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As filed with the Securities and Exchange Commission on March 29, 1996
Registration No. 33 -
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INAMED CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Florida 3800 Howard Hughes Parkway 59-0920629
(State or other jurisdiction Las Vegas, Nevada 89109 (I.R.S. Employer
of incorporation or organization) (702) 791-3388 Identification No.)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Donald K. McGhan
Inamed Corporation
3800 Howard Hughes Parkway, Suite 900
Las Vegas, Nevada 89109
(702) 791-3388
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate Date of Commencement of Proposed Sale of the Securities to the
Public: From time to time after the effective date of the 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. / /
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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Shares to be Amount to be Offering Price Per Share Aggregate Offering Price Amount of
Registered Registered (1) (2) (2) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, par value 3,500,000
$.01 per share shares $11.31 $39,593,750 $13,654
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(1) Pursuant to Rule 416 under the Securities Act of 1933, this
Registration Statement also relates to such additional shares of
Inamed Corporation Common Stock as may be issued as a result of the
anti-dilution provisions contained in certain convertible notes issued
by Inamed Corporation described elsewhere in this Registration
Statement.
(2) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(c) on the basis of the average of the high
and low prices of the Inamed Corporation Common Stock, par value $.01
per share, on March 22, 1996.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion, dated March 29, 1996
PROSPECTUS
INAMED CORPORATION
COMMON STOCK
($.01 PAR VALUE)
This Prospectus relates to shares of the Common Stock, par value $.01 per
share (the "Common Stock") of Inamed Corporation, a Florida corporation (the
"Company" or "Inamed"), to be issued from time to time upon conversion of up to
approximately $35 million aggregate principal amount of certain convertible
notes (the "Notes") of the Company, and the offering and sale of such shares by
the holders thereof (each a "Selling Stockholder") from time to time thereafter
(all such shares being hereinafter referred to collectively as the "Shares").
See "Shares Being Offered" and "Selling Stockholders." As of the date of this
Prospectus, the approximately $35 million aggregate principal amount of Notes
are convertible at the current conversion rate into an aggregate of 3,500,000
shares of Common Stock.
Shares of the Common Stock are traded on the Nasdaq SmallCap Market under
the symbol "IMDCC."
AN INVESTMENT IN THE SHARES OF COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGE 3.
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.
Each of the shares of Common Stock offered hereby may be offered for sale and
sold by the Selling Stockholders from time to time in varying amounts, including
in block transactions, on the Nasdaq SmallCap Market at then prevailing prices
or in private transactions at prices and on terms to be determined at the time
of sale. The Shares may be sold by the Selling Stockholders directly, through
an underwritten offering, through agents designated from time to time or to or
through broker-dealers designated from time to time. To the extent required,
the number and series of Shares to be sold, the name of the Selling
Stockholders, the purchase price, the public offering price, if applicable, the
name of any such agent or broker-dealer, and any applicable commissions,
discounts or other items constituting compensation to such underwriters, agents
or broker-dealers with respect to a particular offering will be set forth in a
supplement or supplements to this Prospectus (each, a "Prospectus Supplement").
The aggregate proceeds to the Selling Stockholders from the sale of the Shares
so offered will be the purchase price of the Shares sold less (i) the aggregate
commissions, discounts and other compensation, if any, paid by the Selling
Stockholders to underwriters, agents or broker-dealers and (ii) certain other
expenses of the offering and sale of the Shares that will be the responsibility
of the Selling Stockholders. See "Selling Stockholders" and "Plan of
Distribution." The Company will not receive any proceeds from the sale of the
Shares. The Company knows of no selling arrangement between any underwriter,
agent or broker-dealer and the Selling Stockholders.
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of any of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any discount or commission received by them
and any profit on the resale of the Shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
The date of this Prospectus is March __, 1996.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all amendments
and exhibits, referred to as the "Registration Statement") under the Securities
Act, with respect to the Shares. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information pertaining to the Shares and the Company, reference is made
to the Registration Statement. Statements contained herein or in any document
incorporated herein by reference concerning the provisions of any contract or
other document are not necessarily complete and, in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement or such other document. Each such statement is qualified
in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Commission. Reports,
proxy statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661; and at Suite 1300,
Seven World Trade Center, New York, New York 10048; and copies of such material
can be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Company for the year ended
December 31, 1995, the Company's Current Report on Form 8-K dated February 6,
1996, and the description of the Inamed Common Stock contained in the
Company's registration statement filed pursuant to Section 12(g) of the
Exchange Act, including any amendment or reports filed for the purpose of
updating such description filed by the Company, all of which are on file with
the Commission, are incorporated in this Prospectus by reference and made a
part hereof.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the offering of the Shares described in this Prospectus shall
be deemed to be incorporated herein by reference and to be a part hereof from
the respective dates of the filing of such documents. Any statement contained
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 which 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 provide without charge to each person to whom a Prospectus
is delivered, on the written or oral request of any such person, a copy of any
or all of the documents incorporated by reference herein, other than certain
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into the documents that this Prospectus incorporates). Such
requests should be addressed to Donald K. McGhan, President, Inamed Corporation,
3800 Howard Hughes Parkway, Suite 900, Las Vegas, Nevada 89109; telephone (702)
791-3388.
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THE COMPANY
Inamed Corporation (the "Company"), through its 23 domestic and
international operating subsidiaries, develops, manufactures and markets medical
devices and products for surgical specialty applications. The Company's major
operating subsidiaries are: McGhan Medical Corporation and CUI Corporation,
which develop, manufacture and sell medical devices principally for the plastic
and general surgery fields; Bioenterics Corporation which develops, manufactures
and sells medical devices and associated instrumentation to the bariatrics and
general surgery fields; Biodermis Corporation which develops, produces and
distributes premium products for dermatology, wound care and burn treatment;
Bioplexus Corporation which is a development stage company that develops,
produces and distributes specialty medical products for use by the general
surgery profession; Flowmatrix Corporation which manufactures high quality
silicone components and devices for Inamed's wholly-owned subsidiaries and
distributes an international line of proprietary silicone products; Medisyn
Technologies Corporation which focuses on the development and promotion of the
merits of the use of silicone chemistry in the fields of medical devices,
pharmaceuticals and biotechnology; Inamed Development Company, which is engaged
in the research and development of new medical devices using silicone-based
technology; McGhan Limited, an Irish corporation which manufactures medical
devices principally for the plastic and general surgery fields; Medisyn
Technologies, Ltd. and Chamfield Ltd., Irish corporations which specialize in
the development of silicone materials for use by Inamed's wholly-owned
subsidiaries; and Inamed B.V., a Netherlands corporation, Inamed B.V.B.A., a
Belgium corporation, Inamed GmbH, a German corporation, Inamed S.R.L., an
Italian corporation, Inamed Ltd., a United Kingdom corporation, Inamed S.A.R.L.,
a French corporation and Inamed S.A., a Spanish corporation, which all sell
medical devices on a direct sales basis in the various countries in which they
are located. The Company has five additional foreign and domestic
subsidiaries which have recently been formed and which at present have
immaterial operations.
Since 1984, the Company has experienced sales growth from approximately
$2.4 million to over $80 million for the year ended December 31, 1995. With
respect to products manufactured by the Company's subsidiaries specializing in
plastic surgery products, the Company and/or its subsidiaries are defendants in
numerous State court actions and a Federal class action in the United States
District Court, Northern District of Alabama, Southern Division, under Chief
Judge Sam C. Pointer, Jr., U.S. District Court, regarding Master File No. C892-
P-10000-S (Silicone Gel Breast Implants Product Liability Litigation MDL 926).
