BIO-TECHNOLOGY GENERAL CORP.
813,333 Warrants to purchase shares of Common Stock
at a purchase price of $4.92 per share
406,666 Warrants to purchase shares of Common Stock
at a purchase price of $9.84 per share
1,219,999 shares of Common Stock issuable upon exercise of Warrants
------------------------
This Prospectus relates to (i) the resale of warrants to purchase shares of
common stock, $.01 par value ("Common Stock"), of Bio-Technology General Corp.
(the "Company" or "BTG") at a purchase price of $4.92 per share (the "A
Warrants") from time to time for the account of a certain security holder (the
"Selling Security Holder"), (ii) the resale of warrants to purchase shares of
Common Stock of the Company at a purchase price of $9.84 per share (the "B
Warrants," and together with the A Warrants, the "Warrants") from time to time
for the account of the selling security holder (the "Selling Security Holder"),
(iii) the resale of shares of Common Stock issuable upon exercise of the
Warrants from time to time for the account of the Selling Security Holder, and
(iv) the issuance of shares of Common Stock upon exercise of the Warrants by any
holder of the Warrants other than the Selling Security Holder.
The Company will not receive any of the proceeds from the sale of the
Common Stock or the Warrants by the Selling Security Holder. The proceeds from
the exercise of the Warrants, if any, will be received by the Company. See "Use
of Proceeds."
The 813,333 A Warrants and 406,666 B Warrants, each exercisable for one
share of Common Stock, which may be sold by the Selling Security Holder were
originally issued by Gynex Pharmaceuticals, Inc. ("Gynex") in a private
placement of units in March 1992 (the "Gynex Private Placement"). In August
1993, Gynex merged with and into a wholly-owned subsidiary of the Company (the
"Merger"). Pursuant to the Merger, all of the issued and outstanding warrants of
Gynex were converted into warrants to purchase the Company's Common Stock at an
exchange ratio of 1 share of Gynex common stock for each 0.61 shares of the
Company's Common Stock (the "Exchange Ratio") with an appropriate adjustment to
the exercise price giving effect to the Exchange Ratio.
The Warrants are immediately exercisable and transferable. The A Warrants
and the B Warrants may be exercised at any time on or prior to 5:00 p.m.
(Eastern Standard Time) on March 31, 1998 and March 31, 1999, respectively. See
"Selling Security Holder" and "Description of Capital Stock."
The distribution of the Common Stock and Warrants by the Selling Security
Holder may be effected from time to time in one or more transactions (which may
involve block transactions) in the over-the-counter market (including the Nasdaq
National Market) or any exchange on which the Common Stock or Warrants may then
be listed, in negotiated transactions, through the writing of options on shares
(whether such options are listed on an options exchange or otherwise), or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Security Holder may effect such transactions by selling
shares and Warrants to or through broker-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Security Holder and/or purchasers of shares and
Warrants for whom they may act as agent (which compensation may be in excess of
customary commissions). The Selling Security Holder may also sell the shares of
Common Stock or the Warrants pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), or may pledge shares
and Warrants as collateral for margin accounts and such shares and Warrants
could be resold pursuant to the terms of such accounts. The Selling Security
Holder and any broker-dealers that act in connection with the sale of Common
Stock or Warrants might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act and any commissions received by them and any
profit on the resale of the shares or Warrants might be deemed to be
underwriting discounts or commissions under the Securities Act. The Selling
Security Holder may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the Common Stock and Warrants
against certain liabilities, including liabilities arising under the Securities
Act.
(Outside Front Cover Page is continued on the following page)
<PAGE>
(Continuation of Outside Front Cover Page)
The Company's Common Stock trades on the Nasdaq National Market under the
symbol "BTGC." On May 9, 1996, the closing sale price of the Common Stock was
$7.25 per share. In addition, the Company has a class of warrants that presently
trade on the Nasdaq National Market under the symbol "BTGCL." The Company does
not intend to apply to list the Warrants on any securities exchange, but it is
anticipated that the Warrants will trade on the OTC Market. To date the Warrants
registered herein have not been traded, and it is unlikely that an active
trading market in the Warrants will develop and continue. See "Risk Factors--No
Prior Public Market for the Warrants."
------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" LOCATED ON PAGE 6.
All expenses of the registration of securities covered by this Prospectus
are to be borne by the Company, except that the Selling Security Holder will pay
underwriting discounts, selling commissions, and fees and the expenses, if any,
of counsel or other advisers to the Selling Security Holder.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is May 10, 1996
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No person has been authorized to give any information or to make any
representation in connection with this offering other than those contained in
the Prospectus or a supplement to this Prospectus, and, if given or made, such
other information or representations must not be relied upon as having been
authorized by the Company or any other person. Neither this Prospectus nor any
supplement to this Prospectus constitutes an offer to sell or the solicitation
of an offer to buy any securities other than the securities to which it relates
or an offer to sell or the solicitation of an offer to buy such securities in
any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this Prospectus or a supplement to this Prospectus nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or thereof or that the information contained herein or therein is correct
as of any time subsequent to its date.
TABLE OF CONTENTS
PAGE
----
Available Information......................................... 3
Information Incorporated by Reference......................... 4
The Company................................................... 5
Risk Factors.................................................. 6
Use of Proceeds............................................... 14
Description of Capital Stock.................................. 14
Selling Security Holder....................................... 16
Plan of Distribution.......................................... 16
Legal Matters................................................. 17
Experts ...................................................... 17
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"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and the regional offices of the Commission
located at Seven World Trade Center, 13th Floor, New York, New York 10048, and
500 West Madison Street, Chicago, Illinois 60661, and copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and its public reference facilities in New
York, New York and Chicago, Illinois, at prescribed rates. Copies of such
information may also be inspected at the reading room of the library of the
National Association of Securities Dealers, Inc., 1735 K Street, Washington,
D.C. 20006. This Prospectus does not contain all of the information set forth in
the Registration Statement of which this Prospectus is a part and exhibits
thereto which the Company has filed with the Commission under the Securities Act
and to which reference is hereby made.
