<PAGE> 1
As filed with the Securities and Exchange Commission on September 23, 1999
Registration No. 333-81747
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 1 TO
FORM S-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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A-FEM MEDICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 33-0202574
(State of Incorporation) (I.R.S. Employer 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)
Steven T. Frankel
President and Chief Executive Officer
A-FEM 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
Danielle Benderly
PERKINS COIE LLP
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 this Registration Statement becomes effective.
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, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities to Amount to be Offering Price Per Aggregate Offering Registration
be Registered Registered Share(1) Price(1) Fee(2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share. 1,746,696 $1.2656 $2,210,618 $615
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee as
required by Section 6(b) of the Securities Act and calculated pursuant to Rule
457(c) under the Securities Act based upon the average of the high and low bid
prices of A-Fem's Common Stock on September 16, 1999, as reported on the OTC
Bulletin Board.
(2) A registration fee of $783 was paid on June 28, 1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
================================================================================
<PAGE> 2
1,746,696 Shares of Common Stock
A-FEM MEDICAL CORPORATION
This is a public offering of A-Fem Medical Corporation common stock.
A-Fem's shareholders are selling 1,746,696 shares, including 996,236 shares
issuable upon exercise of warrants to purchase A-Fem common stock. A-Fem will
not receive any of the proceeds from the sale of shares by the shareholders.
A-Fem will receive proceeds from the exercise of each warrant equal to its
exercise price. The exercise prices for the warrants range from $1.00 to $5.00
per share.
A-Fem's common stock is traded on the OTC Bulletin Board under the
symbol "AFEM."
A PURCHASE OF SHARES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE
"RISK FACTORS" BEGINNING ON PAGE 3.
<TABLE>
<CAPTION>
PER SHARE TOTAL PROCEEDS TO TOTAL PROCEEDS TO
PRICE TO PUBLIC A-FEM SELLING SHAREHOLDERS
--------------- ----- --------------------
<S> <C> <C>
$1.41 $2,480,628 $2,456,291
</TABLE>
The "Per Share Price to Public" is estimated based on the average of the
high and low sales prices for a share of A-Fem common stock as reported on the
OTC Bulletin Board as of August 13, 1999. The Total Proceeds to A-Fem are
estimated based upon the weighted average exercise price of the warrants of
$2.49 per share. A-Fem will pay approximately $90,000 in expenses associated
with registering these shares of common stock.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------
--------------------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER __, 1999.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
HOW TO OBTAIN MORE INFORMATION........................................... 3
A-FEM MEDICAL CORPORATION................................................ 3
RISK FACTORS............................................................. 4
FORWARD-LOOKING INFORMATION.............................................. 12
USE OF PROCEEDS.......................................................... 12
SELLING SHAREHOLDERS..................................................... 12
DESCRIPTION OF SECURITIES................................................ 16
PLAN OF DISTRIBUTION..................................................... 19
LEGAL MATTERS............................................................ 21
EXPERTS ................................................................ 21
</TABLE>
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HOW TO OBTAIN MORE INFORMATION
A-Fem files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document that A-Fem
has filed at the SEC's public reference rooms at Judiciary Plaza, 450 Fifth
Street, N.W. Washington, D.C. 20549-1004. You may obtain information on the
operation of the public reference room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet web site at http\\www.sec.gov where some of the
documents A-Fem has filed may be found.
This prospectus is part of a registration statement that A-Fem has
filed with the SEC. The registration statement contains more information about
A-Fem and its common stock, including supplemental exhibits and schedules. You
can get a copy of the registration statement from the SEC at the address listed
above or from the SEC's Internet web site.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it. This means that we can disclose important
information to you by referring you to those documents. The information we
incorporate by reference is considered a part of this prospectus.
A-Fem's Annual Report on Form 10-KSB for the year ended December 31,
1998, as amended, and A-Fem's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1999, filed with the SEC pursuant to the Exchange Act, are
incorporated by reference in this prospectus.
The information relating to A-Fem contained in this prospectus does not
purport to be comprehensive and should be read together with the information
contained in its Annual Report on Form 10-KSB for the year ended December 31,
1998, as amended, and its Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1999, which accompany this prospectus.
A-FEM MEDICAL CORPORATION
A-Fem Medical Corporation is a medical technology company with multiple
product platforms targeting women's health needs. A-Fem has developed three
proprietary technology platforms: one based on its INSYNC(R) MINIFORM
interlabial pad, another based on its RAPID-SENSE(TM) diagnostic tests and the
third based on its PADKIT(R) Sample Collection System. A-Fem markets the inSync
miniform as an alternative to tampons, pads or liners for light flow protection.
A-Fem is also developing point-of-care diagnostic products that provide
quantified results using its proprietary RAPID-SENSE technology. The PADKIT,
currently in clinical trials, utilizes a miniform as a non-invasive sample
collection method for use in testing for certain cancers and other diseases.
A-Fem needs to raise approximately $3 million in financing, in addition
to the funds needed for its monthly operating expenses, to be able to carry out
its development and marketing plans for its products. A-Fem has raised
approximately $0.7 million through the sale of equity securities to date.
Because the exercise prices for most of the warrants exceed the current market
price for A-Fem's common stock, it is unlikely that the majority of the selling
shareholders will exercise their warrants in the near future.
A-Fem's principal executive offices are located at 10108 S.W. Nimbus
Avenue, Suite J-5, Portland, Oregon 97223.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. The risks and uncertainties described below are not the
only ones facing A-Fem. Additional risks and uncertainties not currently known
to us or that we currently deem immaterial may also impair our business
operations.
If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
such case, the trading price of A-Fem common stock could decline, and you may
lose all or part of your investment.
