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As filed with the Securities and Exchange Commission on January 17, 1997
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BIOMERICA, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2645573
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1533 Monrovia Avenue
Newport Beach, California 92663
(714) 645-2111
(Address, including zip code, and telephone number,
including area code, of registrants' principal executive offices)
Joseph H. Irani, President Copy To:
Biomerica, Inc. Joseph Lesko, Esq.
1533 Monrovia Avenue Solomon Ward Seidenwurm & Smith
Newport Beach, California 92663 401 B Street, Suite 1200
(714) 645-2111 San Diego, California 92101
(619) 231-0303
(Name, address, including zip code, and
telephone number, including area code, of
agent for service)
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form S-3 are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being offered 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/
R-1
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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 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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================
Proposed Proposed
Title of each class of Amount to maximum maximum Amount of
securities to be registered be registered offering price aggregate registration
per unit (1) offering fee
price(1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.08 333,333 $3.81 $1,269,999 $445
par value shares
================================================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(c), based on the average of the high and low sales prices of the
registrant's Common Stock as reported on the NASDAQ SmallCap on January 13,
1997.
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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PROSPECTUS
333,333 SHARES
BIOMERICA, INC.
COMMON STOCK
This prospectus ("Prospectus") relates to the offering from time to
time by certain persons named in this Prospectus (the "Selling Stockholders") of
up to 333,333 shares (the "Shares") of Common Stock, $.08 par value per share,
of Biomerica, Inc. (the "Company"). The Company will not receive any proceeds
from the offering of the Shares by the Selling Stockholders (the "Offering"),
but the Company did receive one million dollars in gross proceeds from the
initial private placement of the Shares to the Selling Stockholders.
The Selling Stockholders directly, or through agents, dealers,
underwriters, or market makers, may offer and sell from time to time all or any
part of the Shares in amounts and on terms to be determined at the time of sale.
To the extent required, the specific Shares to be sold, the names of the Selling
Stockholders, the respective purchase price and public offering price, the names
of any such agent, dealer or underwriter, and any applicable commission or
discount with respect to a particular offer will be set forth in an accompanying
Prospectus Supplement. Offers or sales of the Shares have not been registered or
qualified under the laws of any country other than the United States. See "Plan
of Distribution."
The aggregate proceeds to the Selling Stockholders from the sale of the
Shares will be the purchase price of the Shares sold less the aggregate agents'
commissions and underwriters' discounts, if any. By agreement, the Company will
pay substantially all of the expenses incident to the registration of the
Shares, except for underwriting discounts and selling commissions associated
with the sale of the Shares, all of which shall be paid by the Selling
Stockholders. See "Plan of Distribution" herein for a description of
indemnification arrangements for agents, dealers and underwriters.
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 5.
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 ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is January ____, 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The registration
statement on Form S-3 (of which this Prospectus is a part) (the "Registration
Statement"), the exhibits and schedules forming a part thereof and the reports,
proxy statements and other information filed by the Company with the Commission
in accordance with the Exchange Act can be inspected and copied at the
Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following regional offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of the Web site is http://www.sec.gov. In addition, the
Common Stock is currently quoted on the NASDAQ SmallCap ("NASDAQ") and similar
information concerning the Company can be inspected and copied at the offices of
The NASDAQ Operations, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission the Registration Statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Shares. This Prospectus does not contain all the information set
forth in the Registration Statement, certain portions of which have been omitted
as permitted by the Commission's rules and regulations. Statements contained in
this Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference and the
exhibits and schedules thereto. For further information regarding the Company
and the Shares, reference is hereby made to the Registration Statement and such
exhibits and schedules, which may be obtained from the Commission at its
principal office in Washington, D.C. upon payment of the fees prescribed by the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the Exchange
Act with the Commission and are incorporated herein by reference:
a. The Company's Annual Report on Form 10-KSB for the fiscal year ended May 31,
1996, filed on August 27, 1996;
b. The Company's Quarterly Report on Form 10-QSB for the three months ended
November 30, 1996, filed on January 15, 1997;
c. The Company's Quarterly Report on Form 10-QSB for the three months ended
August 31, 1996, filed on October 11, 1996;
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d. The Company's definitive Proxy Statement mailed on or about September 24,
1996; and
e. The description of the Company's Common Stock contained in the Registration
Statement on Form 10 filed on September 12, 1978.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Shares shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in the applicable Prospectus Supplement) or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Copies of all documents that are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates) will be provided without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request. Requests should be directed to the Corporate Secretary of the Company,
1533 Monrovia Avenue, Newport Beach, California 92663 (telephone number: (714)
645-2111).
