<PAGE>
As filed with the Securities and Exchange Commission on December 30, 1998
Registration Statement No. 333-_____
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)
New York 2083 11-2653613
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation) Classification Code Number) Identification No.)
<TABLE>
<S> <C>
AMBI Inc. Fredric D. Price, President, CEO
4 Manhattanville Road AMBI Inc.
Purchase, New York 10577 4 Manhattanville Road
(914) 701-4500 Purchase, New York 10577
(Address, including zip code, (914) 701-4500 (Name, address,
and telephone number, including including zip code, and telephone
area code, of registrant's number, including area code,
principal executive offices) of agent for service)
</TABLE>
--------
Copies To:
Oscar D. Folger, Esq.
521 Fifth Avenue
New York, New York 10175
(212) 697-6464
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 Aggregate Amount of
Securities Being Registered Registered per Share (1) Offering Price Registration Fee
- --------------------------- ------------ ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock 2,133,000 $1.0625 $2,266,313 $630.04
</TABLE>
(1) Estimated for purposes of computing the registration fee pursuant to Rule
457(c) at $1.0625 per share based upon the average of the high and low prices of
$1.09375 and $1.03125 on December 28, 1998, respectively.
-----------------------
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.
----------------------
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 30, 1998
PROSPECTUS
AMBI INC.
2,133,000 Shares of Common Stock
--------------------------------
The shareholders of AMBI Inc. (the "Company" or "AMBI") listed below
(the "Selling Security Holders") are offering and selling 2,133,000 shares of
Common Stock, par value $.005 per share, (the "Common Stock") under this
prospectus (the "Offered Shares"). Of these shares, 1,265,000 shares of Common
Stock are issuable upon the conversion of Series F Preferred Stock or stock
dividends paid thereon. The Series F Preferred Stock will be issued upon
effectiveness of this registration statement. Up to 1,500,000 of the remaining
Offered Shares will be issued in repayment of a promissory note entered into in
March 1996.
Some or all of the selling shareholders expect to sell their Offered
Shares. The selling shareholders may offer their AMBI stock through public or
private transactions, on or off the Nasdaq Stock Market, at prevailing market
prices, or at privately negotiated prices. All net proceeds from the sale of the
Offered Shares will go to the shareholders who offer and sell their shares.
Accordingly, the Company will not receive any proceeds from sales of the AMBI
shares.
The Company's Common Stock is traded on the Nasdaq National Market
System under the symbol AMBI. As reported by Nasdaq for December 28, 1998, the
last sale price for the Company's Common Stock was $1.0625.
---------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
---------------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION
HAS APPROVED THESE SECURITIES OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is December __, 1998.
<PAGE>
AVAILABLE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission ("SEC"). You may
read and copy any document we file at the SEC's public reference rooms at Room
1024, 450 Fifth Street, N.W., Washington, D.C., and at the SEC'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 SEC, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates, and can also be
accessed electronically through the SEC'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.
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. This
prospectus also does not contain all the information set forth in the
registration statement. For further information, you can obtain the complete
registration statement and the documents incorporated herein by reference from
the SEC offices listed above.
We have authorized no one to provide you with different information. We
are not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document.
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 nutrition
and pharmaceutical products. The executive offices of the Company are located at
4 Manhattanville Road, Purchase, New York 10577 and its telephone number at that
address is 914-701-4500.
RISK FACTORS
An investment in the Offered Shares involves a high degree of risk.
Prospective investors should understand that they may lose 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. Please see particularly the
discussion under "Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Form 10-K/A for the year
ended June 30, 1998, 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. Actual
results could differ materially from those projected in such forward-looking
statements.
