<PAGE> 1
As filed with the Securities and Exchange Commission on March 12, 1997.
Registration No. 333-15989
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
Amendment No. 1.
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
NEOPROBE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 31-1080091
(State or Other (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation or
Organization)
425 Metro Place North
Suite 400
Dublin, Ohio 43017-1367
(614) 793-7500
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
Robert S. Schwartz, Esq. Mr. David C. Bupp
Benesch, Friedlander, with a copy to: Neoprobe Corporation
Coplan & Aronoff 425 Metro Place North
88 East Broad Street Suite 400
Columbus, OH 43215 Dublin, Ohio 43017-1367
(614) 223-9300 (614) 793-7500
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
----------------
Approximate date of commencement of proposed sale to the public: as soon as
possible after the effective date of this registration statement
----------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
Title of each Proposed Proposed Amount
class of Amount maximum maximum of
securities to be offering price aggregate registration
to be registered registered per unit(1) offering price fee
- -----------------------------------------------------------------------------------------------------------
<S> <C>
Common Stock, 125,805 $13.3125 $1,674,779.06 507.51(3)(4)
par value $.001 per share(2)
- -----------------------------------------------------------------------------------------------------------
<FN>
(1) Based upon the average of the high and low prices of Common Stock on November 8, 1996 pursuant to rule 457(c).
(2) Each share of Common Stock carries one Right to purchase a unit which currently consists of one-hundredths
of a share of Series A Junior Participating Preferred Stock, par value $.001 per share, pursuant to a Rights
Agreement dated July 18, 1995.
(3) Pursuant to paragraph (a) of Rule 429, the Prospectus contained herein also
relates to Registration Statement No. 33-72700, and 723,115 shares of Common
Stock out of the 5,711,965 shares registered thereunder are being carried
forward. A registration fee of $10,956.14 was paid to register the 5,711,965
shares of Common Stock, $1,387 of which is allocable to the 723,115 shares
of Common Stock being carried forward under this Registration Statement.
(4) Paid with original filing on November 13, 1996.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
PURSUANT TO RULE 429 THE PROSPECTUS CONTAINED HEREIN ALSO RELATES TO
REGISTRATION STATEMENT NO. 33-72700.
<PAGE> 2
PROSPECTUS
[NEOPROBE LOGO]
848,920 SHARES OF COMMON STOCK
This Prospectus relates to 848,920 shares of common stock, par value $.001
per share ("Common Stock") of Neoprobe Corporation ("Neoprobe" or the
"Company"). See "Selling Shareholders." The Company will not receive any of the
proceeds from the sale of the Common Stock hereunder.
The Common Stock is listed on the Nasdaq National Market under the symbol
"NEOP". On ___________, 1997, the closing price for the Common Stock was $____.
---------------------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS,"
BEGINNING ON PAGE 3.
---------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=====================================================================================================
PRICE UNDERWRITING PROCEEDS TO
TO DISCOUNTS AND SELLING
PUBLIC(1) COMMISSIONS SECURITYHOLDERS(1)(2)(3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................... $ (2) $
- -----------------------------------------------------------------------------------------------------
Total Minimum(4)................... $-0- $-0- $-0-
- -----------------------------------------------------------------------------------------------------
Total Maximum(5)................... $ (2) $
- -----------------------------------------------------------------------------------------------------
<FN>
(1) To be offered at market related prices prevailing at the time of sale. These amounts are based on the closing
price of the Common Stock on the Nasdaq National Market given above.
(2) The Selling Shareholders, when selling shares under this Prospectus, may sell such shares from time to time with
or through broker/dealers selected by them individually; see "Plan of Distribution". Such broker/dealers may be
compensated by receiving discounts from market price on the shares sold to them or by the payment of commissions
and fees in amounts to be determined by negotiations between the Selling Shareholders and their respective broker/dealers
from time to time. In connection with the sale of securities under this Prospectus, the broker/dealers selected
by the Selling Shareholders may be deemed to be underwriters within the meaning of the Securities Act of 1933,
in which event brokerage commissions or discounts received by such broker/dealers may be deemed to be underwriting
compensation. The Selling Shareholders may agree to indemnify their respective broker/dealers against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) The Company will not receive any proceeds from the sale of the securities
offered hereby.
(4) Assumes that none of the Common Stock is sold.
(5) Assumes that all of the Common Stock is sold.
</TABLE>
--------------------------
The date of this Prospectus is _____________, 1997
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Copies of such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material may be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. The Company files
electronically reports, proxy statements and other information with the
Commission through the Commission's EDGAR system. The Commission maintains a
World Wide Web site on the Internet that contains reports, proxy and information
statements and other information regarding the Company and other issuers that
file electronically through the Commission's EDGAR system. The Internet address
of such site (its Uniform Resource Locator or URL) is http://www.sec.gov.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request, a copy of any or all of the documents incorporated herein, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). See "Incorporation of Certain Documents by
Reference." Requests should be directed to Neoprobe Corporation, 425 Metro Place
North, Suite 400, Dublin, Ohio 43017; Attention: John Schroepfer, Vice
President--Finance and Administration; Telephone (614) 793-7500.
ADDITIONAL INFORMATION
The Company has filed with the Commission a registration statement under
the Securities Act of 1933 with respect to the Common Stock. This Prospectus
does not contain all of the information set forth in the registration statement
and the exhibits thereto. For further information regarding the Company and
these securities, reference is made to such registration statement, including
all amendments thereto and the schedules and exhibits filed as part thereof.
Statements contained herein concerning provisions of documents are necessarily
summaries of the documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission. The
Company's executive offices are located at 425 Metro Place North, Suite 400,
Dublin, Ohio 43017. Its telephone number is (614) 793-7500.
NO DEALER, SALESMAN OR ANY OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED BY THIS
PROSPECTUS, OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IS UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE OF THE PROSPECTUS.
TRADEMARKS
Neoprobe is the owner of United States and foreign registered trademarks
"Neoprobe(R)," "RIGS(R)" and "RIGScan(R)." "Radioimmunoguided Surgery(TM),"
"RIGSystem(TM)," "ILM(TM)," and "RIGS/ACT(TM)" are commercially used trademarks
of Neoprobe.
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<PAGE> 4
RISK FACTORS
The securities offered hereby involve a high degree of risk. Each
prospective investor should carefully consider the following risk factors
inherent in and affecting the business of the Company, together with the other
information in this Prospectus, before making an investment decision. The
discussion in this Prospectus contains forward-looking statements that involve
risks and uncertainties. The Company's actual results may differ significantly
from the results discussed in the forward-looking statements.
EARLY STAGE OF DEVELOPMENT; NO COMMERCIALIZED PRODUCTS
The Company is still in the development stage and has not received approval
to market any of its products, except in the Republic of Korea. To date, the
Company has completed a Phase III clinical trial with the Company's lead
product, RIGScan CR49, for the surgical detection of metastatic and recurrent
colorectal cancer in both the United States and Europe. The Company filed
marketing applications for this product with regulatory agencies in Europe in
May 1996 and with the United States Food & Drug Administration ("FDA") in
December 1996. Enrollment of patients in a separate Phase III clinical study for
primary colorectal cancer has been completed in the United States and in Europe.
