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As filed with the Securities and Exchange Commission on March 19, 1997
Registration No. 333-19799
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
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, Suite 900 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)
Copy to:
Theodore R. Maloney
Nida & Maloney
A Professional Corporation
801 Garden Street, Suite 201
Santa Barbara, California 93101-1580
(805) 568-1151
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. / /
If any of the securities being registered on this form are being offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. / /
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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) (1) Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, per value $ $ $
$.01 per share shares
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- --------------------------------------------------------------------------------------------------------------------
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(1) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(c) on the basis of the average of the bid
and asked price of the Inamed Corporation Common Stock, par value
$.01 per share, on March 14, 1997.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION DATED MARCH 19, 1997
PROSPECTUS
INAMED CORPORATION
SHARES OF COMMON STOCK
($.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"), (i) issued to the holders of record on June 10, 1996
of the Company's 11% Secured Convertible Notes due 1997 (the "Secured Notes"),
(ii) shares of Common Stock issuable from time to time upon conversion of $6.2
million in principal amount of the Company's 4% Convertible Debentures due
2000 (the "Debentures") and (iii) shares of Common Stock issuable from time to
time upon exercise of warrants to purchase 500,000 shares of Common Stock (the
"Warrants") issued in connection with the issuance of the Debentures, 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." Certain of the Shares were issued to the holders of
the Secured Notes in connection with the amendment of the Indenture governing
the Secured Notes and the waiver by the holders of certain covenant defaults
under the Indenture governing the Secured Notes and the balance are issuable
upon conversion or exercise of privately placed securities.
Shares of the Common Stock are traded on the Nasdaq SmallCap Market under
the symbol "IMDC."
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 19, 1997.
<PAGE>
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. The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding the Company.
The address of the Web site is: http://www.sec.gov. The Company's Common
Stock is quoted on the Nasdaq SmallCap Market and reports, proxy and
information statements and other information concerning the Company can be
inspected at the National Association of Securities Dealers, Inc., 1735 K
Street N.W., Washington D.C. 20006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Company for the year ended
December 31, 1995 and the amendments number 1 and 2 thereto filed on Form
10-K/A on April 30, 1996 and March , 1997, the Company's Quarterly Report on
Form 10-Q for the periods ended March 31, June 30 and September 30, 1996 and
amendment number 1 thereto filed on Form 10-Q/A on March , 1997 and the
Company's Current Reports on Form 8-K filed February 6, 1996, April 19, 1996
and May 31, 1996 and the description of the Inamed Common Stock contained in
the Company's registration statement on Form ____ filed pursuant to Section
12(g) of the Exchange Act on 19 (Commission File No. 1-9741), 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 25 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 $81.6 million for the year ended December 31, 1995.
However, the Company incurred a loss of $6.9 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, THE QUARTERLY REPORTS ON FORM 10-Q FOR THE QUARTERS ENDED
MARCH 31, JUNE 30 AND SEPTEMBER 30, 1996 AND THE CURRENT REPORTS ON FORM 8-K
FILED WITH THE COMMISSION ON FEBRUARY 6, 1996, APRIL 19, 1996 AND MAY 31, 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 such 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
Implant Products Liability (the "Settlement Agreement") providing for
settlement of the claims as to the class (the
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"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 Settlement was approved by the court in
1994. 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 against all Settlement defendants 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. Discrete information as to each defendant
was not made available by the court and the Company is not aware of any
information from such findings that would affect the Company's $9.1 million
accrual. 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"). With respect to the parties
thereto, the Revised Settlement Program incorporated and superseded the
Settlement. The Revised Settlement Program did not fix liability on any
defendants, but established maximum contribution amounts and therefore will
not directly impact the Company's $9.1 million charge.
The Company recorded a pre-tax charge of $23.4 million in the third
quarter of 1995. The charge represented the present value (discounted at 8%)
of the maximum additional amount that the Company would be required to
contribute to the Revised Settlement Program, $50 million over a 15-year
period based on a claims-made and processed basis. Due to the uncertainty of
the ultimate resolution and acceptance of the Revised Settlement Program by
the registrants, claimants, and plaintiffs and combined with the current lack
of information related to the substance of the claims, the Company reversed
this charge for the third quarter of 1995.
