<PAGE>
As filed with the Securities and Exchange Commission on November 19, 1999
Registration No. 333-90465
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
PRE-EFFECTIVE AMENDMENT NO. 1
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
SYNBIOTICS CORPORATION
(Exact name of Registrant as specified in its charter)
CALIFORNIA 95-3737816
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
__________________________
11011 Via Frontera , San Diego, California 92127
(858) 451-3771
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
__________________________
Kenneth M. Cohen
President and Chief Executive Officer
SYNBIOTICS CORPORATION
11011 Via Frontera, San Diego, California 92127
(858) 451-3771
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_________________________
Copy to:
Hayden J. Trubitt, Esq.
Matthew B. Swartz, Esq.
BROBECK, PHLEGER & HARRISON LLP
550 West C Street, Suite 1300
San Diego, California 92101
_________________________
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
_________________________
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
SYNBIOTICS CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
WHERE YOU CAN FIND MORE INFORMATION................ 2
ABOUT SYNBIOTICS CORPORATION....................... 2
RISK FACTORS....................................... 3
FORWARD-LOOKING STATEMENTS......................... 3
USE OF PROCEEDS.................................... 8
SELLING SHAREHOLDER................................ 8
PLAN OF DISTRIBUTION............................... 8
LEGAL MATTERS...................................... 9
INDEMNIFICATION.................................... 9
</TABLE>
<PAGE>
PROSPECTUS
239,950 Shares
SYNBIOTICS CORPORATION
Common Stock
Our Common Stock is traded on the Nasdaq National Market under the symbol
"SBIO". On November 3, 1999, the closing sale price of Synbiotics Common Stock
as reported on the Nasdaq National Market was $2.50 per share.
These shares of Common Stock are being sold by Banque Paribas, which
received a warrant in connection with a Credit Agreement we signed with Banque
Paribas and certain other banks. We will not receive any part of the proceeds
from the sale.
See "Risk Factors" on page 3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of the prospectus. Any representation to the contrary is a
criminal offense.
- --------------------------------------------------------------------------------
The date of this prospectus is November 19, 1999.
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<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, and Chicago. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them which means that we can disclose important information to you by
referring you to those documents instead of having to repeat the information in
this prospectus. The information incorporated by reference is considered to be
part of this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
the selling shareholder sells all the shares.
-- Annual Report on Form 10-KSB for the year ended December 31, 1998;
-- Quarterly Reports on Form 10-QSB for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
-- Current Report on Form 8-K/A dated April 2, 1999;
-- Registration Statement on Form 8-A filed with the SEC on
November 14, 1983.
This filing describes the terms, rights and provisions applicable to
our Common Stock; and
-- Registration Statement on Form 8-A filed with the SEC on October 7,
1998. This filing describes the terms, rights and provisions
applicable to our Preferred Stock Purchase Rights.
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:
Synbiotics Corporation
11011 Via Frontera
San Diego, CA 92127
Attn: Corporate Secretary
(858) 451-3771
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling shareholder will not
make an offer of these shares in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the front of those documents.
This prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-90465).
ABOUT SYNBIOTICS CORPORATION
We are a leading provider of rapid diagnostic and laboratory diagnostic
products for the animal health care industry. We also market a line of animal
vaccines. We were founded in 1982 to research and develop monoclonal antibody-
based diagnostic and therapeutic products. In the early years, we were focused
on developing therapeutics for human diseases. The high cost of human drug
development, however, coupled with the lengthy FDA approval process, motivated
us to begin commercializing its technology through the less restrictive animal
health care market. Synbiotics is one of a small number of companies that
focuses exclusively on animal health and is the second largest provider of
diagnostic products to the animal health market.
Our principal executive offices are located at 11011 Via Frontera, San
Diego, California 92127, and our telephone number is (858) 451-3771.
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<PAGE>
RISK FACTORS
You should carefully consider the risks described below together with all
of the other information included in or incorporated by reference into this
prospectus before making an investment decision. The risks and uncertainties
described below are not the only ones facing our company. If any of the
following risks actually occurs, our business, financial condition, results of
operations or cash flows could be materially adversely affected. In such case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.
The market in which we operate is intensely competitive, particularly with
regard to our key canine heartworm diagnostic products, and many of our
competitors are larger and more established
The market for animal health care products is extremely competitive.
