<PAGE>
As filed with the Securities and Exchange Commission on February 9, 1996
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------
EDITEK, INC.
(Exact name of registrant as specified in its charter)
Delaware 8071 95-3863205
(State of (Primary Standard Industrial (I.R.S Employer
incorporation) Classification Code Number) Identification No.)
1238 Anthony Road
Burlington, North Carolina 27215
(910) 226-6311
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Peter J. Heath
Vice President of Finance and Copies to:
Chief Financial Officer James Verdonik
EDITEK, INC. Petree Stockton, L.L.P.
1238 Anthony Road 4101 Lake Boone Trail
Burlington, North Carolina 27215 Raleigh, NC 27607
(910) 226-6311 (919) 420-1700
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
Approximate date of commencement of proposed sale to public:
From time to time after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ X ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of each maximum maximum
class of Amount offering aggregate Amount of
securities to to be price per offering registration
be registered registered share (1) price (1) fee
<S> <C> <C> <C> <C>
Common Stock,
par value $.15
per share 11,478,193 $3.50 $40,173,675 $13,851.88
</TABLE>
(1) Estimated solely for purposes of calculating the
registration fee based upon the closing price reported on the American
Stock Exchange on February 6, 1996.
The Registrant hereby amends the Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that the Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) of the Securities Act
of 1933, may determine.
<PAGE>
EDITEK, INC.
CROSS-REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
Item Number and Caption Heading in Prospectus
<S> <C>
1. Forepart of the Registration <C>
Statement and Outside Front
Cover Page of Prospectus Front Page of Registration
Statement; Front Cover
Page of Prospectus
2. Inside Front and Outside Back
Cover Pages of Prospectus Second Page of Prospectus;
Back Cover Page of
Prospectus
3. Summary Information, Risk
Factors and Ratio of Earnings
to Fixed Charges Risk Factors
4. Use of Proceeds N/A
5. Determination of Offering
Price Front Cover Page of
Prospectus
6. Dilution N/A
7. Selling Shareholders Selling Shareholders
8. Plan of Distribution Front Cover Page of
Prospectus;
Plan of Distribution
9. Description of Securities
to be Registered Outstanding Shares
10. Interests of Named Experts
and Counsel Legal Matters; Experts
11. Material Changes Recent Developments
12. Incorporation of Certain
Information by Reference Incorporation of Certain
Information by Reference
13. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities Not applicable
</TABLE>
<PAGE>
PROSPECTUS DATED FEBRUARY 9, 1996
SUBJECT TO COMPLETION
This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities
laws of any such State.
EDITEK, INC.
This Prospectus relates to an aggregate total of 11,478,193 shares
of Common Stock, par value $.15 per share (the "Common Stock") of EDITEK,
Inc. (the "Company" or "EDITEK"), which number of shares includes (i) shares
issued to MLI Dissolution, Inc., ("MLI") formerly MEDTOX Laboratories,
Inc. pursuant to an Asset Purchase Agreement between the Company and MLI
(the "MEDTOX Agreement"), (ii) shares sold to Dr. Harry McCoy, a MEDTOX
shareholder, in a transaction immediately after the Company's
acquisition of MEDTOX and (iii) shares which are issuable to the holders
of the 104 shares of the Company's Series A Convertible Preferred Stock (the
"Series A Preferred Stock") upon conversion of the Series A Preferred Stock,
(the "Conversion Shares"). This Prospectus also relates to shares of Common
Stock issuable to Harlan Kleiman upon the exercise of warrants issued to
Harlan Kleiman as compensation for the sale of Series A Preferred Stock (the
"Investment Banker Warrants") pursuant to an agreement between Harlan Kleiman
and the Company (the "Kleiman Agreement"). The MEDTOX shareholders, Dr. Harry
McCoy, the holders of the 104 shares of Series A preferred stock, and Harlan
Kleiman are hereinafter referred to as the "Selling Shareholders." See
"Plan of Distribution" and "Selling Shareholders." The securities offered
hereby (the "Shares") are to be offered on account of the Selling
Shareholders.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED
ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE
"RISK FACTORS".
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.
<TABLE>
<CAPTION>
Price to Proceeds to Company
Public Discounts or other Persons
<S> <C> <C> <C>
Per Share (1) (2) (3)
Total Maximum (4) (1) (2) (3)
</TABLE>
(1) The Selling Shareholders may from time to time affect the sale of
their Shares at prices and at terms then prevailing or at prices related
to the then-current market price. The Common Stock of the Company is
traded on the American Stock Exchange under the symbol "EDI". On
February 6, 1996, the closing price of the Common Stock as reported by
the American Stock Exchange was $3.50 per share.
(2) The Selling Shareholders may pay regular brokers' commissions in
cash at the time(s) of the sale of their Shares.
(3) The Company will not receive any proceeds from the sales of the
Shares to which this Prospectus relates. The Selling Shareholders will
receive proceeds based on the market price of the Shares at the time(s)
of sale. The Company will, however, receive $2.775 per share upon the
exercise of the Investment Banker Warrants.
(4) Without deduction of expenses for the offering (all of which will be
borne by the Company), estimated to be approximately $28,000.
The date of this Prospectus is February 9, 1996
<PAGE>
(Inside front cover page of Prospectus)
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at its Regional Offices located at 75 Park Place, New
York, New York 10007, and the John C. Kluczynski Federal Building, 230
South Dearborn Street, Chicago, Illinois 60604. Copies of such
material can be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 upon request and payment of the prescribed fee.
The Company's Common Stock is listed on the American Stock
Exchange (the "AMEX"), and reports, proxy statements and other
information filed by the Company can be inspected at such exchange.
The Company has filed with the Commission in Washington, D.C., a
Registration Statement under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the registration of the
securities offered hereby. This Prospectus omits certain of the
information contained in the Registration Statement, of which this
Prospectus is a part. Statements contained herein concerning the
provisions of any documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference. Items of information
omitted from this Prospectus but contained in the Registration
Statement may be obtained from the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, upon request and payment of
the prescribed fee.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, each of which was previously filed by
the Company with the Commission pursuant to Section 13 of the Exchange
Act, are incorporated herein by reference:
a. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994.
b. The Company's Report on Form 10-Q for the quarter ended
March 31, 1995.
2
<PAGE>
c. The Company's Report on Form 10-Q for the quarter ended
June 30, 1995.
d. The Company's Proxy Statement dated September 25, 1995.
e. The Company's Report on Form 10-Q for the quarter ended
September 30, 1995.
f. The Company's Report on Form 8-K dated January 30, 1996.
g. Description of the Common Stock contained under the
caption "Description of Registrant's Securities to be
Registered" in the Company's Registration Statement on Form
8-A filed pursuant to Section 12(g) of the Exchange Act.
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 made hereby
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents. Any
statement contained 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 any other subsequently filed document
which also is or is deemed to be incorporated by reference herein or in
any accompanying Prospectus Supplement 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.
The Company will provide without charge to each person to whom a
Prospectus is delivered upon written or oral request of each person, a
copy of any documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus
incorporates). Requests for such copies should be directed to EDITEK,
Inc., Attention: Secretary, 1238 Anthony Road, Burlington, North
Carolina 27215, (910) 226-6311.
RISK FACTORS
An investment in the Common Stock is speculative and involves a
high degree of risk. Investors should carefully consider the following
factors, among others, before investing in the Common Stock.
1. Dependence on Sales of Equity. As of December 31, 1995,
the Company had not achieved a positive cash flow from operations.
Accordingly, the Company relies on available credit arrangements,
outside funding of research and development and continued sales of its
equity securities to fund operations until a
3
<PAGE>
positive cash flow can be achieved. From January 1, 1991 through
December 31, 1995, the Company raised approximately $12 million from
equity financing and issued 6,058,699 shares of the Company's Common Stock for
an average price of $1.98 per share, all of which were issued at a
discount to the market value of the Company's Common Stock. In order to finance
the acquisition of MEDTOX, pay applicable costs and expenses and to
provide working capital, the Company raised approximately $21 million
from the sale of the Preferred Stock and Common Stock. This amount and
the amount borrowed, as described below, have allowed the Company to
consummate the MEDTOX acquisition and the Company believes should
provide enough working capital to help the Company achieve positive cash
flow. If the Company is unable to achieve a positive cash flow,
additional financing will be required. There can be no assurance that
additional financing can be obtained or if obtained, that the terms will
be favorable to the Company.
