statement on Form S-3. Our report
dated March 5, 1999 contains an explanatory paragraph that states the
Company has suffered recurring losses from operations, and anticipates
it will require additional financing in order to fund its operations
during 1999. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the
outcome of that uncertainty.
/s/ KPMG LLP
Columbus, Ohio
December 8, 1999
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned officer and/or director of Bigmar, Inc. (the
"Company"), does hereby constitute and appoint John G. Tramontana, Philippe
Rohrer and Cynthia R. May, or any of them, my true and lawful attorneys and
agents, each with power of substitution, to do any and all acts and things in my
name and on my behalf in any and all capacities, and to execute any and all
instruments for me and in my name in any and all capacities, which said
attorneys or agents, or any of them, may deem necessary or advisable to enable
the Company to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the filing of a Registration Statement on Form S-3 for the
resale by selling stockholders of shares of Common Stock of the Company issued
pursuant to private placement transactions between October, 1998 and August,
1999, including specifically but without limitation, power and authority to sign
for me in my name in any and all capacities, any and all amendments (including
post-effective amendments) to such Registration Statement, and I do hereby
ratify and confirm all that the said attorneys and agents, or their substitute
or substitutes, or any of them, shall do or cause to be done by virtue hereof.
December 8, 1999 /s/ John G. Tramontana
-------------------------
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned officer and/or director of Bigmar, Inc. (the
"Company"), does hereby constitute and appoint John G. Tramontana, Philippe
Rohrer and Cynthia R. May, or any of them, my true and lawful attorneys and
agents, each with power of substitution, to do any and all acts and things in my
name and on my behalf in any and all capacities, and to execute any and all
instruments for me and in my name in any and all capacities, which said
attorneys or agents, or any of them, may deem necessary or advisable to enable
the Company to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the filing of a Registration Statement on Form S-3 for the
resale by selling stockholders of shares of Common Stock of the Company issued
pursuant to private placement transactions between October, 1998 and August,
1999, including specifically but without limitation, power and authority to sign
for me in my name in any and all capacities, any and all amendments (including
post-effective amendments) to such Registration Statement, and I do hereby
ratify and confirm all that the said attorneys and agents, or their substitute
or substitutes, or any of them, shall do or cause to be done by virtue hereof.
December 8, 1999 /s/ Philippe Rohrer
-------------------------
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned officer and/or director of Bigmar, Inc. (the
"Company"), does hereby constitute and appoint John G. Tramontana, Philippe
Rohrer and Cynthia R. May, or any of them, my true and lawful attorneys and
agents, each with power of substitution, to do any and all acts and things in my
name and on my behalf in any and all capacities, and to execute any and all
instruments for me and in my name in any and all capacities, which said
attorneys or agents, or any of them, may deem necessary or advisable to enable
the Company to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the filing of a Registration Statement on Form S-3 for the
resale by selling stockholders of shares of Common Stock of the Company issued
pursuant to private placement transactions between October, 1998 and August,
1999, including specifically but without limitation, power and authority to sign
for me in my name in any and all capacities, any and all amendments (including
post-effective amendments) to such Registration Statement, and I do hereby
ratify and confirm all that the said attorneys and agents, or their substitute
or substitutes, or any of them, shall do or cause to be done by virtue hereof.
December 8, 1999 /s/ Cynthia R. May
-------------------------
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned officer and/or director of Bigmar, Inc. (the
"Company"), does hereby constitute and appoint John G. Tramontana, Philippe
Rohrer and Cynthia R. May, or any of them, my true and lawful attorneys and
agents, each with power of substitution, to do any and all acts and things in my
name and on my behalf in any and all capacities, and to execute any and all
instruments for me and in my name in any and all capacities, which said
attorneys or agents, or any of them, may deem necessary or advisable to enable
the Company to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the filing of a Registration Statement on Form S-3 for the
resale by selling stockholders of shares of Common Stock of the Company issued
pursuant to private placement transactions between October, 1998 and August,
1999, including specifically but without limitation, power and authority to sign
for me in my name in any and all capacities, any and all amendments (including
post-effective amendments) to such Registration Statement, and I do hereby
ratify and confirm all that the said attorneys and agents, or their substitute
or substitutes, or any of them, shall do or cause to be done by virtue hereof.
December 8, 1999 /s/ Bernard Kramer
-------------------------
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned officer and/or director of Bigmar, Inc. (the
"Company"), does hereby constitute and appoint John G. Tramontana, Philippe
Rohrer and Cynthia R. May, or any of them, my true and lawful attorneys and
agents, each with power of substitution, to do any and all acts and things in my
name and on my behalf in any and all capacities, and to execute any and all
instruments for me and in my name in any and all capacities, which said
attorneys or agents, or any of them, may deem necessary or advisable to enable
the Company to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the filing of a Registration Statement on Form S-3 for the
resale by selling stockholders of shares of Common Stock of the Company issued
pursuant to private placement transactions between October, 1998 and August,
1999, including specifically but without limitation, power and authority to sign
for me in my name in any and all capacities, any and all amendments (including
post-effective amendments) to such Registration Statement, and I do hereby
ratify and confirm all that the said attorneys and agents, or their substitute
or substitutes, or any of them, shall do or cause to be done by virtue hereof.
December 8, 1999 /s/ Massimo Pedrani
-------------------------
