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As filed with the Securities and Exchange Commission on November 13, 1997
Registration No. 333-28125
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3 REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ACCUMED INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 36-4054899
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
900 N. FRANKLIN STREET, SUITE 401
CHICAGO, ILLINOIS 60610
(312) 642-9200
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(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
PETER P. GOMBRICH
Chief Executive Officer
AccuMed International, Inc.
900 N. Franklin Street, Suite 401
Chicago, Illinois 60610
(312) 642-9200
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(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Copy to:
JOYCE L. WALLACH, ESQ.
AccuMed International, Inc.
900 N. Franklin Street, Suite 401
Chicago, Illinois 60610
(312) 642-9200
Telecopy (312) 642-2985
Approximate date of commencement of proposed sale to the public: from time to
time after the
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effective date of this Registration Statement.
If 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 on continuous basis pursuant to Rule 415 under the Securities Act
of 1933, 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. [ ]
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 the 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.
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PROSPECTUS
3,770,000 SHARES
ACCUMED INTERNATIONAL, INC.
COMMON STOCK
This Prospectus relates to 3,770,000 shares (the "Shares") of Common
Stock, par value $0.01 per share (the "Common Stock"), of AccuMed International,
Inc., a Delaware corporation (the "Company" or "AccuMed") of which (i) an
aggregate of 2,720,000 shares (the "Conversion Shares") are underlying 12%
Convertible Promissory Notes (the "Notes"), (ii) 1,025,000 shares (the "Warrant
Shares") are underlying Common Stock Purchase Warrants (the "Warrants") 25,000
shares are currently outstanding (such shares, together with the Conversion
Shares and the Warrant Shares, are collectively referred to as the "Shares").
The Company will not receive any of the proceeds from any sales of the Shares,
but will receive aggregate gross proceeds of $3,203,000 if all of the Warrants
are exercised to acquire the Warrant Shares for cash at their respective current
exercises prices. The Registration Statement of which this Prospectus forms a
part has been filed pursuant to the terms of the agreements governing the
Warrants and the Notes between the Company and holders thereof. (Holders of
Warrants and Notes are collectively referred to as the "Selling
Securityholders.") See "Selling Securityholders."
The Common Stock is quoted on the National Association of Securities
Dealers Automated Quotation System ("Nasdaq") National Market under the trading
symbol "ACMI." The Selling Securityholders may, from time to time, sell the
Shares at market prices prevailing on Nasdaq at the time of the sale or at
negotiated prices (this "Offering") under the terms described under the caption
"Plan of Distribution." See "Risk Factors," "Selling Securityholders" and "Plan
of Distribution."
The last reported sale price for the Common Stock on November 7, 1997,
as reported on the Nasdaq, was $2.06 per share.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE
CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
SEE "RISK FACTORS" BEGINNING AT PAGE 12.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
AND EXCHANGE 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.
No underwriting commissions or discounts will be paid by the Company in
connection with this Offering. Estimated expenses payable by the Company in
connection with this Offering are approximately $24,000.
This date of this Prospectus is ________________, 1997.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Prospectus constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company,
or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among other things, the following: the
Company's history of losses and uncertainty of profitability; the uncertainty of
market acceptance of the Company's products; the Company's limited sales,
marketing and distribution experience and dependence on distributors; the
Company's highly competitive industry and rapid technological change within such
industry; the Company's ability to obtain rights to technology and obtain and
enforce patents and other proprietary rights; the Company's ability to
commercialize and manufacture products; the results of clinical studies; the
results of the Company's research and development activities; the business
abilities and judgment of the Company's personnel; the availability of qualified
personnel; changes in, or failure to comply with, governmental regulations; the
ability to obtain adequate financing in the future; general and business
conditions; and other factors referenced in this Prospectus. See "Risk Factors."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the following regional offices: New York Regional Office, 7
World Trade Center, Room 1400, New York, New York 10048 and Chicago Regional
Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the Commission, including the Company, at
http://www.sec.gov. The Common Stock is quoted on the Nasdaq National Market and
reports and other information regarding the Company may be inspected at the
National Association of Securities Dealers, Inc. at 1735 K Street, N.W.,
Washington, D.C. 20006.
