As filed with the Securities and Exchange Commission on March 24, 1998.
Registration No. 333-46333
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE EFFECTIVE AMENDMENT NO. 1
FORM S-3/A-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
THE FEMALE HEALTH COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Wisconsin
(State or Other 39-1144397
Jurisdiction of (I.R.S. Employer
Incorporation or Identification No.)
Organization)
919 North Michigan Avenue
Suite 2208
Chicago, Illinois 60611
(312) 280-2281
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
O.B. Parrish, Chairman of the Board and
Chief Executive Officer
919 North Michigan Avenue
Suite 2208
Chicago, Illinois 60611
(312) 280-2281
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, WI 53202
Attn: James M. Bedore, Esq.<PAGE>
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. ___
CALCULATION OF REGISTRATION FEE
_____________________________________________________________________________
Proposed Proposed
Maximum Maximum
Aggregate Aggregate Amount of
Title of Shares Amount to be Price Offering Registration
to be Registered Registered (1) Per Share(2) Price(2) Fee (1) (2)
_____________________________________________________________________________
Common Stock,
$.01 Par Value 1,239,727 shs. $3.00 $3,719,181 $1,120.42
_____________________________________________________________________________
(1) The Registrant registered 1,239,247 shares on the original filing of this
Registration Statement and paid the $1,120 filing fee associated with such
shares at that time. This amendment registers an additional 480 shares. The
filing fee for these additional 480 shares is $0.42 which is being paid
herewith.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act. Represents the average of the
high and low sales prices for the Company's Common Stock on the American Stock
Exchange on March 18, 1998.
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>
PRELIMINARY PROSPECTUS DATED March 24, 1998
SUBJECT TO COMPLETION
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale will be unlawful prior
to registration or qualification under the securities laws of any such state.
1,239,727 Shares
THE FEMALE HEALTH COMPANY
COMMON STOCK
The shares offered hereby (the "Shares") consist of 1,239,727 shares of
common stock, $.01 par value per share (the "Common Stock") of The Female
Health Company, a Wisconsin corporation ("FHC" or the "Company") which are
owned, or will become owned upon the exercise or conversion of convertible
securities owned, by the selling shareholders listed herein under "Selling
Shareholders" (the "Selling Shareholders"). The Shares may be offered from
time to time by the Selling Shareholders. All expenses of the registration
incurred in connection herewith are being borne by the Company, but all other
selling expenses incurred by the Selling Shareholders, including any brokers'
or underwriters' fees or commissions, will be borne by the Selling
Shareholders. The Company has agreed to indemnify the Selling Shareholders
against certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"). The Company will not receive any
proceeds from the sale of the Shares by the Selling Shareholders. The weighted
average purchase price (which includes the fair market value as of the date of
issuance for stock issued to consultants and advisors) of all of the currently
outstanding common stock to be resold by the Selling Shareholders hereunder is
$2.93 per share. Of the 1,239,727 shares being registered for resale
hereunder, 1,123,927 of which are shares which may be issued to the Selling
Shareholders upon exercise or conversion of other securities. Upon the
effective date of the Registration Statement to which this Prospectus relates,
a total of 1,073,927 of such shares will be issued or issuable pursuant to the
terms of such convertible securities. The weighted average purchase price for
such 1,073,927 shares of common stock then issued or issuable is currently
approximately $2.63 per share.
The Selling Shareholders, whether pledgees, donees, transferees or other
successors, may sell the Shares from time to time in any of three ways:
(i) through broker-dealers; (ii) through agents; or (iii) directly to one or
more purchasers. The distribution of the Shares may be affected from time to
time in one or more transactions (which may involve crosses or block
transactions) (a) on the American Stock Exchange; or (b) in transactions
otherwise than on the American Stock Exchange. Any of such transactions may be
affected at market prices prevailing at the time of sale, at prices related to
such prevailing market prices, at negotiated prices or at fixed prices. The
Selling Shareholders may effect such transactions by selling the Shares to or
through broker-dealers and such broker-dealers may receive compensation in the<PAGE>
form of discounts, concessions or commissions from the Selling Shareholders
and/or commissions from purchasers of the Shares for whom they may act as agent
(which discounts, concessions or commissions will not exceed those customary in
the types of transactions involved). The Selling Shareholders and any
broker-dealers or agents that participate in the distribution of the Shares
might be deemed to be underwriters and any profit on the sale of the Shares by
them and any discounts, commissions or concessions received by any such
broker-dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act.
The Common Stock is currently listed on the American Stock Exchange under
the symbol "FHC." On March 16, 1998, the last reported sale price of the
Common Stock on the American Stock Exchange was $3.00 per share.
The Shares being offered hereby the Selling Shareholders have not been
registered for sale under the securities laws of any state or jurisdiction as
of the date of this Prospectus. Brokers or dealers affecting transactions in
the Shares shall confirm their registration thereof under the securities law of
the state in which such transactions occur, or the existence of an exemption
from registration.
THERE ARE CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BEFORE
PURCHASING SHARES IN THIS OFFERING. SEE "RISK FACTORS" ON PAGE 9.
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND <PAGE>
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is March 24, 1998.
<PAGE>
AVAILABLE INFORMATION
This Prospectus, which constitutes a part of a Registration Statement on
Form S-3 (the "Registration Statement") filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities Act,
omits certain of the information set forth in the Registration Statement.
Reference is hereby made to the Registration Statement and to the exhibits
thereto for further information with respect to the Company and the securities
offered hereby. Copies of the Registration Statement and the exhibits thereto
are on file at the offices of the Commission and may be obtained upon payment
of the prescribed fee or may be examined without charge at the public reference
facilities of the Commission described below.
Statements contained herein and concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by references to the copy of the applicable document filed with the
Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the following
regional offices of the Commission: Midwest Regional Office, Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661, and Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, NY 10048. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, all reports filed by the Company via the Commission's
Electronic Data Gathering and Retrieval System can be obtained from the
Commission's Internet Website located at http://www.sec.gov. The Company's
Common Stock is listed on the American Stock Exchange and reports and other
information concerning the Company can also be inspected at such exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portion of documents filed by the Company with
the Commission
(File No. 0-18849) are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1997.
(b) The Company's quarterly report on Form 10-QSB for the quarter ended
December 31, 1997.
