September 11, 1996
VIA ELECTRONIC TRANSMISSION
Mr. Evan Callio
Securities & Exchange Commission
Division of Corporation Finance
450 Fifth Avenue, N.W.
Washington, D.C. 20549
RE: Synthetech, Inc. Registration Statement on Form S-3
File No. 333-8203
Dear Mr. Callio:
Pursuant to Rule 461 of the Securities Act of 1933, as amended, Synthetech,
Inc. hereby requests that the effective date of the above-captioned
Registration Statement be accelerated so that the Registration Statement
will become effective at 9:00 a.m. Eastern Standard Time on Thursday,
September 12, 1996, or as soon thereafter as practicable.
SYNTHETECH, INC.
BY:/s/ Charles B. Williams
Charles B. Williams
Vice President of Finance
and Administration, Chief
Financial Officer
<PAGE>
September 11, 1996
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Avenue, N.W.
Washington, D.C. 20549
RE: Synthetech, Inc.
Amendment No. 1 to Registration Statement on Form S-3
(File No. 333-8203)
Ladies and Gentlemen:
Synthetech, Inc. an Oregon corporation (the "Company"), in connection with
the proposed offering of 850,000 shares of the Company's common stock, hereby
attaches for filing pursuant to the requirements of the Securities Act of
1933, as amended, and the applicable rules and regulations thereunder, a copy
of Amendment No. 1 to the Registration Statement on Form S-3, marked to
indicate changes between the text thereof and of the Registration Statement
filed with the Securities and Exchange Commission on July 16, 1996.
If you have comments or require any further information with respect to this
filing, please call the undersigned (541-967-6575).
Sincerely yours,
/s/ Charles B. Williams
Charles B. Williams
Vice President of Finance
and Administration, Chief
Financial Officer
<PAGE>
As filed with the Securities and Exchange Commission on September 12, 1996
Registration No. 333-8203
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SYNTHETECH, INC.
(Exact name of Registrant as specified in its charter)
Oregon 84-0845771
(State of (I.R.S. Employer
Incorporation) Identification
No.)
1290 Industrial Way
Albany, Oregon 97321
(541) 967-6575
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive
Offices)
M. Sreenivasan
President and Chief Executive Officer
SYNTHETECH, INC.
1290 Industrial Way
Albany, Oregon 97321
(541) 967-6575
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
Cynthia Clarfield Hess, Esq. David R. Clarke, Esq.
Sehar S. Ahmad, Esq. VENTURE COUNSEL,
PERKINS COIE P.C.
1211 S.W. Fifth Avenue, Suite 250
Suite 1500 1230 S.W. First Avenue
Portland, OR 97204 Portland, Oregon 97204
(503) 727-2000 (503) 225-9000
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
Registration Statement.
If any 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
CALCULATION OF REGISTRATION FEE
Title of Each Amount to Proposed Proposed Amount
Class be Maximum Maximum of
of Securities to Registered Offering Aggregate Registration
be Registered Price Per Offering
Share(1) Price(1) Fee(2)
Common Stock, 750,000 $8.00 $6,000,000 $2,069.00
$.001 par value
Common Stock, 100,000 $2.22 $222,000 $76.55
$.001 par value
Total 850,000 - $6,222,000 $2,145.55
(1) Estimated solely for the purpose of calculating the
registration fee under Rule 457. The offering price has been
estimated and the registration fee has been computed pursuant to
Rule 457(c) based on (i) 750,000 Selling Shareholder shares at an
estimated price per share of $8.00 based on the average of the bid
and asked price quoted for the Common Stock in the over-the-counter
market on September 9, 1996 as reported on the Nasdaq SmallCap Market
and (ii) 100,000 shares being issued pursuant to the exercise of warrants
at an exercise price of $2.22.
(2) A filing fee of $2,198.28 has previously been paid.
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, as amended, or until this
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
850,000 Shares
SYNTHETECH, INC.
Common Stock
The shares of common stock, $.001 par value per share
offered hereby (the "Shares") are shares of Synthetech,Inc.,
an Oregon corporation (the "Company"), 750,000 of which may be
sold from time to time by a shareholder of the Company (the
"Selling Shareholder") and 100,000 of which may be issued and sold
from time to time by the Company upon exercise of certain warrants
(the "Warrants") to purchase Common Stock. See "Selling Shareholder"
and "Warrants." The Company will not receive any part of the
proceeds from the sale of the Shares being sold by the Selling
Shareholder in this offering (the "Offering"). The Company will
receive proceeds from the exercise of the Warrants equal to the
exercise price of $2.22 per share.
