<PAGE>
As filed with the Securities and Exchange Commission on June 25, 1996
Registration No. 333-2053
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
AMENDMENT NO. 1 TO
FORM S-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------------------
ATHENA MEDICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 8070 33-0202574
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
10180 S.W. Nimbus Avenue, Suite J-5
Portland, Oregon 97223
(503) 968-8800
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
WILLIAM H. FLEMING
PRESIDENT AND CHIEF OPERATING OFFICER
ATHENA MEDICAL CORPORATION
10180 S.W. Nimbus Avenue, Suite J-5
Portland, Oregon 97223
(503) 968-8800
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies to:
Patrick J. Simpson, Esq.
Cynthia Clarfield Hess, Esq.
PERKINS COIE
1211 S.W. Fifth Avenue, Suite 1500
Portland, OR 97204
(503) 727-2000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
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, please check the following box. /X/
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box: /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Each Class Amount to be Proposed Maximum Proposed Maximum Amount of
of Securities to be Registered Registered Offering Aggregate Registration
Price Per Share (1) Offering Price(1) Fee (2)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 3,891,394 $4.12 $16,032,543 $5,528.46
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Common Stock, $.01 par value 1,821,900 $1.30 $2,368,470 $816.71
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Total 5,713,294 $18,318,513 $6,345.17
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457. The offering price has been estimated and the registration fee
has been computed pursuant to Rule 457(c), based on (i) 3,891,394 Selling
Shareholder shares at $4.12 per share (final sales price of the Common
Stock as quoted on NASD's OTC Bulletin Board on June 19, 1996) and
(ii) 1,821,900 shares being issued pursuant to the exercise of warrants at
the respective exercise prices thereof.
(2) A filing fee of $6,652 has previously been paid.
---------------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
5,713,294 SHARES
ATHENA MEDICAL CORPORATION
COMMON STOCK
-----------------
The shares of common stock, par value $.01 per share, offered hereby (the
"Shares") are shares of Athena Medical Corporation, a Nevada corporation (the
"Company"), 3,891,394 of which may be sold from time to time by certain
shareholders of the Company (the "Selling Shareholders") and 1,821,900 of which
may be issued and sold from time to time by the Company upon exercise of certain
warrants (the "Warrants") to purchase Common Stock as described below. See
"Principal and Selling Shareholders." The Company will not receive any part of
the proceeds from the sale of the Shares being sold by the Selling Shareholders
in this offering (the "Offering"). The Company will receive proceeds from the
exercise of the Warrants equal to the exercise price of the respective Warrant
exercised. The exercise prices range from $.41 to $3.00 per share.
The Common Stock is traded in the over-the-counter market under the symbol
"AFEM." On June 19, 1996, the last reported sales price for the Common Stock as
reported on the National Association of Securities Dealers' OTC Bulletin Board
(the "NASD OTC Bulletin Board") was $4.12 per share.
-----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
SHARES.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
SECURITIES IN ANY STATE TO ANY PERSON TO WHICH IT
IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
<TABLE>
<CAPTION>
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO PROCEEDS TO
PUBLIC COMMISSIONS COMPANY(3) SELLING SHAREHOLDERS(3)
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<S> <C> <C> <C> <C>
PER SHARE BEING SOLD BY SELLING
SHAREHOLDERS(1). . . . . . . . . . . $4.12 $-- $0 $16,032,543
PER SHARE BEING SOLD BY COMPANY (2). $1.30 $-- $2,285,970 $0
TOTAL. . . . . . . . . . . . . . . . $18,318,513 $-- $2,285,970 $16,032,543
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</TABLE>
(1) The Selling Shareholders may sell the Shares to or through dealers at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The above computations
are based on the last reported sales price of a share of Common Stock as of
June 19, 1996 and do not necessarily reflect the prices of shares to the
public on the dates the transactions are actually effected.
(2) Based upon the weighted average exercise price of the Warrants of $1.30 per
share.
(3) Expenses of this Offering, estimated at $82,500, are payable by the
Company.
------------------------
THE DATE OF THIS PROSPECTUS IS ________, 1996
<PAGE>
ADDITIONAL INFORMATION
The Company has filed a Registration Statement on Form S-2 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., with respect to the Shares offered hereby. The
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. For further information with respect to the
Company and the Shares, reference is made to the Registration Statement and the
exhibits thereto. Statements made in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
The Registration Statement is available for review at the Commission's
offices in Washington, D.C. All or part of the Registration Statement may be
inspected and copied, upon payment of the prescribed fees, at the Public
Reference Section of the Commission, 450 Fifth Street N.W., Judiciary Plaza,
Washington, D.C. 20549-1004.
In addition, the Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at, and copies of such material obtained at prescribed
rates from, the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004 and at the
Commission's regional offices located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511.
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995 and the Company's Quarterly Report on Form 10-QSB for the
period ended March 31, 1996 are being delivered with this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document filed with the Commission pursuant to the Exchange
Act is incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
2. The Company's Quarterly Report on Form 10-QSB for the period ended
March 31, 1996.
In addition, all documents filed by the Company pursuant to Section 13, 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this Offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus and the Registration
Statement of which it is a part to the extent that a statement contained herein
or in any other subsequently filed Incorporated Document or in an accompanying
prospectus supplement modifies or supersedes such statement. Any such statement
so modified or superseded shall not be
PAGE 2
<PAGE>
deemed, except as so modified or superseded, to constitute a part of this
Prospectus or such Registration Statement.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the Incorporated Documents, other than exhibits
to such documents, unless such exhibits are specifically incorporated by
reference therein. Requests should be directed to Kimberly Mick, Controller,
Athena Medical Corporation, 10180 S.W. Nimbus Avenue, Suite J-5, Portland,
Oregon 97223, telephone (503) 968-8800. The information relating to the
Company contained in this Prospectus does not purport to be comprehensive and
should be read together with the information contained in the Incorporated
Documents.
RISK FACTORS
Prospective investors should consider the following factors, among others,
in making a decision concerning purchase of the shares of Common Stock offered
hereby:
LACK OF REVENUES FROM PRODUCTS; EARLY STAGE OF PRODUCT DEVELOPMENT. The
Company's current product--the Fresh 'n Fit-Registered Trademark- interlabial
pad (the "Padette"), and products in development, the Tampette collection
device, the AWARE-TM- pregnancy test (the "Pregnancy Test") and other
contemplated diagnostic products--are in the early stages of development or
marketing. See "--Government Regulation." There have been no significant
revenues from the Padette and there have been no revenues at all from the
Tampette, the Pregnancy Test or from the diagnostic products in development.
Potential investors should be aware of the problems, delays, expenses and
difficulties encountered by any company whose products are in an early stage of
development, many of which may be beyond the Company's control. These include,
but are not limited to, unanticipated developmental, testing, regulatory
compliance, manufacturing and marketing costs and competition. In addition, the
Company's products are subject to the risks inherent in new products. These
risks include the absence of any assurance that products in development will be
successfully developed, or that the Company's products, once developed, can be
successfully manufactured, will be commercially successful or will not become
obsolete within a short time after their development. Moreover, the costs of
research and development and clinical trials for new products cannot be reliably
forecast and may substantially exceed the Company's expectations and financial
resources.
OPERATING LOSSES. During the year ended December 31, 1995 and the three
months ended March 31, 1996, the Company incurred losses of $4,196,109 and
$1,013,051, respectively. In 1996 the Company expects losses to continue as the
costs of marketing, research and development and related administrative
activities are expected to exceed income from product sales. These losses are
expected to be funded from the Company's revenues, cash reserves and future
financing, if any. See "--Need for Funds."
NEED FOR FUNDS. The Company expects to raise additional funds through
equity and/or debt financing for the development, manufacture and marketing of
its planned products. These funds may not be available or available on terms
favorable to the Company or its shareholders. The Company recently engaged
Sands Brothers & Co., Ltd. to act as the Company's investment banker in
connection with a proposed private placement of approximately $7-10 million in
equity. The Company is also in discussions with Capital Consultants, Inc.
("CCI"), a significant shareholder of the Company, relating to a possible equity
bridge financing of up to approximately $1.225 million. There is no assurance
that either of these private placements will be consummated. See "Recent
Developments." The inability of the Company to obtain such financing could
adversely affect the Company. The Notes to the Company's audited financial
statements for the year ended December 31, 1995 raise substantial doubt about
the Company's ability to continue as a going concern. In addition, future
financing could have a dilutive effect on holders or purchasers of the Shares.
PAGE 3
<PAGE>
MANUFACTURING RISKS. The Company currently manufactures the Padette. As a
manufacturer, the Company will continually face risks regarding the availability
and costs of raw materials and labor, the potential need for additional capital
equipment, increased maintenance costs, plant and equipment obsolescence,
quality control and excess capacity. A disruption in the Company's production
or distribution could have a material adverse effect on the Company's financial
results. The Company currently purchases certain raw materials from one
supplier. Although the Company does not believe it would be difficult to
replace these suppliers, the Company has not approved other suppliers for the
sale of certain raw materials to the Company.