(c) The description of the Company's Common Stock which is contained in
the Company's Registration Statement on Form 8-A filed September 28, 1990 under
the Exchange Act.
All reports and other documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the<PAGE>
filing of such reports and documents. Any statement contained in a document,
all or a portion of which is incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained or incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents
that this Prospectus incorporates). Written or oral request for copies should
be directed to William R. Gargiulo, Jr., Secretary, The Female Health Company,
919 North Michigan Avenue, Suite 2208, Chicago, Illinois 60611, (312-280-2281).
CAUTIONARY STATEMENT REGARDING
FORWARD LOOKING STATEMENTS
Certain statements included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended September 30, 1997, which are not statements of
historical fact, are intended to be, and are hereby identified as,
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company cautions readers that
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievement expressed or implied by such forward-looking statements. Such
factors include, among others, the items identified in such documents or under
the section of this document entitled "Risk Factors."<PAGE>
THE COMPANY
The Company was incorporated in Wisconsin in 1971. The Company is a
global start-up company. Its business consists of the manufacture and sale of
the female condom, known in the United States as REALITYR and under various
other trade names in foreign countries. The Company was established in its
current form as The Female Health Company on February 1, 1996.
Over the past several years, the Company has expended significant time and
resources in the development of the female condom and securing FDA approval to
market the female condom in the United States. During this time, the Company
also operated its original business of marketing specialty chemical and branded
consumer products for the leisure time, household and institutional health care
markets under the name Wisconsin Pharmacal. After considering various
alternatives, on March 10, 1995, the Board of Directors selected the female
condom as the central focus for the Company's strategic direction. This
resulted in a strategy to sell WPC Holdings ("Holdings") and change the
Company's name to The Female Health Company. After negotiations with the two
potential purchasers, the Company executed a purchase agreement in June 1995
agreeing to sell Holdings to WPC Acquisition Corporation, subject to approval
of the Company's shareholders (the "Sale"). At a special meeting of the
Company's shareholders held on January 18, 1996, the shareholders approved the
Sale and on January 29, 1996, the Company effectuated the Sale.
While the Company was in the process of preparing a proxy statement to
request that the Company's shareholders approve the Sale, the Company became
aware that the sole stockholder of Chartex Resources Limited (which, together
with its wholly owned subsidiary, Chartex International, Plc, is referred to
herein collectively as "Chartex"), the manufacturer and owner of certain
worldwide rights to, and the Company's sole supplier of, the female condom, was
considering various alternatives for Chartex's future. Chartex had been funded
primarily by a nonprofit Danish foundation. The foundation, as a nonprofit
group, was not in a position to commercialize the female condom once it was
fully developed. Because of this and the perceived benefits of an acquisition
of Chartex, the Company negotiated with the sole stockholder to acquire Chartex
and, on November 20, 1995, the Company executed an acquisition agreement to
purchase the outstanding stock of Chartex (the "Chartex Acquisition"). The
Company effectuated the Chartex Acquisition on February 1, 1996. These
transactions created The Female Health Company as a global start-up business.
As a result of the Sale and the Chartex Acquisition, the Company's sole
business consists of the manufacture, marketing and sale of the female condom.
The Company owns certain global intellectual property rights for the female
condom, including patents in the United States, the European Union, Japan and
various other countries, regulatory approvals in certain countries, including a
Pre-Market Approval ("PMA") granted by the United States Food and Drug
Administration approving and permitting marketing of the female condom in the
United States (which PMA is required to market the product in the United States
since the FDA determined that the product was a Class III medical device
regulated by the FDA), and CE mark in the European Union (representing that the
product, as a medical device, has been approved by the European Union ("EU")
for marketing in the member countries of the EU) and certain proprietary
manufacturing technology. In addition, the Company leases a state of the art
manufacturing facility in London, England capable of producing 60 million
female condoms per year. The facility has been inspected and approved by the
FDA and the European Union.
<PAGE>
The Company believes the female condom has global potential to help
prevent sexually transmitted diseases ("STDs") and unintended pregnancy. The
World Health Organization ("WHO") estimates that worldwide there are
333 million new cases of STDs each year and the American Journal of Obstetrics
and Gynecology (1993) noted that half of all pregnancies in women between the
ages of 15 and 44 in the U.S. alone are unintended. Prevention of STDs and
unintended pregnancies can significantly lower health care costs through the
avoidance of expensive treatment for STDs and the expenses associated with
unintended pregnancies. For example, a recent study by the National Academy of
Science indicated that in the U.S. $17 billion is spent annually on STDs.
However, for every $43 spent on treatment, only $1 is spent on prevention.
The female condom is made of polyurethane which is approximately 40%
stronger than latex, of which most male condoms are made. It is thin,
comfortable and, unlike the male condom, can be put in place prior to sexual
arousal. As a result, it is less disruptive to the natural flow of the sex
act. To date, there have been no reported allergic reactions to the female
condom. It is estimated about 7% of all individuals are allergic to latex.
The female condom is effective in preventing STDs. The Joint United
Nations Global Programme on HIV/AIDS ("UNAIDS") supported a comprehensive study
in which one group was provided the male condom as an option, and a second
group was provided with the male condom and female condom as options. In the
group where the female condom was made available as an option versus the male
condom only group, there was a 34% reduction in the incidence of STDs and a 25%
reduction in unprotected sex acts. These results were released by UNAIDS in
Geneva, Switzerland on July 14, 1997.
The Company is focusing its efforts on the global public sector, the
United States, Japan, the European Union and other key markets. The Company's
strategy is to position itself as a manufacturer and capitalize on its
proprietary position by selling through global public sector and
country-specific private sector partners with established female/consumer
marketing organizations with sufficient resources to penetrate the market.
Existing global public sector and country-specific partners purchase the female
condom ex-factory and are responsible for all marketing expenses.
UNAIDS and the Company have entered into a multi-year global public sector
agreement for FHC to provide the female condom to developing countries at a
special reduced price based on worldwide volume.
In the United States, the Company continues the educational-based thrust
of its marketing in the private sector, focusing on advertisement and promotion
directed toward young adults and special programs towards city, county and
state public health agencies.
