<PAGE>
As filed with the Securities and Exchange Commission on September 18, 1997
Registration Statement No. _______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
AMBI INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
New York 2083 11-2653613
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation) Classification Code Number) No.)
</TABLE>
<TABLE>
<S> <C>
AMBI 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 telephone number, (Name, address, including zip code, and telephone
including area code, of registrant's principal executive number, including area code, of agent for service)
offices)
</TABLE>
----------
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 Amount of
Title of Each Class of Securities Being Amount Being Offering Price per Aggregate Offering Registration Fee
Registered Registered Share (1) Price
<S> <C> <C> <C> <C>
Common Stock 500,000 $2.5625 $1,281,250 $388.26
</TABLE>
(1) Estimated for purposes of computing the registration fee pursuant to Rule
457(c) at $2.5625 per share based upon the average of the high and low prices
which were both $2.5625 on September 15, 1997.
-----------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment 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>
SUBJECT TO COMPLETION, DATED SEPTEMBER 18, 1997
PROSPECTUS
AMBI INC.
500,000 Shares of Common Stock
--------------------------------
This Prospectus relates to an aggregate of 500,000 shares of Common
Stock (the "Offered Shares") of AMBI Inc. (the "Company"), par value $.005 per
share (the "Common Stock") issued in a private placement consummated in August
1997 in connection with the acquisition of Nutrition 21. See "Material Changes."
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. The Company will not
receive any proceeds from the sale of the shares of Common Stock by the Selling
Security Holders. The Company will pay substantially all of the expenses with
respect to the offering and sale of the Offered Shares to the public, including
the costs associated with registering the Offered Shares under the Securities
Act of 1933, as amended (the "Securities Act"), and preparing and printing this
Prospectus. Normal underwriting commissions and broker fees, however, as well as
any applicable transfer taxes, are payable individually by the Selling Security
Holders. See "Selling Security Holders."
The Company has been advised by the Selling Security Holders that the
Offered Shares may be offered for sale from time to time by or for the account
of such Selling Security Holders in the open market, on the Nasdaq National
Market, in privately negotiated transactions, in an underwritten offering, or a
combination of such methods, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Offered Shares are intended to be sold through one or more broker-dealers or
directly to purchasers. Such broker-dealers may receive compensation in the form
of commissions, discounts or concessions from the Selling Security Holders
and/or purchasers of the Offered Shares for whom such broker-dealer may act as
agent, or to whom they may sell as principal, or both (which compensation as to
a particular broker-dealer may be in excess of customary concessions). The
Selling Security Holders and any broker-dealers who act in connection with the
sale of Offered Shares hereunder may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions received by them and proceeds
of any resale of the Offered Shares may be deemed to be underwriting discounts
and commissions under the Securities Act. The Selling Security Holders have
agreed not to sell or dispose of their Offered Shares until various dates
commencing November 10, 1997. See "Selling Security Holders" and "Plan of
Distribution."
The Company's Common Stock is traded on the Nasdaq National Market
System under the symbol AMBI. As reported by Nasdaq for September 15, 1997, the
last sale price for the Company's Common Stock was $2.5625.
---------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is September __, 1997.
<PAGE>
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 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, and can
also be accessed electronically through the Commission's Web site at
http://www.sec.gov. The Company's securities are traded on the Nasdaq National
Market System and reports and proxy statements can also be obtained from The
Nasdaq Stock Market, Inc. at 1735 K Street NW, Washington, D. C. 20006.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Offered
Shares. This Prospectus is part of the Registration Statement and does not
contain all the information set forth in the Registration Statement, certain
portions of which have been omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement and the documents incorporated herein by reference and
attached hereto. Such additional information may be obtained from the
Commission's principal office in Washington, D.C.
