<PAGE> 1
As filed with the Securities and Exchange Commission on December 13, 1996
File No. _________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_________________________
NU-TECH BIO-MED, INC.
(Exact name of Registrant as specified in its charter)
Delaware 25-1411971
(State of Incorporation) (I.R.S. Employer
Identification Number)
55 Access Road
Warwick, RI 02886
(401) 732-6520
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
_________________
J. Marvin Feigenbaum
Chief Executive Officer
Nu-Tech Bio-Med Inc.
500 Fifth Avenue, Suite 2424
New York, NY 10017
Telephone (212) 391-2424
Facsimile (212) 391-2864
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
_________________
With copies to:
VICTOR J. DiGIOIA, ESQ.
GOLDSTEIN & DiGIOIA, LLP
369 Lexington Avenue
New York, New York 10017
Telephone (212) 599-3322
Facsimile (212) 557-0295
Approximate date of commencement of proposed sale to the public: As
soon as practicable 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 plan, 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. /x/
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Securities Being Amount to be Offering Aggregate Registration
Registered Registered Price per Offering Fee(1)
Share(1) Price(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value(2)................... 325,477 $11.3125 $3,681,959 $1,116
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par
value(3)................... 15,856 $11.3125 179,371 54
===================================================================================================================================
Common Stock, $.01 par
value(4)................... 1,471,979 $11.3125 16,651,762 5,045
===================================================================================================================================
Common Stock, $.01 par
value(5)................... 37,404 $11.3125 423,133 128
===================================================================================================================================
Common Stock, $.01 par
value (6).................. 375,000 $11.3125 4,242,188 1,285
===================================================================================================================================
Total...................... 2,225,716 $25,178,413 $7,628
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee,
based on the average of the closing bid and asked prices of a share of
Common Stock as quoted on the Nasdaq SmallCap Market on December 9,
1996 ($11.3125 per share).
(2) Issued and outstanding shares of Common Stock to be sold by certain
Selling Security Holders.
(3) Includes 15,866 shares of Common Stock issuable upon exercise of
outstanding options with exercise prices ranging from $4.37 per share
to $20.30 per share. Pursuant to Commission Rule 416 there are also
being registered such additional number of shares as may become
issuable pursuant to the anti-dilution provisions of the options.
(4) Includes 1,471,979 shares of Common Stock issuable upon exercise of
outstanding warrants with exercise prices ranging from $6.30 per share
to $28.35 per share. Pursuant to Commission Rule 416 there are also
being registered such additional number of shares as may become
issuable pursuant to the anti-dilution provisions of the warrants.
(5) Includes 37,404 shares of Common Stock issued by the Company in
connection with its acquisition of the business of Prompt Medical
Billing Services, Inc. ("Prompt Medical"). Pursuant to Rule 416, there
are also being registered such additional number of shares of Common
Stock as may become issuable pursuant to the anti-dilution provisions
of the Asset Purchase Agreement between the Company and Prompt Medical.
ii
<PAGE> 3
(6) Includes 250,000 Shares issued by the Company in connection with its
private placement offering completed in April 1996 and an additional
125,000 Shares issued in settlement of certain claims by the investors
of such placement.
---------------------------
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 SECTION 8(a) MAY
DETERMINE.
================================================================================
iii
<PAGE> 4
NU-TECH BIO-MED, INC.
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
Between Registration Statement on Form S-3 and Form of Prospectus
<TABLE>
<CAPTION>
Item Number and Heading Caption in Prospectus
----------------------- ---------------------
<S> <C> <C>
1. Forepart of the Registration Statement
and Outside Front Cover of Prospectus Outside Front Cover of Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus......................... Inside Front and Outside Back Cover Pages of Prospectus
3. Summary Information, Risk Factors,
and Ratio of Earnings to Fixed
Charges..................................... Prospectus Summary; The Company; Risk Factors;
4. Use of Proceeds............................. Use of Proceeds
5. Determination of Offering Price............. Outside Front Cover Page of Prospectus
6. Dilution.................................... Not Applicable
7. Selling Security Holders.................... Selling Security Holders
8. Plan of Distribution........................ Inside Front Cover; Plan of Distribution
9. Description of Securities to be
Registered.................................. Description of Securities
10. Interests of Named Experts and
Counsel..................................... Legal Matters and Experts
11. Material Changes............................ Recent Developments
12. Incorporation of Certain Information
by Reference................................ Incorporation of Certain Information by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................. Not Applicable
</TABLE>
iv
<PAGE> 5
Subject to Completion, dated December 13, 1996
P R O S P E C T U S
- -------------------
This Prospectus covers an aggregate of 2,225,716 Shares of Common Stock
NU-TECH BIO-MED, INC.
This Prospectus relates to an aggregate of 2,225,716 shares of Common
Stock, $.01 par value (the "Shares") of Nu-Tech Bio-Med, Inc.. (the "Company"),
held by certain securities holders ("Selling Security Holders") of which (i)
15,866 shares are issuable upon exercise of outstanding options ("Options"),
(ii) 1,471,979 shares are issuable upon exercise of outstanding warrants
("Warrants"), (iii) 37,404 shares of Common Stock which are issued in connection
with the Company's acquisition of Prompt Medical Billing, Inc., (iv) 375,000
shares of Common Stock issued in connection with a private placement offering by
the Company completed in April 1996 and the settlement of certain claims related
thereto and (v) an aggregate of 325,477 Shares held by certain Selling Security
Holders. The actual number of Shares of Common Stock may be subject to increase
or decrease dependent upon the exercise price in effect at the date of exercise
of the options and warrants. No other shares of capital stock of the Company are
being registered herewith.
The Shares may be sold from time to time by the Selling Security
Holders, or by the transferees of the Shares, Options or Warrants. No
underwriting arrangements have been entered into by the Selling Security
Holders. The distribution of the Shares by the Selling Security Holders and/or
their transferees may be effected in one or more transactions that may take
place on the over-the-counter market, including ordinary brokers transactions,
privately negotiated transactions or through sales to one or more dealers for
resale of the Shares as principals, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Shares may be sold by the Selling Security Holders either (i) to a
broker or dealer as principal for resale as such broker or dealer for its
account pursuant to this Prospectus (e.g. in a transaction with a "market
maker"); (ii) in brokerage transactions, including transaction in which the
broker solicits purchasers or (iii) in privately negotiated transactions
pursuant to any applicable exemption under the Securities Act of 1933, as
amended (the "Act"). Usual and customary or specifically negotiated brokerage
fees or commissions may be paid by the Selling Security Holders in connection
with such sales. The Selling Security Holders and intermediaries through whom
such Shares are sold may be deemed "underwriters" within the meaning of the Act,
with respect to the Shares offered.
Concurrently herewith, pursuant to separate registration statements on
Forms S-3 and S-8 filed by the Company with the Securities and Exchange
Commission, the Company is registering an additional 2,214,658 shares of
Common Stock of the Company for resale thereof. Significant sales of such
additional shares may affect the market price of the Common Stock and the
liquidity of the Shares offered hereby.
The Common Stock is traded in the over-the-counter market and listed on
the SmallCap Market of the Nasdaq Stock Market ("Nasdaq") under the symbol
"NTBM," and on the Boston Stock Exchange under the symbol "NTB." On December 9,
1996, the closing bid and asked prices for the Common Stock as reported on
Nasdaq were $11.125 and $11.50, respectively. See "Price Range of Common Stock
and Certain Market Information," as set forth in the Form 10-KSB for the fiscal
year ended December 31, 1995.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE PURCHASED
ONLY BY THOSE PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
<PAGE> 6
SEE "RISK FACTORS" COMMENCING AT PAGE 13 OF THIS PROSPECTUS.
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.
The date of this Prospectus is __________________________, 1997
<PAGE> 7
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 and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy and information
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional
Offices of the Commission: New York Regional Office, 7 World Trade Center, 13th
Floor, New York, New York 10048; and Chicago Regional Office, Everett McKinley
Dirkson Building, 210 South Dearborn Street, Room 1204, Chicago, Illinois 60604.
Copies of such material may be obtained from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference,
except as superseded or modified herein:
1. The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended September 30, 1996.
2. The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended June 30, 1996.
3. The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1996.
4. The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995.
5. The Company's Form 8-K filed with the Commission on August 29,
1996.
6. The Company's Form 8-K filed with the Commission on September
23, 1996.
7. The Company's Form 8-K/A filed with the Commission on November
14, 1996.
8. The Company Proxy Statement with respect to its Annual Meeting
of Shareholders held on August 27, 1996.
9. The Company's Form 8-K filed with the Commission on December
3, 1996.
2
<PAGE> 8
10. The Company's Form 8-A filed with the Commission on August 15,
1994.
11. The Company's Form 8-K/A filed with the Commission on January
10, 1996.
12. The Company's Form 8-K filed with the Commission on April 15,
1996.
13. The Company's Form 8-K filed with the Commission on June 26,
1996.
All documents filed by the Company subsequent to the date of this
Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and
prior to the filing of a post-effective amendment which indicates that all
Shares offered hereby have been sold or which deregisters all Shares then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed modified or
superseded for purposes of this Registration Statement and Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement of which this Prospectus forms a
part.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any document described above (other than exhibits). Requests
for such copies should be directed to Nu-Tech Bio-Med, Inc. 55 Access Road,
Warwick, Rhode Island 02886. The Company's telephone numbers are (401) 732-6520
or (212) 391-2424.
3
<PAGE> 9
PROSPECTUS SUMMARY
The following summary is intended to set forth certain pertinent facts
and highlights from material contained in the body of this Prospectus and the
Company's Report on Form 10-KSB for the fiscal year ended December 31, 1995,
(the "Form 10-KSB") and the Forms 10-QSB for the quarters ended September 30,
1996, June 30, 1996, and March 31, 1996 (the "Forms 10-QSB"), as well as the
Company's Report on Form 8-K (collectively, the "Forms 8-K") filed by the
Company since December 31, 1995 up to the date hereof, all of which are
incorporated herein by reference. The summary is qualified in its entirety by
reference to the more detailed information and consolidated financial statements
appearing elsewhere in this Prospectus and forms 10-KSB and 10-QSB. Each
prospective investor is urged to read this Prospectus, the Form 10-KSB,
Forms 10-QSB and Forms 8-K in their entirety.
THE COMPANY
GENERAL
Nu-Tech Bio-Med, Inc. (hereinafter sometimes referred to as
"Nu-Tech") was originally organized under the laws of the State
of Delaware in September 1981 under the name "Applied DNA Systems, Inc." On
November 16, 1994, the Company changed its name to its present name. The
Company's wholly-owned operating subsidiary, Analytical Biosystems Corporation
("ABC" or "Analytical Biosystems") was organized under the laws of the State of
Delaware in August, 1985.
On October 21, 1996, Nu-Tech acquired substantially all of the assets
of Prompt Medical Billing Services, Inc., a Florida corporation, as well as
assuming certain liabilities. Prior to the acquisition Prompt Medical was
engaged in the medical billing business with operations located in Miami,
Florida. The asset acquisition was accomplished through Nu-Tech's newly formed
subsidiary, NTBM Billing Services, Inc. Nu-Tech, through NTBM Billing Services,
intends to retain and expand the medical billing business acquired from Prompt
Medical. See"Recent Events-Acquisition of Assets of Prompt Medical."
On November 18, 1996, the United States Bankruptcy Court (Central
District of California) approved the reorganization plan of Medical Science
Institute, a California corporation ("MSI") which had been jointly submitted to
the court by Nu-Tech and MSI. MSI had been operating as a debtor-in-possession
under Chapter 11 of the United States Bankruptcy Code since October 1995.
Pursuant to the plan, Nu-Tech acquired all of the capital stock of MSI and MSI
became a wholly-owned subsidiary of Nu-Tech. MSI is a full service medical
laboratory facility and its primary executive offices are located in Burbank,
California. MSI operates throughout the State of California. See "Recent
Events-Acquisition of Medical Science Institute."
On November 8, 1996, Nu-Tech joined with Physicians Clinical
Laboratory, a Delaware corporation, ("PCL") in submitting a plan of
reorganization for PCL under Chapter 11 of the United States Bankruptcy Code
("Chapter 11") whereby Nu-Tech will acquire 51% of the capital stock of PCL. PCL
has been operating as a debtor-in-possession under Chapter 11 of the United
States Bankruptcy Code since November 8, 1996 and prior to such time suffered
significant losses and was in default of approximately $120,000,000 of debt. PCL
is a full service clinical
4
<PAGE> 10
laboratory which provides a comprehensive battery of testing services. PCL
operates throughout the State of California and its executive offices are
located in Sacramento, California. The plan of reorganization is subject to the
approval of the United States Bankruptcy Court and there can be no assurance
that the plan will be approved by the court or that the acquisition of PCL will
be consummated. See Recent Acquisition Activities - Proposed Physicians Clinical
Laboratory Acquisition."
As a result of the acquisitions of the business of Prompt Medical and
MSI, the business of the Company has significantly changed and expanded.
Additionally, in the event the PCL acquisition is consummated, of which there
can be no assurance, the business of the Company will further change
significantly. Prior to such acquisitions, the Company's sole business
activities were through its subsidiary, Analytical Biosystems. Unless the
context otherwise requires, the "Company" will refer to Nu-Tech, NTBM
Billing, Analytical Biosystems and MSI.
Analytical Biosystems is a clinical oncology laboratory service and
research company which currently performs and furnishes a patented in vitro
chemosensitivity assay known as the Fluorescent Cytoprint Assay ("FCA") which
aids oncologists in selecting those chemotherapeutic drugs most likely to be
effective in treating a cancer patient's solid mass tumor. The FCA, which was
developed by M. Boris Rotman, Ph.D., Professor of Medical Science at Brown
University, Providence, Rhode Island, is a patented laboratory procedure that
measures the effectiveness of specific chemotherapy drugs in destroying cancer
cells retrieved from solid mass tumors removed from individual patients. The FCA
tests cancer tissue taken from the individual's tumor against many of the
chemotherapeutic agents likely to be used for that tumor type. Information
provided by the test helps rule out ineffective drugs and assists the
oncologists in determining appropriate chemotherapy.
ABC also offers an ATPase cell viability assay ("ATP-CVA") which is a
bioluminescent assay utilized for the determination of inhibition of metabolic
activity in cancer cells. The Company uses the non-proprietary ATP-CVA in
conjunction with Analytical Biosystem's FCA for the purpose of expanding the
number of chemotherapeutic drugs which ABC can offer for in vitro drug response
testing. Such expanded drugs include taxol, which is utilized in the treatment
of breast and ovarian cancer. Analytical Biosystems intends that the FCA will be
principally used for the assay of those chemotherapeutic drugs such as
cisplatin, doxorubicin and mitomycin C which have the effect of bursting or
killing cancer cells. With respect to other chemotherapeutic drugs which work in
a different fashion such as taxol and taxotere, the ATP-CVA will detect the
inhibition of metabolic activity. These two latter drugs, which have been
approved by the Food and Drug Administration for the use in the treatment of
breast, lung and ovarian cancer, will be assayed by the Company utilizing the
ATPase assay. In addition, ABC has added navelbine to the chemotherapeutic
drugs which it is capable to assay, which is currently used in the treatment of
non-small cell lung cancer and whose effect is to burst or kill the cancer cells
immediately. This drug is being assayed by Analytical Biosystems utilizing the
FCA.
The existing and potential customers of Nu-Tech, ABC, MSI, and PCL and
NTBM Billing are medical offices, surgeons, oncologists, pathologists, patients,
hospitals, health maintenance organizations ("HMOs"), community health centers,
and third party insurance companies.