The claims are for general and punitive damages substantially exceeding
provisions made in the Company's consolidated financial statements. The Company
is currently in negotiations to settle the primary litigation relating to this
matter. See "Risk Factors; Litigation."
RISK FACTORS
AN INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK. THE
FOLLOWING DISCUSSION OF RISK FACTORS IS QUALIFIED IN ITS ENTIRETY BY, AND
SHOULD BE READ IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND
CONSOLIDATED FINANCIAL STATEMENTS APPEARING IN THE REPORTS OF THE COMPANY
FILED WITH THE COMMISSION UNDER THE EXCHANGE ACT, INCLUDING THE ANNUAL REPORT
OF THE COMPANY ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 FILED WITH
THE COMMISSION AND THE CURRENT REPORT ON FORM 8-K FILED WITH THE COMMISSION
ON FEBRUARY 6, 1996.
Litigation
Inamed and/or its subsidiaries are defendants in numerous state court
actions and a federal class action in the United States District Court, Northern
District of Alabama, Southern Division, under the Chief Judge Sam C. Pointer,
Jr., U.S. District Court, regarding Master File No. C892-P-10000-S (Silicone Gel
Breast Implants Product Liability Litigation MDL 926). The claims are for
general and punitive damages substantially exceeding provisions made in the
Company's consolidated financial statements. The Company's consolidated
financial statements have been prepared assuming that the Company will withstand
the financial results of said litigation.
Several U.S. based manufacturers negotiated a settlement with the
Plaintiffs' Negotiating Committee ("PNC"), and on March 29, 1994 filed a
Proposed Non-Mandatory Class Action Settlement in the Silicone Breast
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Implant Products Liability (the "Settlement Agreement") providing for settlement
of the claims as to the class (the "Settlement") as described in the Settlement
Agreement. The Settlement Agreement provides for resolution of any existing or
future claims, including claims for injuries not yet known, under any federal or
state law, from any claimant who received a silicone breast implant prior to
June 1, 1993. A fairness hearing for the non-mandatory class was held before
Judge Pointer on August 18, 1994. On September 1, 1994, Judge Pointer gave
final approval to the non-mandatory class action settlement.
The Company was not originally a party to the Settlement Agreement.
However, on April 8, 1994, the Company and the PNC reached an agreement that
would join the Company into the Settlement. The agreement reached between the
Company and the PNC added value to the Settlement by enabling all plaintiffs and
U.S. based manufacturers to participate in the Settlement, and facilitating the
negotiation of individual contributions by the Company, Minnesota Mining and
Manufacturing Company ("3M") and Union Carbide Corporation ("UCC") which total
more than $440 million.
Under the terms of the Settlement Agreement, the parties stipulate and
agree that all claims of the Settlement Class against the Company regarding
breast implants and breast implant materials shall be fully and finally settled
and resolved on the terms and conditions set forth in the Settlement Agreement.
Under the terms of the Settlement Agreement, the Company agreed to pay
$1 million to the Settlement fund for each of 25 years starting three years
after Settlement approval by the Court. The Company recorded a pre-tax charge
of $9.1 million in the fourth quarter of 1993. The charge represent the present
value (discounted at 8%) of the Company's settlement of $25 million over a
payment period of 25 years.
Under the Settlement, $1.2 billion had been provided for "current claims"
(disease compensation claims). In May 1995, Judge Pointer completed a
preliminary review of current claims which had been filed as of September 1994,
in compliance with deadlines set by the court. Judge Pointer determined that,
based on the preliminary review, it appeared that projected amounts of eligible
current claims exceeded the $1.2 billion provided in the Settlement. The
Settlement provided that in the event of such over-subscription, the amounts to
be paid to eligible current claimants would be reduced and claimants would have
a right to "opt-out" of the Settlement at that time.
On October 1, 1995, Judge Pointer finalized details of a scaled-back breast
implant injury settlement involving defendants Bristol-Myers Squibb, Baxter
International and 3M, allowing plaintiffs to reject this settlement and file
their own lawsuits if they believe payments are too low. On November 14, 1995,
McGhan Medical Corporation and UCC were added to this list of settling
defendants to achieve the Bristol, Baxter, 3M, McGhan and UCC Revised Settlement
Program (the "Revised Settlement Program").
The Company has opposed the plaintiffs' claims in these complaints and
other similar actions, and continues to deny any wrongdoing or liability to the
plaintiffs of any kind. However, the extensive burdens and expensive litigation
the Company would continue to incur related to these matters prompted the
Company to work toward and enter into the Settlement which insures a more
satisfactory method of resolving claims of women who have received the Company's
breast implants.
Management's commitment to the Settlement under the Revised Settlement
Program does not alter the Company's need for complete resolution sought under a
Mandatory (Limited Fund, non-opt) Settlement Class (the "Mandatory Class") which
the Company has had on file with the District Court since October 11, 1994
and which the Company intends to amend to reflect events and commitments
entered into by the Company on November 14, 1995 in connection with the
Revised Settlement Program. The Company sought this relief under a request
filed with the United States
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District Court, Northern District of Alabama, Southern Division for
Certification of Inamed Corporation Mandatory Class under the provisions of
Federal Rules of Civil Procedure. There can be no assurance that the Company
will receive a Mandatory Class certification.
If the Mandatory Class is not certified, then the Company will continue to
be a party to the Revised Settlement Program. However, under the Revised
Settlement Program, the Company will continue to be subject to further potential
litigation from persons who opt out of the Revised Settlement Program. The
number of such persons who opt out and the outcome of any ensuing litigation are
uncertain. The failure of the Mandatory Class to be certified is expected to
have a material adverse effect on the Company.
Need for Additional Financing
The proceeds from the offering of the Notes (even if converted into
Shares) and the Company's existing cash on hand will not be sufficient to
fund the Company's full litigation settlement payment or to fund the
Company's capital expenditures, working capital and operational needs. Based
on the Company's estimates of the potential settlement terms, the Company
estimates that it will need at least an additional $40 million over the next
15 years to fund the full settlement commitment, either from operations or
financing activities, or both. There can be no assurance that the Company
will be able to generate sufficient revenues or obtain any such additional
financing or, if it is able to obtain such financing, that it will be
available on terms acceptable to the Company. Such needs are in addition to
funds needed for planned operations and needed capital expenditures.
Limits on Additional Indebtedness
The Indenture governing the Notes imposes certain operating and financial
restrictions on the Company affecting, among other things, the ability of the
Company to incur certain indebtedness and create liens except for Senior
Indebtedness (as defined in the Indenture). Unless waived or amended by the
holders of the Notes as permitted in the Indenture, these restrictions will
continue so long as any Notes are outstanding. In addition, the guaranty and
pledge agreements entered into by certain of the Company's subsidiaries in
connection with the issuance of the Notes also impose additional limitations on
the ability of the subsidiaries to incur certain indebtedness and to create
liens. The covenants are subject to various exceptions that are generally
designed to allow the Company to continue to operate its business without under
restraint and, therefore, are only limited prohibitions with respect to certain
activities. However, these restrictions, in combination with the leveraged
nature of the Company, could limit the ability of the Company to effect future
financing, respond to changing market conditions and otherwise may restrict
corporate activities.