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 OR INCORPORATED HEREIN BY REFERENCE IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
2
<PAGE>
THE COMPANY
AMBI Inc., (the "Company") is a New York corporation which was
incorporated on June 29, 1983. The Company develops and commercializes
pharmaceutical and dietary products. 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
An investment in the Offered Shares offered hereby involves a high
degree of risk. Prospective investors should understand that they may sustain a
total loss of their investment and should consider carefully the following risk
factors, among others, in making their investment decision. This Prospectus
contains and incorporates by reference forward looking statements within the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Reference is made in particular to the discussion under "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Form 10-K for the year ended June 30, 1996, which is
incorporated in this Prospectus by reference. Such statements are based on
current expectations that involve a number of uncertainties including those set
forth in the following risk factors and actual results could differ materially
from those projected in such forward-looking statements.
Recent Sale of Subsidiary
In December 1996, the Company sold its Aplin & Barrett Limited subsidiary.
Substantially all of the Company's earnings through the date of sale had been
generated by this subsidiary. The Company has only recently reinvested the
proceeds from this sale into a new business to replace the potential to generate
revenues. See "Material Changes."
Continuing Operating Losses
The Company has had net operating losses since its inception in 1983. At March
31, 1997 the Company's accumulated deficit was approximately $38.5 million. For
the first three quarters of fiscal 1997, such operating losses were
approximately $11.7 million. The Company's revenues have been generated to date
solely from sales of non-therapeutic products, development agreements, and
research grants. The Company is currently generating sales from its medical food
product, Cardia(TM) Salt Alternative, animal healthcare products, and
development agreements. While the Company is looking to expand its revenues
through, among other things, the continued acquisition of pharmaceutical and
dietary products, it is not certain that any further acquisitions will be
concluded. The Company does not expect to generate revenues from the products
currently in its R&D pipeline for several years. The Company's ability to
achieve profitability depends, in part, on its ability to successfully penetrate
the market with Cardia(TM) Salt Alternative. Profitability will depend, in
addition, upon the Company's ability to obtain regulatory approval for products,
to enter into agreements for product development and/or commercialization, or to
develop the capacity to manufacture and/or market its products. There can be no
assurance that the Company will obtain required regulatory approvals,
successfully develop, commercialize, manufacture and market its products or
achieve profitability.
Need for Additional Funding
The Company's future capital requirements will depend on many factors, including
expenses associated with the continued marketing of existing products, expenses
associated with research and development, and funds required for the acquisition
of products and/or companies. Progress with pre-clinical and clinical trials,
the time and costs involved in obtaining regulatory approvals, the costs
involved in filing, prosecuting and enforcing patent claims,
3
<PAGE>
competing technological and market developments, the establishment of
collaborative arrangements, the cost of manufacturing facilities and of
commercialization activities and arrangements, the cost of product in-licensing
and possible acquisitions may impact the Company. The Company's existing
resources are expected to be insufficient to fund the Company's foreseeable
operational and acquisition activities, and additional funds will be required.
The Company intends to seek such additional funding through arrangements with
corporate collaborators, through public or private sales of its securities,
including equity securities, or through bank financing arrangements. There can
be no assurance that additional funding will be available at all or on
reasonable terms. Moreover, any of such financings may result in substantial
dilution to the Company's existing equity holders.
Government Regulation
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, safety, and efficacy. 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,
for both human and animal use, will be subject to the regulatory approval
processes for new drugs. They are subject to approval in the U.S. by the Food
and Drug Administration ("FDA"), 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 to
conduct 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, or will continue to be marketable even after approval.
Certain of the Company's products in the medical food business areas do not
require FDA approval for marketing, but are subject to monitoring by the FDA. No
assurances can be given that FDA interactions on these products will not occur
at some point in the future.
Drug Related Risks
Adverse side effects from the treatment of diseases and disorders in both human
and animal patients may 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
and any such defense is likely to require the utilization of significant Company
resources. Further, there can be no assurance that the Company will be able to
satisfy any claim 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
4
<PAGE>
such persons.
Competition
The Company is evaluating certain proprietary 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 nutraceuticaIs.