5
<PAGE> 11
ABC maintains its administrative offices and clinical laboratory and
research facilities at 55 Access Road, Warwick, Rhode Island 02886, and its
telephone number is (401) 732-6520. Nu-Tech maintains its executive offices at
500 Fifth Avenue, New York, New York 10036, telephone number (212) 391-2424. MSI
maintains its executive offices at 811 South San Fernando Blvd, Burbank,
California and its telephone number is (818) 846-4674. NTBM Billing maintains
a place of business at 9090 SW 87th Ct. Miami Florida and its telephone number
is (305) 273-1288.
RECENT EVENTS
COMPLETION OF PRIVATE PLACEMENTS
DECEMBER 1996 PLACEMENT. On December 2, 1996, the Company completed a
private placement offering under Section 4(2) of the Securities Act of 1933
and/or Regulation D promulgated thereunder, pursuant to which it issued a total
of 14,000 shares of Series A Convertible Preferred Stock for a total aggregate
purchase price of $14,000,000. The Company realized net proceeds of
approximately $12,426,000 from the private offering. The proceeds of the
offering have been utilized by the Company for the purchase of certain debt
securities of Physicians Clinical Laboratory, Inc., as well as to make certain
payments under the MSI Plan, all as described below as well as for other general
purposes. The terms of the Series A Preferred Stock are governed by an Amended
Certificate of Designations, Rights and Preferences approved by the Board of
Directors in accordance with the Company's Articles of Incorporation and filed
with the Secretary of State of Delaware on October 23, 1996 and further amended
on November 20, 1996. The Series A Preferred Stock is convertible, by its terms,
into shares of Common Stock at the lesser of (i) $17.50 per share or (ii) 75% of
the average closing price of a share of the Company's Common Stock as reported
by the Nasdaq SmallCap Market for the five (5) trading days prior to the date of
the holder's notice of conversion. The Series A Preferred Stock is convertible
into the Company's Common Stock at the option of the holder commencing on the
45th day after the issue date. Up to one third of the shares of Series A
Preferred Stock may be converted into Common Stock on each of the 45th day, 75th
day and 105th day after the issue date. The initial issue date was November 6,
1996 and the first date on which holders may obtain conversion of the Series A
Preferred Stock was December 20, 1996. Commencing upon the 270th day following
completion of the private placement, the Company has the right, upon 30 days
prior notice, to cause the Series A Preferred Stock to be converted into Common
Stock at the then applicable conversion price. The holders of a majority of the
Series A Preferred Stock were granted one "demand" registration right with
respect to the Common Stock underlying the Series A Preferred Stock. In the
event the Company does not file with, and have declared effective by, the
Commission, a registration statement under the Act within 120 days of receipt of
the demand notice of the investors holding the shares of Series A Preferred
Stock, the then applicable conversion price of the Series A Preferred Stock will
be reduced by 10%. Further, for each 30 day period after the 120 day period that
the registration statement has not been declared effective, the conversion price
will be reduced by an additional 2%, up to an aggregate of 12%. The Company has
simultaneously herewith filed a registration statement with the Commission with
regard to the shares of Common Stock underlying the Series A Preferred Stock.
THIS PROSPECTUS DOES NOT INCLUDE ANY OF THE SHARES OF COMMON STOCK UNDERLYING
THE SERIES A PREFERRED STOCK.
6
<PAGE> 12
Under various agreements related to the sale of the shares, the Company
paid to several investment bankers approximately $1,380,000 from the gross
proceeds and agreed to issue up to 60,000 shares of common stock and five year
Common Stock purchase warrants to purchase 85,714 shares of common stock
exercisable at $15.00 per share. This Prospectus and the Registration Statement
of which this Prospectus forms a part includes the 60,000 shares of restricted
stock and the Shares underlying the 85,714 Warrants (subject to adjustment in
accordance with the warrant). The Company has engaged certain financial public
relations firms for which such firms have been paid an aggregate of $1,275,000,
which funds were paid from the offering proceeds.
APRIL 1996 PLACEMENT. On April 12, 1996, the Company completed a private
offering, under Section 4(2) of the Securities Act and/or Regulation D
promulgated thereunder, of 250,000 shares of its Common Stock to 36 investors
for an aggregate of $2,875,000. The Company paid to the placement agent
commissions of $143,750 (5% of the gross proceeds of the April offering), an
expense allowance of $20,000, and Common Stock purchase warrants to purchase
75,000 shares of the Company's Common Stock at an exercise price of $14.50 per
share, subject to adjustment. The Company realized net proceeds of approximately
$2,630,000 after deduction of the placement agent commissions and expenses,
legal fees, blue sky filing fees and other miscellaneous expenses. This
Prospectus includes the 25,000 Shares (subject to adjustment in accordance with
the Warrant) underlying the Warrants issued to the Placement Agent. The proceeds
were used for general working capital purposes as well as certain costs and
expenses related to the PCL, MSI and Prompt Medical acquisition activities.
An aggregate of 250,000 shares of Common Stock were issued to investors
in the April Offering. Investors in the April Offering were granted certain
demand and piggyback registration rights for the shares of Common Stock sold in
the April Offering. In settlement of certain alleged claims by the investors in
the April Offering that the Company had failed to timely register the Shares
owned by such investors, the Company has agreed to issue one-half share to the
investors for each Share purchased in the April Offering provided that the
price of the Common Stock on Nasdaq on the date of effectiveness of the
Prospectus is less than $11.50 per share. Fractional Shares will
not be issued and will be rounded down to the nearest whole share of Common
Stock. THIS PROSPECTUS INCLUDES ALL 375,000 SHARES OF COMMON STOCK ISSUED IN
CONNECTION WITH THE APRIL 1996 PLACEMENT AND THE SETTLEMENT OF CERTAIN CLAIMS.
See "Risk Factors - Simultaneous Registration of Other Securities."
RECENT ACQUISITION ACTIVITIES.
PROPOSED PHYSICIANS CLINICAL LABORATORY ACQUISITION
The proceeds of Series A Preferred Stock offering completed on December
2, 1996 discussed above were used in furtherance of, among other things, the
acquisition of certain debt securities of Physicians Clinical Laboratory, Inc.,
a Delaware corporation ("PCL"), which is a full service clinical laboratory
capable of providing a comprehensive battery of testing services. PCL is a
publicly held corporation which, until recently, filed reports with the
Commission under the Securities Exchange Act of 1934, as amended. PCL is
delinquent in its filings with the Commission and has not filed any reports
since the quarter ended May 31, 1996. PCL has been operating as a debtor-in-
possession under Chapter 11 of the Bankruptcy Code since November 8, 1996. PCL's
common stock is traded in the over-the-counter market of the National Securities
Dealers Automated Quotation System under the symbol "PCLI". PCL reported net
revenues of approximately $ 111,111,000 and $90,000,000 for the fiscal years
ended February 28, 1995 and
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<PAGE> 13
February 29, 1996, respectfully. PCL had net losses of approximately $67,500,000
for the fiscal year ended February 29, 1996 and is currently incurring operating
losses of approximately $20,000,000 on an annualized basis. PCL has operations
throughout the State of California and has been operating since 1992. PCL is
continuing to incur significant ongoing losses and is in default on
approximately $80,000,000 in senior secured debt (the "Senior Debt") and
approximately $40,000,000 in subordinated debt (the "Subordinated Debt"). For
the quarter ended September 30, 1996, PCL estimates its net losses were
approximately $________.
Nu-Tech has reached an agreement with the holders of the Senior Debt,
Subordinated Debt and the management of PCL whereby Nu-Tech will acquire a 51%
interest in PCL. The terms of the agreement provide that PCL would file a plan
of reorganization under Chapter 11 of the United States Bankruptcy Code to
effectuate the agreement (the "PCL Plan"). On November 8, 1996, PCL and the
Company filed the PCL Plan with the U.S. Bankruptcy Court located in the Central
District of California (Case No. SV96-23185-GM). As required by the
aforementioned agreement, the Company purchased $13,300,000 of Senior Debt for
$10,000,000 on November 7, 1996 in advance of the filing of the PCL Plan with
the bankruptcy court. In accordance with the PCL Plan, certain holders of Senior
Debt contributed $10,000,000 in DIP financing to PCL, which under the terms of
the reorganization, will be forgiven. The PCL Plan also requires that the
Company purchase an additional 17% of the capital stock of PCL for $5,000,000
upon approval of the PCL Plan. Pursuant to the PCL Plan, and assuming approval
of the PCL Plan by the bankruptcy court, the debt purchased by Nu-Tech will be
converted into 34% of the common stock of PCL, which together with the 17%
purchased for $5,000,000, will result in NuTech owning 51% of the outstanding
common stock of PCL. The PCL Plan is subject to the approval of the bankruptcy
court and there can be no assurance such approval will be obtained or that the
acquisition will be consummated. There can be no assurance that the Company
will be able to raise sufficient funds to consummate the PCL acquisition or to
successfully operate the business even if the PCL acquisition is consummated.
See "Risk Factors - Risks of PCL Acquisition."
Pursuant to the PCL Plan, J. Marvin Feigenbaum, President and Chief
Executive Officer of the Company, has been retained as crisis manager of PCL and
serves as the equivalent of the Chief Operating Officer of PCL. It is
contemplated that Mr. Feigenbaum will serve in such capacity pending the
bankruptcy court's determination of the PCL Plan. In consideration of lending
Mr. Feigenbaum's services to PCL, Nu-Tech receives approximately $104,000 on an
annualized basis. In the event the PCL Plan is consummated, Nu-Tech will have
the right to nominate three persons to the five member Board of Directors of
PCL. In the event the PCL Plan is not consummated, Nu-Tech shall not be entitled
to nominate any person to the PCL Board of Directors.
There can be no assurance that the PCL Plan will be consummated, or if
consummated, will be upon the terms as originally submitted to the bankruptcy
court. Should the PCL Plan not be consummated, Nu-Tech will be a creditor of
PCL. Under the terms of the PCL Plan, however, no competing offer for PCL may
be accepted by the bankruptcy court unless (i) such competing offer is at least
$3.75 million higher than the bid by Nu-Tech and (ii) on the effective date of
the competing plan Nu-Tech receives $1.88 million in cash as compensation for
its time and expense in pursuing the PCL Plan.
8
<PAGE> 14
ACQUISITION OF MEDICAL SCIENCE INSTITUTE
On November 18, 1996, the United States Bankruptcy Court of the Central
District of California (the "Court") (Case No. LA 95-37790 TD) approved the
First Amended Plan of Reorganization (the "MSI Plan") of Medical Science
Institute ("MSI") pursuant to which Nu-Tech acquired all of the capital stock of
MSI. Nu-Tech and MSI submitted the MSI Plan to the court on October 18, 1996.
MSI is engaged in the medical laboratory business primarily in the State of
California and had been operating under Chapter 11 of the U.S. Bankruptcy Code
since October 26, 1995. MSI provides clinical laboratory testing services,
including testing of human tissue and fluid specimens to physicians,
managed-care organizations, hospitals and other health care providers. MSI is a
California corporation with its principal executive offices located in Burbank,
California.
Pursuant to the MSI Plan, the holders of all of the MSI capital stock
(including any and all options, warrants and other convertible securities) will
receive 134,228 shares of Common Stock of Nu-Tech with an aggregate value of $2
million. The number of shares of Common Stock to be issued under the MSI Plan
are based upon the average closing price of a share of Common Stock on the
Nasdaq SmallCap Market for the 15 day period preceding November 18, 1996 ($14.90
per share). The recipients of Nu-Tech's Common Stock will be entitled to
"piggyback" registration rights with respect to such shares. The sole holder of
all capital stock of MSI is Fausto Mendez, Jr., the former President of MSI. Mr.
Mendez has the option to receive $275,000 in cash with a concurrent reduction in
the number of shares of Nu-Tech's Common Stock. NONE OF THE COMPANY'S SECURITIES
ISSUED IN CONNECTION WITH THE MSI ACQUISITION ARE BEING REGISTERED UNDER THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A PART.
In addition, Nu-Tech agreed to make certain other payments to creditors
and assume certain obligations under the MSI Plan. These payments include: (i)
approximately $750,000 to pay administrative claims of professionals (ii) an
additional $425,000 for professional administrative claims payable over 12
months (iii) approximately $572,000 payable for federal and state payroll taxes
(iv) approximately $2,500,000 to Austin Financial Services, Inc., a secured
creditor of MSI (v) trade payables in the amount of approximately $738,000 (vi)
$75,000 payable to the federal government in satisfaction of certain claims and
(viii) $750,000 payable to general unsecured creditors. At the hearing
confirming the MSI Plan held on November 18, 1996, the Company tendered
$2,200,000 to the Court with respect to such payments.
With respect to the sums payable under the MSI Plan to Austin
Financial, Nu-Tech obtained a loan in the principal amount of $2,500,000 from a
third party lender on December 2, 1996 and utilized the loan proceeds to pay off
Austin Financial. The loan bears interest at 15% per annum. All principal and
interest on the loan is payable on January 31, 1997. The loan is secured by the
Company's 16.4447% participation interest in a credit facility dated April 1,
1994 between the lender and Physician's Clinical Laboratory, which participation
represents the Company's purchase of the $13,300,000 of debt securities of PCL.
The loan is further secured by a personal guaranty of Nu-Tech's President, J.
Marvin Feigenbaum. The third party lender is a significant creditor of PCL and
has agreed to the terms of the PCL Plan. See "Risk Factors Need for Additional
Funds".
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<PAGE> 15
Mr. Mendez, formerly President of MSI, has entered into an employment
agreement with MSI pursuant to which he will be employed at a salary of $182,000
per year. Mr. Mendez also has the right to serve on the Board of Directors of
MSI. Mr. Mendez was granted the right to borrow up to $100,000 from the Company,
to be secured by the shares of Common Stock received by him under the MSI Plan.
Mr. Mendez will also receive options to purchase 10,000 shares of Nu-Tech Common
Stock for every $1,000,000 of annual collectable revenues obtained by MSI
through the acquisition of other businesses by MSI in which Mr. Mendez acted as
the procuring cause. The options to be granted, if any, will bear an exercise
price equal to the fair market value of Nu-Tech's Common Stock at the time of
grant.
ACQUISITION OF BUSINESS ASSETS OF PROMPT MEDICAL BILLING, INC.
On October 21, 1996, the Company, through a newly formed wholly-owned
subsidiary, NTBM Billing Services, Inc. ("NTBM") acquired substantially all of
the medical billing service assets of Prompt Medical Billing, Inc., a privately
owned Florida corporation engaged in the medical billing service business in
Miami, Florida. The Company acquired the assets for a total consideration of
$675,000 consisting of $100,000 in cash and 37,404 shares of restricted common
stock. The number of shares may be subject to increase in the event the fair
market value of the shares at the termination of the two year period is less
than $500,000 or in the event that the holders thereof are unable to sell the
shares. All of the consideration paid by the Company has been placed into escrow
for a period of up to two years, to be released upon attainment of certain
performance levels. The Company has agreed to file a registration statement with
the Securities and Exchange Commission to register the shares for sale under the
Act prior to expiration of the two-year escrow period. None of the shares issued
in connection with the Prompt Medical acquisition are being registered herein or
are included in this Prospectus. The cash consideration will be released from
escrow in eight quarterly installments of $12,500 together with interest.
Additionally, NTBM entered into a two year employment agreement with a former
principal and executive officer of Prompt Medical who will have significant
management duties with respect to the operation of the business at a cost of
$20,000 per annum. NTBM also entered into a consulting agreement with Health
Systems Development Corporation for a term of two years at approximately $5,000
per month plus commissions on new business. ALL 37,404 SHARES OF COMMON STOCK
ISSUED IN CONNECTION WITH THE ACQUISITION OF PROMPT MEDICAL'S BUSINESS ARE BEING
REGISTERED IN THIS PROSPECTUS.
OTHER EVENTS
IMAGING SYSTEMS AGREEMENT
On April 20, 1995, ABC entered into an Agreement with Loats Associates,
Inc. ("Loats") pursuant to which Loats was engaged for the purpose of
evaluating, redesigning, configuring, assembling and installing a new and
improved version of the image system currently utilized by ABC in connection
with the quantitative evaluation of assays performed utilizing the FCA.