ADDITIONAL INFORMATION
Additional information regarding the Company and the securities offered
hereby is contained in Pre-effective Amendment No. 1 to the Registration
Statement on Form S-3 (Registration No. 333-28125) of which this Prospectus
forms a part, and the exhibits thereto filed with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). For further
information pertaining to the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto, which
may be inspected without charge at, and copies of which may be obtained at
prescribed rates from, the office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The Company furnishes stockholders with annual reports containing audited
financial statements
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and other periodic reports as the Company may deem to be appropriate or as
required by law or the rules of the National Association of Securities Dealers,
Inc.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have heretofore been filed by the Company
with the Commission pursuant to the Exchange Act are incorporated by reference
herein and shall be deemed to be a part hereof:
(1) The Company's Current Report on Form 8-K dated October 15, 1996 filed
with the Commission on October 30, 1996.
(2) The Company's Amendment No. 1 on Current Report on Form 8-K/A dated
October 15, 1996.
(3) The Company's Amendment No. 2 on Current Report on Form 8-K/A dated
October 15, 1996.
(4) The Company's Amendment No. 3 on Current Report on Form 8-K/A dated
October 15, 1996.
(5) The Company's Amendment No. 4 on Current Report on Form 8-K/A dated
October 15, 1996.
(6) The Company's Annual Report on Form 10-KSB for the year ended December
31, 1996.
(7) The Company's Amendment No. 1 to Form 10-KSB for the year ended December
31, 1996.
(8) The Company's Amendment No. 2 to Form 10-KSB for the year ended December
31, 1996.
(9) The Company's Amendment No. 3 to Form 10-KSB for the year ended December
31, 1996.
(10) The Company's Current Report on Form 8-K dated March 3, 1997.
(11) The Company's Amendment No. 1 to Current Report on Form 8-K/A dated March
3, 1997.
(12) The Company's Amendment No. 2 to Current Report on Form 8-K/A dated March
3, 1997.
(13) The Company's Amendment No. 3 to Current Report on Form 8-K/A dated March
3, 1997.
(14) The Company's Amendment No. 4 to Current Report on Form 8-K/A dated March
3,
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1997.
(15) The Company's Quarterly Report on Form 10-QSB for the quarter ended March
31, 1997.
(16) The Company's Amendment No. 1 to Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1997.
(17) The Company's Amendment No. 2 to Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1997.
(18) The Company's Amendment No. 3 to Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1997.
(19) The Company's Amendment No. 4 to Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1997.
(20) The Company's Quarterly Report on Form 10-QSB for the quarter ended June
30, 1997.
(21) The Company's Amendment No. 1 to Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1997.
(22) The Company's Amendment No. 2 to Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1997.
(23) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1997.
(24) The description of the Common Stock contained in the Company's Amendment
No. 1 to Registration Statement on Form 8-A/A filed with the Commission
on January 2, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this Offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the documents incorporated by reference in this Prospectus (not including
exhibits and other information that is incorporated by reference unless the
exhibits are themselves specifically incorporated by reference). Requests for
such documents should be directed to AccuMed International, Inc., located at 900
North Franklin Street, Suite 401, Chicago, Illinois 60610, Attn: Leonard R.
Prange, Chief Financial Officer and Chief Operating Officer, telephone (312)
642-9200.
The following are trade names and trademarks of the Company:
alamarBlue(TM), the "AccuMed" logo and name, AcCell(TM), TracCell(TM),
MacroVision(TM), Sensititre(R), SensiTouch(TM), ARIS(TM), AutoReader(TM),
AutoInnoculator(TM) Relational Cytopathology
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Reference Guide(TM), FluoreTone(TM), MacCell(TM), SpeciFind(TM), Pathos(TM),
AcCell Savant(TM) and "and you thought you'd seen it all" (TM).
The Company's address is 900 North Franklin Street, Suite 401, Chicago,
Illinois 60610, and its telephone number is (312) 642-9200.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus, including information under
"Risk Factors," and the financial statements incorporated be reference herein.