Companies in the animal health care market compete to develop new products, to
market and manufacture products efficiently, to implement effective research
strategies, and to obtain regulatory approval. Our current competitors include
significantly larger companies such as Pfizer Animal Health, Merial S.A.S. (the
successor to Rhone-Merieux), Schering-Plough and IDEXX Laboratories. These
companies are substantially larger and have greater financial, manufacturing,
marketing, and research resources than we do. Our current competitors also have
extensive expertise in conducting pre-clinical and clinical testing of new
products and in obtaining the necessary regulatory approvals to market products.
In addition, IDEXX Laboratories prohibits its distributors from selling
competitors' products, including ours. Further, additional competition could
come from new entrants to the animal health care market. We cannot assure you
that we will be able to compete successfully in the future or that competition
will not harm our business.
Our canine heartworm products constitute 46% of our sales. In addition to
our historic competition with IDEXX Laboratories, the sales leader in this
product category, our sales were substantially affected in 1999 by a new
heartworm product from Heska Corporation. We have filed a lawsuit against
Heska, claiming that its heartworm product infringes our patent. Also, we
believe Abbott Laboratories may enter the canine heartworm diagnostic market in
2000. If so, our market share and average selling prices may decline, perhaps
materially.
We have a history of losses and an accumulated deficit
Although we generated profits for the years ended December 31, 1997 and
1996, we did not achieve profitability for the year ended December 31, 1998 and
we have had a history of losses. Synbiotics has incurred a consolidated
accumulated deficit of $11,150,000 at September 30, 1999. We may not achieve
profitability again and if we are profitable in the future there can be no
assurance that profitability can be sustained.
We depend on third party manufacturers
We contract for the manufacture of some of our products, including all of
our vaccines, our Witness(R), VetRED(R) and ICT Gold diagnostic kits, and our
SCA 2000 instrument. We also expect that some of our anticipated new products
will be manufactured by third parties. In addition, some of the products
manufactured for us by third parties, including Witness(R), VetRED(R) and ICT
Gold are licensed to us by their manufacturers. There are a number of risks
associated with our dependence on third-party manufacturers including:
. reduced control over delivery schedules;
. quality assurance;
. manufacturing yields and costs;
. the potential lack of adequate capacity during periods of excess demand;
. limited warranties on products supplied to us; and
. increases in prices and the potential misappropriation of our
intellectual property.
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<PAGE>
If any of our third party manufacturers fail to supply us with an
adequate number of finished products, our business would be significantly
harmed. We have no long-term contracts or arrangements with any of our vendors
that guarantee product availability, the continuation of particular payment
terms or the extension of credit limits.
In addition, sales of our feline leukemia virus ("FeLV") vaccine to Merial
S.A.S. and other distributors for resale in Europe will be at risk unless our
manufacturer, Bio-Trends International, Inc. ("Bio-Trends"), obtains European
Union regulatory approvals for its manufacturing facilities. Loss of these sales
would have a material adverse effect on our profitability and our cash flows.
If we encounter delays or difficulties in our relationships with our
manufacturers, the resulting problems could have a material adverse effect on
us. In fact, all of our vaccine products (exclusive of our FeLV and canine
corona virus products) were manufactured using bulk antigen fluids that were
supplied by a third party. The supply agreement expired and we were unable to
locate a replacement supplier for these bulk antigen fluids. We decided to
discontinue the sales of the affected products once our remaining supplies were
exhausted, which occurred during the third quarter of 1999. Sales of the
affected products totaled $2,073,000, $1,596,000 and $1,225,000 during 1998,
1997 and 1996, respectively.
We rely on third party distributors for a substantial portion of our sales,
but we are experiencing difficulties with the distribution channel
During the year ended December 31, 1998, sales to two distributors totaled
33% of our net sales. Because we are dependent upon distributors for such a
large portion of our sales, our ability to establish and maintain an adequate
sales and marketing capability in any or all of our targeted markets may be
impaired. Our failure to independently sell and market our products could
materially harm our business. Further, distributor agreements render our sales
exposed to the efforts of third parties who are not employees of Synbiotics and
over whom we have no control. Their failure to generate significant sales of
our products could materially harm our business. Reduction by these
distributors of the quantity of our products which they distribute would
materially harm our business. In addition, IDEXX Laboratories' prohibition
against its distributors carrying competitors' products, including ours, has and
could continue to make some distributors unavailable to us. We adopted a
similar policy in the second quarter of 1999, which caused some of our
distributors to abandon our product line. Although we have rescinded this
policy, we do not expect to get the distributors back to any meaningful extent.