IF A-FEM IS NOT ABLE TO OBTAIN ADDITIONAL FINANCING, A-FEM MAY NOT BE ABLE TO
CONTINUE OPERATING
During the fiscal year ended December 31, 1998, and the six months
ended June 30, 1999, A-Fem incurred losses of approximately $4.6 million and
$1.3 million, respectively. Further, A-Fem has not generated significant
revenues from operations. A-Fem expects to continue to incur losses as the costs
of developing, manufacturing and marketing its products continue to exceed
income from product sales.
In order to carry out our development and marketing plans for our
PADKIT and RAPID-SENSE products, we will need to raise significant additional
capital. If we are unable to obtain sufficient financing, it would have a
material adverse effect on our financial condition.
IF A-FEM IS NOT ABLE TO ATTRACT A STRATEGIC PARTNER, A-FEM MAY BE UNABLE TO
EXECUTE ITS MARKETING AND DISTRIBUTION PLANS FOR THE INSYNC MINIFORM
A-Fem expects that significant, ongoing expenditures will be necessary
to successfully implement its business plan and develop, manufacture and market
its products. These circumstances raise substantial doubt about A-Fem's ability
to continue as a going concern. If A-Fem is unable to obtain adequate additional
financing, enter into a strategic partnership, or generate sufficient profitable
sales revenues, we may be required to curtail our product development, marketing
activities and other operations, and we may be forced to cease operations.
In order to carry out our marketing plans, we will need to find one or
more partners to assist in marketing and distributing the product. To date we
have been unable to attract such a partner. If we are not able to attract one or
more partners, we may be unable to carry out our marketing and distribution
plans for this product, which could have a material adverse effect on our
financial conditions and results of operations.
A-FEM IS UNLIKELY TO EARN SIGNIFICANT REVENUES FROM ITS PRODUCTS IN THE NEAR
TERM BECAUSE MOST OF A-FEM'S PRODUCTS ARE IN AN EARLY STAGE OF PRODUCT
DEVELOPMENT
A-Fem's products, the INSYNC(R) MINIFORM, PADKIT(TM), and
RAPID-SENSE(TM) diagnostic products, are in the early stages of development or
marketing. There have been no significant revenues from the INSYNC(R) MINIFORM,
and there have been no revenues at all from the PADKIT(TM) or RAPID-SENSE(TM)
diagnostic products. A-Fem has concluded it cannot raise sufficient funds to
market the inSync miniform nationally through retail outlets. A-Fem cannot
estimate the potential market for our products.
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You should be aware that A-Fem may encounter problems because our
products are in an early stage of development or marketing, including the
following risks:
- A-Fem may encounter unanticipated developmental, testing,
regulatory compliance and marketing costs;
- The new products that A-Fem is developing may not be successfully
developed;
- A-Fem's new products, once developed, may not be successfully
manufactured, advertised and marketed;
- Any of A-Fem's products may become obsolete within a short time
after its development; and
- Costs of research and development and clinical trials for A-Fem's
new products may substantially exceed A-Fem's expectations and
financial resources.
A-FEM'S PRODUCTS MAY NOT ACHIEVE MARKET ACCEPTANCE
A-Fem's only product in commercial production, the INSYNC(R) MINIFORM,
is a new product form that addresses women's concerns with current feminine
protection products. Because the INSYNC MINIFORM is worn interlabially, unlike
any other existing feminine protection products, women may not understand how to
use the INSYNC MINIFORM or may not find it comfortable, and women may not
purchase this product or our other products in commercially viable quantities.
If our products do not achieve adequate market acceptance, such failure may have
a material adverse effect on our financial condition and results of operations.
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A-FEM'S PRODUCTS MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH EXISTING OR FUTURE
PRODUCTS PRODUCED BY A-FEM'S COMPETITORS
A-Fem's current product and products in development will compete with
products from other companies that have an established market, more employees
and substantially greater research, financial and marketing resources than
A-Fem. With respect to our miniform products, these competitors include the
Procter & Gamble Company, Johnson & Johnson, Kimberly-Clark and Playtex. A-Fem's
research, financial and marketing resources may not be adequate to create and
market products that will compete successfully with existing or future products
created and marketed by such competitors.
A-Fem has licensed non-exclusive rights to its miniform technology to
the Proctor & Gamble Company. Because the Proctor & Gamble Company has
significantly greater resources than does A-Fem, if Proctor & Gamble chooses to
manufacture and market a product that incorporates A-Fem's miniform technology,
A-Fem's INSYNC MINIFORM may not be able to successfully compete with such a
Proctor & Gamble product.
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HOLDERS OF A-FEM'S COMMON STOCK MAY EXPERIENCE DILUTION IF A-FEM FULFILLS ITS
FINANCING NEEDS BY ISSUING ADDITIONAL SHARES OF STOCK
In order to carry out our development, marketing and distribution plans
for our products, we will need to raise significant funds through equity and/or
debt financing. We do not expect significant amounts of debt financing to be
available in the near term, and expect that we will have to issue additional
equity to meet our financing needs. Such equity financing may not be available
or may not be available on terms favorable to A-Fem or our shareholders. If we
issue additional equity in the future to raise funds, this could have a dilutive
effect on holders or purchasers of shares of our common stock.
A-FEM'S PATENT AND OTHER INTELLECTUAL PROPERTY PROTECTION MAY NOT BE ADEQUATE
A-Fem has received a patent with respect to the PADKIT(TM) that covers
the method and apparatus for collection and use of vaginal fluid for diagnostic
purposes. The term for these patents is or will be 20 years from the date of the
application or, if the application contains a specific reference to an earlier
filed application under 35 USC Sections 120, 121 or 365(c), 20 years from the
date on which the earliest such application was filed.