Sale of Subsidiary, Acquisition of New Business
In December 1996, the Company sold its Aplin & Barrett Limited
subsidiary ("A&B"). Substantially all of the Company's earnings through the date
of sale had been generated by this subsidiary. Primarily as a result of the
divestiture, revenues decreased 30% in the fiscal year ended June 30, 1997
("fiscal 1997") from the fiscal year ended June 30, 1996 ("fiscal 1996"). In
August 1997, the Company reinvested the proceeds from the sale of A&B, as well
as funds from additional borrowings, into the acquisition of Nutrition 21. As a
result of the revenues from Nutrition 21, revenues in the fiscal year ended June
30, 1998 ("fiscal 1998") increased 84% from fiscal 1997, more than fully
replacing the revenues formerly derived from the A&B business. It is likely that
Nutrition 21 will continue to provide a majority of the Company's revenues at
least through the next fiscal year. The Company operates Nutrition 21 as a
separate business located in San Diego, California. The Company's management
does not have significant experience in Nutrition 21's nutritional supplement
business. While certain of Nutrition 21's previous personnel have continued with
the business, the Company does not have and does not plan to obtain employment
agreements with Nutrition 21's personnel. There can be no assurance that
Nutrition 21's current personnel will remain with the Company, nor that they can
be readily replaced should they leave the Company. Furthermore, the Nutrition 21
business remains relatively new to the Company. There can be no assurance that
the Nutrition 21 business and sales of the Company's other products will
continue to generate revenues, cash flow, and earnings equal to those which
would have come from A&B or that they will be sufficient to make the Company's
operations profitable on a continuing basis. See also "Need for Additional
Funding" and "Dependence on Patents and Proprietary Technology."
History of Operating Losses
The Company has had net operating losses from its inception in 1983
through the first quarter of fiscal 1998. At June 30, 1998 the Company's
accumulated deficit was approximately $44.7 million. In fiscal 1998, operating
profit was approximately $1.5 million compared to operating losses in fiscal
1997 of approximately $16.6 million. All of the Company's revenues to date have
come from sales of non-therapeutic products, development agreements, and
research grants. The Company's current sales are from its Nutrition 21 business,
Cardia(TM) Salt, animal healthcare products, and development agreements. While
the Company is looking to expand its revenues through, among other things, the
continued acquisition of nutrition products, it is not certain that any further
acquisitions will be concluded. The Company does not expect to generate revenues
from the products it is currently developing for several years. The Company's
ability to maintain profitability depends, in part, on its ability to
successfully market Nutrition 21's
3
<PAGE>
principal products, chromium picolinate and selenium, and Cardia(TM) Salt. Other
factors important to the Company's profitability will include: (1) entering into
agreements for product development and acquisitions, (2) commercialization of
new products, (3) developing the capacity to manufacture and/or market its
products, and (4) obtaining regulatory approval, if and as required, for
products. There can be no assurance that the Company will successfully develop,
commercialize, manufacture and market its products, continue to achieve
profitability, or obtain required regulatory approvals.
Need for Additional Funding
The Company's future capital requirements will depend on many factors.
These factors include expenses for: (1) continued marketing of existing
products, (2) research and development, and (3) the acquisition of products
and/or companies. Other expenses include: (1) filing, prosecuting and enforcing
patent claims, (2) completing technological and market developments, (3) the
establishment of collaborative arrangements for manufacturing and marketing, (4)
product in-licensing or acquisition, (5) pre-clinical and clinical trials, and
(6) obtaining regulatory approvals. We expect the Company's existing resources
to be sufficient to fund the Company's foreseeable operations for the next 12
months. However, any increase in the level of acquisitions and research and
development could require additional funds. For example, the Company had to
borrow money from State Street Bank and Trust Company ("State Street") for part
of the purchase price for Nutrition 21. On December 31, 1997, the Company
entered into a Revolving Credit and Term Loan Agreement with State Street to
refinance these borrowings. The refinanced borrowings bear interest at the prime
rate plus one percent and are due June 30, 2000. The principal amount of the
Term Loan as of November 30, 1998 was approximately $2 million and is subject to
monthly payments. The revolving credit line provides up to $4,000,000 based on
certain of the Company's assets. The Company intends to seek other additional
funding through arrangements with corporate collaborators, public or private
sales of its securities, or bank financing arrangements. The Company does not
currently have any specific arrangements for additional financing and there can
be no assurance that additional funding will be available at all or on
reasonable terms. Moreover, such financings may result in substantial dilution
to the Company's existing shareholders.
