<PAGE>
As filed with the Securities and Exchange Commission on May 9, 1997
Registration No. 333
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
BIO-VASCULAR, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1526554
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2575 University Avenue 55114
St. Paul, Minnesota (Zip Code)
(Address of Principal Executive Offices)
---------------------
CERTAIN NON-PLAN OPTIONS
CERTAIN RESTRICTED STOCK AWARDS
(Full title of the plan)
---------------------
M. Karen Gilles
Chief Financial Officer
2575 University Avenue
St. Paul, Minnesota 55114
(Name and address of agent for service)
(612) 603-3700
(Telephone number, including area code, of agent for service)
---------------------
Approximate date of commencement of proposed sale to the public:
Immediately upon the filing of this registration statement
---------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed maximum Proposed maximum
Title of securities to be Amount to be registered(1) offering price per aggregate offering Amount of registration
registered share(2) price(2) fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share (3)........ 206,334 shares $9.85 $2,032,461.75 $615.90
====================================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, as
amended, (the "Securities Act") this Registration Statement includes an
indeterminate number of additional shares as may be issuable as a result of
anti-dilution provisions described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee and calculated pursuant to Rule 457(h) under the
Securities Act as follows: (i) with respect to options to purchase shares
previously granted, on the basis of the weighted average exercise price of
such options of $10.00; and (ii) with respect to shares registered
hereunder for resale, on the basis of the average between the high and low
reported sales prices of the Registrant's Common Stock on May 6, 1997 of
$5.125 per share, as reported by the Nasdaq National Market.
(3) Each share of Common Stock includes one Common Stock Purchase Right.
================================================================================
<PAGE>
EXPLANATORY NOTE
As provided in Instruction C to Form S-8, any prospectus that is to be used
for reoffers and resales of restricted securities must be filed as a part of a
Registration Statement on Form S-8. Accordingly, the Prospectus that is to be
used for reoffers and resales of shares of Common Stock acquired prior to the
effective date of this Registration Statement pursuant to the grant of certain
restricted stock awards has been filed as a part of this Registration Statement.
ii
<PAGE>
PROSPECTUS
6,344 Shares
BIO-VASCULAR, INC.
Common Stock
-----------------------
This Prospectus relates to 6,334 shares (the "Shares") of Common Stock, par
value $.01 per share (the "Common Stock"), of Bio-Vascular, Inc. (the "Company")
that may be offered for sale for the account of certain shareholders of the
Company as stated herein under the heading "Selling Shareholders."
The Selling Shareholders have advised the Company that sales of the Shares
offered hereunder by them, or by their pledgees, donees, transferees or other
successors in interest, may be made from time to time in the over-the-counter
market, through negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. The Shares may be sold
by one or more of the following methods: (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) purchases 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. Sales may
be made pursuant to this Prospectus to or through broker-dealers who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders or the purchasers of Common Stock for whom such broker-
dealer may act as agent or to whom they may sell as principal, or both (which
compensation as to a particular broker-dealer may be in excess of customary
commissions). One or more supplemental prospectuses will be filed pursuant to
Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"), to
describe any material arrangements for the sale of the Shares offered hereunder
when such arrangements are entered into by any of the Selling Shareholders and
any other broker-dealers that participate in the sale of the Shares.
The Selling Shareholders and any broker-dealers or other persons acting on
their behalf in connection with the sale of Common Stock hereunder may be deemed
to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit realized by them on the resale of
Common Stock as principals may be deemed to be underwriting commissions under
the Securities Act. As of the date hereof, there are no special selling
arrangements between any broker-dealer or other person and any Selling
Shareholder.
No period of time has been fixed within which the Shares may be offered or
sold. None of the proceeds from the sale of the Shares will be received by the
Company. The Company will pay all expenses with respect to this offering, except
for brokerage fees and commissions and transfer taxes for the Selling
Shareholders, which will be borne by the Selling Shareholders.
The shares of Common Stock offered hereby involve certain risks. See "Risk
Factors" beginning on page 3 of this Prospectus.
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "BVAS." On May 6, 1997, the last sale price of the Common Stock on
the Nasdaq National Market was $5.00 per share.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
The date of this Prospectus is May 9, 1997.
No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this Prospectus in
connection with the offer described in this Prospectus and, if given or made,
such information and representations must not be relied upon as having been
authorized by the Company or the Selling shareholders. Neither the delivery of
this Prospectus nor any sale made under this Prospectus shall under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof or since the date of any documents
incorporated herein by reference. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any securities other than the
securities to which it relates, or an offer or solicitation in any state to any
person to whom it is unlawful to make such offer in such state.