We are also exposed to the risk that any sales by us directly to veterinarians
could alienate our current distributors.
Our direct selling efforts may not succeed
We are increasing our efforts to sell our products directly to
veterinarians, including by telesales and overt the Internet. We are
inexperienced in large-scale direct selling efforts and may not be able to
successfully execute this strategy. Also, veterinarians have traditionally
relied on distributors, and the number of veterinarians willing to purchase
directly from manufacturers may be smaller than we believer.
Our profitable vaccine sales in Europe may decline soon
Merial distributes in Europe our FeLV vaccine, which we obtain from Bio-
Trends. Our gross profit in 1998 on these sales of FeLV to Merial in Europe was
$520,000. Merial has exercised a contractual right which will enable it, in
2002, to introduce its own FeLV vaccine product in Europe. If Merial does so,
our sales to Merial in Europe would probably decline sharply.
There is no assurance that acquired businesses can be successfully combined
There can be no assurance that the anticipated benefits of the 1998
acquisition of Prisma Acquisition Corp. ("Prisma"), the 1997 acquisition of the
veterinary diagnostics business of Synbiotics Europe SAS ("SBIO-E"), the 1996
acquisition of the business of International Canine Genetics, Inc. ("ICG"), or
any other future acquisitions (collectively, the "Acquired Business") will be
realized. Acquisitions of businesses involve numerous risks, including
difficulties in the assimilation of the operations, technologies and products of
the Acquired Business, introduction of different distribution channels,
potentially dilutive issuances of equity and/or increases in leverage
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<PAGE>
and risk resulting from issuances of debt securities, the need to establish
internally operating functions which had been previously provided pre-
acquisition by a corporate parent, accounting charges, operating companies in
different geographic locations with different cultures, the potential loss of
key employees of the Acquired Business, the diversion of management's attention
from other business concerns and the risks of entering markets in which we have
no or limited direct prior experience. In addition, there can be no assurance
that the acquisitions will not have a material adverse effect upon Synbiotics'
business, results of operations, financial condition or cash flows, particularly
in the quarters immediately following the consummation of the acquisition, due
to operational disruptions, unexpected expenses and accounting charges which may
be associated with the integration of the Acquired Business and Synbiotics, as
well as operating and development expenses inherent in the Acquired Business
itself as opposed to integration of the Acquired Business.
We depend on key executives and personnel
Our future success will depend, to a significant extent, on the ability of
our management to operate effectively, both individually and as a group.
Competition for qualified personnel in the animal health care products industry
is intense, and we may not be successful in attracting and retaining such
personnel. There are only a limited number of persons with the requisite skills
to serve in those positions and it may become increasingly difficult to hire
such persons.
The loss of the services of any of our key personnel or the inability to
attract or retain qualified personnel could harm our business.
We rely on new and recent products
We rely to a significant extent on new and recently developed products, and
expect that we will need to continue to introduce new products to be successful
in the future. There can be no assurance that we will obtain and maintain
market acceptance of our products. There can be no assurance that future
products will meet applicable regulatory standards, be capable of being produced
in commercial quantities at acceptable cost or be successfully commercialized.
There can be no assurance that new products can be manufactured at a cost
or in quantities necessary to make them commercially viable. If we are unable
to produce internally, or to contract for, a sufficient supply of our new
products on acceptable terms, or if we should encounter delays or difficulties
in our relationships with manufacturers, the introduction of new products would
be delayed, which could have a material adverse effect on our business.
We may need additional capital in the future
We currently anticipate that our existing cash balances and short term
investments and cash flow expected to be generated from future operations will
be sufficient to meet our liquidity needs for at least the next twelve months.
However, we may need to raise additional funds if our estimates of revenues,
working capital and/or capital expenditure requirements change or prove
inaccurate or in order for us to respond to unforeseen technological or
marketing hurdles or to take advantage of unanticipated opportunities.
