AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION ON MARCH __, 1999
REGISTRATION NO. 333-71257
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NUMBER ONE TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PARACELSIAN, INC.
(Exact name of Registrant as Specified in Its Charter)
DELAWARE 56-1399565
(State of Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
222 Langmuir Laboratories
Cornell Technology Park
Ithaca, New York 14850
(607) 257-4224
(Address, Including Zip Code and Telephone, Including Area Code,
of Registrant's Principal Executive Offices)
Bernard Landes
222 Langmuir Laboratories
Cornell Technology Park
Ithaca, New York 14850
(607) 257-4224
(Address, Including Zip Code and Telephone, Including Area Code,
of Registrant's Principal Executive Offices)
Copies to:
Ronald D. Raxter, Esq.
The Sanford Holshouser Law Firm, PLLC
219 Fayetteville Street
Suite 1000
Raleigh, North Carolina 27601
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462 (b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462
(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
TO BE REGISTERED REGISTERED PER SHARE (1) PROPOSED FEE
OFFERING PRICE MAXIMUM
Common Stock, 7,316,180 (2) $0.88 $6,438,238 $1,790
$0.01 par value per share
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457 (c) under the Securities
Act of 1933.
(2) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable in connection with the shares
registered for sale hereby as a result of any stock dividend, stock
split, recapitalization or other similar transaction effected without
the receipt of consideration which results in an increase in the number
of the Registrant's outstanding shares of Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8 (a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8 (a),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION
PROSPECTUS
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7,316,180 SHARES
PARACELSIAN, INC.
COMMON STOCK
This document registers shares of common stock of Paracelsian, Inc.
which are owned by the selling stockholders listed in this Prospectus.
The shares were sold to the selling stockholders by Paracelsian in
January and December 1998 under exemptions from the securities laws.
Paracelsian will not receive any proceeds from the sale of the shares
registered in this Prospectus.
After registration, the shares of common stock will be available for
sale on the NASD Bulletin Board under the symbol "PRLN" where the other
registered shares of Paracelsian are listed.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
Per Share Total
--------- -----
Public Offering Price
Underwriting Discounts and Commissions -0- -0-
Proceeds to the Selling Shareholders
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------
The date of this Prospectus is _______, 1999.
<PAGE>
RISK FACTORS RELATING TO PURCHASE OF THE SHARES
IN ADDITION TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, PROSPECTIVE PURCHASERS SHOULD CONSIDER THE
FOLLOWING FACTORS CAREFULLY IN EVALUATING PARACELSIAN AND ITS BUSINESS. SEE ALSO
"SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS."
PARACELSIAN IS ATTEMPTING TO DEVELOP A NEW TECHNOLOGY WITH NEW MANAGEMENT AND A
REVISED BUSINESS PLAN WHICH MAY NOT BE SUCCESSFUL
Although Paracelsian commenced operations in April 1991, it has yet to
generate significant revenues. Paracelsian has been engaged primarily in
research, product engineering and raising capital. In January 1998, Paracelsian
acquired an entirely new Board of Directors and executive management. New
management has substantially altered the business plan for Paracelsian with the
aim of generating operating revenues. Revenues for fiscal 1998 were
approximately $56,000 which resulted primarily from contract laboratory services
and the sale of biological test kits developed by Paracelsian. Future revenues
will be derived from sales of Paracelsian's services that are currently under
development and royalties in connection with licensing of its technology. There
can be no assurance that Paracelsian will be able to attain such revenues in
sufficient amounts to achieve profitable operations. Results of operations in
the future will be influenced by numerous factors, including the ability of
Paracelsian to develop and manage the introduction of its new services, market
acceptance of Paracelsian's services, competition and the ability to control
costs.
