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As filed with the Securities and Exchange Commission on January 26, 1998
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
BIOSPHERICS INCORPORATED
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(Exact name of Registrant as specified in its charter)
Delaware 52-0849320
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(State or other jurisdiction of (IRS employer identification no.)
incorporation or organization)
12051 Indian Creek Court, Beltsville, Maryland 20705, (301) 419-3900
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(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Gilbert V. Levin, President and Chief Executive Officer,
Biospherics Incorporated
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12051 Indian Creek Court, Beltsville, Maryland 20705, (301) 419-3900
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
James E. Baker, Jr.
Baxter, Baker, Sidle & Conn, P.A.
120 E. Baltimore Street, Suite 2100
Baltimore, Maryland 21202
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
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. [ ]
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CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed
Class of Maximum Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Registration
Registered Registered Per Share (1) Offering Price (1) Fee
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Common Stock
($.005 par value) 1,620,000 $4.4375 $7,188,750 $2,121 (1)
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based
on the last sales price of the Common Stock on the NASDAQ National Market
System on January 21, 1998.
The shares of Common Stock registered hereunder include (i) 750,000 shares of
Common Stock issued to a Selling Shareholder in connection with a private
placement transaction completed on December 12, 1997 (the "Private Placement"),
(ii) 750,000 shares of Common Stock issuable to a Selling Shareholder upon
exercise of warrants issued in connection with the Private Placement (the
"Private Placement Warrants") and (iii) 120,000 shares of Common Stock
issuable upon exercise of other warrants held by other Selling Shareholders
(the "Wharton Warrants" and, together with the Private Placement Warrants, the
"Warrants"). In addition, to the shares set forth in the table, which
represents a good faith estimate of the number of shares underlying the
Warrants, the amount to be registered includes an indeterminate number of
shares issuable upon exercise of or in respect of the Warrants, as such
number may be adjusted as a result of stock splits, stock dividends and
antidilution provisions in accordance with Rule 416.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until 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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This Preliminary Prospectus and the information contained herein are subject to
completion or amendment. These securities may not be sold, nor may offers to
buy be accepted, prior to the time the Prospectus is delivered in final form.
Under no circumstances shall this Preliminary Prospectus constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such jurisdiction.
Subject to Completion dated January 26, 1998
PROSPECTUS
1,620,000 Shares of Common Stock
BIOSPHERICS INCORPORATED
This prospectus (this "Prospectus") relates to the offer and sale of up to
1,620,000 shares (the "Shares") of Common Stock, $.005 par value (the "Common
Stock"), of Biospherics Incorporated ("Biospherics" or the "Company").
The Shares will be offered for sale by certain stockholders of the Company (the
"Selling Shareholders") or by their respective pledgees, donees, transferees or
other successors in interest, from time to time in one or more transactions
(which may involve block transactions) effected on the NASDAQ National Market
System (or on any national securities exchange or U.S. inter-dealer quotation
system of a registered national securities association on which the Shares are
then listed), in sales occurring in the public market of such exchange, in
privately-negotiated transactions, through the purchase or writing of options on
the Shares, in short sales or in a combination of such methods of sale. Such
methods of sale may be conducted at market prices prevailing at the time of
sale, at prices related to such prevailing market price or at negotiated prices.
The Selling Shareholders may effect such transactions directly, or indirectly
through broker-dealers or agents acting on their behalf, and in connection with
such sales, such broker-dealers or agents may receive compensation in the form
of commissions or discounts from the Selling Shareholders and/or the purchasers
of the Shares for whom they may act as agent or to whom they sell Shares as
principal or both (which commissions or discounts are not anticipated to exceed
those customary in the types of transactions involved). To the extent required,
the names of any agents or broker-dealers, and applicable commissions or
discounts and any other required information with respect to any particular
offer of Shares by the Selling Shareholders, will be set forth in a Prospectus
Supplement. Any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), may be sold pursuant to Rule 144 rather than pursuant to this
Prospectus. See "Selling Shareholders" and "Plan of Distribution".
While the Company will receive proceeds from the exercise of Warrants, it will
not receive any of the proceeds from the sale of the Shares. See "Selling
Shareholders" for information with respect to Shares held or acquirable by the
Selling Shareholders. The Company will pay the expenses of registration
estimated at $29,621. The Selling Shareholders and any dealer acting in
connection with the offering of any of the Shares or any broker executing
selling orders on behalf of the Selling Shareholders may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
profit on the sale of any or all of the Shares by them and any discounts or
commissions received by any such brokers or dealers may be deemed to be
underwriting discounts and commissions under the Securities Act.
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The Common Stock of Biospherics is quoted on the NASDAQ National Market System
under the symbol "BINC."
On January 21, 1998 the closing price of the Common Stock on the NASDAQ National
Market System was $4.4375 per share.
SEE "RISK FACTORS" COMMENCING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 26, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission located at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices at Seven World Trade Center, 13th Floor, New
York, New York 10048; and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can also be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains a World Wide Web site (located at
http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding the Company. The Common Stock is listed on the
NASDAQ National Market System and reports, proxy statements and other
information concerning the Company may be inspected at the offices of the NASDAQ
Stock Market, 1735 K Street, N.W., Washington, D.C. 20006-1500.