The Common Stock was traded over-the-counter on the Nasdaq
Small Cap Market under the symbol "NZYM." On September 11,
1996, the Common Stock was approved for trading on the Nasdaq
National Market under the symbol "NZYM". On September 9, 1996, the
average of the bid and asked price for the Common Stock was
$8.00 per share.
See "Risk Factors" beginning on page 3 of this Prospectus
for a discussion of certain factors that should be considered
by prospective purchasers of the Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Price to Underwriting Proceeds Proceeds to
Public Discounts to Selling
and Company Shareholder(3)
Commissions(1)
Per Share being sold $8.00 $-- $0 $8.00
by Selling Shareholder(1)
Per Share being sold $2.22 $-- $2.22 $0
by the Company(2)
Total $6,222,000 $-- $222,000 $6,000,000
</TABLE>
(1)The Selling Shareholder may sell the Shares to or through dealers
at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The
above computations are based on the average of the bid and asked
price of the Common Stock as of September 9, 1996 and do not
necessarily reflect the prices of shares to the public on the
dates the transactions are actually effected.
(2)Based upon the exercise price of the Warrants of $2.22.
(3)Expenses of this Offering, estimated at $45,000, are payable by
the Company.
The date of this Prospectus is September 12, 1996
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with the Securities and Exchange
Commission (the "Commission"), Washington, D.C., with respect to the
Shares offered hereby. The Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits
thereto. For further information with respect to the Company and the
Shares, reference is made to the Registration Statement and the
exhibits thereto. Statements made in this Prospectus as to the
contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all
respects by such reference.
The Registration Statement is available for review at the
Commission's offices in Washington, D.C. All or part of the
Registration Statement may be inspected and copied, upon payment of
the prescribed fees, at the Public Reference Section of the
Commission, 450 Fifth Street N.W., Judiciary Plaza, Washington, D.C.
20549-1004.
In addition, the Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Commission. Such reports,
proxy statements and other information can be inspected and copied
at, and copies of such material obtained at prescribed rates from,
the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004
and at the Commission's regional offices located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
A copy of the Company's 1996 Annual Report containing financial
statements audited by the Company's independent public accountants
was first mailed to the Shareholders on June 19, 1996. The Company
intends to continue to furnish Annual Reports to its Shareholders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the year
ended March 31, 1996, including financial statements
incorporated by reference, as amended by Form 10-KSB/A as
filed with the Commission on June 21, 1996.
2. The Company's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1996, including financial statements incorporated
by reference.
3. The description of the Company's Common Stock contained in
the Registration Statement on Form 8-A filed with the
Commission on November 8, 1984 under Section 12(g) of the
Exchange Act.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this Offering shall be
deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents (such
documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents").
<PAGE>
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Prospectus
and the Registration Statement of which it is a part to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document or in an accompanying prospectus supplement
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or such
Registration Statement.
The Company will provide without charge to each person to whom a
copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the Incorporated
Documents, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference therein.
Requests should be directed to Charles B. Williams, Vice President of
Administration and Finance, Chief Financial Officer, Secretary and
Treasurer, at the Company's principal executive offices, Synthetech,
Inc., 1290 Industrial Way, Albany, Oregon 97321, telephone (541) 967-
6575. The information relating to the Company contained in this
Prospectus does not purport to be comprehensive and should be read
together with the information contained in the Incorporated
Documents.
RISK FACTORS
An investment in the shares of Common Stock offered hereby involves
a high degree of risk. This Prospectus contains, in addition to historical
information, forward-looking statements that involve risks and uncertainties.
The Company's actual results could differ materially from the results
discussed in the forward-looking statements. Prospective investors should
consider the following factors, among others, in making a decision
concerning purchase of the shares of Common Stock offered hereby:
Uncertain Market for Products and Potential Quarterly
Fluctuations. The market for peptide building blocks is driven by
the market for the peptide-based drugs into which they are
incorporated. The drug development process is dictated by the
marketplace, drug companies and the regulatory environment. The
Company has no control over the pace of peptide-based drug
development, which drugs get selected for clinical trials, which
drugs are approved by the Food and Drug Administration ("FDA"), and,
even if approved, the ultimate potential of such drugs. Currently,
most of the Company's products are used in clinical-stage drugs which
are subject to a significant risk of suspension or early cancellation
and only a very small percentage of which are ultimately approved for
market use. Due to the wide range of drugs under development,
sizable fluctuations in orders, and the unpredictability of order or
reorder cycles for products, the Company does not have a stable
baseload of demand for its products and cannot estimate the potential
market for its products. The Company's customers vary substantially
from year to year and the Company currently cannot rely on any one
customer as a constant source of revenue. For the foregoing reasons,
the Company has experienced in the past, and is likely to experience
in the future, significant fluctuations in its quarterly results.