PARACELSIAN HAS LIMITED LIQUIDITY AND CAPITAL RESOURCES WHICH MAY CURTAIL ITS
OPERATIONS
As of December 31, 1998, Paracelsian maintained working capital of
$131,000 which included cash of approximately $189,000. In December 1998,
Paracelsian raised $250,000 through a private placement of its stock and in
March 1999, Paracelsian raised an additional $150,000 in cash through a private
placement of its stock. The cost of Paracelsian's current operations is
approximately $90,000 per month. Failure to continue to successfully raise
additional capital to support its continued operations may curtail Paracelsian's
ability to implement its business plan to generate operating revenues.
Paracelsian presently intends to pursue additional capital of $1 million to $1.5
million in the near term, if available on reasonable terms, to provide resources
for the hiring of additional personnel, expansion and/or relocation of lab
facilities, and the acceleration of product development efforts. Of course,
there can be no assurance that additional financing will be available on
acceptable terms or at all. If adequate funds are not available from operating
revenues or sources of financing, Paracelsian's operations would have to be
curtailed.
PARACELSIAN'S CURRENT BUSINESS PLAN IS DEPENDENT ON A KEY DISTRIBUTOR AND
FAILURE OF THAT RELATIONSHIP WILL SIGNIFICANTLY REDUCE THE PROSPECT OF FUTURE
REVENUES
Paracelsian's initial revenues are highly dependent upon the ability to
market the BioFITTM designation in the herbal and dietary supplement market.
BioFITTM designation confirms that the herbal and dietary supplement product
shows biological activities consistent with the benefit claims on the product's
label. Paracelsian has entered into an agreement with a leading manufacturer of
herbal and other dietary supplement products to serve as Paracelsian's exclusive
agent for the marketing and distribution of its BioFITTM Certification Program.
Paracelsian is relying on this company for the successful and timely launch of
its BioFITTM program and the receipt of operating revenues from BioFITTM.
Failure to launch BioFITTM in a timely manner or failure to secure an adequate
number of customers would materially reduce anticipated operating revenues.
PARACELSIAN DOES NOT CURRENTLY HAVE A COMPLETE MANAGEMENT TEAM WHICH LIMITS ITS
ABILITY TO IMPLEMENT ITS NEW BUSINESS PLAN
Key positions not yet filled include Chief Financial Officer, Chief
Operations Officer, Vice President of
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<PAGE>
Science, and Vice President of Business Development. Presently, these functions
are performed by Bernard Landes, Ph.D., Paracelsian's Chairman, President and
Chief Executive Officer, assisted by certain members of Paracelsian's Board of
Directors. Paracelsian's ability to implement its business plan is limited by
the lack of a complete full-time management team.
PARACELSIAN'S OPERATIONS ARE DEPENDENT ON KEY PERSONNEL TO IMPLEMENT ITS NEW
BUSINESS PLAN
The loss of the services of Mr. Landes could have a material adverse
effect on Paracelsian. In addition, Paracelsian's performance depends on its
ability to attract and retain qualified management and professional, scientific
and technical operating staff, as well as its ability to recruit qualified
representatives for its contract sales services. There can be no assurance that
Paracelsian will be able to continue to attract and retain qualified personnel.
Lack of qualified personnel will limit Paracelsian's ability to implement its
business plan.
