<PAGE>
As filed with the Securities and Exchange Commission on May __, 1999.
Registration No. 333-_____
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
PROCEPT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2893483
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
840 MEMORIAL DRIVE, CAMBRIDGE, MASSACHUSETTS 02139; (617) 491-1100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------------
JOHN F. DEE
Chief Executive Officer and President
Procept, Inc.
840 Memorial Drive
Cambridge, Massachusetts 02139
(617) 491-1100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with copies to:
LYNNETTE C. FALLON, ESQ.
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
(617) 573-0100
----------------------
Approximate date of commencement of proposed sale to
the public: From time to time after the effective date of
this Registration Statement.
----------------------
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.|_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /x/
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------
Title of each class Proposed maximum Proposed maximum
of securities Amount to be offering price aggregate offering Amount of
to be registered registered per share (1) price (1) registration fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 4,421,209 shares $1.90625 $8,427,930 $2,343
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
and computed pursuant to Rule 457(c) and based upon the prices on
May 5, 1999 as reported on The Nasdaq Stock Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a)
OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE>
Subject to Completion, dated May 7, 1999
PROCEPT, INC.
---------------------
4,421,209 SHARES OF COMMON STOCK TO BE
SOLD BY THE SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
PROCEPT: THE OFFERING BY THE SELLING STOCKHOLDERS:
- -------- -----------------------------------------
<S> <C>
- - We are a biopharmaceutical company engaged - 1,173,509 shares of Procept common stock are
in the development and commercialization being offered on exercise of warrants and unit
of novel drugs with a focus on infectious purchase options assumed by Procept in connection
diseases and oncology. with the acquisition of Pacific Pharmaceuticals, Inc.
This Prospectus relates to the resale of the shares
- - Procept, Inc. of Procept common stock issuable on exercise of those
840 Memorial Drive warrants and unit purchase options.
(617) 491-1100
- 1,849,287 shares of Procept common stock are
- - Nasdaq Small Cap Symbol: PRCT being offered on exercise of Class C Warrants and
unit purchase options issued in 1998 as a result of
anti-dilution provisions triggered by the Pacific
acquisition. This Prospectus relates to the resale
of the shares of Procept common stock issuable on
exercise of those warrants and unit purchase
options.
- We previously issued 1,398,413 shares of Procept
common stock in private transactions, primarily
associated with the Pacific acquisition. This
Prospectus relates to the resale of those shares.
- The shares may be offered and sold by the selling
stockholders from time to time in open-market or
privately negotiated transactions which may involve
underwriters or brokers.
- There is an existing trading market for these
shares. The reported last sales price on May 5,
1999 was $1.9375 per share.
- We will not receive any of the proceeds from the
sale of shares covered by this Prospectus although
we will receive payment of the exercise price of the
warrants and unit purchase options.
</TABLE>
---------------
PROCEPT'S BUSINESS INVOLVES SIGNIFICANT RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
---------------
Neither the SEC nor any state securities commission has determined
whether this Prospectus is truthful or complete. Nor have they made, nor will
they make, any determination as to whether anyone should buy these securities.
Any representation to the contrary is a criminal offense.
The date of this Prospectus is ________, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Procept, Inc................................................................................................3
Where You Can Find More Information.........................................................................4
Risk Factors................................................................................................5
Use of Proceeds............................................................................................11
Selling Stockholders.......................................................................................12
Plan of Distribution.......................................................................................22
Legal Matters..............................................................................................23
Experts....................................................................................................23
</TABLE>
2
<PAGE>
PROCEPT, INC.
Procept, Inc., together with its subsidiaries (collectively "Procept")
is a biopharmaceutical company currently engaged in the development and
commercialization of novel drugs based on biotechnological research. On March
17, 1999, Procept consummated its merger with Pacific Pharmaceuticals, Inc.
("Pacific"), in which Pacific became a subsidiary of Procept. The combined
company will have a product portfolio with a focus in anti-infectives and
oncology, including three compounds in human clinical trials that may be
candidates for accelerated regulatory approval. Procept continues its search to
acquire or in-license drug development candidates to expand its pipeline of
potential biopharmaceutical products.
A more complete description of the business of Procept and its recent
activities can be found in the documents listed under "WHERE YOU CAN FIND MORE
INFORMATION." The principal offices of Procept, a Delaware corporation, are
located at 840 Memorial Drive, Cambridge, Massachusetts 02139, and its telephone
number at such offices is (617) 491-1100.
This Prospectus relates to the resale by stockholders of the Company of
the following shares of Procept common stock (the "Registered Shares"):
- an aggregate of 1,398,413 shares held by the selling
stockholders named herein;
- an aggregate of 3,022,796 shares issuable upon exercise of
warrants and other convertible securities held by the selling
stockholders named herein; and
- pursuant to Rule 416 under the Securities Act of 1933, as
amended (the "Act"), shares issuable by Procept as stock
dividends on the shares registered hereunder to be issued
pursuant to contractual obligations.
3
<PAGE>
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 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 on the SEC's
Website at http://www.sec.gov.
The SEC allows us to incorporate by reference information from other
documents that we file with them, which means that we can disclose important
information by referring to those documents. The information incorporated by
reference is considered to be part of this Prospectus, and information that we
file later with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 prior to the sale of all the shares covered
by this Prospectus:
- Annual Report on Form 10-K for the fiscal year ended December
31, 1998, filed with the SEC on March 31, 1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed with the SEC on May __, 1999;
- Current Report on Form 8-K filed with the SEC on March 30,
1999; and
- The description of the Procept common stock contained in our
Registration Statement on Form 8-A, filed with the SEC on
January 21, 1993, as amended by Procept's Registration
Statement on Form 8-A/A filed with the Commission on November
8, 1993 and February 7, 1994, including any amendment or
reports filed for the purpose of updating the description of
our common stock.
You may request a copy of these filings, at no cost, by writing or
telephoning using the following contact information:
Procept, Inc.
840 Memorial Drive
Cambridge, MA 02139
Attn: Michael Fitzgerald
(617) 491-1100
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling stockholders will
not make an offer of these shares in any state where the offer is not permitted.
You should not assume that the information in this Prospectus or any supplement
is accurate as of any date other than the date on the front of those documents.
4
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK WILL BE SUBJECT TO A HIGH
DEGREE OF FINANCIAL RISK. IN DECIDING WHETHER TO INVEST, PROSPECTIVE INVESTORS
SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS AS WELL AS THE OTHER
INFORMATION IN THIS DOCUMENT. THE LIST OF RISKS SET OUT BELOW MAY NOT BE
EXHAUSTIVE.
IT IS ESPECIALLY IMPORTANT TO KEEP THESE RISK FACTORS IN MIND WHEN READING
FORWARD-LOOKING STATEMENTS. THESE ARE STATEMENTS THAT RELATE TO FUTURE PERIODS
AND INCLUDE STATEMENTS ABOUT OUR LEAD STRUCTURE AND CANDIDATE DRUG DISCOVERY
EFFORTS, PRODUCT DEVELOPMENT AND RECEIPT OF REGULATORY APPROVALS. GENERALLY, THE
WORDS "ANTICIPATES," "EXPECTS," "INTENDS," "SEEKS," "PLANS" AND SIMILAR
EXPRESSIONS IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES, AND OUR ACTUAL RESULTS COULD DIFFER
SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
WE MAY NEVER BECOME PROFITABLE
We are not able to predict when, or if, we will become profitable, nor are
we able to predict whether any profitability will be sustained if it is
achieved. We have never made a profit in any fiscal period and, as of December
31, 1998, have an accumulated deficit of approximately $61.0 million. We had a
net loss in 1996 of $11.2 million, a net loss in 1997 of $9.1 million before
dividends on preferred stock of $4.2 million and a net loss in 1998 of $3.3
million. In addition, we expect to incur operating losses over the next several
years. To date, our only sources of revenue have been up-front payments and
research and development funding from our corporate partners. For the
foreseeable future, we expect that our level of revenues and operating results
will depend upon our ability to enter into new collaborations. We have not
received any revenues from the discovery, development or sale of a commercial
product and we may not realize any revenues in the future. Procept is not able
to predict when or if, it will be profitable, nor is it able to predict whether
such profitability will be sustained if it is achieved.
WE WILL NOT RECEIVE ANY REVENUE FROM PRODUCT SALES OR SIGNIFICANT PAYMENTS FROM
PARTNERS IF WE FAIL TO DISCOVER DRUGS OR DEVELOP PRODUCTS
We may fail to develop products. To date, we are developing several
candidate drugs and are engaged in clinical trials, but we have not completed
clinical trials, or obtained regulatory approval for or marketed any product.
Our product development efforts may fail for many reasons, including:
- the candidate drug or potential product fails in preclinical
studies;
- a potential product is not shown to be safe and effective in
clinical studies;
- required regulatory approvals are not obtained;
- a potential product cannot be produced in commercial
quantities at an acceptable cost; or
- a product does not gain market acceptance.