(Inside Front Cover Page is continued on the following page)
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(Continuation of Inside Front Cover Page)
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission by the Company (File No.
0-15313) pursuant to the Exchange Act are incorporated by reference into this
Prospectus:
(i) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, as amended.
(ii) The Company's Current Report on Form 8-K dated April 9, 1996.
(iii) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996.
(iv) The Company's Form 8-A dated July 25, 1983, as amended by
Amendment No. 1 to Form 8-A dated September 29, 1983 and
Amendment No. 2 to Form 8-A dated October 1, 1986.
(v) The Company's Form 8-A dated April 19, 1996, relating to the A
Warrants.
(vi) The Company's Form 8-A dated April 19, 1996, relating to the B
Warrants.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed incorporated by reference into this Prospectus
and to be a part hereof from the date of the filing of such documents or
reports.
Any statement contained in a document incorporated by reference herein,
unless otherwise indicated therein, speaks as of the date of the document. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus modifies or replaces such statement.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than exhibits to such documents. Requests should be
addressed to: Bio-Technology General Corp., 70 Wood Avenue South, Iselin, New
Jersey 08830, Attention: President (Tel. No. (908) 632-8800). The Company
furnishes its stockholders with an annual report containing audited financial
statements. In addition, the Company may furnish such other reports as may be
authorized, from time to time, by the Board of Directors.
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<PAGE>
THE COMPANY
The Company, founded in 1980, is principally engaged in the research,
development, manufacture and marketing of products for human health care. The
Company is focusing primarily on the development of therapeutic products that
address serious conditions such as endocrine and metabolic disorders,
cardio/pulmonary diseases, ophthalmic and skin disorders.
The Company's marketed products include Bio-Tropin(TM) (human growth
hormone), which is currently being marketed in several countries in Europe,
Latin America, Asia and the Far East for the treatment of growth hormone
deficiency in children; Oxandrin(R) (oxandrolone), which is primarily marketed
in the United States, for the treatment of weight loss; BioLon(TM) (sodium
hyaluronate), which is currently marketed in several countries in North and
Latin America, Europe, Asia and the Far East for the protection of the corneal
endothelium during intraocular surgery; Delatestryl(R) (injectable
testosterone), which is currently marketed in the United States for hypogonadism
and delayed puberty; and Silkis(R), a vitamin D derivative, which is currently
approved in two European countries for the topical treatment of recalcitrant
psoriasis.
The Company's principal products in advanced stages of development and
clinical testing include Oxandrin for the treatment of Turner syndrome in girls
and constitutional delay of growth and puberty in boys; Androtest-SL(R)
(sublingual testosterone) for hypogonadism; Bio-Hep-B(TM), a third generation
vaccine against hepatitis B virus; a higher dose formulation of Oxandrin
(oxandrolone), for AIDS cachexia; OxSODrol(TM) (human superoxide dismutase) for
the treatment of bronchopulmonary dysplasia in premature infants; Hepandrin(TM)
(oxandrolone), for the treatment of alcoholic hepatitis; and Imagex(TM), a
clot-imaging agent. BTG's current pre-clinical research focus is on
cardiovascular drugs, including an anti-reocclusion agent and an
anti-coagulant.
The Company believes that its specialized biotechnology skills, including
its vector technology, macromolecular purification processes and manufacturing
capabilities, give it competitive advantages in developing and commercializing
new biotechnology products. In addition to its specialized genetic engineering
skills, the Company has expertise in the clinical development of more
traditional pharmaceutical agents. To enhance the Company's research and
development activities, the Company has established ties with leading academic
and scientific institutions around the world, some of which also undertake
research projects with the Company. These institutions are important resources
for the Company, providing access to technological advances in the fields of
biotechnology, drug-delivery, biology and pre-clinical research. During 1995 the
Company established a sales and marketing force in the United States to promote
distribution of Oxandrin and other BTG products in the United States.
The Company's headquarters are located at 70 Wood Avenue South, Iselin, New
Jersey, where the Company has leased approximately 12,800 square feet of office
space. Human clinical studies, marketing activities, quality assurance and
regulatory affairs are coordinated at the Company's headquarters. Pre-clinical
studies, as well as research, development and manufacturing activities, are
primarily carried out through its wholly-owned subsidiary in an approximately
80,000 square foot research and Good Manufacturing Practice ("GMP") designed
manufacturing facility located in Rehovot, Israel. All references herein to BTG
or the Company mean Bio-Technology General Corp. and its wholly-owned
subsidiaries, Bio-Technology General (Israel) Ltd. ("BTG-Israel") and BTG
Pharmaceuticals Ltd. N.V.
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RISK FACTORS
THE SECURITIES BEING OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
PROSPECTIVE INVESTORS SHOULD REVIEW THE ENTIRE PROSPECTUS AND THE INFORMATION
INCORPORATED HEREIN BY REFERENCE AND CAREFULLY CONSIDER, AMONG OTHER FACTORS,
THE MATTERS SET FORTH BELOW. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS
WHICH INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER
SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO,
THOSE DISCUSSED BELOW.
LIMITED COMMERCIAL PRODUCTS. The Company's principal activities since its
formation in 1980 have been the research and development of products with
commercial potential. Commercialization of the Company's products is subject to
successful clinical testing and governmental approvals, the timing of which is
not within the control of the Company and has taken and may continue to take
longer than anticipated. Acceptance by the medical community of the Company's
products is also necessary for their successful commercialization.
LACK OF PROFITABLE OPERATIONS. Prior to 1995, the Company's revenue was not
sufficient to offset the expenses incurred in its research, development and
production activities. At March 31, 1996, the Company had an accumulated deficit
of approximately $90.6 million. To the extent the Company is unable to sustain
its profitability, its ability to continue its operations will depend upon its
ability to secure additional funds from other sources. See "--Capital Needs."
