AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION ON JANUARY 25, 1999
REGISTRATION NO. 33-
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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
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, 7,309,524 (2) $0.88 $6,432,381 $1,286
$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
PARACELSIAN, INC.
7,309,524 SHARES
COMMON STOCK, PAR VALUE $0.01 PER SHARE
The shares offered hereby (the "Shares") consist of 7,309,524 shares of
common stock, par value $.01 per share (the "Common Stock") of Paracelsian,
Inc., a Delaware corporation ("Paracelsian" or the "Company") which are owned by
the selling stockholders listed herein under "Selling Stockholders"
(collectively, the "Selling Stockholders"). The Shares were acquired by the
Selling Stockholders pursuant to that certain transaction evidenced by the stock
purchase agreement dated January 14, 1998 and stock purchase agreement dated
December 15, 1998 (the "Transactions"). The Shares issued in the Transactions to
the Selling Stockholders were issued pursuant to exemptions from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"). In accordance with the terms of the Transactions, the Company
has agreed to register the Shares for resale by such Selling Stockholders.
The Shares may be offered from time to time by the Selling Stockholders
after the date of this Prospectus. The Company shall pay all expenses of
registration incurred in connection with this offering, except that each Selling
Stockholder shall pay any commissions, discounts, or other fees payable to
broker-dealers in connection with any sale of the Shares, as well as legal and
accounting fees and expenses incurred by the Selling Stockholders. None of the
Shares have been registered prior to the filing of this Registration Statement
of which this Prospectus is a part. The Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholders.
The Selling Stockholders have not advised the Company of any specific
plans for the distribution of the Shares covered by this Prospectus. The Shares
may be sold from time to time on the National Association of Securities Dealers,
Inc. ("NASD") Electronic Bulletin Board (the "Bulletin Board") at the market
price then prevailing, although sales may also be made in negotiated
transactions or otherwise. The Selling Stockholders and the brokers and dealers
through whom sales of the Common Stock 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. See "Plan of Distribution."
The Common Stock is quoted on the Bulletin Board under the symbol
"PRLN." On January __, 1999, the last reported sale price of the Common Stock
was $______ per share.
THE SHARES OFFERED INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE
COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is _______, 1999.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
the Commission's regional offices located at 7 World Trade Center, New York, New
York 10048 and Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and copies of such materials may be obtained from the
Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates. Copies of such materials may also be obtained from the web
site that the Commission maintains at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.
The Company has filed with the Commission a Registration Statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Shares
offered hereby of which this Prospectus is a part. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
portions of which are omitted in accordance with the rules and regulations of
the Commission. For further information, reference is hereby made to the
Registration Statement and the exhibits and schedules thereto.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference in this Prospectus:
1. The Annual Report of the Company on Form 10-KSB for the fiscal year
ended September 30, 1998;
2. The description of the Company's Common Stock contained in its
Registration Statement on Form S-1 filed on December 27, 1991; and
3. All reports and other documents subsequently filed by the Company
pursuant to Sections 13 (a), 13 (c), 14 or 15 (d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the Shares.
Any statement incorporated herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into any such document). Requests for such documents
should be submitted in writing to the Company, 222 Langmuir Laboratories,
Cornell Technology Park, Ithaca, New York 14850 Attention: Corporate Secretary
or by telephone at (607)257-4224
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION NOT CONTAINED OR INCORPORATED
HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH
PERSON TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS AT ANY TIME NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, IMPLY THAT THE INFORMATION IS CORRECT AS OF ANY DATE SUBSEQUENT
TO THE DATE HEREOF.
Paracelsian and BioFIT are trademarks of the Company.
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<PAGE>
FORWARD LOOKING STATEMENTS
This Prospectus may contain, in addition to historical information,
various "forward looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act, that represent the Company's
judgment concerning the future and are subject to risks and uncertainties that
could cause the Company's actual operating results and financial position to
differ materially from those projected in the forward looking statements. Such
forward looking statements can be identified by the use of forward looking
terminology, such as "may," "will," "expect," "anticipate," "estimate," or
"continue" or the negative thereof or other variations thereof or comparable
terminology. The Company cautions that any such forward looking statements are
further qualified by important factors that could cause the Company'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. The Company 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.