<PAGE>
THE COMPANY
Bio-Vascular, Inc. (the "Company") develops, manufactures and markets
proprietary specialty medical products for use in thoracic, cardiac, neuro and
vascular surgery. The Company's products include the Tissue-Guard product line
and the Biograft(R) peripheral vascular graft. The Tissue-Guard product line
includes Peri-Strips(R), Dura-Guard(R), Vascu-Guard(R), Supple Peri-Guard(R),
Peri-Guard(R), Tissue-Guard(TM) and Supple Tissue-Guard(TM). Tissue-Guard
products are made from bovine pericardium (the thin membrane surrounding the
heart of cattle) processed using the Company's proprietary tissue-fixation
technologies. The Tissue-Guard products, made in various configurations, are
used in a wide variety of surgical procedures and are designed to reinforce,
reconstruct and repair tissue and prevent leaks of air, blood and other body
fluids. Biograft is used to bypass blocked blood vessels and is produced from
modified human umbilical veins. The Company also markets and sells two surgical
tools used in cardiac and vascular surgery, Flo-Rester(R), vessel occluders and
the Bio-Vascular Probe(R), both of which are used in bypass surgeries.
Peri-Strips was cleared to market by the Food and Drug Administration
("FDA") in April of 1994. Peri-Strips are used primarily in lung volume
reduction surgery ("LVRS") and other surgical procedures on the lung. LVRS is
performed principally on patients with late-stage emphysema who have
significantly reduced respiratory function. During a bilateral procedure, a
portion of each diseased lung is removed from the patient to provide relief from
the symptoms of emphysema. Peri-Strips are designed to prevent air leakage at
the surgical staple line which is essential to successful LVRS. While there is
considerable evidence that LVRS can significantly improve patients' breathing
capacity, exercise tolerance and quality of life, there does not present exist,
however, a statistically significant body of clinical data from which to draw
conclusions concerning long-term outcomes associated with LVRS, as the procedure
was first performed less than four years ago. See "Risk Factors--Limitations on
Third-Party Reimbursement".
Dura-Guard, which was cleared to market by the FDA in June of 1995, is a
dural patch used in cranial surgery designed to reduce post-surgical adhesions
and fluid leakage. Vascu-Guard which was cleared to market by the FDA in June of
1995, is a vascular patch used primarily in carotid endarterectomy procedures
designed to improve tissue integration and reduce suture line bleeding. In
addition, the Company markets Supple Peri-Guard and Peri-Guard as a general
soft-tissue patching material for use in specialty surgical procedures.
The Company was incorporated in Minnesota in July 1985. The Company's
principal executive offices are located at 2575 University Avenue, St. Paul,
Minnesota 55114, and its telephone number is (612) 603-3700.
2
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RISK FACTORS
The following factors should be considered in evaluating an investment in
the Common Stock. The Company also cautions readers that this Prospectus, and
the information incorporated herein by reference, includes certain forward-
looking statements and information that are based on management's beliefs as
well as on assumptions made by, and upon information currently available to,
management. When used in this Prospectus or in information incorporated herein
by reference, the words "expect," "anticipate," "intend," "plan," "believe,"
"seek" and "estimate" or similar expressions or the negative thereof are
intended to identify such forward-looking statements. However, this Prospectus
and the information incorporated herein by reference also contain other forward-
looking statements. Forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions,
including, but not limited to, the following risk factors, which could cause the
Company's future results and shareholder values to differ materially from those
expressed in any forward-looking statements made by or on behalf of the Company.
Many of such factors are beyond the Company's ability to control or predict.
Readers are cautioned not to put undue reliance on forward-looking statements.
The Company disclaims any intent or obligation to update publicly any forward-
looking statements, whether as a result of new information, future events or
otherwise.
Limitations on Third-Party Reimbursement
The Company's products are purchased primarily by hospitals and other
users, which bill various third-party payers, such as government health
programs, private health insurance plans, managed care organizations and other
similar programs, for the health care goods and services provided to their
patients. Payers may deny reimbursement if they determine that a product used in
a procedure was not used in accordance with established payor protocol regarding
cost-effective treatment methods or was used for an unapproved indication.
Third-party payers are also increasingly challenging the prices charged for
medical products and services and, in some instances, have put pressure on
medical device suppliers to lower their prices. The Company is unable to predict
what changes will be made in the reimbursement methods used by third-party
health care payers. There can be no assurance that the surgical procedures in
which the Company's products are used will continue to be considered cost-
effective by third-party payers, that reimbursement for such surgeries will be
available or, if available will continue, or that payers' reimbursement levels
will not adversely affect the Company's ability to sell its products on a
profitable basis. The cost of health care has risen significantly over the past
decade, and there have been and may continue to be proposals by legislators,
regulators and third-party payers to curb these costs. Failure by hospitals and
other users of the Company's products to obtain reimbursement from third-party
payers, changes in third-party payers' policies towards reimbursement for
procedures using the Company's products or legislative action could have a
material adverse effect on the Company's business, financial condition and
results of operations.
In January of 1996, the Healthcare Financing Administration ("HCFA"), the
agency of the federal government that administers Medicare, made a national
policy decision not to reimburse LVRS ("the HCFA decision"), which had been
reimbursed nationwide on a regional basis during fiscal 1994 and 1995. The
Company estimates that approximately 70% of the patients undergoing LVRS in
fiscal 1995 were Medicare patients. In April of 1996, the National Institute of
Health ("NIH") announced a collaborative study of LVRS with HCFA. The study, as
it is currently structured, is estimated to take seven years if it goes to
completion and will include 2,580 Medicare patients, with a little more than
half of those receiving bilateral open median sternotomy or thoracoscopic LVRS.