WE MAY NOT RECEIVE SIGNIFICANT PAYMENTS FROM PARTNERS DUE TO A FAILURE TO ENTER
INTO PARTNERSHIPS OR UNSUCCESSFUL RESULTS IN EXISTING COLLABORATIONS
Our revenue stream and our strategy depend, in part, on our entering
into partnerships with third parties. We may not be able to establish any
corporate partnerships, and we cannot guarantee that these partnerships will be
established on commercially acceptable terms. Our future corporate partnerships
may not ultimately be successful. Even if partnerships are entered into, our
partners could terminate agreements or these agreements could expire before any
meaningful developmental milestones are reached. The termination or expiration
of any or all of these agreements could have a material adverse effect on our
business.
5
<PAGE>
Much of the revenue that we may receive under these partnerships depends
upon our partners' successful development and commercial introduction of new
products derived from our chemical diversity libraries or pharmaceutical
screens. Our partners may develop alternative technologies or products outside
of their partnerships with us, and these technologies or products may be used to
develop treatments for the diseases targeted by our partnerships. This could
have a material adverse effect on our business.
IF WE FAIL TO OBTAIN LICENSES FOR NEW PRODUCTS, OUR BUSINESS STRATEGY MAY FAIL
Our business strategy includes obtaining exclusive licenses to certain
compounds with pharmaceutical activity in order to further develop and
commercialize such compounds. While we believe that we will be able to execute
on this business strategy, we cannot guarantee that we will obtain the license
on commercially acceptable terms or at all.
WE FACE UNCERTAINTY IN RAISING ADDITIONAL FUNDS NECESSARY TO FUND OUR OPERATIONS
We may be required to repeatedly raise additional capital to fund our
operations. Capital may be raised through public or private equity financings,
partnerships, debt financings, bank borrowings, or other sources. Additional
funding may not be available on favorable terms or at all. Our capital
requirements will depend upon numerous factors, including the following:
- the establishment of partnerships;
- the development of competing technologies or products;
- changing market conditions;
- the cost of protecting our intellectual property rights;
- the purchase of capital equipment;
- the progress of our drug discovery and development programs;
- the progress of any collaborations and receipt of any
option/license, milestone and royalty payments resulting from
those collaborations; and
- in-licensing and acquisition opportunities.
If adequate funds are not otherwise available, we may be required to
curtail operations significantly. To obtain additional funding, we may need to
enter into arrangements that require us to relinquish rights to certain
technologies, candidate drugs, products and/or potential markets. To the extent
that additional capital is raised through the sale of equity, or securities
convertible into equity, you may experience dilution of your proportionate
ownership in Procept.
PROCEPT HAS OBLIGATIONS TO ISSUE SHARES OF COMMON STOCK IN THE FUTURE WHICH WILL
DILUTE THE OUTSTANDING SHARES
As of April 30, 1999, 10,464,953 shares of Procept common stock were
issuable upon exercise of options and warrants to purchase Procept common stock
that either are currently outstanding or Procept has an obligation to issue,
including the 3,022,796 Warrant Shares registered hereunder. The exercise prices
of such options and warrants range from $0.70 to $202.49 per share. In addition,
Procept has the option to issue shares of common stock in lieu of certain cash
obligations, including an obligation to purchase outstanding shares of Preferred
Stock of Procept's partially owned subsidiary BG Development Corp. for a
purchase price of approximately $7,300,000 which assumes the exercise of
outstanding warrants pursuant to which Procept would receive $800,000 in gross
proceeds.
6
<PAGE>
In addition, Procept is obligated to issue additional shares of common
stock without consideration as a dividend substitute under existing contractual
provisions to investors in Procept's 1998 private placement, the former holders
of Preferred Stock of Pacific and certain other stockholders. These additional
issuances, which include the Dividend Shares being registered hereunder, are
semi-annual issuances beginning in October 9, 1999. Assuming the stockholders
entitled to the Dividend Shares do not sell any of their current holdings in
Procept, the first semi-annual issuance will be 560,931 shares and each issuance
thereunder will increase by 5% of the preceding semi-annual issuance. In
addition, these same stockholders will be entitled to receive additional shares
of common stock without consideration if Procept engages in a dilutive issuance
of securities. Upon the sale into the public market of shares of common stock by
the holders of these contractual rights, such rights will terminate
LIQUIDATION RIGHTS OF CERTAIN STOCKHOLDERS COULD REDUCE PROCEEDS TO OTHER
STOCKHOLDERS
Under existing contractual provisions, in the event of (i) a
liquidation, dissolution or winding up of Procept, (ii) the sale or other
disposition of all or substantially all of Procept's assets, or (iii) any
consolidation, merger, combination, reorganization or other transaction in which
Procept is not the surviving entity, Procept stockholders holding 9,141,714
shares of common stock are entitled to receive an aggregate of $27,004,623 as a
liquidation "preference" prior to any payment to the other stockholders. Except
in the case of a liquidation, dissolution or winding up, such payment will be in
the form that equity holders will receive in the acquisition transaction. In the
event of a liquidation, dissolution or winding up, such payment is contingent
upon Procept's having available resources to make such payment. These
contractual rights will terminate upon the sale into the public market of shares
of common stock by the holders of these contractual rights.
CONCENTRATION OF CONTROL OF OUR STOCK COULD LEAD TO FAILURE TO MAXIMIZE STOCK
PRICE AND CONFLICTS OF INTEREST
The Aries Trust, the Aries Domestic Fund, L.P., the Aries Master Fund,
Paramount Capital Investments LLC and Dr. Lindsay Rosenwald (collectively, the
"Paramount Purchasers"), together are the holders of (i) an aggregate of
4,504,858 shares of Procept common stock, and (ii) warrants and options
exercisable for 4,117,673 shares of Procept common stock. Assuming the exercise
of all the warrants held by the Aries Purchasers and no warrant exercises by
other holders the ownership position of the Aries Purchasers would represent
approximately 56% of Procept common stock. Paramount Capital Asset Management,
Inc. ("PCAM") is the investment manager and general partner of The Aries Trust,
the Aries Domestic Fund, L.P. and the Aries Master Fund. Lindsay A. Rosenwald,
M.D., the Chairman and sole stockholder of PCAM, is also President of Paramount
Capital Investments, LLC ("PCI"). In addition, The Aries Trust and the Aries
Domestic Fund, L.P. have the right to designate a majority of the members of the
Board of Directors. Accordingly, these entities may effectively control matters
requiring approval by Procept's stockholders, including electing directors,
adopting or amending certain provisions of Procept's certificate of
incorporation or by-laws and approving or preventing certain mergers or other
similar transactions, such as a sale of substantially all of Procept's assets
(including transactions that could give holders of Procept common stock the
opportunity to realize a premium over the then- prevailing price for their
shares).
Furthermore, the control rights of the Paramount Purchasers may
effectively discourage a third party from making an acquisition proposal and
thereby inhibiting a change of control in circumstances that could give the
holders of Procept common stock the opportunity to realize a premium over the
then-prevailing market price of such stocks or affect the market price of the
common stock, or both. The Procept stockholders other than the Paramount
Purchasers will be minority equity holders and will be unable to control
Procept's management or business policies. Moreover, subject to contractual
restrictions
7
<PAGE>
and general fiduciary obligations, Procept is not prohibited from engaging in
future transactions with the Paramount Purchasers.
PCI is a New York-based merchant banking and venture capital firm
specializing in biotechnology companies. In the regular course of its business,
PCI identifies, evaluates and pursues investment opportunities in biomedical and
pharmaceutical products, technologies and companies. None of PCI or its
affiliates are obligated pursuant to any agreement or understanding with Procept
to make any additional products or technologies available to Procept, nor can
there be any assurance, and Procept does not expect and purchasers of the
Registered Shares should not expect, that any biomedical or pharmaceutical
product or technology identified by PCI or such affiliates in the future will be
made available to Procept. In addition, certain of the current officers and
directors of Procept or certain of any officers or directors of Procept
hereafter appointed may from time to time serve as officers or directors of
other biopharmaceutical or biotechnology companies. There can be no assurance
that such other companies will not have interests in conflict with those of
Procept.
OUR BUSINESS MAY FAIL DUE TO INTENSE COMPETITION IN OUR INDUSTRY
Our business may fail because we face intense competition from major
pharmaceutical companies and specialized biotechnology companies providing
chemical diversity libraries, pharmaceutical screening systems, combinatorial
chemistry technologies and other expertise. In addition, in pursuing our
internal drug discovery program, we compete against pharmaceutical and
biotechnology companies developing drugs against infectious diseases, and our
partners face similar competition in the respective markets for which they are
developing drugs. Many of these competitors have greater financial and human
resources and more experience in research and development than we have.
Competitors that identify lead structures, develop candidate drugs, complete
clinical trials, obtain regulatory approvals, and begin commercial sales of
their products before us will enjoy a significant competitive advantage. We
anticipate that we will face increased competition in the future as new
companies enter the market and alternative technologies become available.
