As filed with the Securities and Exchange Commission on April 14, 1999
Registration No. 333-69735
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------------
AMERICAN BIOGENETIC SCIENCES, INC.
(Exact Name of Registrant as Specified In Its Charter)
Delaware 11-2655906
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1375 Akron Street, Copiague, NY 11726
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
--------------------------
RICHARD A. RUBIN, ESQ.
PARKER CHAPIN FLATTAU & KLIMPL, LLP
1211 Avenue of the Americas
New York, New York 10036
(212) 704-6000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
--------------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: X
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell nor is it seeking an offer to buy these securities in any state where
the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL ____, 1999
PROSPECTUS
- -----------
10,800,000 Shares
American Biogenetic Sciences, Inc.
Class A Common Stock
-------------------
The stockholders of American Biogenetic Sciences, Inc. listed on page
10 of this prospectus are offering for sale 10,800,000 shares of class A common
stock of ABS under this prospectus.
The selling stockholders may offer their shares through public or
private transactions, at prevailing market prices, or at privately negotiated
prices. See "Plan of Distribution."
-------------------------------
Nasdaq National Market Symbol:
"MABXA"
-------------------------------
On April 9, 1999, the closing price of a share of our class A common
stock on the Nasdaq National Market was $ 1.09.
----------------------------
This investment involves a high degree of risk. You should carefully
consider the factors described under the caption "risk factors"
beginning on page 3 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined
if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
----------------------------
The date of this prospectus is ______, 1999
<PAGE>
PROSPECTUS SUMMARY
This summary highlights some information from this prospectus. It may
not contain all of the information important to you. To understand this offering
fully and get a better understanding of our business and operations, you should
read the entire prospectus carefully, including the risk factors, and the
documents we have incorporated by reference in the section "Where You Can Find
More Information About Us."
Please note that references in this prospectus to "we," "our" or "us"
refer to American Biogenetic Sciences, Inc. and our subsidiary, Stellar Bio
Systems, Inc., not to the selling stockholders.
General Information About ABS
We are engaged in researching, developing and marketing cardiovascular
and neurobiology products for commercial development. We commenced selling our
products during the last quarter of 1997.
Some of our products are designed to be used for in vivo, while others
are designed for in vitro, diagnostic procedures. In vivo diagnostic procedures
are those in which proteins or compounds are injected directly into the body or
bloodstream to assess abnormal reactions or conditions. During in vitro
procedures, blood, urine or other bodily fluid or tissue is extracted from the
body and the diagnostic tests are performed in a test tube or other laboratory
equipment.
Our main products are:
o Thrombus Precursor Protein test, referred to as the TpP(TM) test.
This is an in vitro diagnostic test used to assess the risk of
blood clots in the veins or arteries. This test is also used to
monitor the performance of anti-clotting therapy or drugs used in
the prevention of blood clots.
o Functional Intact Fibrinogen test, referred to as the FiF(TM)
test. This is an in vitro diagnostic test which measures the
levels of fibrinogen in blood. Fibrinogen is a protein used in the
blood-clotting process.
These tests assist doctors in diagnosing and treating blood clots
lodged in the legs and the lungs, known as thrombosis, a condition which can be
fatal. Thrombosis is also associated with many other medical conditions, like
heart attacks, strokes and complications during pregnancies. We are pursuing the
application of our tests in these areas with additional clinical testing. We
have also developed patented antibodies for use in our TpP(TM) and FIF(TM)
tests.
On April 23, 1998, we purchased all of the issued and outstanding
shares of common stock of Stellar Bio Systems, Inc., a manufacturer and
distributor of in vitro diagnostic products and research reagents used in the
biotechnology industry. A reagent is a chemical substance used to detect another
substance in a chemical reaction. Stellar's in vitro diagnostic products focus
on the infectious disease and auto-immune disease markets. Stellar markets a
complete line of products to determine the immune status of numerous human
herpes viruses. In addition, auto-immune diseases, like lupus, are detected
using Stellar's products. Stellar is also the largest domestic provider of
normal mouse serum, which is used as a test component by major in vitro
diagnostic product manufacturers for a variety of purposes.
Our company was incorporated in Delaware in September 1983. Our
principal executive offices are located at 1375 Akron Street, Copiague, New York
11726, and our telephone number at that address is (516) 789-2600.
We have 36,023,841 shares class A common stock and 3,000,000 shares of
class B common stock outstanding. This offering will not result in the issuance
of additional shares.
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<PAGE>
RISK FACTORS
Before you buy shares of our class A common stock, you should be aware
that there are various risks associated with that purchase, including those
described below. You should consider carefully these risk factors, together with
all of the other information in this prospectus and the documents we have
incorporated by reference in the section "Where You Can Find More Information
About Us", before you decide to purchase shares of our class A common stock.
