<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 2000
REGISTRATION NO. 333-82349
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LJL BIOSYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE 77-0360183
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
405 TASMAN DRIVE
SUNNYVALE, CA 94089
(408) 541-8787
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
LEV. J. LEYTES
PRESIDENT AND CHIEF EXECUTIVE OFFICER
405 TASMAN DRIVE
SUNNYVALE, CA 94089
(408) 541-8787
(Name, Address Including Zip Code, and Telephone Number
Including Area Code, of Agent for Service)
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COPIES TO:
MARK B. WEEKS
STEPHEN B. THAU
VENTURE LAW GROUP
A Professional Corporation
2800 Sand Hill Road
Menlo Park, CA 94025
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE PUBLIC: AS SOON AS PRACTICABLE 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.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT TO PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED MAXIMUM MAXIMUM REGISTRATION FEE
OFFERING PRICE AGGREGATE
PER UNIT(1) OFFERING PRICE(1)
<S> <C> <C> <C> <C>
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Common Stock, par value $0.001.......... 2,000,000 $4.50 $9,000,000 $2,502
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee based on the average of the high and low closing price
of the Common Stock as reported on the Nasdaq National Market on June
30, 1999 pursuant to Rule 457(c).
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The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until 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>
PROSPECTUS
405 TASMAN DRIVE
SUNNYVALE, CA 94089
(408) 541-8787
2,000,000 shares of Common Stock
THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 3 IN
DETERMINING WHETHER TO PURCHASE OUR COMMON STOCK.
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The selling stockholders identified on page 16 of this prospectus are
offering these shares of common stock. For additional information on the methods
of sale, you should refer to the section entitled "Plan of Distribution" on page
15. We will not receive any portion of the proceeds from the sale of these
shares.
Our common stock is quoted on the Nasdaq National Market under the
symbol LJLB.
On July 20, 1999, the last sale price of our common stock on the Nasdaq
National Market was $4.375 per share.
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<CAPTION>
PRICE TO PUBLIC UNDERWRITING PROCEEDS TO
DISCOUNTS AND SELLING
COMMISSION STOCKHOLDERS
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<S> <C> <C> <C>
Per Share................................................................ See Text Above See Text Above See Text Above
Total....................................................................
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed on the
adequacy or accuracy of the disclosures in this prospectus. Any representation
to the contrary is a criminal offense.
The date of this prospectus is July 21, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
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THE COMPANY................................................................................................................ 1
RISK FACTORS............................................................................................................... 3
USE OF PROCEEDS............................................................................................................ 15
ISSUANCE OF COMMON STOCK TO SELLING STOCKHOLDERS........................................................................... 15
PLAN OF DISTRIBUTION....................................................................................................... 15
SELLING STOCKHOLDERS....................................................................................................... 16
LEGAL MATTERS.............................................................................................................. 17
EXPERTS.................................................................................................................... 17
WHERE YOU CAN FIND MORE INFORMATION........................................................................................ 17
</TABLE>
We have not authorized any dealer, salesperson or other person to give
any information or represent anything not contained in this prospectus. You
should not rely on any unauthorized information. This prospectus does not offer
to sell or buy any shares in any jurisdiction in which it is unlawful. The
information in this prospectus is current as of the date on the cover.
THE COMPANY
We design, produce and sell products and services which accelerate and
enhance the chemical and analytical tests that pharmaceutical and biotechnology
companies perform in the process of discovering new drugs or medicines. Our
customers include pharmaceutical and biotechnology companies.
The drug discovery process involves several stages, including:
- Target identification: Target identification involves determining
the biological molecules (or targets) in the body that are
associated with diseases. Recent advancements in the science of
genomics, which identifies these biological molecules, have
resulted in a substantial increase in the number of targets
associated with different diseases.
- Compound development: In the context of drug discovery research,
"compounds" are potential new drug candidates. Many new compounds
today are developed using a molecule-making technique known as
combinatorial synthesis or combinatorial chemistry, a field whose
recent rapid evolution has resulted in a substantial increase in
the number of compounds available to pharmaceutical companies and
biotechnology firms.
- Assay development: In the context of drug discovery research,
"assays" are tests which involve mixing various chemicals and
analyzing interactions between targets and compounds. Our
customers hope that these assays can serve as a model for showing
a compound's action in the body. Assays involve chemicals called
"reagents," a compound and a target. All three of these
components are combined in a mixture that is put in a small well
on a microplate, which is then fed through an instrument where a
reading (also called a
<PAGE>
"screening") is performed to evaluate the potential effectiveness
of the compound being evaluated.
- Screening: Screening is the process of evaluating, testing and
finding compounds that have the potential to become a drug
candidate. Screening is done by performing the assay (i.e.,
mixing together reagents, a compound and a target) and evaluating
the assay results by reading the assay signal. Scientists can
then evaluate these signals or outputs to determine whether there
is any indication that the compound has the potential to become a
drug candidate. The speed at which an instrument reads each assay
is important to the speed of the screening process. Currently,
"high throughput" screening generally indicates performing
20,000 - 100,000 readings per day, while "ultra high throughput"
generally indicates reading more than 100,000 data points per
day.
- Lead optimization: Compounds that have been identified in the
screening process as potential drug candidates, are considered
"leads" or "lead compounds." Following the initial screening
steps, leads are further evaluated and developed in a process
referred to as lead optimization. This process may involve doing
further screens using many different variations of the lead
compound and various assay methods. Once a compound has been
refined to a formulation that a scientist feels has the best
chance of becoming an effective drug, it moves further along in
the drug development process towards clinical trials.
Historically, target identification and compound development have been
the limiting steps in the drug discovery process, but recent advancements in the
sciences of genomics and combinatorial chemistry have resulted in the generation
of significant numbers of new targets and compounds. This growth in the number
of targets and compounds has now shifted the limiting steps of the drug
discovery process to assay development, screening and lead optimization.
To address these bottlenecks, we are developing an integrated family of
products that gives our customers the ability to more rapidly screen the greatly
increasing numbers of compounds and targets. The first products in this product
family have been launched to the market. Our proprietary product line consists
of instruments used for reading assays and consumable items, such as microplates
and reagents used in assays. Each of these products can be used individually or
in conjunction with other companies' products, but we believe our products
provide their best results when used as an integrated system. Our instruments
allow customers the flexibility to use four different methods of reading assay
results, which provides them with the ability to use the same instrument to
perform tests that otherwise may require several instruments. Since our
instrumentation requires smaller amounts of reagents, compounds, and targets
consumed per test, we also have developed a cost effective screening solution.
We believe that our technology platform (i.e., family of products) addresses the
major throughput limitations associated with our customers' current efforts to
perform screens at a high rate of throughput in a cost effective way, thereby
enhancing their ability to accelerate the identification and optimization of
lead compounds for development into new medicines.