Loats was engaged by ABC to perform and complete the project on a
work-for-hire basis. The project was completed in December 1995 at a
cost to the Company of $300,000.
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<PAGE> 16
TERMINATION OF CLINICAL TRIALS AGREEMENT
On August 14, 1995, ABC entered into an agreement (the "Clinical Trials
Agreement") with a research institution (the "Institution") and certain
individuals (the "Principal Investigators") related to the conduct and
performance of certain proprietary research and development activities to be
performed and/or coordinated on a work for hire basis on behalf of ABC by the
Institution. The Clinical Trials Agreement was terminated by the Company in
August 1996 as a result of the Institution's inability to obtain the requisite
number of accruals. The Company is discussing new clinical trials with several
medical research institutions. There can be no assurance that the Company will
be successful in reaching agreements with these research institutions or that
the clinical trials will be completed.
RHODE ISLAND LABORATORY LICENSE
Analytical Biosystems has received approval, effective May 21, 1996,
from the State of Rhode Island Department of Health that its clinical laboratory
license had been expanded to include laboratory testing for routine chemistry,
histopathology and cytology and that the expanded testing approvals had been
added to the CLIA database.
The expansion of the clinical license will allow ABC to provide
additional services to health care providers and to bill third party insurance
carriers under existing CPT codes which are included in these licenses.
Management believes that these changes to its clinical license, and the
resultant ability to utilize existing CPT codes increases ABC's ability to
obtain reimbursement for its testing procedures.
AUGUST 1994 PLACEMENT.
On August 9, 1994, the Company completed a private offering of its
securities to 15 investors for an aggregate of $620,000. The private placement
was intended to comply pursuant to Section 4(2) under the Act and/or Regulation
D promulgated thereunder. The securities sold by the Company comprised (i)
$400,000 principal amount of 7% Promissory Notes due the earlier of August 1,
1995 or upon the completion of a public offering of Common Stock of the Company
in which the Company receives gross proceeds of not less than $5 million, (ii)
57,143 shares of Common Stock for an aggregate of $200,000, and (iii) 114,286
Common Stock Purchase Warrants for an aggregate of $20,000; each Warrant
representing the right to purchase one share of Common Stock commencing
September 1, 1995 through July 31, 2001 at an exercise price of $7.00 per share.
The Promissory Notes were repaid in full when the Company completed its public
offering in December 1994.
The proceeds of the April 1994 offering were principally intended to
fund and sustain the Company's operations through December 31, 1994, and to fund
expenses to be incurred in connection with the completed public offering.
THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A PART
INCLUDES THE 52,143 SHARES OF COMMON STOCK AND THE SHARES OF COMMON STOCK
UNDERLYING THE 114,286 WARRANTS SOLD IN THE AUGUST 1994 OFFERING.
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<PAGE> 17
APRIL 1995 PLACEMENT.
On April 27, 1995, the Company, in a private transaction effected with
eight investors, sold an aggregate of 120,000 shares of Common Stock and an
aggregate of 45,714 Common Stock Purchase Warrants (the "Warrants") for an
aggregate of $722,285.70. The private placement placement was intended to comply
pursuant to Section 4(2) under the Act and/or Regulation D promulgated
thereunder. The Warrants are exercisable at $7 per share through July 31, 2001,
and the Warrantholders were accorded certain piggyback registration rights with
respect to the shares of Common Stock underlying the Warrants. ALL 120,000 OF
THE SHARES OF COMMON STOCK ISSUED IN CONNECTION WITH THE APRIL 1995 PLACEMENT
ARE BEING REGISTERED UNDER THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS
FORMS A PART. The proceeds received by the Company as a result of the aforesaid
transaction were used for additional working capital purposes.
JULY 1995 PLACEMENT.
On July 14, 1995, the Company, in a private transaction effected with
seven investors, sold an aggregate of 93,335 shares of Common Stock and an
aggregate of 35,408 Common Stock Purchase Warrants (the "Warrants") for an
aggregate of $561,780.40. The private placement was intended to comply pursuant
to Section 4(2) under the Act and/or Regulation D promulgated thereunder. The
Warrants are exercisable at $7.00 per share through July 31, 2001, and the
warrantholders were accorded certain piggyback registration rights with respect
to the shares of Common Stock underlying the Warrants. ALL OF THE SHARES OF
COMMON STOCK ISSUED IN CONNECTION WITH THE JULY 1995 PLACEMENT ARE BEING
REGISTERED UNDER THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A
PART. The proceeds received by the Company as a result of the aforesaid
transaction were to make available to the Company additional working capital.
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<PAGE> 18
THE OFFERING
<TABLE>
<S> <C>
Common Stock Outstanding
Prior to Offering (1) ............ 2,089,528 shares
Common Stock Outstanding
After the Offering (2) ........... 4,315,244 shares
Risk Factors .............................. This Offering involves a high degree of risk. See
"Risk Factors."
Use of Proceeds (3)........................ All of the proceeds of this Offering will be paid to
the respective Selling Security Holders and none of
the proceeds will be received by the Company. The
Company will receive approximately $1,829,850 from the
exercise of the Options and $14,067,157 from the exercise
of the Warrants, assuming all of such securities are
exercised in full. All proceeds will be used for
working capital purposes. See "Use of Proceeds."
Nasdaq SmallCap Symbol..................... NTBM
Boston Stock Exchange Symbol............... NTB
</TABLE>
- ---------------------
(1) Does not include (i) 350,000 shares of Common Stock reserved for
issuance under the Company's 1994 Incentive Stock Option Plan, of which
131,100 shares have been reserved for currently outstanding options and
218,900 shares are available for future issuances, (ii) 200,000 shares
of Common Stock reserved for issuance under the Company's Non-Executive
Director Stock Option Plan of which options to purchase 60,545 shares
have been issued and 139,455 shares are reserved for future issuances,
(iii) 13,715 shares reserved for currently outstanding options and
under the Company's 1992 Incentive Stock Option Plan which has been
terminated; (iv) any shares of Common Stock to be issued under the MSI
Plan.
(2) Assumes the conversion of all of the shares of Series A Preferred Stock
at a conversion price of $8.48 (the average closing bid price of the
Common Stock on the Nasdaq SmallCap Market on December 9, 1996 less
25%) into 1,650,943 shares of Common Stock. Does not include (i)
350,000 shares of Common Stock reserved for issuance under the
Company's 1994 Incentive Stock Option Plan, of which 131,100 shares
have been reserved for currently outstanding options and 218,900 shares
are available for future issuances, and (ii) 200,000 shares of Common
Stock reserved for issuance under the Company's Non-Executive Director
Stock Option Plan of which options to purchase 60,545 shares have been
issued and 139,455 shares are reserved for future issuances, (iii)
13,715 shares reserved for currently outstanding options under the
Company's 1992
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<PAGE> 19
Incentive Stock Option Plan which has been terminated; (iv) any shares
of Common Stock to be issued under the MSI Plan.
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<PAGE> 20
RISK FACTORS
An investment in the Shares of Common Stock offered hereby involves a
high degree of risk. The following factors, in addition to those discussed
elsewhere in this Prospectus should be considered carefully in evaluating the
Company and its business. An investment in the Shares is suitable only for those
investors who can bear the risk of loss of their entire investment.
SAFE HARBOR STATEMENT
Certain statements in this Prospectus, and the Company's Reports to the
Commission filed under the Securities Exchange Act of 1934 which are
incorporated by reference herein, constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 (the "1995
Reform Act"). Nu-Tech Bio-Med, Inc. desires to avail itself of certain "safe
harbor" provisions of the 1995 Reform Act and is therefore including this
special note to enable the Company to do so. Forward-looking statements included
in this Prospectus or hereafter included in other publicly available documents
filed with the Securities and Exchange Commission, reports to the Company's
stockholders and other publicly available statements issued or released by the
Company involve known and unknown risks, uncertainties, and other factors which
could cause the Company's actual results, performance (financial or operating)
or achievements to differ from the future results, performance (financial or
operating) achievements expressed or implied by such forward looking statement.
Such future results are based upon management's best estimates based upon
current conditions and the most recent results of operations. These risks
include, but are not limited to risks associated with recently consummated
acquisitions (including MSI and Prompt Medical), potential acquisitions
(including PCL), uncertainty of market acceptance of Analytical Biosystem's FCA,
dependence on reimbursement by third party payors, uncertainty of eligibility
for Medicare/Medicaid reimbursement, need for additional capital, certain patent
and technology considerations, health care reform, competition and technological
changes, limited facilities, governmental regulations, dependence upon key
personnel, professional and product liability, uncertainty of completion of the
PCL acquisition, and other risks detailed in the Company's Securities and
Exchange Commission filings, including its Annual Report on Form 10-KSB for the
year ended December 31, 1995 and Report on Form 10-QSB for the quarter ended
September 30, 1996, as well as recently filed Reports on Form 8-K, each of which
could adversely affect the Company's business and the accuracy of the forward
looking statements contained herein.
HISTORICAL LOSSES AND ACCUMULATED DEFICIT OF NU-TECH
Through the third quarter of the fiscal year ended September 30 1996,
Nu-Tech was classified as a development-stage company for financial accounting
purposes by reason of the fact that it has not generated significant revenues
from operations prior to such date. Nu-Tech anticipates that as a result of the
acquisition of Prompt Medical and MSI, and resultant revenues, Nu-Tech shall no
longer be classified as a development stage company as of December 31, 1996.
Since 1990, the Company's principal business has been conducted through its
wholly-owned subsidiary, ABC. Prior to 1990, Nu-Tech, through other subsidiary
corporations, had
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<PAGE> 21
engaged in other unrelated businesses which have been discontinued. Since
inception (February 1, 1982) through September 30, 1996, the Company has
incurred an accumulated deficit during the development stage of approximately
$16,434,131. For the fiscal years ended December 31, 1995 and 1994, and the
fiscal quarter ended September 30, 1996, the Company incurred net losses of
approximately $2,089,000, $1,394,000 and $993,000, respectively. For the nine
month period ended September 30, 1996, the Company incurred net losses of
approximately $2,558,000. The amount of stockholders equity at December 31, 1995
was approximately $2,588,000, approximately $2,062,000 at March 31, 1996 and
approximately $3,404,000 at September 30, 1996. The amount of its working
capital at June 30, 1996 was approximately $3,193,000 and $2,627,000 at
September 30, 1996. It is anticipated that the Company will continue to incur
losses until such time, if ever, that ABC attains sales of its FCA in amounts
sufficient to support its operations and/or the operations of MSI can be
stabilized and returned to profitability. There can be no assurance that the
Company will be able to successfully implement its marketing strategy, generate
significant revenues or achieve profitable operations in the future. See
Consolidated Financial Statements and Notes thereto appended to the Forms 10-KSB
and 10-QSB.
ACQUISITION OF PCL
PCL is currently operating under Chapter 11 of the United States
Bankruptcy Code. Nu-Tech and PCL have submitted a plan to the United States
Bankruptcy Court to acquire PCL which is incurring ongoing and significant
losses which Nu-Tech believes is at the rate of approximately $20,000,000 per
year. Additionally, PCL is also in default on approximately $80,000,000 in
senior secured debt and approximately $40,000,000 in subordinated debt. The
Company purchased $13,300,000 of PCL Senior Debt in advance of submission of the
PCL Plan to the bankruptcy court. There can be no assurance the PCL acquisition
will be consummated or that the PCL Plan as submitted to the bankruptcy court
will be approved as submitted. Under such circumstances, in the event the PCL
Plan is not approved, the Company will be a creditor of PCL holding Senior Debt
in default.
In addition to the risks associated with the businesses of the Company
and PCL on an individual basis, the combined entity will present additional
risks solely by virtue of the combination of the two companies. Assuming the
acquisition of PCL is completed, the Company's size will increase substantially
and its operations will expand from one geographical area to three areas in
three states located on opposite ends of the country. There can be no assurance
that the PCL acquisition will be consummated in accordance with the PCL Plan,
if at all.
The Company anticipates that it will require additional funds of at
least $5,000,000 to consummate the PCL acquisition. Additionally, PCL will
require further funds to stabilize its operations following the acquisition, and
may require funds to continue its operations during the pendency of the
bankruptcy proceedings. There can no assurance that these funds will be
available to either the Company or PCL.
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<PAGE> 22
ACQUISITION OF MSI
Nu-Tech has just recently completed the acquisition of MSI which
had been operating under Chapter 11 of the Bankruptcy Code since 1995. MSI
incurred losses of approximately $3,314,000 during the fiscal year ended
December 31, 1995 and of approximately $2,109,000 for the nine-month period
ended September 30, 1996. There can be no assurance that the acquisition will
result in additional profits to the Company. In addition to the risks associated
with the businesses of the Company and MSI on an individual basis, the combined
entity will present additional risks solely by virtue of the combination of the
two companies. As a result of the MSI acquisition, the Company's size has
increased substantially and its operations have expanded from one geographical
area to two areas in two states located on opposite ends of the country.
NEED FOR ADDITIONAL FUNDS
The Company anticipates it will need additional capital of at least
$5,000,000 to consummate the PCL acquisition and an additional $3,000,000 for
operation of MSI. In addition, the Company must obtain funds in the amount of
$2,500,000 to repay the indebtedness incurred in connection with the MSI
acquisition, which indebtedness is due and payable in full, on January 31, 1997.
Additionally, the Company will require funding to finance operations of ABC and
Nu-Tech. The Company, in the future, will also need additional funds from loans
and/or the sale of equity securities. No assurance can be given that such funds
will be available or, if available, will be on commercially reasonable terms
satisfactory to the Company. In the event such funds are not available, the
Company may be forced to curtail operations, or, in an extreme situation, cease
operations.
RISKS OF COMBINED BUSINESSES
In addition to the risks associated with the businesses of Nu-Tech, MSI
and Prompt Medical on an individual basis, which have been described elsewhere
in this Prospectus, the combined entity will present additional risks solely by
virtue of the combination of these companies. Additionally, the Company has
proposed, as described elsewhere in this Prospectus, acquiring PCL. As a result
of the recently consummated acquisitions of Prompt Medical and MSI, Nu-Tech's
size has increased substantially and its operations have expanded from one
geographical area to three areas in three different states at opposite ends of
the country. Additionally, if the PCL acquisition is consummated as
contemplated, Nu-Tech's size will further increase and its operations will be
further expanded. Nu-Tech's existing management has no experience in operating a
company of such dimension and there can be no assurance management will be able
to effectively operate the combined entities.
RISK FACTORS ASSOCIATED WITH MEDICAL LABORATORY BUSINESS
As a result of Nu-Tech's recent acquisition of MSI, and in light of
its proposed acquisition of PCL, both of which are discussed elsewhere
in this Prospectus, the
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<PAGE> 23
Company is presently, and will continue to be after the consummation of the PCL
acquisition, subject to numerous risks associated with the medical laboratory
business. Investors in the Shares are urged to consider these risks in
evaluating the Company and its new businesses.
Competition
Competition in the clinical laboratory industry is intense. Each of MSI
and PCL competes with other independent clinical laboratories as well as
laboratories located in physicians' offices and in hospitals. Several regional
and national independent clinical laboratories are larger and have greater
financial resources than either MSI or PCL. Each of MSI or PCL may encounter
more intense and varying levels of competition from other independent clinical
laboratory companies in the future. In addition, changes in the regulatory
environment in which each of MSI and PCL operates could affect the basis for
competition in the industry, and could thereby have a material adverse effect on
each of MSI and PCL's results of operations. There is also competition in the
industry for acquisition candidates, and there can be no assurance that such
candidates will be available to Nu-Tech, MSI or PCL on favorable terms, or at
all.