A-Fem has received a patent with respect to the INSYNC MINIFORM that
covers the manufacturing methods and manufacturing materials. A-Fem has filed
patent applications for its first generation RAPID-SENSE technology.
The issuance of patents to A-Fem is not conclusive as to validity or as
to the enforceable scope of claims. The validity and enforceability of a patent
can be challenged by litigation after its issuance, and, if the outcome of
litigation is adverse to the owner of the patent, the owner's rights could be
diminished or eliminated. The issuance of patents covering any of A-Fem'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
A-Fem's products and processes, and the degree of protection afforded by foreign
patents may be different from that in the United States.
The technologies used by A-Fem may infringe upon patents or proprietary
technology of others. The cost of enforcing A-Fem's patent rights in lawsuits
that A-Fem may bring against infringers or defending itself against infringement
charges by other patent holders may be high and could adversely affect A-Fem.
Trade secrets and confidential know-how are important to A-Fem's
scientific and commercial success. Although A-Fem 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 A-Fem.
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A-FEM MAY BE ADVERSELY AFFECTED BY OTHER BUSINESSES' FAILURE TO ACHIEVE YEAR
2000 COMPLIANCE
A-Fem could be adversely affected by the failure of one or more of the
organizations with which it conducts business to become fully Year 2000
compliant. If any of the organizations with which A-Fem does business, including
banks, utilities, shipping services, and other similar service organizations,
fails to become Year 2000 compliant such failure could impair A-Fem's ability to
conduct its day-to-day business and fulfill its obligations under existing or
future contracts. Any of these circumstances could have an adverse impact on
A-Fem's financial condition and results of operations.
A-FEM MAY BE ADVERSELY AFFECTED BY CERTAIN GOVERNMENT REGULATIONS
Many of A-Fem's activities are subject to regulation by various local,
state and federal regulatory authorities in the United States.
Before a medical product may be marketed for use by humans, laboratory
and clinical trials must be performed to validate the safety and effectiveness
of the product. The PADKIT(TM) is still in the development stage and will
require FDA approval before it may be marketed to the public. Obtaining such
approval may be a lengthy and expensive proceeding and may involve extensive
testing and clinical trials to demonstrate safety, reliability and efficacy.
In addition, regulations may change, resulting in unexpected costs and
uncertainty. A-Fem may not be able to comply with the applicable requirements,
and necessary approvals may not be granted. We cannot predict the extent and
impact of future governmental regulations. If we fail to comply with the
applicable regulatory requirements, we may be subject to fines, injunctions,
civil penalties, recall or product seizure, among other penalties.
A-FEM DEPENDS ON OUR MANAGEMENT AND CONSULTANTS TO SUCCESSFULLY IMPLEMENT OUR
BUSINESS PLAN
A-Fem depends to a large extent upon the abilities and continued
participation of its executive officers, consultants and current directors. The
loss of any of these people could have a serious adverse effect upon our
business. We may not be able to attract and retain key personnel with the skills
and expertise necessary to manage our business. We do not have key-man life
insurance on the lives of any of our personnel. Because competition for
management and scientific staff in the biotechnology, biomedical and health care
fields is intense, we may not be able to continue to employ personnel and
consultants with sufficient expertise to satisfy our needs. We do not have
employment contracts with any personnel other than Steven T. Frankel and James
R. Wilson.
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A-FEM'S PRODUCT LIABILITY INSURANCE COVERAGE FOR CLAIMS IS LIMITED AND DOES NOT
COVER CLAIMS ARISING FROM TOXIC SHOCK SYNDROME
A-Fem could be subject to claims for personal injuries or other damages
resulting from its products. We carry general liability insurance, including
products liability insurance in the amount of $4,000,000. If any claims for
amounts exceeding our insurance coverage were successful, it would have a
material adverse effect on A-Fem. A-Fem's insurance may not adequately protect
A-Fem against all such liabilities. A-Fem's insurance does not cover actions
brought in countries other than the United States or claims relating to toxic
shock syndrome.
THIS OFFERING MAY HAVE AN ADVERSE IMPACT ON THE MARKET PRICE OF A-FEM'S COMMON
STOCK
The number of shares being offered hereby represents approximately 16.5
percent of the total common stock of A-Fem outstanding at July 31, 1999,
including the 996,236 shares of A-Fem's Common Stock to be issued to the selling
shareholders upon exercise of their warrants.
Each shareholder will offer to sell 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
shareholders and holders of warrants, there are no agreements between the
shareholders or warrantholders and A-Fem or, to A-Fem's knowledge, among the
shareholders or warrantholders, with respect to the sale of shares.
If the shareholders or warrantholders were simultaneously to sell or
resell a large number of shares in the market, the market price of A-Fem's
common stock could be adversely affected.
A-FEM MAY ISSUE ADDITIONAL SHARES OF PREFERRED STOCK, WHICH COULD DILUTE THE
INTERESTS OF HOLDERS OF OUR COMMON STOCK
A-Fem is authorized to issue up to 10,000,000 shares of preferred stock
and A-Fem's Board of Directors has the authority to fix the rights, preferences,
privileges and restrictions of such shares without any further vote or action by
A-Fem's shareholders.
Through July 1999, A-Fem issued a total of 6,346,335 shares of Series A
Convertible Preferred Stock and warrants to purchase an additional 598,786
shares of Series A Convertible Preferred Stock at a weighted average exercise
price of $0.78 to Capital Consultants, LLC (formerly Capital Consultants, Inc.)
in exchange for aggregate consideration consisting of 4,316,405 shares of
A-Fem's common stock, warrants to purchase 50,000 shares of A-Fem's common stock
and approximately $3.9 million.
