As filed with the Securities and Exchange Commission on November 3, 1995
Registration Statement No. _______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
APPLIED MICROBIOLOGY, INC.
(Exact name of registrant as specified in its charter)
New York 2083 11-2653613
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation)
Applied Microbiology, Inc. Fredric D. Price
771 Old Saw Mill River Road 771 Old Saw Mill River Road
Tarrytown, New York 10591 Tarrytown, New York 10591
(914) 347-5767 (914) 347-5767
(Address, including zip code, and (Name, address, including zip
telephone number, including area code, code, and telephone number,
of registrant's principal executive including area code, of agent for
offices) service)
------------------
Copies To:
Oscar D. Folger, Esq.
521 Fifth Avenue
New York, New York 10175
Approximate date of commencement of proposed sale to public:
From time to time after the effective date of this Registration
Statement depending on market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. /__/
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount Being Offering Price per Aggregate Offering Amount of
Securities Being Registered Registered Share (1) Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock 4,788,006 $4.625 $22,144,527 $7,636.04
</TABLE>
(1) Estimated for purposes of computing the registration fee pursuant to Rule
457(c) at $4.625 per Share based upon the average of the high and low prices of
$4.875 and $4.375, respectively, on November 1, 1995.
_______________________
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
______________________
2
<PAGE>
PROSPECTUS
APPLIED MICROBIOLOGY, INC.
4,788,006 Shares of Common Stock
________________________________
This Prospectus relates to an aggregate of 4,788,006 shares of Common
Stock of Applied Microbiology, Inc. (the "Company"), par value $.005 per share
(the "Common Stock"), of which 696,576 shares of Common Stock are issuable upon
the exercise of options and warrants, and of which up to 4,091,430 shares of
Common Stock are issuable upon the conversion of Series C Preferred Stock (the
"Preferred Stock") (the "Conversion Shares") sold in a private placement
consummated in October 1995. Subject to the Company's right to redeem the
Preferred Stock prior to conversion, one third of the Conversion Shares may be
converted and will become available for sale commencing on each of the
following three dates: (A) one third on the later of (i) December 4, 1995 or
(ii) the date of this Prospectus; (B) one third on the later of (i) January 3,
1996 or (ii) the date of this Prospectus; and (C) one third on January 18,
1996. All Conversion Shares will in any event be convertible into Common Stock
and available for sale on January 18, 1996. See "Plan of Distribution." This
Prospectus does not relate to the sale or issuance by the Company of any
securities. Any shares of Common Stock which are offered will be offered for
the respective accounts of the Selling Security Holders, who will acquire
shares of Common Stock upon exercise of options or warrants which are owned by
them, as well as upon conversion of the Preferred Stock. See "Selling Security
Holders." The Company will receive the exercise prices payable upon exercise
of the warrants and the options. However, the Company will not receive any
proceeds from the sale of the shares of Common Stock by the Selling Security
Holders. The Company has been advised by the Selling Security Holders that
there are no underwriting arrangements with respect to the sale of the Common
Stock, that the Common Stock will be sold from time to time in the
over-the-counter market at then prevailing prices and in private transactions
at negotiated prices, and that usual and customary brokerage fees, if any, will
be paid by the Selling Security Holders in connection therewith.
The Company's Common Stock is traded on the Nasdaq National Market
System under the symbol AMBI. As reported by Nasdaq for November 1, 1995, the
last sale price for the Company's Common Stock was $4.375.
---------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
==================================================================
Price to Underwriting Discounts Proceeds to Selling
Public(1) and Commissions Security Holders(1)
Per Share -0-
==================================================================
(1) Not determinable at present time.
The date of this Prospectus is ___________________, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, registration statements, proxy statements and other
information filed by the Company with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C., and at the Commission's
Regional Offices: Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois; 7 World Trade Center, New York, New York, and Suite
500, 5757 Wilshire Boulevard, Los Angeles, California, and with respect to
registration statements, Suite 788, 1375 Peachtree Street, Atlanta, Georgia.
Copies of such materials can be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
The Company undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference in the Prospectus (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically incorporated by
reference into the information that the Prospectus incorporates). Such request
should be directed to the Secretary, Applied Microbiology, Inc., 771 Old Saw
Mill River Road, Tarrytown, New York 10591.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY
JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL OR AN
OFFERING OF ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO
WHICH IT RELATES. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
OFFER OR SALE MADE HEREUNDER AT ANY TIME SHALL IMPLY THAT THE
INFORMATION PROVIDED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
4
<PAGE>
THE COMPANY
Applied Microbiology, Inc., (the "Company") is a New York corporation
which was incorporated on June 29, 1983. The Company researches, develops,
manufactures, and sells food ingredients, and researches, develops and
manufactures special dietary foods and pharmaceuticals. The executive offices
of the Company are located at 771 Old Saw Mill River Road, Tarrytown, New York
10591 and its telephone number at that address is 914-347-5767.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE A
HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD, CONSIDER CAREFULLY THE
FOLLOWING FACTORS IN ANALYZING THIS OFFERING:
Government Regulation
Healthcare and cosmetics
Products which are intended for use in the diagnosis, cure,
mitigation, treatment or prevention of disease in humans or animals are subject
to extensive governmental regulation. All such products are subject to
regulation for quality assurance, toxicology and safety. Products containing
such agents must undergo thorough preclinical and clinical evaluations of
performance as to safety and efficacy under approved protocols.