In Japan, the Company has entered into a relationship with Taiho
Pharmaceutical Co., Inc. ("Taiho"), a $1 billion division of a $5 billion
Japanese health care company. Taiho will market the female condom in Japan
once it receives Japanese regulatory approval. In October 1997, Taiho submitted
an application to Koseisho (the Japanese equivalent of the United States Food
and Drug Administration) seeking approval to market the female condom in Japan.
The application is currently under review, with Taiho expecting to receive
approval to launch the female condom in Japan in 1998. The Company's partner in
Japan has invested more than $2 million to date in pre-launch development
expenses. These expenses include costs for extensive contraceptive clinical
studies by outside investigators throughout Japan. The results of these<PAGE>
studies were recently published in the July 1997 issue of "The World of
Obstetrics and Gynecology," a leading Japanese medical journal. The clinical
investigator stated that "the results from the study show that the female
condom is acceptable to Japanese couples, is efficacious and can be used
safely. It is judged to be a highly useful medical device."
The Company received approval by the European Union in January 1997 and is
entitled to use the CE mark. This means the female condom may be marketed in
any member country without country-specific approval. The Company is currently
in discussions with potential European partners.
In addition to Japan, the Company currently has partners in South Korea,
Taiwan, Canada, Brazil and Holland. The Company is also in discussions with
potential partners for Russia, the European Union, The People's Republic of
China, India and other countries.
The Company's principal executive offices are located at 919 North
Michigan Avenue, Suite 2208, Chicago, Illinois, 60611, and its telephone number
is 312-280-2281.<PAGE>
RISK FACTORS
Prospective investors should carefully consider the risk factors set forth
below as well as the other information contained in this Prospectus.
1. Additional Capital Required; Potential Dilution. Sales of the
Company's sole product, the female condom, are currently insufficient to cover
fixed manufacturing overhead, advertising, general and administrative costs.
Consequently, management recognizes that the Company must secure additional
capital to fund operating losses. At this stage in the Company's development,
the amount and timing of the Company's future capital requirements cannot be
precisely determined. Management's current plans require that the Company
raise additional capital during fiscal 1998, either through the sale of debt or
equity securities or the sale of Company assets or rights, or by discounting
receivables and/or letters of credit or by other means available to the
Company. However, factors affecting the Company's capital requirements,
including new market launches by the Company's international partners and sales
orders from existing customers, are outside the control of management. Some of
these factors may increase the amount of capital required or accelerate the
date when additional capital will be required or both. No assurance can be
given that the Company will be successful in raising additional capital.
Further, there can be no assurance that such amount, if raised, will be
sufficient to operate the Company until sales of the female condom generate
sufficient revenues to fund operations. In addition, any such funds raised may
be costly to the Company and/or dilutive to existing shareholders.
2. Reliance on Product Line. The Company expects to derive its future
revenues from sales of the female condom, its sole current product. The
product is in the early stages of its commercialization. Accordingly, the
ultimate level of consumer acceptance of the female condom, which includes the
consumer's decision to purchase the female condom versus other available
products, is not yet known.
The Company's current level of expenditures has been established to
support a higher level of revenues associated with the female condom. For the
Company to begin generating cash from operations, sales of the female condom
will have to increase approximately four to five times the current annualized
level ($250,000 per month). If sales do not increase from current levels to
this degree or if the cost to obtain this level of sales is prohibitive, the
Company will continue to incur operating losses and, ultimately, the Company's
viability may be in jeopardy.
3. Continued Listing on the American Stock Exchange. The Company's
common stock is listed for trading on the American Stock Exchange (the
"Exchange"). The Constitution of the Exchange provides that its Board of
Governors may, in its discretion, at any time, remove any security from
listing. Although the determination as to whether a security warrants
delisting is not based on any precise mathematical formula, the Exchange has
adopted a number of guidelines which it will consider when deciding whether to
delist an Exchange-traded security. Certain of these guidelines address the
issuer's financial condition. For example, the Exchange will consider
delisting the securities of an issuer which has stockholders' equity of less
than $2 million if the Company has sustained losses from continuing operations
and/or net losses in two of its three most recent fiscal years (which the
Company has) or which has stockholders' equity of less than $4 million if the
Company has sustained losses from continuing operations and/or net losses in
three of its four most recent fiscal years (which the Company has). The<PAGE>
Exchange will also consider delisting the stock of a company which has incurred
net losses in its five most recent fiscal years (which the Company has). As of
December 31, 1997, the Company had stockholders' equity of approximately $4.5
million. On February 5, 1998, the Company received a letter from the Exchange
noting that the Company has fallen below certain of the Exchange's continued
listing guidelines and indicating that the Exchange will review the Company's
listing eligibility. The letter specifically noted that the Company has fallen
below the Exchange's continued listing guidelines triggered by both (a) five
years of losses and (b) equity below $4 million since the Company had losses in
three of its four most recent fiscal years. There can be no assurance that the
Exchange will permit the continued listing of the Company's common stock on the
Exchange. If the Exchange delists trading of the Company's common stock,
investors would likely find it more difficult to obtain accurate quotations of
the price of the Company's common stock and to sell the common stock on the
open market.
4. History of Losses; Sufficiency of Capital; Independent Auditor's
Going Concern Opinion. The Company incurred a loss of $6.3 million for the
year ended September 30, 1997 and a loss of $1.1 million for the quarter ended
December 31, 1997. As of December 31, 1997, the Company had an accumulated
deficit of $38.1 million. At December 31, 1997, the Company had working
capital of $2.4 million and stockholders' equity of $4.5 million. Historically,
the Company has incurred cash operating losses relating to expenses incurred to
develop, manufacture and promote the female condom. Consistent with the
availability of resources, the Company expects to incur substantial
expenditures in fiscal 1998 in an effort to support its manufacturing
operations and increase awareness and distribution of the female condom around
the globe. Until internally generated funds are sufficient to meet cash
requirements, the Company will remain dependent upon its ability to generate
sufficient capital from outside sources. There can be no assurance that the
Company will achieve a profitable level of operations in the near term or at
all.
The independent auditor's report on the Company's consolidated financial
statements for the years ended September 30, 1997 and 1996 was qualified as to
the Company's ability to continue as a going concern. While many factors are
considered by the auditor in reaching their opinion, the primary reason for the
going concern opinion on the Company's financial statements was due to
continued deficit cash flows from operations, driven largely by continued
operating losses. For the year ended September 30, 1997, the Company's net
cash used in operations was $5.0 million. For the three months ended December
31, 1997, the net cash used in operations totaled $0.9 million.