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 is marketing this product directly to hypertensive
patients and to medical professionals (physicians. pharmacists and dietitians)
for recommendation to 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/or 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 market presence.
The Company is developing a class of bacteriocins/antimicrobial peptides known
as lanthocins as drugs for the treatment of bacterial infections such as ulcer
disease, diseases of the colon, and hospital-acquired systemic infections. The
Company understands that there are many corporate and research organizations
that are seeking to develop other bacteriocins and other antimicrobial peptides
as drugs to treat these and similar bacterial infections. 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.
Shares Eligible for Future Sale
Sales of a substantial number of shares of Common Stock in the public market
could adversely affect the market price for the Common Stock. The Company
currently has outstanding 222 shares of its Series C Convertible Preferred Stock
which as of September 15, 1997 are convertible into 1,234,932 shares of Common
Stock (subject to anti-dilution adjustments), 45,000 shares of Series D
Preferred Stock, and 528,937 Warrants issued in connection with the Series D
Preferred Stock. The Company has registered the sale of all of the Common Stock
underlying the Preferred Stock and Warrants as well as 4,342,467 shares of
Common Stock issuable pursuant to various other warrants and stock options.
Dividends Not Likely
The Company has never paid any dividends on its Common Stock. The payment of
dividends is also restricted by provisions of the Preferred Stock. When the
Company becomes legally able to pay dividends, such payment shall be subject to
the discretion of the Board of Directors, which will take into account earnings,
financial requirements of the Company, and other factors deemed relevant by the
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.
5
<PAGE>
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, 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.
Dependence on Others
In order to develop, test and market its products, it may be necessary for the
Company to obtain licenses to patents or other proprietary rights of third
parties, or enter into agreements with collaborative partners. There can be no
assurance that any such licenses or agreements would be available, if at all, on
terms acceptable to the Company. If AMBI is not able to obtain such licenses or
enter into such agreements, it could encounter delays in introducing its
products into the market, or find that development, manufacture or sale of its
products will be limited.
No Manufacturing Experience and Reliance on Third Parties for Manufacturing
The Company currently has no facilities to manufacture its products in
accordance with Good Manufacturing Practices ("GMP") prescribed by the FDA and
must rely on third parties to manufacture its products. There can be no
assurance that these manufacturers will meet the Company's requirements for
quality, quantity and timeliness, or that the Company would be able to find
substitute manufacturers, if necessary.
Dependence on Patents and Proprietary Technology
The biotechnology and pharmaceutical industries place considerable importance on
obtaining patent and trade secret protection for new technologies, products and
processes. The Company's success will depend, in part, on its ability to obtain
patent protection for its products and manufacturing processes, preserve its
trade secrets and operate without infringing the proprietary rights of third
parties. In addition to AMBI's own patents and patent applications, Orion
Corporation and the University of Maryland have exclusively licensed their
rights in certain patents and patent applications to the Company. The Company's
future performance is partly dependent upon these license agreements.
The Company is conducting research and expects to seek additional patents in the
future, but there can be no assurance as to its success or the timeliness in
obtaining any such patents or as to the breadth or degree of protection, which
any such patents will afford the Company. The patent position of biotechnology
and pharmaceutical firms is
6
<PAGE>
often highly uncertain and usually involves complex legal and factual questions.
There is a substantial backlog of biotechnology patent applications at the
United States Patent and Trademark Office. No consistent policy has emerged
regarding the breadth of claims covered in biotechnology patents. Accordingly,
there can be no assurance that any current or future patent applications
relating to the Company's products or technology will result in patents being
issued or that, if issued, such patents will afford adequate protection to the
Company or not be challenged, invalidated or infringed. Furthermore, there can
be no assurance that others will not independently develop similar products and
processes, duplicate any of the Company's products or, if patents are issued to
the Company, design around such patents. In addition, the Company could incur
substantial costs in defending itself in suits brought against it or in suits in
which the Company may assert its patents against others. If the outcome of any
such litigation is adverse to the Company, the Company's business could be
adversely affected. To determine the priority of inventions, the Company may
also have to participate in interference proceedings declared by the United
States Patent and Trademark Office, which could result in substantial cost to
the Company.