THE BUSINESS PLAN IS BASED ON PROPRIETARY TECHNOLOGY AND ITS SUCCESS MAY BE
LIMITED BY THE UNPREDICTABILITY OF PATENT PROTECTION
Certain of the technologies utilized in Paracelsian's products are
proprietary. Paracelsian believes that patent protection of materials or
processes it develops and any products that may result from Paracelsian's
research and development efforts are important to the possible commercialization
of Paracelsian's products. Paracelsian currently has US patent protection
regarding various uses of its assays. Its Ah-IMMUNOASSAY technology has been
approved for use in the detection of dioxins. It has also been approved as a
novel method of identifying compounds that might be effective against HIV and
other viral infections. Paracelsian's CDK1 Assay has been approved to quantify
cancer causing activity of test substances, even those that have been previously
thought to be non-genotoxic and /or non-mutagenic. Paracelsian's scientists have
been using the CDK1 Assay to test the TCM library for cancer treatments. While
Paracelsian is actively seeking partners to fully develop the market potential
of these patents, there can be no assurance that Paracelsian's patents will
afford adequate protection to Paracelsian or its licensees. Further, there can
be no assurance that any patents that have been or may be issued will provide
Paracelsian with significant protection from competitors. Other private and
public entities may file applications for patents and other proprietary rights
to technology which could be harmful to the commercialization of Paracelsian's
services and products. The ultimate scope and validity of patents which are now
owned by or which may be granted to third parties in the future, the extent to
which Paracelsian may wish or be required to acquire rights under such patents,
and the cost or availability of such rights cannot be determined by Paracelsian
at this time. In addition, Paracelsian also relies on unpatented proprietary
technology in the development and commercialization of its services and
products. There is no assurance that others may not independently develop the
same or similar technology or obtain access to Paracelsian's proprietary
technology or disclose such technology or that Paracelsian can meaningfully
protect its rights in such unpatented proprietary technology.
THE DIRECTORS AND EXECUTIVE OFFICER OF PARACELSIAN HAVE THE POWER TO TAKE
ACTIONS THAT MAY NOT BE IN THE BEST INTERESTS OF OTHER SHAREHOLDERS
The directors and executive officer of Paracelsian beneficially own or
have voting control over 7,153,477 shares of Common Stock, or approximately
38.07% of Paracelsian's outstanding shares of Common Stock as of December 22,
1998. Such directors and executive officers are therefore in a position to
significantly influence the election of Paracelsian's directors. Subject to its
fiduciary duties under Delaware law, the board of directors has the power to
select management and direct the business and affairs of Paracelsian. Certain
shareholders may not believe that such policies are in their best interests.
THE LIMITED TRADING MARKET FOR THE COMMON STOCK MAY REDUCE THE STOCK PRICE
The common stock is currently traded on the NASD Bulletin Board (the
electronic pink sheets) under the
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<PAGE>
symbol "PRLN." There are only a limited number of trades of the common stock on
this market. Due to the limited trading market for the common stock, it is
possible that holders of the common stock will be not be able to resell their
shares in the future for a price per share that is equal to or more than the
current price of the common stock.
THE PENNY STOCK RULES FURTHER REDUCE TRADING OF THE COMMON STOCK
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
brokers to give additional disclosures regarding stocks meeting the definition
of a penny stock. Paracelsian's common stock currently would be defined as a
penny stock. These additional disclosure requirements may cause brokers to be
unwilling to engage in transactions in Paracelsian's common stock and thereby
reduce trading activity. This may make it more difficult for shareholders to
sell their common stock.
THE STOCK PRICE OF THE COMMON STOCK IS SUBJECT TO WIDE FLUCTUATIONS
The market price of the common stock has been and may continue to be
subject to wide fluctuations in response to variations in operating results from
quarter to quarter, market conditions in the industry and general economic
conditions. During the period from February 1998 to February 1999, the common
stock has ranged in price from a low of $0.18 to a high of $2.00. The price per
share of the common stock when a shareholder wishes to sell the common stock may
be less than the purchase price.
ANY RETURN ON AN INVESTMENT IN THE COMMON STOCK MUST BE FROM PRICE APPRECIATION
SINCE PARACELSIAN IS UNLIKELY TO PAY CASH DIVIDENDS
Paracelsian has not paid any cash dividends. It is unlikely Paracelsian
will pay any cash dividends in the foreseeable future. Earnings, if any, will be
retained by Paracelsian for further development and expansion of its business.
Any return on an investment in the shares is dependent on appreciation in the
stock price.
WHERE YOU CAN FIND MORE INFORMATION
Paracelsian files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the SEC). You may read and copy any reports, statements or other information we
file at the SEC's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public from commercial document retrieval services and at the Internet world
wide web site maintained by the SEC at
As allowed by SEC rules, this prospectus does not contain all the
information you can find in the Registration Statement or the exhibits to the
Registration Statement.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information contained directly in this prospectus.