In the near term, the Company's management expects operating costs to continue
to exceed funds generated from operations due principally to the Company's
fixed manufacturing costs relative to current production volumes and the
ongoing need to commercialize the female condom around the world. While
management believes that revenue from sales of the female condom will
eventually exceed operating costs and that ultimately operations will generate
sufficient funds to meet capital requirements, there can be no assurance that
such level of operations will be achieved in the near term. Management
believes that the Company must first achieve, on a continuing basis, positive
cash flow from operations and net operating profits in order for the Company's
independent auditor's to reevaluate the going concern opinion.
5. Competition. The Company believes that there is currently no other
female condom sold in the world. The Company is aware of at least one other<PAGE>
party that was developing an intravaginal pouch which could compete with the
female condom. This party has obtained a patent on its device. Chartex
instituted a suit for patent infringement in December, 1990 against this other
company, its vice chairman and the alleged inventor of the competing
intravaginal pouch. The defendants brought a summary judgment motion alleging
that, regardless of the infringement or noninfringement of the Chartex patents
by the competing product, the defendants were entitled to exemption from
infringement litigation under 35 U.S.C. S 271(e)(1). This statute exempts
devices from patent infringement if the making or using of those devices is
"solely for uses reasonably related to the development and submission of
information" to the FDA. The summary judgment was granted based upon a review
of the statutory section expressed in a Northern District of California
decision which is pending under appeal to the U.S. Court of Appeals for the
Federal Circuit. As a result, the other company would have to market the
product before Chartex could pursue a suit for patent infringement. The
Company is unaware of any current development activity or attempt to secure FDA
approval. The Company believes the other company has discontinued development
of the product.
Other parties may also seek to develop an intravaginal pouch which
does not infringe Chartex's patents. These products, if developed, could be
distributed by companies with greater financial resources and customer contacts
than the Company.
There are a number of other products currently marketed which have a
higher degree of accepted efficacy for preventing conception. These products
include birth control pills, Norplant and Depo Provera. However, other than
the female condom, only the male condom is generally recognized as being
efficacious in preventing unintended pregnancies and STDs. Companies
manufacturing these products are generally larger than the Company and have
access to greater resources than the Company. In addition, the female condom
is generally sold at the retail level at prices comparatively greater than the
price of the male condom. Accordingly, the female condom will not be able to
compete with the male condom solely on the basis of price.
6. Future Sales of Common Stock. Sales of the Company's Common Stock in
the public market or the perception that such sales may occur, could adversely
affect the market price of the Company's Common Stock. As of March 4, 1998,
the Company had outstanding 9,556,163 shares of common stock and 1,409,927
shares of convertible preferred stock which are convertible into an equal
number of shares of common stock. Of these shares, 8,693,652 shares currently
outstanding are eligible for resale in the public market by persons other than
"affiliates" of the Company (generally, a person who has a control relationship
with the Company) without regard to any resale limitations under Rule 144 of
the Securities Act. Further, the Company has issued options and warrants to
purchase an aggregate of 2,411,780 shares of Common Stock, approximately
1,337,047 of which are currently exercisable. The Company has filed or intends
to file registration statements under the Securities Act to register the sale
of the shares underlying these options and warrants and, accordingly, any
shares received upon exercise of these options or warrants will also be freely
tradable without restriction by persons other than affiliates.
7. Volatility of Stock Price. The market price of the Company's Common
Stock has been and may continue to be affected by quarter-to-quarter variations
in the Company's operating results, announcements by the Company's competitors
and other factors. In addition, the stock market has from time to time
experienced extreme price and volume fluctuations, particularly among emerging<PAGE>
growth company stocks, which have often been unrelated to the operating
performance of particular companies. Factors not directly related to the
Company's performance, such as governmental regulation or negative industry
reports, may also have a significant adverse impact on the market price of the
Company's Common Stock.
8. Dependence on Key Personnel. The Company's success will depend in
large part upon its ability to attract and retain highly qualified personnel.
The Company is particularly dependent upon the services of O.B. Parrish, its
Chairman of the Board and Chief Executive Officer and Mary Ann Leeper, Ph.D.,
its President and Chief Operating Officer. The Company has entered into an
employment agreement with Dr. Leeper. The loss of the services of these or
certain other key individuals, or the failure of the Company to attract and
retain other skilled personnel, could have a material adverse impact on the
Company. The Company has not purchased key man life insurance insuring the
lives of any of its executive officers of key employees.
9. Penny Stock Rules. The Securities Enforcement and Penny Stock reform
Act of 1990 requires additional disclosure in connection with trades in any
stock defined as a "penny stock." The Securities and Exchange Commission's
regulations generally define a penny stock to be an equity security that has a
price of less than $5.00 per share, subject to certain exceptions (including
equity securities listed on the American Stock Exchange) or issued by an issuer
that has (a) net tangible assets in excess of $2 million, if such issuer has
been in continuous operation for at least three years, (b) net tangible assets
in excess of $5 million, if such issuer has been in continuous operation for
less than three years, or (c) average annual revenues of at last $6 million for
the last three years). Unless an exception is available, the regulations
require the delivery, prior to any transaction involving a penny stock, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith.
In addition, if the Company's common stock falls within the definition of
"penny stock," trading in the Company's securities would be covered by Rule
15g-9 promulgated under the Securities Exchange Act of 1934. Under this rule,
generally broker/dealers who recommend such securities to persons other than
established customers and certain accredited investors must make a special
written suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale of such securities.
Although the Company believes that its securities will, as of the date of
this prospectus, be outside the definitional scope of a penny stock, as they
will be listed on the American Stock Exchange, in the event the Common Stock
were subsequently to become characterized as a penny stock, the market
liquidity for the Company's securities could be adversely affected. In such an
event, the regulations on penny stocks could limit the ability of
broker/dealers to sell the Company's securities and thus the ability of
purchasers in this offering to sell their securities in the secondary market.
10. Contingent Liabilities. The Company has entered into an exclusive
North American licensing agreement with the owner of the "reality" trademark
and a royalty agreement with a nonprofit organization that previously conducted
a major study to assess the safety and efficacy of the female condom. The
Company's fiscal 1997 trademark royalty expense was approximately $5,700.