This represents less than 2% of those currently estimated to benefit from LVRS.
The HCFA decision materially and adversely
3
<PAGE>
affected the Company's financial results. In fiscal 1996 revenue from the sale
of Peri-Strips decreased $1,214,000 to $4,336,000. The Company understands that
some private insurance companies and managed care organizations are currently
reimbursing LVRS based on their own evaluation of the procedure and its
outcomes. It is unknown whether these private payers will change their
reimbursement practices in the future.
Highly Competitive Industries and Risk of Technological Obsolescence
The Company faces intense competition. The medical products industry is
highly competitive and characterized by rapid innovation and technological
change. The Company expects technology to continue to develop rapidly, and the
Company's success will depend to a large extent on its ability to maintain a
competitive position with its technology. There can be no assurance that the
Company will be able to compete effectively in the marketplace or that products
developed by its competitors will not render its products obsolete or non-
competitive. Similarly, there can be no assurance that the Company's competitors
will not succeed in developing or marketing products that are viewed by
physicians as providing superior clinical performance or are less expensive
relative to the Company's products currently marketed or to be developed.
Several established companies manufacture and sell surgical products which
compete with all of the Company's surgical products. The companies with which
the Company competes have greater distribution capabilities, substantially
greater capital resources and larger marketing, research and development staffs
and facilities than the Company. In addition, many of the Company's competitors
offer broader product lines within the Company's specific product markets. Broad
product lines may give the Company's competitors the ability to negotiate
exclusive, long-term medical product supply contracts and the ability to offer
comprehensive pricing for their products, including those that compete with the
Company's products. By offering a broader product line in the general field of
medical products and supplies, competitors may also have a significant advantage
in marketing competing products to group purchasing organizations and managed
care organizations that increasingly seek to reduce costs. There can be no
assurance that the Company will be able to compete effectively with such
manufacturers.
Intellectual Property
The Company protects its technology through trade secrets and proprietary
know-how and through patents, both owned and licensed. The Company seeks to
protect its trade secrets and proprietary know-how through confidentiality
agreements with employees, consultants and other parties. Supple Peri-Guard,
which is used in the manufacture of the majority of the Company's Tissue-Guard
products, is protected exclusively by trade secrets. There can be no assurance
that the Company's trade secrets or confidentiality agreements will provide
meaningful protection of the Company's proprietary information or, in the event
of a breach of any confidentiality agreement, that the Company will have
adequate remedies. There can be no assurance that any pending or future patent
applications will result in issued patents, or that any current or future
patent, regardless of whether the Company is an owner or licensee of such
patent, will not be challenged, invalidated or circumvented or that the rights
granted thereunder or under its licensing agreements will provide a competitive
advantage to the Company. Furthermore, there can be no assurance that others
will not independently develop similar technologies or duplicate any technology
developed by the Company or that the Company's technology does not or will not
infringe patents or other rights owned by others.
The medical product industry is characterized by frequent and substantial
intellectual property litigation, and competitors may resort to intellectual
property litigation as a means of competition. Intellectual property litigation
is complex and expensive, and the outcome of such litigation is difficult to
predict. Any future litigation, regardless of the outcome, could result in
substantial expense to the Company and significant diversion of the efforts of
the Company's technical and management personnel.
4
<PAGE>
Litigation may also be necessary to enforce patents issued to the Company and
license agreements entered into by the Company, to protect trade secrets or
know-how owned by the Company or to determine the enforceability, scope and
validity of the proprietary rights of others. An adverse determination in any
such proceeding could subject the Company to significant liabilities to third
parties, or require the Company to seek licenses from third parties or pay
royalties that may be substantial. Furthermore, there can be no assurance that
necessary licenses would be available to the Company on satisfactory terms, if
at all. Accordingly, an adverse determination in a judicial or administrative
proceeding or failure to obtain necessary licenses could prevent the Company
from manufacturing or selling certain of its products which in turn would have a
material adverse effect on the Company's business, financial condition and
results of operations.
Risks Associated with Human Tissue Products
Both the United States and Europe have recently focused attention on the
safety of tissue banks, spurred by incidents of the transmission of human
disease during tissue transplantation. In the United States, recent regulations
drafted by the FDA have outlined requirements for tissue banks. The regulations
have specifically excluded from regulation medical devices subject to FDA
review, including preserved umbilical cord vein grafts such as Biograft. As a
result, the Company does not expect Biograft to be subject to tissue bank
regulations in the United States and the related expensive donor screening and
donor testing procedures. There can be no assurance, however, that the FDA will
not impose additional regulatory requirements on Biograft at some later date or
that Biograft would be able to meet any such new requirements.