Revenue may display significant variations due to the introduction of new
research and development contracts and licensing arrangements, the completion or
termination of those contracts and arrangements, the timing and amounts of
milestone payments, the timing of payments and the timing of regulatory
approvals of products. The Company's profitability will be dependent on its
success in developing, obtaining regulatory approvals for and effectively
marketing its product. There can be no assurance as to whether the Company will
be able to sustain profitability.
CAPITAL NEEDS. Historically, the substantial majority of the Company's
funds necessary to finance its operations has been provided by debt and equity
financings. The Company has also relied on contract fees and research and
development revenue provided by the Company's collaborative partners and funds
for research and development provided by the Chief Scientist of the State of
Israel (the "Chief Scientist") to finance its operations. There can be no
assurance that these financing alternatives will be available in the future to
satisfy the Company's cash requirements. The Company believes that its remaining
cash resources, together with anticipated product sales, scheduled payments to
be made to BTG under its current agreements with pharmaceutical partners and
third parties, the proceeds of sales of equity and continued funding from the
Chief Scientist at current levels, will be sufficient to fund the Company's
ongoing operations for the foreseeable future. There can, however, be no
assurance that product sales will occur as anticipated, that scheduled payments
will be made by third parties, that current agreements will not be canceled,
that the Chief Scientist will continue to provide funding at current levels, or
that unanticipated events requiring the expenditure of funds will not occur.
The satisfaction of the Company's future cash requirements will depend in
large part on the status of commercialization of the Company's products, the
Company's ability to enter into additional research and development and
licensing arrangements, and the Company's ability to obtain additional equity
investments, if necessary. There can be no assurance that the Company will be
able to obtain additional funds or, if such funds are available, that such
funding will be on favorable terms. In addition, the indentures under which the
Company's debt securities were issued limit the ability of the Company to
satisfy its cash requirements through borrowings or the issuance of debt
securities, and prohibit the sale of equity securities at a price per share of
less than $1.00 (as adjusted under certain circumstances). The Company continues
to seek additional collaborative research and development and licensing
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<PAGE>
arrangements, in order to provide revenue from sales of certain products and
funding for a portion of the research and development expenses relating to the
products covered, although there can be no assurance that the Company will be
able to obtain such agreements.
The annual cash flows of the Company have fluctuated significantly due to
the impact of net losses, capital spending and issuances of Common Stock and
other financings. The Company expects that cash flow in the near future will be
primarily determined by the levels of net income (loss) less depreciation and
amortization, and financings, if any, undertaken by the Company.
PATENTS AND PROTECTION OF PROPRIETARY TECHNOLOGY. The Company has developed
patentable technology and proprietary know-how and has acquired from various
universities and institutions certain basic technologies, as to which either
patents have been issued or patent applications are pending. There can be no
assurance that patent applications will result in issued patents or that patents
will not be circumvented or invalidated. The Company also relies on unpatented
proprietary technology. There can be no assurance that others may not obtain
access to BTG's proprietary technology. Furthermore, there can be no assurance
that others may not independently develop the same or similar technology and
obtain patents thereon either in the United States or in jurisdictions where the
Company is seeking patents for which the Company may have to obtain licenses.
There can be no assurance that needed licenses will be available on acceptable
terms or at all. The Company believes that important legal issues remain to be
resolved as to the extent and scope of patent protection for biotechnology
products, and the Company expects that administrative hearings, litigation or
both will be necessary to determine the validity and scope of its and others'
proprietary or biotechnology patents. Such administrative proceedings or
litigation may require a significant commitment of the Company's resources in
the future.
During 1991, the Company received notification from the United States
Patent and Trademark Office (the "Patent Office") Board of Patent Appeals and
Interferences of the declaration of an interference between an issued patent
assigned to the Company covering a method for producing enzymatically active
human copper/zinc superoxide dismutase ("SOD") in bacteria and a pending
application of Chiron Corporation ("Chiron"), which claims an earlier filing
date. While the Company is vigorously defending its patent, it cannot predict
the outcome of such interference. However, should the Company's patent be
disallowed and a corresponding patent be issued to Chiron, the Company's present
method of producing enzymatically active human copper/zinc SOD in bacteria may
need to be altered, which may or may not be possible; alternatively, the Company
could seek a license to market under Chiron's patent, which may or may not be
available. Subsequent to the interference being declared, Chiron was issued a
U.S. patent for the bacterially produced form of recombinant human copper/zinc
SOD. The Company is seeking to have the Patent Office either expand the scope of
the existing interference action or declare a separate interference to determine
that the Company rather than Chiron should hold the patent for the bacterially
produced form of recombinant human copper/zinc SOD on the basis that the
Company's scientists, not Chiron scientists, invented the method for producing
recombinant human copper/zinc SOD in bacteria. Unless the Company is able to
prevail in this effort or to obtain a license from Chiron, the Company may be
unable to commercialize OxSODrol in the United States. This matter is currently
under consideration by the Patent Office. In addition, the Israeli Patent Office
has accepted a Chiron patent application covering a DNA construct having certain
specified features for expression of active copper/zinc SOD and a method for
production of active copper/zinc SOD in a microorganism harboring this
construct. The Company is opposing the grant of this patent; however, there can
be no assurance that this opposition will be successful. If the opposition is
unsuccessful, the Company may be precluded from manufacturing OxSODrol in
Israel.
