As filed with the Securities and Exchange
Commission on January ___, 2000 Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THERMOGENESIS CORP.
(Exact name of the Company as specified in its charter)
Delaware 94-3018487
- --------------------------------- ---------------------------------------
(State or other jurisdiction or (I.R.S. Employer Identification Number)
incorporation or organization)
3146 Gold Camp Drive
Rancho Cordova, California 95670
(916) 858-5100
--------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Philip H. Coelho
Chief Executive Officer
THERMOGENESIS CORP.
3146 Gold Camp Drive
Rancho Cordova, CA 95670
(916) 858-5100
--------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
David C. Adams, Esq. Daniel B. Eng, Esq.
General Counsel BARTEL ENG LINN & SCHRODER
THERMOGENESIS CORP. 300 Capitol Mall, Suite 1100
3146 Gold Camp Drive Sacramento, CA 95814
Rancho Cordova, California 95670 (916) 442-0400
(916) 858-5110
Approximate date of commencement of the proposed sale to the public: As soon as
practicable, and from time to time 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]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
<PAGE>ii
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum Amount of
Title of each class of securities Amount to be offering price aggregate offering registration
to be registered registered per share price fee
------------------------------------- ------------------ -------------------- ------------------- ----------------
Common Stock Underlying Series B
Preferred Stock 4,236,000 (1) $2.96 (3) $12,538,560 $3,311
Common Stock Underlying Warrants 484,562 (2) $2.73 (4) $ 1,322,855 $ 350
Total 4,720,562 $13,861,415 $3,661
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(1) Represents the maximum number of shares of common stock issuable upon the
conversion of the Series B preferred stock and offered for resale.
(2) Represents the number of shares of common stock offered for resale
following the exercise of warrants, including 40,000 shares underlying
placement agent warrants.
(3) Calculated in accordance with Rule 457(c) of the Securities Act of 1933, as
amended ("Securities Act"). Estimated for the sole purpose of calculating
the registration fee and based upon the average of the high and low price
per share of our common stock on January 14, 2000, as reported on the
Nasdaq SmallCap Market.
(4) Calculated in accordance with Rule 457(g) of the Securities Act.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>1
Subject to Completion January ___, 2000 PROSPECTUS
4,720,562 Shares
THERMOGENESIS CORP.
Common Stock
All of the shares of common stock of THERMOGENESIS CORP. offered are being sold
by selling stockholders listed in this prospectus. Of the shares being sold by
the selling stockholders, up to 4,236,000 shares may be resold upon the
conversion of Series B convertible preferred stock, and up to 484,562 shares may
be resold upon the exercise of outstanding warrants. The Series B preferred
stock and warrants were issued in private placements completed in December 1999
and January 2000. We will not receive any proceeds from the resale of any common
stock by the selling stockholders.
Our common stock is traded and listed on The Nasdaq SmallCap Market, under the
symbol "KOOL." On January 17, 2000, the last reported sale price for the common
stock was $2.97. There is no market for either the Series B preferred stock or
the warrants.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGE 5.
-------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON STOCK OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is January ___, 2000.
<PAGE>2
AVAILABLE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements, or other information on file at the Commission's public
reference room in Washington, D.C. You can request copies of those documents,
upon payment of a duplicating fee, by writing to the Commission.
We have filed a registration statement on Form S-3 with the Commission. This
prospectus, which forms a part of that registration statement, does not contain
all information included in the registration statement. Certain information is
omitted and you should refer to the registration statement and its exhibits.
With respect to references made in this prospectus to any contract or other
document of our company, such references are not necessarily complete and you
should refer to the exhibits attached to the registration statement for copies
of the actual contract or document. You may review a copy of the registration
statement, including exhibits, and other reports, statements, or other
information that we file with the Commission, at the Commission's public
reference room located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material,
when filed, may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Please call the Commission at 1-800-SEC-0330 for further information on
the operation of the public reference rooms. Our filings and the registration
statement can also be reviewed by accessing the Commission's website at
http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered part of this prospectus, and information that we file later with the
Commission will automatically update and supersede the information in this
prospectus. We incorporate by reference the documents listed below and any
future filings we make with the Commission under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934.
(1) Annual Report on Form 10-K for the year ended June 30, 1999;
(2) Quarterly Report on Form 10-Q for the quarter ended September 30,
1999;
(3) Current Report on Form 8-K for the event dated December 22, 1999;
(4) Proxy Statement for the Annual Meeting of Stockholders held on
December 10, 1999; and
(5) The description of our common stock contained in Form 8-A.
Our Exchange Act file number is 0-16375. You may request a copy of these filings
at no cost, by writing or telephoning us at the following address: THERMOGENESIS
CORP., 3146 Gold Camp Drive, Rancho Cordova, California 95670, Attention:
Corporate Secretary; telephone (916) 858-5100.
<PAGE>3
PROSPECTUS SUMMARY
This is a summary of information contained elsewhere in this prospectus. This
summary is not complete and does not contain all of the information that you
should consider before investing in the common stock. You should carefully read
the entire prospectus, including the documents and information incorporated by
reference into it. This prospectus contains forward-looking statements that are
subject to risks and uncertainties, such as our products being subject to
regulatory approvals, market acceptance of new technologies, and other risks
detailed in the section entitled "Risk Factors" and in our Annual Report as
filed with the Commission. A glossary of certain technical terms used is located
at the back of this prospectus.
Our Business
We are a leading developer and manufacturer of micro-manufacturing systems
designed to harvest biopharmaceutical drugs from blood. Biopharmaceutical drugs
utilize the body's naturally occurring proteins, enzymes, growth factors,
hormones, and progenitor cells for the treatment of human disease. Our
technology platforms are designed to micro-manufacture biopharmaceutical drugs
from a single donation of blood, in contrast to the manufacture of
biopharmaceutical drugs by using "pools" of blood from thousands of donors, or
by using expensive recombinant technology.
In February of 1999, following FDA 510(k) clearance of the CryoSeal AHF System
which micro-manufactures cryoprecipitated anti-hemophilic factors
(Cryoprecipitated AHF) from single units of plasma for the intravenous treatment
of hemophiliacs, we prepared to initiate clinical trials for an autologous
fibrin glue (AFG) indication for the CryoSeal Platform technology. These
activities included: hiring C L McIntosh as the Clinical Research Organization
to lead the clinical trial effort and preparing the initial draft of a clinical
protocol for an I.D.E. approved pivotal trial utilizing the Company's autologous
fibrin glue as a hemostatic agent in liver resectioning surgery; selecting sites
and site investigators; forming a steering committee of physicians and a data
monitoring safety board; and beginning preparation for pre-clinical animal
studies and final design review for the product. For further discussion, see
"Annual Report on Form 10-K -- Business."
Our Strategy
Our strategy to exploit our market opportunity includes the following:
o Utilize our expertise in the areas of thermodynamics and cryopreservation;
o Develop products through platform designs to build new products with only a
small incremental research and development investment;
o Become the leader in the design, development, manufacture, and sale of
medical devices which produce biopharmaceutical drugs from an autologous or
directed single donor unit of blood to reduce or eliminate contamination
and risk of infection to the recipient; and
o Develop disposable products that are used with platform designed products
to provide a recurrent stream of revenue.