Our first high throughput screening product, Analyst HT, first
shipped in the second quarter of 1998, is what we believe to be one of the most
sensitive assay detection instruments currently available on the market,
specifically designed for high throughput screening and it offers customers the
flexibility of reading results in four different assay detection modes. The term
"assay detection" refers to the instrument's ability to detect and analyze how
potential drug compounds perform when tested against specific biological
targets. Additionally, with a built-in capability of reading both 96-well or
384-well plates, Analyst HT permits our customers to perform up to 70,000 tests
per day.
Our second product, Acquest, first shipped in the fourth quarter of
1998, goes beyond the capabilities of Analyst HT by offering customers the
opportunity to use state-of-the-art ultra-high throughput screening formats that
dramatically increase the number of screens that can be performed at any one
time. Also multi-mode, the Acquest is designed to accept microplates with both
384-well and 1,536-well formats. Its assay throughput is designed to reach a
level of 200,000 tests per day.
Our third product, Analyst AD, introduced in the second quarter of
1999, offers customers a cost effective system with flexible assay development
capabilities and is fully compatible with our Analyst HT. Both Analyst AD and
Analyst HT read results in four different assay detection modes and share the
same optical reading technology we call "Smart Optics".
<PAGE>
This compatibility allows customers to easily transfer assays, from their
assay development departments, to their high throughput screening areas.
We believe that our family of instruments, including Analyst HT,
Acquest and Analyst AD, provide several important advantages over other
currently available analyzers, including:
- increased throughput;
- minimization of time and costs associated with the transfer of
assay methods from the assay development part of the drug
discovery process to the high throughput screening part of the
process;
- improved analytical performance and flexibility;
- lower reagent costs;
- the ability to be quickly integrated into existing high
throughput screening laboratories; and
- the capacity to evolve with changing high throughput screening
needs.
Our principal executive offices are located at 405 Tasman Drive,
Sunnyvale, CA 94089 and our telephone number is (408) 541-8787. As used in this
prospectus, "we," "us," "our" and "LJL" refer to LJL BioSystems, Inc., a
Delaware corporation, and its wholly-owned subsidiary.
RISK FACTORS
We desire to take advantage of the "Safe Harbor" provisions of the
Private Securities Litigation Reform Act of 1995 and of Section 21E and Rule
3b-6 under the Securities Exchange Act of 1934. Specifically, we wish to alert
readers that the following important factors, as well as other factors
including, without limitation, those described elsewhere in reports we have
filed with the SEC and incorporated into this prospectus by reference, could in
the future affect, and in the past have affected, our actual results and could
cause our results for future periods to differ materially from those expressed
in any forward-looking statements made by or on behalf of us. We assume no
obligation to update these forward-looking statements.
WE RECENTLY ADOPTED A NEW BUSINESS STRATEGY AND HAVE HAD OPERATING LOSSES
EVER SINCE; THE MARKET FOR OUR HIGH THROUGHPUT SCREENING PRODUCTS IS NEW
AND UNDEFINED, AND WE MAY NEVER ACHIEVE PROFITABILITY
In the second half of 1996, we implemented a new strategic business
model to develop products for the high throughput screening market. In
connection with this change in strategy, we shifted our focus from developing
and manufacturing clinical diagnostic and research products on an OEM basis to
developing, manufacturing and marketing products for the high throughput
screening market. As a result, our historical operating and financial
performance is generally not indicative of future financial and business
results. We incurred operating losses for the three months ended March 31, 1999
and the years ended December 31, 1998 and 1997 as a result of our change in
business strategy and anticipate that we may continue to incur losses for at
least the next several years, due to the substantial increases in expenditures
necessary to develop and commercialize our high throughput screening and
ultra-high throughput screening products. We began commercial shipments of our
first high throughput screening instrument, the Analyst HT, in the second
quarter of 1998. Accordingly, we are subject to the risks inherent in the
operation of a new business, such as:
- the failure to develop an effective sales, marketing and
distribution channel;
- failure to achieve market acceptance and demand for our
high throughput screening and ultra-high
<PAGE>
throughput screening products;
- failure to implement commercial scale-up of developed high
throughput screening and ultra-high throughput screening
products; and
- failure to attract and retain key personnel.
Furthermore, the high throughput screening market is new and undefined,
and the use of high throughput screening by pharmaceutical and biotechnology
companies is limited. Demand for our high throughput screening and ultra-high
throughput screening products will depend upon the extent to which
pharmaceutical and biotechnology companies adopt high throughput screening as a
drug discovery tool. If high throughput screening does not become a widely used
method in drug discovery, demand for our products will not develop as we
currently expect or at all. The lack of demand for our high throughput screening
and ultra-high throughput screening products would have a material adverse
effect on our business, financial condition and results of operations.
BECAUSE WE ARE IN THE EARLY STAGE OF INSTRUMENT DEVELOPMENT, OUR ABILITY TO
DEVELOP HIGH THROUGHPUT SCREENING AND ULTRA-HIGH THROUGHPUT SCREENING
INSTRUMENTS IS UNCERTAIN
Our success will depend on our ability to develop and commercialize our
high throughput screening and ultra-high throughput screening instruments. We
began commercial shipments of our first high throughput screening instrument,
Analyst HT, in the second quarter of 1998. We had not previously developed or
commercialized products for the high throughput screening market before this
time. The successful implementation and operation of our high throughput
screening and ultra-high throughput screening products is a complex process
requiring the integration of, among other technologies:
- advanced optics;
- electronics;
- robotics;
- microfluidics;
- fluorescence detector technologies; and
- software and information systems.
Even if Analyst HT, Analyst AD, Acquest and our other high throughput
screening and ultra-high throughput screening products appear promising at
commercial launch, they may not achieve market acceptance at a level necessary
to enable production at a reasonable cost, to support the required sales and
marketing effort, and to support continuing research and development costs. In
addition, our high throughput screening or ultra-high throughput screening
instruments may:
- be difficult or overly expensive to produce;
- fail to achieve performance levels expected by customers;
- have a price level that is unacceptable in our targeted
industries; or
- be precluded from commercialization by the proprietary rights
of others or other competitive forces.
There can be no assurance that we will be able to successfully
manufacture and market the Analyst HT, Analyst AD, Acquest or any of our other
products on a timely basis, achieve anticipated performance levels or
throughputs, gain industry acceptance of our products or develop a profitable
business. The failure to achieve any of these objectives would have a
<PAGE>
material adverse effect on our business, financial condition and results of
operations.