In addition, the Company may be required to obtain licenses to patents or other
proprietary rights of third parties. No assurance can be given that any licenses
required under any such patents or proprietary rights would be made available on
terms acceptable to the Company, if at all. If the Company does not obtain such
licenses, it could encounter delays in product market introductions while it
attempts to design around such patents or other rights, or be unable to develop,
manufacture or sell products.
The Company also seeks to protect its proprietary technology, including
technology which may not be patented or patentable, in part by confidentiality
agreements and, if applicable, inventors' rights agreements with its
collaborators, advisors, employees and consultants. There can be no assurance
that these agreements will not be breached, or that the Company will have
adequate remedies for any breach or that the Company's trade secrets will not
otherwise be disclosed.
Sales Dependent in Part on Third Party Reimbursement
Sales of the Company's products may depend to some extent on the availability of
reimbursement from third-party payers, such as government and private insurance
plans. No assurance can be given that such reimbursement will be available.
Dependence on Acquisitions
The Company intends to expand in part by pursuing a strategy of seeking
acquisitions. There can be no assurance that suitable acquisition candidates can
be found or effectively integrated into the Company. There can be no assurance,
that future acquisitions will not have an adverse effect upon the Company's
operating results, particularly in the fiscal quarters immediately following the
consummation of such transactions during which the operations of the acquired
businesses are being integrated into the Company's operations.
7
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Offered
Shares by the Selling Security Holders.
SELLING SECURITY HOLDERS
The following table sets forth the names of the Selling Security
Holders, the number of shares of Common Stock beneficially owned by such Selling
Security Holder and the number of Offered Shares which may be offered for sale
pursuant to this Prospectus by each such Selling Security Holder. None of the
Selling Security Holders has held any position, office or other material
relationship with the Company or any of its affiliates within the past three
years other than as a result of his or its ownership of shares of Common Stock.
The Offered Shares may be offered from time to time by the Selling Security
Holders named below. However, such Selling Security Holders are not obligated to
sell any such Offered Shares immediately under this Prospectus. All information
with respect to share ownership has been furnished by the Selling Security
Holders. Because the Selling Security Holders are not obligated to sell any such
Offered Shares, no estimate can be given as to the number of shares of Common
Stock that will be held by any Selling Security Holder upon termination of any
offering made hereby.
<TABLE>
<CAPTION>
Securities to
Securities Owned Securities be Owned
Name and Address Before Offering to be Sold (1) after Offering
- ---------------- ----------------- -------------- --------------
<S> <C> <C> <C>
Alice Barnhart 7,000 7,000 -0-
James Bie, trustee Bie Family Trust 30,000 30,000 -0-
Herbert H. Boynton or Donna P. 240,000 240,000 -0-
Boynton, co-trustees under
Declaration of Trust dated June 22,
1978, as amended
Diana Chubbic 25,000 5,000 20,000
Joel Cornish 27,500 27,500 -0-
Patty Jo Cornish 7,000 7,000 -0-
Melissa Cunningham 5,000 5,000 -0-
Stephanie Dutton 2,500 2,500 -0-
Mary Erwin 17,500 17,500 -0-
April Johnson 1,250 1,250 -0-
Howden King 18,500 17,500 1,000
Angelique Mambelli 35,000 35.000 -0-
Scot A. Morris 10,500 10,500 -0-
Patricia P. Ortleib 4,650 4,650 -0-
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C> <C>
Laurence Rivkin, trustee L.N.R. 47,500 47,500 -0-
Family Trust
Brett Smithers 2,650 2,350 300
Al Smithson 3,500 3,500 -0-
Hayley Wade 1,250 1,250 -0-
Jack M. and Mary G. Williams, 35,000 35,000 -0-
trustees, The Williams Family Trust
</TABLE>
- --------------------
(1) Assumes sale of all Offered Shares.
