<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 18, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
BIOCIRCUITS CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE ---- 94-3060271
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) Number)
</TABLE>
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1324 CHESAPEAKE TERRACE
SUNNYVALE, CALIFORNIA 94089
(408) 745-1961
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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JOHN B. KAISER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
1324 CHESAPEAKE TERRACE
SUNNYVALE, CALIFORNIA 94089
(408) 745-1961
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------
COPY TO:
DEBORAH A. MARSHALL, ESQ.
LANA K. HAWKINS, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CA 94306-2155
(415) 843-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
---------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is filed in a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement of the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock 2,896,226(1) $0.9375(2) $ 2,715,211.88(2) $ 822.79(2)(3)
Common Stock 13,707,134(4) $1.06 (5) $14,529,562.04(5) $4,402.90(5)
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</TABLE>
(1) Previously included in the Registration Statement filed by the
Company on April 29, 1997. Includes all shares of Common Stock
issuable upon exercise of warrants issued on April 15, 1997
pursuant to a private placement and a warrant issued to a
manufacturing supplier.
(2) Estimated in accordance with Rule 457(c) solely for the purpose of
computing the amount of the registration fee based on the average
of the high and low prices of the Company's Common Stock as reported
on the Nasdaq National Market on April 23, 1997.
(3) Previously paid with the filing of the Company's Registration
Statement on April 29, 1997.
(4) Includes all shares of Common Stock issuable upon exercise of
warrants issued on July 3, 1997 pursuant to a private placement.
(5) Estimated in accordance with Rule 457(c) solely for the purpose
of computing the amount of the registration fee based on the average
of the high and low prices of the Company's Common Stock as reported
on the Nasdaq National Market on July 16, 1997.
----------------------------
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 THAT 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>
BIOCIRCUITS CORPORATION
Cross Reference Sheet pursuant to Item 501(b) of Regulation S-K showing location
in prospectus of information required by Items of Form S-3
Cross Reference Sheet showing the location in the Prospectus of the Items on
Form S-3
<TABLE>
<CAPTION>
FORM S-3 ITEM AND CAPTION LOCATION IN PROSPECTUS
<S> <C> <C>
1. Forepart of Registration Statement and
Outside Cover Page of Prospectus . . . . . . . . .Outside Front Cover Page
2. Inside Front and Outside Back Inside Front and Outside Back
Cover Pages of Prospectus. . . . . . . . . . . . . . . . . . . Cover Pages
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges . . . . . . . The Company; Risk Factors
4. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price. . . . . . . . . . . . . . . . . . . . . *
6. Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
7. Selling Security Holders . . . . . . . . . . . . . Selling Securityholders
Outside Front Cover Page;
8. Plan of Distribution . . . . . . . . . . . . . . . . .Plan of Distribution
9. Description of Securities to Be Registered . . . . . . . . . . . . . . . *
10. Interests of Named Experts and Counsel . . . . . . . . . . . . . . . . . *
11. Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
12. Incorporation of Certain Information
by Reference. . . . . . . . . . . . . . . . . . . Inside Front Cover Page
13. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities . . . . . . . . . . . . . *
</TABLE>
- -------------------
* Such item is inapplicable or the answer thereto is in the negative.
<PAGE>
PROSPECTUS
16,603,360 SHARES
BIOCIRCUITS CORPORATION
-----------------
COMMON STOCK
-----------------
This Prospectus relates to a total of 16,603,360 shares of Common
Stock (the "Shares"), with a par value of $0.001 (the "Common Stock"), (i)
531,250 of which were issued by Biocircuits Corporation ("the Company") on
April 15, 1997 pursuant to a private placement (the "April Common Stock
Financing"), (ii) 1,157,488 of which were issued by the Company on April 15,
1997 pursuant to a private placement of units consisting of one share of
Common Stock and one warrant to purchase one share of Common Stock (the
"April Units Financing"), (iii) 1,157,488 of which are issuable upon exercise
of warrants issued pursuant to the April Units Financing (the "April
Financing Warrants"), (iv) 6,853,567 of which were issued by the Company on
July 3, 1997 pursuant to a private placement (the "July Financing"), (v)
6,853,567 of which are issusable upon exercise of warrants issused pursuant
to the July Financing (the "July Financing Warrants"), and (vi) 50,000 of
which are issuable upon exercise of one Common Stock warrant issued in
connection with a manufacturing arrangement (the "KMC Warrant"). All of the
Shares are being offered on behalf of certain security holders of the Company
described herein (the "Selling Securityholders"). The April Financing
Warrants are exercisable for an aggregate of 1,157,488 shares at $0.75 per
share at any time on or after June 5, 1997 and before November 23, 1998,
subject to certain adjustments. The July Financing Warrants are exercisable
for an aggregate of 6,853,567 shares at $0.75 per share at any time within
eighteen months of July 3, 1997, subject to certain adjustments. The KMC
Warrant is exercisable for an aggregate of 50,000 shares at $0.01 per share
at any time on or after March 28, 1997 and before June 30, 1998. The April
Financing Warrants, the July Financing Warrants and the KMC Warrant are
collectively referred to herein as the "Warrants."
The Shares may be offered by the Selling Securityholders from time to
time in transactions on the Nasdaq National Market, in privately negotiated
transactions or a combination of such methods of sale, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The
Selling Securityholders may effect such transactions by selling the Shares to
or through broker-dealers, and such broker-dealers may receive compensation
in the form of discounts, concessions or commissions from the Selling
Securityholders or the purchasers of the Shares for whom such broker-dealers
may act as agent or to whom they sell as principal or both (which
compensation to a particular broker-dealer might be in excess of customary
commissions). See "Selling Securityholders" and "Plan of Distribution."
The Warrants may or may not be exercised. The Company will receive all of
the proceeds from any exercise of the Warrants but will not receive any
proceeds from the sale of the shares of Common Stock by the Selling
Securityholders hereof. See "Plan of Distribution."
The Selling Securityholders, directly or through agents, dealers or
underwriters, may sell the Common Stock offered hereby from time to time on
terms to be determined at the time of sale. The Company's Common Stock is
traded on the Nasdaq National Market under the symbol BIOC. The last
reported sales price on the Company's Common Stock on the Nasdaq National
Market on July 16, 1997 was $1.06 per share.
-----------------
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 5.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
No underwriting commissions or discounts will be paid by the Company in
connection with this offering. Estimated expenses payable by the Company in
connection with this offering are $30,225.69. The aggregate proceeds to the
Selling Securityholders from the sale of the Shares will be the purchase price
of the Shares sold less the aggregate agents' commissions and underwriters'
discounts, if any, and other expenses of issuance and distribution not borne by
the Company. See "Plan of Distribution."
The Selling Securityholders and any broker-dealers, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and any commission received by
them and any profit on the resale of the Shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act. The
Company has agreed to indemnify the Selling Securityholders and certain other
persons against certain liabilities, including liabilities under the Securities
Act.
The date of this Prospectus is July 18, 1997.
<PAGE>
No person is authorized in connection with any offering made hereby to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus, and any information or representation not
contained or incorporated herein must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, by any person in any jurisdiction in which
it is unlawful for such person to make such offer or solicitation. Neither the
delivery of this Prospectus at any time nor any sale made hereunder shall, under
any circumstances, imply that the information herein is correct as of any date
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational reporting 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 Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's
following Regional Offices: Chicago Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and New York Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of such
Web site is http://www.sec.gov. The Company's Common Stock is quoted on the
Nasdaq National Market, and such reports, proxy statements and other information
can also be inspected at the offices of The Nasdaq Operations, 1735 K Street,
N.W., Washington, D.C. 20006.
Additional information regarding the Company and the Shares offered hereby
is contained in the Registration Statement on Form S-3 and the exhibits thereto
filed with the Commission under the Securities Act. This Prospectus does not
contain all of the information contained in such Registration Statement and the
exhibits thereto. Statements contained in this Prospectus regarding the contents
of any document or contract may be incomplete and, in each instance, reference
is made to the copy of such contract or document filed as an exhibit to the
Registration Statement. For further information pertaining to the Company and
the Shares, reference is made to the Registration Statement and the exhibits
thereto, which may be inspected without charge at, and copies thereof may be
obtained at prescribed rates from, the office of the Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act is by this reference incorporated in and made a part of
this Prospectus:
(i) The Company's Annual Report on Form 10-K, as amended by Form 10-K/A-2,
for the fiscal year ended December 31, 1996;
(ii) The Company's Quarterly Report on Form 10-Q/A for the quarterly
period ended March 31, 1997;
(iii) the Company's Report on Form 8-K, filed on July 18, 1997; and
(iv) the description of the Company's Common Stock contained in the
Company's Registration Statement filed on Form 8-A, filed on March 20, 1992.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering shall be deemed to be incorporated by
reference herein and to be a part of this Prospectus from the date of filing
of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents or into this
Prospectus) will be provided without charge to each person, including any
beneficial owner to whom this Prospectus is delivered, upon a written or oral
request to Biocircuits Corporation, Attention: John B. Kaiser, President and
Chief Executive Officer, 1324 Chesapeake Terrace, Sunnyvale, California,
94089, telephone number (408) 745-1961.
2.
<PAGE>
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THE COMPANY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS.
Biocircuits was founded in 1989 to develop new immunodiagnostic testing
systems. Immunodiagnostic tests, or "assays," are performed on samples of
bodily fluids to diagnose a variety of infectious diseases and other
conditions, such as endocrine dysfunctions, and to conduct therapeutic drug
monitoring. Immunodiagnostic tests utilize biological reagents, such as
antibodies, and an instrument to detect the presence of a substance of
interest, or "analyte," such as a virus or hormone.
The Company's IOS point-of-care immunodiagnostic testing system consists
of a compact, inexpensive instrument and disposable test cartridges that can
be operated by a user with no special skills or training. The system enables
users to perform tests at many locations, including physicians' offices,
ambulatory clinics and small clinical laboratories. In the first quarter of
1996, the Company began marketing its IOS system with cartridges capable of
performing T4 and T Uptake tests, two of the most commonly requested
immunodiagnostic tests for assessing thyroid function. In September 1996,
the Company announced clearance from the United States Food and Drug
Administration (the "FDA") to market a qualitative serum pregnancy assay, a
test designed to allow physicians to perform this common pregnancy test in
their offices during the patient visit where they can provide more immediate
pre-natal care to patients. In December 1996, the Company announced FDA
clearance to market a quantitative hCG assay, a test to track the progress of
early pregnancies. Also in December 1996, the Company launched its Thyroid
Stimulating Hormone ("TSH") assay on a second generation cartridge. The TSH
assay is a test to assess thyroid function. The second generation cartridge
will be required for the market launch of all new assays. In addition,
existing assays will be converted to the new cartridge in the near future.
Biocircuits is currently developing three additional assays: a prostate
specific antigen ("PSA") test for management of prostate cancer patients, a
Digoxin test for monitoring the therapeutic usage of this drug in the
treatment of heart disease and a Free T4 test for diagnosing true clinical
thyroid status. The Company plans to continue to develop additional
immunodiagnostic assays commonly requested by office-based physicians.
The Company believes that its IOS system is the first low-cost,
commercially available product which permits a physician to perform
immunodiagnostic tests at the point of patient care. Performing tests with
current immunodiagnostic testing systems is time consuming, expensive and
requires multiple steps and skilled technicians. The Company believes that
the IOS system reduces the cost of immunodiagnostic testing by providing test
results more rapidly than other current testing procedures.
Biocircuits is targeting the approximately 36,000 small- to medium-sized
physician office practices and free-standing alternate site laboratories
which are licensed under the Clinical Laboratories Improvement Act of 1967
and Amendments of 1988 ("CLIA") for high or moderate complexity testing. Most
of these sites do not currently have an immunodiagnostic testing capability.
The IOS system is approved for moderately complex testing.
To perform a test, the operator inserts the test cartridge into the IOS
instrument, which then reads the relevant assay information contained on the
cartridge's bar code. The cartridge is then partially released from the
instrument, enabling the operator to place the specimen (blood, urine or
other samples) into one to two wells in the cartridge, depending on the test.
The sample automatically flows to the test zone, where it produces a signal
that the instrument uses to determine the test results. The IOS instrument
provides a liquid crystal display and a printed output in approximately 20 to
35 minutes, with the time varying by test. Receiving results within this
time frame enables the doctor to make a treatment decision before the patient
leaves the office, facilitating earlier treatment and obviating the need for
an additional visit or telephone call.
Biocircuits has developed significant knowledge about lipid/polymer
biomaterials in the past eight years that the Company believes could be
useful in other diagnostic system applications. In August 1995, Biocircuits
entered into an agreement with Beckman Instruments, Inc. ("Beckman") and
received $3,500,000 in the form of convertible debt (the "Note") in exchange
for granting Beckman options for licensing and marketing rights to certain
testing applications using the Company's lipid-polymer technology. Pursuant
to the terms of the agreement, Biocircuits completed a feasibility study in
August 1996. Because Beckman subsequently elected not to exercise its
development license option, Biocircuits regained full rights to the
lipid-polymer technology in December 1996, including all improvements made
during the feasibility study. In connection with the decision, Beckman also
elected to convert the Note into 1,111,727 shares of the Company's Common
Stock and a warrant to purchase the Company's Common Stock. The warrant is
exercisable for an aggregate of 222,345 shares of the Company's Common Stock
at approximately $3.45 per share at any time between December 13, 1996 and
August 15, 2000.
The Company has recently entered into a letter of intent (the "Letter of
Intent") with the Becton-Dickinson Microbiology Systems Division of Becton,
Dickinson and Company ("Becton") to enter into an agreement (the "Agreement")
that would give Becton exclusive worldwide marketing rights to the IOS system
and all cartridges currently available as well as those that will be
developed in the future. It is also possible that Becton will assume
responsibility for manufacturing the IOS instrument in 1998. The Company
currently plans to continue to manufacture cartridges for transfer to Becton
as well as to develop new test cartridges. The Letter of Intent is not
legally binding and the Agreement, which is currently being negotiated by the
parties, may never be finalized and executed. If the Agreement is executed,
the Company's operations will be materially affected and the Company's
results could differ materially from those anticipated herein.
The Company has incurred a loss in each period since its inception. At
March 31, 1997, the Company's accumulated deficit was $55.1 million.
Biocircuits expects to incur additional losses over the next several years.
The losses may vary from period to period, including from quarter to quarter,
and may increase due to the uncertainty of whether the sales and marketing
programs of the Company will achieve the desired results. The Company does
not expect to realize any significant revenue until at least 1998.
The Company historically has financed its operations primarily through
sales of common and preferred stock, interest income on the cash balances
available after such financings, long term debt and capital asset lease
financings. Since its inception through March 31, 1997, the Company raised a
total of approximately $61 million in the sale of common and preferred
stock, including $38.9 million and $21.5 million from private and public
financings, respectively.
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3.
<PAGE>
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THE OFFERING
Shares offered. . . . . . . . . . . . Up to 16,603,360 shares, all of which
are being offered by the Selling
Securityholders.(1)
Common Stock outstanding after
the offering. . . . . . . . . . . . . 25,396,660 shares.(2)
Use of Proceeds . . . . . . . . . . . The Warrants may or may not be exercised.
The net proceeds received by the Company
from any exercise of the Warrants will
be considered uncommitted funds that may
be used by the Company for general
corporate purposes, including sales and
marketing and research and development.
The Company will not receive any of the
proceeds from the sale of the Common
Stock by the Selling Securityholders.
Nasdaq Symbol . . . . . . . . . . . . BIOC.
(1) Includes (i) 531,250 shares issued pursuant to the April Common Stock
Financing, (ii) 1,157,488 shares issued pursuant to the April Units
Financing, (iii) 1,157,488 shares issuable upon exercise of the
April Financing Warrants, (iv) 6,853,567 shares issued pursuant to
the July Financing, (v) 6,853,567 shares issuable upon exercise of
the July Financing Warrants, and (vi) 50,000 shares issuable upon
exercise of the KMC Warrant.
(2) Assumes the exercise of all of the Warrants and the sale of all of the
Shares.
Biocircuits Corporation and IOS are registered trademarks of the Company.
- --------------------------------------------------------------------------------
4.
<PAGE>
RISK FACTORS
THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY WITH THE INFORMATION
PROVIDED ELSEWHERE IN THIS PROSPECTUS IN EVALUATING AN INVESTMENT IN THE SHARES
OFFERED HEREBY.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THOSE SET FORTH IN THE FOLLOWING RISK FACTORS AND ELSEWHERE IN THIS
PROSPECTUS.