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THE COMPANY
Biomerica, Inc. ("Biomerica") is primarily engaged in the development,
manufacture and marketing of medical diagnostic test kits. In addition, since
1984, Biomerica has followed a corporate strategy of developing new business
opportunities through selected investments in companies in which synergistic
benefits could be realized through the sharing of technology, corporate
administration and/or capital resources. Each of these companies is or has been
in a business involving the application of advanced technologies in the
biomedical, pharmaceutical, and/or other applied sciences. As of May 31, 1996,
Biomerica was the beneficial owner of 30% of the voting securities of Lancer
Orthodontics, Inc. ("Lancer") and 74% of the voting securities of Allergy Immuno
Technologies, Inc. ("AIT").
The Company was incorporated in Delaware in September 1971 under the
name "Nuclear Medical Systems, Inc." The Company changed its corporate name in
February 1983 to NMS Pharmaceuticals, Inc. and in November 1987 to Biomerica,
Inc. Its principal place of business and executive offices are located at 1533
Monrovia Avenue, Newport Beach, California 92663 (telephone number 714-645-2111,
telefax number 714-722-6674).
In addition to the Company's ownership of Lancer, the President of the
Company beneficially owns approximately 19% of the outstanding Lancer common
stock and is an officer and director of Lancer. Another of the Company's
directors also serves on Lancer's board of directors and two Biomerica employees
also serve as directors of Lancer. The Company controls Lancer and AIT and their
financial statements are consolidated with those of Biomerica.
Biomerica develops, manufactures, and sells medical diagnostic products
designed to detect certain medical conditions and diseases in the areas of
certain cancers, heart attack, fertility, gastritis and ulcers, diabetes and
Candida. Since the late 1970's, Biomerica has developed, produced and sold
immunoassay diagnostic test kits, which are used by hospitals, clinical
laboratories and medical researchers to analyze blood or urine from patients in
the diagnosis of various diseases and other medical complications, or to measure
the level of specific hormones or other substances which may exist in the human
body in extremely small concentrations.
Lancer develops, manufactures, and sells high technology orthodontic
products including, among others, brackets and wires. Lancer is well established
in the field of orthodontics and its products are sold worldwide through
distributors and a direct sales force.
AIT provides esoteric clinical testing services to doctors, clinics and
drug firms in specialized areas of allergy and sensitivity determinations. In
the meantime, as a consequence of its development effort in the field of allergy
treatment, AIT owns four patents covering several inventions relating to the
therapeutic aspect of allergy. AIT intends to utilize these patents to develop
new allergy drugs on its own and/or in conjunction with other companies.
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RISK FACTORS
The following factors should be considered carefully with the
information provided elsewhere in this Prospectus in evaluating an investment in
the Shares offered hereby.
This Prospectus contains forward-looking statements that involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including those set forth in the following risk factors and elsewhere
in this Prospectus.
Competition. Human immunodiagnostics is an intensely competitive field
in which there are a number of well-established companies. Many of Biomerica's
competitors have substantially greater financial resources and larger, more
established sales, marketing, and service organizations. The primary bases of
competition in the immunodiagnostic testing market are throughput, ease-of-use,
price, breadth of test menu, quality of results and service. There can be no
assurance that Biomerica will be able to compete successfully on any of these
bases.
The Company believes that Biomerica's principal competitors are large
companies with a diagnostic division such as Abbott Laboratories, Becton,
Dickinson and Company, Boehringer Mannheim, GmbH, Chiron/Ciba-Corning
Diagnostics Corporation and Johnson & Johnson. Each of these companies has an
established position in the clinical laboratory test market with systems based
on traditional immunoassay technology. No assurance can be given that
Biomerica's products will compete successfully with existing or future products
of such competitors or that new competitors will not enter the market with
competing technologies.
