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REGISTRATION NO. 333-
As filed with the Securities and Exchange Commission on May 17, 1996
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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AMERICAN BIOMED, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0136574
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10077 GROGANS MILL ROAD #100
THE WOODLANDS, TEXAS 77380
(713) 367-3895
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
STEVEN B. RASH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMERICAN BIOMED, INC.
10077 GROGANS MILL ROAD #100
THE WOODLANDS, TEXAS 77380
(713) 367-3895
(Name, address and telephone number, including area code, of agent for service)
With copies to:
PORTER & HEDGES, L.L.P.
700 LOUISIANA
HOUSTON, TEXAS 77002-2764
(713) 226-0600
ATTN.: ROBERT G. REEDY
Approximate date of commencement of proposed sale to public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please 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
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PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF SHARES OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.001
per share......................... 1,101,000 $1.125(1) $1,238,625.00 $427.11
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Common Stock Underlying
Warrants.......................... 1,425,250 $1.125(2) $1,603,406.20 $552.90
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TOTAL 2,526,250 --- $2,842,031.20 $980.01
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(1) Pursuant to Rule 457(c), the registration fee for these shares is
calculated based upon the average of the bid and asked price per share
of the Common Stock reported by the NASD's OTC Bulletin Board(R) on May
14, 1996, or $1.125 per share.
(2) In accordance with Rule 457(g), the registration fee for these shares
is calculated based upon a price of $1.125 per share, which represents
the highest of: (i) the price at which the warrants may be exercised;
(ii) the offering price of securities of the same class included in the
registration statement; or (iii) the price of securities of the same
class, as determined pursuant to Rule 457(c).
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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.
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AMERICAN BIOMED, INC.
CROSS-REFERENCE SHEET
(PURSUANT TO ITEM 501(b) OF REGULATION S-K)
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ITEM FORM S-3 ITEM AND CAPTION LOCATION IN PROSPECTUS
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<S> <C> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus........... Facing Page; Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus.................................... Inside Front Cover Page; Outside Back Cover Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges............... The Company; Risk Factors
4. Use of Proceeds.................................. Not Applicable
5. Determination of Offering Price.................. Not Applicable
6. Dilution......................................... Not Applicable
7. Selling Security Holders......................... Selling Security Holders
8. Plan of Distribution............................. Outside Front Cover Page; Plan of Distribution
9. Description of Securities to be Registered....... Not Applicable
10. Interests of Named Experts and Counsel........... Legal Matters
11. Material Changes................................. Not Applicable
12. Incorporation of Certain Information
By Reference..................................... Documents Incorporated by Reference
13. Disclosure of Commission Position
On Indemnification for Securities Act
Liabilities...................................... Not Applicable
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PROSPECTUS
2,526,250 SHARES
AMERICAN BIOMED, INC.
COMMON STOCK
($.001 PAR VALUE)
This prospectus relates to 2,526,250 shares of common stock, par value
$.001 per share (the "Common Stock"), of American BioMed Inc., (the "Company")
which may be offered and sold from time to time by security holders of the
Company (the "Selling Security Holders"). Of the total number of shares offered
hereby, 1,425,250 are issuable upon the exercise of certain warrants to acquire
Common Stock and 1,101,000 are currently outstanding shares of the Company's
Common Stock owned by certain security holders of the Company. See "Selling
Security Holders." The Company will not receive any of the proceeds from the
sale of the shares of Common Stock offered hereby. However, if all of the
warrants representing shares of Common Stock in this offering are exercised, the
Company will receive aggregate proceeds therefrom of $559,762.50.
The Company's Common Stock traded on the Nasdaq Small-Cap Market under
the symbol "ABMI" from October 22, 1991 through October 13, 1994. Currently, the
Company's Common Stock is traded in the over-the-counter market on the NASD's
OTC Bulletin Board.(R) On May 14, 1996, the closing bid and asked prices for the
Company's stock were, respectively, $1.0625 and $1.1875 per share.
The Common Stock may be offered and sold from time to time by the
Selling Security Holders named herein through underwriters, dealers or agents or
directly to one or more purchasers in fixed price offerings, in negotiated
transactions, at market prices prevailing at the time of sale or at prices
related to such market prices. The terms of the offering and sale of Common
Stock in respect of which this Prospectus is being delivered, including any
initial public offering price, any discounts, commissions or concessions
allowed, reallowed or paid to underwriters, dealers or agents, the purchase
price of the shares of Common Stock, the proceeds to the Selling Security
Holders, and any other material terms shall be as set forth in a Prospectus
Supplement. See "Plan of Distribution" for possible indemnification arrangements
for underwriters, dealers and agents.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" BEGINNING
ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is May 17, 1996.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C. a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Common Stock offered by this Prospectus. Certain portions of the Registration
Statement have not been included in this Prospectus. For further information,
reference is made to the Registration Statement and the exhibits thereto. 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. The
Registration Statement (with exhibits), as well as such reports, proxy
statements and other information, can be inspected and copied at the public
reference facilities maintained by the Commission at its principal offices at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and its
regional offices at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60601 and 7 World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549.
DOCUMENTS INCORPORATED BY REFERENCE
The Company hereby incorporates by reference in this Prospectus (i) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995; the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1996; and (iii) the description of the Company's Common Stock
contained in the Company's Form S-1, dated May 11, 1993, including any
amendments or reports filed for the purpose updating such description. All other
reports filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange
Act since December 31, 1995 are hereby incorporated herein by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Prospectus and before
the termination of the offering covered hereby will be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus or in any other subsequently filed
document which also is or is deemed to be incorporated by reference modifies or
replaces such statement.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference in this Prospectus,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates. All such requests should be directed to American BioMed, Inc.,
10077 Grogans Mill Road #100, The Woodlands, Texas 77380, Attention: Steve Rash,
telephone number (713) 367-3895.