At December 31, 1996, the Company's reasonable estimate of its liability
to fund the Revised Settlement Program was a range between $9.1 million, the
original estimate as noted above, and the discounted present value of the $50
million aggregate the Company would potentially contribute under the Revised
Settlement Program, with no amount within the range a better estimate. Because
of the uncertainty of the ultimate resolution and acceptance of the Revised
Settlement Program by the registrants, claimants, and plaintiffs (which
acceptance and participation is necessary for any contributions under the
Revised Settlement Program) and the current lack of and changing information
related to the substance of the claims, no estimate of the possible additional
loss or range of loss can be made and, consequently, the financial statements
do not reflect any additional provision for the litigation settlement.
The Company has entered into a Settlement Agreement with health care
providers pursuant to which the Company was required to pay, on or before
December 17, 1996, $1 million into the MDL Settlement Fund ("the Fund") to
be administered by Edgar C. Gentle, III, Esq. ("the Fund Agent"). The
Company, in the spirit of the Revised Settlement Program, contributed
$600,000 to the claims administration management for the settlement.
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 does not alter the Company's
need for complete resolution sought under a mandatory ("non-opt-out")
settlement class (the "Mandatory Class") or other acceptable settlement
resolution. Therefore, the Company has petitioned the United States
District Court, Northern District of Alabama, Southern Division, for
certification of a Mandatory Class under the provisions of Federal Rules of
Civil Procedure. On July 11, 1996, the Company filed an appearance of counsel
and status report on the INAMED Mandatory Class application to the United
States District Court, Northern District of Alabama, Southern Division, Chief
Honorable Judge Samuel C. Pointer, Jr. There can be no assurance that the
Company will receive Mandatory Class certification or another acceptable
settlement resolution.
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
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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 Company's existing cash on hand (whether or not the Notes are
converted into shares of common stock) 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 (assuming the Secured Notes and
Debentures are converted) 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. Such needs will be further increased if some or all of
the Secured Notes not already converted or Debentures are not converted into
shares of common stock. The Company will receive no funds if the Secured Notes
and Debentures are converted, but in such event the Company will be relieved
of the obligation to repay such securities.
Limits on Additional Indebtedness
The Indenture governing the Secured 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 Secured Notes as permitted in the Indenture,
these restrictions will continue so long as any Secured 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
Secured 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.
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 with 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
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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 incurred expenses of 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
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<PAGE>
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,
the 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 results of operation and cash flows 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 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 financial condition, results of
operation or cash flows, 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. See "Litigation" above. 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.
7
<PAGE>
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 formulae 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.
Manufacturing Capacity and Material Supply
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.
The Company obtains certain raw materials and components for a number of its
products from single suppliers, including Nusil Corporation and Specialty
Silicone Fabricators who presently are the exclusive suppliers to the Company
of raw silicone and certain components, respectively. The Company believes that
its sources of supply could be replaced if necessary without undue disruption,
but it is possible that the process of qualifying new materials and/or vendors
for certain raw materials and components could cause a material interruption
in manufacturing or sales. No mateiral interruptions occurred during the
Company's last fiscal year as result of such supply relationships.
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
8
<PAGE>
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.
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 March 14, 1997, 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
9
<PAGE>
direction of its business and affairs. Although it will be reduced by the
conversion of Notes into shares of common stock and the increase of
additional shares of common stock, such as the Shares, 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.
Shares of Common Stock Eligible for Sale
As of March 14, 1997, the Company had an aggregate of 8,209,350 issued
and outstanding shares of Common Stock. In addition, as of March 14, 1997,
the Company had reserved for issuance an aggregate of approximately 11,506,038
shares of Common Stock issuable pursuant to: (i) outstanding vested and
non-vested options, warrants, convertible securities, such as the Secured
Notes and the Debentures, 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.