This prospectus incorporates by reference the documents set forth below that we
have previously filed with the SEC. These documents contain important
information about our companies and their financial condition.
Annual Report on Form 10-K Year ended September 30, 1998
Quarterly Report on Form 10-Q Quarter ended December 31, 1998
Paracelsian also incorporates by reference into this prospectus
additional documents that may be filed
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<PAGE>
with the SEC after the date of this prospectus. These include periodic reports,
such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as proxy statements.
If you are a shareholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through us, the SEC or
the SEC's Internet world wide web site as described above. Documents
incorporated by reference are available from us without charge, excluding all
exhibits unless we have specifically incorporated by reference an exhibit in
this prospectus by requesting them in writing or by telephone from the
appropriate company at the following addresses:
Paracelsian, Inc.
222 Langmuir Laboratories, Cornell Technology Park
Ithaca, New York 14850
Attention: Corporate Secretary
Telephone: (607)257-4224
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROSPECTUS. THIS
PROSPECTUS IS DATED MARCH __, 1999. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THE PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE SALE OF ANY COMMON STOCK WITH
THIS PROSPECTUS SHALL CREATE ANY IMPLICATION TO THE CONTRARY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL
FOR SUCH PERSON TO MAKE SUCH OFFER OR SOLICITATION.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This prospectus contains, in addition to historical information,
various "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward looking statements
represent Paracelsian's judgment concerning the future and are subject to risks
and uncertainties that could cause Paracelsian's actual operating results and
financial position to differ materially from those projected in the forward
looking statements. Such forward looking statements are necessarily estimates
reflecting the best judgment of the senior management of Paracelsian. Statements
in this prospectus that are not historical facts are forward looking statements
for the purpose of the safe harbor provided by Section 21E of the Exchange Act
and Section 27A of the Securities Act.
Terms such as "may," "will," "expect," "anticipate," "estimate," or
"continue" or other variations of these terms are intended to identify forward
looking statements. Paracelsian cautions that any such forward looking
statements are further qualified by important factors that could cause
Paracelsian's actual operating results and financial position to differ
materially from the forward looking statements, including without limitation
considerations described in connection with specific forward looking statements,
factors set forth in this prospectus under the caption "Risk Factors," and other
cautionary statements set forth in this prospectus. Readers are cautioned not to
place undue reliance on these forward looking statements, which speak only as of
the date of this prospectus. Paracelsian undertakes no obligation to release
publicly the results of any revisions to these forward looking statements to
reflect events or circumstances arising after the date of this prospectus or to
reflect the occurrence of unanticipated events.
PARACELSIAN
Paracelsian is a development stage drug discovery and research service
company that uses its proprietary screening technology to measure the effects of
natural compounds on cell division. This research enables
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<PAGE>
Paracelsian to provide a sound scientific understanding of the bases for the
beneficial effects of herbal medicines and dietary supplements. Paracelsian's
management has focused its primary activities in three (3) areas:
(1) Quality Assurance Designation. Paracelsian uses its proprietary
technology to evaluate herbal and dietary supplement products based on
how they perform in a scientifically selected battery of functional
tests. If they demonstrate activity within the proper range, the
product is certified as BioFIT, or "Bio Functional Integrity
Tested,"Paracelsian's trademarked designation. Paracelsian has entered
into an agreement with a leading manufacturer of herbal and other
dietary supplement products to serve as its exclusive agent for the
marketing and distribution of its BioFIT Certification Program.
Paracelsian has begun to receive certain payments pursuant to this
agreement.
(2) Product Discovery and Development. Paracelsian is investigating
several potential therapeutic compounds from its extract library of
approximately 2,764 Traditional Chinese Medicines and other plant
materials to target drug candidates. If the tests are successful,
Paracelsian will pursue the marketing of these compounds indirectly
through manufacturers. Paracelsian also believes that it may be able to
identify potential collaborative partners to use the BioFIT process to
investigate "target" compounds of various materials.