Substantial clinical and statistical analysis of the data collected from the
clinical trials of this product and substantial clinical trials of the Company's
other products must be completed before submissions can be made to appropriate
regulatory authorities. Such analysis and trials require substantial financial
and management resources and could require more time than is currently
estimated. There can be no assurance that the Company will be able to conclude
successfully the clinical tests or development of any of its proposed products
within the Company's expected time frame and budget, if at all, or that the
Company's products will prove to be safe and effective in clinical trials. There
also can be no assurance that the Company will be able to obtain governmental
approval for the commercial marketing and sale of any of its proposed products.
If the Company is unable to conclude successfully the clinical tests or if the
RIGS system does not prove to be safe and effective, or if the Company does not
obtain governmental approval or is otherwise unable to commercialize the RIGS
system successfully, the Company's business, financial condition and results of
operations will be materially adversely affected and could result in the
cessation of the Company's business.
LIMITED REVENUES; CONTINUING NET LOSSES; ACCUMULATED DEFICIT
The Company's limited history of operations, the nature of its business
and the governmental approval process make the prediction of future operating
results difficult and highly unreliable. The Company's business, therefore,
must be evaluated in light of the risks, expenses, delays and complications
normally encountered by development-stage companies in the highly competitive,
highly regulated biomedical industry, which is characterized by a high rate of
failure. Since its inception in 1983, the Company has been primarily engaged in
research and development of the RIGS technology. The Company has experienced
significant operating losses in each year since inception, and had an
accumulated deficit of approximately $64.1 million as of December 31, 1996. For
the years ended December 31, 1994, 1995 and 1996, the Company's net losses were
$10.6 million, $10.8 million, and $21 million, respectively. The Company
expects operating losses to continue in 1997 as research and development and
clinical trial efforts continue and as the Company awaits for the regulatory
authorities to complete their review of the Company's first marketing license
application. The Company's ability to achieve profitable operations is
dependent upon obtaining regulatory approval of its products and making the
transition to a revenue generating company. There can be no assurance that the
Company will ever achieve a profitable level of operations.
DEPENDENCE UPON PRINCIPAL PRODUCT LINE; UNCERTAINTY OF MARKET ACCEPTANCE
The Company's future success is dependent upon obtaining regulatory
approvals to market, and achieving market acceptance of, the Company's proposed
RIGS products, which represent the Company's principal proposed product line.
There can be no assurance that the Company will receive approval from the
appropriate regulatory body to market any of its RIGS products. Moreover,
achieving market acceptance for the RIGS products, if approved, will require
significant efforts and expenditures to create awareness and demand for the RIGS
products by surgeons, nuclear medicine departments of hospitals, oncologists
and, possibly, cancer patients. Widespread use of the Company's RIGS products
would require the training of numerous physicians, and the time required to
complete such training could result in a delay or dampening of market
acceptance. There can be no assurance that the Company's initial proposed
commercial products, RIGS products for colorectal cancer, or any other proposed
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<PAGE> 5
products will become standard surgical procedure or even generally accepted
medical practice, or that the Company will achieve any market penetration. In
addition, purchase decisions are greatly influenced by health care
administrators who are subject to increasing pressures to reduce costs.
Healthcare administrators must determine that the Company's products are
cost-effective alternatives to current means of tumor detection. The failure to
obtain governmental approvals or achieve significant market acceptance for such
products would have a materially adverse effect on the Company's business,
financial condition and results of operations.
GOVERNMENT REGULATION
The Company's biologic products will require a regulatory license to market
by the FDA and by comparable agencies in foreign countries. In addition, various
federal, state and foreign statutes also govern or influence the manufacture,
safety, labeling, storage, record keeping and marketing of such products. The
process of obtaining regulatory licenses and approvals is costly, time consuming
and prone to unexpected delay. The Company has encountered and may continue to
encounter delays in the completion of testing for certain proposed products.
Future delays could result from, among other things, a longer than expected
review process and possible additional analysis and reconciliation of any
perceived differences between data generated in Phase I/II and Phase II
clinical trials and data generated in Phase III clinical trials, slower than
expected patient enrollment rates, difficulties in analyzing data from clinical
trials or in validating manufacturing processes and changes in regulatory
requirements. In addition, although certain members of management and
significant employees and consultants have had substantial experience in
conducting and supervising clinical trials for pharmaceutical and biomedical
products, the Company has not previously submitted a Biologic License
Application ("BLA") to the FDA or a dossier to European regulatory agencies for
approval of a license to market its products. There can be no assurance that
clinical data collected in the Company's pivotal Phase III trials will be
sufficient to support approval of licenses for the Company's products or that
the FDA or European regulatory agencies will not require additional information
and data, including additional clinical studies, or refuse to file the
application for substantive review. Failure to obtain these licenses and to
commence commercial marketing on a timely basis could jeopardize the Company's
rights under certain of its current or contemplated contractual arrangements
for the supply of necessary components of its RIGS system products and would
have a material adverse effect on the Company's business, financial condition
and results of operations. Moreover, foreign and domestic approvals, if
granted, may include significant limitations on uses of the products. Further,
even if such regulatory approval is obtained, use of the Company's products
could reveal side effects that, if serious, could result in suspension of
existing licenses and delays in obtaining licenses in other jurisdictions. A
marketed product, manufacturer and manufacturing facilities are subject to
continual review and periodic inspections, and later discovery of previously
unknown problems with a product, manufacturer or facility may result in
restrictions on such product or manufacturer, including withdrawal of the
product from the market. Noncompliance with applicable governmental
requirements can result in import detentions, fines, civil penalties,
injunctions, suspensions or loss of regulatory approvals, recall or seizure of
the Company's products, operating restrictions, government refusal to approve
product export applications, or to allow the Company to enter into supply
contracts, and criminal prosecution. Additional governmental regulation may be
established which could prevent or delay regulatory approval of the Company's
products. Any delays or failure to receive required approvals or limiting
conditions on approvals could materially adversely affect the Company's
business, operating results and financial condition.
In addition to regulations enforced by the FDA, the manufacture,
distribution and use of Neoprobe's products are also subject to regulation by
the Nuclear Regulatory Commission, the Department of Transportation and other
federal, state, and local government authorities. Neoprobe and/or its
manufacturer of the radiolabeled antibodies must obtain a specific license from
the Nuclear Regulatory Commission to manufacture and distribute radiolabeled
antibodies as well as comply with all applicable regulations. Neoprobe must also
comply with Department of Transportation regulations on the labeling and
packaging requirements for shipment of radiolabeled antibodies to licensed
clinics, and must comply with federal, state and local governmental laws
regarding the disposal of radioactive waste. There can be no assurance that the
Company will be able to obtain all necessary licenses and permits and be able to
comply with all applicable laws. The failure to obtain such licenses and permits
or to comply with applicable laws would have a materially adverse effect on the
Company's business, financial condition and results of operations.