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THE COMPANY
American BioMed, Inc., a Delaware corporation (the "Company"), is
engaged in the development, manufacture and marketing of medical, surgical and
diagnostic devices. The Company's primary technology is directed at
interventional cardiology, endovascular surgery and minimally invasive surgical
devices. The principal products are atherectomy catheters, stents, clot filters
and drug delivery catheter systems. The Company's primary business strategy is
to design and develop minimally invasive medical devices to treat
atherosclerotic disease. The Company holds patents and/or proprietary rights on
several devices designed to facilitate the flow of blood through blood vessels
and to eliminate or minimize the buildup of plaque within vessels or other
synthetic implanted vessel devices.
The Company's executive offices are located at 10077 Grogans Mill Road
#100, The Woodlands, Texas 77380, and its telephone number is (713) 367-3895.
RISK FACTORS
In evaluating the Company and its business, prospective investors
should carefully consider all of the information set forth in this Prospectus
and should give particular attention to the following risk factors.
DEVELOPMENT STAGE; FINANCIAL CONDITION; QUALIFICATION OF INDEPENDENT
ACCOUNTANT'S OPINION
The Company is in the development stage and devotes substantially all
of its efforts to financial planning, raising capital, research and development
and developing markets for its products. The Company's cash requirements have
heretofore significantly exceeded its resources due to its expenditures related
to research and development, obtaining regulatory approvals, obtaining and
maintaining manufacturing and distribution arrangements, acquisitions and
product introductions. Consequently, the Company has incurred a cumulative loss
of $22,249,703 since its inception and had a working capital deficit of
$3,923,037 at March 31, 1996. The Company expects to continue to incur operating
losses until such time as it derives meaningful revenues from the sale of its
products. There are problems, delays, expenses and difficulties typically
encountered by companies in the development stage, many of which may be beyond
the Company's control, such as unanticipated results of laboratory or clinical
tests requiring changes in product design, changes in applicable government
regulations or the interpretation thereof, market acceptance of the Company's
products, and development of competing products by others. There can be no
assurance that the Company will successfully complete the transition from a
development stage company to profitability. Such ability is dependent upon,
among other things, its ability to obtain additional working capital to develop,
manufacture, and market its products and the success of future operations. The
Company's independent accountants have included an explanatory paragraph in
their report on the Company's financial statements at December 31, 1995, as to
the uncertainty relating to the Company's ability to continue as a going
concern.
GOVERNMENTAL REGULATION AND FDA APPROVAL
The Company's products, development activities and manufacturing
processes are subject to extensive and rigorous regulation by the United States
Food and Drug Administration (the "FDA") pursuant to the Federal Food, Drug, and
Cosmetic Act (the "FDA Act"), by comparable agencies in foreign countries, and
by state regulatory agencies. Under the FDA Act, medical devices must receive
FDA clearance before they can be commercially marketed in the United States. The
process of obtaining marketing clearance from the FDA for new products can take
a number of years and require the expenditure of substantial resources, and may
involve rigorous pre-clinical and clinical testing. The time required for
completing such testing and obtaining FDA clearance is uncertain, and there is
no assurance that the Company will have sufficient resources to complete the
required testing and regulatory review process, that such clearances will be
granted, or that FDA review will not involve delays that will adversely affect
the Company's ability to commercialize additional products. Delays or rejections
may be encountered based upon changes in FDA policy during the period of product
development and FDA review of each submitted application. Similar delays may
also be encountered in other countries. Even if regulatory approvals to market a
product are obtained from the FDA, these approvals may entail limitations on the
indicated uses of the product. In addition, as can be expected with any
investigational device, modifications will be made to the Company's products to
incorporate and enhance their functionality and performance based upon new data
and design review. There can be no assurance that the FDA will
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not request additional information relating to product improvements, that any
such improvements will not require further regulatory review thereby delaying
the testing, approval and commercialization of the Company's development
products, or that ultimately any such improvements will receive FDA clearance.
Product approvals by the FDA can also be withdrawn due to failure to comply with
regulatory standards or the occurrence of unforseen problems following initial
approval. Later discovery of previously unknown problems with a product,
manufacturer, or facility may result in restrictions on such product or
manufacturer, including fines, delays or suspensions of regulatory clearances,
seizures or recalls of products, operating restrictions and criminal
prosecution, and could have a material adverse effect on the Company. FDA
regulations depend heavily on administrative interpretation, and there can be no
assurance that future interpretations made by the FDA or other regulatory
bodies, with possible retroactive effect, will not adversely affect the Company.
FDA regulations also require manufacturers of medical devices to adhere
to certain "Good Manufacturing Practices" ("GMP"), which include testing,
quality control and documentation procedures. On February 5, 1993, the FDA
issued a Warning Letter to the Company advising it of several GMP deficiencies
in its Cathlab Corporation ("Cathlab") manufacturing facility. The Company
responded to the Warning Letter and the Warning Letter was subsequently lifted.
Compliance with applicable regulatory requirements is subject to continual
review and will be monitored through periodic inspections by the FDA. In May
1993, following an inspection of the Cathlab facility, the Company was advised
by the FDA of continuing GMP deficiencies. The Company is not presently subject
to any enforcement or other action adversely affecting the continued manufacture
or distribution of the Company's products from this facility. The Company has
been working with the FDA to resolve the deficiencies raised in the most recent
inspection and believes that a resolution of these issues satisfactory to the
FDA can be reached. If a satisfactory resolution of the deficiencies cannot be
reached, there could be additional FDA action.
POSSIBLE DEFAULT ON ABERLYN LEASE
In January 1993, the Company and Aberlyn Capital Management Limited
Partnership ("Aberlyn") entered into a three-year Master Lease Agreement,
pursuant to which the Company can request Aberlyn to purchase equipment for up
to $1,000,000 and lease it back to the Company. During 1993, two draws were made
against this agreement, one in the amount of $205,000 against Cathlab equipment
and another in the amount of $100,000 against equipment at the Company's
Woodlands facility. In 1994, this lease was re-negotiated to require semi-annual
rather than monthly payments. The Company has not made payments when due and
Aberlyn has demanded payment in full. As of March 25, 1996, Aberlyn had agreed
to discuss a restructuring of all the Company's leases. This restructuring
decision will be predicated in part upon the success of the Company's current
fundraising efforts. If such negotiations are not successful, Aberlyn may assert
that the Company is in default of these obligations, which are collateralized by
certain assets of the Company. The loss of these assets could have a material
adverse effect on the Company's financial position, results of operations and
cash flows.