GENERAL
Paracelsian is a development stage bioscience and technology company
that utilizes its proprietary screening technology to identify novel therapeutic
compounds from herbal sources and to define the biological mechanisms through
which herbal medicines affect cellular function. The screening technology has
been developed by the Company to identify potential products that regulate the
biological signals generated by targeted cells that result in controlled or
uncontrolled cell growth and division. The Company's screening technology
evaluates the effects of herbal products on intracellular signals referred to as
"signal transduction technology".
Cellular signaling is one of the basic steps in biology and is
necessary for normal growth of tissues to support life. The Company's technology
enables researchers to observe signal transduction and measure the effects of
chemicals contained in synthetic or natural compounds, such as herbal extracts,
on cellular processes. In the course of these studies, the Company can
distinguish the effects of such chemicals on targeted cells, thereby screening
compounds within herbs and herbal extracts to identify those with promising
therapeutic effects.
The Company believes that the results of its research coincide with the
need for sound scientific understanding of herbal medicines. The Company's
technology provides tools for the definition of solid and valid scientific bases
for the beneficial health effects of herbal medicines and dietary supplements.
In addition, the Company has utilized its technology to screen and identify
active substances contained within its library of traditional Chinese medicines.
The Company has the ability to develop novel procedures for detecting
biologically relevant activities of complex mixtures of compounds (such as in
the herbal extracts) or of the active constituents thereof. These procedures are
generally referred to as bioassays. The Company's assay technology enables
researchers to measure the effects of chemicals contained in synthetic and
natural compounds on normal and abnormal cell division and other biological
processes. The ability to conduct in vitro screening of biological activity,
quickly without lengthy and costly animal testing, is a significant innovation
for researchers in the pharmaceutical, agrochemical, herbal supplement and
environmental testing industries.
The Company has operated at a loss since its formation in 1991. There
can be no assurance that the Company 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.
-3-
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, PROSPECTIVE PURCHASERS SHOULD CONSIDER THE
FOLLOWING FACTORS CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS. SEE ALSO
"FORWARD LOOKING STATEMENTS."
DEVELOPMENT STAGE COMPANY AND LIMITED OPERATING HISTORY
The Company is considered to be a development stage company. Although
the Company commenced operations in April 1991, it has yet to generate
significant revenues and has no assurance of substantial future revenues. The
Company has been engaged primarily in research, product engineering and raising
capital. In January 1998, the Company acquired an entirely new Board of
Directors and executive management. New management has substantially altered the
business plan for the Company with the aim of generating operating revenues.
Unless the Company is successful with its business plan, it may be several years
before significant revenues are realized. Revenues for fiscal 1998 were
approximately $56,000. Future revenues will be derived from sales of the
Company's services that are currently under development and royalties in
connection with licensing of its technology. There can be no assurance that the
Company 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 the Company to develop and manage the
introduction of its new services, market acceptance of the Company's services,
competition and the ability to control costs.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1998 the Company maintained working capital of
approximately $219,000 which included approximately $250,000 of cash. Subsequent
to fiscal year end, in December 1998, the Company raised $250,000 in cash
through a private placement of its stock at the then current market value.
Management believes that these resources are adequate to provide for its
operating needs until such time as its revenue stream commences. Management
further believes that it can successfully raise additional capital if necessary
to support its continued operations until such time as revenues are sufficient
to provide internally generated funds. The Company 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 operations or sources of financing, the
Company's business will be materially adversely affected.
LIMITED TRADING MARKET
The Common Stock is currently traded on the Bulletin Board (the
electronic pink sheets) under the symbol "PRLN." There is no assurance that
holders of the Common Stock will 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 due to the limited trading market for the Common Stock.
DEPENDENCE ON A KEY DISTRIBUTOR AND CERTAIN INDUSTRIES
The Company's initial revenues are highly dependent upon the ability to
market the BioFIT designation in the herbal and dietary supplement market. The
Company has entered into an agreement with a leading manufacturer of herbal and
other dietary supplement products to serve as the Company's exclusive agent for
the marketing and distribution of its BioFIT Certification Program. The Company
must therefore rely to a substantial degree on this company for the successful
and timely launch of its BioFIT program. Failure to launch BioFIT in a timely
manner or failure to secure an adequate number of customers could have a
material adverse effect on the Company. The Company's operations could also be
materially and adversely affected by a general economic decline in the herbal
and dietary supplement industries.