2. Operating Losses; Uncertainty of Sales Growth and Market
Acceptance of Products. From its inception in June 1983 through
September 30 1995, the Company accumulated a deficit from operations of
approximately $29 million. The Company currently derives approximately
72% of its revenue from the sale of its Substance Abuse Testing
Products and Services. The market for Substance Abuse Testing Products
and Services is extremely competitive. The Company's ability to
finance its operations and to achieve profitability will depend, in
large part, upon the Company's ability to increase the sales volume of
its current on-site products and laboratory services and to achieve
cost savings by integrating MEDTOX and the Company's existing
laboratory operations, as well as the ability to develop, introduce and
successfully market new VERDICT and EZ-SCREEN on-site test kits. Market
acceptance of new products and the ability to increase sales volume of
current products and services generally requires substantial time and
effort. There can be no assurance that the Company and its products
and services will compete effectively against other diagnostic testing
methods that now exist, or may be developed by others, or that the
Company will achieve profitability and there can be no assurance of
savings from the integration of laboratory operations. (See "Risk
Factors - Obsolescence and Technological Change" and "Risk Factors -
Government Regulation").
3. Debt Service; Debt Seniority; No Dividends. To finance
the acquisition of MEDTOX and to provide working capital the Company
borrowed $5 million in January, 1996. The debt financing consists of
two term loans totaling $4 million and up to $7 million in the form of
a revolving line of credit based on the receivables of the Company (the
"Loan Agreement"). The amount of credit available to the Company
varies with the accounts receivable and the inventory of the Company.
On January 30, 1996, the receivables and inventory amounts made $2.9
million of the credit facility available, of which the Company has
drawn down approximately $1 million as of February 7, 1996. There can
be no assurance that the Company will have sufficient revenues to service
payments of principal and interest on this indebtedness. Failure to
service this indebtedness would have a material adverse effect on the
Company. The indebtedness of the Company will be
4
<PAGE>
senior to the Series A Preferred Stock and shares of Common Stock upon
liquidation of the Company. Interest payments on the indebtedness may
cause there to be insufficient cash to pay any dividends. In addition,
the loan amount and the line of credit agreement contain covenants that
restrict the Company's ability to pay dividends even if the Company has
cash available from which to pay dividends. See "Number of Shares of
Common Stock - Debt Financing."
4. Unexpected Effects of Merger(s). The Company completed the
acquisition of the MEDTOX assets on January 30, 1996, (the "Closing Date").
The Company also acquired the assets and operations of Bioman Products, Inc.
on June 1, 1995. The Company anticipates that certain synergism will arise
between the Company and Bioman and MEDTOX. In February 1994, the
Company acquired Princeton Diagnostic Laboratories of America, Inc.
("PDLA"). There can be no assurance that any synergism will arise from
the recent acquisitions. The efforts required to integrate the
business of the Company with other operations may have a material
adverse effect on the operations of either the Company or the acquired
company(s).
5. Adverse Effect on Market Price of Future Sales of the
Company Stock. A substantial number of shares of stock of the Company
have been issued in transactions that are exempt from registration
under the Securities Act of 1933, as amended, either in private
placements or pursuant to Regulation S, see "Risk Factors - Dependence
on Sales of Equity."
In addition to the shares of Common Stock covered by this
Prospectus, on January 30, 1996 and February 2, 1996, the Company sold
303 shares of Series A Preferred Stock utilizing the exemption afforded
by Regulation S of the Commission (the "Offshore Offering"), which
shares are convertible into a minimum of 5,459,459 shares of Common
Stock and may be convertible into more shares of Common Stock if the
market price of the Common Stock of the Company is less than $3.70 per
share on the conversion dates. As of February 6, 1996 the market price
of the common stock was $3.50 per share at which price the 303 shares of
Series A Preferred Stock would be convertible into 5,771,429 shares of
Common Stock, based on a conversion price of $2.625 per share or a 25%
discount to the market price on February 6, 1996.
Regulation S provides generally that offers or sales that occur
outside the United States and in compliance with the requirements
thereof are not subject to the registration requirements of the Act.
Subject to certain restrictions and conditions set forth therein,
Regulation S is available for offers and sales to investors that are
not U.S. persons. Such offshore investors who purchase the shares of
Series A Preferred Stock in the Offshore Offering pursuant to
Regulation S are not permitted to transfer such shares or Conversion
Shares to a U.S. Person (defined generally as a resident of the U.S. or
an entity organized under the laws of the U.S.) for a period of at
least 40 days after February 2, 1996, the closing of the Offshore
Offering (the "Restricted Period"). Resales to buyers who are not U.S.
persons are permitted at any time.
After the expiration of the Restricted Period, investors who
purchased shares of Series A Preferred Stock in the Offshore
Offering may sell such shares or Conversion
5
<PAGE>
Shares in the U.S., but only if such shares are registered or an
exemption from registration is available. Accordingly, beginning on
March 30, 1996 (the first day any investor will be able to convert
shares of Series A Preferred Stock into shares of Common Stock), to the
extent that any offshore investors have converted their shares of
Series A Preferred Stock into Common Stock, such offshore investors
will also be able to sell such Common Stock in the U.S. if the shares
are registered or an exemption is available.
The Company does not expect to file a registration statement with
respect to shares sold pursuant to Regulation S. Therefore, sales of
Conversion Shares for such offshore investors must be made in
compliance with an exemption from registration. The stock certificates
for the Conversion Shares will not contain restrictive securities
legends. Consequently, the Company will not be able to prevent resales
of Series A Preferred Stock or Conversion Shares by offshore investors
and each offshore investor will make its own determination whether such
sales qualify for exemptions from registration.
If substantial sales of the Company's Common Stock occur,
whether by the investors in the Offshore Offering or by U.S. investors
pursuant to this Prospectus or otherwise, such sales could have a
material adverse effect on the market price of the Company's Common
Stock.
6. Adverse Effect of Price Protection Provisions. The
number of shares of Common Stock issuable upon conversion of a share of
Series A Preferred Stock will equal the number derived by dividing (i)
the purchase price of the Series A Preferred Stock ($50,000 per share)
by (ii) the lower of (x) $2.775 or (y) 75% of the Market Price of the
Common Stock on the day the shares of Series A Preferred Stock are converted
into Common Stock. "Market Price" is defined for this purpose as the
daily average of the closing bid prices quoted on the American Stock
Exchange or other exchange on which the Common Stock is traded for the
five trading days immediately preceding the date the shares are
converted. Accordingly, a minimum of 7,333,333 shares of Common Stock
are issuable upon conversion of the 407 shares of Series A Preferred Stock
sold in both the U.S. Offering and the Offshore Offering, but the actual
number of shares of Common Stock issuable upon conversion of the Series
A Preferred Stock will not be known until the time of issuance of the
shares of Common Stock upon conversion. As of February 6, 1996 the market
price of the common stock was $3.50 per share at which price the 407 shares of
Series A Preferred Stock would be convertible into 7,752,381 shares of
Common Stock, based on a conversion price of $2.625 per share or a 25%
discount to the market price on February 6, 1996.
The MEDTOX Asset Purchase Agreement provides that, if after the
Closing Date the market value of the Common Stock of the Company
declines below $1.986 per share during four specified periods (the
"Repricing Periods") following press releases by the Company, the
Company will issue additional shares of Common Stock ("Additional
Shares") to shareholders of MEDTOX who retain their shares of Common
Stock through four specified dates (the "Repricing Dates") to
compensate the MEDTOX shareholders for decreases after the closing of
the MEDTOX acquisition in the market price of the Common Stock of the
Company below $1.986 per share. The Repricing Dates are the fifth
trading day following the date the Registrant issues press
6
<PAGE>
releases announcing its financial performance for the fiscal quarters
ending on March 31, 1996, September 30, 1996 and September 30, 1997 and
the fiscal year ending on December 31, 1996 and the Repricing Periods
are the dates between the dates of the press releases and the Repricing
Dates. Accordingly, the number of Additional Shares issuable in the
future in connection with the MEDTOX acquisition cannot be determined
at this time and will depend upon changes in the market price of the
Common Stock, as well as the extent to which MEDTOX shareholders retain
the MEDTOX shares on each of the Repricing Dates.