<PAGE>4
Our History
Our core expertise lies in the technical fields of thermodynamics and
cryopreservation, technologies that we initially applied to the development of
ultra-rapid freezers and thawers, which are currently being sold to blood banks
and hospitals in 32 countries throughout the world. Until the fourth quarter of
fiscal year 1998, our revenues had been principally derived from these products.
Following four years of intensive research and development, we began shipping in
the second quarter of fiscal year 1998 our new platform product called the
BioArchive(R) System. The BioArchive System is a computer-controlled liquid
nitrogen platform with dedicated disposables for the collection,
cryopreservation, and archive of blood and blood components. The BioArchive
System is used internationally and in the U.S. as part of a National Heart Lung
and Blood Institute study to process, cryopreserve, and archive hematopoietic
stem and progenitor cells sourced from placental cord blood. These stem cells
are then used to reconstitute the immune system of patients suffering from
leukemia, lymphoma, diverse inherited anemias, or hypoproliferative stem cell
disorders. We have entered into a period of rapid transformation as we begin to
manufacture and market micro-manufacturing systems which may generate recurring
revenues from the ongoing sale of high margin blood processing disposables.
Our strategy is to utilize our two new technology platforms - the BioArchive
Platform and the CryoSeal(TM) Platform - as the basis for developing
micro-manufacturing systems to produce biopharmaceutical drugs from either
autologous or single-directed donor blood which will compete in two major
medical markets: Wound Care and Cellular Therapy. Currently the Company is
aggressively pursuing worldwide strategic partners in an effort to maximize the
value of its new technology platforms.
We are incorporated in Delaware, and our principal executive offices are located
at 3146 Gold Camp Drive, Rancho Cordova, California 95670, and our telephone
number is (916) 858-5100.
Risk Factors
For a discussion of considerations relevant to an investment in the common
stock, see the section entitled "RISK FACTORS" beginning on page 5.
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The Offering
Common Stock Outstanding Before the Offering.............................................................21,188,262
Common Stock Offered by Selling Stockholders (a)..........................................................4,720,562
Common Stock Outstanding After the Offering (a)..........................................................25,908,824
Use of Proceeds................................................(we will not receive any proceeds from the offering)
Nasdaq SmallCap Symbol.........................................................................................KOOL
</TABLE>
(a) Assumes that holders of Series B preferred stock have converted such shares
into a maximum of 4,236,000 shares of common stock in the aggregate and
that warrant holders have exercised their warrants to purchase 484,562
shares of common stock in the aggregate.
<PAGE>5
RISK FACTORS
An investment in our common stock involves a number of very significant risks.
Because of these risks, only persons able to bear the risk of and withstand the
loss of their entire investment should invest in the common stock. Prospective
investors should also consider the following before making an investment
decision.
Recurring Losses. Except for net income of $11,246 for fiscal 1994, we have not
been profitable since our inception. For the fiscal year ended June 30, 1999, we
had a net loss of $6,098,904, and an accumulated deficit at June 30, 1999, of
$30,745,189. The report of independent auditors on our June 30, 1999, financial
statements includes an explanatory paragraph indicating there is substantial
doubt about our ability to continue as a going concern. For the three months
ended September 30, 1999, we had an unaudited net loss of $1,752,000.
Need for Additional Financing. Historically, we have had to seek capital for our
growth and operations due to lack of revenues. Based on proceeds of
approximately $4.0 million received in our most recent private placement, we
believe we will have sufficient working capital for our 2000 fiscal year
operations. However, if actual sales do not meet expectations, or marketing and
production costs increase significantly, we will need additional financing to
complete and implement our long-term business objectives. Further, delays in
obtaining required governmental approvals to, or additional testing requirements
prior to, marketing our new products will result in decreased revenues and
increased costs that may require us to seek additional financing. We are
attempting to obtain a bank line of credit secured by our accounts receivable.
However, we cannot guarantee that we will be able to obtain a working line of
credit. In the event that there is a cash shortage and we are unable to obtain a
bank loan, additional equity financing will be required which will have the
effect of diluting the ownership of existing shareholders.
Dependence on New Products for Future Growth. Historically, substantially all of
our sales have been from products related to the freezing, thawing, and storing
of blood plasma. Because we expect this segment of the blood plasma market to
have limited growth, new products for the biotechnology market will have to be
successfully developed and marketed for future growth. We are currently focusing
on developing and marketing novel thermodynamic blood processing systems such
as: (1) the CryoSealJ AHF System for automated production of Cyroprecipitated
AHF; (2) the CryoSealJ AFG System for the automated production of autologous
fibrin glue; (3) a MicroSeal(TM) AFG system; (4) a CryoFactor APDGF System for
automated concentration of platelet derived growth factors; and (5) the
BioArchive(R) a system for collecting, processing, controlled-rate freezing, and
inventory management of thermolabile blood products in liquid nitrogen utilizing
disposable containers. Although these products use technology related to our
core competence, they also represent a departure from our former core blood
plasma business. Further, although we have had discussions with experts in areas
of application for these products, these products are still in their development
and/or initial market phase. No assurance can be given that all of these
potential products can be successfully developed, and if developed, that a
market will also develop for them.
Continued Nasdaq Listing. The Nasdaq SmallCap Market on which our common shares
are traded has established certain maintenance listing requirements that must be
satisfied in order for a company's shares to continue to be listed. Primarily
because of historical losses, no assurance can be given that we will continue to
be able to satisfy those continued listing requirements, which could result in
the delisting of our common shares from the Nasdaq SmallCap Market. Delisting
may result in the trading of our shares on the Over-The-Counter Bulletin Board
which may adversely affect the liquidity of our shares.
<PAGE>6
Government Regulation of Products. Most of our products require FDA clearance to
sell in the U.S. Further, we will require approval from comparable agencies to
sell our products in foreign countries. These approvals may limit the U.S. or
foreign market in which our products may be sold or circumscribe applications
for U.S. or foreign markets in which our products may be sold. Further, if we
cannot establish that our products are substantially equivalent, or superior, in
safety and efficacy to previously approved products in the U. S., delays may
result in final clearance from the FDA for marketing its products. No assurance
can be given that the FDA clearance to market our products in the U. S. will be
obtained, or that regulatory approval will be received in all foreign countries.
Although the standards established by the FDA are generally more encompassing,
our products may also be required to meet certain additional criteria or receive
certain approvals from other foreign governments for marketing and sales.
Influence of Governments and Insurance Companies on Sales of Our Products. Our
business may be materially affected by continuing efforts by government, and
third party payors such as medicare, medicaid, and private health insurance
plans, to reduce the costs of healthcare. For example, in certain foreign
markets the pricing and profit margins of certain healthcare products are
subject to government controls. In the U.S., we expect that there will continue
to be a number of federal and state proposals to implement similar government
control. In addition, increasing emphasis on managed care in the U.S. will
continue to place pressure on the pricing of healthcare products. As a result,
continuing effort to contain healthcare costs may result in reduced sales or
price reductions for our products.
Inability to Protect Our Patents, Trademarks, and Other Proprietary Rights Could
Adversely Impact Our Competitive Position. We believe that our patents,
trademarks, and other proprietary rights are important to our success and our
competitive position. Accordingly, we devote substantial resources to the
establishment and protection of our patents, trademarks, and proprietary rights.