WE DEPEND ON PATENTS AND PROPRIETARY RIGHTS THAT MAY FAIL TO PROTECT OUR
BUSINESS
Our success will depend, in large part, on our ability to obtain and
maintain patent or other proprietary protection for our technologies, products,
and processes, and our ability to operate without infringing the proprietary
rights of other parties. We may not be able to obtain patent protection for the
composition of matter of discovered compounds, processes developed by our
employees, or uses of compounds discovered through our technology. Legal
standards relating to the validity of patents covering pharmaceutical and
biotechnological inventions and the scope of claims made under these patents are
still developing. There is no consistent policy regarding the breadth of claims
allowed in biotechnology patents. The patent position of a biotechnology firm is
highly uncertain and involves complex legal and factual questions.
We may not receive any issued patents based on currently pending or any
future applications. Any issued patents may not contain claims sufficiently
broad to protect against competitors with similar technology. In addition, our
patents, our partners' patents, and those patents for which we have license
rights may be challenged, narrowed, invalidated or circumvented. Furthermore,
rights granted under patents may not provide us with any competitive advantage.
We may have to initiate litigation to enforce our patent and license
rights. If our competitors file patent applications that claim technology also
claimed by us, we may have to participate in interference or opposition
proceedings to determine the priority of invention. An adverse outcome could
subject us to significant liabilities to third parties and require us to cease
using the technology or to license the disputed
8
<PAGE>
rights from third parties. We may not be able to obtain any required licenses on
commercially acceptable terms or at all.
The cost to us of any litigation or proceeding relating to patent
rights, even if resolved in our favor, could be substantial. Some of our
competitors may be able to sustain the costs of complex patent litigation more
effectively than we can because of their substantially greater resources.
Uncertainties resulting from the initiation and continuation of any pending
patent or related litigation could have a material adverse effect on our ability
to compete in the marketplace.
We also rely on certain proprietary trade secrets and know-how that are
not patentable. We have taken measures to protect our unpatented trade secrets
and know-how, including the use of confidentiality agreements with our
employees, consultants, and certain contractors. It is possible that the
agreements may be breached, that we would have inadequate remedies for any
breach, or that our trade secrets will otherwise become known or be
independently developed or discovered by competitors.
UNCERTAIN PHARMACEUTICAL PRICING ENVIRONMENT MAY IMPACT OUR BUSINESS
Our ultimate ability to commercialize any products that we or our
partners develop depends on the extent to which reimbursements to patients for
the cost of such products and related treatments will be available from
government health administration authorities, private health insurance
providers, and other organizations. It is uncertain whether third party payers
will reimburse patients for newly approved health care products or will do so at
a level that will enable us to obtain a satisfactory price for our products.
Healthcare reform is an area of increasing attention and is a priority of many
government officials. Any such reform measures, if adopted, could adversely
affect the pricing of therapeutic or diagnostic products in the US or elsewhere
and the amount of reimbursement available from governmental agencies or third
party insurers. We cannot predict the effect of these measures upon our
business.
QUALIFIED MANAGERIAL AND SCIENTIFIC PERSONNEL ARE SCARCE IN OUR INDUSTRY
We are highly dependent on the principal members of our scientific and
management staff. Our success will depend in part on our ability to identify,
attract and retain qualified managerial and scientific personnel. There is
intense competition for qualified personnel. We may not be able to continue to
attract and retain personnel with the advanced technical qualifications or
managerial expertise necessary for the development of our business. If we fail
to attract and retain key personnel, it could have a material adverse effect on
our business, financial condition and results of operations.
OUR COMMON STOCK MAY HAVE A VOLATILE PUBLIC TRADING PRICE AND LOW TRADING VOLUME
The market price of Procept common stock has been highly volatile and
the market for Procept common stock has experienced significant price and volume
fluctuations, some of which are unrelated to the operating performance of
Procept. Many factors may have a significant adverse effect on the market price
of the common stock, including:
- announcements of technological innovations or new commercial
products by us or our competitors;
- developments concerning proprietary rights, including patent
and litigation matters;
- publicity regarding actual or potential results with respect
to products or compounds under development by us or our
partners;
- unexpected terminations of partnerships;
- regulatory developments in the US and other countries;
9
<PAGE>
- general market conditions; and
- quarterly fluctuations in our revenues and other financial
results.
YEAR 2000 ISSUES COULD CAUSE INTERRUPTION OR FAILURE OF OUR COMPUTER SYSTEMS
We use a significant number of computer systems and software programs
in our operations, including applications used in support of research and
development activities, accounting, and various administrative functions.
Although we believe that our internal systems and software applications contain
source code that is able to interpret appropriately the dates following December
31, 1999, our failure to make or obtain necessary modifications to our systems
and software could result in systems interruptions or failures that could have a
material adverse effect on our business. We do not anticipate that we will incur
material expenses to make our systems Year 2000 compliant. Unanticipated costs
necessary to avoid potential systems interruptions could exceed our present
expectations and consequently have a material adverse effect on our business. In
addition, if our key supply and service providers fail to make their respective
computer software programs and operating systems Year 2000 compliant, it could
have a material adverse effect on our business.
THE POSSIBLE APPLICABILITY OF "PENNY STOCK" RULES WILL ADVERSELY IMPACT
LIQUIDITY FOR PROCEPT'S SECURITIES
If our common stock fails to continue to be listed on a national
securities exchange or listed on a qualified automated quotation system, it may
become subject to Rule 15g-9 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which imposes additional sales practice
requirements on broker-dealers that sell such securities. Rule 15g-9 defines a
"penny stock" to be any equity security that has a market price (as therein
defined) of less than $5.00 per share or with an exercise price of less than
$5.00 per share, subject to certain exceptions including the securities being
quoted on Nasdaq's SmallCap Market. For transactions covered by this rule, a
broker-dealer must make a special suitability determination for the purchaser,
have delivered the Commission's required disclosure statement regarding "penny
stock" and have received the purchaser's written consent to the transaction
prior to sale. In addition, Rule 15g-4 requires that a broker-dealer also must
disclose the sales commission payable to it and its registered representative
and current quotations for the security. Finally, Rule 15g-6 requires that a
broker-dealer send its customers who hold penny stock in their accounts monthly
statements disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stock. Consequently, such
rules may affect the ability of broker-dealers to sell Procept's securities and
may affect the ability of purchasers of the Registered Shares to sell any of
their Procept common stock.
The foregoing required penny stock restrictions will not apply to
Procept's securities if Procept meets certain minimum net tangible assets or
average revenue criteria. There can be no assurance that Procept's securities
will qualify for exemption from the penny stock restrictions. In any event, even
if Procept's securities were exempt from such restrictions, Procept would remain
subject to Section 15(b)(6) of the Exchange Act, which gives the Commission the
authority to restrict any person from participating in a distribution of penny
stock, if the Commission finds that such a restriction would be in the public
interest.
10
<PAGE>
If Procept's securities were subject to the rules on penny stocks, the
market liquidity for Procept's securities would be materially adversely
affected.
USE OF PROCEEDS
Procept will not receive any proceeds from the sale of the Registered
Shares. Procept could, however, receive an aggregate of up to $12,072,945 upon
exercise of outstanding unit purchase options and warrants that must be
exercised before 3,022,796 of the Registered Shares could be sold hereunder.
11
<PAGE>
SELLING STOCKHOLDERS
The Selling Stockholders are the holders of:
- an aggregate of 1,398,413 shares of Procept common stock
issued by Procept in various private placements, including
Procept's 1998 private placement (the "Outstanding Shares");
and
- currently exercisable warrants issued by Procept in private
placements or assumed by Procept in connection with its
acquisition of Pacific (the "Warrants") to purchase, at prices
ranging from $3.67 to $9.20 per share, an aggregate of
3,022,796 shares of Procept common stock (the "Warrant
Shares"), which expire on various dates from October 8, 2001
to September 7, 2007.
- the right to receive stock dividends under agreements between
Procept and the Selling Stockholders (the "Dividend Shares").
Dividend Shares are issuable on each October 9th and April 9th
beginning with October 9, 1999 in an amount equal to five
percent (5%) of shares held by such Selling Stockholder
entitled to such stock dividends. Under Rule 416 of the Act,
this Prospectus covers future issuances of Dividend
Shares on the shares being registered hereunder.
The following table sets forth as of April 10, 1999:
- the name of each Selling Stockholder (in addition to the named
Selling Stockholders, any person who receives Registered
Shares from a Selling Stockholder as a gift or in connection
with a pledge may sell up to 500 of such shares using this
Prospectus);
- the aggregate number of shares of common stock owned by or
issuable upon exercise of outstanding convertible securities
owned by each Selling Stockholder ("Shares Held"); and
- the aggregate number of Outstanding Shares and Warrant Shares
to be offered by each Selling Stockholder pursuant to this
Prospectus. In addition to the Outstanding Shares and Warrant
Shares, this Prospectus also covers the resale of Dividend
Shares which may be issued to each Selling Stockholder holding
Outstanding Shares or holding Unit Purchase Options issued by
Procept in 1998 (the "1998 UPOs") and Unit Purchase Options
issued by Pacific in 1997 and assumed by Procept (the "1997
UPOs ).