BECAUSE WE ARE IN THE EARLY STAGE IN DEVELOPMENT, OUR ABILITY TO DEVELOP
REAGENTS AND ASSAY KITS IS UNCERTAIN
We expect in the future that a substantial portion of our revenues may
be derived from the sale of reagents, assay kits and microplates. We have
limited experience in the development, manufacture and marketing of reagents,
assay kits and microplates, having only recently introduced our first assay
kits, TKX and TKXtra and LJL designed microplates, HE (High
Efficiency). We intend to continue to license assay technologies from third
parties and to develop reagents, assay kits and microplates internally. We may
not succeed in licensing any additional assay technologies on acceptable terms,
if at all, and we may not successfully commercialize any reagents that we
license. In addition, we are internally developing reagents, assay kits and
microplates, but have limited experience in this area. We may not successfully
develop additional reagents, assay kits or microplates internally, and any
reagents, assay kits or microplates we do develop may not achieve market
acceptance. We intend to outsource the manufacture of microplates and, as sales
volumes increase, to also outsource the manufacture of reagents and assays kits.
We may not be able to enter into agreements with third parties for the
manufacture of reagents, assay kits or microplates on terms commercially
acceptable to us or at all. In addition, we intend to sell reagents, assay kits
and microplates to purchasers of high throughput screening and ultra-high
throughput screening instruments, including the Analyst HT, Analyst AD and
Acquest. Sales of the Analyst HT, Analyst AD and Acquest may not be sufficient
to support this strategy. A failure to achieve commercial acceptance of our
reagents, assay kits and microplates would have a material adverse effect on our
business, financial condition and results of operations.
BECAUSE WE DEPEND ON NEW PRODUCTS AND OUR MARKETS ARE SUBJECT TO RAPID
TECHNOLOGICAL CHANGE, WE MAY NOT BE ABLE TO COMMERCIALIZE PRODUCTS WE
DEVELOP
The pharmaceutical and biotechnology instrumentation and reagents
markets are characterized by rapid technological change and frequent new product
introductions. Our future success will depend on our ability to enhance our
current and planned high throughput screening and ultra-high throughput
screening products and to develop and introduce, on a timely basis, new products
that address the evolving needs of our customers, including fluorescence-based
reagents and assay kits, as well as products based on our FLARe and
SmartOptics technologies. We anticipate that production units for these new
products may not be available for several months or years, if at all. The
production of new high throughput screening and ultra-high throughput screening
products, microplates, fluorescence-based reagents and assay kits may present
development and manufacturing challenges. We may experience difficulties that
could delay or prevent the successful development, introduction and marketing of
our new products or our product enhancements. Any failure to develop and
introduce products in a timely manner in response to changing market demands or
customer requirements could have a material adverse effect on our business,
financial condition and results of operations.
WE HAVE LIMITED SALES AND MARKETING EXPERIENCE AND MAY NOT BE ABLE TO DEVELOP A
DIRECT SALES FORCE OR DISTRIBUTION CHANNELS THAT CAN MEET OUR
CUSTOMERS NEEDS, AND OUR FAILURE TO DO SO WILL HURT OUR FINANCIAL
RESULTS
We have limited experience in direct marketing, sales and distribution.
Our future profitability will depend on our ability to further develop a direct
sales force to sell our high throughput screening and ultra-high throughput
screening products to pharmaceutical and biotechnology companies. Our products
are technical in nature and we therefore believe it is necessary to develop a
direct sales force consisting of people with scientific backgrounds and
expertise. Competition for such employees is intense. We may not be able to
attract and retain qualified salespeople or be able to build an efficient and
effective sales and marketing organization. Failure to attract or retain
qualified salespeople or to build such a sales and marketing organization would
have a material adverse effect on our business, financial condition and results
of operations.
We intend to market our high throughput screening and ultra-high
throughput screening products in certain international markets through
distributors. Other than Japan, we do not currently have distributors in any
international markets, and there can be no assurance that we will be able to
engage qualified distributors. Such distributors may:
- fail to satisfy financial or contractual obligations to us;
- fail to adequately market our products;
<PAGE>
- cease operations with little or no notice to us; or
- offer, design, manufacture or promote competing product lines.
The failure to develop and maintain effective distribution channels
could have a material adverse effect on our business, financial condition and
results of operations.
WE PARTICIPATE IN A HIGHLY COMPETITIVE MARKET AND OUR PRODUCTS MAY NOT BE
ACCEPTED IN THE MARKET
The market for high throughput screening and ultra-high throughput
screening products is highly competitive. We expect that competition will
increase significantly as more biotechnology and pharmaceutical companies adopt
high throughput screening and ultra-high throughput screening instruments as a
drug discovery tool and as new companies enter the market with advanced
technologies and products. We compete in many areas, including high throughput
screening and ultra-high throughput screening products, microplates, assay
development and reagent sales. We compete with companies which directly market
high throughput and ultra high throughput screening products. In addition,
pharmaceutical and biotechnology companies, academic institutions, governmental
agencies and other research organizations are conducting research and developing
products in various areas which compete with our technology platform, either on
their own or in collaboration with others. Further, certain companies offer
screening services on a contract or collaborative basis, and these services
could eliminate a potential customer's need to purchase our products. Our
technological approaches may be rendered obsolete or uneconomical by advances in
existing technological approaches or the development of different approaches by
one or more of our current or future competitors. Many of our competitors have
greater financial, operational and personnel resources, and more experience in
research and development, sales and marketing and other areas than we do.
THE HIGH THROUGHPUT SCREENING AND ULTRA-HIGH THROUGHPUT SCREENING MARKET IS
CONCENTRATED, WHICH LIMITS THE NUMBER OF OUR POTENTIAL CUSTOMERS
The market for high throughput screening and ultra-high throughput
screening products is highly concentrated, with approximately 50 large
pharmaceutical companies operating a substantial portion of our targeted drug
discovery laboratories. Accordingly, we expect a relatively small number of
customers will continue to account for a substantial portion of our revenues. We
face risks associated with a highly concentrated customer base as we sell our
high throughput screening and ultra-high throughput screening products,
including the failure to establish or maintain relationships within a limited
customer pool, or substantial financial difficulties or decreased capital
spending by our customers, any of which could have a material adverse effect on
our business, financial condition and results of operations.
OUR PRODUCTS HAVE LENGTHY SALES CYCLES, WHICH COULD CAUSE OUR OPERATING
RESULTS TO FLUCTUATE SIGNIFICANTLY FROM QUARTER TO QUARTER
The sale of high throughput screening and ultra-high throughput
screening products typically involves a significant technical evaluation and
commitment of capital by customers. Accordingly, the sales cycle associated with
our products is expected to be lengthy and subject to a number of significant
risks, including customers' budgetary constraints and internal acceptance
reviews, that are beyond our control. Due to this lengthy and unpredictable
sales cycle, our operating results could fluctuate significantly from quarter to
quarter.
