As filed with the Securities and Exchange Commission
on July 29, 1994
Registration Statement No. 33-54407
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 1 TO
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
NATIONAL PATENT DEVELOPMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-1926739
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
9 West 57th Street
Suite 4170
New York, New York 10019
(212) 826-8500
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
Lawrence M. Gordon, Esquire
9 West 57th Street
Suite 4170
New York, New York 10019
(212) 230-9513
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
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
Subject to Completion, dated July 29, 1994
PROSPECTUS
NATIONAL PATENT DEVELOPMENT CORPORATION
7,498,413 SHARES OF COMMON STOCK
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PAR VALUE $.01 PER SHARE
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INVESTORS SHOULD CONSIDER THE INFORMATION UNDER "RISK
FACTORS" IN CONNECTION WITH THEIR INVESTMENT DECISION.
This Prospectus relates to an aggregate of 7,498,413
shares of common stock, par value $.01 per share (the "Common
Stock"), of National Patent Development Corporation, a Delaware
corporation (the "Company"). Of the 7,498,413 shares offered
hereby, 4,000,000 are being offered by the Company and 3,498,413
shares of Common Stock are being offered by certain selling
securities holders from time to time (the "Selling Securities
Holders"). See "Selling Securities Holders." On July 25, 1994
the closing price of the Common Stock on the American Stock
Exchange, Inc. ("AMEX")was $2 15/16.
To the extent required, the number of shares being sold
by the Company, the purchase price, the public offering price,
the proceeds to the Company and the other terms of the offering
of the Common Stock by the Company will be set forth in a
Prospectus Supplement to be delivered at the time of any such
offering.
The Common Stock to be sold by the Company may be sold
directly by the Company or through agents, underwriters or
dealers designated from time to time. If any agents of the
Company or any underwriters are involved in the sale of the
Common Stock by the Company in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and
any applicable discounts or commissions with respect to such
Common Stock will also be set forth in a Prospectus Supplement,
to the extent required. See "Plan of Distribution".
It is presently anticipated that all of the above
referred to shares of Common Stock will be offered from time to
time by the Selling Shareholders in one or more transactions on
the American Stock Exchange, Inc. or the Pacific Stock Exchange,
Inc., in privately negotiated transactions or otherwise, at fixed
prices that may be changed, at market prices prevailing at the
time of the sale, at prices related to such prevailing market
prices, or at negotiated prices. It is anticipated that broker-
dealers participating in sales of the Common Stock will receive
ordinary and customary brokerage commissions. See "Plan of
Distribution".
The Company will receive none of the proceeds from the
sale of the shares of Common Stock by the Selling Securities
Holders but will receive proceeds from the sale of shares offered
by the Company, see "Use of Proceeds."
All expenses incurred by the Company in connection with
the preparation of this Prospectus, estimated to be $10,648, are
being borne by the Company.
Proceeds
Underwriting to Selling
Price to Discounts and Proceeds Securities
Public Commissions to Company Holders
Per Share $2 15/16 - $11,750,000 $10,276,588
Total
The date of this Prospectus is July 29, 1994.
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CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum Amount of
Title of each Class Amount offering aggregate registra-
of securities to be to be price per offering tion fee
registered registered unit(1) price(2) (2)
Common Stock, 7,498,413(2) $2 15/16 $22,026,588 $5,077.23
$.01 par value
per share
Total 7,498,413 $22,026,588 $5,077.23
(1) The proposed maximum offering price per share is $2
15/16 and is based on the last sales price of the Common Stock on
the American Stock Exchange, Inc. ("AMEX") on July 25, 1994.
(2) In the initial filing of the Registration
Statement, the Company registered 2,486,000 shares of Common
Stock. The registration fee being submitted with this Amendment
No. 1 is for the additional 5,012,413 shares of Common Stock
registered hereby.
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 1993, 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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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN OR PACIFIC STOCK
EXCHANGES OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
This Prospectus omits certain of the information
contained in the Registration Statement relating to the Common
Stock which is on file with the Commission. 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 Commission. Such Registration Statement,
reports, proxy statements, and other information can be inspected
and copied at the public reference facilities of the Commission
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C., and
at its regional offices located at 75 Park Place, New York, New
York; and 5757 Wilshire Boulevard, Los Angeles, California.
Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. Such material
can also be inspected at the American Stock Exchange, Inc., 86
Trinity Place, New York, New York, and at the Pacific Stock
Exchange, Inc., 301 Pine Street, San Francisco, California, on
which Exchanges the Company's Common Stock is listed.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission are
incorporated by reference into this Prospectus:
1. Annual Report on Form l0-K for the year ended December
31, 1993.
2. Annual Report on Form 10-K/A for the year ended December
31, 1993.
