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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1998
REGISTRATION NO. 333-
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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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ABAXIS, INC.
(Exact Name of Registrant as Specified in its Charter)
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CALIFORNIA 77-0213001
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
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1320 CHESAPEAKE TERRACE
SUNNYVALE, CALIFORNIA 94089
(408) 734-0200
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
CLINTON SEVERSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
ABAXIS, INC.
1320 CHESAPEAKE TERRACE
SUNNYVALE, CALIFORNIA 94089
(408) 734-0200
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
Copy to:
Thomas W. Furlong, Esq.
Thaddeus G. Stephens, Esq.
GRAY CARY WARE & FREIDENRICH LLP
400 Hamilton Avenue
Palo Alto, California 94301-1825
(650) 328-6561
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to a 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 Act 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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TITLE OF SHARES AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED BE REGISTERED(1) AGGREGATE PRICE PER UNIT(2) AGGREGATE PRICE(2) REGISTRATION FEE(3)
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Common Stock (no par value ) 1,675,000 $1.625 $2,721,875 $756.69
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(1) Shares of Common Stock which may be offered pursuant to this Registration
Statement consisting of 1,600,000 shares issuable upon conversion of 4,000
shares of issued and outstanding Series C Convertible Preferred Stock and
75,000 shares of Common Stock issued and outstanding. In addition to the
shares set forth in the table, the amount to be registered includes an
indeterminate number of shares issuable upon conversion of or in respect of
the Series C Convertible Preferred Stock, as such number may be adjusted as
a result of stock splits, stock dividends and antidilution provisions in
accordance with Rule 416.
(2) Estimated solely for the purpose of computing the registration fee and
based on the average high and low sales prices of the Common Stock of
Abaxis, Inc. as reported on the Nasdaq National Market on December 28,
1998.
(3) Computed pursuant to Rule 457(c) based on the average high and low sale
prices of the Common Stock of Abaxis, Inc. reported on the Nasdaq National
Market for December 28, 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 SUCH SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
SEC is effective. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 30, 1998
1,675,000 SHARES
ABAXIS, INC.
COMMON STOCK
The selling shareholders of Abaxis, Inc. listed on page 13 may offer and
resell up to 1,675,000 shares of Abaxis common stock under this prospectus, for
each of their own accounts. The number of shares the selling shareholders may
sell includes shares of common stock that currently are issued and outstanding,
as well as shares of common stock that they may receive if they convert their
shares of Series C Preferred Stock. We will not receive any proceeds from such
sales.
We issued shares of our Series C Preferred Stock in a private transaction
on November 17, 1998 to the selling shareholders. We issued 75,000 shares of our
common stock to one of the selling shareholders as a fee for assisting us with
the sale of our Series C Preferred Stock.
Our common stock is quoted on the Nasdaq National Market under the symbol
"ABAX." On December 28, 1998, the last sale price of our common stock was
$1.6875.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE
"RISK FACTORS" BEGINNING ON PAGE TWO.
The shares have not been approved or disapproved by the SEC or any state
securities commission, nor have these organizations determined that this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
THE DATE OF THIS PROSPECTUS IS ______________, 1998
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TABLE OF CONTENTS
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ABOUT ABAXIS..............................................................1
RISK FACTORS..............................................................2
WHERE YOU CAN FIND MORE INFORMATION......................................11
FORWARD LOOKING INFORMATION..............................................12
USE OF PROCEEDS..........................................................12
SELLING SHAREHOLDERS.....................................................12
PLAN OF DISTRIBUTION.....................................................13
LEGAL MATTERS............................................................14
EXPERTS..................................................................14
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ABOUT ABAXIS
We develop, manufacture and market portable blood analysis systems. The
system allows health care providers to rapidly perform certain key blood tests.
Our products consist of a compact 6.9 kilogram analyzer and a series of
single-use plastic discs, called reagent discs, that contain all the chemicals
required to perform a panel of up to 12 tests. The system can be operated with
minimal training, and it performs multiple routine tests on whole blood, serum
or plasma using either venous or fingerstick samples. The system provides test
results in less than 15 minutes with the same precision and accuracy as a
clinical laboratory analyzer. We currently market this system for veterinary use
under the name VetScan and in the human market under the name Piccolo.
Our principal executive offices are located at 1320 Chesapeake Terrace,
Sunnyvale, California 94089. Our telephone number is (408) 734-0200.
VetScan and Piccolo are registered trademarks of Abaxis, Inc. Other
trademarks that we may refer to in this prospectus belong to their respective
owners.
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RISK FACTORS
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933. These statements accurately reflect
our current view with respect to future events and financial performance. The
future events that we describe in these risk factors involve risks and
uncertainties, among them are risks and uncertainties related to:
1. the market acceptance of our products;
2. our continuing development of our products;
3. obtaining required Food and Drug Administration clearance and other
federal, state and local government approvals;
4. the manufacture and distribution of our products on a commercial
scale;
5. general market conditions; and
6. competition.
When used in this prospectus, the words "anticipates," "believes,"
"expects," "intends," "plans," "future," and similar expressions identify
forward-looking statements. Our actual results could differ materially from
those that we project in the forward-looking statements as a result of factors
that we have set forth throughout this document as well as factors of which we
are currently not aware.
Your investment in the shares being offered by the selling shareholders in
this prospectus involves a high degree of risk and should not be made by you if
you cannot afford the loss of your entire investment. In addition to the other
information in this prospectus, or incorporated in this prospectus by reference,
you should consider carefully the following risk factors before investing in the
common stock offered by the prospectus:
WE ARE NOT PROFITABLE; WE MUST INCREASE SALES OF OUR PICCOLO AND VETSCAN
PRODUCTS TO BE PROFITABLE
As of September 30, 1998, we had not been profitable in any period since
our formation in 1989, and we had incurred cumulative net losses of
approximately $50.4 million. We expect our losses to continue through at least
the first half of fiscal year 2000. Our ability to become profitable will
depend, in part, on our ability our sales volumes of our VetScan and Piccolo
products. Increasing our sales volume of our products will depend upon our
ability to:
1. continue to develop our products;
2. increase our sales and marketing activities;
3. increase of manufacturing activities; and
4. effectively compete against current and future competitors.