----------------------------------------------------
Risks Associated with Our Lack of Operating History,
History of Losses and Future Need for Capital
----------------------------------------------------
We Are In The Development Stage And Cannot Anticipate When We Will Generate
Significant Revenues.
ABS remains in the development stage. Although we have products at
various stages of development and have started to generate revenues, we cannot
assure you as to if and when we may begin generating significant revenues from
product sales and cease being a development stage company. We have not generated
significant revenues from product sales from our inception to date and have
incurred losses every year since our formation in 1983. Through December 31,
1998, we have received an aggregate of $1,302,000 in licensing fees, royalties
and under collaborative agreements. Sales of the TpP(TM) and FIF(TM) tests,
which commenced during the fourth quarter of 1997, and sales of Stellar's
products since its acquisition on April 23, 1998, totaled $1,347,000 through
December 31, 1998.
We Have A History And Expectation of Losses.
Our research, development, and general and administrative expenses have
resulted in significant losses and are expected to continue to result in
significant losses for the foreseeable future.
We have incurred the following losses since 1994:
Fiscal year ended:
o December 31, 1994..................... $7,431,000
o December 31, 1995..................... $5,607,000
o December 31, 1996..................... $7,700,000
o December 31, 1997..................... $7,147,000
o December 31, 1998..................... $7,548,000
The Cycle From Product Development To Commercialization Is Lengthy
And May Result in Delays In The Commercialization Of Our Products
Our existing products and our products under development are subject to
the risks inherent in the development of biotechnology products. We are unable
to predict with any degree of certainty when, or if, we will complete the
research, development and testing of products under development and other future
products, or if completed, whether we will obtain required regulatory approvals.
In addition, we cannot assure you that once our products are developed, tested
and approved, that we will be able to produce our products in commercial
quantities at reasonable costs, that our products will be acceptable to the
medical community, or that our marketing and sales efforts will be successful.
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<PAGE>
We Will Likely Need Additional Financing To Commercialize Our Products.
The research, development, commercialization, manufacturing and
marketing of our products will likely require financial resources which are
significantly in excess of those presently available to us.
We cannot assure you that we will be able to arrange financing or other third
party arrangements on acceptable terms necessary to fully develop and
commercialize any of our products.
------------------------------------------------------
Risks Associated with the Industry in Which We Operate
------------------------------------------------------
Our Products Are Highly Regulated.
The investigation, manufacture, exportation, marketing and sale of
diagnostic and therapeutic products in or from the United States is subject to
regulation by the Food and Drug Administration, as well as by comparable foreign
and state agencies. Although we have obtained pre-market clearance for some of
our existing products, we cannot assure you that any of our future products will
be approved by the FDA or other applicable foreign regulatory agencies. Any FDA,
foreign and state regulatory approvals or clearances, once obtained, can be
withdrawn or modified. Our inability to obtain and maintain, any necessary
United States or foreign clearances or manufacturing and marketing approvals for
our products could have a material adverse effect on our business, financial
condition and results of operations. In addition, noncompliance with applicable
government requirements can result in, among other things, fines, injunctions,
civil penalties, recall or seizure of products, total or partial suspension of
production, failure of the government to grant pre-market clearance or
pre-market approval for devices, withdrawal of marketing or manufacturing
approvals, and criminal prosecutions.
Our Main Competitors Generally Have More Financial Resources Than We Have.
The biotechnology industry is characterized by rapid technological
advances, evolving industry standards and technological obsolescence. Our
inability to meet and surpass our competitors' technological advances, could
have a material adverse effect on our business, financial condition and results
of operations.
We have numerous competitors, none of whom we believe to be dominant,
but who have financial resources and research and development staffs and
facilities substantially greater than ours. Our competitors and others may
develop products which may render our products obsolete or which have advantages
over our products, such as greater accuracy and precision or greater acceptance
by the medical community. Competing products may also get through the regulatory
approval process sooner than our products, enabling our competitors to market
their products earlier than we can. Usually, the first person to market a
product has a significant marketplace advantage. In addition, other products now
in use, presently undergoing the regulatory approval process, or under
development by others, may perform similar functions as our existing products or
those under development.
Acceptance By The Medical Community is Essential To Our Future Success.
The commercial success of our products is substantially dependent on
acceptance and use of our products by the medical community. We cannot assure
you that any of our products will be accepted by the medical community, or, if
acceptable, as to the length of time it would take to gain acceptance.
Widespread acceptance of our products as useful additional tools to diagnosis
and treatment will require educating the medical community about the product's
benefits, reliability and effectiveness. In addition, acceptance of our products
may be adversely affected by competing products which may be as or more
effective than our products for a specific use.
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<PAGE>
We May Have Increased Expenses If Our Marketing Efforts Are Not Successful.