The Company intends to pursue regulatory approval for the
pharmaceutical and related uses of its products. The Company's proposed
pharmaceutical products will be subject to the regulatory approval processes
for new drugs. The Company believes that its products for the treatment of
bovine mastitis will be considered animal drugs which are subject to approval
by the Food and Drug Administration ("FDA") Center for Veterinary Medicine in
the U.S. and by other developed countries' regulatory agencies. To take a
product from the discovery stage through research and preclinical development
to the point where the Company and/or its partners can make the necessary
filing (to the FDA and governmental agencies outside the U.S.) to conduct human
clinical trials may take several years. Regulatory requirements for human
clinical trials are substantial, depend upon a variety of factors, vary by
country, and will further add to the time necessary to determine whether a
product candidate can be approved for human use. There can be no assurance
that the Company's proposed products will prove to be safe and effective under
these regulatory procedures.
Foods and food processing
Ingredients added to or used in food which are considered "food
additives" require FDA approval in the U.S. unless, based on the submission of
safety and functionality data, such ingredients are considered generally
recognized as safe ("GRAS"). Use of GRAS food ingredients does not require FDA
approval, but companies frequently submit petitions to the FDA which request
that the FDA affirm GRAS status. The Company submitted a request to the FDA for
such affirmation for the Company's nisin preparation. The FDA has affirmed that
nisin or a nisin preparation which meets certain specifications is GRAS for use
in pasteurized cheese spreads and pasteurized cheese spreads with fruits,
vegetables, or meats (GRAS Affirmed uses). The use of Nisaplin or nisin in
cheese products and foods, other than for GRAS Affirmed uses, may occur based
on the manufacturer or user determining that such use is GRAS. Such uses may
necessitate a submission to FDA. Should such a submission to the FDA become
necessary, timely action by the FDA cannot be assured.
Drug Related Risks
Adverse side effects from the treatment of diseases and disorders in
both human and animal patients may
5
<PAGE>
occur during clinical testing of a new drug on humans and animals. Such
effects may delay FDA approval and even cause a company to terminate its
efforts to develop a drug for commercial use. In addition, adverse side
effects that develop after the FDA has approved a drug could result in legal
action against a company. Drug developers and manufacturers, including the
Company, may face substantial liability for damages in the event of adverse
side effects or product defects identified with their products used in clinical
tests or marketed to the public. There can be no assurance that the Company
will be able to defend itself successfully in any suit that may be brought
against it. Further, there can be no assurance that the Company will be able
to satisfy any claims for which it may held liable resulting from the use or
misuse of products which it has developed, manufactured or sold.
Dependence on Key Executive and Skilled Personnel
The business of the Company depends heavily upon the participation of
Mr. Fredric D. Price, President and Chief Executive Officer of the Company.
Loss of his services would adversely affect the operations of the Company. In
addition, both the long term and short term success of the Company depend in
large part upon its continued ability to attract and retain skilled scientific
and managerial employees. There can be no assurance that the Company will at
all times be able to attract such qualified individuals as a result of the
highly competitive nature of the market for such persons.
Competition
The Company believes that it produces the major part of the world's
annual output of nisin. Nevertheless, there are a number of companies with
greater financial resources than the Company who may be seeking to enter the
industry. Nisaplin competes in the marketplace with other processes and
additives, which to some extent are similar in function and in some
circumstances are directly competitive.
The Company is evaluating certain proprietary special dietary food
products in the areas of cardiovascular disease, diabetes, infectious disease,
and gastrointestinal disorders. Special Dietary Foods are foods that supply
particular dietary needs or that may aid in the dietary management of disease
and are sometimes known as medical foods, functional foods, or nutraceuticals.
The Company was granted an exclusive license by a division of Orion
Corporation ("Orion"), the largest pharmaceutical company in Finland, to make,
have made, use and sell in the United States Orion's patented salt alternative.
This product, currently being sold in Finland and Japan by Orion and its
licensee, has significantly less sodium than regular salt and contains
potassium and magnesium, essential minerals that may help in the dietary
management of blood pressure. The Company intends to initially market this
product to physicians for recommendation to their hypertensive patients and to
those at risk of developing hypertension.
The Company has not previously marketed products in this manner.
Other larger food and pharmaceutical companies (with substantially greater
financial resources and with relevant marketing experience) could acquire
or develop products that may compete with the Company's salt alternative
and with other special dietary food products that the Company may acquire
in the future. There can be no assurance that the Company's salt alternative
will be successful or that the Company will be able to develop or acquire
other special dietary foods that have a substantial marketplace potential.
The Company understands that there are numerous scientific
laboratories which seek to develop alternative bacteriocins and other
antimicrobial peptides. Success by competitors in work with other
anti-bacterial or germicidal products may substantially and adversely affect
the Company's prospects. Many of the large corporations that are involved in
or are expected to enter the field of biotechnology have substantially greater
financial, marketing and human resources than the Company and have the
capability of providing significant long-term competition.
6
<PAGE>
Dividends Not Likely
The Company has never paid any dividends on its Common Stock. The
payment of future dividends will be dependent upon earnings, financial
requirements of the Company and other factors deemed relevant by the Company's
Board of Directors. For the foreseeable future it is anticipated that any
earnings which may be generated from operations of the Company will be used to
finance the growth of the Company and that cash dividends will not be paid to
holders of Common Stock.
Volatility of Stock Price
The market prices for securities issued by small health care companies
have been volatile. Announcements of technological innovations for new
commercial products by the Company's competitors, adverse developments
concerning regulatory review, proprietary rights and corporate plans, the
introduction of new products and changes in general conditions in the
pharmaceutical industry may have a significant impact on the Company's business
and on the market price of the Common Stock.