WE HAVE LIMITED MANUFACTURING EXPERIENCE AND MAY NOT BE ABLE TO SCALE-UP
OUR MANUFACTURING OPERATIONS TO COMMERCIAL LEVELS
We are only producing Analyst HT, Acquest, Analyst AD, reagents and
assay kits in limited quantities, and have not yet manufactured other products
in significant quantities. We may encounter difficulties in scaling up
production of our high throughput screening and ultra-high throughput screening
products due to, among other things, quality control and assurance, component
supply and availability of qualified personnel. Even if we successfully develop
and introduce our products to market, we may not be able to manufacture them in
sufficient quantities at acceptable cost while meeting quality control
standards. We intend to outsource the manufacture of microplates and, as sales
volumes increase, to outsource the
<PAGE>
manufacture of reagents and assay kits. Difficulties encountered in the
manufacturing scale-up of Analyst HT, Analyst AD, Acquest and other high
throughput screening and ultra-high throughput screening products could have
a material adverse effect on our business, financial condition and results of
operations.
WE MAY NOT SUCCESSFULLY MANAGE OUR GROWTH
Our success will depend on the expansion of our operations and the
effective management of growth, which will place a significant strain on our
management, operational and financial resources. To manage such growth, we must
expand our facilities, augment our operational, financial and management systems
and hire and train additional qualified personnel. Our failure to manage growth
effectively would have a material adverse effect on our business, financial
condition and results of operations.
WE DEPEND UPON KEY PERSONNEL WHO MAY TERMINATE THEIR EMPLOYMENT WITH US AT
ANY TIME; WE NEED TO HIRE ADDITIONAL QUALIFIED PERSONNEL
Our success will depend to a significant degree upon the continued
services of key management, technical, and scientific personnel, including Lev
J. Leytes, the Chairman of our Board of Directors, President and Chief Executive
Officer. In addition, our success will depend on our ability to attract and
retain other highly skilled personnel. Competition for qualified personnel is
intense, and the process of hiring such qualified personnel is often lengthy.
There can be no assurance that we can recruit such personnel on a timely basis,
if at all. Our management and other employees may voluntarily terminate their
employment with us at any time. The loss of the services of key personnel, or
the inability to attract and retain additional qualified personnel, could have a
material adverse effect on our business, financial condition and results of
operations.
BECAUSE WE DEPEND ON SUPPLIERS AND CONTRACT MANUFACTURERS, WE ARE SUBJECT TO
RISKS BEYOND OUR CONTROL
Certain components used in our high throughput screening and ultra-high
throughput screening products are currently purchased from a single or a limited
number of outside sources. The reliance on a sole or limited number of suppliers
could result in:
- delays associated with redesigning a product due to a failure
to obtain a single source component;
- an inability to obtain an adequate supply of required
components; and
- reduced control over pricing, quality and timely delivery.
We do not maintain long-term agreements with any of our suppliers, and
therefore the supply of a particular component could be terminated at any time
without penalty to the supplier. Any interruption in the supply of single source
components could have a material adverse effect on our business, financial
condition and results of operations. We intend to rely on contract
manufacturers, some of which may be single source vendors, for the development,
manufacture and supply of certain of our reagents, assay kits and microplates.
There can be no assurance that we will be able to enter into such manufacturing
contracts on commercially reasonable terms, if at all, or that our current or
future contract manufacturers will meet our requirements for quality, quantity
or timeliness. If the supply of any components, reagents, assay kits or
microplates is interrupted, components, reagents, assay kits and microplates
from alternative suppliers and contract manufacturers may not be available in
sufficient volumes within required timeframes, if at all, to meet our production
needs.
WE HAVE AN ACCUMULATED DEFICIT AND OUR FUTURE PROFITABILITY IS UNCERTAIN
As of March 31, 1999, we had an accumulated deficit of approximately
$14.6 million. The expansion of our operations and continued development of our
high throughput screening and ultra-high throughput screening products will
require a substantial increase in sales, marketing and research and development
expenditures for at least the next several years. As a result, we expect to
incur operating losses for the next several years. Our profitability will depend
on our ability to successfully develop and commercialize our high throughput
screening and ultra-high throughput screening products.
<PAGE>
Accordingly, the extent of future losses and the time required to achieve
profitability, if achieved at all, is highly uncertain. Moreover, if
profitability is achieved, the level of such profitability cannot be
predicted and may vary significantly from quarter to quarter.
WE MAY NEED TO RAISE CAPITAL IN THE FUTURE AND ADDITIONAL FUNDING IS UNCERTAIN
We may be required to raise substantial additional capital over a
period of several years in order to develop and commercialize our products. Our
future capital requirements will depend on numerous factors, including the costs
associated with:
- developing and commercializing our products;
- developing a direct marketing and sales force;
- maintaining existing, or entering into future, licensing and
distribution agreements;
- protecting intellectual property rights;
- entering the reagents and assay kits business;
- expanding facilities; and
- consummating possible future acquisitions of technologies,
products or businesses.
We may consume available resources more rapidly than currently
anticipated, resulting in the need for additional funding. Accordingly, we may
be required to raise additional capital through a variety of sources, including
the public equity market, private equity financing, collaborative arrangements,
and public or private debt. Additional capital may not be available on
acceptable terms, if at all. If adequate funds are not available, we may be
required to significantly reduce or refocus our operations or to obtain funds
through arrangements that may require us to relinquish rights to certain of our
products, technologies or potential markets, which would have a material adverse
effect on our business, financial condition and results of operations. To the
extent that additional capital is raised through the sale of equity or
convertible securities, the issuance of such securities would result in
ownership dilution to our existing stockholders.
WE HAVE INTERNATIONAL SALES AND OPERATIONS, WHICH SUBJECT US TO RISKS RELATED TO
FOREIGN CURRENCY EXCHANGE RATES, TARIFFS, FOREIGN REGULATIONS, IMPORT
AND EXPORT RESTRICTIONS AND DIFFICULTIES MANAGING AND STAFFING
INTERNATIONAL OPERATIONS.
We sell products in foreign countries in local currencies, which
exposes us to foreign currency exchange risk. In order to reduce the risk from
fluctuation in foreign currency exchange rates, our UK subsidiary uses the U.S.
dollar as its functional currency; however, our UK subsidiary bills its
customers in the customer's local currency. Foreign currency assets and
liabilities are translated into U.S. dollars at end-of-period exchange rates,
except for property and equipment, which is translated at historical exchange
rates. Revenue and expenses are translated at average exchange rates in effect
during each period. Gains or losses from foreign currency transactions are
included in net income (loss) and to date have not been material. We have not
entered into any currency hedging activities.
We expect that international sales will account for a significant
portion of our total revenues in the future. International sales and operations
are subject to a number of risks, including:
- the imposition of government controls;
- export license requirements;
<PAGE>
- restrictions on the export of critical technology;
- political and economic instability or conflicts;
- trade restrictions;
- changes in tariffs and taxes;
- difficulties in staffing and managing international
operations;
- problems in establishing or managing distributor
relationships; and
- general economic conditions.