Common stock ownership information is based solely upon information
furnished to Procept or reports furnished to Procept by the respective
individuals or entities, as the case may be, pursuant to the rules of the
Commission. Except as described elsewhere in this Prospectus (including the
footnotes following the table), none of the Selling Stockholders have held any
position or office with, been employed by, or otherwise had a material
relationship with, Procept or any of its predecessors or affiliates within the
past three years.
12
<PAGE>
<TABLE>
<CAPTION>
NAME OF TOTAL SHARES OUTSTANDING WARRANT REGISTERED
SELLING STOCKHOLDER HELD (1) SHARES SHARES (2) SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Abeshouse, Mark (3) - - 2,251 2,251
Ain, Ross D. 9,479 - 1,450 1,450
Alae Partners 47,393 - 7,248 7,248
Angelastro, Philip J. 11,848 - 1,812 1,812
The Alfred J. Anzalone Family Limited Partnership 23,697 - 3,624 3,624
Arias, Mauricio 11,848 - 1,812 1,812
Aries Domestic Fund, L.P. (4) 1,456,715 304,193 243,002 547,195
Aries Trust (5) 2,760,555 175,549 466,733 642,282
Aristizabal, Mario 11,848 - 1,812 1,812
Arntson, Morris A. Jr. 11,848 - 1,812 1,812
Ballweg, Martin G. 23,697 - 3,624 3,624
Batkin, Alan R. 4,794 2,038 - 2,038
Baz, Raul 11,848 - 1,812 1,812
Beagle Limited (6) 94,787 - 14,496 14,496
Eckardt C. Beck Defined Pension Plan U/A 1/1/95 11,848 - 1,812 1,812
Berg, Mark 37,448 15,918 - 15,918
Bernstein, Lawrence 7,109 - 1,087 1,087
Richard Berry, MD & Beverly Berry 11,848 - 1,812 1,812
Bershad, David J. 37,448 15,918 - 15,918
Bios Equity Fund L.P. 32,825 - 10,872 10,872
Barry Birbrower, P.C. Profit Sharing Trust 11,848 - 1,812 1,812
Blair, DH (7) - - 12,328 12,328
Robert S. Bogatin Trust UDT 3/15/91 11,848 - 1,812 1,812
Borak, Evan S. (8) - - 3,504 3,504
Brady, James W. 4,740 - 725 725
Braziel, Ronald W. 47,393 - 7,248 7,248
Broidy, Elliott 42,419 7,958 3,624 11,582
Cass & Co. - Magnum Capital Growth Fund 18,722 7,958 - 7,958
Cassedy, Thomas L. 18,722 7,958 - 7,958
Thomas L. Cassidy IRA Rollover 23,697 - 3,624 3,624
Andrew Cichelli & Barbara Cichelli JT TEN 7,491 3,184 - 3,184
Cline, Jack R. Jr. 11,848 - 1,812 1,812
Commonwealth Associates 63,981 63,981 - 63,981
Conrads, Robert J. 29,687 2,546 3,624 6,170
Continental Consulting Corporation 11,848 - 1,812 1,812
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
NAME OF TOTAL SHARES OUTSTANDING WARRANT REGISTERED
SELLING STOCKHOLDER HELD (1) SHARES SHARES (2) SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Couderay Partners 12,607 - 7,248 7,248
Cox, Archibald, Jr. (9) 169,679 31,835 14,496 46,331
Davis, Tommy L. - - 10,872 10,872
Lelia Cordero De Adame & Lilia Olivera JT TEN 9,363 3,980 - 3,980
de Salas-Porras, Maria-Eugenia A. 11,848 - 1,812 1,812
Desai, Praful, MD 11,848 - 1,812 1,812
Daniel J. Dornan & Particia Ann Dornan JT TEN 9,363 3,980 - 3,980
Doyle, J. William 35,545 - 5,436 5,436
Dritz, James L. 11,848 - 1,812 1,812
Dworetzky, Edward 23,697 - 3,624 3,624
Dworetzky, Norma 23,697 - 3,624 3,624
Edelman, Joseph (10) - - 8,004 8,004
Edmund C. Neuhaus & Olga M. Neuhaus JT TEN 3,745 1,591 - 1,591
Fabiani, Joseph A. (11) 13,106 5,571 1,179 6,750
Fischer, Lauren S. (12) - - 3,105 3,105
Florin, Marc (13) - - 11,635 11,635
Roxanne H. Frank Revocable Trust 12,607 - 7,248 7,248
Friedman, Ben and Sharyn 11,848 - 1,812 1,812
Gallans & Brooks Associates, Inc. Pension Fund 11,848 - 1,812 1,812
A. Mark Gambee, MD and Karen D. Todd, MD JTWORS 23,697 - 3,624 3,624
Garfinkel, Shelley 10,652 - 3,624 3,624
Gerace, Anthony J. 8,521 - 2,899 2,899
Giamanco, Joseph 36,256 - 7,248 7,248
Giant Trading, Inc. 14,979 6,367 - 6,367
Gittis, Howard 47,393 - 7,248 7,248
Laura Gold Gallaries Ltd, PFT SHG TR 9,363 3,980 - 3,980
Stuart Goldberg and Rhoda Goldberg JTWROS 11,848 - 1,812 1,812
Gilbert Goldstein Paul Shapiro Trustees, UIT 84,841 15,918 7,248 23,166
Howard Gittis, dated 12/23/88
Goodman, John M. 11,848 - 1,812 1,812
Gordon, Michael J. 6,898 414 906 1,320
Gordon, Robert P. 17,301 7,354 - 7,354
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
NAME OF TOTAL SHARES OUTSTANDING WARRANT REGISTERED
SELLING STOCKHOLDER HELD (1) SHARES SHARES (2) SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Halperin, Alan and Paula 23,697 - 3,624 3,624
Irving B. Harris Revocable Trust 12,607 - 7,248 7,248
Harvard School of Dental Medicine 4,738 4,738 - 4,738
Hawk Management and Financial Services, Inc. 47,393 - 7,248 7,248
Hawkins Group, LLC (14) - - 111,156 111,156
Heil, Edward F. 23,697 - 3,624 3,624
Herman, Paul R. 11,848 - 1,812 1,812
HJK, LLC 47,393 - 7,248 7,248
Holubow, Fred 2,522 - 1,450 1,450
Harry Huang and Adrienne Masters 11,848 - 1,812 1,812
IMS Global Investments X, Ltd. (15) 94,787 - 14,496 14,496
Jackson Hole Investments Acquisition LP 23,697 - 3,624 3,624
Jesselson Children, 12/18/80 Trust FBO 187,234 79,587 - 79,587
Jesselson, Michael G. 12/18/80 TR 187,234 79,587 - 79,587
Joyce, Michael 47,393 - 7,248 7,248
Jurgensmeyer, Charles 23,697 - 3,624 3,624
Jerome Kahn Jr. Revocable Trust 5,674 - 3,262 3,262
Kaiserman, Donald B. and Sylvia A. 11,848 - 1,812 1,812
Kane, Patrick M. 32,941 7,958 2,174 10,132
Ellen I. Kaplan Revocable Trust 23,697 - 3,624 3,624
Kash, Peter (16) - - 12,799 12,799
Katzmann, Scott A. (17) - - 89,194 89,194
Kehaya, Ery W. - - 3,624 3,624
Kendall, Donald R., Jr. 33,060 3,980 3,624 7,604
John R. Kennedy & John R. Kennedy Pension Fund 18,722 7,958 - 7,958
Kessel, Lawrence and Shirley 11,848 - 1,812 1,812
Keys Foundation (18) 165,877 - 25,368 25,368
Kimble, George and Mary Ellen 11,848 - 1,812 1,812
Knox, John (19) - - 1,386 1,386
Knox, Robert A. 18,722 7,958 - 7,958
Kratchman, Martin (20) - - 1,421 1,421
Ksiazek, Harold and Jeanette 11,848 - 1,812 1,812
LaRocque, John (21) 71,090 - 21,744 21,744
Lash, Roger S. 17,393 - 3,624 3,624
Levine, Brad DMD 23,697 - 3,624 3,624
Levine, Jeff (22) - - 7,361 7,361
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NAME OF TOTAL SHARES OUTSTANDING WARRANT REGISTERED
SELLING STOCKHOLDER HELD (1) SHARES SHARES (2) SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hyman A. Lezell Revocable Trust 11,848 - 1,812 1,812
Lincoln Wood Investment 71,090 - 10,872 10,872
Linscott, Donald W. 11,848 - 1,812 1,812
Donna Lipman and Lawrence Lipman, Tenants in Common 11,848 - 1,812 1,812
Stephen A. Lisenby and Patricia J. Lisenby 35,545 - 5,436 5,436
Loeb, John Jr. 21,211 3,980 1,812 5,792
Lozito, Donna F. (23) - - 7,626 7,626
Lydecker, Richard A. and Gay C. 2,369 - 362 362
Lydon, Harris R.L. Jr. 11,848 - 1,812 1,812
Managed Risk Trading LP 4,719 2,005 - 2,005
Geo. Manos & Associates, Inc. 11,848 - 1,812 1,812
McCullick, Mike 11,848 - 1,812 1,812
McDermott, Stephen (24) - - 536 536
Sean McGould & Erin McGould JT TEN 9,363 3,980 - 3,980
McInerney, Tim (25) - - 20,265 20,265