We cannot assure you that we will be able to successfully increase our
sales volumes of our products to achieve profitability.
WE ARE NOT ABLE TO PREDICT SALES IN FUTURE QUARTERS AND A NUMBER OF FACTORS
EFFECT OUR PERIODIC RESULTS
We are not able to accurately predict our sales in future quarters. In any
quarter, we derive a significant portion of our revenues from sales to a limited
number of distributors who resell our products to the ultimate user. While we
are better able to predict sales of our reagent discs, as we sell these discs
primarily for use with analyzers
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that we sold in prior periods, we generally are unable to predict with much
certainty sales of our analyzers, as we typically sell our analyzer to new
users. Accordingly, our sales in any one quarter are not indicative of our sales
in any future period. In addition, we generally operate with limited order
backlog, because we ship our products shortly after we receive the orders from
our customers. As a result, our product sales in any quarter are generally
dependent on orders that we receive and ship in that quarter. We base our
expense levels, which are to a large extent fixed, in part on our expectations
as to future revenues. We may be unable to reduce our spending in a timely
manner to compensate for any unexpected revenue shortfall. As a result, any such
shortfall would immediately materially and adversely impact our operating
results and financial condition. In addition, we have historically experienced a
decrease in our sales, especially in Europe, in our second and third quarters.
Accordingly, we believe that period to period comparisons of our results of
operations are not necessarily meaningful.
Our periodic operating results have varied in the past. In the future, we
expect our periodic operating results to vary significantly depending on, but
not limited to, a number of factors, including:
1. the level of competition in the markets in which we compete;
2. the size and timing of sales orders that we receive from our
customers;
3. market acceptance of our current and future products;
4. new product announcements made by us or our competitors;
5. changes in our pricing structures or the pricing structures of our
competitors;
6. our ability to develop, introduce and market new products on a timely
basis;
7. the costs, and possible supply constraints, of the components that we
use to build our products;
8. our manufacturing capacities and our ability to increase the scale of
these capacities;
9. the mix of product sales between our analyzer and our reagent disc
products;
10. the different sales channels available to us;
11. the limited size of our sales force;
12. the amount we spend on research and development;
13. changes in our strategy;
14. changes in our key personnel;
15. changes in regulatory matters; and
16. general economic trends in the economy.
WE MAY NEED ADDITIONAL FUNDING IN THE FUTURE AND THESE FUNDS MAY NOT BE
AVAILABLE TO US
We believe that our existing capital resources, bank and equipment
financing loans and anticipated revenue from the sales of our products will be
adequate to satisfy our currently planned operating and financial requirements
through fiscal year 2000 although no assurances can be given. We will need
additional funds, however, if we do not achieve anticipated revenue from the
sale of our Piccolo and VetScan products. In addition, we expect to incur
substantial additional costs to support our future operations, including:
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1. further commercialization of our products and development of new test
methods to allow us to further penetrate the human diagnostic market
and the veterinary diagnostic market;
2. our need to acquire capital equipment for our manufacturing
facilities, which includes the ongoing development and implementation
of automated manufacturing lines to provide capacity for the
production of commercial volumes of our products;
3. research and design costs related to the continuing development of our
current and future products; and
4. additional pre-clinical testing and clinical trials for our current
and future products.
To the extent that our existing resources and anticipated revenue from the
sale of the Piccolo and VetScan systems are insufficient to fund our activities,
we will have to raise additional funds from the issuance of public or private
securities. We may not be able to raise additional funding, or if we are able
to, we may not be able to raise funding on acceptable terms. We may dilute
then-existing shareholders if we raise additional funds by issuing new equity
securities. Alternatively, we may have to relinquish rights to certain of our
technologies, products and/or sales territories if we are required to obtain
funds through arrangements with collaborative partners. If we are unable to
raise needed funds, we may be required to curtail our operations significantly.
This would materially adversely affect our operating results and financial
condition.
WE HAVE LIMITED MARKETING AND DISTRIBUTION EXPERIENCE AND FEW RESOURCES TO
DEVOTE TO MARKETING AND DISTRIBUTION; OUR INTERNATIONAL SALES EFFORTS ARE
CHARACTERIZED BY A HIGH DEGREE OF DISTRIBUTOR TURNOVER
We have been marketing our VetScan System products for less than four years
in the veterinary diagnostic market, and we have only recently begun marketing
our Piccolo System products in the human diagnostic market. Accordingly, we have
very limited marketing and distribution experience, especially in the human
diagnostic market. Further, we have limited resources to devote to marketing and
distribution. In particular, we have only seven full-time sales personnel
involved in our sales and marketing activities. While these individuals work
with our distribution partners both domestically and internationally to extend
our market reach, the primary selling activities are often done by these
individuals. If we are to increase our sales, we will need to increase the size
of our sales force. However, we may be constrained from growing our sales force
by our financial resources and the availability of qualified sales personnel.
This means that we may not be able to build an effective sales and marketing
organization, or we may not be able to establish an extensive and effective
distribution network. We cannot assure you that:
1. we will be able to build a successful sales and marketing
organization;
2. we will be able to establish effective distribution arrangements;
3. any distribution arrangements that we are able to establish will be
successful in marketing our products; or
4. the costs associated with marketing and distributing our products will
not be excessive.
Although we have established some international distributors, we have
limited experience and resources in marketing and distributing our products in
international markets. Moreover, we have experienced a high degree of turnover
among our international distributors. This high degree of turnover makes it
difficult for us to establish a steady distribution network overseas.
Consequently, we may not be successful in marketing our Piccolo System and
VetScan System products internationally.