Due to the small number of approved peptide-based drugs, there can be
no assurance that a market for peptide building blocks will continue
to exist.
Industry Cost Factors. The market for peptide building blocks
is dependent on the market for pharmaceuticals products. The levels
of revenues and profitability of pharmaceutical companies may be
affected by the continuing efforts of governmental and third party
payors to contain or reduce the cost of health care through various
means. For example, in certain foreign markets, pricing or
profitability of prescription pharmaceuticals is subject to
government control. In the United States, there have been, and the
Company expects that there will continue to be, a number of federal
and state proposals to implement similar government controls. In
addition, in both the United States and elsewhere, sales of
prescription pharmaceuticals are dependent in part on the
availability of reimbursement to the consumer from third party payors
such as government and private insurance plans. Third party payors
are increasingly challenging the prices charged for medical products
and services. There can be no assurance that peptide-based drugs
<PAGE>
will be considered cost effective, and that reimbursement will be
available or sufficient to allow peptide-based drugs to be sold on a
profitable basis. In addition, as cost pressures in the
pharmaceutical industry have tightened, the cancellation rate for
drug development programs has increased. Because a majority of the
Company's revenues historically have come from peptide building
blocks used in drug development programs, such cancellations may have
a significant impact on the Company's business.
<PAGE>
Regulatory Matters. The Company is subject to a variety of
federal, state and local laws, rules and regulations related to the
discharge or disposal of toxic, volatile or other hazardous
chemicals. Although the Company believes that it is in compliance
with these laws, rules and regulations in all material respects, and
to date has not been required to take any action to correct any
noncompliance, the failure to comply with present or future
regulations could result in fines being imposed on the Company,
suspension of production or cessation of operations. Third parties
may also have the right to sue to enforce compliance. Moreover, it
is possible that increasingly strict requirements imposed by
environmental laws and enforcement policies thereunder could require
the Company to make significant capital expenditures. The operation
of a chemical manufacturing plant entails the inherent risk of
environmental damage or personal injury due to the handling of
potentially harmful substances, and there can be no assurance that
material costs and liabilities will not be incurred in the future
because of an accident or other event resulting in personal injury or
unauthorized release of such substances to the environment. In
addition, the Company generates hazardous materials and other wastes
which are disposed at various offsite facilities. The Company may be
liable, irrespective of fault, for material cleanup costs or other
liabilities incurred at these disposal facilities in the event of a
release of hazardous substances by such facilities into the
environment. The Company has obtained environmental risk insurance.
Potential Regulation. The peptide building blocks produced by
the Company are intermediate ingredients which are then processed by
the companies to which they are sold, and are therefore currently not
subject to the requirements of the FDA. The Company's customers do,
however, typically impose inspection and quality assurance programs
on the Company. These programs involve materials handling, record
keeping and other requirements. As many of the Company's customers
are requiring increased processing by the Company of its products,
the Company expects these compliance programs to become more
extensive. The Company may not be able to comply with the applicable
requirements or such requirements may require the expenditure of
significant capital.
Product Liability. Use of the Company's products in
pharmaceuticals and the subsequent testing, marketing and sale of
such pharmaceuticals involves an inherent risk of product liability.
In addition, research and development activities in amino acid
technology, and the production of fine chemicals (including organic
chemicals) may expose workers engaged in performing duties related to
such activities to health hazards. There can be no assurance that
claims for product liability will not be asserted against the Company
or that the Company would be able to successfully defend any claim
that may be asserted. A product liability claim could have a
material adverse effect on the business and/or financial condition of
the Company.