MDBC Capital Corp. 18,722 7,958 - 7,958
Messina, Kirkland (26) - - 519 519
Milfam I 11,848 - 1,812 1,812
Miller, Albert R., Trustee 9,363 3,980 - 3,980
Miller, Mike and Terry 47,393 - 7,248 7,248
Milstein, Albert 11,848 - 1,812 1,812
Minerva, Donald 23,697 - 3,624 3,624
Moonlight International LTD 18,722 7,958 - 7,958
Moskowitz, Reed 9,363 3,980 - 3,980
Murphy, Charles J., Jr. 9,363 3,980 - 3,980
William Kymmerly Murphy & Linda Carolyn 11,848 - 1,812 1,812
Murphy Revocable Trust
Nagle, Arthur J. 21,211 3,980 1,812 5,792
Natiello, Joseph A. 10,652 - 3,624 3,624
Newman, Kevin P. 11,848 - 1,812 1,812
John S. Osterweis Trustee for The 21,211 3.980 1,812 5,792
Osterweis Revocable Trust U/A dated
1/13/93
Ostrovsky, Paul D. and Rebecca L. 10,568 1,974 906 2,880
Ostrovsky, Steven N. 36,495 7,958 2,718 10,676
Paine Webber, Inc. 18,722 7,958 - 7,958
Palmetto Partners, LTD. (27) 169,679 31,835 14,496 46,331
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
NAME OF TOTAL SHARES OUTSTANDING WARRANT REGISTERED
SELLING STOCKHOLDER HELD (1) SHARES SHARES (2) SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pelts, James J. 4,740 - 725 725
Pequot Scout Fund, LP 29,621 - 18,120 18,120
Pharm-Eco Laboratories, Inc. 23,697 - 3,624 3,624
Pictet Bank & Trust Nassau Ltd. 23,697 - 3,624 3,624
Porlana Capital Corp. PTE Ltd. 47,393 - 7,248 7,248
Prager, Tis 33,060 3,980 3,624 7,604
Ramaker, James K. 23,697 - 3,624 3,624
Reaback, Louis 11,848 - 1,812 1,812
Reaback, Raymond 11,848 - 1,812 1,812
Resnick, Michael 9,479 - 1,450 1,450
David Rosenbaum and Margot Kahn JTWROS 630 - 362 362
Rosenwald, Lindsay (28) 118,066 100,010 1,211,073 1,311,083
Rothblatt, Martin 9,363 3,980 - 3,980
Rubin, Wayne L. (29) - - 41,134 41,134
Abel Quezada Rueda & Mercedes Pesqueira V JT WROS 3,745 1,591 - 1,591
Ruggeberg, Karl (30) - - 11,726 11,726
Ruttenberg, David W. 11,848 - 1,812 1,812
Sanger Investments II 7,491 3,184 - 3,184
Roy Schaefer and Marlena , JTWROS 30,571 7,958 1,812 9,770
Schawelson, Sandra 11,848 - 1,812 1,812
Selz, Bernard 56,170 23,876 - 23,876
Furman Selz, LLC 59,242 - 9,060 9,060
J.F. Shea Co., Inc. (31) 198,350 23,876 21,744 45,620
Siirola, Thomas C. 11,848 - 1,812 1,812
Silver, William S. - - 1,812 1,812
Smith, Richard A. 18,722 7,958 - 7,958
Soloman, Debrah (32) - - 1,072 1,072
Solomon, Philip 5,020 2,133 - 2,133
Speisman, Aaron 9,363 3,980 - 3,980
Spencer, Melvin 11,848 - 1,812 1,812
Spencer, William M., III 37,448 15,918 - 15,918
Joseph Stevens & Co. (33) - - 29,446 29,446
Strassman, Andrew 11,848 - 1,812 1,812
Joseph Strassman and Barbara Strassman 23,697 - 3,624 3,624
Strassman, Richard (34) 11,848 - 9,607 9,607
Suan Investments 37,448 15,918 - 15,918
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
NAME OF TOTAL SHARES OUTSTANDING WARRANT REGISTERED
SELLING STOCKHOLDER HELD (1) SHARES SHARES (2) SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tanen, David (35) - 643 643
Tauber, Herman 18,722 7,958 - 7,958
Teitelbaum, Myron M. M.D. 37,702 5,953 3,624 9,577
Tokenhouse Trading Company Limited 47,393 - 7,248 7,248
Umbach, Joseph A. 9,363 3,980 - 3,980
Villamizar, Rodrigo 11,848 - 1,812 1,812
Donald E. Vinson and Virginia V. Trust 18,213 2,706 1,812 4,518
Vitols, Juris 23,697 - 3,624 3,624
Walner, David (36) - - 8,984 8,984
Wayne, Peri 6,964 2,960 - 2,960
Weiss, Melvyn I. 61,145 15,918 3,624 19,542
Weiss, Michael S. (37) - - 174,975 174,975
Westbury Nursery Products Ltd. 47,393 - 7,248 7,248
Widmer, Bruno 23,697 - 3,624 3,624
Woldow, Andrew 4,644 1,974 - 1,974
Wolfson Decedent's 1993 Trust (38) 374,469 159,175 - 159,175
Wolfson Equities 47,393 - 7,248 7,248
Youner, Lauren (39) - - 2,659 2,659
Zambrano, Gabriel 9,479 - 1,450 1,450
Zapco Holdings Inc. Deferred Compensation Plan Trust 18,722 7,958 - 7,958
--------------------------------------------------------------------------------
TOTAL 9,141,714 1,398,413 3,022,796 4,421,209
</TABLE>
(1) Total Shares Held does not include shares issuable to the Selling
Stockholders on exercise of outstanding warrants and options. Except as
indicated in footnotes below, none of the Selling Stockholders will
hold more than one percent of the outstanding common stock after the
completion of the Offering.
(2) Except as indicated in the footnotes below, all of the Warrant Shares
held by each Selling Stockholder are issuable on exercise of Procept's
Class C Warrants at an exercise price of $3.67 per share.
(3) Mr. Abeshouse's Warrant Shares include: (1) 1,779 shares issuable upon
exercise of 1997 UPOs; (2) 258 shares issuable upon exercise of Class A
Warrants issuable on exercise of 1997 UPOs; (3) 95 shares issuable upon
exercise of 1995 Unit Purchase Options originally issued by Pacific and
assumed by Procept ("1995 UPOs") and (4) 119 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1995 UPOs.
(4) Warrant Shares of The Aries Domestic Fund, L.P. (the "Fund") include:
(1) 22,600 shares issuable upon exercise of 1998 UPOs, (2) 5,980 shares
issuable upon exercise of Class C Warrants issuable on exercise of 1998
UPOs, (3) 32,197 shares issuable upon exercise of 1997 UPOs, (4) 4,671
shares issuable upon exercise of Class A Warrants issuable on exercise
of 1997 UPOs, (5) 2,716 shares issuable upon exercise of 1995 UPOs; (6)
3,395 shares issuable upon exercise of Class A Warrants issuable on
exercise of 1995 UPOs and (7) 4,889 shares issuable upon exercise of
common stock Warrants exercisable at $8.84 per share originally issued
by Pacific and assumed by Procept. Assuming the sale of all Registered
Shares, and assuming the exercise of all of the options and warrants
held by the Fund, it would beneficially own 2,321,113 shares,
representing 14.78% of the outstanding common stock.
18
<PAGE>
(5) Warrant Shares of The Aries Trust (the "Trust") include: (1) 45,884
shares issuable upon exercise of 1998 UPOs, (2) 12,140 shares issuable
upon exercise of Class C Warrants issuable on exercise of 1998 UPOs,
(3) 62,461 shares issuable upon exercise of 1997 UPOs, (4) 9,061 shares
issuable upon exercise of Class A Warrants issuable on exercise of 1997
UPOs, (5) 2,716 shares issuable upon exercise of 1995 UPOs, (6) 3,395
shares issuable upon exercise of Class A Warrants issuable on exercise
of 1995 UPOs, and (7) 11,408 shares issuable upon exercise of common
stock Warrants exercisable at $8.84 per share originally issued by
Pacific and assumed by Procept. Assuming the sale of all Registered
Shares, and assuming the exercise of all of the options and warrants
held by the Trust, it would beneficially own 4,349,094 shares,
representing 29.13% of the outstanding common stock.
(6) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by Beagle Limited, it would
beneficially own 149,283 shares, representing 1.20% of the outstanding
common stock.