The Company has filed with the Commission a Registration Statement on Form S-3
under the Securities Act with respect to the Shares offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement and the exhibits filed therewith or incorporated therein
by reference. Regarding statements contained in this Prospectus as to the
contents of any contract or any other document referred to herein, reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement or incorporated therein by reference, each such statement
being qualified in all respects by such reference. A copy of the Registration
Statement may be inspected, without charge, at the offices of the Commission in
Washington, D.C. and copies of all or any part of the Registration Statement may
be obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, upon the
payment of the fees prescribed by the Commission.
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company or any Selling Shareholder. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that the information herein is correct
as of any time subsequent to the date hereof or that there has been no change in
the affairs of the Company since such date.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein by
reference:
(a) The Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 1996.
(b) The Company's quarterly report on Form 10-QSB for the three months
ended March 31, 1997.
(c) The Company's quarterly report on Form 10-QSB for the three months
ended June 30, 1997.
(d) The Company's quarterly report on Form 10-QSB for the three months
ended September 30, 1997.
(e) The Company's current report on Form 8-K filed on December 18, 1997.
(f) All other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act following the fiscal year
ended December 31, 1996 and prior to the termination of the offering
contemplated hereby.
Any statement 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 subsequently filed document, which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
written or oral request of such person, a copy of any and all of the information
that has been incorporated by reference in this Prospectus (not including the
exhibits to the information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to Mr. Jeffrey W.
Church, Executive Vice President and Chief Financial Officer, 12051 Indian Creek
Court, Beltsville, Maryland 20705; telephone number (301) 419-3900.
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FORWARD LOOKING STATEMENTS
Certain statements contained in this Prospectus, including without limitation,
statements containing the words "believes," "estimates," "expects" and words of
similar import, constitute "forward looking statements." Such words and
expressions are intended to identify such forward looking statements, but are
not intended to constitute the exclusive means of identifying such statements.
Such forward looking statements involve known and unknown risks, uncertainties
and other factors that may cause the actual results, performance or achievements
of the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such forward
looking statements. These risks, uncertainties and other factors include, but
are not limited to, those discussed below under the heading "Risk Factors."
Given these uncertainties, prospective investors are cautioned not to place
undue reliance on such forward looking statements. The Company disclaims any
obligation to update any such factors or to publicly announce the results of any
revisions to any of the forward looking statements contained herein to reflect
any events or developments. Investors should also review forward looking
statements contained in the Company's most recent Annual Report on Form 10-KSB
and subsequent quarterly reports on Form 10-QSB.
THE COMPANY
General. Biospherics Incorporated (the "Company"), a Delaware corporation, was
founded in 1967. The Company is engaged in the business of providing (i)
information services to private industry and to Federal, State and local
government agencies, and (ii) biological and chemical research services. The
Company consists of an Information Services Division ("ISD") and a BioTech
Programs Unit ("BioTech"). As part of BioTech, the Company is also developing
its own proprietary products. In February 1996, the Company sold its
Environmental and Laboratory Services Division ("ELSD") to permit better focus
on the major businesses of the Company, ISD and BioTech.
The principal executive offices of the Company are located at 12051 Indian Creek
Court, Beltsville, Maryland 20705, and its telephone number is (301) 419-3900.
The Company's Common Stock trades on the NASDAQ National Market System under the
symbol BINC.
Information Services Division. ISD's information professionals provide
computerized health, pharmaceutical and medical data collection and clinical
trial management, report and publication writing and editing, development of
programmatic concepts in public health information and education, database
management, reservation services and computer-assisted health resource
information. ISD collects and disseminates information by providing customized
telesupport and database management systems that combine the human element of
live operators with communications technology. ISD answers millions of calls
annually from professionals and the public nationwide and disseminates millions
of publications. The core of its operation consists of three call centers
(Beltsville, Cumberland and Columbia, MD) that efficiently manage and track high
volumes of calls. The technology is combined with computerized database
management systems, which results in an efficient and effective system to
collect and disseminate large amounts of information.
ISD specializes in public health issues and provides information services on a
wide range of diseases and disabilities, disease prevention, and education.
Areas of expertise include
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Alzheimer's disease, AIDS, cancer, diabetes, heart disease, and stroke, in
addition to the broader areas of smoking, aging, and environmental hazards such
as mishandling of pesticides. Programs are staffed by health professionals and
other information specialists who are given extensive training and are subject
to strict quality control guidelines. ISD's clients have included some of the
major U.S. pharmaceutical companies as well as government departments that deal
with health or education. ISD holds contracts with such agencies as the
Department of the Navy, the General Services Administration and the Department
of Health and Human Services. Contracts with non-governmental parties are
typically obtained following private negotiations and are most often for a term
of one year, although many such contracts have continued to renew for several
years. Contracts with governmental parties are obtained after a competitive
bidding process and are most often for terms ranging from two to three years,
with additional option years. Many have been re-won numerous times.
Significant portions of the Company's revenue relate to several government and
commercial ISD contracts.