POTENTIAL FAILURE TO SATISFY USSC NOTE
On May 1, 1995, the Company and United States Surgical Corporation
("USSC"), a Delaware corporation, entered into an Option Agreement (the "Option
Agreement"), pursuant to which USSC was granted a 90-day option to purchase the
Company's technologies for stents (including the OmniStent(TM)), atherectomy
catheters (including the OmniCath Atherectomy Catheter(R)), toposcopic catheters
(including the Evert-O-Cath(TM) Drug Delivery Catheter) and all the intellectual
property rights, inventory, equipment and goodwill related thereto
(collectively, the "Assets"). Upon execution of the Option Agreement, USSC paid
$2.0 million to the Company (the "Initial Payment") in consideration of the
option and in partial consideration for the purchase price.
On July 20, 1995, USSC elected not to exercise its option to acquire
certain assets. As a result, the Company retained $1.0 million of the Initial
Payment as a forfeited option fee. The other $1.0 million is payable to USSC
plus interest at 10% per annum beginning July 20, 1995 (the "Note"). The Note,
originally due January 20, 1996, which is collateralized by the Company's stent
technology, was extended to March 15, 1996. On May 9, 1996, the Company and USSC
finalized negotiations to extend the Note until September 15, 1996. The
agreement requires payments as follows: $50,000 on May 22, $75,000 on June 15,
$75,000 on July 15, $75,000 on August 15 and the remaining balance of the Note
on Setember 15.
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If the Company fails to make payments on the Note as they come due,
USSC may assert that the Company is in default of the Note, which is
collateralized by the Company's stent technology. The loss of this asset could
have a material adverse effect on the Company's financial position, results of
operations and cash flows.
POSSIBILITY OF UNSUCCESSFUL NEW PRODUCT DEVELOPMENT; RELIANCE ON PRODUCTS UNDER
DEVELOPMENT
Three of the Company's primary development products, the OmniCath(R),
the OmniStent(TM), and the Evert-O-Cath(TM), are under development in several
different versions. Commercial introduction of the OmniCath(R) can only commence
upon completion of human clinical trials and receipt of regulatory approval. In
1995, the Company received FDA approval to commence Phase II clinical trials of
the OmniCath(R) for peripheral use and is awaiting approval from the Canadian
government to conduct human clinical trials for coronary use in Canada. The
Company has not completed the approval process with respect to the
OmniStent(TM). The Company has received FDA approval of a version of the
Evert-O-Cath(TM) for non-coronary use; however, the Company has determined not
to market that product and to seek regulatory approval of a version of the
Evert-O-Cath(TM) for non-coronary use with more advanced features. There can be
no assurance that FDA approval of marketable products will be obtained on a
timely basis, if at all. The success of the OmniCath(R), the OmniStent(TM), and
the Evert-O-Cath(TM), if and when commercially introduced, will depend upon
acceptance by the medical community, which cannot be assured. Finally, there can
be no assurance that the products, if sold, will generate the level of profits
anticipated. In the event commercialization or development of the OmniCath(R),
the OmniStent(TM), and/or the Evert-O-Cath(TM) is delayed or those product lines
do not achieve market acceptance, there will be a material adverse effect on the
Company's financial position, results of operations and cash flows.
POTENTIAL NEED FOR ADDITIONAL PARTNERS
The Company's strategy for research, development, and commercialization
of certain of its products may require the Company to enter into collaborative
arrangements with corporate partners. There can be no assurance that the Company
will be able to attract such corporate partners or that the Company will be able
to negotiate such partnerships on acceptable terms. Further, reliance on
collaborations with others may adversely affect the Company's profitability.
Although the Company believes its collaborators will have an economic motivation
to perform their contractual obligations under any arrangements with the
Company, the time and amount of resources they devote to these activities will
not be within the control of the Company and may be affected by such
collaborator's financial condition or other difficulties. There can be no
assurance that such parties will perform their obligations as expected, or that
the Company will generate any revenues from these agreements. In addition, there
can be no assurance that any such corporate partners will not pursue alternative
technologies to develop products similar to those being developed by the
Company.
TECHNOLOGICAL CHANGE
The medical device industry is characterized by extensive research and
development and rapid technological change. Development by others of new or
improved products, processes or technologies may make the Company's products or
proposed products obsolete or less competitive. The Company will be required to
devote continued efforts and financial resources to bring its development
products to market, enhance its existing products and develop new products for
the medical marketplace.
HIGHLY COMPETITIVE INDUSTRY
Competition in the biomedical industry is intense. Many of the
Company's products compete directly with similar products sold by a number of
companies. There can be no assurance that these products will be able to
maintain a sizable market share, if any. There are many companies and academic
institutions that are capable of developing products of similar design, and that
have developed and are capable of developing products based on other
technologies, including lasers, drug-based therapies and thermal systems, that
are or may be competitive with the Company's current and proposed products. Many
of these companies and academic institutions are well-established, have
substantially
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greater financial and other resources than the Company, and have established
reputations for success in the development, sale and service of products. These
companies and academic institutions may succeed in developing competing products
that are more effective than those of the Company or that receive FDA approval
more quickly than the Company's products. The Company's ability to compete will
be dependent upon its ability to get products approved by regulatory authorities
and introduced to the market, including the arrangement of a distribution
network, and to provide products with advanced performance features, none of
which can be assured.
UNCERTAINTY OF MARKET ACCEPTANCE
As with any new medical technology, there is substantial risk that
the marketplace may not accept or be receptive to the potential benefits of such
technology. Achieving market acceptance for the Company's products will require
substantial marketing efforts and the expenditure of significant funds to inform
potential customers, including third-party distributors, of the distinctive
characteristics and benefits of those products. There can be no assurance that
the Company's current and proposed products will be accepted by the medical
community or that any of the Company's current or proposed products will be able
to compete effectively against current and alternative treatments.