Holding Company Structure
The Shares represent an interest exclusively in the Company, which is a
holding company. Since the operations of the Company are currently conducted
entirely through subsidiaries, the cash flow of the Company and its ability
to pay dividends on the Common Stock are dependent upon the cash flows of
such subsidiaries and the distributions of these subsidiaries are separate
and distinct legal entities. In addition, the payment of dividends and
certain loans and advances to the Company by such subsidiaries may be subject
to certain statutory or contractual restrictions, are contingent upon the
earnings of such subsidiaries and are subject to various business
considerations. Any right of the Company to receive assets of any
subsidiary, upon the liquidation or reorganization of any such subsidiary
(and the consequent right of the holders of the Shares to participate in
those assets), will be effectively subordinated to the claims of that
subsidiary's creditors, except to the extent that the Company is itself
recognized as a creditor of such subsidiary, in which case the claims of the
Company would still be subordinate to any security in the assets of such
subsidiary that is senior to any security granted in favor of the Company and
any indebtedness of such subsidiary senior to that held by the Company.
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Dependence Upon Key Personnel and Consultants
The Company's ability to successfully develop its products, manage growth
and maintain a competitive position will depend in a large part on its ability
to attract and retain highly qualified scientific and management personnel, and
to develop and maintain relationships with leading research institutions and
consultants. The Company is highly dependent upon its Chairman and its Chief
Executive Officer, the principal members of its management, key employees,
scientific staff and consultants which the Company may retain from time to time.
There can be no assurance that the Company will be able to continue to attract
and retain such personnel. This is particularly the case so long as the current
product liability litigation remains unresolved. The Company's consultants may
be affiliated or employed by others and some have consulting or other advisory
arrangements with other entities that may conflict or compete with their
obligations to the Company. The Company addresses such potential conflicts by
requiring that its consultants, scientific collaborators and sponsored
researchers execute confidentiality agreements upon commencement of
relationships with the Company, by closely monitoring the work of such persons
and by requiring material transfer and patent assignment agreements whenever
possible and appropriate. Inventions or processes discovered by such persons
will not necessarily become the property of the Company and may remain the
property of such persons or others.
Control by Management
The Company's Board of Directors currently consists of its two senior
Executive Officers. The Company has been unable to retain independent directors
due to the existing litigation. Therefore, management does not have the
oversight of independent members of the Board of Directors.
Competition and Technological Uncertainty
The medical device industry is characterized by extensive world-wide
research and development efforts and rapid technological change. Success in
the medical device field is dependent upon product quality, reliability,
design features, service, price, and the relationship between the Company and
the physicians and group purchasing organizations utilizing the products.
The Company believes that its product lines are competitive with other
product lines in the market. However, competition from other domestic and
foreign medical device companies and research and academic institutions in
the areas of product development, product and technology acquisition,
manufacturing and marketing is intense and is expected to increase. The
Company's products compete with those of a number of other domestic and
foreign manufacturers, many of whom have substantially greater revenues and
resources than the Company's. These or other competitors may succeed in
obtaining approval from the Food and Drug Administration (the "FDA") or other
regulatory agencies for their products more rapidly than the Company.
Competitors have also developed or are in the process of developing
technologies that are, or in the future may be, the basis for competitive
products. With the rapid progress of medical technology the Company's
products are always subject to the risk of obsolescence through the
introduction of new products or techniques.
Research and Development
The medical device and product industry is characterized by rapid
technological change, which requires a continuous high level of expenditures
for enhancing existing products and developing new products. The Company is
committed to high expenditures for research and product development. The
Company also believes that a crucial factor in the success of a new product
is getting it through regulatory approvals and to market quickly to respond
to new user needs or advances in medical technologies, without compromising
product quality. The Company is continually engaged in product development
and improvement programs. During the fiscal years ended December 31, 1993,
1994 and 1995, the Company spent approximately $3.07 million, $3.72 million
and $4.39 million, respectively, on research and development activities.
There can be no assurance that the Company will be successful in enhancing
existing products or developing new products that will timely achieve
regulatory approval or receive market acceptance. See "Government
Regulation" below. The Company has not engaged in material customer or
government sponsored research.
Government Regulation
The production and marketing of the Company's products and its ongoing
research and development, preclinical testing and clinical trial activities
are subject to extensive regulation and review by numerous governmental
authorities in the United States, including the FDA, and in other countries.
Most medical devices developed by the Company must undergo rigorous
preclinical and clinical testing and an extensive regulatory approval process
administered by the FDA under the Food, Drug and Cosmetic Act, as amended
(the "FDC Act"), and comparable foreign authorities before they can be
marketed. The FDA regulations govern the testing, marketing and registration
of new medical devices, in addition to regulating manufacturing practices,
labeling and record keeping procedures. The process of obtaining clearance
from the FDA to market products either through pre-market approvals or
pre-market notifications is costly and time consuming and can delay the
marketing and sale of the Company's products. Additionally, there is no
assurance that such approval will be granted. The FDA is empowered to
perform unannounced inspections of the Company's facilities and operations
and to restrain violations of the FDC Act. The Company has limited
experience in, and limited resources available to commit to, regulatory
activities. Failure to comply with the applicable regulatory requirements
can, among other things, result in non-approval, suspensions of regulatory
approvals, fines, product seizures and recalls, operating restrictions,
injunctions and criminal prosecution.
Medical device laws, ranging from device approval requirements to
requests for product data and price controls, are in effect in many countries
in which the Company does business outside the United States. In addition,
government reimbursement policies for health care costs are becoming
increasingly significant factors for medical device companies. Currently,
U.S. Congress is considering various health care reforms that are designed to
reduce the cost of existing government and private insurance programs. It is
uncertain at this time what impact, if any, the health care reform efforts
will have on the Company. Any changes that limit or reduce reimbursement for
the Company's products could have a material adverse effect on the financial
condition of the Company.
The time required for completing such testing and obtaining such
approvals is uncertain and approval itself may not be obtained. In addition,
delays or rejections may be encountered due to, among other reasons,
regulatory review of each submitted new device application or product license
application, as well as changes in regulatory policy during the period of
product development. Similar delays may also be encountered in foreign
countries. If regulatory approval of a product is granted, such approval may
entail limitations on the indicated uses for which the product may be
marketed. Further, even if such regulatory approval
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is obtained, a marketed product, its manufacturer and the facilities in which
the product is manufactured are subject to continual review and periodic
inspections. Later discovery of previously unknown problems with a product,
manufacturer or facility may result in restrictions on such product or
manufacturer, including withdrawal of the product from the market and
litigation.
International Operations
In addition to the Company's U.S. manufacturing operations, the Company
manufactures products at its facilities overseas. The Company maintains
sales and marketing offices in many European and other countries. Operations
in countries outside the U.S. are subject to certain financial and other
risks, including currency restrictions, currency exchange fluctuations and
changes in foreign laws. Several countries in which the Company does
business have enacted laws and regulations that are protectionist in nature
and have resulted in increased costs and operational efforts by the Company
in order to continue to effectively compete in those countries. The Company
does not presently believe that such laws and regulations will have a
material adverse effect on the Company's foreign operations, although there
can be no assurance that they will not in the future.
Liability and Recall Exposure
The use of the Company's products have in the past and may in the future
expose the Company to liability claims. These claims could be made directly
by patients or consumers or by companies, institutions or others using or
selling such products. In addition, the Company is subject to the inherent
risk that a government authority or third party may require the recall of one
or more of the Company's products. The Company has not obtained liability
insurance that would cover a claim relating to the use or recall of its
products. In the absence of such insurance, claims made against the Company
or a product recall could have a material adverse effect on the Company's
financial position, results of operations, cash flows and prospects. In
addition, there can be no assurance that, if the Company seeks insurance
coverage in the future, such coverage will be available at reasonable cost
and in amounts sufficient, if at all, to protect the Company against claims
that could have a material adverse effect on the financial condition and
prospects of the Company. Further, liability claims relating to the use of
the Company's products or a product recall could negatively affect the
Company's ability to obtain or maintain regulatory approvals for its products.