ISD accounted for over 90% of the Company's total revenues from continuing
operations in 1996 and 1997. During 1996, government business accounted for
approximately 57% of ISD's business, increasing to over two-thirds of ISD
revenue in the first nine months of 1997. This resulted primarily from
completion of two commercial contracts in October 1995 and June 1997. The
Company hopes to increase its share of commercial business, and expects to
respond to a high level of public interest in health information.
The Company has announced its plan to expand its traditional ISD business via a
new subsidiary. The new company will focus on expansion of ISD's healthcare
business into demand management. To that end, on December 12, 1997, the Company
is pursuing the formation of a new subsidiary. The Company intends to transfer
its commercial ISD business to this subsidiary to provide it an initial base of
business. The Company has preliminarily agreed to issue an equity interest in
the subsidiary to a physician group in exchange for the transfer of certain
proprietary assets necessary to pursue the demand management business. The
subsidiary will require a substantial additional infusion of capital to commence
operations. The subsidiary will attempt to secure a private placement financing
(which is likely to include an equity component) to provide such funds by the
end of the first quarter of 1998. Commencement of operations also depends upon
finalizing a definitive agreement with the physician group.
BioTech Programs Unit. BioTech is the Company's research and development arm,
dedicated to developing proprietary products and services with a view toward
commercial applications. Over the last several years, the Company has invested
more than $3 million in these developments, primarily in its nonfattening sugar,
D-Tagatose. The Company has accumulated a number of patents on its products.
D-Tagatose as a Bulk Sweetener. BioTech has patented the use of a naturally
occurring sugar, D-Tagatose, as a low-calorie and nonfattening sweetener. It is
a true sugar that looks, feels, performs, and tastes like table sugar. Present
in small amounts in many dairy products, it differs from all other nonfattening
sweeteners in that it has the full bulk of sugar with the same clean, sweet
taste. Biospherics has been developing the substance since receiving a patent
for its use as a food additive in 1988 and two patents for the production
process (1990 and 1991).
In September 1996, the Company signed a license agreement with MD Foods
Ingredients amba of Denmark (MD Foods) for the exclusive worldwide rights to
manufacture, market, and
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distribute D-Tagatose as a food ingredient in return for a non-refundable
up-front payment and a royalty schedule based upon net sales. Under the
agreement, MD Foods may sub-license the D-Tagatose technology for use in foods
and beverages. In return for the exclusive license, MD Foods will take
responsibility for all future marketing and development expenses, including the
cost of constructing and operating its own production plants. MD Foods
manufactures a wide variety of foods and food ingredients made from milk. The
Danish dairy company ranks as the eighth largest dairy products company in the
world. It has the largest whey protein processing plant, the by-product of
which is the raw material for making D-Tagatose. MD Foods is widely regarded as
a manufacturer of high quality products and has the capability for worldwide
distribution.
The up-front payment has been made by MD Foods, part in September 1996 and part
in January 1997. The payment totaled $2.5 million, $1 million of which is a
non-refundable advance against future royalties. Biospherics will receive
running royalties from commercial sales of D-Tagatose. MD Foods also funds
Biospherics for certain technological support. To strengthen their cooperative
efforts, the two companies established an advisory committee to plan and review
progress in bringing D-Tagatose to its various world market sectors. The
committee consists of three MD Foods representatives and one Biospherics
representative. The committee proposes strategies and actions for MD Foods
management's consideration.
MD Foods expects to compete for a share of the U.S. market for sweeteners. A
panel of experts has advised that D-Tagatose may qualify for early entry into
the U.S. market as a food ingredient that is a Generally Recognized as Safe
(GRAS). MD Foods has begun design of a commercial plant to manufacture
D-Tagatose. MD Foods has advised that the decision to proceed with plant
construction will be deferred until successful GRAS affirmation in the U.S.,
currently anticipated in mid-1998. The target date for plant start-up is the
latter portion of 1999 or early in 2000.
The Company believes that D-Tagatose will fill a market not currently accessible
to other sweetener products. That market initially includes chocolate
confections, chewing gum, ice cream, and table top sugar. Later on, market
applications may broaden to include baked goods, heat-processed foods, frozen
desserts, other dairy products, cereals, and other products in which the full
bulk of sugar is required. Biospherics believes that chocolate candies and
chewing gum are excellent introductory uses for its nonfattening sugar, because
each constitutes a large market and each uses sugar as a major ingredient.
Manufacturers have long sought a low-calorie substitute for table sugar in
chocolate candy, which, partly because of its high sugar content, none has
succeeded in emulating the flavor of table sugar. Also, unlike table sugar,
D-Tagatose has been shown to cause virtually no tooth decay.
D-Tagatose as an Anti-Hyperglycemic Agent. The Company has received additional
key patents for the use of D-Tagatose as an anti-hyperglycemic agent (1994) and
also as a treatment for diabetes (1995). Studies are ongoing with respect to
this potential use of D-Tagatose. The Company is discussing the possibility of
licensing the use of D-Tagatose as an anti-hyperglycemic agent with a number of
pharmaceutical and nutritional products companies, while development efforts
proceed.
Safe-for-Human-Pesticides. The increasing concern over pesticide hazards in
foods and the general environment indicates a market for an economical and
effective product that poses no
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human threat. In November 1992, the Company received U.S. patents for its
safe-for-humans pesticides. More development work is required in order to
develop a commercial insecticide.