LIMITED MARKETING EXPERIENCE; DEPENDENCE ON THIRD PARTY DISTRIBUTORS
The Company sells and intends to sell its products primarily through
third-party distributors and may, on a limited basis, sell products
independently. The Company is, and will be, substantially dependent on its
arrangements with distributors to generate product revenues, and there can be no
assurance that the Company will be able to obtain satisfactory arrangements with
distributors, or that the Company realize substantial revenues from sales by
distributors. The loss of any of its major distributors, in the absence of
substantially similar replacement arrangements, could have a material adverse
effect on the ability of the Company to introduce and sell products and to move
beyond the development stage. In the event that the Company determines that its
distribution arrangements are unsatisfactory, or is unable to obtain
satisfactory distribution arrangements for any product in any geographic area,
unless prohibited by existing distribution arrangements, the Company may attempt
to distribute products in that geographic area independently. Inasmuch as the
Company has limited marketing experience and has limited financial and other
resources to undertake extensive independent marketing activities, there can be
no assurance that the Company will be able to market products successfully.
LIMITED MANUFACTURING EXPERIENCE
The Company currently manufactures OmniCaths(R) for human clinical
trials. The Company has no experience manufacturing these products in commercial
quantities and there can be no assurance that the Company will be able to
manufacture them on a cost-effective basis. Failure to meet production
requirements could have a material adverse impact on the ability of the
Company's products to achieve market acceptance. The Company's inability to
maintain its current manufacturing arrangements, or obtain other necessary
manufacturing arrangements, on acceptable terms could have a material adverse
effect on the Company's ability to commercialize products. Further, failure of
the Company or its manufacturers to adhere to GMP could delay production of
products, which could in turn have a material adverse effect on the Company's
financial position, results of operations and cash flows.
RELIANCE AND LIMITATIONS ON THIRD PARTY REIMBURSEMENT
The Company's products are purchased by hospitals, physicians, and
other health care providers, which bill various third-party payors, such as
government health programs, private health insurance plans, managed care
organizations and other similar programs, for the health care goods and services
provided to their patients. Payors may deny reimbursement if they determine that
a product was not used in accordance with established payor protocol regarding
cost-effective treatment methods, or was used for an unapproved treatment.
Increasingly, third-party payors are also contesting the prices charged for
medical products and services and, in some instances, have put pressure on
medical device suppliers to lower their prices. There is no assurance that
reimbursement for the Company's products will be available or, if available,
that payors' reimbursement levels will not adversely affect the Company's
ability to sell its products on a profitable basis. Failure by hospitals and
other users of the Company's products to obtain reimbursement from third-party
payors and changes in third-party payors' policies towards reimbursement for
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procedures using the Company's products could have a material adverse effect on
the Company's financial position, results of operations and cash flows.
PROPOSED HEALTH CARE REFORM
The cost of health care has risen significantly over the past decade,
and there have been and may continue to be proposals by legislators, regulators
and third-party payors to curb these costs. Health care reform is an area of
increasing national attention and a priority of many governmental officials.
Certain reform proposals, if adopted, could impose limitations on the prices the
Company will be able to charge in the United States for its diagnostic products
and any therapeutic products or the amount of reimbursement available for the
Company's products from governmental agencies of third-party payors.
DEPENDENCE ON PATENTS AND PROTECTION OF PROPRIETARY INFORMATION
The medical device industry traditionally has placed considerable
importance on obtaining and maintaining patents and trade secret protection for
significant new technologies, products and processes and the Company's ability
to compete effectively with other companies is materially dependent upon the
proprietary nature of it technologies. The Company pursues a policy of generally
obtaining patent protection in both the United States and abroad for patentable
subject matter in its proprietary devices. Currently, the Company owns several
United States patents and has United States and international patent
applications pending with respect to the OmniCath(R), OmniStent(TM) and to
cardiac-assist pumps under development by the Company. There can be no assurance
that any pending or future patent applications will result in issued patents, or
that any current or future patents issued to the Company will not be challenged,
invalidated or circumvented, or that the rights granted thereunder will provide
a competitive advantage to the Company. The invalidation of key patents or
proprietary rights owned by the Company could have an adverse effect on the
Company and on its business prospects.
The patent position of medical device firms generally is highly
uncertain and involves complex legal and factual questions. There has not
emerged any consistent policy regarding the breadth of claims allowed in medical
device patents. Accordingly, there can be no assurance that patent applications
relating to the Company's products or technology will afford protection against
competitors with similar technology. In addition, companies that obtain patents
claiming products or processes that are necessary for or useful to the
development of the Company's products can bring legal actions against the
Company claiming infringement. In recent years it has been common for companies
in the medical device field to aggressively challenge the rights of other
companies to develop and sell competitive devices. Differences in catheter
devices can be very small and there has been substantial litigation by
established companies to prevent the marketing of new devices. Regardless of the
outcome, any future litigation could result in substantial expense to the
Company and significant diversion of the efforts of the Company's technical and
management personnel. There can be no assurance that the Company will have the
financial resources necessary to enforce any patent rights it may hold. Although
the Company is not aware of any claim that it infringes or will infringe any
existing patent, in the event that in the future the Company is unsuccessful in
defending against a claim of infringement, it may be required to obtain licenses
to patents or to other proprietary technology in order to develop, manufacture
or market its products. There can be no assurance that the Company will be able
to obtain licenses on commercially reasonable terms or that the patents
underlying the licenses will be valid and enforceable. In the event the
Company's right to market any of its products were to be successfully
challenged, the Company's business and prospects would be materially adversely
affected.
DEPENDENCE ON KEY PERSONNEL
The success of the Company largely will be dependent on the efforts of
David P. Summers, Ph.D., its founder and Chairman of the Board and Steven B.