Technological Obsolescence
The fields in which the Company's products are being developed are
undergoing rapid technological advances. There is no assurance that the
Company will be in a position to take advantage of such advances. In
addition, there can be no assurance that some of the Company's products will
not be rendered obsolete as a result of the successful application of such
technology by competitors.
Product Liability Claims and Uninsured Risks
To the extent that the Company is successful in developing and
marketing new products, it will be exposed to liability resulting from the use
of such products. The Company has obtained product liability insurance for the
products it currently markets and intends to obtain product liability insurance
for products it will market in the future. Although the Company may apply for
product liability insurance, there is no assurance that it will receive
insurance or that such insurance will be sufficient to cover all possible
liabilities.
Foreign Currency Risk
The Company's principal subsidiary is located in the United Kingdom.
Such subsidiary operates its business, including the billing of customers ouside
the U.S., in the Great Britain pound (GBP). In the United States, all
transactions are denominated in U.S. dollars. The financial reporting currency
for the Company is the U.S. dollar (USD). Therefore, investors are exposed to
the risk of possible currency fluctuations between the GBP and the USD.
7
<PAGE>
SELLING SECURITY HOLDERS
The securities being offered hereby are for the accounts of the
following persons:
<TABLE>
<CAPTION>
Name and Address Securities Owned Securities to be Securities to
Before Offering Sold (1) be Owned
after Offering
<S> <C> <C> <C>
AG Superfund
International Partners 91,429 91,429 -0-
Banque Scandinave en Suisse 457,143 457,143 -0-
Bigwood Investments Ltd. 137,143 137,143 -0-
Yetta Braunstein 43,333 33,333 10,000
Carousel Investments 91,429 91,429 -0-
Core Communications Group, Inc. 35,000 35,000 -0-
Corporate Securities Group 16,666 16,666 -0-
Datek Securities Corp. 187,887 187,887 -0-
Richard Deutsch 58,333 58,333 -0-
Fleet Clearing Corp. 91,429 91,429 -0-
GAM Arbitrage, Inc. 182,857 182,857 -0-
Avinoam Geffen 83,333 33,333 50,000
The Gifford Fund 342,857 342,857 -0-
Edward Goldberg 10,000 5,000 5,000
H. Donald Hayback 1,258 1,258 -0-
Leonardo, L.P. 502,857 502,857 -0-
Norma Loren 138,333 33,333 105,000
McLaughlin Financial Group, Inc. 15,000 15,000 -0-
Nelson Partners 1,010,286 1,010,286 -0-
Malkie Newberg 16,916 16,666 250
Olympus Securities, Ltd. 132,571 132,571 -0-
Panshore Services 91,429 91,429 -0-
Abraham Pelman 24,166 16,666 7,500
Simon Pelman 16,666 16,666 -0-
Donald S. Radcliffe 8,500 5,000 3,500
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C> <C>
Schroder Wertheim & Co.
Incorporated 100,000 100,000 -0-
Philip Sears 5,000 5,000 -0-
Celia Stefansky 16,666 16,666 -0-
Strategic Growth International,
Inc. 100,769 100,769 -0-
Streaks Worldwide, Ltd. 228,571 228,571 -0-
Treetop Partners, L.P. 137,143 137,143 -0-
Tula Business 457,143 457,143 -0-
Wood Gundy (London) Limited 137,143 137,143 -0-
</TABLE>
____________________
(1) All securities to be sold consist of Shares of Common Stock issuable
upon exercise of options and warrants and upon conversion of the Preferred
Stock.
9
<PAGE>
PLAN OF DISTRIBUTION
The securities are being offered for the respective accounts of the
Selling Security Holders. The Company will not receive any proceeds from the
sale of any securities by the Selling Security Holders, although it will
receive proceeds from the exercise of options and warrants by the Selling
Security Holders.
Subject to the Company's right to redeem the Preferred Stock prior to
conversion, one third of the Conversion Shares may be converted and will become
available for sale commencing on each of the following three dates: (A) one
third on the later of (i) December 4, 1995 or (ii) the date of this Prospectus;
(B) one third on the later of (i) January 3, 1996 or (ii) the date of this
Prospectus; and (C) one third on January 18, 1996. All Conversion Shares will
in any event be convertible into Common Stock and available for sale on January
18, 1996.
The sale of securities by the Selling Security Holders may be effected
from time to time in transactions in the over- the-counter market, in
negotiated transactions, or through a combination of such methods of sale, at
fixed prices, which may be charged at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Security Holders may effect such transactions by selling
the securities to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Security Holders and/or the purchasers of the securities for which
such broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary compensation).
The Selling Security Holders and any broker-dealers who act in
connection with the sale of the securities hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and profit on any sale of the securities as
principal might be deemed to be underwriting discounts and commissions under
the Securities Act.
EXPERTS
The consolidated financial statements of the Company as of June 30,
1995 and 1994, and for each of the years of the three-year period ended June
30, 1995, have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. To the extent
that KPMG Peat Marwick LLP audits and reports on consolidated financial
statements of the Company issued at future dates, and consents to the use of
their report thereon, such consolidated financial statements also will be
incorporated by reference in the registration statement in reliance upon their
report and said authority.
LEGAL MATTERS
Certain legal matters in connection with this offering are being
passed upon for the Company by Oscar D. Folger, Esq., 521 Fifth Avenue, New
York, New York 10175. Mr. Folger's wife owns 5,000 shares of the Common Stock
of the Company.