L-Sugars. Earlier in its low-calorie sweetener research, the Company obtained
patents in the U.S. and abroad for the use of a broad group of L-hexose sugars
for sweetening and bulking foods, beverages, and drugs. To date, no economic
means for production exists. The Company, however, intends to attempt to
develop such for some of the L-Sugars.
For now, Biospherics' research efforts and investment are largely devoted to
continuing to assist MD Foods in the development of D-Tagatose because of the
near term favorable prospects for this product. While many of the other BioTech
products described above show much promise, the continued development thereof is
dependent upon many factors, including but not limited to the Company having
sufficient funds to devote to such efforts.
Governmental Regulation. The business activities of the Company are subject to
a variety of Federal and State compliance, licensing, and certification
requirements. Management believes that the Company is, and has been at all
times, in full compliance with Federal and State environmental protection and
worker safety laws. The Company has not incurred significant expense in
complying with such laws and does not anticipate material expense, except for
the FDA approval for commercialization of D-Tagatose (which is to be borne by MD
Foods) and the L-Sugars. Commercialization of D-Tagatose and L-Sugars in the
United States for use as food additives will require FDA approval. As of this
date, Biospherics believes that results of its test program warrant continuing
the development efforts to provide a broad family of low-calorie sweeteners.
RISK FACTORS
Investors should consider carefully the following factors, in addition to the
other information contained in this Prospectus, before purchasing the shares of
Common Stock offered hereby.
Exclusive License of D-Tagatose. The Company has granted an exclusive worldwide
license to MD Foods Ingredients amba of Denmark (MD Foods) for the manufacture,
marketing and distribution of D-Tagatose as a food ingredient. Receipt of
future payments from MD Foods is dependent upon MD Foods' efforts to
commercialize this product. While the Company has and expects to continue to
provide assistance to MD Foods, the commercialization of D-Tagatose as a food
product is largely outside of the control of the Company.
BioTech Product Development. While the Company is in the process of attempting
to commercialize other potential uses of D-Tagatose as well as to develop other
products within BioTech, no such other uses of D-Tagatose and no such other
products have been developed to a stage where any significant revenue has been
generated. Development of products will require significant additional research
and development, including process development, extensive clinical testing and
market research. Such additional effort will require substantial funding which
may not be available to the Company. As a result, the Company's potential
products are subject to the risks of failure inherent in the development of
products based on new technologies. There can be no assurance that the Company's
research and development activities will result in any commercially viable
products.
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ISD Contracts. The principal portion of the Company's revenues has been
generated traditionally by the ISD unit. Several of the Company's contracts
provide these revenues (principally contracts with the U.S. Government) are in a
state of flux. These contracts are awarded pursuant to a competitive bidding
process. In some cases, the Company is the apparent successful bidder for such
a contract but one or more unsuccessful parties have filed protests challenging
the final award of these contracts to the Company. In other cases, another
party is the apparent successful bidder for such a contract and the Company has
filed a protest challenging the final award of a contract. In addition,
substantial portions of the Company's revenue have been historically generated
by several commercial ISD contracts. Such contracts are typically for one year
terms. Although the Company believes that it will retain/acquire contracts to
continue to generate sufficient revenue to maintain the Company in accordance
with past practices, there can be no assurance thereof.
Healthcare Information and Management Opportunity. The Company has announced
plans to expand its traditional information systems business to include
providing demand management information services to HMO's, other group health
organizations, insurers and employees in company health plans (the "Healthcare
Opportunity"). The Company intends to pursue the Healthcare Opportunity by
forming a new subsidiary, transferring significant portions of its traditional
ISD business and assets to such subsidiary; and issuing an equity interest in
such subsidiary in exchange for certain proprietary assets necessary to pursue
the Healthcare Opportunity. The completion of the formation of the subsidiary,
the final negotiation with the other stockholder, the completion of permanent
financing for the subsidiary and the start-up and commencement of operations of
the Healthcare Opportunity will require substantial effort, the recruitment of
management with experience in the demand management information services
industry, and the expenditure of substantial funds. There can be no assurance
that such efforts will come to fruition or that if completed, will result in a
successful operation.
Future Capital Needs; Uncertainty of Additional Funding. In order to complete
the research and development and other activities necessary to commercialize the
Company's BioTech products, to start-up and continue to fund the Healthcare
Opportunity and to fund the balance of the traditional ISD business, additional
financing may be required. The Company's capital requirements depend on
numerous factors, including without limitation the progress of its research and
development programs, the progress of preclinical and clinical testing, the time
and costs involved in obtaining regulatory approvals, the costs of filing,
prosecuting, defending and enforcing any patent claims and other intellectual
property rights, competing technological and market developments, changes in the
Company's existing research relationships, the ability of the Company to
establish collaborative arrangements, the development of commercialization
activities and arrangements, and the purchase of capital equipment. There can
be no assurance that the Company will obtain any or all such necessary funding.