This issuance of Series A Preferred Stock and any future issuance of
preferred stock may:
- have the effect of delaying, deferring or preventing a change in
control of A-Fem;
- discourage bids for the common stock at a premium over the market
price of the common stock; or
- adversely affect the market price and the voting and other rights
of the holders of common stock.
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CERTAIN MERGERS OR TAKEOVER ATTEMPTS COULD BE DELAYED OR PREVENTED BY THE
ANTI-TAKEOVER EFFECT OF NEVADA LAW
Certain "business combination" provisions of Nevada law could make it
more difficult to consummate a merger or tender offer involving A-Fem, even if
such event could be beneficial to the interests of the shareholders.
THE THIN PUBLIC MARKET FOR A-FEM'S COMMON STOCK MAY CAUSE VOLATILITY IN OUR
STOCK PRICE
A-Fem's common stock trades on the OTC Bulletin Board and is thinly
traded.
The market price of our common stock has experienced significant
volatility. During 1998, the price of our common stock ranged from $1.00 per
share to $3.625 per share. The market price of the common stock could be subject
to significant variation due to:
- the degree of success A-Fem achieves in implementing its business
strategy, changes in business or economic conditions affecting
A-Fem, its customers or its competitors;
- fluctuations in A-Fem's operating results, changes in or actual
results varying from earnings or other estimates made by securities
analysts;
- announcements by A-Fem or our competitors concerning product
developments, patents or proprietary rights; and
- other factors both within and outside our control.
In addition, the stock market may experience volatility that affects
the market prices of companies in ways unrelated to the operating performance of
such companies, and such volatility may adversely affect the market price of our
common stock.
There has been significant volatility in the market price of securities
of other early stage companies, technology companies in general and
biotechnology companies in particular.
A-FEM MAY NOT BE ABLE TO SUCCESSFULLY MANUFACTURE ITS PRODUCTS
A-Fem currently manufactures the INSYNC MINIFORM. As a manufacturer,
A-Fem faces the following risks:
- A-Fem may not be able to maintain sufficient numbers of employees,
or may have to pay increased wages.
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- A-Fem may not be able to obtain sufficient raw materials, including
the fiber used to manufacture the miniform, when needed or at
reasonable prices.
- A-Fem may have to expend additional funds to purchase additional
capital equipment to be able to increase the quantity of miniforms
we manufacture or to remedy plant or equipment obsolescence.
- A-Fem may not be able to adequately maintain the quality of the
miniforms it manufactures.
- If the demand for miniforms is significantly greater or lower than
we predict, we may experience excess or inadequate manufacturing
capacity.
Any of the risks listed above, or any other disruption in A-Fem's
production, could have a material adverse effect on A-Fem's results of
operations and financial condition.
A-FEM MAY EXPERIENCE AN ADVERSE IMPACT FROM FUTURE SALES OF OUR STOCK
As of July 31, 1999, 3,583,560 shares of common stock were subject to
outstanding stock options under A-Fem's stock option plans at a weighted average
exercise price of approximately $2.57 per share. As of July 31, 1999, 2,461,673
shares were issuable upon exercise of outstanding warrants at a weighted average
exercise price of $2.37 per share.
We intend to file a registration statement on Form S-8 under the
Securities Act to register for resale a total of 5,150,000 shares of common
stock reserved for issuance under A-Fem's stock option plans. Sales of
substantial amounts of A-Fem's common stock in the public market by existing
shareholders or holders of options or warrants could cause the price of the
common stock to go down.
In addition to the 1,746,696 shares of common stock offered hereby, an
additional 1,106,030 shares are registered under another registration statement
on Form S-2 under the Securities Act, approximately 844,000 shares are freely
tradable under the federal securities laws subject to volume limitations under
Rule 144, and approximately additional 6,624,098 are freely tradable under the
federal securities laws to the extent they are not held by our affiliates or are
not subject to certain contractual volume restrictions. As of December 31, 1999,
approximately 52,084 additional shares will become 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 one year is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of:
- __________ 1% of the then outstanding shares of the issuer's common
stock, and
- __________ the average weekly trading volume during the four
calendar weeks preceding such sale
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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 two years
is entitled to sell such shares under Rule 144(k) without regard to any of the
limitations described above.
FORWARD-LOOKING INFORMATION
This prospectus includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. This Act
provides a "safe harbor" for forward-looking statements to encourage companies
to provide prospective information about themselves so long as they identify
these statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact that
we make in this prospectus or in any documents incorporated by reference are
forward-looking. In particular, the statements herein regarding our industry
prospects and our future results of operations or financial position are
forward-looking statements. Forward-looking statements reflect our current
expectations and are inherently uncertain. Our actual results may differ
significantly from our expectations. The section entitled, "Additional Factors
That May Affect Future Results," that appears in our Annual Report on Form
10-KSB for the year ended December 31, 1998, as amended, as well as the section
entitled, "Risk Factors," that appears in this prospectus, describe some, but
not all, of the factors that could cause these differences.
USE OF PROCEEDS
A-Fem will receive proceeds upon exercise of the warrants by certain of
the selling shareholders, and payment of the exercise prices for such warrants,
of between zero and $2.5 million, depending on how many warrants are exercised.
After the deduction of an estimated $90,000 of offering expenses being paid by
A-Fem, proceeds from the exercise of the warrants will be used for the
development and marketing of A-Fem's products and general corporate purposes.
A-Fem has not been advised when or whether the holders of warrants intend to
exercise their warrants. No proceeds will be received by A-Fem from sales of
shares by the shareholders.