It is our strategy to seek arrangements with large pharmaceutical
companies to market our products. In the event we are unable to enter into those
arrangements in the future or if our arrangements are not successful, we may
seek to market our products through independent distributors. Independent
distributors may require us to develop a marketing program to support sales. In
that event, we may incur additional expenses for the development of promotional
literature and aides, the hiring of sales representatives and the completion of
studies in order to promote the interests of distributors in our products. We
cannot assure you that we will be able to develop those marketing arrangements
on satisfactory terms or that, if necessary, we would have the working capital
to establish the sales support generally required by independent distributors.
----------------------------------------------------------
Risks Associated with Our Internal Operations and Policies
----------------------------------------------------------
We Do Not Intend To Declare Dividends in the Foreseeable Future.
Our board of directors does not intend to declare any dividends in the
foreseeable future, but intends to retain all earnings, if any, for use in our
business operations. The holders of class A and class B common stock are
entitled to receive dividends when, as and if declared by the board of directors
out of funds legally available for dividend payments. To date, we have not paid
any cash dividends. The payment of dividends, if any, in the future is within
the discretion of our board of directors and will depend upon our earnings,
capital requirements and financial condition, and other relevant factors.
We Depend On the Services of Our Key Personnel.
Our success depends to a significant extent upon the efforts of (1)
Alfred J. Roach, the Chairman of our board of directors and one of our major
stockholders, (2) Mr. John S. North, our President and Chief Executive Officer,
and (3) Dr. Emer Leahy, our Senior Vice President-Business Development. Mr.
Roach is not subject to any employment agreement. Our employment agreement with
Mr. North expires on November 15, 2001 and our employment agreement with Dr.
Leahy expires on November 30, 2001. We do not maintain life insurance on the
lives of Mr. Roach, Mr. North or Dr. Leahy. The loss of the services of Mr.
Roach, Mr. North or Dr. Leahy could adversely affect our business and prospects.
Because of the nature of our business, our success is dependent upon our ability
to attract and retain technologically qualified personnel, particularly research
scientists. There is substantial competition for qualified personnel, including
competition from companies with substantially greater resources than ours. We
cannot assure you that we will be successful in recruiting or retaining
personnel of the requisite caliber or in adequate numbers to enable us to
conduct our business and effectively compete in our industry.
Year 2000 Issues
Historically, certain computerized systems have used two digits rather
than four to define the applicable year. Computer equipment and software and
devices with imbedded technology that are time-sensitive may recognize a date
using "00" as the year 1900 rather than the year 2000, resulting in system
failure or miscalculations. This problem is generally referred to as the "Year
2000 issue."
We are in the process of assessing the impact of the Year 2000 issue on
our information systems. We have identified potential deficiencies and are
addressing them through updates and remediation. In accordance with accounting
rules, costs associated with modifying existing computer software for Year 2000
issues will be expensed as incurred. We are also in the process of assessing the
measures being taken by our customers and suppliers to address the Year 2000
issues and expect to have a contingency plan in place by the end of the second
quarter in 1999. We are not dependent on
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<PAGE>
any one customer or supplier and our management believes that alternate sources
of supply for product components are widely available. We estimate the cost of
the Year 2000 to be approximately $50,000.
------------------------------------------------------------
Risks Which May Dilute the Value of Your ABS Shares or Limit
the Effect of Their Voting Power
------------------------------------------------------------
No Assurance of Continued Nasdaq Listing.
The closing price of our class A common stock on April 9, 1999 was
$1.09 and our tangible net assets, as defined under Nasdaq rules, was $5,016,000
as of December 31, 1998. The Nasdaq National Market continuing listing
parameters require that stocks have a minimum bid price of $1.00 and that listed
companies have net tangible assets of $4,000,000. We cannot assure you that we
will continue to meet these and meet other Nasdaq requirements and that our
class A common stock will continue to be quoted on Nasdaq. If we fail to
maintain a Nasdaq listing, our securities will likely be traded on the OTC
Bulletin Board. As a result, the market value of our class A common stock could
decline and stockholders may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, our class A common stock.
The Price Of Our Common Stock Is Highly Volatile.
The price of our class A common stock is highly volatile. During the
period from January 1, 1998 to April 9, 1999 the price of our class A common
stock has ranged from a high of $2.63 in February 1998 to a low of $0.16 in
October 1998. Following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted against
such a company. If similar litigation were instituted against us, it could
result in substantial costs and a diversion of our management's attention and
resources, which could have an adverse effect on our business. The volatile
fluctuations of the market price are based on (1) the number of shares in the
market at the time as well as the number of shares we may be required to issue
in the future, compared to the market demand for our shares;(2) our performance
and meeting expectations of our performance, including the development and
commercialization of our products and proposed products; and (3) general
economic and market conditions.
ABS Is Controlled By Alfred J. Roach.