During 1997, the Company did not achieve the minimum level of sales necessary
to incur a royalty expense to the nonprofit organization.<PAGE>
In conjunction with the Company's 1995 sale of its wholly-owned
subsidiary, the Company remains contingently liable under a preexisting
employment agreement and a facilities lease assumed by the buyer. In the event
that the buyer defaults in making payments under these agreements, the Company
would be obligated to make the payments. At September 30, 1997, the total
future payments of these contingent liabilities was $3.1 million for the
facilities lease and $0.6 million for the employment agreement.
11. Product Liability. The nature of the Company's product may expose
the Company to significant product liability risks. The Company maintains
product liability insurance with coverage limits of $5 million per year on the
female condom. There can be no assurance that the Company will be able to
maintain such insurance on acceptable terms or that such insurance will provide
adequate coverage against product liability claims. While no product liability
claims on the female condom have been brought against the Company to date, a
successful product liability claim against the Company in excess of the
Company's insurance coverage could have a material adverse effect on the
Company.
12. Foreign Currency and Market Risk. The Company manufactures the
female condom in a facility located in London, England. Further, a material
portion of the Company's future sales are likely to be in foreign markets.
Manufacturing costs and sales to foreign markets are subject to normal currency
risks associated with changes in the exchange rate of foreign currencies
relative to the United States Dollar. To date, the Company's management has not
deemed it necessary to utilize currency hedging strategies to manage its
currency risks. On an ongoing basis, management continues to evaluate its
commercial transactions and is prepared to employ currency hedging strategies
when it believes such strategies are appropriate. In addition, some of the
Company's future international sales may be in developing nations where
dramatic political or economic changes are possible. Such factors may
adversely affect the Company's results of operations and financial condition.
13. Government Regulation. The female condom is subject to regulation by
the FDA, pursuant to the federal Food, Drug, and Cosmetic Act (the "FDC Act"),
and by other state and foreign regulatory agencies. Under the FDC Act, medical
devices must receive FDA clearance before they can be sold. FDA regulations
also require the Company to adhere to certain "Good Manufacturing Practices,"
which include testing, quality control and documentation procedures. The
Company's compliance with applicable regulatory requirements is monitored
through periodic inspections by the FDA. The failure to comply with applicable
regulations may result in fines, delays or suspensions of clearances, seizures
or recalls of products, operating restrictions and criminal prosecutions and
could have a material adverse effect on the Company.
14. Management of Operations. The Company's future short-term and
long-term success will be dependent upon its ability to effectively anticipate,
respond to and manage changing business conditions. The Company believes that
current management will be able to properly manage the Company's future
operations. However, there can be no assurance that the Company will be able
to adapt its manufacturing operations or administrative and financial functions
to manage the Company's growth or to otherwise address the future needs of the
business.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by<PAGE>
the Selling Shareholders.
SELLING SHAREHOLDERS
The 1,239,727 shares of the Company's Common Stock offered for sale
pursuant to this Prospectus are owned by the shareholders listed below, or will
become owned by such shareholders upon the exercise or conversion of
convertible securities owned by them.
The Shares being registered for sale by C.C.R.I. Corporation ("CCRI")
are the shares which may be received by CCRI upon exercise of its Amended
Warrant dated as of July 1, 1997 (the "Warrant"). The Warrant is exercisable
for a total of 150,000 shares of the Company's Common Stock at an exercise
price of $2.00 per share provided certain conditions are satisfied. The
Warrant was issued by the Company to CCRI in consideration of CCRI's investor
relations services provided to the Company. The Company and CCRI are parties
to a Consulting Agreement dated March 13, 1995, which was amended by an
Amendment to Consulting Agreement dated as of July 1, 1997, a letter from the
Company to CCRI on February 2, 1998, and a letter from the Company to CCRI on
March 18, 1998. The Consulting Agreement, as amended, provides that CCRI will
provide consulting services to the Company until April 15, 1998. The 150,000
shares underlying the Warrant vest in equal increments of 50,000 shares as
follows: (a) the first 50,000 shares vested and became exercisable on April
15, 1995; (b) the second 50,000 shares vested and became exercisable on
September 1, 1997, since, on or before that date, the closing price of the
Company's Common Stock was $4.00 per share or higher; (c) the third increment
of 50,000 shares vest and become exercisable on April 15, 1998 if, on or before
that date, the closing price of the Common Stock is $7.50 per share or higher
(which vesting criteria has not yet been satisfied). Warrant shares which have
not vested as of April 15, 1998 will not become exercisable and the Warrant
will terminate as to such unvested shares after April 15, 1998. In accordance
with this Consulting Agreement, CCRI continues to provide investor relations
services to the Company.
Chase Capital Advisors, Inc. ("Chase"), Richard J. Glaisner,
Richard A. Schilffarth, Donald L. Grande, Howard M. Schnoll and Rick Cogswell
received the Shares being registered for sale by them hereby in consideration
of certain consulting services which their affiliated entity provided to the
Company, primarily consisting of assisting the Company in its capital-raising
efforts.
Professional Edge Fund, L.L.C., JMG Capital Partners, L.P. and Triton
Capital Investments, Ltd. each received the shares of Convertible Preferred
Stock--Series 2 and the warrants referred to below in a private transaction on
December 31, 1997. In connection with that transaction, Harlan P. Kleiman,
Robert Schacter, Steven Lamar, Ernest Krauss and Thomas P. Griesel received
warrants to purchase Common Stock in connection with their services to the
Company's placement agent in that offering.
Sanford Henry received his 25,000 shares on October 2, 1997 as
compensation for certain financial consulting services which he provided in
Europe for the Company.
The Selling Shareholders acquired their respective Shares absent
registration under the Securities Act pursuant to the exemption from
registration afforded by the provisions of Section 4(2) of the Securities Act
and Regulation D promulgated thereunder. The Shares are being registered to<PAGE>
permit public secondary trading of the Shares, and the Selling Shareholders may
offer the Shares for resale from time to time. See "Plan of Distribution."
In recognition of the fact that each Selling Shareholder may wish to
be legally permitted to sell the Shares when it deems appropriate, the Company
has filed with the Commission, under the Act, a Registration Statement on Form
S-3, of which this Prospectus forms a part, with respect to the resale of the
Shares from time to time by the Selling Shareholders.