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<PAGE> 6
NO ASSURANCE OF CONTINUED RIGHTS TO TARGETING AGENTS; ROYALTY PAYMENTS
Targeting agents, such as monoclonal antibodies or peptides which are able
to bind specifically to tumor antigens or receptors, are essential to the
Company's technology and the Company's ultimate success. The targeting agents
used by the Company in its research and clinical studies and as components of
its proposed RIGS products are the patented or proprietary technology of others.
The Company must purchase the rights to those targeting agents or must obtain
rights to use them through license agreements with their owners. There can be no
assurance that such arrangements will continue or that they will continue on
terms acceptable to the Company. Furthermore, license agreements typically
impose obligations to diligently develop commercial products and to pay
royalties on those products. Failure to perform such obligations may lead to the
termination of such license agreements. Loss of the Company's rights to
targeting agents for any reason (including, in the case where the Company is a
sublicensee of the targeting agents, a breach by a sublicensor under its
agreement with the owner of a targeting agent) or the inability to obtain
necessary rights on acceptable terms could have a material adverse effect on the
Company's business, financial condition and results of operations. Moreover,
there can be no assurance that improved targeting agents will not be developed
by other entities for which the Company will be required to seek satisfactory
additional license arrangements. If such licenses cannot be readily obtained,
the Company could encounter delays in product market introductions or could find
that the development, manufacture or sale of products requiring such licenses
could be foreclosed, which could have a material adverse impact on the Company's
business, operating results and financial condition. Upon commercialization of
the Company's products, the Company will be required to make royalty payments
pursuant to its existing and contemplated license agreements which could
adversely impact the Company's operating results.
PATENTS, PROPRIETARY TECHNOLOGY AND TRADE SECRETS
The Company's success depends, in part, on its ability to secure patent
protection and maintain trade secret protection, and on its ability to operate
without infringing on the patents of third parties. The Company has received 10
United States patents, including U.S. Patent No. 4,782,840 which relates to the
RIGS system surgical method, and holds one additional patent jointly with The
Ohio State University Research Foundation ("OSURF"). The Company has filed
applications for certain additional United States and foreign patents. There can
be no assurance, however, that the patents for which the Company has applied
will be issued to the Company. Moreover, the Company believes that some of the
technology it develops will not be patentable in certain foreign markets. There
can be no assurance that any of the Company's patents or patent applications
will not be challenged, invalidated, or circumvented in the future. In addition,
there can be no assurance that competitors, many of which have substantially
more resources than the Company and have made substantial investments in
competing technologies, will not seek to apply for and obtain patents that will
prevent, limit, or interfere with the Company's ability to make, use, or sell
its products either in the United States or internationally. Furthermore, the
patent positions of biotechnology firms, including the Company, are highly
uncertain and involve complex legal and factual questions. To date, a consistent
and predictable application of United States patent laws regarding the grant and
interpretation of patent claims in the area of biotechnology has not evolved.
Due to these uncertainties, the probability of challenges, invalidations and
circumventions is higher than in technologically and legally stable fields.
Patent applications in the United States are maintained in secrecy until
patents issue, and patent applications in foreign countries are maintained in
secrecy for a period after filing. Publications of discoveries in the scientific
or patent literature tends to lag behind actual discoveries and the filing of
related patent applications. Patents issued and patent applications filed
relating to medical devices are numerous and there can be no assurance that
current and potential customers and other third parties have not filed or will
not file in the future applications for, or have not received or in the future
will not receive, patents or obtain additional proprietary rights relating to
products or processes used or proposed to be used by the Company.
The Company's U.S. Patent No. 4,782,840 includes claims to surgical
procedures having a number of steps, including, for example, the step of
administering an effective amount of an antibody specific for cancer tissue,
labeled with a radioactive isotope. The claims also include the step of delaying
surgery for a time interval following the administration step to permit the
radiolabeled antibody to concentrate preferentially in any cancer tissue that is
present and for the unbound radiolabeled antibody in the blood pool to be
cleared to a blood pool background level, so as to increase the ratio of
radiation from cancer tissue to background radiation. There can be no assurance
that
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<PAGE> 7
potential competitors will not promote surgical procedures that do not include
one or more of the steps recited in the claims of U.S. Patent No. 4,782,840,
including the aforementioned steps.
The Company also relies upon trade secrets, technical know-how, and
continuing technological innovation to develop and maintain its competitive
position. The Company typically requires its employees, consultants, and
advisors to execute confidentiality and assignment of inventions agreements in
connection with their employment, consulting, or advisory relationships with the
Company. There can be no assurance, however, that these agreements will not be
breached or that the Company will have adequate remedies for any breach.
Further, there also can be no assurance that others will not gain access to the
Company's trade secret information or independently develop or acquire the same
or equivalent trade secret information. Certain of the research activities
relating to the development of antibody technology that may be components of the
Company's proposed RIGS system technology products were conducted by agencies of
the United States government. When the United States government participates in
research activities, it retains certain rights that include the right to use the
technologies for governmental purposes under a royalty-free license, as well as
rights to use and disclose technical data and computer software that could
preclude the Company from asserting trade secret rights in that data and
software.
The Company has not been notified by any third party that the Company's
products and procedures infringe any valid, enforceable claim of any patent
owned by others. Any such claim, however, whether with or without merit, could
be time-consuming and expensive to respond to and could divert the Company's
technical and management personnel. The Company may be involved in litigation to
defend against claims of infringement by the Company, to enforce patents issued
to the Company, or to protect trade secrets of the Company. If any relevant
claims of third-party patents are upheld as valid and enforceable in any
litigation or administrative proceeding, the Company could be prevented from
practicing the subject matter claimed in such patents, or would be required to
obtain licenses from such patent owners, or to redesign its products and
processes to avoid infringement. There can be no assurance that the Company will
be able to obtain acceptable licenses or rights, if at all, to other patents
which the Company deems necessary for its operations. Accordingly, an adverse
determination in a judicial or administrative proceeding or failure to obtain
necessary licenses could prevent the Company from manufacturing and selling its
products, which would have a material adverse effect on the Company's business,
financial condition, and results of operations. The Company intends to
vigorously protect and defend its intellectual property. Costly and
time-consuming litigation brought by the Company may be necessary to enforce
patents issued to 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.
LIMITED THIRD PARTY REIMBURSEMENT
The Company's products will be marketed to hospitals and other users that
bill various third party payers, including government programs, such as federal
Medicare and state Medicaid, and private insurance plans, for the health care
services provided to their patients. Third party payers carefully review and are
increasingly challenging the prices charged for medical products and services.
Although the Company intends to establish the prices for its products according
to criteria believed to be acceptable to third party payers, there can be no
assurance that such payers will not deny reimbursement on the basis that the
Company's products are not in accordance with established payer policies
regarding cost-effective treatment methods, or on some other basis. There can be
no assurance that the Company would be able to provide economic and medical data
to overcome any third party payer objections.