We currently hold patents for products, and have patents pending for additional
products that we market or intend to market. However, our actions to establish
and protect our patents, trademarks, and other proprietary rights may be
inadequate to prevent imitation of our products by others or to prevent others
from claiming violations of their trademarks and proprietary rights by us. If
our products are challenged as infringing upon patents of other parties, we will
be required to modify the design of the product, obtain a license, or litigate
the issue, all of which may have an adverse business effect on us.
Trade Secrets. We use various methods, including the use of confidentiality
agreements with employees, vendors, and customers, to protect our trade secrets
and proprietary know-how for our products. However, such methods may not provide
complete protection and there can be no assurance that others will not obtain
our know-how, or independently develop the same or similar technology.
Competition. We hope to develop a competitive advantage in the medical
applications of our products, but there are many competitors that are
substantially larger and who possess greater financial resources and personnel
than we have. Our current principal market is the users of ultra-rapid blood
plasma freezing and thawing equipment. There are four companies that sell
freezers to the blood plasma freezing industry which are larger and possess
greater financial and other resources than we do. The CryoSeal System may face
competition from major plasma fractionaters that currently sell fibrin glue
sourced from pooled plasma outside the U.S. With regard to the BioArchive
System, numerous larger and better-financed medical device manufacturers may
choose to enter this market as it develops.
Limited Marketing and Sales Force for New Products. We currently sell our
existing medical devices through a direct sales and marketing force, and our
foreign distribution network. Although we have entered into exclusive
<PAGE>7
distribution agreements for the area of the two new platform products, there are
no assurances that the distributors will produce significant sales of the
systems.
Lack of Production Experience for New Products. We currently manufacture our
blood plasma thawers and freezers that are less technologically sophisticated
products. Although we have redesigned our manufacturing facility to accommodate
the BioArchive System and the CryoSeal System, we do not have significant
experience in manufacturing those more complex medical devices or in the
manufacture of disposables. Furthermore, there can be no assurance that our
current resources and manufacturing facility could handle a significant increase
in orders for either the BioArchive System or the CryoSeal System. If we are
unable to meet demand for sales of the new systems, we would need to contract
with third-party manufacturers for the backlog, and no assurances can be made
that such third-party manufacturers can be retained, or retained on terms
favorable to us and our pricing of the equipment. Inability to have products
manufactured by third parties at a competitive price will erode anticipated
margins for such products, and negatively impact our profitability.
No Assurance of New Product Acceptance. The market acceptance of our new
products in development will depend upon the medical community and third-party
payers accepting the products as clinically useful, reliable, accurate, and cost
effective compared to existing and future products or procedures. Market
acceptance will also depend on our ability to adequately train technicians on
how to use the CryoSeal System and the BioArchive System. Even if our systems
are clinically adopted, the use may not be recommended by the medical profession
or hospitals unless acceptable reimbursement from health care and third party
payers is available. Failure of either of these new systems to achieve
significant market share could have material adverse effects on our long term
business, financial condition, and results of operation. See our "Annual Report
on Form 10-K -- Description of Business" and "Risk Factors -- Uncertain
Availability of Third-Party Reimbursement."
There is No Assurance That Our Senior Management Team Will Remain With Us. We
are dependent upon the experience and services of Philip H. Coelho, Chairman and
Chief Executive Officer, and James H. Godsey, President and Chief Operating
Officer. The loss of either person would adversely affect our operations. We
have obtained key man life insurance covering Mr. Coelho in the amount of
$2,000,000 as some protection against this risk. See our "Annual Report on Form
10-K - Description of the Business -- Employees."
Product Liability and Uninsured Risks. We may be liable if any of our products
cause injury, illness, or death. We also may be required to recall certain of
our products should they become damaged or if they are defective. We are not
aware of any material product liability claim against us. Further, we maintain a
general liability policy that includes product liability coverage of $1,000,000
per occurrence and $2,000,000 per year in the aggregate. However, a product
liability claim against us could have a material adverse effect on our business
or financial condition.
Risk of Software Defects. Our CryoSeal System and BioArchive System rely on
computer software components that direct the harvesting process of the CryoSeal
System, and the controlled-rate freezing, storage and retrieval robotics of the
BioArchive System. The software program for these products, including updated
versions in the future, may contain undetected errors or failures. Despite
testing by us and our customers, there can be no assurance that errors will not
be found in the software during continuous use. Unfound errors may result in
loss or delay in market acceptance, which could have an adverse material effect
on our business, financial condition, and results of operations.
<PAGE>8
Future Sales of Unregistered Shares Could Have A Negative Impact on Trading
Price of the Common Stock. Under an agreement with the selling stockholders, we
have agreed to register for resale by this prospectus shares of common stock to
be issued upon the conversion of the Series B preferred stock and upon the
exercise of the warrants. The Series B preferred stock is currently convertible
into approximately 8.3% of our outstanding common stock. If a substantial
decline in the average market price of our common stock were to occur and all of
the Series B preferred shares are then converted, up to approximately 19.8% of
our outstanding common stock could become available for resale by this
prospectus. Because the trading price for our common stock may be affected by
the number of shares available for resale, the market price of our common stock
could drop as a result of sales of a large number of shares of our common stock
in the market after this offering, or the perception that such sales could
occur.
We Could Be Required to Redeem Our Series B Convertible Preferred Stock at a
Premium Which Would Require a Large Expenditure of Capital and Could Have a
Material Adverse Affect on Our Financial Condition. The holders of our Series B
convertible preferred stock have the right to force us to repurchase their
Series B convertible preferred stock at a premium if the Company takes certain
action, deemed to be solely within the Company's control - e.g., causing the
Company to be delisted from the Nasdaq Market, or taking other defined action
detrimental to the Series B holders. See "Description of Securities" below. The
repurchase of our Series B convertible preferred stock would require a large
expenditure of capital and we may not have sufficient funds to satisfy the
redemption. In addition, you could face further dilution of your ownership
percentage as a result of a decline in the market price of our common stock or
in the event of certain defaults which would result in an increase in the number
of shares of common stock issuable upon conversion of the Series B convertible
preferred stock. Any such event could adversely affect the price of our stock
and our ability to raise additional capital. We have no intention of taking
action that would require such an event.
No Cash Dividends. To date, we have not paid any cash dividends, and we do not
expect to pay any cash on our common stock in the foreseeable future. The Series
B convertible preferred stock carries a mandatory 6% dividend, paid quarterly,
out of funds legally available. At our election, that dividend may be accrued to
the conversion value of that series of stock in lieu of any cash payment. With
our current cash needs, we do not anticipate that the dividend will be paid in
cash and, therefore, additional shares of common stock may be issued upon
conversion. See "Description of Securities" below.
<PAGE>9
SUMMARY FINANCIAL INFORMATION
The following summary information is derived from the financial statements
included in our Annual Report on Form 10-K for the year ended June 30, 1999, and
Quarterly Report on Form 10-Q for the quarter ended September 30, 1999,
incorporated by reference herein, and should be read in conjunction with those
financial statements and the related notes thereto.