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. The main regulatory agency is the U. S. Food and Drug
Administration ("FDA"). All such products are subject to regulation for quality
assurance, toxicology, safety, and efficacy. Such products must undergo thorough
preclinical and clinical evaluations of performance as to safety and efficacy
under approved protocols.
All of the products which the Company is currently selling are in
business areas which do not require FDA approval for marketing, but are subject
to monitoring by the FDA. The FDA may make inquiries or take other actions
concerning these products at some point in the future. In 1996, Nutrition 21
obtained approval from the FDA for chromium picolinate for use as a supplement
in animal feed for swine.
The Company may pursue regulatory approval for the pharmaceutical and
related uses of certain 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 United
States by the FDA, and also 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 filings inside and 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. Since the sale of A&B, the Company does not have any
pharmaceutical products which have completed this process. All of the Company's
potential pharmaceutical products are in various stages of preclinical and
clinical development. There can be no
4
<PAGE>
assurance that the Company's proposed products will prove to be safe and
effective under these regulatory procedures, or will be marketable even after
approval. The Company made its first regulatory submission with the FDA in
October 1997 for approval of an Investigational New Drug Application ("IND") for
nisin colonic-release tablets for the treatment of bacterial infections of the
colon. In November 1997, the FDA advised the Company that it could proceed under
the IND with a clinical trial.
In addition to FDA regulations, the Federal Trade Commission ("FTC")
regulates product advertising claims. From 1993 to 1996, Nutrition 21 was
subject to an FTC inquiry regarding certain advertising claims made from 1989 to
1992. In November 1996, Nutrition 21, without any admission that any laws had
been violated, entered into a settlement agreement with the FTC. This agreement
limits the Company's ability to make claims about its Nutrition 21 products
without "competent and reliable scientific evidence." The agreement also
mandated the maintenance of records relating to advertising materials and the
notification of customers and employees that certain advertising was no longer
to be used unless substantiated by competent and reliable scientific evidence.
Drug Related Risks
Adverse side effects may occur in both human and animal patients during
clinical testing of a new drug. Such side 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 in their products when
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 be very expensive and use
significant Company resources. Further, the Company may not be able to satisfy
any claim for which it may be held liable without significant loss to the
Company's resources and business.
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 be
able to attract such qualified individuals as a result of the highly competitive
demand for such persons.
Competition
The Company is evaluating certain proprietary nutrition products in the
areas of cardiovascular disease, diabetes, infectious disease, and
gastrointestinal disorders. The Company has limited experience in marketing
products and licensing others to market its products in these product areas.
There are many larger food and pharmaceutical companies with substantially
greater financial resources and/or with relevant marketing experience in this
area than the Company. These other companies could acquire or develop products
that may compete with the Company's current or future products. There can be no
assurance that the Company will be able to develop or acquire other nutrition
products 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 serious bacterial
infections. There are many other corporate and research organizations that are
developing other bacteriocins and antimicrobial peptides as drugs to treat these
and similar bacterial infections. Success by competitors 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.
5
<PAGE>
The nutrition supplement manufacturing industry is very fragmented with
many competitors and potential competitors which are larger than the Company and
which have greater financial resources than the Company. Although the Company
holds exclusive rights to the United States patent for chromium picolinate,
foreign producers compete on price with the Company in foreign markets. The
Company also faces competition on price from illegal imports into the United
States. See also "Dependence on Patents and Proprietary Technology."