In addition, as we expand our international operations and the amount
of revenue invoiced in local currencies becomes a larger portion of our
business, fluctuations in the value of foreign currencies relative to the U.S.
dollar may adversely affect our business, financial condition and results of
operations.
WE MAY ACQUIRE TECHNOLOGIES AND BUSINESSES, WHICH COULD EXPOSE US TO
ADDITIONAL RISKS AND BE DILUTIVE TO EXISTING STOCKHOLDERS
We may acquire certain technologies, products or businesses to broaden
the scope of our existing and planned product lines and technologies. Such
acquisitions would expose us to:
- the risks associated with the assimilation of new
technologies, operations, sites and personnel;
- the diversion of resources from our existing business and
technologies;
- the inability to generate revenues to offset associated
acquisition costs;
- the requirement to maintain uniform standards, controls,
and procedures; and
- the impairment of relationships with employees and customers
as a result of any integration of new management personnel.
Acquisitions may also result in the issuance of dilutive equity
securities, the incurrence or assumption of debt or additional expenses
associated with the amortization of acquired intangible assets or potential
businesses. Our failure to successfully address such risks could have a material
adverse effect on our business, financial condition and results of operations.
THIRD PARTY INTELLECTUAL PROPERTY RIGHTS MAY LIMIT OUR ABILITY TO DEVELOP AND
SELL OUR PRODUCTS; WE HAVE LICENSED TECHNOLOGY THAT WE USE IN OUR
PRODUCTS, BUT WE COULD LOSE RIGHTS TO THIS TECHNOLOGY AND THE ABILITY
TO SELL OUR PRODUCTS IF WE MATERIALLY BREACH THIS LICENSE
Our success will depend in part on our ability to obtain patents,
maintain trade secret protection and operate without infringing the proprietary
rights of others. We hold four U.S. patents. We have 11 pending U.S. patent
applications, six international patent applications and 26 provisional U.S.
patent applications. To supplement our proprietary technology, we have licensed
ten patents and one patent application from FluorRx pursuant to a June 1997
agreement, as amended. In October 1998, we exercised our option under this
agreement to license three more patent applications. Under this license, we
obtained certain worldwide rights relating to FluorRx's FLARe technology.
Certain of these rights have been licensed on an exclusive basis. Certain other
rights have been licensed on a non-exclusive basis, and therefore could be or
are licensed to third parties. In accordance with this agreement, we paid
one-time fees as well as agreed to pay royalties based on sales of
<PAGE>
our products that incorporate this technology. The license may be terminated
in the event of a material breach by us. Furthermore, FluorRx may elect to
convert the exclusive rights into non-exclusive rights in the event that we
fail to make certain minimum royalty payments. If FluorRx were to terminate
the license due to a material breach of the license by us, we would lose the
right to incorporate FLARe technology into our high throughput screening and
ultra-high throughput screening products, which would require us to exclude
FLARe technology from our existing and future products and either license or
internally develop alternative technologies. There can be no assurance that
we would be able to license alternative technologies on commercially
acceptable terms, or at all, or that we would be capable of internally
developing such technologies. Furthermore, other companies may independently
develop technology with functionality similar or superior to the FLARe
technology that does not or is claimed not to infringe the FLARe patents or
that otherwise circumvents the technology we have licensed.
We are aware of third party patents that contain issued claims that may
cover certain aspects of our reagent technologies. In the future we may be
required to license third-party patents to produce certain reagents, assay kits
and related products. Licenses for such patents may not be available on
commercially acceptable terms, if at all. Any action against us claiming damages
and seeking to enjoin commercial activities relating to the affected
technologies could subject us to potential liability for damages. We could incur
substantial costs in defending patent infringement claims, obtaining patent
licenses, engaging in interference and opposition proceedings or other
challenges to our patent rights or intellectual property rights made by third
parties, or in bringing such proceedings or enforcing any patent rights against
third parties. Our inability to obtain necessary licenses or our involvement in
proceedings concerning patent rights could have a material adverse effect on our
business, financial condition and results of operations.
The patent positions of bioanalytical product companies, including
ours, are uncertain and involve complex legal and factual questions. In
addition, the coverage claimed in a patent application can be significantly
reduced before the patent is issued. Consequently, there can be no assurance
that our patent applications or those of our licensor will result in patents
being issued or that any issued patents will provide protection against
competitive technologies or will be held valid if challenged or circumvented.
Others may independently develop products similar to ours or design around or
otherwise circumvent patents issued to us. In the event that any relevant claims
of third-party patents are upheld as valid and enforceable, we could be
prevented from practicing the subject matter claimed in such patents, or would
be required to obtain licenses from the patent owners of each of such patents or
to redesign our products or processes to avoid infringement. There can be no
assurance that such licenses would be available or, if available, would be on
terms acceptable to us or that we would be successful in any attempt to redesign
our products or processes to avoid infringement. If we do not obtain the
necessary licenses, we could be subject to litigation and encounter delays in
product introductions while we attempt to design around such patents.
Alternatively, the development, manufacture or sale of such products could be
prevented. Litigation would result in significant costs to us as well as
diversion of management time. Adverse determinations in any such proceedings
could have a material adverse effect on our business, financial condition and
results of operations.
We also rely on trade secret and copyright law, as well as employee and
third-party nondisclosure agreements to protect our intellectual property rights
in our products and technology. There can be no assurance that these agreements
and measures will provide meaningful protection of our trade secrets,
copyrights, know-how, or other proprietary information in the event of any
unauthorized use, misappropriation or disclosure. In addition, others may
independently develop substantially equivalent proprietary technologies.
Litigation to protect our trade secrets or copyrights would result in
significant costs to us as well as diversion of management time. Adverse
determinations in any such proceedings or unauthorized disclosure of our trade
secrets could have a material adverse effect on our business, financial
condition and results of operations. In addition, the laws of certain foreign
countries do not protect our intellectual property rights to the same extent as
U.S. laws. There can be no assurance that we will be able to protect our
intellectual property in these markets.
