<PAGE> 1
As filed with the Securities and Exchange Commission on January 29, 1998
Registration No. 333-33429
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------------
POST-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Saliva Diagnostic Systems, Inc.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation or organization)
91-1549305
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(I.R.S. Employer Identification No.)
11719 NE 95th Street
Vancouver, Washington 98682
(360) 696-4800
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Kenneth J. McLachlan, President
Saliva Diagnostic Systems, Inc.
11719 NE 95th Street
Vancouver, Washington 98682
(360) 696-4800
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all correspondence to:
LaDawn Naegle, Esq.
Bryan Cave LLP
700 13th Street, N.W., Suite 700
Washington, D.C. 20005-3960
(202) 508-6000
Approximate date of commencement of proposed sale to public: From time to
time after this Registration Statement becomes effective.
<PAGE> 2
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. [X] 333-33429.
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
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Title of each class Proposed maximum Proposed maximum
of securities to be Amount to be offering price per aggregate offering Amount of
registered registered(1) unit (2) price (2) registration fee(3)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per 6,659,632 shares $0.344 $4,624,481.40 $1,395.55
share
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A total of 3,247,442 shares were the subject of the initial filing. A
total of 4,559,632 shares were the subject of Amendment No. 1 to the
initial filing. This Post-Effective Amendment No. 1 includes for
registration an additional 2,100,000 shares.
(2) Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(c), based upon the average of the closing bid and
ask prices for 3,247,442 shares of the Common Stock of $0.766 on
August 6, 1997, for 1,312,190 shares of $1.078 on September 23, 1997,
and for 2,100,000 shares of $0.344 on January 26, 1998, as reported by
the Nasdaq Small Cap Market.
(3) Includes filing fee of $213.11, which the Commission should offset
against the Company's current available credit with the Commission.
Also includes filing fees of $753.79 on 3,247,442 shares, and $428.65
on 1,312,190 shares, of the securities being registered on this form,
which fees were paid on previous filings.
---------------------------------
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> 3
PROSPECTUS
SALIVA DIAGNOSTIC SYSTEMS, INC.
6,659,632 SHARES OF COMMON STOCK
Saliva Diagnostic Systems, Inc. (the "Company") is registering for
resale up to 6,659,632 shares (the "Shares") of its common stock, $.01 par
value (the "Common Stock"), which include (i) 1,814,286 shares which have been
and may be issued in accordance with the terms of a Common Stock Subscription
Agreement dated June 30, 1997 by and between the Company and The Tail Wind Fund
Ltd. ("Tail Wind") (the "Tail Wind Subscription Agreement"); (ii) 2,220,000
shares which have been issued in accordance with the terms of a Common Stock
Subscription Agreement dated June 30, 1997 by and among the Company and certain
other investors (the "Investors"); (iii) 2,285,714 shares which have been
issued in accordance with the terms of a Common Stock Subscription Agreement
dated as of August 22, 1997 by and between the Company and an additional
Investor; (iv) 100,000 shares which may be issued upon the exercise of warrants
granted to Tail Wind (the "Tail Wind Warrants"); (v) 194,632 shares which may
be issued upon the exercise of warrants granted to Grayson & Associates, Inc.
(the "Grayson Warrants"); and (vi) 45,000 shares which were issued upon the
exercise of certain warrants. All of the Common Stock offered hereby is being
offered for the account of certain shareholders of the Company which acquired
their securities in private placements conducted by the Company. See "Selling
Shareholders." Additional shares that may become issuable as a result of the
anti-dilution provisions of the Tail Wind Warrants and the Grayson Warrants are
offered hereby pursuant to Rule 416 under the Securities Act of 1933, as
amended (the "Securities Act"). The Company will not receive any of the
proceeds from the sale of the Common Stock being offered hereby (the
"Offering"), but will receive the exercise price payable upon the exercise of
the Tail Wind Warrants and the Grayson Warrants. There can be no assurance
that all or any part of the Tail Wind Warrants or the Grayson Warrants will be
exercised or that they will be exercised for cash.
The Shares may be sold from time to time in transactions
(which may include block transactions) on the Nasdaq Small Cap Market at the
market prices then prevailing. Sales of the Shares may also be made through
negotiated transactions or otherwise. The Selling Shareholders and the brokers
and dealers through which the sales of the Shares may be made may be deemed to
be "underwriters" within the meaning set forth in the Securities Act, and their
commissions and discounts and other compensation may be regarded as
underwriters' compensation. See "Plan of Distribution."
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND SHOULD
NOT BE PURCHASED BY INVESTORS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE MATTERS
DISCUSSED UNDER "RISK FACTORS" BEGINNING ON PAGE 4.
---------------------------------
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.
---------------------------------
<TABLE>
<CAPTION>
Price to Public(1) Proceeds to Selling Shareholders(1)(2)
--------------- --------------------------------
<S> <C> <C>
Per Share of Common Stock $0.344 $0.344
Total(3) $2,152,838.30 $2,152,838.30
</TABLE>
(1) Estimated based upon the average of the high and low sales prices for the
Common Stock on January 26, 1998, as reported by Nasdaq.
(2) Excludes regular brokerage commissions and other expenses, including
expenses of counsel in excess of $10,000, if any, for Tail Wind and the
Investors, which will be paid by Tail Wind and the Investors, respectively.
The other expenses of the Offering are estimated to be approximately $23,900,
all of which will be paid by the Company.
(3) Assumes all Shares registered will be issued to the Selling Shareholders
and will be sold in this Offering.