The price protection provisions of the Series A Preferred Stock are
transferred upon any transfer of the Series A Preferred Stock, but
terminate upon conversion of the Series A Preferred Stock. The price
protection afforded the MEDTOX shareholders terminates upon transfer of
the Common Stock issued to MEDTOX shareholders.
Other shareholders of the Company do not have the price protection
afforded holders of Series A Preferred Stock and the MEDTOX
shareholders. Accordingly, if the market price of the Common Stock of
the Company declines, the interests in the Company's other shareholders
will be diluted by the price protection provisions afforded holders of
Series A Preferred Stock and the MEDTOX shareholders. Substantial
sales of shares of Common Stock by the MEDTOX shareholders or
purchasers of Series A Preferred Stock or other shareholders may have a
material adverse effect on the market price of the Common Stock of the
Company, which would increase the number of Additional Shares issuable
to MEDTOX shareholders on the Repricing Dates and the number of shares
of Common Stock issuable upon conversion of the Series A Preferred
Stock.
7. Obsolescence and Technological Change. Modern
biotechnology has undergone, and continues to undergo, rapid and
significant technological change. The Company requires adequate
financial resources in order to maintain a competitive position with
respect to its technology and to continue to attract and retain
qualified technical personnel. These financial resources may be
unavailable. The Company concentrates its research and development
resources on those products which it believes will generate the most
revenue most quickly. There can be no assurance, however, that future
technological developments will not render existing or proposed
products of the Company uneconomical or obsolete.
8. Competition. The Company competes with a number of
firms, most of which have more experience and significantly greater
human and financial resources than the Company. There can be no
assurance that the Company will be able to compete successfully with
such other companies.
9. Inadequacy of Patents and Proprietary Information
Protection. The Company holds eight issued United States patents of which
seven of these patents generally form the basis for the EZ-SCREEN
and one-step technologies. Additionally,
7
<PAGE>
the Company has one patent that relates to methods of utilizing whole blood
as a sample medium on its immunoassay devices. The Company also holds various
patents in several foreign countries. The Company also holds two United
States patents which it acquired in the acquisition of Granite
Technological Enterprises, Inc. in 1986.
There can be no guarantee that there will not be a
challenge to the validity of the patents. In the event of such a
challenge, the Company might be required to spend significant funds to
defend its patents, and there can be no assurance that the Company
would be successful in any such action.
The Company holds eleven registered trade names and/or
trademarks in reference to its products and corporate names.
Additionally, applications have been made for additional trade
names.
The Company believes that the basic technologies requisite to the
production of antibodies are in the public domain and are not
patentable. The Company intends to rely upon trade secret protection
of certain proprietary information, rather than patents, where it
believes disclosure could cause the Company to be vulnerable to
competitors who could successfully replicate the Company's production
and manufacturing techniques and processes.
10. Government Regulation. Certain tests that will be
administered to humans must be cleared by the United States Food and
Drug Administration (the "FDA") prior to their marketing for diagnostic
purposes in the United States. The FDA regulated products produced by
the Company are in-vitro diagnostic products subject to FDA clearance
through the 510(k) process. In the 510(k) system, the statutory
response time is 90 days and clearance seldom requires an extended
period. To date, the Company has received 510(k) clearance for 10
different products and the average time for clearance was 58 days with a
maximum of 141 days and a minimum of 20 days. The 510(k) process
requires the submission of information and data to the FDA that
demonstrates that the device to be marketed is substantially equivalent
to devices marketed prior to the enactment date of the Medical Device
Amendments. For in-vitro diagnostic products of the type manufactured
by the Company, this data is generated by performing clinical studies
comparing the results obtained using the Company's device to those
obtained through an existing test product or method. The Clinical
Laboratory Improvement Regulations (CLIA) introduced in 1992 will be
administered, in part, by that branch of the FDA which oversees in-vitro
diagnostic products and will impact the 510(k) approval process.
Proposed changes in 510(k) submission requirements are now under review.
These changes are likely to make the process more rigorous and to
increase review times. The Company is registered as a medical device
manufacturer with the FDA and is subject to relevant FDA regulations.
8
<PAGE>
The Company's animal facilities are subject to and
comply with applicable regulations of the USDA. The livestock related
products of the Company may become subject to state regulation, but the
Company does not anticipate any difficulties in complying with these
regulations, if enacted.
With reclassification of the Company's contract with the U. S.
Department of Defense from UNCLASSIFIED to SECRET, it has been
necessary to establish the appropriate security procedures and
facilities, including designation of a Facility Security Officer who is
responsible for overseeing the security system, including conduct of
periodic security audits by appropriate defense agencies.
Additionally, the Company is now subject to periodic audits of its
accounting systems and records by the Department of Defense Audit
Agency.
The PDLA and MEDTOX laboratories and certain of the laboratory
personnel are licensed or otherwise regulated by certain federal
agencies, states, and localities in which PDLA and MEDTOX conduct its
business. Federal, state, and local laws and regulations require PDLA
and MEDTOX, among other things, to meet standards governing the
qualifications of laboratory owners and personnel, as well as the
maintenance of proper records, facilities, equipment, test materials,
and quality control programs. In addition, both laboratories are
subject to a number of other federal, state, and local requirements,
which provide for inspection of laboratory facilities and participation
in proficiency testing, as well as govern the transportation,
packaging, and labeling of specimens tested by either laboratory. The
laboratories are also subject to laws and regulations prohibiting the
unlawful rebate of fees and limiting the manner in which business may
be solicited.
PDLA was certified by Substance Abuse and Mental Health Services
Administration ("SAMHSA") in 1989. MEDTOX was certified in 1988.
SAMHSA, certifies laboratories meeting strict standards under Subpart C
of Mandatory Guidelines for Federal Workplace Drug Testing Programs.
Both laboratories receive and use small quantities of hazardous
chemicals and radioactive materials in its operations and is licensed
to handle and dispose of such chemicals and materials. Any business
handling or disposing of hazardous and radioactive waste is subject to
potential liabilities under certain of these laws.
The Company cannot predict whether future changes in governmental
regulations might significantly increase compliance costs or adversely
affect the time or cost required to develop and introduce new
products. In addition, products of the Company are or may become
subject to foreign regulations.
11. Dependence on Key Personnel. Although the Company
believes it has been successful to date in recruiting and retaining
qualified personnel, the growth of the Company is dependent on its
ability to continue to attract the services of qualified
9
<PAGE>
executive, technical and marketing personnel. There can be no
assurance the Company will be able to attract and retain the personnel
it requires.
12. Possible Volatility of Stock Price. Factors such as
announcement of technological innovations or new commercial products by
the Company or its competitors, governmental regulation, patent or
proprietary right developments, or public safety and health concerns
may have a significant impact on the market price of the Company's
securities. In addition, resales of securities by shareholders may add
significantly to volatility. Moreover, there has been a history in
recent years of significant volatility in the market prices for
securities of companies in the biotechnology field.
13. Potential Conflicts of Interest. The Company has in the
past engaged in a number of material transactions with its directors
and executive officers and may engage in such transactions in the
future. All such transactions have been in the past, and will be in the
future, approved by a majority of the Company's disinterested
directors.
14. Dividends. The Company, to date, has not declared or
paid any cash dividends. The shares of Series A Preferred Stock issued to
finance the MEDTOX acquisition have certain dividend rights. The Company's
ability to declare or pay such dividends are restricted by certain covenants
in the Loan Agreement. See "Number of Shares of Common Stock-Rights of Series
A Preferred Stock" and "Number of Shares of Common Stock-Debt Financing."
15. Potential Product Liability. Manufacturing and marketing
of products by the Company entail a risk of product liability claims.
The exposure to product liability claims in the past was mitigated to
some extent by the fact that the Company's products were principally
directed toward food processors (as contrasted with human diagnostics)
and most of its Conventional Biodiagnostic Products were used as
components in research, testing or manufacturing by the purchaser and
conformed to the purchaser's specifications. On August 13, 1993, the
Company procured insurance coverage against
10
<PAGE>
the risk of product liability arising out of events after such date,
but such insurance does not cover claims made after that date based on
events that occurred prior to that date. Consequently, for uncovered
claims, the Company could be required to pay any and all costs
associated with any product liability claims brought against it, the
cost of defense whatever the outcome of the action, and possible
settlement or damages if a court rendered a judgment in favor of any
plaintiff asserting such a claim against the Company. Damages may
include punitive damages, which may substantially exceed actual
damages. The obligation to pay such damages could have a material
adverse effect on the Company and exceed its ability to pay such
damages. No product liability claims are pending.