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WE NEED TO DEVELOP ADDITIONAL REAGENT DISCS FOR THE HUMAN DIAGNOSTIC MARKET IF
WE ARE TO COMPETE IN THAT MARKET
We have developed a blood analysis system that consists of a portable blood
analyzer and single-use reagent discs. Each reagent disc performs a series of
standard blood tests. We believe that it is necessary to develop additional
series of reagent discs with various tests for use with the Piccolo and VetScan
systems. Currently, we have primarily developed reagent discs suitable for the
veterinary diagnostic market. In order to be competitive in the more lucrative
human diagnostic market, we need to develop additional reagent discs that
include certain standard tests for which the medical community receives
reimbursements from third party payors such as HMOs and Medicare. The tests that
we need to develop to compete in the human diagnostic market include the
standard electrolyte tests -- potassium, sodium, chloride and carbon dioxide --
and lipid tests. Currently, we are in clinical testing for the potassium, sodium
and carbon dioxide tests, but we are still developing the chloride and lipid
tests. We may not be able to develop these new reagent discs on a timely and
cost effective basis. Also, we may not be able to obtain regulatory clearance
for these new reagent discs. Further, even if we gain regulatory approval, we
may not be able to successfully manufacture or market the reagent discs. Our
failure to meet one or more of these challenges will materially adversely effect
our operating results and financial condition.
WE RELY ON DISTRIBUTORS TO SELL OUR PRODUCTS; WE RELY ON SOLE DISTRIBUTOR
ARRANGEMENTS IN A NUMBER OF COUNTRIES
We distribute our products primarily through distributors. As a result, we
are dependent upon these distributors to sell our products and to assist us in
promoting and creating a demand for our products. We have a number of
distributors in the United States who distribute our VetScan products, although
one of these distributors has accounted for a majority of our sales in the
United States to date. We believe that our future growth depends on the efforts
of these distributors. If one of our distributors were to stop selling our
products, we may not be able to replace it. Further, many of our distributors
may carry our competitors' products, and may promote our competitors' products
over our own products. Finally, we do not have at this time distribution
partners in the United States who distribute our products for the human
diagnostic market.
We currently have exclusive distribution agreements in the following
countries:
1. Argentina;
2. Australia;
3. Austria;
4. France;
5. Germany;
6. Greece;
7. Hong Kong;
8. Italy;
9. Japan;
10. Korea;
11. Mexico;
12. New Zealand;
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13. Norway;
14. Portugal;
15. Spain;
16. Switzerland;
17. Turkey; and
18. the United Kingdom.
Our distributor in each of these countries is responsible for obtaining the
necessary approvals to sell our products. These distributors may not be
successful in obtaining proper approvals for our products in their respective
countries, and they may not be successful in marketing our products. We plan to
enter into additional distribution agreements to expand our international
distribution base and solidify our international presence. However, we may not
be successful in entering into additional distributor agreements. Our
distributors may, and have in the past, terminate their relationship with us at
any time. If that happens, we may not be able to negotiate acceptable
alternative distribution relationships.
OUR MANUFACTURING CAPACITY IS LIMITED AND WE MAY NOT BE ABLE TO EXPAND IT
We have limited manufacturing capacity. Because our products are highly
complex, it is difficult for us to manufacture them through an assembly line
process. While we believe that the autoline assembly system that we are
installing will be adequate for our current needs, we may not be able to
increase the scale of the autoline system to handle either (1) larger volume
production or (2) the production of new or varied products. Further, all aspects
of such a scale-up must comply with applicable governmental regulations. We may
encounter significant delays or incur unforeseen costs in expanding our
manufacturing capacity because of the complexities described above. In addition,
we will need to continue to develop the infrastructure that we require to
effectively manage our manufacturing operations. The process of manufacturing
sufficient quantities of our products can be expensive, time-consuming and
complex. We may not be able to successfully add technical and non-technical
personnel that we need to meet the additional staffing requirements that any
increase in production would require. If we are unable to develop such increased
manufacturing capabilities and infrastructure with appropriate quality, at
acceptable costs and on a timely basis, our business or financial condition
could be materially adversely affected.
WE DEPEND ON SOLE SUPPLIERS FOR SEVERAL KEY COMPONENTS TO OUR PRODUCTS
We use several components that are currently available from limited or sole
sources. A single injection molding manufacturer currently makes the molded
plastic discs which, when loaded with reagents and welded together, form our
reagent disc products. We believe that only a few manufacturers are capable of
producing these discs to the narrow tolerances that we require; to date, we have
only qualified one manufacturer to manufacture the molded plastic discs.
Moreover, we currently depend on a single vendor for some of the chemicals that
we use to produce the dry reagent chemistry beads. Further, our analyzer
products use several technologically advanced components that are each available
only from single vendors. Because we are dependent on a limited number of
suppliers and manufacturers for critical components to our products, we are
particularly susceptible to any interruption in the supply of these products or
the viability of our assembly arrangements. The loss of one of these suppliers
or a disruption in our manufacturing arrangements would materially adversely
affect our business and financial condition.
COMPETITION FROM LARGER, BETTER ESTABLISHED ENTITIES SUCH AS HOSPITALS AND
COMMERCIAL LABORATORIES
Blood analysis is a well established field in which there are a number of
competitors that have substantially greater financial resources and larger, more
established marketing, sales and service organizations than we do. We compete
with the following organizations:
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1. commercial clinical laboratories;
2. hospitals clinical laboratories; and
3. manufacturers of bench top multi-test blood analyzers and other
testing systems that health care providers can use "on-site."
We may not be able to compete with these organizations or their products or
with future organizations or future products.
Historically, hospitals and commercial laboratories perform the most human
medical testing, and commercial laboratories perform the most veterinary medical
testing. Our products compete with the commercial and hospital laboratories with
respect to:
1. range of tests offered;
2. the immediacy of results;
3. cost effectiveness;
4. ease of use; and
5. reliability of results.
We believe that we compete effectively on each of these factors except for
the range of tests offered. Clinical laboratories are effective at processing
large panels of tests using skilled technicians and complex equipment. While our
current offering of reagent discs cannot provide the same range of tests, we
believe that our products provide a sufficient breadth of test menus to compete
successfully with clinical laboratories, in certain limited markets, on the
basis of the other four factors. However, we cannot assure a potential investor
that we will continue to be able to compete effectively on (1) cost
effectiveness, (2) ease of use, (3) immediacy of results or (4) reliability of
results. We also cannot assure a potential investor that we will ever be able to
compete effectively on the basis of range of tests offered.
Competition in the human and veterinary diagnostic markets is intense. Most
of our competitors have significantly greater financial and other resources than
we do. In particular, many of our competitors have large sales forces and
well-established distribution channels. Consequently, we must develop our
distribution channels and improve our direct sales force in order to compete in
these markets.