UNCERTAIN ABILITY TO MANAGE GROWTH. The Company anticipates that in order
to achieve success in its industry, the Company will be required to increase
rapidly its sales, production and employee base. The Company anticipates these
increases will place significant demands on the Company's management, working
capital and financial and management control systems. The Company may not be
able to meet the demands of future growth. Any inadequacies in these areas
could have a material adverse effect on the Company's business, financial
condition and results of operations.
RISKS OF INTERNATIONAL BUSINESS. The Company's business is and
will be subject to the risks generally associated with doing business
internationally, including changes in demand resulting from
fluctuations in exchange rates, foreign governmental regulation and
changes in economic conditions. These factors, among others, could
influence the Company's ability to sell its products in international
markets. In addition, the Company's business is subject to the risks
associated with legislation and regulation relating to imports,
including quotas, duties or taxes and other charges, restrictions and
retaliatory actions on imports to other countries in which the
Company's products may be sold or manufactured.
POTENTIAL ADVERSE IMPACT OF OFFERING ON MARKET PRICE OF COMMON STOCK.
The number of Shares being offered pursuant to the Prospectus by the
Selling Shareholders and the Company represent approximately 53 percent
of the total common stock of the Company outstanding at March 31, 1996,
assuming the exercise of all Warrants covering Shares being registered
hereby. See "Selling Shareholders." Each Selling Shareholder intends
to offer his, her or its Shares at such time and in such manner as he,
she or it deems appropriate. Other than certain contractual volume
limitations relating to the sale of Shares by certain Selling
Shareholders and holders of Warrants (the "Warrantholders"), there are
no agreements between the Selling Shareholders or Warrantholders and
the Company or, to the Company's knowledge, among the Selling
Shareholders or Warrantholders, with respect to the sale of Shares. If
Selling Shareholders or Warrantholders were simultaneously to sell or
resell a large amount of Shares in the market, the market price of the
Company's common stock could be adversely affected. See "Selling
Shareholders" and "Plan of Distribution."
TRADING MARKET FOR SHARES. Trading of the Company's common stock is currently
conducted in the over-the-counter market on the NASD OTC Bulletin Board
or the "pink sheets." As a result, stockholders may find it more
difficult to dispose of, or obtain accurate quotations as to the price
of, common stock than if the common stock were listed on the National
Association of Securities Dealers Automated Quotation System (the
"NASDAQ") or a national stock exchange. In addition, the volume
of trading in the common stock may be very limited on a daily basis.
VOLATILITY OF STOCK PRICE. There has been significant volatility in the
market price of the Company's common stock. During 1995, the price of the
Company's common stock ranged from $7 3/4 per share to $2 1/2 per share. In
addition, there has been significant volatility in the market price of
securities of early stage companies, technology companies generally and
biotechnology companies in particular. Various factors, including but not
limited to announcements by the Company or its competitors concerning product
developments, patents or proprietary rights, may significantly affect the
Company's business and the market price of the common stock.
PAGE 4
<PAGE>
These factors as well as general economic conditions such as recessions or high
interest rates may adversely affect the market price of the Company's common
stock.
PENDING LEGAL PROCEEDINGS. The Company has been named as a defendant in a
civil action brought in the Circuit Court of Oregon for Washington County by
Kassia International Incorporated (the "Plaintiff"). The complaint alleges that
the Company breached its obligations to complete the purchase of the Plaintiff
in the spring of 1995 and seeks damages of up to $6 million under various
theories. Although the Company intends to vigorously defend against such
lawsuit, the Company cannot predict the outcome of the lawsuit. An award of
damages (in excess of any available insurance) or the expenditure of significant
sums even in the successful defense of the case could have a material adverse
effect on the Company's financial condition and results of operations. See
"Recent Developments."
COMPETITION. The Company's current products and products in development
will compete with products from other companies that have more employees and
substantially greater research, financial and marketing resources than the
Company. Many of these competitors also have the resources to manufacture and
market their own products, which in many cases the Company may not be able to
do.
PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION. In 1987 the Company
acquired exclusive worldwide license to six U.S. patents (one of which has since
expired) and additional foreign patents in the United Kingdom, Germany, Canada
and Japan, covering the Padette. Additionally, the Company was assigned a
patent issued in 1991 used in manufacturing the Padette and has filed for
additional applications of its own. The Company also anticipates filing patent
applications for protection on future products and technology. The term for
patents issuing on applications filed on or after June 8, 1995 is 20 years from
the date of application or, if the application contains a specific reference to
an earlier filed application under 35 U.S.C. Sections 120, 121 or 365(c),
20 years from the date on which the earliest such application was filed. The
term of patents issuing on applications filed before June 8, 1995, is the
greater of the 20-year term described above or 17 years from grant, depending on
the amount of time between application and issuance. There can be no assurance
that patents will be issued or upheld or that additional patents will be
obtained or that patents will provide significant protection or be beneficial to
the Company.
The issuance of patents to the Company or to a licensor is not conclusive
as to validity or as to the enforceable scope of claims therein. The validity
and enforceability of a patent can be challenged by litigation after its
issuance, and, if the outcome of such litigation is adverse to the owner of the
patent, the owner's rights could be diminished or withdrawn. The issuance of
patents covering any of the Company's products may be insufficient to prevent
competitors from essentially duplicating the product by designing around the
patented aspects. The patent laws of other countries may differ from those of
the United States as to the patentability of the Company's products and
processes. Moreover, the degree of protection afforded by foreign patents may
be different from that in the United States.
The technologies used by the Company may infringe upon patents or
proprietary technology of others. The cost of enforcing the Company's patent
rights in lawsuits that the Company may bring against infringers or defending
itself against infringement charges by other patent holders may be high and
could adversely affect the Company.
The Company has domestic trademarks in Fresh n'Fit and a butterfly logo.
The Company has received notice from another company claiming that such other
company has the prior right to use the "Athena" name. The Company may in the
future be required to refrain from using the "Athena" name. To date, the
Company has not prominently featured the "Athena" name on its products and
therefore the Company believes that refraining from its use on products in the
future will not have a material adverse effect on the Company.
PAGE 5
<PAGE>
Trade secrets and confidential know-how are important to the Company's
scientific and commercial success. Although the Company seeks to protect its
proprietary information through confidentiality agreements and appropriate
contractual provisions, others may develop independently the same or similar
information or gain access to proprietary information of the Company.
GOVERNMENT REGULATION. Many of the Company's activities are subject to
regulation by various local, state and federal regulatory authorities in the
United States and by governmental authorities in foreign countries where its
products may be marketed.
Some of the Company's contemplated products will require Food and Drug
Administration ("FDA") approval and approval from similar authorities in other
countries. Obtaining such approvals may be a lengthy and expensive proceeding
often involving extensive testing and clinical trials to demonstrate safety,
reliability and efficacy. In addition, the process of obtaining FDA approval
may be subject to change in regulations resulting in unexpected costs and
uncertainty. The Company may not be able to comply with the applicable
requirements and necessary approvals may not be granted. Moreover, the extent
and impact of future governmental regulation cannot be predicted. Failure to
comply with the regulatory requirements applicable to the Company may result in
fines, injunctions, civil penalties, recall or product seizure, among other
penalties.
The Padette has received approval for over-the-counter marketing in the
United States under a 510(k) pre-market notification submission to the FDA as a
Class II device. No further FDA requirements for clinical evaluation are
expected. Requests for regulatory approval for marketing in several countries
have been made. The Company
cannot predict when or whether approvals in other countries will be obtained.
The Tampette and the Company's contemplated diagnostic products are still in the
development stage and have yet to complete clinical trial. See "--Lack of
Revenues from Products; Early State of Product Development." The Company
anticipates submitting data to the FDA for the Tampette and the Pregnancy Test.
There can be no assurance, however, as to when, if ever, such data will be
submitted to the FDA or necessary FDA approval will be obtained.
DEPENDENCE ON MANAGEMENT AND CONSULTANTS. The Company depends to a large
extent upon the abilities and continued participation of its current directors,
executive officers and consultants. The loss of any of these people could have
a serious adverse effect upon the Company's business. The Company may not be
able to attract and retain key personnel with the skills and expertise necessary
to manage its business. The Company does not have key-man life insurance on the
lives of any of its personnel. The Company has employment contracts with
William H. Fleming, the Company's President, Chief Operating Officer, Secretary
and Director; and John F. Perry, the Company's Chief Executive Officer and
Chairman of the Board. In addition, the Company has contracts with most of its
consultants. Competition for management and scientific staff in the
biotechnology, biomedical and health care fields is intense. The Company may
not be able to continue to employ personnel and consultants with sufficient
expertise to satisfy the Company's needs.
PRODUCT LIABILITY. The Company could be subject to claims for personal
injuries or other damages resulting from its products. The Company carries
general liability insurance, including products liability insurance in the
amount of $2,000,000. While there have been no product liability claims against
the Company, in the event any claims for amounts exceeding its insurance
coverage were successful, they could have a material adverse effect on the
Company. The Company's insurance may not adequately protect the Company against
all such liabilities. The Company's insurance does not cover actions brought in
countries other than the United States. The Company's current product is not
intended for internal use and therefore the Company does not consider claims
relating to toxic shock syndrome to be a risk to the Company. However, the
Company cannot guarantee that the product will not be used internally by persons
misusing the product. Toxic shock syndrome is excluded from the Company's
insurance policy.