Additionally, many of Lancer's competitors have substantially greater
financial resources and larger, more established sales, marketing, and service
organizations. Lancer believes that there are seven major competitors in the
orthodontic products field; Unitek, a division of 3M, "A" Company, Ormco, a
division of Sybron, RMO Inc., American Orthodontics, GAC and Dentaurum. The
primary bases of competition in the orthodontic market are price, quality and
service. There can be no assurance that Lancer will be able to compete
successfully on any of these bases.
Intellectual Property, Patents and Licenses. In general, Biomerica does
not seek patent protection for its products, and instead strives to maintain the
confidentiality of its proprietary know-how. The Company believes that the
patent positions of any medical device manufacturer are uncertain and involve
complex legal and factual questions for which important legal principles are
largely unresolved.
AIT owns several patents and Lancer owns a single patent. There can be
no assurance, however, that these patents will provide significant proprietary
protection or will be circumvented or invalidated.
New Product Development. The diagnostic test industry is characterized
by ongoing technological developments and changing customer requirements. As a
result, the Company's success and continued growth depend, in part, on
Biomerica's ability in a timely manner to develop and successfully introduce
into the marketplace, enhancements of existing products or
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new products that incorporate technological advances, meet customer requirements
and respond to products developed by Biomerica's competition. There can be no
assurance that Biomerica will be successful in developing products on a timely
basis or that such products will adequately address that changing needs of the
marketplace.
Government Regulation. Biomerica's immunodiagnostic products are
regulated in the United States as medical devices primarily by the FDA and as
such, require regulatory clearance or approval prior to commercialization.
Pursuant to the Federal Food, Drug and Cosmetic Act, and the regulations
promulgated thereunder, the FDA regulates, among other things, the clinical
testing, manufacture, labeling, promotion, distribution, sale and use of medical
devices in the United States. Failure of Biomerica to comply with applicable
regulatory requirements can result in, among other things, warning letters,
fines, injunctions, civil penalties, recall or seizure of products, total or
partial suspension of production, the government's refusal to grant premarket
clearance or premarket approval of devices, withdrawal of marketing approvals,
and criminal prosecution.
Sales of medical devices outside the United States are subject to
foreign regulatory requirements that vary widely from country to country. The
time required to obtain registrations or approvals required by foreign countries
may be longer or shorter than that required for FDA clearance or approval, and
requirements for licensing may differ significantly from FDA requirements. There
can be no assurance that Biomerica will be able to obtain regulatory clearances
for its current or any future products in the United States or in foreign
markets.
Lancer's products are also subject to regulation by the FDA under the
Medical Device Amendments of 1976 (the "Amendments"). Lancer has registered with
the FDA as required by the Amendments. There can be no assurance that Lancer
will be able to obtain regulatory clearances for its current or any future
products in the United States or in foreign markets.
Need to Retain and Attract Key Employees. The Company is highly
dependent upon the principal members of its management and scientific staff,
especially Joseph H. Irani and Dr. Robert Orlando, the loss of whose services
might impede the achievement of the Company's business objectives. Furthermore,
recruiting and retaining additional qualified scientific, manufacturing,
marketing and sales personnel also will be critical to the Company's success.
The Company faces competition for qualified individuals from numerous
manufacturers of medical products and other high technology products, as well as
universities and academic institutions.
Potential Adverse Impact of Reimbursement Policies. Political, economic
and regulatory influences are subjecting the health care industry in the United
States to fundamental change. Although Congress has failed to pass comprehensive
health care reform legislation to date, the Company anticipates that Congress,
state legislatures and the private sector will continue to review and assess
alternative benefits, controls on health care spending through limitations on
the growth of private health insurance premiums and Medicare and Medicaid
spending, the creation of large insurance purchasing groups, price controls on
pharmaceuticals and other fundamental changes to the health care delivery
system. Any such proposed or actual changes could cause any potential partners
of the Company to limit or eliminate spending on collaborative development
projects. Legislative debate is expected to continue in the future,
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market forces are expected to demand reduced costs and the Company cannot
predict what impact the adoption of any federal or state health care reform
measures or future private sector reforms may have on its business.