Technological Obsolescence
The Company's products are being developed in areas which are
undergoing rapid technological advances. There can be no assurance that the
Company will be able to take advantage of such advances. In addition, some of
the Company's products may be rendered obsolete as a result of the successful
application of such technological advances by competitors. In the nutrition
supplement market there are numerous products for which claims are made similar
to those made by the Company for chromium picolinate. Research supporting
competitors' claims in the nutrition supplement market is not subject to
mandatory review by any government agency. Therefore, new products can appear
and be brought to market rapidly and with little advance notice. While the
Company believes that its current research provides strong substantiation for
its claims for chromium picolinate, there can be no assurance that a competitive
product will not appear or be supported by new research before the Company is
able to respond with new product development or countervailing research. See
also "Government Regulation."
Product Liability Claims and Uninsured Risks
Even if the Company is successful in developing and marketing new
products, it may be exposed to liability resulting from the use of such
products. The Company has product liability insurance for the products it
currently markets and intends to obtain product liability insurance for products
it will market in the future. There can be no assurance that the Company will
obtain additional insurance or that such insurance will be sufficient to cover
all possible liabilities.
Dependence on Others
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 blend. This
product is currently being sold in the United States by the Company as
Cardia(TM) Salt and is being sold in countries outside the United States by
Orion and its licensees. The product has significantly less sodium than regular
salt and contains potassium and magnesium, essential minerals that may help
individuals concerned about salt intake as it affects overall cardiovascular
risk. In October 1998, the Company granted American Home Products Corporation's
Whitehall-Robins Healthcare Division an exclusive license to sell Cardia(TM)
Salt in the U.S. retail market. Also in October 1998, the Company entered into
an exclusive agreement with Cultor Food Science, Inc. to market Cardia(TM) Salt
as a food ingredient to the U.S. processed food industry. The Company is
dependent on the license from Orion and the marketing efforts of American Home
Products Corporation's Whitehall-Robins Healthcare Division and Cultor Food
Science, Inc. for the success of this product.
In order to develop, test and market its products, it may be necessary
for the Company to obtain other licenses to patents or other proprietary rights
of third parties, or enter into other agreements with collaborative partners.
The Company may not be able to obtain any such licenses or agreements or their
terms may not be acceptable to the Company. If the Company 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
pharmaceutical products in accordance with Good
6
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Manufacturing Practices prescribed by the FDA and must rely on third parties to
manufacture its products. These manufacturers may not meet the Company's
requirements for quality, quantity and timeliness, and the Company may not be
able to find substitute manufacturers, if necessary.
Dependence on Patents and Proprietary Technology
The biotechnology and pharmaceutical industries place considerable
importance on patent and trade secret protection for new technologies, products
and processes. In addition, the Company relies on such intellectual property to
protect its investment in the nutrition products business. 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. The Company holds
exclusive rights to the United States patent for chromium picolinate, which
expires in August 2000. The Company also holds patents on various uses of
chromium picolinate. The Company 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. In addition to the Company'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 patent rights. The Company's reliance on patent protection
is subject to the risks in relying on patent protection described below.
The patent position of biotechnology and pharmaceutical firms is 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, competitors may independently
develop similar products and processes, duplicate 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. The negative outcome of any such litigation could adversely affect the
Company's business. The Company may also have to participate in interference
proceedings declared by the United States Patent and Trademark Office at
substantial cost in order to assert the priority of its inventions.
The Company may also be required to obtain licenses to patents or other
proprietary rights of third parties. No assurance can be given that any such
licenses would be made available on terms acceptable to the Company, if at all.
If the Company does not obtain such licenses, it could either be delayed in
marketing new products while it attempts to design around such patents or other
rights, or be unable to develop, manufacture or sell such products.
The Company also seeks to protect its proprietary technology, including
technology which may not be patented or patentable, in part by confidentiality
and inventors' rights agreements with its collaborators, advisors, employees,
and consultants. These agreements may be breached and the Company may not have
adequate remedies for any such breach. Also, the Company's trade secrets may be
disclosed in some manner not covered by these agreements.