THE COMPANY HAS RECENTLY ENTERED INTO A LETTER OF INTENT WITH BECTON TO
ENTER INTO AN AGREEMENT THAT WOULD GIVE BECTON EXCLUSIVE WORLDWIDE MARKETING
RIGHTS TO THE IOS SYSTEM AND ALL CARTRIDGES CURRENTLY AVAILABLE AS WELL AS
THOSE THAT WILL BE DEVELOPED IN THE FUTURE. IT IS ALSO POSSIBLE THAT BECTON
WILL ASSUME RESPONSIBILITY FOR MANUFACTURING THE IOS INSTRUMENT IN 1998. THE
COMPANY CURRENTLY PLANS TO CONTINUE TO MANUFACTURE CARTRIDGES FOR TRANSFER TO
BECTON AS WELL AS TO DEVELOP NEW TEST CARTRIDGES. THE LETTER OF INTENT IS NOT
LEGALLY BINDING AND THE AGREEMENT, WHICH IS CURRENTLY BEING NEGOTIATED BY THE
PARTIES, MAY NEVER BE FINALIZED AND EXECUTED. IF THE AGREEMENT IS EXECUTED,
THE COMPANY'S OPERATIONS WILL BE MATERIALLY AFFECTED AND THE COMPANY'S
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED HEREIN.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING; MAINTENANCE OF NASDAQ
LISTING
Obtaining additional funds will be critical to the Company's ability to
maintain operations through 1998. The Company will therefore continue to seek
funding from various equity financing sources. Raising additional funds from
public or private sources will result in significant dilution to then
existing shareholders. If adequate funding is not available on a timely
basis, the Company will be required to curtail its operations significantly
or to cease operations. There can be no assurance that the Company will be
successful in obtaining additional financing. The report issued by the
Company's auditors for the year ended 1996 contains an explanatory paragraph
expressing substantial doubt about the Company's ability to continue as a
going concern.
On April 15, 1997, the Company closed the first tranche in two private
placements in which the Company sold its common stock and issued warrants to
purchase common stock (defined hereinafter, collectively, as the April 1997
Financings"). The first private placement, the April Common Stock Financing,
was to consist of the sale of 2,500,000 shares of common stock at $1.00 per
share to be issued in three tranches. The second private placement, the April
Unit Financing, was to consist of the sale of 5,447,000 units at $1.00 per
unit, each unit consisting of one share of common stock and one warrant to
purchase one share of common stock at $0.75 per share, to be issued in two
tranches.
The closing of the second tranche of the April 1997 Financings was
conditional upon the Company installing a minimum of eighty-eight (88) Good
Manufacturing Practices ("GMP") units of the IOS system during the three
month period ended June 30, 1997 that were sold directly or indirectly by the
Company. Although the Company implemented various sales and marketing
programs, including evaluation programs targeted to physicians and incentive
programs for its sales representatives and distributor sales representatives
in order to reach this milestone, the milestone was not met by the Company
and the second tranche of the April 1997 Financings did not close. The
closing of the third tranche of the April Common Stock Financing was
conditional upon the Company installing a minimum of two hundred thirty-five
(235) GMP units of the IOS system that are sold directly or indirectly by the
Company. Investors in the April Common Stock Financing have elected not to
fund the third tranche.
The Company issued 531,250 shares of its common stock in the first
tranche of the April Common Stock Financing and 1,157,488 units in the first
tranche of the April Units Financing. The April Financing Warrants expire
eighteen months after April 15, 1997, subject to certain adjustments. At the
Company's option, the Company may shorten the exercise period of the April
Financing Warrants in which case they may become redeemable by the Company at
$0.01 per share if the closing price for the Company's common stock is
greater than or equal to $2.00 per share for ten days. The first tranche of
the April 1997 Financings resulted in gross proceeds to the Company of
approximately $1.7 million. With these funds, the Company's cash resources
were adequate to satisfy its requirements until the end of the second quarter
of 1997.
On July 3, 1997, the Company closed the July Financing in which the
Company sold 6,853,567 units at $0.75 per unit, each unit consisting of one
share of common stock and one warrant to purchase one share of common stock
at $0.75 per share. The warrants issued in the July Financing expire eighteen
months after July 3, 1997, subject to certain adjustments. The July Financing
resulted in gross proceeds to the Company of approximately $5.1 million. With
these funds, the Company believes its cash resources will be adequate to
satisfy its requirements until the end of the second quarter of 1998.
The Company believes that maintaining its listing on the Nasdaq National
Market ("Nasdaq") is central to its ability to raise additional funds as well
as to provide liquidity to investors. The conversion of the Beckman Note
resulted in the Company meeting Nasdaq listing requirements at year end 1996.
The Company failed temporarily to meet the Nasdaq net tangible asset listing
requirement at the end of the first quarter of 1997. However, the proceeds
from the first tranche of the April 1997 Financings allowed the Company to
meet the Nasdaq net tangible asset listing requirement, on a proforma basis,
for the first quarter of 1997. Proceeds from the July Financing allowed the
Company to meet the Nasdaq net tangible asset listing requirement, on a
proforma basis, for the second quarter of 1997. In addition, the Company
believes the proceeds from the July Financing will result in it meeting
Nasdaq listing requirements through third quarter 1997. Thereafter, the
Company may be required to generate sufficient revenue or raise additional
capital to maintain Nasdaq listing requirements through year end 1997.
The Company believes its cash requirements may increase in future
periods due to higher expenses. The Company expects to incur substantial
additional costs, including costs related to ongoing research and development
activities, either alone or in collaboration with strategic partners,
clinical trials, expansion of manufacturing, research and development and
administrative facilities, development of manufacturing capabilities,
obtaining regulatory
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approvals and establishing sales, marketing and distribution capabilities. The
Company's long-term capital requirements will depend on numerous factors,
including the progress of the Company's research and product development, the
timing and cost of obtaining regulatory approvals, the costs associated with
patents and other intellectual property rights, the levels of resources devoted
to the development of manufacturing and marketing capabilities and potential
collaborative partnerships. The Company may also seek additional funding
through collaborative relationships and the acquisition of capital equipment,
including lease financing, if available on attractive terms. The Company also
may attempt to obtain funds through arrangements with strategic partners or
others that may require the Company to relinquish rights to certain of its
technologies, products or marketing territories in exchange for funding. If
adequate funds are not available from these sources, the Company may be required
to curtail its operations significantly. No assurance can be given that any
additional financing will be available, or, if available, that it will be
available on acceptable terms.
NEED TO RETAIN AND ATTRACT KEY EMPLOYEES; REDUCTION IN WORK FORCE
On April 3, 1997, in order to reduce its losses and conserve
approximately $250,000 per month, the Company reduced its work
force from 92 to 54 employees. Of the existing work force, 14 employees are
engaged in development activities, 21 are engaged in manufacturing, and 19
are devoted to sales, marketing and administrative activities, including 9
sales representatives.
The Company is highly dependent upon the principal members of its
management and scientific staff and key individuals in all areas of the
Company. Although the Company believes it has retained sufficient employees
to achieve its near-term business objectives after its reduction in force on
April 3, 1997, there can be no assurance that the loss of services of such
employees might not impede the achievement of the Company's business
objectives. Furthermore, there can be no assurance that the reduction in
force will not adversely affect the Company's ability to retain its remaining
employees. The Company has implemented certain programs which it believes
will help in retaining key employees. Such programs include retention
packages granted to officers and certain Company employees which provide for
lump sum payments equal to twelve and six months, respectively, of salary if
such employees are employed on the closing date of a merger or sale of the
Company prior to March 20, 1998 and the repricing of outstanding options to
purchase common stock to the current market price of the Company's common
stock on March 20, 1997. The Company faces competition for qualified
individuals from numerous manufacturers of medical products and other high
technology products, as well as universities and academic institutions.
There can be no assurance that the Company will be able to attract new
qualified personnel on acceptable terms. The Company maintains life insurance
policies equal to the lesser of one times the annual salary or $150,000 for
all officers and employees.
DEVELOPMENT STAGE COMPANY; PRODUCTS UNDER DEVELOPMENT
Biocircuits was founded in 1989 and is a development stage company. To
achieve profitable operations, the Company, alone or with others, must, among
other things, successfully develop, obtain regulatory approval for,
manufacture, introduce and market its current and potential products. The
time frame necessary to develop the Company's products is uncertain. The
Company has experienced significant delays in the scheduled completion of its
IOS point-of-care instrument and test cartridges, and there can be no
assurance that further product development delays will not occur in the
future.
The Company's first sale and shipment of its IOS system, with cartridges
capable of performing T4 and T Uptake tests, occurred in March 1996. Certain
design changes to the IOS instrument were required since the first sale and
shipment of the IOS system. In April 1996, problems in some of the instrument
circuitry and software, which caused the instrument to cease operating,
required certain parts and software modifications. Further product shipments
were suspended at that time while the problems were diagnosed and corrected.
In order to correct the problems, the Company changed some electrical
components within the instrument, revised an electronic circuit board,
revised the embedded software which operates the instrument, and upgraded all
systems, including instruments in inventory at the Company's instrument
supplier. All changes were validated and documented, and shipments to
distributors were resumed in the middle of June. In addition, all instruments
previously shipped to customers were retrofitted.
In September 1996, the Company received FDA clearance to market a
qualitative serum pregnancy assay. The Company received clearance from the
FDA for a TSH assay in November 1996 and a quantitative hCG assay in December
1996. During 1996, the Company developed an improved second generation
cartridge for its new assays as well as existing assays. Development of the
second generation cartridge and optimization of the assays in the new
cartridge took several months longer than anticipated due to design
iterations. Product optimization followed cartridge design completion.
Optimization is also an iterative process of developing the specific
chemistries and system fluidies to ensure each assay performs at its claimed
specifications. As a result, launch of the new assays (TSH, Quantitative hCG
& Serum hCG) have experienced delays. In December 1996, the Company launched
its TSH assay on the second generation cartridge. In March 1997, the Company
began shipping the T4 and T Uptake tests on the second generation cartridge.
The second generation cartridge will be required for the market launch of all
future assays. Biocircuits is currently developing three additional assays: a
prostate specific antigen ("PSA") test for management of prostate cancer
patients, a Digoxin test for monitoring the therapeutic usage of this drug in
the treatment of heart disease and a Free T4 test for diagnosing true
clinical thyroid status. The Company does not expect to realize any
significant revenue until at least 1998.
There can be no assurance that the IOS point-of-care system and tests will
perform reliably and in accordance with the Company's specifications, that
additional design changes may not be required in the future, that the Company
will be able to develop successfully or obtain regulatory clearance for
additional tests or any other future products, that the reduction in assay
development employees will not result in further delays in developing those
tests, that the second generation cartridge will perform as planned, that any of
the Company's products can be manufactured in
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sufficient quantity, at acceptable cost and with appropriate quality, or that
any products, if and when approved, can be successfully marketed. Failure to
meet one or more of these challenges could have a material adverse effect on the
Company.
UNCERTAIN MARKET ACCEPTANCE OF POINT-OF CARE PRODUCT
Substantially all immunodiagnostic testing currently is performed at
large clinical laboratories rather than point-of-care sites. There can be no
assurance that the Company will be successful in developing and penetrating
the point-of-care market for immunodiagnostic testing. The Company currently
employs 8 sales representatives to develop its relationships with
distributors which supply a substantial portion of medical and test products.
The Company believes it must expand its sales force to between 12 and 20
sales representatives and further develop its relationships with distributors
which currently supply a substantial portion of medical and test products to
physicians. Due to its limited cash resources, the Company is uncertain when
or if it will be able to attain a sales force of at least 12 sales
representatives. The selling process typically requires the Company's sales
force to work closely with distributors, generate qualified physician leads
and perform demonstrations for the IOS system in physicians' offices. The
selling process can be time-consuming and there can be no assurance that the
Company will be successful in marketing the IOS system, that the rate of
sales growth will meet expectations or that the marketing programs of the
Company will achieve the desired results. To date, the number of instrument
sales to distributors and placements in physicians' offices have been, and
continue to be, significantly less than the Company's expectations, due
primarily to the technical problems the Company encountered with the
performance of the IOS system, which resulted in a loss of momentum within
the Company's distribution network. The Company believes that if instrument
sales continue to be below expectations, the Company's revenue and financial
performance will be materially adversely affected. Certain design changes to
the IOS instrument were required since the first sale and shipment of the IOS
system. In April 1996, problems in some of the instrument circuitry and
software required certain parts and software modifications. Further product
shipments were suspended at that time while the problems were diagnosed and
corrected. All changes were validated and documented, and shipments to
distributors were resumed in the middle of June 1996. In addition, all
instruments previously shipped to customers were retrofitted. The
requirements to make certain design changes to the instrument and the
suspension of product shipments had an adverse impact on 1996 revenue and
overall financial performance. There can be no assurance that additional
design changes may not be required in the future or that the system
performance will be reliable over time.
In general, market acceptance of the Company's initial point-of-care system
will depend upon the Company's ability to demonstrate the accuracy and value of
its system and to persuade physicians to perform the Company's initial tests in
their own facilities rather than send those tests to clinical laboratories. More
specifically, in order for the Company to have success in penetrating the
point-of-care immunodiagnostic market and to achieve significant sales of IOS
systems and test cartridges, the Company believes it will need to expand its
menu of tests. The Company believes that TSH, along with the Company's
additional products in development, are test key elements in penetrating the
physicians' office market. There can be no assurance that the TSH test will have
the desired impact in increasing the market acceptance of the Company's IOS
system.
HISTORY OF LOSSES; EXPECTATION OF FUTURE LOSSES
At March 31, 1997, the Company's accumulated deficit was approximately
$55.1 million. Biocircuits expects to incur additional losses over the next
several years. The Company expects that currently available funds will be used
primarily for sales and marketing programs for its IOS point-of-care system and
development of additional tests for the IOS point-of-care system. The losses may
vary from period to period, including from quarter to quarter, and may increase,
due to the uncertainty of whether the sales and marketing programs of the
Company will achieve the desired results. Accordingly, the Company believes that
quarter-to-quarter results are not a useful indicator of the Company's
performance. There can be no assurance that any products will be manufactured
or marketed successfully, or that profitability will ever be achieved.
COMPETITION
Human immunodiagnostics is an intensely competitive field in which there
are a number of well established companies. Many of these competitors have
substantially greater financial resources and larger, more established sales,
marketing, and service organizations. The primary bases of competition in the
immunodiagnostic testing market are throughput, ease of use, price, breadth
of test menu, quality of results and service. There can be no assurance that
the Company will be able to compete successfully on any of these bases.
The Company believes that its principal competitors will be large
companies with a diagnostics division such as Abbott Laboratories; Becton,
Dickinson and Company; Boehringer Mannheim, GmbH; Chiron/Ciba-Corning
Diagnostics Corporation; Diagnostic Products Corporation and Johnson &
Johnson. Each of these companies has an established position in the clinical
laboratory test market with systems based on traditional immunoassay
technology. No assurance can be given that the Company's products will
compete successfully with existing or future products of such competitors or
that new competitors will not enter the market with competing technologies.
The Company expects that in the future, one or more of these companies or
others will develop and introduce new systems for the point-of-care market.
If any such company is able to develop or acquire rights to a better
immunodiagnostic testing system, the Company's business would be materially
adversely affected.
MANUFACTURING RISKS; RELIANCE ON CONTRACT MANUFACTURERS
The Company has established its proprietary manufacturing capability for
the test cartridges for its IOS system. Various plastic components and other
material for the cartridges are and will be obtained from contract
manufacturers, some of which are sole source supply agreements. In order to
meet increased cartridge demand, the Company's cartridge manufacturing
milestones include improving manufacturing process yields, reducing the
direct labor content of its disposable tests, reducing the material cost
component of the cartridges, expanding mold and cartridge manufacturing
capacity as both the test menu and test manufacturing volume expand,
increasing the level of automation and manufacturing the cartridge at the
Company's targeted cost. Following the introduction of the second generation
cartridge and several manufacturing process improvements, yields have
improved to the targeted levels of 90% and the Company has not experienced
any backlogs. The Company plans further manufacturing improvements including
the use of a multiple cavity mold and a 30% increase in capacity with no
increase in direct labor. There can be no assurance that the Company will be
successful in achieving these milestones or that these milestones will be
achieved on a timely basis. The scale-up process will require the Company to
develop advanced manufacturing techniques and rigorous process controls and
the automation efforts will be critical to meet the Company's longer-term
cartridge manufacturing demands and cost targets. In addition, the Company
must be able to manufacture its products in compliance with regulatory
requirements, including the FDA's GMP guidelines. No assurance can be given
as to the ability of the Company to acquire the required materials and
produce commercial quantities of cartridges in compliance with applicable
regulations at an acceptable costs.