In both domestic and foreign markets, sales of the Company's products
will depend in part on the availability of reimbursement from third-party payors
such as government health administration authorities, private health insurers
and other organizations. Third-party payors are increasingly challenging the
price and cost effectiveness of medical products and services. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products. There can be no assurance that the Company's products will be
considered cost effective or that adequate third-party reimbursement will be
available to enable the Company to maintain price levels sufficient to realize
an appropriate return on its investment in product development. Legislation and
regulations affecting the pricing of health care services may change, which
could affect the Company's products and could further limit reimbursement for
medical products and services.
Risk of Product Liability; Possible Unavailability of Insurance.
Testing, manufacturing and marketing of the Biomerica's products entail risk of
product liability. Biomerica currently has product liability insurance. There
can be no assurance, however, that Biomerica will be able to maintain such
insurance at a reasonable cost or in sufficient amounts to protect Biomerica
against losses due to product liability. An inability to maintain insurance at
an acceptable cost or to otherwise protect against potential product liability
could prevent or inhibit the commercialization of the Biomerica's products. In
addition, a product liability claim or recall could have a material adverse
effect on the business or financial condition of the Company.
Lancer is subject to the same risks of product liability. Lancer
currently has product liability insurance. Lancer also is subject to the risk of
loss of its product liability insurance and the consequent exposure to
liability.
Hazardous Materials. Biomerica's research and development involves the
controlled use of hazardous materials and chemicals. Although Biomerica believes
that its safety procedures for handling and disposing of such materials comply
with the standards prescribed by state and federal regulations, the risk of
accidental contamination or injury from these materials cannot be completely
eliminated. In the event of such an accident, the Company could be held liable
for any damages that result and any such liability could exceed the resources of
the Company. The Company may incur substantial costs to comply with
environmental regulations.
Volatility of Stock Price. The market price of the Company's Common
Stock, like that of the common stock of many other medical device and other high
technology companies, has been highly volatile. Factors such as delays in
obtaining FDA approval for new products, fluctuations in the Company's actual or
anticipated operating results, announcements of technological innovations or new
commercial products by the Company or its competitors, governmental regulation,
changes in the current structure of the health care financing and payment
systems in the United States, developments in or disputes regarding patent or
other proprietary rights, economic and other external factors and general market
conditions may have a significant effect on the market price of the Common
Stock.
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<PAGE> 10
SELLING STOCKHOLDERS
The Selling Stockholders received their Shares pursuant to a private
placement (the "Private Placement"). In connection with the Private Placement,
the Company agreed to file a registration statement with the Commission covering
the Shares issued to each Selling Stockholder and to indemnify each Selling
Stockholder against claims made against them arising out of, among other things,
statements made in such registration statement. In addition, the Company agreed
to cause this registration statement to remain effective for a period of at
least 36 months or until all of the Shares are sold or until the Selling
Stockholders may sell under Rule 144, or other exemption acceptable to the
Company, all of the Shares then held by the Selling Stockholders in any three
month period.
The following table provides certain information with respect to the
Shares held and to be offered under this Prospectus from time to time by each
Selling Stockholder. Because the Selling Stockholders may sell any amount of
their Shares pursuant to this Prospectus, and this offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
number and percentage of shares of Common Stock that will be held by each
Selling Stockholder upon termination of this offering. See "Plan of
Distribution."
<TABLE>
<CAPTION>
TOTAL SHARES OF
COMPANY STOCK NUMBER OF
BENEFICIALLY SHARES
NAME OWNED OFFERED
<S> <C> <C>
The Aries Fund, A Cayman
Island Trust(1) ............................ 111,111 111,111
the Aries Domestic Fund, L.P(1) ............ 222,222 222,222
Total ...................................... 333,333 333,333
</TABLE>
(1) The investment manager of The Aries Fund, A Cayman Island Trust, is
Paramount Capital Asset Management, Inc., a subchapter S corporation ("Paramount
Capital"). The general partner of The Aries Domestic Fund, L.P. is Paramount
Capital. The sole stockholder of Paramount Capital is Lindsay A. Rosenwald, M.D.