Competition. The Company does not have a significant amount of
direct competition because peptide-based pharmaceuticals,
particularly those which utilize synthetic amino acids, are
relatively new and the market for peptide building blocks is still
very small. As the market continues to grow with multi-ton order
sizes becoming more prevalent, the Company has begun to see more
competition. Current competition in the multi-kilo or smaller
quantities of natural amino acid based peptide building blocks comes
primarily from several European fine chemical companies. Multi-ton
order sizes of these natural peptide building blocks have begun to
attract a wider group of domestic and international chemical
companies. In the area of synthetic amino acid based peptide
building blocks, the Company has competition on a selective product
basis from fine chemical producers in Europe and Japan.
<PAGE>
Competition also increases for supplying peptide building blocks
for drug development programs that reach late clinical trials and
move into an approved status as a result of increased quantities
typically required at these stages and pharmaceutical company
requirements to have second sources of material available. The
Company's competitors have technical, financial, selling and other
resources available to them that is significantly greater than those
available to the Company.
Risks of Technological Change. The market for the Company's
products is characterized by rapid changes in both product and
process technologies. The Company's future results of operations
will depend upon its ability to improve and market its existing
products and to successfully develop, manufacture and market new
products. There can be no assurance that the Company will be able to
continue to improve and market its existing products or develop and
market new products, or that technological developments will not
cause the Company's products or technology to become obsolete or
noncompetitive.
Manufacturing Capacity. The Company currently manufactures
peptide building blocks. As a manufacturer, the Company will
continually face risks regarding the availability and costs of raw
materials and labor, the potential need for additional capital
equipment, increased maintenance costs, plant and equipment
obsolescence and quality control. Because the Company is facing
manufacturing capacity constraints in its existing facility, the
Company is in the process of constructing an additional plant at its
Albany, Oregon location to increase production capacity. There can
be no assurance that completion of the new facility will not be
subject to delays and that the existing facility will have sufficient
capacity to meet the demand for the Company's products, particularly
in the event that several of the peptide-based drugs for which the
Company supplies peptide building blocks simultaneously become
commercially successful. A disruption in the Company's production or
distribution could have a material adverse effect on the Company's
financial results.
Uncertain Ability to Manage Growth. The Company anticipates
that in order to remain successful in its industry, the Company will
be required to increase its production and employee base. The
Company anticipates these increases may place significant demands on
the Company's management, working capital and financial and
management control systems. The Company may not be able to meet the
demands of future growth. Any inadequacies in these areas could have
a material adverse effect on the Company's business, financial
condition and results of operations.
Dependence on Key Personnel. The Company is highly dependent on
the principal members of its senior management and key scientific and
technical personnel. The Company's success is also dependent upon
its ability to attract and retain additional qualified scientific,
technical and managerial personnel. Significant competition exists
for such personnel, and there can be no assurance that the Company
will retain its key employees or that it will be able to attract and
retain such other highly-qualified personnel as may be required in
the future. The Company does not have employment agreements with any
of its personnel or key man life insurance on the lives of any of its
personnel. The inability of the Company to successfully hire, train,
and retain qualified personnel could have an adverse effect on the
Company.
Risks of International Business. Sales to customers outside the
United States accounted for approximately 21% of the Company's net
sales during the year ended March 31, 1996. The Company expects that
international sales will continue to account for a significant
percentage of net sales. The Company's business is and will be
subject to the risks generally associated with doing business
internationally, including changes in demand resulting from
fluctuations in exchange rates, foreign governmental regulation and
changes in economic conditions. These factors, among others, could
influence the Company's ability to sell its products in international
markets. In addition, the Company's business is subject to the risks
associated with legislation and regulation relating to imports,
including quotas, duties or taxes and other charges, restrictions and
retaliatory actions on imports to other countries in which the
Company's products may be sold or manufactured.
<PAGE>
Absence of Dividends. The Company has not paid any dividends on
its Common Stock since its inception and does not anticipate paying
any dividends in the foreseeable future. Earnings of the Company, if
any, are expected to be used to finance the development and expansion
of the Company's business. Any future decision with respect to
dividends will depend on future earnings, future capital needs and
the Company's operating and financial condition, among other factors.
See "Description of Securities--Common Stock."
Volatility of Stock Price. There has been significant
volatility in the market price of the Company's common stock.
Between July 1, 1995 and June 30, 1996, the bid price of the
Company's common stock ranged from $3.22 per share to $10.75 per
share. The Common Stock is currently traded on the Nasdaq Small Cap
Market. Application has been made to have the Common Stock approved
for trading on the Nasdaq National Market, which market has
experienced, and is likely to experience in the future, significant
price and volume fluctuations that could adversely affect the market
price of the Common Stock without regard to the Company's
performance. The Company believes factors such as fluctuations in
financial results and developments in its industry could contribute
to the volatility of the price of Common Stock. These factors, as
well as general economic conditions such as recessions or high
interest rates, may adversely affect the market price of the Common
Stock.