In December 1992, the Company entered into an agreement with KMC Systems
Inc. ("Kollsman") pursuant to which Kollsman was appointed the exclusive
North American supplier of the IOS instrument. The agreement with Kollsman
contained certain minimum purchase requirements and expired three years from
the date of first commercial production, subject to certain rights of earlier
termination. In April 1996, the Company and Kollsman executed a letter
agreement to amend the 1992 agreement (the "Letter Agreement"), pursuant to
which Kollsman will be the exclusive supplier of the IOS instrument through
1997, the minimum purchase requirements were eliminated and the Company and
Kollsman agreed to an acceptable fixed transfer price to be paid through
1997, the revised term of the agreement. Also pursuant to the Letter
Agreement, the Company agreed to issue Kollsman a warrant to purchase 250,000
shares of Common Stock at an exercise price of $7.00 per share, subject to an
increase of 50,000 shares under certain circumstances. The warrant expires
at year end 1997, subject to certain extension rights. In November 1996, the
Company and Kollsman amended the Letter Agreement to extend the expiration
date of the warrant to June 1998, subject to certain extension rights. In
order to secure an adequate supply of IOS instruments, the Company
established a standby letter of credit for the benefit of Kollsman. In late
March 1997, the Company and Kollsman agreed to reduce the amount of the
standby letter of credit by $249,000 in exchange for reducing the exercise
price of the warrant from $7.00 to $2.00 per share. Also in late March 1997,
the Company and Kollsman agreed to issue Kollsman a warrant to purchase
50,000 shares of Common Stock in exchange for a one month shutdown of
instrument production. In the quarter ended March 31, 1997, the Company
recorded a $124,000 expense as manufacturing overhead, $60,000 for the
warrant price reduction from $7.00 to $2.00 per share and $64,000 for the
issuance of the 50,000 warrant to purchase Common Stock. Such expense
determination was calculated according to Financial Accounting Standard Board
Statement No. 123. In early May 1997, the Company subsequently agreed with
Kollsman to extend the instrument production line shutdown until August 1997.
The Company further agreed to and has paid Kollsman $436,000 to cover the
cost of raw material and work in process currently at, or to be delivered to,
Kollsman. Such prepaid inventory will be credited back against future
deliveries of IOS instruments to Biocircuits. In return, Kollsman canceled
the $700,000 standby letter of credit and the associated funds collateralized
by the Company's bank have been released back to the Company. The Company is
entirely dependent on Kollsman as the sole source of production of its IOS
instruments. Kollsman, in turn, relies upon sole-source suppliers for certain
components. Failure of Kollsman's suppliers to deliver the required
quantities on a timely basis and at commercially reasonable prices, or
Kollsman's failure to deliver the IOS instruments to the Company on a timely
basis or at commercially reasonable costs could materially adversely affect
the Company.
GOVERNMENT REGULATION
The Biocircuits IOS point-of-care system is regulated in the United
States as a medical device by the FDA and as such, requires regulatory
clearance or approval prior to commercialization. Pursuant to the Federal
Food, Drug and Cosmetic Act (the "FDC Act"), and the regulations
promulgated thereunder, the FDA regulates, among other things, the clinical
testing, manufacture, labeling, promotion, distribution, sale and use of
medical devices in the United States. Failure of the Company to comply with
applicable regulatory requirements can result in, among other things, warning
letters, fines, injunctions, civil penalties, recall or seizure of products,
total or partial suspension of production, the government's refusal to grant
premarket clearance or premarket approval of devices, withdrawal of marketing
approvals, and criminal prosecution.
In the United States, medical devices are classified into one of three
classes, Class I, II or III, based on the controls necessary to reasonably
ensure their safety and effectiveness. Class I devices are those devices
whose safety and effectiveness can reasonably be ensured through general
controls, such as adequate labeling, pre-market notification, and adherence
to GMP regulations. Class II devices are those devices whose safety and
effectiveness can reasonably be ensured through the use of general special
controls, such as performance standards, post-market surveillance, patient
registries, and FDA guidelines. Class III devices are devices which must
receive pre-market approval by the FDA to ensure their safety and
effectiveness. Generally, Class III devices are life-sustaining,
life-supporting or implantable devices, or new devices which have been found
not to be substantially equivalent to legally marketed devices.
Before a new medical device may be introduced into the market in the
United States, the manufacturer or distributor generally must obtain either
FDA clearance of a section 510(k) premarket notification or FDA approval of a
premarket approval ("PMA") application.
If the manufacturer or distributor can establish that the device is
"substantially equivalent" to a legally marketed Class I or Class II
medical device or to a Class III medical device for which the FDA has not
required a PMA (the "predicated device"), the manufacturer or distributor
may seek FDA marketing clearance for the device by filing a 510(k)
notification. In a 510(k) filing, the manufacturer or distributor is required
to demonstrate that the device has the same intended use and the same
technological characteristics as the predicate device or has different
technological characteristics that do not raise different questions of safety
and efficacy than the predicate device. A 510(k) notification must contain
information to support the claim of substantial equivalence, which may
include laboratory test results or the results of clinical studies.
Following submission of a 510(k) notification, the manufacturer or
distributor may not place the device into commercial distribution until an
order of substantial equivalence is issued by the FDA. The Company
understands that the FDA has been requiring a more rigorous demonstration of
substantial equivalence in connection with 510(k) notifications. Although it
generally takes from four to twelve months from the date of submission to
obtain a 510(k) clearance, it may take longer. FDA regulations do not specify
the time in which it must respond to a 510(k) submission. The FDA may
determine that the proposed device is not substantially equivalent to a
legally marketed device, or may require further information, such as
additional test data, before the FDA is able to make a substantial
equivalence determination. Such determination or request for additional
information could delay the Company's market introduction of its future
products and could have a materially adverse effect on the Company's
continued operations. Further, for any of the Company's devices cleared
through the 510(k) process, modifications or enhancements that could
significantly change safety or effectiveness or constitute a major change in
the intended use of the device will require a new 510(k) submission. The
Company's IOS point-of-care instrument tests currently are regulated as Class
II medical devices. The Company has received 510(k) clearances for the
instrument and the T4 and T Uptake tests, the T4-only test, the qualitative
serum pregnancy test, the TSH test and the quantitative hCG test in 1995 and
1996.
If a manufacturer or distributor cannot establish that a proposed device
is substantially equivalent to another legally marketed predicate device, the
manufacturer or distributor must seek pre-market approval of the proposed
device through submission of a PMA application. A PMA application must be
supported by extensive data, including pre-clinical and clinical trial data
to prove the safety and efficacy of the device, as well as extensive
manufacturing information. If human clinical trials are required and the
device presents "a significant risk," the sponsor of the trial (usually the
manufacturer or distributor) is required to file an investigational device
exemption ("IDE") application with the FDA before commencing human clinical
trials. The IDE application must be supported by data, typically including
the results of laboratory and animal testing. If the IDE application is
approved by the FDA and one or more appropriate institutional review boards
("IRBs"), human clinical trials may begin at a specific number of
investigational sites with a specific number of subjects, as approved by FDA.
If the device presents a "nonsignificant risk" to subjects, a sponsor may
begin the clinical trial after obtaining approval of one or more appropriate
IRBs without the need for FDA approval. An IDE supplement must be submitted
to and approved by the FDA before a sponsor or investigator may make a change
to the investigational plan that may affect its scientific soundness or the
rights, safety or welfare of human subjects. A PMA application must contain
the results of clinical trials, the results of any relevant bench tests,
laboratory and animal studies, a complete description of the device and its
components, and a detailed description of the methods, facilities and
controls used to manufacture the device. The submission also must include the
proposed labeling, advertising and training methods, if required. Upon
receipt, the FDA conducts a preliminary review of the PMA application to
determine whether the submission is sufficiently complete to permit a
substantive review. If sufficiently complete, the submission is declared
fileable by the FDA. By statute, the FDA has 180 days to review a PMA
application, although the review time often is extended significantly by the
FDA asking for more information or clarification of information already
provided in the submission. While the FDA has responded to PMA applications
within the allotted time period, PMA reviews more often occur over a
significantly protracted time period and generally take approximately 12 to
24 months or more from the date of filing to approval. The FDA also will
inspect the manufacturing facilities to ensure compliance with the FDA's GMP
requirements prior to approval of a PMA. This is a lengthy and expensive
process, and there can be no assurance that such approval will be obtained
for any future product the Company may develop which may be determined to be
subject to such requirements. A number of devices for which PMA marketing
clearance has been sought by others have never been cleared for marketing.
Modifications to a device that is the subject of an approved PMA, its
labeling or manufacturing process may require FDA approval of new PMAs or PMA
supplements, which often require submission of the same type of information
required for the initial PMA. There can be no assurance that any of the
Company's future products will ever obtain the necessary FDA regulatory
clearance for commercial distribution.
Any products distributed by Biocircuits pursuant to the above described
clearances are subject to pervasive and continuing regulation by the FDA. The
Company also will be required to manufacture its products in registered
establishments and in accordance with GMP regulations. There can be no
assurance that the Company or its OEM suppliers' facilities will meet GMP
requirements. Failure to meet such requirements could result in certain
actions by the FDA, including the possible shutdown of the Company's
manufacturing facilities. In addition, the FDA has enacted changes to the
GMP regulations that may increase the cost of compliance with GMPs. The
Company's facility will be subject to periodic inspections by the FDA for
compliance with GMP and other applicable requirements. Labeling and
promotional activities are subject to scrutiny by the FDA and, in certain
instances, by the Federal Trade Commission. Current FDA enforcement policy
strictly prohibits marketing of medical devices for unapproved uses. The
export of medical devices also is subject to regulation in certain instances.
In addition, the use of the Company's products may be regulated by various
state agencies. For example, the Company was required to obtain a license
from the State of California to manufacture its proposed products. There can
be no assurance that the Company's proposed products will be able to comply
successfully with any such requirements or regulations.
The potential market for the Company's products may be affected by CLIA.
CLIA establishes requirements for any facility that performs laboratory
testing on human specimens for the purpose of providing information for
diagnosis or treatment of human beings. CLIA covers such testing in virtually
all settings, including physicians' offices. Regulations implementing CLIA
establish requirements for laboratories in such areas as administration,
participation in proficiency testing, patient test management, quality
control, personnel, quality assurance and inspection. Under these
regulations, the specific requirements that a laboratory must meet depend
upon the complexity of the tests performed by the laboratory. Laboratory
tests are categorized as either waived tests, tests of moderate complexity or
tests of high complexity. Laboratories that perform either moderate or high
complexity tests must meet standards in all areas, with the major difference
in requirements between moderate and high complexity testing concerning
quality control and personnel standards. Quality control standards for
moderate complexity testing are being implemented in stages. Laboratories
performing high complexity testing must meet all the quality control
requirements by the effective date of the regulations. Personnel standards
for high complexity testing are more rigorous than those for moderate
complexity testing. In general, personnel conducting high complexity testing
will need more education and experience than those doing moderate complexity
testing. Under the CLIA regulations, all laboratories performing moderately
complex or highly complex tests will be required to obtain either a
registration certificate or certification of accreditation from the Health
Care Financing Administration ("HCFA").
The Company's IOS system has been classified as moderately complex, and
thus any laboratory using such products would have to meet the regulatory
requirements for testing of moderate complexity testing.
The Company understands that laboratories, including physician office
laboratories, will be evaluating the requirements of CLIA in determining
whether to perform certain types of moderate and high complexity diagnostic
tests. The Company believes that the sale of its proposed products will not
be adversely affected by CLIA. However, no assurances can be given that the
statute and its implementing regulations will not have a materially adverse
impact on the Company and its ability to market and sell its IOS system or
any future products that the Company may develop.
Although Biocircuits believes that it will be able to comply with all
applicable regulations regarding the manufacture and sale of diagnostic
devices, such regulations are always subject to change and depend heavily
upon administrative interpretations. There can be no assurance that future
changes in regulations or interpretations made by the U.S. Department of
Health and Human Services, FDA, HCFA or other regulatory bodies, with
possible retroactive effect, will not adversely affect the Company. In
addition to the foregoing, Biocircuits is subject to numerous federal, state
and local laws and regulations relating to such matters as safe working
conditions, laboratory and manufacturing practices, environmental, fire
hazard control, and disposal of hazardous or potentially hazardous
substances. To date, compliance with these laws and regulations has not had a
material effect on the Company's financial results, capital requirements or
competitive position, and the Company has no plans for material capital
expenditures relating to such matters. However, there can be no assurance
that it will not be required to incur significant costs to comply with such
laws and regulations in the future, or that such laws or regulations will not
have a materially adverse effect upon the Company's ability to do business.
Sales of medical devices outside the United States are subject to
foreign regulatory requirements that vary widely from country to country. The
time required to obtain registrations or approvals required by foreign
countries may be longer or shorter than that required for FDA clearance or
approval, and requirements for licensing may differ significantly from FDA
requirements. Some countries historically have permitted human studies
earlier in the product development cycle than regulations in the United
States permit. Other countries have requirements similar to those of the
United States. This disparity in the regulation of medical devices may result
in slower product clearance in certain countries than in others. Furthermore,
the introduction of the Company's IOS system or any future products in
foreign markets might require obtaining foreign regulatory clearances. There
can be no assurance that the Company will be able to obtain regulatory
clearances for its current or any future products in the United States or in
foreign markets.
THIRD PARTY REIMBURSEMENT
Political, economic and regulatory influences are subjecting the
healthcare industry in the United States to fundamental change. Although
Congress has failed to pass comprehensive health care reform legislation to
date, the Company anticipates that Congress, state legislatures and the
private sector will continue to review and assess alternative benefits,
controls on health care spending through limitations on the growth of private
health insurance premiums and Medicare and Medicaid spending, the creation of
large insurance purchasing groups, price controls on pharmaceuticals and
other fundamental changes to the health care delivery system. Any such
proposed or actual changes could cause any potential partners of the Company
to limit or eliminate spending on collaborative development projects.
Legislative debate is expected to continue in the future, market forces are
expected to demand reduced costs and the Company cannot predict what impact
the adoption of any federal or state health care reform measures or future
private sector reforms may have on its business.
In both domestic and foreign markets, sales of the Company's IOS
point-of-care system and other potential products, if any, will depend in
part on the availability of reimbursement from third-party payors such as
government health administration authorities, private health insurers and
other organizations. Third-party payors are increasingly challenging the
price and cost effectiveness of medical products and services. Significant
uncertainty exists as to the reimbursement status of newly approved health
care products. There can be no assurance that the Company's products will be
considered cost effective or that adequate third-party reimbursement will be
available to enable Biocircuits to maintain price levels sufficient to
realize an appropriate return on its investment in product development.
Legislation and regulations affecting the pricing of health care services may
change, which could affect the Company's products and could further limit
reimbursement for medical products and services.
RISK OF PRODUCT LIABILITY; POSSIBLE UNAVAILABILITY OF INSURANCE
Testing, manufacturing and marketing of the Company's potential products
will entail risk of product liability. The Company currently has product
liability insurance. However, there can be no assurance that the Company will be
able to maintain such insurance at a reasonable cost or in sufficient amounts to
protect the Company against losses
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due to product liability. An inability to maintain insurance at an acceptable
cost or to otherwise protect against potential product liability could prevent
or inhibit the commercialization of the Company's products. In addition, a
product liability claim or recall could have a material adverse effect on the
business or financial condition of Biocircuits.
HAZARDOUS MATERIALS
The Company's research and development involves the controlled use of
hazardous materials and chemicals. Although the Company believes that its safety
procedures for handling and disposing of such materials comply with the
standards prescribed by state and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated.
In the event of such an accident, the Company could be held liable for any
damages that result and any such liability could exceed the resources of the
Company. The Company may incur substantial costs to comply with environmental
regulations.
ANTI-TAKEOVER EFFECT OF DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
The Board of Directors has authority to issue up to 10,000,000 shares of
Preferred Stock, in addition to the 30,000,000 designated shares of Series A
Preferred Stock, of which 11,643,237 were outstanding on July 16, 1997, and
to fix the rights, preferences, privileges and restrictions, including voting
rights, of those shares without any further vote or action by the
stockholders. The rights of the holders of the Common Stock will be subject
to, and may be adversely affected by, the rights of the holders of the
outstanding Series A Preferred Stock and any other Preferred Stock that may
be issued in the future. The outstanding Series A Preferred Stock could have
the effect of making it more difficult for a third party to acquire a
majority of the outstanding voting stock of the Company. Furthermore,
certain provisions of the Company's Amended and Restated Certificate of
Incorporation, such as a classified Board of Directors, its Amended and
Restated Bylaws and of Delaware law could delay or make more difficult a
merger, tender offer or proxy contest involving the Company.
VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock, like that of the common
stock of many other medical device and other high technology companies, has been
highly volatile. Factors such as delays in obtaining FDA approval for the IOS
point-of-care system, fluctuations in the Company's actual or anticipated
operating results, announcements of technological innovations or new commercial
products by the Company or its competitors, governmental regulation, changes in
the current structure of the health care financing and payment systems in the
United States, developments in or disputes regarding patent or other proprietary
rights, economic and other external factors and general market conditions may
have a significant effect on the market price of the Common Stock.