The Company is unaware of any material relationship between any of the
Selling Stockholders and the Company in the past three years.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholders or
by donees or transferees, directly or through underwriters, dealers or agents,
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the Selling Stockholders or the purchasers of Shares for
whom they may act as agent. The Shares or any part of the Shares may be sold in
amounts and on terms to be determined at the time of sale, including, without
limitation, block trades, in the over-the-counter market, or otherwise, at
negotiated prices or at or relating to quoted market prices then prevailing. The
Selling Stockholders
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reserve the sole right to accept and, together with any agent of the Selling
Stockholders, to reject in whole or in part any proposed purchase of the Shares.
The Selling Stockholders will pay any sales commissions or other seller's
compensation applicable to such transactions.
To the extent required, the amount of the Shares to be sold, purchase
prices, public offering prices, the names of any agents, dealers or
underwriters, and any applicable commissions or discounts with respect to a
particular offer will be set forth by the Company in a Prospectus Supplement
accompanying this Prospectus or, if appropriate, a post-effective amendment to
the Registration Statement. The Selling Stockholders and agents who execute
orders on its behalf may be deemed to be underwriters as that term is defined in
Section 2(11) of the Securities Act and a portion of any proceeds of sales and
discounts, commissions or other seller's compensation may be deemed to be
underwriting compensation for purposes of the Securities Act.
Offers or sales of the Shares have not been registered or qualified
under the laws of any country, other than the United States. To comply with
certain states' securities laws, if applicable, the Shares will be offered or
sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Shares may not be offered or sold
unless they have been registered or qualified for sale in such states or an
exemption from registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act any
person engaged in a distribution of the Shares may not simultaneously engage in
market-making activities with respect to such Shares for a period of five
business days prior to the commencement of such distribution. In addition to and
without limiting the foregoing, the Selling Stockholders and any other person
participating in a distribution will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the Shares by the Selling Stockholders or any other persons. All of the
foregoing may affect the marketability of the Shares and the brokers' and
dealers' ability to engage in market-making activities with respect to the
Shares.
Pursuant to an agreement with the Selling Stockholders, the Company
will pay substantially all of the expenses incident to the registration of the
Shares, estimated to be approximately $45,000. Under an agreement entered into
with the Company, the Selling Stockholders, control persons of the Selling
Stockholders, and any underwriter they may utilize will be indemnified by the
Company against certain civil liabilities, including liabilities under the
Securities Act.
EXPERTS
The consolidated financial statements of Biomerica, Inc. and subsidiaries, as of
May 31, 1996, and for each of the years in the two-year period ended May 31,
1996, have been incorporated by reference herein and in the registration
statement in reliance upon the report of Corbin & Wertz, independent certified
accountants, incorporated herein by reference, and upon the authority of such
firm as experts in accounting and auditing.
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LEGAL MATTERS
The validity of the Shares offered by this Prospectus will be passed upon for
the Company by Solomon Ward Seidenwurm & Smith, LLP, San Diego, California.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING HEREIN CONTAINED AND, IF GIVEN OR MADE, UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
TABLE OF CONTENTS
Page
Available Information ....................... 2
Incorporation of Certain Documents by
Reference ................................ 2
The Company ................................. 2
Risk Factors ................................ 5
Selling Stockholders ........................ 8
Plan of Distribution ........................ 8
Experts ..................................... 9
Legal Matters ............................... 10
January ____, 1997
333,333 SHARES
BIOMERICA, INC.