The Stark Bill and Other Restrictions Referral
Each of MSI and PCL are subject to certain self-referral prohibitions
of Federal law, commonly known as the "Stark Bill." The Stark Bill, which became
effective January 1, 1992, generally prohibits MSI and PCL from billing the
Medicare program if the physician ordering the test (or an immediate family
member of such physician, as defined by Stark Bill) has an ownership or
investment interest in the Company, MSI or PCL or a compensation arrangement
with the Company. Ownership interests would include ownership of shares of
Common Stock purchased in the open market or otherwise. In the event that a
significant number of either MSI or PCL's referring physicians who, in the
aggregate, refer to either MSI or PCL a significant portion of their respective
Medicare-billed testing were to acquire and maintain ownership or investment
interests in either MSI or PCL, or enter into compensation agreements with
either MSI or PCL, and in such case either Nu-Tech, MSI or PCL were to continue
to perform testing services for such physicians comprising a significant portion
of either Nu-Tech, MSI or PCL's Medicare-billed testing, then either MSI or
PCL's inability to bill the Medicare program for tests ordered by such
physicians would have a material adverse effect on their respective revenues.
Each of MSI and PCL have internal procedures to identify referring physicians
who are stockholders of either Nu-Tech MSI or PCL by asking such physicians to
indicate whether they own any securities of NuTech MSI or PCL on provided test
requisition forms. There can be no assurance that physicians have complied or
in the future will comply with these requests or accurately represent ownership
of any Common Stock. The Stark Bill also requires MSI and PCL to comply with
certain reporting requirements relating to physicians who have an ownership
interest in the Company and physicians who order tests from, and have a
compensation arrangement with, the Company. There can be no assurance that
either the Company, MSI or PCL will be able to obtain adequate information
concerning its physician stockholders to enable it fully to comply with these
reporting obligations. Proposed regulations implementing the Stark Bill also
would prohibit the Company, MSI and PCL from
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<PAGE> 24
offering a physician price discounts for laboratory services as an inducement
for obtaining Medicare referrals. Those regulations also would prohibit the
purchase by the Company of a physician-owned laboratory unless, for a period of
one year before the transaction and one year after the transaction, the
physician had not had any other financial relationship with the Company, MSI or
PCL. Violations of the Stark Bill could subject the Company to significant civil
penalties or exclusion from the Medicare program.
In August, 1993, Congress passed and the President signed the Omnibus
Budget Reconciliation Act of 1993 ("OBRA '93"), which amended certain important
provisions of the Stark Bill. OBRA '93 extended the prohibition on physician
self-referrals to all Medicare- and Medicaid-billable clinical laboratory
services, prohibiting the billing of such services to Medicare, Medicaid or any
other State plan. Under the amendments, physician ownership of shares in a
publicly traded corporation in which the average stockholder equity either at
the end of the corporations' most recent fiscal year or an average over the
prior three fiscal years exceeds $75 million will not be considered ownership or
an investment interest subject to the prohibition. While this exception is not
relevant to the ownership of shares in the Company at present, it may apply in
the future.
In July, 1993 the California Legislature passed, and the Governor
signed, a comprehensive workers' compensation reform package. One of the
statutes prohibits the referral by a physician of workers' compensation medical
services to a clinical laboratory in which the physician or his or her family
has a financial interest. The term "financial interest" is defined very broadly,
covering many forms of direct or indirect payments, and includes interests which
are created or transferred to avoid the prohibition. The legislation exempts
referrals under the following circumstances: (1) when the physician's practice
is in a rural area and there is no alternative site within a reasonable
distance, (2) when the financial interest is a loan made on commercially
reasonable terms and the terms are not affected by referrals or volume of
services, (3) when the financial interest is a lease made on commercially
reasonable terms and the terms are not affected by referrals or volume of
services, (4) when the interest is ownership of securities in a public company
for which distribution or transfers for value are not based on referrals and
which has gross assets over $100 million (a condition which presently is not met
by the Company), (5) when the physician is not compensated for the referral or a
university employed physician refers to a university owned laboratory and (6)
when the laboratory is owned by the physician's group practice or the referral
is made by the physician's group practice to a multi-specialty clinic. The law
also requires disclosure to the patient of any financial interest of the
physician in the facility to which the referral is made. Violation of the law,
which is a misdemeanor, could subject MSI or PCL to fines and disciplinary
action, including license revocation.
Prohibitions of Mark-up of Laboratory Services
Clinical laboratories, physicians, hospitals and other health care
providers in California are subject to Section 655.5 of the California Business
and Professions Code. This statute prohibits those subject to the statute,
including MSI and PCL, in billing patients or third-party payors, from
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marking up charges for any clinical laboratory services actually not rendered
by the provider. Approximately % of the net revenue of PCL for fiscal year
ended December 31, 1995 was attributable to tests performed for PCL to its
customers. Less than % of the net revenue for PCL for fiscal year ended
December 31, 1995 was attributable to the marked-up portion of such charges.
Approximately % of the net revenue of MSI for fiscal year ended December 31,
1995 was attributable to tests performed for MSI to its customers. Less than
% of the net revenue for MSI for fiscal year ended December 31, 1995 was
attributable to the marked-up portion of such charges.
Antikickback Laws
The Medicare/Medicaid antikickback statute prohibits laboratories from
paying remuneration as inducement for referrals of patients or specimens to
third parties for testing and contains severe penalties for violating testing
services reimbursed by the Medicare or Medicaid (referred to in California as
"MediCal") programs. NuTech, PCL and MSI believe that their existing business
relationships do not violate this statute. Court decisions and an
administrative decision suggest that any direct or indirect payment conferred
upon one who refers Medicare or Medicaid patients by or on behalf of the
referral recipient may violate the statute if any part of the purpose of such
benefits is to provide an incentive for such referrals. In addition, a provider
convicted of violating such laws would b excluded from participation in the
Medicare and MediCal programs. The Office of Inspector General of the United
States Department of Health and Human Services has issued "safe harbor"
regulations, which identify certain payment practices which do not violate the
antikickback statute. Although these regulations protect certain types of
investment interests, they do not protect investments by physicians or
hospitals in Nu-Tech, PCL or MSI or the purchase of clinical laboratories from
persons in a position to refer business to the laboratory after the purchase
occurs.
California law also prohibits the receipt or acceptance by licensed
physicians of various forms of consideration, including rebates, refunds,
discounts or preferences as compensation or inducement for referring patients,
clients or customers to any other person (including a clinical laboratory),
irrespective of any ownership which the physician may have in the entity to
which the referral is made or the source of payment of other services.
Laboratories that violate the California antikickback laws may be subject to
loss of licensure and substantial fines. In addition, a provider convicted of
violating such laws would be excluded from participation in the Medicare and
MediCal programs. Each of PCL and MSI believe that it satisfies the requirements
of California law with respect to its relationship with its physician-owners.
Medicare/MediCal Reimbursement
Laboratories are required to bill Medicare or MediCal directly for
services and supplies provided to patients under these programs, and to accept
Medicare or MediCal reimbursement as payment in full. In 1984, Congress
established a reimbursement fee schedule for clinical laboratory testing
performed for Medicare beneficiaries (excluding hospital in-patients). State
20
<PAGE> 26
Medicaid programs, including MediCal, are prohibited from paying more than the
Medicare fee schedule stipulates for testing for Medicaid beneficiaries. When
initially established, the Medicare fee schedules were set at 60% of prevailing
local charges. Medicare reimbursement rates for clinical laboratory testing
subsequently have been reduced several times pursuant to Congressional mandate.
The reductions in Medicare reimbursement rates have been offset to some extent
by increases in both the national cap and local fee schedules tied to the
Consumer Price Index ("CPI"). Further decreases in such fee schedules, however,
could have a material adverse effect on businesses and operations of PCL and
MSI. Proposals that would reduce the amounts reimbursable to and other
independent testing laboratories under the Medicare program are continuously
under consideration by Congress and the Executive Branch.
Capitation Risk
Approximately ___% of the net revenue of PCL during its last fiscal
year was derived from testing performed on behalf of members of HMOs.
Approximately ___% of the net revenue of MSI during its last fiscal year was
derived from testing performed on behalf of members of HMOs. Each of MSI and PCL
is paid a fixed fee per month for each HMO member for whom it has agreed to
perform clinical laboratory services, and therefore is at risk that the variable
cost of providing such services will exceed the related revenues. To the extent
that a greater percentage of either MSI's or PCL's business in the future is
derived from capitated payments, this risk will be amplified and the revenues
and operations of each may be materially affected.
Management Information Systems
MSI's and PCL's testing operations and the level of service provided by
each of PCL and MSI to its clients are dependent upon the accurate and effective
operation of their respective management information systems. Any difficulty
associated with or failure of such systems even for a short period of time, or
any inability to expand processing capacity or develop and maintain networking
capability when needed, could have a material adverse effect upon MSI's and
PCL's results of operations.
Litigation and Liability Insurance Coverage
Although no significant liability has been imposed to date, each of
MSI, PCL and Nu-Tech could be subject to legal actions arising out of the
performance of its testing services, which could entail significant costs and
liabilities. There can be no assurance that Nu-Tech, MSI or PCL will not
at some time in the future incur significant liability arising out of such
actions or any other actions relating to past or future testing services. While
each of Nu-Tech, MSI and PCL currently maintains liability insurance, there can
be no assurance that such coverage is sufficient, that each of Nu-Tech, MSI and
PCL will be able to maintain such coverage with appropriate policy limits at an
acceptable cost or that each of Nu-Tech, MSI and PCL will have other resources
sufficient to satisfy any liability or litigation expense that may result from
any uninsured or underinsured claims.
21
<PAGE> 27
OTHER RISKS
UNCERTAINTY OF MARKET ACCEPTANCE OF ANALYTICAL BIOSYSTEMS' FCA
Since 1986, ABC has performed over 4,100 assays on solid mass tumors
collected from over 250 different institutions and physicians. To date, however,
ABC has attempted only limited marketing of the FCA. Demand for and market
acceptance of the FCA is subject to a high degree of uncertainty, and there can
be no assurance that the FCA will ever achieve a sufficient level of market
acceptance to enable ABC to become profitable. The commercial success of ABC is
materially dependent upon its ability to educate the medical community
generally, and oncologists, surgeons, hospitals and HMOs in particular, of the
benefits and applications of ABC's assay, and to distinguish ABC's technology
from existing technology in the field and assays marketed by others. The process
of educating the physician regarding the use and benefits of a new technology
such as the FCA is, in the Company's opinion, difficult. No assurance can be
given that ABC will be able to successfully recruit experienced sales personnel
or successfully implement its proposed sales and marketing programs. In
addition, as part of ABC's research and development and to enhance the ability
of ABC to proceed with its intended sales and marketing of the FCA, ABC is
seeking to develop new protocols to conduct new randomized prospective clinical
trials. While the clinical trials which the Company anticipates conducting are
not required as a condition to use or market the FCA, the Company believes that
the results will have a material effect upon the acceptance of the Company's
assay and the ultimate success of the Company's business, in that such results
would, if they demonstrate the efficacy of the FCA, be an added sales and
marketing tool. There is no assurance as to the results of such anticipated
non-mandatory clinical trials or the time over which such trials will be
completed.
DEPENDENCE ON REIMBURSEMENT BY THIRD PARTY PAYORS
The success of ABC in being able to market its FCA, in addition to
educating potential users, will be dependent upon its ability to obtain routine
reimbursement approval from third party payors. Additionally, the businesses of
both MSI and PCL are dependent upon reimbursement for services. Reimbursement
for diagnostic tests is typically determined by reference to whether such tests
are generally accepted as standard medical practice by each third party payor,
how the charges for such tests compare to charges for established tests for
similar indications, and whether the charges are within the range of usual and
customary services. Such determinations are independently made by each third
party payor. Third party payors also consider whether a test will further the
general objective of health care cost containment and enhance the potential for
the reduction of treatment costs. ABC has recently received an expanded license
from the State of Rhode Island which allows ABC to utilize existing CPT codes
for portions of its laboratory services and which ABC anticipates will enable
ABC to obtain reimbursement for certain of its services. There can be no
assurance that the Company will be able to maintain reimbursement approval on
a routine basis from enough additional third party payors so as to have a
significant impact on the marketing of the FCA. In the absence of third party
reimbursement, the Company
22
<PAGE> 28
will be dependent upon direct patient payment. Such dependence may affect the
amount and collectability of receivables of ABC.
CERTAIN PATENT AND TECHNOLOGY CONSIDERATIONS
Prior to the acquisition of Prompt Medical and MSI, the Company's
primary business was the FCA being marketed through Analytical Biosystems. ABC
is the owner of three patents granted by the United States Patent Office
relating to the FCA and its integral technology, as well as foreign patents
which are founded upon its United States patents. The Company views ABC's
patents as being material to ABC's business, its future success, and its ability
to compete. The three United States patents were originally issued in 1985, 1988
and 1990, and the protection afforded the Company by virtue of such patents will
expire in the years 2002, 2005 and 2007, respectively. On and after the
respective dates of the expiration of the Company's patents, the Company's
patented technology may become generally available to the marketplace.
ABC's success will depend in part on its ability to defend its patents,
maintain trade secrets and operate without infringing upon the proprietary
rights of others, both in the United States and in foreign countries. In
addition, there can be no assurance that any patents issued to ABC will
not be challenged, invalidated or circumvented, or that the rights granted
thereunder will afford ABC protection from competitive products or processes.
Furthermore, there can be no assurance that ABC or the Company will have the
financial or other resources necessary to enforce or to defend a patent
infringement or proprietary rights violation action. Neither ABC nor Nu-Tech is
aware of any objection or challenge to its patents or of any asserted claim of
patent infringement.
The Company also relies on certain proprietary trade secrets and
know-how, which are not patentable, and on certain ancillary technologies which
are not patentable or proprietary and are therefore available to the Company's
competitors. Although the Company has taken steps to protect its unpatented
trade secrets and know-how, there can be no assurance that the Company's trade
secrets will not otherwise become known or be independently developed or
discovered by competitors.
The ability of ABC to obtain patents and similar rights and the nature,
extent and enforceability of the intellectual property rights that may be
obtained as a result of ABC's research efforts involve complex legal and factual
concerns. Discoveries made or developed by the Company may not qualify for
patents or if qualified, may be subject to challenge or to protracted
proceedings. In addition, other public or private concerns, including
universities, may hold or have filed patent applications and have been issued
patents on inventions or otherwise possess proprietary rights to technology
which may be necessary to commercially implement the Company's inventions. The
extent to which the Company may be required to license other patents or
proprietary rights, and the cost and availability of such licenses, are
presently unknown. There can be no assurances that others may not independently
develop similar technology or otherwise obtain access to the Company's know-how.
23
<PAGE> 29
HEALTH CARE REFORM
The Clinton Administration and various Congressional and private
parties have proposed various plans to continue the reform of health care.
Numerous alternatives are under consideration, including mandated basic health
care benefits, controls on health care spending, price controls, the creation of
large insurance purchasing groups and fundamental changes in the health care
delivery system. In addition, several states have passed and implemented, or are
considering, various health care reform proposals. The various proposals and
plans may affect the businesses and operations of each of Nu-Tech, MSI, NTBM and
ABC, as well as PCL. Although ABC believes its FCA to be cost-effective in
overall chemotherapy treatment, changes in the level of support by federal and
state governments of health care services, the methods by which such services
may be delivered and the prices for such services may all have a materially
adverse impact on the Company's ability to achieve and sustain a profit. Health
care reform could also reduce the profitability of certain medical institutions
and, in turn, adversely impact the fees Nu-Tech, MSI, PCL, NTBM and ABC are able
to charge for their services. The Company cannot predict which, if any, health
care reform plan might be adopted or, if adopted, the effect on these
businesses.
COMPETITION AND TECHNOLOGICAL CHANGES
At the present time, there are several companies which commercially
market chemoresistant assays in addition to general oncology related laboratory
services. The Company believes that it is the only company currently marketing a
patented chemosensitivity assay in the United States. ABC believes that it
competes based upon its patented technology, the high evaluability rate (i.e.,
the ability to successfully test the tumor) for most types of human solid
tumors, and the positive and negative predictive accuracy of ABC's FCA assay.