CONCENTRATION OF SHARE OWNERSHIP
Based upon the shares owned and outstanding as of July 16, 1997, the
Company's officers, directors and 5% stockholders of the Company as a group
beneficially owned approximately 65% of the Company's outstanding Common
Stock (on an as-converted basis). As a result, these stockholders will be
able to exercise significant influence over all matters requiring stockholder
approval, including the election of directors and approval of significant
corporate transactions.
THE COMPANY
Biocircuits Corporation was incorporated in Delaware in March 1989. The
Company's executive offices are located at 1324 Chesapeake Terrace, Sunnyvale,
California 94089, and its telephone number is (408) 745-1961.
USE OF PROCEEDS
8.
<PAGE>
The Company will not receive any of the proceeds from the sale of the
Common Stock by the Selling Securityholders. The net proceeds received by
the Company from the exercise of the Warrants will be considered uncommitted
funds that may be used by the Company for general corporate purposes,
including sales and marketing and research and development.
DIVIDEND POLICY
The Company has never paid cash dividends. The Company's Board of
Directors currently intends to retain any earnings for use in the Company's
business and does not anticipate paying any cash dividends in the foreseeable
future.
9.
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth the names of the Selling Securityholders,
the number of shares of Common Stock (on an as-converted basis) beneficially
owned by each Selling Securityholder prior to this offering, the number of
shares of Common Stock being offered for the account of each Selling
Securityholder and the number and percentage of Common Stock to be owned by each
Selling Securityholder after completion of this offering. This information is
based upon information provided by the Selling Securityholders. Because the
Selling Securityholders may offer all, some or none of their Common Stock, no
definitive estimate as to the number of shares thereof that will be held by the
Selling Securityholders after such offering can be provided.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING(1)(2) OFFERING(1)(3)
------------------------------ ----------------------------
SHARES BEING
SELLING SECURITYHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
---------------------- ------ ---------- ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
Entities affiliated with
Special Situations Fund III,
L.P.(4) 9,345,899 37.73% 9,062,498 283,401 *
Entities affiliated with
The Sprout Group(5) 3,892,567 18.61% 1,758,334 2,134,233 10.20%
H&Q Biocircuits Investors,
L.P.(6) 3,032,192 14.10% 2,525,000 507,192 2.36%
Glenbrook Partners, L.P.(7) 1,152,840 5.55% 1,024,600 128,240 *
Entities affiliated with
Sanderling(8) 896,408 4.40% 255,000 641,408 3.15%
Cove Investments Limited
Partnership(9) 584,590 2.86% 141,950 442,640 2.17%
Entities affiliated with
J.F. Shea(10) 485,181 2.32% 252,500 232,681 1.10%
Kaiser Survivor Trust(11) 432,744 2.12% 253,100 179,644 *
Lancaster Investment
Partners(12) 385,000 1.88% 300,000 85,000 *
KMC Instruments, Inc.(13) 300,000 1.44% 50,000 250,000 1.2%
Richard H. Osgood,
Inc.(14) 260,385 1.27% 234,584 25,801 *
Porter Partners, L.P.(15) 216,250 1.06% 85,000 131,250 *
Julie T. Berlacher(16) 181,667 * 150,000 31,667 *
Rogers Family Trust(17) 164,683 * 95,834 68,849 *
Stephen J. Massocca(18) 126,250 * 100,000 26,250 *
C. Fred Toney, Jr.(19) 109,585 * 74,584 35,001 *
EDJ Limited(20) 108,125 * 42,500 65,625 *
George L. Farinsky and
Barbara J. Farinsky,
Trustees of the Farinsky
1992 Trust(21) 99,403 * 21,250 78,154 *
Irwin Friedman 53,125 * 53,125 0 *
Lambda Financial Service
Corp. 53,125 * 53,125 0 *
John C. Coleman, Jr.(22) 67,999 * 50,500 17,499 *
Christopher J. Whitcomb(23) 17,750 * 17,750 0 *
Thomas J. Dietz(24) 2,126 * 2,126 0 *
</TABLE>
- -------------------------------------
* Less than one percent.
10.
<PAGE>
(1) Unless otherwise indicated below, the persons named in the table have or
will have sole voting and investment power with respect to all shares
beneficially owned by them, subject to community property laws where
applicable. Applicable percentage of ownership is based on 20,246,414
shares of Common Stock (on an as-converted basis) outstanding on July
15, 1997, adjusted as required by rules promulgated by the Commission.
(2) Assumes exercise of the April Financing Warrants, the July Financing
Warrants and the KMC Warrant.
(3) Assumes the sale of all shares offered hereby. The Company has agreed
to pay all reasonable fees and expenses incident to the filing of this
offering. See "Plan of Distribution."
(4) Includes 626,667 shares of Common Stock held of record by Special
Situations Cayman Fund, L.P. ("SSCF"); 51,042 shares of Common Stock
issuable upon the exercise of warrants held of record by SSCF; 63,750
shares of Common Stock issuable upon the exercise of April Financing
Warrants held of record by SSCF; 533,333 shares of Common Stock
issuable upon the exercise of July Financing Warrants held by SSCF;
2,037,983 shares of Common Stock held of record by Special Situations
Fund III, L.P. ("SSFIII"); 153,125 shares of Common Stock issuable
upon the exercise of warrants held of record by SSFIII; 255,000 shares
of Common Stock issuable upon the exercise of April Financing Warrants
held of record by SSFIII; 1,733,333 shares of Common Stock issuable
upon the exercise of July Financing Warrants held by SSFIII; 1,945,833
shares of Common Stock held of record by Special Situations Private
Equity Fund, L.P. ("SSPEF"); 212,500 shares of Common Stock issuable
upon the exercise of April Financing Warrants held of record by SSPEF;
1,733,333 shares of Common Stock issuable upon the exercise of July
Financing Warrants held by SSPEF.
(5) Includes 42,362 shares of Common Stock held of record by DLJ Capital
Corporation ("DLJ"); 25,870 shares of Common Stock issuable upon the
exercise of July Financing Warrants held by DLJ; 310,440 shares of
Series A Convertible Preferred Stock held by DLJ; 508,886 shares of
Common Stock held of record by Sprout Capital VII, L.P. ("SCVII");
310,770 shares of Common Stock issuable upon the exercise of July
Financing Warrants held by SCVII; 3,729,240 shares of Series A
Convertible Preferred Stock held of record by SCVII; 267,502 shares of
Common Stock held of record by Sprout Capital VI, L.P. ("SCVI");
163,360 shares of Common Stock issuable upon the exercise of July
Financing Warrants held by SCVI; 1,960,320 shares of Series A
Convertible Preferred Stock held of record by SCVI; 401,734 shares of
Common Stock held by record by ML Venture Partners II, L.P. ("ML
Venture"); 166,667 shares of Common Stock issuable upon the exercise
of July Financing Warrants held by ML Venture; 2,000,000 shares of
Series A Convertible Preferred Stock held of record by ML Venture, all
of which Robert Curry, Ph.D., a director of the Company and a general
partner of the Sprout Group (the submanager of ML Venture), disclaims
beneficial ownership of, except to the extent of any partnership
interest therein; and 5,416 shares subject to stock options held by
Dr. Curry, exercisable within 60 days of the date of this table, all
of such options shall be assigned to ML Venture upon exercise.
(6) Includes 212,500 shares of Common Stock issuable upon the exercise of
April Financing Warrants held of record by H&Q Biocircuits Investors,
L.P. and 1,050,000 shares of Common Stock issuable upon the exercise of
July Financing Warrants.
(7) Includes 42,000 shares of Common Stock issuable upon the exercise of
warrants held of record by Glenbrook Partners, L.P. ("Glenbrook");
27,200 shares of Common Stock issuable upon the exercise of April
Financing Warrants held of record by Glenbrook; and 485,100 shares of
Common Stock issuable upon the exercise of July Financing Warrants.
(8) Includes 439,631 shares of Common Stock held of record by Sanderling
Venture Partners III, L.P. ("SVPIII"); 74,464 shares of Common Stock
issuable upon the exercise of April Financing Warrants held of record
by SVPIII; 227,733 shares of Common Stock held of record by Sanderling
III Limited Partnership ("SIIILP"); 38,573 shares of Common Stock
issuable upon the exercise of April Financing Warrants held of record
by SIIILP; 75,766 shares of Common Stock held of record by Sanderling
III Biomedical, L.P. ("SIIIB"); 12,833 shares of Common Stock issuable
upon the exercise of April Financing Warrants held of record by SIIIB;
25,778 shares of Common Stock held of record by Sanderling Ventures
Management ("SVM"); 1,630 shares of Common Stock issuable upon the
exercise of April Financing Warrants held of record by SVM.
(9) Includes 125,000 shares of Common Stock issuable upon the exercise of
warrants held of record by Cove Investments Limited Partnership
("Cove"); and 70,975 shares of Common Stock issuable upon the exercise
of April Financing Warrants held of record by Cove.
(10) Includes 248,140 shares of Common Stock held of record by E&M RP Trust
("E&M"), 10,625 shares of Common Stock issuable upon the exercise of
April Financing Warrants held of record by E&M; 52,500 shares of
Common Stock issuable upon the exercise of July Financing Warrants
held by E&M; 110,791 shares of Common Stock held of record by Tahoe
Partnership I ("Tahoe"); 10,625 shares of Common Stock issuable upon
the exercise of April Financing Warrants held of record by Tahoe;
52,500 shares of Common Stock issuable upon the exercise of April
Financing Warrants held of record by Tahoe; and 52,500 shares
of Common Stock issuable upon the exercise of July Financing Warrants
held by record by Tahoe.
(11) Includes 78,252 shares of Common Stock and 70,000 shares of Series
A Stock held of record by the Kaiser Living Trust under a Trust dated
March 7, 1991; 126,550 shares of Common Stock held of record by the
Kaiser Survivor's Trust; 21,250 shares of Common Stock issuable upon
the exercise of April Financing Warrants held of record by the Kaiser
Survivor's Trust; 105,300 shares of Common Stock issuable upon the
exercise of July Financing Warrants held by the Kaiser Survivor's
Trust; and 83,892 shares of Common Stock subject to stock Options held
by Mr. Kaiser exercisable within 60 days of the date of this table.
(12) Includes 35,000 shares of Common Stock issuable upon the exercise of
warrants held of record by Lancaster Investment Partners ("Lancaster");
10,625 shares of Common Stock issuable upon the exercise of
April Financing Warrants held of record by Lancaster; and 139,375
shares of Common Stock issuable upon the exercise of July Financing
Warrants.
(13) Includes 300,000 shares of Common Stock issuable upon the exercise of
warrants held of record by KMC Instruments, Inc.
(14) Includes 11,667 shares of Common Stock issuable upon the exercise of
warrants held of record by Mr. Osgood; 10,625 shares of Common Stock
issuable upon the exercise of April Financing Warrants held of record by
Mr. Osgood; and 106,667 shares of Common Stock issuable upon the
exercise of July Financing Warrants.
(15) Includes 43,750 shares of Common Stock issuable upon the exercise of
warrants held of record by Porter Partners, L.P. ("Porter"); and 42,500
shares of Common Stock issuable upon the exercise of April Financing
Warrants held by record by Porter.
(16) Includes 11,667 shares of Common Stock issuable upon the exercise of
warrants held of record by Ms. Berlacher; 6,375 shares of Common
Stock issuable upon the exercise of April Financing Warrants held of
record by Ms. Berlacher; and 68,625 shares of Common Stock issuable
upon the exercise of July Financing Warrants.
(17) Includes 21,250 shares of Common Stock issuable upon the exercise of
April Financing Warrants held of record by the Rogers Family Trust;
and 26,667 shares of Common Stock issuable upon the exercise of July
Financing Warrants.
(18) Includes 8,750 shares of Common Stock issuable upon the exercise of
warrants held of record by Mr. Massocca; 6,375 shares of Common
Stock issuable upon the exercise of April Financing Warrants held of
record by Mr. Massocca; and 43,625 shares of Common Stock issuable
upon the exercise of July Financing Warrants.
(19) Includes 11,667 shares of Common Stock issuable upon the exercise of
warrants held of record by Mr. Toney; 10,625 shares of Common Stock
issuable upon exercise of April Financing Warrants held of record by
Mr. Toney.
(20) Includes 21,875 shares of Common Stock issuable upon the exercise of
warrants held of record by EDJ Limited ("EDJ"); and 21,250 shares of
Common Stock issuable upon the exercise of April Financing Warrants
held of record by EDJ.
(21) Includes 312,614 shares of Series A Convertible Preferred Stock held of
record by George L. Farinsky and Barbara J. Farinsky, Trustees of the
Farinsky 1992 Trust (the "Farinsky Trust"); and 10,625 shares of Common
Stock issuable upon the exercise of April Financing Warrants held of
record by the Farinsky Trust.
11.
<PAGE>
(22) Includes 5,833 shares of Common Stock issuable upon the exercise of
warrants held of record by Mr. Coleman; 4,250 shares of Common Stock
issuable upon the exercise of April Financing Warrants held of record by
Mr. Coleman; and 21,000 shares of Common Stock issuable upon the exercise
of July Financing Warrants.
(23) Includes 8,875 shares of Common Stock issuable upon the exercise of
July Financing Warrants held of record by Mr. Whitcomb.
(24) Includes 1,063 shares of Common Stock issuable upon the exercise of
April Financing Warrants held of record by Mr. Dietz.
12.
<PAGE>
PLAN OF DISTRIBUTION
The Shares may be offered by the Selling Securityholders from time to time
in transactions on the Nasdaq National Market, in privately negotiated
transactions or a combination of such methods of sale, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Selling
Securityholders may effect such transactions by selling the Shares directly or
by or through agents or broker-dealers who may receive compensation in the form
of discounts, concessions or commissions from the Selling Securityholders or the
purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation to a particular
broker-dealer might be in excess of customary commissions).
The Selling Securityholders and any underwriters, dealers or agents that
participate in the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by them and any provided pursuant to the sale of the Shares
by them might be deemed to be underwriting discounts and commissions under the
Securities Act. In order to comply with the securities laws of certain states,
if applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless it has been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares may not simultaneously engage in
market making activities with respect to such Shares for a period of nine
business days prior to the commencement of such distribution. In addition and
without limiting the foregoing, each Selling Securityholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-2, 10b-6 and 10b-7, which
may limit the timing of purchases and sales of the Shares by the Selling
Securityholders.
The Company entered into agreements with the Selling Securityholders to
register their Shares under applicable federal and state securities laws. The
Company will pay substantially all of the expenses incident to the offering and
sale of the Shares to the public, other than commissions, concessions and
discounts of underwriters, dealers or agents. Such expenses (excluding such
commissions and discounts) are estimated to be $30,225.69. Such agreements
provide for cross-indemnification of the Selling Securityholders and the Company
to the extent permitted by law, for losses, claims, damages, liabilities and
expenses arising, under certain circumstances, out of any registration of the
Shares.
13.
<PAGE>
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The financial statements of Biocircuits Corporation appearing in
Biocircuits Corporation's Annual Report (Form 10-K/A-2) for the year ended
December 31, 1996 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon (which contains an explanatory
paragraph with respect to the Company's ability to continue as a going
concern) included therein and incorporated herein by reference. Such
financial statements are, and audited financial statements to be included in
subsequently filed documents will be, incorporated herein in reliance upon
the reports of Ernst & Young LLP pertaining to such financial statements (to
the extent covered by consents filed with the Securities and Exchange
Commission) given upon the authority of such firm as experts in accounting
and auditing.
14.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION
WHERE SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
PAGE
----
Available Information.........................................................2
Incorporation of Certain Documents by Reference...............................2
Summary Information...........................................................3
The Offering..................................................................4
Risk Factors..................................................................5
The Company...................................................................8
Use of Proceeds...............................................................8
Dividend Policy...............................................................9
Selling Securityholders.......................................................10
Plan of Distribution..........................................................13
Legal Matters.................................................................14
Experts.......................................................................14
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
16,603,360 SHARES
BIOCIRCUITS CORPORATION
COMMON STOCK
------------
PROSPECTUS
------------
July 18, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the Company in
connection with the sale, issuance and distribution of the securities being
registered, other than underwriting discounts and commissions. All amounts are
estimates except the SEC registration fee. None of these expenses will be paid
by the Selling Securityholders.