Competition and Technological Change. The information systems industry is
subject to rapid and significant technological change. Competitors of the
Company are numerous and include, among others, major pharmaceutical, chemical,
consumer, and biotechnology companies, specialized firms, universities and other
research institutions. There can be no assurance that the Company's competitors
will not succeed in developing technologies and products that are more effective
than any which are being developed by the Company or that would render the
Company's technology and potential products obsolete and noncompetitive. Many
of these competitors have substantially greater financial and technical
resources and production and
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marketing capabilities than the Company. The Company may seek any required
additional funding through equity offerings, private financings and
collaborative or other arrangements with third parties. There can be no
assurance that additional funds will be available on acceptable terms. If
additional funds are raised by issuing equity securities, further substantial
dilution to existing shareholders may result. If adequate funds are not
available, the Company may be required to delay, scale back or eliminate one or
more of its research and development programs, or to obtain funds through
entering into arrangements with third parties that may require the Company to
relinquish rights to certain of its technologies or potential products that the
Company would not otherwise relinquish.
Government Regulation and Product Approvals. With respect to products developed
by the BioTech unit, research, testing, manufacture, labeling, distribution,
marketing and advertising of products are subject to extensive regulation by
governmental regulatory authorities in the United States and other countries.
The rigorous regulatory approval processes of the U.S. Food and Drug
Administration (FDA) in the United States and of certain foreign regulatory
authorities can take five to ten years or more and require the expenditure of
substantial resources. There can be no assurance that the Company will be able
to obtain the necessary approvals for clinical testing or for the marketing of
products. Moreover, additional government regulations may be established that
could prevent or delay regulatory approval of the Company's products. Delays in
obtaining regulatory approvals could have a material adverse effect on the
Company. Even if regulatory approval of a product is granted, such approval may
include significant limitations on the indicated uses of the product or the
manner in which or conditions under which the product may be marketed. Any
sales of the Company's products outside the United States will be subject to
regulatory requirements governing clinical trials and marketing approval. These
requirements vary widely from country to country and could delay introduction of
the Company's products in some countries. To the Company's knowledge, there is
no current government regulation of the services expected to be provided via the
Healthcare Opportunity. However, there can be no assurance that such regulation
will not be initiated. In such an event, the costs and other requirements of
such regulation could be prohibitive and may adversely affect the Company's
pursuit of the Healthcare Opportunity.
Patents and Proprietary Technology. The Company's success depends, in part, on
its ability to obtain and maintain patent protection for its BioTech products
and methods, both in the United States and in other countries No assurance can
be given that any additional patents will be issued to the Company, that the
protection of any patents that may be issued in the future will be significant,
or that current or future patents will be held valid if subsequently challenged.
Dependence Upon Key Employees. The success of the Company is dependent upon the
efforts of its senior management team, including Gilbert V. Levin, Karen M.
Levin, Richard C. Levin and Jeffrey W. Church. A change in the association of
these individuals or other officers and directors of the Company could adversely
affect the Company if suitable replacement personnel could not be employed. The
success of the Company also depends upon its ability to continue to attract and
retain qualified technical personnel. There is intense competition for
qualified personnel in the areas of the Company's activities, and there can be
no assurance that the Company will be able to continue to attract and retain the
qualified personnel necessary for the development or expansion of its business.
10
<PAGE>
Anti-Takeover Provisions. Certain provisions of the Company's Amended and
Restated Articles of Incorporation, as well as aspects of certain stock options
granted to Gilbert V. Levin and Karen M. Levin, could discourage a third party
from attempting to acquire, or make it more difficult for a third party to
acquire, control of the Company without approval of the Company's Board of
Directors. Such provisions could also limit the price that certain investors
might be willing to pay in the future for shares of the Common Stock. Certain
of such provisions allow the Board of Directors to authorize the issuance of
Preferred Stock with rights superior to those of the Common Stock.
Volatility of Stock Price and Earnings. The stock market has from time to time
experienced significant price and volume fluctuations that may be unrelated to
the operating performance of particular companies. In addition, the market
price of the Common Stock has on occasion been, and may prove to continue to be,
highly volatile. Announcements of technological innovations or new commercial
products by the Company or its competitors, developments or disputes concerning
patent or proprietary rights, publicity regarding actual or potential results
relating to products under development by the Company or its competitors,
regulatory developments in both the United States and foreign countries, sales
of a large number of shares of Common Stock in the market, and economic and
other external factors, as well as period-to-period fluctuations in financial
results, among other factors, may have a significant impact on the market price
of the Common Stock. In addition, the company has experienced substantial
fluctuations in earnings from period to period. There can be no assurances that
this trend will not continue due to the nature of the Company's business.
Potential for Dilution. As of January 21, 1998, "Warrants" to purchase 870,000
shares of Common Stock issued in connection with the Private Placement and
exercisable over the next three years at prices of $4.00 and $4.50 (as may be
adjusted from time to time under certain antidilution provisions) were
outstanding. The shares of Common Stock issuable upon exercise of these
Warrants are being registered pursuant to this Registration Statement. The
Warrants are not registered and may be sold only if registered under the
Securities Act or sold in accordance with an applicable exemption from
registration, such as Rule 144.
As of January 21, 1998, 870,000 shares of Common Stock were reserved
for issuance upon exercise of the Warrants. At December 31, 1997, there were
8,829,190 shares of Common Stock outstanding. Of these outstanding shares,
8,079,190 were freely tradeable without restriction under the Securities Act
unless held by affiliates.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by the
Selling Shareholders. If any of the Warrants are exercised, the Company will
receive the proceeds from such exercise and intends to use such proceeds for
general working capital purposes.