The MEDTOX and PDLA laboratory testing services are
primarily diagnostic and expose the laboratories to the risk of
liability claims. PDLA has retained continuous professional and
general liability insurance coverage since 1985. MEDTOX has retained
continuous professional and general liability insurance coverage since
1984. To date, PDLA or MEDTOX have not had any substantial product
liability and no material professional service claims are currently
pending.
16. Anti-Takeover Effect of State Law and Certain Charter
and Bylaw Provisions. The Company's Certificate of Incorporation and
Bylaws contain certain provisions that could have the effect of making
it more difficult for a third party to acquire, or of discouraging a
third party from attempting to acquire, control of the Company. For
example, the Board of Directors has the authority to fix the rights and
preferences of and issue shares of Preferred Stock without further
action by stockholders. Therefore, Preferred Stock could be issued
without stockholder approval that could have voting, liquidation, and
dividend rights superior to that of existing shares of the Company
stock. The issuance of Preferred Stock could adversely affect the
voting power of holders of Common Stock and the likelihood that such
holders would receive dividend payments and payments upon liquidation
and could have the effect of delaying, deferring, or preventing a
change in control of the Company. The Company has no present plan to
issue any shares of Preferred Stock. Such provisions may limit the
price that certain investors may be willing to pay in the future for
shares of the Company's Stock.
NUMBER OF SHARES OF COMMON STOCK
This Prospectus relates to a total of 11,478,193 shares of Common
Stock of the Company. 2,517,306 of these shares of Common Stock were
issued to MLI pursuant to the MEDTOX Agreement and 235,295 shares were sold
to Dr. Harry McCoy, a shareholder of MEDTOX, immediately following the
acquisition of MEDTOX. Of the shares issued to MLI, 2,391,441 shares
have been distributed to the shareholders of MEDTOX and 125,865 shares
are being held in an escrow account to satisfy certain contingent
indemnification obligations of MLI pursuant to the MEDTOX Agreement.
This Prospectus also relates to shares of Common Stock which are
issuable to the holders of 104 shares of Series A Preferred Stock upon
the conversion of the Series A Preferred Stock of which a minimum of
1,873,873 shares of Common Stock are
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<PAGE>
issuable and 586,667 shares of Common Stock issuable to Harlan Kleiman
upon the exercise of the Investment Banker Warrants.
Price Protection Shares
This Prospectus also relates to 6,265,052 shares of Common Stock
(the "Price Protection Shares") which may be issued to the former
shareholders of MEDTOX and upon the conversion of the Series A
Preferred Stock in certain circumstances in the future as described
below.
The MEDTOX Asset Purchase Agreement which provides that, if after
the Closing Date the market value of the Common Stock of the Company
declines below $1.986 per share during the Repricing Periods following
press releases, the Company will issue additional shares of Common Stock
("Additional Shares") to shareholders of MEDTOX who retain their shares
of Common Stock through four specified dates (the "Repricing Dates") to
compensate the MEDTOX shareholders for decreases in the market price of
the shares after the closing of the MEDTOX acquisition in the market
price of the Common Stock of the Company below $1.986 per share. The
Repricing Dates are the fifth trading day following the date the Registrant
issues press releases announcing its financial performance for the fiscal
quarters ending on March 31, 1996, September 30, 1996 and September 30, 1997
and the fiscal year ending on December 31, 1996 and the Repricing Periods
are the dates between the press releases and the Repricing Dates.
Consequently, the number of Additional Shares issuable in the future in
connection with the MEDTOX acquisition cannot be determined at this time
and will depend upon changes in the market price of the Common Stock, as
well as the extent to which MEDTOX shareholders retain the MEDTOX shares on
each of the Repricing Dates.
The Preferred Stock is convertible into shares of Common Stock,
at any time from March 30, 1996, the 60th day after the shares of
Series A Preferred Stock were first issued by the Company (the "Initial
Conversion Date"), until January 30, 1998, the second anniversary of
the Initial Preferred Issuance Date, at which time all conversion
rights terminate and any remaining shares of Series A Preferred Stock
will be automatically converted, at a rate determined by a formula
based on a discount from the market price of the Common Stock at the
time of conversion, unless the holder of such Series A Preferred Stock
notifies the Company not to convert such shares. The Series A Preferred Stock
has no voting power and has certain liquidation preference and dividend
rights. The number of shares of Common Stock issuable upon conversion
of a share of Series A Preferred Stock will equal the number derived by
dividing (i) the purchase price of the Series A Preferred Stock ($50,000
per share) by the lesser of (i) $2.775 or (ii) 75% of the Market Price of
the Common Stock on the day the shares of Series A Preferred Stock are
converted into Common Stock. "Market Price" is defined for this purpose as
the daily average of the closing bid prices quoted on the American Stock
Exchange or other exchange on which the Common Stock is traded for the
five trading days immediately preceding the date the shares are
converted. The actual number of shares of Common Stock issuable upon
conversion of the 104 shares of Series A Preferred Stock will not be
known until the Conversion Date of such shares, but will not be less
than 1,873,873 shares if all 104 shares of Series A Preferred Stock are
converted. As of February 6, 1996 the market price of the common stock
was $3.50 per share at which price 104 shares of Series A Preferred Stock
would be convertible into 1,980,952 shares of common stock.
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<PAGE>
The price protection provisions of the Series A Preferred Stock
are transferred upon any transfer of the Series A Preferred Stock, but
terminate upon conversion of the Series A Preferred Stock. The price
protection afforded the MEDTOX shareholders terminates upon transfer of
the Common Stock issued to the MEDTOX shareholders.
The Company will not receive any proceeds from the sale of
shares by the Selling Shareholders. The Company will, however,
receive $2.775 per share upon the exercise of the Investment Banker
Warrants. See "Selling Shareholders" and "Plan of Distribution."
The number of shares of Common Stock described above includes
only shares covered by this Prospectus and does not include the minimum
of 5,459,460 shares of Common Stock issuable upon conversion of 303 shares
of Preferred Stock sold by the Company to offshore investors pursuant to
Regulation S.
The Common Stock is traded on the American Stock Exchange under
the symbol "EDI." On February 6, 1996, the closing price of the
Common Stock as reported by the American Stock Exchange was $3.50 per
share.
Debt Financing
To finance the acquisition of MEDTOX and to provide working
capital, the Company borrowed $4,990,000 as of January 30, 1996. The
debt financing consists of two term loans of $2 million each and a
revolving line of credit based on the accounts receivable and inventory
of the Company. The Loan Agreement contains certain restrictions on
the payment of dividends. The capitalized terms below are defined in
the Loan Agreement. The Company is restricted from paying any
dividends until February 1, 1997 and only in the amount not in excess
of one-third of the Excess Cash Flow for the previous fiscal year. For
this purpose, Excess Cash Flow means, for any period, the greater of
(A) zero (0); or (B) without duplication, the total of the following
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<PAGE>
for the Company and its respective Subsidiaries on a consolidated
basis, each calculated for such period: (1) EBITDA; plus (2) tax
refunds actually received; less (3) Capital Expenditures (to the extent
actually made in cash and or due to be made in cash within such
period); less (4) income and franchise taxes paid or accrued excluding
any provision for deferred taxes included in the determination of net
income; less (5) decreases in deferred income taxes resulting from
payments of deferred taxes accrued in prior periods; less (6) Interest
Expenses paid or accrued; less (7) scheduled amortization of
Indebtedness actually paid and/or due to be paid within such period
less (8) voluntary prepayments of the Term Loans. In addition, the
Company is restricted from paying any dividends until the first of the
two term loans is paid off and after giving effect to any such dividend
payment, the Company must have at least $500,000 available under the
revolving line of credit. The last scheduled payment of that term loan
is July 1, 1997.
Capital Stock
As of February 7, 1996, the Company's authorized capital stock
consisted of 30,000,000 shares of Common Stock, par value $.15 per
share, 480 shares of Series A Preferred Stock (of which 407 shares were
issued and outstanding as of February 7, 1996) and 999,520 shares of
undesignated Preferred Stock, par value $1.00 per share. Each share of
the Series A Preferred Stock is convertible into shares of Common Stock
of the Company. See "Rights of the Series A Preferred Shares." The Board of
Directors is authorized, subject to any limitations prescribed by law,
without further stockholder approval, to issue from time to time
additional shares of Preferred Stock, in one or more classes or series.