Rash, the Company's President and Chief Executive Officer. Although the Company
has entered into employment agreements with each of Dr. Summers and Mr. Rash,
the loss of services of either person would have a material adverse effect on
the Company's business and prospects. The success of the Company also is
dependent upon its ability to retain its operating, marketing, technical and
financial personnel. The competition for qualified personnel in the medical
device industry is intense and, accordingly, there can be no assurance that the
Company will be able to hire or retain necessary personnel.
7
<PAGE> 11
EXPOSURE TO PRODUCT LIABILITY CLAIMS
The medical device industry historically has been litigious, and the
manufacture and sale of the Company's products inherently entails a risk of
product liability claims. As a supplier of products which may be used in medical
diagnosis or treatment, the Company will face the risk of exposure to product
liability claims in the event that the end use of its products results in
unanticipated adverse effects. The Company does not currently carry any product
liability insurance. The Company may, but will not be obligated, to acquire such
coverage as the Company further develops products. No assurance can be given
that the Company will acquire such insurance, that adequate insurance coverage
will be available at a reasonable cost, or that a product liability claim would
not have a material adverse effect on the business or financial condition of the
Company. In addition, the costs of defending or settling a product liability
action and the negative publicity arising therefrom, could have a material
adverse impact on the Company, even if the Company were ultimately to prevail.
Furthermore, in the event problems arise with the Company's products after
commercial introduction, the Company might be required to recall the defective
products. In that event, the costs and potential liability to the Company could
be significant and would have a material adverse effect on the Company's
business and operations.
RISKS OF INTERNATIONAL TRANSACTIONS
The Company has arrangements with several foreign distributors to
distribute products in Europe, Southeast Asia, the Far East, Central America and
South America. In addition, the Company obtains certain supplies from foreign
suppliers. International transactions subject the Company to several potential
risks, including fluctuating exchange rates (to the extent the Company's
transactions are not in U.S. dollars), regulation of fund transfers by foreign
governments, United States and foreign export and import duties and tariffs and
political instability. There can be no assurance that any of the foregoing will
not have a material adverse effect upon the business of the Company.
BUSINESS EXPANSION AND COMPANY ACQUISITIONS
Since the closing of the Company's initial public offering in October
1991 (the "1991 Offering"), the Company has expanded its business and activities
through the stock acquisition of Freedom Machine, Inc. ("FMI") and Cathlab, and
the purchase of rights to certain technology from VMS Medical, Inc. ("VMS").
Further, the Company has entered into agreements to become the distributor of
products developed by others. The Company views this expansion as complementary
to its OmniCath(R) and Evert-O-Cath(TM) development efforts and as a possible
opportunity to generate sales. There can be no assurance that the Company's
acquisitions and expanded activities will prove successful, that acquired or
distributed products will prove complementary to the Company's business, that
the Company will generate sales or profits from these activities or from any of
its acquired companies or assets, or that such acquisitions and activities will
not overtax the Company's limited management, financial and other resources and
slow or prevent the Company from achieving its research and development goals.
In 1993, an arrangement by which the Company was to distribute the products of a
third party was dissolved pursuant to a settlement agreement.
DELISTING OF SECURITIES FROM NASDAQ
The National Association of Securities Dealers, Inc. ("NASD") has
adopted rules which impose stringent criteria for continued listing of
securities on the NASDAQ Small-Cap Market. Under the rules, in order to maintain
the listing of its securities on the NASDAQ Small-Cap Market, a company must
have, among other things, total assets of $2 million, capital and surplus of $1
million and, in certain circumstances, a minimum bid price for its common stock
of $1.00 per share. The Company's Common Stock traded on the NASDAQ Small-Cap
Market under the symbol "ABMI" from October 22, 1991 through October 13, 1994.
On October 13, 1994, the Company was delisted from NASDAQ because the Company
did not meet the required $1 million in equity as of June 30, 1994. Trading in
the Company's stock is presently conducted in the over-the-counter market on the
NASD's "OTC Bulletin Board." As a consequence of such delisting, investors may
find it comparatively more difficult to dispose of, or to obtain accurate
quotations as to the price of, the Company's securities than when the Common
Stock was traded on the NASDAQ Small-Cap Market. In addition, the delisting may
prove detrimental to the amount of news coverage the Company receives, and
information relating to the Company may be comparatively more difficult to
obtain than when the Common Stock was traded on the NASDAQ Small-Cap Market.
This in turn could result in a decline in the market for
8
<PAGE> 12
the Company's securities and make it more difficult for the Company to obtain
additional financing. No assurance can be given that the Company will be
eligible at some future date for the relisting of its Common Stock on the NASDAQ
Small-Cap Market.
The Penny Stock Reform Act of 1990 requires additional disclosure,
relating to the market for penny stocks, in connection with trades in any stock
defined as a penny stock. The Commission has adopted regulations that generally
define a penny stock to be an equity security that has a market price of less
than $5.00 per share, subject to certain exceptions. Such exceptions include any
equity security listed on the NASDAQ Small-Cap Market and any equity security
issued by an issuer that has (i) net tangible assets of at least $2,000,000, if
such issuer has been in continuous operation for three years, (ii) net tangible
assets of at least $5,000,000, if such issuer has been in continuous operation
for less than three years, or (iii) average annual revenue of at least
$6,000,000, if such an issuer has been in operation for less than 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, because the Company's securities are not quoted on the
NASDAQ Small-Cap Market and the Company does not have $2,000,000 in net tangible
assets, trading in the Common Stock is covered by Rule 15g-9 promulgated under
the Securities Exchange Act of 1934 for non-NASDAQ and nonexchange listed
securities. Under such rule, broker/dealers who recommend such securities to
persons other than established customers and accredited investors must make a
special written suitability determination for the purchaser and receive the
purchaser's written agreement to a transaction prior to sale. Securities also
are exempt from this rule if the market price is at least $5.00 per share.
The Company's Common Stock currently falls within the definition of a
penny stock and this may have impaired the market liquidity for the Company's
securities, given that regulations on penny stocks may limit the ability of
broker/dealers to sell the Company's securities, and thus limit the ability of
purchasers of the Company's securities to sell their securities in the secondary
market.