--------------------------------------------------
The date of this Prospectus is January __, 1998
<PAGE> 4
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 and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other information
can be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;
and the Commission's regional offices at Room 1204, 219 South Dearborn Street,
Chicago, Illinois 60604; Room 1028, 7 World Trade Center, New York, New York
10007; and Suite 500 East, 5757 Wilshire Boulevard, Los Angeles, California
90036. Copies of such material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains an internet web site that contains
reports, proxy statements and other materials filed electronically by the
Company through the Commission's Electronic Data, Gathering, Analysis and
Retrieval (EDGAR) system. This web site can be accessed at http://www.sec.gov.
The Common Stock is traded on the Nasdaq Small Cap Market ("Nasdaq") under the
symbol "SALV," and copies of reports and other information are also available
for inspection at the Nasdaq Stock Market, 1735 K Street, N.W., Washington,
D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act with respect
to the shares of Common Stock offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement or the exhibits
thereto. As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information contained or incorporated by reference in
the Registration Statement. For further information, reference is hereby made
to the Registration Statement and exhibits thereto, copies of which may be
inspected at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or obtained from the Commission at the same address at
prescribed rates.
The Company furnishes Annual Reports to the holders of its securities
which contain financial information which have been examined and reported upon,
with an opinion expressed by, its independent certified public accountants.
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<PAGE> 5
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
(1) Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996, filed on March 31, 1997 (File No.
000-21284) pursuant to Section 13(a) of the Exchange Act, as
amended on Form 10-KSB/A, filed on June 10, 1997 (File No.
000-21284) (the "1996 Annual Report");
(2) Quarterly Report on Form 10-QSB for the fiscal quarter ended
March 31, 1997, filed on May 15, 1997 (File No. 000-21284)
pursuant to Section 13(a) of the Exchange Act;
(3) Definitive Proxy Statement, filed on April 29, 1997 (File No.
000-21284) pursuant to Section 14(a) of the Exchange Act;
(4) Current Report on Form 8-K dated May 30, 1997, filed on May
30, 1997 (File No. 000-21284) pursuant to Section 13(a) of the
Exchange Act, as amended on Form 8-K/A dated May 30, 1997,
filed on June 9, 1997 (File No. 000-21284);
(5) Current Report on Form 8-K dated July 5, 1997, filed on July
30, 1997 (File No. 000-21284) pursuant to Section 13(a) of the
Exchange Act;
(6) Quarterly Report on Form 10-QSB for the fiscal quarter ended
June 30, 1997, filed on August 9, 1997 (File No. 000-21284)
pursuant to Section 13(a) of the Exchange Act;
(7) Definitive Proxy Statement, filed on October 14, 1997 (File
No. 000-21284) pursuant to Section 14(a) of the Exchange Act.
(8) Quarterly Report on Form 10-QSB for the fiscal quarter ended
September 30, 1997, filed on November 14, 1997 (File No.
000-21284) pursuant to Section 13(a) of the Exchange Act; and
(9) Definitive Proxy Statement, filed on January 26, 1998 (File
No. 000-21284) pursuant to Section 14(a) of the Exchange Act.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof shall hereby be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
See "Available Information." Any statement contained in a document
incorporated or deemed to be incorporated herein by reference 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
incorporated or deemed to be incorporated herein by reference modifies or
supersedes such statement. Any statement contained herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained in any subsequently filed document incorporated or deemed
to be incorporated herein by reference
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<PAGE> 6
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THESE DOCUMENTS (EXCLUDING
EXHIBITS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO
THE INFORMATION INCORPORATED HEREIN) WILL BE PROVIDED BY FIRST CLASS MAIL
WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST BY SUCH PERSON TO SHAREHOLDER RELATIONS, SALIVA
DIAGNOSTIC SYSTEMS, INC., 11719 NE 95TH STREET, VANCOUVER, WASHINGTON 98682
(TELEPHONE NUMBER (360) 696-4800).
No person has been authorized in connection with this offering to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Company, the Selling Shareholders or any other person. This Prospectus does
not constitute an offer to sell, or a solicitation of an offer to purchase, any
securities other than those to which it relates, nor does it constitute an
offer to sell or a solicitation of an offer to purchase by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
CAUTIONARY STATEMENT
THIS PROSPECTUS, AS WELL AS INFORMATION INCORPORATED BY REFERENCE
HEREIN, CONTAINS FORWARD-LOOKING STATEMENTS, WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS INCLUDE,
BUT ARE NOT LIMITED TO, THOSE STATEMENTS RELATING TO DEVELOPMENT OF NEW
PRODUCTS, THE ABILITY TO OBTAIN NEW DISTRIBUTION AGREEMENTS AND INCREASE
DISTRIBUTION FOR PRODUCTS UNDER EXISTING DISTRIBUTION AGREEMENTS, APPROVAL OF
THE COMPANY'S PRODUCTS AS AND WHEN REQUIRED BY THE FOOD AND DRUG ADMINISTRATION
("FDA") IN THE UNITED STATES AND SIMILAR REGULATORY BODIES IN OTHER COUNTRIES,
AND THE SCALE-UP OF MANUFACTURING IN THE UNITED STATES AND ATTENDANT FDA
APPROVALS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO THE BUSINESS AND
ECONOMIC RISKS FACED BY THE COMPANY AND THE COMPANY'S ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS
A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS"
BELOW, UNDER "ITEM 1 - BUSINESS" AND "ITEM 6 - MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION" IN THE 1996 ANNUAL REPORT, AND IN THE OTHER
DOCUMENTS INCORPORATED BY REFERENCE HEREIN.
4
<PAGE> 7
RISK FACTORS
The securities offered hereby are speculative and involve a high
degree of risk, including, but not limited to, the risk factors described
below. Each prospective investor should carefully consider the following risk
factors inherent in and affecting the business of the Company and this offering
before making an investment decision.