Special Note: Certain statements set forth below constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. See "Special Note Regarding Forward-Looking Statements" on page 2 for
additional factors relating to such statements.
THE COMPANY
BACKGROUND
AccuMed International, Inc. was incorporated in California in June 1988
under the name Alamar Biosciences, Inc. Prior to December 29, 1995, the Company
was engaged in developing, manufacturing and marketing microbiology products,
including alamarBlue(TM) and certain diagnostic test kits under the name Alamar.
AccuMed, Inc., an Illinois corporation, was formed in February 1994 and was
engaged in researching and developing cytopathology products. Effective January
1995, - AccuMed, Inc. acquired the Sensititre microbiology business by
purchasing certain assets of a division of Radiometer America, Inc. and
purchasing from Radiometer (UK) Limited all of the shares of Sensititre Limited,
an English registry company (renamed AccuMed International Limited,
"Sensititre," and collectively, such businesses are referred to as "AccuMed,
Inc."). On December 29, 1995, AccuMed, Inc. merged with and into the Company
(the "Merger"). The Company then changed its name to AccuMed International,
Inc., reincorporated under Delaware law and changed its fiscal year end from
September 30 to December 31.
On October 15, 1996, the Company acquired a two-thirds interest in
Oncometrics Imaging Corp., a company continuing under the laws of the Yukon
Territory, Canada ("Oncometrics"). Oncometrics was formed in 1995 as a
wholly-owned subsidiary of Xillix Technologies Corp. to complete the development
of an automated instrument designed to be used in the detection, diagnosis and
prognosis of early-stage cancer by measuring the DNA in cells on microscope
slides.
On October 15, 1996, the Company also acquired all the outstanding shares
of common stock (the "RADCO Stock") not already owned by the Company of RADCO
Ventures, Inc., a Delaware corporation ("RADCO"), at which time RADCO became a
wholly-owned subsidiary of the Company. RADCO was formed in March 1996, for the
purpose of developing a diagnostic microbiology test panel and automated reading
instrument known as FluoreTone(TM). RADCO was merged with and into the Company
effective November 15, 1996, at which time RADCO ceased to exist as a separate
corporate entity.
THE BUSINESS
The Company designs, manufactures and markets diagnostic screening
products for clinical diagnostic laboratories serving the cytopathology and
microbiology markets. The Company's primary focus is on the development of
cytopathology products that support the review and analysis of Pap smears in
order to improve the quality of cell analysis and increase accuracy and
productivity in the laboratory. The Company commenced sales of its initial
cytopathology product, the AcCell(TM)
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Cytopathology System, an automated slide handling, data management system and
microscopy workstation, at the end of the first quarter of 1996. The
TracCell(TM) 2000 Slide Mapping System (the "TracCell 2000) is a slide mapping
system that automatically creates a computerized map that excludes empty space
and certain non-clinically relevant portions of the specimen to permit a more
efficient analysis of the slide. A human screener then reviews the mapped
specimen through an AcCell microscopy workstation. In August 1997, the United
States Food and Drug Administration (the "FDA") granted the Company clearance to
market the TracCell 2000 in the United States pursuant to a pre-market
notification under Section 510(k) (a "510(k) Notification") under the United
States Food, Drug and Cosmetic Act (the "FD&C Act").
In May 1997, the Company entered into an agreement with Leica Microscopy
and Systems GmbH, a leader in precision microscopy and imaging technology
("Leica"), pursuant to which Leica has exclusive third party distribution rights
to the AcCell 2000 and 2001 Systems outside the Western Hemisphere. Leica also
has a right of first refusal and negotiation to be the exclusive distributor
outside the Western Hemisphere of future cytopathology products developed by the
Company. The Company presently markets the AcCell systems and TracCell through
its direct sales force. From May 1996 until September 1997, the Company had
granted Olympus America exclusive third party distribution rights to the AcCell
2000 and 2001 Systems in the Western Hemisphere. In September 1997, the Company
and Olympus entered into an amendment to terminate the original agreement and
permit Olympus to require the Company to repurchase up to six AcCell systems per
month from Olympus' inventory beginning in October 1997 at the original purchase
price.