SELLING SHAREHOLDERS
The Shares were issued in one or more private placement transactions
to the Selling Shareholders. The following table sets forth certain information
with respect to the Selling
11
<PAGE>
Shareholders as of January 21, 1998, as follows: (i) the name and position or
other relationship with the Company within the past three years of each Selling
Shareholder; (ii) the number of the Company's outstanding shares of Common Stock
beneficially owned by each Selling Shareholder (including shares obtainable
under options exercisable within sixty (60) days of such date) prior to the
offering hereby; (iii) the number of shares of Common Stock being offered
hereby; and (iv) the number of and percentage of the Company's outstanding
shares of Common Stock to be beneficially owned by each Selling Shareholder
after completion of the sale of Common Stock being offered hereby. There is no
assurance that any of the Selling Shareholders will sell any or all of the
Shares offered hereby.
Shares
Beneficially Shares Beneficially Owned
Owned at Number of After Offering
Name of Selling January 21, Shares Being --------------------------
Shareholder 1998 (1) (2) Offered Number Percent
- --------------------------------------------------------------------------------
RCG International 881,999 1,500,000 0 0
Investors, LDC
Wharton Capital 0 60,000 0 0
Partners, Ltd.
Francis F. Bodkin, Jr. 0 30,000 0 0
Mark Germain 0 20,100 0 0
Sanford Zweifach 0 9,900 0 0
TOTAL 881,999 1,620,000 0 0
(1) Except as otherwise noted, the information contained in the table
above reflects "beneficial" ownership of the Common Stock within the
meaning of Rule 13d-3 under the Exchange Act. On December 31, 1997,
the Company had 8,829,190 shares of Common Stock outstanding.
(2) The number of shares set forth in the table represents an estimate of
the number of shares of Common Stock to be offered by the Selling
Shareholders. The actual number of shares of Common Stock issuable
upon exercise of the Warrants is indeterminate, is subject to
adjustment and could be materially less or more than such estimated
number depending on factors which cannot be predicted by the Company
at this time. The actual number of shares of Common Stock
offered hereby, and included in the Registration Statement of which
this Prospectus is a part, includes such additional number of shares
of Common Stock as may be issued or issuable upon exercise of the
Warrants by reason of the adjustment mechanisms described therein, or
by reason of any stock split, stock dividend or similar transaction
involving the Common Stock, in order to prevent dilution, in
accordance with Rule 416 under the Securities Act. Pursuant to the
terms of the Warrants, the Warrants
12
<PAGE>
are exercisable by any holder only to the extent that the number of
shares of Common Stock thereby issuable, together with the number of
shares of Common Stock owned by such holder and its affiliates (but
not including shares of Common Stock underlying any unexercised
portion of the Warrants) would not exceed 9.9% of the then outstanding
Common Stock as determined in accordance with Section 13(a) of the
Exchange Act. Accordingly, the number of shares of Common Stock set
forth in the table for this Selling Shareholder exceeds the
number of shares of Common Stock that this Selling Shareholder could
own beneficially at any given time through its ownership of the
Warrants. In that regard, beneficial ownership of this Selling
Shareholder set forth in the table is not determined in accordance
with Rule 13d-3 under the Exchange Act.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 18,000,000 shares of Common
Stock, $.005 par value, and 2,000,000 shares of Preferred Stock, $.01 par value.
As of December 31, 1997, there were 8,829,190 shares of Common Stock outstanding
and no shares of Preferred Stock outstanding.
The holders of Common Stock of the Company are entitled to receive pro rata
dividends when and as declared by the Board of Directors in its discretion out
of funds legally available therefor. In the event of the dissolution of the
Company, whether voluntary or involuntary, the holders of Common Stock are
entitled to share ratably in the assets of the Company legally available for
distribution to its shareholders after the payment of the liquidation preference
of any outstanding Preferred Stock. The holders of Common Stock have no
preemptive, subscription, conversion or redemption rights, and are not subject
to further calls or assessments by the Company. The Common Stock currently
outstanding is, and the Common Stock issued in this offering will be, validly
issued, fully paid and nonassessable.
Except as otherwise provided in the charter of the Company or required by law,
the holders of shares of Common Stock are entitled to one vote per share on all
matters to be voted on by shareholders and do not have the right of cumulative
voting in connection with elections for directors, which means the holders of
more than half the outstanding shares of Common Stock can elect all of the
directors of the Company.
The Company is also authorized to issue 2,000,000 shares of Preferred Stock.
The Company's Board of Directors is authorized to issue the Preferred Stock in
one or more series and, with respect to each series, to determine the
preferences and rights and the qualifications, limitations, or restrictions
thereof, including the dividend rights, conversion rights, voting rights,
redemption rights and terms, liquidation preferences, sinking fund provisions,
the number of shares constituting each series and the designation of such
series. The Board of Directors could, without shareholder approval, issue
Preferred Stock with voting and other rights that could adversely affect the
voting rights of the holders of the Common Stock.