The future regulatory environment for Biograft in Europe is unclear. While
the MDD issued by the EU explicitly excludes medical devices derived from human
tissue from regulation, certain European medical device manufacturers are
actively lobbying for the re-inclusion of such devices in the MDD. If this
effort is successful, the earliest date for applying for CE mark approval for
Biograft is expected to be 1998. In addition, if extensive donor screening and
donor testing requirements are imposed, such requirements could make it
uneconomical to sell Biograft in Europe even under the CE mark. Biograft
accounted for 9% and 11% of the Company's net revenue and international net
revenue, respectively, for the year ended October 31, 1996.
Bovine Spongiform Encephalopathy ("BSE") is endemic in cattle in the United
Kingdom (UK) and has received much publicity in Europe regarding beef for
dietary consumption. Under the direction of the USDA, the U.S. government has
had an active program of surveillance and import controls since the late 1980's,
designed to prevent the introduction of BSE into U.S. cattle. To date, all
evidence indicates that U.S. cattle are free of BSE. The Company obtains all of
its raw pericardium from USDA slaughterhouses. To date, BSE has not impeded sale
of the Company's products worldwide. The Company's Notified Body, the British
Standards Institute ("BSI"), and French authorities have specifically reviewed
Tissue-Guard sourcing and manufacturing processes and have then accepted the
Company's bovine pericardium products. The Company cannot predict whether or not
a case of BSE may someday be reported in the U.S. If a case of BSE were reported
in the U.S. cattle, it could have a material adverse effect on the Company's
business, financial condition and results of operations. As a result of concerns
related to BSE, if certain countries were to prohibit the sale of Tissue-Guard
products such prohibition by certain countries could have a material adverse
effect on the Company's business, financial condition and results of operation.
Governmental Regulation
The Company's products, development activities and manufacturing processes
are subject to extensive and rigorous regulation by the FDA and by comparable
agencies in foreign countries. In the
5
<PAGE>
United States, the FDA regulates the introduction, manufacturing, labeling and
record keeping procedures for medical devices. The process of obtaining
marketing clearance from the FDA for new products and new applications for
existing products can be time-consuming and expensive, and there is no assurance
that such clearances will be granted or that FDA review will not involve delays
that would adversely affect the Company's ability to commercialize additional
products or additional applications for existing products. In addition, certain
of the Company's products that are in the research and development stage may be
subject to a lengthy and expensive pre-market approval ("PMA") process with the
FDA. Even if regulatory approvals to market a product are obtained from the FDA,
these approvals may entail limitations on the indicated uses of the product.
Product approvals by the FDA can also be withdrawn due to failure to comply with
regulatory standards or the occurrence of unforeseen problems following initial
approval. The FDA could also limit or prevent the manufacture or distribution of
the Company's products and has the power to require the recall of such products.
FDA regulations depend heavily on administrative interpretation, and there can
be no assurance that future interpretations made by the FDA or other regulatory
bodies, with possible retroactive effect, will not adversely affect the Company.
The FDA, various state agencies and foreign regulatory agencies inspect the
Company and its facilities from time to time to determine whether the Company is
in compliance with various regulations relating to manufacturing practices,
validation, testing, quality control and product labeling. A determination that
the Company is in violation of such regulations could lead to imposition of
civil penalties, including fines, product recalls or product seizures and, in
extreme cases, criminal sanctions.
Approximately 22% of the Company's revenue in fiscal 1996 resulted from
sales of its products outside the Untied States through independent
distributors. International regulatory bodies have established varying
regulations governing product standards, packaging requirements, labeling
requirements, import restrictions, tariff regulations, duties and tax
requirements. The Company relies on independent distributors to comply with
these foreign regulatory requirements and communication between foreign
regulatory agencies and the Company is indirect and occurs through the foreign
distributor. The inability or failure of independent distributor to comply with
the varying regulations or the imposition of new regulations could restrict such
distributors' ability to sell the Company's products internationally and thereby
adversely affect the Company's business, financial condition and results of
operations.
The new registration scheme in the EU requires that the Company's quality
system conform with the ISO 9001 international quality standard and that its
products conform with the "essential requirements" set forth by the MDD for the
class of products produced by the Company. Compliance with these requirements
will allow the Company to issue a "Declaration of Conformity" and apply the CE
mark to products, allowing free sale in the EU. While the Company has obtained
the "CE" mark for its Tissue-Guard products, there can be no assurance that the
Company will be able to maintain compliance with the regulations to retain the
CE mark. In addition, it is uncertain whether the Company will be successful in
obtaining the CE mark for its other products or new product introductions.
Failure to obtain the CE mark by 1998 would limit the Company's ability to sell
its products in Europe and would have a material adverse effect on the Company's
business, financial condition and results of operations.
Exposure to Product Liability Claims; Risk of Product Recall
The medical product industry historically has been litigious, and the
manufacture and sale of the Company's products inherently entails a risk of
product liability claims. Because the Company's principal products are designed
to be permanently placed in the human body, production errors could result in an
unsafe product and injury to the patient. Although the Company maintains product
liability insurance in amounts believed to be adequate based upon the nature and
risks of its business in general and its actual experience to date, there can be
no assurance that one or more liability claims will not
6
<PAGE>
exceed the coverage limits of such policies or that such insurance will continue
to be available on commercially reasonable terms, if at all. Furthermore, the
Company does not expect to be able to obtain insurance covering its costs and
losses as the result of any recall of its products due to alleged defects,
whether such a recall is instituted by the Company or required by a regulatory
agency.