DEPENDENCE ON PERSONNEL
The Company does not currently have a complete management team. Key
positions not yet filled include Chief Financial Officer, Chief Operations
Officer, Vice President of Science, and Vice President of Business Development.
Presently, these functions are performed by Bernard Landes, Ph.D., the Company's
Chairman, President and Chief Executive Officer, assisted by certain members of
the Company's Board of Directors. The loss of the services of Mr. Landes could
have a material adverse effect on the Company. In addition, the Company'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 the Company will be able to continue to attract
and retain qualified personnel.
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<PAGE>
POTENTIAL LIABILITY
In connection with the provision of its services, the Company could be
held liable for errors or omissions. The Company maintains professional
liability insurance that includes safety issues as well as data processing
errors and omissions. There can be no assurance that the Company will be able to
maintain such insurance coverage on terms acceptable to the Company. The Company
could be materially and adversely affected if it were required to pay damages or
bear the costs of defending any claim outside the scope of or in excess of a
contractual indemnification provision or beyond the level of insurance coverage
or in the event that an indemnifying party does not fulfill its indemnification
obligations.
UNPREDICTABILITY OF PATENT PROTECTION; PROPRIETARY TECHNOLOGY
Certain of the technologies utilized in the Company's products are
proprietary. The Company believes that patent protection of materials or
processes it develops and any products that may result from the Company's
research and development efforts are important to the possible commercialization
of the Company's products. The Company currently has US patent protection
regarding the use of compounds identified from two of its traditional Chinese
medicine extracts and for its improved Ah-IMMUNOASSAY technology. However, there
can be no assurance that the Company's patents will afford adequate protection
to the Company or its licensees. Further, there can be no assurance that any
patents that have been or may be issued will provide the Company 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 the Company'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 the
Company may wish or be required to acquire rights under such patents, and the
cost or availability of such rights cannot be determined by the Company at this
time. In addition, the Company 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 the Company's proprietary technology or disclose
such technology or that the Company can meaningfully protect its rights in such
unpatented proprietary technology.
In addition, although all of the Company's employees are parties to
confidentiality agreements which are intended to protect the Company's
proprietary technology, there can be no assurance that any of such employees
will not compromise any of the Company's proprietary rights.
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP
The directors and executive officers of the Company beneficially own or
have voting control over 7,153,477 shares of Common Stock, or approximately
38.07% of the Company'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 the Company's directors and thereby
select management and direct policies of the Company.
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<PAGE>
VOLATILITY OF STOCK PRICE
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.
NON-PAYMENT OF CASH DIVIDENDS
The Company has not paid any cash dividends and it is unlikely that the
Company will pay any cash dividends in the foreseeable future. Earnings, if any,
will be retained by the Company for further development and expansion of its
business. There can be no assurance that the Company will ever pay cash
dividends.
EFFECTS OF ISSUANCE OF PREFERRED STOCK
The Company's Articles of Incorporation authorized the issuance of up
to 1,000,000 shares of preferred stock on terms which may be fixed by the
Company's Board of Directors without further shareholder action. While the
Company has previously issued shares of preferred stock, as of the date of this
Prospectus, the Company has no shares of preferred stock outstanding. The terms
of any future series of preferred stock, which may include priority claims to
assets and dividends and special voting rights, could adversely affect the
rights of holders of the Common Stock. The issuance of such preferred stock
could make the possible takeover of the Company or the removal of management of
the Company more difficult, discourage hostile bids for control of the Company
in which shareholders may receive premiums for their shares of Common Stock, or
otherwise dilute the rights of holders of Common Stock and the market price of
the Common Stock.
USE OF PROCEEDS
The Shares being offered hereby are for the account of the Selling
Stockholders and the Company is not selling any of the Shares. Accordingly, the
Company will not receive any proceeds from the sale of Shares. See "Plan of
Distribution."
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<PAGE>
SELLING STOCKHOLDERS
The Selling Stockholders received the Shares in connection with the
Transactions. The following table sets forth certain information as of the date
of this Prospectus. All of the Shares being offered by the Selling Stockholders
may be sold pursuant to this Prospectus. The Shares are being registered to
permit public secondary trading in the Shares and the Selling Stockholders may
offer the Shares for resale from time to time. See "Plan of Distribution."