One of the effects of the Preferred Stock may be to enable the Board of
Directors to render more difficult or to discourage an attempt to obtain control
of the Company by means of a merger, tender offer, proxy contest or otherwise,
and thereby to protect the continuity of the Company's management.
13
<PAGE>
PLAN OF DISTRIBUTION
The Shares covered hereby may be offered and sold from time to time by the
Selling Shareholders for their respective pledgees, donees, transferees or other
successors in interest. The Selling Shareholders will act independently of the
Company in making decisions concerning sales or other dispositions of any
Shares, and will act independently of the Company in making decisions with
respect to the timing, manner and size of each sale. Such sales may be made in
one or more transactions (which may involve block transactions) on the NASDAQ
National Market System or otherwise, at prices and on terms then prevailing or
at prices related to the then market price, in negotiated transactions, through
the writing of options on the Shares, in short sales or any combination thereof
In addition, any Shares offered hereby which qualify for sale pursuant to Rule
144 under the Securities Act or any other exemption may be sold under Rule 144
or an other exemption rather than pursuant to this Prospectus.
The Shares may also be sold by one or more of the following methods: (a) a
block trade in which the broker-dealer engaged by the Selling Shareholders will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by the
broker-dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) underwritten
public offerings. In effecting sales, broker-dealers engaged by the Selling
Shareholders may arrange for other broker-dealers to participate.
Broker-dealers may receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated.
In offering their Shares, the Selling Shareholders and any broker-dealers who
execute sales for the Selling Shareholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Shareholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions.
This offering will terminate as to each Selling Shareholder on the earlier of
(a) the date on which such Selling Shareholder's shares may be resold without
volume restrictions under the Securities Act; or (b) the date on which all
Shares offered hereby have been sold by the Selling Shareholders. There can be
no assurance that any of the Selling Shareholders will sell any or all of the
shares of Common Stock offered hereby.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby will
be passed upon for the Company by Baxter, Baker, Sidle & Conn, P.A., 120 E.
Baltimore Street, Suite 2100, Baltimore, Maryland 21202.
EXPERTS
The financial statements of Biospherics Incorporated appearing in Biospherics
Incorporated's Annual Report on Form 10-KSB as of and for the year ended
December 31, 1996, have been
14
<PAGE>
audited by Coopers & Lybrand L.L.P., independent accountants, as set forth in
their report thereon incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
Any financial statements and schedules hereafter incorporated by reference in
the registration statement of which this prospectus is a part that have been
audited and are the subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon the authority
of such firms as experts in accounting and auditing to the extent covered by
consents filed with the Commission.
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof or that there has been no change in the affairs of the
Company since such date.
TABLE OF CONTENTS
Page
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 4
Forward Looking Statements................................................ 5
The Company............................................................... 5
Risk Factors.............................................................. 8
Use of Proceeds........................................................... 11
Selling Shareholders...................................................... 11
Description of Capital Stock.............................................. 13
Plan of Distribution...................................................... 14
Legal Matters............................................................. 14
Experts................................................................... 14
1,620,000 Shares of
Common Stock
January 26, 1998
PROSPECTUS
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses to be paid in connection
with the sale of the shares of Common Stock being registered hereby, all of
which will be paid by the Registrant. All amounts are estimates except for the
Securities and Exchange Commission registration fee.
Securities and Exchange Commission registration fee......................$ 2,121
NASDAQ National Market System filing fee................................. 15,000
Accounting fees and expenses............................................. 1,500
Legal fees and expenses.................................................. 10,000
Printing and miscellaneous............................................... 1,000
-------
Total....................................................................$29,621
-------
-------
ITEM 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits the Registrant to
indemnify directors, officers, employees and agents of the Registrant against
actual and reasonable expenses (including attorneys' fees) incurred by them in
connection with any action, suit or proceeding brought against them by reason of
their status or service as a director, officer, employee or agent by or on
behalf of the Registrant, and against expenses (including attorneys' fees),
judgments, fines and settlements actually and reasonably incurred in connection
with any such action, suit or proceeding, if (i) he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Registrant, and (ii) in the case of a criminal proceeding,
he or she had no reasonable cause to believe his or her conduct was unlawful.
Except as ordered by a court, no indemnification shall be made in connection
with any proceeding brought by or in the right of the corporation where the
person involved is adjudged to be liable to the Registrant.
Article IV of the Registrant's By-Laws provides that the Registrant shall, to
the fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify each person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was, or has agreed to
become a director or officer of the Registrant, or is or was serving, or has
agreed to serve at the request of the Registrant as a director, officer or
trustee of, or in a similar capacity with, another corporation, partnership,
joint venture, trust or other enterprise. The indemnification provided for in
Article IV is expressly not exclusive of any of the rights to which those
seeking
II-1
<PAGE>
indemnification may be entitled under any law, agreement or vote of stockholders
or disinterested directors or otherwise, and shall inure to the benefit of the
heirs, executors and administrators of such persons.
Article TENTH of the Registrant's Restated Certificate of Incorporation provides
that a director shall not be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent that elimination or limitation of liability is not
permitted under the Delaware General Corporation Law as in effect when such
liability is determined.
The Registrant also maintains a Directors and Officers Liability Policy.
ITEM 16. Exhibits.