As of March 31, 1999, Alfred J. Roach, the Chairman of our board of
directors, was entitled to cast approximately 52.4% of all votes at meetings of
stockholders or by consent without a meeting. As a result, Mr. Roach will be
able to exercise significant control over ABS through his ability to determine
the outcome of votes of stockholders regarding, among other things, nomination
and election of directors and approval of significant transactions. Mr. Roach's
holdings of ABS may increase in the future through his exercise of options to
purchase an additional 1,160,000 shares of our class A common stock which he may
exercise at any time.
We Have A Substantial Number Of Shares Reserved For Future Issuances.
The issuance of reserved shares would dilute the equity interest of
existing stockholders and could have a significant adverse effect on the market
price of our class A common stock. As of March 31, 1999, we had 9,516,945 shares
of class A common stock reserved for possible future issuances upon conversion
of the class B common stock and exercise of outstanding options and warrants.
See "Dilution."
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<PAGE>
In addition, we intend to seek additional financing which may result in
the issuance of additional shares of our capital stock and/or rights to acquire
additional shares of our capital stock. Those additional issuances of capital
would result in a reduction of your percentage interest in ABS.
A Significant Number of Restricted Shares May Be Resold Under Rule 144.
Future sales of substantial amounts of shares in the public market, or
the perception that those sales could occur, could adversely affect the market
price of our class A common stock. As of March 31, 1999, we had outstanding
36,023,841 shares of class A common stock. Of our outstanding shares,
approximately 20,583,368 shares of class A common stock are presently freely
transferable without restriction under the Securities Act and 15,440,473 shares
are "restricted shares" which may be sold under an exemption from registration
under the Securities Act. See "Dilution"; "Shares Eligible for Future Sale."
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus and in the documents we have
incorporated by reference, may contain forward-looking statements. Those
statements can be generally identified by the use of forward-looking words like
"may," "will," "expect," "anticipate," "intend," "estimate," "continue,"
"believe," or other similar words. These statements discuss future expectations,
or state other "forward-looking" information. When considering those statements,
you should keep in mind the risk factors and other cautionary statements in this
prospectus. The risk factors noted in this section and other factors noted in
this prospectus could cause our actual results to differ materially from those
contained in any forward-looking statements.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC- 0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public over the Internet at the SEC's Website at "http://www.sec.gov."
We have filed with the SEC a registration statement on Form S-3 to
register the shares being offered. This prospectus is part of that registration
statement and, as permitted by the SEC's rules, does not contain all the
information included in the registration statement. For further information with
respect to us and our class A common stock, you should refer to the registration
statement and to the exhibits and schedules filed as part of the registration
statement, as well as the documents discussed below.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update or supersede this information.
This prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement or incorporated in the registration statement by
reference.
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 (File No.
0-19041) until all of the shares are sold:
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<PAGE>
o Annual Report on Form 10-K for the year ended December 31,
1998; and
o The description of our class A common stock contained in the
registration statement on Form 8-A filed on February 26, 1991,
including all amendments or reports filed for the purpose of
updating that description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Chief Financial Officer
American Biogenetic Sciences, Inc.
1375 Akron Street
Copiague, New York 11726
(516) 789-2600
You can review and copy the registration statement, its exhibits and
schedules, as well as the documents listed below, at the public reference
facilities maintained by the SEC as described above. The registration statement,
including its exhibits and schedules, are also available on the SEC's web site.
USE OF PROCEEDS
The selling stockholders are selling all of the shares covered by this
prospectus for their own account. Accordingly, we will not receive any proceeds
from the resale of the shares.
We received $2,700,000 in proceeds from our sale of the shares to the
selling stockholders. We used the proceeds, together with $1,152,000 of our
funds, to repurchase:
o the remaining 5% convertible debentures with an outstanding
principal amount of $3,248,000 plus interest and a 16% premium
of the principal amount; and
o outstanding warrants to purchase 261,228 of our class A common
stock at an exercise price of $1.9141 per share.
We will bear the expenses relating to this registration, other than
discounts and commissions, which will be paid by the selling stockholders.
DILUTION
As of March 31, 1999, we had issued and outstanding 36,023,841 shares
of class A common stock.
At that date, there were an additional 9,516,945 shares of class A
common stock reserved for possible future issuances as follows:
o 3,000,000 shares for issuance upon conversion of the
outstanding class B common stock;
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<PAGE>
o 2,775,000 shares for issuance upon the exercise of
outstanding options under our 1986 Stock Option Plan.
These options are exercisable at prices ranging from
$1.50 to $10.00 per share;
o 1,995,000 shares for issuance upon the exercise of
presently outstanding options or options which may be
granted in the future under our 1996 Stock Option
Plan. Options to purchase 1,621,084 shares were
outstanding at March 31, 1999. These options are
exercisable at prices ranging from $0.25 to $5.25 per
share;
o 487,500 shares for issuance upon the exercise of
presently outstanding options or options which may be
granted in the future under our 1993 Non-Employee
Director Stock Option Plan. Options to purchase
120,000 shares were outstanding at March 31, 1999.