MATERIAL CHANGES
On October 1, 1995, David Guttman resigned as the Company's Chairman of
the Board of Directors. Sheldon G. Gilgore, M.D., was elected the Company's new
Chairman of the Board of Directors, effective October 1, 1995.
On October 20, 1995, the Company completed an $8.95 million private
placement of the Preferred Stock. One third of the Preferred Stock is
convertible into Common Stock on each of three dates as set forth
10
<PAGE>
under "Plan of Distribution." The Company has agreed to register the Common
Stock issuable upon conversion of the Preferred Stock. Such shares of Common
Stock are included in the registration statement of which this Prospectus forms
a part. See"Selling Security Holders" and "Plan of Distribution." In
connection with this private placement, the Company also issued a warrant to
purchase 136,381 shares of Common Stock at $6.30 per share. Such shares of
Common Stock are not registered herewith.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's annual report on Form 10-K for the year ended June 30,
1995, as filed with the Commission pursuant to Section 13 of the Securities
Exchange Act of 1934, is incorporated in this Prospectus and made a part hereof
by reference.
The Commission file number for the foregoing document is 0-14983. In
addition, any amendments to such document and all other reports, proxy
statements and other documents of the Company hereafter filed with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, prior to the termination of the offering of the
securities covered by this Prospectus, shall be deemed to be incorporated in
this Prospectus and made a part hereof by reference from the date of filing of
each such document. Any statement contained in an earlier 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 incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
INDEMNIFICATION
The Company's by-laws provide that the Company will indemnify its
directors and officers to the fullest extent permitted by law. The New York
Business Corporation Law (the "BCL") provides that a corporation may indemnify
a director or officer, made a party to a derivative action, against reasonable
expenses actually and necessarily incurred by him in connection with the
defense of such action, except in relation to matters as to which such director
or officer is adjudged to have breached his duty to the corporation. In
addition, the BCL provides that a corporation may indemnify a director or
officer, made, or threatened to be made, a party to any action other than a
derivative action on behalf of the indemnifying corporation, whether civil or
criminal, against judgments, fines, amounts paid in settlement and reasonable
expenses actually and necessarily incurred as a result of such action, if such
director or officer acted in good faith, for a purpose which he reasonably
believed to be in the best interests of the corporation and, in criminal
actions or proceedings, in addition, had no reasonable cause to believe that
his conduct was unlawful.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing 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 Act and is, therefore, unenforceable.
ADDITIONAL INFORMATION
11
<PAGE>
This Prospectus contains certain information concerning the Company
and its securities, but does not contain all the information set forth in the
Registration Statement and the Exhibits thereto filed with the Commission under
the Securities Act of 1933, as amended, to which reference is made. Any
summary from the Exhibits contained in this Prospectus is necessarily
incomplete and must not be considered as a full statement of the provisions of
such instruments.
12
<PAGE>
APPLIED MICROBIOLOGY, INC.
4,788,006 Shares of Common Stock
______________________
PROSPECTUS
______________________
November ___, 1995
No dealer, salesman or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus, 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 any offer to buy any
securities in any jurisdiction in which such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall under any circumstances create any implication that there has been no
change in the affairs of the Company since the date hereof.
13
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
securities being registered under this Registration Statement are estimated as
follows:
Securities and Exchange Commission fee.... $ 7,636
Legal Fees and expenses.................. 10,000
Accountant's fees and expenses........... 4,000
Miscellaneous............................ 1,364
-------
Total.................... $23,000
Item 15. Indemnification of Directors and Officers.
Section 5.04 of the Company's by-laws provides that the Company will
indemnify its directors and officers to the fullest extent permitted by law.
Section 722 of the New York Business Corporation Law provides that a
corporation may indemnify a director or officer, made a party to a derivative
action, against reasonable expenses actually and necessarily incurred by him in
connection with the defense of such action, except in relation to matters as to
which such director or officer is adjudged to have breached his duty to the
corporation. Such indemnification does not include amounts paid in settling or
otherwise disposing of a threatened or pending action which is settled or
otherwise disposed of without court approval.
Section 722 of the Business Corporation Law further provides that a
corporation may indemnify a director or officer, made, or threatened to be
made, a party to any action other than a derivative action on behalf of the
indemnifying corporation, whether civil or criminal, against judgments, fines,
amounts paid in settlement and reasonable expenses actually and necessarily
incurred as a result of such action, if such director or officer acted in good
faith, for a purpose which he reasonably believed to be in the best interests
of the corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
Section 723 specifies the manner in which payment of such
indemnification may be authorized by the corporation. It provides that
indemnification by a corporation is mandatory in any case in which the director
or officer has been completely successful, whether on the merits or otherwise,
in defending an action referred to in Section 722. In the event that
the director or officer has not been wholly successful or the action is
settled, indemnification must be authorized by the appropriate corporate action
as set forth in Section 723. Section 724 provides that upon application by a
director or officer, indemnification may be awarded by a court to the extent
authorized under Sections 722 and 723. Section 725 provides that no
indemnification agreement in any Certificate of Incorporation or By-Laws is
valid unless consistent with the statute. In addition, Section 725 contains
certain other miscellaneous provisions affecting the indemnification of
directors and officers.
Insofar as indemnification by the Company for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing 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 Act and is, therefore, unenforceable. In the event that
14
<PAGE>
a claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company 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.
Item 16. Exhibits.