3. The Company's Proxy Statement for the Annual Meeting of
the Stockholders on June 8, 1994.
4. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994.
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All documents subsequently filed with the Commission by the
company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the
termination of the offering, shall be deemed to be incorporated
by reference into this Prospectus from the date of filing of such
documents.
Any person receiving a copy of this Prospectus may obtain
without charge, upon written or oral request, a copy of any of
the documents incorporated by reference herein, except for
exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the documents which this
Prospectus incorporates). Requests should be directed to:
Corporate Secretary, National Patent Development Corporation, 9
West 57th Street, New York, New York 10019, (212) 826-8500.
RISK FACTORS
Investors should consider, among other items, the
following factors in connection with a decision to purchase the
Common Stock offered hereby.
1. Liquidity: Financial Condition. The Company believes
that it has sufficient cash and cash equivalents and borrowing
availability under existing and potential lines of credit to
satisfy its cash requirements until the first scheduled maturity
of its Swiss Franc denominated indebtedness on March 1, 1995.
However as of July 28, 1994, in order for the Company to meet its
long-term cash needs, which include the repayment of $9,605,000
of Swiss Franc denominated indebtedness scheduled to mature in
1995 and $4,169,000 of Swiss Franc denominated indebtedness which
is scheduled to mature in 1996, based upon an exchange rate of
approximately SFr. 1.35 per US $1.00, the Company must obtain
additional funds. The Company has reduced and is continuing to
reduce its long-term debt through the issuance of equity
securities in exchange for long-term debt (including the shares
of Common Stock issued in the Exchange Offer), and is also
exploring new credit arrangements on an ongoing basis. However,
there is no assurance that the Company will be able to obtain any
new credit arrangements.
At March 31, 1994, the Company and its majority-owned
subsidiaries held cash and cash equivalents totaling $9,848,000.
Of these amounts, approximately $7,748,000 is held by the
Company and is available for the general corporate purposes of
the Company.
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2. Recent Historical Operating Losses, Retained Earnings
Deficit. Since 1987, the Company has experienced losses before
income taxes, discontinued operations and extraordinary items.
These losses were the result of operating losses at certain of
its subsidiaries, which were not wholly offset by operating
profits from certain of its other subsidiaries. The Company's
current strategy is to consolidate certain related operating
businesses and to improve their operating results, while
continuing to make investments in new ventures or make selected
divestitures based on market conditions.
For the quarter ended March 31, 1994, the Company's loss
from operations before income taxes and extraordinary items was
$2,394,000, as compared to a loss of $2,939,000 for the quarter
ended March 31, 1993. For the year ended December 31, 1993, the
Company's loss from operations before income taxes and
extraordinary items was $8,371,000, as compared to a loss of
$13,178,000 for the year ended December 31, 1992. As of March
31, 1994, the Company had stockholders' equity of $66,158,000 and
a deficit of $41,488,000. Losses in future years may adversely
affect the Company's ability to service its debt.
3. Ratio of Earnings to Fixed Charges. The ratio of
earnings to fixed charges represents the number of times that
fixed charges were covered by income before income taxes,
discontinued operations and extraordinary items, as adjusted by
such fixed charges. For the three months ended March 31, 1994
and the year ended December 31, 1993, the Company had a
deficiency in the coverage of fixed charges to earnings before
fixed charges of $2,326,000 and $10,747,000 respectively.
4. Holding Company; Dependence on Subsidiaries. The
Company is primarily a holding company, which is a legal entity
separate and distinct from its various operating subsidiaries.
As a holding company, the Company is dependent upon management
fees, dividends and other payments or advances from operating
subsidiaries as its principal source of cash to service
outstanding debt. The ability of the Company to obtain cash from
an operating subsidiary depends upon, among other factors, the
operating results of the subsidiary, restrictions on payments to
the Company imposed by creditors of the subsidiary, restrictions
on payments to the Company imposed by other agreements governing
the subsidiary and the degree of dilution of dividend payments
resulting from public ownership of equity securities of the
subsidiary.
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As of March 31, 1994, there is currently at the holding
company level approximately $7,748,000 of cash and cash
equivalents. GTS Duratek, Inc. ("Duratek") under its Revolving
Line of Credit, is prohibited from making any payments to the
Company. GPS Technologies, Inc. ("GPS"), under the terms of its
Amended and Restated Revolving Credit and Term Loan and Security
Agreement, may only pay the Company an amount equal to 80% of the
amount GPS would have paid in federal income taxes if it filed
its federal income tax return on a stand-alone basis. However,
GPS may be prohibited from distributing approximately $1,200,000
of management fees and tax sharing payments to the Company in
1994 if GPS were to be in violation of certain covenants in its
bank agreements.