Each class or series of Preferred Stock shall have such number of
shares, designations, preferences, voting powers, qualifications and
special or relative rights or privileges as shall be determined by the
Board of Directors, which may include, among others, dividend rights,
voting rights, redemption and sinking fund provisions, liquidation
preferences, conversion rights and preemptive rights.
Rights of Common Stock
Holders of Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of stockholders and do not have
cumulative voting rights. Accordingly, stockholders casting a
plurality of the votes cast by the stockholders entitled to vote in an
election of directors may elect all of the directors standing for
election.
Holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefore, subject to any preferential dividend
rights of Series A Preferred Stock and other Preferred Stock that may
be issued in the future. Delaware law prohibits the payment of
dividends or other distributions to holders of shares of Common Stock
if after the payment the net assets of the Company would be less than
its capital. In addition, the Company may be prohibited from paying
dividends under the terms of loan agreements or other contracts.
Upon the liquidation, dissolution or winding up of the Company,
the holders of Common Stock are entitled to receive ratably the net
assets of the Company available after the payment of all debts and
other liabilities and subject to the prior rights of Preferred Stock
that may be issued in the future. Holders of Common Stock have no
preemptive, subscription or conversion rights. The outstanding shares
of Common Stock are, and the shares issuable upon conversion of Series
A Preferred Stock and upon exercise of warrants and when issued
pursuant to the MEDTOX Agreement will be, when issued and paid for,
fully-paid and nonassessable. The rights, preferences and privileges
of holders of Common Stock are subject to the rights of the holders of
shares of the Series A Preferred Stock and any other class or series of
Preferred Stock that the Company may designate and issue in the future.
14
<PAGE>
The issuance of Preferred Stock could have the effect of making
it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of the outstanding voting stock
of the Company. The Company has no present plans to issue any
additional shares of Preferred Stock.
Rights of the Series A Preferred Stock
The principal rights of the Series A Preferred Stock are
summarized below. This description is qualified, and subject to the
rights set forth in the Certificate of Designations of EDITEK, Inc.
Series A Convertible Preferred Stock.
Conversion Rights. The Series A Preferred Stock is convertible
into shares of Common Stock with the number of shares issuable upon
conversion of each share of Series A Preferred Stock to be determined
by dividing (i) the aggregate price paid for the Series A Preferred Stock
($50,000 per share), by (ii) the lower of (a) $2.775 or (b)
Seventy-Five Percent (75%) of the average closing bid price of the
Common Stock of the Company over the five-day period immediately
preceding the conversion date. As the market price of the Common Stock
changes from day to day, the number of shares issuable upon conversion
will vary depending upon the conversion date.
The Series A Preferred Stock will be automatically converted
if not converted on or before January 30, 1998 unless a holder of such
shares instructs the Company not to convert the shares. No shares may
be converted during the fifty-nine (59) days after issuance of the
first The Series A Preferred Stock. Commencing March 30, 1996, all the
Series A Preferred Stock can be converted.
Voting Rights. Except as required by applicable law, the
Series A Preferred Stock does not have voting rights.
Dividend Rights. The Series A Preferred Stock will accrue an
annual dividend of Four Thousand Five Hundred ($4,500) Dollars per
share, (the "Preferred Dividend"). Such Preferred Dividend shall be payable
when and as declared by the Board of Directors in its sole discretion. The
Preferred Dividend is cumulative until December 31, 1997. Dividends accruing
after December 31, 1997 will not be cumulative. No dividend shall be payable
on shares of Common Stock of the Company until all accrued cumulative
unpaid dividends are paid to holders of the Series A Preferred Stock.
Liquidation Preference. Holders of shares of Series A Preferred
Stock will have a preference upon the liquidation of the Company over
the Common Stock. The initial liquidation preference shall equal Fifty
Thousand ($50,000) Dollars per share of Series A Preferred Stock and
shall increase to equal the sum of Fifty Thousand ($50,000) Dollars,
plus all accrued but unpaid cumulative Preferred Dividends, plus all
declared but unpaid noncumulative Preferred Dividends. After payment
in full of the liquidation preference, the holders of Series A
Preferred Stock shall not be entitled to receive any additional
liquidation payments.
15
<PAGE>
THE COMPANY
EDITEK, Inc. (formerly Environmental Diagnostics, Inc.), a
Delaware corporation, was organized in September, 1986 to succeed the
operations of a predecessor California corporation. EDITEK, Inc. and
its subsidiaries are referred to herein as "the Company". The Company
operates a toxicology laboratory that provides testing services for
identification of substances of abuse and develops, manufactures and
markets on-site diagnostic and screening tests which are used to detect
substances in humans, foodstuffs, animals or feed and the environment.
The Company entered the laboratory business on February 11, 1994
when it completed the acquisition of Princeton Diagnostic Laboratories
of America, Inc. ("PDLA") which is now a wholly owned subsidiary. PDLA
was incorporated in Delaware in December, 1986. On December 22, 1986,
it acquired from Stauffer Chemical Company, a subsidiary of
Cheesebrough-Pond's Inc., all of the Common Stock of Psychiatric
Diagnostic Laboratories of America, Inc., through which PDLA conducts
most of its operations. On January 30, 1996, the Company acquired the
assets and certain liabilities of another laboratory, MEDTOX. MEDTOX
was formed in 1984 and is located in St. Paul, Minnesota. MEDTOX enjoys
a well deserved reputation for quality and customer service and is
often referred to in the laboratory industry as a "Laboratory's
Laboratory."
MEDTOX was co-founded in 1984 by Dr. Harry McCoy. Dr. McCoy saw
the need for a state-of-the-art, full service, toxicology reference
laboratory that would provide timely, accurate analysis for a wide
range of drugs and toxins. From its inception, MEDTOX has fulfilled
that goal by offering broad-based toxicology services, including 24
hour emergency service at no extra cost to the client, therapeutic drug
monitoring, medico-legal investigations, etc.
MEDTOX rapidly gained a reputation for high quality and superb
customer service in the local Minnesota medical market through the
provision of toxicology laboratory services for local hospitals,
physicians and general medical laboratories. MEDTOX then began an
expanded regional program as well as national marketing which increased
revenues and expanded the customer base.
In 1987, MEDTOX purchased its largest Minneapolis competitor,
Metropolitan Medical Center, and gained the services of Dr. Gary
Hemphill, one of the leading scientists and laboratory directors at
MEDTOX today. Dr. Hemphill and MMC also gave MEDTOX a foothold in the
burgeoning employment drug screening business, forensic toxicology
market.
With the creation of National Institute for Drug Abuse ("NIDA")
in 1988 to oversee mandated drug screening for safety sensitive
employees, MEDTOX became one of the first ten laboratories in the
country on the original list of NIDA certified
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<PAGE>
laboratories. MEDTOX business then rapidly grew in two major toxicology
market segments:
1. Forensic toxicology (substance abuse testing).
2. Medical toxicology - the provision of reference toxicology testing in
the areas of therapeutic drug monitoring, etc., for hospitals,
physicians and general clinical laboratories lacking the
sophisticated toxicology capabilities of MEDTOX.
Today, MEDTOX has over 240 employees with annual revenues of
approximately $20,000,000 with net income of approximately $3,000,000.
The combination of the laboratory services of PDLA, MEDTOX and
the Company's other products and services allows the Company to offer a
full line of products and services for the substance abuse testing
marketplace, including (1) on-site tests for the detection of substance
of abuse drugs (EZ-SCREENr and VERDICTr); (2) on-site qualitative and
quantitative determination of alcohol intoxication (both disposable and
electronic instrument detection devices); (3) Substance Abuse and
Mental Health Services Administration (SAMHSA), formerly NIDA,
certified laboratory testing (screening and confirmation); (4)
accessory items (gloves, specimen containers, permanent recording
temperature strips); and (5) consultation (National Consortium For a
Drug-Free Workplace) (NCDFW). All of these products and services will
be marketed through MEDTOX. Sales of these Substance Abuse Testing
Products and Services accounted for approximately 72% of the revenues
of the Company for the nine months ended September 30, 1995.