Further, our future capital requirements will depend on many factors beyond
our control or ability to accurately estimate, including continued scientific
progress in our product and development programs, the cost of manufacturing
scale-up, the costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims, the cost involved in patent infringement litigation,
competing technological and market developments, and the cost of establishing
effective sales and marketing arrangements. In addition, we expect to review
potential acquisitions that would compliment our existing product offerings or
enhance our technical capabilities. While we have no current agreements or
negotiations underway with respect to any such acquisition, any future
transaction of this nature could require potentially significant amounts of
capital. Such funds may not be available at the time or times needed, or
available on terms acceptable to us. If adequate funds are not available, or
are not available on acceptable terms, we may not be able to take advantage of
market opportunities, to develop new products, or to otherwise respond to
competitive pressures. This inability could materially harm our business.
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<PAGE>
In July 1997, we obtained $15,000,000 of debt financing from Banque
Paribas, of which $11,493,000 was used in connection with our acquisition of
portions of Rhone Merieux S.A.S. The $15,000,000 included a $5,000,000
revolving line of credit. Draws by us under this line of credit are subject to
certain requirements and can be used only for certain purposes. Additionally,
Banque Paribas requires us to maintain certain financial ratios and levels of
tangible net worth and also restricts our ability to pay dividends and make
loans, capital expenditures, or investments without its consent.
If adequate funds are not available to us, or if they are not available on
terms reasonably favorable to us, we may need to delay, reduce, or eliminate one
or more of our research and development programs. Any of these events would
impair our competitive position and harm our business.
Our business is seasonal
Our operations are seasonal due to the success of our canine heartworm
diagnostic products. Our sales and profits tend to be concentrated in the first
half of the year as our distributors prepare for the heartworm season by
purchasing diagnostic products for resale to veterinarians. The operations of
SBIO-E have reduced our seasonality as sales of their large animal diagnostic
products tend to occur evenly throughout the year. We believe that increased
sales of our instrument products will also reduce our seasonality.
Our failure to adequately establish or protect our proprietary rights may
adversely effect us
We rely on a combination of patent, copyright, and trademark laws, and on
trade secrets and confidentiality provisions and other contractual provisions to
protect our proprietary rights. These measures afford only limited protection.
We currently have 11 issued U.S. patents and several pending patent
applications. Our means of protecting our proprietary rights in the U.S. or
abroad may not be adequate and competitors may independently develop similar
technologies. Our future success will depend in part on our ability to protect
our proprietary rights and the technologies used in our principal products.
Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy aspects of our products or to obtain and use trade secrets or
other information that we regard as proprietary. In addition, the laws of some
foreign countries do not protect our proprietary rights as fully as do the laws
of the U.S. Issued patents may not preserve our proprietary position. Even if
they do, competitors or others may develop technologies similar to or superior
to our own. If we do not enforce and protect our intellectual property, our
business will be harmed.
From time to time, third parties, including our competitors, have asserted
patent, copyright, and other intellectual property rights to technologies that
are important to us. We expect that we will increasingly be subject to
infringement claims as the number of products and competitors in the animal
health care market increases.
The results of any litigated matter are inherently uncertain. In the event
of an adverse result in any litigation with third parties that could arise in
the future, we could be required to:
. pay substantial damages, including treble damages if we are held to
have willfully infringed;
. cease the manufacture, use and sale of infringing products significant
resources to develop non-infringing technology; or
. obtain licenses to the infringing technology.
Licenses may not be available from any third party that asserts
intellectual property claims against us on commercially reasonable terms, or at
all.
Also, litigation is costly regardless of its outcome and can requires
significant management attention. For example, in 1997, Barnes-Jewish Hospital
filed an action against claiming that our canine heartworm diagnostic products
infringe their patent. We settled this lawsuit, but there can be no assurance
that we would be able to successfully resolve similar incidents in the future.
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<PAGE>
Also, because our patents and patent applications cover novel diagnostic
approaches,
. the patent coverage which we receive could be significantly narrower
than the patent coverage we seek in our patent applications; and
. our patent positions involve complex legal and factual issues which
can be hard for patent examiners or lawyers asserting patent coverage
to successfully resolve.
Because of this, our patent position could be vulnerable and our
business could be materially harmed.
The U.S. patent application system also exposes us to risks. In the United
States, the first party to make a discovery is granted the right to patent it
and patent applications are maintained in secrecy until the underlying patents
issue. For these reasons, we can never know if we are the first to discover
particular technologies. Therefore, we can never be certain that our
technologies will be patented and we could become involved in lengthy,
expensive, and distracting disputes concerning whether we were the first to make
the disputed discovery. Any of these events would materially harm our business.