The rights of the Company and its creditors to
participate in the assets of any of the Company's subsidiaries
upon bankruptcy or liquidation of a subsidiary are subject to the
prior claims of the subsidiary's creditors except to the extent
the Company may itself be a creditor with recognized claims
against the subsidiary; however, the Company's claims may be
subordinate to the claims of any secured creditors of the
subsidiary. See "The Company."
5. Currency Fluctuations. On March 31, 1994, the value
of the Swiss Franc to the U.S. dollar was approximately 1.412 to
1. At March 31, 1994, the Company had an aggregate of SFr.
26,318,000 of Swiss Franc denominated indebtedness outstanding,
of which SFR. 23,823,000 represents principal amount outstanding
and SFr. 2,495,000 represents interest accrued thereon. Foreign
currency valuation fluctuations may adversely affect the results
of operations and financial condition of the Company. In order
to protect itself against foreign currency valuation
fluctuations, the Company has at times swapped or hedged a
portion of its obligations denominated in Swiss Francs; however,
at March 31, 1994, the Company had not swapped or hedged any of
its Swiss Franc obligations. If the value of the Swiss Franc to
the U.S. dollar increases, the Company will recognize transaction
losses on its Swiss Franc obligations. There can be no assurance
that the Company will be able in the future to swap or hedge
obligations denominated in foreign currencies at prices
acceptable to the Company, or at all. The Company will review
its policy as to hedging on a continuing basis.
THE COMPANY
The Company is primarily a holding company, which is
a legal entity separate and distinct from its various operating
subsidiaries. The Company's operations consist of four operating
business segments: Physical Science, Distribution, Optical
Plastics and Electronics.
8
Physical Science
The Company's Physical Science Group consists of (i)
GPS Technologies, Inc. ("GPS"), an approximately 92% owned
subsidiary, and (ii) GTS Duratek, Inc. ("Duratek"), an
approximately 66% owned subsidiary. For a description of a
transaction between GPS and General Physics Corporation, see
"Recent Developments".
GPS provides a wide range of management and
technical training as well as specialized engineering services to
various commercial industries and the United States government.
Principal clients of GPS include electric utilities, process
industries, manufacturing plants, Federal agencies and the
aerospace industries. In addition, the Company currently owns
approximately a 28% investment in General Physics Corporation
("General Physics"), which provides a wide range of personnel
training and technical support services to the domestic
commercial nuclear power industry and the United States
Department of Energy and Defense, as well as environmental
engineering, training and support services to governmental and
commercial clients.
Duratek's operations consist of two operating
groups: (1) "Environmental Services" engaged in cleanup of water
and other liquids containing radioactive and/or hazardous (mixed
waste) contaminants and minimum additive vitrification for long-
term stabilization of such waste and (2) "Consulting and Staff
Augmentation" services. Duratek provides services for various
utility, industry, government and commercial clients.
Distribution
The Company's Distribution Group, incorporated under
the name Five Star Group, Inc. ("Five Star"), is engaged in the
wholesale distribution of home decorating, hardware and
finishing products.
Healthcare
The Company's investment in the Health Care industry
consists of the Company's ownership of approximately 36% of the
outstanding shares of common stock of Interferon Sciences, Inc.
("ISI"). ISI is a bipharmaceutical company engaged in the
manufacture and sale of ALFERON N Injection, the only product
approved by the Food and Drug Administration that is based upon a
natural source, multi-species alpha interferon. ISI also is
developing its existing injectable, topical and/or oral
formulations of its natural alpha interferon for the potential
treatment of HIV, hepatitis C, hepatitis B, multiple sclerosis,
cancers and other indications.
9
Additionally, the Company owns approximately 4.9% of
the outstanding shares of common stock of American White Cross,
Inc. (formerly, NPM Healthcare Products, Inc.) ("White Cross").
White Cross is a leading manufacturer and marketer of private
label adhesive and cotton-based health and personal care
products.
Optical Plastics
The Company's Optical Plastics Group, through its
wholly owned subsidiary MXL Industries, Inc., manufactures molded
and coated optical products, such as shields and face masks and
non-optical plastic products.
Electronics
The Company's Electronics Group, through its
subsidiary Eastern Electronics Mfg. Corporation, is engaged in
contract manufacturing, such as printed circuit board assembly
for the electronics industry.
The Company, a Delaware corporation, was
incorporated in 1959, and its headquarters are located at 9 West
57th Street, New York, New York 10019. Its telephone number is
(212) 826-8500.
RECENT DEVELOPMENTS
Exchange Offer and Private Purchases
On July 11, 1994 (the "Expiration Date"), the
Company completed an Exchange Offer (the "Exchange Offer") for
its Swiss denominated 8% Bonds due March 1, 1995, 6% Convertible
Bonds due March 7, 1995, 5 3/4% Convertible Bonds due May 9,
1995, 5 5/8% Convertible Bonds due March 18, 1996 (collectively,
the "Old Swiss Franc Bonds") and 7% Dual Currency Bonds due March
18, 1996 (the "Old U.S. Dollar Bonds") and (collectively with the
Old Swiss Franc Bonds, the "Old Bonds"). The Offer was co-
managed by Banque Scandinave en Suisse and Banque Leu AG.