SHARES BEING OFFERED
In January 1996, the Company issued $35 million in principal amount of
11% Secured Convertible Notes due 1999 (the "Secured Notes"). On January 17
and 29, 1997, the Company issued $4.2 and $2.0 million, respectively, in
principal amount of 4% Convertible Debentures due 2000 (the "Debentures") and
warrants to purchase 500,000 shares of Common Stock (the "Warrants" and,
together with the Secured Notes and the Debentures, the "Securities"). The
Securities were originally issued in transactions exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act"). On or
about June 10, 1996 the Company sought the consent waiver by the holders of
the Secured Notes to certain amendments to the Indenture governing the Secured
Notes and the waiver by such holders of certain covenant defaults under the
Indenture relating to the Company's financial performance for the quarter
ended March 31, 1996. In connection with the Indenture amendment and waiver,
the Company agreed to issue to each holder of record of Secured Notes on June
10, 1996 additional shares of Common Stock (the "Bonus Shares") equal to five
percent (5%) of the shares such holders would receive if such holder had
converted such holder's Secured Notes on such date. The Company agreed to
issue and issued such shares to the holders entitled thereto on January 10,
1997 in a transaction exempt from registration under the Securities Act.
The Debentures are unsecured obligations of Inamed, the principal amount
of which is payable as follows, $4.2 million on January 16, 2000 and $2.0
million on January 28, 2000. The Debentures bear interest at the rate of 4%
per annum until maturity. The Debentures will become convertible 60 days
after their original issuance at the option of the holder into shares of
Common Stock. The Debentures will be convertible thereafter until maturity at
the option of the holder.
Subject to certain conditions (including the registration of the Common
Stock issuable on conversion), the Debentures will also be automatically
convertible at the option of the Company after one year from the date of
issuance. The Debentures are presently convertible at any time after the
stated occurrences at a conversion price (based on the stated principal
amount of the Debentures converted) equal to a the lesser of (A) the greater
of (1) the average per share market value for the five trading days
immediately preceding the original issue date (the "Issue Date Trading
Value") and (2) an amount determined by dividing (x) the average per share
trading market value for the five trading days immediately preceding the date
of conversion (the "Conversion Date Trading Value") by (y) a fraction, the
numerator of which is the sum of (i) 1.33 and (ii) the Conversion Date
Trading Value divided by the Issue Date Trading Value and the denominator of
which is 2. As of the date of this Prospectus, Debentures in the aggregate
principal amount of $6.2 million are outstanding, which Debentures are
convertible at the current conversion rate into an aggregate of 988,835
shares of Common Stock.
In connection with the issuance of the Debentures the Company entered
into registration rights agreements with the purchasers of the Debentures and
the Warrants to use its best efforts to register the shares of Common Stock
underlying such securities. Specifically, the Company agreed to file with the
Commission within 14 days of the date of issuance of the Debentures, and 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 Debentures. In the event a registration statement
relating to the shares issuable upon conversion of the Debentures has not been
declared effective on or before the 60th day following the date of issuance of
the Debentures, then for each of the first two months following such date in
which the registration statement has not been declared effective, the
conversion price will be reduced by three percent. The Company also agreed to
include in such registration statement the shares of Common Stock issuable
upon exercise of the Warrants. In connection with the solicitation of the
waivers and amendments to the Indenture governing the Secured Notes, the
Company also undertook to use its best efforts to register the Bonus Shares
following their issuance.
The Shares offered hereby include the number of Shares issuable upon
conversion of $6.2 million in aggregate principal amount of Debentures, 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 Debentures. At the current conversion rate, 988,835 shares of Common
Stock are issuable upon conversion of $6.2 million aggregate principal amount
of the Debentures.
The foregoing shares underlying the Securities constitute the Shares
that are subject to this Prospectus.
10
<PAGE>
The names of the persons who currently hold the Bonus Shares, the
Debentures and the Warrants, the aggregate principal amount of the
Debentures and the number of Warrants held by each such holder, the number of
whole shares of Inamed Common Stock into which such securities are
convertible or exercisable at the current conversion or exercise price and
the number of shares of Common Stock beneficially owned by each such person
and the number of shares of Common Stock to be held by each such person
following the offering and each of all of the Shares are set forth under
"Selling Stockholders" below. The Shares may not be transferred unless they
are registered under the Securities Act or an exemption from registration is
available. The Debentures and the Warrants have not been registered under the
Securities Act and the Company has no obligation to register either.