Number of Shares Number of Shares Number of Shares
Name of Beneficially Owned Being Offered Beneficially Owned
Selling Shareholders Prior to Offering Hereby After Offering
- --------------------- --------------- --------- --------------
C.C.R.I. Corporation 150,000(1) 150,000 0
Chase Capital Advisors, Inc. 64,564 36,800 27,764
Richard J. Glaissner 19,970 19,970 0
Richard A. Schilffarth 8,790 8,790 0
Donald L. Grande 6,891 6,891 0
Howard M. Schnoll 8,349 8,349 0
Rick Cogswell 10,000 10,000 0
Professional Edge Fund, L.L.C. 484,963(2) 484,963 0
JMG Capital Partners, L.P. 242,482(3) 242,482 0
Triton Capital Investments, Ltd.242,482(3) 242,482 0
Harlan P. Kleiman 2,960(4) 2,960 0
Robert Schacter 200(4) 200 0
Steven Lamar 480(4) 480 0
Ernest Krauss 200(4) 200 0
Thomas P. Griesel 160(4) 160 0
Sanford Henry 25,000 25,000 0
(1)Represents the aggregate number of shares which may be received by CCRI upon
exercise of its warrant. Currently, only 100,000 shares are exercisable.
(2)Includes 364,963 shares of Convertible Preferred Stock--Series 2, which
automatically convert into an equal number of shares of the Company's Common
Stock on the date the registration statement to which this prospectus relates
is declared effective by the Securities and Exchange Commission (the
"Conversion Date"). Also includes 120,000 shares of Common Stock which may be
received upon exercise of a warrant held by the shareholder. The warrant is
exercisable at any time prior to December 31, 2001 at an exercise price equal
to the lesser of (a) $3.425 per share or (b) the average of the three closing
bid prices per share for a share of the Company's Common Stock for any three
consecutive trading days, as selected by the holder, during the 30 consecutive
trading-day period ending on the trading day immediately prior to the date of
the exercise of the warrant.
(3)Includes 182,482 shares of Convertible Preferred Stock--Series 2, which
automatically convert into an equal number of shares of the Company's Common
Stock on the Conversion Date. Also includes 60,000 shares of Common Stock
which may be received upon exercise of a warrant held by the shareholder. The
warrant is exercisable at any time prior to December 31, 2001 at an exercise
price equal to the lesser of (a) $3.425 per share or (b) the average of the
three closing bid prices per share for a share of the Company's Common Stock
for any three consecutive trading days, as selected by the holder, during the
30 consecutive trading-day period ending on the trading day immediately prior
to the date of the exercise of the warrant.
(4)Represents shares which may be received upon exercise of a warrant held by
the Selling Shareholder. The warrant was received by the Selling Shareholder
in connection with his services to the Company's placement agent in the private<PAGE>
offering of the Convertible Preferred Stock--Series 2. The warrant is
exercisable at any time prior to December 31, 2001 at $4.11 per share.
PLAN OF DISTRIBUTION
The Selling Shareholders, or their pledgees, donees, transferees or
other successors, may sell the Shares in any one of three ways: (i) through
broker-dealers; (ii) through agents; or (iii) directly to one or more
purchasers. The distribution of the Shares may be effected from time to time
in one or more transactions (which may involve crosses or block transactions)
(a) on the American Stock Exchange or (b) in transactions otherwise than on the
American Stock Exchange. Any of such transactions may be effected at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices or at fixed prices. The Selling
Shareholders 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 Shareholders and/or
commissions from purchasers of the Shares for whom they may act as agent (which
discounts, concessions or commissions will not exceed those customary in the
types of transactions involved). The Selling Shareholders and any
broker-dealers or agents that participate in the distribution of the Shares
might be deemed to be underwriters, and any profit on the sale of Shares by
them and any discounts, commissions or concessions received by any such
broker-dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act.
EXPERTS
The consolidated financial statements of the Company at September 30,
1997 and for the two years in the period ended September 30, 1997, incorporated
in this Prospectus by reference from the Company's Annual Report on
Form 10-KSB, have been audited by McGladrey & Pullen LLP, independent auditors,
as set forth in their report (which contains an explanatory paragraph with
respect to conditions which raise substantial doubt about the Company's ability
to continue as a going concern), in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing. The consolidated
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or amounts
and classification of liabilities that might result from the outcome of that
uncertainty.
LEGAL MATTERS
The legality of the Shares of Common Stock offered hereby will be
passed upon for the Company by Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c., 1000 North Water Street, Suite 2100, Milwaukee, Wisconsin
53202.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Sections 180.0850 to 180.0859 of the Wisconsin Business
Corporation Law, directors and officers of the Company are entitled to
mandatory indemnification from the Company against certain liabilities and
expenses (i) to the extent such officers or directors are successful in the
defense of a proceeding and (ii) in proceedings in which the director or
officer is not successful in the defense thereof, unless (in the latter case
only) it is determined that the director or officer breached or failed to<PAGE>
perform his duties to the Company and such breach or failure constituted:
(a) a willful failure to deal fairly with the Company or its shareholders in
connection with a matter in which the director or officer had a material
conflict of interest; (b) a violation of the criminal law unless the director
or officer had reasonable cause to believe his or her conduct was lawful or had
no reasonable cause to believe his or her conduct was unlawful; (c) a
transaction from which the director or officer derived an improper personal
profit; or (d) willful misconduct. It should be noted that Section 180.0859 of
the Wisconsin Business Corporation Law specifically states that it is the
public policy of Wisconsin to require or permit indemnification in connection
with a proceeding involving securities regulation, as described therein, to the
extent required or permitted under Sections 180.0850 to 180.0858 as described
above. Additionally, under the Wisconsin Business Corporation Law, directors
of the Company are not subject to personal liability to the Company, its
shareholders or any person asserting rights on behalf thereof for certain
breaches or failures to perform any duty resulting solely from their status as
such directors, except in circumstances paralleling those in subparagraphs (a)
through (d) outlined above.
Consistent with Sections 180.0850 to 180.0859 of the Wisconsin
Business Corporation Law, Article VIII of the Company's By-Laws provides that
the Company shall indemnify any person in connection with legal proceedings
threatened or brought against him by reason of his present or past status as an
officer or director of the Company in the circumstances described above.