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In September 1991, the Company received a letter from Biogen stating that
it believed that the Company's recombinant surface antigen of the hepatitis-B
virus, which is an active ingredient of the Company's Bio-Hep-B, or the
Company's intermediates for the process of making such antigen, falls within the
claims of one or more of Biogen's patents and/or patent applications. To date,
the Company's activities with respect to its Bio-Hep-B have been limited to
research and clinical evaluations, which activities the Company believes do not
infringe Biogen's patent rights. The Company has also made inquiries of Biogen
and SmithKline Beecham (the exclusive licensee of all of Biogen's hepatitis-B
patents except those in Japan) requesting that the Company be granted a license
to the Biogen patents; however, such efforts have not been successful to date.
In January 1992, BTG-Israel filed an application in the Israeli Patent
Office for a compulsory license to manufacture BTG's Bio-Hep-B under Biogen's
Israeli patent which license, upon approval, would enable BTG to produce the
vaccine in Israel and likely to export the vaccine to countries in which neither
Biogen nor others have been granted a blocking patent. In September 1995 the
Israeli Registrar of Patents ruled in an interlocutory decision that BTG-Israel
is entitled to a compulsory license to the Biogen patent, which license will
enable the Company to produce the vaccine in Israel and likely to export the
vaccine to countries in which neither Biogen nor others have been granted a
blocking patent. Biogen's appeal of the interlocutory decision was rejected. The
Registrar now has to finalize the terms of the license, including royalties to
be paid by BTG to Biogen. There can be no assurance that a compulsory license
will finally be issued and there can be no assurance that if it issues, the
grant will not be appealed by Biogen or overturned by a court. If a compulsory
license is not issued or if a court overturns the issuance, BTG may not be able
to manufacture or sell its Bio-Hep-B in Israel or to export such product from
Israel unless the patent is revoked. In August 1992, Biogen sued BTG-Israel for
allegedly infringing its Israeli patent (which is the subject of the compulsory
license application) by virtue of its preparation of BTG's Bio-Hep-B for use in
clinical trials, and applied for an interlocutory injunction restraining
BTG-Israel from continuing research and development and clinical trials. In June
1993, the District Court of Tel Aviv, Israel denied Biogen's application for an
interlocutory injunction in connection with research and development and
clinical trials, but did prohibit BTG-Israel from commercial marketing of
Bio-Hep-B unless permitted by Biogen or its exclusive licensee, until a
compulsory license is obtained, or until the patent is revoked.
On March 16, 1993, Genentech Inc. ("Genentech") filed a complaint with the
U.S. International Trade Commission (the "ITC") alleging, among other things,
that BTG's importation of human growth hormone ("hGH") into the United States
violates Section 337 of the Tariff Act of 1930 because of the existence of
certain claims in U.S. patents of Genentech. Genentech sought an immediate
investigation and an order that BTG cease and desist from importing hGH into the
United States. The trial on the Genentech complaint was held in April 1994. In
January 1995 the ITC issued a final decision dismissing the complaint with
prejudice as a sanction for Genentech's conduct which resulted in an incomplete
record and violated the due process rights of BTG and Novo-Nordisk A/S, another
respondent in the proceeding. The ITC also found no violation by BTG of Section
337 of the Tariff Act of 1930. Genentech appealed the ITC decision to the United
States Court of Appeals for the Federal Circuit (the "CAFC"). The appeal was
heard on December 4, 1995, and a decision is pending.
On December 1, 1994, Genentech filed a lawsuit against the Company in the
United States District Court for the District of Delaware alleging that BTG's
importation of BTG's hGH infringed two Genentech process patents. In January
1995, BTG commenced an action against Genentech in the United States District
Court for the Southern District of New York seeking, among other things,
declaratory judgment as to the non-infringement, invalidity and unenforceability
of such Genentech patents. The Delaware action was consolidated with the New
York action, and in August 1995 the United States District Court for the
Southern District of New York granted a preliminary injunction prohibiting the
commercial introduction
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in the United States of BTG's hGH. BTG appealed to the United States Court of
Appeals for the Federal Circuit and, on April 8, 1996, that court affirmed the
preliminary injunction obtained by Genentech prohibiting the commercial
introduction of BTG's hGH in the United States, finding that Genentech had
established before the District Court a reasonable likelihood of success on the
merits of its patent infringement claim. The case now returns to the Federal
District Court in New York for further proceedings and trial. The Company is
currently evaluating its options in light of the District Court decision. If the
Company continues to pursue the litigation with Genentech, it will incur
substantial legal fees in defending and prosecuting these lawsuits.
In September 1993, JCR Pharmaceuticals Co., Ltd. ("JCR"), the Company's
exclusive distributor of human growth hormone products in Japan, received a
letter from attorneys representing Genentech and its Japanese licensee claiming
that JCR's sale of the Company's hGH in Japan infringed certain Genentech
patents and patent applications and demanding that JCR cease the sale of the
Company's hGH in Japan. There can be no assurance that the Company's hGH will
not be found to infringe certain Genentech patents in Japan. If the Company's
hGH is found to infringe certain Genentech patents in Japan, the Company may be
obligated to pay money damages and will be obligated to obtain a license from
Genentech in Japan, of which there can be no assurance, or JCR will be required
to stop selling the Company's hGH in Japan.
Genentech has been granted patents in Israel which cover general methods of
genetically engineering products. The Company is opposing the grant of three of
these patents; two U.S. patents granted to Genentech which correspond to one of
the three patents granted to Genentech in Israel are currently the subject of
the complaint asserted by Genentech against the Company before the ITC and in
the District Court in New York. There can be no assurance that the Company will
be successful in its opposition to these patents. If the Company is unsuccessful
in its opposition, then the Company may be unable to manufacture its products in
Israel.
Janssen, a division of Johnson & Johnson, has commenced an interference
action in the U.S. Patent Office relating to a cyclodextrin patent. One claim of
this patent, which relates to the cyclodextrin patent is exclusively licensed to
BTG. If Janssen is successful in the interference proceeding, BTG may not be
able to market Androtest-SL in the United States without a license, which may
not be available. The Company is currently in negotiations to secure a license
to Janssen's patents and technology, although there can be no assurance it will
be able to obtain a license on reasonable terms or at all. If Janssen is
successful in this interference action and BTG is unable to obtain a license,
BTG may be prohibited from commercializing Androtest-SL.