1. Limited Operating History. Since July 1990, the Company has
been engaged primarily in research and development activities focused on
developing proprietary collection devices and rapid assays. To date, sales of
the Company's products have been to a limited customer base. The Company has a
limited operating history upon which an evaluation of the Company's prospects
can be made. Such prospects must be considered in light of the risks, expenses
and difficulties frequently encountered in the establishment of a new business
in a continually evolving, heavily regulated industry, characterized by an
increasing number of market entrants and intense competition, as well as the
risks, expenses and difficulties encountered in the shift from development to
commercialization of new products based on innovative technology. There can be
no assurance that the Company will be able to implement successfully its
marketing strategy, obtain necessary regulatory approval, generate increased
revenues or ever achieve profitable operations.
2. Significant Operating Losses; Accumulated Deficit; Explanatory
Paragraph in Report of Independent Certified Public Accountants. The Company
has incurred significant operating losses since its inception, resulting in an
accumulated deficit of $21,914,246 and $25,742,171 at December 31, 1996 and
September 30, 1997, respectively, and a shareholders' equity of $1,160,632 and
$1,283,666 at December 31, 1996 and September 30, 1997, respectively. The
Company has incurred additional operating losses through the date of this
Prospectus. Such losses are expected to continue for the foreseeable future
and until such time, if ever, as the Company is able to attain sales levels
sufficient to support its operations. The Company's independent certified
public accountants have included an explanatory paragraph in their report
stating that the Company's significant operating losses and significant capital
requirements raise substantial doubt about the Company's ability to continue as
a going concern.
3. Significant Capital Requirements; Need for Additional
Financing. The Company's capital requirements have been and will continue to
be significant. The Company has been dependent on private placements of its
debt and equity securities and on a public offering of securities in March 1993
to fund such requirements. The Company is dependent upon its other efforts to
raise capital resources, including proceeds received from the exercise of
warrants, to finance the costs of manufacturing, marketing and conducting
clinical trials and submissions for FDA approval of its products and continuing
the design and development of the Company's new products. Marketing,
manufacturing and clinical testing may require capital resources substantially
greater than the resources currently available to the Company. There can be no
assurance that the Company will be able to obtain additional capital resources
necessary to permit the Company to implement or continue its programs. There
can be no assurance that such financing will be available on commercially
reasonable terms or at all. Any additional equity
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<PAGE> 8
financing may involve substantial dilution to the interests of the Company's
shareholders, which dilution also has occurred in the past.
4. Uncertain Acceptance of Saliva-Based Tests and Rapid Tests as
Diagnostic Tools. The human specimens traditionally used for the diagnostic
testing and quantitative measurement of most physiologically active substances,
drugs and toxins in the body, are blood and urine. Substantially all of the
assay-based diagnostic test kits currently available were approved by the FDA
for use with these testing specimens. Political and social factors may create
impediments to the use of rapid tests as diagnostic tools. These factors
include whether certain diagnostic tests, such as HIV antibody tests, should be
conducted without trained specialists and whether rapid tests in nontraditional
testing environments will lead to invasions of privacy. Although the Company
acknowledges the existence of such considerations, it is committed to
developing rapid testing devices as useful diagnostic tools. Limitations on
the Company's ability to market rapid tests caused by political and social
factors could have a material adverse effect on the Company's operations.
5. Uncertainty of New Product Development. The design and
development of the Company's rapid testing platforms in their current designs
have been completed and limited revenues have been generated from sales
thereof. The Company will be required to devote considerable additional
efforts to finalize the evaluation of its products. Satisfactory completion of
development, testing, evaluations, obtaining regulatory approvals and achieving
sufficient production levels of such products will be required prior to their
being available for commercial sale. The Company's products remain subject to
all the risks inherent in the introduction of new diagnostic products,
including unanticipated problems, as well as the possible insufficiency of
funds to continue design and development which could result in abandonment of
or substantial change in the design or development of such products. There can
be no assurance that such products will be successfully developed, be developed
on a timely basis or prove to be as effective as products based on existing or
newly developed technologies. The inability to successfully complete
development, or a determination by the Company, for financial or other reasons,
not to undertake to complete development of any product, particularly in
instances in which the Company has made significant capital expenditures, could
have a material adverse effect on the Company.
6. Competition. The market in which the Company operates, saliva
and blood-based collection and diagnostic testing, is highly competitive. The
Company is aware of certain entities, including ChemTrak, Inc., Epitope, Inc.,
Quidel, Inc. and Trinity Biotech, plc and specialized biotechnology firms, as
well as universities and other research institutions, which have developed or
are developing technologies and products which are competitive with Omni-SAL(R)
and the Company's products under development. Many of these competitors are
established and have substantially greater research, marketing and financial
resources than the Company. The Company expects that the number of products
competing with its products will increase as the perceived benefits of
saliva-based testing become more widely recognized. There can be no assurance
the Company will be able to compete successfully.
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<PAGE> 9
7. Technological Change and Risk of Technological Obsolescence.
The biotechnology industry and, in particular, saliva and blood-based
diagnostic testing, is subject to rapid and significant technological change.
There can be no assurance that the Company's competitors will not succeed in
developing technologies and products relating to the collection of saliva for
diagnostic testing prior to the Company or that they will not develop
technologies and products that are more effective than any which have been or
are being developed by the Company. In addition, the diagnostic products
market is characterized by changing technology and developing industry
standards sometimes resulting in product obsolescence or short product life
cycles. Accordingly, the ability of the Company to compete will be dependent
on its introducing products to the marketplace in a timely manner and enhancing
and improving such products. There can be no assurance that the Company will
be able to keep pace with technological developments or that its products will
not become obsolete.