On the Expiration Date, the Company accepted an
aggregate of SFr. 2,569,000 principal amount of its Swiss
denominated bonds and $1,377,000 of its 7% Dual Currency
Convertible Bonds. Under the terms of the Exchange Offer, the
Company will issue 1,224,658 shares of Common Stock in exchange
for the Old Bonds tendered in the Exchange Offer, including
accrued interest thereon.
10
On July 27, 1994, the Company entered into (i) an
agreement with Hermes Imperial Investments L.P., pursuant to
which it repurchased SFr. 1,164,000 of the 8% Bonds due March 1,
1995, SFr. 310,000 of the 5 3/4% Convertible Bonds due May 9,
1995, SFr. 1,450,000 of the 6% Convertible Bonds due March 7,
1995 and SFr. 1,695,000 of the 5 5/8% Convertible Bonds due March
18, 1996 in exchange for 1,402,760 shares of Common Stock and
(ii) an agreement with Alexandra Global Investment Fund 1, Ltd.
pursuant to which it repurchased SFr. 576,000 of the 8% Bonds due
March 1, 1995, SFr. 100,000 of the 5 3/4% Convertible Bonds due
May 9, 1995, SFr. 740,000 of the 6% Convertible Bonds due March
7, 1995 and SFr. 480,000 of the 5 5/8% Convertible Bonds due
March 18, 1996 and U.S. $45,000 of the 7% Dual Currency
Convertible Bonds due March 18, 1996 in exchange for 595,046
shares of Common Stock (collectively the "Private Purchases").
As of July 28, 1994, there were outstanding SFr.
4,782,000 of the 8% Bonds due March 1, 1995, SFr. 5,485,000 of
the 6% Convertible Bonds due March 7, 1995, SFr. 2,695,000 of the
5 3/4% Convertible Bonds due May 9, 1995, SFr. 2,245,000 of the 5
5/8% Convertible Bonds due March 18, 1996 and $2,505,000 of the
7% Dual Currency Bonds due March 18, 1996.
As a result of the Exchange Offer and the Private
Purchases, the Company increased its shareholders' equity by
approximately $9,100,000 and reduced its interest expense by
approximately $750,000 per year.
American Drug Company
On February 2, 1994, the Board of Directors of the
Company approved a dividend of approximately 46% of the common
stock of American Drug Company ("ADC") to holders of record as of
the close of business on August 4, 1994 of the Common Stock and
Class B Capital Stock. ADC is currently a wholly-owned
subsidiary of the Company which will focus on developing markets
for American-made generic pharmaceutical and health care products
in Russia and the other states of the Commonwealth of Independent
States and on developing other business opportunities. For every
four outstanding shares of Common Stock or Class B Capital Stock
owned as of the Record Date, a shareholder will receive one share
of ADC common stock, plus one warrant to purchase one share of
ADC common stock, at a exercise price per share of $1.00.
Following the distribution, the Company will continue to be a
significant investor in ADC through its ownership of
approximately 54.1% of the outstanding common stock of ADC,
without accounting for outstanding options and warrants.
11
In July 1994, the Company agreed to sell to NPD
Trading (USA), Inc., a wholly-owned subsidiary of ADC, an
aggregate of $2.5 million of common stock, to be registered, of
the Company, GTS Duratek, Inc. ("Duratek") or Interferon
Sciences, Inc. ("ISI") (or a combination thereof, to be
determined in the Company's discretion), which common stock the
Company agreed to register, at its own expense, and deliver to
ADC within a 24 month period commencing three months from the
Effective Date of the Distribution, as requested by ADC. NPD
Trading will purchase these equity securities from time to time
by issuing a note to the Company (the "Note"). Borrowings under
the Note will be made by NPD Trading as it purchases the
securities, and principal and accrued interest will become due on
the date which is five years from the Effective Date of the
Distribution. The securities will be purchased by NPD Trading at
their fair market value (as determined by the closing price of
the applicable issue on the securities exchange upon which it is
then listed on the business day immediately preceding each
purchase thereof).
In addition, the Company has agreed to advance up to
$250,000 in cash to NPD Trading, if needed, for a six month
period from the Effective Date, for working capital purposes (the
"Short-Term Loan"). The amount of any such advances outstanding
pursuant to the Short-Term Loan, which bears interest at the
prime rate, will be payable by ADC on or before the date which is
12 months from the Effective Date. The Company also has agreed,
in the event that it is unable to effect the registration of the
securities described above within three months from the Effective
Date to provide funds on the same terms as the Short-Term Loan,
if needed, in an amount sufficient to support the working capital
needs of the Company until such time as the shares are
registered.