Possible Adverse Effects of Future Legislation or Regulations
Heightened public awareness and concerns regarding the growth in overall
health care expenditures in the United States, combined with the continuing
efforts of governmental authorities to contain or reduce costs of health
care, may result in the enactment of national health care reform or other
legislation or regulations that impose limits on the number and type of
medical procedures which may be performed or which have the effect of
restricting a physician's ability to select specific products for use in
certain procedures. Such new legislation or regulations may materially
adversely affect the demand for the Company's products. In the United
States, there have been, and the Company expects that there will continue to
be, a number of federal and state legislative proposals and regulations to
implement greater governmental control on the health care industry. For
example, the Clinton Administration and certain members of Congress have
proposed health care reform legislation that may impose pricing or
profitability limitations or other restrictions on companies in the health
care industry. The announcement of such proposals may materially adversely
affect the Company's ability to raise capital or to form collaborations, and
the enactment of any such reforms could have a material adverse effect on the
Company. In certain foreign markets, the pricing and profitability of health
care products are subject to governmental influence or control. In addition,
legislation or regulations that impose restrictions on the price that may be
charged for health care products or medical devices may adversely affect the
Company's financial condition, results of operations and cash flows. From
time to time, legislation or regulatory proposals are proposed and discussed
which could alter the review and approval process relating to pharmaceutical
or medical device products. The Company is unable to predict the likelihood
of adverse effects which might arise from future legislative or
administrative action, either in the United States or abroad.
Reimbursement
The Company's ability to sell its products successfully may depend in part
on the extent to which reimbursement for such products and related treatment
will be available from government health administration authorities, private
health insurers, managed care entities and other organizations. Such payors are
increasingly challenging the price of medical products and services and
establishing protocols and formulaes which effectively limit physicians' ability
to select products and procedures. Uncertainty exists as to the reimbursement
status of health care products (especially innovative technologies), and there
can be no assurance that adequate reimbursement coverage will be available to
enable the Company to achieve market acceptance of its products or to maintain
price levels sufficient for realization of an appropriate return on its
products.
7
<PAGE>
Manufacturing Capacity
To be successful, the Company's products must be manufactured in
commercial quantities under current Good Manufacturing Practices ("GMP")
prescribed by the FDA and at acceptable costs. The Company will need to
expand its manufacturing capabilities. In the event the Company determines
to expand its manufacturing capabilities, it will require the expenditure of
substantial funds, the hiring and retention of significant additional
personnel and compliance with extensive regulations applicable to such
expansion. There can be no assurance that the Company will be able to expand
such capabilities successfully. If the Company is not able to expand its
manufacturing capabilities, it could materially and adversely affect the
Company's financial condition, results of operations, cash flows and prospects.
Uncertainty Regarding Patents and Proprietary Technology
The Company's success will depend, in part, on its and its licensors'
ability to obtain, assert and defend its patents, protect trade secrets and
operate without infringing the proprietary rights of others. The Company has
filed applications for or has been issued U.S. and foreign patents, and has
exclusive or non-exclusive licenses under patent applications or patents of
others. The patent position of medical device firms generally is highly
uncertain and involves complex legal and factual questions. There can be no
assurance that the patent applications owned by or licensed to the Company will
result in issued patents, that any issued patents will provide the Company with
proprietary protection or competitive advantages, will not be infringed upon or
designed around by others, will not be challenged by others and held to be
invalid or unenforceable or that the patents of others will not have a material
adverse effect on the Company, its financial condition, results of operations,
cash flows and prospects.
The Company is aware that its competitors and other companies, institutions
and individuals have been issued patents relating to its products. In addition,
the Company's competitors and other companies, institutions and individuals may
have filed patent applications or been issued patents relating to other
potentially competitive products of which the Company is not aware. Further,
the Company's competitors and other companies, institutions and individuals may,
in the future, file applications for, or be granted or license or otherwise
obtain proprietary rights to, patents relating to other potentially competitive
products. There can be no assurance that these existing or future patents or
patent applications will not conflict with the Company's or its licensors'
patents or patent applications. Such conflicts could result in a rejection of
the Company's or its licensors' patent applications or the invalidation of their
patents, which could have a material adverse effect on the Company's competitive
position, its financial condition, results of operations, cash flows and
prospects. In the event of such conflicts, or in the event the Company believes
that such competitive products may infringe the patents owned by or licensed to
the Company, the Company may pursue patent infringement litigation or
interference proceedings against, or may be required to defend against
litigation involving, holders of such conflicting patents or competing products.
Such proceedings may materially adversely affect the Company's competitive
position, and there can be no assurance that the Company will be successful in
any such proceeding. Litigation and other proceedings relating to patent
matters, whether initiated by the Company or a third party, can be expensive and
time consuming, regardless of whether the outcome is favorable to the Company,
and can result in the diversion of substantial financial, managerial and other
resources from the Company's other activities. An adverse outcome could subject
the Company to significant liabilities to third parties or require the Company
to cease production and sale of other products. In addition, if patents that
contain dominating or conflicting claims have been or are subsequently issued to
others and such claims are ultimately determined to be valid, the Company may be
required to obtain licenses under patents or other proprietary rights of others.
No assurance can be given that any licenses required under any such patents or
proprietary rights would be made available on terms acceptable to the Company,
if at all. If the Company does not obtain such licensees, it could encounter
delays or could find that the development, manufacture or sale of products
requiring such licenses is foreclosed.
The Company also seeks to protect its proprietary technology and processes
in part by confidentiality agreements with its collaborative partners, employees
and consultants. There can be no assurance that these agreements will not be
breached, that the Company will have adequate remedies for any breach, or that
the Company's trade secrets will not otherwise become known or be independently
discovered by competitors.
8
<PAGE>
Environmental Matters
The Company is subject to federal, state, county and local laws and
regulations relating to the protection of the environment. In the course of
its business, the Company is involved in the handling, storage and disposal
of materials that are classified as hazardous. The Company's safety
procedures for handling, storage and disposal of such materials are designed
to comply with the standards prescribed by applicable laws and regulations.
However, there can be no assurance that the Company will not be involved in
an accidental contamination or injury from these materials. In the event of
such an accident or injury, the Company could be held liable for any damages
that result, and any such liability could materially adversely affect the
Company, its financial condition, results of operations, cash flows and
prospects. Further, there can be no assurance that the cost of complying
with these laws and regulations will not increase materially in the future.
Control by Officers and Directors
As of December 31, 1995, the Company's officers and directors
beneficially owned approximately 21% of the outstanding Common Stock.
Depending upon the size of the Board of Directors, these shareholders may be
able to elect one or more of the Company's directors and will have the
ability to influence the Company and the direction of its business and
affairs. Such concentration ownership may have the effect of delaying or
preventing a change in control of the Company, which could adversely affect
the market price for the Common Stock.
Potential Volatility of Stock Price; No Dividends
The market prices for securities of medical device companies have
historically been highly volatile. Future announcements concerning the Company
or its competitors or industry, including, but not limited to, the results of
testing, technological innovations or new commercial products, the achievement
of or failure to achieve certain milestones, governmental regulations, rules and
orders, developments concerning patents or other proprietary rights, litigation
or public concern about the safety of the Company's products, may have a
material adverse effect on the market price of the Common Stock. In addition,
the stock market has experienced extreme price and volume fluctuations. This
volatility has significantly affected the market prices of securities of many
pharmaceutical and medical device companies for reasons frequently unrelated or
disproportionate to the performance of the specific companies. These broad
market fluctuations may materially adversely affect the market price of the
Common Stock. The Company has never paid dividends, cash or otherwise, on its
capital stock and does not anticipate paying any such dividends in the
foreseeable future. The Company's agreement with the holders of the Notes
prohibits the payment of dividends on its Common Stock.