11
<PAGE>
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 Securities, the principal
amount or number of Debentures or Warrants held by such persons, the number of
shares of Common Stock beneficially owned as of the date of this Prospectus
by each such holder and the number of shares of Common Stock to be held by
each such holder following the offer and each of all of the Shares.
12
<PAGE>
<TABLE>
<CAPTION>
No. of Shares No. of Whole
Principal of Common Shares of Percent of
Amount of Warrants Stock No. of Common Stock Class to be
Debentures Held Beneficially Shares Owned After Owned After
Shareholder Held (# Shares) Owned (1) Offered The Offering(2) Offering
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Atticus Partners, L.P. 52,500 2,500 50,000 *
Citicorp Center,
153 East 63rd Street, 43rd floor
New York, NY 10022
Mr. and Mrs. L.D. Blatt 10,500 500 10,000 *
21 Carrington Place
Grosse Pointe Farms, MI 48236
Mr. Edward D. DeLacy 5,250 250 5,000 *
2145 Piedras Drive
Santa Barbara, CA 93108
Fir Tree Partners Value Fund, L.P. 252,000 12,000 240,000 2.90%
1211 Avenue of the Americas, 29th Floor
New York, NY 10036
Fir Tree Value Partners, LDC 63,000 3,000 60,000 *
1211 Avenue of the Americas, 29th Floor
New York, NY 10036
Mr. Gary Fuhrman 500 500 -0- *
c/o Arnhold & S. Bleichroeder
45 Broadway
New York, NY 10008
Glen Rock Partners, L.P. 94,500 4,500 90,000 1.11%
c/o RH Capital Associates
55 Harristown Road
Glen Rock, NJ 07452
Little Wing L.P. 36,750 1,750 35,000 *
375 Park Avenue, Suite 1404
New York, NY 10162
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Shares No. of Whole
Principal of Common Shares of Percent of
Amount of Warrants Stock No. of Common Stock Class to be
Debentures Held Beneficially Shares Owned After Owned After
Shareholder Held (# Shares) Owned (1) Offered The Offering(2) Offering
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Roger Miles 10,500 500 10,000 *
59 Lupine Avenue, Suite 6
San Francisco, CA 84118
Oracle Partners, L.P.(3) 330,750 15,750 315,000 3.77%
712 Fifth Avenue, 45th Floor
New York, NY 10019
Oracle Institutional Partners, L.P.(3) 51,450 2,450 49,000 *
712 Fifth Avenue, 45th Floor
New York, NY 10019
Quasar International Partners, C.V.(3) 88,200 4,200 84,000 1.03%
712 Fifth Avenue, 45th Floor
New York, NY 10019
GSAM Oracle Fund, Inc.(3) 264,600 12,600 252,000 3.04%
712 Fifth Avenue, 45th Floor
New York, NY 10019
IMED Investors, L.L.C. 142,800 6,800 136,000 1.66%
900 N. Michigan Avenue, 19th Floor
Chicago, IL 60611
Anaconda Opportunity Fund, L.P. $60,940 7,255 67,827 17,827 50,000 *
c/o Anaconda Capital Management
730 5th Avenue, 15th Floor
New York, NY 10019
Mr. Norman Salsitz 10,500 500 10,000 *
9 Craig Road
Springfield, NJ 07081
SC Fundamental Value Fund, L.P.(4) 613,225 27,625 585,600 7.13%
712 Fifth Avenue, 19th Floor
New York, NY 10019
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
No. of Shares No. of Whole
Principal of Common Shares of Percent of
Amount of Warrants Stock No. of Common Stock Class to be
Debentures Held Beneficially Shares Owned After Owned After
Shareholder Held (# Shares) Owned (1) Offered The Offering(2) Offering
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SC Fundamental Value BVI, Ltd.(4) 275,275 14,875 260,400 3.17%
712 Fifth Avenue, 18th Floor
New York, NY 10019
Dreyfus Premier Strategic Investing 551,250 26,250 525,000 6.13%
200 Park Avenue, 55th Floor
New York, NY 10166
Dreyfus Strategic Income Fund 698,250 33,250 665,000 7.64%
200 Park Avenue, 55th Floor
New York, NY 10166
Dreyfus Aggressive Value Fund 10,500 500 10,000 *
200 Park Avenue, 55th Floor
New York, NY 10166
GEM Management Ltd. 417,745 417,745 417,745 -0- *
P.O. Box 860
17 Bond Street
St. Helier
Jersey, Channel Islands, JE4 OYZ
Kaplan, Gottbetter and Levenon LLP 50,000 50,000 50,000 -0- *
630 Third Avenue, 23rd Floor
New York, NY 10017
Lionhart Global Appreciation Fund $2,069,530 25,000 299,110 299,110 -0- *