Dependence on Limited Number of Products
Since the divestiture of A&B and the subsequent purchase of Nutrition
21, the Company's revenues have been primarily derived from the sales of two
products: chromium picolinate and selenium, which are the principal products of
the Nutrition 21 business. While the Company is working to acquire or develop
additional products, at the present time a decline in the sales of chromium
picolinate or selenium for whatever reason could have a material adverse impact
on the Company's results of operations and financial condition.
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Sales Dependent in Part on Third Party Reimbursement
If and when they become available, sales of the Company's
pharmaceutical 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. See
also "Government Regulation."
Dependence on Acquisitions
The Company intends to expand in part by seeking acquisitions. There
can be no assurance that suitable acquisition candidates can be found or
effectively integrated into the Company. Furthermore, future acquisitions may
have an adverse effect upon the Company's operating results, particularly in the
quarters immediately following the acquisition when the operations of the
acquired businesses are being integrated into the Company's operations.
Maintenance Criteria for Nasdaq Securities; Penny Stock Rules
The Common Stock is quoted on the Nasdaq National Market System. In
order to maintain such listing the Company must continue to be registered under
Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act") and
have: (1) net tangible assets of at least $4,000,000, (2) at least 750,000
shares outstanding not held by affiliates of the Company with a market value of
at least $5,000,000, (3) at least 400 shareholders, (4) a minimum bid price of
$1.00 per share, and (5) at least two market makers. The Company believes that
it currently complies with all of the requirements for continued listing. There
can be no assurance that in the future the Company will continue to meet the
requirements for continued listing on the Nasdaq National Market System. If the
Company's securities fail to maintain a Nasdaq listing, the market value of the
Common Stock would likely decline and purchasers of the Common Stock would
likely find it more difficult to sell the Common Stock, or to obtain accurate
quotations as to its market value.
In addition, if the Company fails to maintain a Nasdaq listing for its
securities, and no other exclusion from the definition of a "penny stock" under
the Exchange Act is available, then any broker engaging in a transaction in the
Company's securities would be required to provide any customer with a risk
disclosure document, disclosure of market quotations, if any, disclosure of the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market values of the Company's securities
held in the customer's accounts. The bid and offer quotation and compensation
information must be provided prior to effecting the transaction and must be
contained on the customer's confirmation. If brokers become subject to the
"penny stock" rules when engaging in transactions in the Company's securities,
they would become less willing to engage in such transactions, thereby making it
more difficult for purchasers of the Common Stock to dispose of their shares.
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 1,500 shares of its Series E Convertible Preferred
Stock which as of December 10, 1998 are convertible into 1,200,000 shares of
Common Stock (subject to anti-dilution adjustments), 528,937 Warrants issued in
connection with the Series D Preferred Stock, and 575 shares of Series F
Preferred Stock issued upon effectiveness of this registration statement. 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
8
<PAGE>
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.
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.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Offered
Shares by the Selling Security Holders. Accordingly, the Company will not
receive any proceeds from sales of the Offered Shares.
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 Before Offering (1) to be Sold (2) after Offering
- ---- -------------------- -------------- --------------
<S> <C> <C> <C>
NP Partners (3)(5) 1,366,080 316,500 1,049,580(4)
Olympus Securities, Ltd. (3)(5) 787,951 316,500 471,451(4)
Azwell, Inc. (6) 2,130,816 1,500,000 630,816
</TABLE>
- --------------------
(1) Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities and includes any securities which the person has the right
to acquire within 60 days of the date of this Prospectus through the
conversion or exercise of any security or right.
(2) Assumes that all of the Offered Shares held by the Selling Security
Holders are sold, and that the Selling Security Holders acquire no
additional shares of Common Stock before the completion of this
offering.