8. Government Regulation. The development, manufacture and sale
of the Company's products in the United States are subject to regulation by the
FDA and other governmental agencies. The process of obtaining FDA approval is
costly and time-consuming, and there can be no assurance that any of the
Company's products not yet approved will be approved by the FDA or other
regulatory agencies. Delays in obtaining regulatory approvals may adversely
affect the development, testing or marketing of the Company's products and the
ability of the Company to generate product revenues therefrom. If and when the
Company's products are approved by the FDA, they will be subject to continuing
regulation by the FDA and state and local agencies. The FDA has established a
number of requirements for manufacturers and requirements regarding labeling
and reporting. The failure to comply with these requirements can result in
regulatory action, including warning letters, product seizure, injunction,
product recalls, civil fines and prosecution. An FDA enforcement action could
have a material adverse effect on the Company. The Company is subject to
regulation in certain foreign markets. There can be no assurance that
regulatory approvals for any of the Company's products or for its manufacturing
in the United States will be obtained in a timely manner, or at all.
9. Risks Related to Foreign Activities. The Company and its
manufacturers may be subject to various import duties imposed by foreign
governments applicable to both finished products and components and may be
affected by various other import and export restrictions or duties as well as
other developments having an impact upon international trade. These factors
could, under certain circumstances, have an impact both on the manufacturing
cost and the wholesale and retail prices of such products. To the extent that
transactions relating to foreign sales, manufacturing of the Company's products
and purchases of components involve currencies other than United States
dollars, the operating results of the Company could be adversely affected by
fluctuations in foreign currency exchange rates.
10. Uncertainty of Market Acceptance; Dependence Upon Third Party
Distributors. The Company has limited marketing capabilities and resources.
Achieving market acceptance will require substantial marketing efforts and the
expenditure of significant funds to inform potential consumers and the public
of the perceived benefits of the Company's current and proposed products.
Moreover, the Company does not have the financial or other resources to
undertake extensive marketing and advertising activities. The Company has
recently begun to
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<PAGE> 10
develop strategic alliances and marketing arrangements, including joint
ventures, license or distribution arrangements. The Company's prospects will
be significantly affected by its ability to successfully develop and maintain
its relationships with its joint venturers, licensors and distributors and upon
the marketing efforts of such third parties. While the Company believes that
any independent distributors and sales representatives with whom it enters into
such arrangements will have an economic motivation to commercialize the
Company's products, the time and resources devoted to those activities
generally will be controlled by such entities and not by the Company. There
can be no assurance that the Company will be able, for financial or other
reasons, to develop and maintain any third party distribution or marketing
arrangements or that such arrangements, if established, will result in the
successful commercialization of any of the Company's products.
11. Dependence on Manufacturers. The Company relies on
arrangements with third parties for the manufacture of some of its products.
Such manufacturers, if located in the United States or if manufacturing
products to be sold in the United States, must comply with the FDA's good
manufacturing practices ("GMP") and pass pre-approval inspections by the FDA
and periodic GMP inspections. MML Diagnostic Packaging, Inc. ("MML")
manufactures Omni-Swab and Saliva.Sampler for the Company in the United States
and has advised the Company that it is in compliance with all applicable FDA
requirements for such manufacturing. There can be no assurance that the
Company's manufacturer will continue to comply with GMP, that the Company will
be able to locate additional manufacturers that comply with GMP or secure
agreements with such manufacturers on terms acceptable to the Company. There
can be no assurance that MML will be able to meet the Company's requirements or
that MML will continue to manufacture Omni-Swab or Saliva.Sampler on terms
acceptable to the Company.
12. Dependence Upon Third-Party Suppliers. The Company believes
that most of the components used in the manufacture of its proposed products
are currently available from numerous suppliers located in the United States,
Europe and Asia. The Company believes, however, that certain components are
available from a limited number of suppliers. Although the Company believes
that it will not encounter difficulties in obtaining these components, there
can be no assurance that the Company will be able to enter into satisfactory
agreements or arrangements for the purchase of commercial quantities of such
components. The failure to enter into agreements or otherwise arrange for
adequate or timely supplies of components and the possible inability to secure
alternative sources of components could have a material adverse effect on the
Company's ability to manufacture its products. In addition, development and
regulatory approval of the Company's products in the United States are
dependent upon the Company's ability to procure certain components and certain
packaging materials from FDA-approved sources. Since the FDA approval process
requires manufacturers to specify their proposed suppliers of certain
components in their premarket approval applications ("PMAs"), if any such
component were no longer available from the specified supplier, FDA approval of
a new supplier would be required, resulting in potential manufacturing delays.
13. Dependence on Small Number of Customers. The Company derives
a large portion of its revenues from sales to a small number of customers.
Sales to three customers
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<PAGE> 11
accounted for approximately 49% of total product revenues in 1996. Sales to
two customers accounted for approximately 50% of total product revenues in
1995. The loss of sales to any of the Company's major customers could have a
material adverse effect on the Company's financial condition and results of
operations.
14. Dependence on Key Personnel. The success of the Company will
be largely dependent on the personal efforts of Kenneth J. McLachlan, its
President and Chief Executive Officer, and certain key management and
scientific personnel. The loss of Mr. McLachlan's services or the services of
other key management or scientific personnel would have a material adverse
effect on the Company's business and prospects. Competition among biotechnology
companies for qualified employees is intense, and the loss of key personnel or
the inability to attract and retain the additional highly skilled employees
required for the Company's activities could adversely affect its business.
There can be no assurance that the Company will be able to hire or retain such
necessary personnel.
15. Uncertainty of Patent Protection; Proprietary Information.
The Company has applied for United States patents on certain aspects of its
saliva collection and diagnostic testing devices and has been awarded eight of
these patents. To the extent possible, the Company also anticipates filing
patent applications for protection on future products and technology which it
develops. There can be no assurance that patents applied for will be obtained,
that any such patents will afford the Company commercially significant
protection of its technology or that the Company will have adequate resources
to enforce its patents. Inasmuch as the Company intends to sell its products
in foreign markets, it is in the process of seeking foreign patent protection
on its current products and technologies. The patent laws of other countries
may differ from those of the United States as to the patentability of the
Company's products and technologies and the degree of protection afforded.