In September 1996 the Company voluntarily issued a Safety Alert regarding
the usage of its bovine pericardium as a urethral sling and removed "urethral
sling" from the "indications" statement in its instructions for use. The Company
issued the safety alert as a prudent course of action. The deletion of "urethral
sling" from the labeling caused the action to fall into the category of a "field
correction". In November 1966 the FDA acknowledged this field correction and
reported it in the "FDA Weekly Enforcement Report" of November 11, 1996 as a
"recall", as the definition of a recall encompasses field corrections. No
product units were physically recalled and none were returned to the Company.
Although Peri-Guard and Supple Peri-Guard have included the urethral sling
indications in their labeling for several years, the products were rarely used
in this application until late 1995. At that time a handful of urological
surgeons began using the products in place of autologous facia slings to treat
female urinary incontinence. Approximately 65 transvaginal implants were done,
resulting in 16 explants due to vaginal discharge, opening of the vaginal
incision, and localized inflammation without fever. These results were similar
to those which have been reported for synthetic urethral slings.
A product liability claim, recall or other claim with respect to uninsured
liabilities or in excess of insured liabilities could have a material adverse
effect on the business, financial condition and results of operations of the
Company.
Dependence on Distributor Sales
Sales to distributors constitute a significant portion of the Company's
current business. In the year ended October 31, 1996, three domestic
distributors accounted for an aggregate of 44% of gross revenue, with each of
such distributors accounting for in excess of 10% of the Company's gross revenue
for the period. There can be no assurance that the Company will be able to
maintain its relationships with these significant distributors, or, in the event
of termination of any of such relationships, that a new replacement distributor
will be found. The loss of a significant distributor could materially adversely
affect the Company's business, financial condition and results of operations if
a new distributor or other suitable sales organization could not be found on a
timely basis in the relevant geographic market.
7
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SELLING SHAREHOLDERS
This Prospectus relates to the offering of 6,334 shares of Common Stock of
the Company by the Selling Shareholders named below. The shares being offered by
the Selling Shareholders hereunder were acquired pursuant to the grant of
certain restricted stock awards to employees of Bio-Vascular. The following
table sets forth certain information, as of April 1, 1997, and as adjusted to
reflect the sale of the shares offered hereby, with respect to the beneficial
ownership of the Common Stock by the Selling Shareholders. Unless otherwise
noted below, each Selling Shareholder possess sole voting and investment power
with respect to the shares shown opposite such Selling Shareholder's name.
<TABLE>
<CAPTION>
Beneficial Ownership
of Common
Stock After Offering
Shares of (1)(2)(3)
Common Stock --------------------
Beneficially Number of Percent
Owned Before Shares to Number of Class
Name Offering (1)(2) be Sold of Shares (4)
- ---- ---------------- --------- ----------- --------
<S> <C> <C> <C>
Robert Crohn............... 2,019 1,286 733 *
Mark Hughes................ 4,129 2,957 1,172 *
Elizabeth Kempen........... 2,997 1,967 1,030 *
Camille Meyer.............. 4,220 124 4,096 *
Total..... 6,334
</TABLE>
- --------------------------------------
* Less than one percent (1%).
(1) Based upon questionnaires received from each selling shareholder, or a
representative of the selling shareholder, in connection with the
preparation of the Registration Statement on Form S-8, of which this
Prospectus is a part.
(2) Shares not outstanding but deemed beneficially owned by virtue of the right
of a person or member of a group to acquire them within 60 days are treated
as outstanding only when determining the amount and percentage owned by
such person or group.
(3) This assumes all shares being offered and registered hereunder are sold,
although no Selling Shareholder is obligated to sell any shares.
(4) Based upon 9,547,538 shares of Common Stock outstanding as of May 6, 1997.
8
<PAGE>
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Oppenheimer Wolff & Donnelly, Minneapolis, Minnesota.
EXPERTS
The financial statements of the Company as of October 31, 1996 and 1995,
and for each of the three years in the period ended October 31, 1996,
incorporated by reference in this Prospectus, have been audited and reported
upon by Coopers & Lybrand L.L.P., independent accountants. Such financial
statements have been incorporated by reference in this Prospectus in reliance
upon the report of Coopers & Lybrand L.L.P., incorporated by reference herein,
and upon the authority of such firm as experts in accounting and auditing. To
the extent that Coopers & Lybrand L.L.P. audits and reports on the financial
statements of the Company issued at future dates and consents to the use of
their report thereon, such financial statements also will be incorporated by
reference in this Prospectus in reliance upon their report and said authority.
9
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by the Company pursuant to the Exchange Act may be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can also be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission also maintains a Website at http://www.sec.gov that
contains reports, proxy and information statements, registration statements and
other information that has been or will be filed by the Company.