Nasdaq SmallCap Market Status
The Company has been notified by The Nasdaq Market, Inc. ("Nasdaq") that
Nasdaq believes that the Company is not in compliance with the continuing
listing requirements of the Nasdaq SmallCap Market. The Company is in
discussions with Nasdaq and believes that the Company is in material
compliance with all applicable listing requirements and the Company is
committed to undertake such action as is necessary to preserve such
compliance and listing. There can be no assurance, however, that Nasdaq will
reach the same conclusion as the Company or that the Company will be able to
continue to meet the continuing listing requirements of Nasdaq, particularly
in light of the pending and threatened litigation against the Company.
Shares of Common Stock Eligible for Sale
As of December 31, 1995, the Company had an aggregate of approximately
7,677,617 issued and outstanding shares of Common Stock. In addition, as of
December 31, 1995, the Company had reserved for issuance an aggregate of
approximately 295,400 shares of Common Stock issuable pursuant to: (i)
outstanding vested and non-vested options, warrants and similar rights; and
(ii) contingent obligations to issue additional shares. Pursuant to the
Company's Certificate of Incorporation, the Company currently has 20,000,000
authorized shares of Common Stock. Subject to certain limitations, the
persons holding such options and warrants may obtain the shares of Common
Stock underlying such options and warrants at any time. The issuance of a
large number of shares of Common Stock would dilute the percentage interest
of other existing stockholders of the Company and the holders of Shares.
Certain stockholders, including certain officers, directors, employees and
affiliates of the Company also currently hold issued and outstanding shares of
Common Stock and/or certain of the options or warrants to purchase additional
shares of Common Stock. See "Security Ownership of Certain Beneficial Owners
and Management of the Company" in the Company's Annual Report on Form 10-K.
Sales of substantial amounts of such shares could adversely affect the market
value of the Common Stock.
9
<PAGE>
SHARES BEING OFFERED
On January 23, 1996, the Company issued $35 million in principal amount of
11% Secured Convertible Notes due 1999 (the "Notes"). The Notes were originally
issued in a transaction exempt from registration under the Securities Act of
1933, as amended (the "Securities Act").
The Notes are secured obligations of Inamed, the principal amount of which
is payable on March 31, 1999 and bears interest at the rate of 11% per annum
until maturity. The Notes will become convertible on April 22, 1996 (90 days
from the closing of the offering of the Notes) at the option of the holder into
shares of Common Stock. The Notes will be convertible thereafter until maturity
at the option of the holder.
The Notes will also be automatically convertible upon the occurrence of all
of the following: (i) (a) the United States District Court, Northern District
of Alabama, Southern Division (or any successor court with jurisdiction over the
Silicone Gel Breast Implant Products Liability Litigation (MDL 926)) shall issue
an order certifying Inamed Corporation's Mandatory (non "opt-out" Limited Fund)
Class under Rule 23(b)(1)(B) of the Federal Rules of Civil Procedure, which
order shall become a Final Order and (b) the shares of Common Stock to be
issued upon conversion of the Notes shall have been registered with the
Commission under the Securities Act of 1933, as amended, and such registration
shall continue to be in effect, (ii) 60 days shall elapse from the date of the
last to occur of the events described in subclauses (a) and (b) of clause (i),
(iii) subsequent to the occurrence of the events described in clauses (i) and
(ii), the closing bid price of the Company's Common Stock as reported on the
Nasdaq SmallCap Market or any other national securities exchange or over-the-
counter market on which the Company's Common Stock is then listed or quoted
shall equal or exceed $14.00 per share for 15 consecutive trading days and (iv)
subsequent to the occurrence of the events described in clauses (i), (ii) and
(iii), the Company delivers to the trustee under the Indenture governing the
Notes an officers' certificate stating that no material adverse change has
occurred since the filing of the Company's Annual or Quarterly Report on Form
10-K or 10-Q filed most recently prior to the delivery of such officers'
certificate. "Final Order" as used herein means an order or judgment of the
court with jurisdiction in the respective matter or other court of competent
jurisdiction as to which the time to appeal, seek leave to appeal, petition for
certiorari or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari or other proceedings for reargument, rehearing
or leave to appeal shall then be pending or as to which any right to appeal,
petition for certiorari, reargue, rehear or seek leave to appeal shall have been
waived in writing in form and substance satisfactory to the Company or, in the
event that an appeal, writ of certiorari, or reargument or rehearing thereof or
leave to appeal has been motioned for or sought, such order of the court shall
have been affirmed by the highest court to which such order was appealed, or
certiorari has been denied or from which reargument or rehearing or leave to
appeal was motioned for or sought, and the time to take any further appeal,
petition for certiorari, move for reargument or rehearing or seek leave to
appeal shall have expired. The conversion of the Notes pursuant to the
foregoing provisions (the "Automatic Conversion") shall be deemed to have been
effected as to any and all outstanding Notes on the date of the fifteenth
consecutive trading day on which the Company's Common Stock shall have satisfied
the trading requirements specified in clause (iii) of the first sentence of this
paragraph, and the person in whose name any certificate or certificates for
shares of Common Stock are issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
PROVIDED, HOWEVER, that any such Automatic Conversion on any date when the
Company's stock transfer books are closed shall constitute the person in whose
name the certificates are to be issued as the record holder thereof for all
purposes on the next succeeding day on which such stock transfer books are open,
but such conversion shall be at the conversion price in effect on the date upon
which the Automatic Conversion is deemed to have been effected.
The Notes are presently convertible at any time after the stated
occurrences at the option of the holder into one share of Inamed Common Stock
for each $10.00 principal amount of Notes, subject to adjustment under stated
circumstances.
As of the date of this Prospectus, Notes in the aggregate principal
amount of $35 million are outstanding, which Notes are convertible at the
current conversion rate into an aggregate of 3,500,000 shares of Common Stock.
10
<PAGE>
The names of the persons who currently hold the Notes, the aggregate principal
amount of the Notes held by each such holder and the number of whole shares of
Inamed Common Stock into which the Notes of such holder are convertible at the
current conversion rate are set forth under "Selling Stockholders" below.
Neither the Notes nor the Shares may be transferred unless they are registered
under the Securities Act or an exemption from registration is available. The
Notes have not been registered under the Securities Act and the Company has no
obligation to register the Notes.
The Indenture includes an undertaking of the Company to use its best
efforts to register the Shares. Specifically, the Company shall: (i) use its
best efforts to file as or before March 31, 1996 (the "Filing Deadline") with
the Commission, and shall use its best efforts to cause to become effective, a
registration statement on Form S-3 with respect to the shares of the Company's
Common Stock issuable upon the conversion of the Notes. In the event the
Commission or its staff determines that the Company is not eligible to register
the shares of the Company's Common Stock issuable upon the conversion of the
Notes on Form S-3, then the Company shall use its best efforts to file with the
Commission by the Filing Deadline and shall use its best efforts to cause to
become effective a registration statement on Form S-1 or another appropriate
form of the Commission. The Company shall keep such registration statement on
Form S-3 effective as long as permissible under the securities laws and shall
keep any such registration statement on Form S-1 (or other form) effective until
thirty (30) days following the earlier of: (A) Automatic Conversion of the
Notes or (B) the stated maturity of the Notes. If any such registration
statement is not filed with the Commission on or before the Filing Deadline,
then the Company shall pay as liquidated damages additional interest on the
principal amount of the Notes, payable in cash and equal to one-half of one
percent (1/2%) per annum, to holders of the Notes. If a registration statement
with respect to the shares of the Company's Common Stock issuable upon
conversion of the Notes is not declared effective by the Commission within 90
days of the Filing Deadline, then the Company shall pay as liquidated damages
additional interest on the principal amount of the Notes, payable in cash and
equal to one-half of one percent (1/2%) per annum, to holders of the Notes.