Exhibit No. Description
(4) Certificate of Amendment dated October 18, 1995
to Registrant's Certificate of Incorporation
(5) Opinion of Oscar D. Folger
(23)(a) Consent of Oscar D. Folger (Included in
Exhibit (5))
(23)(b) Consent of KPMG Peat Marwick LLP (Included
in Part II)
Item 17. Undertakings
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 fact 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. Notwithstanding the foregoing, any increase or decrease
in the volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
high and low and of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (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 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.
15
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) That for purposes of determining any liability under the
Securities Act of 1933, each filing of Registrant's annual report pursuant to
Section 13(a) or 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 therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
16
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Tarrytown, New York on
the 3rd day of November 1995.
Applied Microbiology, Inc.
By: /s/
Fredric D. Price, President, CEO and Director
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Fredric D. Price as his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead in any and all capacities to sign any and
all amendments (including post-effective amendments) to this Registration
Statement on Form S-3 and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission
under the Securities Act of 1933.
--------------------
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/_______________________
Sheldon G. Gilgore Chairman of the Board November 1, 1995
__/s/______________________
Fredric D. Price President, CEO and Director November 3, 1995
(Principal Accounting and
Financial Officer)
__/s/______________________
Ian Clack Director November 1, 1995
__/s/______________________
Douglas A. Cotter Director November 1, 1995
__/s/______________________
Audrey T. Cross Director November 1, 1995
__/s/______________________
John P. Friend Director November 1, 1995
__/s/______________________
Robert E. Pollack Director November 1, 1995
<PAGE>
Independent Auditors' Consent
The Board of Directors
Applied Microbiology, Inc.:
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
New York, New York
November 3, 1995
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
(4) Certificate of Amendment dated October 18, 1995
to Registrant's Certificate of Incorporation
(5) Opinion of Oscar D. Folger
(23)(a) Consent of Oscar D. Folger (Included in
Exhibit (5))
(23)(b) Consent of KPMG Peat Marwick LLP (Included
in Part II)
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
APPLIED MICROBIOLOGY, INC.
(Pursuant to Sections 502 and 805 of the Business Corporation Law)
1. The name of the corporation is Applied Microbiology, Inc. The name under
which it was formed is Applied Microbiology, Inc.
2. The date its certificate of incorporation was filed by the Department of
State is June 29, 1983.
3. The certificate of incorporation is hereby amended by the addition of
the following new Article Fifteenth, which states the number, designation,
relative rights, preferences, and limitations which have been fixed by
resolution of the corporation's board of directors for shares of the 1992
Redeemable Preferred Stock:
"ARTICLE Fifteenth: There is hereby created a series of the Preferred
Stock of this corporation to consist of 1,000 shares of Preferred
Stock $.01 par value per share, which this corporation now has authority
to issue.
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series C Preferred Stock" (the "Series C Preferred Stock") and
the number of shares constituting the Series C Preferred Stock shall be 1,000.
Such number of shares may be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number of shares of
Series C Preferred Stock to a number less than the number of shares then
outstanding plus the number shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series C
Preferred Stock.
Section 2. Rank. The Series C Preferred Stock shall rank: (1) prior to
all of the Corporation's Common Stock, par value $.005 per share ("Common
Stock"); (ii) prior to any class or series of capital stock of the Corporation
hereafter created specifically ranking by its terms junior to any Series C
Convertible Preferred Stock of whatever subdivision (collectively, with the
Common Stock, "Junior Securities"); (iii) on parity with any class or series of
capital stock of the Corporation hereafter created specifically ranking by its
terms on parity with the Series C Preferred Stock ("Parity Securities") in each
case as to distributions of assets upon liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary (all such distributions
being referred to collectively as "Distributions"), and (iv) junior to the 1992
Preferred Stock and any class or series of capital stock of the Corporation
which is hereafter created and is not specifically ranked junior to or in parity
with the Series C Preferred Stock.
Section 3. Dividends. The Series C Preferred Stock will bear no
dividends, and the holders of the Series C Preferred Stock shall not be
entitled to receive dividends on the Series C Preferred Stock.
<PAGE>
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution of winding up of
the Corporation, either voluntary or involuntary, the holders of each share of
Series C Preferred Stock shall be entitled to receive, immediately after any
distributions to Senior Securities required by the Corporation's Certificate of
Incorporation or any certificate of designation of preferences, and prior and in
preference to any distribution to Junior Securities but in parity with any
distribution of Parity Securities, an amount per share equal to the sum of (i)
$10,000 for each such share of Series C Preferred Stock (the "Original Series C
Issue Price") and (ii) an amount equal to 8% of the Original Series C Issue
Price per annum for the period that has passed since the date of issuance of
such share (such amount being referred to herein as the "Premium"). If upon the
occurrence of such event, the assets and funds thus distributed among the
holders of the Series C Preferred Stock and Parity Securities shall be
insufficient to permit the payment to such holders of the full preferential
amounts due to the holders of the Series C Preferred Stock and the Parity
Securities, respectively, then the entire assets and funds of the Corporation
legally available for distribution shall be distributed among the holders of the
Series C Preferred Stock and the Parity Securities, pro rata, based on the
respective liquidation amounts to which each such series of stock is entitled by
the Corporation's Certificate of Incorporation and any certificate of
designation of preferences.
(b) Upon the completion of the distribution required by
subsection 4(a), if assets remain in this Corporation, they shall be distributed
to holders of Parity Securities (unless holders of Parity Securities have
received distributions pursuant to subsection (a) above) and Junior Securities
in accordance with the Corporation's Certificate of Incorporation including any
duly adopted certificate(s) of designation of preferences.