Other companies may independently develop equivalent or superior products and
technologies and may obtain patent or similar rights with respect thereto.
Although the Company believes that its products and technologies have been
independently developed and do not infringe on the patents of others, there can
be no assurance that the Company's products and technologies do not and will
not infringe on the patents of others. In the event of infringement, the
Company would, under certain circumstances, be required to modify its device or
obtain a license. There can be no assurance that the Company will be able to
do either of the foregoing in a timely manner or upon acceptable terms and
conditions, and the failure to do so could have a material adverse effect on
the Company. There can be no assurance that the Company will have the
financial or other resources necessary to successfully defend a claim of
violation of proprietary rights.
16. Product Liability; Insurance Coverage. The Company may be
exposed to potential product liability claims by consumers. The Company
maintains product liability insurance coverage in an amount up to $4,000,000
per occurrence, up to a maximum of $4,000,000 in the aggregate, with excess
umbrella liability insurance coverage of $4,000,000. In the event of a product
liability claim, there can be no assurance that such insurance will be
sufficient to cover all possible liabilities. In the event of a successful
suit against the Company, insufficiency of insurance coverage would have a
material adverse effect on the Company.
9
<PAGE> 12
17. Possible Removal of Securities from Nasdaq System; Disclosure
Relating to Low-Priced Stocks. The Company may be unable to maintain the
standards for continued quotation on Nasdaq and the Common Stock could be
subject to removal from the Nasdaq system.
On October 27, 1997, the Company was informed that its Common Stock
could be subject to delisting from the Nasdaq SmallCap Market due to its
failure to comply with the minimum bid price or capital and surplus continued
listing requirements. The Company was informed that it would be provided until
the close of business on January 27, 1998 to regain compliance. The Nasdaq
requirements currently provide for delisting of a company whose common stock
fails to maintain a minimum closing bid price of $1.00 or greater for ten
consecutive trading days, or whose capital and surplus and market value of the
public float exceed $2,000,000 and $1,000,000, respectively, for ten
consecutive trading days. Although the Common Stock has not yet attained a
minimum closing bid price of $1.00, on January 26, 1998, the Company received
$1,500,000 gross proceeds from a private placement of its equity securities.
After giving effect to this private placement, the Company's capital and
surplus is in excess of the Nasdaq minimum of $2,000,000. Accordingly, on
January 27, 1998, the Company formally requested Nasdaq to grant to the Company
a hearing upon written submission to avoid a delisting decision and to stay any
delisting pending the hearing. By making such a formal submission, the Company
understands the delisting has been automatically stayed pending the hearing.
There is no assurance that Nasdaq will grant a hearing to the Company or that
such a hearing, if granted, will result in the continued inclusion of the
Common Stock on Nasdaq.
Under the Nasdaq system continued listing requirements effective
February 1998, a company will be required to maintain net tangible assets
of $2,000,000, market capitalization of $35,000,000 or net income of $500,000 in
the most recently completed fiscal year or in two of the last three most
recently completed fiscal years. Continued inclusion will also require a
$1,000,000 market value of the public float, two market-makers and a minimum bid
price of $1.00 per share without exception.
If the Company is removed from the Nasdaq system, trading, if any, in
the Common Stock would thereafter be conducted in the over-the-counter
market on an electronic bulletin board established for securities that do not
meet the Nasdaq inclusion requirements or in what are commonly referred to as
the "pink sheets". As a result, an investor would find it more difficult to
dispose of, or to obtain accurate quotations as to the price of, the Company's
securities. In addition, if the Company's securities were removed from the
Nasdaq system, they would be subject to so-called "penny stock" rules that
impose additional sales practice requirements on broker-dealers who sell such
securities. Consequently, removal from the Nasdaq system, if it were to occur,
could affect the ability or willingness of broker-dealers to sell the Company's
securities and the ability of purchasers of the Company's securities to sell
their securities in the secondary market. There is no assurance that the
Company will continue to remain eligible for continued inclusion of the Common
Stock on Nasdaq.
18. No Dividends. To date, the Company has not paid any dividends
on its Common Stock and does not expect to declare or pay any dividends in the
foreseeable future.
10
<PAGE> 13
19. Significant Outstanding Options and Warrants. As of January
23, 1998, there were outstanding (i) stock options to purchase an aggregate of
3,097,915 shares of Common Stock at exercise prices ranging from $0.40 to $5.50
per share; (ii) warrants to purchase 1,380,000 shares of Common Stock which
were issued in the Company's initial public offering, are exercisable at $1.25
per share, and expire March 31, 1998, unless extended by the Company; and (iii)
warrants to purchase 567,216 shares which are exercisable at prices ranging
from $0.50 to $4.00 per share.
To the extent that outstanding options or warrants are exercised,
dilution to the Company's shareholders will occur. Moreover, the terms upon
which the Company will be able to obtain additional equity capital may be
adversely affected since the holders of outstanding options and warrants can be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain any needed capital on terms more favorable to the Company
than the exercise terms provided by such outstanding securities.
20. Litigation. In January 1997, a lawsuit was filed by Ronald
Lealos, the former President of the Company, who resigned in December 1996.
The complaint in the lawsuit alleged various breach of contract claims. This
lawsuit was dismissed without prejudice as a prerequisite to a settlement
agreement between Mr. Lealos and the Company. No final settlement acceptable
to the Company has yet been concluded with Mr. Lealos. New litigation may
ensue and, if such litigation is decided adverse to the Company, there can be
no assurance that it would not have a material adverse effect on the Company.
The Company is also currently involved in litigation brought by Luc
Hardy against the Company and former officer and directors, Ronald Lealos and
Eugene Seymour, and Richard Kalin. This matter involves allegations against the
Company and the individual defendants arising from Mr. Hardy's termination by
the Company in 1994. A jury verdict for the plaintiff, which is not a final
judgment, was rendered on July 25, 1997 in the approximate amount of $740,000.