There can be no assurance that ABC's competitors will not succeed in developing
technologies and services that are more accurate and effective than ABC's FCA or
any other assay which may be developed by ABC or that would render the Company's
technology and services obsolete or noncompetitive. In addition, in the event of
the future development and approval of chemotherapeutic drugs which are not
capable of being assayed by the FCA and such drugs become commonly used, such
event may materially affect the ability of Analytical Biosystems to market the
FCA.
In addition, there are many public and private companies, including
several well-known pharmaceutical companies and specialized biotechnology
companies, universities and research centers, engaged in developing therapeutic
and diagnostic products for the treatment of cancer. Many of ABC's competitors
have substantially greater financial and technological resources than the
Company or Analytical Biosystems, and have significantly greater experience in
sales and marketing and research and development. Such companies may be more
successful in developing alternate methods to predict the effectiveness or
non-effectiveness of chemotherapeutic drugs on an individual cancer patient.
24
<PAGE> 30
LIMITED FACILITIES FOR FCA SERVICES
ABC currently has limited laboratory facilities at which to perform its
FCA services. Since 1986, the Company has performed over 4,100 assays and
currently is performing approximately 20 assays per month. The Company believes
that ABC's present facilities are adequate to allow ABC to perform up to
approximately 900 assays per month. No assurance may be given that the Company
will have adequate or sufficient cash resources to fund necessary expansion of
facilities and equipment to fully accommodate its future needs, or that
additional capital for such purposes will be available to it. Such
circumstances would have an adverse effect upon the ABC's ability to maximize
its business potential. Although as a result of the MSI acquisition and
proposed PCL acquisition the Company has and will have additional laboratory
facilities at its disposal, there can be no assurance that the operations of
ABC will be positively augmented by or assumed by these new facilities.
PLEDGE OF PRINCIPAL ASSETS TO SECURE EXISTING LOANS
FROM THE STATE OF RHODE ISLAND
In connection with a series of loans obtained during 1993 and 1994 by
the Company from the State of Rhode Island Economic Development Small Business
Loan Fund Corporation ("SBLFC") in the principal aggregate amount of $791,000,
the Company executed two patent security agreements granting the SBLFC a
security interest in ABC's patents to secure $541,000 of the $791,000 of SBLFC
loans (the principal balance of which, as of September 30, 1996, was
approximately $370,000). All of the SBLFC loans, including those which are
subject to the patent security interest, are further secured by a security
interest in the Company's accounts receivable, inventory and equipment. Each of
these loans is for a term of five years from its respective loan date, bear
interest at the rate of 5.4% and, as to each loan, after the first year is
amortized monthly as to principal and interest. The aggregate amount of monthly
loan repayments are approximately $18,000 per month for the remainder of the
loan terms. In the event that the Company, for whatever reason, is unable to
continue to meet its loan repayment obligations, its assets will be subject to
the rights of the SBLFC as a secured party. Further, until the SBLFC loans are
repaid, it is unlikely that the Company or ABC will be able to obtain additional
secured financing.
GOVERNMENTAL REGULATION
The Company is subject to regulation by the Health Care Financing
Administration ("HCFA") a division of the United States Department of Health
and Human Services, under the Clinical Laboratories Improvement Act of 1988
("CLIA"). These regulations mandate that all clinical laboratories be certified
to perform testing on human specimens and provide specific conditions for
certification. These regulations also contain guidelines for the qualification,
responsibilities, training, working conditions and oversight of clinical
laboratory employees. In addition, specific standards are imposed for each type
of test which is performed in a laboratory. CLIA and the regulations
promulgated thereunder
25
<PAGE> 31
are enforced through continuous quality inspections of test methods, equipment,
instrumentation, materials and supplies on a biennial and "spot" basis. Any
change in CLIA or these regulations or in the interpretation thereof could have
a materially adverse effect on the Company's business, prospects, financial
condition or results of operations. To its knowledge, the Company is in
compliance with the currently applicable regulations of HCFA. At the present
time, the United States Food and Drug Administration ("FDA") does not regulate
the FCA. In addition, the extent of potentially adverse government regulations
which might arise from future legislation or administrative action cannot be
predicted.
DEPENDENCE UPON KEY PERSONNEL
The Company is dependent upon the executive abilities of its Chairman,
J. Marvin Feigenbaum, to implement its present and anticipated future plans and
programs. Mr. Feigenbaum has no background or training as a scientist, nor is
Mr. Feigenbaum a physician. The Company has entered into an employment agreement
with Mr. Feigenbaum for a term ending November 30, 1997, and has obtained, for
its benefit, a policy of key man life insurance on the life of Mr. Feigenbaum in
the amount of $1,000,000. The loss of Mr. Feigenbaum's services may have a
materially adverse effect on the business or prospects of the Company.
Additionally, as a result of the recent acquisitions of Prompt Medical and MSI,
as well as the pending acquisition of PCL, current management, especially Mr.
Feigenbaum, has been unable to devote full-time to operating ABC and the
marketing of the FCA. The Company will be required to hire additional management
or retain existing management at MSI and PCL in order to operate such
businesses. In light of the financial difficulties of both MSI and PCL,
culminating in their bankruptcy filings, it may be difficult for the Company,
MSI or PCL to attract qualified personnel to these businesses. There can be no
assurance that the Company will be successful in retaining current management or
hiring qualified persons to operate these businesses.
PROFESSIONAL AND PRODUCT LIABILITY
As a clinical laboratory performing assay services and other medical
laboratory services, the Company may be subject to professional and/or product
claims. While no claims have been asserted against or instituted to date arising
out of the performance by the Company of any assay, any such actions in the
future may subject the Company to liability for damages and significant costs
associated with the defense of such action or claim. ABC presently
maintains professional liability insurance in the amount of $1,000,000 per claim
and $3,000,000 aggregate as well as product liability insurance in the amount of
$2,000,000 per occurrence and $4,000,000 aggregate. In addition, both MSI and
PCL maintain professional liability insurance in the amount of $1,000,000 per
claim and $3,000,000 aggregate, and product liability insurance in the amount of
$1,000,000 per occurrence and $2,000,000 aggregate. There can be no assurance,
however, that this coverage will be adequate to protect the Company, MSI or PCL
against future claims or that insurance will be available to the Company, MSI or
PCL in the future on acceptable terms, if at all, or that a liability or other
claim would not materially and adversely affect the business, prospects,
financial condition or results of operations of the Company, MSI or PCL. The
26
<PAGE> 32
Company intends, however, if feasible, to increase the amounts of such insurance
coverage to such greater amount as management, in its discretion, may determine
having due regard to the cost of such insurance coverage.
CLASSIFIED BOARD OF DIRECTORS
On November 14, 1994, at a Special Meeting of Stockholders in Lieu of
Annual Meeting, the Company's stockholders authorized and approved an amendment
to the Company's Certificate of Incorporation to provide for a classified Board
of Directors consisting of three classes or directors with terms which currently
expire at the 1997, 1998 and 1999 Annual Meeting of Stockholders. Any further
amendment to the Company's Certificate of Incorporation affecting the classified
Board may only be adopted upon the affirmative vote of not less than 75% of the
issued and outstanding shares entitled to vote thereon.
NO DIVIDENDS AND NONE ANTICIPATED
Nu-Tech has never declared nor paid a dividend on any shares of its
capital stock and the Board of Directors intends to continue this policy for the
foreseeable future.
SHARES ELIGIBLE FOR RESALE
The Company currently has 2,089,528 shares of Common Stock issued and
outstanding, of which ______ shares may be deemed "restricted securities" as
that term is defined under the Securities Act of 1933, as amended. Such
restricted securities may be sold in the future only pursuant to registration
under the Act or an exemption therefrom, including Rule 144 promulgated
thereunder.
Upon the effectiveness of the registration statement of which this
Prospectus forms a part, all 2,225,716 Shares offered hereby shall be eligible
for immediate sale in the public market. This represents an increase of
approximately 106% in the total issued and outstanding shares of Common Stock of
the Company. Sales of the Shares offered hereby could adversely affect the
market price of the Company's Common Stock.
Additionally, the Company has simultaneously herewith (or anticipates
filing shortly) filed with the Securities Exchange Commission registration
statements to register for sale an additional 2,214,658 shares of Common Stock
of the Company. Sales of such additional shares will have an adverse effect upon
the price of the Company's Common Stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares of Common Stock offered hereby. The Company will receive approximately
$1,829,850 from the exercise of all of the Options and approximately
$14,067,157 from the exercise of all of the Warrants, assuming all
27
<PAGE> 33
of such securities are exercised in full of which there can be no assurance.
All such proceeds will be used for working capital proceeds as well as to fund
the acquisition of PCL and the operations of MSI, and to make payments as
required under the MSI Plan.
28
<PAGE> 34
SELLING SECURITY HOLDERS AND
TRANSACTIONS WITH SELLING SECURITY HOLDERS
AUGUST 1994 OFFERING
<TABLE>
<CAPTION>
WARRANT SHARES
SHARES OWNED OWNED PRIOR TO SHARES/WARRANT % OF SHARES OWNED
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING OFFERING SHARES OFFERED AFTER OFFERING(1)
----------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Richard Friedman(2)........... 0 5,714 0/5,714 *
Eliyahu Gurary(2)............. 5,714 11,428 5,714/11,428 *
Seymour Gordon(2)............. 2,857 5,714 2,857/5,714 *
Meyer Laufer(2)............... 8,571 17,142 8,571/17,142 *
Jeffrey Markowitz(2).......... 0 5,714 0/5,714 *
Michael G. Jesselson
and Lucy Lang
Trustees UIT 1/10/89 M/B
Benjamin J. Jesselson FBO
Yosepha Bracha
Jesselson(2)(3)............... 4,285 8,571 4,285/8,571 *
Chaim Seeger(2)............... 2,857 5,714 2,857/5,714 *
Michael G. Jesselson
and Linda Jesselson
Trustees UID
6/30/93 FBO Maya
Ariel Ruth Jesselson(2)(3).... 4,285 8,571 4,285/8,571 *
Michael G. Jesselson
and Linda Jesselson
Trustees UIT 6/1/87 FBO
Jonathan Judah
Jesselson(2)(3)............... 4,285 8,571 4,285/8,571 *
Michael G. Jesselson
and Lucy Lang
Trustees UIT 12/18/91 FBO
Yaira Jesselson(2)(3)......... 4,285 8,571 4,285/8,571 *
Dr. Michael Nichols(2)........ 2,857 5,714 2,857/5,714 *
Donald Zucker Trust
F/B/O Benjamin Louis Zucker,
Barbara Hrbek Zucker(2)....... 2,857 5,714 2,857/5,714 *
Robert Goldstein(2)........... 2,857 5,714 2,857/5,714 *
Dr. R. Michael Williams(2).... 2,857 5,714 2,857/5,714 *
Ms. Josephine Fagenson(2)..... 2,857 5,714 2,857/5,714 *
</TABLE>
29
<PAGE> 35
SELLING SECURITY HOLDERS AND
TRANSACTIONS WITH SELLING SECURITY HOLDERS
APRIL 1995 PLACEMENT
<TABLE>
<CAPTION>
WARRANT SHARES
SHARES OWNED OWNED PRIOR TO SHARES/WARRANT % OF SHARES OWNED
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING OFFERING SHARES OFFERED AFTER OFFERING(1)
----------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Erica Jesselson, Lucy Lang,
Claire Strauss,
Michael G. Jesselson,
Benjamin J. Jesselson
Trustees UID
12/18/80 FBO(3)(4)............ 33,334 12,700 33,334/12,700 *
Erica Jesselson, Lucy Lang,
Claire Strauss,
Michael G. Jesselson,
Benjamin J. Jesselson
Trustees UID
12/18/80 FBO
Benjamin J. Jesselson(3)(4)... 33,333 12,699 33,333/12,699 *
Jesselson 1983
Charitable Trust(3)(4)........ 33,333 12,699 33,333/12,699 *
Sylvia B. Slifka(4)........... 4,000 1,523 4,000/1,523 *
Transtech GBM Inc.(4)......... 4,000 1,523 4,000/1,523 *
Diana Gross(4)................ 4,000 1,524 4,000/1,524 *
Milan Glumidge(4)............. 4,000 1,523 4,000/1,523 *
Bernard Goldberg(4)........... 4,000 1,523 4,000/1,523 *
</TABLE>
30
<PAGE> 36
SELLING SECURITY HOLDERS AND
TRANSACTIONS WITH SELLING SECURITY HOLDERS
JULY 1995 PLACEMENT
<TABLE>
<CAPTION>
WARRANT SHARES
SHARES OWNED OWNED PRIOR TO SHARES/WARRANT % OF SHARES OWNED
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING OFFERING SHARES OFFERED AFTER OFFERING(1)
----------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Barnet Liberman(5)............ 16,667 6,328 16,667/6,328 *
Sam Malamud(5)................ 16,667 6,328 16,667/6,328 *
Shira Joseph(5)............... 10,000 3,804 10,000/3,804 *
Nancy Magidoff(5)............. 3,333 1,268 3,333/1,268 *
Robert Gordon(5).............. 3,333 1,268 3,333/1,268 *
Peter Gordon(5)............... 3,334 1,268 3,334/1,268 *
Sholom Schwartz(5)............ 16,667 6,328 16,667/6,328 *
Avroham Simpson(5)............ 16,667 6,328 16,667/6,328 *
Leah Kasinetz(5).............. 6,667 2,488 6,667/2,488 *
</TABLE>
31
<PAGE> 37
SELLING SECURITY HOLDERS AND
TRANSACTIONS WITH SELLING SECURITY HOLDERS
APRIL 1996 PLACEMENT
<TABLE>
<CAPTION>
WARRANT SHARES
SHARES OWNED OWNED PRIOR TO SHARES/WARRANT % OF SHARES OWNED
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING OFFERING SHARES OFFERED AFTER OFFERING(1)
----------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Gregg Marcus.................. 5,000 0 5,000/0 *
Larry Blau.................... 2,500 0 2,500/0 *
Andrew Perrotta............... 5,000 0 5,000/0 *
Nathan Muchnick............... 5,000 0 5,000/0 *
Todd Schwartz................. 2,500 0 2,500/0 *
Joseph Albanese............... 5,000 0 5,000/0 *
Dawn Marie Vicino............. 5,000 0 5,000/0 *
Sheldon Schwartz.............. 5,000 0 5,000/0 *
Glenn Chwatt.................. 5,000 0 5,000/0 *
Peter Horrigan................ 2,500 0 2,500/0 *
Robert Nardone................ 5,000 0 5,000/0 *
Stuart Green.................. 5,000 0 5,000/0 *
Karol, Hausman & Sosnik,
P.C......................... 5,000 0 5,000/0 *
Michael Roberts............... 2,500 0 2,500/0 *
Herb Cron..................... 10,000 0 10,000/0 *
Richard Schurig............... 2,500 0 2,500/0 *
Martin Schneider.............. 5,000 0 5,000/0 *
Allan Mantel.................. 2,500 0 2,500/0 *
Myron Weiner.................. 15,000 0 15,000/0 *
Nicholas Sitnycky............. 25,000 0 25,000/0 *
Sharpy Corporation............ 10,000 0 10,000/0 *
Lovella Fiedtkou.............. 2,500 0 2,500/0 *
Prudential Securities c/f
Steven Leber (IRA)............ 10,000 0 10,000/0 *
Barry Leibowitz............... 2,500 0 2,500/0 *
Michael Krokel................ 5,000 0 5,000/0 *
Alliance Capital Investments
Corp........................ 10,000 0 10,000/0 *
Barry Drager.................. 5,000 0 5,000/0 *
A. Joseph Melnick............. 2,500 0 2,500/0 *
Arthur Luxenberg.............. 5,000 0 5,000/0 *
Eric Witmondt................. 5,000 0 5,000/0 *
Conrad Isoldi................. 5,000 0 5,000/0 *
Barry Gersten................. 5,000 0 5,000/0 *
Fred Kasner................... 5,000 0 5,000/0 *
Cindy Dolgin.................. 2,500 0 2,500/0 *
Harvey Berkman................ 5,000 0 5,000/0 *
Behala Anstalt................ 50,000 0 50,000/0 *
</TABLE>
32
<PAGE> 38
SELLING SECURITY HOLDERS AND
TRANSACTIONS WITH SELLING SECURITY HOLDERS
OPTIONS
<TABLE>
<CAPTION>
WARRANT SHARES
SHARES OWNED OWNED PRIOR TO SHARES/WARRANT % OF SHARES OWNED
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING OFFERING SHARES OFFERED AFTER OFFERING(1)
----------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Kenneth Blackman, Ph.D.(5).... 0 33,571 0/5,714 *
Patricia Meitner, Ph.D.(7).... 0 2,928 0/714 *
Joseph DiBenedeto, M.D.(9).... 0 1,429 0/1,429 *
Greg Goulette(10)............. 0 2,143 0/2,143 *
David Scott(11)............... 0 143 0/143 *
Jules Reich(12)............... 0 5,714 0/5,714 *
</TABLE>
33
<PAGE> 39
SELLING SECURITY HOLDERS AND
TRANSACTIONS WITH SELLING SECURITY HOLDERS
WARRANTS
<TABLE>
<CAPTION>
WARRANT SHARES
SHARES OWNED OWNED PRIOR TO SHARES/WARRANT % OF SHARES OWNED
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING OFFERING SHARES OFFERED AFTER OFFERING(1)
----------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Small Business Loan Fund
Corporation(12)............... 0 45,714 0/45,714 *
Equity Group(13).............. 0 7,143 0/7,143 *
Starr Securities(14).......... 0 73,000 0/73,000 *
Stanley R. Goldstein(15)...... 1,000 10,000 1,000/10,000 *
Victor J. DiGioia............. 0 10,000 0/10,000 *
Charles P. Axelrod(15)........ 0 10,000 0/10,000 *
Charles Laloggia(16).......... 0 30,000 0/30,000 *
Dr. Fishkin(17)............... 0 30,000 0/30,000 *
J. Marvin Feigenbaum(18)...... 9,999 500,000 9,999/500,000 *
Kenneth Orr(19)............... 41,273 60,000 0/60,000 *
Michael Metter(19)............ 0 15,000 0/15,000 *
Robert S. Colman Trust(20).... 0 37,500 0/37,500 *
Joseph F. Furlong III(20)..... 0 37,500 0/37,500 *
World Capital Funding(22)..... 60,000 27,404 0/27,404 *
Shalom Steinberg(22).......... 0 3,500 0/3,500 *
Manchester Asset Management (22) 0 27,405 0/27,405 *
Settondown International Capital (22) 0 27,405 0/27,405 *
Corporate Relations
Group(23)................... 0 300,000 0/300,000 *
</TABLE>
SHARES
<TABLE>
<CAPTION>
WARRANT SHARES
SHARES OWNED OWNED PRIOR TO SHARES/WARRANT % OF SHARES OWNED
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING OFFERING SHARES OFFERED AFTER OFFERING(1)
----------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Zev Feigenabum Trust 45,316 0 45,316/0 *
</TABLE>
34
<PAGE> 40
- ---------------
(1) Assumes the exercise of all options and warrants referred to herein.