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For the Three Months
For the Year Ended June 30, Ended September 30,
------------------------------------------------ -----------------------------
1997 1998 1999 1998 1999
------------- ------------- ------------- ------------ ------------
Statement of Operations Data:
Revenues $ 6,614,044 $ 4,396,891 $ 5,004,890 $ 1,099,000 $ 980,000
Operating expenses $ 7,207,274 $ 8,493,699 $ 6,859,093 $ 1,643,000 $ 1,512,000
Net loss $(4,805,822) $(9,550,795) $(6,098,904) $(1,804,000) $(1,752,000)
Basic and diluted net loss per
common share $ (0.32) $ (0.54) $ (0.50) $ (0.10) $ (0.08)
Weighted average shares
outstanding 14,805,000 17,629,876 19,242,310 18,925,669 20,804,942
</TABLE>
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June 30, September 30,
-------------------------------- ------------------------------
1998 1999 1998 1999
-------------- ------------ ------------- ------------
Selected Balance Sheet Data:
Working Capital $3,665,798 $5,054,940 $2,039,959 $3,471,000
Total Assets $7,799,242 $8,133,264 $5,943,760 $6,427,000
Total Liabilities $2,226,350 $1,414,620 $2,164,362 $1,443,000
Stockholders' Equity $5,572,892 $6,718,644 $3,779,398 $6,427,000
</TABLE>
<PAGE>10
THE COMPANY
We design and sell products and devices which utilize our proprietary
thermodynamic technology for the processing of biological substances, including
the cryopreservation, thawing, harvesting, and archiving of blood components.
Historically, our primary revenues have been from sales of blood plasma freezers
and thawers to hospitals, blood banks, and blood transfusion centers. Currently,
we are manufacturing several categories of thermodynamic devices that are being
sold to the blood plasma industry under FDA clearance to market in the United
States. Other potential markets for our proprietary technology include surgical,
pharmaceutical, and industrial applications. Since fiscal year 1998, we focused
our efforts on research and development and refinement of a core line of
products for blood banks. Since fiscal 1994, we have developed new applications
for our products and technology, including a system for harvesting
cryoprecipitated AHF from a donor's blood plasma for use in the treatment of
hemophilia, and by some physicians as a hemostatic agent or tissue sealant in
certain surgical and medical procedures.
Our strategy has been to develop superior blood processing devices for the niche
blood processing markets where new products could quickly establish credibility
for our proprietary technology. We believe that by concentrating our products to
serve the blood plasma industry, many customers, such as the Red Cross or other
blood transfusion societies of various countries, would validate our proprietary
technology for rapid freezing of biological substances, more specifically blood
plasma. Early products were designed for blood banks and hospitals and received
510(k) permission to market, and we sell those products either directly or
through our distribution network in the 32 countries where our products are
marketed. See our "Annual Report on Form 10-K. -- Description of the Business -
Distribution Channels".
From 1988 to 1992, our products were designed to transfer heat by causing heat
transfer liquids to directly contact plastic sealed containers within which
resided various blood components. Early product designs used liquids containing
chloro-flouro-carbons ("CFC") which we phased out in the fall of 1992.
Thereafter, we developed an alternative heat transfer method which automatically
interposed a thin flexible membrane between the heat transfer liquid and
biological substances which process allowed for use of non-CFC based heat
transfer liquids.
Principal products initially developed by us and marketed to hospitals, blood
banks, and blood transfusion centers consisted of freezers and thawers for blood
plasma. We have continued to design and develop various freezer models and
thawers for expanded applications, and these products remain the core products
of our current business. To expand our market and product use, we have changed
the focus of our research and development to the design of new products that
would be applied to different applications within the blood industry, including
surgical, pharmaceutical, and medical procedures that utilize freezing and
thawing technology as part of standard procedures. See our "Annual Report on
Form 10-K."
Recent Financing and Other Recent Events
On December 22, 1999, and January 4, 2000, we completed a private placement of
4,040 shares of Series B convertible preferred stock, raising an aggregate of
$4,040,000, before direct expenses. Warrants to purchase 484,562 shares of
common stock at an exercise price of $2.73 per share were also issued. The net
proceeds from the private placement are being used for general working capital.
Under the terms of the private placement, we are required to register the common
shares underlying the Series B preferred stock and warrants.
<PAGE>11
SUMMARY OF THE OFFERING
We are registering 4,720,562 shares of common stock for resale by the selling
stockholders of which a maximum of 4,236,000 shares may be issued upon the
conversion of Series B preferred stock and 484,562 shares may be issued upon the
exercise of warrants.
USE OF PROCEEDS
We will receive no proceeds from the resale of the shares of common stock by the
selling stockholders upon the conversion of the Series B preferred stock.
PLAN OF DISTRIBUTION
The selling stockholders, their pledgees, donees, transferees, or other
successors in interest may from time to time offer and sell all or a portion of
the shares in transactions on the Nasdaq SmallCap Market, or on any other
securities exchange or market on which the common stock is listed or traded, in
negotiated transactions or otherwise, at prices then prevailing or related to
the then-current market price or at negotiated prices. The selling stockholders
or their pledgees, donees, transferees, or other successors in interest may sell
their shares directly or through agents or broker-dealers acting as principal or
agent, or in block trades or pursuant to a distribution by one or more
underwriters on a firm commitment or best-efforts basis. To the extent required,
the names of any agent or broker-dealer and applicable commissions or discounts
and any other required information with respect to any particular offer will be
set forth in an accompanying prospectus supplement. Each of the selling
stockholders and their pledgees, donees, transferees or other successors in
interest reserves the right to accept or reject, in whole or in part, any
proposed purchase of the shares to be made directly or through agents.
In connection with distributions of the shares, any selling stockholder may
enter into hedging transactions with broker-dealers and the broker-dealers may
engage in short sales of the shares in the course of hedging the positions they
assume with the selling stockholder. Any selling stockholder also may sell the
shares short and deliver the shares to close out such short positions. Any
selling stockholder also may enter into option or other transactions with
broker-dealers that involve the delivery of the shares to the broker-dealers,
which may then resell or otherwise transfer such shares. Any selling stockholder
also may loan or pledge the shares to a broker-dealer and the broker-dealer may
sell the shares so loaned or upon a default may sell or otherwise transfer the
pledged shares. These activities are limited by the purchase agreements between
us and the Series B convertible preferred stockholders during periods of 20
trading days occurring every six months for the three years when the conversion
price is subject to periodic adjustment.
The selling stockholders, any agents, dealers or underwriters that participate
with the selling stockholders in the resale of the shares of common stock and
the pledgees, donees, transferees or other successors in interest of the selling
stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act, in which case any commissions received by such agents, dealers
or underwriters and a profit on the resale of the shares of common stock
purchased by them may be deemed underwriting commissions or discounts under the
Securities Act.
There is no assurance that the selling stockholders will sell any or all of the
shares.
<PAGE>12
Pursuant to registration rights agreements between us and the selling
stockholders, we have agreed to pay all expenses incurred in the registration of
the shares other than brokerage commissions incurred by the selling stockholders
and the legal fees of the selling stockholders' one legal counsel.
In addition to selling their common stock under this prospectus, the selling
stockholders may:
o transfer their common stock in other ways not involving market makers or
established trading markets, including by gift, distribution, or other
transfer; or
o sell their common stock under Rule 144 of the Securities Act.
SELLING STOCKHOLDERS
The following table identifies the selling stockholders, as of January 20, 2000,
and indicates certain information known to us with respect to (i) any material
relationship between the selling stockholders and us during the past three
years, (ii) the number of shares of common stock held by the selling
stockholders, (iii) the amount to be offered for the selling stockholders'
account, and (iv) the number of shares and percentage of outstanding shares of
common stock to be owned by the selling stockholders after the sale of the
common stock offered by the selling stockholders. The selling stockholders are
not obligated to sell their common stock offered by this prospectus.