In October 1997, a hearing was held on the Company's motions to set aside the
jury verdict and for a new trial. The Company is currently awaiting a
decision. There can be no assurance such motions will be granted or that
the final judgment in this case will not have a material adverse effect on the
Company.
In April 1996, Meritxell Ltd. filed a complaint against the Company
involving a dispute with respect to the conversion rate of a convertible
debenture issued to Meritxell by the Company. Both parties have filed motions
for summary judgment and the Company is currently awaiting a decision on those
motions. There can be no assurance the Company's motion will be granted or
that, if denied, a decision on the merits would not have a material adverse
effect on the Company.
11
<PAGE> 14
THE COMPANY
The Company is primarily engaged in the development, manufacturing and
marketing of rapid in vitro assays for use in the detection of infectious
diseases and other conditions, proprietary specimen collection devices and
other diagnostic devices. The Company's principal executive offices are
located at 11719 NE 95th Street, Vancouver, Washington, 98682 and its telephone
number is (360) 696-4800.
The Company develops rapid immunoassays utilizing immunochromatography
for the detection of antibodies to selected pathogens, such as the HIV, the
virus that causes AIDS, and Helicobacter pylori, a bacteria linked to peptic
ulcers and gastric cancer. The Company's immunoassays are designed to require
only a few simple steps and minutes to use. The tests produce visual results in
under 20 minutes, and may be used without special equipment, storage or
training. The Company's data and independent evaluations demonstrate that its
Hema.Strip HIV and Sero.Strip HIV tests are generally equivalent in performance
to widely used FDA-licensed tests for HIV.
To date, the Company has developed three rapid HIV tests: Sero.Strip
HIV, Hema.Strip HIV and Saliva.Strip HIV, and a rapid H. pylori test:
Stat.Simple. The Company has under development rapid tests for hepatitis and
tuberculosis. The Company has commenced production and marketing of two
medical specimen collectors: Saliva.Sampler and Omni-Swab. In addition, the
Company has conducted preliminary research that indicates its rapid test format
may be expanded to detect other diseases, such as tuberculosis, measles,
malaria, rubella, tetanus, herpes, chlamydia, mumps, influenza, parvovirus,
pertussis, certain cancers, tumor markers and cardiac disease.
SELLING SHAREHOLDERS
None of the Selling Shareholders is an affiliate of the Company or has
had any position, office or other material relationship with the Company within
the past three years except as a shareholder of the Company or as noted below.
The following table sets forth information with respect to the Selling
Shareholders, based upon information provided to the Company by them.
12
<PAGE> 15
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares Beneficially
Name of Selling Shareholder Prior to Offering Shares Being Offered Owned After Offering (1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mark Alt 100,000 100,000 0
Sterling E. Baker 122,500 100,000 22,500
Linda Bidell 200,000 200,000 0
Collin Bingham Trust 50,000 50,000 0
Tanner Payne Boyer Trust 50,000 50,000 0
Brian Brammell 187,000 145,000 (2) 42,000
E. Paul Brodsky, CPA, IRA 25,000 25,000 0
Mary L. Brodsky, IRA 25,000 25,000 0
Carol Bruckner 76,000 75,000 1,000
Center for Aids Research and 100,000 100,000 0
Training, Inc.
The Covette Community Property Trust 100,000 100,000 0
David Fitzpatrick 50,000 50,000 0
David Freund 2,285,714 2,285,714 (3) 0
Gerald Grayson (4) 200,000 200,000 0
Grayson & Associates, Inc. (5) 194,632 194,632 (6) 0
Dean Greenberg 50,000 50,000 0
Harvey Katzman 127,250 100,000 27,250
Hollywood Pins Co. Pension Plan 270,000 200,000 70,000
Alan Lerner 20,000 20,000 0
Michael Lipkin 100,000 100,000 0
Sandy Linka 30,000 30,000 0
Gary Nathanson 233,000 100,000 133,000
Lisa Neuhof 25,000 25,000 0
Jack P. Slovak 62,000 (7) 50,000 12,000
Robert A. Slovak 60,000 50,000 10,000
Stanton Law Corporation 50,000 50,000 0
Profit Sharing Plan
George L. Stanton 130,000 100,000 30,000
The Tail Wind Fund Ltd. 2,770,807 1,914,286 (8) 856,521
Linda Trester 20,000 20,000 0
WCGMG, Inc., DBPP 100,000 100,000 0
Jacob Zamstein, MD 65,000 50,000 15,000
Total 7,878,903 6,659,632 1,219,271
===== ========= ========= =========
</TABLE>
(1) Assumes all shares offered hereby are sold to persons who are not
affiliates of the Selling Shareholders. The Selling Shareholders may,
but are not required to, sell all shares offered hereby.
(2) Includes 45,000 shares which were issued in November 1996 upon the
exercise of certain warrants acquired by Mr. Brammel.
(3) Includes 1,035,714 shares which have been issued upon the exercise of
certain reset rights under the terms of the Subscription Agreement
dated as of August 22, 1997 by and between the Company and Daid
Freund.
(4) Mr. Grayson is a principal of Grayson & Associates, Inc., which has
been engaged by the Company to provide certain capital raising
services through September 1997.
(5) In March 1997, Grayson & Associates, Inc. received a cash fee and
warrants from the Company as compensation for assisting the Company
with a private placement of debentures. Grayson & Associates, Inc.
also received a cash fee and the Grayson Warrants in connection with
the private placement of certain of the Shares.
13
<PAGE> 16
(6) Includes 194,632 shares which may be issued upon exercise of the
Grayson Warrants.
(7) Includes 12,000 shares registered in the name of Slovak Family Trust.