Denotes less than 1%. Does not include (i) 350,000 shares of Common Stock
reserved for issuance under the Company's 1994 Incentive Stock Option
Plan, of which 131,100 shares have been reserved for currently outstanding
options and 218,900 shares are available for future issuances, (ii) 200,000
shares of Common Stock reserved for issuance under the Company's
Non-Executive Director Stock Option Plan of which options to purchase
60,545 shares have been issued and 139,455 shares are reserved for future
issuances, (iii) 13,715 shares reserved for currently outstanding options
and under the Company's 1992 Incentive Stock Option Plan which has been
terminated; and (iv) any shares of Common Stock to be issued under the
MSI Plan.
(2) Includes Common Stock Purchase Warrants exercisable at $7.00 per Share
(subject to adjustment) and exercisable until July 2001.
(3) Michael G. Jesselson is a trustee, co-trustee and/or a beneficiary of the
several referenced trusts and therefore holds shared voting and dispositive
power.
(4) Includes Common Stock Purchase Warrants exercisable at $7.00 per Share
(subject to adjustment) and exercisable until July 2001.
(5) Includes Common Stock Purchase Warrants exercisable at $7.00 per Share
(subject to adjustment) and exercisable until July 2001.
(6) Intentionally omitted
(7) Includes non-qualified options to purchase 357 Shares at an exercise price
of $6.30 per Share and are exercisable until January 2002.
(8) Includes non-qualified options to purchase 1,429 Shares at an exercise
price of $12.25 per Share and are exercisable until May 1998.
(9) Includes non-qualified options to purchase 2,143 Shares at an exercise
price of $4.37 per Share and are exercisable until May 1998.
(10) Includes non-qualified options to purchase 143 Shares at an exercise price
of $20.30 per Share and are exercisable until December 1997.
(11) Includes non-qualified options to purchase 5,714 Shares at an exercise
price of $6.30 per Share and are exercisable until October 1998.
(12) Includes Common Stock Purchase Warrants to purchase 2,857 Shares at an
exercise price of $15.75 per Share and exercisable until February 1998 and
Common Stock Purchase Warrants to purchase 42,857 Shares at an exercise
price of $28.35 per Share and exercisable until April 1998.
(13) Includes Common Stock Purchase Warrants to purchase 7,134 Shares at an
exercise price of $6.30 per Share and exercisable until October 1998.
35
<PAGE> 41
(14) Includes Common Stock Purchase Warrants to purchase 73,000 Shares at an
exercise price of $9.10 per Share and exercisable until December 1999.
Starr Securities served as underwriter for the Company's December 1994
public offering. Does not include shares of Common Stock held in Starr's
trading account or from time to time in connection with its market making
and trading activities.
(15) Includes Common Stock Purchase Warrants to purchase 10,000 Shares at an
exercise price of $7.00 per Share and exercisable until December 2001. Mr.
Goldstein and Mr. DiGioia are members of the law firm of Goldstein and
DiGioia LLP which serves as general counsel to the Company. Mr. Axelrod is
a former member of the firm.
(16) Includes Common Stock Purchase Warrants to purchase 30,000 Shares at an
exercise price of $7.00 per Share and exercisable until September 1998.
(17) Includes Common Stock Purchase Warrants to purchase 75,000 Shares at an
exercise price of $14.50 per Share and exercisable until March 2001.
(18) Includes Common Stock Purchase Warrants to purchase 300,000 Shares at an
exercise price of $7.00 per Share and exercisable until December 2001.
Also includes Common Stock Purchase Warrants to purchase 200,000 Shares
at $11.625 exercisable until December 2001. Does not include 45,000
Options accrued by the Feigenbaum Foundation of which Mr. Feigenbaum is
trustee. Mr. Feigenbaum serves as President, Chief Executive Officer and
Chief Financial Officer of the Company. Does not include options to
purchase 105,000 shares granted under the 1994 Employee Stock Option Plan.
(19) Includes Common Stock Purchase Warrants at an exercise price of $14.50 per
Share and exercisable until April 2001. Mr. Orr is the President and sole
stockholder of First Cambridge Securities Corporation. First Cambridge
served as placement agent in connection with the Company's April 1996
placement. Mr. Mettor serves as an officer of First Cambridge. Does not
include shares of Common Stock held in First Cambridge's trading account or
from time to time in connection with its market making and trading
activities.
(20) Includes Common Stock Purchase Warrants at an exercise price of $9.50 per
Share and exercisable until November 2001.
(21) Intentionally omitted
(22) Includes Common Stock Purchase Warrants at an exercise price of $15.00 per
Share and exercisable until December 2001.
(23) Includes Common Stock Purchase Warrants to purchase 200,000 Shares at an
exercise price of $14.00 per Share and exercisable until September 1997 and
Common Stock Purchase Warrants to purchase 100,000 Shares at an exercise
price of $16.80 per Share and exercisable until September 1998.
36
<PAGE> 42
DESCRIPTION OF SECURITIES
THE COMPANY'S AUTHORIZED CAPITALIZATION CONSISTS OF 12,000,000 SHARES
OF COMMON STOCK, PAR VALUE $.01 PER SHARE AND 1,000,000 SHARES OF PREFERRED
STOCK, PAR VALUE $.01 PER SHARE, WHICH MAY BE ISSUED IN ONE OR MORE SERIES. AS
OF THE DATE HEREOF, THERE WERE 2,089,528 SHARES OF COMMON STOCK OUTSTANDING AND
14,000 SHARES OF SERIES A PREFERRED STOCK OUTSTANDING. NO OTHER SHARES OR
CLASSES OF PREFERRED STOCK HAVE BEEN AUTHORIZED OR ISSUED. THE FOLLOWING SUMMARY
DESCRIPTION OF THE COMMON STOCK AND PREFERRED STOCK ARE QUALIFIED IN THEIR
ENTIRETY BY REFERENCE TO THE COMPANY'S ARTICLES OF INCORPORATION.
COMMON STOCK
Each share of Common Stock entitles its holder to one non-cumulative
vote per share and, the holders of more than fifty percent (50%) of the shares
voting for the election of directors can elect all the directors if they choose
to do so, and in such event the holders of the remaining shares will not be able
to elect a single director. Holders of shares of Common Stock are entitled to
receive such dividends as the Board of Directors may, from time to time, declare
out of Company funds legally available for the payment of dividends. Upon any
liquidation, dissolution or winding up of the Company, holders of shares of
Common Stock are entitled to receive pro rata all of the assets of the Company
available for distribution to shareholders after the satisfaction of the
liquidation preference of the Preferred Stockholders.
Shareholders do not have any pre-emptive rights to subscribe for or
purchase any stock, warrants or other securities of the Company. The Common
Stock is not convertible or redeemable. Neither the Company's Certificate of
Incorporation nor its By-Laws provide for pre-emptive rights.
PREFERRED STOCK
General. The Preferred Stock may be issued in one or more series, to be
determined and to bear such title or designation as may be fixed by resolution
of the Board of Directors prior to the issuance of any shares thereof. Each
series of the Preferred Stock will have such voting powers (including, if
determined by the Board of Directors, no voting rights), preferences, and other
rights as determined by the Board of Directors, with such qualifications,
limitations or restrictions as may be stated in the resolutions of the Board of
Directors adopted prior to the issuance of any shares of such series of
Preferred Stock.
Because the terms of each series of Preferred Stock may be fixed by the
Company's Board of Directors without shareholder action, the Preferred Stock
could be issued with terms calculated to defeat a proposed takeover of the
Company, or to make the removal of the Company's management more difficult.
Under certain circumstances, this could have the effect of decreasing the market
price of the Common Stock. Management of the Company is not aware of any such
threatened transaction to obtain control of the Company.
37
<PAGE> 43
SERIES A CONVERTIBLE PREFERRED STOCK
The Company filed a Certificate of Designation (the "Certificate of
Designation") on October 23, 1996 which was subsequently amended on November 20,
1996 with the Secretary of State of Delaware designating 14,000 shares of
Preferred Stock as "Series A Convertible Preferred Stock." The following is a
summary of the rights, preferences and privileges of the Series A Preferred
Stock.
Dividends. Holders of shares of the Series A Stock are not be entitled
to receive dividends in cash or otherwise.
Liquidation Rights. In case of the voluntary or involuntary
liquidation, dissolution or winding up of the Company, holders of shares of
Series A Preferred Stock are entitled to receive the liquidation price of $1,000
per share before any payment or distribution is made to the holders of the
Common Stock or any other series or class of the Company's stock hereafter
issued which ranks junior as to liquidation rights to the Series A Preferred
Stock. The holders of the shares of the Series A Preferred Stock will not be
entitled to receive the liquidation price of such shares until the liquidation
price of any other series or class of the Company's stock hereafter issued which
ranks senior as to the liquidation rights to the Series A Preferred Stock
("senior liquidation stock") has been paid in full. There is no prohibition upon
the Company's creation of senior liquidation stock. See "Voting Rights." The
holders of Series A Preferred Stock and all series or classes of the Company's
stock hereafter issued which rank on a parity as to liquidation rights with the
Series A Preferred Stock ("parity liquidation stock") are entitled to share
ratably, in accordance with the respective preferential amounts payable on such
stock, in any distribution (after payment of the liquidation price of the senior
liquidation stock) which is not sufficient to pay in full the aggregate of the
amounts payable thereon. After payment in full of the liquidation price of the
shares of the Series A Preferred Stock, the holders of such shares will not be
entitled to any further participation in any distribution of assets by the
Company. Neither a consolidation or merger of the Company with another
corporation, nor a sale or transfer of all or part of the Company's assets for
cash, securities or other property will be considered a liquidation, dissolution
or winding up of the Company.
Voting Rights. The holders of the Series A Preferred Stock will be not
entitled to voting rights except as required by Delaware Corporate Law.
Redemption. The Series A Preferred Stock is not redeemable by the
Company at any time.
Conversion Rights. Commencing on the 45th day following the closing of
the Offering Period, and on the 75th and 105th days following the closing of the
Offering Period, on each such date one-third of the Shares sold in the Offering
will be convertible into Common Stock, at the option of the holder. The Shares
will be convertible into such number of shares of Common Stock (the "Conversion
Shares") as shall equal $1,000 divided by a Conversion Rate equal to the lesser
of (i) 75% of the average closing price of the Common Stock on the Nasdaq
SmallCap Market for the 5 trading days immediately preceding the date of the
holder's notice of conversion or (ii) $17.50, subject to adjustment as described
below. No fractional shares will be issued and, in lieu of any fractional share,
cash in an amount based on the then current market price, determined as provided
in the Certificate of Designation, of the Common Stock will be paid.
38
<PAGE> 44
The conversion rate of the Series A Preferred Stock is subject to
adjustment in certain circumstances, including the payment of a stock dividend
on shares of the Common Stock. combinations and subdivisions of the Common
Stock, certain reclassifications of the Common Stock, and certain cash dividends
and distributions of evidences of indebtedness or assets to holders of certain
of the Company's capital stock. No adjustment in the conversion rate is required
unless it would result in at least a 1% increase or decrease in the conversion
rate; however any adjustment not made is carried forward. No adjustment need be
made in the conversion rate in any of the foregoing cases if the holders of the
Series A Preferred Stock participate in the distribution or transaction on a
basis and with notice that the Board of Directors determines to be fair to the
holders of the Series A Stock.
In case of any consolidation or merger of the Company with any other
corporation (other than a wholly-owned subsidiary), or in case of sale or
transfer of all or substantially all of the assets of the Company, or in the
case of any share exchange whereby the Common Stock is converted into other
securities or property, the Company will be required to make appropriate
provision so that the holder of each share of Series A Preferred Stock then
outstanding will have the right thereafter to convert such share of Series A
Preferred Stock into the kind and amount of shares of stock and other securities
and property receivable upon such consolidation, merger, sale, transfer or share
exchange by a holder of the number of shares of Common Stock into which such
share of Series A Preferred Stock might have been converted immediately prior to
such consolidation, merger, sale, transfer or share exchange.
Mandatory Conversion. In the event that less than all of the Shares of
Series A Preferred Stock are not converted prior to the date which is 270 days
from the closing of the Offering Period, then the Company has the right, upon 30
days prior notice to cause all remaining outstanding Shares of Series A
Preferred Stock to be mandatorily converted into Common Stock at the then
applicable conversion rate.