The Company has filed with the Commission a Registration Statement on Form
S-8 under the Securities Act. This Prospectus does not contain all of the
information, exhibits and undertakings set forth in the Registration Statement,
certain portions of which are omitted as permitted by the Rules and Regulations
of the Commission. Copies of the Registration Statement and the exhibits are on
file with the Commission and may be obtained, upon payment of the fee prescribed
by the Commission, or may be examined, without charge, at the offices of the
Commission set forth above. For further information, reference is made to the
Registration Statement and its exhibits.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-13907) are incorporated by reference in this Prospectus: (1) the Company's
Annual Report on Form 10-K for the year ended October 31, 1996; (2) the
Company's Quarterly Report on Form 10-Q for the quarter ended January 31, 1997;
(3) the Company's Current Report on Form 8-K dated November 26, 1996; (4) all
other reports filed by the Company pursuant to Sections 13 or 15(d) of the
Exchange Act since October 31, 1996; (5) the description of the Company's Common
Stock contained in its Registration Statement on Form 10, including any
amendments or reports filed for the purpose of updating such description; and
(6) the description of the Company's Common Stock Purchase Rights contained in
the Company's Registration Statement on Form 8-A, including any amendments or
reports filed for the purpose of updating such description.
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 the offering hereunder 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. Any statement contained herein or in a document all or any
portion of which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein 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.
10
<PAGE>
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the foregoing documents (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to Bio-Vascular,
Inc., 2575 University Avenue, St. Paul, Minnesota, 55114, Attention: M. Karen
Gilles, Chief Financial Officer, telephone (612) 603-3700.
11
<PAGE>
PART II
INFORMATION REQUIRED
IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the Commission (File No.
0-13907) are incorporated by reference in this Registration Statement: (1) the
Company's Annual Report on Form 10-K for the year ended October 31, 1996; (2)
the Company's Quarterly Report on Form 10-Q for the quarter ended January 31,
1997; (3) the Company's Current Report on Form 8-K dated November 26, 1996; (4)
all other reports filed by the Company pursuant to Sections 13 or 15(d) of the
Exchange Act since October 31, 1996; (5) the description of the Company's Common
Stock contained in its Registration Statement on Form 10, including any
amendments or reports filed for the purpose of updating such description; and
(6) the description of the Company's Common Stock Purchase Rights contained in
the Company's Registration Statement on Form 8-A, including any amendments or
reports filed for the purpose of updating such description.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all shares of Common Stock offered pursuant to this
Registration Statement have been sold or that de-registers all shares of Common
Stock then remaining unsold, shall be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof from the date of filing of
such documents.
The financial statements of the Company incorporated by reference in this
Registration Statement have been audited by Coopers & Lybrand L.L.P.,
independent accountants, for the periods indicated in such firm's report
thereon, which report is included in the Company's Annual Report on Form 10-K
for the year ended October 31, 1996. The financial statements audited by Coopers
& Lybrand L.L.P. have been incorporated herein by reference in reliance on such
firm's report given on their authority as experts in accounting and auditing. To
the extent that Coopers & Lybrand L.L.P. audits and reports on the financial
statements of the Company issued at future dates, and consents to the use of
their report thereon, such financial statements will also be incorporated by
reference in the Registration Statement in reliance upon their report and said
authority.
Item 4. Description of Securities.
The descriptions of the Company's Common Stock and the Common Stock
Purchase Rights to be offered pursuant to this Registration Statement have been
incorporated by reference into this Registration Statement as described in Item
3 of this Part II.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Article 5, Section 5.1 of the Company's Bylaws provides that directors,
officers, employees and agents, past or present, of the Company, and persons
serving as such of another corporation or entity at the request of the Company,
shall be indemnified by the Company to the fullest extent permitted by
applicable state law.
II-1
<PAGE>
Section 302A.521 of the Minnesota Business Corporation Act provides that a
Minnesota business corporation shall indemnify any director, officer, employee
or agent of the corporation made or threatened to be made a party to a
proceeding, by reason of the former or present official capacity (as defined) of
the person, against judgments, penalties, fines, settlements and reasonable
expenses incurred by the person in connection with the proceeding if certain
statutory standards are met. "Proceeding" means a threatened, pending or
completed civil, criminal, administrative, arbitration or investigative
proceeding, including one by or in the right of the corporation. Section
302A.521 contains detailed terms regarding such right of indemnification and
reference is made thereto for a complete statement of such indemnification
rights.
Item 7. Exemption from Registration Claimed.
The shares to be reoffered or resold pursuant to this Registration
Statement were issued without registration under the Securities Act in reliance
on Section 4(2) of the Securities Act, which provides an exemption for
transactions not involving a public offering. In determining that such exemption
was available, the Company relied on the fact that, as an offering only to
employees, directors and consultants of the Company, the shares were being
issued through direct communication only to a limited number of investors having
both knowledge of and access to most relevant information regarding the Company
and that the certificates evidencing such shares bear a legend restricting
transfer in non-registered transactions.
Item 8. Exhibits.
4.1 Restated Articles of Incorporation of the Company, as amended (filed
herewith electronically).