In foreign markets, reimbursement is obtained from a variety of sources,
including governmental authorities, private health insurance plans, and labor
unions. In most foreign countries, there are also private insurance systems that
may offer payments for alternative therapies. Although not as prevalent as in
the United States, health maintenance organizations are emerging in certain
European countries. The Company may need to seek international reimbursement
approvals, although there can be no assurance that any such approvals will be
obtained in a timely manner or at all. Failure to receive international
reimbursement approvals could have an adverse effect on market acceptance of the
Company's products in the international markets in which such approvals are
sought.
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<PAGE> 8
There can be no assurance as to either United States or foreign markets
that third-party reimbursement and coverage or newly approved products will be
available or adequate, that current reimbursement policies of third-party payers
will not be decreased in the future or that future legislation, regulation, or
reimbursement policies of third-party payers will not otherwise adversely affect
the demand for the Company's products or its ability to sell its products on a
profitable basis. If third-party payer coverage or reimbursement is unavailable
or inadequate, the Company's business, financial condition, and results of
operations could be materially adversely affected.
COMPETITION
The biotechnology industry is characterized by intense competition. Many
companies, research institutes and universities are working in a number of
pharmaceutical or biotechnology disciplines similar to the Company's field of
interest. In addition, many companies are engaged in the development of or
currently offer products which may be or are competitive with the Company's
proposed products. Most of these entities have substantially greater financial,
technical, manufacturing, marketing, distribution or other resources than the
Company. Competing tumor detection technologies include computed tomography
("CT"), magnetic resonance imaging ("MRI") and, more recently
immunoscintigraphy. The Company may compete against a number of these companies
including Cytogen Corp., Immunomedics Inc. and NeoRx Corp. One or more of these
or other companies could also design and develop products that compete directly
with the Company's products, in which case the Company would face intense
competition. Such competition could have a material adverse effect on the
Company's business, financial condition and results of operations. The Company
is aware that other research and testing is being conducted in Western Europe in
connection with the use of radiolabeled targeting agents and radiation-detection
probes. There can be no assurance that one or more of these or other companies
will not develop technologies that are more effective or less costly than the
Company's products, or that would otherwise render the Company's products and
technology non-competitive or obsolete. Such technologies would have a material
adverse effect on the Company's business, financial condition and results of
operations.
Any product developed by the Company that gains regulatory approval will
have to compete for market acceptance and market share. An important factor in
such competition may be the timing of market introduction of competitive
products. Accordingly, the relative speed with which the Company can develop
products, complete clinical testing and regulatory approval processes, gain
reimbursement acceptance and supply commercial quantities of the product to the
market is expected to be an important competitive factor. In addition, the
Company believes that the primary competitive factors in the market for tumor
detection products are safety, efficacy, ease of delivery, reliability,
innovation and price. The Company also believes that physician relationships and
customer support are important competitive factors. There can be no assurance
that the Company's can achieve or maintain a competitive position or that the
Company's intraoperative detection products for the treatment of cancer will be
introduced or marketed in a timely fashion or that any such products will
achieve significant market acceptance. In such event, the Company's business,
operating results and financial condition could be materially adversely
affected.
RISK OF TECHNOLOGICAL OBSOLESCENCE
The medical device industry is characterized by rapid and significant
technological change. There can be no assurance that third parties will not
succeed in developing or marketing technologies and products that are more
effective than those developed or marketed by the Company or that would render
the Company's technology and products obsolete or noncompetitive. Additionally,
new surgical procedures and medications could be developed that replace or
reduce the importance of current procedures that use the Company's products.
Accordingly, the Company's success will depend in part on its ability to respond
quickly to medical and technological changes through the development and
introduction of new products. Product development involves a high degree of risk
and there can be no assurance that the Company's new product development efforts
will result in any commercially successful products. In such event, the
Company's business, operating results and financial condition could be
materially adversely affected.
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<PAGE> 9
LIMITED MANUFACTURING CAPACITY AND EXPERIENCE
To date, the Company's manufacturing activities have consisted primarily of
manufacturing limited quantities of products clinical trials. In order to
achieve financially self sustaining operations, the Company must manufacture or
have others manufacture its RIGS products, including targeting agents, in
commercial quantities at an acceptable cost. If the Company scales up
manufacturing its products, there can be no assurance that the Company will not
encounter difficulties such as problems involving product yields, quality
control and assurance, supplies of components, and shortages of qualified
personnel. Moreover, in order to assemble, complete, package and distribute its
RIGS products in commercial quantities, the Company will have to maintain a
current Good Manufacturing Practices ("GMP") facility to manufacture its
products or engage independent contractors to manufacture such products. The
GMP facility will have to adhere to GMP regulations and to guidelines enforced
by the FDA and other regulatory agencies through their facilities inspection
programs. If such an inspection by the FDA or another regulatory agency results
in a requirement for additional modifications to the facility, the Company's
ability to manufacture its products could be adversely affected. There can be
no assurance that the Company will be able to engage independent contractors or
develop and maintain a GMP facility at a cost acceptable to the Company.
The Company uses or relies on certain components and services used in its
devices that are provided by sole source suppliers. Although the Company has
identified primary and alternative vendors, the qualification of additional or
replacement vendors for certain components or services is a lengthy process. Any
significant supply interruption would have a material adverse effect on the
Company's ability to manufacture its products and, therefore, a material adverse
effect on its business, financial condition, and results of operations.
The Company expects to manufacture its products based on forecasted product
orders. Lead times for materials and components ordered by the Company vary
significantly, and depend on factors such as the business practices of the
specific supplier, contract terms, and general demand for a component at a given
time. Certain components used in the Company's products have long lead times. As
a result, there is a risk of excess or inadequate inventory if orders do not
match forecasts.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the shares of Common Stock of the Company, like that of
the securities of many other biotechnology companies, has been and is likely to
continue to be highly volatile. For example, the closing price for shares of the
Company's Common Stock for the last two years has been as high as $22 and as low
as $1.50. Factors such as the results of preclinical and clinical trials by the
Company or its competitors, other evidence of the safety and efficacy of the
Company's or competitors' products, announcements of technological innovations
or new commercial products by the Company or its competitors, changes in
securities analysts' estimates or recommendations, governmental regulation,
developments in patent or other proprietary rights of the Company or its
competitors, and fluctuations in the Company's operating results may have a
significant effect on the market price of the Common Stock. In addition, the
stock market has experienced and continues to experience extreme price and
volume fluctuations which have affected the market price of many biotechnology
companies and which have often been unrelated to the operating performance of
these companies. These broad market fluctuations, as well as general economic
and political conditions, may adversely affect the market price of the Common
Stock. The Company has more than 22.5 million shares of Common Stock
outstanding, almost all of which are freely tradeable.