(c) A consolidation or merger of the Corporation with or into
any other corporation or corporations, or a sale, conveyance or disposition of
all or substantially all of the assets of the Corporation or the effectuation
by the Corporation of a transaction or series of related transactions in which
more than 50% of the voting power of the Corporation is disposed of, shall not
be deemed to be a liquidation, dissolution or winding up within the meaning of
this Section 4, but shall instead be treated pursuant to Section 7 hereof.
Section 5. Conversion and Registration. The record Holders of this Series
C Preferred Stock shall have converison rights as follows (the "Conversion
Rights"):
(a) Right to Convert. The record Holder of this Series C
Preferred Stock shall be entitled, at the times and in the amounts set forth
below, and, subject to the Company's right of redemption set forth in Section
6(a), at the office of the Company or any transfer agent for the Series C
Preferred Stock, to convert portions of the aggregate number of shares of Series
C Preferred Stock held by such Holder into that number of fully-paid and
non-assessable shares of the $.005 par value common stock of the Company (the
"Common Stock") at the Converison Rate as set forth below. The number of shares
of Common Stock into which this Series C Preferred Stock may be converted is
hereinafter referred to as the "Conversion Rate" for such Series C Preferred
Stock. The record Holder of this Series C Preferred Stock shall be entitled, at
the option of the Holder, subject to the Company's right of redemption set forth
in Section 6(a), to convert such Preferred Stock as follows:
I. one-third (the "First 1/3") of the shares of Series C Preferred Stock
issued to such Holder is convertible, pursuant to the Registration
Statement, at any time beginning on the later of (i) 45 days following the
date of the Last Closing and (ii) the date upon which the Registration
Statement becomes effective (the "Registration Effective Date"), but is in
any event convertible, pursuant to Regulation S and applicable exemptions,
at any time beginning 90 days following the date of the Last Closing if the
Registration Statement has not yet become effective, and
<PAGE>
II. an additional one-third (the "Second 1/3") of the shares of Series C
Preferred Stock issued to such Holder is convertible, pursuant to the
Registration Statement, at any time beginning on the later of (i) 75 days
following the date of the Last Closing and (ii) the Registration Effective
Date, but is in any event convertible, pursuant to Regulation S and
applicable exemptions, at any time beginning 90 days following the date of
the Last Closing if the Registration Statement has not yet become
effective, and
III. all remaining shares (the "Final 1/3") of Series C Preferred Stock
issued to such Holder are convertible at any time beginning 90 days
following the date of the Last Closing, pursuant to the Registration
Statement, if it has become effective, or pursuant to Regulation S and
applicable exemptions, if the Registration Statement has not become
effective.
The shares shall be convertible at the office of the Company or any
transfer agent for the Series C Preferred Stock, into that number of
fully-paid and non-assessable shares of Common Stock of the Company
calculated in accordance with the following formula:
Number of shares issued upon conversion of one share of Preferred Stock
[(.08)(N/365)(10,000)]+10,000+Late Registration Penalty (if applicable)
= ---------------------------------------------------------------------
Conversion Price
o N = the number of days between (i) the date that, in connection with
the consummation of the initial purchase by Subscriber of shares of
shares of Series C Preferred Stock from the Company, the escrow agent
first had in its possession funds representing full payment for the
shares of Series C Preferred Stock for which conversion is being
elected, and (ii) the applicable date of conversion for the Series C
Preferred Stock for which conversion is being elected (the "Date of
Conversion"), and
o Conversion Price = the lesser of (x) the Closing Bid Price, as that
term is defined below, on October 13, 1995 (the "Fixed Conversion
Price"), or (y) 85% of the average Closing Bid Price, as that term is
defined below, of the Company's Common Stock for the five (5) trading
days immediately preceding the Date of Conversion, as defined below.
For purposes hereof, the term "Closing Bid Price" shall mean the closing
bid price of the Company's Common Stock as reported by Nasdaq (or, if
not reported by Nasdaq, as reported by such other exchange or market
where traded).
o Late Registration Penalty
= (1/3x[.025x(A/30)x$10,000]) + (1/3x[.025x(B/30)x$10,000]), where
- A (the number of days registration is late for the First 1/3 of
shares of Series C Preferred Stock issued to Holder) equals the
number of days between (i) the 45th day following the date of the
Last Closing, and (ii) the date that the Registration Effective
Date, but in no event shall the value of A exceed 45.
and
- B (the number of days registration is late for the Second 1/3 of
shares of Series C Preferred Stock issued to Holder) equals the
number of days between (i) the 75th day following the date of the
Last Closing, and (ii) the Registration Effective Date, but in no
event shall the value of B exceed 15.
<PAGE>
(b) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of this Series C Preferred Stock. In lieu
of any fractional share to which the Holder would otherwise be entitled, the
Company shall pay cash to such Holder in an amount equal to such fraction
multiplied by the Conversion Price then in effect. In the case of a dispute as
to the calculation of the Conversion Rate, the Company's calculation shall be
deemed conclusive absent manifest error. In order to convert Series C Preferred
Stock into full shares of Common Stock, the Holder shall surrender the
certificate or certificates therefor, duly endorsed, by either overnight courier
or 2-day courier, to the office of the Company or of any transfer agent for the
Series C Preferred Stock, and shall give written notice ("Notice of Conversion")
to the Company at such office that he elects to convert the same, the number of
shares of Series C Preferred Stock so converted and a calculation of the
Conversion Rate (with an advance copy of the certificate(s) and the notice by
facsimile); provided, however, that the Company shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless either the certificates evidencing such Series C Preferred Stock are
delivered to the Company or its transfer agent as provided above, or the Holder
notifies the Company or its transfer agent that such certificates have been
lost, stolen or destroyed and executes an agreement satisfactory to the Company
to indemnify the Company from any loss incurred by it in connection with such
certificates.