PAGE 6
<PAGE>
EXERCISE OF WARRANTS AND OPTIONS; POTENTIAL ADVERSE IMPACT OF SHARES
ELIGIBLE FOR FUTURE SALES. As of June 5, 1996, 2,240,530 shares of Common Stock
were subject to outstanding stock options under the Company's Stock Option Plan
at a weighted average exercise price of $1.73 per share and 3,602,900 shares
were issuable upon exercise of outstanding warrants at a weighted average
exercise price of $1.90 per share. While outstanding warrants and options are
exercisable, the holders thereof have the opportunity to profit from a rise in
the market price of the common stock. The Company may find it more difficult to
raise additional equity capital while the warrants and options are outstanding.
At any time when the holders might be expected to exercise their warrants and
options, the Company would probably be able to obtain additional equity capital
on terms more favorable than those provided in the warrants and options being
exercised. Holders of warrants and options do not have any of the rights or
privileges of stockholders of the Company prior to exercise of the warrants and
options.
Sales of substantial amounts of the Company's common stock in the public
market by existing shareholders could adversely affect the price of the common
stock. In addition to the 5,713,294 shares of common stock offered hereby,
2,445,729 shares are freely tradable under the federal securities laws to the
extent they are not held by affiliates of the Company or are not subject to
certain contractual volume restrictions and, as of June 1996, an additional
2,567,967 shares became eligible for resale under Rule 144. In general, under
Rule 144 as currently in effect, any person (or persons whose shares are
aggregated) who has beneficially owned restricted securities for at least two
years is entitled to sell, within any three-month period, a number of shares
that does not exceed the greater of (i) 1% of the then outstanding shares of the
issuer's common stock and (ii) the average weekly trading volume during the four
calendar weeks preceding such sale, provided that certain public information
about the issuer as required by Rule 144 is then available and the seller
complies with certain other requirements. A person who is not an affiliate, has
not been an affiliate within three months prior to sale, and has beneficially
owned the restricted securities for at least three years is entitled to sell
such shares under Rule 144(k) without regard to any of the limitations described
above.
The Company intends to file a registration statement on Form S-8 under the
Securities Act by late 1996. Such registration statement would cover shares of
Common Stock reserved for issuance under the Company's Stock Option Plan and
certain warrants that are not being registered pursuant to this offering.
ABSENCE OF DIVIDENDS. The Company has not paid any dividends on its Common
Stock since its inception and does not anticipate paying any dividends in the
foreseeable future. Earnings of the Company, if any, are expected to be used to
finance the development and expansion of the Company's business. Any future
decision with respect to dividends will depend on future earnings, future
capital needs and the Company's operating and financial condition, among other
factors. See "Description of Securities--Common Stock."
USE OF PROCEEDS
The net proceeds from the sale of the Shares issued upon exercise of the
Warrants, after the deduction of an estimated $82,500 of offering expenses being
paid by the Company, will be used for the development and marketing of the
Company's products and general corporate purposes. The Company has not been
advised when or whether the holders of Warrants intend to exercise their
Warrants. No proceeds will be received by the Company from sales of Shares by
the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth information as of April 30, 1996 regarding
the beneficial ownership of common stock by each Selling Shareholder. The
amounts listed under "Shares Registered for Sale" do not reflect the common
stock underlying Warrants owned by certain of the Selling Shareholders that are
being registered pursuant to the Registration Statement.
PAGE 7
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING(3)
-------------------
SHARES BENEFICIALLY SHARES REGISTERED BEFORE AFTER
NAME OF SELLING SHAREHOLDER OWNED (1) FOR SALE(2) SALES SALES(4)
- -------------------------------- ------------------- ----------------- ------- --------
<S> <C> <C> <C> <C>
Capital Consultants, Inc. 3,170,000(5) 3,120,000 35.2% *
2300 SW First Ave.
Portland, OR 97201
Cort MacKenzie Securities, Inc. 1,354,335(6) 129,585 13.3% 12.0%
5335 S.W. Meadows Road, Suite 270
Lake Oswego, OR 97035
John Robert Booth 17,411(7) 15,871 * *
G. Dale Garlow 302,199(8) 275,469 3.4% *
Donald P. Leach 302,199(8) 275,469 3.4% *
Yamhill Valley Vineyards 75,000(9) 75,000(9) * 0%
</TABLE>
- ---------------------------
*Less than 1%.
(1) "Beneficial Ownership" is defined pursuant to Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and generally means
any persons, who directly, or indirectly, have or share voting or
investment power with respect to a security. A person shall be deemed to
be the beneficial owner of a security if that person has the right to
acquire beneficial ownership of such security within sixty days, including
but not limited to, any right to acquire such security through the exercise
of any option or warrant or through the conversion of a security.
(2) Includes shares that may be sold pursuant to this Prospectus. However, in
some cases these shares may instead be sold pursuant to Rule 144 under the
Securities Act and in some cases may not be sold at all during the time
this Prospectus may be used for sales. See "Plan of Distribution."
(3) Percent of class for any shareholder listed is calculated without regard to
shares of common stock issuable to others upon exercise of outstanding
stock options or warrants. Any shares a shareholder is deemed to own by
having the right to acquire by exercise of an option or a warrant are
considered to be outstanding solely for the purpose of calculating that
shareholder's ownership percentage.
(4) Assumes the sale pursuant to the Offering of all shares listed in the
"Shares Registered for Sale" column. Also assumes that none of the listed
shareholders sells shares not listed in such column or purchases additional
shares in this Offering or otherwise except pursuant to certain outstanding
options or warrants.
(5) Capital Consultants, Inc. ("CCI") is an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940 and has, on behalf of
certain of its clients, the sole voting power and the sole investment power
with respect to the shares. Includes 31,200 shares owned by CCI. Includes
50,000 shares subject to warrants held by CCI on behalf of certain of its
clients exercisable within 60 days after April 30, 1996.
PAGE 8
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(6) Includes 1,224,750 shares subject to warrants exercisable within 60 days
after April 30, 1996, 308,750 of which are beneficially owned by Cort
MacKenzie & Thomas, Inc. ("CMT"). CMT has agreed not to sell, within any
three-month period, the greater of (i) 1% of the then outstanding shares of
the Company's common stock and (ii) the average weekly trading volume
during the four calendar weeks preceding such sale. 270,000 shares listed
in the shares beneficially owned column are warrants exercisable within
60 days after April 30, 1996 which are beneficially owned by Thomas C.
Stewart, President of Cort MacKenzie Securities, Inc.
(7) Includes 1,540 shares subject to warrants exercisable within 60 days after
April 30, 1996.
(8) Includes 26,730 shares subject to warrants exercisable within 60 days after
April 30, 1996. Messrs. Garlow and Leach have agreed that they will not
sell the greater of (i) in any single trading day more than 1% of the
average daily reported volume of trading of the Company's shares for the
four preceding calendar weeks or (ii) 12,500 shares in any five consecutive
trading days.
(9) Yamhill Valley Vineyards is owned by Denis R. Burger and his wife.
Sovereign Ventures L.L.C., an Oregon limited liability company, owned
equally by Mr. Burger and Michael C. Hubbard, owns an additional 761,135
shares. Mr. Hubbard beneficially owns an additional 150,000 shares.
Except as set forth below, none of the Selling Shareholders has any
position, office or other material relationship with the Company (or had any
such position, office or material relationship within the past three years).
Capital Consultants, Inc. ("CCI") received its shares being registered pursuant
to the Registration Statement in connection with a $6 million private placement
of convertible debentures in December 1994. Under the terms of its agreement
with the Company, CCI is entitled to elect one member to the Company's Board of
Directors. Jeffrey Grayson, the representative elected by CCI, voluntarily and
without disagreement, resigned from the Company's Board of Directors in December
1995. CCI currently has no representative on the Company's Board of
Directors. CCI is currently in discussions with the Company relating to
a possible equity bridge financing of up to $1.225 million. See "Recent
Developments."
Cort MacKenzie & Thomas, Inc. ("CMT") is part of a joint venture that
entered into a distribution arrangement in the Far East for the Company's
products. This agreement was recently terminated and the Company has agreed to
pay CMT one-quarter of one U.S. cent for each Padette sold by the Company within
China for three years, provided that such payments shall not exceed $100,000 in
any 12-month period. See "Recent Developments."
Denis R. Burger, a principal shareholder of Yamhill Valley Vineyards
("Yamhill") was a member of the Company's Board of Directors until his
resignation in February 1995. During 1994, the Company entered into an
agreement with Sovereign Ventures, LLC ("Sovereign") to provide consulting
services including operational and strategic guidance and assistance in
financing matters. Sovereign is owned 50% by Mr. Burger. A total of $352,620
was paid to Sovereign pursuant to such agreement. Sovereign is also a principal
shareholder of the Company, holding in excess of 750,000 shares of the Company's
Common Stock.