Exercise of Warrants and Options; Potential Adverse Impact of
Shares Eligible for Future Sales. As of June 30, 1996, 1,044,260
shares of Common Stock were subject to outstanding stock options
under the Company's Stock Option Plan at a weighted average exercise
price of $3.57 per share and 25,000 shares were issuable upon
exercise of outstanding warrants at a weighted average exercise price
of $1.81 per share. While outstanding warrants and options are
exercisable, the holders thereof have the opportunity to profit from
a rise in the market price of the common stock. The Company may find
it more difficult to raise additional equity capital while the
warrants and options are outstanding. At any time when the holders
might be expected to exercise their warrants and options, the Company
would probably be able to obtain additional equity capital on terms
more favorable than those provided in the warrants and options being
exercised. Holders of warrants and options do not have any of the
rights or privileges of stockholders of the Company prior to exercise
of the warrants and options.
Sales of substantial amounts of the Company's common stock in
the public market by existing shareholders could adversely affect the
price of the common stock. In addition to the 850,000 shares of
common stock offered hereby, 8,417,791 shares are freely tradable
under the federal securities laws to the extent they are not held by
affiliates of the Company. At June 30, 1996, 4,222,865 shares were
eligible for resale under Rule 144. In general, under Rule 144 as
currently in effect, any person (or persons whose shares are
aggregated) who has beneficially owned restricted securities for at
least two years is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (i) 1% of the
then outstanding shares of the issuer's common stock and (ii) the
average weekly trading volume during the four calendar weeks
preceding such sale, provided that certain public information about
the issuer as required by Rule 144 is then available and the seller
complies with certain other requirements. A person who is not an
affiliate, has not been an affiliate within three months prior to
sale, and has beneficially owned the restricted securities for at
least three years is entitled to sell such shares under Rule 144(k)
without regard to any of the limitations described above.
<PAGE>
SELLING SHAREHOLDER
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Percentage of Outstanding
Selling Shares Shares Before After
Shareholder Beneficially Registered Sales Sales
Owned For Sale
JB Partners 2,000,000 750,000 14.8% 9.3%
</TABLE>
______________
*Less than 1%.
Pursuant to a Shareholders Agreement among JB Partners, a New
York limited partnership ("JB"), and the then current directors and
officers of the Company who held shares of the Company's Common
Stock, such shareholders have agreed to vote their shares in favor of
the election to the Board of Directors of a person nominated by JB.
Such agreement shall terminate on the earlier to occur of the
following: (i) JB's ownership of common stock is reduced to less
than 500,000 shares, (ii) the effectiveness of the registration
statement pursuant to JB's demand registration rights set forth in
its Stock and Warrant Purchase Agreement with the Company, as
amended, (iii) any merger, consolidation or reorganization of the
Company in which more than 50% of the voting power of the Company is
transferred or (iv) March 31, 1998.
THE WARRANTS
A total of 100,000 shares of Common Stock may be sold pursuant
to this Prospectus upon exercise of the Warrants. The Warrants were
issued by the Company on December 31, 1991 at an exercise price of
$2.22 per share and will expire on December 31, 1996.
DESCRIPTION OF SECURITIES
Common Stock
The authorized capital stock of the Company consists of
100,000,000 shares of common stock, $.001 par value per share. As of
May 30, 1996, there were 13,510,736 shares of common stock
outstanding. All of the outstanding shares of Common Stock are fully
paid and nonassessable.
Holders of Common Stock are entitled to receive dividends as may
from time to time be declared by the Board of Directors out of funds
legally available therefor and to one vote per share on all matters
on which the holders of Common Stock are entitled to vote. The
current policy of the Company is to retain earnings to provide funds
for the operation and expansion of its business. The Company has
never paid any cash dividends, and the Board of Directors does not
anticipate paying cash dividends in the foreseeable future. See
"Risk Factors--Absence of Dividends." Holders of common stock do not
<PAGE>
have any cumulative voting rights or conversion, pre-emptive,
redemption or sinking fund rights. In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are
entitled to share equally and ratably in the Company's assets, if
any, remaining after the payment of all liabilities of the Company.
The holders of Common Stock are entitled to one vote for each
share held on all matters submitted to the shareholders.