In 1993 diAGnostix, inc. was incorporated by the Company in
Delaware as a wholly owned subsidiary to address the broadly defined
environmental testing marketplace. In 1995 the Company acquired Bioman
Products, Inc. and successfully developed and introduced to the market
the EZ-QUANT DON Test Kit. Development of new food safety testing products
by the Company continues, with at least one new product launch planned for
1996. diAGnostix, inc. is currently sourcing additional products manufactured
by other companies that could be sold through diAGnostix, inc. Sales of the
products sold through diAGnostix, inc. Sales of the products sold through
diAGnostix, inc. accounted for approximately 15% of the Company's revenues for
the nine months ended September 30, 1995.
The Company also sells prepared and dehydrated culture media,
animal blood products, sera and plasma, custom antisera, and other
biomedical products and supplies, which are either produced by the
Company or purchased from other suppliers. The Company expects sales of
these products, which were first introduced in 1986, to account
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<PAGE>
for a smaller portion of its future revenues due to the highly
competitive nature of that market and management's decision to focus
primarily on the marketing of its diagnostic tests. Sales of these
products accounted for approximately 5% of the revenues of the Company
for the nine months ended September 30, 1995.
The Company began in late 1991 to market contract manufacturing
services to other companies. These services utilize the same
manufacturing equipment and processes used to manufacture the on-site
products. During the the nine months ended September 30, 1995, sales
revenues from these services accounted for less than 1% of the
revenues of the Company.
Since 1991 the Company has earned revenues from a contract it
has with the U.S. Department of Defense. Under this contract the
Company develops and produces for sale to the U.S. Department of
Defense test kits for biological agents. During nine months ended
September 30, 1995, the Company billed $194,000, or 3%, of the total
revenues of the Company.
EDITEK executive offices are located at 1238 Anthony Road,
Burlington, North Carolina 27215, and its telephone number is (910)
226-6311.
SELLING SHAREHOLDERS
This Prospectus relates to an aggregate total of 11,478,193
shares of the Common Stock, of which (i) 2,517,306 shares were issued
to MLI Dissolution, Inc. (formerly MEDTOX Laboratories, Inc.) ("MLI")
pursuant to an Asset Purchase Agreement between the Company and MLI,
with 2,391,441 shares being subsequently distributed to the
shareholders of MEDTOX ("MEDTOX Shareholders") and 125,865 shares being
held in escrow to satisfy certain contingent indemnification
obligations of MEDTOX, (ii) 235,295 shares were issued to Dr. Harry
McCoy ("McCoy") in a private placement that occurred following the
MEDTOX acquisition; (iii) a minimum of 1,873,873 shares ("Conversion
Shares") are issuable to certain holders (the "Series A Preferred
Shareholders") of 104 shares of the Company's Series A Preferred Stock
upon conversion of the Preferred Stock; and (iv) 586,667 shares are
issuable to Harlan Kleiman ("Placement Agent") upon the exercise of
warrants issued to it as compensation for sales of the Series A
Preferred Stock pursuant to an agreement between Placement Agent and
the Company. MLI, the MEDTOX Shareholders, McCoy, the Series A Preferred
Shareholders and the Placement Agent are hereinafter referred to as the
"Selling Shareholders". The remaining 6,265,052 shares ("Price Protection
Shares") of Common Stock covered by this Prospectus are being registered
in the event the MEDTOX Shareholders become entitled to receive "Additional
Shares" and/or more than the minimum number of Conversion Shares become
issuable upon conversion of the Series A Preferred Stock. See "Number of
Shares of Common Stock."
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<PAGE>
Set forth below is a list and description of each Selling
Shareholder, together with the number of Shares beneficially owned, the
number of Shares being offered, and the number of Shares (and the
percent of the class) to be owned after completion of the offering.
<TABLE>
<CAPTION>
Material Securities Percent
Relationship Had Securities Beneficially Common Stock
With the Beneficially Owned Owned After Owned After
Name of Selling Company Within As of February 7, Securities Offered Completion of Completion of
Shareholder Past Three Years 1996 (1) Hereby Offering (2) Offering
<S> <C> <C> <C> <C> <C>
MEDTOX
SHAREHOLDERS:
John Walker Abelson
and Beverly Jean
Abelson Shareholder 9,192 (3) 9,192 (3) 0 *
James S. Arrington Shareholder 40,417 (3) 40,317 (3) 100 *
Richard A. Brotherton Shareholder 112,887 (3) 112,887 (3) 0 *
Robert Brotherton Shareholder 26,190 (3) 24,190 (3) 2,000 *
Judd Y. Carpenter Shareholder 47,171 (3) 47,171 (3) 0 *
Matthew S. Carpenter Shareholder 47,171 (3) 47,171 (3) 0 *
Scott M. Carpenter Shareholder 47,171 (3) 47,171 (3) 0 *
Walter S. Carpenter
and Elsa M. Carpenter,
Trustees of the Walter
S. Carpenter
Revocable Trust Shareholder 113,694 (3) 113,694 (3) 0 *
Louis B. Hauser and
Mary M. Hauser Shareholder 37,092 (3) 37,092 (3) 0 *
D. Gary Hemphill Shareholder 161,268 (3) 161,268 (3) 0 *
Donald Hunt and
Johanne Hunt Shareholder 18,385 (3) 18,385 (3) 0 *
William A. Jetter and
Mary E. Jetter Shareholder 46,655 (3) 45,155 (3) 1,500 *
Marian M. Johnson, et
al., Trustees of the
Marian M. Johnson
Revocable Trust Shareholder 43,139 (3) 43,139 (3) 0 *
Patsy O. Johnson and
Ramon E. Johnson Shareholder 4,032 (3) 4,032 (3) 0 *
Ann C. Kay Shareholder 47,171 (3) 47,171 (3) 0 *
Paul A. Kay Shareholder 33,624 (3) 33,624 (3) 0 *
Kingsley R. Labrosse Shareholder 193,682 (3) 193,682 (3) 0 *
Mary J. Labrosse Shareholder 75,472 (3) 75,472 (3) 0 *
Harry G. McCoy Shareholder/ 687,007 (3)(4) 687,007 (3)(4) 0 *
Harry G. McCoy and
Julia McCoy Shareholder 130,949 (3) 130,949 (3) 0 *
MLI Dissolution, Inc. Shareholder 125,865 (3)(5) 125,865 (3)(5) 0 *
Charles F. Mettille and
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Material Securities Percent
Relationship Had Securities Beneficially Common Stock
With the Beneficially Owned Owned After Owned After
Name of Selling Company Within As of February 7, Securities Offered Completion of Completion of
Shareholder Past Three Years 1996 (1) Hereby Offering (2) Offering
<S> <C> <C> <C> <C> <C>
Anita Mettille Shareholder 32,254 (3) 32,254 (3) 0 *
Frank Mettille Shareholder 80,634 (3) 80,634 (3) 0 *
Clifford T. Orton and
Ruth L. Orton Shareholder 193,682 (3) 193,682 (3) 0 *
Clifford T. Orton, Jr.
and Andrea K. Orton Shareholder 4,032 (3) 4,032 (3) 0 *
Thomas J. Orton Shareholder 2,016 (3) 2,016 (3) 0 *
Nancy Pinto-Orton and
Brian R. Pinto Shareholder 4,032 (3) 4,032 (3) 0 *
Andre C. Pool Shareholder 16,127 (3) 16,127 (3) 0 *
Katherine L. Seifert Shareholder 9,192 (3) 9,192 (3) 0 *
Michael Spiten and
Linda Spiten Shareholder 8,305 (3) 8,305 (3) 0 *
Harriet A. Thomas Shareholder 76,602 (3) 76,602 (3) 0 *
Lowell Van De Riet
and Mary Van De Riet Shareholder 29,351 (3) 29,351 (3) 0 *
Cynthia K. Veit Shareholder 219,486 (3) 219,486 (3) 0 *
Donald Veit Shareholder 16,127 (3) 16,127 (3) 0 *
Cheryl Wachenheim Shareholder 18,127 (3) 16,127 (3) 2,000 *
SERIES A
PREFERRED
SHAREHOLDERS:
Capital Ventures
International Shareholder 360,360 (6) 360,360 (6) 0 *
Kensington Partners
L.P. Shareholder 90,090 (6) 90,090 (6) 0 *
Little Wing L.P. Shareholder 270,270 (6) 270,270 (6) 0 *
Morgan Capital,
L.L.C. Shareholder 882,882 (6) 882,882 (6) 0 *
Santina Holding Corp. Shareholder 270,270 (6) 270,270 (6) 0 *
PLACEMENT
AGENT:
Harlan Kleiman Placement Agent 586,667 (7) 586,667 (7) 0 *
</TABLE>
* Less than 1%.