THE WARRANTS
A total of 1,821,900 shares of Common Stock may be sold pursuant to this
Prospectus upon exercise of the Warrants. The Warrants have been privately
issued by the Company over the past two years to 18 persons or entities in
connection with a variety of transactions, including the settlement of
litigation, and in consideration for consulting, advisory and capital raising
services. All of the Warrants expire between May 1999 and December 2000, with
the exception of Warrants to purchase 18,400 shares of Common Stock which expire
in July 2001 and Warrants to purchase 55,000 shares of Common Stock which expire
in December 2004. The weighted average exercise price of the Warrants is $1.30
per share. The following table sets forth the number, exercise price and
expiration date for the Warrants:
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NUMBER OF WARRANTS EXERCISE PRICE EXPIRATION DATE
682,000 $1.50 12/31/99
600,000 $1.00 05/01/99
308,750 $1.50 11/18/99
84,000 $0.41 12/23/99
55,000 $1.50 12/31/04
36,000 $1.50 10/02/99
20,000 $3.00 10/02/99
18,400 $1.25 07/01/01
10,000 $1.64 05/18/00
5,000 $2.88 12/29/00
2,750 $1.00 02/23/00
---------------------
Total 1,821,900
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 33,000,000 shares
of common stock, $.01 par value per share. As of June 5, 1996, there were
8,958,243 shares of common stock outstanding. All of the outstanding shares of
Common Stock are fully paid and nonassessable.
Holders of Common Stock are entitled to receive dividends as may from time
to time be declared by the Board of Directors out of funds legally available
therefor and to one vote per share on all matters on which the holders of Common
Stock are entitled to vote. The current policy of the Company is to retain
earnings to provide funds for the operation and expansion of its business. The
Company has never paid any cash dividends, and the Board of Directors does not
anticipate paying cash dividends in the foreseeable future. See "Risk
Factors--Absence of Dividends." Holders of common stock do not have any
cumulative voting rights or conversion, pre-emptive, redemption or sinking fund
rights. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share equally and ratably in
the Company's assets, if any, remaining after the payment of all liabilities of
the Company.
The holders of Common Stock are entitled to one vote for each share held on
all matters submitted to the shareholders.
CERTAIN ANTIDILUTION RIGHTS
Holders of common stock who owned shares of Common Stock on February 17,
1994 have the right to receive additional shares of Common Stock (without
consideration) sufficient to maintain their percentage ownership if the Company
issues Common Stock (or warrants or options to acquire Common Stock) on or after
February 17, 1994 and before February 17, 1997 at a price of less than $.40 per
share. No other holders of Common Stock have antidilution rights.
CHANGE IN CONTROL
The Nevada Control Share Acquisition Act places certain restrictions on
acquisition of control shares, similar to those found in other jurisdictions.
The Company has opted, as permitted by Nevada law, to provide in
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<PAGE>
its bylaws that this Act does not apply to acquisition of shares of the
Company's stock. The Company's articles and bylaws do not contain any
provisions that would delay, defer or prevent a change in control of the
Company.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Twelve of the Company's Articles of Incorporation, as amended, and
Article VIII of the Company's Bylaws provide that the Company is required to
indemnify current or former directors, officers, employees or agents of the
Company to the fullest extent permitted by Nevada law. The rights of
indemnification under the Articles and Nevada law are not exclusive of any other
rights of indemnification to which the persons indemnified may be entitled under
any agreement, vote of shareholders or directors or otherwise. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
PLAN OF DISTRIBUTION
The Shares being sold by the Selling Shareholders may be sold from time to
time by such Selling Shareholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made in the over-the-counter market
or otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. Such Shares may be
sold by one or more of the following means: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) a purchase by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; and
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated immediately prior to the sale. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
such sales. In addition, any Shares covered by this Prospectus that qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.
Under agreements that may be entered into by the Selling Shareholders,
dealers who participate in the distribution of the Shares may be entitled to
indemnification by the Selling Shareholders against certain liabilities,
including liabilities under the Securities Act.
Certain of the dealers may be customers of, including borrowers from,
engage in transactions with, and perform services for, the Company, a Selling
Shareholder or one or more of their affiliates in the ordinary course of
business.
The Shares offered by the Selling Shareholders hereby may be distributed to
purchasers thereof in the states of Florida, Georgia, New Jersey, New York,
Oregon and Washington.
All of the Shares to be issued upon the exercise of the Warrants are to be
offered for the account of the Company. The Company will not pay any sales
commissions or other seller's compensation in connection with the exercise of
the Warrants. Shares issued upon the exercise of the Warrants will be freely
transferable by the holders thereof, subject to compliance with applicable state
securities laws and except for such Shares received by persons who may be deemed
to be "affiliates" of the Company (within the meaning of Rule 144). Persons who
are deemed to be affiliates of the Company within the meaning of Rule 144 may
not publicly offer or sell such Shares received upon exercise of the Warrants
except pursuant to an effective registration statement under the Securities
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<PAGE>
Act or pursuant to Rule 144 (without regard to the applicable holding period
provided thereunder). The Company has not been advised when or whether the
holders of the Warrants intend to exercise their Warrants, or if they do so,
whether they intend to sell their securities received as a result of such
exercise.
The sale of the Shares to be issued upon exercise of the Warrants are being
registered or exemptions for such sales are available to the Company in the
following states: Oregon, California, Alabama, New York and Florida. Any
resales of such Shares by holders thereof must be made in compliance with
applicable state securities laws.
PAGE 12
<PAGE>
RECENT DEVELOPMENTS
POTENTIAL FINANCINGS. The Company recently engaged Sands Brothers & Co.,
Ltd. to act as the Company's investment banker in connection with a proposed
private placement of approximately $7-10 million in equity. The Company is also
in discussions with Capital Consultants, Inc. ("CCI"), relating to a possible
equity bridge financing of up to approximately $1.225 million. There is no
assurance that either of these private placements will be consummated.
CONSULTING AGREEMENTS. In November 1995, the Company entered into a
Consulting Agreement with Peter Loftis for consulting services in the area of
trade relations, sales and marketing. Pursuant to the agreement, the Company
has agreed to pay Mr. Loftis a fee of $10,000 per month. The Company has also
granted Mr. Loftis warrants to purchase 100,000 shares of the Company's common
stock at a purchase price of $2.88 per share, one-third of which vested
immediately, one-third of which vested after six months of service and the
remainder of which vest after 12 months of service. The Consulting Agreement is
terminable by either party with 60 days' prior notice.
In June 1995, the Company entered into a Consulting Agreement with David
Pitassi for consulting services in the area of sales, marketing, product
development and manufacturing. Pursuant to the agreement, the Company has
agreed to pay Mr. Pitassi $1,000 per month as a minimum payment. In addition,
services rendered over and above one day per month will be compensated at the
rate of $250 per hour. The Company has granted to Mr. Pitassi warrants to
purchase 100,000 shares of the Company's common stock at a purchase price of
$2.88 per share, one-third of which vested immediately, one-third of which will
vest on June 30, 1996 and the remainder of which will vest on June 30, 1997.
The agreement may be terminated by either party with 30 days' prior notice.
DISTRIBUTION OF PRODUCTS. In July 1995, the Company entered into a
Distributor's Agreement with OSSCA International, Inc. ("OSSCA") with respect to
the nonexclusive distribution of the Padette to the United States military and
other United States government agencies. The term of the Agreement is three
years and may be extended annually thereafter by the parties. Pursuant to the
Agreement, OSSCA agreed to an initial order of 1,000,000 Padettes, and 6,000,000
Padettes per year. The parties have agreed that OSSCA will take delivery of
Padettes as soon as the Company's products are in distribution in the United
States.
In March 1996 the Company entered into a letter of understanding with
Pinturas Condor ("Condor"), a consumer products company located in Quito,
Ecuador, whereby Condor will be the exclusive distributor of the Company's
products in Ecuador, Colombia, Venezuela and Peru. Condor has agreed to
purchase at least $895,000 of Padettes during the first three years of the
contract.
In December 1995, the Company entered into an agreement with Chinese
Business Services ("CBS") pursuant to which CBS became the exclusive distributor
for direct sales of the Padette within China. The term of the agreement is two
years with automatic one year renewals. The Agreement may also be terminated by
the Company if, among other reasons, CBS fails to meet certain minimum purchase
orders. The Company has also agreed to issue to CBS a warrant to purchase
10,000 shares (subject to decrease in the event minimum purchase requirements
are not met) of the Company's common stock at a purchase price of $4.00 per
share.
The Company and Beijing Kang Mei Biological Products, Ltd., a
joint venture comprised of Cort MacKenzie & Thomas, Inc., and Fang-Hai
Science and Technology (the "Joint Venture") previously entered into a
distribution arrangement relating to certain countries in the Far East
which was recently terminated. The Company has agreed to pay to Cort
MacKenzie & Thomas, Inc. one-quarter of one U.S. cent for each Padette
sold by the Company within China during the three-year term commencing
on the effective date of the new agreement; provided, however, that such
payments shall not exceed $100,000 in any 12-month period.