HEALTHCARE REIMBURSEMENT MAY NOT BE AVAILABLE. The Company's ability to
successfully commercialize human therapeutic products may depend in part on the
extent to which reimbursement for the cost of such products and related
treatment will be available from government health administration authorities,
private health coverage insurers and other organizations. Significant
uncertainty exists as to the reimbursement status of newly approved healthcare
products, and there can be no assurance that adequate third-party coverage will
be available for the Company to maintain price levels sufficient for realization
of an appropriate return on its investment in product development. Government
and other third party payors are increasingly attempting to contain healthcare
costs by limiting both coverage and the level of reimbursement for new
therapeutic products approved for marketing by the United States Food and Drug
Administration ("FDA") and by refusing, in some cases, to provide any coverage
for use of approved products for disease indications for which the FDA has not
granted marketing approval. If adequate coverage and reimbursement levels are
not provided by government and third-party payors for use of the Company's
healthcare products, the market acceptance of these products would be adversely
affected. It is anticipated that one or more healthcare reform proposals, the
principal goals of which will be to provide health insurance coverage to
substantially all Americans and to reduce the rate of increase in national
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healthcare expenditures, will be considered by Congress and various states in
the next several years. There can be no assurance as to the ultimate content,
timing or effect of any healthcare reform legislation, nor is it possible at
this time to estimate the impact of potential legislation on the Company.
RISK OF TECHNICAL OBSOLESCENCE; HIGHLY COMPETITIVE INDUSTRY. Biotechnology
has undergone rapid and significant technological change. The Company expects
that this technology will continue to develop rapidly, and the Company's future
success will depend, in large part, on its ability to maintain a competitive
position. Rapid technological development may result in products or processes
becoming obsolete before marketing of these products or before the Company
recovers a significant portion of the research, development and
commercialization expenses incurred with respect to those products.
Numerous companies, including well-known pharmaceutical and biotechnology
companies, are engaged in the business of researching and developing products
similar to those of the Company. Many of these companies have substantially
greater capital resources and larger research and development staffs and
facilities than the Company. Such companies may succeed in their research,
producing on a more timely basis products that may be more effective than any
which may be developed by the Company. These companies may also be more
successful than the Company in the production and marketing of such products.
RETENTION OF KEY PERSONNEL. The Company is dependent upon the efforts of
its officers and scientists and other employees. The loss of certain of these
key employees could materially and adversely affect the Company's business.
There is a great deal of competition for the limited number of scientists with
expertise in the area of the Company's operations. The business of the Company
is dependent upon its ability to attract and retain qualified research and
managerial personnel. The Company does not maintain, and has no current
intention of obtaining, "key man" life insurance on any of its employees.
RISK OF OPERATIONS IN ISRAEL. The Company's primary research, development
and production operations are at this time conducted in Israel and can be
affected by economic, military and political conditions in that country and in
the Middle East in general. The Company manages its Israeli operations with the
object of protecting against any material net financial loss in U.S. dollars
from the impact of Israeli inflation and currency devaluations on its non-U.S.
dollar assets and liabilities. The Bank of Israel's monetary policy is to manage
the exchange rate while allowing the Consumer Price Index to rise by
approximately 11% in 1993, 14% in 1994 and 8% in 1995. For those expenses linked
to the Israeli Shekel, such as salaries and rent, this resulted in corresponding
increases in these costs in U.S. dollars. In 1993, 1994 and 1995 the Shekel was
devalued by approximately 8%, 1% and 4%, respectively, against the U.S. dollar.
As a result of the devaluations of the Shekel and modest increases in
cost-of-living adjustments in Shekel salaries in 1993, BTG's costs of local
goods and services in Israel measured in U.S. dollars remained relatively
constant in 1993 despite the rise in the Consumer Price Index. However, because
of the insignificant devaluation of the Shekel against the U.S. dollar despite
the 14% and 8% annual rate of increase in the Consumer Price Index during 1994
and 1995, respectively, BTG's cost of local goods and services, to the extent
linked in whole or in part to the Consumer Price Index, increased in U.S. dollar
terms in 1994 and 1995. To the extent that expenses in Shekels exceed BTG's
revenues in Shekels (which to date have consisted primarily of research funding
from the Chief Scientist and sales of Bio-Tropin and BioLon in Israel), the
devaluations of Israeli currency have been and will continue to be a benefit to
BTG's financial condition. However, should BTG's revenues in Shekels exceed its
expenses in Shekels in any material respect, the devaluation of the Shekel will
adversely affect BTG's financial condition. Further, to the extent the
devaluation of the Shekel with respect to the U.S. dollar does not substantially
offset the increase in the costs of local goods and services in Israel, BTG's
financial results will be adversely affected as local expenses measured
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in U.S. dollars will increase. There can be no assurance that the government of
Israel will continue to devalue the Shekel from time to time to offset the
effects of inflation in Israel.
RISK OF PRODUCT LIABILITY. The testing and marketing of the Company's
products entail risk of product liability. Although the Company has so far been
able to obtain indemnification from pharmaceutical companies commercializing its
products, there can be no assurance that other such companies will agree in the
future to indemnify the Company for other of the Company's products or that such
companies will, if obligated to do so, have adequate resources to fulfill their
indemnity agreements. Further, to the extent the Company elects to test or
market products independently, it will bear the risk of product liability
directly. The Company presently has $5,000,000 of product liability insurance
coverage in place. Any successful product liability claim made against the
Company could substantially reduce or eliminate any stockholders' equity the
Company may have and could have a significant adverse impact on the future of
the Company.