Article VIII of the By-Laws also provides that the directors of the Company are
not subject to personal liability to the Company, its shareholders or persons
asserting rights on behalf thereof, as provided in the Wisconsin Business
Corporation Law. The By-Laws also contain a nonexclusivity clause which
provides in substance that the indemnification rights under the By-Laws shall
not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any agreement with the Company, any
By-Law or otherwise.
The indemnification provided as set forth above is not exclusive of
any other rights to which a director or an officer of the Company may be
entitled.
The general effect of the foregoing provisions is to reduce the
circumstances in which an officer or director may be required to bear the
economic burdens of the foregoing liabilities and expenses.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company 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 of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.<PAGE>
No person is authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offer
contained herein, and, if given or made, such information or representation
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or the solicitation of an offer
to buy any security other than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a solicitation of an
offer to buy shares of Common Stock in any jurisdiction where such offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor
any sales made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof.
TABLE OF CONTENTS Page
Available Information .......... 3
Incorporation of Certain
Documents by Reference ........ 3
Cautionary Statement Regarding
Forward Looking Statements .... 3
The Company .................... 5
Risk Factors. .................. 7
Use of Proceeds ................ 9
Selling Shareholders ........... 9
Plan of Distribution ...........11
Experts ........................11
Legal Matters ..................11
Indemnification of Directors
and Officers ..................11<PAGE>
1,239,727 Shares
THE FEMALE HEALTH COMPANY
COMMON STOCK
PRELIMINARY
PROSPECTUS
March 24, 1998
<PAGE>
II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses relating to the registration of the Shares of Common Stock
being offered hereby, other than underwriting discounts and commissions, will
be borne by the Company. Such expenses are estimated to be as follows:
Item Amount
Securities and Exchange Commission
Registration Fee $1,120
Legal Fees and Expenses 2,500
Accounting Fees and Expenses 2,000
Miscellaneous Expenses 500
-------
$6,120
=======
Item 15. Indemnification of Directors and Officers
Pursuant to Sections 180.0850 to 180.0859 of the Wisconsin Business
Corporation Law, directors and officers of the Company are entitled to
mandatory indemnification from the Company against certain liabilities and
expenses (i) to the extent such officers or directors are successful in the
defense of a proceeding and (ii) in proceedings in which the director or
officer is not successful in the defense thereof, unless (in the latter case
only) it is determined that the director or officer breached or failed to
perform his duties to the Company and such breach or failure constituted:
(a) a willful failure to deal fairly with the Company or its shareholders in
connection with a matter in which the director or officer had a material
conflict of interest; (b) a violation of the criminal law unless the director
or officer had reasonable cause to believe his or her conduct was lawful or had
no reasonable cause to believe his or her conduct was unlawful; (c) a
transaction from which the director or officer derived an improper personal
profit; or (d) willful misconduct. It should be noted that Section 180.0859 of
the Wisconsin Business Corporation Law specifically states that it is the
public policy of Wisconsin to require or permit indemnification in connection
with a proceeding involving securities regulation, as described therein, to the
extent required or permitted under Sections 180.0850 to 180.0858 as described
above. Additionally, under the Wisconsin Business Corporation Law, directors
of the Company are not subject to personal liability to the Company, its
shareholders or any person asserting rights on behalf thereof for certain
breaches or failures to perform any duty resulting solely from their status as
such directors, except in circumstances paralleling those in subparagraphs (a)
through (d) outlined above.
Consistent with Sections 180.0850 to 180.0859 of the Wisconsin Business
Corporation Law, Article VIII of the Company's By-Laws provides that the
Company shall indemnify any person in connection with legal proceedings
threatened or brought against him by reason of his present or past status as an
officer or director of the Company in the circumstances described above.
Article VIII of the By-Laws also provides that the directors of the Company are<PAGE>
not subject to personal liability to the Company, its shareholders or persons
asserting rights on behalf thereof, as provided in the Wisconsin Business
Corporation Law. The By-Laws also contain a nonexclusivity clause which
provides in substance that the indemnification rights under the By-Laws shall
not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any agreement with the Company, any
By-Law or otherwise.
The indemnification provided as set forth above is not exclusive of any
other rights to which a director or an officer of the Company may be entitled.
The general effect of the foregoing provisions is to reduce the
circumstances in which an officer or director may be required to bear the
economic burdens of the foregoing liabilities and expenses.
Item 16. Exhibits
Exhibit
Number Description
4.1 Amended and Restated Articles of Incorporation. (1)
4.2 Articles II, VII and XI of the Amended and Restated By-Laws of the
Company.(2)
5 Opinion of Counsel.
23.1 Consent of McGladrey & Pullen, LLP, independent accountants.
23.2 Consent of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
(included in Exhibit 5).
24 Power of Attorney (incorporated by reference to the signature page of
this Registration Statement). (1)
99.1 Investor relations and development services Consulting Agreement
dated March 13, 1995 between C.C.R.I. Corporation and the Company.(3)
99.2 Consultant Warrant Agreement dated March 13, 1995 issued by the
Company to C.C.R.I. Corporation.(4)
99.3 Amendment to Consulting Agreement dated as of July 1, 1997 between
C.C.R.I. Corporation and the Company. (1)
99.4 Letter from the Company to C.C.R.I. Corporation dated July 1, 1997,
regarding the C.C.R.I. Warrant. (1)
99.5 Form of Securities Purchase Agreement dated December 31, 1997 between
the Company and the purchasers set forth on an exhibit thereto. (1)
99.6 Form of Registration Rights Agreement dated December 31, 1997 between
the Company and the investors in the Company's December 31, 1997 private
placement. (1)
99.7 Form of Common Stock Purchase Warrant dated December 31, 1997 issued
by the Company to the investors listed on the exhibit thereto. 91)<PAGE>
99.8 Letter from the Company to C.C.R.I. Corporation dated March 18, 1998,
regarding the C.C.R.I. Warrant.
1 Incorporated herein by reference to the Company's Registration Statement on
Form S-3, Registration Statement No. 333-46333 filed February 13, 1998.
2 Incorporated herein by reference to the Company's 1995 Form 10-K.
3 Incorporated herein by reference to the Company's March 31, 1995 Form 10-Q.
4 Incorporated herein by reference to the Company's Pre-Effective Amendment
No. 3 to its Form S-1 Registration Statement, Registration No. 333-3922, filed
on June 17, 1996.