Our business is regulated by the United States and various foreign
governments
Our business is subject to substantial regulation by the United States
government, most notably the United States Department of Agriculture, and the
French government. In addition, our operations may be subject to future
legislation and/or rules issued by domestic or foreign governmental agencies
with regulatory authority relating to our business. There can be no assurance
that we will continue to be in compliance with any of these regulations.
For marketing outside the United States, we, and our suppliers, are subject to
foreign regulatory requirements in such foreign jurisdictions, which vary widely
from country to country. There can be no assurance that we, and our suppliers,
will meet and sustain compliance with any such requirements. In particular, our
sales of feline leukemia virus vaccine to Merial S.A.S. or other distributors
for resale in Europe will be at risk unless Bio-Trends, our supplier, obtains
European Union regulatory approvals for its manufacturing facilities.
Our liability insurance may prove inadequate
Our products carry an inherent risk of product liability claims and associated
adverse publicity. While we have maintained product liability insurance for
such claims to date, we cannot be certain that this type of insurance will
continue to be available to us or that, if it is available, that it can be
obtained on acceptable terms. Also, our current coverage limits may not be
adequate. Any claim against us which results in our having to pay damages in
excess of our coverage limits will materially harm our business. Even if such a
claim is covered by our existing insurance, the resulting increase in insurance
premiums or other charges would increase our expenses and harm our business.
We use hazardous materials
Our business requires that we store and use hazardous materials and chemicals,
including radioactive compounds. Although we believe that our procedures for
storing, handling, and disposing of these materials comply with the standards
prescribed by local, state, and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated.
If any of these materials were mishandled, or if an accident with them occurred,
the consequences could be extremely damaging and we could be held liable for
them. Our liability for such an event would materially harm our business and
could exceed all of our available resources for satisfying it.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this
prospectus contain forward-looking statements that are based on current
expectations, estimates and projections about our industry, management's
beliefs, and assumptions made by management. Words such as "anticipates",
""expects", "intends", "plans", "believes", "seeks", "estimates", and variations
of such words and similar expressions are intended to identify such forward-
looking statements. These statements are not guarantees of future performance
and are subject to certain
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risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed or forecasted in any
forward-looking statements. Such risks and uncertainties include those noted in
"Risk Factors" above and in the documents incorporated by reference. We
undertake no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of Common
Stock by the selling shareholder.
SELLING SHAREHOLDER
We signed a credit agreement with a group of banks represented by Banque
Paribas as agent on July 9, 1997. In connection with that credit agreement, we
executed a warrant for Banque Paribas to purchase 239,950 shares of our Common
Stock, at $0.01 per share, prior to May 31, 2007. Prior to this offering, Banque
Paribas owned the warrant but held none of our shares. Banque Paribas plans to
sell 239,950 shares of Common Stock in this offering. Except for the credit
agreement referred to above, we have not had a material relationship with Banque
Paribas in the past three years. The shares are being registered to permit the
public secondary trading of the shares, and Banque Paribas may offer the shares
from time to time (see "Plan of Distribution").
The following table contains certain information regarding Banque Paribas'
beneficial ownership of our Common Stock as of October 31, 1999. The amount in
the column "Number of Shares Being Offered" represents all of the shares that
Banque Paribas may distribute in this offering. However, Banque Paribas
currently has no agreements, arrangements or understandings related to the sale
of any of the shares. The table assumes that Banque Paribas will sell all of
the shares.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Owned Beneficially Owned
Prior to Offering Number of After Offering
------------------ Shares Being -------------------
Name of Selling Stockholder Number Percent Offered/1/ Number Percent
--------------------------- ------ ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
Banque Paribas 239,950 2.5% 239,950 0 0.0%
</TABLE>
/ 1 / Banque Paribas may offer less than the total amount of the shares
being registered in this offering, or they may choose not to offer any of the
shares being registered in this offering.
PLAN OF DISTRIBUTION
We are registering the shares on behalf of Banque Paribas and any donees
and pledgees who may sell shares received from Banque Paribas after the date of
this Prospectus. All costs, expenses and fees in connection with the
registration of the shares offered hereby (other than certain fees and expenses
of the selling shareholder's counsel) will be borne by us. Brokerage
commissions and similar selling expenses, if any, attributable to the sale of
shares will be borne by the selling shareholder. Sales of shares may be
effected by the selling shareholder from time to time in one or more types of
transactions (which may include block transactions) on the Nasdaq National
Market, in the over-the-counter market, in negotiated transactions, through put
or call transactions relating to the shares, through short sales of shares, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not involve brokers
or dealers. The selling shareholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of his securities, nor is there an underwriter
or coordinating broker acting in connection with the proposed sale of shares by
the selling shareholders.