The Company shall use reasonable efforts to issue and deliver within three
(3) business days after delivery to the Company of such certificates, or after
such agreement and indemnification, to such Holder of Series C Preferred Stock
at the address of the Holder on the books of the Company, a certificate or
certificates for the number of shares of Common Stock to which the Holder shall
be entitled as aforesaid. The date on which conversion occurs (the "Date of
Conversion") shall be deemed to be the date set forth in such Notice of
Conversion, provided (i) that the advance copy of the Notice of Conversion is
faxed to the Company before midnight, New York City time, on the Date of
Conversion and (ii) that the stock certificates (the "Preferred Stock
Certificates") representing the Series C Preferred Stock to be converted are
received by the transfer agent or the Company within five business days
thereafter. The person or persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on such date. If the original
Preferred Stock Certificates to be converted are not received by the transfer
agent or the Company within five business days after the Date of Conversion, the
Notice of Conversion shall become null and void.
(c) Reservation of Stock Issuable Upon Conversion. The Company
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the Series C Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all then outstanding
shares of Series C Preferred Stock; and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of Series C Preferred Stock, the
Company will take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.
(d) Automatic Conversion. Each share of Series C Preferred Stock
outstanding on October 13 1998 automatically shall be converted into Common
Stock on each date at the Conversion Price then in effect and October 13, 1998
shall be deemed the Date of Conversion with respect to such Conversion.
(e) Adjustment to Fixed Conversion Price.
(i) If, prior to the conversion of all of the Series C
Preferred Stock, the number of outstanding shares of Common Stock is increased
by a stock split, stock dividend, or other similar event, the Fixed Conversion
Price shall be proportionately reduced, or if the number of outstanding shares
of Common Stock is decreased by a combination or reclassification of shares, or
other similar event, the Fixed Conversion Price shall be proportionately
increased.
<PAGE>
(ii) If, prior to the conversion of all Series C Preferred
Stock, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event at a result of which
shares of Common Stock of the Company shall be changed into the same or a
different number of shares of the same or another class or classes of stock or
securities of the Company or another entity, then the Holders of Series C
Preferred Stock shall thereafter have the right to purchase and receive upon
conversion of Series C Preferred Stock, upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such shares of stock and/or
securities as may be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore purchasable and
receivable upon the conversion of Series C Preferred Stock held by such Holders
had such merger, consolidation, exchange of shares, recapitalization or
reorganization not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holders of the
Series C Preferred Stock to the end that has provisions hereof (including,
without limitation, provisions for adjustment of the Fixed Conversion Price
and of the number of shares issuable upon conversion of the Series C Preferred
Stock) shall thereafter be applicable, as nearly as may be practicable in
relation to any shares of stock or securities thereafter deliverable upon the
exercise hereof. The Company shall not effect any transaction described in this
subsection 3(e) unless the resulting successor or acquiring entity (if not the
Company) assumes by written instrument the obligation to deliver to the Holders
of the Series C Preferred Stock such shares of stock and/or securities as, in
accordance with the foregoing provisions, the Holders of the Series C Preferred
Stock may be entitled to purchase.
(iii) If any adjustment under this Section 5(e) would
create a fractional share of Common Stock or a right to acquire a fractional
share of Common Stock, such fractional share shall be disregarded and the number
of shares of Common Stock issuable upon conversion shall be the next higher
number of shares.
As used herein, the term "Registration Statement" shall mean a shelf
registration statement for the Common Stock under the Securities Act of 1933 and
the term "Last Closing" shall mean the date of the last closing for the sale by
the Company of any Series C Preferred Stock.
Section 6. Redemption by Company.
(a) Company's Right to Redeem. The Company shall have the right,
in its sole discretion, upon receipt of a Notice of Conversion pursuant to
Section 5, to redeem in whole or in part any Series C Preferred Stock submitted
for conversion, immediately prior to conversion. If the Company elects to redeem
some, but not all, of the Series C Preferred Stock submitted for conversion, the
Company shall redeem from among the Series C Preferred Stock submitted by the
various shareholders for conversion on the applicable date, a pro-rata amount
from each shareholder so submitting Series C Preferred Stock for conversion.
(b) Mechanics of Redemption. The Company shall effect each such
redemption by giving notice of its election to redeem, by facsimile within 1
business day following receipt of a Notice of Conversion from a Holder, with a
copy by 2-day courier, to (A) the Holder of Series C Preferred Stock submitted
for conversion at the address and facsimile number of such Holder appearing in
the Company's register for the Series C Preferred Stock and (B) the Company's
Transfer Agent. Such redemption notice shall indicate whether the Company will
redeem all or part of the Series C Preferred Stock submitted for conversion and
the applicable redemption price. The Company shall not be entitled to send any
notice of redemption and begin the redemption procedure unless it has (i) the
full amount of the redemption price, in cash, available in a demand or other
immediately available account in a bank or similar financial institution or (ii)
immediately available credit facilities, in the full amount of the redemption
price, with a bank or similar financial instititution on the date the redemption
notice is sent to shareholders.