Following the Distribution, the Company will have a
continuing relationship with ADC as a result of (i) the
Management Services Agreement between the Company and ADC
relating to professional services and employee benefit
administration, (ii) the Stock Purchase and Loan Agreement
between the Company, NPD Trading (USA), Inc. ("NPD Trading") and,
ADC, relating to the purchase by NPD Trading of certain shares of
common stock of the Company, Duratek, and/or ISI, and the loan by
the Company to NPD Trading in connection therewith and (iii) the
Company's continuing majority ownership of Common Stock. In
addition, Martin M. Pollak, Executive Vice President, Treasurer
and a director of the Company, is President, Chief Executive
Officer and a director of ADC; Jerome I. Feldman, President,
Chief Executive Officer and a director of the Company, is
Chairman of the Board of, and a consultant to, ADC; and Scott N.
Greenberg, Chief Financial Officer and a director of the Company,
is Chief Financial Officer and a director of ADC.
12
Interferon Sciences, Inc.
On May 13, 1994, ISI filed a registration statement with the
Commission relating to a proposed public offering of 3,000,000
shares of its common stock (with an additional 450,000 shares of
its common stock subject to an over-allotment option). D. Blech
& Company, Incorporated is the underwriter of the offering. On
July 1, 1994, ISI filed an amendment with the Commission which
increased the shares in the public offering to 4,000,000 shares
of its common stock (with an additional 600,000 shares of its
common stock subject to an over-allotment option).
General Physics Corporation
On April 7, 1994, General Physics entered into an agreement
with GPS and the Company to acquire substantially all of the
operating assets of GPS and certain of its subsidiaries. General
Physics agreed to pay GPS a purchase price with a current present
value of approximately $36 million. The purchase price will be
payable to GPS as follows: $10 million in cash; 3.5 million
shares of General Physics common stock valued at approximately
$13,500,000 (based upon the price per share of General Physics
common stock prior to the announcement of the transaction which
was $3.875); warrants to acquire 1,000,000 shares of General
Physics common stock at $6.00 per share valued at approximately
$1,300,000; warrants to acquire up to 475,644 additional shares
of General Physics common stock at $7.00 per share valued at
approximately $500,000; and 6% Senior Subordinated Debentures due
2004 (the "Debentures"), in the aggregate principal amount of
$15,000,000, valued at approximately $10,700,000. The values
assigned to each component of consideration were based upon (i)
discussions with the independent investment banker to the
Independent Committee of General Physics and the investment
banker to GPS and (ii) negotiations between the Independent
Committee of General Physics and the Board of Directors of GPS.
Portions of the cash and stock consideration of the purchase
price will be (a) used to repay outstanding bank debt of GPS
which at March 31, 1994 was $6,350,000 and long-term debt of GPS
which at March 31, 1994 was $8,975,000 to be repaid to the
Company and (b) held in escrow.
The transaction is contingent upon the occurrence of certain
events, including, without limitation, the approval of the
transaction by the stockholders of General Physics and GPS. The
transaction is anticipated to close as soon as practicable in the
second half of 1994, if all necessary approvals are obtained and
conditions satisfied. The Company anticipates that, if the
aforementioned transaction is consummated, it will own
approximately 52% of the outstanding common stock of General
Physics, and if the Company were to exercise all of its warrants,
it would own approximately 58% of the outstanding common stock of
General Physics.
13
MARKET PRICES OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock, $.01 par value, is
traded on the American Stock Exchange, Inc. and the Pacific Stock
Exchange, Inc. The following tables present its high and low
closing market prices during the periods indicated as reported by
the American Stock Exchange, Inc.
Quarter High Low
1994 First 4 7/8 3 7/8
Second 3 15/16 2 3/4
1993 First 3 5/8 2 1/2
Second 4 1/4 2 1/2
Third 3 3/4 2 7/8
Fourth 5 3/4 3 7/16
1992 First 5 5/8 4 1/8
Second 4 5/8 3 3/8
Third 3 3/4 2 13/16
Fourth 3 1/4 2 1/16
On July 25, 1994, the closing price of the Common
Stock on the American Stock Exchange was $2 15/16.
In March 1989, the Company decided to discontinue
payment of its quarterly dividend because the Board of Directors
believed that the resources available for the quarterly dividend
would be better invested in operations and the reduction of long-
term debt.