(1) Includes Common Stock as to which the holder has sole or shared
voting or investment power and Common Stock issuable pursuant to options
and/or warrants exercisable within the next 60 days.
(2) Assumes all Shares being registered in this offering will be
sold. However, to the best of the Company's knowledge, the holders of
such securities have no commitment to anyone to sell all or part of the
securities being registered.
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<PAGE>
(3) Does not include "Additional Shares" which may become issuable to
MEDTOX shareholders for shares held on the "Repricing Dates" in the
event the market price of the Common Stock of the Company is less than
$1.986 on any Repricing Date. See "Number of Shares of Common Stock-
Price Protection Shares."
(4) Includes 235,295 shares of Common Stock purchased by McCoy after the
MEDTOX acquisition, which 235,295 shares do not have the benefit of the price
protection provisions of the MEDTOX Purchase Agreement. See "Number of Shares
of Common Stock."
(5) 125,865 shares held in escrow, subject to the
indemnification provisions of the MEDTOX Purchase Agreement. Any shares
not delivered to the Company prior to January 30, 1997 shall be
delivered to MLI and the Company has been advised that such shares will
be distributed to the MEDTOX shareholders in connection with the
liquidation and dissolution of MLI if not used to satisfy the indemnification
obligations of MLI.
(6) The number of shares of Common Stock listed as beneficially
owned is the minimum number of Conversion Shares issuable upon
conversion of the Series A Preferred Stock. A greater number of
Conversion Shares will be issuable to any Series A Preferred Shareholder
who exercises its Series A Preferred Stock at a time when the market
price of the Common Stock of the Company is less than $3.70 per share.
As of February 6, 1996, the market price of the common stock was $3.50 per
share at which the 104 shares of Series A Preferred Stock would be convertible
into 1,980,952 shares of Common Stock. See "Number of Shares of Common
Stock-Price Protection Shares."
(7) Shares issuable upon the exercise of the Investment Banker
Warrants. See "Number of Shares of Common Stock ."
If Additional Shares become issuable to any MEDTOX Shareholder
or if more than the minimum number of Conversion Shares become issuable
to any Series A Preferred Shareholder, such shares will be taken from
the pool of Price Protection Shares registered hereby but not listed
next to the name of any Selling Shareholder in the table. Price
Protection Shares will be issued to Selling Shareholders in the
chronological order based on the date the shares become issuable. In
the event the number of Additional Shares and extra Conversion Shares
issued exceeds the number of Price Protection Shares registered hereby,
the Company intends to register more shares of Common Stock to cover
the deficiency when and as the need arises.
PLAN OF DISTRIBUTION
The Selling Shareholders may from time to time effect the sale
of their Shares in one or more transactions in the public market, at
prices and at terms then prevailing or at prices related to the
then-current market price, or in negotiated transactions or otherwise.
The Shares may be sold pursuant to the Registration Statement, another
registration statement or pursuant to an exemption from registration,
including Rule 144. If all or a portion of the Shares are sold in such
transactions, they may be sold by means of: (a) a block trade in which
the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal
to facilitate the
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<PAGE>
transactions; (b) purchases by a broker as principal and resale by such
broker for its account pursuant to this Prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; (d) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; or (e) a combination of the foregoing methods. In effecting
sales, brokers or dealers engaged by the Selling Shareholders may arrange
for other brokers or dealers to participate. The brokers or dealers engaged
by the Selling Shareholders will receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated prior to the sale.
Such brokers or dealers and any other participating brokers or dealers,
as well as the Selling Shareholders, may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales.
To the best knowledge of the Company, there are currently no plans,
arrangements or understandings between any of the Selling Shareholders and
any broker or dealer regarding the sale of stock by the Selling Shareholders.
RECENT DEVELOPMENTS
On January 30, 1996, the Company completed the acquisition of MEDTOX
pursuant to the MEDTOX Agreement. The purchase price for the MEDTOX
assets and the assumption of certain liabilities was $24 million of
which $19 million was paid in cash at closing and $5 million was paid
in the form of 2,517,306 shares of Common Stock of the Company. The
amount used to purchase the assets and certain liabilities of MEDTOX
was raised from the issuance of 380 shares of the Series A Preferred
Stock and the borrowing of approximately $5 million by the Company.
To obtain funds necessary to complete the MEDTOX Acquisition and to
provide for the Company's working capital needs, the Company and its
affiliated entities, Psychiatric Diagnostic Laboratories of American, Inc.
and diAGnostix, Inc., Delaware corporations and wholly-owned subsidiaries of
the Company, entered into a credit facility with Heller Financial, Inc.
("Heller") consisting of two term loans in the amount of $2
million each, one with an eighteen-month term and the other with a
three-year term, and a revolving line of credit of up to $7 million
(the "Credit Facility") with the amount available under the Credit
Facility dependent upon the amount of assets available to secure
borrowings under the Credit Facility. As of January 30, 1996
approximately $2.9 million was available under the Credit Facility, of
which approximately $1 million has been drawn down by the Company as of
February 7, 1996. The closing for the term loans and the Credit
Facility occurred on January 30, 1996.
In connection with the Credit Facility, the Company and its
subsidiaries have granted Heller a security interest in substantially
all their assets and have agreed to comply with many financial and
other covenants which restrict operations of the Company and its
subsidiaries, including the ability to pay dividends. See "Number of
Shares of Common Stock-Debt Financing" for a description of
restrictions on dividends imposed by the Credit Facility.
On January 31, 1996, the Board of Directors of the Company
elected two additional members to the Board of Directors of the Company,
bringing the total number
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of Directors to six. Dr. Harry McCoy was the President and Co-Founder
of MEDTOX. Dr. McCoy received his Bachelors Degree in Biology from the
University of California, San Diego and a Doctorate in Pharmacy from the
University of California, San Francisco. He conducted his clinical
internship at the Stanford Medical Center, University of California and
pursued his Post-Doctoral Fellowship in Pharmacokinetics with the
University of Minnesota where he held joint faculty appointments at the
U. of M. College of Pharmacy and the Section of Clinical Pharmacology at
the St. Paul-Ramsey Medical Center.
Mr. George Masters is Vice Chairman, President and Chief
Executive Officer of Seragen, Inc. Mr. Masters has spend his entire
business career in the healthcare industry, including 20 years with
Warner-Lambert. He left Warner-Lambert in 1983 as a Group President,
and for the past 12 years has held senior management positions with a
number of biotechnology companies. Mr. Masters has been a board member
of approximately fifteen medically oriented companies and currently
serves as a member of the Board of Directors of: CME Telemetrix,
Hemosol, Inc., ImmuCell Corporation, Intelligent Medical Imaging, and
Seragen. Mr. Masters is on the Board of Directors of the Biotechnology
Industry Organization in Washington, DC and serves on its Executive
Committee. He is on the Board of Visitors of Boston University School
of Medicine and the Board of Associates of the Whitehead Institute for
Biomedical Research at MIT. He also acts as an investment advisor to
three venture capital funds.
EXPERTS
The consolidated financial statements of EDITEK, Inc. appearing
in the EDITEK, Inc. Annual Report (Form 10-K) for the year ended
December 31, 1994, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting
and auditing.
LEGAL MATTERS
Legal matters in connection with the issuance of the Common
Stock offered hereby will be passed upon for the Company by Petree
Stockton, L.L.P Raleigh, North Carolina. As of February 7, 1996,
attorneys at Petree Stockton, L.L.P. owned no shares of Common Stock of
the Company.
INDEMNIFICATION AND LIMITATION OF LIABILITY
The Bylaws of the Company provide that the Company shall
indemnify the directors and officers of the Company against liability
(and expenses related thereto) arising out of their status as directors
and officers to the extent permitted by law. Additionally certain
mandatory indemnification rights are available under the Delaware
General Corporation Law ("DGCL") to officers and directors to the
extent they are
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successful in the defense of any proceeding to which they were a party
by virtue of their position as a director or officer.