(3) Environmental Screening and Drug Development. Paracelsian has two
patented bioassays: the Ah-Immunoassay and CDK1 Assay. The
Ah-Immunoassay detects potentially toxic dioxins in the environment and
provides quick, accurate and inexpensive results compared to
traditional analytical techniques. Paracelsian has entered into an
agreement with a Japanese industry to test commercial incinerators for
dioxin levels. Paracelsian has begun to receive certain payments
pursuant to this agreement. The Ah-Immunoassay has also been received
patent approval as a novel method of identifying compounds that might
be effective against HIV and other viral infections. The CDK1 Assay
detects non-geotoxic carcinogens and measures the concentration of
Cyclin Dependent Kinase 1 ("CDK1"), a key cell division control enzyme.
Compounds that inhibit CDK1 may be capable of inhibiting cell growth in
proliferative based disorders such as cancer. This assay would enable
researchers to screen out carcinogenic drug candidates before animal
carcinogenicity trials are conducted, potentially saving drug
researchers significant costs.
Paracelsian has operated at a loss since its formation in 1991. There
can be no assurance that Paracelsian will ever achieve profitable operations.
See "Risk Factors."
Paracelsian was incorporated in Delaware in 1991. Its principal
executive offices are located at 222 Langmuir Laboratories, Cornell Technology
Park, Ithaca, New York 14850 and its telephone number is (607) 257-4224. Its
common stock is quoted on the NASD Bulletin Board under the symbol "PRLN." On
March __, 1999, the last reported sale price of the common stock was $______ per
share. Paracelsian and BioFIT are trademarks of Paracelsian.
USE OF PROCEEDS
The shares being registered in this prospectus are owned by the selling
stockholders. Paracelsian is not selling any shares and will not receive any
proceeds from the sale of any of the shares. See "Plan of Distribution."
SELLING STOCKHOLDERS
The selling stockholders purchased the shares directly from Paracelsian
in private sales under certain exemptions from the securities law. The following
table sets forth certain information regarding the stock ownership of the
selling stockholders as of the date of this prospectus. All of the shares being
registered by the
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selling stockholders may be sold pursuant to this prospectus. The shares are
being registered to permit the selling shareholders to sell the shares to the
public from time to time. See "Plan of Distribution." The percentage ownership
is based on the 18,690,253 shares of common stock which were issued and
outstanding as of December 22, 1998.
<TABLE>
<CAPTION>
Shares Shares Shares Beneficially
Beneficially Owned Being Owned After Sale of
Prior to Registration Registered All Registered Shares
--------------------- ---------- ---------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Biomar International, Inc. (1) 6,025,575 32.24 6,025,575 -0- -0-
John A. Williams 758,666 4.06 666,666 92,000 *
Bernard Landes 203,000 1.09 100,000 103,000 *
C. David Smith 100,000 * 100,000 -0- -0-
Thomas D. Livingston 208,095 1.11 200,000 8,095 *
Thomas H. Evans 50,000 * 50,000 -0- -0-
Sylvestor Johnson IV 117,283 * 117,283 -0- -0-
Stephen Holt, MD 6,656 * 6,656 -0- -0-
G.W. Thorpe 50,000 * 50,000 -0- -0-
</TABLE>
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* Denotes beneficial ownership of less than one percent of the Shares.
(1) Effective February 1999, Biomar International, Inc. changed its
corporate name to BioSignia, Inc.
PLAN OF DISTRIBUTION
The shares registered in this prospectus by the selling stockholders
may be sold at any time after the effective date of the prospectus. The decision
to offer and sell the shares and the timing and amount of any offers or sales
that are made, is within the sole discretion of the selling stockholders. The
shares may be sold by one or more of the following methods, without limitation:
(a) a block trade in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
(c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
(d) privately negotiated transactions between the selling stockholders
and purchasers without a broker-dealer.