These options are exercisable at prices ranging from
$1.00 to $6.75 per share; and
o 1,259,445 shares for issuance upon exercise of other
outstanding warrants and options held by unaffiliated
third parties. These warrants and options are
exercisable at prices ranging from $0.75 to $4.25 per
share.
SHARES ELIGIBLE FOR FUTURE SALE
Of the 36,023,841 shares of class A common stock outstanding as of
March 31, 1999, approximately 20,583,368 shares are presently freely
transferable without restriction under the Securities Act.
Of the remaining 15,440,473 outstanding shares of class A common stock:
o 10,800,000 are "restricted securities", issued in October
1998, which are covered by this prospectus. These shares will
be freely tradeable without restriction on the effective date
of the registration statement;
o 619,723 shares are "restricted securities" issued between
February 1997 and March 1999; and
o 4,020,750 shares are held by persons who may be deemed to be
our "affiliates". Of these shares, 1,974,500 are "restricted
securities" issued between November 1997 and March 1999. The
remaining 2,046,250 of those shares are "restricted
securities" that were acquired more than two years ago or are
not "restricted securities" because they were acquired in the
market or under a registration statement under the Securities
Act.
"Restricted securities" and unrestricted securities held by our
affiliates may be sold:
(1) under a prospectus under an effective registration
statement under the Securities Act,
(2) in compliance with the exemption provisions of Rule
144, or
(3) under another exemption under the Securities Act.
Rule 144 permits sales of "restricted securities" by any person,
whether or not an affiliate, after one year. At that time, sales can be made
subject to the Rule's volume and other limitations and after two years by
non-affiliates without adhering to Rule 144's volume or other limitations.
Shares of our
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<PAGE>
class A common stock owned by our "affiliates" which are not "restricted
securities" may be sold at any time by complying with Rule 144's volume and
other limitations.
In general, an "affiliate" is a person with the power to manage and
direct our policies. The SEC has stated that, generally, executive officers and
directors of an entity are deemed affiliates of the entity.
In addition, all shares issuable upon the exercise of options under our
stock option plans have been registered under the Securities Act for issuance
and, unless held by our "affiliates", will be freely tradable upon issuance. If
acquired by our "affiliates," shares issued upon the exercise of those options
could be sold at any time by complying with Rule 144's volume and other
limitations unless covered by a registration statement and prospectus that
permits their sale without those limitations. To date, no registration
statements have been filed with respect to the resale of those shares. See
"Dilution."
SELLING STOCKHOLDERS
We issued the shares of class A common stock covered by this prospectus
to the selling stockholders on October 27, 1998 in a private placement
transaction. Under the terms of the private placement, we issued 10,800,000
shares of class A common stock to the selling stockholders at a price of $0.25
per share. At the time of the issuances, the price per share of our class A
common stock was $0.19. We agreed to register the shares issued in the private
placement under the Securities Act at our expense, other than selling discounts
and commissions.
The following table lists information regarding the selling
stockholders' ownership of shares of our class A common stock as of March 31,
1999, and as adjusted to reflect the sale of the shares.
Information concerning the selling stockholders, their pledgees, donees
and other non-sale transferees who may become selling stockholders, may change
from time to time. To the extent the selling stockholders or any of their
representatives advises us of such changes, we will report those changes in a
prospectus supplement to the extent required. See "Plan of Distribution."
<TABLE>
<CAPTION>
Shares of Class A
Common Stock
Beneficially Owned After
Shares of the Offering
Common ------------
Stock Shares of ----------------------------
Owned Prior Common
to the Stock to be
Name Offering Sold Number Percent
----- -------- ---- ------ -------
<S> <C> <C> <C> <C>
Alfred J. Roach................................. 8,735,250 (1) 4,000,000 4,735,250 (1) 12%
Larry Kupferberg................................ 400,000 (2) 400,000 0 (2) *
Donehew Fund Limited Partnership................ 240,000 240,000 0 *
David Biggs..................................... 40,000 40,000 0 *
Robert Donehew.................................. 80,000 80,000 0 *
R. Dave Garwood................................. 40,000 40,000 0 *
The Rachel Beth Heller 1997 Trust Lawrence
Kupferberg, TTEEU/A dtd 7/9/97................ 400,000 400,000 0 *
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<PAGE>
Shares of Class A
Common Stock
Beneficially Owned After
Shares of the Offering
Common ------------
Stock Shares of ----------------------------
Owned Prior Common
to the Stock to be
Name Offering Sold Number Percent
----- -------- ---- ------ -------
The Evan Todd Heller 1997 Trust Lawrence
Kupferberg, TTEE U/A dtd 6/17/97............. 400,000 400,000 0 *
Delaware Charter Guarantee &Trust
Company F/B/O Ronald I. Heller - IRA......... 642,075 (3) 600,000 42,075(3) *
Delaware Charter Guarantee & Trust
Company F/B/O David S. Nagelberg - IRA....... 1,242,075 (4) 1,200,000 42,075 (4) *
Tyler Runnels................................... 292,700 280,000 12,700 *
Kevin Charos & Anthony Charos JTTEN............. 200,000 200,000 0 *
Delaware Charter Guarantee & Trust
Company F/B/O Martin H. Meyerson - IRA....... 100,000 100,000 0 *
Kenneth Koock................................... 120,000 120,000 0 *
Jacqueline Knapp................................ 790,000 790,000 0 *
Janice Halle-Nesses............................. 790,000 790,000 0 *
John Davies..................................... 160,000 160,000 0 *
Invest, Inc..................................... 160,000 160,000 0 *
Peter Janssen................................... 800,000 800,000 0 *
------- ------- -----------------
Total 15,632,100 10,800,000 4,832,100
</TABLE>
* Less than 1%
(1) Includes 3,000,000 shares of class A common stock issuable upon
conversion of currently outstanding class B common stock and 1,160,000
shares of class A common stock issuable upon exercise of presently
exercisable options.