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. Pursuant to this
Prospectus, the Offered Shares may be sold by the Selling Security Holder from
time to time while the Registration Statement to which this Prospectus relates
is effective on the Nasdaq National Market System ("NNM") or otherwise at prices
and terms prevailing at the time of sale, at prices and terms related to such
prevailing prices and terms, in negotiated transactions or at fixed prices. The
Selling Security Holder may choose to sell all or a portion of such Offered
Shares from time to time in any manner described herein. The methods by which
the Offered Shares may be sold by the Selling Security Holder include, without
limitation: (i) ordinary brokerage transactions, which may include long or short
sales, (ii) transactions which involve cross or block trades or any other
transactions permitted by the NNM, (iii) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus, (iv) "at the market" to or through market makers or into an existing
market for the Common Stock, (v) in other ways not involving market makers or
established trading markets, including direct sales to purchasers or sales
effected through agents, (vi) through transactions in options or swaps or other
derivatives (whether exchange-listed or otherwise), or (vii) any combinations of
any such methods of sale. In addition, the Selling Security Holder may enter
into hedging transactions with broker-dealers which require the delivery to such
broker-dealers of the Offered Shares offered hereby, which Offered Shares such
broker-dealers may resell pursuant to this Prospectus.
In effecting sales, brokers and dealers engaged by the Selling Security
Holder may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the Selling Security Holder to
sell a specified number of Offered Shares at a stipulated price per share, and,
to the extent such a broker or dealer is unable to do so acting as agent for the
Selling Security Holder, may purchase as principal any unsold Offered Shares at
the price required to fulfill such broker or dealer commitment to the Selling
Security Holder. Brokers or dealers who acquire Offered Shares as principals may
thereafter resell such shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other brokers or dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise,
at market prices and terms prevailing at the time of sale, at prices and terms
related to such prevailing prices and terms, in negotiated transactions or at
fixed prices, and in connection with the methods as described above. The Offered
Shares held by the Selling Security Holder may also be sold hereunder by
brokers, dealers, banks or other persons or entities who receive such Offered
Shares as a pledgee of the Selling Security Holder. The Selling Security Holder
and brokers and dealers through whom sales of Offered Shares may be effected may
be deemed to be "underwriters," as defined under the Securities Act, and any
profits realized by them in connection with the sale of the Offered Shares may
be considered to be underwriting compensation.
9
<PAGE>
The agreement between the Company and the Selling Security Holders,
dated as of August 11, 1997 (the "Agreement"), provides that the Company and the
Selling Security Holders will enter into agreements indemnifying each other
against certain liabilities, including civil liabilities under the Securities
Act respecting this Registration Statement. The Agreement also provides that the
Selling Security Holders will not sell or dispose of their Offered Shares for
various periods. Selling Security Holders holding an aggregate of 85,000 shares
have agreed not to sell or dispose of their Offered Shares until November 10,
1997, Selling Security Holders holding an aggregate of 175,000 shares have
agreed not to sell or dispose of their Offered Shares until February 7, 1998,
and Mr. Boynton has agreed not to sell or dispose of his Offered Shares until
August 11, 1998.
EXPERTS
The consolidated financial statements of the Company as of June 30,
1996 and 1995, and for each of the years of the three-year period ended June 30,
1996, 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.
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
Except as set forth herein, there have been no material developments
since the filing on May 14, 1997 of the Company's quarterly report on Form 10-Q
for the nine months ended March 31, 1997.