(7) D.H. Blair's Warrant Shares include: (1) 10,766 shares issuable upon
exercise of 1997 UPOs and (2) 1,562 shares issuable upon exercise of
Class A Warrants issuable on exercise of 1997 UPOs.
(8) Mr. Borak's Warrant Shares include: (1) 2,771 shares issuable upon
exercise of 1998 UPOs and (2) 733 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1998 UPOs.
(9) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by Mr. Cox, he would
beneficially own 235,040 shares, representing 1.68% of the outstanding
common stock.
(10) Mr. Edelman's Warrant Shares include: (1) 2,441 shares issuable upon
exercise of 1998 UPOs; (2) 646 shares issuable upon exercise of Class C
warrants issuable on exercise of 1998 UPOs; (3) 3,948 shares issuable
upon exercise of 1997 UPOs; (4) 507 shares issuable upon exercise of
Class A Warrants issuable on exercise of 1997 UPOs; (5) 405 shares
issuable upon exercise of 1995 UPOs and (6) 507 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1995 UPOs.
(11) Mr. Fabiani's Warrant Shares include: (1) 1,030 shares issuable upon
exercise of 1997 UPOs and (2) 149 shares issuable upon exercise of
Class A Warrants issuable on exercise of 1997 UPOs.
(12) Ms. Fischer's Warrant Shares include: (1) 2,455 shares issuable upon
exercise of 1998 UPOs and (2) 650 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1998 UPOs.
(13) Mr. Florin's Warrant Shares include: (1) 1,945 shares issuable upon
exercise of 1998 UPOs; (2) 515 shares issuable upon exercise of Class C
Warrants issuable on exercise of 1998 UPOs; (3) 8,014 shares issuable
upon exercise of 1997 UPOs and (4) 1,163 shares issuable upon exercise
of Class A Warrants issuable on exercise of 1997 UPOs.
(14) Warrant Shares of the Hawkins Group, LLC include: (1) 87,899 shares
issuable upon exercise of 1998 UPOs and (2) 23,257 shares issuable upon
exercise of Class C Warrants issuable on exercise of 1998 UPOs.
Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by the Hawkins Group, LLC, it
would beneficially own 239,506 shares, representing 1.12% of the
outstanding common stock.
(15) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by IMS Global Investments X,
Ltd, it would beneficially own 149,283 shares, representing 1.20% of
the outstanding common stock.
(16) Mr. Kash's Warrant Shares include: (1) 7,068 shares issuable upon
exercise of 1997 UPOs; (2) 1,025 shares issuable upon exercise of Class
A Warrants issuable on exercise of 1997 UPOs; (3) 2,091 shares issuable
upon exercise of 1995 UPO's and (4) 2,614 shares issuable upon exercise
of Class A Warrants issuable on exercise of 1995 UPO's.
(17) Mr. Katzmann's Warrant Shares include: (1) 28,811 shares issuable upon
exercise of 1998 UPOs; (2) 7,623 shares issuable upon exercise of Class
C Warrants issuable on exercise of 1998 UPOs; (3) 38,495 shares
issuable upon exercise of 1997 UPOs; (4) 5,585 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1997 UPOs; (5)
3,858 shares issuable upon exercise of 1995 UPOs and (6) 4,822 shares
issuable upon exercise of Class A Warrants issuable on exercise of 1995
UPOs.
(18) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by the Keys Foundation, it
would beneficially own 272,110 shares, representing 2.18% of the
outstanding common stock.
(19) Mr. Knox's Warrant Shares include: (1) 1,096 shares issuable upon
exercise of 1998 UPOs and (2) 290 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1998 UPOs.
(20) Mr. Kratchmann's Warrant Shares include: (1) 936 shares issuable upon
exercise of 1997 UPOs; (2) 136 shares issuable upon exercise of Class A
Warrants issuable on exercise of 1997 UPOs; (3) 155 shares
19
<PAGE>
issuable upon exercise of 1995 UPO's and (4) 194 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1995 UPO's.
(21) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by Mr. LaRocque, he would
beneficially own 152,834 shares, representing 1.16% of the outstanding
common stock.
(22) Mr. Levine's Warrant Shares include: (1) 5,821 shares issuable upon
exercise of 1998 UPOs and (2) 1,540 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1998 UPOs.
(23) Ms. Lozito's Warrant Shares include: (1) 2,639 shares issuable upon
exercise of 1998 UPOs; (2) 698 shares issuable upon exercise of Class C
Warrants issuable on exercise of 1998 UPOs; (3) 3,745 shares issuable
upon exercise of 1997 UPOs and (4) 543 shares issuable upon exercise of
Class A Warrants issuable on exercise of 1997 UPOs.
(24) Mr. McDermott's Warrant Shares include: (1) 468 shares issuable upon
exercise of 1997 UPOs and (2) 68 shares issuable upon exercise of Class
C Warrants issuable on exercise of 1997 UPOs.
(25) Mr. McInerney's Warrant Shares include: (1) 4,623 shares issuable upon
exercise of 1998 UPOs; (2) 1,223 shares issuable upon exercise of Class
C Warrants issuable on exercise of 1998 UPOs; (3) 12,592 shares
issuable upon exercise of 1997 UPOs and (4) 1,827 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1997 UPOs.
(26) Mr. Messina's Warrant Shares include: (1) 411 shares issuable upon
exercise of 1998 UPOs and (2) 109 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1998 UPOs.
(27) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by Palmetto Partners, LTD, it
would beneficially own 262,203 shares, representing 1.91% of the
outstanding common stock.
(28) Dr. Rosenwald's Warrant Shares include: (1) 381,925 shares issuable
upon exercise of 1998 UPOs; (2) 101,053 shares issuable upon exercise
of Class C Warrants issuable on exercise of 1998 UPOs; (3) 594,825
shares issuable upon exercise of 1997 UPOs; (4) 86,292 shares issuable
upon exercise of Class A Warrants issuable on exercise of 1997 UPOs,
(5) 20,879 shares issuable upon exercise of 1995 UPOs and (6) 26,099
shares issuable upon exercise of Class A Warrants issuable on exercise
of 1995 UPOs. Assuming the sale of all Registered Shares, and assuming
the exercise of all of the options and warrants held by Dr. Resenwald,
he would beneficially own 1,922,009 shares, representing 4.71% of the
outstanding common stock. Share figures do not include shares being
offered for the account of The Aries Domestic Fund, L.P. and The Aries
Trust (together the "Aries Funds"). Dr. Rosenwald controls the
investment activities of the Aries Funds and may be deemed the
beneficial owner of the shares being offered by such Selling
Stockholders. See "Risk Factors - Concentration of Control of Our Stock
Could Lead to Failure to Maximize Stock Price and Conflicts of
Interest."
(29) Mr. Rubin's Warrant Shares include: (1) 12,120 shares issuable upon
exercise of 1998 UPOs; (2) 3,207 shares issuable upon exercise of Class
C Warrants issuable on exercise of 1998 UPOs; (3) 18,157 shares
issuable upon exercise of 1997 UPOs; (4) 2,634 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1997 UPOs; (5)
2,230 shares issuable upon exercise of 1995 UPOs and (6) 2,787 shares
issuable upon exercise of Class A Warrants issuable on exercise of 1995
UPOs.
(30) Mr. Ruggeberg's Warrant Shares include: (1) 6,300 shares issuable upon
exercise of 1998 UPOs; (2) 1,667 shares issuable upon exercise of Class
C Warrants issuable on exercise of 1998 UPOs; (3) 2,322 shares issuable
upon exercise of 1997 UPOs; (4) 337 shares issuable upon exercise of
Class A Warrants issuable on exercise of 1997 UPOs; (5) 489 shares
issuable upon exercise of 1995 UPOs and (6) 611 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1995 UPOs.
(31) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by the J.F. Shea Co., Inc., it
would beneficially own 296,392 shares, representing 2.22% of the
outstanding common stock.
(32) Ms. Soloman's Warrant Shares include: (1) 936 shares issuable upon
exercise of 1997 UPOs and (2) 136 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1997 UPOs.
(33) Warrant Shares of Joseph Steven's & Co. include: (1) 23,285 shares
issuable upon exercise of 1998 UPOs and (2) 6,161 shares issuable upon
exercise of Class C Warrants issuable on exercise of 1998 UPOs.
(34) Mr. Strassman's Warrant Shares include: (1) 6,164 shares issuable upon
exercise of 1998 UPOs and (2) 1,631 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1998 UPOs.
(35) Mr. Tanen's Warrant Shares include: (1) 562 shares issuable upon
exercise of 1997 UPOs and (2) 81 shares issuable upon exercise of Class
A Warrants issuable on exercise of 1997 UPOs.
20
<PAGE>
(36) Mr. Walner's Warrant Shares include: (1) 1,787 shares issuable upon
exercise of 1998 UPOs; (2) 473 shares issuable upon exercise of Class C
Warrants issuable on exercise of 1998 UPOs; (3) 5,872 shares issuable
upon exercise of 1997 UPOs and (4) 852 shares issuable upon exercise of
Class A Warrants issuable on exercise of 1997 UPOs.