CHANGES IN THIRD PARTY PAYOR REIMBURSEMENT REGULATIONS CAN NEGATIVELY EFFECT OUR
BUSINESS
By regulating the maximum amount of reimbursement they will provide for
blood testing services, third party payors, such as HMOs, pay-per-service
insurance plans, Medicare and Medicaid, can indirectly affect the pricing or the
relative attractiveness of our human testing products. For example, the Health
Care Financing Administration sets the level of reimbursement of fees for blood
testing services for Medicare beneficiaries. If third party payors decrease the
reimbursement amounts for blood testing services, it may decrease the amount
that physicians and hospitals are able to charge patients for such services.
Consequently, we will need to charge less for our products. If the government
and third party payors do not provide for adequate coverage and reimbursement
levels to allow health care providers to use our products, the demand for our
products will decrease.
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WE ARE SUBJECT TO NUMEROUS GOVERNMENTAL REGULATIONS
Need for FDA certification for our medical device products.
Our Piccolo products are regulated under the 1976 Medical Device Amendments
to the Food, Drug and Cosmetic Act, which is administered by the Food and Drug
Administration. The FDA classified our initial Piccolo products as "Class II"
devices. Class II devices require us to submit to the FDA a pre-market
notification form or 510(k). The FDA uses the 510(k) to substantiate product
claims that are made by medical device manufacturers prior to marketing. In our
510(k) notification, we must, among other things, establish that the product we
plan to market is "substantially equivalent" to (1) a product that was on the
market prior to the adoption of the 1976 Medical Device Amendment or (2) to a
product that the FDA has previously cleared under the 510(k) process. The FDA
review process of a 510(k) notification can last anywhere from three months to
over year, and the FDA must issue a written order finding "substantial
equivalence" before a company can market a medical device. To date, we have
received market clearance from the FDA for our Piccolo System and 16 reagent
tests that we have on four reagent discs. We are currently developing additional
tests that the FDA will have to clear through the 510(k) notification
procedures. These new test products are crucial for our success in the human
diagnostic market. If we do not receive 510(k) clearance for a particular
product, we will not be able to sell that product in the United States.
Need to Comply with Manufacturing Regulations
The 1976 Medical Device Amendment also requires us to manufacture our
Piccolo products in accordance with Good Manufacturing Practices guidelines.
Current Good Manufacturing Practice requirements are set forth in the quality
system regulation. These requirements regulate the methods used in, and the
facilities and controls used for, the design, manufacture, packaging, storage,
installation and servicing of our medical devices intended for human use. Our
manufacturing facility is subject to periodic audits. In addition, various state
regulatory agencies may regulate the manufacture of our products. For example,
we have obtained a license from the State of California to manufacture our
products. In September 1996, the FDA granted our manufacturing facility "in
compliance" status, based on the regulations for Good Manufacturing Practices
for medical devices. We are scheduled for inspection by the FDA and the State of
California on a routine basis, typically once every 24 months. We cannot assure
an investor that we will successfully pass a re-inspection by the FDA or the
State of California. In addition, we cannot assure an investor that we can
comply with all current or future government manufacturing requirements and
regulations. If we are unable to comply with the regulations, or if we do not
pass routine inspections, our business and results of operations will be
materially adversely effected.
Affects of the Clinical Laboratory Improvement Amendments on our products.
Our Piccolo products are affected by the Clinical Laboratory Improvement
Amendments of 1988. The Clinical Laboratory Improvement Amendments are intended
to insure the quality and reliability of all medical testing in the United
States regardless of where tests are performed. The current Clinical Laboratory
Improvement Amendments divide laboratory tests into three categories: "simple,"
"moderately complex" and "highly complex." Tests performed using the Piccolo
system are in the "moderately complex" category. This category requires that any
location in which testing is performed be certified as a laboratory. Hence, we
can only sell our Piccolo products to customers who meet the standards of a
laboratory. To receive "laboratory" certification, a testing facility must be
certified by the Health Care Financing Administration. After the testing
facility receives a "laboratory" certification, it must then meet the Clinical
Laboratory Improvement Amendments regulations. Because we can only sell our
Piccolo products to testing facilities that are certified "laboratories," the
market for our products is correspondingly constrained. In an effort to expand
the market for our Piccolo products, we have filed an application to have our
Piccolo products exempted from the Clinical Laboratory Improvement Amendments.
If our exemption request is denied, we will continue to be subject to the
Clinical Laboratory Improvement Amendments. Consequently, the market for our
Piccolo products will be confined to those testing facilities that are certified
as "laboratories" and our growth will be limited accordingly.
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We are subject to various federal, state and local regulations.
Federal and state regulations regarding the manufacture and sale of health
care products and diagnostic devices may change. We cannot predict what impact,
if any, such changes would have on our business. In addition, as we continue to
sell in foreign markets, we may have to obtain additional governmental
clearances in those markets. We may not be able to obtain regulatory clearances
for our products in the United States or in foreign markets, and the failure to
obtain these regulatory clearances will materially adversely affect our business
and results of operations.
Although we believe that we will be able to comply with all applicable
regulations of the Food and Drug Administration and of the State of California,
including Quality System Regulations, current regulations depend on
administrative interpretations. Future interpretations made by the Food and Drug
Administration, the Health Care Finance Administration or other regulatory
bodies may adversely affect our business.
WE RELY ON PATENTS AND OTHER PROPRIETARY INFORMATION, THE LOSS OF ANY OF WHICH
WOULD NEGATIVELY AFFECT OUR BUSINESS
As of December 1, 1998, we have filed 27 patent applications in the United
States and have been issued 19 patents. Additionally, we have filed several
international patent applications covering the same subject matter as our
domestic applications. The patent position of any medical device manufacturer,
including Abaxis, is uncertain and may involve complex legal and factual issues.
Consequently, we may not be issued any additional patents, either domestically
or internationally. Furthermore, our patents may not provide significant
proprietary protection because there is a chance that they will be circumvented
or invalidated. We cannot be certain that we were the first creator of the
inventions covered by our issued patents or pending patent applications, or that
we were the first to file patent applications for these inventions, because (1)
the United States Patent and Trademark Office maintains all patent applications
in secrecy until it issues the patents and (2) publications of discoveries in
the scientific or patent literature tend to lag behind actual discoveries by
several months.