PAGE 13
<PAGE>
LEGAL PROCEEDINGS. The Company has been named as a defendant in a civil
action brought in the Circuit Court of Oregon for Washington County by Kassia
International Incorporated (the "Plaintiff"). The complaint alleges that the
Company breached its obligations to complete the purchase of the Plaintiff in
the spring of 1995 and seeks damages of up to $6 million under various theories.
Although the Company intends to vigorously defend against such lawsuit, the
Company cannot predict the outcome of the lawsuit. See "Risk Factors."
The Company was in a dispute with G. Dale Garlow, Donald P. Leach and
John R. Booth, shareholders of the Company who claimed they were entitled to
certain registration rights, among other matters (collectively, "GL&B"). In
February 1996, the Company and GL&B entered into a Settlement Agreement,
Registration Rights Agreement and Release (the "Settlement Agreement"), pursuant
to which the Company agreed to deliver warrants to purchase an aggregate of
30,000 shares of the Company's common stock at an exercise price of $1.50 per
share and 25,000 shares of the Company's common stock at an exercise price of
$3.00 per share. The Company also agreed to register all the shares owned by
GL&B as well as the shares of common stock underlying the warrants granted to
GL&B pursuant to the Settlement Agreement. In addition, the Company has agreed
to pay to the Shareholders an aggregate of $30,000. Messrs. Leach and Garlow
have each agreed to certain volume limitations in the sale of their shares. See
"Selling Shareholders."
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon by
Perkins Coie, Portland, Oregon.
EXPERTS
The financial statements incorporated by reference in this Prospectus to
the Annual Report on Form 10-KSB for the year ended December 31, 1995 have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and so incorporated herein in reliance upon
the authority of said firm as experts in auditing and accounting in giving said
report. Reference is made in said report which includes an explanation of the
factors discussed in the notes to the financial statements that raise
substantial doubt about the Company's ability to continue as a going concern.
PAGE 14
<PAGE>
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- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY OF THE SELLING SHAREHOLDERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT
RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO
WHICH IT RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE
SUCH OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
-----------
TABLE OF CONTENTS
PAGE
----
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
The Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Description of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Recent Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
5,713,294 SHARES
ATHENA MEDICAL
CORPORATION
COMMON STOCK
,1996
----------
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PAGE 15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
AMOUNT
--------------
SEC Registration Fee . . . . . . . . . . . . . . . . . $ 7,526
Accounting Fees and Expenses*. . . . . . . . . . . . . 3,000
Legal Fees and Expenses* . . . . . . . . . . . . . . . 60,000
Blue Sky Fees and Expenses*. . . . . . . . . . . . . . 10,000
Printing, including Registration Statement,
Prospectus, etc.* . . . . . . . . . . . . . . . . . 1,000
Miscellaneous Expenses*. . . . . . . . . . . . . . . . 974
--------------
TOTAL EXPENSES*. . . . . . . . . . . . . . . . . . . . $82,500
--------------
--------------
- -------------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada General Corporation Law (the "Nevada Act") requires the
indemnification of an individual made a party to a proceeding because the
individual is or was a director, officer, employee or agent of the corporation
against expenses, including attorney fees, actually and reasonably incurred, to
the extent that the individual is successful on the merits or otherwise in the
individual's defense in the proceeding, or in defense of any claim, issue or
matter therein. In addition, the Nevada Act allows the corporation to indemnify
such an individual if:
(a) The conduct of the individual was in good faith;
(b) The individual reasonably believed that the individual's conduct was
in the best interest of the corporation, or not opposed to its best interests;
and
(c) In the case of any criminal proceeding, the individual had no
reasonable cause to believe the individual's conduct was unlawful.
In the case of any proceeding by or in the right of the corporation, the
individual must also meet the standards set forth above to be entitled to
indemnification, but may still not be indemnified if the individual is adjudged
liable to the corporation or for amounts paid in settlement to the corporation,
unless ordered by a court of competent jurisdiction upon application.
Article Twelve of the articles of incorporation of the registrant requires
that the bylaws of the registrant shall provide for the indemnification of the
registrant's directors, officers, employees and agents to the fullest extent
permitted by Nevada law. Article VIII of the bylaws of the registrant requires
the registrant to indemnify any current or former director, officer, employee or
agent from and against expenses actually and reasonably incurred, including
attorney fees, judgments, fines and amounts paid in settlement, in connection
with any action, suit or proceeding to which the individual is a party because
of service to registrant, provided that the individual
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<PAGE>
acted in good faith and in a manner the individual reasonably believed to be in
or not opposed to the best interests of the registrant and, with respect to any
criminal action or proceeding, the individual had no reasonable cause to believe
the individual's conduct was unlawful. The same indemnification obligation
applies to actions by or in the right of the corporation if the foregoing
standards are met, but shall not apply if the individual is adjudged liable to
the corporation or to amounts paid in settlement, unless ordered by a court of
competent jurisdiction. This right to indemnification does not exclude any
other rights to which an individual may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. Article Eight of the bylaws further requires the
indemnification of an individual made a party to a proceeding because the
individual is or was a director, officer, employee or agent of the corporation
against expenses, including attorney fees, actually and reasonably incurred, to
the extent that the individual is successful on the merits or otherwise in the
individual's defense in the proceeding, or in defense of any claim, issue or
matter therein.
In addition to the rights to indemnification set forth above, the
registrant has, in Article Thirteen of its articles of incorporation, eliminated
the liability of each director and officer of the corporation for damages for
any breach of fiduciary duty, except that a director or officer shall be liable
for damages which result from:
(a) Acts or omissions which involve intentional misconduct, fraud or
knowing violation of law;
(b) The willful or grossly negligent payment of any improper dividend or
distribution; or
(c) Acts or omissions which occurred prior to March 18, 1987.
This provision is consistent with the Nevada Act, which allows the elimination
of personal liability for officers and directors in the articles of
incorporation, except in the situations described in subsections (a) and
(b) above.
ITEM 16. EXHIBITS.
5.1 Opinion of Perkins Coie.*
10.1 License Agreement dated April 30, 1986 between Shalom Z. Hirschman,
M.D., and Marvin P. Loeb & Company. Incorporated by reference to
Exhibit 10.1 to the Company's Form S-2, SEC File No. 33-88230 (the
"S-2").
10.2 Limited License & Option Agreement between Marvin Loeb & Company and
the Company dated December 30, 1986. Incorporated by reference to
Exhibit 10.2 to the S-2.
10.3 Consulting Agreement between Shalom Hirschman, M.D. and the Company
dated June 23, 1987. Incorporated by reference to Exhibit 10.3 to the
S-2.
10.4 Consulting Agreement between the Company and Roland Gertstenberger
dated January 31, 1996.**
10.5 Consulting Agreement between the Company and Karen K. Anderegg
dated January 5, 1995. Incorporated by reference to Exhibit 10.28 to
the Company's Annual Report on Form 10-KSB for the year ended December
31, 1994.
10.6 Consulting Agreement between the Company and Peter Loftis dated
November 6, 1995.**
10.7 Consulting Agreement between the Company and David M. Pitassi dated as
of February 1995.**
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<PAGE>
10.8 Share Exchange Agreement among Xtramedics, Inc., Athena Profem, Inc.,
and Athena shareholders dated February 17, 1994. Incorporated by
reference to Exhibit 1 to the Company's Quarterly Report on Form
10-QSB/A for the period ended March 31, 1994 (the "March 31, 1994
10-QSB/A").
10.9 Assumption of Employment Agreement between the Company and John F.
Perry dated February 17, 1994. Incorporated by reference to Exhibit 2
to the March 31, 1994 10-QSB/A.
10.10 Employment Agreement between Athena Medical Corporation (an Oregon
corporation) and John F. Perry dated as of July 1, 1993. Incorporated
by reference to Exhibit 2 to the March 31, 1994 10-QSB/A.
10.11 Assumption of Employment Agreement between the Company and William H.
Fleming dated February 17, 1994. Incorporated by reference to Exhibit
2 to the March 31, 1994 10-QSB/A.
10.12 Employment Agreement between Athena Medical Corporation (an Oregon
corporation) and William H. Fleming dated as of July 1, 1993.
Incorporated by reference to Exhibit 2 to the March 31, 1994 10-QSB/A.
10.13 Business Park Lease between the Company, Petula Associates, Ltd. and
Koll Portland Associates dated March 1, 1996.**
10.14 Agreement dated July 1, 1994 between Sovereign Ventures and Athena
Medical Corporation. Incorporated by reference to Exhibit 10.10 to
the S-2.
10.15 Registration Rights Agreement between Athena Medical Corporation and
Capital Consultants, Inc., dated December 29, 1994. Incorporated by
reference to Exhibit 10.15 to the S-2.
10.16 Form of Registration Rights Agreement used for Mr. Waller, Esler,
Stephens & Buckley and Lane Powell Spears Lubersky.**
10.17 Athena Medical Corporation's 1994 Incentive and Non-Qualified Stock
Option Plan dated as of June 7, 1994. Incorporated by reference to
Exhibit 10.14 to the S-2.