SELLING SHAREHOLDERS
A total of 996,236 shares of common stock may be sold pursuant to this
prospectus upon exercise of the warrants. The warrants were privately issued by
A-Fem to thirteen persons or entities in connection with a variety of
transactions, including the settlement of litigation, and in consideration for
consulting,
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advisory and capital raising services. All of the warrants expire between August
1999 and May 2009. The weighted average exercise price of the warrants is $2.49
per share.
A-Fem and Thomas C. Stewart have agreed that if Mr. Stewart or his
affiliates purchase shares of common stock upon exercise of warrants,
beneficially owned by Mr. Stewart, on or before May 31, 2000, A-Fem will extend
for five years the exercise period of warrants to purchase a like number of
shares of common stock.
The following table sets forth information as of May 1999 regarding the
beneficial ownership of common stock by each selling shareholder. The amounts
listed under "Shares Registered for Sale" reflects the common stock underlying
warrants owned by certain of the selling shareholders that are being registered
pursuant to this registration statement.
"Beneficial Ownership" is defined pursuant to Rule 13d-3 of the
Securities Exchange Act of 1934, as amended, and generally means any persons who
directly, or indirectly, have or share voting or investment power with respect
to a security. A person will 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.
"Shares Registered for Sale" 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."
The percentage of outstanding shares listed for any shareholder 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 such shares upon exercise of an
option or a warrant are considered to be outstanding solely for the purpose of
calculating that shareholder's ownership percentage.
The percentage of outstanding shares after sales for any shareholder
assumes the sale pursuant to this offering of all shares listed in the "Shares
Registered for Sale" column and the shareholder does not sell shares other than
those listed in the column or purchase additional shares except pursuant to
options or warrants.
<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING
-------------------------
SHARES BENEFICIALLY SHARES REGISTERED BEFORE AFTER
NAME OF SELLING SHAREHOLDER OWNED FOR SALE SALES SALES
- --------------------------------- ---------------------------- ----------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Bashaw Family Trust Shares: 104,166 104,166 1.1% 0
Warrants: 0 0
Bradley N. Brown Shares: 26,042 26,042 * 0
Warrants: 6,510 (1) 6,510
Karen Clifton Trust A Shares: 26,042 26,042 * 0
Warrants: 6,510 (1) 6,510
Stephen F. Duffy Shares: 26,042 26,042 * 0
Warrants: 6,510 (1) 6,510
EVG Family LLC Shares: 26,042 26,042 * 0
Warrants: 6,510 (1) 6,510
</TABLE>
Page 13
<PAGE> 15
<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING
-------------------------
SHARES BENEFICIALLY SHARES REGISTERED BEFORE AFTER
NAME OF SELLING SHAREHOLDER OWNED FOR SALE SALES SALES
- --------------------------------- ---------------------------- ----------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Charles E. Finegan, Jr. Shares: 29,350 (2) 0 2.0% *
Warrants: 160,000 (3) 142,000
Gunther Family Trust Shares: 26,042 26,042 * 0
Warrants: 6,510 (1) 6,510
Ronald Hagen Shares: 15,000 (4) 15,000 * 0
Warrants: 0 0
John McCormick Shares: 30,000 (5) 0 3.0% 1.3%
Warrants: 266,666 (6) 266,666
J. Douglas McKay Shares: 26,042 26,042 * 0
Warrants: 6,510 (1) 6,510
Terry A. Reinmuth Shares: 23,000 (7) 10,000 * *
Warrants: 0 0
Richard T. Schroeder Shares: 336,500 (8) 210,000 5.5% 2.4%
Warrants: 200,000 (9) 95,000
Alexander V. Sharp Shares: 0 0 * 0
Warrants: 35,000 (10) 35,000
Thomas C. Stewart Shares: 62,950 (11) 0 11.4% 9.1%
Warrants: 1,139,650 (12) 270,000
Sunbelt Investments Shares: 137,500 (13) 50,000 1.4% 0
Warrants: 0 0
Paul N. Temple Revocable Shares: 26,042 26,042 * 0
Trust U/A 2/11/80 Warrants: 6,510 (1) 6,510
James Thompson Shares: 15,000 15,000 * 0
Warrants: 0 0
Shares: 13,000 (14) 0
Alfred E. Thurber, Jr. Warrants: 142,000 (15) 142,000 1.8% *
E. Patricia Trusty Shares: 10,000 10,000 * 0
Warrants: 0 0
W.S. Farish & Company Shares: 137,500 (13) 87,500 1.4% 0
Warrants: 0 0
Mark T. Waller Shares: 21,500 21,500 * *
Warrants: 2,600 (16) 0
</TABLE>
Page 14
<PAGE> 16
<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING
-------------------------
SHARES BENEFICIALLY SHARES REGISTERED BEFORE AFTER
NAME OF SELLING SHAREHOLDER OWNED FOR SALE SALES SALES
- --------------------------------- ---------------------------- ----------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Richard H. Wentworth Shares: 85,096 (18) 15,000 * *
Warrants: 0 0
James R. Wilson Shares: 397,604 (18) 30,000 4.1% 3.8%
Warrants: 0 0
</TABLE>
- ----------
* Less than 1%.
(1) Consists of 6,510 shares issuable upon exercise of a warrant to
purchase shares of A-Fem's common stock at an exercise price of $1.92
per share.
(2) Includes 6,800 shares held jointly by Mr. Finegan and his spouse, 2,800
held by Finegan Jr. IRA and 3,750 shares by Finegan Jr. Sep. IRA.
(3) Consists of 50,000 shares issuable upon exercise of a warrant to
purchase shares of A-Fem's common stock at an exercise price of $1.50
per share, 35,000 shares issuable upon exercise of a warrant to
purchase shares of A-Fem's common stock at an exercise price of $3.50
per share and 75,000 shares issuable upon exercise of a warrant to
purchase shares of A-Fem's common stock at an exercise price of $5.00
per share.