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<PAGE>
(3) Beneficial ownership is determined as of the date of this Prospectus
and is based upon a conversion price of the Series F Preferred Stock
equal to $1.25 per share (the "Conversion Price"). The number of shares
of Series F Preferred Stock issued to each investor is: NP Partners,
287.5 shares; and Olympus Securities, Ltd., 287.5 shares. The actual
number of shares of Common Stock issuable upon conversion of the Series
F Preferred Stock is that number of shares of Common Stock equal to the
quotient obtained by dividing (i) the aggregate stated value of the
Series F Preferred Stock ($1,000 per share), plus dividends accrued at
a rate of 10% per annum assuming that no dividends are paid in cash,
divided by (ii) the Conversion Price. No holder of the Series F
Preferred Stock is entitled to convert or exercise such securities to
the extent that the shares to be received by such holders upon such
conversion or exercises would cause such holders in the aggregate to
beneficially own more than 10.0% of the outstanding Common Stock of the
Company following such conversion during the 60-day period ending on
and including the date of such conversion. After completion of the sale
of all Offered Shares, NP Partners would be deemed to be beneficial
owner of approximately 3.6% of the Company's outstanding Common Stock
and Olympus Securities, Ltd. would be deemed to be beneficial owner of
approximately 1.6% of the Company's outstanding Common Stock.
(4) Gives effect to the conversion of all shares of Series F Preferred
Stock and the sale of all of the shares of Common Stock issued on such
conversion.
(5) Citadel Investment Group, L.L.C. is the trading manager of each of NP
Partners and Olympus Securities, Ltd. (the "Citadel Entities") and
consequently has voting control and investment discretion over
securities held by the Citadel Entities. The ownership for each of the
Citadel Entities does not include ownership information for the other
Citadel Entities. Citadel Investment Group, L.L.C. and each of the
Citadel Entities disclaims beneficial ownership of the shares of Common
Stock held by the other Citadel Entities.
(6) Consists of shares of Common Stock issuable upon repayment of a
promissory note. After completion of the sale of all Offered Shares,
Azwell, Inc. would be deemed to be beneficial owner of approximately
2.1% of the Company's outstanding Common Stock.
PLAN OF DISTRIBUTION
The Common Stock offered by this Registration Statement is being
offered on behalf of the Selling Security Holders. Such Common Stock may be sold
or distributed from time to time by the Selling Security Holders, or by donees
or transferees of, or other successors in interest to, the Selling Security
Holders, directly to one or more purchasers or through brokers, dealers or
underwriters who may act solely as agents or may acquire such Common Stock as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices, or at fixed prices,
which may be changed. The sale of the Common Stock offered hereby may be
effected hereby may be effected in one or more of the following methods: (i)
ordinary brokers' transactions; (ii) transactions involving cross or block
trades or otherwise on the Nasdaq National Market; (iii) purchases by brokers,
dealers or underwriters as principal and resale by such purchasers for their own
accounts 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, swaps or other derivatives (whether exchange-listed or otherwise);
(vii) in privately negotiated transactions; (viii) to cover short sales; or (ix)
any combination of the foregoing.
From time to time, one or more of the Selling Security Holders may
pledge, hypothecate or grant a security interest in some or all of the Offered
Shares owned by them, and the pledgees, secured parties or persons to whom such
securities have been hypothecated shall, upon foreclosure in the event of
default, be deemed to be Selling Security Holders hereunder. The number of
Selling Security Holder's Offered Shares beneficially owned by those Selling
Security Holders who so transfer, pledge, donate or assign Selling Security
Holders' Offered Shares will
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<PAGE>
decrease as and when they take such actions. The plan of distribution for
Selling Security Holders' Offered Shares sold hereunder will otherwise remain
unchanged, except that the transferees, pledgees, donees or other successors
will be Selling Security Holders hereunder. In addition, a Selling Security
Holder may, from time to time, sell short the Common Stock of the Company, and
in such instances, this Prospectus may be delivered in connection with such
short sales and the Offered Shares offered hereby may be used to cover such
short sales.