Item 17. Undertakings
The undersigned registrant undertakes as follows:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) will not apply if
the information required to be included in a post effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act and which are incorporated by reference
in this Registration Statement.
(b) That, for the purposes 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.
(c) 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.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or<PAGE>
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]<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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on the 24 day of March,
1998.
THE FEMALE HEALTH COMPANY
BY /s/ O.B. Parrish
O.B. Parrish, Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board,
/s/ O.B. Parrish Chief Executive Officer, March 24, 1998
O.B. Parrish Acting Principal Financial
and Accounting Officer
and Director
President, Chief Operating March 24, 1998
Mary Ann Leeper, Ph.D. * Officer and Director
Vice President, Secretary, March 24, 1998
William R. Gargiulo, Jr. * Treasurer and Director
___________________ Director ___________, 1998
Stephen M. Dearholt
___________________ Director ___________, 1998
David R. Bethune
*By: /s/ O.B. Parrish
O. B. Parrish
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Description Number
4.1 Amended and Restated Articles of Incorporation. (1)
4.2 Articles II, VII and XI of the Amended and Restated
By-Laws of the Company.(2)
5 Opinion of Counsel.
23.1 Consent of McGladrey & Pullen, LLP, independent
accountants.
23.2 Consent of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c. (included in Exhibit 5).
24 Power of Attorney (incorporated by reference to
the signature page of this Registration Statement). (1)
99.1 Investor relations and development services Consulting
Agreement dated March 13, 1995 between C.C.R.I.
Corporation and the Company.(3)
99.2 Consultant Warrant Agreement dated March 13, 1995
issued by the Company to C.C.R.I. Corporation.(4)
99.3 Amendment to Consulting Agreement dated as of
July 1, 1997 between C.C.R.I. Corporation and
the Company. (1)
99.4 Letter from the Company to C.C.R.I. Corporation dated July 1, 1997
regarding the C.C.R.I. Warrant. (1)
99.5 Form of Securities Purchase Agreement dated
December 31, 1997 between the Company and the
purchasers set forth on an exhibit thereto. (1)
99.6 Form of Registration Rights Agreement dated
December 31, 1997 between the Company and
the investors in the Company's December 31, 1997
private placement. (1)
99.7 Form of Common Stock Purchase Warrant dated
December 31, 1997 issued by the Company to the
investors listed on the exhibit thereto. (1)
99.8 Letter from the Company to C.C.R.I. Corporation dated
March 18, 1998, regarding the C.C.R.I. warrant.
1 Incorporated herein by reference to the Company's Registration Statement on
Form S-3, Registration Statement No. 333-46333 filed February 13, 1998.
2 Incorporated herein by reference to the Company's 1995 Form 10-K.3
3 Incorporated herein by reference to the Company's March 31, 1995 Form 10-Q.
4 Incorporated herein by reference to the Company's Pre-Effective Amendment<PAGE>
No. 3 to its Form S-1 Registration Statement, Registration No. 333-3922, filed
on June 17, 1996.<PAGE>
EXHIBIT 5
March 24, 1998
The Female Health Company
919 North Michigan Avenue
Suite 2208
Chicago, IL 60611
Gentlemen: Re: Registration Statement on Form S-3
We have acted as counsel for The Female Health Company, a Wisconsin
corporation (the "Company"), in connection with the Company's registration of
1,239,727 shares (the "Shares") of its $.01 par value common stock at the
request of the Selling Shareholders listed in the Registration Statement
(defined below).
In such capacity we have examined, among other documents, the Amended and
Restated Articles of Incorporation of the Company, as amended, and the
Registration Statement on Form S-3 to be filed by the Company with the
Securities and Exchange Commission on or shortly after the date of this letter
covering the sale by the Selling Shareholders of the Shares (the "Registration
Statement"). Based on the foregoing and such additional investigation as we
have deemed necessary, it is our opinion that:
1. The Company is a corporation existing under the laws of the State of
Wisconsin and, based solely on a certificate of the Department of Financial
Institutions of the State of Wisconsin; (a) has filed with the Department of
Financial Institutions during its most recently completed report year the
required annual report; (b) is not the subject of a proceeding under Wisconsin
Statutes Section 180.1421 to cause its administrative dissolution; (c) no
determination has been made by the Department of Financial Institutions that
grounds exist for such action; (d) no filing has been made with the Department
of Financial Institutions of a decree of dissolution with respect to the
Company; and (e) Articles of Dissolution of the Company have not been filed
with the Department of Financial Institutions.
2. The Shares are (or, after issuance upon exercise of certain warrants
and conversion of certain Class A Convertible Preferred Stock--Series 2 in
accordance with their terms, will be) legally issued, fully-paid and
nonassessable, except as set forth in Wisconsin Statutes
Section 180.0622(2)(b), as interpreted.
We consent to the filing of a copy of this opinion as an exhibit to the
Registration Statement on Form S-3.
REINHART, BOERNER, VAN DEUREN,
NORRIS & RIESELBACH, s.c.
BY /s/ David R. Krosner
David R. Krosner
MW2\26124DRK:LG<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated November 20, 1997, which contains an explanatory
paragraph relating to uncertainty as to the Company's ability to continue as a
going concern, on the consolidated financial statements of The Female Health
Company and subsidiary as of September 30, 1997 and for the years ended
September 30, 1997 and 1996, which appears in the September 30, 1997, Annual
Report on Form 10-KSB of The Female Health Company.
/s/ McGladrey & Pullen, LLP
Schaumburg, Illinois
March 24, 1998
<PAGE>
EXHIBIT 99.8
THE FEMALE HEALTH COMPANY
919 North Michigan Avenue
Suite 2208
Chicago, IL 60611
March 18, 1998
Malcolm McGuire, President
C.C.R.I. Corporation
3104 East Camelback Road
Suite 539
Phoenix, AZ 85016
Dear Malcolm:
As we discussed, please be advised that if, on or before April 15, 1998,
the closing price of a share of The Female Health Company's common stock,
wherever listed, is $7.50 or higher, the final 50,000 shares under warrant to
you will become fully vested and exercisable at the $2.00 per share exercise
price specified in the warrant and in accordance with the other terms specified
therein.
Yours very truly,
/s/O.B.Parrish
O.B. Parrish
MW2\34673OBP:PN<PAGE>