The following exhibits are filed herewith or incorporated by reference herein:
Exhibit
Number Exhibit Title
4.1 Amended and Restated Articles of Incorporation of the Company.
(Incorporated by reference)
4.2 Bylaws of the Company. (Incorporated by reference)
4.3 Specimen Common Stock Certificate. (Incorporated by reference)
4.4 Securities Purchase Agreement dated as of December 12, 1997, by and
between the Company and RCG International Investors,
LDC (Incorporated by reference)
5.1 Opinion of Baxter, Baker, Sidle & Conn, P.A.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Baxter, Baker, Sidle & Conn, P.A. (included in Exhibit 5.1)
24.1 Power of Attorney (See signature page).
ITEM 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act 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 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 and will be governed by the final adjudication of such issue.
II-2
<PAGE>
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; (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 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 (i)
and (ii) do not apply if the information required to be included in a
post-effective amendment thereby is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed a new
registration statement relating to the securities offered therein, and
the offering of the 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 that remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this 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.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Beltsville, State of Maryland, on January 26, 1998.
BIOSPHERICS INCORPORATED
By: /s/ Gilbert V. Levin
----------------------------
Gilbert V. Levin,
President and Chief Executive Officer
II-3
<PAGE>
Baxter, Baker, Sidle & Conn, P.A.
Attorneys at Law
120 E. Baltimore Street, Suite 2100
Baltimore, Maryland 21202-1643
James E. Baker, Jr.
Direct Line (410) 385-8122 Telephone (410) 230-3800
e-mail: [email protected] Facsimile (410) 230-3801
EXHIBIT 5.1
January 21, 1998
Biospherics Incorporated
12051 Indian Creek Court
Beltsville, MD 20705
Ladies and Gentlemen:
We have acted as counsel to Biospherics Incorporated, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, of 1,620,000 shares of Common Stock of the Company,
$.005 par value per share, pursuant to a Registration Statement on Form S-3 to
be filed with the Securities and Exchange Commission (the "Registration
Statement").
In rendering the opinions contained herein, we have examined originals
or photostatic or certified copies of all certificates, documents, agreements
and other instruments as we have deemed appropriate.
Based upon the foregoing, we are of the opinion that each of the
1,620,000 shares of the Common Stock of the Company covered by the Registration
Statement, when issued by the Company in accordance with the Securities Purchase
Agreement and accompanying Stock Purchase Warrants dated as of December 12,
1997, and for not less than the par value thereof, will be duly authorized,
validly issued, fully paid and nonassessable.
<PAGE>
Biospherics Incorporated
January 21, 1998
Page 2
This opinion is furnished by us solely for the benefit of the
Company in connection with the filing of the Registration Statement. We
consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Baxter, Baker, Sidle & Conn, P.A.
By: /s/ James E. Baker, Jr.
------------------------------
James E. Baker, Jr., Vice President
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated March 7, 1997, on our audits of the financial
statements of Biospherics Incorporated as of December 31, 1996 and for each of
the two years in the period ended December 31, 1996, appearing in the
Biospherics Incorporated Annual Report on Form 10-KSB filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1934. We also consent
to the references to our firm under the caption "Experts."
Coopers & Lybrand L.L.P.
Baltimore, Maryland
January 26, 1998
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Gilbert V. Levin and M. Karen Levin and each of
them, his or her true and lawful attorneys-in-fact and agents with full power of
substitution, for him or her and in his or her name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-3, and to file the same
with all exhibits thereto and all 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 and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all of said attorneys-in-fact and
agents, or any of them, or his or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Name Title Date
- --------------------------------------------------------------------------------
/s/ Gilbert V. Levin President, Chief Executive
- ------------------------- Officer and Director January 22, 1998
Gilbert V. Levin
/s/ Jeffrey W. Church Executive Vice President,
- ------------------------- Principal Financial Officer,
Jeffrey W. Church Principal Accounting Officer
and Chief Financial Officer January 22, 1998
Directors:
/s/ M. Karen Levin Director January 22, 1998
- -------------------------
M. Karen Levin
/s/ Dr. David A. Blake Director January 16, 1998
- --------------------------
Dr. David A. Blake
/s/ Dr. Lionel V. Baldwin Director January 16, 1998
- --------------------------
Dr. Lionel V. Baldwin
/s/ A. Bruce Cleveland Director January 21, 1998
- --------------------------
A. Bruce Cleveland
<PAGE>
/s/ Dr. Rita R. Colwell Director January 14, 1998
- ---------------------------
Dr. Rita R. Colwell
/s/ George S. Jenkins Director January 15, 1998
- ---------------------------
George S. Jenkins
/s/ Dr. Anne S. MacLeod Director January 21, 1998
- ---------------------------
Dr. Anne S. MacLeod
The Company has agreed to pay for all costs and expenses incident to the
issuance, offer, sale and delivery of the Shares, including, but not limited to,
all expenses and fees of preparing, filing and printing the Registration
Statement and Prospectus and related exhibits, amendments and supplements
thereto and mailing of such items. The Company will not pay selling commissions
and expenses associated with any such sales by the Shareholders. The Company
has agreed to indemnify the Shareholders against civil liabilities under the
Securities Act of 1933.