COMMON STOCK
PROSPECTUS
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, other than underwriting discounts and commissions which
shall be paid for by the Selling Stockholders, in connection with the offerings
of the Shares are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee ............... $ 445
Blue Sky Fees and Expenses .................... 15,000
Legal Fees and Expenses ....................... 25,000
Accounting Fees and Expenses .................. 5,000
Miscellaneous ................................. 1,000
---------
Total ......................................... $ 46,445
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IX of the Certificate of Incorporation provides that directors
of the Registrant shall not be liable to the Registrant or its stockholders for
monetary damages for their conduct as directors to the full extent permitted by
the Delaware General Corporation Law ("Delaware Law") as it existed at the time
the Certificate of Incorporation was adopted, and as it may thereafter be
amended. Any amendment to or repeal of Article IX shall apply only to acts or
omissions of directors occurring after such amendment or repeal.
Article IX of the Certificate of Incorporation also provides that the
Registrant shall indemnify and hold harmless its directors and officers to the
fullest extent permitted under Delaware Law against all expense, liability and
loss (including attorney's fees, judgements, fines, ERISA excise taxes or
penalties and amounts paid in settlement) incurred in connection with their
service or status as directors and officers, and such indemnification shall
continue as to a person who has ceased to a director, officer, employee or agent
and shall inure to the benefit of his or her heirs, executors and
administrators; provided however, that the Registrant shall indemnify any such
person seeking indemnification in connection with a proceeding initiated by such
person only if such proceeding was authorized by the Board of Directors. Such
indemnification also extends to liabilities arising from actions taken by
directors or officers when serving at the request of the Registrant as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, employee benefit plan or other enterprise.
Section 145 of Delaware Law, as currently in effect, sets forth the
indemnification rights of directors and officers of Delaware corporations. Under
such provision, a director or officer of a corporation (i) shall be indemnified
by the corporation for all expenses of litigation or other legal proceedings
when he or she is successful on the merits or otherwise, (ii) may be indemnified
by the corporation for the expenses, judgments, fines and amounts paid in
settlement
II-1
<PAGE> 15
of such litigation (other than a derivative suit), even if he or she is not
successful on the merits, if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
corporation (and, in the case of a criminal proceeding, had no reason to believe
his or her conduct was unlawful), and (iii) may be indemnified by the
corporation for the expenses of a derivative suit (a suit by a stockholder
alleging a breach by a director or an officer of a duty owed to the
corporation), even if he or she is not successful on the merits, if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the corporation, provided that no such
indemnification may be made in accordance with this clause (iii) if the director
or officer is adjudged liable to the corporation, unless a court determines
that, despite such adjudication but in view of all the circumstances, he or she
is fairly and reasonably entitled to indemnification of such expenses. The
indemnification described in clauses (ii) and (iii) above shall be made only
upon a determination by (A) a majority of a quorum of disinterested directors,
(B) independent legal counsel in a written opinion, or (C) the stockholders,
that indemnification is proper because the applicable standard of conduct has
been met.
The effect of the indemnification provisions contained in the Articles
is to require the Registrant to indemnify its directors and officers under
circumstances where such indemnification would otherwise be discretionary and to
extend to the Registrant's directors and officers the benefits of Delaware Law
dealing with director and officer indemnification, as well as any future changes
that might occur under Delaware Law in this area.
The Articles state that the indemnification rights granted thereunder
are not exclusive of any other indemnification rights to which the director or
officer may otherwise be entitled. As permitted by Section 145(g) of Delaware
Law, the Articles also authorize the Registrant to purchase directors and
officers insurance for the benefit of its directors and officers, irrespective
of whether the Registrant has the power to indemnify such persons under Delaware
Law. The Registrant currently does not maintain such insurance as allowed by
these provisions.
ITEM 16. EXHIBITS
See Exhibit Index.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
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<PAGE> 16
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that subparagraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby further undertakes that, for the purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such Securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions under Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newport Beach, State of California, on January 17,
1997.
BIOMERICA, INC.
By: /s/ JOSEPH H. IRANI
-------------------------------------
Joseph H. Irani
Chief Executive and Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and
appoints Joseph H. Irani and Janet Moore, and each of them as his true and
lawful attorney-in-fact and agent, each with full powers of substitution and
resubstitution and full power to act without the other, to sign on his behalf,
individually and in the capacities stated below, and to file any and all
amendments, including post-effective amendments, to this Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting to
each said attorney-in-fact and agent full power and authority to perform any
other act on behalf of the undersigned required to be done in or about the
premises.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on January 17, 1997.