In addition, we may need to license or circumvent certain patents to
produce our products. Moreover, we may have to participate in interference
proceedings, which are proceeding in front of the U.S. Patent and Trademark
Office, to determine who will be issued a patent. These proceedings could be
costly and could be decided against us.
Although we have not had infringement claims filed against us to date, we
may in the future be sued by third parties who claim that our products violate
their intellectual property rights. We may not be successful in defending
ourselves against such claims. Even if we are successful, the defense of such
claims would be expensive and would divert management's focus away from running
our business. Consequently, any infringement claim, even if without merit, could
adversely affect our business.
We also rely upon copyrights, trademarks and unpatented trade secrets.
Others may independently develop substantially equivalent proprietary
information and techniques that would undermine our proprietary technologies.
Further, others may gain access to our trade secrets or disclose such
technology. Any of these events would negatively impact our business.
WE DEPEND ON KEY MEMBERS OF OUR MANAGEMENT AND SCIENTIFIC STAFF , AND WE MUST
RETAIN AND RECRUIT QUALIFIED INDIVIDUALS IF WE ARE TO BE COMPETITIVE
We are highly dependent on the principal members of our management and
scientific staff. The loss of any of these key personnel might impede the
achievement of our business objectives. We currently do not maintain key man
life insurance on any of our employees. Furthermore, in order to be successful,
we must recruit and retain additional qualified marketing, sales and
manufacturing personnel. Although we believe that we will be successful both in
retaining our current management and scientific staff and attracting and
retaining skilled and experienced marketing, sales and manufacturing personnel,
we may not be able to employ such personnel on acceptable terms
9
<PAGE> 13
because numerous medical products and other high technology companies compete
for the services of these qualified individuals.
WE ARE SUBJECT TO PRODUCT LIABILITY CLAIMS AND WE MAY NOT HAVE SUFFICIENT
PRODUCT LIABILITY INSURANCE
Our business exposes us to potential product liability risks which are
inherent in the testing, manufacturing and marketing of human medical products.
We currently maintain product liability insurance. We believe that this
insurance is adequate for our needs, taking into account the risks involved and
cost of coverage. However, our product liability insurance may be insufficient
to cover potential liabilities. Furthermore, in the future the coverage that we
require may be unavailable on commercially reasonable terms, if at all. Even
with our current insurance coverage, a product liability claim or recall could
materially adversely affect our business or our financial condition.
WE MUST COMPLY WITH STRICT AND COSTLY ENVIRONMENTAL REGULATIONS
We are subject to stringent federal, state and local laws, rules,
regulations and policies that govern the use, generation, manufacture, storage,
air emission, effluent discharge, handling and disposal of certain materials and
wastes. In particular, we are subject to laws, rules and regulations governing
the handling and disposal of biohazardous materials used in the development and
testing of our products. Although we believe that we have complied with these
laws and regulations in all material respects and have not been required to take
any action to correct any noncompliance, we may have to incur significant costs
to comply with environmental regulations if our manufacturing to commercial
levels continues to increase. In addition, if a government agency determines
that we have not complied with these laws, rules and regulations, we may have to
pay significant fines and/or take remedial action that would be expensive.
OUR STOCK PRICE IS HIGHLY VOLATILE AND INVESTING IN OUR STOCK INVOLVES A HIGH
DEGREE OF RISK
The market price of our common stock, like the securities of many other
medical products companies, fluctuates over a wide range, and will continue to
be highly volatile in the future. The following factors may effect the market
price of our common stock:
1. fluctuation in the Company's operating results;
2. announcements of technological innovations or new commercial products
by us or our competitors;
3. changes in governmental regulation;
4. prospects and proposals for health care reform;
5. governmental or third party payors' controls on prices that our
customers may pay for our products;
6. developments or disputes concerning patent or our other proprietary
rights;
7. public concern as to the safety of our devices or similar devices
developed by our competitors; and
8. general market conditions.
Because our stock price is so volatile, investing in our common stock is
highly risky. A potential investor must be able to withstand the loss of his
entire investment in our common stock.
10
<PAGE> 14
OUR PREFERRED STOCK MAY HAVE THE EFFECT OF PREVENTING OR DELAYING A CHANGE OF
CONTROL OF ABAXIS
Our Board of Directors, without shareholder approval, can issue preferred
stock. The issuance of one or more series of preferred stock can (1) adversely
effect the rights of the holders of our common stock, (2) can delay or prevent a
change of control of Abaxis or (3) make it more difficult for our current
shareholders to remove management. Without approval from our shareholders, in
September 1996 we issued shares of Series A Preferred Stock; in July 1997 we
issued shares of Series B Preferred Stock; and in November 1998 we issued shares
of Series C Preferred Stock.
WE DO NOT PAY DIVIDENDS
We have never paid cash dividends, and we do not anticipate paying cash
dividends in the future.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
public reference facilities of the SEC in Washington, D.C., Chicago, Illinois
and New York, New York. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public from the SEC's web site at http:\\www.sec.gov.
The SEC allows us to "incorporate by reference" the information we have
filed with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus and any later information that we
file with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any additional documents
we file with the SEC until the offering of the common stock is terminated. This
prospectus is part of a registration statement on Form S-3 that we filed with
the SEC. The documents that we incorporate by reference are:
(1) The description of our common stock contained in our Registration
Statement on Form 8-A filed on December 11, 1991.
(2) Our Annual Report on Form 10-K for the fiscal year ended March 31,
1998.
(3) Our Quarterly Reports on Form 10-Q for the quarters ended June 30,
1998 and September 30, 1998.
(4) Our Definitive Proxy Statement for our annual meeting of shareholders
filed on September 18, 1998.
(5) Our Current Report on Form 8-K filed on November 25, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Shareholder Services
Abaxis, Inc.