The Company also develops, manufactures and markets in vitro diagnostic
clinical microbiology products for the human clinical laboratory, veterinary and
pharmaceutical markets. In March 1997, the Company acquired certain assets
relating to the ESP Culture System II product line (the "ESP Product Line") from
Difco Microbiology Systems, Inc., a Michigan corporation ("Difco"), consisting
of disposables, software and instruments for the growth and detection of
microorganisms in blood cultures, sterile body fluids and mycobacteria samples.
The Company offers the microbiology laboratory a variety of FDA-cleared
products, under the trade name Sensititre, for the minimum inhibitory
concentration and identification ("MIC/ID") testing of bacteria suspected of
causing infections and for measuring the susceptibility of such bacteria to
different types and concentrations of antibiotics. AccuMed's microbiology
products include disposable test kits and a range of automated instruments. In
September 1996, the Company entered into an agreement with Fisher Scientific
Company ("Fisher Scientific"), a leading distributor of clinical laboratory
products, pursuant to which Fisher has been granted exclusive rights to
distribute the Company's Sensititre human clinical microbiology products in the
United States. The Company also markets alamarBlue(TM), a proprietary, non-toxic
indicator reagent that measures cell growth for in vitro testing. The Company is
developing the KB Reader, an automated instrument designed to read the results
of a Kirby-Bauer method susceptibility test. The Company is also developing
Fluoretone, a diagnostic microbiology test panel and an automated reading
instrument. There can be no assurance that any such products will be
successfully developed or marketed.
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For additional information regarding the Company's products, competition
and intellectual property, see "Risk Factors--Uncertainty of Market Acceptance
and Initial Investment in Cytopathology Products;" "--Technological Change and
Competition; "--Delayed or Unsuccessful Product Development"; "--Government
Regulation;" and "--Protection of Intellectual Property."
The Company's principal executive offices are located at 900 North
Franklin Street, Suite 401, Chicago, Illinois 60610, and its telephone number is
(312) 642-9200.
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THE OFFERING
Securities offered .... 3,770,000 shares of Common Stock offered by the Selling
Securityholders
Common Stock
outstanding after
the Offering (1) .. 26,451,050 shares (which assumes the exercise of
Warrants and conversion of Notes to acquire an aggregate
of 3,745,000 Warrant Shares and Conversion Shares to be
sold in the Offering)
Use of Proceeds ....... The Company will not receive any proceeds from the sale
of the Common Stock by the Selling Securityholders.
Aggregate proceeds to the Company of approximately
$3,203,000 pursuant to exercises of Warrants by the
Selling Securityholders, if all the Warrants are
exercised, will be used by the Company for general
corporate purposes, including research and development,
sales and marketing, manufacturing equipment and
facilities and working capital
Nasdaq National
Market Symbol ......... ACMI
- -----------------------------
(1) Based upon shares outstanding at November 7, 1997 (of which 116,000 shares
are subject to forfeiture if certain milestones under a microbiology
product development agreement are not achieved. Excludes: (i) an aggregate
of 3,471,619 shares reserved for issuance upon exercise of warrants (other
than the Warrants relating to the Warrant Shares) outstanding at November
7, 1997; (ii) an aggregate of 2,616,608 shares reserved for issuance upon
the exercise of stock options outstanding at November 7, 1997, including
options to purchase 1,616,398 shares the granting of which is subject to
stockholder approval of the 1997 Stock Option Plan; and (iii) an aggregate
of 1,583,602 shares reserved for issuance upon exercise of options
available for future grant under the Company's 1997 Stock Option Plan, the
reservation of which is subject to stockholder approval of such Plan. On
May 23, 1997, the Company's stockholders approved an amendment to the
Company's Certificate of Incorporation increasing the authorized Common
Stock from 30,000,000 shares to 50,000,000 shares.
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RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVES A
HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS, IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS.
SPECIAL NOTE: CERTAIN STATEMENTS SET FORTH BELOW CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE REFORM ACT. SEE "SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS" ON PAGE 2 FOR ADDITIONAL FACTORS RELATING TO SUCH
STATEMENTS.