Signature Title
/s/ JOSEPH H. IRANI Chief Executive and Financial
- ---------------------------- Officer and Director (Principal Executive
Joseph H. Irani and Financial Officer)
/s/ DR. ROBERT ORLANDO Director
- ----------------------------
Dr. Robert Orlando
/s/ DR. P.B. KAPLAN
- ---------------------------- Director
Dr. P.B. Kaplan
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<PAGE> 18
EXHIBIT INDEX
EXHIBIT
NUMBER
- -------
3.1 Certificate of Incorporation of Registrant filed with the Secretary of
State of Delaware on September 22, 1971 (incorporated by reference to
Exhibit 3.1 filed with Amendment No. 1 to Registration Statement on
Form S-1, Commission File No. 2-83308).
3.2 Certificate of Amendment to Certificate of Incorporation of Registrant
filed with the Secretary of State of Delaware on September 22, 1971
(incorporated by reference to Exhibit 3.1 filed with Amendment No. 1 to
Registration Statement on Form S-1, Commission File No. 2-83308).
3.3 Certificate of Amendment to Certificate of Incorporation of Registrant
filed with the Secretary of State of Delaware on February 6, 1978
(incorporated by reference to Exhibit 3.1 filed with Amendment No. 1 to
Registration Statement on Form S-1, Commission File No. 2-83308).
3.4 Certificate of Amendment to Certificate of Incorporation of Registrant
filed with the Secretary of State of Delaware on January 19, 1987
(incorporated by reference to Exhibit 3.4 filed with the Form 8
Amendment to the Registrant's Annual Report on Form 10-K for the fiscal
year ended May 31, 1987).
3.5 Certificate of Amendment to Certificate of Incorporation of Registrant
filed with the Secretary of State of Delaware on November 4, 1987
(incorporated by reference to Exhibit 3.5 filed with the Registrant's
Annual Report on Form 10-K for the fiscal year ended May 31, 1991).
3.6 Certificate of Amendment to Certificate of Incorporation of Registrant
filed with the Secretary of State of Delaware on December 20, 1994
(incorporated by reference to Exhibit 3.7 filed with the Registrant's
Annual Report on Form 10-KSB for the fiscal year ended May 31, 1995).
3.6 Bylaws of Registrant (incorporated by reference to Exhibit 3.2 filed
with Amendment No. 1 to Registration Statement on Form S-1, Commission
File No. 2-83308).
5.1 Opinion of Solomon Ward Seidenwurm & Smith, LLP.
10.1 Office lease dated June 1, 1988 between Registrant and Redington
Company covering Registrant's lease of premises at 1531/1535 Monrovia
Avenue, Newport Beach, California (incorporated by reference to Exhibit
10.1 filed with the Registrant's Annual Report on Form 10-K for the
fiscal year ended May 31, 1989).
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<PAGE> 19
10.2 Contract for Employment of Joseph H. Irani dated June 1, 1986
(incorporated by reference to Exhibit 10.2 filed with Registrant's
Annual Report on Form 10-K for the fiscal year ended May 31, 1986).
10.3 Lancer purchase agreement and warrants (incorporated by reference to
Exhibit 10.10 filed with Registrant's Annual Report on Form 10-K for
the fiscal year ended May 31, 1989).
10.4 1991 Stock Option and Restricted Stock Plan of Registrant (incorporated
by reference to Exhibit 4.1 to Registration Statement on Form S-8,
Commission File No. 33-47054, filed with the Securities and Exchange
Commission on April 6, 1992).
10.5 1995 Stock Option and Restricted Stock Plan of Registrant (incorporated
by reference to Exhibit 4.1 to Registration Statement on Form S-8,
Commission File No. 333-00159, filed with the Securities and Exchange
Commission on January 11, 1996).