On August 11, 1997, AMBI Inc. (the "Company") acquired the entire
beneficial interest in Nutrition 21, a limited partnership, ("N21") by way of
the acquisition of Selene Systems, Inc. ("Selene"), which is the general partner
of N21, J. Bie Enterprises, Inc., which is a corporate limited partner of N21,
and the limited partnership interests owned by all other limited partners of
N21. N21 is engaged in the business of developing, producing, and marketing
proprietary nutrition products and dietary supplements. The purchase price for
the acquisition was $10,000,000 (the "Cash Purchase Price"), plus 500,000
restricted shares of Common Stock of the Company (which are being registered
hereby), and additional cash payments which are contingent upon the achievement
of certain sales levels in the next four years. The Company will also pay
royalties to the sellers on sales of certain patented products. Part of the Cash
Purchase Price was provided pursuant to a Revolving Credit and Term Loan
Agreement (the "Loan Agreement") with State Street Bank and Trust Company (the
"Bank") and the remainder came from internal working capital. The loans bear
interest at the Bank's prime rate plus one percent and are due February 1, 1998
unless extended pursuant to certain conditions set forth in the Loan Agreement.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been filed with the Commission by
the Company are incorporated herein by reference and made a part hereof. The
Commission file number for all documents which are incorporated by reference is
0-14983.
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(1) Annual Report on Form 10-K for the fiscal year ended
June 30, 1996.
(2) Quarterly Report on Form 10-Q for the three months
ended September 30, 1996.
(3) Quarterly Report on Form 10-Q for the six months
ended December 31, 1996.
(4) Quarterly Report on Form 10-Q for the nine months
ended March 31, 1997.
(5) Current Report on Form 8-K filed December 27, 1996.
(6) Current Report on Form 8-K filed August 25, 1997.
(7) The section entitled "Description of Securities" in
the Company's registration statement on Form S-1
(Registration No. 33-4822), declared effective on
August 28, 1986.
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.
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, AMBI Inc., 771 Old Saw Mill River Road,
Tarrytown, New York 10591.
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 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 Securities Act and
is, therefore, unenforceable.
11
<PAGE>
ADDITIONAL INFORMATION
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, 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>
AMBI INC.
500,000 Shares of Common Stock
----------------------
PROSPECTUS
----------------------
September ___, 1997
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.
TABLE OF CONTENTS
Available Information ....... 2
The Company ................. 3
Risk Factors ................ 3
Use of Proceeds ............. 8
Selling Security
Holders ..................... 8
Plan of Distribution ........ 9
Experts ..................... 10
Legal Matters ............... 10
Material Changes ............ 10
Incorporation by Reference .. 10
Indemnification ............. 11
Additional Information ...... 12
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............. $ 389
Nasdaq National Market listing fee................. 10,000
Legal Fees and expenses............................ 10,000
Accountant's fees and expenses..................... 5,000
Miscellaneous...................................... 611
-------
Total............................ $26,000
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
- ----------- -----------
(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
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 a 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.
(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.
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(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 16th day of September 1997.
AMBI Inc.
By: /s/
------------------------------------------
Fredric D. Price, President, CEO and Director
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 August 22, 1997
/s/
- ---------------------------
Fredric D. Price President, CEO and Director September 16, 1997
(Principal Accounting and
Financial Officer)
/s/
- ---------------------------
Audrey T. Cross Director August 22, 1997
/s/
- ---------------------------
Robert E. Flynn Director August 25, 1997
/s/
- ---------------------------
Colin Kop Director August 22, 1997
/s/
- ---------------------------
Robert E. Pollack Director August 27, 1997
17
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Exhibit 5
LAW OFFICES OF OSCAR D. FOLGER
521 Fifth Avenue
New York, New York 10175
September 17, 1997
AMBI Inc.
771 Old Saw Mill River Road
Tarrytown, New York 10591
Re: Form S-3 Registration Statement
Gentlemen:
We have acted as counsel for AMBI Inc., a New York corporation (the
"Company"), in connection with the registration by the Company of 500,000 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
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Exhibit 23(b)
Independent Auditors' Consent
The Board of Directors
AMBI 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
September 18, 1997
19