EFFECT OF GOVERNMENTAL REGULATION. The Company is subject to regulation by
numerous governmental authorities in the United States and other countries. All
of the Company's products, manufacturing processes and facilities require
governmental licensing or approval prior to commercial use. The approval process
applicable to products of the type being developed by the Company usually takes
five to seven years from the commencement of human clinical trials and typically
requires substantial expenditures. The Company and its licensees may encounter
significant delays or excessive costs in their respective efforts to secure
necessary approvals or licenses. Future United States or foreign legislative or
administrative acts could also prevent or delay regulatory approval of the
Company's or its licensees' products. Failure to obtain requisite governmental
approvals, or failure to obtain approvals of the scope requested, could delay or
preclude the Company or its licensees from marketing their products, could limit
the commercial use of the products and could also allow competitors time to
introduce competing products ahead of product introduction by the Company and
thereby have a material adverse effect on the Company's results of operations,
liquidity and financial condition. Even after regulatory approval is obtained,
use of the products could reveal side effects that, if serious, could result in
suspension of existing approvals and delays in obtaining approvals in other
jurisdictions. Regulation by governmental authorities in the United States and
other countries is a significant factor affecting the timing of the
commercialization of the Company's products and its ongoing research and
development activities. The timing of regulatory approvals is not within the
Company's control. To date, the length of time required to obtain regulatory
approval of genetically-engineered products has been significantly longer than
expected, both for the Company and the biotechnology industry in general. These
delays have had, and if they continue will have, a material adverse effect on
the results of operations and financial condition of the Company. The Company
believes that these delays have negatively impacted its ability to attract
funding and that, as a result, the terms of such financings have been less
favorable to the Company than they might otherwise have been had the Company's
product revenues provided sufficient funds to finance the large costs of taking
a product from discovery through commercialization. As a result, the Company has
had to license the commercialization of many of its products to third parties in
exchange for research funding and royalties on product sales; this will result
in lower revenues than if BTG had commercialized the products on its own. See
"-- Capital Needs."
DEPENDENCE ON THIRD PARTIES. The Company has licensed substantially all its
basic technology from third-parties. In addition, the Company has generally
licensed the commercialization rights for its products to third-parties. These
license agreements, which constitute BTG's most significant assets, may be
canceled by the other party upon BTG's failure to perform its obligations
thereunder. In addition, certain contracts may also be canceled by the Company's
licensees at any or at certain specified times.
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The Company has derived, and expects to continue to derive over the next
several years, a portion of its revenues from existing and new licensing,
research and development and marketing agreements. These agreements typically
provide the Company's licensees with certain rights, subject to an obligation to
pay royalties to the Company based on any future product sales, to manufacture
and market specified products developed using the Company's proprietary
technology. Certain of these agreements provide for funding by licensees of
research activities performed on their behalf by the Company. Continued funding
and participation by these licensees will depend not only on the timely
achievement of milestones, which cannot be assured, but also on each licensee's
own financial, competitive, marketing and strategic considerations. Such
considerations include the relative advantages, including patent and proprietary
positions, of alternate products being marketed or developed by others.
The Company's revenues from license agreements have fluctuated in the past
and are expected to continue to fluctuate in the future. In addition, some of
the license agreements from which the Company derives those revenues are subject
to early termination. There is no assurance that historical levels of revenue
from these sources will be maintained. Furthermore, the amounts of any royalty
payments to be received by the Company under its license agreements will be
dependent on the extent to which its licensees devote resources to the
development and commercialization of the products. Although the Company believes
its licensees have an economic motivation to commercialize their products, the
Company will have no effective control over the licensees' commercialization
efforts.
LIMITED MANUFACTURING AND MARKETING CAPABILITY AND EXPERIENCE. The Company
has limited commercial scale manufacturing capacity and experience. While it is
expected that the Company's manufacturing facilities will allow the Company to
satisfy the requirements of existing license and distribution agreements for the
near term, there is no assurance that these requirements will be satisfied. The
Company will be required to obtain regulatory approval for all of its commercial
manufacturing processes and facilities. Any failure to receive, or substantial
delay in obtaining, regulatory approval for its manufacturing processes and
facilities could have a material adverse effect on the Company. The Company
believes that it operates its facilities under, and is in compliance with, the
FDA's good laboratory and manufacturing practices.
The Company during 1995 established a sales and marketing force in the
United States to promote distribution of Oxandrin and other BTG products in the
United States. With respect to territories outside the United States the Company
does not yet have an established sales force and relies on third parties to
market its products. There can be no assurance that the Company's marketing
strategy will be successful. The Company's ability to market its products
successfully in the future will be dependent on a number of factors, many of
which are not within its control.
VOLATILITY OF SHARE PRICE. The market prices for securities of
biotechnology companies have been volatile. Factors such as announcements of
technological innovations or new commercial products by the Company or its
competitors, governmental regulation, patent or proprietary rights developments,
public concern as to the safety or other implications of biotechnology products
and market conditions in general may have a significant impact on the market
price of the Company's Common Stock.
The market price of the Company's Common Stock has fluctuated over a wide
range and it is likely that the price of the Company's Common Stock will
fluctuate in the future. In addition, the market price of the Company's Common
Stock could be adversely affected by future exercises of outstanding warrants or
conversions of outstanding convertible securities. Further, the future sale of a
substantial number of shares of the Company's Common Stock by existing
stockholders and option and warrant holders may have an adverse impact on the
market price of the Company's Common Stock. See "--Dilutive Effect of Stock
Issuances, Grants, Options and Warrants" and "--Effect on Trading Market of
Common Stock."
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ABSENCE OF DIVIDENDS. No dividends have been paid on the Company's Common
Stock to date and the Company does not anticipate paying dividends in the
foreseeable future. The indentures under which the Company's 7 1/2% Convertible
Senior Subordinated Notes due April 15, 1997 and the Series B 11% Senior Secured
Convertible Notes due October 15, 1998 were issued prohibit the payment of cash
dividends on BTG Common Stock.