The amount of the liquidated damages (and the additional interest payable on the
principal amount of the Notes) will increase by an additional one-half of one
percent (1/2%) per annum with respect to each subsequent 90-day period until a
registration statement with respect to the shares of the Company's Common Stock
issuable upon conversion of the Notes is declared effective by the Commission,
up to a maximum amount of liquidated damages (additional interest) of five
percent (5%) per annum. Such additional interest as liquidated damages with
respect to the filing of a registration statement shall accrue until such time
as the registration statement is filed with the Commission and such additional
interest as liquidated damages with respect to the effectiveness of a
registration statement shall accrue until such time as a satisfactory
registration statement is declared effective by the Commission. The payment of
such interest shall not excuse the Company from its obligations to use its best
efforts to register such shares of the Company's Common Stock issuable upon the
conversion of the Notes.
The Shares offered hereby represent the number of Shares issuable upon
conversion of $35 million in aggregate principal amount of Notes, as such number
and type of shares may be increased or decreased as a result of adjustments to
the conversion rate pursuant to the anti-dilution provisions of the Notes. At
the current conversion rate, 3,500,000 shares of Common Stock are issuable upon
conversion of $35 million aggregate principal amount of the Notes.
SELLING STOCKHOLDERS
The persons identified below for whose account Shares are being offered
hereby is referred to herein as a "Selling Stockholder." The table set forth
below and the footnotes thereto provide the following information: the names and
addresses of the persons who currently hold Notes, the aggregate principal
amount of the Notes held by each such holder, the number of whole shares of
Common Stock into which the Notes of such holder are convertible at the current
conversion rate and the number of shares of Common Stock beneficially owned as
of the date of this Prospectus by each such holder.
11
<PAGE>
<TABLE>
<CAPTION>
No. of Whole
Shares of No. of Shares No. of Whole
Aggregate Common Stock of Common Shares of Percent of
Principal Into Which Stock Common Stock Class to be
Amount of Notes are Beneficially Owned After Owned After
Name and Address of Holder Notes Held Convertible Owned (1) The Offering(2) Offering
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
L.D. and Tracy Blatt $ 100,000 10,000 10,000 0 *
31915 Groesbeck
Fraser, MI 48026
Robert D. Burrows and $ 100,000 10,000 10,000 0 *
Geraldine P. Burrows
2200 Middleton Road
Hudson, OH 44236
Jimmy H. Caplan $ 30,000 3,000 3,000 0 *
Market Makers
1708 De La Vina Street
Santa Barbara, CA 93101
Edward DeLacy $ 50,000 5,000 5,000 0 *
2145 Piedras Drive
Santa Barbara, CA 93105
Atticus Partners, L.P. $ 500,000 50,000 50,000 0 *
Citicorp Center
153 E. 53rd St., 43rd Floor
New York, NY 10022
Dreyfus Corporation Strategic $5,250,000 525,000 525,000 0 *
Investing Fund
200 Park Ave., 55th Floor
New York, NY 10166
Dreyfus Corporation Strategic $6,650,000 665,000 665,000 0 *
Income Fund
200 Park Ave., 55th Floor
New York, NY 10166
Dreyfus Corporation Aggressive $ 100,000 10,000 10,000 0 *
Value Fund
200 Park Ave., 55th Floor
New York, NY 10166
Fir Tree Value Fund, L.P. $2,250,000 225,000 225,000 0 *
1211 Avenue of the Americas
29th Floor
New York, NY 10036
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
No. of Whole
Shares of No. of Shares No. of Whole
Aggregate Common Stock of Common Shares of Percent of
Principal Into Which Stock Common Stock Class to be
Amount of Notes are Beneficially Owned After Owned After
Name and Address of Holder Notes Held Convertible Owned (1) The Offering(2) Offering
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fir Tree Value Partners, LDC $ 750,000 75,000 75,000 0 *
1211 Avenue of the Americas
29th Floor
New York, NY 10036
Michael and Nancy Freedman $ 100,000 10,000 10,000 0 *
30400 Telegraph Road, #435
Birmingham, MI 48010
Little Wing L.P. $ 350,000 35,000 35,000 0 *
375 Park Avenue, Suite 1404
New York, NY 10152
Roger Miles $ 100,000 10,000 10,000 0 *
59 Lupine Avenue, #8
San Francisco, CA 94118
Oracle Partners, L.P. $3,150,000 315,000 390,200(3) 75,200(3) *
712 Fifth Avenue, 45th Floor
New York, NY 10019
Oracle Institutional Partners, $ 490,000 49,000 124,200(3) 75,200(3) *
L.P.
712 Fifth Avenue, 4th Floor
New York, NY 10019
Quasar International Partners, $ 840,000 84,000 159,200(3) 75,200(3) *
C.V.
712 Fifth Avenue, 45th Floor
New York, NY 10019
GSAM Oracle Fund $2,520,000 252,000 327,200(3) 75,200(3) *
712 Fifth Avenue, 45th Floor
New York, NY 10019
Risk Arbitrage Partners, L.P. $ 500,000 50,000 50,000 0 *
712 Fifth Avenue, 45th Floor
New York, NY 10019
Norman Salzitz $ 100,000 10,000 15,000 5,000 *
9 Craig Road
Springfield, NJ 07081
SC Fundamental Value Fund, $5,485,000 548,500 548,500(4) 0 *
L.P.
Siegler, Collery & Co.
712 Fifth Avenue, 19th Floor
New York, NY 10019
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
No. of Whole
Shares of No. of Shares No. of Whole
Aggregate Common Stock of Common Shares of Percent of
Principal Into Which Stock Common Stock Class to be
Amount of Notes are Beneficially Owned After Owned After
Name and Address of Holder Notes Held Convertible Owned (1) The Offering(2) Offering
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SC Fundamental Value BVI, Ltd. $2,975,000 297,500 297,500(4) 0 *
Citco Fund Services
Corporate Center, W. Bay Rd.
Grand Cayman
Cayman Islands
P.O. Box 31106 SMB
Steven Smith $ 210,000 21,000 21,000 0 *
32 Lakecrest
Gross Pointe Farms
Detroit, MI 48236
Gary Fuhrman $ 100,000 10,000 10,000 0 *
254 East 68th St., 24A
New York, NY 10021
Glen Rock Partners, L.P. $ 900,000 90,000 90,000 0 *
c/o RH Capital Associates
55 Harristown Road
Glen Rock, NJ 07452
MB Partners $1,360,000 136,000 136,000 0 *
900 North Michigan Avenue
Suite 1900
Chicago, IL 60611
Attn: Greg Carlin
</TABLE>
- -----------------------------
(1) The number of shares specified in this table as being beneficially
owned by each Selling Stockholder assumes the conversion
of all Notes beneficially owned by such Selling Stockholder.
(2) The number of shares specified in this column assumes that each
Selling Stockholder sells all shares issuable upon conversion of all
Notes beneficially owned by such Selling Stockholder.
(3) Includes 75,200 shares of Common Stock beneficially owned by Larry N.
Feinberg. Mr. Feinberg is a principal of the general partner of Oracle
Partners, L.P., Oracle Institutional Partners, L.P., Quasar
International Partners, C.V. and GSAM Oracle Fund.