(37) Mr. Weiss's Warrant Shares include: (1) 18,352 shares issuable upon
exercise of 1998 UPOs; (2) 4,856 shares issuable upon exercise of Class
C Warrants issuable on exercise of 1998 UPOs; (3) 128,158 shares
issuable upon exercise of 1997 UPOs; (4) 18,592 shares issuable upon
exercise of Class A Warrants issuable on exercise of 1997 UPOs; (5)
2,230 shares issuable upon exercise of 1995 UPOs and (6) 2,787 shares
issuable upon exercise of Class A Warrants issuable on exercise of 1995
UPOs.
(38) Assuming the sale of all Registered Shares, and assuming the exercise
of all of the options and warrants held by the Wolfson Decedent's 1993
Trust, it would beneficially own 428,794 shares, representing 2.40% of
the outstanding common stock.
(39) Ms. Youner's Warrant Shares include: (1) 2,322 shares issuable upon
exercise of 1997 UPOs and (2) 337 shares issuable upon exercise of
Class C Warrants issuable on exercise of 1997 UPOs.
21
<PAGE>
PLAN OF DISTRIBUTION
A total of 4,421,209 shares of Procept common stock are being directly
offered for sale by the Selling Stockholders to the public. Procept has filed
with the Commission a Registration Statement on Form S-3, of which this
Prospectus forms a part, with respect to the resale of the Registered Shares
from time to time in open market or privately negotiated transactions and has
agreed to prepare and file such amendments and supplements to the Registration
Statement as required by the Securities Act and as may be necessary to keep the
Registration Statement effective until the earlier of (i) the date such shares
can be sold pursuant to Section 144(k) of the Securities Act or (ii) the date on
which the Selling Stockholders no longer hold any of the Registered Shares.
During any time when a supplement or amendment is so required, after notice from
Procept, the Selling Stockholders are required to cease sales until this
Prospectus has been supplemented or amended.
Procept has been advised that the Selling Stockholders may sell the
Registered Shares from time to time in open-market or privately-negotiated
transactions, or by a combination of such methods of sale, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Other than as
described below, the Selling Stockholders will act independently of Procept in
making decisions with respect to the timing, pricing, manner and size of each
sale. The Selling Stockholders may effect such transactions by selling the
Registered Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders or the purchasers of the Registered Shares or both
(which compensation to a particular broker-dealer might be in excess of
customary commissions). Such broker-dealers, upon their resale of such
securities, may be deemed Selling Stockholders in this Offering. The Selling
Stockholders have advised Procept, that, as of the date of this Prospectus, they
have not made any arrangements relating to the distribution of the Registered
Shares.
Upon Procept's being notified by the Selling Stockholders that any
material arrangement has been entered into with a broker-dealer for the sale of
Procept common stock through a secondary distribution, or a purchase by a
broker-dealer, a Prospectus supplement will be filed, if required, pursuant to
Rule 424 under the 1933 Act, disclosing facts material to the transaction.
The Selling Stockholders may, upon request of Procept, be prohibited
from selling any of the Registered Shares offered hereby during (a) a period,
not to exceed two 30-day periods within any one 12-month period, required in
connection with a primary underwritten offering of Procept's securities and (b)
any period, not to exceed one 45-day period per circumstance or development,
during which the presence of material undisclosed information could make the
information disclosed in this Prospectus misleading, as determined by Procept in
good faith.
The Selling Stockholders and any broker-dealer who acts in connection
with the sale of Registered Shares hereunder may be deemed to be "underwriters"
as that term is defined in the Securities Act, and any commissions or discounts
received by them and profit on the resale of Registered Shares may be deemed to
constitute underwriting discounts or commissions under the Securities Act.
Procept has agreed to pay for certain costs and expenses incurred by it
in connection with the issuance, offer, sale and delivery of the Registered
Shares, including, but not limited to, all registration and filing fees, any
blue sky fees and expenses, all necessary printing and duplicating expenses and
all fees and disbursements of counsel and accountants for Procept (including the
expenses of any audit of financial statements). Procept has agreed, subject to
certain limitations, to bear the expenses of counsel to the Selling Stockholders
if separate counsel is retained. Procept also has agreed to indemnify the
Selling Stockholders against certain civil liabilities, including liabilities
under the Securities Act. Procept will
22
<PAGE>
not pay brokerage commissions or taxes associated with sales by the Selling
Stockholders or any accounting and other non-legal expenses incurred by Selling
Stockholders.
Procept will inform the Selling Stockholders that the antimanipulation
provision of Regulation M promulgated under the Exchange Act may apply to the
sales of their Registered Shares offered hereby. Procept will advise the Selling
Stockholders of the requirement for delivery of this Prospectus in connection
with any sale of the Registered Shares offered hereby.
Certain Selling Stockholders may from time to time purchase shares of
Procept common stock in the open market. These Selling Stockholders will be
notified that they should not commence any distribution of the Registered Shares
offered hereby unless they have terminated their purchasing and bidding for
Procept common stock in the open market as provided in applicable securities
regulations, including, with limitation, Regulation M.
LEGAL MATTERS
The validity of the shares of Procept common stock offered hereby have
been passed upon for Procept by Palmer & Dodge LLP, Boston, Massachusetts.
Lynnette C. Fallon, a partner at Palmer & Dodge LLP, is the Secretary of
Procept.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in accounting and auditing. The financial statements
incorporated in this prospectus by reference from the Pacific Pharmaceuticals
Inc. 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.
23
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be borne by the registrant in connection with the
offering of the Registered Shares are estimated as follows:
<TABLE>
<S> <C>
SEC Registration Fee................................. $ 2,343
Printing expenses.................................... $ 1,500
Accounting fees and expenses......................... $ 7,500
Legal fees and expenses.............................. $ 15,000
Transfer Agent and Registrar fees $ 3,000
Miscellaneous expenses............................... $ 1,657
Total........................................... $ 31,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law grants Procept the
power to indemnify each person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the fact
that he is or was a director, officer, employee or agent of Procept, or is or
was serving at the request of Procept as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgements, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of Procept,
and with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful, provided, however, no indemnification shall
be made in connection with any proceeding brought by or in the right of Procept
where the person involved is adjudged to be liable to Procept except to the
extent approved by a court. ARTICLE EIGHTH of Procept's Restated Certificate of
Incorporation as currently in effect provides that Procept shall, to the fullest
extent permitted by the Delaware General Corporation Law, as amended from time
to time, indemnify each person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was, or has agreed to become, a director or
officer of Procept, or is or was serving, or has agreed to serve, at the request
of Procept, as a director, officer or trustee of, or in a similar capacity with,
another corporation, partnership, joint venture, trust or other enterprise. The
indemnification provided for in ARTICLE EIGHTH is expressly not exclusive of any
other rights to which those seeking indemnification may be entitled under any
law, agreement or vote of stockholders or disinterested directors or otherwise,
and shall inure to the benefit of the heirs, executors and administrators of
such persons. ARTICLE EIGHTH permits the Board of Directors to authorize the
grant of indemnification rights to other employees and agents of Procept and
such rights may be equivalent to, or greater or less than, those set forth in
ARTICLE EIGHTH.
Article V, Section 1 of Procept's By-Laws provides that Procept shall
have the power to purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of Procept, or is or was serving
at the request of Procept, as a director, officer or trustee of, or in a similar
capacity with, another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against and incurred by such person
in any such capacity.
Pursuant to Section 102(b)(7) of the Delaware General Corporation Law,
ARTICLE NINTH of Procept's Restated Certificate of Incorporation eliminates a
director's personal liability for monetary damages to Procept and its
stockholders for breaches of fiduciary duty as a director, except in
circumstances involving a breach of a director's duty of loyalty to Procept or
its stockholders, acts or
II-1
<PAGE>
omissions not in good faith, intentional misconduct, knowing violations of the
law, self-dealing or the unlawful payment of dividends or repurchase of stock.
ITEM 16. EXHIBITS
See Exhibit Index immediately following signature page.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any Prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of Prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 of 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the Prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the Prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or
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<PAGE>
furnished to the Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Form F-3.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, 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 any
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Act of 1934) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions referred to in Item 15
hereof, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Cambridge, the Commonwealth of Massachusetts, on
May 7, 1999.
PROCEPT, INC.
By: /s/ John F. Dee
--------------------------------------
John F. Dee
President
We, the undersigned officers and directors of Procept, Inc., hereby
severally constitute and appoint John F. Dee and Lynnette C. Fallon, and each of
them singly, our true and lawful attorneys, with full power to them in any and
all capacities, to sign any amendments to this Registration Statement on Form
S-3 (including pre- and post-effective amendments), and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all the each
of said attorneys-in-fact may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on May 7, 1999.