In addition, any securities covered by this prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act might be sold under Rule 144
rather than pursuant to this prospectus.
In making sales, brokers or dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate. Such brokers or dealers
may receive commissions or discounts from the selling
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stockholders. The selling stockholders and the brokers and dealers through whom
sales of the shares may be made may be deemed to be "underwriters" within the
meaning of the Securities Act, and their commissions or discounts and other
compensation may be regarded as underwriters' compensation.
Paracelsian anticipates that the Registration Statement of which this
prospectus is a part shall remain effective until the date on which all of the
shares included in the Registration Statement have been distributed to the
public. Certain of the selling shareholders will be subject to applicable
provisions of the Exchange Act, and the rules and regulations thereunder, that
may limit the timing of purchases and sales of shares by these selling
shareholders.
Paracelsian agreed to pay its own legal and accounting fees, all
registration and filing fees attributable to the registration of the shares, any
legal fees and filing fees relating to state securities or "blue sky" filings,
and any printing fees. The selling stockholders shall pay their own legal and
accounting fees and any other expense. Any commissions, discounts or other fees
payable to broker-dealers in connection with any sale of the shares shall be
paid by the stockholder selling such shares.
Paracelsian has also agreed to indemnify the selling stockholders and
their officers, directors, employees and agents, and each person who controls
any selling stockholder, in certain circumstances against certain liabilities,
including liabilities arising under the Securities Act. Each selling stockholder
has agreed to indemnify Paracelsian and its directors and officers in certain
circumstances against certain liabilities, including liabilities arising under
the Securities Act.
None of the selling stockholders are obligated to sell any of the
Shares registered in this prospectus.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed
upon for Paracelsian by The Sanford Holshouser Law Firm, PLLC, 219 Fayetteville
Street, Suite 1000, Raleigh, North Carolina 27601.
EXPERTS
The consolidated financial statements of Paracelsian, Inc. and
subsidiary (a development stage company) as of September 30, 1998 and 1997, and
for each of the years then ended and for the period from April 15, 1991
(inception) to September 30, 1998, have been incorporated by reference in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference and upon the authority of said firm as
experts in accounting and auditing.
The cumulative statements of operations, stockholders' equity, and cash
flows for the period April 15, 1991 (inception) to September 30, 1998 include
amounts for the period from April 15, 1991 (inception) to September 30, 1991 and
for each of the years in the four-year period ending September 30, 1995, which
were audited by other auditors whose report has been furnished to KPMG LLP
("KPMG") and KPMG's opinion, insofar as it relates to the amounts included for
the period April 15, 1991 (inception) through September 30, 1995 is based solely
on the report of the other auditors.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates,
except for the registration fee.
Registration fee $ 1,286
Legal fees and expenses 10,000
Accounting fees and expenses 5,000
Miscellaneous expenses 2,000
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TOTAL $ 18,286
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits
indemnification of officers and directors of the Company under certain
conditions and subject to certain limitations. Section 145 of the Delaware
General Corporation Law also provides that a corporation has the power to
purchase and maintain insurance on behalf of its officers and directors against
any liability asserted against such person and incurred by him or her in such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
under the provisions of Section 145 of the Delaware General Corporation Law.
The Tenth Article of the Certificate of Incorporation of the Company
provides that the Company shall indemnify its directors and executive officers
to the fullest extent permitted by the Delaware General Corporation Law. The
rights to indemnity thereunder continue as to a person who has ceased to be a
director, officer, employee or agent and inure to the benefit of the heirs,
executors and administrators of the person. In addition, expenses incurred by a
director or officer in defending any civil, criminal, administrative or
investigative action, suit or proceeding by reason of the fact that he or she is
or was a director or officer of the Company (or was serving at the Company's
request as a director or officer of another corporation) shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Company as authorized by the relevant section
of the Delaware General Corporation Law.