SOME OF OUR PRODUCTS ARE SUBJECT TO GOVERNMENT REGULATION, AND THE FAILURE BY
US OR OUR OEM CUSTOMERS TO COMPLY WITH GOVERNMENT REGULATIONS COULD
LIMIT OUR SALES OF THESE PRODUCTS
While we believe that none of our high throughput screening and
ultra-high throughput screening products will be regulated as medical devices or
otherwise subject to FDA regulation, our clinical diagnostics products,
including the Luminometer, Q2000, Horizon and a microplate heater, are subject
to FDA regulation as medical devices, as well as similar foreign regulation. The
process of obtaining and maintaining required regulatory clearances and
approvals and otherwise
<PAGE>
remaining in regulatory compliance in the U.S. and certain other countries is
lengthy, expensive and uncertain. Although we have phased out production of
the Luminometer, Q2000 and the microplate heater, we will continue to
manufacture the Horizon on an OEM basis during 1999 but do not expect to
manufacture the Horizon after 1999. The Horizon is used in research and
clinical laboratories to perform in vitro diagnostic tests, which are exempt
from investigational device exemption requirements, including the need to
obtain the FDA's prior approval, provided that, among other things:
- the testing is noninvasive;
- the product is not used as a diagnostic procedure without
confirmation by another medically established test or
procedure; and
- distribution controls are established to assure that in vitro
diagnostic products distributed for research are used only for
those purposes.
To our knowledge, our OEM customers have met these conditions. However,
the FDA may not agree that our OEM customers' distribution of our clinical
diagnostic products meet and have met the requirements for investigational
device exemption. Failure by us, our OEM customers or the recipients of our
clinical diagnostic products to comply with the investigational device exemption
requirements could result in enforcement action by the FDA, which could
adversely affect us or our OEM customers' ability to gain marketing clearance or
approval of these products or could result in the recall of previously
distributed products.
Applicable law requires that we comply with the FDA's regulations for
the manufacture of the Horizon. The FDA monitors compliance with its regulations
by subjecting medical product manufacturers to periodic FDA inspections of their
manufacturing facilities. The FDA has recently revised its regulations, and the
new regulations impose design controls and make other significant changes in the
requirements applicable to manufacturers. We are also subject to other
regulatory requirements, and may need to submit reports to the FDA, including
adverse event reporting. Failure to comply with current FDA regulations or other
applicable legal requirements can lead to, among other things:
- warning letters;
- seizure of violative products;
- suspension of manufacturing, government injunctions; and
- potential civil or criminal liability on our part and the
part of the responsible officers and employees.
In addition, the government may halt or restrict continued sale of such
instruments. Any such actions could have a material, adverse effect on our
business, financial condition and results of operations.
In conjunction with the export of our clinical diagnostics instruments,
we maintain International Organization for Standardization ("ISO") 9001
certification and apply the CE mark to certain products that are exported, which
subjects our operations to periodic surveillance audits. While we believe we are
currently in compliance with all applicable regulations and standards, there can
be no assurance that our operations will be found to comply with these
regulations or standards or other applicable legal requirements in the future or
that we will not be required to incur substantial costs to maintain our
compliance with existing or future manufacturing regulations, standards or other
requirements. Any such noncompliance or increased cost of compliance could have
a material adverse effect on our business, results of operations and financial
condition.
We are also subject to numerous federal, state and local laws relating
to safe working conditions, manufacturing practices, environmental protection,
storage, use and disposal of hazardous or potentially hazardous substances. Any
material failure to comply with such laws could require us to incur significant
costs and would have a material, adverse effect upon our ability to do business.
Changes in existing requirements or adoption of new requirements or policies
relating to
<PAGE>
government regulations could materially and adversely affect our ability to
comply with such requirements.
WE USE HAZARDOUS MATERIALS AND IMPROPER HANDLING OF THESE MATERIALS BY OUR
EMPLOYEES OR AGENTS COULD EXPOSE US TO SIGNIFICANT FINANCIAL PENALTIES
Our research and development and manufacturing operations involve the
use of hazardous materials, biological samples and chemicals. In the future, we
plan to manufacture certain reagents, some of which likely will contain
hazardous materials, including carcinogens. We are subject to federal, state and
local laws and regulations governing the storage, use, and disposal of such
materials and certain waste products. The risk of accidental contamination or
injury from the use of these materials cannot be completely eliminated. In the
event of an accident, we could be held liable for damages that result and any
such liability could exceed our resources, which would have a material adverse
effect on us. We may incur substantial costs to comply with environmental and
safety regulations if we develop our own commercial reagents manufacturing
facility.
YEAR 2000 PROBLEMS COULD ADVERSELY IMPACT OUR BUSINESS
We have established a Year 2000 Program to address certain Year 2000
issues. This program focuses on four key areas of readiness:
- Internal Infrastructure Readiness, addressing internal
hardware and software, including both information and
non-information technology systems;
- Supplier Readiness, addressing the preparedness of suppliers
providing material incorporated into our products;
- Product Readiness, addressing product functionality; and
- Customer Readiness, addressing customer support and
transactional activity.
For each readiness area, we are in the process of performing risk
assessment, conducting testing, repairing Year 2000 issues, developing
contingency plans to mitigate unknown risks, and communicating Year 2000
information to employees, suppliers, customers and other third parties.
INTERNAL INFRASTRUCTURE READINESS. We have completed an assessment of our
internal software applications and information technology hardware and have
commenced work on testing and repairs. Readiness activities are intended to
encompass all major categories of software applications we use, including:
- those used for manufacturing, engineering, sales, finance,
and human resources;
- hardware, including hubs, routers, telecommunication
equipment, workstations and other items; and
- non-information technology systems, including embedded
systems, facilities and other operations, such as financial,
banking, security and utility systems.
At March 31, 1999, approximately 80 percent of our mission critical
internal infrastructure has either been tested and determined to be Year 2000
ready or is undergoing testing but is believed to be Year 2000 ready based on
representations by the supplier. Testing and repair activity is scheduled for
completion by July 31, 1999. Although we have not yet found any significant
mission critical software applications which require repair, any repairs that
may yet be found to be required are expected to be completed by July 31, 1999.
SUPPLIER READINESS. This area focuses on minimizing two components of risk
associated with suppliers:
<PAGE>
- a supplier's product integrity; and
- a supplier's business capability to continue providing
products and services.
We have identified and contacted key suppliers regarding their relative
risks in these two components. To date, we have received responses from
approximately 75 percent of our key suppliers, who indicate that the products
provided to us are Year 2000 compliant. In addition, the key suppliers have
indicated they are in the process of developing or executing repair plans, if
needed, to address Year 2000 issues which may affect their ability to continue
providing products and services to us. Our assessment of our key suppliers' Year
2000 readiness, and testing and repair of any Year 2000 compliance issues, are
scheduled to be completed by July 31, 1999.
PRODUCT READINESS. This area focuses on identifying and resolving Year 2000
issues existing in our products. This area encompasses a number of activities,
including testing, evaluation, engineering and manufacturing implementation. We
have completed a Year 2000 readiness assessment for our current generation of
released high throughput screening products based upon a series of
industry-recognized testing parameters and have determined that these products
are Year 2000 ready.
CUSTOMER READINESS. This area focuses on customer readiness as it relates to
our responsibility to provide customer support, including retrofitting products
as well as providing other services to our customers. Primarily due to our
product readiness efforts regarding our current generation of released products,
we have completed our assessment of Year 2000 risk in this area and have
determined there are no issues to address.