10.18 Purchase Warrant issued to Richard Schroeder for 100,000 shares of
common stock` dated May 3, 1994. Incorporated by reference to Exhibit
10.16 to the S-2.
10.19 Form of Purchase Warrant issued to Cort MacKenzie for 346,000 shares
of common stock dated March 1996.**
10.20 Purchase warrant issued to Alexander V. Sharp for 35,000 shares of
common stock dated October 3, 1995.**
10.21 Purchase Warrant issued to Cort MacKenzie for 300,000 shares of common
stock dated July 11, 1994. Incorporated by reference to Exhibit 10.17
to the S-2.
10.22 Purchase Warrant issued to Charles E. Finegan, Jr. for up to 90,000
shares of common stock dated October 2, 1994. Incorporated by
reference to Exhibit 10.18 to the S-2.
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<PAGE>
10.23 Purchase Warrant issued to Alfred E. Thurber, Jr. for up to 90,000
shares of common stock dated October 2, 1994. Incorporated by
reference to Exhibit 10.19 to the S-2.
10.24 Purchase Warrant issued to Financial Management Consulting Group for
up to 50,000 shares of common stock dated October 28, 1994.
Incorporated by reference to Exhibit 10.22 to the S-2.
10.25 Purchase Warrant issued to Cort MacKenzie & Thomas, Inc. for 308,750
shares of common stock dated November 18, 1994.**
10.26 Purchase Warrant issued to James E. Reinmuth for 160,000 shares of
common stock dated April 28, 1995.**
10.27 Purchaser Warrant issued to Richard T. Schroeder for 160,000 shares of
common stock dated April 28, 1995.**
10.28 Purchase Warrant issued to James R. Wilson for 160,000 shares of
common stock dated April 28, 1995.**
10.29 Purchase Warrant issued to Karen K. Anderegg for 100,000 shares of
common stock dated May 18, 1995.**
10.30 Purchase Warrant issued to Charles E. Finegan, Jr. for 70,000 shares
of common stock dated May 18, 1995.**
10.31 Purchase Warrant issued to Alfred E. Thurber, Jr. for 70,000 shares of
common stock dated May 18, 1995.**
10.32 Purchase Warrant issued to Mark T. Waller for up to 500,000 shares of
common stock dated September 29, 1995.**
10.33 Purchase Warrant issued to Esler Stephens & Buckley for up to 100,000
shares of common stock dated September 29, 1995.**
10.34 Purchase Warrant issued to Capital Consultants, Inc. for 50,000 shares
of common stock dated October 5, 1995.**
10.35 Purchase Warrant issued to David M. Pitassi for 100,000 shares of
common stock dated December 29, 1995.**
10.36 Purchase Warrant issued to Peter Loftis for 100,000 shares of common
stock dated December 29, 1995.**
10.37 Distributor's Agreement between the Company and OSSCA International,
Inc. dated July 30, 1995.**
10.38 Commission Agreement between the Company and OSSCA International, Inc.
dated July 30, 1995.**
II-4
<PAGE>
10.39 Distribution Agreement between the Company and Meix Corporation dba
Chinese Business Services, dated December 30, 1995.**
10.40 Commitment Letter between First Portland Leasing Corp. and the Company
dated January 9, 1996.**
10.41 Form of Agreement between the Company and Beijing Kang Mei Biological
Products, Ltd. (a joint venture comprised of Cort MacKenzie & Thomas,
Inc., and Fang-Hai Science and Technology).*
10.42 Form of Purchase Warrant issued to Thomas C. Stewart for 270,000
shares of common stock dated December 29, 1995.**
10.43 Form of Purchase Warrant issued to Michael D. Stewart for 35,000
shares of common stock dated December 29, 1995.**
10.44 Form of Agreement between Cort MacKenzie & Thomas, Inc. and the
Company.*
10.45 Form of Indemnity Agreement between Cort MacKenzie & Thomas, Inc. and
the Company.*
10.46 Form of Purchase Warrant issued to James Reinmuth for 150,000 shares
of common stock dated June 1996.*
10.47 Form of Purchase Warrant issued to James Reinmuth for 100,000 shares
of common stock dated June 1996.*
13. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996. Incorporated by reference to such filings with the
Commission on May 15, 1996, file number 0-17119.
24.1 Consent of Arthur Andersen LLP.*
24.2 Consent of Perkins Coie.* Included in Exhibit 5.1.
- --------------
*Filed herewith.
**Previously filed.
II-5
<PAGE>
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; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(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 liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
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 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-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on June 24, 1996.
ATHENA MEDICAL CORPORATION
By:/s/ William H. Fleming
------------------------------------------
William H. Fleming
President and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on June 24, 1996 by the following
persons in the capacities indicated:
Signature Title
--------- -----
/s/ William H. Fleming President, Chief Operating Officer,
--------------------------------- Secretary and Director (Principal
William H. Fleming Operating Officer)
* John F. Perry Chairman, Chief Executive Officer
--------------------------------- and Director
John F. Perry
* David S. Porter Chief Financial Officer
--------------------------------- (Principal Accounting Officer)
David S. Porter
* James E. Reinmuth Director
---------------------------------
James E. Reinmuth
* Carol A. Scott Director
---------------------------------
Carol A. Scott
* RoseAnna Sevcik Director
---------------------------------
RoseAnna Sevcik
* By /s/ William H. Fleming
---------------------------------
William H. Fleming, Attorney-in-Fact
II-7
<PAGE>
[PERKINS COIE LETTERHEAD]
June 24, 1996
Athena Medical Corporation
10170 S.W. Nimbus Avenue, Suite J-5
Portland, OR 97223
Gentlemen and Ladies:
We have acted as counsel to Athena Medical Corporation (the "Company") in
connection with the preparation and filing of a registration statement on
Form S-2 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") relating to the offering of 5,713,294 shares
of the Company's common stock, $.01 par value per share (the "Common Stock"),
3,891,394 of which (the "Selling Shareholder Shares") may be sold from time
to time by certain selling shareholders (the "Selling Shareholders") and
1,821,900 of which (the "Company Shares") may be issued and sold from time to
time by the Company upon exercise of certain warrants (the "Warrants") to
purchase Common Stock.
We have examined the Registration Statement and such documents and
records of the Company and other documents as we have deemed necessary for
the purpose of this opinion. Based upon the foregoing, we are of the opinion
that:
(i) the Company Shares are validly authorized, and when (a) the
Warrants have been validly exercised and (b) such shares have
Been duly delivered against payment therefor pursuant to the terms
of the Warrants, such shares are validly issued, fully paid and
nonassessable; and
(ii) the Selling Shareholder Shares are validly authorized and issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm in the Prospectus of
the Registration Statement under the heading "Legal Matters." In giving such
consent, we do not
<PAGE>
Athena Medical Corporation
June 24, 1996
Page 2
thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act.
Very truly yours,
/s/ PERKINS COIE
<PAGE>
AGREEMENT
BETWEEN: ATHENA MEDICAL CORPORATION, a Nevada corporation ("AFEM");
AND: BEIJING KANG MEI BIOLOGICAL PRODUCTS, LTD., a corporation organized
and existing under the laws of the People's Republic of China, as an
equity joint venture comprised of Cort MacKenzie & Thomas, Inc., and
Beijing Fang-Hai Science and Technology Centre ("Kang Mei").
DATED: Effective November 1, 1995.
AGREEMENT:
The parties agree as follows:
1. Kang Mei may, on and after the date of this Agreement, place orders
for the purchase of products from AFEM for sale in the territory of the People's
Republic of China (the "Territory"). All such orders shall be subject to
acceptance by AFEM in its sole discretion, and if accepted will be payable by
irrevocable confirmed letter of credit and on such other terms and conditions as
the parties may mutually agree in writing. Nothing in this Section 1 shall be
construed to prevent AFEM from entering into sales or distribution arrangements
with other third parties, including exclusive arrangements with respect to
certain products and/or markets within the Territory.
2. Kang Mei has not made and will not make, in the marketing of AFEM's
products or in performance of this Agreement, any payments, loans or gifts or
promises or offers of payments, loans or gifts of any money or anything of
value, directly or indirectly: (a) to or for the use or benefit of any official
or employee of any government or an agency or instrumentality of any such
government; (b) to any political party or official or candidate thereof; or (c)
to any other person, if Kang Mei knows or has reason to know that any part of
such payment, loan or gift will be directly or indirectly given or paid to any
such governmental official or employee or political party or candidate or
official thereof; or (d) to any other person, the payment of which would violate
the laws of any country in which this Agreement is to be performed or the
country or countries of such receiving person.
3. Each party shall cooperate with the other to provide information as
may be required or requested by government regulatory agencies, ministries, or
independent auditors, with respect to matters arising out of or in relation to
this Agreement.
4. This Agreement is executed by authorized representatives of Kang Mei
and AFEM. Both parties represent that their performance of their respective
obligations under this Agreement shall be in accordance with all applicable laws
of any jurisdiction in which performance pursuant to this Agreement occurs.
5. Each party represents that it has not previously assigned, encumbered
or otherwise transferred any right, liability or interest it has under this
Agreement or any prior agreement to any other party.