DILUTIVE EFFECT OF STOCK ISSUANCES, GRANTS, OPTIONS AND WARRANTS; EFFECT ON
TRADING MARKET. BTG has granted options to purchase an aggregate of
approximately 6,000,000 shares of the Company's Common Stock under certain
employee benefit plans. Warrants to purchase an aggregate of approximately
3,536,000 shares of the Company's Common Stock, including the Warrants, are also
outstanding under previous financing arrangements and other transactions. Many
of these options and warrants have exercise prices below the current market
price of the Company's Common Stock. In addition, the Company may issue
additional stock, warrants and/or options to raise capital in the future. The
Company regularly examines opportunities to expand its technology base and
product line through means such as licenses, joint ventures and acquisition of
assets or ongoing businesses and may issue securities in connection with such
transactions. See "--Capital Needs". The Company may also issue additional
securities in connection with its employee benefit plans. During the terms of
such options and warrants, the holders thereof are given the opportunity to
profit from a rise in the market price of the Company's Common Stock. The
exercise of such options and warrants may have an adverse effect on the market
value of the Company's Common Stock. The existence of such options and warrants
may adversely affect the terms on which the Company can obtain additional equity
financing. See "-- Capital Needs." To the extent the exercise prices of such
options and warrants are less than the net tangible book value of the Company's
Common Stock at the time such options and warrants are exercised, the Company's
stockholders will experience an immediate dilution in the net tangible book
value of their investment. In addition to the shares of Common Stock registered
hereunder, the Company currently has registered for resale from time to time on
behalf of certain stockholders of the Company an aggregate of approximately
2,700,000 additional shares of Common Stock. The sale of these shares could
adversely affect the market price for the Common Stock.
NO PRIOR PUBLIC MARKET FOR WARRANTS. There is no existing market for the
Warrants and there can be no assurance as to the liquidity of any market that
may develop for the Warrants, the ability of Warrantholders to sell their
Warrants or at what price Warrantholders will be able to sell their Warrants.
Future trading prices of the Warrants will depend upon many factors, including,
among other things, the Company's operating results and the price of the Common
Stock. It is unlikely an active market for the Warrants will develop.
CERTAIN ANTI-TAKEOVER EFFECTS. The shares beneficially owned by the
Company's executive officers, directors and five percent stockholders, combined
with the ability of the Company's Board of Directors to issue shares of
preferred stock without further vote or action by the Company's stockholders,
may have the effect of delaying, deferring or preventing a change in control of
the Company without further action by the Company's stockholders. Consequently,
the market price for the Company's Common Stock may be less likely to reflect a
"premium for control." In addition, Section 203 of the Delaware Law, which is
applicable to the Company, contains provisions that are normally considered to
have the effect of inhibiting a non-negotiated merger or other business
combination.
LIMITATION ON USE OF NET OPERATING LOSS CARRYFORWARDS. The Company has net
operating loss carryforwards available to reduce future federal taxable income,
aggregating approximately $50 million as of December 31, 1995, which expire from
1997 through 2010. The use of such carryforwards is severely limited as a result
of ownership changes resulting from previous share issuances. Subsequent changes
in the Company's ownership may cause further limitations on the annual amounts
of the carryforwards which can be utilized.
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USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Warrants or the
shares of Common Stock issuable upon the exercise of the Warrants by the Selling
Security Holder. The proceeds, if any, received by the Company upon the exercise
of the Warrants will be utilized by the Company for working capital purposes.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 150,000,000 shares of Common Stock, par
value $.01, and 4,000,000 shares of Preferred Stock, par value $.01. The
following brief description of the capital stock of the Company is qualified in
its entirety by reference to the Company's Certificate of Incorporation, as
amended, copies of which are on file with the Commission.
COMMON STOCK. Holders of Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders generally, including the
election of directors. Subject to the rights of holders of Preferred Stock, the
holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor, and in the event of liquidation, dissolution or winding up
of the Company, to share ratably in all assets remaining after payment of
liabilities. The holders of Common Stock have no preemptive or conversion rights
and are not subject to further calls or assessments by the Company.
The Transfer Agent and Registrar for the Common Stock is the American Stock
Transfer & Trust Company, New York, New York.
PREFERRED STOCK. The Board of Directors has authority to issue the
Preferred Stock from time to time without stockholder approval, in one or more
series. The Board of Directors is authorized with respect to any series of
Preferred Stock to fix the designation, the number of shares, the voting powers,
the conditions of the conversion privilege, if any, the terms and conditions of
the redemption rights, if any, the rights upon liquidation, merger,
consolidation, distribution or sale of assets, and dissolution or winding-up,
the dividend rate and whether dividends shall be cumulative, and any other
powers, preferences and relative, participating, optional and other rights and
the qualifications, limitations and restrictions of such series. No shares of
Preferred Stock are currently outstanding.
WARRANTS.
CLASS A WARRANTS.
The following summary of certain provisions of the A Warrants being offered
hereby does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all provisions contained in the A Warrants.
The Company has 813,333 A Warrants outstanding as of the date hereof. Each
of the A Warrants entitles the registered holder thereof to purchase one share
of Common Stock at a purchase price of $4.92 per share, subject to adjustment
under certain circumstances, at any time up to and including 5:00 p.m. New York
time on March 31, 1998.
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The exercise price of the A Warrants and the number and kind of shares of
Common Stock to be obtained upon exercise of the A Warrants is subject to
adjustment in certain circumstances. In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of shares
of Common Stock, the exercise price of the A Warrants in effect immediately
prior to such subdivision shall be proportionately reduced, and conversely, in
case the outstanding shares of Common Stock of the Company shall be combined
into a smaller number of shares of Common Stock, the exercise price of the A
Warrants in effect immediately prior to such combination shall be
proportionately increased. In case the Company shall at any time declare a
dividend upon its Common Stock payable solely in shares of Common Stock, the
exercise price of the A Warrants in effect immediately prior to such dividend
shall be proportionately reduced.