Further, as permitted by the DGCL, the Certificate of
Incorporation of the Company includes a provision limiting the personal
liability of its directors for monetary damages for certain breaches of
their duties as directors to the extent permitted under the DGCL. The
Company also maintains a directors' and officers' liability policy
which insures such persons against claims arising from certain acts or
decisions by them in their capacities as directors and officers of the
Company, subject to certain exclusions and deductible and maximum
amounts.
In addition to such other rights of indemnification as they may
have as directors or as members of a committee of directors, the
Company's Amended and Restated Equity Compensation Plan and Amended and
Restated Stock Option Plan for Non-Employee Directors provide for
indemnification for certain of the Company's directors for liabilities
arising in connection with their actions taken as members of the
committees administering such plans.
Such limitation of liability pursuant to state law does not
affect liability, if any, arising under the federal securities laws.
Further, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to contractual provisions or otherwise,
the Company has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore unenforceable.
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PROSPECTUS
EDITEK, INC.
February 9, 1996
TABLE OF CONTENTS
Page
Available Information. 2
Incorporation of Certain Information by Reference 2
Risk Factors 3
Number of Shares of Common Stock 11
The Company 16
Selling Shareholders 18
Plan of Distribution 21
Recent Developments 22
Experts 23
Legal Matters 23
Indemnification and Limitation of Liability 23
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in
connection with this offering, and, if given or made, such information
or representations must not be relied upon as having been authorized by
the Company. This Prospectus does not constitute an offer to sell, or
a solicitation of an offer to buy, any securities other than the
registered securities to which it relates, or an offer to or
solicitation of any person in any jurisdiction in which such offer or
solicitation would be unlawful. The delivery of this Prospectus at any
time does not imply that information herein is correct as of any time
subsequent to its date.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses of this Registration Statement
will be paid by the Registrant and are as follows:
Registration Fee - Securities and
Exchange Commission $13,851.88
Legal Fees 10,000.00
Accounting Fees and Expenses 3,000.00
Miscellaneous 1,000.00
Total $27,851.88
Item 15. Indemnification of Directors and Officers.
Article III, Section 6, of the Bylaws of the Registrant
provides as follows:
The corporation shall indemnify any person made a party
to an action by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he, his testator or
intestate, is or was a director or officer of the corporation, against
expenses, including attorneys fees, actually and necessarily incurred
by him in connection with the defense of such action or in connection
with an appeal therein, except in relation to matters as to which such
director or officer is adjudged to be liable for negligence or misconduct
in the performance of his duty to the corporation except as otherwise
provided, by law or in the certificate of incorporation of the corporation.
The corporation shall indemnify any person made or threatened to be made a
party to an action or proceeding other than one of the type referred
to in the foregoing, whether civil or criminal, including, without
limitation, an action by or in the right of any other corporation
which any director or officer of the corporation served in any
capacity at the request of the corporation, by reason of the fact that
he, his testator or intestate was a director or officer of the
corporation or served such other corporation in any capacity, against
judgments, fines, amounts paid in settlement and expenses, including
attorneys fees, actually and necessarily incurred as a result of such
action or proceeding or any appeal therein, if such director or
officer acted, in good faith, for the purpose which he reasonably
believed to be in the best interest of the corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause
to believe
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that his conduct was unlawful. The termination of any such civil or
criminal action or proceeding by judgment, settlement, conviction or
upon a plea of nolo contendere, or its equivalent, shall not in itself
create a presumption that any such director or officer did not act in
good faith, for a purpose which he reasonably believed to be in the
best interest of the corporation or that he had reasonable cause to
believe that his conduct was unlawful. Expenses incurred in defending a
civil or criminal action or proceeding may be paid by the corporation
in advance of the final disposition of such action or proceeding. The
foregoing right of indemnification shall not be deemed exclusive of any
other rights to which those indemnified may be entitled as a matter of
law or any Bylaw, agreement, vote of stockholders, provision in the
certificate of incorporation or otherwise.
Reference is made to paragraph 8 of Article Sixth of the
Registrant's Certificate of Incorporation, as amended, which provides
as follows:
8. A director of this Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit.
Reference is also made to Section 145 of Title 8 of the
Delaware Code, which provides as follows:
(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo
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<PAGE>
contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable
to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses
(including attorneys fees) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification under subsections (a) and (b)
of this section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee
or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of
this section.
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<PAGE>
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative, or
investigative action, suit or proceeding, may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this section.
Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the Board
of Directors deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of this
section shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify
him against such liability under this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority
to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of
such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent
of another corporation, partnership, joint
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<PAGE>
venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators
of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses
or indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court
of Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
In actions other than those brought by or on behalf of the
Company, the Company may indemnify its directors, officers, employees
and other agents for expenses (including attorneys fees), judgments,
fines and settlements incurred by such persons, provided that the
person seeking indemnification acted in accordance with a statutory of
good faith conduct. In actions brought derivatively on behalf of the
Company ("derivative actions") or by the Company itself, the Company
may indemnify such individuals for expenses actually and reasonably
incurred and not for judgments, fines or settlements. Such limited
indemnification is not permitted in any derivative or direct action as
to issues or claims for which the officer or director is held liable to
the Company unless the Court determines that, in view of all the
circumstances, the person is fairly and reasonably entitled to
indemnity for such expenses. The Company may advance expenses incurred
by any person entitled to indemnification in defending a proceeding,
provided that, if such advance is made to an officer or director, such
person provides an undertaking to the Company to repay all amounts
advanced if it is ultimately determined that the person is not entitled
to be indemnified.
In addition to such other rights of indemnification as they may
have as directors or as members of a committee of directors, the
Company's Amended and Restate Equity Compensation Plan and Amended and
Restated Stock Option
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<PAGE>
Plan for Non-Employee Directors provide for indemnification for certain
of the Company's directors for liabilities arising in connection with
their actions taken as members of the committees administering such
plans.
Further, the Company maintains a directors' and officers' liability
policy which insures such persons against claims arising from certain
acts or decisions by them in their capacities as directors and officers
of the Company, subject to certain exclusions and deductible and
maximum amounts.
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<PAGE>
Item 16. Exhibits
5.1 Opinion of Petree Stockton, L.L.P. regarding
legality of securities.*
23.1 Consent of Petree Stockton, L.L.P. (contained in
Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (contained on signature pages)
* To be filed by amendment
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;
(ii) To reflect in the Prospectus any facts or
events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement is on Form S-3 or
Form S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the
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<PAGE>
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration 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 of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Burlington, State
of North Carolina, on February 8, 1996.
EDITEK, INC.
By:/s/ James D. Skinner
James D. Skinner
President,
Principal Executive Officer and
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS that each individual whose
signature appears below constitutes and appoints Mr. James D. Skinner
and Mr. Peter J. Heath and each of them his true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file
the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, full power and authority to do and
perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or his substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/ James D. Skinner President, February 8, 1996
James D. Skinner Principal Executive
Officer, and
Chairman of the Board
/s/ Samuel C. Powell Ph.D. Director February 8, 1996
Samuel C. Powell, Ph.D.
/s/ Peter J. Heath Vice President of February 8, 1996
Peter J. Heath Finance and Chief
Financial Officer
/s/ Gene E. Lewis Director February 8, 1996
Gene E. Lewis
/s/ Robert J. Beckman Director February 8, 1996
Robert J. Beckman
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/s/ Harry G. McCoy, Pharm.D. Director February 8, 1996
Harry G. McCoy, Pharm.D.
/s/ George W. Masters Director February 8, 1996
George W. Masters
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EXHIBIT INDEX
Exhibit No. Description
5.1 Legal Opinion of Petree Stockton, L.L.P.*
23.1 Consent of Petree Stockton, L.L.P.
(Contained in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (contained on signature page)
* To be filed by amendment.
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts"in the
Registration Statement (Form S-3 No. 33-00000) and related Prospectus of
EDITEK, Inc. for the registration of 11,478,193 shares of its common stock and
to the incorporation by reference therein of our report dated March 9, 1995,
with respect to the consolidated financial statements and schedules of EDITEK,
Inc. included in its Annual Report (Form 10-K) for the year ended December 31,
1994, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Raleigh, North Carolina
February 8, 1996