As permitted by Section 102(b) (7), of the Delaware General Corporation
Law, the Ninth Article of the Company's Certificate of Incorporation provides
that a director of the Company shall not be personally liable for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or acts or omissions that involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law or (iv) for any transaction from which the
director derived any improper personal benefit.
The Registrant has an insurance policy covering the directors and
officers of the Registrant with respect to certain liabilities, including
liabilities arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS.
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<PAGE>
EXHIBIT NO. DESCRIPTION
---------- -----------
5.1 Opinion of The Sanford Holshouser Law Firm, PLLC
23.1 Consent of KPMG LLP
24.1 Power of Attorney. Reference is made to page II-4
of the Registration Statement.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to 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 end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424 (b) (ss. 230.424 (b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 Section 15 (d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15 (d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, Delaware Corporation law, 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
II-2
<PAGE>
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 question has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of 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.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly cause this Amendment One to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Ithaca,
State of New York, on the 31st day of March, 1999.
PARACELSIAN, INC.
By: /s/ BERNARD LANDES
------------------
Bernard Landes
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment One to the Registration Statement has been signed pursuant to power of
attorney by the following persons in the capacities and on the dates indicated:
Signature Title Date
/s/ BERNARD M. LANDES Chairman of the Board and Chief March 31, 1999
-----------------
Executive Officer (Principal
Executive Officer)
/s/ BERNARD M. LANDES Chief Financial Officer March 31, 1999
-----------------
(Principal Financial
and Accounting Officer)
/s/ BERNARD M. LANDES Director March 31, 1999
- -------------------------- Chairman of the Board
Bernard M. Landes
/s/ T. NELSON CAMPBELL Director March 31, 1999
- --------------------------
T. Nelson Campbell
Director
- --------------------------
James J. Dunseith
/s/ HIRA GURTOO Director March 31, 1999
- --------------------------
Hira Gurtoo
II-3
<PAGE>
/s/ LIANPING HE Director March 31, 1999
- --------------------------
Lianping He
/s/ ROBERT A BUCHANAN, MD Director March 31, 1999
- --------------------------
Robert A. Buchanan, MD
/s/ THOMAS D. LIVINGSTON Director March 31, 1999
- --------------------------
Thomas D. Livingston.
/s/ T. COLIN CAMPBELL Director March 31, 1999
- --------------------------
T. Colin Campbell
/s/ LOREN ISRAELSEN Director March 31, 1999
- --------------------------
Loren Israelsen
II-4
Exhibit 5.1
[THE SANFORD HOLSHOUSER LAW FIRM, PLLC LETTERHEAD]
______________, 1999
PARACELSIAN, Inc.
222 Langmuir Laboratories
Cornell Technology Park
Itacha, New York 14850
Re: 7,316,180 Shares of Common Stock of Paracelsian, Inc.
-----------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to PARACELSIAN, Inc., a Delaware corporation
(the "Company"), in connection with the registration of 7,316,180 shares of
common stock (the "Common Stock"), as described in the Company's Registration
Statement on Form S-3 (the "Registration Statement"), to be filed promptly with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended.
In connection with the issuance and sale of the Common Stock , we have
examined and are familiar with the Articles of Incorporation and By-Laws of the
Company, both as amended to date, the records of the corporate proceedings of
the Company, and such other documents and records we have deemed relevant for
purposes of rendering this opinion. It is our opinion that the Common Stock is
validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus which is part of the Registration Statement.
Subject to the foregoing sentence, this opinion is given as of the date hereof
solely for your benefit and may not be relied upon, circulated, quoted or
otherwise referred to for any purpose without our prior written consent.
Sincerely,
THE SANFORD HOLSHOUSER LAW FIRM
Exhibit 23.1
Independent Certified Public Accountants' Consent
The Board of Directors
Paracelsian, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Raleigh, North Carolina
March 31, 1999