USE OF PROCEEDS
The Company will receive none of the proceeds from
the sale of the Common Stock offered by the Selling Securities
Holders. The Company anticipates that it will primarily use the
shares of Common Stock offered by the Company to (i) fulfill its
funding commitment to ADC as described in "Recent Developments -
American Drug Company," and (ii) retire a portion of its 8% Bonds
due March 1, 1995, 6% Convertible Bonds due March 7, 1995, 5 3/4%
Convertible Bonds due May 9, 1995, 5 5/8% Convertible Bonds due
March 18, 1996 and 7% Dual Currency Bonds due March 18, 1996
(including accrued interest). At the present time, the Company
anticipates that it will primarily use the proceeds to initially
retire its Swiss Franc denominated indebtedness scheduled to
mature in March and May 1995 (including accrued interest
thereon).
14
PLAN OF DISTRIBUTION
The distribution of the Common Stock by the Selling
Securities Holders may be effected from time to time in one or
more transactions on AMEX or the Pacific Stock Exchange, Inc., in
privately-negotiated transactions or otherwise, at fixed prices
that may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, or at
negotiated prices.
The Selling Shareholders and any underwriters,
broker-dealers or agents that act in connection with the sale of
the shares of Common Stock hereunder may be deemed to be
"underwriters" as that term is defined in the Securities Act of
1933, as amended (the "Securities Act"), and any commissions
received by them and profit on any resale of the shares as
principal might be deemed to be underwriting discounts and
commissions under the Securities Act.
It is anticipated that broker-dealers participating
in sales of the Common Stock will receive ordinary and customary
brokerage commissions.
The Company may offer the Common Stock in any of
three ways: (i) through underwriters or dealers; (ii) directly
to a limited number of purchasers or to a single purchaser; or
(iii) through agents. To the extent required, any Prospectus
Supplement with respect to shares of the Common Stock will set
forth the terms of the offering and the proceeds to the Company
from the sale thereof, any underwriting discounts and other items
of price, and any discounts or concessions allowed or reallowed
or paid to dealers. Any public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are utilized, the Common Stock being
sold to them will 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. The Common Stock may be offered to the public either
through underwriting syndicates represented by one or more
managing underwriters or directly by one or more firms acting as
underwriters. To the extent required, the underwriter or
underwriters with respect to the Common Stock being offered by
the Company will be named in the Prospectus Supplement relating
to such offering and, if an underwriting syndicate is used, the
managing underwriter or underwriters will be set forth on the
cover page of such Prospectus Supplement. Any underwriting
agreement will provide that the obligations of the underwriters
are subject to certain conditions precedent, and that the
underwriters will be obligated to purchase all of the Common
15
Stock to which such underwriting agreement relates if any is
purchased. The Company will agree to indemnify any underwriters
against certain civil liabilities, including liabilities under
the Securities Act.
The Common Stock may be sold directly by the Company or
through agents designated by the Company from time to time. To
the extent required any agent involved in the offer or sale of
the Common Stock in respect of which this Prospectus is delivered
will be set forth in the Prospect Statement. Unless otherwise
indicated in the Prospectus Statement, any such agent will be
acting on a best efforts basis for the period of its appointment.
The Company will pay all of the expenses of this
offering.
The shares of Common Stock are listed on AMEX and
the Pacific Stock Exchange, Inc. The Common Stock offered hereby
by the Company and the Selling Securities Holders when issued,
will be listed, subject to notice of issuance, on said Exchanges.
16
SELLING SECURITIES HOLDERS
The Registration Statement, of which this Prospectus
is a part, relates to an aggregate of 4,000,000 shares of Common
Stock to be sold by the Company from time to time and an
aggregate of 3,498,413 shares of Common Stock to be sold by
certain other Selling Securities Holders set forth below from
time to time.
The following table sets forth the name of the other
Selling Securities Holders, their relationship with the Company
and certain information supplied by them regarding their
beneficial ownership of the Common Stock as of July 28, 1994.
The securities to be offered and the securities to be
beneficially owned by such Selling Securities Holders after
completion of the offering are also set forth below.
SHARES OF
COMMON PERCENTAGE COMMON
STOCK OF COMMON STOCK
OWNED STOCK OWNED
SELLING PRIOR OWNED PRIOR AFTER
SECURITIES TO THE TO THE THE
HOLDER OFFERING OFFERING OFFERING
Hermes Imperial
Investments, L.P.(1) 1,742,686 7% 103,977
Alexandra Global
Investment Fund 1, Ltd.(2) 595,046 2% 0
Banque Scandinave
en Suisse(3) 235,279 * 0
Bank Leu Ltd. (3) 989,379 * 0
Sigler & Co. (4) 40,000 * 0
________________
* Less than one percent.
17
(1) On July 27, 1994, Hermes Imperial Investments, L.P.
("Hermes"), entered into an agreement pursuant to which it
received an aggregate of 1,638,709 shares of Common Stock as
payment for certain Old Bonds of the Company owned by Hermes and
as payment of all of the Company's obligations under a note to
Hermes in connection with its purchase of certain Old Bonds.