SEC Registration Fee . . . . . . . . . . . . $ 5,225.69
Printing and Engraving Expenses. . . . . . . 2,500.00
Legal Fees and Expenses. . . . . . . . . . . 15,000.00
Accounting Fees and Expenses . . . . . . . . 7,500.00
Total. . . . . . . . . . . . . . . . . . . . $ 30,225.69
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws include provisions to (i) eliminate the personal
liability of its directors for monetary damages resulting from breaches of their
fiduciary duty to the extent permitted by Section 102(b)(7) of the General
Corporation Law of Delaware (the "Delaware Law") and (ii) require the Registrant
to indemnify its directors and officers to the fullest extent permitted by
Section 145 of the Delaware Law, including circumstances in which
indemnification is otherwise discretionary. Pursuant to Section 145 of the
Delaware Law, a corporation generally has the power to indemnify its present and
former directors, officers, employees and agents against expenses incurred by
them in connection with any suit to which they are, or are threatened to be
made, a party by reason of their serving in such positions so long as they acted
in good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interests of a corporation, and, with respect to any criminal
action, they had no reasonable cause to believe their conduct was unlawful. The
Registrant believes that these provisions are necessary to attract and retain
qualified persons as directors and officers. These provisions do not eliminate
liability for breach of the director's duty of loyalty to the Registrant or its
stockholders, for acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law, for any transaction from which the
director derived an improper personal benefit or for any willful or negligent
payment of any unlawful dividend or any unlawful stock purchase agreement or
redemption.
The Registrant has entered into agreements with its directors and executive
officers that require the Registrant to indemnify such persons against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
(including expenses of a derivative action) in connection with any proceeding,
whether actual or threatened, to which any such person may be made a party by
reason of the fact that such person is or was a director or officer of the
Registrant or any of its listed enterprises, provided such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Registrant and, with respect to any criminal
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The indemnification agreements also set forth certain procedures that will apply
in the event of a claim for indemnification thereunder.
II-1
<PAGE>
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
3.1 Amended and Restated Certificate of Incorporation.(1)
3.2 Amended and Restated Bylaws.(2)
4.1 Specimen Stock Certificate.(1)
4.2 Common Stock Purchase Agreement, dated April 15, 1997, among
the Registrant and the Purchasers named therein.(3)
4.3 Common Stock and Warrant Purchase Agreement, dated April 15,
1997, among the Registrant and the Purchasers named
therein.(3)
4.4 Form of Warrant issued pursuant to the Common Stock and
Warrant Purchase Agreement, dated April 15, 1997.(3)
4.5 Form of Warrant issued to KMC Systems, Inc.(3)
4.6 Common Stock and Warrant Purchase Agreement, dated
July 2, 1997, among the Registrant and the Purchasers
named therein.
4.7 Form of Warrant issued pursuant to the Common Stock and
Warrant Purchase Agreement, dated July 2, 1997.
5.1 Opinion of Cooley Godward LLP.(4)
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to 5.1.
24.1 Power of Attorney.(3)
- ----------------------
(1) Filed as an exhibit to the Registration Statement on Form S-3 (No.
33-93736), as amended, incorporated herein by reference.
(2) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-46587), as amended, and incorporated herein by reference.
(3) Filed as an exhibit to the Registration Statement on Form S-3
(No. 333-26079), filed April 29, 1997, and incorporated herein by
reference.
(4) Opinion of Cooley Godward LLP regarding 2,896,226 of the Shares being
registered herein filed as an exhibit to the Registration Statement on
Form S-3 (No. 333-26079), filed April 29, 1997, and incorporated herein
by reference.
ITEM 17. UNDERTAKINGS.
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 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; and
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference
in 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to provisions described in Item 15, 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 Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the
II-2
<PAGE>
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 Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Sunnyvale, State of California, on
July 18, 1997.
BIOCIRCUITS CORPORATION
By /s/ John Kaiser
--------------------------
John Kaiser
Chairman of the Board, President
and Chief Executive Officer
By /s/ James Welch
--------------------------
James Welch
Secretary, Treasurer and
Controller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
/s/ John Kaiser
- ------------------------------ Chairman of the Board, July 18, 1997
John Kaiser President and Chief Executive
Officer (Principal Executive
Officer)
/s/ James Welch
- ------------------------------ Secretary, Treasurer and July 18, 1997
James Welch Controller (Principal Financial
and Accounting Officer)
/s/ Robert Curry, Ph.D.*
- ------------------------------ Director July 18, 1997
Robert Curry, Ph.D.
/s/ Patrick Latterell*
- ------------------------------ Director July 18, 1997
Patrick Latterell
/s/ David Rubinfien*
- ------------------------------ Director July 18, 1997
David Rubinfien
* By /s/ John Kaiser
- ------------------------------
Attorney-in-fact
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER EXHIBITS
3.1 Amended and Restated Certificate of Incorporation.(1)
3.2 Amended and Restated Bylaws.(2)
4.1 Specimen Stock Certificate.(1)
4.2 Common Stock Purchase Agreement, dated April 15, 1997, among
the Registrant and the Purchasers named therein.(3)
4.3 Common Stock and Warrant Purchase Agreement, dated April 15,
1997, among the Registrant and the Purchasers named
therein.(3)
4.4 Form of Warrant issued pursuant to the Common Stock and
Warrant Purchase Agreement, dated April 15, 1997.(3)
4.5 Form of Warrant issued to KMC Systems, Inc.(3)
4.6 Common Stock and Warrant Purchase Agreement, dated
July 2, 1997, among the Registrant and the Purchasers
named therein.
4.7 Form of Warrant issued pursuant to the Common Stock and
Warrant Purchase Agreement, dated July 2, 1997.
5.1 Opinion of Cooley Godward LLP.(4)
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to 5.1.
24.1 Power of Attorney.(3)
- ----------------------
(1) Filed as an exhibit to the Registration Statement on Form S-3 (No.
33-93736), as amended, incorporated herein by reference.
(2) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-46587), as amended, and incorporated herein by reference.
(3) Filed as an exhibit to the Registration Statement on Form S-3
(No. 333-26079), filed April 29, 1997, and incorporated herein by
reference.
(4) Opinion of Cooley Godward LLP regarding 2,896,226 of the Shares being
registered herein filed as an exhibit to the Registration Statement on
Form S-3 (No. 333-26079), filed April 29, 1997, and incorporated herein
by reference.
<PAGE>
BIOCIRCUITS CORPORATION
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
JULY 2, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES . . . . . . . . . . . . . . . . . . 1
2.1 Sale of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Separate Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. CLOSING AND DELIVERY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Issuance of the Units at the Closing. . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. . . . . . . . . . . . . 2
4.1 Organization and Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.2 Due Execution, Delivery and Performance of the Agreement. . . . . . . . . . . . . 2
4.3 Issuance, Sale and Delivery of the Shares and Warrants. . . . . . . . . . . . . . 3
4.4 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.5 No Material Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.6 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.7 Maintenance of Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.8 Registration Pursuant to Section 9 Hereof . . . . . . . . . . . . . . . . . . . . 4
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS . . . . . . . . . . . 5
5.1 Investment Representations, Warranties and Covenants. . . . . . . . . . . . . . . 5
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. . . . . . . . . . . . . . 6
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. . . . . . . . . . . . . . . . 6
7.1 Receipt of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.2 Representations and Warranties Correct. . . . . . . . . . . . . . . . . . . . . . 6
7.3 Covenants Performed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT EACH CLOSING . . . . . . . . . . . . . . 6
8.1 Representations and Warranties Correct. . . . . . . . . . . . . . . . . . . . . . 6
8.2 Covenants Performed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.3 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.4 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES
ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
9.1 Registration Procedures and Expenses. . . . . . . . . . . . . . . . . . . . . . . 7
9.2 Transfer of Securities After Registration . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
i.
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
9.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . 9
9.4 Termination of Conditions and Obligations . . . . . . . . . 10
9.5 Information Available . . . . . . . . . . . . . . . . . . . 10
9.6 Market Stand-Off. . . . . . . . . . . . . . . . . . . . . . 11
9.7 Changes in Purchaser Information. . . . . . . . . . . . . . 11
SECTION 10. BROKER'S FEE. . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 11. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 12
12.1 Waivers and Amendments. . . . . . . . . . . . . . . . . . . 12
12.2 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 12
12.3 Severability. . . . . . . . . . . . . . . . . . . . . . . . 12
12.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 12
12.5 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 12
12.6 Successors and Assigns. . . . . . . . . . . . . . . . . . . 12
12.7 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 13
12.8 Payment of Fees and Expenses. . . . . . . . . . . . . . . . 13
ATTACHMENTS:
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Warrant
Exhibit C - Schedule of Exceptions
Appendix I - Stock Certificate and Warrant Questionnaire
Appendix II - Registration Statement Questionnaire
Appendix III - Certificate of Subsequent Sale
ii.
<PAGE>
NOTICE TO PURCHASERS IN ALL STATES:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
<PAGE>
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 2nd day of July, 1997 (the
"Effective Date"), by and among BIOCIRCUITS CORPORATION, a Delaware corporation
with its principal place of business at 1324 Chesapeake Terrace, Sunnyvale,
California 94089 (the "Company") and each of those persons and entities,
severally and not jointly, listed as a Purchaser on the Schedule of Purchasers
attached as EXHIBIT A hereto. Such persons and entities are hereinafter
collectively referred to herein as "Purchasers" and each individually as a
"Purchaser."
AGREEMENT
In consideration of the mutual covenants contained in this Agreement, and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and each Purchaser (severally and not jointly) hereby
agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES. Subject to the
terms and conditions of this Agreement, the Company has, or before the Closing
(as defined below) will have authorized the sale and issuance of (a) up to
8,000,000 shares of its Common Stock (the "Common Stock") and (b) Warrants, each
in substantially the form attached hereto as EXHIBIT B (each a "Warrant" and
collectively the "Warrants"), to purchase up to 8,000,000 shares (the "Warrant
Shares") of the Company's Common Stock. The shares of Common Stock sold
hereunder and the Common Stock issuable upon exercise of the Warrants together
shall be referred to herein as the "Shares." The Shares and the Warrants shall
be referred to herein as the "Securities."
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES.
2.1 SALE OF UNITS.
(a) At each Closing (as defined in Section 3), the Company will sell
to each Purchaser, and each Purchaser will purchase from the Company, at a
purchase price equal to the Closing bid price of the Company's Common Stock, as
reported on the Nasdaq Stock Market on July 2, 1997, plus $0.13 per "Unit," the
number of "Units" set forth below such Purchaser's name on the signature page
for Purchaser attached hereto, as reflected on the Schedule of Purchasers
attached hereto as EXHIBIT A (the "Schedule of Purchasers"). As used herein, a
Unit is comprised of one share of Common Stock and one warrant to purchase one
share of Common Stock.
2.2 SEPARATE AGREEMENT. Each Purchaser shall severally, and not jointly,
be liable for only the purchase of the Units that appear on EXHIBIT A hereto and
that relate to such Purchaser. The Company's agreement with each of the
Purchasers is a separate agreement, and the sale of Units to each of the
Purchasers is a separate sale.
<PAGE>
SECTION 3. CLOSING AND DELIVERY.
3.1 CLOSING. The Closing of the purchase and sale of the Units pursuant
to this Agreement (the "Closing") shall take place at the offices of Cooley
Godward LLP, 5 Palo Alto Square, 3000 El Camino Real, Palo Alto, California, on
the 3rd day of July or on such other date and place as may be agreed to by the
Company and the Purchasers.
3.2 ISSUANCE OF THE UNITS AT THE CLOSING. At the Closing, the Company
shall cause to be issued to each Purchaser stock certificates and Warrants
registered in the name of such Purchaser, or in such nominee name(s) as
designated by such Purchaser, representing the number of shares of Common Stock
and Warrants to be purchased by such Purchaser at such Closing as set forth in
the Schedule of Purchasers. The Company shall deliver such stock certificates
and Warrants to each Purchaser at the Closing or promptly thereafter. The
name(s) in which the stock certificates and Warrants are to be issued to each
Purchaser are set forth in the Stock Certificate and Warrant Questionnaire in
the form attached hereto as APPENDIX I, as completed by each Purchaser.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
EXHIBIT C, the Company hereby represents and warrants to, and covenants with,
the Purchasers as follows:
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as it is currently being conducted.
4.2 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENT. The
Company's execution, delivery and performance of this Agreement have been duly
authorized under Delaware law by all requisite corporate action by the Company,
and will not violate (i) any law, (ii) the Company's Amended and Restated
Certificate of Incorporation, as amended, (iii) the Bylaws of the Company,
(iv) the Rules of the Nasdaq National Market (including rules relating to
listing criteria), or (v) any provision of any material indenture, mortgage,
agreement, contract or other material instrument to which the Company is a party
or by which the Company or any of its properties or assets is bound as of the
date hereof, or result in a breach of or constitute (upon notice or lapse of
time or both) a default under any such indenture, mortgage, agreement, contract
or other material instrument or result in the creation or imposition of any
lien, security interest, mortgage, pledge, charge or other encumbrance, of any
material nature whatsoever, upon any properties or assets of the Company. Upon
the execution and delivery, and assuming the valid execution and delivery of
this Agreement by each of the Purchasers, this Agreement will constitute a valid
and binding obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as
2.
<PAGE>
the indemnification agreements of the Company in Section 9.3 hereof may be
legally unenforceable.
4.3 ISSUANCE, SALE AND DELIVERY OF THE SHARES AND WARRANTS. When issued
and paid for in accordance with this Agreement or, if applicable, the Warrant,
the Securities will be validly issued and outstanding, fully paid and
non-assessable. In reliance on the Purchasers' representations set forth in
Section 5 hereof, the Company represents and warrants that, when issued and paid
for in accordance with this Agreement or, if applicable, the Warrant, the Shares
and the Warrants will be issued in compliance with all applicable federal and
state securities laws and the applicable rules of the National Association of
Securities Dealers. The Company agrees that, at all times, there shall be
reserved for issuance and delivery upon exercise of the Warrants all shares of
its Common Stock or other shares of capital stock of the Company from time to
time issuable upon exercise of the Warrants.
4.4 ADDITIONAL INFORMATION. The Company represents and warrants that the
information contained in the following documents, which the Company has
furnished to the Purchasers, or will furnish if requested by the Purchasers
prior to the Closing, is or will be true and correct in all material respects as
of their respective filing dates:
(a) the Company's Quarterly Report on Form 10-Q for the three month
period ended March 31, 1997 (without exhibits unless specifically requested);
(b) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, as amended (without exhibits unless specifically
requested);
(C) Notice of Annual Meeting and Proxy Statement for the Company's
1996 Annual Meeting of Stockholders; and
(d) Notice of Annual Meeting and Proxy Statement for the Company's
1997 Annual Meeting of Stockholders.
In addition, the Company represents and warrants that any other information
provided by the Company to the Purchasers in writing in connection with the
transactions contemplated by this Agreement (the "Additional Written
Information") will not, as of the Closing Date, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein, or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (other than information
relating to the Placement Agent furnished by the Placement Agent expressly for
use in the Agreement as to which the Company makes no representation or
warranty); provided, however, that the Company makes no representations with
respect to any projections contained in the Additional Written Information
except with respect to any non-projected factual information contained in such
projections.
4.5 NO MATERIAL CHANGE. There has been no material adverse change in the
financial condition, results of operations, business or prospects of the Company
since March 31, 1997,
3.
<PAGE>
except as described in the Annual Report on Form 10-K, as amended, for the
fiscal year ended December 31, 1996 described in Section 4.4(b)hereof.
4.6 SEC REPORTS.
(a) The Company has timely filed and will continue to timely file
with the Securities and Exchange Commission (the "Commission") all reports ("SEC
Reports") required to be filed by it under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). All of the SEC Reports filed by or to be filed
by the Company comply or will comply in all material respects with the
requirements of the Exchange Act. None of the SEC Reports contains or will
contain, as of the respective date thereof, any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. All financial statements contained in
the SEC Reports have been prepared or will be prepared in accordance with
generally accepted accounting principles consistently applied throughout the
period indicated ("GAAP"). Each balance sheet presents or will present fairly
in accordance with GAAP the financial position of the Company as of the date of
such balance sheet, and each statement of operations, of stockholders' equity
and of cash flows presents or will present fairly in accordance with GAAP the
results of operations, the stockholders' equity and the cash flows of the
Company for the periods then ended.
(b) No event has occurred since December 31, 1996 requiring the
filing of an SEC Report that has not heretofore been filed and furnished to the
Purchasers or that will be furnished to the Purchasers upon request.
(C) The SEC Reports and this Agreement taken together as a whole will
not, as of the Closing Date, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein, or necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading (other than information relating to the Placement
Agent furnished by the Placement Agent expressly for use in the Agreement as to
which the Company makes no representation or warranty).
4.7 MAINTENANCE OF LISTING. For so long as the Company is obligated to
keep in effect the Registration Statements provided under Section 9 hereof, the
Company will use its best efforts to maintain its listing on The National Market
of The Nasdaq Stock Market or a national securities exchange, as defined in the
Exchange Act.