SIGNATURE TITLE
- --------- -----
Chairman of the Board and a Director
- -----------------------------
Michael S. Weiss
/s/ John F. Dee President and Chief Executive Officer
- -----------------------------
John F. Dee and a Director (Principal Executive Officer)
/s/ Michael E. Fitzgerald Vice President, Finance and chief Financial Officer
- -----------------------------
Michael E. Fitzgerald (Principal Financial Officer and Principal
Accounting Officer)
/s/ Zola P. Horovitz Director
- -----------------------------
Zola P. Horovitz
/s/ Max Link Director
- -----------------------------
Max Link
/s/ Mark C. Rogers Director
- -----------------------------
Mark C. Rogers
/s/ Elliot H. Vernon Director
- -----------------------------
Elliott H. Vernon
/s/ Nigel Rulewski Vice President, Medical Affairs, Chief Medical
- -----------------------------
Nigel Rulewski Officer and a Director
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
--- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of Procept. Filed as Exhibit 3.1
to Procept's Form 10-Q for the quarter ended June 30, 1997, Commission
File No. 0-21134, and incorporated herein by reference.
4.2 Certificate of Amendment of the Restated Certificate of Incorporation
of Procept, filed with the Secretary of State of Delaware on October 7,
1997, to be effective as of October 14, 1997. Filed as Exhibit 3.1 to
Procept's Form 10-Q for the quarter ended September 31, 1997,
Commission File No. 0-21134, and incorporated herein by reference.
4.3 Certificate of Amendment to the Amended and Restated Certificate of
Incorporation, filed with the Secretary of State of Delaware on May 19,
1998, effective as of June 1, 1998. Filed as Exhibit 4.4 to Procept's
Registration Statement on Form S-8, Commission File No. 333-66885, and
incorporated herein by reference.
4.4 Bylaws of Procept. Filed as Exhibit 3.2 to Procept's Registration
Statement on Form S-1, Commission File No. 33-57188, and incorporated
by reference.
4.6 Warrant Agreement to Purchase Class D Convertible Preferred Stock dated
August 1, 1991, issued to Comdisco, Inc. Filed as Exhibit 4.2 to
Procept's Registration Statement on Form S-1, Commission File No.
33-57188, and incorporated herein by reference.
4.7 Warrant Agreement to Purchase Class D Convertible Preferred Stock dated
September 11, 1992, issued to Comdisco, Inc. Filed as Exhibit 4.3 to
Procept's Registration Statement on Form S-1, Commission File No.
33-57188, and incorporated herein by reference.
4.8 Warrant to Purchase Common Stock dated January 5, 1993, issued to
Tucker Anthony Incorporated. Filed as Exhibit 4.6 to Procept's
Registration Statement on Form S-1, Commission File No. 33-57188, and
incorporated herein by reference.
4.9 Warrant to Purchase Common Stock dated as of February 17, 1994, issued
to D. Blech & Company, Incorporated. Filed as Exhibit 4.6 to Procept's
Form 10-K for the year ended December 31, 1994, Commission File No.
0-21134, and incorporated herein by reference.
4.10 Warrant Agreement dated February 17, 1994 between Procept and D. Blech
& Company, Incorporated. Filed as Exhibit 4.7 to Procept's Form 10-K
for the year ended December 31, 1994, Commission File No. 0-21134, and
incorporated herein by reference.
4.11 Warrant to Purchase Common Stock dated as of April 1, 1994, issued to
Hambrecht & Quist Guaranty Finance, L.P. Filed as Exhibit 4 to
Procept's Form 10-Q for the quarter ended March 31, 1994, Commission
File No. 0-21134, and incorporated herein by reference.
4.12 Warrant to Purchase Common stock dated as of September 11, 1995, issued
to Oppenheimer & Co., Inc. Filed as Exhibit 4.10 to Procept's
Registration Statement on Form S-1, Commission File No. 33-96798, and
incorporated herein by reference.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
4.13 Form of Warrant Agreement between Procept and Commonwealth Associates.
Filed as Exhibit 4.11 to Procept's Registration Statement on Form S-1,
Commission File No. 33-96798, and incorporated herein by reference.
4.14 Form of Warrant to Purchase Common Stock dated as of May 17, 1996, and
Schedule of Holders. Filed as Exhibit 4.11 to Procept's Form 10-K for
the year ended December 31, 1996, Commission File No. 0-21134, and
incorporated herein by reference.
4.15 Warrant to Purchase Common Stock dated as of January 6, 1997, issued to
Furman Selz LLC. Filed as Exhibit 4.13 to Procept's Form 10-K for the
year ended December 31, 1996, Commission File No. 0-21134, and
incorporated herein by reference.
4.16 Unit Purchase Warrant Agreement dated May 17, 1996, issued to David
Blech. Filed as Exhibit 4.1 to Procept's Form 10-Q for the quarter
ended June 30, 1997, Commission File No. 0-21134, and incorporated
herein by reference.
4.17 Form of Subscription Agreement between Procept and Subscribers of
Procept Common Stock listed on Schedule of Subscribers. Filed as
Exhibit 4.17 to Procept's Registration Statement on Form S-3
(Commission File No. 333-51245) on April 28, 1998 (the "1998 S-3").
4.18 Form of Class C Warrant to Purchase Common Stock, including Schedule of
Holders. Filed as Exhibit 4.18 to the 1998 S-3.
4.19 Form of 1998 Unit Purchase Option, including Schedule of Holders. Filed
as Exhibit 4.2 to Procept's Form 10-Q for the quarter ended June 30,
1998, Commission File No. 0-21134, and incorporated herein by
reference.
4.20 Form of 1995 Unit Purchase Warrant. Filed as Exhibit 4.1 to Procept's
Form 8-K on March 31, 1999, Commission File No. 0-21134 (the "March
1999 Form 8-K"), and incorporated herein by reference.
4.21 Form of 1997 Unit Purchase Option. Filed as Exhibit 4.2 the March 1999
Form 8-K, and incorporated herein by reference.
4.22 Form of Class A Warrant. Filed as Exhibit 4.3 the March 1999 Form 8-K,
and incorporated herein by reference.
4.23 Form of Class B Warrant. Filed as Exhibit 4.4 the March 1999 Form 8-K,
and incorporated herein by reference.
4.24 Form of Warrant to Purchase Shares of Common Stock issued to Aries
Trust and Aries Domestic Fund, L.P. Filed as Exhibit 4.5 the March 1999
Form 8-K, and incorporated herein by reference.
5.1 Opinion of Palmer & Dodge LLP. Filed herewith.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants to
Procept. Filed herewith.
23.2 Consent of Palmer & Dodge LLP (contained in Exhibit 5.1).
</TABLE>
<PAGE>
<TABLE>
<S> <C>
23.3 Consent of Deloitte & Touche LLP. Filed herewith.
24.1 Power of Attorney (included on the signature page of this Registration
Statement).
</TABLE>
<PAGE>
Exhibit 5.1
PALMER & DODGE LLP
ONE BEACON STREET, BOSTON, MA 02108-3190
TELEPHONE: (617) 573-0100 FACSIMILE: (617) 227-4420
May 7, 1999
Procept, Inc.
840 Memorial Drive
Cambridge, Massachusetts 02139
Ladies & Gentlemen:
We are rendering this opinion in connection with the Registration
Statement on Form S-3 (the "Registration Statement") filed by Procept, Inc. (the
"Company") with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, on or about the date hereof. The Registration Statement
relates to up to 4,421,209 shares of the Company's Common Stock, $0.01 par
value, (the "Common Stock"), comprising (i) 1,398,413 shares of Common Stock
(the "Shares") currently outstanding and (ii) 3,022,796 shares of Common Stock
(the "Warrant Shares") issuable upon exercise of warrants to purchase Common
Stock (the "Warrants") and other convertible securities (the "Options"). We
understand that the Shares and the Warrant Shares are to be offered and sold in
the manner described in the Registration Statement.
We have acted as your counsel in connection with the preparation of the
Registration Statement. We are familiar with the proceedings of the Board of
Directors in connection with the authorization, issuance and sale of the
Shares, the Warrants and the Options. We have examined such other documents as
we consider necessary to render this opinion.
Based upon the foregoing, we are of the opinion that the Shares have
been duly authorized and are validly issued, fully paid and non-assessable, and
that upon exercise of the Warrants and the Options in accordance with the terms
thereof, the Warrant Shares will be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as a part of the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus filed as part thereof.
Very truly yours,
/s/ Palmer & Dodge LLP
PALMER & DODGE LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTS
We hereby consent to the incorporation by reference in this registration
statement on Form S-3 of our report dated March 17, 1999 relating to the
financial statements, which appear in Procept's Annual Report on Form 10-K for
the year ended December 31, 1998. We also consent to the reference to us under
the heading "Experts" in such registration statement.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
May 7, 1999
<PAGE>
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Procept, Inc. on Form S-3 of our report dated July 8, 1998, appearing in the
Annual Report on Form 10-K of Pacific Pharmaceuticals, Inc. for the year
ended March 31, 1998 and to the reference to us under the heading "Experts"
in the Prospectus, which is a part of this Registration Statement.
DELOITTE & TOUCHE LLP
San Diego, California
May 7, 1999