OUTSTANDING OPTIONS AND WARRANTS
As of March 31, 1996, the Company had outstanding stock options to
purchase 4,782,361 shares of its Common Stock and outstanding warrants to
purchase 4,290,600 shares of its Common Stock, which options and warrants are
exercisable over the next several years at prices ranging from $0.001 to
$9.2125. The holders of certain of such options and warrants therefore have an
opportunity to profit from a rise in the market price of the Company's Common
Stock with a resulting dilution in the interests of the other stockholders.
Further, the terms on which the Company may obtain additional financing during
the next several years may be adversely affected by the existence of such
options and warrants. The holders of the options and warrants are likely to
exercise them at a time when the Company would otherwise be able to obtain
additional capital through an equity financing on terms more favorable than
those provided by the options and warrants.
AUTHORIZATION OF PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance of
preferred stock with designations, rights and preferences determined from time
to time by the Board of Directors. Accordingly, the Board of Directors is
empowered, without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights of the holders of the Company's
Common Stock. In the event of issuance, the preferred stock could be utilized,
under certain circumstances, as a method of discouraging, delaying or preventing
a change in control of the Company. The issuance of preferred stock with
anti-takeover measures could have a depressive effect on the market price of the
Company's Common Stock and could discourage hostile bids in which stockholders
may receive premiums for their shares. At present, no shares of preferred stock
are outstanding.
9
<PAGE> 13
The Company does not anticipate paying cash dividends on its Common
Stock in the foreseeable future. It is anticipated that any earnings that may be
generated from the Company's operations will be used to finance the Company's
growth.
POSSIBLE VOLATILITY OF SECURITIES PRICES
The market price of the Company's securities may be highly volatile, as
has been the case with the securities of other companies engaged in high
technology research and development. Factors such as announcements by the
Company or its competitors concerning technological innovations, new commercial
products or procedures, proposed government regulations and developments, or
disputes relating to patents or proprietary rights may have a significant impact
on the market price of the Company's securities.
SELLING SECURITY HOLDERS
The following table sets forth the name of each Selling Security Holder
and the number of shares of Common Stock being offered by each Selling Security
Holder. The shares of Common Stock being offered hereby are being registered to
permit public secondary trading, and the Selling Security Holders may offer all
or a portion of the shares for resale from time to time. See "Plan of
Distribution."
<TABLE>
<CAPTION>
Amount Amount Percentage
Beneficially Beneficially Beneficially
Owned Owned Owned
Prior to Amount Following Following
Name Offering Offered Offering Offering++
---- -------- ------- -------- --------
<S> <C> <C> <C> <C>
Cassie & Associates................................ 30,000 30,000 --- ---
Lyons Community Property Trust..................... 223,000 223,000(1) --- ---
Texas Commerce Bank................................ 175,000 175,000 --- ---
Conley, Rose & Tayon............................... 40,000 40,000 --- ---
Scott Printing..................................... 70,000 70,000 --- ---
George Zimmerman................................... 150,000 150,000 --- ---
ACT Medical........................................ 56,000 56,000 --- ---
Gunn & Associates.................................. 20,000 20,000 --- ---
Joyce Heinrich..................................... 5,000 5,000 --- ---
Porter & Hedges, L.L.P............................. 30,000 30,000 --- ---
Joseph J. Janecka, Jr.............................. 7,000 7,000 --- ---
Herbert L. Kalman................................. 10,000 10,000 --- ---
Gibbs and Runyan................................... 14,000 14,000 --- ---
Zoetic, Inc........................................ 50,000 50,000+ --- ---
Christ Demos....................................... 50,000 50,000+ --- ---
James Bertocchio................................... 25,000 25,000+ --- ---
Duane Gengler...................................... 87,500 87,500+ --- ---
Richard J. Domerq.................................. 220,000 220,000+ --- ---
Phillip R. Rose.................................... 137,500 137,500+ --- ---
Dan Hallman........................................ 47,857 18,000 29,857 *
Charles Robertson.................................. 40,000 35,000 5,000 *
Norman Bruns....................................... 51,818 50,000 1,818 *
San Benlo, Inc..................................... 12,000 12,000 --- ---
Charles Horrell.................................... 22,000 20,000 2,000 *
</TABLE>
10
<PAGE> 14
<TABLE>
<CAPTION>
Amount Amount Percentage
Beneficially Beneficially Beneficially
Owned Owned Owned
Prior to Amount Following Following
Name Offering Offered Offering Offering++
---- -------- ------- -------- --------
<S> <C> <C> <C> <C>
John N. Koroyanis.................................. 25,000 25,000+ --- ---
Steven Rose........................................ 25,000 25,000+ --- ---
Richard Feldman.................................... 102,500 102,500+ --- ---
Betty Janitz....................................... 25,000 25,000+ --- ---
Chris Liakouras.................................... 25,000 25,000+ --- ---
Charles R. Bosco................................... 100,000 100,000+ --- ---
Joe Pigford (Dyad Industries)...................... 25,000 25,000+ --- ---
Marshall Weinstein................................. 25,000 25,000+ --- ---
P.E. & Mary Helen Jones............................ 25,000 25,000+ --- ---
Amalgam Capital.................................... 151,750 151,750+ --- ---
George M. Britton.................................. 125,000 125,000+ --- ---
Penny Koenig....................................... 90,000 40,000(2) 50,000 *
Harrell Huff....................................... 90,000 40,000(3) 50,000 *
Oral M. Bertocchio Trust UTD 10/88................. 90,000 40,000(4) 50,000 *
Stanley J. Hydrisko................................ 2,000 1,000(5) 1,000 *
Heatmax............................................ 65,000 65,000(6) --- ---
OTC Communications................................. 106,000 10,000 96,000 *
Nitinol Devices Corp............................... 20,000 20,000 --- ---
Dr. Allan G. Adelman............................... 10,000 10,000 --- ---
Dr. Ken Snyderman.................................. 2,000 2,000 --- ---
Dr. Andrew Common.................................. 5,000 5,000 --- ---
Louis T. Buonocore................................. 24,000 24,000 --- ---
Endotec, Inc....................................... 50,000 50,000 --- ---
Rubin and Rudman................................... 30,000 30,000 --- ---
TOTAL 2,811,925 2,526,250 285,675 2.8%
</TABLE>
- --------------
+ These shares may be acquired upon the exercise of a warrant to purchase
Common Stock at an exercise price of $0.40 per share.