The number of shares listed under "Shares to be Sold" in the table assumes that
the selling stockholders have converted their Series B preferred stock or
exercised their warrants into the maximum number of shares currently permitted
and will sell all common shares in a secondary offering pursuant to this
prospectus.
Under the Exchange Act, any person engaged in a distribution of the shares of
our common stock offered by this prospectus may not simultaneously engage in
market making activities with respect to our common stock during the applicable
periods prior to the commencement of such distribution. In addition, and without
limiting the foregoing, each selling stockholder may be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder
including, without limitation, Regulation M. Further, the selling shareholders
may resell their shares pursuant to Rule 144.
The Series B convertible preferred stock and warrants are not registered or
listed for trading on the Nasdaq Stock Market or on any exchange.
The shares shown as owned and offered by Advantage Fund II Ltd., by Koch
Investment Group Limited, and by Clarion Capital under this prospectus may be
issued upon conversion of Series B convertible preferred stock and exercise of
warrants acquired by these selling stockholders from us in a private placement.
Under the terms of the Series B convertible preferred stock and the warrants, no
selling stockholder can convert Series B convertible preferred stock or exercise
warrants to the extent such conversion or exercise would cause the selling
stockholder's beneficial ownership of our common stock (excluding shares
underlying unconverted Series B convertible preferred stock and unexercised
warrants) to exceed 4.9% of the outstanding shares of common stock.
<PAGE>13
<TABLE>
<S> <C> <C> <C> <C>
Shares Owned Shares to Shares Owned
Prior to Offering be Sold After Offering (6)
------------------- ---------------- ----------------
Name of Stockholder Number Number Number Percentage
------------------------------- ------------------- ---------------- ---------------- -----------
Advantage Fund II Ltd. 1,507,549 (1) 2,896,125 (2)(4) 0 0
Koch Investment Group Limited 904,529 (1) 1,737,675 (3)(4) 0 0
Clarion Capital Corporation 134,121 (1)(2) 46,762 (4) 110,000 *
Division of Financial West Group 40,000 (5) 40,000 0 0
Reedland Capital Partners, a
</TABLE>
Footnotes to Table
- ------------------
* Less than one percent.
(1) Represents the number of shares issuable upon the conversion of the Series
B convertible preferred stock at the initial fixed conversion price of
$2.2719, including conversion of two years of accrued dividends thereon,
plus shares issuable upon exercise of the warrants.
(2) Genesee International, Inc., the investment manager of Advantage Fund II
Ltd., may be deemed to beneficially own the shares offered by Advantage
through its shared dispositive and voting power over such shares. Mr.
Donald R. Morken, the controlling stockholder of Genesee International, may
be deemed to control the exercise by Genesee International of such shared
dispositive and voting power over such shares.
(3) Koch Industries, Inc., the indirect parent company of Koch Investment Group
Limited, may be deemed to beneficially own the shares offered by Koch
Investment Group Limited through its shared dispositive and voting power
over such shares. Messrs. Charles Koch and David Koch, the majority
stockholders of Koch Industries, may be deemed to control the exercise by
Koch Industries of such shared dispositive and voting power over such
shares
(4) Represents the maximum number of shares that can be issued upon the
conversion of Series B convertible preferred stock which is approximately
19.8% of the then issued and outstanding shares at the time of the closing
plus the shares issuable upon the exercise of the warrants. However, the
subscription agreements limit the number of shares of common stock that can
be issued to the holders upon conversion of the Series B convertible
preferred stock to 4.9% of the then outstanding shares of common stock at
any time.
(5) Represents shares underlying placement agent warrants, exercisable until
December 22, 2004, at $2.72628 per share
(6) Assumes all shares offered are sold.
As of the date of this prospectus, the selling stockholders do not hold any
other of our securities other than the shares being offered under this
prospectus and the Series B convertible preferred stock and warrants described
in this prospectus, except for 110,000 shares held by Clarion Capital
Corporation. None of the selling stockholders has had any material relationship
with us within the past three years.
<PAGE>14
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of two classes: 50,000,000 shares, $.001
par value, of common stock and 2,000,000 shares, $.001 par value, of preferred
stock. As of January 14, 2000, 21,338,262 shares of common stock were
outstanding, 750,000 shares of Series A preferred stock were outstanding, and
4,040 shares of Series B preferred stock were outstanding. There are no other
series of preferred stock outstanding.
Common Stock
Common stock shareholders have full voting rights, one vote for each share held
of record. Subject to preferential rights of Series A and Series B preferred
stock shareholders, common stock shareholders are entitled to receive dividends
as may be declared by the Board out of funds legally available therefor, and
share pro rata in any distributions to stockholders upon liquidation. Common
stock shareholders have no conversion, preemptive, or other subscription rights.
All of the outstanding shares of common stock are, and the shares offered hereby
will be, validly issued, fully paid, and nonassessable.
Preferred Stock
As discussed below, we have two series of preferred stock designated. The Board
is authorized to establish other series or designations of preferred stock with
rights, preferences, privileges, and restrictions on such stock as the Board may
determine, subject to the rights of the outstanding series of preferred stock.
Series A Convertible Redeemable Preferred Stock
We have designated 1,200,000 shares as Series A convertible redeemable preferred
stock. Each share of Series A preferred stock has the following characteristics:
Conversion. Each share of Series A preferred stock is convertible into five
shares of common stock at the option of the holder or at our option provided
that the common stock is trading at an average price equal to or greater than
$5.00 per share for 30 consecutive trading days. Each share of Series A
preferred stock is subject to customary anti-dilution protection.
Voting Rights. Provided that more than 35% of the number of Series A
preferred stock shares remain outstanding, the Series A preferred stock
shareholders are entitled to vote for one director, as a separate class, and
approval by holders of at least a majority of the Series A preferred stock,
voting together as a separate class, is required for certain events including
(i) any issuance of a new series of shares having rights, preferences, or
privileges with respect to liquidation preference, redemption or dividend rights
senior or equivalent to the Series A preferred stock, (ii) any payment or
declaration of any dividends rights or any other distribution or redemption of
any of our capital stock, (iii) sale or disposition of substantially all of our
property or business or any consolidation or merger with any entity in which we
are not the survivor, (iv) an amendment to our articles of incorporation or
bylaws, and (v) any investments of another business exceeding $1 million in the
aggregate. Unless required by law, the Series A preferred stock shareholders
will be entitled to vote on all other matters with the common stock
shareholders, together as a class, on an as converted basis. The Series A
preferred stock shareholders have approved by a majority vote the issuance of
the Series B preferred shares on a pari passu basis with the Series A shares.
<PAGE>15
Dividends. Each share of Series A preferred stock is entitled to receive
non-cumulative dividends at the same rate and same time as any dividends
declared on our common stock determined on an as converted basis.
Liquidation Rights. Upon liquidation, dissolution, or winding up of our
company, the holder of Series A preferred stock shall be entitled to received a
liquidation preference equal to $6.25 per share which shall increase at the rate
of 8% per share, per year, compounded annually on each anniversary date of the
issuance of the Series A preferred stock before there are any distributions to
common stock shareholders. After payment to Series A preferred stock
shareholders of the liquidation preference as adjusted, the Series A preferred
stock shareholders shall not be entitled to any further distribution. If upon
any liquidation, dissolution, or winding up the assets to be distributed among
the Series A preferred stock shareholders shall be insufficient for full payment
of the liquidation preference, then the amount to be distributed shall be
distributed ratably to the Series A preferred stock shareholders and any other
preferred stock of equal rank.