23.1 Consent of Corbin & Wertz.
23.2 Consent of Solomon Ward Seidenwurm & Smith (included in Exhibit 5.1).
24 Power of Attorney (included on signature page to this Registration
Statement).
27 Financial Data Schedule (electronically filed with the Securities and
Exchange Commission only and incorporated herein by reference to
Exhibit 27 to the Company's Form 10-QSB for the quarter ended November
30, 1996).
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<PAGE> 1
EXHIBIT 5.1
OPINION OF SOLOMON WARD SEIDENWURM & SMITH, LLP
[LETTERHEAD SOLOMON WARD SEIDENWURM & SMITH, LLP]
January 17, 1997
Biomerica, Inc.
1522 Monrovia Avenue
Newport Beach, California 92663
Gentlemen:
At your request we have examined the registration statement on Form S-3 (the
"Registration Statement") to be filed by you with the Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933,
as amended, of 333,333 shares (the "Shares") of Common Stock, $.08 par value per
share, of Biomerica, Inc. (the "Company") held by certain entities named in the
Registration Statement.
In our capacity as counsel, in connection with this opinion, we have examined
originals, or copies identified to our satisfaction as being true copies, of
such corporate documents or records of the Company as we have considered
necessary or appropriate for the opinions hereinafter expressed.
We have assumed for the purposes of this opinion that the signatures on
documents and instruments examined by us as originals are genuine, and that all
documents submitted to us as copies conform with the originals, which facts we
have not independently verified.
On the basis of and subject to the foregoing, and in reliance thereon, and
subject to the qualifications, limitations, assumptions and exceptions set forth
below, we are of the opinion that, as of the date hereof, the Shares are validly
issued, fully paid and non-assessable securities of the Company.
The opinions expressed herein are subject to the following qualifications,
limitations, assumptions and exceptions:
(a) The effect of any further amendment, alteration or
adoption of any law, statute, rule, regulation or ordinance, or of any future
judicial interpretation thereof, or of any future amendment or alteration of the
Company's Articles of Incorporation, the Company's Bylaws, or any other
applicable contract, agreement, instrument, judgment or decree.
(b) The effect of Section 1670.5 of the California Civil Code
or any other California law, federal law or equitable principle which provides
that a court may refuse to enforce, or may limit the application of, a contract
or any clause thereof which
<PAGE> 2
Biomerica, Inc.
January 17, 1997
Page 2
the court finds to have been unconscionable at the time it was made or contrary
to public policy.
(c) We express no opinion as to the past, present or future value
of any of the capital stock of the Company.
(d) We express no opinion as to the Company's compliance or
noncompliance with applicable federal or state antifraud statutes, rules and
regulations concerning the sale of securities.
Our opinion is limited in all respects to the effect on the subject transaction
of the substantive law of the State of Delaware, as currently in effect. Special
rulings of authorities administering such laws have not been sought or obtained.
We assume no responsibility as to the applicability or effect on the subject
transaction of the laws of any other jurisdiction.
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 related to
the Company.
This opinion is rendered to you solely in connection with the filing of the
Registration Statement with the Securities and Exchange Commission by the
Company and without our prior written consent may not be (a) relied upon by you
for any other purpose, (b) relied upon by any other person or entity for any
other purpose, or (c) copied, reproduced, quoted, referred to, disseminated or
made available to any other person or entity or in any other document, report or
financial statement. We disclaim any obligation to advise you of facts,
circumstances, events or developments which hereafter may be brought to our
attention and which might alter, affect or modify the opinion expressed herein.
We consent to your filing this opinion as an exhibit to the Registration
Statement.
Sincerely,
SOLOMON WARD SEIDENWURM & SMITH, LLP
By:/S/ Richard L. Seidenwurm
----------------------------------
Richard L. Seidenwurm
RLS/kap
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
To Board of Directors
Biomerica, Inc.
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated July 19, 1996 appearing in the Annual
Report on Form 10-KSB of Biomerica, Inc. for the year ended May 31, 1996 and to
the reference to our firm under the heading "Experts" in the prospectus.
/S/ CORBIN & WERTZ
------------------
CORBIN & WERTZ
Irvine, California
January 17, 1997