4.2 Amended and Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form S-4 (File
No. 33-74750)).
4.3 Form of the Company's Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on Form
10 (File No. 0-13907)).
4.4 Rights Agreement dated effective as of June 12, 1996, between the
Company and American Stock Transfer and Trust Company, which includes as
Exhibit A the form of Rights Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K, dated June 12,
1996 (File No. 0-13907)).
5.1 Opinion and Consent of Oppenheimer Wolff & Donnelly (filed herewith
electronically).
23.1 Consent of Oppenheimer Wolff & Donnelly (included in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand L.L.P. (filed herewith electronically).
24.1 Power of Attorney (included on page II-4 of this Registration
Statement).
II-2
<PAGE>
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represents a fundamental change in the
information set forth in this 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 this
registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, except
as to certain insurance policies, the registrant has been advised that in
the opinion of the Securities and Exchange commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<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-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Paul, State of Minnesota, on May 9, 1997.
BIO-VASCULAR, INC.
By: /s/ John T. Karcanes
-------------------------------------
John T. Karcanes
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints John T. Karcanes and M. Karen Gilles, and each of them,
as his or her true and lawful attorney-in-fact and agent, each with full powers
of substitution and re-substitution, for him and in his or her name, place and
stead, in any and all capacities, to sign any or all amendments (including post-
effective amendments) to this Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed on May 9, 1997 by the following persons in
the capacities indicated.
/s/ John T. Karcanes
- -------------------------- President, Chief Executive Officer
John T. Karcanes (Principal Executive Officer) and Director
/s/ M. Karen Gilles
- -------------------------- Vice President of Finance and Chief
M. Karen Gilles Financial Officer (Principal Financial and
Accounting Officer)
/s/ James F. Lyons
- -------------------------- Chairman of the Board of Directors
James F. Lyons
/s/ Richard W. Perkins
- -------------------------- Director
Richard W. Perkins
/s/ Anton R. Potami
- -------------------------- Director
Anton R. Potami
- -------------------------- Director
Timothy M. Scanlan
- -------------------------- Director
Edward E. Strickland
II-4
<PAGE>
BIO-VASCULAR, INC.
REGISTRATION STATEMENT
ON FORM S-8
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Item No. Description Method of Filing
- -------- ----------- ----------------
<S> <C> <C>
4.1 Restated Articles of
Incorporation of the Filed herewith
Company, as amended....... electronically.
4.2 Amended and Restated Incorporated by
Bylaws of the Company..... reference to Exhibit 3.2
to the Company's
Registration Statement
on Form S-4 (File No.
33-74750).
4.3 Form of the Company's
Common Stock Certificate.. Incorporated by
reference to Exhibit 4.1
to the Company's
Registration Statement
on Form 10 (File No.
0-13907).
4.4 Rights Agreement dated
effective as of June
12, 1996, between the
Company and American
Stock Transfer and
Trust Company, which Incorporated by
includes as Exhibit A reference to Exhibit 4.1
the form of Rights to the Company's Current
Certificate............... Report on Form 8-K,
dated June 12, 1996
(File No. 0-13907).
5.1 Opinion and Consent of
Oppenheimer Wolff &
Donnelly.................. Filed herewith
electronically.
23.1 Consent of Oppenheimer
Wolff & Donnelly.......... Included in Exhibit 5.1.
23.2 Consent of Coopers &
Lybrand L.L.P............. Filed herewith
electronically.
24.1 Power of Attorney......... Included on page II-4 of
this Registration
Statement.
</TABLE>
E-1
<PAGE>
Exhibit 4.1
ARTICLES OF INCORPORATION AS AMENDED OF
BIO-VASCULAR, INC.
ARTICLE 1 - NAME
----------------
1.1 The name of the corporation shall be Bio-Vascular, Inc.
ARTICLE 2 - REGISTERED OFFICE
-----------------------------
2.1 The location and office address of the registered office of the
corporation in this state shall be 2845 Hamline Avenue North, Suite 218, St.
Paul, Minnesota 55113.
ARTICLE 3 - CAPITAL STOCK
-------------------------
3.1 Authorized Shares. The aggregate number of shares of stock which the
corporation shall have authority to issue is twenty-five million (25,000,000)
shares, twenty million (20,000,000) of which shall be designated common stock,
$0.01 par value (hereinafter referred to as "Common Stock") and five million
(5,000,000) of which shall be designated preferred stock, $0.01 par value
(hereinafter referred to as "Preferred Stock"). The Board of Directors is
authorized to establish, from the authorized shares of Preferred Stock, one or
more classes or series of shares, to designate each such class and series, and
to fix the rights and preferences of each such class and series. Without
limiting the authority of the Board of Directors granted hereby, each such class
or series of Preferred Stock shall have such voting powers, full or limited, or
no voting powers, such preferences and relative, participating, optional or
other special rights, and such qualifications, limitations or restrictions as
shall be stated and expressed in the resolution or resolutions providing for the
issue of such class or series of Preferred Stock as may be adopted from time to
time by the Board of Directors prior to the issuance of any shares thereof.