The selling shareholders may effect such transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in
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the form of discounts, concessions, or commissions from the selling shareholders
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
The selling shareholders and any broker-dealers that act in connection with
the sale of shares might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by such
broker-dealers and any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. The Selling Shareholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares against certain liabilities, including liabilities arising under
the Securities Act.
The selling shareholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
When the selling shareholders notify us that a material arrangement has
been entered into with a broker-dealer for the sale of shares through a block
trade, special offering, exchange distribution or secondary distribution or a
purchase by a broker or dealer, a supplement to this prospectus will be filed,
if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i)
the names of the selling shareholders and of the participating broker-dealer(s),
(ii) the number of shares involved, (iii) the price at which such shares were
sold, (iv) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this Prospectus and (vi) other facts material to the transaction.
In addition, when the selling shareholders notify us that a donee or pledgee
intends to sell more than 500 shares, we will file a supplement to this
prospectus.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain states the shares may
not be sold unless they have been registered or qualified for sale or an
exemption from registration or qualification requirements is available and is
complied with.
LEGAL MATTERS
Our outside law firm, Brobeck, Phleger & Harrison LLP, San Diego,
California will issue an opinion about the legality of the shares.
INDEMNIFICATION
Section 317 of the California General Corporation Law allows companies to
indemnify their officers and directors against expenses, judgments, fines and
amounts paid in settlement under certain conditions and subject to certain
limitations.
Article VIII of our Bylaws provides that we shall indemnify any person who
is or was a director, officer, employee or agent of ours, or any person who is
or was serving at our request as a director, officer, employee or agent of
another corporation, subject to certain limitations. In addition, expenses
incurred by a director, officer, employee or agent in defending a lawsuit by
reason of that person's relationship with us, may be paid by us in advance of
the final disposition of such lawsuit after we receive an undertaking by or on
behalf of such person to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by us.
Our Articles of Incorporation, as amended, provide that none of our
directors shall be liable for monetary damages in an action by or in Synbiotics'
right for breach of a director's duties to us and our shareholders, as set forth
in Section 309 of the California Corporations Code. However, such provision
does not eliminate or limit the liability of a director:
(i) for acts or omissions that involve intentional misconduct or
knowing or culpable violation of law;
-9-
<PAGE>
(ii) for acts or omissions that a director believes to be contrary
to our best interests or those of our shareholders or that
involve the absence of good faith on the part of a director;
(iii) for any transaction from which a director derives an improper
personal benefit;
(iv) for acts or omissions that show a reckless disregard of the
director's duty in circumstances in which the director was
aware, or should have been aware in the ordinary course of
performing the director's duties, of a risk of serious
injury to us or to our shareholders;
(v) for acts or omissions that constitute an unexecuted pattern of
inattention that amounts to an abdication of the director's
duty to us;
(vi) under Section 310 of the California Corporations Code; or
(vii) under Section 316 of the California Corporations Code.
Such provision eliminating liability does not eliminate or limit the liability
of an officer for any act or omission as an officer notwithstanding that the
officer is also a director or that his or her actions, if negligent or improper,
have been ratified by the directors.
We are authorized to provide indemnification of our agents (as defined in
Section 317 of the California Corporations Code) for breach of duty to us and
our shareholders through bylaw provisions or through agreements with the agents,
or both, in excess of the indemnification otherwise permitted by Section 317 of
the California Corporations Code, subject to the limits on such excess
indemnification set forth in Section 204 of the California Corporations Code.
We have entered into such indemnification agreements with each of our directors
and officers.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Synbiotics pursuant to these provisions, or otherwise, we have been advised
that, in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
-10-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various costs and expenses we are paying
with respect to the sale and distribution of the securities being registered.
All of the amounts shown are estimates except the SEC registration fee.