SIGNIFICANT CAPITAL REQUIREMENTS; NEED FOR ADDITIONAL CAPITAL. The
Company has expended substantial funds for research and product development,
scale-up of manufacturing capacity, marketing and distribution ramp-up and other
working capital and general corporate purposes. Management believes that the
Company's existing capital resources and anticipated internally generated
revenues will provide sufficient capital to meet the Company's current and
projected requirements over the next 12 months.
Pursuant to a Shareholders Agreement, the Company is obligated to fund
two-thirds of the working capital requirements of its majority-owned subsidiary
Oncometrics Imaging Corp. ("Oncometrics"). It is anticipated that such
requirements will be substantial during the next 12 months and beyond. If the
Company is unable to fulfill such obligation, additional shares may be issued to
the other holder of Oncometrics stock, thus reducing the relative value of
Company's equity position in Oncometrics.
The Company's future liquidity and capital requirements will depend upon
numerous factors, including the costs and timing of expansion of manufacturing
capacity, the costs, timing and success of the Company's product development
efforts, the costs and timing of potential acquisitions, the extent to which the
Company's existing and new products gain market acceptance, competing
technological and market developments, the progress of commercialization efforts
by the Company and its distributors, the costs involved in preparing, filing,
prosecuting, maintaining, enforcing and defending patent claims and other
intellectual property rights, developments related to regulatory and third party
reimbursement matters, and other factors. Additional financing may be required
to fund the Company's operations beyond the next 12-month period. If additional
financing is needed, the Company may seek to raise additional funds through
public or private financings, collaborative relationships or other arrangements.
The Company currently has no commitments with respect to sources of additional
financing, and there can be no assurance that any such financing sources, if
needed, would be available to the Company or that adequate funds for the
Company's operations, whether from the Company's revenues, financial markets,
collaborative or other arrangements with corporate partners or from other
sources, will be available when needed or on terms satisfactory to the Company.
The failure of the Company to obtain adequate additional financing may result in
the failure of the Company to repay its obligations under certain indebtedness
as they become due and may require the Company to delay, curtail or scale back
some or all of its research and development programs, sales and marketing
efforts, manufacturing operations, clinical studies and regulatory activities
and, potentially, to cease its operations. Any additional equity financing may
involve substantial dilution to the Company's then-existing stockholders. See
"--Substantial Indebtedness."
LIMITED RELEVANT OPERATING HISTORY; SIGNIFICANT OPERATING LOSSES;
ACCUMULATED DEFICIT;
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CHARGES ARISING FROM AMORTIZATION OF GOODWILL AND IN-PROCESS RESEARCH AND
DEVELOPMENT, ISSUANCE OF CONVERTIBLE NOTES; UNCERTAINTY OF PROFITABILITY. The
Company was formed in 1988 under the name Alamar Biosciences, Inc. and was
engaged primarily in research and development of microbiology products based on
the alamarBlue technology. Prior to the Merger, the Company never realized any
significant revenues from product sales. AccuMed, Inc. was incorporated in
February 1994 and, effective January 1995, acquired the Sensititre microbiology
business. Until such acquisition, AccuMed, Inc. had no revenues and operations
consisted of a limited amount of cytopathology research and development.
Accordingly, although the Sensititre business had a significant operating
history and revenues from sales, AccuMed, Inc., as a separate entity, had very
limited operating history prior to the Merger. Upon consummation of the Merger,
the operations of the Company and AccuMed, Inc. were combined, and the Company
began to develop, manufacture and sell both the alamarBlue and the Sensititre
microbiology products and recently (in 1996 and 1997) began to commercialize
certain cytopathology products. In March 1997, the Company acquired the ESP
Product Line from Difco. The Company has been advised that Difco, and its
affiliates Difco Laboratories Incorporated, a Michigan corporation ("Difco Labs
Michigan") and Difco Laboratories Incorporated, a Wisconsin corporation ("Difco
Labs Wisconsin"), have been engaged in the production of the ESP Product Line
since 1992. Accordingly, there is a limited relevant operating history with
respect to the ESP Product Line upon which an evaluation of its prospects can be
made. Difco was not able to conduct the ESP Business in a profitable manner and
the Company has conducted the ESP Business in a profitable manner for only a
limited time. Thus, the Company has a limited relevant operating history upon
which an evaluation of its prospects can be made. Such prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered in establishing a new business in a continually evolving industry
with 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.