Except as provided in the resolution or resolutions of the Board of Directors
creating any class or series of Preferred Stock, the shares of Common Stock
shall have the exclusive right to vote for the election and removal of directors
and for all other purposes. Each holder of Common Stock shall be entitled to one
vote for each share held.
3.2 Issuance of Shares. The Board of Directors of the corporation is
authorized from time to time to accept subscription for, issue, sell and deliver
shares of stock of any class or series of the corporation, and rights to
purchase any such shares of the corporation, to such persons, at such time, for
such consideration, and upon such terms and conditions as the Board shall
determine.
ARTICLE 4 - RIGHTS OF SHAREHOLDERS
----------------------------------
4.1 No Pre-emptive Rights. No shareholder of the corporation shall have
any pre-emptive right to subscribe for, purchase or acquire any shares of stock
of any class or series of the corporation now or hereafter authorized or issued.
<PAGE>
4.2 No Cumulative Voting Rights. No shareholder shall have the right to
cumulate votes for the election of directors.
ARTICLE 5 - WRITTEN ACTION BY DIRECTORS
---------------------------------------
5.1 Any action required or permitted to be taken at a Board meeting may be
taken by written action signed by all of the directors or, in cases where the
action need not be approved by the shareholders, by written action signed by the
number of directors that would be required to take the same action at a meeting
of the Board at which all directors were present.
ARTICLE 6 - MERGER, EXCHANGE, SALE OF ASSETS AND DISSOLUTION
------------------------------------------------------------
6.1 Where approval of shareholders is required by law, the affirmative
vote of the holder of at least a majority of the voting power of all shares
entitled to vote shall be required to authorize the corporation (i) to merge
into or with one or more other corporations, (ii) to exchange its shares for
shares of one or more other corporations, (iii) to sell, lease, transfer or
otherwise dispose of all or substantially all of its property and assets,
including its good will, or (iv) to commence voluntary dissolution.
ARTICLE 7 - AMENDMENT OF ARTICLES OF INCORPORATION
--------------------------------------------------
7.1 Any provision contained in these Articles of Incorporation may be
amended, altered, changed or repealed by the affirmative vote of the holders of
at least a majority of the voting power of the shares present and entitled to
vote at a duly held meeting or such greater percentage as may be otherwise
prescribed by the laws of the State of Minnesota.
2
<PAGE>
Exhibit 5.1
May 9, 1997
Bio-Vascular, Inc.
2575 University Avenue
Saint Paul, MN 55114
Re: Registration Statement on Form S-8
Certain Non-Plan Options; And
Certain Restricted Stock Awards
Ladies and Gentlemen:
We have acted as counsel to Bio-Vascular, Inc., a Minnesota corporation
(the "Company"), in connection with the registration by the Company of 206,334
shares (the "Shares") of its Common Stock, $.01 par value, pursuant to the
Company's Registration Statement on Form S-8 for certain of the Company's non-
plan options and certain of the Company's restricted stock awards, under which
200,000 and 6,334 shares, respectively, are to be registered, to be filed with
the Securities and Exchange Commission on May 9, 1997 (the "Registration
Statement"). Of the shares to be registered, 6,334 Shares already have been
issued pursuant to certain restricted stock awards (the "Issued Shares") and
200,000 shares remain to be issued pursuant to non-plan options (the "Remaining
Shares").
In acting as counsel for the Company and arriving at the opinions expressed
below, we have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein.
In connection with our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, the
legal capacity of natural persons and the conformity to original documents of
all documents submitted to us as certified or photostatic copies.
<PAGE>
Bio-Vascular, Inc.
May 9, 1997
Page 2
Based on the foregoing, and subject to the qualifications and limitations
set forth herein, it is our opinion that:
1. The Company had the corporate authority to issue the Issued Shares and has
the corporate authority to issue the Remaining Shares, in the manner and
under the terms set forth in the Registration Statement.
2. The Issued Shares have been duly authorized and, at the time of their
issuance, were validly issued, fully paid and nonassessable.
3. The Remaining Shares have been duly authorized and, when issued, delivered
and paid for in accordance with the terms of the non-plan options and
restricted stock awards referred to in the Registration Statement, will be
validly issued, fully paid and nonassessable.
We express no opinion with respect to laws other than those of the State of
Minnesota and the federal laws of the United States of America, and we assume no
responsibility as to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to its use as part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement as described above. It is not to be
used, circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
/S/ Oppenheimer Wolff & Donnelly
OPPENHEIMER WOLFF & DONNELLY
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our reports dated December 16, 1996, on our audits of the financial
statements and financial statement schedule of Bio-Vascular, Inc. as of October
31, 1996 and 1995, and for each of the three years in the period ended October
31, 1996, which reports are included in the Company's Annual Report on Form 10-K
for the year ended October 31, 1996. We also consent to the references to our
firm under the caption "Incorporation of Certain Documents by Reference" and
under the caption "Experts" in the Prospectus filed as a part of the
registration statement.
COOPERS & LYBRAND L.L.P.
Minneapolis, Minnesota
May 8, 1997