<TABLE>
<S> <C>
SEC Registration Fee........................................................ $ 163.43
Printing Expenses*.......................................................... $ 1,000.00
Expenses associated with complying with various states' registrations*...... $ 0.00
Legal Fees and Expenses*.................................................... $ 6,000.00
Nasdaq Market Listing Fee*.................................................. $ 0.00
Accounting Fees and Expenses*............................................... $ 3,000.00
Miscellaneous*.............................................................. $ 3,000.00
----------
Total..................................................................... $13,163.43
==========
</TABLE>
________________
*Estimated
Item 15. Indemnification of Directors and Officers
Section 317 of the California General Corporation Law allows companies to
indemnify their officers and directors against expenses, judgments, fines and
amounts paid in settlement under certain conditions and subject to certain
limitations.
Article Three of our Bylaws provides that we shall indemnify any person who
is or was a director, officer, employee or agent of ours, or any person who is
or was serving at our request as a director, officer, employee or agent of
another corporation, subject to certain limitations. In addition, expenses
incurred by a director, officer, employee or agent in defending a lawsuit by
reason of that person's relationship with us, may be paid by us in advance of
the final disposition of such lawsuit after we receive an undertaking by or on
behalf of such person to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by us.
Our Articles of Incorporation, as amended, provide that none of our
directors shall be liable for monetary damages in an action by or in Synbiotics'
right for breach of a director's duties to us and our shareholders, as set forth
in Section 309 of the California Corporations Code. However, such provision
does not eliminate or limit the liability of a director:
(i) for acts or omissions that involve intentional misconduct or knowing
or culpable violation of law;
(ii) for acts or omissions that a director believes to be contrary to our
best interests or those of our shareholders or that involve the
absence of good faith on the part of a director;
(iii) for any transaction from which a director derives an improper
personal benefit;
(iv) for acts or omissions that show a reckless disregard of the
director's duty in circumstances in which the director was aware, or
should have been aware in the ordinary course of performing the
director's duties, of a risk of serious injury to us or to our
shareholders;
II-1
<PAGE>
(v) for acts or omissions that constitute an unexecuted pattern of
inattention that amounts to an abdication of the director's duty to
us;
(vi) under Section 310 of the California Corporations Code; or
(vii) under Section 316 of the California Corporations Code;
Such provision eliminating liability does not eliminate or limit the liability
of an officer for any act or omission as an officer notwithstanding that the
officer is also a director or that his or her actions, if negligent or improper,
have been ratified by the directors.
We are authorized to provide indemnification of our agents (as defined in
Section 317 of the California Corporations Code) for breach of duty to us and
our shareholders through bylaw provisions or through agreements with the agents,
or both, in excess of the indemnification otherwise permitted by Section 317 of
the California Corporations Code, subject to the limits on such excess
indemnification set forth in Section 204 of the California Corporations Code.
We have entered into such indemnification agreements with each of our directors
and officers.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Synbiotics pursuant to these provisions, or otherwise, we have been advised
that, in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
Item 16. Exhibits
Exhibit Number
--------------
4.1.1 Credit Agreement between Banque Paribas and
Synbiotics./1/
4.1.2 Waiver and First Amendment to $15,000,000 Credit
Agreement Among the Registrant, the Banks Named Therein
and Banque Paribas as Agent, dated March 6, 1998./2/
4.1.3 Waiver and Second Amendment to $15,000,000 Credit
Agreement Among the Registrant, the Banks Named Therein
and Banque Paribas as Agent, dated January 12, 1999./3/
4.2 Warrant Agreement between the Registrant and Banque
Paribas, dated July 9, 1997./4/
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (see pages II-3 and II-4).
__________
/1/ Incorporated by reference to Exhibit 10.64 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1997.
/2/ Incorporated by reference to Exhibit 10.64.1 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1998.
II-2
<PAGE>
/3/ Incorporated by reference to Exhibit 4.3.2 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended March 31, 1999.
/4/ Incorporated by reference to Exhibit 10.66 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1997.
Item 17. Undertakings
We hereby undertake:
(1) To file, during any period in which we offer or sell securities, a
post-effective amendment to this registration statement to include any
additional or changed material information on the plan of distribution;
(2) That, for determining liability under the Securities Act, each such
post-effective amendment shall be treated as a new registration statement of the
securities offered, and the offering of the securities at that time shall be
treated as the initial bona fide offering; and
(3) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by our director, officer, or
controlling person 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, we will, unless in the opinion of our counsel
the question has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify that
we have reasonable grounds to believe that we meet all of the requirements for
filing on Form S-3 and have duly caused this Registration Statement to be signed
on our behalf by the undersigned, thereunto duly authorized, in the City of San
Diego, State of California, on the 19th day of November, 1999.