Hermes is a Delaware limited partnership, the General Partner of
which is Hermes Capital Group, Ltd. and the limited partner of
which is Bank Imperial Moscow. See "Recent Developments -
Exchange Offer and Private Purchases."
(2) On July 27, 1994, Alexandra Global Investment Fund 1,
Ltd. ("Alexandra"), entered into an agreement pursuant to which
it received an aggregate of 595,046 shares of Common Stock as
payment for certain Old Bonds of the Company owned by Alexandra.
Hermes Capital Group, Ltd. is the portfolio manager of Alexandra.
See "Recent Developments - Exchange Offer and Private Purchases."
(3) Under the terms of the Exchange Offer, the shares of
Common Stock were issued to exchanging bondholders.
(4) Issued in connection with the Exchange Offer as a fee
for conducting the Exchange Offer.
18
DESCRIPTION OF CAPITAL STOCK
Common and Class B Stock
As of July 25, 1994 the Company had outstanding two
classes of common stock: 21,348,867 shares of Common Stock, par
value $.01 per share, entitled to one vote per share on all
matters, and 250,000 shares of Class B Capital Stock, par value
$.01 per share ("Class B Stock"), entitled to ten votes per share
on all matters, without distinction between classes except when
approval of a majority of each class is required by statute. The
Class B Stock is convertible at any time into shares of Common
Stock on a share for share basis.
Since the Common Stock and Class B Stock do not have
cumulative voting rights, the holders of shares having more than
50% of the voting power, if they choose to do so, may elect all
the directors of the Company and the holders of the remaining
shares would not be able to elect any directors.
The holders of Common Stock and Class B Stock are
entitled to share equally in any dividends (other than stock
dividends) that may be declared, and if any stock dividends are
declared, they are to be declared and paid at the same rate on
each class of stock in the shares of such class. In the event of
liquidation, dissolution or winding up of the Company, the
holders of the Common Stock and the Class B Stock are entitled to
share equally in the corporate assets available for distribution
to stockholders. None of the shares of either class has any
preemptive or redemption rights or sinking fund provisions
applicable to it, and all the presently outstanding shares are
fully paid and non-assessable.
Certain of the Company's borrowing agreements and
indentures contain restrictions on dividends and on the
repurchase by the Company of its Common Stock or Class B Stock.
On March 22, 1989 the Board of Directors of the Company
determined that the Company would omit its regular dividend
commencing with the first quarter ended March 31, 1989.
19
Preferred Stock
The Company is authorized to issue l0,000,000 shares,
par value $.l per share, of preferred stock. There are presently
no shares of Preferred Stock issued. To the extent that any
shares of Preferred Stock may be issued, such Preferred Stock may
(i) have priority over Common Stock with respect to dividends and
the assets of the Company upon liquidation; (ii) have significant
voting power; (iii) provide for representation of the holders of
the Preferred Stock on the Company's Board of Directors upon the
occurrence of certain events; and (iv) require the approval of
the holders of the Preferred Stock for the taking of certain
corporate actions, such as mergers.
Transfer Agent and Registrar
Harris Trust Company of New York is the transfer agent
and registrar for the Common Stock.
LEGAL OPINION
Andrea D. Kantor, Esq., Associate General Counsel of
the Company, has passed upon the legality of the Common Stock of
the Company being offered hereby. Ms. Kantor has options to
purchase 17,500 shares of Common Stock under the Company's Non-
Qualified Stock Option Plan, all of which are currently
exercisable.
EXPERTS
The audited consolidated financial statements and
schedules of the Company as of December 31, 1993 and 1992 and for
each of the years in the three-year period ended December 31,
1993, incorporated by reference herein and elsewhere in the
Registration Statement, have been incorporated by reference
herein and in the Registration Statement in reliance upon the
reports of KPMG Peat Marwick, independent certified public
accountants, incorporated by reference herein, and upon the
authority of said firm as experts in auditing and accounting.
20
MISCELLANEOUS
No person has been authorized to give any information
or to make any representations, other than as set forth in this
Prospectus, in connection with the offer 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.
Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create an
implication that there has been no change in the affairs of the
Company since the date hereof. This Prospectus does not
constitute an offer to sell or solicitation of an offer to buy
any of these securities to any person in any jurisdiction in
which such offer or solicitation may not lawfully be made and
does not constitute an offer of any securities other than those
to which it relates.