<TABLE>
<CAPTION>
Shares Shares
Beneficially Shares Beneficially
Owned Prior Being Owned After
to Offering Offered Offering
------------------------ -------- ---------------------
Number Percent(1) Number Percent (1)
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Biomar International, Inc. 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-
G.W. Thorpe 50,000 * 50,000 -0- -0-
</TABLE>
- --------------------
* Denotes beneficial ownership of less than one percent of the Shares.
(1) Based on the 18,690,253 Shares which were issued and outstanding as of
December 22, 1998.
PLAN OF DISTRIBUTION
The Shares offered hereby by the Selling Stockholders may be sold from
time to time by the Selling Stockholders, or by pledges, donees, transferees or
other successors in interest. The decision to offer and sell the Shares, and the
timing and amount of any offers or sales that are made, is and will be within
the sole discretion of the Selling Stockholders. The Shares may be sold from
time to time on the Bulletin Board, at prices then prevailing, in negotiated
transactions or otherwise. The Shares may be sold by one or more of the
following methods, without limitation: (a) a block trade in which the
broker-dealer so engaged 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 effecting 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 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. 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.
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<PAGE>
The Company anticipates that the Registration Statement 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 the Selling Shareholders.
The Company shall 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,
the filing fee payable to the Bulletin Board, and all printing fees incurred in
connection herewith. Each Selling Stockholder shall pay his, her or its own
legal and accounting fees and any other expense incurred by the Selling
Stockholder. Any commissions, discounts or other fees payable to broker-dealers
in connection with any sale of the Shares shall be borne by the Selling
Stockholder selling such Shares.
The Company has 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 the Company and its directors and officers in certain
circumstances against certain liabilities, including liabilities arising under
the Securities Act.
There can be no assurance that the Selling Stockholders will sell any
or all of the Shares offered by them hereunder.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed
upon for the Company 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 Peat
Marwick 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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<PAGE>
II -1
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.
EXHIBIT NO. DESCRIPTION
----------- -----------
5.1 Opinion of The Sanford Holshouser Law Firm, PLLC
23.1 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney. Reference is made to page II-4.
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.
<PAGE>
II -1
(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 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 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 22nd day of January, 1999.
PARACELSIAN, INC.
By: /s/ BERNARD LANDES
-----------------------------------------
Bernard Landes
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints, jointly and severally, Bernard
Landes and T. Nelson Campbell, and each of them acting individually, as his
attorney-in-fact, each with full power of substitution and resubstituion, for
him or her in any and all capacities, to sign any and all amendments to this
Registration Statement (including post-effective amendments), and to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ BERNARD M. LANDES Chairman of the Board and Chief January 22, 1999
- -------------------------- Executive Officer (Principal Executive
Bernard M. Landes Officer)
/s/ BERNARD M. LANDES Chief Financial Officer January 22, 1999
- -------------------------- (Principal Financial
Bernard M. Landes and Accounting Officer)
/s/ BERNARD M. LANDES Director January 22, 1999
- -------------------------- Chairman of the Board
Bernard M. Landes
/s/ T. NELSON CAMPBELL Director January 22, 1999
- --------------------------
T. Nelson Campbell
Director
- --------------------------
James J. Dunseith
/s/ HIRA GURTOO Director January 22, 1999
- --------------------------
Hira Gurtoo
/s/ LIANPING HE Director January 22, 1999
- --------------------------
Lianping He
/s/ ROBERT A. BUCHANAN, MD Director January 22, 1999
- --------------------------
Robert A. Buchanan, MD
/s/ THOMAS D. LIVINGSTON Director January 22, 1999
- --------------------------
Thomas D. Livingston.
/s/ T. COLIN CAMPBELL Director January 22, 1999
- --------------------------
T. Colin Campbell
/s/ LOREN ISRAELSEN Director January 21, 1999
- --------------------------
Loren Israelsen
</TABLE>
Exhibit 5.1
[THE SANFORD HOLSHOUSER LAW FIRM, PLLC LETTERHEAD]
______________, 1998
PARACELSIAN, Inc.
222 Langmuir Laboratories
Cornell Technology Park
Ithaca, New York 14850
Re: 7,309,524 Shares of Common Stock of Company
-------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to PARACELSIAN, Inc., a Delaware corporation
(the "Company"), in connection with the registration of 7,309,524 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.
We are familiar with the corporate proceedings taken by the Company in
connection with the issuance and sale of the Common Stock. 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 Peat Marwick LLP
Raleigh, North Carolina
January , 1999