<PAGE>
Indemnification of Directors
Article 7 of the Company's Articles provides that the Company is
required to indemnify current or former directors of the Company to
the fullest extent permitted by the Oregon Business Corporation Act
(the "Act").
The Company has entered into Indemnification Agreements with
each current and former officer and director documenting and
detailing such indemnification rights. The Company expects to enter
into similar agreements with future officers and directors. The
Company has obtained insurance for the protection of its directors
and officers against any liability asserted against them in their
official capacities, including coverage under the Securities Act.
The rights of indemnification under the Articles and the Act are not
exclusive of any other rights of indemnification to which the persons
indemnified may be entitled under any bylaw, agreement, vote of
shareholders or directors or otherwise. 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, the Company has been informed that in the
opinion of the Securities and Exchange Commission (the "Commission")
such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Oregon Control Share and Business Combination Statutes
The Company is subject to certain provisions of the Act that in
certain circumstances restrict the ability of significant
shareholders from exercising voting rights (the "Control Share Act").
The Control Share Act generally provides that a person (the
"Acquiring Person") who acquires voting stock of an Oregon
corporation in a transaction that results in the Acquiring Person's
holding more than 20%, 33 1/3% or 50% of the total voting power of
the corporation (a "Control Share Acquisition") cannot vote the
shares the Acquiring Person acquires in the Control Share Acquisition
("control shares") unless voting rights are accorded to the control
shares by (i) a majority of each voting group entitled to vote and
(ii) the holders of a majority of the outstanding voting shares,
excluding the control shares held by the Acquiring Person and shares
held by the corporation's officers and inside directors. The term
"Acquiring Person" is broadly defined to include persons acting as a
group.
The Acquiring Person may, but is not required to, submit to the
corporation a statement setting forth certain information about the
Acquiring Person and its plans with respect to the corporation. The
statement may also request that the corporation call a special
meeting of shareholders to determine whether voting rights will be
accorded to the control shares. If the Acquiring Person does not
request a special meeting of shareholders, the issue of the control
shares' voting rights will be considered at the next annual or
special meeting of shareholders. If the Acquiring Person's control
shares are accorded voting rights and represent a majority of all
voting power, shareholders who do not vote in favor of voting rights
for the control shares will have the right to receive the appraised
"fair value" of their shares, which may not be less than the highest
price paid per share by the Acquiring Person for the control shares.
The Company is subject to certain provisions of the Act that
govern business combinations between corporations and interested
shareholders, which generally provides that if a person or entity
acquires 15% or more of the voting stock of an Oregon corporation (an
"Interested Shareholder"), the corporation and the Interested
Shareholder, or any affiliated entity of the Interested Shareholder,
<PAGE>
may not engage in certain business combination transactions for three
years following the date the person became an Interested Shareholder.
Business combination transactions for this purpose include (a) a
merger or plan of share exchange, (b) any sale, lease, mortgage or
other disposition of 10% or more of the assets of the corporation and
(c) certain transactions that result in the issuance of capital stock
of the corporation to the Interested Shareholder. These restrictions
do not apply if (i) the Interested Shareholder, as a result of the
transaction in which such person became an Interested Shareholder,
owns at least 85% of the outstanding voting stock of the corporation
(disregarding shares owned by directors who are also officers and
<PAGE>
certain employee benefit plans), (ii) the board of directors approves
the share acquisition or business combination before the Interested
Shareholder acquired 15% or more of the corporation's outstanding
voting stock or (iii) the board of directors and the holders of at
least two-thirds of the outstanding voting stock of the corporation
(disregarding shares owned by the Interested Shareholder) approve the
transaction after the Interested Shareholder acquires 15% or more of
the corporation's voting stock.
Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock is
American Securities Transfer and Trust, Inc., Denver, Colorado.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling
Shareholders, or by pledgees, donees, transferees or other successors
in interest. Such sales may be made in the over-the-counter market
or otherwise at prices and at terms then prevailing or at prices
related to the then current market price, or in negotiated
transactions. The Shares may be sold by one or more of the
following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction; (b) a purchase by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this
Prospectus; and (c) ordinary brokerage transactions and transactions
in which the broker solicits purchasers. In effecting sales, brokers
or dealers engaged by the Selling Shareholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive
commissions or discounts from the Selling Shareholders in amounts to
be negotiated immediately prior to the sale. Such brokers or dealers
and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection
with such sales. In addition, any Shares covered by this Prospectus
that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this Prospectus.