21
REGISTRATION STATEMENT
The Company has filed with the Commission a
Registration Statement on Form S-3 under the Securities Act of
which this Prospectus is a part. This Prospectus does not contain
all of the information set forth in the Registration Statement
and its exhibits, certain parts of which are omitted in
accordance with the Rules and Regulations of the Commission, and
to all of which reference is made. For further information
pertaining to the securities hereby offered and to the Company,
reference is made to the Registration Statement, including
exhibits incorporated therein by reference or filed as part
thereof, copies of which may be obtained from the Commission's
principal office in Washington, D.C. at prescribed rates, or,
under certain circumstances, from the Company.
22
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses payable by the Registrant in connection
with the issuance and distribution of the securities being
registered (other than underwriting discounts and commissions, of
which there are none) are as follows:
SEC Registration Fee $ 7,648.73
Accounting Fees and Expenses $ 2,500
Miscellaneous Expenses $ 500
TOTAL: $ 10,648.73
Item 15. Indemnification of Directors and Officers.
Section l45 of the Delaware General Corporation Law, as
amended, grants each corporation organized thereunder certain
powers to indemnify its officers and directors against liability
for certain of their acts. Article ELEVEN of the Company's
Restated Certificate of Incorporation and Article III, Section l5
of the by-laws of the Company, provide that the Company shall, to
the full extent permitted by law or to the extent that a court of
competent jurisdiction shall deem proper or permissible under the
circumstances, whichever is greater, indemnify all directors,
officers, incorporators, employees, or agents of the Company.
In addition, Section l02 of the Delaware General
Corporation Law permits corporations, through provisions in their
certificates of incorporation, to limit the monetary liability of
directors. Article TWELVE of the Company's Restated Certificate
of Incorporation provides that no director of the Company shall
be liable to the Company or any of its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section l74 of the Delaware
General Corporation Law (relating to the liability of directors
for unlawful payment of dividends or unlawful stock purchase or
redemption), or (iv) for any transaction from which the director
derived an improper benefit.
The Company has purchased Director's and Officers'
Liability Insurance, including a Company Reimbursement Policy.
Subject to the policy conditions, the insurance provides coverage
for amounts payable by the Company to its directors and officers
pursuant to the Company's by-laws.
23
Item l6. Exhibits
4.1 Specimen Common Stock Certificate (filed as Exhibit 4.5
to the Company's Registration Statement (Registration
No. 33-15700), and incorporated by reference herein.
4.2 Amendment to Restated Certificate of Incorporation.
4.3 Amended By-Laws of the Company (filed as Exhibit 3.3 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1986) and incorporated by reference
herein.
5.1 Opinion of Andrea D. Kantor, Esq.*
10.1 Stock Purchase and Loan Agreement, dated as of July __,
1994 between National Patent Development Corporation
and American Drug Company (filed as Exhibit 10.11 to
American Drug Company's Registration Statement
(Registration No. 33-78252), and incorporated by
reference herein.
23.1 Consent of KPMG Peat Marwick.*
*Filed herewith
Item 17. Undertakings.
The undersigned registrant hereby undertakes 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.
The undersigned registrant hereby undertakes 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 in such information in the registration
statement.
24
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of
1934.
The undersigned registrant hereby undertakes 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.
The undersigned registrant hereby undertakes 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.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the registrant pursuant to the
foregoing provisions, the registrant has been informed that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 Act and will be governed by the final
adjudication of such issue.
25
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, and the State of New York, on this 29th day
of July 1994.
NATIONAL PATENT DEVELOPMENT
CORPORATION
(Registrant)
BY: Jerome I. Feldman
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of l933,
this Registration Statement has been signed by the following
persons in their capacities on July 29, 1994.
SIGNATURES TITLE
Jerome I. Feldman President and Chief Executive
Officer and Director
(Principal Executive Officer)
Scott N. Greenberg Vice President, Chief Financial
Officer and Director (Principal
Financial and Accounting Officer)
Martin M. Pollak Executive Vice President and
Treasurer and Director
Ogden R. Reid Director
26
Exhibit 5.1
National Patent Development Corporation
9 West 57th Street, Suite 4170
New York, NY 10019
Gentlemen:
Reference is made to the Registration Statement on Form S-3
of National Patent Development Corporation (the "Company")
relating to the registration of 7,498,413 shares of the Company's
common stock, par value $.01 per share (the "Common Stock").
I am Associate General Counsel of the Company, and have
examined such corporate records and other documents as I have
deemed relevant. Based upon the above, I am of the opinion that
the Common Stock to be sold pursuant to the Registration
Statement has been duly authorized and, when issued, assuming
compliance with all federal and state securities laws, will be
validly issued, fully paid, and non-assessable.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and the use of my name in the
Prospectus.
Very truly yours,
Andrea D. Kantor
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
National Patent Development Corporation
We consent to the use of our reports incorporated herein by
reference and to the reference to our firm under the heading
"Experts" in the Prospectus.
KPMG PEAT MARWICK
New York, New York
July 29, 1994