<PAGE>
The redemption price per share of the Series C Preferred Stock shall be
calculated in accordance with the following formula:
Late Closing Bid price on
[[(.08)(N/365) (10,000)] + 10,000 + Registration ] x Date of Conversion
Penalty -----------------------
Conversion Price
For the purposes of the above formula "N", "Closing Bid Price",
"Conversion Price" and "Late Registration Penalty" shall have the meanings
set forth in Section 5.
The redemption price shall be paid to the Holder of Series C Preferred Stock
redeemed within 10 business days of the delivery of the notice of such
redemption to such Holder; provided, however, that the Company shall not be
obligated to deliver any portion of such redemption price unless either the
certificates evidencing the Series C Preferred Stock redeemed are delivered to
the Company or its transfer agent as provided in Section 4(b), or the Holder
notifies the Company or its transfer agent that such certificates have been
lost, stolen or destroyed and executes an agreement satisfactory to the Company
to indemnify the Company from any loss incurred by it in connection with such
certificates.
Section 7. Corporate Change. The Closing Bid Price used to determine the
Conversion Price shall be appropriately adjusted to reflect, as deemed equitable
and appropriate by the Corporation, any stock dividend, stock split or share
combination of the Common Stock. In the event of a merger, reorganization,
recapitalization or similar event of or with respect to the Company (a
"Corporate Change") (other than a Corporate Change in which all or substantially
all of the consideration received by the holders of the Company's equity
securities upon such Corporate Change consists of cash or assets other than
securities issued by the acquiring entity or any affiliate thereof), this Series
C Preferred Stock shall be assumed by the acquiring entity and thereafter this
Series C Preferred Stock shall be convertible into such class and type of
securities as the Holder would have received had the Holder converted this
Series C Preferred Stock immediately prior to such Corporate Change.
Section 8. Voting Rights. Except as otherwise provided by law, the
holders of the Series C Preferred Stock shall have no voting power whatsoever,
and no holder of Series C Preferred Stock shall vote or otherwise participate in
any proceeding in which actions shall be taken by the Corporation or the
shareholders thereof or be entitled to notification as to any meeting of the
Board of Directors or the shareholders.
To the extent that under New York law the vote of the holders of the Series
C Preferred Stock, voting separately as a class, is required to authorize a
given action of the Corporation, the affirmative vote or consent of the holders
of at least a majority of the outstanding shares of the Series C Preferred Stock
shall constitute the approval of such action by the class. To the extent that
under New York law the holders of the Series C Preferred Stock are entitled to
vote on a matter with holders of Common Stock, voting together as one class,
each share of Series C Preferred Stock shall be entitled to a number of votes
equal to the number of shares of Common Stock into which it is then convertible
using the record date for the taking of such vote of stockholders as the date as
of which the Conversion Price is calculated. Holders of the Series C Preferred
Stock shall be entitled to notice of all shareholder meetings or written
consents with respect to which they would be entitled to vote, which notice
would be provided pursuant to the Corporation's by-laws and applicable statutes.
<PAGE>
Section 9. Protective Provisions. So long as shares of Series C Preferred
Stock are outstanding, the Corporation shall not without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of at
least a majority of the then outstanding shares of Series C Preferred
Stock-alter or change the rights, preferences or privileges of the shares of
Series C Preferred or any Senior Securities so as to affect adversely the Series
C Preferred Stock.
Section 10. Status of Redeemed or Converted Stock. In the event any
shares of Series C Preferred Stock shall be redeemed or converted pursuant to
Section 5 or Section 6 hereof, the shares so converted or redeemed shall be
canceled, shall return to the status of authorized but unissued Preferred Stock
of no designated series, and shall not be issuable by the Corporation as Series
C Preferred Stock.
Section 11. Preference Rights. Nothing contained herein shall be
construed to prevent the Board of Directors of the Corporation from issuing one
or more series of preferred stock with dividend and/or liquidation preferences
equal to or greater than the dividend and liquidation preferences of the Series
C Preferred Stock."
[intentionally left blank]
<PAGE>
4. This amendment was adopted by the Board of Directors under the authority
of Sections 502 and 708(b) of the Business Corporation law.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under penalties of perjury this 18th day of
October, 1995.
/s/ Stephen Benoit
------------------------------------------
Stephen Benoit, Vice President
/s/ Benjamin T. Sporn
------------------------------------------
Benjamin T. Sporn, Secretary
November 2, 1995
Applied Microbiology, Inc.
771 Old Saw Mill River Road
Tarrytown, New York 10591
Re: Form S-3 Registration Statement
Gentlemen:
We have acted as counsel for Applied Microbiology, Inc., a New York
corporation (the "Company"), in connection with the registration by the Company
of 4,788,006 shares of Common Stock, par value $0.005 per share (the
"Securities"), which are the subject of a Registration Statement on Form S-3
under the Securities Act of 1933, as amended (the "Act").
As counsel to the Company we have examined and relied upon the
original or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records and other instruments as we have deemed
necessary in order to render the following opinion.
On the basis of and subject to the foregoing, it is our opinion that
the Securities to be issued and sold by the Company have been duly authorized
and, when issued and sold, will be duly issued and fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement. In giving such consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the
Rules and Regulations of the Securities and Exchange Commission thereunder.
This opinion is to be used only in connection with the offer and sale
of the Securities as variously referred to herein while the Registration
Statement is in effect.
Very truly yours,
Oscar D. Folger