Under agreements that may be entered into by the Selling
Shareholders, dealers who participate in the distribution of the
Shares may be entitled to indemnification by the Selling Shareholders
against certain liabilities, including liabilities under the
Securities Act.
Certain of the dealers may be customers of, including borrowers
from, engage in transactions with, and perform services for, the
Company, a Selling Shareholder or one or more of their affiliates in
the ordinary course of business.
All of the Shares to be issued upon the exercise of the Warrants
are to be offered for the account of the Company. The Company will not
pay any sales commissions or other seller's compensation in connection
with the exercise of the Warrants. Shares issued upon the exercise of
the Warrants will be freely tradable by the holders thereof, subject to
compliance with applicable state securities laws and except for such shares
received by persons who may be deemed to be "affiliates" of the Company
(within the meaning of Rule 144). Persons who are deemed to be affiliates
of the Company within the meaning of Rule 144 may not publicly offer or
sell such Shares received upon exercise of the Warrants except pursuant
to an effective registration statement under the Securities Act or
pursuant to Rule 144 (without regard to the applicable holding period
<PAGE>
provided thereunder). The Company has not been advised when or whether
the holders of the Warrants intend to exercise their Warrants, or if they
do so, whether they intend to sell their securities received as a result
of such exercise.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed
upon by Perkins Coie, Portland, Oregon.
EXPERTS
The financial statements incorporated by reference in this
Prospectus and included in the Annual Report on Form 10-KSB for the
year ended March 31, 1996 have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with
respect thereto, and so incorporated herein in reliance upon the
authority of said firm as experts in auditing and accounting in
giving said report.
<PAGE>
No dealer, salesperson or
any other person has been
authorized to give any 850,000 Shares
information or to make any
representations other than
those contained in this
Prospectus in connection SYNTHETECH, INC.
with the offer contained
herein, and, if given or Common Stock
made, such information or
representations must not be
relied upon as having been
authorized by the Company or
by any of the Selling
Shareholder. This
Prospectus does not
constitute an offer of any
securities other than those
to which it relates or an
offer to sell, or a
solicitation of an offer to
buy, those to which it
relates in any state to any
person to whom it is not
lawful to make such offer in
such state. The delivery of
this Prospectus at any time
does not imply that the
information herein is
correct as of any time
subsequent to its date.
TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain
Documents September 12, 1996
by Reference 2
Risk Factors 3
Selling Shareholder 7
Description of Securities 7
Plan of Distribution 9
Legal Matters 9
Experts 9
Additional Information II-1
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
<S> <C>
Item 14. Other Expenses of Issuance and Distribution
Amount
SEC Registration Fee $ 2,198.28
Accounting Fees and Expenses* 1,000.00
Legal Fees and Expenses* 30,000.00
Blue Sky Fees and Expenses* 7,000.00
Printing, including Registration
Statement, Prospectus, 1,500.00
etc.*
Miscellaneous Expenses* 3,301.72
----------
TOTAL EXPENSES* $45,000.00
==========
</TABLE>
_____________
*Estimated
Item 15. Indemnification of Directors and Officers
As an Oregon corporation the Registrant is subject to the Oregon
Business Corporation Act ("OBCA") and the exculpation from liability
and indemnification provisions contained therein. Pursuant to
Section 60.047(2)(d) of the OBCA, Article 7 of the Registrant's
Articles of Incorporation (the "Articles") eliminates the liability
of the Registrant's directors to the Registrant or its shareholders
except for any liability related to (i) breach of the duty of
loyalty; (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (iii) any
unlawful distribution under ORS 60.367; or (iv) any transaction from
which the director derived an improper personal benefit.
Section 60.391 of the OBCA allows corporations to indemnify
their directors and officers against liability where the director or
officer has acted in good faith and with a reasonable belief that
actions taken were in the best interests of the corporation or at
least not opposed to the corporation's best interests and, if in a
criminal proceeding, the individual had no reasonable cause to
believe the conduct in question was unlawful. Under the OBCA,
corporations may not indemnify against liability in connection with a
claim by or in the right of the corporation or for any improper
personal benefit in which the director or officer was adjudged liable
to the corporation. Section 60.394 of the OBCA mandates
indemnification for all reasonable expenses incurred in the
successful defense of any claim made or threatened whether or not
such claim was by or in the right of the corporation. Finally,
pursuant to the Section 60.401 of the OBCA, a court may order
indemnification in view of all the relevant circumstances, whether or
not the director or officer met the good-faith and reasonable belief
standards of conduct set out in Section 60.391 of the OBCA.