(2) Does not include 400,000 shares of class A common stock beneficially
owned by the Evan Todd Heller 1997 Trust and 400,000 shares of class A
common stock beneficially owned by the Rachel Beth Heller 1997 Trust,
which are listed separately below. Mr. Kupferberg is the trustee of
those trusts.
- 11 -
<PAGE>
(3) Includes 42,075 shares of class A common stock issuable upon exercise
of presently exercisable warrants beneficially owned by Mr. Heller.
Those warrants are exercisable at $.075 per share.
(4) Includes 42,075 shares of class A common stock issuable upon exercise
of presently exercisable warrants beneficially owned by Mr. Nagelberg.
Those warrants are exercisable at $.075 per share.
Each of Messrs. Heller, Nagelberg, Koock and Meyerson are employees of
M.H. Meyerson, one of our financial advisors since August 1998.
PLAN OF DISTRIBUTION
The selling stockholders and their pledgees, donees, transferees and
other subsequent owners, may offer their shares at various times in one or more
of the following transactions:
o in the over-the-counter market; or
o in privately negotiated transactions
at prevailing market prices at the time of sale, at prices related to those
prevailing market prices, at negotiated prices or at fixed prices.
The selling stockholders may also sell the shares under Rule 144
instead of under this prospectus, if Rule 144 is available for those sales.
The transactions in the shares covered by this prospectus may be
effected by one or more of the following methods:
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o purchases by a broker or dealer as principal, and the resale
by that broker or dealer for its account under this
prospectus, including resale to another broker or dealer;
o block trades in which the broker or dealer will attempt to
sell the shares as agent but may position and resell a portion
of the block as principal in order to facilitate the
transaction; or
o negotiated transactions between selling stockholders and
purchasers without a broker or dealer.
The selling stockholders and any broker-dealers or other persons acting
on the behalf of parties that participate in the distribution of the shares may
be deemed to be underwriters. Any commissions or profits they receive on the
resale of the shares may be deemed to be underwriting discounts and commissions
under the Securities Act.
As of the date of this prospectus, we are not aware of any agreement,
arrangement or understanding between any broker or dealer and any of the selling
stockholders with respect to the offer or sale of the shares under this
prospectus.
We have advised the selling stockholders that during the time each is
engaged in distributing shares covered by this prospectus, each must comply with
the requirements of the Securities Act and Rule 10b-5 and Regulation M under the
Exchange Act. Under those rules and regulations, they:
o may not engage in any stabilization activity in connection
with our securities;
- 12 -
<PAGE>
o must furnish each broker which offers class A common stock
covered by this prospectus with the number of copies of this
prospectus which are required by each broker; and
o may not bid for or purchase any of our securities or attempt
to induce any person to purchase any of our securities other
than as permitted under the Exchange Act.
In the Purchase and Investment Agreements we executed in connection
with the October 1998 private placement we agreed to indemnify and hold harmless
each selling stockholder against liabilities under the Securities Act, which may
be based upon, among other things, any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of a material
fact, unless made or omitted in reliance upon written information provided to us
by that selling stockholder. We have agreed to bear the expenses incident to the
registration of the shares, other than selling discounts and commissions.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law allows companies to
indemnify their directors and officers against expenses, judgments, fines and
amounts paid in settlement under the conditions and limitations described in the
law. Our certificate of incorporation authorizes us to indemnify our officers,
directors and other agent to the fullest extent permitted under Delaware law.