(4) Consists of shares held jointly by Mr. Hagen and his spouse.
(5) Consists of 29,500 shares held in Mr. McCormick's IRA and 500 held in
his spouse's IRA.
(6) Consists of 100,000, 50,000, 66,666 and 50,000 shares issuable upon
exercise of warrants to purchase shares of A-Fem's common stock at an
exercise price of $1.00, $2.00, $2.88 and $3.00, respectively.
(7) Consists of shares with respect to which voting and dispository
decisions are made by James E. Reinmuth, Terry Reinmuth's brother and
attorney-in-fact. James E. Reinmuth is the Chairman of A-Fem's Board of
Directors.
Page 15
<PAGE> 17
(8) Includes 30,000 shares held by Mr. Schroeder's spouse and 9,000 shares
held by two of his children.
(9) Consists of 75,000 shares issuable upon exercise of warrants to
purchase A-Fem's common stock at an exercise price of $1.50 per share
and 125,000 shares issuable upon exercise of warrants to purchase
A-Fem's common stock at an exercise price of $2.88 per share.
(10) Consists of 35,000 shares issuable upon exercise of a warrant to
purchase shares of A-Fem's common stock at an exercise price of $1.50
per share.
(11) Consists 62,950 shares of common stock owned by Cort MacKenzie
Securities & Co., Inc.
(12) Consists of 869,650 shares and 270,000 shares issuable upon exercise of
warrants to purchase common stock at an exercise price of $1.50 and
$2.00, respectively, held by Cort MacKenzie & Co., Inc. and Thomas C.
Stewart, respectively. Cort MacKenzie & Co., Inc. has agreed not to
sell, within any three-month period, the greater of (i) 1% of the then
outstanding shares of A-Fem's common stock and (ii) the average weekly
trading volume during the four calendar weeks preceding such sale.
(13) Includes 50,000 shares held by Sunbelt Investments, of which W.S.
Farish & Company is the sole general partner, 12,500 shares held by
W.S. Farish & Company for the benefit of Cornelia G. Corbett, 25,000
shares held by W.S. Farish & Company for the benefit of Edward H.
Gerry, 25,000 shares held by W.S. Farish & Company for the benefit of
Henry A. Gerry, and 25,000 shares held by W.S. Farish & Company for the
benefit of Martha F. Gerry.
(14) Consists of 13,000 shares of common stock owned jointly by Mr. Thurber
and his spouse.
(15) Consists of 32,000, 35,000 and 75,000 shares issuable upon exercise of
warrants to purchase shares of A-Fem's common stock at an exercise
price of $1.50, $3.50 and $5.00 per share, respectively.
(16) Consists of 2,600 shares issuable upon exercise of a warrant to
purchase shares of A-Fem's common stock at an exercise price of $1.00
per share.
(17) Includes 40,000 shares held jointly with the Janet J. Wentworth Trust
and 10,000 shares held in Mr. Wentworth's IRA.
(18) Includes 46,666 and 37,500 shares issuable upon exercise of options to
purchase A-Fem's common stock at an exercise price of $3.00 and $2.13,
respectively, and 160,000 shares held jointly by Mr. Wilson and his
spouse.
DESCRIPTION OF SECURITIES
The authorized capital stock of A-Fem consists of 33,000,000 shares of
common stock, $.01 par value per share and 10,000,000 shares of Preferred Stock,
$0.01 par value per share. As of July 31, 1999, there were 9,530,208 shares of
common stock and 6,346,335 shares of Series A Convertible Preferred Stock
outstanding. All of the outstanding shares of stock are fully paid and
nonassessable.
PREFERRED STOCK
A-Fem is authorized to issue shares of Preferred Stock, $.01 par value,
from time to time in one or more series, in any manner permitted by law, as
determined from time to time by the Board of Directors. The Board of Directors
has the authority to fix and determine the rights and preferences of the shares
of any series so established, including dividends, conversion prices, voting
rights, redemption prices, maturity dates and similar matters without further
action by the shareholders.
SERIES A CONVERTIBLE PREFERRED STOCK
The Series A Convertible Preferred Stock consists of 7,200,000
authorized shares and 6,346,335 shares outstanding. Each shares of Series A
Stock is entitled to receive a liquidation preference of $2.00 per share (plus
Page 16
<PAGE> 18
any declared but unpaid dividends) and to receive dividends in preference to
holders of the common stock. A holder of shares of Series A Stock may convert
such shares into an equal number of shares of common stock at any time. The
conversion rate is subject to adjustments for dividends and distributions and
any classification, exchange, or substitution of the common stock or any
reorganization, merger, consolidation, or sale of assets by A-Fem.
The Series A Stock is entitled to vote on all matters submitted to a
vote of the holders of the common stock and to vote together with the holders of
the common stock as one class. With respect to certain transactions, including
the creation of any senior or substantially similar security, any transaction
constituting a deemed dividend under federal tax law, or as otherwise provided
by law, the Series A Stock vote as a class separately from the common stock.
COMMON STOCK
The holders of common stock are entitled to one vote for each share
held on all matters submitted to the shareholders.
Subject to the rights of the holders of any outstanding shares of
Preferred Stock, 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 A-Fem is to retain
earnings to provide funds for the operation and expansion of its business. A-Fem
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 A-Fem,
holders of common stock are entitled to share equally and ratably in A-Fem's
assets, if any, remaining after the payment of all liabilities of A-Fem.