Cito Building, Wickhams Cay
P.O. Box 662
Road Town
Tortola, BVI
HBK Offshore Fund, Ltd. $1,241,718 164,466 164,466 -0- *
c/o Citco Fund Services
Attn: Kieran Conrow
Kaya Flamboyan 9
Curacao, Netherlands Antilles
HBK Cayman, LP $ 827,812 109,644 109,644 -0- *
c/o Trident Trust Co.
Elizabethan Square
P.O. Box 847, Grand Cayman
Cayman Islands, BWI
Michael Angelo, LP $ 250,000 33,113 33,113 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York, NY 10167
Nutmeg Partners, LP $ 200,000 26,490 26,490 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York, NY 10167
Angelo, Gordon & Co., LP $ 300,000 39,735 39,735 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York, NY 10167
GAM Arbitrage Investments, Inc. $ 250,000 33,113 33,113 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York, NY 10167
AG Super Fund, LP $ 300,000 39,735 39,735 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York NY 10167
AG Super Fund International
Partners, LP $ 200,000 26,490 26,490 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York, NY 10167
Raphael, LP $ 300,000 39,735 39,735 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York, NY 10167
AG Long Term Super Fund, LP $ 200,000 26,490 26,490 -0- *
c/o Angelo, Gordon & Co., LP
245 Park Avenue, 26th Floor
New York, NY 10167
</TABLE>
- -----------------------------
* Less than one percent.
(1) The number of shares specified in this table as being beneficially
owned by each Selling Stockholder includes all shares which may be
received upon issuance or conversion of securities in accordance
with Rule 13d-3.
(2) The number of shares specified in this column assumes that each
Selling Stockholder sells all Shares.
(3) Does not include 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.
15
<PAGE>
Neither the Company nor any of its affiliates has had any material
relationship with any Selling Stockholder within the past three years.
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 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 and a post-effective amendment
to the Registration Statement of which this Prospectus is a part. 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.
16
<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.
17
<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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
INAMED CORPORATION
Common Stock
PROSPECTUS
March 19, 1997
<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 . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,226
*Blue Sky Fees and Expenses (including counsel fees) . . . . . . . 1,000
*Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 8,000
*Accounting Fees and Expenses. . . . . . . . . . . . . . . . . . . 8,500
*Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
-------
*Total $22,726
</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.
II-1
<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 19, 1997.
INAMED CORPORATION
By: /s/ Donald K. McGhan
---------------------------
Name: Donald K. McGhan
Title: President and Chairman
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 19, 1997
Donald K. McGhan
/s/ Michael D. Farney Director and Chief Executive Officer March 19, 1997
- ------------------------
Michael D. Farney
/s/ Willem Oost-Lievense Chief Financial Officer (Principal March 19, 1997
- ------------------------ Accounting and Financial Officer)
Willem Oost-Lievense
</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 to 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 (Incorporated herein by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-3 filed April 29, 1996 (Commission File No.
333-02085)).
5.1 Opinion of Shutts & Bowen. *
23.1 Consent of Coopers & Lybrand L.L.P. *
23.2 Consent of Shutts & Bowen (included in Exhibit 5.1). *
24.1 Power of Attorney. **
</TABLE>
*To be filed by amendment.
** Previously filed.
II-6