(4) Gary N. Seigler and Peter M. Collery are controlling stockholders,
directors and president and vice president, respectively, of the
identified person or the general partner thereof and have the power
to direct the voting and investment decisions of each.
14
<PAGE>
Neither the Company nor any of its affiliates has had any material
relationship with any Selling Stockholder within the past three years. Jimmy H.
Caplan d/b/a/ Market Makers has provided financial communications and public
relations services to the Company as an independent contractor since February
1987. The Company has agreed to bear all costs and expenses of registering the
Shares under the Securities Act, including registration fees, its legal and
accounting fees and expenses and photocopying costs. The Selling Stockholders
will bear all other expenses of the offering and sale of the Shares, including
any underwriting discounts, selling commissions or other compensation to agents,
broker-dealers or underwriters, transfer fees or taxes, if any, and fees and
expenses of counsel and other advisers, if any, to the Selling Stockholders.
PLAN OF DISTRIBUTION
The Shares offered hereby are being offered by the Selling Stockholders.
The Company will receive no proceeds from the sale of any of the Shares by the
Selling Stockholders. The sale of the Shares may be effected by the Selling
Stockholders from time to time in transactions on the Nasdaq SmallCap Market, in
secondary or other distributions in accordance with the rules of the Nasdaq
SmallCap Market, in negotiated transactions, or a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at the
time of sale, at prices related to prevailing market prices or at negotiated
prices. The Selling Stockholders may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders and/or the purchasers of the Shares for whom such broker-
dealers may act as agents or to whom they sell as principals, or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). To the extent required, the number of Shares to be sold, the
purchase price, the name of any such agent, dealer or underwriter, and any
applicable commissions with respect to a particular offer will be set forth in
an accompanying Prospectus Supplement. The aggregate proceeds to the Selling
Stockholders from the sale of the Shares sold by the Selling Stockholders hereby
will be the purchase price of such Shares less a broker's commission.
There is no assurance that the Selling Stockholders will sell any or all of
the Shares offered hereby.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
If any Shares are sold in an underwritten offering, such Shares may be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise indicated in the applicable Prospectus Supplement, the
obligations of any underwriters to purchase Shares will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all of
the Shares specified in such Prospectus Supplement if any are purchased.
Shares may be sold through a broker-dealer acting as agent or broker for
the Selling Stockholders, or to a broker-dealer acting as principal. In the
latter case, the broker-dealer may then resell such Shares to the public at
varying prices to be determined by such broker-dealer at the time of resale.
The Company has been advised by the Selling Stockholders that they have
not, as of the date of this Prospectus, entered into any arrangement with an
underwriter, agent or broker-dealer for the sale of the Shares.
To the extent required, the number of Shares to be sold, the purchase
price, the public offering price, if applicable, the name of any underwriter,
agent or broker-dealer, and any applicable commissions, discounts or other items
constituting compensation to such underwriters, agents or broker-dealers with
respect to a particular offering will be set forth in an accompanying Prospectus
Supplement.
15
<PAGE>
EXPERTS
The consolidated balance sheets of Inamed Corporation and subsidiaries
as of December 31, 1995 and 1994, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995, and all related schedules which
appear in Inamed Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995, have been incorporated by reference herein in reliance
upon the reports, dated March 28, 1996, of Coopers & Lybrand L.L.P.,
independent accountants given on the authority of that firm as experts in
accounting and auditing. Certain legal matters with respect to the Shares
will be passed upon for the Company by Shutts & Bowen, Miami, Florida.
ADDITIONAL INFORMATION
The Prospectus does not contain all the information set forth in the
Registration Statement, or amendments thereto, certain portions of which have
been omitted pursuant to the Commission's rules and regulations. The
information so omitted may be obtained from the Commission's principal office in
Washington, D.C., upon payment of the fees prescribed by the Commission.
The Florida Business Corporation Act and the Bylaws of the Company provide
for indemnification of the Company's officers and directors. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act, and is therefore unenforceable.
<PAGE>
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus or any Prospectus
Supplement in connection with the offering described herein and, if given or
made, such information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder shall, under any
circumstances, create an implication that the information contained or
incorporated by reference herein is correct as of any time subsequent to its
date or that there has been no change in the affairs of the Company since such
date. This Prospectus and any Prospectus Supplement do not constitute an offer
to sell or a solicitation of an offer to buy any securities other than those
specifically offered hereby or of any securities offered hereby in any
jurisdiction in which such offer or solicitation is not authorized, or in which
the person making such offer or solicitation is not qualified to do so, or to
anyone to whom it is unlawful to make such offer or solicitation.
TABLE OF CONTENTS
Page
----
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Documents
by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Shares Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
INAMED CORPORATION
Common Stock
PROSPECTUS
March ___, 1995
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses in connection with the distribution of the Shares are
set forth below and will be borne by the Registrant.
<TABLE>
<CAPTION>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . $13,654
*Blue Sky Fees and Expenses (including counsel fees) . . . . . . . 1,000
*Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 4,000
*Accounting Fees and Expenses. . . . . . . . . . . . . . . . . . . 8,500
*Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
-------
*Total $28,154
</TABLE>
- --------------------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (1) of Section 607.0850 of the Florida Business Corporation Act
(the "FBCA") empowers a corporation to indemnify any person who was or is a
party to any proceeding (other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against liability
incurred in connection with such proceeding (including any appeal thereof) if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Subsection (2) of Section 607.0850 of the FBCA empowers a corporation to
indemnify any person who was or is a party to any proceeding by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
such person acted in any of the capacities set forth in the preceding paragraph,
against expenses and amounts paid in settlement not exceeding, in the judgment
of the board of directors, the estimated expenses of litigating the proceeding
to conclusion, actually and reasonably incurred in connection with the defense
or settlement of such proceeding including appeals, provided that the person
acted under the standards set forth in the preceding paragraph. However, no
indemnification should be made for any claim, issue or matter as to which such
person is adjudged to be liable unless, and only to the extent that, the court
in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
deems proper.
Subsection (3) of Section 607.0850 of the FBCA provides that to the extent
a director, officer, employee or agent of a corporation has been successful on
the merits or otherwise in the defense of any proceeding referred to in
subsections (1) or (2) of Section 607.0850 or in the defense of any claim, issue
or matter therein, he shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith.
<PAGE>
Subsection (4) of Section 607.0850 of the FBCA provides that any
indemnification under subsections (1) or (2) of Section 607.0850, unless
determined by a court, shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (1) or (2) of Section
607.0850. Such determination shall be made:
(a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) if such a quorum is not obtainable, or, even if obtainable, by
majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two
or more directors not at the time parties to the proceeding;
(c) by independent legal counsel:
(1) selected by the board of directors as prescribed in
paragraph (a) or a committee selected as prescribed in paragraph (b); or
(2) if no quorum of directors can be obtained under paragraph
(a) or no committee can be designated under paragraph (b), by a majority
vote of the full board of directors (in which directors who are parties may
participate); or
(d) by the shareholders by a majority vote of a quorum of
shareholders who were not parties to such proceedings or if no quorum is
obtainable, by a majority vote of shareholders who were not parties to such
proceeding.
Under subsection (6) of Section 607.0850 of the FBCA, expenses incurred by
a director or officer in defending a civil or criminal proceeding may be paid by
the corporation in advance of the final disposition thereof upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it is ultimately determined that such director or officer is not entitled to
indemnification under Section 607.0850.