1320 Chesapeake Terrace
Sunnyvale, California 94089
(408) 734-0700
11
<PAGE> 15
FORWARD LOOKING INFORMATION
This prospectus and the documents that we are incorporating by reference
contain forward-looking statements. Abaxis bases these statements on our current
expectations, estimates and projections about our industry. Either the beliefs
of our management, or the assumptions that they make, form the basis for those
expectations, estimates and projections. The safe harbor created by Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 generally protects Abaxis and the selling shareholders from liability for
these statements. You can often recognize such forward-looking statements by
words such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," and variations of such words and similar expressions.
These forward-looking statements do not guarantee future performance and
are subject to risks, uncertainties and assumptions that are difficult to
predict. The "Risk Factor" section starting on page two of this prospectus sets
forth some of such risks and uncertainties. The documents that we have
incorporated by reference in this prospectus may also set forth risks and
uncertainties. These risks and uncertainties could cause actual results to
differ materially and adversely from those that we have discussed in the
forward-looking statements. We do not undertake an obligation to publicly update
any of these forward-looking statements to reflect new information or future
events.
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by any of
the selling shareholders.
SELLING SHAREHOLDERS
The selling shareholders currently hold unregistered shares of our common
stock or will hold shares of common stock that are issuable upon conversion of
the Series C Preferred Stock.
SERIES C PREFERRED STOCK
We sold 4,000 shares of our Series C Convertible Preferred Stock to certain
non-U.S. purchasers on November 17, 1998. The 4,000 shares of Series C Preferred
Stock may convert into 1,600,000 shares of our common stock. This number is
determined by dividing $1,000, the original price per share of Series C
Preferred Stock, by $2.50, the original conversion price for the Series C
Preferred Stock. The conversion price may be adjusted to reflect any stock
dividends, stock splits, stock combinations, recapitalizations or similar
events. Furthermore, the Series C Preferred Stock will automatically convert
into common stock no later than October 31, 2002. Shares of Series C Preferred
Stock have no voting rights other than those required by the General Corporation
Law of the State of California.
COMMON STOCK
We issued 75,000 shares of our common stock to an individual as
compensation for his services in connection with the sale of the Series C
Preferred Stock.
NUMBER OF SHARES OF COMMON STOCK THAT WE MAY ISSUE
Assuming full conversion of the Series C Preferred Stock, we would issue or
have issued 1,675,000 shares of our common stock to the selling shareholders.
These 1,675,000 shares would represent approximately 12% of our outstanding
common stock as of December 28, 1998.
SELLING SHAREHOLDER TABLE
The table below lists, in each case as of December 28, 1998:
1. the name of each selling shareholder;
12
<PAGE> 16
2. the number of shares each selling shareholder beneficially owns;
3. how many shares of common stock the selling shareholder may resell
under this prospectus; and
4. assuming each selling shareholder sells all the shares listed next to
its name, how many shares of common stock each selling shareholder
will beneficially own after completion of the offering.
Beneficial ownership is determined in accordance with rules promulgated by
the SEC, and the information is not necessarily indicative of beneficial
ownership for any other purpose. This table is based upon information supplied
to us by officers, directors and principal shareholders. Except as otherwise
indicated, Abaxis believes that the persons or entities named in the table have
sole voting and investment power with respect to all shares of the common stock
shown as beneficially owned by them, subject to community property laws where
applicable.
In order to prevent dilution to the selling shareholders, these numbers may
also change because of (1) stock splits, (2) stock dividends or (3) similar
events involving our common stock.
We may amend or supplement this prospectus from time to time in the future
to update or change this list of selling shareholders and shares which may be
resold.
<TABLE>
<CAPTION>
Beneficial Ownership Prior Beneficial Ownership
to the Offering Shares to be After the Offering
-------------------------- Sold in the --------------------
Selling Shareholder Shares Percent Offering Shares Percent
- ------------------------------------------ ----------- ------------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C>
Banca del Gottardo 1,200,000 8.6% 1,200,000 0 *
Viale S. Franscini 8
6900 Lugano
Switzerland
- ------------------------------------------
NeoMed Innovations ASA 400,000 * 400,000 0 *
Parkveien I5
0256 Oslo
Norway
- ------------------------------------------
Per Erick Danielsen 75,000 * 75,000 0 *
c/o CREDIT SUISSE
Attn. Mr. Hans Schmid
8820 Wadenswil (ZH)
Switzerland
TOTAL 1,675,000
- ------------------------------------
</TABLE>
* Less than one percent
PLAN OF DISTRIBUTION
The selling shareholders may sell their shares of common stock in one or
more transactions, which may involve block transactions,
1. on the Nasdaq National Market;
2. on such other markets on which our common stock may from time to time
be trading;
3. in privately-negotiated transactions;
13
<PAGE> 17
4. through the writing of options on the shares of common stock, short
sales or any combination the two.
The selling shareholders may sell at market prices at the time of sale, at
prices related to the market price or at negotiated prices. It is possible that
a selling shareholder will attempt to sell shares of common stock in block
transactions to market makers or other purchasers at a price per share which may
be below the then current market price. Some or all of the shares of common
stock offered by this prospectus may not be issued to, or sold by, the selling
shareholders.
The selling shareholders and any brokers, dealers or agents, upon effecting
the sale of any of the shares of common stock, may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933 or the
Securities Exchange Act of 1934, or the rules and regulations thereunder. In
addition, the selling shareholders and any other persons participating in the
sale or distribution of the shares of common stock will be subject to applicable
provisions of the Securities Exchange Act of 1934 and the rules and regulations
thereunder. These provisions may limit the timing of purchases and sales of any
of common stock by the selling shareholders or any other such person. The
foregoing may affect the marketability of the shares of common stock.
We have agreed to use our best efforts to keep the Registration Statement,
of which this prospectus constitutes a part, effective until the earlier of (1)
the date when the selling shareholders have resold all of the shares of their
registered common stock pursuant to Rule 144, Regulation S or an effective
registration statement or (2) one year from the date that the SEC declares the
Registration Statement effective.
LEGAL MATTERS
Gray Cary Ware & Freidenrich LLP will issue an opinion about the legality
of the shares for us.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended March 31, 1998 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
14
<PAGE> 18
================================================================================
No one (including any salesman or broker) is authorized to provide oral or
written information about this offering that is not included in this prospectus.
ABAXIS, INC.