A Selling Security Holder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the Common
Stock in the course of hedging the positions they assume with such Selling
Security Holder, including, without limitation, in connection with distributions
of the Common Stock by such broker-dealers. A Selling Security Holder may also
enter into option or other transactions with broker-dealers that involve the
delivery of the Offered Shares to the broker-dealers, who may then resell or
otherwise transfer such Offered Shares. A Selling Security Holder may also loan
or pledge the Offered Shares to a broker-dealer and the broker-dealer may sell
the Offered Shares so loaned or upon a default may sell or otherwise transfer
the pledged Offered Shares.
Brokers, dealers, underwriters or agents participating in the
distribution of the Offered Shares as agents may receive compensation in the
form of commissions, discounts or concessions from the Selling Security Holders
and/or purchasers of the Common Stock for whom such broker-dealers may act as
agent, or to whom they may sell as principal, or both (which compensation as to
a particular broker-dealer may be less than or in excess of customary
commissions). The Selling Security Holders and any broker-dealers who act in
connection with the sale of the Offered Shares hereunder may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and any commissions they receive and proceeds of any sale of
the Offered Shares may be deemed to be underwriting discounts and commissions
under the Securities Act. Neither the Company nor any Selling Security Holders
can presently estimate the amount of such compensation. The Company knows of no
existing arrangements between any Selling Security Holders, any other
stockholder, broker, dealer, underwriter or agent relating to the sale or
distribution of the Offered Shares.
The Company will pay substantially all of the expenses incident to the
registration, offering and sale of the Offered Shares to the public other than
commissions or discounts of underwriters, broker-dealers or agents. The Company
has also agreed to indemnify the Selling Security Holders and certain related
persons against certain liabilities, including liabilities under the Securities
Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company, the Company has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefore, unenforceable.
The Company has advised the Selling Security Holders that during such
time as they may be engaged in a distribution of the Offered Shares included
herein they are required to comply with Regulation M promulgated under the
Exchange Act. With certain exceptions, Regulation M precludes any Selling
Security Holder, any affiliated purchasers, and any broker-dealer or other
person who participates in such distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase any security which is the
subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security. All of
the foregoing may affect the marketability of the Offered Shares.
This offering will terminate on the earlier of (a) the date on which
the shares are eligible for resale without restrictions pursuant to Rule 144(k)
under the Securities Act or (b) the date on which all shares offered hereby have
been sold by the Selling Security Holders.
11
<PAGE>
EXPERTS
The consolidated financial statements of AMBI Inc. and subsidiary as of
June 30, 1998 and 1997, and for each of the years in the three-year period ended
June 30, 1998, 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 29,775 shares of the Common Stock of the
Company.
MATERIAL CHANGES
There have been no material developments since the filing on November
16, 1998 of the Company's report on Form 10-Q for the quarterly period ended
September 30, 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of June 30, 1998 Burns Philp & Company Limited ("BP") owned
7,763,837 shares of Common Stock, and continues such Common Stock ownership as
of the date hereof.
On December 12, 1996, the Company completed the sale of its UK-based
subsidiary, Aplin & Barrett Limited ("A&B") to BP in accordance with the terms
of a Share Purchase Agreement. As part of the transaction, BP has provided the
Company with a revolving line of credit of up to $2.5 million. Any borrowings
under this line of credit can be forgiven under certain circumstances. As of the
date of filing this Prospectus, no amount has been drawn under this line of
credit.
In connection with the sale of A&B, the Company and A&B entered into
two License Agreements. Pursuant to the first License Agreement, the Company is
exclusively licensed by A&B for the use of nisin generally in pharmaceutical
products and animal healthcare products. Pursuant to the second License
Agreement, A&B is exclusively licensed by the Company generally for the use of
nisin as a food preservative and for food preservation. In addition, the Company
entered into a Supply Agreement with A&B pursuant to which A&B was required to
sell nisin to the Company while the Company was establishing its own source of
supply. The Company established its own source of supply for nisin, and sent
notice of termination of the Supply Agreement effective September 26, 1997.