Subsection (7) of Section 607.0850 of the FBCA states that indemnification
and advancements of expenses provided under Section 607.0850 are not exclusive
and empowers the corporation to make any other further indemnification or
advancement of expenses under any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, for actions in an official capacity and in
other capacities while holding an office. However, a corporation cannot
indemnify or advance expenses if a judgment or other final adjudication
establishes that the actions of the director, officer, employee or agent were
material to the adjudicated cause of action and such person (a) violated
criminal law, unless the person had reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful, (b)
derived an improper personal benefit from a transaction, (c) was or is a
director in a circumstance where the liability under Section 607.0834 of the
FBCA (relating to unlawful distributions) applies, or (d) engaged in willful
misconduct or conscious disregard for the best interests of the corporation in a
proceeding by or in right of the corporation to procure a judgment in its favor
or in a proceeding by or in right of a shareholder.
Subsection (8) of Section 607.0850 provides that indemnification and
advancement of expenses shall continue, unless otherwise provided when
authorized or ratified, as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized or
ratified.
Subsection (9) of Section 607.0850 of the FBCA permits any director or
officer who is or was a party to a proceeding to apply for indemnification or
advancement of expenses, or both, to any court of competent
II-2
<PAGE>
jurisdiction and lists the determinations the court should make before ordering
indemnification or advancement of expenses.
Subsection (12) of Section 607.0850 of the FBCA permits a corporation to
purchase and maintain insurance for a director or officer against any liability
incurred in his official capacity or arising out of his status as such
regardless of the corporation's power to indemnify him against such liability
under Section 607.0850.
The Company is obligated under its Bylaws to indemnify a present or former
director, officer, employee or agent of the Company and may indemnify any other
person, in connection with any threatened, pending or completed civil, criminal,
administrative, or investigative action, suit, or proceeding arising out of an
officer's or director's past or future service to the Company or a subsidiary,
or to another organization at the request of the Company or a subsidiary, if he
acted in faith and in a manner reasonably believed to be in or not opposed to
the best interests of the Company and, with respect to any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. The determination
of whether the standards referred to above have been met is made by (i) the
Board of Directors of the Company by a majority vote of a quorum consisting of
directors who were not parties to such proceeding, or (ii) if such a quorum is
not obtainable or, even if obtainable, a majority of a committee of two or more
disinterested directors if so designated by the Board, or (iii) by independent
legal counsel in a written opinion, or (iv) by the shareholders.
ITEM 16. EXHIBITS
See Exhibit Index at Page II-6.
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:
(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;
and
(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 (1)(i) and (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 by the Registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-3
<PAGE>
(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 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 described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Las Vegas, State of Nevada, on March 29, 1996.
INAMED CORPORATION
By: /s/ Donald K. McGhan
---------------------------
Name: Donald K. McGhan
Title: President and Chairman
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Donald K. McGhan and Michael D. Farney, and each
of them, his true and lawful attorneys-in-fact and agents with full power of
substitution and re-substitution for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents and each of them full power and authority, to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
to all intents and purposes and as fully as they might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
their substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons (which
persons constitute a majority of the Board of Directors) in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ----------- -------- -------
<S> <C> <C>
/s/ Donald K. McGhan Director, Chairman of the Board and
- -------------------- President (Principal Executive Officer) March 29, 1996
Donald K. McGhan
/s/ Michael D. Farney Director, Chief Executive Officer
- -------------------- and Chief Financial Officer March 29, 1996
Michael D. Farney (Principal Accounting and Financial Officer)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Filed (F)
- ------- ------------------------------------------------------------------------------------ ---------
<S> <C> <C>
4.1 Certificate of Incorporation (Incorporated herein by reference to Exhibit 3.1
of Company's Annual Report on Form 10-K for the year ended December 31,
1995 (Commission File No. 0-7101)).
4.2 Bylaws of the Company (Incorporated herein by reference to Exhibit 3.2 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
(Commission File No. 0-7101)).
4.3 Specimen Stock Certificate for Inamed Corporation Common Stock, par value $.01
per Share. F
5.1 Opinion of Shutts & Bowen. F
23.1 Consent of Coopers & Lybrand L.L.P. *
23.2 Consent of Shutts & Bowen (included in Exhibit 5.1). F
24.1 Power of Attorney (included on page II-5). F
</TABLE>
*To be filed by amendment.
II-6
<PAGE>
EXHIBIT 4.3
Specimen Stock Certificate
[Face of Security]
INAMED
INAMED CORPORATION
Incorporated under the laws of the State of Florida
Authorized Capital Stock 20,000,000 Shares Par Value $.01 Per Share
NUMBER SHARES
THIS CERTIFIES THAT
IS THE OWNER OF
FULL PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF ONE CENT ($.01) EACH OF
THE COMMON STOCK, OF
INAMED CORPORATION
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all of the provisions of the Certificate of
Incorporation of the Corporation as now or hereafter amended (a copy of which
certificate is on file with the Transfer Agent), to all of which the holder by
acceptance hereof assents. This certificate is not valid unless countersigned
and registered by the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signature
of its duly authorized officers.
DATED
-------------------- --------------------
Secretary President
Countersigned and Registered:
U.S. Stock Transfer Corporation
(Glendale, CA)
Transfer Agent and Registrar
AUTHORIZED SIGNATURE
[SEAL]
<PAGE>
[Back of Security]
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM ---- as tenants in common UNIF GIFT MIN ACT ----________Custodian________
TEN ENT ---- as tenants by the entireties (Cust) (Minor)
JT TEN ---- as joint tenants with right of survivorship Under Uniform Gifts to Minors
and not as tenants in common Act__________________________
(State)
</TABLE>
FOR VALUE RECEIVED, ___________________ HEREBY SELL, ASSIGN AND TRANSFER
UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE:
________________________________________________
___________________________________________________________________________
(Please print or typewrite name and address, including zip code, of Assignee)
___________________________________________________________________________
___________________________________________________________________________
____________________________________shares of the capital stock represented
by the within Certificate and do hereby irrevocably constitute and appoint
______________________________Attorney to transfer the said stock on the
books of the within named Corporation with full power of substitution in
the premises.
Dated: _________________________
______________________________________
NOTICE: The signature to this
assignment must correspond
with the name as written upon
the face of the certificate in
every particular, without
alteration or enlargement of
any change whatever.
<PAGE>
EXHIBIT 5.1
Shutts & Bowen
201 S. Biscayne Boulevard
1500 Miami Center
Miami, Florida 33131
March 28, 1996
Inamed Corporation
3800 Howard Hughes Parkway, Suite 900
Las Vegas, Nevada 89109
Re: Registration Statement On Form S-3
----------------------------------
Gentlemen:
We have examined the Registration Statement on Form S-3 filed by you with
the Securities and Exchange Commission on February 21, 1996 (the "Registration
Statement"), in connection with the issuance of 3,500,000 (as adjusted) shares
of Common Stock of Inamed Corporation, a Florida corporation (the "Company")
upon conversion of the Company's 11% Secured Convertible Notes due 1999 issued
under that certain Indenture dated as of January 2, 1996 between the Company and
Santa Barbara Bank & Trust (the "Indenture") and the registration of the Common
Stock under the Securities Act of 1933, as amended. As your special counsel in
connection with this transaction, we have examined the proceedings heretofore
taken by the Company in connection with the authorization, issuance and sale of
the Common Stock.
Based on these examinations, it is our opinion that upon completion of the
proceedings being taken or which we, as your special counsel, contemplate will
be taken prior to issuance of the Common Stock, the Common Stock, when issued
and sold in the manner referred to in the Indenture and the Registration
Statement, will be legally and validly issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name, wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof and
any amendments or supplements thereto.
Respectfully submitted,
/s/ SHUTTS & BOWEN