The A Warrants may be exercised upon surrender of the warrant certificates
on or prior to their expiration date at the offices of the Company with the
"Form of Subscription" attached to the A Warrant certificate completed and
executed as indicated, accompanied by payment of the full exercise price (by
certified check payable to the order of the Company) for the number of A
Warrants being exercised.
CLASS B WARRANTS.
The following summary of certain provisions of the B Warrants being offered
hereby does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all provisions contained in the B Warrants.
The Company has 406,666 B Warrants outstanding as of the date hereof. Each
of the B Warrants entitles the registered holder thereof to purchase one share
of Common Stock at a purchase price of $9.84 per share, subject to adjustment
under certain circumstances, at any time up to and including 5:00 p.m. New York
time on March 31, 1999.
The exercise price of the B Warrants and the number and kind of shares of
Common Stock to be obtained upon exercise of the B Warrants is subject to
adjustment in certain circumstances. In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of shares
of Common Stock, the exercise price of the B Warrants in effect immediately
prior to such subdivision shall be proportionately reduced, and conversely, in
case the outstanding shares of Common Stock of the Company shall be combined
into a smaller number of shares of Common Stock, the exercise price of the B
Warrants in effect immediately prior to such combination shall be
proportionately increased. In case the Company shall at any time declare a
dividend upon its Common Stock payable solely in shares of Common Stock, the
exercise price of the B Warrants in effect immediately prior to such dividend
shall be proportionately reduced.
The B Warrants may be exercised upon surrender of the warrant certificates
on or prior to their expiration date at the offices of the Company with the
"Form of Subscription" attached to the B Warrant certificate completed and
executed as indicated, accompanied by payment of the full exercise price (by
certified check payable to the order of the Company) for the number of B
Warrants being exercised.
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<PAGE>
SELLING SECURITY HOLDER
The following table sets forth information as of December 31, 1995 except
as otherwise noted, with respect to the number of shares of Common Stock and the
number of Warrants beneficially owned by the Selling Security Holder. The
Selling Security Holder owns 3.3% of the outstanding Common Stock prior to the
consummation of the offering and upon consummation of the offering the Selling
Security Holder will own less than one percent of the outstanding Common Stock.
<TABLE>
<CAPTION>
===================================================================================================================================
Number of shares Number of Number of Number of shares
Selling of Common Stock Number of shares A Warrants B Warrants of Common Stock
Security beneficially owned of Common Stock registered registered beneficially owned
Holder prior to offering (1) registered herein (2) herein herein after offering
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Edward Blech
Trust, Mordecai
Jofen, Trustee 1,467,999(3) 1,219,999 813,333 406,666 248,000(4)
===================================================================================================================================
</TABLE>
(1) Includes shares issuable upon the exercise of Warrants.
(2) Consists of shares issuable upon the exercise of Warrants.
(3) Consists of 813,333 shares issuable upon the exercise of A Warrants,
406,666 shares issuable upon the exercise of B Warrants and 248,000
shares issuable upon the exercise of other warrants which have an
exercise price of $5.49 per share.
(4) Consists of 248,000 shares of Common Stock issuable upon the exercise
of warrants which have an exercise price of $5.49 per share.
PLAN OF DISTRIBUTION
The distribution of the shares of Common Stock and Warrants by the Selling
Security Holder may be effected from time to time in one or more transactions
(which may involve block transactions) in the over-the-counter market (including
the Nasdaq National Market) or any exchange on which the Common Stock or
Warrants may then be listed, in negotiated transactions, through the writing of
options on shares (whether such options are listed on an options exchange or
otherwise), or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Security Holder may effect such
transactions by selling shares and Warrants to or through broker-dealers, and
such broker-dealer may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Security Holder and/or
purchasers of shares and Warrants for whom they may act as agent (which
compensation may be in excess of customary commissions). The Selling Security
Holder may also sell such shares of Common Stock and Warrants pursuant to Rule
144 promulgated under the Securities Act, or may pledge shares and Warrants as
collateral for margin accounts and such shares and Warrants could be resold
pursuant to the terms of such accounts. The Selling Security Holder and any
broker-dealers that act in connection with the sale of the Common Stock or
Warrants might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
on the resale of the shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Security Holder 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.
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Because the Selling Security Holder may be deemed to be an "underwriter"
within the meaning of Section 2(11) of the Securities Act, the Selling Security
Holder will be subject to prospectus delivery requirements under the Securities
Act. Furthermore, in the event of a "distribution" of the shares, such Selling
Security Holder, any selling broker or dealer and any "affiliated purchasers"
may be subject to Rule 10b-6 under the Exchange Act, which Rule would prohibit,
with certain exceptions, any such person from bidding for or purchasing any
security which is the subject of such distribution until his participation in
that distribution is completed. In addition, Rule 10b-7 under the Exchange Act
prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or stabilizing the price of Common Stock in connection with this
offering.
In order to comply with certain state securities laws, if applicable, the
Common Stock and the Warrants will not be sold in a particular state unless such
securities have been registered or qualified for sale in such state or any
exemption from registration or qualification is available and complied with.
The Company will not receive any of the proceeds from the sale of warrants
or shares of Common Stock by the Selling Security Holder. The proceeds, if any,
from the exercise of the Warrants will be received by the Company; no brokerage
commissions or discounts will be paid in connection therewith.
LEGAL MATTERS
Legal matters relating to the Common Stock have been passed upon for the
Company by Fulbright & Jaworski L.L.P., New York, New York 10103. Partners and
Of Counsel of Fulbright & Jaworski L.L.P., as of April 17, 1996, beneficially
owned an aggregate of 9,712 shares of the Company's Common Stock.
EXPERTS
The audited financial statements and schedules incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
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