The Company and BP also entered into an Investors' Rights Agreement
pursuant to which BP agreed until December 11, 1998, not to acquire, directly or
indirectly, the Company's securities, and to refrain from selling the Company's
Common Stock. So long as BP owns at least 10% of the Company's outstanding
Common Stock, BP will vote its shares in favor of Fredric D. Price and one
nominee of Fredric D. Price for election to the Company's Board. So long as BP
owns at least 20% of the Company's outstanding Common Stock, BP is entitled to
nominate one member for election to the Company's Board.
As of the date of sale, two of the Company's Board members were
representatives of BP. BP's Board representatives did not participate in the
vote of the Company's Board which approved the sale of A&B to BP. As a result of
the sale, BP's representation on the Company's Board of Directors was reduced
from two members to one member. Currently, BP has not nominated a member for
election to the Company's Board. The amount of consideration for the sale was
arrived at through arms-length negotiation and a fairness opinion was obtained.
12
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been filed with the SEC by the
Company are incorporated herein by reference and made a part hereof. The SEC
file number for all documents which are incorporated by reference is 1-12106.
(1) Annual Report on Form 10-K/A for the fiscal year ended June 30,
1998.
(2) Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1998.
(3) Current Report on Form 8-K filed December 11, 1998.
(4) 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 SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act,
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., 4 Manhattanville Road, Purchase,
New York 10577.
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.
13
<PAGE>
AMBI INC.
2,133,000 Shares of Common Stock
----------------------
PROSPECTUS
----------------------
December ___, 1998
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document.
TABLE OF CONTENTS
Available Information .......... 2
The Company .................... 3
Risk Factors ................... 3
Use of Proceeds ................ 9
Selling Security Holders ....... 9
Plan of Distribution ........... 10
Experts ........................ 12
Legal Matters .................. 12
Material Changes ............... 12
Certain Relationships .......... 12
Incorporation by Reference ..... 13
Indemnification ................ 13
14
<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.......... $ 630
Nasdaq National Market listing fee.............. 17,500
Legal Fees and expenses......................... 10,000
Accountant's fees and expenses.................. 5,000
Miscellaneous................................... 1,870
-------
Total......................... $35,000
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
15
<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(a) Exchange Agreement dated as of November 24, 1998, by and among the
Company and certain investors.*
4(b) Certificate of Amendment of the Certificate of Incorporation of the
Company creating Series F Convertible Preferred Stock.*
4(c) Registration Rights Agreement dated as of November 24, 1998, by and
among the Company and certain investors.*
(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
- -------------------------------------
* Incorporated by reference from the Company's Current Report on Form 8-K filed
December 11, 1998.
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
16
<PAGE>
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.
(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.
17
<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 Purchase, New York on
the 30th day of December 1998.
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/
- ---------------------------
Robert E. Flynn Chairman of the Board December 30, 1998
/s/
- ---------------------------
Fredric D. Price President, CEO and Director December 30, 1998
/s/
- ---------------------------
Gerald A. Shapiro CFO (Principal Accounting and
Financial Officer) December 30, 1998
/s/
- ---------------------------
P. George Benson Director December 30, 1998
/s/
- ---------------------------
Audrey T. Cross Director December 30, 1998
/s/
- ---------------------------
Marvin Moser Director December 30, 1998
/s/
- ---------------------------
Robert E. Pollack Director December 30, 1998
</TABLE>
18
<PAGE>
Exhibits 5 and 23.1
LAW OFFICES OF OSCAR FOLGER
521 Fifth Avenue
New York, New York 10175
December 30, 1998
AMBI Inc.
4 Manhattanville Road
Purchase, New York 10577
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 2,133,000
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 issued or to be issued and sold or to be sold have been duly
authorized and are, or, 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 Act 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,
/s/ Oscar D. Folger
24
<PAGE>
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
Stamford, Connecticut
December 24, 1998