Page 17
<PAGE> 19
NEVADA CONTROL SHARE AND BUSINESS COMBINATION STATUTES
Nevada law may restrict the ability of significant stockholders of
A-Fem to exercise voting rights. The law generally applies to a person who
acquires voting stock of a Nevada corporation in a transaction that results in
such person's holding more than 20%, 33 1/3% or 50% of the total voting power of
the corporation. If such a transaction occurs, the person cannot vote the shares
unless voting rights are restored to those shares:
- by a majority of the outstanding voting shares, including the
acquired shares, and
- if the transaction will result in any alteration or change in any
preference or other right given to any class or series of
outstanding shares, by the holders of a majority of each class or
series affected, excluding the acquired shares and shares held by
the corporation's officers and inside directors.
This law is construed broadly and may apply to persons acting as a
group.
The restricted stockholder may, but is not required to, submit to the
corporation a statement setting forth information about itself and its plans
with respect to the corporation. The statement may request that the corporation
call a special meeting of stockholders to determine whether voting rights will
be granted to the shares acquired. If a special meeting of stockholders is not
requested, the issue of voting rights of the acquired shares will be considered
at the next annual or special meeting of stockholders. If the acquired shares
are granted voting rights and they represent a majority of all voting power,
stockholders who do not vote in favor of granting such voting rights will have
the right to receive the fair value of their shares. At a minimum, the fair
value will be equal to the highest price paid per share by the restricted
stockholder for the shares acquired in a transaction subject to this law.
A-Fem is also subject to provisions of Nevada law that govern business
combinations between corporations and interested stockholders. These provisions
generally prohibit a corporation from entering into a business combination
transaction with a person, or affiliate of such person, for a period of three
years from the date such person acquires 10% or more of the voting stock of the
corporation. For the purpose of this law, the prohibition generally applies to
the following:
- A merger or consolidation;
- Any sale, lease, mortgage, or other disposition of assets with a
value equal to 5% or more of the total assets or market value of
the corporation, or representing 10% or more of the earning power
of the corporation;
Page 18
<PAGE> 20
- Transactions that result in the issuance of 5% or more of the
capital stock of the corporation to the interested stockholder; or
- Any plan for the liquidation or dissolution of the corporation
proposed by or under any agreement with the interested stockholder.
However, the general prohibition does not apply if the board of
directors approves the share acquisition or business combination before the
stockholder acquired 10% or more of the corporation's outstanding voting stock.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Nevada corporation law provides that a company may indemnify its
officers, directors and employees for liability arising out of certain actions.
A-Fem has included in its Articles of Incorporation and Bylaws provisions to
indemnify its directors and officers to the fullest extent permitted by the
Nevada General Corporation Law. Such indemnification may be available for
liabilities arising in connection with this offering. To the extent that
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling A-Fem pursuant to such
indemnification provisions, A-Fem has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is unenforceable.
A-Fem has adopted in its Articles of Incorporation a provision that
limits personal liability for breach of the fiduciary duty of its directors, to
the extent provided by Section 78.037 of the Nevada General Corporation Law.
Such provision eliminates the personal liability of directors for damages
occasioned by breach of fiduciary duty, except for liability based on the
director's duty of loyalty to A-Fem, liability for acts or omissions involving
intentional misconduct, fraud or a knowing violation of law, liability based on
payments of improper dividends, and liability for acts occurring prior to the
date such provision was added.
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 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;
- a purchase by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
- direct sales by selling shareholders to other individuals or
entities.
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
Page 19
<PAGE> 21
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, be borrowers from, engage
in transactions with, and perform services for, A-Fem, 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 California, Florida, Georgia,
Idaho, 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 A-Fem. A-Fem 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 A-Fem (within the meaning of Rule 144). Persons who are deemed
to be affiliates of A-Fem within the meaning of Rule 144 may not publicly offer
or sell such shares received upon exercise of the warrants except pursuant to an
effective registration statement under the Securities Act or pursuant to Rule
144 (without regard to the applicable holding period provided thereunder). A-Fem
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 A-Fem in the
following states: California, Florida, Georgia, Idaho, New York, Oregon and
Washington. Any resales of such shares by holders thereof must be made in
compliance with applicable state securities laws.
Page 20
<PAGE> 22
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon by
Perkins Coie LLP, Portland, Oregon.
EXPERTS
The financial statements incorporated by reference in this prospectus
and elsewhere in the registration statement, to the extent and for the periods
indicated in their reports, have been audited by Arthur Andersen LLP,
independent public accountants, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
Page 21
<PAGE> 23
<PAGE> 24
================================================================================
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. A-FEM
MEDICAL CORPORATION HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION
DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS CONSTITUTES AN
OFFER TO SELL, AND SOLICITS AN OFFER TO BUY, SHARES OF COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS.
1,746,696 SHARES
A-FEM MEDICAL
CORPORATION
COMMON STOCK
SEPTEMBER ___, 1999
================================================================================
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
SEC Registration Fee.......................................... $ 783
Accounting Fees and Expenses*................................. 3,000
Legal Fees and Expenses*...................................... 75,000
Blue Sky Fees and Expenses*................................... 10,000
Printing, including Registration Statement, prospectus, etc.*. 1,000
Miscellaneous Expenses*....................................... 217
--------
TOTAL EXPENSES*............................................... $ 90,000
========
</TABLE>
- ----------
*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 Twelve 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 acted in
good faith and in a manner the individual reasonably believed to be in or not
opposed to the best
PAGE II-1
<PAGE> 26
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 that result from:
(a) Acts or omissions that 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 that 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.
<TABLE>
<S> <C>
4.1(1) Articles of Incorporation, as amended
4.2(1) Amended and Restated Registration Rights Agreement
4.3(1) Form of Stock Purchase Warrant
4.4(1) Form of Series A Preferred Stock Certificate
5.1 Opinion of Perkins Coie LLP
10.1(2) Employment Agreement between A-Fem Medical Corporation and
Steven T. Frankel dated effective April 25, 1998
10.2(3) Business Park Lease between A-Fem Medical Corporation, Petula
Associates, Ltd. and Koll Portland Associates dated March 1,
1996
10.3(4) Scholls Business Center First Amendment to Lease between A-Fem
Medical Corporation, Petula Associates, Ltd. and Equity FC, Ltd.