Registration Rights and Adjustment. Under the terms of the Series A
Preferred Stock, and a registration rights agreement entered into among the
Company and the holders of the Series A Preferred Stock, the Company agreed that
it would use its best efforts to file with, and have declared effective by, the
Commission a registration statement with respect to the shares of Common Stock
underlying the Series A Preferred Stock within 120 days of receipt of a demand
notice from the holders of a majority of the Series A Preferred Stock. This
Prospectus forms a part of the registration statement filed by the Company in
response to the demand notice received by the Company. Under the terms of the
Series A Preferred Stock, in the event the registration statement is not
declared effective within such 120 day period, the then applicable conversion
price would be reduced by 10%. In addition, for each 30 day period beyond the
120 period that the registration statement is not declared effective, the then
applicable conversion price is subject to further reduction of 2%, up to an
aggregate of 12%.
No Sinking Fund. The Company is not required to provide for the
retirement or redemption of the Series A Preferred Stock through the operation
of a sinking fund.
Other Provisions. The shares of Series A Preferred Stock, when issued,
will be duly and validly issued, fully paid and nonassessable. The holders of
the shares of the Series A Stock have no pre-emptive rights with respect to any
shares of capital stock of the Company or any other securities of the Company
convertible into or carrying rights or options to purchase any such shares.
39
<PAGE> 45
TRANSFER AGENT
The transfer agent for the Company's Common Stock is American Stock
Transfer and Trust Company, 40 Wall Street, New York, New York 10004. The
Company acts as its own transfer agent for the Series A Preferred Stock.
PLAN OF DISTRIBUTION
The Shares of Common Stock held by certain Selling Security Holders and
the Shares underlying the Options and Warrants issuable to Selling Security
Holders upon exercise thereof, may be offered and sold from time to time by the
Selling Stockholders as market conditions permit in the over-the-counter market,
or otherwise, at prices and terms then prevailing or at prices related to the
then-current market price, or in negotiated transactions. The Shares offered
hereby may be sold by one or more of the following methods, without limitation:
(a) a block trade in which a broker or dealer so engaged 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 a broker or 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) face-to-face transactions between sellers
and purchasers without a broker-dealer. In effecting sales, brokers or dealers
engaged by the Selling Stockholder may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive commissions or discounts from
the Selling Stockholders in amounts to be negotiated immediately prior to the
sale. Such brokers and dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, in connection with such sales.
Mr. Kenneth Orr, a principal of First Cambridge Securities Corp. is a
Selling Security Holder. First Cambridge is a registered broker dealer and a
market maker of the Company's Common Stock. Additionally, Starr Securities is a
Selling Security Holder and a market maker of the Company's Common Stock. Under
certain circumstances Rule 10b-6 promulgated under the Securities Exchange Act
of 1934 may preclude both First Cambridge and Starr Securities from making a
market in any of the Company's securities for up to nine days prior to the sale
of the shares by Mr. Orr or by Starr Securities pursuant to this Prospectus and
continuing until each has completed the distribution of securities. The
cessation of market making activities by First Cambridge or Starr Securities may
have a material adverse effect on the market, including price, for the Common
Stock.
REPORTS TO SHAREHOLDERS
The Company distributes annual reports to its stockholders, including
consolidated financial statements examined and reported on by independent
auditors, and will provide such other reports as management may deem necessary
or appropriate to keep stockholders informed of the Company's operations.
LEGAL MATTERS
The legality of the offering of the Shares will be passed upon for the
Company by Goldstein & DiGioia, LLP, 369 Lexington Avenue, New York, New York
l00l7. Certain members of the Firm of Goldstein & DiGioia LLP, namely
Mr. Goldstein and Mr. DiGioia, are Selling Security Holders.
40
<PAGE> 46
EXPERTS
The financial statements of Prompt Medical Billing, Inc. For the period
from March 1, 1994 (date of inception) to December 31, 1994 and for the year
ended December 31, 1995 appearing in Nu-Tech Bio-Med's Report on Form 8-K/A
filed November 14, 1996 have been audited by McClain & Company LLP, as set forth
in their report thereon included therein and 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.
The consolidated financial statements of Nu-Tech Bio-Med, Inc.
appearing in Nu-Tech Bio-Med's Annual Report (Form 10-KSB) for the year ended
December 31, 1995, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated 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.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement under the Act with the
Securities and Exchange Commission (the "Commission"), with respect to the
securities offered by this Prospectus. This Prospectus does not contain all of
the information set forth in the Registration Statement. For further information
with respect to the Company and such securities, reference is made to the
Registration Statement and to the exhibits and schedules filed therewith. Each
statement made in this Prospectus referring to a document filed as an exhibit to
the Registration Statement is qualified by reference to the exhibit for a
complete statement of its terms and conditions. The Registration Statement,
including exhibits thereto, may be inspected without charge to anyone at the
office of the Commission, and copies of all or any part thereof may be obtained
from the Commission's principal office in Washington, D.C. upon payment of the
Commission's charge for copying.
41
<PAGE> 47
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Expenses in connection with the issuance and distribution of the
securities being registered herein are estimated.
<TABLE>
<CAPTION>
Amount
------
<S> <C>
Securities and Exchange Commission
Registration Fee................................................... 7,628
Printing and Engraving Expenses..................................... 2,000
Accounting Fees and Expenses........................................ 15,000
Legal Fees and Expenses............................................. 25,000
Blue Sky Fees and Expenses.......................................... 500
Transfer Agent and Registrar Fees................................... 1,000
Miscellaneous Fees and Expenses..................................... 500
Total...........................$49,628
=
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of Delaware provides generally that a
corporation may indemnify any person who was or is a party to or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative in nature,
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
and, in a proceeding not by or in the right of the corporation, judgments, fines
and amounts paid in settlement, actually and reasonably incurred by him in
connection with such suit or proceeding, if he acted in good faith and in a
manner believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reason to believe his conduct was unlawful. Delaware law further provides that a
corporation will not indemnify any person against expenses incurred in
connection with an action by or in the right of the corporation if such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent that
the court in which such action or suit was brought shall determine that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for the expenses
which such court shall deem proper.
II-1
<PAGE> 48
The By-Laws of the Company provide for indemnification of officers and
directors of the Company to the greatest extent permitted by Delaware law for
any and all fees, costs and expenses incurred in connection with any action or
proceeding, civil or criminal, commenced or threatened, arising out of services
by or on behalf of the Company, providing such officer's or director's acts were
not committed in bad faith. The By-Laws also provide for advancing funds to pay
for anticipated costs and authorizes the Board to enter into an indemnification
agreement with each officer or director.
In accordance with Delaware law, the Company's Certificate of
Incorporation contains provisions eliminating the personal liability of
directors, except for (i) breaches of a director's fiduciary duty of loyalty to
the Company or to its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law, and
(iii) any transaction in which a director receives an improper personal benefit.
These provisions only pertain to breaches of duty by directors as such, and not
in any other corporate capacity, e.g., as an officer. As a result of the
inclusion of such provisions, neither the Company nor its stockholders may be
able to recover monetary damages against directors for actions taken by them
which are ultimately found to have constituted negligence or gross negligence,
or which are ultimately found to have been in violation of their fiduciary
duties, although it may be possible to obtain injunctive or equitable relief
with respect to such actions. If equitable remedies are found not to be
available to stockholders in any particular case, stockholders may not have an
effective remedy against the challenged conduct.
The Company has entered into Indemnification Agreements with each of
its directors and officers (the "Indemnitees") pursuant to which it has agreed
to provide for indemnification, to the fullest extent permitted by law and the
Company's By-Laws, against any and all expenses, judgments, fines, penalties and
amounts paid in settlement arising out of any claim in connection with any
event, occurrence or circumstance related to such individual serving as a
director or officer of the Company. Such indemnification includes the advance of
expenses to the Indemnitees (including the payment of funds in trust therefor
under certain circumstances) and is subject to there not having been determined
that the Indemnitee would not be permitted to be indemnified under applicable
law. The rights of indemnification are in addition to any other rights which the
Indemnitees may have under the Company's Certificate of Incorporation, By-Laws,
the Delaware General Corporation Law or otherwise.
ITEM 16. EXHIBITS
The following exhibits, designated by an asterisk (*), have been
previously filed with the Commission and, pursuant to 17 C.F.R. Section 230.411,
are incorporated by reference to the document referenced in brackets following
the descriptions of such exhibits. The following exhibits designated by a double
asterisk (**) will be filed by amendment. All other exhibits are filed herewith.
II-2
<PAGE> 49
EXHIBIT INDEX
The exhibits designated with an asterisk (*) have previously been filed
with the Commission and, pursuant to 17 C.F.R. Secs. 201.24 and 240.12b-32, are
incorporated by reference to the document referenced in brackets following the
descriptions of such exhibits. The exhibits designated with an ** will be filed
by amendment.
Exhibit
No. Description
_______ ___________
2.1* Asset Purchase Agreement dated September 13, 1996,
among Nu-Tech BioMed, Inc., NTBM Billing Services,
Inc., Prompt Medical Services, Inc., Judith Prussin
and Jeffrey Prussin (filed without exhibits or
schedules)[filed as Exhibit 2.1 to Report on Form 8-K
filed dated September 31, 1996].
2.2* Order Confirming Medical Science Institute's First
Amended Plan of Reorganization dated November 18,
1996 (US Central District of California Case No. LA
95-37790 TD) together with First Amended Disclosure
Statement and Plan of Reorganization for Medical
Science Institute [filed as Exhibit 2.2 to Report on
Form 8-K filed with the Commission on December 3,
1996].
2.3* Disclosure Statement of Physicians Clinical
Laboratory as filed with the U.S. Bankruptcy Court
(Central District of California Case No. SV96-
23185-GM) [filed as Exhibit 2.3 to Form S-3 File No.
_______]
2.4* Joint Plan of Reorganization of Physicians Clinical
Laboratory as filed with the U.S. Bankruptcy Court
(Central District of California Case No. SV96-
23185-GM) [filed as Exhibit 2.4 to Form S-3 File No.
____].
3.1* Amended and Restated Certificate of Incorporation
filed with the Secretary of State of Delaware on
November 16, 1994 [Exhibit 3.1.5 to Amendment No. 1
to Registration Statement on Form SB-2, File No.
33-84622]
3.2* Amended and Restated By-Laws effective November 16,
1994 [Exhibit 3.2.2 to Registration Statement on Form
SB-2, File No. 33-84622]
3.3* Amended Certificate of Designations, Preferences and
Rights and Number of Shares of Series A Preferred
Stock as filed with the Secretary of State of
Delaware on October 23, 1996 [filed as Exhibit 3.3 to
Report on Form 10QSB for the fiscal quarter ended
September 30, 1996].
II-3
<PAGE> 50
3.4* Certificate of Amendment of Amended Certificate of
Designations, Preferences and Rights and Number of
Shares of Series A Convertible Preferred Stock as
filed with the Secretary of State of Delaware on
November 20, 1996.
4.1* Form of Common Stock Certificate [Exhibit 4.1 to
Registration Statement on Form SB-2, File No.
33-84622]
4.2* Form of Warrant and Warrant Agreement relating to
Warrants to purchase an aggregate of 114,286 shares
of Common Stock issued to certain individuals on
August 9, 1994 in connection with a Bridge Financing
[Exhibit 4.2 to Registration Statement on Form SB-2,
File No. 33-84622]
4.3* Form of and Warrant Agreement issued to Starr
Securities, Inc. and Stein, Shore Securities, Inc.
[Exhibit 4.4 to Registration Statement on Form SB-2,
File No. 33-84622]
4.4* Form of Registration Rights Agreement dated August 9,
1994 between the Registrant and certain individuals
in connection with completed Bridge Financing
[Exhibit 4.5 to Registration Statement on Form SB-2,
File No. 33-84622]
5.1** Opinion of Goldstein & Digioia LLP and consent re:
legality of Shares.
10.1* Amended and Restated Employment Agreement with J.
Marvin Feigenbaum [Exhibit 10.2 to Registration
Statement on Form SB-2, File No. 33-84622]
10.2* Employment Agreement with Dr. Kenneth E. Blackman as
of July 1, 1994 [Exhibit 10.3 to Registration
Statement on Form SB-2, File No. 33-84622]
10.3* Patent No. 4,559,299 dated December 17, 1985 [Exhibit
10.4 to Registration Statement on Form SB-2, File No.
33-84622]
10.4* Patent No. 4,734,372 dated March 29, 1988 [Exhibit
10.5 to Registration Statement on Form SB-2, File No.
33-84622]
10.5* Patent No. 4,937,298 dated June 26, 1990 [Exhibit
10.6 to Registration Statement on Form SB-2, File No.
33-84622]
II-4
<PAGE> 51
10.6* Assignment of Patent No. 4,559,299, recorded on March
29, 1993, by Brown University Research Foundation, in
favor of Analytical Biosystems Corporation [Exhibit
10.7 to Registration Statement on Form SB-2, File No.
33-84622]
10.7* Assignment of Patent No. 4,734,372, recorded on March
29, 1993, by Brown University Research Foundation,
Inc., in favor of Analytical Biosystems Corporation
[Exhibit 10.8 to Registration Statement on Form SB-2,
File No. 33-84622]
10.8* Assignment of Patent No. 4,937,187, recorded on March
29, 1993, by Brown University Research Foundation,
Inc. in favor of Analytical Biosystems Corporation
[Exhibit 10.9 to Registration Statement on Form SB-2,
File No. 33-84622]
10.9* Consulting Agreement with Starr Securities, Inc.
[Exhibit 10.10 to Amendment No. 1 to Registration
Statement on Form SB-2, File No. 33-84622]
10.10* Funding Agreement dated December 14, 1990 between
Rhode Island Partnership for Science and Technology
and Analytical Biosystems Corporation [Exhibit 10.11
to Registration Statement on From SB-2, File No.
33-84622]
10.11* Loan Agreement dated February 11, 1993 between State
of Rhode Island Economic Development Small Business
Loan Fund Corporation ("SBLFC") and Analytical
Biosystems Corporation in the amount of $150,000
[Exhibit 10.(iii) to Report on Form 10-KSB for the
fiscal year ended December 31, 1992]
10.12* Loan Agreement dated February 25, 1993 between SBLFC
and Analytical Biosystems Corporation in the amount
of $100,000 [Exhibit 10(iii) to Report on Form 10-KSB
for the fiscal year ended December 31, 1992]
10.13* Loan Agreement dated April 19, 1993 between SBLFC and
Analytical Biosystems Corporation in the amount of
$250,000 [Exhibit 10(i)(a) to Report on Form 8-K
dated April 30, 1993]
10.14* Loan Agreement dated October 22, 1993 between SBLFC
and Analytical Biosystems Corporation in the amount
of $166,666 [Exhibit 10(iii)(d) to Report on Form
10-KSB for the fiscal year ended December 31, 1993]
II-5
<PAGE> 52
10.15* Loan Agreement dated February 17, 1994 between SBLFC
and Analytical Biosystems Corporation in the amount
of $125,000 [Exhibit 10(iii)(e) to Report on Form
10-KSB for the fiscal year ended December 31, 1993]
10.16* Security Agreement dated October 22, 1993 between
SBLFC and Analytical Biosystems Corporation [Exhibit
10.17 to Registration Statement on From SB-2, File
No. 33-84622]
10.17* Patent Security Agreement dated April 19, 1993
between SBLFC and Analytical Biosystems Corporation
[Exhibit 10.18 to Registration Statement on From
SB-2, File No. 33-84622]
10.18* Patent Security Agreement dated October 22, 1993
between SBLFC and Analytical Biosystems Corporation
[Exhibit 10.19 to Registration Statement on From
SB-2, File No. 33-84622]
10.19* Form of Indemnification Agreements between Registrant
and Registrant's Directors and Officers [Exhibit
10.20 to Registration Statement on From SB-2, File
No. 33-84622]
10.20* Lease Agreement as of November 1, 1994 for facility
located at 55 Access Road, Warwick, Rhode Island
02886 [Exhibit 10.21 to Amendment No. 1 to
Registration Statement on From SB-2, File No.