SYNBIOTICS CORPORATION
By /s/ Michael K. Green
---------------------------------------------
Michael K. Green
II-3
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Michael
K. Green, as attorney-in-fact, with the power of substitution, for him in any
and all capacities, to sign any amendment to this Registration Statement and to
file the same, with exhibits thereto and other documents in connection
therewith, with the SEC, granting to said attorney-in-fact full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, 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 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 Title Date
--------- ----- ----
<S> <C> <C>
/s/ Kenneth M. Cohen Chief Executive Officer, President, and November 19, 1999
- -------------------------------------------
Kenneth M. Cohen Director
(Principal Executive Officer)
/s/ Michael K. Green Chief Financial Officer, Vice President, November 19, 1999
- -------------------------------------------
Michael K. Green Finance
(Principal Financial Officer)
/s/ Keith A. Butler Chief Accounting Officer and Corporate November 19, 1999
- -------------------------------------------
Keith A. Butler Controller
* Director November 19, 1999
- -------------------------------------------
Patrick Owen Burns
* Director November 19, 1999
- -------------------------------------------
James C. DeCesare
* Director November 19, 1999
- -------------------------------------------
Brenda D. Gavin
* Director November 19, 1999
- -------------------------------------------
Joseph Klein III
* Director November 19, 1999
- -------------------------------------------
Donald E. Phillips
*/s/ Michael K. Green
- -------------------------------------------
Michael K. Green, attorney-in-fact
</TABLE>
II-4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-3
UNDER
SECURITIES ACT OF 1933
SYNBIOTICS CORPORATION
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Number Exhibit
- -------------- -------
4.1.1 Credit Agreement among the Registrant, the Banks Named
Herein and Banque Paribas as Agent, dated as of
July 9, 1997./1/
4.1.2 Waiver and first Amendment to $15,000,000 Credit agreement
among the Registrant, the Banks Named Therein and Banque
Paribas as Agent, dated March 6, 1998./2/
4.1.3 Waiver and Second Amendment to $15,000,000 Credit Agreement
Among the Registrant, Banks Named Therein and Banque
Paribas as Agent, dated January 12, 1999./3/
4.2 Warrant Agreement between the Registrant and Banque Paribas,
dated July 9, 1997./4/
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Pricewaterhouse Coopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (see pages II-3 and II-4).
- -----------------------------------------
/1/ Incorporated by reference to Exhibit 10.64 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1997.
/2/ Incorporated by reference to Exhibit 10.64.1 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1998.
/3/ Incorporated by reference to Exhibit 4.3.2 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended March 31, 1999.
/4/ Incorporated by reference to Exhibit 10.66 to the Registrant's
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1997.
<PAGE>
EXHIBIT 5.1
OPINION OF BROBECK, PHLEGER & HARRISON LLP
November 5, 1999
Synbiotics Corporation
11011 Via Frontera
San Diego, California 92127
Re: Synbiotics Corporation Registration Statement on Form S-3 for
239,950 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Synbiotics Corporation, a California
corporation (the "Company"), in connection with the registration for resale of
239,950 shares of Common Stock (the "Shares"). The Shares are issuable upon
exercise of a certain warrant, dated October 28, 1998 (the "Warrant"), as
described in the Company's Registration Statement on Form S-3 ("Registration
Statement") filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act").
This opinion is being furnished in accordance with the requirements of Item
16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-B.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the original issuance of
such Warrant and the future exercise thereof.
Based on such review, we are of the opinion that the Shares have been duly
authorized, and if, as and when issued upon exercise of the Warrant in
accordance with the terms of the Warrant (including payment of the indicated
exercise price), will be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to this firm under the caption "Legal Matters" in
the prospectus which is part of the Registration Statement. In giving this
consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act, the rules and regulations
of the Securities and Exchange Commission promulgated thereunder, or Item 509 of
Regulation S-B.
This opinion letter is rendered as of the date first written above and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Warrant or the Shares.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated March 11, 1999 relating
to the financial statements which appear in Synbiotics Corporation's Annual
Report on Form 10-KSB for the year ended December 31, 1998.
PRICEWATERHOUSECOOOPERS LLP
San Diego, California
November 5, 1999