Page 1 - AGREEMENT (AFEM/Kang Mei)
<PAGE>
6. Any notice, advice or consent required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been given when
personally delivered to a party or 24 hours after deposit in the United States
Mail, first class postage prepaid by certified or registered mail, return
receipt requested, or 24 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party as
follows:
If to AFEM: Athena Medical Corporation
Attn: William H. Fleming, President
10180 SW Nimbus Avenue, Suite J-5
Portland, OR 97223 USA
If to Kang Mei: Beijing Kang Mei Biological Products, Ltd.
Attn: Thomas Stewart, Chairman
c/o 5335 Southwest Meadows Road
Suite 270
Lake Oswego, OR 97035 USA
or such other address as a party may specify by a notice in writing, given in
the same manner.
7. THIS AGREEMENT CONTAINS THE FINAL AND EXCLUSIVE AGREEMENT AND
UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF IT, AND
SUPERSEDES ALL PRIOR UNDERSTANDINGS, LETTERS AND AGREEMENTS, ORAL OR WRITTEN.
EXCEPT AS SET FORTH IN THIS AGREEMENT, THERE ARE NO PROMISES, REPRESENTATIONS,
AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN, AMONG THE PARTIES RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT. This Agreement may not be modified except by
a writing signed by the party affected.
EXECUTED by the duly authorized representatives of each party, to be
effective as set forth above.
Athena Medical Corporation
By /s/ William H. Fleming
-------------------------------------
William H. Fleming, President
Beijing Kang Mei Biological Products, Ltd.
By /s/ Thomas C. Stewart
-------------------------------------
Thomas C. Stewart, Chairman and
Legal Representative
Page 2 - AGREEMENT (AFEM/Kang Mei)
<PAGE>
AGREEMENT
BETWEEN: ATHENA MEDICAL CORPORATION, a Nevada corporation ("AFEM");
AND: CORT MACKENZIE & THOMAS, INC., a Delaware corporation ("CMT")
DATED: Effective November 1, 1995
RECITAL:
The parties have previously entered into an arrangement, evidenced by
letters dated November 4, 1994, November 7, 1994, January 10, 1995, February 10,
1995, an unsigned letter dated on or about February 12, 1995 and an undated,
unsigned draft agreement issued in July, 1995, under which CMT would have the
exclusive right to manufacture, distribute and sell various current and future
products of AFEM with the People's Republic of China and other countries and
areas. The parties agree to cancel and terminate such arrangement, and to
release and discharge each other from their respective obligations, commitments
and duties arising under such arrangement, on the terms and conditions set forth
below.
AGREEMENT:
1. In consideration of expenses incurred and investments made by CMT in
establishing an equity joint venture in the People's Republic of China for the
purpose of introducing, marketing and selling AFEM's Fresh 'N Fit-Registered
Trademark- interlabial Padettes (the "Padette") in the People's Republic of
China, including obtaining, through its affiliated joint venture in the PRC,
Beijing Kang Mei Biological Products, Ltd., marketing and sales approval from
the Beijing City Health Department's Consumer Goods Inspection Directorate, in
consideration of CMT's consent to the cancellation of the earlier arrangement,
and in consideration of the provisions of this Agreement, the parties now agree:
1.1 AFEM shall pay Cort MacKenzie & Thomas, Inc. ("CMT") the sum of
US$0.0025 (1/4 of one U.S. cent) for each Padette sold by AFEM to customers
within the People's Republic of China, or sold by AFEM knowingly to third
parties for export and resale in the People's Republic of China, during a three-
year term commencing on the effective date of this Agreement and terminating on
the third anniversary thereof.
1.2 Provided, however, that no such payments to CMT shall exceed
US$100,000.00 in any twelve-month period (beginning on the effective date of
this Agreement). Amounts which would have been payable to CMT but for such
limitation shall not be carried into future years.
1.3 For purposes of the above, the word "sold" means receipt by AFEM
of payment for such Padettes, but excludes receipts from Beijing Kang Mei
Biological Products, Inc. or its affiliates or owner(s).
1.4 Payment by AFEM to CMT for sales pursuant to this Paragraph 1
will be made within 30 days after the end of each calendar quarter of the term,
with the first such payment due on April 30, 1996 (for the quarterly period
ending March 31, 1996 and the two months of the prior quarter).
Page 1 - AGREEMENT (AFEM/CMT)
<PAGE>
CMT recognizes that AFEM is not warranting any particular level of sales of
Padettes in China during any period or periods of the term.
2. Any notice, advice or consent required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been given when
personally delivered to a party or 24 hours after deposit in the United States
Mail, first class postage prepaid by certified or registered mail, return
receipt requested, or 24 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party as
follows:
If to AFEM: Athena Medical Corporation
Attn: William H. Fleming, President
10180 SW Nimbus Avenue, Suite J-5
Portland, OR 97223
If to CMT: Cort MacKenzie & Thomas, Inc.
Attn: Thomas C. Stewart, President
5335 Southwest Meadows Road, Suite 270
Lake Oswego, OR 97035
or such other address as a party may specify by a notice in writing, given in
the same manner.
3. Each party represents that it has not previously assigned, encumbered
or otherwise transferred any right, liability or interest it has under the
arrangement.
4. This Agreement shall be governed by and construed in accordance with
the laws and decisions of the State of Oregon, without regard to the conflict of
laws rules of such state. If litigation is instituted by a party to enforce or
interpret this Agreement, exclusive venue shall lie in Multnomah County, Oregon.
5. THIS AGREEMENT CONTAINS THE FINAL AND EXCLUSIVE AGREEMENT AND
UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF IT, AND
SUPERSEDES ALL PRIOR UNDERSTANDINGS, LETTERS AND AGREEMENTS, ORAL OR WRITTEN.
EXCEPT AS SET FORTH IN THIS AGREEMENT, THERE ARE NO PROMISES, REPRESENTATIONS,
AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN, AMONG THE PARTIES RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT. This Agreement may not be modified except by
a writing signed by the party affected.
EXECUTED by the duly authorized representatives of each party, to be
effective as set forth above.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
-------------------------------------
William H. Fleming, President
CORT MACKENZIE & THOMAS, INC.
By /s/ Thomas C. Stewart
-------------------------------------
Thomas C. Stewart, President
Page 2 - AGREEMENT (AFEM/CMT)
<PAGE>
INDEMNITY AGREEMENT
TO: ATHENA MEDICAL CORPORATION, a Nevada corporation ("AFEM");
FROM: CORT MACKENZIE & THOMAS, INC., a Delaware corporation ("CMT").
DATED: Effective November 1, 1995.
R E C I T A L:
AFEM is concurrently entering into an Agreement with CMT, and a separate
Agreement with Beijing Kang Mei Biological Products, Ltd., a People's Republic
of China joint venture stock corporation ("Kang Mei"). AFEM is willing to do so
on the following basis.
A G R E E M E N T:
For valuable consideration, the receipt and sufficiency of which is
acknowledged, CMT hereby agrees to indemnify, defend and hold harmless AFEM (and
its directors, officers, employees, agents, successors and assigns) from all
claims and losses (including expenses, reasonable attorney fees and costs
incurred by such indemnities in investigating and defending such claims after
presentation thereof) brought or asserted by Beijing Fang-Hai Science &
Technology Centre arising out of or related to either or both of the Agreements
referred to in the Recital to this Indemnity Agreement, whether or not now known
or asserted. PROVIDED, HOWEVER, that this Indemnity Agreement shall be
terminated by AFEM in writing upon CMT's delivery to AFEM of a document duly
executed by the Board of Kang Mei acknowledging and approving/ratifying both
Agreements, accompanied by a certified copy of same acknowledged by Kang Mei's
chairman.
CORT MACKENZIE & THOMAS, INC.
By /s/ Thomas C. Stewart
-------------------------------------
Thomas C. Stewart, President
Accepted as of the date first
set forth above:
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
-------------------------------------
William H. Fleming, President
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
________________________________
PURCHASE WARRANT CERTIFICATE
Issued to:
JAMES E. REINMUTH
Exercisable to Purchase
150,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after June 5, 2001
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before June 5, 2001, up to 150,000 Shares at the Exercise Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $5.00 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is JAMES E. REINMUTH.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means: none. The Required Condition has been
satisfied.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on June 5, 2001 by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10180 SW Nimbus, Suite J-5, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
Page 2 - Warrant Certificate
<PAGE>
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within such 30 day period, then this
Warrant shall automatically terminate upon consummation of such merger,
change, liquidation or sale, and the Warrantholder will have no further
rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
Page 3 - Warrant Certificate
<PAGE>
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
acquired only for investment, for the Warrantholder's own account, and
without any present intention to sell or distribute this Warrant or
the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act or any state securities law and accordingly will not be
transferrable except as permitted under an exemption contained in the
1933 Act and applicable state law, or upon satisfaction of the
registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state law or an exemption from such
registration is available. The Warrantholder understands that the
certificate(s) evidencing the Securities will be imprinted with a
legend which will prohibit the transfer thereof unless they are
registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not
required.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
Page 4 - Warrant Certificate
<PAGE>
If to the Company: ATHENA Medical Corporation
10180 SW Nimbus Ave., Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: James E. Reinmuth
5171 Solar Heights Drive
Eugene, OR 97405
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of June 5, 1996.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
--------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST IN IT MAY BE OFFERED,
SOLD, DISTRIBUTED, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED ABSENT SUCH REGISTRATION
(OR THE AVAILABILITY OF AN EXEMPTION THEREFROM) AND
COMPLIANCE WITH THE OTHER CONDITIONS OF THIS WARRANT
________________________________
PURCHASE WARRANT CERTIFICATE
Issued to:
JAMES E. REINMUTH
Exercisable to Purchase
100,000 Shares of Common Stock
of
ATHENA MEDICAL CORPORATION
Void after June 5, 2001
<PAGE>
This Warrant Certificate certifies that, for value received and subject to the
terms and conditions set forth below, the Warrantholder is entitled to purchase,
and the Company agrees to sell and issue to the Warrantholder, at any time on or
before June 5, 2001, up to 100,000 Shares at the Exercise Price.