1,675,000 SHARES OF
COMMON STOCK
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
December ___, 1998
================================================================================
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions payable by the Registrant in connection with the sale
of the Common Stock being registered. All amounts shown are estimates except for
the registration fee and the NASD filing fee.
<TABLE>
<CAPTION>
AMOUNT TO BE
PAID
------------
<S> <C>
Registration fee...................................................... $ 757
Nasdaq National Market additional listing fee......................... 17,500
Printing expenses..................................................... 2,000
Legal fees and expenses............................................... 20,000
Accounting fees and expenses.......................................... 5,000
Transfer agent and registrar fees..................................... 1,000
Miscellaneous expenses................................................ 743
------------
Total................................................................. $ 47,000
============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation (Exhibit 3.1) and Bylaws (Exhibit
3.2) provide that the Company shall indemnify its directors, officers,
employees, and agents to the full extent permitted by California law, including
in circumstances in which indemnification is otherwise discretionary under
California law. In addition, the Company has entered into separate
indemnification agreements (Exhibit 10.1) with its directors and officers which
would require the Company, among other things, to indemnify them against certain
liabilities which may arise by reason of their status or service (other than
liabilities arising from willful misconduct of a culpable nature) to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified, and to maintain directors' and officers' liability in
reasonable amounts. The Company currently has directors' and officers' liability
insurance in the amount of $4 million per occurrence or per year.
These indemnification provisions may be sufficiently broad to permit
indemnification of the Registrant's officers and directors for liabilities
(including reimbursement of expenses incurred) arising under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
Exhibit No. Description of Document
- ----------- --------------------------------------------------------------
<S> <C>
3.2 By-laws of the Company(1)
3.3 Certificate of Determination(12)
3.4 Certificate of Determination(13)
5.1 Opinion and Consent of Gray Cary Ware & Freidenrich LLP
10.5 1989 Stock Option Plan as amended and forms of agreement(3)
10.6 1992 Outside Directors Stock Option Plan and forms of agreement(4)
</TABLE>
II-1
<PAGE> 20
<TABLE>
<CAPTION>
Exhibit No. Description of Document
- ----------- --------------------------------------------------------------
<S> <C>
10.7 401(k) Plan(1)
10.8 Lease Agreement between the Company and South Bay/Caribbean dated March 11, 1992(3)
10.13 Exclusive Distribution Agreement dated September 20, 1991 between the Company and
Teramecs(1)(2)
10.14 Sponsored Research Agreement dated as of September 20, 1991 between the Company and
Teramecs(1)(2)
10.15 Development Agreement between the Company and Becton Dickinson and Company (through its
Becton Dickinson Immunocytometry Systems Division) dated April 9, 1993(5)(6)
10.16 Distribution agreement between the Company and VedCo, Inc. dated June 20, 1994(6)
10.17 Supply Agreement between the Company and Becton Dickinson and Company (through its
Becton Dickinson Immunocytometry Systems Division) dated September 16, 1994(6)(7)
10.18 Licensing agreement between the Company and Pharmacia biotech, Inc. dated October 1,
1994(6)(7)
10.19 Employment Agreement with Mr. Gary H. Stroy dated March 11, 1995(8)
10.20 Employment Agreement with Mr. Clinton H. Severson dated March 31, 1997(10)
10.21 Amendment to the Lease Agreement between the Company and South Bay/Caribbean dated March 11,
1997(10)
10.22 Equipment Loan Agreement between the Company and Transamerica Business Credit dated
March 4, 1997(10)
10.23 Registration Rights Agreement dated July 18, 1997 between the Company and certain
shareholders(11)
10.24 Securities Purchase Agreement dated July 18, 1997 between the Company and certain
shareholders(11)
10.25 Stock Purchase Agreement dated as of April 1, 1997 between the Company and Coffin
Communications Group(12)
10.26 Form of Stock Purchase Agreement between the Company and Wharton Capital Partners,
Ltd.(12)
10.27 Off Shore Subscription Agreement(13)
</TABLE>
II-2
<PAGE> 21
<TABLE>
<CAPTION>
Exhibit No. Description of Document
- ----------- --------------------------------------------------------------
<S> <C>
22.1 Subsidiaries of Registrant(10)
23.1 Independent Auditors' Consent
23.2 Consent of Gray Cary Ware & Freidenrich LLP. Reference is made to Exhibit 5.1
24.1 Power of Attorney (see signature page)
</TABLE>
- -------------------------
(1) Incorporated by reference from Registration Statement No. 33-44326 filed
December 11, 1991.
(2) Confidential treatment of certain portions of these agreements has been
granted.
(3) Incorporated by reference to the exhibit filed with the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1992.
(4) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1992.
(5) Incorporated by reference to the exhibit filed with the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1993.
(6) Confidential treatment of certain portions of these agreements has been
granted.
(7) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1994.
(8) Incorporated by reference to the exhibit filed with the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1995.
(9) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1996.
(10) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1996.
(11) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997.
(12) Incorporated by reference to the Company's Registration Statement on From
S-3 filed on September 26, 1997.
(13) Incorporated by reference to the Company's Report on Form 8-K filed
November 25, 1998.
All Schedules have been omitted because the information required to be set
forth therein is not applicable or is shown in the Financial Statements or notes
thereto.
ITEM 17. UNDERTAKINGS
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 section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 22
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 14 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, 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.
The undersigned registrant hereby undertakes that:
o For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared
effective; and
o For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 23
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 Sunnyvale, State of California, on December 30, 1998.
ABAXIS, INC.