Preemptive Rights. Each Series A preferred stock shareholder has preemptive
rights to purchase any new share issuance by us in order to maintain his or her
percentage share ownership interest in our company.
Series B Convertible Preferred Stock
We have designated 4,040 shares as Series B convertible preferred stock.
Each share of Series B preferred stock has the following characteristics:
Conversion. The Series B convertible preferred stock is currently limited
in conversion to a maximum of 4,236,000 shares. However, the current conversion
price is a fixed conversion price of $2.2719 which represents the average market
price of our common stock for the ten days prior to the issuance of the Series B
convertible preferred stock on December 22, 1999, the date we sold the initial
4,000 shares of the Series B convertible preferred stock. Commencing on June 22,
2000, the conversion price will be adjusted on such date and every six months
thereafter to be the lesser of (a) 130% of the fixed conversion price as stated
above, or (b) 90% of the average market price for the ten days prior to such
adjustment date. The conversion price is subject to further adjustment under
certain other circumstances, including our inability to provide the Series B
convertible preferred stockholders with common stock certificates on a timely
basis after receiving notice of their conversion, our failure to pay any
applicable redemption price when due, and the occurrence of any of the
repurchase events described below for reasons not solely within our control.
Upon an adjustment of the conversion price, the number of shares into which the
Series B convertible preferred stock may be converted is correspondingly
adjusted. The conversion price and number of shares of common stock underlying
the Series B convertible preferred stock is also subject to adjustment for stock
splits, stock dividends, combinations, capital reorganizations, and similar
events relating to our common stock.
Voting Rights. The Series B convertible preferred stock has no general
voting rights. However, holders of the Series B convertible preferred stock have
the right to consent to the issuance of any capital stock that is senior to the
Series B convertible preferred stock, to any amendment of our certificate of
incorporation which materially and adversely affects the Series B convertible
preferred stock, and to any amendment to the terms of the Series B convertible
preferred stock. In addition, pursuant to the purchase agreements entered into
<PAGE>16
in connection with the issuance of the Series B convertible preferred stock,
without the consent of the holders of the Series B convertible preferred stock,
we may not issue for approximately twelve months after issuance of the Series B
preferred stock, any common stock (or securities convertible into common stock),
at a price below the market price of the common stock on the date of issuance,
except in certain specified instances. For approximately twelve months after
issuance, the holders of the Series B convertible preferred stock also have a
right of first refusal to acquire any such equity securities except in specified
instances set forth in the purchase agreements.
Dividends. Dividends at the rate of $60 per annum per share of Series B
preferred stock (6% annual dividend) are payable in cash or, at our option, may
be added to the value of the Series B convertible preferred stock subject to
conversion and to the $1,000 per share liquidation preference of the Series B
convertible preferred stock.
Redemption. If we are in compliance with the terms of the Series B
convertible preferred stock and our agreements with the selling stockholders, we
have the right at any time to redeem the Series B convertible preferred stock at
a premium (generally, 120% of the $1,000 per share liquidation value plus
accrued and unpaid dividends), and under certain circumstances, at the market
value of the common stock into which the Series B convertible preferred stock
would otherwise be convertible. Assuming we are in compliance with such terms
and agreements, after the third anniversary of issuance, we may redeem the
Series B convertible preferred stock at its liquidation value plus accrued and
unpaid dividends.
If certain events occur which are solely within our control, the holders of
the Series B convertible preferred stock have the right to request that we
repurchase all or some of their Series B convertible preferred stock at the
greater of the premium or converted market value. These events include our
taking actions or omitting to take actions that result in the following:
o there is no closing bid price reported for our common stock for five
consecutive trading days;
o our common stock ceases to be listed for trading on the Nasdaq SmallCap
Market;
o the holders of the Series B convertible preferred stock are unable, for 30
or more days (whether or not consecutive) to sell their common stock
issuable upon conversion of the Series B convertible preferred stock
pursuant to an effective registration statement;
o we default under any of the agreements relating to our sale of the Series B
convertible preferred stock, including our failure to timely deliver
certificates for common stock upon conversion;
o certain business combination events;
o the adoption of any amendment to our Articles of Incorporation materially
adverse to the holders of the Series B convertible preferred stock without
the consent of the holders of a majority of the Series B convertible
<PAGE>17
preferred stock; and
o the holders of the Series B convertible preferred stock are unable to
convert all of their shares because of limitations under exchange or market
rules that require stockholder approval of certain stock issuances and we
fail to obtain such approval.
Liquidation Rights. Upon liquidation, the holders of the Series B
convertible preferred stock will be entitled to receive, before any distribution
to holders of our common stock or any other class or series of our capital stock
ranking junior to the Series B convertible preferred stock, liquidation
distributions equal to $1,000 per share, plus any accrued and unpaid dividends.
Series B Warrants
We also issued warrants in connection with the private placement of our Series B
convertible preferred stock. We issued warrants to purchase 444,562 shares of
common stock to the holders of Series B convertible preferred stock, and 40,000
warrants to the placement agent. The exercise price of the warrants is $2.72628
per share, and they expire on December 22, 2004.
The exercise price and number of shares of common stock issuable upon exercise
of the warrants held by the Series B convertible preferred stockholders are
subject to adjustment in certain events.
Series B Registration Obligation
We have agreed to register for resale the shares of common stock issuable upon
the conversion of the Series B convertible preferred stock and the exercise of
the warrants.
Stock Options
As of January 17, 2000, we had outstanding options to purchase a total of
2,125,500 shares of common stock at exercise prices ranging from $1.13 to $4.50
per share, of which options to purchase 1,887,166 shares were exercisable. Some
of these options are subject to vesting, and in general, have a three or five
year exercise period. See our "Annual Report on Form 10-K -- Notes to Financial
Statements."
Other Warrants
As of January 17, 2000, warrants to purchase a total of 2,958,763 shares of
common stock were outstanding with exercise prices ranging from $1.20 to $3.0966
per share, all of which were exercisable. Included in the number of warrants are
warrants to purchase 484,562 shares of common stock which are subject to resale
by this prospectus. See our "Annual Report on Form 10-K -- Notes to Financial
Statements" which is incorporated by reference in this prospectus.
<PAGE>18
CERTIFICATE OF INCORPORATION AND BYLAWS
Our Amended and Restated Certificate of Incorporation provides that we will
indemnify directors and officers of the company to the fullest extent permitted
by Delaware Law. Further, our bylaws provide authority for the company to
maintain a liability insurance policy that insures directors or officers against
any liability incurred by them in serving for the company.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, and controlling persons of the company
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by a director, officer, or
controlling person of the company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our 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
final adjudication.
TRANSFER AGENT
The transfer agent for our common stock is American Securities Transfer & Trust,
Inc., 938 Quail Street, Suite 101, Lakewood, Colorado 80215-5513.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial statements
and schedule included in our Annual report on form 10-K for the year ended June
30, 1999, as set forth in their report (which contains an explanatory paragraph
describing conditions that raise substantial doubt about the Company's ability
to continue as a going concern as described in Note 1 to the financial
statements), which is incorporated by reference in this prospectus and elsewhere
in the registration statement. Our financial statements and schedule are
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
LEGAL MATTERS
The validity of the shares of common stock offered by the selling stockholders
through this prospectus will be passed upon for us by David C. Adams, V.P. and
General Counsel. Mr. Adams beneficially owned options to acquire 180,000 shares
of common stock and owned outright 24,474 shares of common stock as of January
18, 2000.