-8-
<PAGE> 10
FUTURE CAPITAL NEEDS; UNCERTAINTY OF CAPITAL FUNDING
To date, the Company's capital requirements have been significant. The
Company has depended on the proceeds of sales of its securities and other
financing vehicles to continue clinical testing of its proposed products and to
fund its working capital requirements. The Company believes that the funds it
has on hand will satisfy its cash needs through the end of 1998. Obtaining
approvals to market is costly and time consuming and the Company may require
significant funds in addition to its current cash resources to sustain its
operations and to obtain regulatory approval to commercialize any of its
proposed products. No assurance can be given that the necessary additional
financing will be available to the Company on acceptable terms, if at all, or
that would not result in further dilution to the holders of the Company's equity
securities. The Company's ability to raise additional financing may be dependent
on many factors beyond the Company's control, including the state of capital
markets, the development or prospects for development of competitive technology
by others and the rate of progress of the Company's clinical trials. If
additional funding is unavailable to the Company when needed, the Company will
be required to curtail significantly one or more of its research and development
programs and the Company's business and financial condition will be materially
adversely affected.
PRODUCT LIABILITY
The testing, marketing and sale of the Company's proposed products could
expose the Company to liability claims. The Company currently has $10 million of
liability insurance, which the Company believes is adequate for its current
activities. There can be no assurance, however, that the Company will be able
to continue to obtain insurance at a reasonable cost, if at all, or that such
insurance, will be sufficient to cover any liabilities resulting from any
product liability claims or that the Company will have funds available to pay
any claims over the limits of its insurance. Either an underinsured or an
uninsured claim could have a material adverse effect on the Company's business,
operating results and financial condition.
DEPENDENCE ON KEY PERSONNEL; ABILITY TO ATTRACT NEW PERSONNEL; POSSIBLE
CONFLICTS OF INTEREST
John L. Ridihalgh and David C. Bupp are key employees of the Company and
the loss of the services of either one of them could substantially delay the
achievement of the Company's goals. The Company carries "key man" life insurance
with a death benefit of $1 million on each of them. The Company has entered into
employment agreements with each of these individuals pursuant to which, among
other things, these individuals have agreed not to compete with the Company for
specified periods. The Company's success is dependent on its ability to attract
and retain additional technical and management personnel with expertise in
several technical and scientific disciplines and experience in the regulatory
approval process. The competition for qualified personnel in the biomedical
industry is intense and, accordingly, there can be no assurance that the Company
will be successful in hiring or retaining the requisite personnel. In addition,
the Company will rely on certain of its non-employee directors and members of
its Scientific Advisory Board to assist the Company in formulating and pursuing
its research and commercialization strategy. These directors and members of the
Scientific Advisory Board are and will be employed by entities other than the
Company and may serve as directors of or have a commitment to or consulting or
advisory contracts with other entities, including potential competitors of the
Company. Although the Company has confidentiality agreements with these
directors and with each member of its Scientific Advisory Board, conflicts of
interest may arise between those persons and the Company, which conflicts may
not necessarily be resolved in favor of the Company.
NEED TO MANAGE A CHANGING BUSINESS
In order to compete effectively against current and future competitors,
complete clinical trials in progress, prepare additional products for clinical
trials, and develop future products, the Company believes that it must continue
to expand its operations, particularly in the areas of research and development,
manufacturing and marketing. If the Company were to experience significant
growth in the future, such growth would likely result in new and increased
responsibilities for management personnel and place significant strain upon the
Company's
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<PAGE> 11
management, operating and financial systems and resources. To accommodate such
growth and compete effectively, the Company must continue to implement and
improve information systems, procedures and controls, and to expand, train,
motivate, and manage its work force. The Company's future success will depend to
a significant extent on the ability of its current and future management
personnel to operate effectively. There can be no assurance that the Company's
personnel, systems, procedures and controls will be adequate to support the
Company's future operations. Any failure to implement and improve the Company's
operational, financial, and management systems or to expand, train, motivate or
manage employees could have a material adverse effect on the Company's business,
financial condition and results of operations.
NO DIVIDENDS
The Company has never paid dividends on its Common Stock. The Company
intends to retain any future earnings to finance its growth. Accordingly, any
potential investor who anticipates the need for current dividends from its
investment should not purchase any of the Common Stock offered hereby.
ANTI-TAKEOVER PROVISIONS; BLANK CHECK PREFERRED STOCK
The Company has adopted a Stockholder Rights Plan. Certain provisions of
the Stockholder Rights Plan and certain of the Company's charter provisions and
applicable corporate laws could be used to hinder or delay a takeover bid for
the Company. Such provisions may inhibit takeover bids and decrease the chance
of stockholders realizing a premium over market price for their Common Stock as
a result of a takeover. The Company's Certificate of Incorporation authorizes
the issuance of "blank check" preferred stock with such designations, rights,
preferences and restrictions as may be determined from time to time by the Board
of Directors, 500,000 shares of which have been designated as Series A Junior
Participating Preferred Stock and reserved for issuance pursuant to the
Company's Stockholder Rights Plan. If the Company issues Preferred Stock, the
issuance could be used to thwart a takeover bid and may have a dilutive effect
upon the Company's common stockholders, including the purchasers of the
securities offered hereby. See "Description of Securities."
SELLING SHAREHOLDERS
The Selling Shareholders are offering 848,920 shares of Common Stock for
sale hereby. The names of the Selling Shareholders, and the number of shares of
Common Stock owned by each of them, the percentage of the outstanding shares of
Common Stock that such number constitutes as of the date hereof (if one percent
or more) and the number of shares of Common Stock offered hereunder is set forth
in the table below. The shares of Common Stock offered hereunder will be sold
from time to time at the Selling Shareholder's discretion and the number of
shares of Common Stock to be owned by the Selling Shareholders after sale
hereunder and the percent of class at that time cannot be determined currently
by the Company.
<TABLE>
<CAPTION>
Amount
Saleable
Amount Owned Hereunder
-------------------- ----------
No. of Percent No. of
Name Shares of Class Shares
---- ------ -------- -------
<S> <C> <C> <C> <C>
The Dow Chemical Company (1)................ 847,920 4% 847,920
David Nussbaum.............................. 1,000 -- 1,000
<FN>
- ---------------
(1) The Dow Chemical Company ("Dow") and the Company are parties to agreements
under which the Company licenses certain technology from Dow. As
consideration for those licenses, the Company has agreed to pay certain
royalties to Dow. 124,805 of the shares included above were issued to Dow
in 1996 under as part of such consideration. An employee of Dow is a
director of the Company.
</TABLE>
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<PAGE> 12
PLAN OF DISTRIBUTION
The securities sold hereunder may be sold from time to time by the Selling
Shareholders or by their pledgees, donees, executors, trustees or other
successors or personal representatives. The Selling Shareholders, when selling
securities under this Prospectus, may sell such securities from time to time
through broker/dealers selected by them individually. Such sales may be made
through ordinary transactions on the Nasdaq National Market, or other markets on
which the Company's securities are traded from time to time; secondary
distributions, exchange distributions or special offerings in accordance with
the rules of the National Association of Securities Dealers in which such
broker/dealers may act as principal or agent; block trades in accordance with
the rules of the National Association of Securities Dealers in which such
broker/dealers may attempt to sell such securities as agent and may position and
resell all or a portion of the block as principal to facilitate the transactions
or a combination of such methods of sale. The Selling Shareholders may also sell
their shares under this prospectus in privately negotiated transactions off of
the Nasdaq National Market, which need not be consummated through
broker/dealers. The shares are expected to be sold at market related prices
prevailing at the time of sale. Broker/dealers will be compensated by the
payment of commissions and fees in amounts to be determined by negotiations
between the Selling Shareholders and their respective broker/dealers from time
to time.