++ Assumes no sales are effected by the Selling Security Holder during the
offering period other than pursuant to this Registration Statement.
* Less than one percent.
(1) Includes a warrant to purchase 15,000 shares at an exercise price of
$0.6875 per share.
(2) These shares may be acquired upon the exercise of a warrant to purchase
Common Stock at an exercise price of $0.25 per share.
(3) These shares may be acquired upon the exercise of a warrant to purchase
Common Stock at an exercise price of $0.25 per share.
(4) These shares may be acquired upon the exercise of a warrant to purchase
Common Stock at an exercise price of $0.25 per share.
11
<PAGE> 15
(5) These shares may be acquired upon the exercise of a warrant to purchase
Common Stock at an exercise price of $0.50 per share.
(6) These shares may be acquired upon the exercise of a warrant to purchase
Common Stock at an exercise price of $0.45 per share.
Except as set forth below, no Selling Security Holder has held any
position or office, or has had any material relationship with, the Company or
any of its affiliates within the past three years.
Herbert L. Kalman has served as director, Secretary and Treasurer of
the Company since June 28, 1995. In addition, he served as Vice President and
Chief Financial Officer from March 1994 through October 1995; Phillip R. Rose
and Steven Rose are related by marriage to Mr. Kalman. Joyce Heinrich is
employed as a paid consultant to the Company; Porter & Hedges, L.L.P. represents
the Company as its principal outside legal counsel; Both Conley, Rose & Tayon
and Gunn & Associates represent the Company in patent-related matters. Joseph J.
Janecka, Jr. served as Vice President and General Manager of the Company from
February 20, 1993 to December 23, 1993. Thereafter, he held the position of
Chief Operating Officer. Mr. Janecka resigned from the Company on December 16,
1994. P.E. and Mary Helen Jones are related by marriage to David P. Summers,
Ph.D., currently the Company's Chairman of the Board and Chief Scientific
Officer.
PLAN OF DISTRIBUTION
The Selling Security Holders may offer the shares of Common Stock
subject to this Prospectus from time to time in one or more offerings through
underwriters, dealers or agents, or directly to one or more purchasers in fixed
price offerings, in negotiated transactions, at market prices prevailing at the
time of sale or at prices related to such market prices. Resales by the
purchasers of such shares may be made in the same manner.
If underwriters are used in any offering of shares of Common Stock, the
underwriter or underwriters with respect to such offering will be named in a
Prospectus Supplement. Only underwriters named in a Prospectus Supplement will
be deemed to be underwriters in connection with the shares of Common Stock
offered thereby. Firms not so named will have no direct or indirect
participation in the underwriting of such Common Stock, although such a firm may
participate in the distribution of such Common Stock under circumstances
entitling it to a dealer's commission. Unless otherwise set forth in the
Prospectus Supplement relating to such offering, any underwriting agreement
pertaining to any offering of shares of Common Stock will (i) entitle the
underwriters to indemnification by the Company and the Selling Security Holders
against certain civil liabilities under the Securities Act; (ii) provide that
the obligations of the underwriters will be subject to certain conditions
precedent; and (iii) provide that the underwriters will be obligated to purchase
all shares of such Common Stock so offered if any shares are purchased. If
underwriters are used in any offering of Common Stock, the names of such
underwriters, the anticipated date of delivery and other material terms of the
transaction will be set forth in the Prospectus Supplement relating to such
offering.
The distribution of the shares of Common Stock by the Selling Security
Holders, or by pledgees, transferees or other successors-in-interest of the
Selling Security Holders, may be effected from time to time in one or more
transactions (which may involve block transactions) in the over-the-counter
market, in negotiated transactions or in a combination of such methods of sale,
at fixed prices, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, or at negotiated prices. The Selling
Security Holders may effect such transactions by selling shares of Common Stock
directly to purchasers or to or through broker-dealers acting as principals or
agents. Such broker-dealers may receive compensation in the form of underwriting
discounts, concessions, or commissions from the Selling Security Holders or the
purchasers of the shares of Common Stock for whom such broker-dealers may act as
agent, or to whom they may sell as principal or both (which compensation, as to
a particular broker-dealer, may be less than or in excess of customary
commissions).
Upon the Company's being notified by a Selling Security Holder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution, a supplemented Prospectus will be filed, pursuant to
Rule 424(b) under the Act, setting forth (i)
12
<PAGE> 16
the name of each Selling Securityholder and of the participating
broker-delaer(s), (ii) the number of shares involved, (iii) the price at which
such shares were sold, (iv) the commissions paid or discounts or concessions
allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out in this Prospectus and (vi) other facts material to the transactions.
The Selling Security Holders and any broker-dealers or agents who
participate in a sale of shares of Common Stock covered by this Prospectus may
be deemed to be underwriters (within the meaning of such term under the
Securities Act) of the Common Stock offered thereby. Any commissions received by
them, as well as any proceeds from any sales as principal by them, may be deemed
to be underwriting discounts and commissions under the Securities Act. Unless
otherwise set forth in the applicable Prospectus Supplement, such dealers or
agents may, under agreements with the Selling Security Holders, be entitled to
indemnification by the Company or the Selling Security Holders against certain
civil liabilities under the Securities Act.
With respect to the shares of Common Stock offered hereby which may be
acquired upon the exercise of warrants (the "Warrant Shares"), each of the
warrant holders (the "Warrant Holders"), representing an aggregate of 1,425,250
shares of Common Stock, has agreed that the Company may voluntarily suspend the
effectiveness of this registration statement for a limited time, not to exceed
120 days, if the Company has been advised by counsel or a managing underwriter
involved in an offering by the Company that the offering of the Warrant Shares
pursuant to this registration statement would adversely affect, or would be
improper in view of, a proposed financing, reorganization, recapitalization,
merger, consolidation or similar transaction involving the Company.