4.8 REGISTRATION PURSUANT TO SECTION 9 HEREOF. To the Company's
knowledge, no fact or circumstance exists that will prevent the Company from
filing any Registration Statement required to be filed pursuant to Section 9
hereof.
4.
<PAGE>
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.
Each Purchaser, severally and not jointly, represents and warrants to and
covenants with the Company that:
5.1 INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Purchaser, taking into account the personnel and resources it can
practically bring to bear on the purchase of the Securities contemplated hereby,
either alone or together with the advice of such Purchaser's purchaser
representative, is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in shares presenting
an investment decision like that involved in the purchase of the Securities,
including investments in Securities issued by the Company and Purchaser has
received all information requested by such Purchaser in connection with
Purchaser's decision to purchase the Securities.
(b) Purchaser is acquiring the Securities being acquired by Purchaser
pursuant to this Agreement in the ordinary course of its business and for its
own account for investment only and with no present intention of distributing
any of such Securities or any arrangement or understanding with any other
persons regarding the distribution of such Securities, except in compliance with
Section 5(c).
(c) Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Securities purchased hereunder
except in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), applicable blue sky laws, and the rules and regulations
promulgated thereunder.
(d) Purchaser has completed or caused to be completed the Stock
Certificate and Warrant Questionnaire and the Registration Questionnaire,
attached hereto as APPENDIX I and APPENDIX II, respectively, for use in
preparation of the Registration Statements to be filed by the Company, and the
answers thereto are true and correct to the best knowledge of Purchaser as of
the date hereof and will be true and correct as of the effective date of the
applicable Registration Statement (provided that Purchaser shall be entitled to
update such information by providing notice thereof to the Company prior to the
effective date of such Registration Statement).
(e) Purchaser has, in connection with its decision to purchase the
Securities, relied with respect to the Company and its affairs solely upon the
information delivered to Purchaser as described in Sections 4.4 and 5(a) above
and the representations and warranties of the Company contained herein.
(f) Purchaser is an "accredited investor" within the meaning of Rule
501 of Regulation D promulgated under the Securities Act.
5.
<PAGE>
(g) Purchaser has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. Upon the execution and delivery of this
Agreement by Purchaser, this Agreement shall constitute a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Purchaser in Section 9.3 hereof may be legally unenforceable.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
each Purchaser herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchasers of the Securities being purchased and the payment therefor.
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The
Company's obligation to complete the sale and issuance of the Securities and
deliver shares of Common Stock and Warrants to each Purchaser, individually, as
set forth in the Schedule of Purchasers shall be subject to the following
conditions to the extent not waived by the Company:
7.1 RECEIPT OF PAYMENT. The Company shall have received payment, by check
or wire transfer of immediately available funds, in the full amount of the
purchase price for the number of Units being purchased by such Purchaser at the
Closing as set forth in the Schedule of Purchasers.
7.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by such Purchaser in Section 5 hereof shall be true and correct
when made, and shall be true and correct as of the Closing Date.
7.3 COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by such Purchaser on or prior to the Closing
Date shall have been performed or complied with in all material respects.
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT EACH CLOSING. Each
Purchaser's obligation to accept delivery of the Units and to pay for the
securities evidenced thereby shall be subject to the following conditions to the
extent not waived by such Purchaser:
8.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 4 hereof shall be true and correct
when made, and shall be true and correct as of the Closing Date.
6.
<PAGE>
8.2 COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by the Company shall have been performed or
complied with in all material respects.
8.3 LEGAL OPINION. Purchasers shall have received from Cooley Godward
LLP, counsel to the Company, an opinion letter addressed to the Purchasers,
dated as of the Closing Date, in form and substance reasonably satisfactory to
the Purchasers or their counsel.
8.4 OFFICER'S CERTIFICATE. Purchasers shall have received a certificate
of the Company executed by the Chief Executive Officer of the Company, dated the
Closing Date, to the effect that the representations and warranties of the
Company set forth in Section 4 of this Agreement are true and correct as of the
date of this Agreement and as of the Closing Date, and the Company has satisfied
all the conditions to be performed or satisfied by the Company on or prior to
such Closing Date.
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES
ACT.
9.1 REGISTRATION PROCEDURES AND EXPENSES. The Company is obligated to do
the following:
(a) Within two weeks after the Closing Date, the Company shall
prepare and file with the Commission one or more registration statements in
order to register with the Commission the sale by the Purchasers, from time to
time, of the Shares and the Warrant Shares underlying the Warrants issued for
sale pursuant to such registration statements (a "Registration Statement"). The
Company shall use its best efforts to cause such Registration Statement to
become effective as soon as practicable thereafter. Promptly after filing any
such Registration Statement, the Company will furnish to the Purchasers a copy
of such Registration Statement.
(b) The Company shall use reasonable best efforts to prepare and file
with the Commission (i) such amendments and supplements to each such
Registration Statement and the prospectus used in connection therewith, (ii)
such SEC Reports and (iii) such other filings required by the Commission, as may
be necessary to keep each Registration Statement continuously effective until
the second anniversary of the first date on which no Warrants remain unexercised
or unexpired or until the date on which no Shares registered on such
Registration Statement are outstanding or issuable and remain unsold pursuant to
such Registration Statement; provided, however, that in the event of a
Suspension Period (as defined below) or a Stand-Off Period (as defined in
Section 9.6 hereof), the Company shall extend the period of effectiveness of
such Registration Statement by the aggregate number of days of each such
Suspension Period or Stand-Off Period. The Company may suspend use of a
prospectus when it deems necessary, in its reasonable judgment, until such time
as the Company subsequently authorizes use of such prospectus (each such period,
including any time period during which a stop order issued by the Commission is
in effect with respect to such prospectus or related Registration Statement, a
"Suspension Period"). Upon the declaration of a Suspension Period, the Company
shall use reasonable best efforts to end the Suspension Period as quickly as
possible. Notwithstanding the
7.
<PAGE>
foregoing, the Company shall not allow a Suspension Period to continue for more
than 60 days unless the Company shall deliver to the Purchasers a second notice,
which shall have the effect of extending the Suspension Period by up to an
additional 30 days. In no event shall the Company extend a Suspension Period
beyond such 90 day period. The Company shall not under any circumstances be
entitled to exercise its rights under this subparagraph to effect a Suspension
Period more than two times in any 12 month period. Each Purchaser agrees that
such Purchaser will not sell any Shares pursuant to a prospectus beginning at
the time the Company gives such Purchaser notice of the suspension of the
prospectus and ending at the time the Company gives such Purchaser notice of the
termination of the Suspension Period. Each Purchaser further agrees to promptly
notify the Company of the sale of all of such Purchaser's Securities.
(c) In order to facilitate the public sale or other disposition of
all or any of the Shares by each Purchaser, the Company shall furnish to each
Purchaser with respect to the Shares registered under the Registration Statement
such number of copies of prospectuses and preliminary prospectuses as such
Purchaser reasonably requests in conformity with the requirements of the
Securities Act.
(d) The Company shall file documents required of the Company for blue
sky clearance in states specified in writing by each Purchaser; PROVIDED,
HOWEVER, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented.
(e) Other than fees and expenses, if any, of counsel or other
advisers to the Purchasers, which fees and expenses shall be borne by the
Purchasers except as provided in the next sentence and under Section 12.8 below,
the Company shall bear all expenses (exclusive of underwriting discounts and
commissions) in connection with the procedures in paragraphs (a) through (d) of
this Section 9.1. The Company shall bear the expenses of reasonable fees and
disbursements of a single special counsel for the Purchasers (including any
purchasers pursuant to the Common Stock Purchase Agreement of even date herewith
described in Section 12.9 hereof) reasonably acceptable to each of the
Purchasers in connection with each Registration Statement required to be filed
pursuant to this Section 9 not to exceed $15,000.
9.2 TRANSFER OF SECURITIES AFTER REGISTRATION. Each Purchaser agrees that
such Purchaser will not effect any disposition of the Shares or the Warrants
that would constitute a sale within the meaning of the Securities Act, except:
(i) pursuant to a Registration Statement, in which case such
Purchaser shall submit the certificates evidencing the Shares to the transfer
agent accompanied by a separate "Purchaser's Certificate" (A) in the form of
APPENDIX III attached hereto, (B) executed by such Purchaser or by an officer
of, or other authorized person designated by, such Purchaser, and (C) to the
effect that (1) the Shares have been sold in accordance with the Registration
Statement and (2) the requirement of delivering a current prospectus has been
satisfied; or
(ii) in a transaction exempt from registration under the
Securities Act, in which case such Purchaser shall, prior to effecting such
disposition, submit to the Company
8.
<PAGE>
an opinion of counsel in form and substance reasonably satisfactory to the
Company to the effect that the proposed transaction is in compliance with the
Securities Act.
9.3 INDEMNIFICATION. As used in this Section 9.3 the following terms
shall have the following respective meanings:
(a) "Selling Stockholder" shall mean a Purchaser of Securities under
this Agreement, and any transferee of such a Purchaser who is entitled to resell
Shares pursuant to a Registration Statement;
(b) "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statements referred to in Section 9.1; and
(c) "Untrue Statement" shall include any untrue statement or alleged
untrue statement, or any omission or alleged omission to state in a Registration
Statement a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
The Company agrees to indemnify and hold harmless each Selling Stockholder
(and each person, if any, who controls such Selling Stockholder within the
meaning of Section 15 of the Securities Act, and each officer and director of
such Selling Stockholder and each broker or dealer to or through whom such
Selling Stockholder's Shares are sold) from and against any losses, claims,
damages or liabilities to which such Selling Stockholder (or such controlling
person, officer or director or broker or dealer, as the case may be) may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any Untrue Statement on or after the effective date of a
Registration Statement, or arise out of any failure by the Company to fulfill
any undertaking included in a Registration Statement and the Company will
reimburse such Selling Stockholder (or such controlling person, officer or
director or broker or dealer, as the case may be) for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; PROVIDED, HOWEVER, that the Company
shall not be liable to such Selling Stockholder (or such controlling person,
officer or director or broker or dealer) in any such case to the extent that
such loss, claim, damage or liability arises out of, or is based upon, an Untrue
Statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Stockholder (or such controlling person, officer or director or broker
or dealer), specifically for use in preparation of such Registration Statement,
or the failure of such Selling Stockholder to comply with the covenants and
agreements contained in Section 9.1 or 9.2 hereof respecting sale of the Shares
or any statement or omission in any prospectus that is corrected in any
subsequent prospectus that was delivered to the Selling Stockholder prior to the
pertinent sale or sales by the Selling Stockholder.
Each Purchaser, severally and not jointly, agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the Company within
the meaning of Section 15
9.
<PAGE>
of the Securities Act, each officer of the Company who signs a Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 9.1 or 9.2 hereof
respecting sale of the Shares, or any Untrue Statement contained in a
Registration Statement on or after the effective date thereof if such Untrue
Statement was made in reliance upon and in conformity with written information
furnished by or on behalf of such Purchaser specifically for use in preparation
of such Registration Statement, and such Purchaser will reimburse the Company
(or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; PROVIDED
that in no event shall any indemnity by a Purchaser under this Section 9.3
exceed the gross proceeds received by such Purchaser from the sale of Shares
covered by such Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 9.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; PROVIDED, HOWEVER, that if there exists or shall exist a
conflict of interest that would make it prejudicial, in the opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; PROVIDED, HOWEVER, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel for all indemnified parties.
9.4 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Subsections 5.1(c) and (d) or Section 9.1(c) and Section 9.2 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been sold or otherwise disposed
of in accordance with the intended method of disposition set forth in the
Registration Statement covering such Shares or at such time as an opinion of
counsel satisfactory to the Company shall have been rendered to the effect that
such conditions are not necessary in order to comply with the Securities Act.
9.5 INFORMATION AVAILABLE. So long as a Registration Statement is
required to be effective pursuant to this Section 9 covering the resale of
Shares owned by the Purchasers, the Company will furnish to the Purchasers:
10.
<PAGE>
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Stockholders, within 120 days after the end of each
fiscal year of the Company), one copy of (i) its Annual Report to Stockholders
(which Annual Report shall contain financial statements audited in accordance
with generally accepted auditing standards certified by a national firm of
certified public accountants); (ii) its Annual Report on Form 10-K; (iii) its
quarterly reports on Form 10-Q (the foregoing, in each case, excluding
exhibits); and (iv) its current reports on Form 8-K, if any;
(b) upon the request of any Purchaser, all exhibits excluded by the
parenthetical to subparagraph (a)(iii) of this Section 9.5, in the form
generally available to the public; and
(c) upon the reasonable request of any Purchaser, an adequate number
of copies of prospectuses to supply to any other party requiring such
prospectuses.
9.6 MARKET STAND-OFF. If requested by the underwriters in any proposed
underwritten public offering by the Company of Common Stock, Purchasers, or any
assignees thereof or transferees who are affiliates thereof, will not sell any
of the Shares for up to 90 days following the effective date of the registration
statement relating to such public offering (each such time period a "Stand-Off
Period").
9.7 CHANGES IN PURCHASER INFORMATION. Each Purchaser agrees to promptly
notify the Company of any changes in the information set forth in a Registration
Statement regarding Purchaser or such Purchaser's plan of distribution set forth
in such Registration Statement.
SECTION 10. BROKER'S FEE. The Company and each Purchaser (severally and
not jointly) hereby represent that, except for amounts to be paid to Pacific
Growth Equities, Inc., as Placement Agent (the "Placement Agent") by the Company
as described in Section 12.8 hereof, there are no brokers or finders entitled to
compensation in connection with the sale of the Units, and shall indemnify each
other for any such fees for which they are responsible.
SECTION 11. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be sent by confirmed
facsimile or mailed by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, and shall be
deemed given when so sent in the case of facsimile transmission, or when so
received in the case of mail or courier, and addressed as follows:
(a) if to the Company, to:
Biocircuits Corporation
1324 Chesapeake Terrace
Sunnyvale, California 94089
Attention: John Kaiser
Facsimile: (408) 752-8792
11.
<PAGE>
with a copy so mailed to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306
Attention: Lana K. Hawkins, Esq.
Facsimile: (415) 857-0663
or to such other person at such other place as the Company shall
designate to the Purchasers in writing; and
(b) if to the Purchasers, at the address as set forth at the end of
this Agreement, or at such other address or addresses as may have been furnished
to the Company in writing.
SECTION 12. MISCELLANEOUS.
12.1 WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision
hereof may be changed, waived, discharged, terminated, modified or amended
except upon the written consent of the Company and holders of at least a
majority of the Shares.
12.2 HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
12.3 SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
12.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
12.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
12.
<PAGE>
12.7 ENTIRE AGREEMENT. This Agreement and other documents delivered
pursuant hereto, including the exhibits, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
12.8 PAYMENT OF FEES AND EXPENSES. Subject to Section 9.1(e) hereof, each
of the Company and the Purchasers shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby. (The transactions contemplated hereby and by the Common
Stock Purchase Agreement described in Section 12.9 hereof are jointly referred
to herein as the "Offering"). The Purchasers understand and acknowledge that
the Company shall reimburse the Placement Agent for all reasonable out-of-pocket
expenses incurred by the Placement Agent in connection with the Offering and the
reasonable fees and expenses of Howard, Rice, Nemerovski, Canady, Falk & Rabkin
in connection with its acting as counsel to the Placement Agent, in an amount up
to $50,000 in the aggregate. Purchasers acknowledge that the Placement Agent
will receive a commission, to be paid by the Company, equal to six percent (6%)
of the purchase price of the Units or shares of Common Stock sold in the
Offering, except for any Shares sold to the Sprout Group or any affiliate
thereof, plus six percent (6%) of the exercise price of any Warrants exercised.
If any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
13.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser:
-------------------------
By: /s/ John Kaiser By:
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title:
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address:
---------------------------
Facsimile: (408) 752-8792 -----------------------------------
-----------------------------------
Facsimile:
-------------------------
INVESTMENT AMOUNT: $
---------
NUMBER OF UNITS:
---------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Julie T. Berlacher
-------------------------
By: By: /s/ Julie T. Berlacher
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title:
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 676 Church Rd.
---------------------------
Facsimile: (408) 752-8792 Villanova, PA 19085
-----------------------------------
-----------------------------------
Facsimile: 610-989-1765
-------------------------
INVESTMENT AMOUNT: $51,468.75
---------
NUMBER OF UNITS: 68,625
---------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: /s/ John Coleman
-------------------------
By: By: John Coleman
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title:
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 355 Sacramento St.