In connection with the sale of Common Stock under this Prospectus, the
Selling Shareholders may be deemed to be underwriters within the meaning of the
Securities Act of 1933. It is unlikely that they will perform any of the
functions of an underwriter as that term is understood in its usual commercial
usage, including performing a due diligence investigation of the Company or
making any estimates of the value of its securities. By making this disclosure,
the Selling Shareholders do not admit that they are underwriters within the
meaning of the Securities Act of 1933 and they reserve the right to contest any
allegation that they are acting as such or that they have any liabilities as
such.
In connection with the sale of Common Stock under this Prospectus, the
broker/dealers selected by the Selling Shareholders may be deemed to be
underwriters within the meaning of the Securities Act of 1933, in which event
brokerage commissions or discounts received by such broker/dealers may be deemed
to be underwriting compensation. The Selling Shareholders may agree to indemnify
their respective broker/dealers against certain liabilities, including
liabilities under the Securities Act of 1933. The Selling Shareholders may, if
they so choose, sell their securities under this Prospectus or may sell their
securities under Rule 144 if such securities and such sale meet the conditions
of such Rule.
-11-
<PAGE> 13
DESCRIPTION OF SECURITIES
Neoprobe is authorized to issue 50,000,000 shares of Common Stock, par
value $.001 per share, 22,586,527 shares of which were outstanding as of
December 31, 1996 and 5,000,000 shares of Preferred Stock, par value $.001 per
share, none of which is outstanding. The following brief description of the
capital stock of Neoprobe is qualified in its entirety by reference to
Neoprobe's Certificate of Incorporation, a copy of which is on file with the
Commission.
COMMON STOCK
All outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable. Each share of Common Stock entitles the
holder thereof to one vote on all matters submitted to a vote of the
stockholders including the election of directors. Since the holders of Common
Stock do not have cumulative voting rights, the holders of a simple majority of
the outstanding shares have the power to elect all of the directors to be
elected at a given meeting and the holders of the remaining shares by
themselves would not be able to elect any directors at that meeting. See "Risk
Factors -- Anti-Takeover Provisions; Blank Check Preferred Stock." The holders
of Common Stock do not have preemptive, redemption or conversion rights.
Holders of Common Stock are entitled to receive ratably such dividends as may
be declared by the Board of Directors, from time to time, out of funds legally
available therefor. See "Risk Factors -- No Dividends." If Neoprobe is
liquidated, dissolved, or wound up, holders of the Common Stock have the right
to receive a ratable portion of the assets remaining after the payment of
creditors and the holders of the shares of any class or series of Preferred
Stock to the extent that the then existing terms of the Preferred Stock grant
them priority over the holders of shares of Common Stock.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance of
"blank check" Preferred Stock in one or more classes or series with such
designations, rights, preferences and restrictions as may be determined from
time to time by the Board of Directors, 500,000 shares of which have been
designated as Series A Junior Participating Preferred Stock ("Series A Preferred
Stock") and reserved for issuance pursuant to the stockholder rights plan
described below. As of the date hereof, there are no shares of Preferred Stock
outstanding. The Board of Directors may, without prior stockholder approval,
issue Preferred Stock with dividend, liquidation, conversion, voting or other
rights which could adversely affect the relative voting power or other rights of
the holders of Common Stock. Preferred Stock could be used, under certain
circumstances, as a method of discouraging, delaying, or preventing a change in
control of Neoprobe. Although Neoprobe has no present intention of issuing any
shares of Preferred Stock, there can be no assurance that it will not do so in
the future. If Neoprobe issues Preferred Stock, such issuance may have a
dilutive effect upon the common stockholders, including the purchasers of the
securities offered hereby. See "Risk Factors -- Anti-Takeover Provisions; Blank
Check Preferred Stock."
STOCKHOLDER RIGHTS PLAN
Adoption of the Stockholder Rights Plan. On July 18, 1995, the Board of
Directors adopted a stockholder rights plan for the Company. The purpose of the
stockholder rights plan is to protect the interests of the Company's
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<PAGE> 14
stockholders if the Company is confronted with coercive or unfair takeover
tactics by encouraging third parties interested in acquiring the Company to
negotiate with the Board of Directors.
The stockholder rights plan is a plan by which the Company has distributed
rights ("Rights") to purchase (at the rate of one Right per share of Common
Stock) one hundredth of a share of Series A Preferred Stock at an exercise price
of $35 per Right. The Rights are attached to the Common Stock and are not
exercisable until after 15 percent of the Common Stock has been acquired or
tendered for. At that point, they would be separately traded and exercisable.
Upon certain events, including a third party crossing the 15 percent threshold,
the Rights would "flip-in" (but not the Rights of such substantial stockholder)
and become Rights to acquire, upon payment of the exercise price, Common Stock
(or, in certain circumstances, other consideration) with a value of twice the
exercise price of the Right. If a third party were to take certain action to
acquire the Company, such as a merger, the Rights would "flip-over" and entitle
the holder to acquire stock of the acquiring person with a value of twice the
exercise price. The Rights are redeemable by the Company at any time before they
become exercisable for $.01 per Right and expire on August 28, 2005. The number
of Rights per share of Common Stock will be adjusted in the future to reflect
future splits and combinations of, and Common Stock dividends on, the Common
Stock. The exercise price of the Rights will be adjusted to reflect changes in
the Series A Preferred Stock.
Series A Preferred Stock. The Series A Preferred Stock purchasable upon
exercise of the Rights will be redeemable at a price equal to 100 times the
current per share market price of the Common Stock at the time of redemption,
together with accrued but unpaid dividends. Each share of Series A Preferred
Stock will have a minimum preferential quarterly dividend of $.05 per share and
will be entitled to an aggregate dividend of 100 times the dividend declared on
the Common Stock. In the event of liquidation, the holders of the Series A
Preferred Stock will receive a preferred liquidation payment equal to $.10 per
share and, after the Common Stock has received a proportionate distribution,
will share in the remaining assets on a proportionate basis with the Common
Stock. If dividends on Series A Preferred Stock are in arrears in an amount
equal to six quarterly dividend payments, all holders of Preferred Stock of the
Company (including holders of Series A Preferred Stock) with dividends in
arrears equal to such amount, voting as a class, would have the right to elect
two directors of the Company. Series A Preferred Stock would rank senior to the
Company's Common Stock, but junior to any other outstanding class of Preferred
Stock of the Company as to both the payment of dividends and the distribution of
assets. Each share of Series A Preferred Stock will have 100 votes on all
matters submitted to the stockholders. In the event of any merger, consolidation
or other transaction in which Common Stock is exchanged, each share of Series A
Preferred Stock will be entitled to receive 100 times the amount received per
share of Common Stock. It was the intention of the Company that each share of
Series A Preferred Stock approximate 100 shares of Common Stock as they existed
on the date the Rights were distributed (August 28, 1995); therefore, the
redemption price, dividend, liquidation price and voting rights have been, and
will in the future be, adjusted to reflect splits and combinations of, and
Common Stock dividends on, the Common Stock.