Section 60.414 of the OBCA also provides that the statutory
indemnification provisions are not deemed exclusive of any other
rights to which directors or officers may be entitled under a
corporation's articles of incorporation or bylaws, any agreement,
general or specific action of the board of directors, vote of
shareholders or otherwise.
<PAGE>
The Articles provide that the Registrant is required to
indemnify its current and former directors to the fullest extent
permitted by law. Indemnification Agreements executed by all
directors and officers of the Registrant obligate the Registrant to
indemnify such individuals for liabilities incurred by such
individuals while serving as directors or officers of the Registrant.
Item 16. Exhibits.
Exhibit Description
Number
5.1 Opinion of Perkins Coie regarding legality of the Common
Stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in the opinion filed as
Exhibit 5.1)
*24.1 Power of Attorney
_________________
* Previously filed.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement 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.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered 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.
(b) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly
caused this Amendment No. 1 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Albany, State of Oregon, on September 11, 1996.
SYNTHETECH, INC.
By:/s/ M. Sreenivasan
M. Sreenivasan
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed on
September 11, 1996 by the following persons in the capacities
indicated:
Signature Title
/s/ M. Sreenivasan President, Chief Executive
M. Sreenivasan Officer and Director
(Principal Executive Officer)
/s/ Charles B. Williams Vice President of Finance
Charles B. Williams and Administration, Chief
Financial Officer, Secretary
and Treasurer (Principal
Financial Officer and
Principal Accounting Officer)
* Paul C. Ahrens Chairman of the Board
Paul C. Ahrens
* Howard L. Farkas Director
Howard L. Farkas
* Page E. Golsan, III Director
Page E. Golsan, III
*By /s/ Charles B. Williams
Attorney-in-Fact
<PAGE>
INDEX TO EXHIBIT
TO AMENDMENT NO. 1 TO FORM S-3
FOR SYNTHETECH, INC.
Exhibit Description
Number
5.1 Opinion of Perkins Coie regarding legality of the Common
Stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in the opinion filed
as Exhibit 5.1)
*24.1 Power of Attorney
____________________
* Previously filed.
Exhibit 5.1
September 11, 1996
Synthetech, Inc.
1290 Industrial Way
Albany, Oregon 97321
Re: 850,000 Shares of Common Stock ($.001 par value) of
Synthetech, Inc. (the "Company")
Ladies and Gentlemen:
We have acted as counsel to you in connection with the
preparation of a Registration Statement on Form S-3 (the
"Registration Statement"), File No. 333-8203 under the Securities Act
of 1933, as amended (the "Act"), with respect to 850,000 shares of
Common Stock, $.001 par value (the "Common Stock"), 750,000 of which
(the "Selling Shareholder Shares") may be sold from time to time by a
certain selling shareholder (the "Selling Shareholder") and 100,000 of
which (the "Company Shares") may be issued and sold from time to time
by the Company upon exercise of certain warrants (the "Warrants") to
purchase Common Stock. We have examined the Registration Statement and
such documents and records of the Company as we have deemed necessary for
the purpose of this opinion.
Based upon and subject to the foregoing, we are of the opinion that:
(i) the Company Shares have been validly authorized and when (a) the
Warrants have been exercised and (b) such shares have been duly delivered
against payment therefor pursuant to the terms of the Warrants, such shares
will be validly issued, fully paid and nonassessable; and
(ii) the Selling Shareholder Shares are duly authorized and are validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement. In giving such consent, we do not
admit that we are in the category of persons whose consent is
required under Section 7 of the Act. This opinion has been prepared
solely for your use in connection with the Registration Statement,
and should not be quoted in whole or in part or otherwise be referred
to, nor be relied upon by, nor be filed with or furnished to any
governmental agency or other person or entity, except as otherwise
provided in this paragraph, without the written consent of the firm.
Very truly yours
PERKINS COIE
Exhibit 23.1
to Form S-3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 registration statement,
registering up to 850,000 shares of common stock, of our report dated
May 16, 1996 included in Synthetech, Inc.'s Form 10-KSB for the year
ended March 31, 1996 and to all references to our firm included in
this registration statement.
ARTHUR ANDERSEN LLP
Portland, Oregon
September 11, 1996