10.4(5) Form of Registration Rights Agreement used for Mr. Waller,
Esler, Stephens & Buckley and Lane, Powell, Spears and Lubersky
10.5(6) Form of Registration Rights Agreement
</TABLE>
PAGE II-2
<PAGE> 27
<TABLE>
<S> <C>
10.6(6) ATHENA Medical Corporation's 1994 Incentive and Non-Qualified
Stock Option Plan, dated as of June 7, 1994
10.7(6) Form of Incentive Stock Option Agreement
10.8(6) Form of Non-Statutory Stock Option Agreement
10.9(6) Form of Purchase Warrant Certificate
10.10(7) Agreement dated effective as of April 28, 1997 between The
Proctor & Gable Company and A-Fem Medical Corporation
10.11(8) Employment Agreement between A-Fem Medical Corporation and James
R. Wilson dated as of May 1, 1997
10.12(9) Form of Capital Lease between A-Fem Medical Corporation and
First Portland Leasing Corp.
13.1(10) A-Fem Medical Corporation's Annual Report on Form 10-KSB for the
year ended December 31, 1998
13.2(10) A-Fem Medical Corporation's Quarterly Report on Form 10-QSB for
the quarter ended June 30, 1999
23.1(11) Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie LLP. Included in Exhibit 5.1
</TABLE>
- --------------
(1) Incorporated by reference to the exhibits to A-Fem's quarterly report on
Form 10-QSB for the quarter ended September 30, 1998.
(2) Incorporated by reference to the exhibits to A-Fem's quarterly report on
Form 10-QSB for the quarter ended June 30, 1998.
(3) Incorporated by reference to the exhibits to A-Fem's registration
statement on Form S-2 (file no. 333-2053), filed with the SEC on March
29, 1996.
(4) Incorporated by reference to the exhibits to A-Fem's registration
statement on Form S-2 (File no. 333-2053), filed with the SEC on January
21, 1999.
(5) Incorporated by reference to the exhibits to A-Fem's registration
statement on Form S-2 (file no. 33-88230), filed with the SEC on January
5, 1995.
(6) Incorporated by reference to the exhibits to A-Fem's annual report on
Form 10-KSB for the year ended December 31, 1996.
PAGE II-3
<PAGE> 28
(7) Incorporated by reference to exhibit number 10.1 to A-Fem's current
report on Form 8-K, file number 0-17119, filed with the SEC on May 16,
1997.
(8) Incorporated by reference to the exhibits to A-Fem's quarterly report on
Form 10-QSB for the quarter ended June 30, 1997.
(9) Incorporated by reference to the exhibits to A-Fem's annual report on
Form 10-KSB for the year ended December 31, 1997.
(10) Previously filed with the SEC.
(11) Incorporated by reference to A-Fem's Registration Statement on Form S-2
(file no. 333-81747), filed with the SEC on June 28, 1999.
PAGE II-4
<PAGE> 29
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) that,
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 that remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining liability under the Securities Act 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.
PAGE II-5
<PAGE> 30
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
post-effective amendment to registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Portland, State of
Oregon, on September 23, 1999.
A-FEM MEDICAL CORPORATION
By:/s/ Steven T. Frankel
-------------------------------------
Steven T. Frankel
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on September 23, 1999, by the following
persons in the capacities indicated:
<TABLE>
Signature Title
- --------- -----
<S> <C>
*/s/ William H. Fleming Vice Chairman and Secretary
- ----------------------------------------
William H. Fleming
*/s/ James E. Reinmuth Chairman and Director
- ----------------------------------------
James E. Reinmuth
/s/ Steven T. Frankel President and Chief Executive Officer
- ---------------------------------------- (principal executive officer)
Steven T. Frankel
*/s/ James R. Wilson Director and Treasurer
- ---------------------------------------- (principal financial officer)
James R. Wilson
*/s/ Carol A. Scott Director
- ----------------------------------------
Carol A. Scott
*/s/ RoseAnna Sevcik Director
- ----------------------------------------
RoseAnna Sevcik
*/s/ Martin L. Harvey Controller
- ----------------------------------------
Martin L. Harvey (principal accounting officer)
*By: /s/ Steven T. Frankel
- ----------------------------------------
Steven T. Frankel, Attorney-in-Fact
</TABLE>
S-1
<PAGE> 1
EXHIBIT 5.1
June 28, 1999
A-Fem Medical Corporation
10180 S.W. Nimbus Avenue, Suite J-5
Portland, OR 97223
Gentlemen and Ladies:
We have acted as counsel to A-Fem 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 1,746,696 shares of
the Company's common stock, $.01 par value per share (the "Shares"), which may
be sold from time to time by certain selling shareholders (the "Selling
Shareholders"), 996,236 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.
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 Shares are validly authorized, and
(ii) when the Warrants have been validly exercised and the shares
to be issued upon exercise of the Warrants have been duly
delivered against payment therefor pursuant to the terms of
the Warrants, the Shares are validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and any amendment thereto, including any and all
post-effective amendments, 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 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 LLP
<PAGE> 1
EXHIBIT 23.1
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 2, 1999, included in A-Fem Medical Corporation's Form 10-KSB and Form
10-KSB/A for the year ended December 31, 1998, and to all references to our Firm
included in this registration statement.
Portland, Oregon
September 23, 1999 /s/ Arthur Andersen LLP