--------------------------
16th Floor
Facsimile: (408) 752-8792 ----------------------------------
SF, CA 94111
----------------------------------
Facsimile: 415-274-6824
-------------------------
INVESTMENT AMOUNT: $ 15,750
---------
NUMBER OF UNITS: 21,000
---------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser:
-------------------------
By: By:
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title:
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 3000 Sand Hill Road
--------------------------
Building 4. Suite 270
Facsimile: (408) 752-8792 ----------------------------------
Menlo park, CA 94025
----------------------------------
DLJ CAPITAL CORPORATION Facsimile: 415-854-8779
-------------------------
BY: /s/ KEITH B. GEESLIN
-------------------------- INVESTMENT AMOUNT: $ 19,402.50
Keith B. Geeslin ---------
NUMBER OF UNITS: 25,870
ATTORNEY-IN-FACT ---------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser:
-------------------------
By: By:
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title:
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 3000 Sand Hill Road
--------------------------
Building 4. Suite 270
Facsimile: (408) 752-8792 ----------------------------------
Menlo park, CA 94025
----------------------------------
ML VENTURE PARTNERS, II, L.P. Facsimile: 415-854-8779
BY: DLJ CAPITAL MANAGEMENT CORPORATION, -------------------------
ITS SUB-MANAGER
BY: /s/ KEITH B. GEESLIN
----------------------------
AUTHORIZED OFFICER
Keith B. Geeslin INVESTMENT AMOUNT: $ 125,000.00
----------
NUMBER OF UNITS: 166,667
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser:
-------------------------
By: By:
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title:
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 3000 Sand Hill Road
--------------------------
Building 4. Suite 270
Facsimile: (408) 752-8792 ----------------------------------
Menlo park, CA 94025
----------------------------------
SPROUT CAPITAL VI, L.P. Facsimile: 415-854-8779
BY: DLJ CAPITAL CORPORATION, ------------------------
MANAGING GENERAL PARTNER
BY: /s/ KEITH B. GEESLIN
----------------------------
Keith B. Geeslin INVESTMENT AMOUNT: $ 122,520.00
ATTORNEY-IN-FACT ----------
NUMBER OF UNITS: 163,360
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser:
-------------------------
By: By:
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title:
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 3000 Sand Hill Road
--------------------------
Building 4. Suite 270
Facsimile: (408) 752-8792 ----------------------------------
Menlo park, CA 94025
----------------------------------
SPROUT CAPITAL VI, L.P. Facsimile: 415-854-8779
BY: DLJ CAPITAL CORPORATION, ------------------------
MANAGING GENERAL PARTNER
BY: /s/ KEITH B. GEESLIN
----------------------------
Keith B. Geeslin
ATTORNEY-IN-FACT INVESTMENT AMOUNT: $ 233,077.50
----------
NUMBER OF UNITS: 310,770
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: E&M RP Trust
-------------------------
By: By: /s/ [ILLEGIBLE]
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Trustee
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 655 Brea Canyon Road
--------------------------
Walnut, CA 91789
Facsimile: (408) 752-8792 ----------------------------------
----------------------------------
Facsimile: (909) 869-0840
-------------------------
INVESTMENT AMOUNT: $ 39,375.00
---------
NUMBER OF UNITS: 52,500
---------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Tahoe Partnership I
-------------------------
By: By: /s/ Peter Shea
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Custodian
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 655 Brea Canyon Road
--------------------------
Walnut, CA 91789
Facsimile: (408) 752-8792 ----------------------------------
----------------------------------
Facsimile: (909) 869-0840
-------------------------
INVESTMENT AMOUNT: $ 39,375.00
---------
NUMBER OF UNITS: 52,500
---------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Glenbrook Partners, LP
-------------------------
BY: Prim Ventures, Inc.
ITS: General Partner
By: By: /s/ K. Marshall Matzinger
----------------------------------- --------------------------------
John Kaiser K. Marshall Matzinger
Chief Executive Officer
Title: Chief Financial Officer
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: P.O. Box 12219
--------------------------
308 Dorla Court
Facsimile: (408) 752-8792 ----------------------------------
Zephyr Cove, NV 89448
----------------------------------
PHONE: (702) 588-7300
Facsimile: (720) 588-7922
-------------------------
INVESTMENT AMOUNT: $ 363,824.69 KMM
----------
NUMBER OF UNITS: 481,887 KMM
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: H&Q Biocircuits
Investors, L.P.
-------------------------
By: By: /s/ Jackie Berterretche
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Jackie Berterretche
Title: Attorney-In-Fact
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: One Bush Street
--------------------------
San Francisco, CA 94104
Facsimile: (408) 752-8792 ----------------------------------
----------------------------------
Facsimile: (415) 667-7747
-------------------------
INVESTMENT AMOUNT: $ 787,500
----------
NUMBER OF UNITS: 1,050,500
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Kaiser Survivor Trust
-------------------------
By: By: /s/ John Kaiser
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Trustee
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 1324 Chesapeake Terrace
--------------------------
Sunnyvale Ca 94089
Facsimile: (408) 752-8792 ----------------------------------
----------------------------------
Facsimile:
-------------------------
INVESTMENT AMOUNT: $ 78,975.00
---------
NUMBER OF UNITS: 105,300
---------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Lancaster Investment
Partners
-------------------------
By: By: /s/ [ILLEGIBLE]
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Managing General Partner
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 353 W. Lancaster Ave., #300
---------------------------
Wayne, PA 19087
Facsimile: (408) 752-8792 -----------------------------------
-----------------------------------
Facsimile: 610-989-1765
--------------------------
INVESTMENT AMOUNT: $ 104,531.25
-----------
NUMBER OF UNITS: 139,375
-----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: [ILLEGIBLE]
------------------------
By: By:
----------------------------------- -------------------------------
John Kaiser
Chief Executive Officer
Title:
----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 353 Sacramento St 16th Flr
--------------------------
c/o Pacific Growth Equities
Facsimile: (408) 752-8792 ----------------------------------
San Francisco, CA 94111
----------------------------------
Facsimile: (415) 274-6887
-------------------------
INVESTMENT AMOUNT: $ 32,718.75
----------
NUMBER OF UNITS: 43,625
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: /s/ Richard H. Osgood
------------------------
By: By: Richard H. Osgood
----------------------------------- -------------------------------
John Kaiser
Chief Executive Officer
Title: CEO - Chairman
----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: Pacific Growth
Equities, Inc.
--------------------------
353 Sacramento Street
Facsimile: (408) 752-8792 ----------------------------------
Sixteenth Floor
----------------------------------
San Francisco, CA 94111
----------------------------------
Facsimile: (415) 274-6887
-------------------------
INVESTMENT AMOUNT: $ 80,000.00
----------
NUMBER OF UNITS: 106,667
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Rogers Family Trust
------------------------
By: By: /s/ Roy L. Rogers
----------------------------------- -------------------------------
John Kaiser
Chief Executive Officer
Title: Roy L. Rogers, Trustee
----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 27927 Briones Way
--------------------------
Los Altos Hills, Ca 94022
Facsimile: (408) 752-8792 ----------------------------------
----------------------------------
Facsimile: 415-854-2767
-------------------------
INVESTMENT AMOUNT: $ 20,000.25
----------
NUMBER OF UNITS: 26,667
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Special Situations
Caqmas Find, L.P.
-------------------------
By: By: /s/ Austin Marxe
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Mg. Dir.
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 153 E. 53 St.
--------------------------
New York N.Y.
Facsimile: (408) 752-8792 ----------------------------------
10022
----------------------------------
Facsimile:
-------------------------
INVESTMENT AMOUNT: $ 400,000.25
----------
NUMBER OF UNITS: 533,333
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Special Situations Fund
III, L.P.
-------------------------
By: By: /s/ Austin Marxe
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Mg. Dir.
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 153 E. 53 St.
--------------------------
New York N.Y.
Facsimile: (408) 752-8792 ----------------------------------
10022
----------------------------------
Facsimile: 212-832-6141
-------------------------
INVESTMENT AMOUNT: $ 1,300,000.25
------------
NUMBER OF UNITS: 1,733,333.00
------------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Special Situations
Private Equity Fund
-------------------------
By: By: /s/ Austin Marxe
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Mg. Dir.
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 153 E. 53 St.
--------------------------
51st Floor
Facsimile: (408) 752-8792 ----------------------------------
New York N.Y. 10022
----------------------------------
Facsimile: 212-832-6141
------------------------
INVESTMENT AMOUNT: $ 1,300,000.25
------------
NUMBER OF UNITS: 1,733,333.00
------------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: /s/ C. Fred Toney
-------------------------
By: By: /s/ C. Fred Toney
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Managing Director
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 353 Sacramento St.
--------------------------
SF CA 94411
Facsimile: (408) 752-8792 ----------------------------------
----------------------------------
Facsimile: 415-274-6824
-------------------------
INVESTMENT AMOUNT: $ 20,000
----------
NUMBER OF UNITS: 26,490
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: [ILLEGIBLE]
-------------------------
By: By: /s/ Christopher J. Whitcomb
----------------------------------- --------------------------------
John Kaiser
Chief Executive Officer
Title: Institutional Equity Sales
-----------------------------
Address: 1324 Chesapeake Terrace
Sunnyvale, CA 94089 Address: 2215 Leavenworth St.
--------------------------
San Francisco, CA
Facsimile: (408) 752-8792 ----------------------------------
94133
----------------------------------
Facsimile: 415-274-6824
-------------------------
INVESTMENT AMOUNT: $ 6,656.25
----------
NUMBER OF UNITS: 8,875
----------
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
<PAGE>
EXHIBIT A
SCHEDULE OF PURCHASERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGGREGATE
PURCHASER UNITS PURCHASED PURCHASE PRICE ($)
- --------------------------------------------------------------------------------
Berlacher, Julie T. 68,625 51,468.75
- --------------------------------------------------------------------------------
Coleman, John 21,000 15,750.00
- --------------------------------------------------------------------------------
DLJ Capital Corporation 25,870 19,402.50
- --------------------------------------------------------------------------------
ML Venture Partners, II, L.P. 166,667 125,000.00
- --------------------------------------------------------------------------------
Sprout Capital VI, L.P. 163,360 122,520.00
- --------------------------------------------------------------------------------
Sprout Capital VII, L.P. 310,770 233,077.50
- --------------------------------------------------------------------------------
E&M RP Trust 52,500 39,375.00
- --------------------------------------------------------------------------------
Tahoe Partnership I 52,500 39,375.00
- --------------------------------------------------------------------------------
Glenbrook Partners, LP 485,100 363,825.00
- --------------------------------------------------------------------------------
H&Q Biocircuits Investors, L.P. 1,050,000 787,500.00
- --------------------------------------------------------------------------------
Kaiser, John, Trustee of the
Survivor's Trust under the
Kaiser Living Trust UAD
March 7, 1991 105,300 78,975.00
- --------------------------------------------------------------------------------
Lancaster Investment Partners 139,375 104,531.25
- --------------------------------------------------------------------------------
Massoca, Stephen J. 43,625 32,718.75
- --------------------------------------------------------------------------------
Osgood, Richard H. 106,667 80,000.00
- --------------------------------------------------------------------------------
Rogers Family Trust 26,667 20,000.25
- --------------------------------------------------------------------------------
Special Situations Cayman Fund, L.P. 533,333 400,000.00
- --------------------------------------------------------------------------------
Special Situations Fund III, L.P. 1,733,333 1,300,000.00
- --------------------------------------------------------------------------------
Special Situations Private Equity Fund 1,733,333 1,300,000.00
- --------------------------------------------------------------------------------
Toney, C. Fred 26,667 20,000.00
- --------------------------------------------------------------------------------
Whitcomb, Christopher J. 8,875 6,656.25
- --------------------------------------------------------------------------------
TOTAL: 6,853,567 5,140,175.25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT B
FORM OF WARRANT
<PAGE>
EXHIBIT C
SCHEDULE OF EXCEPTIONS
THE INCLUSION OF ANY MATTER AS PART OF THIS SCHEDULE SHOULD NOT BE
INTERPRETED AS INDICATING THAT THE COMPANY HAS DETERMINED THAT SUCH MATTER IS
NECESSARILY MATERIAL TO THE PURCHASER.
<PAGE>
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(TO BE READ IN CONJUNCTION WITH THE ENTIRE
PURCHASE AGREEMENT WHICH FOLLOWS)
(A) Complete the following items on the Purchase Agreement, copies of which are
attached hereto for your convenience:
1. Signature Page.
2. Appendix I - Stock Certificate and Warrant Questionnaire:
Provide the information requested by the Stock Certificate and Warrant
Questionnaire.
3. Appendix II - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
4. Return the properly completed and signed Purchase Agreement including
the properly completed and signed Appendix I and Appendix II to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Attn: A. Paul Rimas
Tel: (415) 843-5000
Fax: (415) 857-0663
PLEASE RETURN THE COMPLETED AND SIGNED PURCHASE AGREEMENT BY FACSIMILE
WITH ALL OF THE ORIGINAL DOCUMENTS FOLLOWING BY OVERNIGHT COURIER OR
MAIL.
B. The purchase price for the Units may be paid by wire transfer as follows:
Wiring Instructions
-------------------
Cupertino National Bank
3 Palo Alto Square, #150
Palo Alto, CA 94306
1.
<PAGE>
Bank Contact Person: Ms. Terry Dickmeyer at (415) 852-0300
Routing #: 121141152
Account Name: Biocircuits Corporation
Account: 003104087
C. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective as described in the Purchase
Agreement, each Purchaser:
(i) must deliver a current prospectus, and annual, quarterly and
current reports of the Company (Forms 10-K, 10-Q and 8-K) to
the buyer (prospectuses, and annual, quarterly and current
reports may be obtained from the Company at the Purchaser's
request); and
(ii) must send a letter in the form of Appendix III to the
Company so that the Shares may be properly transferred.
2.
<PAGE>
APPENDIX I
BIOCIRCUITS CORPORATION
STOCK CERTIFICATE AND WARRANT QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares and Warrants
are to be registered in (thisis the name that
will appear on your stock certificate(s) and
Warrants. You may use a nominee name if
appropriate:
------------------------
2. The relationship between the Purchaser of the ------------------------
Securities and the Registered Holder listed in
response to item 1 above:
3. The mailing address of the Registered Holder
listed in response to item 1 above:
------------------------
------------------------
------------------------
4. The Social Security Number or Tax
Identification Number of the Registered
Holder listed in the response to item 1 above:
------------------------
Signature:
--------------------
Print Name:
--------------------
Title:
--------------------
<PAGE>
APPENDIX II
BIOCIRCUITS CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statements, please
provide us with the following information:
1. Please state your or your organization's name exactly as it should
appear in the Registration Statements:
2. Please provide the following information, with your current ownership
information as of July 2, 1997:
(a) Number of shares you are purchasing which are to be included in
the Registration Statements:_________.
__________(Common Stock); _________(Warrant Shares).
(b) Number of shares of the Company's Common Stock and Series A
Preferred Stock (excluding the shares you are purchasing) that
you own:__________________(Common Stock);______________
(Preferred Stock).
(c) Number of shares of the Company's Common and Preferred Stock
subject to warrants you own:_________________(Common Stock
Warrants); _____________(Preferred Stock Warrants).
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Proxy Statement in connection with the
Company's most recent Annual Meeting of Stockholders?
Yes No
--- ---
If yes, please indicate the nature of any such relationships:
---------------
- --------------------------------------------------------------------------------
4. In what states do you request the Company qualify the shares for resale
(i.e. in what states do you plan to sell the Shares)?
--------------------------
Signature:
--------------------
Print Name:
--------------------
Title:
--------------------
<PAGE>
APPENDIX III
CERTIFICATE OF SUBSEQUENT SALE
The undersigned, duly authorized by _____________________________, hereby
certifies (1) that ______________________________ is the Purchaser of the Shares
evidenced by Common Stock Certificate No. _______ for _______________ shares (A
COPY OF WHICH, FRONT AND BACK, IS ATTACHED HERETO), (2) that said Purchaser sold
__________________ of such Shares on ________________ in accordance with
registration statement number ________________________ and (3) that the
requirement of delivering a current prospectus and current annual, quarterly and
reports (Forms 10-K, 10-Q, and 8-K) by the Company has been complied with in
connection with such sale.
PRINT OR TYPE:
Name of Purchaser
(Individual or Institution)
selling the Shares:
----------------------------------
Name of Individual representing
Purchaser selling the Shares
(if an Institution):
----------------------------------
Title of Individual representing
Purchaser selling the Shares
(if an Institution):
----------------------------------
SIGNATURE BY:
Individual Purchaser selling the
Shares or Individual representing
Purchaser selling the Shares:
----------------------------------
<PAGE>
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
BIOCIRCUITS CORPORATION
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
No. 1997-C-2-___ ___________ Shares
FOR VALUE RECEIVED, BIOCIRCUITS CORPORATION, a Delaware corporation (the
"Company"), with its principal office at 1324 Chesapeake Terrace, Sunnyvale,
California 94089, hereby certifies that _________________ ("Holder"), or its
assigns, is entitled, subject to the provisions of this Warrant, to purchase
from the Company, at any time on or after the date hereof and before 5:00 p.m.