(8) Includes 100,000 shares which may be issued upon exercise of the Tail
Wind Warrants. Also includes 1,401,381 shares which may be issued in
accordance with the terms of the Tail Wind Subscription Agreement.
Of the Shares offered hereby, 2,632,905 were issued in July 1997 to
Tail Wind and the Investors and 1,250,000 were issued in August 1997 to David
Freund in a private placement pursuant to Regulation D of the Securities Act;
1,401,381 may be issued to Tail Wind under the terms of the Common Stock
Subscription Agreement dated as of June 30, 1997 by and between Tail Wind and
the Company; 1,035,714 were issued in December 1997 to David Freund upon the
exercise of certain reset rights under the terms of the Common Stock
Subscription Agreement dated as of August 22, 1997 by and between Mr. Freund
and the Company; 100,000 are issuable upon the exercise of the Tail Wind
Warrants; 194,632 are issuable upon the exercise of the Grayson Warrants and
45,000 were issued upon the exercise of warrants acquired by Brian Brammel in a
private placement conducted by the Company pursuant to Regulation D in November
1995. The Grayson Warrants were issued as compensation in connection with the
private placement of the Shares sold to the Investors and Tail Wind. The
Grayson Warrants may be exercised at any time on or prior to June 30, 2002,
161,600 at an exercise price of $.50 per share and 33,032 at an exercise price
of $.72656 per share. The Tail Wind Warrants were issued in connection with
the private placement, and may be exercised at any time from January 1, 1998 to
January 1, 2003 for an exercise price of $1.00 per share. Additional shares
that may become issuable as a result of the anti-dilution provisions of the
Tail Wind Warrants and the Grayson Warrants are also offered hereby pursuant to
Rule 416 under the Securities Act.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the shares in one or more
transactions (which may involve one or more block transactions) on the
over-the-counter markets on Nasdaq and upon terms then prevailing or at prices
related to the then current market price, or in separately negotiated
transactions or in a combination of such transactions. The Common Stock
offered hereby may be sold by one or more of the following methods, without
limitation: (a) a block trade in which a broker or 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; (d) privately negotiated
transactions; (e) short sales; and (f) face-to-face transactions between
sellers and purchasers without a broker-dealer. The Selling Shareholders may
also sell Shares in accordance with Rule 144 under the Securities Act. The
Selling Shareholders may be deemed to be underwriters of the shares offered
hereby within the meaning of the Securities Act.
The Company has agreed to keep effective the registration of the
Shares offered hereby for a period of not less than two years, until the date
upon which all of the Shares offered hereby have
14
<PAGE> 17
been sold or until the date on which the Shares may be sold without
registration, whichever is shorter.
In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Such
broker or dealers may receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated. All other expenses incurred in
connection with this offering will be borne by the Company other than the
Selling Shareholders' legal fees. Such brokers and dealers and any other
participating brokers or dealers may, in connection with such sales, be deemed
to be underwriters within the meaning of the Securities Act. Any discounts or
commissions received by any such brokers or dealers may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Company is bearing all of the costs relating to registration of
the Shares, except commissions, discounts or other fees payable to a broker,
dealer, underwriter, agent or market maker in connection with the sale of any
of the Shares and legal fees in excess of $10,000 for the Investors and for
Tail Wind.
LEGAL MATTERS
The validity of the securities being offered will be passed upon for
the Company by Bryan Cave LLP, 700 Thirteenth Street, Washington, D.C. 20005.
EXPERTS
The financial statements of the Company for the fiscal years ended
December 31, 1996 and 1995 have been audited by Hollander, Gilbert & Co.,
independent certified public accountants, to the extent and for the periods set
forth in their report with respect thereto, and are included the Company's
Annual Report on Form 10-KSB for the fiscal year ended December 31, 1996, and
are incorporated herein by reference, in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.
15
<PAGE> 18
No dealer, sales representative or other individual has been
authorized to give any information or make any representation not contained in
this Prospectus in connection with this offering other than those contained in
this Prospectus and if given or made, such information or representation must
not be relied upon as having been authorized by the Company. This Prospectus
does not constitute an offer to sell or solicitation of an offer to buy the
Common Stock by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall under any circumstances create an implication that the
information contained herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . 2
Information Incorporated By Reference . . . . . . . . . . . . . . . . . 3
Cautionary Statement . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
Until March __, 1998 (40 days after the date of the Prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This delivery requirement is in addition to the obligation of dealers to
deliver a Prospectus when acting as Underwriter and with respect to their
unsold allotments or subscriptions.
SALIVA DIAGNOSTIC SYSTEMS, INC.
6,659,632 SHARES OF COMMON STOCK
PROSPECTUS
JANUARY __, 1998
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered hereby will be borne by the Company and are
estimated to be as follows:
<TABLE>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . $1,395.55
Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . 20,000.00*
Accounting Fees . . . . . . . . . . . . . . . . . . . . . . 2,500.00*
Total . . . . . . . . . . . . . . . . . . . . . . . . 23,895.55*
</TABLE>
- ---------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a
corporation to indemnify its directors and officers and to purchase insurance
with respect to liability arising out of their capacity or status as directors
and officers provided that this provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) arising under Section 174 of the General Corporation Law of Delaware, or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Delaware Corporation Law provides further that the indemnification
permitted thereunder shall not be deemed exclusive of any other rights to which
the directors and officers may be entitled under the corporation's by-laws, any
agreement, vote of shareholders or otherwise.
Article Ten of the Company's Certificate of Incorporation eliminates
the personal liability of directors to the fullest extent permitted by Section
145 of the Delaware Corporation Law.