Our certificate of incorporation provides that a director is not
personally liable for monetary damages to us or our stockholders for breach of
his or her fiduciary duties as a director. A director will be held liable for a
breach of his or her duty of loyalty to us or our stockholders, his or her
intentional misconduct or willful violation of law, actions or in actions not in
good faith, an unlawful stock purchase or payment of a dividend under Delaware
law, or transactions from which the director derives an improper personal
benefit. This limitation of liability does not affect the availability of
equitable remedies against the director including injunctive relief or
rescission.
We have purchased a directors and officers liability and reimbursement
policy that covers liabilities of our directors and officers arising out of
claims based upon acts or omissions in their capacities as directors and
officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have 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.
- 13 -
<PAGE>
LEGAL MATTERS
The validity of the shares of class A common stock being offered will be
passed upon for ABS by Parker Chapin Flattau & Klimpl, LLP.
EXPERTS
The audited consolidated financial statements, including the related
notes to those statements, incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
to those statements. Those financial statements and report are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
- 14 -
<PAGE>
================================================================================
We have not authorized any dealer, 10,800,000 Shares
salesperson or any other person to give
any information or to represent anything
not contained in this prospectus. You
must not rely on any unauthorized American Biogenetic Sciences, Inc.
information. This prospectus does not
offer to sell or buy any shares in any
jurisdiction where it is unlawful. The
information in this prospectus is Class A Common Stock
current as of _____________, 1999.
--------------------- --------------------
TABLE OF CONTENTS PROSPECTUS
--------------------- ---------------------
Page
----
Prospectus Summary....................2
Risk Factors..........................3
Information Regarding
Forward-Looking Statements........7
Where You Can Find More
Information About Us..............7
Use of Proceeds.......................8
Dilution..............................8 ________ __, 1999
Shares Eligible for Future Sale.......9
Selling Stockholders ................10
Plan of Distribution ................12
Indemnification for Securities
Act Liabilities...................13
Legal Matters........................14
Experts .............................14
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Listed below is an estimate of the fees and expenses payable in connection
with the proposed offering of the shares which will be paid by ABS.
SEC Registration Fee.....................................$ 2,580.17
Accounting Fees and Expenses.............................$ 3,500.00
Legal Fees and Expenses..................................$ 7,500.00
Miscellaneous............................................$ 1,419.83
----------
TOTAL...............................................$15,000.00
Item 15. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in general, that a corporation incorporated under the
laws of the State of Delaware, such as ABS, may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, other than a derivative action by or in
the right of the corporation, by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another enterprise, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by that person in connection with
that action, suit or proceeding if that person acted in good faith and in a
manner that person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that person's conduct was
unlawful. In the case of a derivative action, a Delaware corporation may
indemnify that person against expenses actually and reasonably incurred by that
person in connection with the defense or settlement of that action or suit if
that person acted in good faith and in a manner that person reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which that person shall have been adjudged to be liable to the corporation
unless and only to the extent that the court determines that person is fairly
and reasonably entitled to indemnity for those expenses.
Article VII of the registrant's By-laws provides for indemnification of
directors, officers, employees and agents of ABS to the fullest extent permitted
under Delaware law. In addition, Article TENTH of the registrant's Restated
Certificate of Incorporation provides, in general, that no director of the
registrant shall be personally liable to the registrant or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL (which provides that under certain circumstances,
directors may be jointly and severally liable for willful or negligent
violations of the DGCL provisions regarding the payment of dividends or stock
repurchases or redemptions), as the same exists or hereafter may be amended, or
(iv) for any transaction from which the director derived an improper personal
benefit.
Under the Purchase and Investment Agreements between ABS and each
selling stockholder, ABS has agreed to indemnify and hold harmless the selling
stockholder, its officers, directors and partners and each person controlling
the selling stockholder (within the meaning of the Securities Act) and each
underwriter, if any, and each person who so controls any underwriter against
all, claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based upon any untrue
II-2
<PAGE>
statement (or alleged untrue statement) of a material fact contained in the
registration statement (including any prospectus or other document incident to
that registration or related qualification or compliance with state securities
laws) or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading or any violation by ABS of the Securities Act or any state
securities law, relating to any action or inaction required by ABS in connection
with that registration, qualification or compliance, and to reimburse each
indemnified person for any legal and other expenses reasonably incurred in
connection with investigating and defending any claim, loss, damages,
liabilities or action; provided that ABS will not be liable in that case to the
extent that any claim, loss, damage, liabilities or expense arises out of or is
based on any untrue statement or omission (or alleged untrue statement or
omission) made in reliance upon and in conformity with written information
furnished to ABS by any indemnified person stated to be specifically for use in
the registration statement (as to which the selling stockholders have agreed to
indemnify ABS, its officers and directors and each person who controls ABS or
the Underwriter).
ABS has purchased a Directors and Officers Liability and Reimbursement
policy that covers liabilities of directors and officers of ABS arising out of
claims based upon acts or omissions in their capacities as directors and
officers.