Anti-Takeover Effects. The Company's stockholder rights plan is designed to
deter coercive takeover tactics and otherwise to encourage persons interested in
acquiring the Company to negotiate with the Board of Directors. The stockholder
rights plan will confront a potential acquirer of the Company with the
possibility that the Company's stockholders will be able to substantially dilute
the acquirer's equity interest by exercising Rights to buy additional stock in
the Company or, in certain cases, stock in the acquirer, at a substantial
discount and may have the effect of deterring third parties from making takeover
bids for control of the Company or may be used to hinder or delay a takeover bid
thereby decreasing the chance of the stockholders of the Company realizing a
premium over market price for their shares of Common Stock as a result of such
bids. See "Risk Factors -- Anti-Takeover Provisions; Blank Check Preferred
Stock." The Board of Directors may redeem the Rights at a nominal consideration
if it considers the proposed acquisition of the Company to be in the best
interests of the Company and its stockholders. Accordingly, the stockholder
rights plan should not interfere with any merger or other business combination
which has been approved by the Board of Directors. Any plan or arrangement which
effectively requires an acquiring company to negotiate with the Company's
management may be characterized as increasing such management's ability to
maintain its position with the Company, including the approval of a transaction
which provides less value to the stockholders while providing benefits to
management.
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<PAGE> 15
CERTAIN CHARTER PROVISIONS AND LAWS
In addition to the stockholder rights plan and the Preferred Stock
provisions described above, certain features of the Company's Certificate of
Incorporation and By-laws and the General Corporation Law of the State of
Delaware ("GCL"), which are further described below, may have the effect of
deterring third parties from making takeover bids for control of the Company or
may be used to hinder or delay a takeover bid thereby decreasing the chance of
the stockholders of the Company realizing a premium over market price for their
shares of Common Stock as a result of such bids.
Limitations on Stockholder Actions. The Certificate of Incorporation
provides that stockholder action may only be taken at a meeting of the
stockholders. Thus a holder of a majority of the voting power could not take
action to replace the Board of Directors, or any class thereof, without a
meeting of the stockholders nor could such a holder amend the By-laws without
presenting the amendment to a meeting of the stockholders. Furthermore, under
the provisions of the Certificate of Incorporation and By-laws of the Company,
special meetings of the stockholders may only be called by the Board. Therefore,
a stockholder, even one who holds a majority of the voting power, may neither
replace sitting Board members nor amend the By-laws before the next annual
meeting of stockholders.
Advance Notice Provisions. The Company's By-laws provide for an advance
notice procedure for the nomination, other than by the Board, of candidates for
election as directors as well as for other stockholder proposals to be
considered at annual meetings of stockholders. In general, notice of intent to
nominate a director or raise matters at meetings must be received by the Company
not less than 120 days before the first anniversary of the mailing of the
Company's proxy statement for the previous year's annual meeting, and must
contain certain information concerning the person to be nominated or the matters
to be brought before the meeting and concerning the stockholder submitting the
proposal.
Delaware Law. The Company is subject to Section 203 of the GCL, which
provides that a corporation may not engage in any business combination with an
"interested stockholder" during the three years after he becomes an interested
stockholder unless the corporation's board of directors approved in advance
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder; the interested stockholder owned
at least 85 percent of the voting stock of the corporation outstanding at the
time the transaction commenced; or the business combination is approved by the
corporation's board of directors and the affirmative vote of at least two-thirds
of the outstanding voting stock which is not owned by the interested
stockholder. An interested stockholder is anyone who owns 15 percent or more of
the outstanding voting stock of the corporation, or is an affiliate or associate
of the corporation and was the owner of 15 percent or more of the outstanding
voting stock of the corporation at any time within the previous three years; and
the affiliates and associates of any such person. Under certain circumstances,
Section 203 of the GCL makes it more difficult for an "interested stockholder"
to effect various business combinations with a corporation for a three-year
period, although the stockholders of a corporation may elect to exclude a
corporation from the section's restrictions.
Classified Board. The Certificate of Incorporation and By-laws of the
Company divide the Board into three classes with staggered three year terms.
There are currently nine directors, three in each class. At each annual meeting
of stockholders, the terms of one class of directors will expire and the newly
nominated directors of that class will be elected for a term of three years. The
Board will be able to determine the total number of directors constituting the
full Board and the number of directors in each class, but the total number of
directors may not exceed 17 nor may the number of directors in any class exceed
six. Subject to these rules, the classes of directors need not have equal
numbers of members. No reduction in the total number of directors or in the
number of directors in a given class will have the effect of removing a director
from office or reducing the term of any then sitting director. Stockholders may
only remove directors for cause. If the Board increases the number of directors
in a class, it will be able to fill the vacancies created for the full remaining
term of a director in that class even though the term may extend beyond the next
annual meeting. The directors will also be able to fill any other vacancies for
the full remaining term of the director whose death, resignation or removal
caused the vacancy.
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<PAGE> 16
A person who has a majority of the voting power at a given meeting will not
in any one year be able to replace a majority of the directors since only one
class of the directors will stand for election in any one year. As a result, at
least two annual meeting elections will be required to change the majority of
the directors by the requisite vote of stockholders. The purpose of classifying
the Board is to provide for a continuing body, even in the face of a person who
accumulates a sufficient amount of voting power, whether by ownership or proxy
or a combination, to have a majority of the voting power at a given meeting and
who may seek to take control of the Company without paying a fair premium for
control to all the holders of Common Stock. This will allow the Board time to
negotiate with such a person and to protect the interests of the other
stockholders who may constitute a majority of the shares not actually owned by
such person. However, it may also have the effect of deterring third parties
from making takeover bids for control of the Company or may be used to hinder or
delay a takeover bid thereby decreasing the chance of the stockholders of the
Company realizing a premium over market price for their shares of Common Stock
as a result of such bids. See "Risk Factors -- Anti-Takeover Provisions; Blank
Check Preferred Stock."
TRANSFER AGENT
The transfer agent for the Common Stock, and the rights agent for the
stockholder rights plan is Continental Stock Transfer & Trust Company,
2 Broadway, New York, New York 10004; telephone (212) 509-4000.
INDEMNIFICATION
Section 145 of the General Corporation Law of the State of Delaware
("Section 145") provides that directors and officers of Delaware corporations
may, under certain circumstances, be indemnified against expenses (including
attorneys' fees) and other liabilities actually and reasonably incurred by them
as a result of any suit brought against them in their capacity as a director or
officer, if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, if they had no reasonable cause to believe
their conduct was unlawful. Section 145 also provides that directors and
officers may also be indemnified against expenses (including attorneys' fees)
incurred by them in connection with a derivative suit if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made
without court approval if such person was adjudged liable to the corporation.