33-84622]
10.21* Consulting Agreement and Warrant with Dr. Elliot
Fishkin [Exhibit 10.22 to Amendment No. 1 to
Registration Statement on From SB-2, File
No. 33-84622]
10.22* Redacted copy of Clinical Trials Agreement dated
August 14, 1995 between Analytical Biosystems
Corporation and research institution and certain
individuals [Exhibit 10.1 to Report on Form 8-K dated
August 11, 1995]
10.23* Agreement dated April 10, 1995 between Analytical
Biosystems Corporation and Loats Associates [Exhibit
10.1 to Report on Form 8-K dated April 20, 1995].
10.24* Form of Registration Rights Agreement entered into
among the Company and the holders of the Company's
Series A Preferred Stock entered into on December 2,
1996.[Filed as Exhibit 10.24 to Registration
Statement on Form S-3 File ____].
II-6
<PAGE> 53
10.25* Form of Registration Rights Agreement entered into
among the Company and certain holders of the
Company's Common Stock entered into on April 12, 1996
in connection with private placement offering
completed on April 12, 1996.[Filed as Exhibit 10.25
to Registration Statement on Form S-3 File ____].
10.26* Form of Agreement dated November 7, 1996 among the
Company, Oaktree Capital Management LLC, and certain
other parties. [Filed as Exhibit 10.26 to
Registration Statement on Form S-3 File ____].
10.27* Secured Promissory Note of Nu-Tech Bio-Med, Inc.
Dated December 2, 1996 in the principal amount of
$2,500,000. [Filed as Exhibit 10.27 to Registration
Statement on Form S-3 File ____].
10.28* Security Agreement dated as of December 2, 1996 by
Nu-Tech Bio-Med, Inc. And Oaktree Capital Management
LLC. [Filed as Exhibit 10.28 to Registration
Statement on Form S-3 File ____].
21 Subsidiaries of Registrant
23.1 Consent of Ernst & Young LLP, independent auditors of
Nu-Tech Bio-Med, Inc.
23.2 Consent of McClain & Company LLP, independent
auditors of Prompt Medical Billing Services, Inc.
23.3 Consent of Goldstein & DiGioia LLP contained in
Exhibit 5.1.
99.1* 1992 Stock Option Plan [Exhibit 28 to Report on Form
10-Q for the quarter ended March 31, 1992]
99.2* 1994 Incentive Stock Option [Exhibit 99.2 to
Registration Statement on From SB-2, File No.
33-84622]
99.3* Non Employee Director Stock Option Plan [Exhibit 99.3
to Registration Statement on From SB-2, File No.
33-84622]
99.4* Amended and Restated Non-Employee Director Stock
Option Plan [filed as Exhibit to the Company's Proxy
Statement for the Annual meeting held August 27,
1996].
II-7
<PAGE> 54
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
A. (1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereto) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(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;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) (i) For the purpose of determining any liability
under the Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in the form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of the Registration Statement as of the time it was declared effective.
(ii) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment that contains a
form of prospectus 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.
(5) For purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration
II-8
<PAGE> 55
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.
B. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, 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 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.
II-9
<PAGE> 56
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 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, State of New York, on the 13th day of
December, 1996.
NU-TECH BIO-MED, INC.
December 13, 1996 By: /s/J. Marvin Feigenbaum
--------------------------------
J. Marvin Feigenbaum
Chairman of the Board, President
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
substitutes and appoints J. Marvin Feigenbaum, his true and lawful attorney-in-
fact and agent, with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file and same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent 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 that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Edmond E. Charrette Director December 13, 1996
- -----------------------------
Edmond E. Charrette, M.D.
/s/ Robert B. Fagenson Director December 13, 1996
- -----------------------------
Robert B. Fagenson
/s/J. Marvin Feigenbaum Chairman of the Board, December 13, 1996
- ----------------------------- President Chief Executive
J. Marvin Feigenbaum Officer
</TABLE>
II-10
<PAGE> 57
<TABLE>
<S> <C> <C>
/s/ Leonard Green Director December 13, 1996
- -------------------------------
Leonard Green
/s/ David A. Sterling Secretary, Director December 13, 1996
- -------------------------------
David A. Sterling
/s/ Chriss W. Street Director December 13, 1996
- -------------------------------
Chriss W. Street
</TABLE>
II-11
<PAGE> 58
EXHIBIT INDEX
The exhibits designated with an asterisk (*) have previously been filed
with the Commission and, pursuant to 17 C.F.R. Secs. 201.24 and 240.12b-32, are
incorporated by reference to the document referenced in brackets following the
descriptions of such exhibits. The exhibits designated with an ** will be filed
by amendment.
Exhibit
No. Description
_______ ___________
2.1* Asset Purchase Agreement dated September 13, 1996,
among Nu-Tech BioMed, Inc., NTBM Billing Services,
Inc., Prompt Medical Services, Inc., Judith Prussin
and Jeffrey Prussin (filed without exhibits or
schedules)[filed as Exhibit 2.1 to Report on Form 8-K
filed dated September 31, 1996].
2.2* Order Confirming Medical Science Institute's First
Amended Plan of Reorganization dated November 18,
1996 (US Central District of California Case No. LA
95-37790 TD) together with First Amended Disclosure
Statement and Plan of Reorganization for Medical
Science Institute [filed as Exhibit 2.2 to Report on
Form 8-K filed with the Commission on December 3,
1996].
2.3* Disclosure Statement of Physicians Clinical
Laboratory as filed with the U.S. Bankruptcy Court
(Central District of California Case No. SV96-
23185-GM) [filed as Exhibit 2.3 to Form S-3 File No.
_______]
2.4* Joint Plan of Reorganization of Physicians Clinical
Laboratory as filed with the U.S. Bankruptcy Court
(Central District of California Case No. SV96-
23185-GM) [filed as Exhibit 2.4 to Form S-3 File No.
____].
3.1* Amended and Restated Certificate of Incorporation
filed with the Secretary of State of Delaware on
November 16, 1994 [Exhibit 3.1.5 to Amendment No. 1
to Registration Statement on Form SB-2, File No.
33-84622]
3.2* Amended and Restated By-Laws effective November 16,
1994 [Exhibit 3.2.2 to Registration Statement on Form
SB-2, File No. 33-84622]
3.3* Amended Certificate of Designations, Preferences and
Rights and Number of Shares of Series A Preferred
Stock as filed with the Secretary of State of
Delaware on October 23, 1996 [filed as Exhibit 3.3 to
Report on Form 10QSB for the fiscal quarter ended
September 30, 1996].
<PAGE> 59
3.4* Certificate of Amendment of Amended Certificate of
Designations, Preferences and Rights and Number of
Shares of Series A Convertible Preferred Stock as
filed with the Secretary of State of Delaware on
November 20, 1996.
4.1* Form of Common Stock Certificate [Exhibit 4.1 to
Registration Statement on Form SB-2, File No.
33-84622]
4.2* Form of Warrant and Warrant Agreement relating to
Warrants to purchase an aggregate of 114,286 shares
of Common Stock issued to certain individuals on
August 9, 1994 in connection with a Bridge Financing
[Exhibit 4.2 to Registration Statement on Form SB-2,
File No. 33-84622]
4.3* Form of and Warrant Agreement issued to Starr
Securities, Inc. and Stein, Shore Securities, Inc.
[Exhibit 4.4 to Registration Statement on Form SB-2,
File No. 33-84622]
4.4* Form of Registration Rights Agreement dated August 9,
1994 between the Registrant and certain individuals
in connection with completed Bridge Financing
[Exhibit 4.5 to Registration Statement on Form SB-2,
File No. 33-84622]
5.1** Opinion of Goldstein & Digioia LLP re: legality of
Shares and consent.
10.1* Amended and Restated Employment Agreement with J.
Marvin Feigenbaum [Exhibit 10.2 to Registration
Statement on Form SB-2, File No. 33-84622]
10.2* Employment Agreement with Dr. Kenneth E. Blackman as
of July 1, 1994 [Exhibit 10.3 to Registration
Statement on Form SB-2, File No. 33-84622]
10.3* Patent No. 4,559,299 dated December 17, 1985 [Exhibit
10.4 to Registration Statement on Form SB-2, File No.
33-84622]
10.4* Patent No. 4,734,372 dated March 29, 1988 [Exhibit
10.5 to Registration Statement on Form SB-2, File No.
33-84622]
10.5* Patent No. 4,937,298 dated June 26, 1990 [Exhibit
10.6 to Registration Statement on Form SB-2, File No.
33-84622]
<PAGE> 60
10.6* Assignment of Patent No. 4,559,299, recorded on March
29, 1993, by Brown University Research Foundation, in
favor of Analytical Biosystems Corporation [Exhibit
10.7 to Registration Statement on Form SB-2, File No.
33-84622]
10.7* Assignment of Patent No. 4,734,372, recorded on March
29, 1993, by Brown University Research Foundation,
Inc., in favor of Analytical Biosystems Corporation
[Exhibit 10.8 to Registration Statement on Form SB-2,
File No. 33-84622]
10.8* Assignment of Patent No. 4,937,187, recorded on March
29, 1993, by Brown University Research Foundation,
Inc. in favor of Analytical Biosystems Corporation
[Exhibit 10.9 to Registration Statement on Form SB-2,
File No. 33-84622]
10.9* Consulting Agreement with Starr Securities, Inc.
[Exhibit 10.10 to Amendment No. 1 to Registration
Statement on Form SB-2, File No. 33-84622]
10.10* Funding Agreement dated December 14, 1990 between
Rhode Island Partnership for Science and Technology
and Analytical Biosystems Corporation [Exhibit 10.11
to Registration Statement on From SB-2, File No.
33-84622]
10.11* Loan Agreement dated February 11, 1993 between State
of Rhode Island Economic Development Small Business
Loan Fund Corporation ("SBLFC") and Analytical
Biosystems Corporation in the amount of $150,000
[Exhibit 10.(iii) to Report on Form 10-KSB for the
fiscal year ended December 31, 1992]
10.12* Loan Agreement dated February 25, 1993 between SBLFC
and Analytical Biosystems Corporation in the amount
of $100,000 [Exhibit 10(iii) to Report on Form 10-KSB
for the fiscal year ended December 31, 1992]
10.13* Loan Agreement dated April 19, 1993 between SBLFC and
Analytical Biosystems Corporation in the amount of
$250,000 [Exhibit 10(i)(a) to Report on Form 8-K
dated April 30, 1993]
10.14* Loan Agreement dated October 22, 1993 between SBLFC
and Analytical Biosystems Corporation in the amount
of $166,666 [Exhibit 10(iii)(d) to Report on Form
10-KSB for the fiscal year ended December 31, 1993]
<PAGE> 61
10.15* Loan Agreement dated February 17, 1994 between SBLFC
and Analytical Biosystems Corporation in the amount
of $125,000 [Exhibit 10(iii)(e) to Report on Form
10-KSB for the fiscal year ended December 31, 1993]
10.16* Security Agreement dated October 22, 1993 between
SBLFC and Analytical Biosystems Corporation [Exhibit
10.17 to Registration Statement on From SB-2, File
No. 33-84622]
10.17* Patent Security Agreement dated April 19, 1993
between SBLFC and Analytical Biosystems Corporation
[Exhibit 10.18 to Registration Statement on From
SB-2, File No. 33-84622]
10.18* Patent Security Agreement dated October 22, 1993
between SBLFC and Analytical Biosystems Corporation
[Exhibit 10.19 to Registration Statement on From
SB-2, File No. 33-84622]
10.19* Form of Indemnification Agreements between Registrant
and Registrant's Directors and Officers [Exhibit
10.20 to Registration Statement on From SB-2, File
No. 33-84622]
10.20* Lease Agreement as of November 1, 1994 for facility
located at 55 Access Road, Warwick, Rhode Island
02886 [Exhibit 10.21 to Amendment No. 1 to
Registration Statement on From SB-2, File No.
33-84622]
10.21* Consulting Agreement and Warrant with Dr. Elliot
Fishkin [Exhibit 10.22 to Amendment No. 1 to
Registration Statement on From SB-2, File
No. 33-84622]
10.22* Redacted copy of Clinical Trials Agreement dated
August 14, 1995 between Analytical Biosystems
Corporation and research institution and certain
individuals [Exhibit 10.1 to Report on Form 8-K dated
August 11, 1995]
10.23* Agreement dated April 10, 1995 between Analytical
Biosystems Corporation and Loats Associates [Exhibit
10.1 to Report on Form 8-K dated April 20, 1995].
10.24* Form of Registration Rights Agreement entered into
among the Company and the holders of the Company's
Series A Preferred Stock entered into on December 2,
1996.[Filed as Exhibit 10.24 to Registration
Statement on Form S-3 File ____].
<PAGE> 62
10.25* Form of Registration Rights Agreement entered into
among the Company and certain holders of the
Company's Common Stock entered into on April 12, 1996
in connection with private placement offering
completed on April 12, 1996.[Filed as Exhibit 10.25
to Registration Statement on Form S-3 File ____].
10.26* Form of Agreement dated November 7, 1996 among the
Company, Oaktree Capital Management LLC, and certain
other parties. [Filed as Exhibit 10.26 to
Registration Statement on Form S-3 File ____].
10.27* Secured Promissory Note of Nu-Tech Bio-Med, Inc.
Dated December 2, 1996 in the principal amount of
$2,500,000. [Filed as Exhibit 10.27 to Registration
Statement on Form S-3 File ____].
10.28* Security Agreement dated as of December 2, 1996 by
Nu-Tech Bio-Med, Inc. And Oaktree Capital Management
LLC. [Filed as Exhibit 10.28 to Registration
Statement on Form S-3 File ____].
21 Subsidiaries of Registrant
23.1 Consent of Ernst & Young LLP, independent auditors of
Nu-Tech Bio-Med, Inc.
23.2 Consent of McLain & Company LLP, independent auditors
of Prompt Medical Billing Services, Inc.
23.3 Consent of Goldstein & DiGioia LLP contained in
Exhibit 5.1.
99.1* 1992 Stock Option Plan [Exhibit 28 to Report on Form
10-Q for the quarter ended March 31, 1992]
99.2* 1994 Incentive Stock Option [Exhibit 99.2 to
Registration Statement on From SB-2, File No.
33-84622]
99.3* Non Employee Director Stock Option Plan [Exhibit 99.3
to Registration Statement on From SB-2, File No.
33-84622]
99.4* Amended and Restated Non-Employee Director Stock
Option Plan [filed as Exhibit to the Company's Proxy
Statement for the Annual meeting held August 27,
1996].
<PAGE> 1
EXHIBIT 21
LIST OF SUBSIDIARIES
Analytical Biosystems Corporation
NTBM Billing Services, Inc.
Medical Science Institute
<PAGE> 1
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Nu-Tech Bio-Med,
Inc. for the registration of 2,225,716 shares of its common stock and to the
incorporation by reference therein of our report dated March 5, 1996 , with
respect to the consolidated financial statements of Nu-Tech Bio-Med, Inc.
included in its Annual Report (Form 10-KSB) for the year ended December 31,
1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Providence, Rhode Island
December 13, 1996
<PAGE> 1
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Nu-Tech Bio-Med,
Inc. for the registration of 2,225,716 shares of common stock and to the
incorporation by reference therein of our report dated September 20, 1996,
except for Notes 8 and 9, as to which the date is October 30, 1996, with
respect to the financial statements of Prompt Medical Billing, Inc. for the
period from March 1, 1994 (date of inception) to December 31, 1994 and for the
year ended December 31, 1995, included in the Current Report on Form 8-K/A of
Nu-Tech Bio-Med, Inc. dated November 14, 1996, filed with the Securities and
Exchange Commission.
MCCLAIN & COMPANY LLP
Miami, Florida
December 13, 1996