<PAGE>19
GLOSSARY OF CERTAIN TECHNICAL TERMS
510(k): formal notification to the Food and Drug Administration ("FDA") by
manufacturers of Class I or Class II devices to obtain clearance to market the
medical device. The device must be substantially equivalent to devices
manufactured prior to 1976.
AUTOLOGOUS: autogenous; related to self; originating within an organism itself,
as an autograft or autotransfusion.
CLASS II MEDICAL SYSTEM: those devices for which general controls alone are
insufficient to assure safety and effectiveness and for which mandatory
performance standards must be developed by the FDA.
COAGULATION: (1) the process of clot formation; (2) in surgery, the disruption
of tissue by physical means to form an amorphous residuum, as in
electrocoagulation and photocoagulation.
CORE LINE PRODUCTS: (1) device for the ultra-rapid cryopreservation of human
blood plasma; (2) portable device for the ultra-rapid cryopreservation of human
blood plasma; (3) device for the rapid thawing of frozen plasma for hospital
patient care; (4) device for the hermetic sealing of blood tissue containers;
(5) "smart" blood collection monitor; (6) Vial BioArchiveTM System for the
Japanese Red Cross.
CRYOPRECIPITATE: any precipitate that results from cooling, as cryoglobulin or
antihemophilic factor.
CRYOPRECIPITATED AHF: A preparation of antihemophilic factor, which is obtained
from a single unit of plasma collected and processed in a closed system.
CRYOPRESERVATION: the maintaining of the viability of excised tissue or organs
by storing at very low temperatures.
CRYOSEALTM: system for harvesting fibrinogen-rich cryoprecipitate from a donor's
blood plasma, a blood component that is currently licensed by the FDA for the
treatment of clotting protein deficient patients.
DEWAR: container that keeps its contents at a constant and generally low
temperature by means of two external walls between which a vacuum is maintained.
FACTOR VIII: antihemophilic factor (AHF): a relatively storage-labile factor
participating only in the intrinsic pathway of blood coagulation. Deficiency of
this factor, when transmitted as a sex-linked recessive trait, causes classical
hemophilia (hemophilia A). More than one molecular form of this factor has been
discovered. Called also antihemophilic globulin (AHG) and antihemophilic factor
A.
FACTOR XIII: fibrin stabilizing factor (FSF): a factor that polymerizes fibrin
monomers so that they become stable and insoluble in urea, thus enabling fibrin
to form a firm blood clot. Deficiency of this factor produces a clinical
hemorrhagic diathesis. Called also fibrinase and Laki-Lorand factor (LLF). The
inactive form is also known as protransglutaminase and the active form as
transglutaminase.
<PAGE>20
FIBRONECTIN: an adhesive glycoprotein: one form circulates in plasma, acting as
an opsonin; another is a cell-surface protein which mediates cellular adhesive
interactions. Fibronectins are important in connective tissue, where they
cross-link to collagen, and they are also involved in aggregation of platelets.
HEMATOLOGY: that branch of medical science, which treats of the morphology of
the blood and blood forming tissues.
HEMOSTATIC: (1) checking the flow of blood; (2) an agent that arrests the flow
of blood.
MACULAR: pertaining to or characterized by the presence of macules; pertaining
to the macula retinae.
N2 BIOARCHIVE: system for controlled rate freezing, storage and retrieval and
inventory management of biological samples which require LN2 storage
temperatures, such as placental, stem and progenitor cells.
PIPELINE PRODUCTS: (1) CryoSealTM System, thermodynamic processor; (2) LN2
BioArchiveTM System, computerized LN2 dewar with robotic arm; (3) CryoFactorTM
System, thermodynamic processor; (4) MicroSealantTM System, bench top
thermodynamic processor; (5) CryoPlateletTM System, thermodynamic processor.
PLATELET DERIVED GROWTH FACTOR (PDGF): a substance contained in the alpha
granules of platelets and capable of inducing proliferation of vascular
endothelial cells, vascular smooth muscle cells, fibroblasts and glia cells; its
action contributes to the repair of damaged vascular walls.
PROGENITOR: a parent or ancestor.
THERMOLABILE: easily altered or decomposed by heat.
VON WILLEBRAND'S FACTOR: the attribute of Factor VIII necessary for the adhesion
of platelets to vascular elements. Deficiency of this factor results in the
prolonged bleeding time seen in von Willebrand's disease.
<PAGE>21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses payable by our company in
connection with the issuance and distribution of the securities being registered
hereunder. No expenses shall be borne by the selling stockholders. All of the
amounts shown are estimates, except for the SEC registration fee.
SEC registration fee $ 3,661
Printing and engraving expenses $ -0-
Accounting fees and expenses * $
Legal fees and expenses * $
Transfer agent and registrar fees * $ -0-
Fees and expenses for qualification under
state securities laws $ -0-
Miscellaneous * $ -0-
---------
TOTAL $
=========
* estimated
<PAGE>II-1
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits indemnification of
directors, officers, and employees of corporations under certain conditions and
subject to certain limitations. Article Eighth of our Amended and Restated
Certificate of Incorporation contain provisions for the indemnification of its
directors and officers to the fullest extent permitted by law.
Under such law, we are empowered to indemnify any person who was or is a party
or is threatened to be made a party to any proceeding (other than an action by
or in the right of our company to procure a judgment in its favor) by reason of
the fact that such person is or was an officer, director, employee or other
agent of our company or our subsidiaries, against expenses, judgments, fines,
settlements, and other amounts actually and reasonably incurred in connection
with such proceeding, if such person acted in good faith and in a manner such
person reasonably believed to be in our best interests and, in the case of a
criminal proceeding, has no reasonable cause to believe the conduct of such
person was unlawful. In addition, we may indemnify, subject to certain
exceptions, any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action by or in the right of our
company to procure a judgment in our favor by reason of the fact that such
person is or was an officer, director, employee or other agent of our company or
our subsidiaries, against expenses actually and reasonably incurred by such
person in connection with the defense or settlement of such action if such
person acted in good faith and in a manner such person believed to be in the
best interest of our company and shareholders. We may advance expenses incurred
in defending any proceeding prior to final disposition upon receipt of an
undertaking by the agent to repay that amount it shall be determined that the
agent is not entitled to indemnification as authorized.
In addition, we have director's and officer's liability insurance, which our
bylaws provide authority to maintain to insure directors or officers against any
liability incurred capacity as such, or arising out of their status as such.