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock offered hereby. However, if all of warrants representing
shares of Common Stock in this offering are exercised, the Company will receive
aggregate proceeds therefrom of $559,762.50.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed on for
the Company by Porter & Hedges, L.L.P., of Houston, Texas. Porter & Hedges,
L.L.P. is offering 30,000 shares of Common Stock pursuant to this prospectus.
See "Selling Security Holders."
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1994 and
the consolidated statements of operations, changes in stockholders' equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 1995 and for the period from inception, September 4, 1984, to
December 31, 1995, incorporated by reference in this prospectus, have been
incorporated herein in reliance on the report, which includes an explanatory
paragraph which refers to substantial doubt regarding the Company's ability to
continue as a going concern, of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
13
<PAGE> 17
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN, OR INCORPORATED BY REFERENCE IN,
THIS PROSPECTUS, 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 A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF, OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE SUCH DATE.
TABLE OF CONTENTS
Page
Available Information..................................... 2
Documents Incorporated by Reference....................... 2
The Company............................................... 3
Risk Factors.............................................. 3
Selling Security Holders.................................. 10
Plan of Distribution...................................... 12
Legal Matters............................................. 13
Experts................................................... 13
================================================================================
================================================================================
AMERICAN BIOMED, INC.
COMMON STOCK
P R O S P E C T U S
MAY 17, 1996
================================================================================
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses payable by the Company in connection with the
offering of the shares of Common Stock to be registered and offered hereby are
as follows:
<TABLE>
<S> <C>
SEC registration fee ................................ $ 1,222.47
Legal fees and expenses ............................. $ 7,500.00
Blue Sky fees and expenses (including legal expenses) $ 0
Accounting fees and expenses ........................ $ 7,000.00
Miscellaneous ....................................... $ 2,500.00
Total ............................................... $18,222.47
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a
corporation to 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,
whether civil, criminal, administrative or investigative, by reason of the fact
that he 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 corporation, partnership, joint venture, trust or
other enterprise against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action.
In an action brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees, actually
and reasonably incurred in connection with the defense or settlement of such
action, and the corporation may not indemnify for amounts paid in satisfaction
of a judgment or in settlement of the claim. In any such action, no
indemnification may be paid in respect of any claim, issue or matters as to
which such person shall have been adjudged liable to the corporation, except as
otherwise approved by the Delaware Court of Chancery or the court in which the
claim was brought. In any other type of proceeding, the indemnification may
extend to judgments, fines and amounts paid in settlement, actually and
reasonably incurred in connection with such other proceeding, as well as to
expenses.
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation and, in the
case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. There are additional limitations applicable to
criminal actions and to actions brought by or in the name of the corporation.
The determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (1) by a majority vote of a quorum of
disinterested members of the board of directors, or (2) by independent legal
counsel in a written opinion, if such a quorum does not exist or if the
disinterested directors so direct, or (3) by the stockholders.
The Company's Certificate of Incorporation requires the Company to
indemnify its directors and officers to the fullest extent permitted by Section
145 of the Delaware General Corporation Law. In addition, the Company maintains
directors' and officers' liability insurance.
II-1
<PAGE> 19
ITEM 16. EXHIBITS.
The following is a list of all the exhibits filed as part of the
Registration Statement.
EXHIBITS
Number
5.1* - Opinion of Porter & Hedges, L.L.P., as to the legality of the
Common Stock.
23.1 - Consent of Coopers & Lybrand L.L.P.
23.2* - Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1).
24.1 - Power of Attorney (included as part of signature page of
Registration Statement).
- ----------------
*To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(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 set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 the 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 the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
II-2
<PAGE> 20
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to 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 Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the 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 registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 21
SIGNATURES
In accordance with 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 of filing on Form S-3 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of The
Woodlands, State of Texas on May 17, 1996.
AMERICAN BIOMED INC.
By: /s/ Steven B. Rash
------------------------------------------
Steven B. Rash
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of American BioMed, Inc.,
constitute and appoint Steven B. Rash or David P. Summers, or either of them,
our true and lawful attorneys and agents, to do any and all acts and things in
our name and on our behalf in our capacities as directors and officers, and to
execute any and all instruments for us and in our names in the capacities
indicated below, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with the filing of this
Registration Statement, including specifically without limitation, power and
authority to sign for any of us, in our names in the capacities indicated below,
any and all amendments hereto; and we do each hereby ratify and confirm all that
the said attorneys and agents, or either of them, shall do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 17, 1996.
Signature Title
--------- -----
/s/ David P. Summers Chairman of the Board
- ------------------------------
David P. Summers, Ph.D.
/s/ Steven B. Rash President, Chief Executive
- ------------------------------
Steven B. Rash Officer and Director
Director
- ------------------------------
Lawrence M. Hoffman
Director
- ------------------------------
Herbert L. Kalman
/s/ Claudio Guazzoni Director
- ------------------------------
Claudio Guazzoni
II-4
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
5.1* Opinion of Porter & Hedges, L.L.P., as to the legality of the Common Stock
23.1 Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
24.1 Power of Attorney (included as part of signature page of Registration Statement)
</TABLE>
- -----------------
* To be filed by amendment.
<PAGE> 1
[COOPERS & LYBRAND LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report, which includes an explanatory paragraph that refers to
substantial doubt regarding the Company's ability to continue as a going
concern, dated March 27, 1996, on our audits of the consolidated financial
statements and the financial statement schedule of American BioMed, Inc. and
Subsidiaries as of December 31, 1994 and 1995, and for the years ended December
31, 1993, 1994 and 1995, and for the period from inception, September 4, 1984,
to December 31, 1995. We also consent to the reference to our firm under the
caption "Experts".
Coopers & Lybrand L.L.P.
-----------------------------
COOPERS & LYBRAND L.L.P.
Houston, Texas
May 13, 1996