SUMMARY. If required, we will formulate contingency plans by September 30,
1999, for those software applications, hardware and non-information technology
systems found to not be Year 2000 ready. We do not anticipate that we will need
contingency plans for our mission critical software applications, hardware and
non-information technology systems, nor do we expect to need contingency plans
for our current generation of released products. We do not know at this point if
we will need contingency plans for key suppliers.
We believe the overall cost to address Year 2000 issues will not be
material; however, we are continually testing and making necessary repairs and
we may need to reassess this estimate over time.
Due to the inherent uncertainty surrounding the Year 2000 issue, we
cannot anticipate all of the possible problems that may occur. Adverse
consequences from Year 2000 issues may materially affect our warranty liability,
the value of capitalized software applications, hardware and non-information
technology systems, the carrying value of our inventory, as well as our
financial condition, results of operation and cash flows. Year 2000 readiness
problems could also subject us to litigation which may include consequential
damages.
EURO CONVERSION
On January 1, 1999, 11 of the 15 member countries of the European Union
established fixed conversion rates between each of their existing sovereign
currencies and the Single European Currency ("Euro"). The participating
countries adopted the Euro as their common legal currency on that date, with a
transition period through January 1, 2002 regarding certain elements of the Euro
change. We do not expect the transition to, or use of, the Euro to materially or
adversely affect our business, financial condition or results of operation.
OUR FUTURE OPERATING RESULTS ARE LIKELY TO FLUCTUATE
Our future operating results are likely to fluctuate substantially from
year to year and quarter to quarter. The degree of fluctuation will depend on a
number of factors, including:
- the timing and level of sales;
- the mix of products sold through direct sales channels and
third party distributors; and
<PAGE>
- any change in the product mix among our existing and planned
product lines.
Fluctuations of these factors could have a material adverse effect on
our business, financial condition and results of operations. Because a
significant portion of our business is expected to be derived from orders placed
by a limited number of large customers, variations in the timing of such orders
could cause significant fluctuations in our operating results. Other factors
that may result in fluctuations in operating results include:
- industry acceptance of high throughput screening and
ultra-high throughput screening as a drug discovery tool;
- market acceptance of our products;
- the timing of new product announcements and the
introduction of new products and new technologies by us
or our competitors;
- delays in research and development of new products;
- increased research and development expenses;
- increased marketing and sales expenses associated with
the implementation of our direct marketing efforts;
- availability and cost of component parts from our suppliers;
- competitive pricing pressures; and
- developments with respect to regulatory matters.
In connection with future introductions of new products, we may be
required to record charges for inventory obsolescence in connection with unsold
inventory, if any, of older generations of products.
Our expenditures for research and development, selling and marketing
and general and administrative functions are based in part on future revenue
projections. We may be unable to adjust spending in a timely manner in response
to any unanticipated declines in revenues, which may have a material adverse
effect on our business, financial condition and results of operations. We may be
required to reduce prices in response to competitive pressures or other factors
or increase spending to pursue new market opportunities. Any decline in the
average selling price of a product which is not offset by a reduction in product
costs or by sales of other products with higher gross margins would decrease our
overall gross profit and adversely affect our business, financial condition and
results of operations. In addition, our operating results may vary from the
expectations of public market analysts and investors, and, as a result, the
price of our common stock could be materially and adversely affected.
<PAGE>
USE OF PROCEEDS
The proceeds from the sale of the common stock offered by this
prospectus are solely for the account of the selling shareholders. We will not
receive any proceeds from the sale of these shares.
ISSUANCE OF COMMON STOCK TO SELLING STOCKHOLDERS
On January 27, 1999, we issued 2,000,000 shares of our common stock to
the selling stockholders in a private placement transaction. This prospectus
covers the resale of the shares of common stock issued in the private placement.
PLAN OF DISTRIBUTION
Shares of Common Stock offered by this prospectus may be offered and
sold from time to time by the selling stockholders. As used herein, "selling
stockholders" includes donees, pledgees or partners of a named selling
shareholder selling shares received from a named selling stockholder after the
date of this prospectus. The selling stockholders will act independently of us
in making decisions with respect to the timing, manner and size of each sale.
The selling stockholders may sell shares from time to time in one or more types
of transactions (which may include block transactions) on the Nasdaq National
Market, in the over-the-counter market, through put or call options transactions
related to the shares or a combination of such methods of sale, at market prices
prevailing at the time of sale, or at negotiated prices. Such transactions may
or may not include brokers or dealers. 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 commission under the Securities Act. We have
agreed to indemnify the selling stockholders against certain liabilities arising
under the Securities Act.
Selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
The selling stockholders may effect such transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (with compensation to a particular broker-dealer
might be in excess of customary commissions).
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 shares. 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, and to their own activities and those
of their affiliates. The selling stockholders have advised us that during the
time they are engaged in attempting to sell the shares offered by this
prospectus, they will:
- not engage in any stabilization activity in connection with
any of our securities;
- provide copies of this prospectus to each person to whom
shares may be offered, and to each broker-dealer, if any,
through whom shares are offered; and
- not bid for or purchase any of our securities or any rights
to acquire our securities, or attempt to induce any person to
purchase any of our securities or rights to acquire our
securities other than as permitted under the Exchange Act.
We have agreed to maintain the effectiveness of this registration
statement until the earlier of the sale of all the shares offered by this
prospectus or the date that each holder of shares can sell all of the shares
it holds in any three-month period in compliance with Rule 144 promulgated
under the Securities Act, but in no event after three years from the date on
which the SEC declared the registration statement containing this prospectus
effective. 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.
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information as of March 1, 1999
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 beneficially owned is based on
12,590,420 shares outstanding at March 1, 1999 determined in accordance with
Rule 13d-3 of the Exchange Act. 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 March 1, 1999 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.
Except as described in footnotes (1) and (2), no selling stockholder
has had any material relationship with us or any of our predecessors or
affiliates within the last three years.
<TABLE>
<CAPTION>
SELLING STOCKHOLDER NUMBER PERCENT SHARES OFFERED BY THIS NUMBER PERCENT
------------------- ------ ------- ---------------------- ------ -------
SHARES BENEFICIALLY PROSPECTUS SHARES BENEFICIALLY
------------------- ---------- -------------------
OWNED PRIOR TO THE OWNED AFTER THE
------------------ ---------------
OFFERING(1) OFFERING
----------- --------
<S> <C> <C> <C> <C> <C>
The Bay City Capital Fund I, L.P. (1).............. 857,143 6.8% 857,143 0 0%
The Kaufmann Fund, Inc............................. 857,143 6.8% 857,143 0 0%
Skyline Venture Partners, L.P. (2)................. 285,714 2.3% 285,714 0 0%
</TABLE>
- -----------
(1) This information is based on a Schedule 13D filed on February 3, 1999.