The effect of the foregoing is to require the Company to indemnify the
officers and directors of the Company for any claim arising against such
persons in their official capacities if such person acted in good faith and in
a manner that he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
<PAGE> 20
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, THE COMPANY HAS
BEEN INFORMED 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.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
4.1 Specimen of Certificate Representing Common Stock, incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-46648).
4.2 Form of Warrant to be issued to each of Grayson & Associates, Inc. and The Tail Wind Fund Ltd., incorporated by
reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated June 5, 1997, filed on July 30, 1997
(File No. 000-21284) pursuant to Section 13(a) of the Exchange Act (the "June 1997 8-K").
5 Opinion of Bryan Cave LLP *
10.1 Common Stock Subscription Agreement dated as of June 30, 1997 by and between the Company and The Tail Wind Fund
Ltd., incorporated by reference to Exhibit 4.2 of the June 1997 8-K.
10.2 Common Stock Subscription Agreement dated as of June 30, 1997 by and between the Company and the investors set
forth on Schedule A thereto, incorporated by reference to Exhibit 4.3 of the June 1997 8-K.
10.3 Registration Rights Agreement dated as of June 30, 1997 between the Company and The Tail Wind Fund Ltd.,
incorporated by reference to Exhibit 4.4 of the June 1997 8-K.
10.4 Form of Registration Rights Agreement dated as of June 30, 1997 between the Company and the investors set forth on
Schedule A to the Common Stock Subscription Agreement dated as of June 30 ,1997 by and between the Company and the
investors set forth on Schedule A thereto, incorporated by reference to Exhibit 4.5 of the June 1997 8-K.
10.5 Common Stock Subscription Agreement dated as of August 22, 1997 by and between the Company and David Freund. *
10.6 Registration Rights Agreement dated as of August 22, 1997 between the Company and David Freund. *
</TABLE>
II-2
<PAGE> 21
<TABLE>
<S> <C>
23.1 Consent of Hollander, Gilbert & Co.
23.2 Consent of Bryan Cave LLP (included in Exhibit 5)
</TABLE>
- ------------------
* Previously filed
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company 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 Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company 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 of 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.
(b) The Company 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:
(i) include any prospectus required by Section 10 (a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events arising after
the effective date of this 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 this
Registration Statement;
(iii) include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of a
Registration Statement in reliance upon
II-3
<PAGE> 22
Rule 430A and contained in the form of Prospectus filed by Registrant pursuant
to Rule 424 (b)(1) or (4) under the Securities Act shall be deemed to be part
of the Registration Statement as of the time it was declared effective.
(5) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Post-Effective Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Vancouver, State of Washington, on January 29, 1998.
SALIVA DIAGNOSTIC SYSTEMS, INC.
By: /s/ Kenneth J. McLachlan
-------------------------
Kenneth J. McLachlan
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Kenneth J. McLachlan Director, President, Chief Executive Officer, Chief January 29, 1998
------------------------ Financial Officer and Chief Accounting Officer
Kenneth J. McLachlan
/s/ Eric F. Stoer Director January 29, 1998
-----------------
Eric F. Stoer
/s/ Eric F. Stoer* Director January 29, 1998
------------------
Hans R. Vauthier
/s/ Eric F. Stoer* Chief Operating Officer and January 29, 1998
------------------ Vice President of Marketing
Paul D. Slowey
/s/ Deloris Schneider Vice President of Finance January 29, 1998
--------------------- and Vice President of Operations
Deloris Schneider
</TABLE>
- -----------------------------
* As attorney-in-fact
<PAGE> 24
SALIVA DIAGNOSTIC SYSTEMS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
4.1 Specimen of Certificate Representing Common Stock, incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-46648).
4.2 Form of Warrant to be issued to each of Grayson & Associates, Inc. and The Tail Wind Fund Ltd., incorporated by
reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated June 5, 1997, filed on July 30, 1997
(File No. 000-21284) pursuant to Section 13(a) of the Exchange Act (the "June 1997 8-K").
5 Opinion of Bryan Cave LLP *
10.1 Common Stock Subscription Agreement dated as of June 30, 1997 by and between the Company and The Tail Wind Fund
Ltd., incorporated by reference to Exhibit 4.2 of the June 1997 8-K.
10.2 Common Stock Subscription Agreement dates as of June 30, 1997 by and between the Company and the investors set
forth on Schedule A thereto, incorporated by reference to Exhibit 4.3 of the June 1997 8-K.
10.3 Registration Rights Agreement dated as of June 30, 1997 between the Company and The Tail Wind Fund Ltd.,
incorporated by reference to Exhibit 4.4 of the June 1997 8-K.
10.4 Form of Registration Rights Agreement dated as of June 30, 1997 between the Company and the investors set forth on
Schedule A to the Common Stock Subscription Agreement dated as of June 30 ,1997 by and between the Company and the
investors set forth on Schedule A thereto, incorporated by reference to Exhibit 4.5 of the June 1997 8-K.
10.5 Common Stock Subscription Agreement dated as of August 22, 1997 by and between the Company and David Freund. *
10.6 Registration Rights Agreement dated as of August 22, 1997 between the Company and David Freund. *
23.1 Consent of Hollander, Gilbert & Co.
23.2 Consent of Bryan Cave LLP (included in Exhibit 5)
</TABLE>
- --------------------
*Previously filed
<PAGE> 1
Exhibit 23.1
Consent of Independent Accountants
To the Board of Directors
Saliva Diagnostic Systems, Inc.
We consent to the incorporation by reference in the Post-Effective Amendment
No. 1 to Registration Statement on Form S-3 of Saliva Diagnostic Systems, Inc.
(Registration No. 333-33429), of our report dated March 21, 1997 relating to
the consolidated financial statements of Saliva Diagnostic Systems, Inc. and
its subsidiaries, and to the reference to our Firm under the caption "Experts"
in the Prospectus.
/s/ Hollander, Gilbert & Co.
Hollander, Gilbert & Co.
Los Angeles, California
January 15, 1998