This Warrant is issued subject to all the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS: Except as may be otherwise clearly required
by the context:
(a) COMMON STOCK means the $0.01 par value common stock of the Company.
(b) COMPANY means ATHENA Medical Corporation, a Nevada corporation.
(c) EXERCISE PRICE means the price at which the Warrantholder may purchase
one Share (or Securities obtainable in lieu of one Share) upon
exercise of this Warrant as determined from time to time pursuant to
the provisions hereof. The Exercise Price is $5.00 per Share.
(d) SECURITIES means the Shares obtained or obtainable upon exercise of
this Warrant or securities obtained or obtainable upon exercise,
exchange or conversion of such Shares.
(e) SHARE shall mean one share of Common Stock for which this Warrant is
initially exercisable.
(f) WARRANT CERTIFICATE means this certificate evidencing the Warrant.
(g) WARRANTHOLDER means the record holder of the Warrant or Securities.
The Warrantholder is JAMES E. REINMUTH.
(h) WARRANT means the warrant evidenced by this certificate or any
certificate obtained upon permitted transfer or partial exercise of
the Warrant evidenced by any such certificate.
(i) REQUIRED CONDITION means: none. The Required Condition has been
satisfied.
2. EXERCISE OF WARRANT. Subject to the Required Condition, all or any part of
this Warrant may be exercised at any time on or before 5 p.m. Pacific Time
on June 5, 2001 by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney, at the office of the Company,
10180 SW Nimbus, Suite J-5, Portland, Oregon 97223, or at such other office
or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall as promptly as practicable instruct its
transfer agent to prepare certificates for the Securities to be received by
the Warrantholder upon completion of the exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with
respect to the Securities being purchased.
The Securities to be obtained on exercise of this Warrant will be deemed to
have been issued, and the Warrantholder will be deemed to have become a
holder of record of those Securities, as of the date of full payment of the
Exercise Price.
If fewer than all the Securities purchasable under this Warrant are
purchased, the Company will, upon such partial exercise, execute and
deliver to the Warrantholder a new Warrant Certificate (dated the date
hereof), in form and tenor similar to this Warrant Certificate, evidencing
that portion of this Warrant not exercised.
Page 2 - Warrant Certificate
<PAGE>
3. TERMINATION UPON MERGER OR SALE. If the Company proposes to merge with or
into another company (other than for the sole purpose of reincorporating
the Company in another jurisdiction), to otherwise reorganize, consolidate,
reclassify or make any other change in the Company's capital structure, to
partially or completely liquidate, or to sell all or substantially all the
Company's assets, the Company will give at least 30 days' prior written
notice thereof to the Warrantholder. To the extent the Warrantholder does
not fully exercise this Warrant within such 30 day period, then this
Warrant shall automatically terminate upon consummation of such merger,
change, liquidation or sale, and the Warrantholder will have no further
rights under this Warrant.
4. ADJUSTMENTS IN CERTAIN EVENTS. The number, class and price of Securities
for which this Warrant may be exercised are subject to adjustment from time
to time upon the occurrence of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares, the number of shares of Common Stock
for which this Warrant is then exercisable will be proportionately
increased and the Exercise Price will be proportionately reduced.
Conversely, if the outstanding shares of the Company's Common Stock
are combined into a smaller number of shares, the number of shares of
Common Stock for which this Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased.
(b) If holders of the Company's outstanding shares of Common Stock
receive, or (on or after the record date fixed for determination of
eligible shareholders) become entitled to receive, without payment or
other consideration therefor, other or additional stock of the Company
by way of dividend, then the Warrantholder will, upon exercise of this
Warrant, be entitled to receive, without payment of additional
consideration therefor, the amount of such other or additional Common
Stock of the Company which the Warrantholder would hold on the date of
such exercise had the Warrantholder been the record holder of such
exercised Common Stock on the date of receipt or entitlement to
receipt of the stock dividend, giving effect to any adjustments prior
to exercise as required by Section 4(a).
(c) When any adjustment is required to be made in the number of shares of
Common Stock purchasable upon exercise of this Warrant, the Company
will promptly determine the new number of such shares purchasable upon
exercise of this Warrant, and (i) prepare and retain on file a
statement describing in reasonable detail the method used in arriving
at the new number of such shares, and (ii) cause a copy of such
statement to be mailed to the Warrantholder within 30 days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other Securities will be
issued in connection with exercise of this Warrant or in connection
with any adjustment pursuant to this Section 4. The number of full
shares issuable shall be determined by the Board of Directors of the
Company or by the terms of any assumption or substitution documents,
and any such determination shall be binding and conclusive.
Page 3 - Warrant Certificate
<PAGE>
5. RESERVATION OF SHARES. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for exercise of this
Warrant upon the basis set forth above will at all times during this term
of this Warrant be reserved for exercise.
6. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of this Warrant, be entitled
to any rights of a shareholder of the Company.
7. TRANSFER OF WARRANT. This is not a bearer warrant, and it may not be sold,
assigned, encumbered or otherwise transferred (except by will or the laws
of intestacy) without the prior written consent of the Company and
compliance with applicable securities laws in accordance with Section 8.
8. COMPLIANCE WITH SECURITIES LAWS. By accepting this Warrant, the
Warrantholder represents, acknowledges and agrees that:
(a) This Warrant, and the Securities if the Warrant is exercised, are
acquired only for investment, for the Warrantholder's own account, and
without any present intention to sell or distribute this Warrant or
the Securities. The Warrantholder further acknowledges that the
Securities will not be issued pursuant to any exercise of this Warrant
unless the exercise and the issuance and delivery of such Securities
shall comply with all relevant provisions of law, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"),
and other federal and state securities laws and regulations, and the
requirements of any stock exchange upon which the Securities may then
be listed.
(b) This Warrant and the Securities have not been registered under the
1933 Act or any state securities law and accordingly will not be
transferrable except as permitted under an exemption contained in the
1933 Act and applicable state law, or upon satisfaction of the
registration and prospectus delivery requirements of the 1933 Act.
Therefore, the Securities (and this Warrant, unless earlier
terminated) must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state law or an exemption from such
registration is available. The Warrantholder understands that the
certificate(s) evidencing the Securities will be imprinted with a
legend which will prohibit the transfer thereof unless they are
registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not
required.
9. MISCELLANEOUS. No amendment, waiver, termination or other change to this
Warrant or any term of it will be effective unless set forth in a writing
signed by the party sought to be bound. The captions heading the Sections
of this Warrant are inserted for convenience of reference only, and are not
to be used to define, limit, construe or describe the scope or intent of
any term, provision or section of this Warrant. Any notices required or
permitted under this Warrant must be in writing and will be deemed to have
been given when personally delivered to a party or 48 hours after deposit
in the United States Mail, first class postage prepaid by both first class
and certified mail, return receipt requested, or 48 hours after delivery to
a recognized national overnight carrier, with overnight shipping charges
paid, and addressed to such party as follows:
Page 4 - Warrant Certificate
<PAGE>
If to the Company: ATHENA Medical Corporation
10180 SW Nimbus Ave., Suite J-5
Portland, OR 97223
Attn: William H. Fleming, President
If to the Warrantholder: James E. Reinmuth
5171 Solar Heights Drive
Eugene, OR 97405
or such other address as a party may specify by a notice in writing, given
in the same manner.
10. APPLICABLE LAW. This Warrant will be governed by and construed in
accordance with the laws of the state of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this
Warrant shall be tried before federal or state courts located in Multnomah
County, Oregon, to the exclusion of all other courts that might have
jurisdiction.
DATED as of June 5, 1996.
ATHENA MEDICAL CORPORATION
By /s/ William H. Fleming
-------------------------------------
William H. Fleming, President
Page 5 - Warrant Certificate
<PAGE>
Exhibit 24.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 20, 1996
included in Form 10-K for the year ended December 31, 1995 and to all references
to our firm included in this registration statement, File No. 333-2053.
ARTHUR ANDERSEN LLP
Portland, Oregon
June 20, 1996