The Bay City Capital Fund I, L.P. refers to the following persons: The
Bay City Capital Fund I, L.P., a Delaware limited partnership, Bay City
Capital Management LLC, a Delaware limited liability company and Bay
City Capital LLC, a Delaware limited liability company, all of which
share voting and dispositive power over all shares held by The Bay City
Capital Fund I, L.P. John D. Diekman, Ph.D., a director of the Company,
is a managing partner of the general partner of The Bay City Capital
Fund I, L.P., does not share voting and dispositive power with respect
to the shares held by such entity, and disclaims beneficial ownership
of such shares in which he has no pecuniary interest.
(2) John G. Freund, M.D., a director of the Company, is the Managing
Director of Skyline Venture Management LLC, the general partner of
Skyline Venture Partners, L.P. Dr. Freund disclaims beneficial
ownership of shares held by Skyline, except to the extent of any
indirect pecuniary interest in his distributive shares therein.
<PAGE>
LEGAL MATTERS
The validity of the issuance of the common stock offered by this
prospectus will be passed upon by Venture Law Group, A Professional Corporation,
Menlo Park, California, counsel to LJL BioSystems, Inc.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission. Certain information in the
registration statement has been omitted from this prospectus in accordance with
the rules of the SEC. We file proxy statements and annual, quarterly and special
reports and other information with the SEC. You can inspect and copy the
registration statement as well as the reports, proxy statements and other
information we have filed with the SEC at the public reference room maintained
by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC
Regional Offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New
York, New York 10048. You can call the SEC at 1-800-732-0330 for further
information about the public reference rooms. We are also required to file
electronic versions of these documents with the SEC, which may be accessed from
the SEC's World Wide Web site at http://www.sec/gov. Reports, proxy and
information statements and other information concerning LJL BioSystems, Inc.,
may be inspected at The Nasdaq Stock Market at 1735 K Street, N.W., Washington,
D.C. 20006.
The SEC allows us to "incorporate by reference" certain of our
publicly-filed documents into this prospectus, which means that information
included in those documents is considered part of this prospectus. Information
that we file with the SEC after the effective date of this prospectus will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until the selling
stockholders have sold all the shares.
The following documents filed with the SEC are incorporated by
reference in this prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31, 1998
(File No. 000-23647).
2. Our definitive Proxy Statement dated April 16, 1999, filed in
connection with our June 1, 1999, Annual Meeting of Stockholders.
3. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, September 30, 1998, June 30, 1998 and March 31, 1998 (File No. 000-23647).
4. Our Current Report on Form 8-K, filed with the SEC on February 11,
1999 (File No. 000-23647).
5. The description of our common stock in our Registration Statement on
Form 8-A filed with the SEC on January 22, 1998 (File No. 000-23647).
We will furnish without charge to you, on written or oral request, a
copy of any or all of the documents incorporated by reference, other than
exhibits to those documents. You should direct any requests for documents to
Robert T. Beggs, 405 Tasman Drive, Sunnyvale, CA 94089, telephone: (408)
541-8787.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN 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 sale and distribution of the Common Stock
being registered. Selling commissions and brokerage fees and any applicable
transfer taxes and fees and disbursements of counsel for the selling
stockholders are payable individually by the selling stockholders. All amounts
shown are estimates except the SEC registration fee and the Nasdaq listing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
SEC registration fee............................................................... $2,502.00
Legal fees and expenses............................................................ 10,000.00
Accounting fees and expenses....................................................... 2,500.00
Nasdaq listing fees................................................................ 17,500.00
Miscellaneous expenses............................................................. 5,000.00
----------
Total.............................................................................. $37,502.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933. Articles XIII and XIV of the
Registrant's Fourth Amended and Restated Certificate of Incorporation and
Article VI of the Registrant's Bylaws provide for indemnification of its
directors, officers, employees and other agents to the maximum extent permitted
by law. In addition, the Registrant has entered into Indemnification Agreements
with its officers and directors and maintains director and officer liability
insurance.
In connection with this offering, the selling stockholders have agreed
to indemnify the Registrant, its directors and officers and each such person who
controls the Registrant, against any and all liability arising from inaccurate
information provided to the Registrant by the selling stockholders and contained
herein up to a maximum (except in the case of willful fraud by the selling
stockholder) of the net proceeds received by the selling stockholders from the
sale of their shares hereunder.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
<C> <S>
4.1(1) Registration Rights Agreement, dated January 27, 1999
5.1(2) Opinion of Venture Law Group, A Professional Corporation
23.1 Consent of Independent Accountants
23.2 Consent of Counsel (included in Exhibit 5.1)
<PAGE>
24.1 Power of Attorney (see page II-3)
</TABLE>
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(1) Incorporated by reference to Exhibit 4.5 filed with our current report
on Form 8-K, as filed February 11, 1999.
(2) Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement 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.
(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.
(4) 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 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions referred to 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 against the Registrant by such director, officer
or controlling person in connection with the securities being registered
hereunder, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
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 Sunnyvale, State of California, on
the 1st day of March, 2000.
LJL BIOSYSTEMS, INC.
By: /s/ Lev J. Leytes
--------------------------
Lev J. Leytes
President, Chief Executive Officer and
<PAGE>
Chairman of the Board of Directors
POWER OF ATTORNEY
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 TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Lev J. Leytes
------------------------
(Lev J. Leytes) President, Chief Executive Officer and Chairman of the Board March 1, 2000
*
------------------------
(Galina Leytes) Executive Vice President and Director March 1, 2000
*
------------------------
(George W. Dunbar, Jr.) Director March 1, 2000
*
------------------------
(Daniel S. Janney) Director March 1, 2000
*
------------------------
(Michael F. Bigham) Director March 1, 2000
*
------------------------
(John G. Freund, M.D.) Director March 1, 2000
*
------------------------
(John D. Diekman, Ph.D.) Director March 1, 2000
*By: /s/ Lev J. Leytes
----------------------
Lev J. Leytes, Attorney in Fact March 1, 2000
</TABLE>
LJL BIOSYSTEMS, INC. INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
-------
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
<C> <S>
4.1(1) Registration Rights Agreement, dated January 27, 1999
5.1(2) Opinion of Venture Law Group, A Professional Corporation
23.1 Consent of Independent Accountants
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
- -----------
(1) Incorporated by reference to Exhibit 4.5 filed with our current report
on Form 8-K, as filed February 11, 1999.
(2) Previously filed.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Prospectus of our report dated January 15, 1999, except as to Note 11, which
is as of January 27, 1999, relating to the consolidated financial statements
and financial statement schedule, which appear in LJL BioSystems, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1998. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
San Jose, California
February 28, 2000