Item 16. Exhibits and Financial Statement Schedules
<TABLE>
<S> <C> <C> <C>
Exhibit Description
3.1 (a) Amended and Restated Certificate of Incorporation (4)
(b) Revised Bylaws (4)
4.1 Certificate of Designation Series A Convertible Redeemable
Preferred Stock (12)
4.2 Certificate of Designation of Series B Convertible
Preferred Stock (16)
4.3 Warrant [form] (16)
4.4 Registration Rights Agreement Dated Dec. 22, 1999 [form] (16)
5.1 Opinion of David C. Adams, General Counsel to the registrant
10.1 (a) Letter of Agreement with Liquid Carbonic, Inc. (1)
(b) Letter of Agreement with Fujitetsumo USA (1)
(c) Letter of Agreement with Fujitetsumo Japan (1)
(d) License Agreement between Stryker Corp. and
THERMOGENESIS CORP., Corp. (5)
(e) Lease of Office and Mfg. Space (4)
(f) Executive Development and Distribution Agreement
between THERMOGENESIS CORP. and Daido Hoxan Inc. (3)
<PAGE>II-2
(g) Administrative Office Lease (6)
(h) Employment Agreement for Philip H. Coelho (8)
(i) Employment Agreement for Charles de B. Griffiths (8)
(j) Employment Agreement for Walter J. Ludt (8)
(k) Employment Agreement for David C. Adams (11)
(l) Employment Agreement for James H. Godsey (11)
(m) Employment Agreement for Sam Acosta (11)
(n) Licensing/Manufacturing Agreement with On-Time Mfg. (8)
(o) License Agreement and distribution with Asahi Medical (9)
(p) License Agreement with Pall/Medsep Corporation (10)
(q) Distribution Agreement with Dideco S.P.A. (13)
(r) Employment Agreement for Philip H. Coelho (15)
(s) Employment Agreement for Renee Ruecker (15)
(t) Amendment to License Agreement with Asahi Medical (15)
(u) Subscription Agreement dated Dec. 22, 1999 [form] (16)
23.1 Consent of General Counsel is contained in exhibit 5.1.
23.2 Consent of Ernst & Young LLP, independent auditors
27.1 Financial Data Schedule (Not Applicable)
</TABLE>
<PAGE>II-3
Footnotes to Index
(1) Incorporated by reference to Registration Statement No. 33-37242 of
THERMOGENESIS CORP., Corp. filed on February 7, 1991.
(2) Incorporated by reference to Form 8-K for July 19, 1993.
(3) Incorporated by reference to Form 8-K for June 9, 1995.
(4) Incorporated by reference to Form 10-KSB for the year ended June 30, 1994.
(5) Incorporated by reference to Form 8-K for September 27, 1995.
(6) Incorporated by reference to Form 10-QSB for the quarter ended December 31,
1995.
(7) Incorporated by reference to Form 8-K for November 27, 1996.
(8) Incorporated by reference to Form 10-KSB for the year ended June 30, 1996.
(9) Incorporated by reference to Form 8-K for May 29, 1996.
(10) Incorporated by reference to Form 8-K for March 27, 1997.
(11) Incorporated by reference to Form 10-K for the year ended June 30, 1997.
(12) Incorporated by reference to Form 8-K for January 14, 1998.
(13) Incorporated by reference to Form 8-K for February 16, 1998.
(14) Incorporated by reference to Form 10-K for the year ended June 30, 1998.
(15) Incorporated by reference to Form 10-K for the year ended June 30, 1999.
(16) Incorporated by reference to Form 8-K for December 23, 1999.
Item 17. Undertakings
(a) The undersigned Company 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;
(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, represent 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 this Registration
Statement or any material change to such information in this
Registration Statement.
<PAGE>II-4
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii),
above, do not apply if the information required to be included in
a post-effective amendment by these paragraphs is contained in
periodic reports filed with or furnished by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act 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
THERMOGENESIS CORP. pursuant to the foregoing provisions, or otherwise,
THERMOGENESIS CORP. has been advised that in the opinion of the 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 Company of expenses
incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Company will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
<PAGE>II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Rancho Cordova, County of Sacramento, State of California, on
January 18, 2000.
THERMOGENESIS CORP.
/s/ PHILIP H. COELHO
----------------------------------
Philip H. Coelho, Chairman & C.E.O.
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James H. Godsey or David C. Adams as his true and
lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, for him and in his name, place, and stead, in any and all
capacities, to sign any and 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 attorneys-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or any of them, or of his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated:
/s/ PHILIP H. COELHO
----------------
Philip H. Coelho Dated: January 18, 2000
Philip H. Coelho, C.E.O.
and Chairman of the Board
(Principal Executive Officer)
/s/ RENEE M. RUECKER
----------------- Dated: January 18, 2000
Renee M. Ruecker,
Vice President Finance
(Principal Accounting Officer and
Principal Financial Officer)
/s/ JAMES H. GODSEY
------------------- Dated: January 18, 2000
James H. Godsey,
President, C.O.O.
Director
/s/ HUBERT E. HUCKEL Dated: January 18, 2000
----------------------
Hubert E. Huckel,
Director
/s/ Patrick McEnancy
----------------------
PATRICK MCENANCY Dated: January 18, 2000
/s/ DAVID S. HOWELL Dated: January 18, 2000
----------------------
David S. Howell,
Director
January 19, 2000
Board of Directors
THERMOGENESIS CORP.
3146 Gold Camp Drive
Rancho Cordova, California 95670
RE: Common Stock of THERMOGENESIS CORP.
Dear Gentlemen:
I have acted as general counsel to THERMOGENESIS CORP., a Delaware corporation
(the "Company"), in connection with the registration of 4,720,562 shares of the
Company's common stock (the "Shares") under the Securities Act of 1933, as
amended (the "Securities Act"), of which 444,562 of the Shares will be offered
to holders of the Company's warrants, and all of which will be sold by selling
stockholders of the Company as further described in the Company's registration
statement on Form S-3 filed under the Securities Act (the "Registration
Statement").
For the purpose of rendering this opinion, I examined originals or copies of
such documents as deemed to be relevant. In conducting my examination, I
assumed, without investigation, the genuineness of all signatures, the
correctness of all certificates, the authenticity of all documents submitted to
me as originals, the conformity to original documents of all documents submitted
as certified or photostatic copies, and the authenticity of the originals of
such copies, and the accuracy and completeness of all records made available to
me by the Company. In addition, in rendering this opinion, I assumed that the
Shares will be offered in the manner and on the terms identified or referred to
in the Registration Statement, including all amendments thereto.
My opinion is limited solely to matters set forth herein. I am admitted to
practice in the State of California and I express no opinion as to the law of
any other jurisdiction other than the laws of the State of Delaware and the laws
of the United States.
Based upon and subject to the foregoing, after giving due regard to such issues
of law as I deemed relevant, and assuming that (i) the Registration Statement
becomes and remains effective, and the prospectus which is a part of the
Registration Statement (the "Prospectus"), and the Prospectus delivery
requirements with respect thereto, fulfill all of the requirements of the
Securities Act, throughout all periods relevant to the opinion, (ii) all offers
and sales of the Shares will be made in compliance with the securities laws of
the states having jurisdiction thereof, and (iii) the Company receives, to the
extent applicable, the consideration set forth in the Prospectus, I am of the
opinion that the Shares issued are, and the Shares to be issued will be, legally
issued, fully paid and nonassessable.
<PAGE>2
I hereby consent in writing to the use of my opinion as an exhibit to the
Registration Statement and any amendment thereto. By giving such consent, I do
not thereby admit that I come within the category of persons where consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Securities and Exchange Commission.
Sincerely,
/s/ DAVID C. ADAMS
-----------------
David C. Adams
General Counsel
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of THERMOGENESIS CORP.
for the registration of 4,720,562 shares of its common stock and to the
incorporation by reference therein of our report dated August 13, 1999, with
respect to the financial statements and schedule of THERMOGENESIS CORP. included
in its Annual Report (Form 10-K) for the year ended June 30, 1999, filed with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Sacramento, California
January 17, 2000