II-3
<PAGE>
Item 16. Exhibits
Exhibit
Number
- ------
*3.1 Restated Certificate of Incorporation of the Company, as filed
with the Secretary of State of the State of Delaware on July 30,
1996 (filed as Exhibit 4.01 to the Company's Registration
Statement on Form S-8, File No. 333-09473).
*3.2 Amended and Restated By-Laws of the Company (filed as Exhibit 4.02
to the Company's Registration Statement on Form S-8, File No.
333-09473).
*5 Opinion of Parker Chapin Flattau & Klimpl, LLP to the legality of
the Class A common stock being offered. Incorporated by reference
to Exhibit 5 to the original registration statement, file number
333-69735, filed with the Commission on December 24, 1998.
23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Parker Chapin Flattau & Klimpl, LLP (contained in
Exhibit 5). Incorporated by reference to Exhibit 23.2 to the
initial filing of the registration statement, file number
333-69735, filed with the Commission on December 24, 1998.
24 Power of Attorney (contained on Signature Page of this Amendment
No. 1 to the Registration Statement).
*99 Form of Purchase and Investment Agreement executed by the Company
and each of the selling stockholders on October 27, 1998.
Incorporated by reference to Exhibit 99 to the original
registration statement, file number 333-69735, filed with the
Commission on December 24, 1998.
- -----------------------
* Not filed herewith. In accordance with Rule 411 promulgated under the
Securities Act of 1933, as amended, reference is made to the documents
previously filed with the Commission, which are incorporated by
reference herein.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
II-4
<PAGE>
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information included in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in this Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by ABS under Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each 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 the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant undertakes that, for purposes of
determining any liability under the Securities Act, each filing of ABS' annual
report under Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of ABS under its By-Laws, or otherwise, ABS 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 ABS of expenses incurred or paid by a director, officer or
controlling person of ABS 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, ABS 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-5
<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
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Copiague, State of New
York, on the 7th day of April, 1999.
AMERICAN BIOGENETIC SCIENCES, INC.
By: /s/ Alfred J. Roach
-------------------------------------------
Alfred J. Roach, Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Alfred J. Roach, Josef C. Schoell
and Timothy J. Roach and each of them with power of substitution, as his
attorney-in-fact, in all capacities, to sign any amendments to this Amendment
No. 1 to the Registration Statement (including post-effective amendments) and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-facts or their substitutes may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities indicated on the 7th day of April, 1999.
Signature Title
--------- -----
/s/ Alfred J. Roach
- -----------------------------
Alfred J. Roach Chairman of the Board, Director
/s/ John S. North
- -----------------------------
John S. North President, Chief Executive Officer, Director
/s/ Josef C. Schoell
- ----------------------------- Vice President-Finance (Principal Financial
Josef C. Schoell and Accounting Officer)
*
- -----------------------------
Gustav Victor Rudolph Born Director
*
- -----------------------------
Ellena M. Byrne Director
/s/ Glenna M. Crooks
- -----------------------------
Glenna M. Crooks Director
*
- -----------------------------
Joseph C. Hogan Director
*
- -----------------------------
Timothy J. Roach Director
*
- -----------------------------
William G. Sharwell Director
*By: /s/ Josef C. Schoell
- -----------------------------
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- ------
*3.1 Restated Certificate of Incorporation of the Company, as filed
with the Secretary of State of the State of Delaware on July 30,
1996 (filed as Exhibit 4.01 to the Company's Registration
Statement on Form S-8, File No. 333-09473).
*3.2 Amended and Restated By-Laws of the Company (filed as Exhibit 4.02
to the Company's Registration Statement on Form S-8, File No.
333-09473).
*5 Opinion of Parker Chapin Flattau & Klimpl, LLP to the legality of
the Class A common stock being offered. Incorporated by reference
to Exhibit 5 to the initial filing of the registration statement,
file number 333-69735, filed with the Commission on December 24,
1998.
23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Parker Chapin Flattau & Klimpl, LLP (contained in
Exhibit 5). Incorporated by reference to Exhibit 23.2 to the
original registration statement, file number 333-69735, filed with
the Commission on December 24, 1998.
24 Power of Attorney (contained on Signature Page of this Amendment
No. 1 to the Registration Statement).
*99 Form of Purchase and Investment Agreement executed by the Company
and each of the selling stockholders on October 27, 1998.
Incorporated by reference to Exhibit 99 to the original
registration statement, file number 333-69735, filed with the
Commission on December 24, 1998.
- -----------------------
* Not filed herewith. In accordance with Rule 411 promulgated pursuant to
the Securities Act of 1933, as amended, reference is made to the
documents previously filed with the Commission, which are incorporated
by reference herein.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated March 22, 1999,
included in American Biogenetic Sciences, Inc.'s Form 10-K for the year ended
December 31, 1998, and to all references to our firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
Melville, New York
April 9, 1999