Article V of the Company's By-laws has provisions requiring the Company to
indemnify its officers, directors, employees and agents which are in
substantially the same language as Section 145.
Article Nine, section (b), of the Company's Certificate of Incorporation
further provides that no director will be personally liable to the Company or
its stockholders for monetary damages or for any breach of fiduciary duty except
for breach of the director's duty of loyalty to the Company or its stockholders,
for acts or omissions not in good faith or involving intentional misconduct or a
knowing violation of law, pursuant to Section 174 of the Delaware General
Corporation Law (which imposes liability in connection with the payment of
certain unlawful dividends, stock purchases or redemptions), or any amendment or
successor provision thereto, or for any transaction from which the director
derived an improper personal benefit.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
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<PAGE> 17
EXPERTS
The audited financial statements incorporated in this Prospectus have been
so incorporated in reliance on the report of Coopers & Lybrand L.L.P., as
independent accountants, for the periods indicated in their report, given on the
authority of such firm as experts in auditing and accounting.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995 (Commission File Number 0-26520);
2. The Company's Quarterly Reports on Form 10-QSB and amendments thereto
on Form 10-QSB/A for the fiscal quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996 (Commission File No. 0-26520);
3. The Company's Current Report on Form 8-K dated March 12, 1997
(Commission File No. 0-26520);
4. The description of the Company's Common Stock, par value $.001 per
share, contained in the Company's Registration Statement on Form 8-A,
as amended by Amendment No. 4 (Commission File Number 0-26520);
5. The description of Rights to Purchase Series A Junior Participating
Preferred Stock contained in the Company's Registration Statement on
Form 8-A (Commission File No. 0-26520); and
6. All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior
to the termination of the offering of the securities hereunder.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
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<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be borne by the registrant,
other than underwriting discounts and commissions, in connection with the
issuance and distribution of the Common Stock upon the exercise of the Warrants.
<TABLE>
<CAPTION>
Payable
by the
Registrant
-------------
<S> <C>
Registration Fee - Securities and Exchange Commission......... $ 507.51
Accounting fees and expenses.................................. $ 2,500.00
Legal fees and expenses....................................... $ 4,000.00
Printing costs................................................ $ 500.00
Miscellaneous................................................. $ 2,492.49
----------
Total.............................................. $10,000.00
==========
</TABLE>
All expenses other than the Securities and Exchange Commission filing fee
are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
("Section 145") provides that directors and officers of Delaware corporations
may, under certain circumstances, be indemnified against expenses (including
attorneys' fees) and other liabilities actually and reasonably incurred by them
as a result of any suit brought against them in their capacity as a director or
officer, if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, if they had no reasonable cause to believe
their conduct was unlawful. Section 145 also provides that directors and
officers may also be indemnified against expenses (including attorneys' fees)
incurred by them in connection with a derivative suit if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made
without court approval if such person was adjudged liable to the corporation.
Article V of the Company's By-laws has provisions requiring the Company to
indemnify its officers, directors, employees and agents that are in
substantially the same language as Section 145.
Article Nine, section (b), of the Company's Certificate of Incorporation
further provides that no director will be personally liable to the Company or
its stockholders for monetary damages or for any breach of fiduciary duty except
for breach of the director's duty of loyalty to the Company or its stockholders,
for acts or omissions not in good faith or involving intentional misconduct or a
knowing violation of law, pursuant to Section 174 of the Delaware General
Corporation Law (which imposes liability in connection with the payment of
certain unlawful dividends, stock purchases or redemptions), or any amendment or
successor provision thereto, or for any transaction from which the director
derived an improper personal benefit.
II-1
<PAGE> 19
ITEM 16. EXHIBITS.
The following exhibits are part of this Registration Statement:
(4) INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS, INCLUDING INDENTURES
4.1. See Articles FOUR, FIVE, SIX, SEVEN and EIGHT of the Restated
Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 99.1 of Registrant's Current Report on Form 8-K,
dated June 20, 1996; Commission File No. 0-20676).
4.2. See Articles II and VI and Section 2 of Article III and Section 4 of
Article VII of the Amended and Restated By-laws of the Registrant
(incorporated by reference to Exhibit 99.4 of Registrant's Current
Report on Form 8-K dated June 20, 1996; Commission File No. 0-20676).
4.6. Rights Agreement dated as of July 18, 1995 between the Registrant and
Continental Stock Transfer & Trust Company (incorporated by reference to
Exhibit 1 of the registration statement on Form 8-A; Commission File No.
0-20676).
(5) OPINION REGARDING LEGALITY
5.1. Opinion of Schwartz, Warren & Ramirez a Limited Liability Company as to
the legality of the Common Stock.*
(23) CONSENTS
23.1. Consent of Coopers & Lybrand L.L.P.
23.2. Consent of Schwartz, Warren & Ramirez a Limited Liability Company is set
forth as part of Exhibit 5.1 above.*
(24) POWERS OF ATTORNEY.
24.1. Powers of Attorney.*
24.2. Certified resolution of the Registrant's Board of Directors authorizing
officers and directors signing on behalf of the Registrant to sign
pursuant to a power of attorney.*
* previously filed
II-2
<PAGE> 20
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;
(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 the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to
the plan or distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(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 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(h) 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,
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> 21
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 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Columbus, State of Ohio, on February 26, 1997.
NEOPROBE CORPORATION
By s/ David C. Bupp
----------------------------------
David C. Bupp, President
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to registration statement has been signed on February
26, 1997 by the following persons in the capacities indicated.
SIGNATURES CAPACITY
---------- --------
John L. Ridihalgh* Director, Chairman of the
- --------------------------- Board, Chief Executive Officer
John L. Ridihalgh (principal executive officer)
s/ David C. Bupp Director, President, Chief
- --------------------------- Operating Officer
David C. Bupp
John Schroepfer* Vice President, Finance and
- --------------------------- Administration (principal financial
John Schroepfer and accounting officer)
C. Michael Hazard * Director
- ---------------------------
C. Michael Hazard
Julius R. Krevans* Director
- ---------------------------
Julius R. Krevans
Michael P. Moore* Director
- ---------------------------
Michael P. Moore
Zwi Vromen* Director
- ---------------------------
Zwi Vromen
Jerry K. Mueller, Jr.* Director
- ---------------------------
Jerry K. Mueller, Jr.
Frank Whitley, Jr.* Director
- ---------------------------
Frank Whitley, Jr.
James Zid* Director
- ---------------------------
James Zid
*By s/ David C. Bupp
- ---------------------------
David C. Bupp
Attorney-in-Fact
<PAGE> 1
Exhibit 23.1
CONSENT TO INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 (File No. 333-15989) of our report dated February 12, 1997, on our
audits of the consolidated financial statements of Neoprobe Corporation and
Subsidiaries.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
March 13, 1997