(Pacific Time) on the date eighteen months after the date hereof, the number of
fully paid and nonassessable shares of Common Stock of the Company set forth
above, subject to adjustment as hereinafter provided; provided, however, that
the expiration date shall be extended by one day for each day since the issuance
of this Warrant on which there has been effective a Suspension Period or a
Stand-Off Period, as such terms are defined in the Common Stock and Warrant
Purchase Agreement dated July 2, 1997 (the "Purchase Agreement"), pursuant to
which this Warrant was issued (the "Expiration Date"); provided further,
however, that in the event the Company sends Holder an "Early Exercise Notice"
as defined in Section 1(b) hereof and complies with the requirements of
Section 1(b) hereof, this Warrant shall cease to be exercisable in accordance
with the terms of Section 1(b) hereof.
Holder may purchase such number of shares of Common Stock at a purchase
price per share (as appropriately adjusted pursuant to Section 6 hereof) of
Seventy-Five Cents ($0.75) (the "Exercise Price"). The term "Common Stock"
shall mean the aforementioned Common Stock of the Company, together with any
other equity securities that may be issued by the Company in addition thereto or
in substitution therefor as provided herein.
The number of shares of Common Stock to be received upon the exercise of
this Warrant and the price to be paid for a share of Common Stock are subject to
adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
1.
<PAGE>
SECTION 1. EXERCISE OF WARRANT.
(a) EXERCISE. Subject to the provisions of Section 1(b) below, this
Warrant may be exercised in whole or in part on any business day prior to the
Expiration Date by presentation and surrender hereof to the Company at its
principal office at the address set forth in the initial paragraph hereof (or at
such other address as the Company may hereafter notify Holder in writing) with
the Purchase Form annexed hereto duly executed and accompanied by proper payment
of the Exercise Price in lawful money of the United States of America in the
form of a check, subject to collection, for the number of Warrant Shares
specified in the Purchase Form. If this Warrant should be exercised in part
only, the Company shall, upon surrender of this Warrant, execute and deliver a
new Warrant evidencing the rights of Holder thereof to purchase the balance of
the Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant and such Purchase Form, together with proper payment of the Exercise
Price, at such office, Holder shall be deemed to be the holder of record of the
Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of the Warrant Shares.
(b) EARLY TERMINATION OF EXERCISABILITY (REDEMPTION AT THE OPTION OF
THE COMPANY). If, at any time beginning on the date this Warrant is first
exercisable and prior to the Expiration Date (1) a registration statement
registering the Warrant Shares for resale under the Securities Act of 1933, as
amended, is effective and (2) the closing price per share of the Company's
Common Stock as quoted on the Nasdaq National Market System or on the primary
national securities exchange on which the Common Stock is then listed, whichever
is applicable, as published in the Western Edition of the Wall Street Journal
(or, if not so reported, as otherwise reported by the Nasdaq National Market
System) over the course of ten (10) consecutive trading days equals or exceeds
Two Dollars ($2.00) (an "Early Exercise Event"), then, within 5 days of such
Early Exercise Event, the Company may, at its option, send written notice to the
Holder and the holders of all warrants issued pursuant to the Purchase Agreement
(an "Early Exercise Notice") that it chooses to exercise its right to effect an
early termination of the exercisability of this Warrant and all such other
warrants.
(i) Subject to compliance by the Company with the provisions of
this Section 1(b), after any Redemption Date (as defined below) specified in any
such Early Exercise Notice, this Warrant shall no longer represent the right to
acquire shares of the Company's Common Stock or other capital stock, but shall
thereafter (until and through the Expiration Date) represent solely the right to
receive the Redemption Price upon surrender of this Warrant. The Holder may
exercise this Warrant at any time prior to the Redemption Date, regardless of
whether any Early Exercise Notice has been issued.
(ii) Any Early Exercise Notice shall set forth (A) the Redemption
Price per Warrant Share, which shall be equal to one cent ($.01) per Warrant
Share (as appropriately adjusted to reelect any adjustments to the number of
shares of Common Stock issuable upon the exercise hereof pursuant to Section 6
hereof) and (B) a date, which shall be no less than 25 days from the date of the
Early Exercise Notice, after which the Warrant will no longer be exercisable,
but will represent solely the right to receive the Redemption Price of this
Warrant
2.
<PAGE>
(the "Redemption Date"); provided, however that if, during the time period after
the date of the Early Exercise Notice and before the Redemption Date, there
shall exist any Suspension Period or Stand-Off Period, as such terms are defined
in the Purchase Agreement, then such 25 day period shall be extended one day for
each day of such Suspension Period or Stand-Off Period.
(iii) On or before the Redemption Date, the Company shall deposit
the Redemption Price of all Warrant Shares (as defined in the Purchase
Agreement) to be redeemed with a bank, trust company, or the Company's transfer
agent with irrevocable instructions and authority to the bank, trust company or
transfer agent to pay, on and after the Redemption Date, the Redemption Price of
the Warrant Shares subject to this Warrant to the Holder upon surrender of this
Warrant. Any moneys deposited by the Company pursuant to this Section 1(b)(iii)
for the redemption of Warrant Shares that are thereafter exercised on or prior
to the Redemption Date shall be returned to the Company forthwith upon such
exercise. The balance of any funds deposited by the Company pursuant to this
Section 1(b)(iii) remaining unclaimed after 5:00 p.m. Pacific Time on the
Expiration Date shall be returned to the Company promptly upon its written
request.
(iv) On or after such Redemption Date, the Holder may surrender
this Warrant to the Company at its principal office at the address set forth in
the initial paragraph hereof (or at such other address as the Company may
hereafter notify Holder in writing), and thereupon the Redemption Price of the
Warrant Shares shall be payable to the Holders, and this Warrant shall be
canceled. From and after such Redemption Date, unless there shall have been a
default in payment of the Redemption Price, this Warrant shall represent solely
the right to receive the Redemption Price, without interest, upon surrender of
this Warrant.
SECTION 2. RESERVATION OF SHARES. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale (other than as provided in any
restrictions on sale pursuant to applicable federal and state securities laws)
and free and clear of all preemptive rights.
SECTION 3. FRACTIONAL INTEREST. The Company will not issue a fractional
share of Common Stock upon exercise of a Warrant. Instead, the Company will
deliver its check for the current market value of the fractional share. The
current market value of a fraction of a share is determined as follows: multiply
the current market price of a full share by the fraction of a share and round
the result to the nearest cent.
The current market price of a share of Common Stock for purposes of this
Section only is the Quoted Price (as defined in Section 6(b) below) of the
Common Stock on the last trading day prior to the exercise date.
SECTION 4. ASSIGNMENT OR LOSS OF WARRANT.
3.
<PAGE>
(a) Except as provided in Section 9, Holder shall be entitled,
without obtaining the consent of the Company, to assign its interest in this
Warrant in whole or in part to any person or persons. Subject to the provisions
of Section 9, upon surrender of this Warrant to the Company or at the office of
its stock transfer agent or warrant agent, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company
shall, without charge, execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees named in such instrument of assignment (any such
assignee will then be a "Holder" for purposes of this Warrant) and, if Holder's
entire interest is not being assigned, in the name of Holder, and this Warrant
shall promptly be canceled.
(b) Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnification satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
SECTION 5. RIGHTS OF HOLDER. Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of Holder are limited to those expressed in this Warrant.
Nothing contained in this Warrant shall be construed as conferring upon Holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company on any matters or with respect to any rights whatsoever as a
stockholder of the Company. No dividends or interest shall be payable or
accrued in respect of this Warrant or the interest represented hereby or the
Warrant Shares purchasable hereunder until, and only to the extent that, this
Warrant shall have been exercised in accordance with its terms.
SECTION 6. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number
and kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
beginning of certain events, as follows:
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If at any time after the
date hereof the Company:
(A) pays a dividend or makes a distribution on its Common Stock
in shares of its Common Stock;
(B) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(C) combines its outstanding shares of Common Stock into a
smaller number of shares;
(D) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(E) issues by reclassification of its Common Stock any shares of
its capital stock;
4.
<PAGE>
then the number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price in effect immediately prior to such action shall
be adjusted so that Holder may receive upon exercise of this Warrant and payment
of the same aggregate consideration the number of shares of capital stock of the
Company which Holder would have owned immediately following such action if
Holder had exercised this Warrant immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
(b) QUOTED PRICE. The "Quoted Price" of the Common Stock is the last
reported sales price of the Common Stock as reported by the Nasdaq National
Market, or the primary national securities exchange on which the Common Stock is
then quoted; provided, however, that if the Common Stock is neither traded on
the Nasdaq National Market nor on a national securities exchange, the price
referred to above shall be the price reflected on the Nasdaq Smallcap Market, or
if the Common Stock is not then traded on the Nasdaq Smallcap Market, the price
reflected in the over-the counter market as reported by the National Quotation
Bureau, Inc. or any organization performing a similar function.
(c) MINIMUM ADJUSTMENT. No adjustment in the Exercise Price of this
Section 6 shall be required unless such adjustment would require an increase or
decrease of at least ten cents ($.10) in such Exercise Price; PROVIDED, HOWEVER,
that any adjustments which by reason of this subsection are not required to be
made, shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 6 shall be made to the nearest
cent or to the nearest share, as the case may be.
(d) DEFERRAL OF ISSUANCE OR PAYMENT. In any case in which an event
covered by this Section 6 shall require that an adjustment in the Exercise Price
be made effective as of a record date, the Company may elect to defer until the
occurrence of such event (i) issuing to Holder, if this Warrant is exercised
after such record date, the shares of Common Stock and other capital stock of
the Company, if any, issuable upon such exercise over and above the shares of
Common Stock or other capital stock of the Company, if any, issuable upon such
exercise on the basis of the Exercise Price in effect prior to such adjustment,
and (ii) paying to Holder by check any amount in lieu of the issuance of
fractional shares pursuant to Section 3.
(e) WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for a
change in the par value of the Common Stock.
(f) NOTICE OF CERTAIN ACTIONS. In the event that:
(A) the Company shall authorize the issuance to all holders of
its Common Stock of rights, warrants, options or convertible securities to
subscribe for or purchase shares of its Common Stock or of any other
subscription rights, warrants, options or convertible securities; or
(B) the Company shall authorize the distribution to all holders
of its Common Stock of evidences of its indebtedness or assets (other than
dividends paid in or
5.
<PAGE>
distributions of the Company's capital stock for which the Exercise Price shall
have been adjusted pursuant to subsection (a) of this Section 6 or cash
dividends or cash distributions payable out of consolidated current or retained
earnings as shown on the books of the Company and paid in the ordinary course of
business); or
(C) the Company shall authorize any capital reorganization or
reclassification of the Common Stock (other than a subdivision or combination of
the outstanding Common Stock and other than a change in par value of the Common
Stock) or of any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required (other than a
consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or change of the Common Stock
outstanding), or of the conveyance or transfer of the properties and assets of
the Company as an entirety or substantially as an entirety; or
(D) the Company is the subject of a voluntary or involuntary
dissolution, liquidation or winding-up procedure; or
(E) the Company proposes to take any action that would require
an adjustment of the Exercise Price pursuant to this Section 6;
then the Company shall cause to be mailed by first-class mail to Holder, at
least twenty (20) days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date as of which the holders of
Common Stock of record to be entitled to receive any such rights, warrants or
distributions are to be determined, or (y) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding-up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up.
SECTION 7. OFFICERS' CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 6, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office an officers' certificate showing the adjusted Exercise Price determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the chairperson, president or chief financial
officer of the Company and by the secretary or any assistant secretary of the
Company. Each such officers' certificate shall be made available at all
reasonable times for inspection by Holder.
SECTION 8. RECLASSIFICATION, REORGANIZATION, CONSOLIDATION OR MERGER. In
the event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock and other than a change in the par
value of the Common Stock) or in the event of any consolidation or merger of the
Company with or into another corporation (other than a merger in which the
Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in the
event of any sale, lease, transfer
6.
<PAGE>
or conveyance to another corporation of the property and assets of the Company
as an entirety or substantially as an entirety, the Company shall, as a
condition precedent to such transaction, cause effective provisions to be made
so that Holder shall have the right thereafter, by exercising this Warrant, to
purchase the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, capital
reorganization and other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock that might have been received
upon exercise of this Warrant immediately prior to such reclassification,
capital reorganization, change, consolidation, merger, sale or conveyance. Any
such provision shall include provisions for adjustments in respect of such
shares of stock and other securities and property that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section 8 shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances.
In the event that in connection with any such capital reorganization, or
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for, or of, a security of the Company other than
Common Stock, any such issue shall be treated as an issue of Common Stock
covered by the provisions of subsection (a) of Section 6.
SECTION 9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. This
Warrant may not be exercised and neither this Warrant nor any of the Warrant
Shares, nor any interest in either, may be offered, sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in
whole or in part, except in compliance with applicable United States federal and
state securities or Blue Sky laws and the terms and conditions hereof. Each
Warrant shall bear a legend in substantially the same form as the legend set
forth on the first page of this Warrant. Each certificate for Warrant Shares
issued upon exercise of this Warrant, unless at the time of exercise such
Warrant Shares are acquired pursuant to a registration statement that has been
declared effective under the Act, and applicable blue sky laws shall bear a
legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM
AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion
7.
<PAGE>
of counsel for the Company, the Warrant Shares represented thereby need no
longer be subject to the restriction contained herein. The provision of this
Section 9 shall be binding upon all subsequent holders of certificates for
Warrant Shares bearing the above legend and all subsequent holders of this
Warrant, if any.
SECTION 10. MODIFICATION AND WAIVER. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by Holder.
8.
<PAGE>
SECTION 11. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to Holder or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to Holder at its address as
shown on the books of the Company or to the Company at the address indicated
therefor in the first paragraph of this Warrant.
SECTION 12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description
headings of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California, without
regard to its conflicts of laws principles.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
by its duly authorized officer and to be dated as of July 3, 1997.
BIOCIRCUITS CORPORATION
By:
--------------------------------
John Kaiser
Chief Executive Officer
9.
<PAGE>
PURCHASE FORM
Dated ___________, 19____
The undersigned hereby irrevocably elects to exercise the within Warrant
No. 1997-C-2-___ to purchase _____________ shares of Common Stock and hereby
makes payment of $_____________ in payment of the exercise price thereof.
HOLDER
By:
---------------------------
Print Name:
-------------------
Title:
------------------------
<PAGE>
ASSIGNMENT FORM
Dated _________, 19____
FOR VALUE RECEIVED, ________________ hereby sells, assigns and transfers
unto __________________________________________________ (the "Assignee"),
(please type or print in block letters)
- --------------------------------------------------------------------------------
(insert address)
its right to purchase up to ______________ shares of Common Stock represented by
this Warrant No. 1997-C-2-___ and does hereby irrevocably constitute and appoint
____________________________ attorney, to transfer the same on the books of the
Company, with full power of substitution in the premises.
HOLDER
By:
---------------------------
Print Name:
-------------------
Title:
------------------------
<PAGE>
[COOLEY GODWARD LLP LETTERHEAD]
MICHAEL R. JACOBSON
415 843-5031
[email protected]
July 18, 1997
Biocircuits Corporation
1324 Chesapeake Terrace
Sunnyvale, CA 94089
RE: BIOCIRCUITS CORPORATION
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Biocircuits Corporation (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of 13,707,134 shares of the
Company's common stock (the "Shares"), with a par value of $0.001, to be sold
by certain stockholders as described in the Registration Statement. Of the
Shares (i) 6,853,567 were issued by the Company pursuant to a private
placement of common stock on July 3, 1997, (the "Common Shares") and (ii)
6,853,576 (the "Warrant Shares") are issuable upon the exercise of warrants
issued by the Company on July 3, 1997 (the "Warrants").
In connection with this opinion, we have examined the Registration Statement,
the Company's Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws, and such other documents, records, certificates, memoranda and
other instruments as we deem necessary as a basis for this opinion. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that (i) the Common Shares are validly issued, fully paid, and nonassessable
and (ii) the Warrant Shares, when sold and issued upon exercise of the
Warrants and in accordance with the terms thereof, and in accordance with the
Registration Statement, will be validly issued, fully paid, and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters"
in the Prospectus included in the Registration Statement.
Very truly yours,
Cooley Godward LLP
/s/ Michael R. Jacobson
Michael R. Jacobson
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-26079) and
related Prospectus of Biocircuits Corporation for the registration of
16,603,360 shares of its common stock and to the incorporation by reference
therein of our report dated January 13, 1997 with respect to the financial
statements of Biocircuits Corporation included in its Annual Report (Form
10-K/A-2) for the year ended December 31, 1996, filed with the Securities and
Exchange Commission.
/S/ ERNST & YOUNG LLP
Palo Alto, California
July 18, 1997