By: /s/ Clinton S. Severson
-----------------------------------------
Clinton S. Severson
President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
Each of the officers and directors of Abaxis, Inc. whose signature appears
below hereby constitutes and appoints Clinton S. Severson and Donald Stewart,
and each of them, his true and lawful attorneys and agents, each with full power
of substitution, and each with power to act alone, to sign on behalf of the
undersigned any amendment or amendments to this Registration Statement on Form
S-3 (including post-effective amendments) and any and all new registration
statements filed pursuant to Rule 462 under the Securities Act of 1933, as
amended, in connection with or related to the offering contemplated by this
Registration Statement, as amended, and to perform any acts necessary in order
to file such amendments or registration statements, with exhibits thereto and
other documents in connection therewith, and each of the undersigned does hereby
ratify and confirm his signature as it may be signed by his said attorney and
agent to any and all such documents and all that said attorneys and agents, or
their or his substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-3 has been signed by the following persons in the capacities
and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Clinton S. Severson Chairman of the Board, President and December 30, 1998
- ------------------------------------------- Chief Executive Officer
Clinton S. Severson
/s/ Donald Stewart Vice President, Finance & Administration, December 30, 1998
- ------------------------------------------- Chief Financial Officer and
Donald Stewart Principal Accounting Officer
Director
- -------------------------------------------
Richard Bastiani
Director
- -------------------------------------------
Brenton G. A. Hanlon
/s/ Prithipal Singh, Ph.D. Director December 30, 1998
- -------------------------------------------
Prithipal Singh, Ph.D.
/s/ Ernest S. Tucker Director December 30, 1998
- -------------------------------------------
Ernest S. Tucker
</TABLE>
II-5
<PAGE> 24
<TABLE>
<CAPTION>
Exhibit No. Description of Document
- ----------- --------------------------------------------------------------
<S> <C>
3.2 By-laws of the Company(1)
3.3 Certificate of Determination(12)
3.4 Certificate of Determination(13)
5.1 Opinion and Consent of Gray Cary Ware & Freidenrich LLP
10.5 1989 Stock Option Plan as amended and forms of agreement(3)
10.6 1992 Outside Directors Stock Option Plan and forms of agreement(4)
10.7 401(k) Plan(1)
10.8 Lease Agreement between the Company and South Bay/Caribbean dated March 11, 1992(3)
10.13 Exclusive Distribution Agreement dated September 20, 1991 between the Company and
Teramecs(1)(2)
10.14 Sponsored Research Agreement dated as of September 20, 1991 between the Company and
Teramecs(1)(2)
10.15 Development Agreement between the Company and Becton Dickinson and Company (through its
Becton Dickinson Immunocytometry Systems Division) dated April 9, 1993(5)(6)
10.16 Distribution agreement between the Company and VedCo, Inc. dated June 20, 1994(6)
10.17 Supply Agreement between the Company and Becton Dickinson and Company (through its
Becton Dickinson Immunocytometry Systems Division) dated September 16, 1994(6)(7)
10.18 Licensing agreement between the Company and Pharmacia biotech, Inc. dated October 1,
1994(6)(7)
10.19 Employment Agreement with Mr. Gary H. Stroy dated March 11, 1995(8)
10.20 Employment Agreement with Mr. Clinton H. Severson dated March 31, 1997(10)
10.21 Amendment to the Lease Agreement between the Company and South Bay/Caribbean dated March 11,
1997(10)
10.22 Equipment Loan Agreement between the Company and Transamerica Business Credit dated
March 4, 1997(10)
10.23 Registration Rights Agreement dated July 18, 1997 between the Company and certain
shareholders(11)
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit No. Description of Document
- ----------- --------------------------------------------------------------
<S> <C>
10.24 Securities Purchase Agreement dated July 18, 1997 between the Company and certain
shareholders(11)
10.25 Stock Purchase Agreement dated as of April 1, 1997 between the Company and Coffin
Communications Group(12)
10.26 Form of Stock Purchase Agreement between the Company and Wharton Capital Partners,
Ltd.(12)
10.27 Off Shore Subscription Agreement(13)
22.1 Subsidiaries of Registrant(10)
23.1 Independent Auditors' Consent
23.2 Consent of Gray Cary Ware & Freidenrich LLP. Reference is made to Exhibit 5.1
24.1 Power of Attorney (see signature page)
</TABLE>
- -------------------------
(1) Incorporated by reference from Registration Statement No. 33-44326 filed
December 11, 1991.
(2) Confidential treatment of certain portions of these agreements has been
granted.
(3) Incorporated by reference to the exhibit filed with the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1992.
(4) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1992.
(5) Incorporated by reference to the exhibit filed with the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1993.
(6) Confidential treatment of certain portions of these agreements has been
granted.
(7) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1994.
(8) Incorporated by reference to the exhibit filed with the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1995.
(9) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1996.
(10) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1996.
(11) Incorporated by reference to the exhibit filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997.
(12) Incorporated by reference to the Company's Registration Statement on From
S-3 filed on September 26, 1997.
(13) Incorporated by reference to the Company's Report on Form 8-K filed
November 25, 1998.
<PAGE> 1
EXHIBIT 5.1
December 30, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: ABAXIS, INC. REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
As legal counsel for Abaxis, Inc., a California corporation (the
"Company"), we are rendering this opinion in connection with the preparation and
filing of a registration statement on Form S-3 (the "Registration Statement")
relating to the registration under the Securities Act of 1933, as amended, of
1,675,000 shares of Common Stock, no par value (the "Common Stock"), consisting
of 1,600,000 shares of Common Stock issuable by the Company upon the conversion
of shares of the Company's Series C Convertible Preferred Stock issued to
certain selling shareholders (the "Conversion Shares") and the 75,000 shares of
Common Stock issued and outstanding (the "Shares").
We have examined such instruments, documents and records as we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the 1,675,000 shares
of Common Stock of the Company being registered pursuant to the Registration
Statement and to be sold by the selling shareholders are duly authorized shares
of Common Stock and the Conversion Shares (if and when issued upon conversion of
the shares of the Company's Series C Convertible Preferred Stock in accordance
with the Company's Certificate of Determination) will be validly issued, fully
paid and nonassessable and the Shares are validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement.
This opinion is to be used only in connection with the issuance of the
Common Stock while the Registration Statement is in effect.
Respectfully submitted,
/s/ Gray Cary Ware & Freidenrich LLP
-----------------------------------------
GRAY CARY WARE & FREIDENRICH LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
of Abaxis, Inc. on Form S-3 of our report dated April 24, 1998 appearing in the
Annual Report on Form 10-K of Abaxis, Inc. for the year ended March 31, 1998 and
to the reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
/s/ Deloitte & Touche LLP
-------------------------
Deloitte & Touche LLP
San Jose, California
December 30, 1998.