The Company has incurred significant net operating losses in each fiscal
quarter since its inception. For the fiscal year ended December 31, 1996, and
for the nine-month period ended September 30, 1997, the Company's net losses
were approximately $11.6 million and $14.1 million, respectively. Losses for the
fiscal year ended December 31, 1996 relate solely to the Company's operations
prior to acquisition of the ESP Business. As of September 30, 1997, the Company
had an accumulated deficit of approximately $48.4 million. Losses are expected
to continue for the foreseeable future until such time, if ever, as the Company
is able to attain sales levels sufficient to support its operations. There can
be no assurance that the Company will be able to implement successfully its
operating strategy, generate increased revenues or ever achieve profitable
operations. See "- Uncertainty of Market Acceptance and Initial Investment in
Cytopathology Products."
During the first quarter of 1997, certain contingencies were satisfied
with respect to 940,955 shares of Common Stock and warrants to purchase 63,472
shares of Common Stock issued in connection with the Merger. As a result,
approximately $3.6 million, the fair market value of such securities at the date
on which such contingencies were satisfied were recorded as goodwill associated
with the Merger and charged off in its entirety to operations during the three
months ended March 31, 1997 as an impaired asset.
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The Company's acquisition of a two-thirds equity interest in Oncometrics
was accounted for under the purchase method of accounting, resulting in
approximately $1.6 million of acquired in-process research and development and
approximately $1.1 million of purchased technology. The $1.1 million of
purchased technology will be amortized over its useful life of ten years and the
$1.6 million of acquired in-process research and development was written off as
a charge to earnings in the last quarter of 1996.
The Company's acquisition of all of the outstanding shares of Common
Stock not previously owned by the Company of RADCO for an aggregate cost to the
Company of $1.4 million also included approximately $800,000 of acquired
in-process research and development. Amounts recorded as acquired in-process
research and development for the RADCO acquisition were written off as a charge
to earnings in the last quarter of 1996.
Issuance of Convertible Notes in the aggregate principal amount of $8.5
million during the first quarter of 1997 at a conversion rate of $0.50 less than
the market price at the time of issuance resulted in recognition of a discount
of $1.9 million recorded against such notes at the date of issuance. Such notes
were first convertible during the second quarter of 1997, which resulted in such
$1.9 million being written off as a non-cash charge against earnings during such
quarter.
SUBSTANTIAL INDEBTEDNESS. On March 14, 1997, the Company issued
three-year, 12% Convertible Promissory Notes in the aggregate principal amount
of $8.5 million (the "Convertible Notes"). The Convertible Notes, which are
unsecured, accrue interest at a rate of 12% per annum due semi-annually in
arrears on February 15 and August 15 while they remain outstanding. If the
Company defaults on its obligation to pay interest when due, the interest rate
would increase to 16% during such default and the noteholders would be entitled
to accelerate the Convertible Notes and demand payment of the entire principal
amount then outstanding in addition to accrued and unpaid interest. Acceleration
of the Convertible Notes would have a material adverse effect on the Company's
financial position. The Company borrowed an aggregate of $4.5 million pursuant
to an equipment loan in September 1997 and in October 1997 entered into a
working capital revolving credit facility allowing for maximum borrowing of $4.0
million, in each case from Transamerica Business Credit Corporation (the
"Transamerica Debt"). The Transamerica Debt is secured by a first priority lien
against virtually all of the Company's assets. The Transamerica Debt requires
substantial payments of interest and principal. Failure of the Company to pay
such obligations as they become due would entitle Transamerica to accelerate all
principal and interest under the Transamerica Debt. The Company does not
have sufficient funds to repay such accelerated principal and interest, which
would entitle Transamerica to foreclose on all assets of the Company, except for
certain stock in foreign subsidiaries and certain royalty payments. Foreclosure
on such assets would require the Company to cease its operations. The terms of
the Transamerica Debt contain various restrictive covenants that limit the
manner in which the Company may conduct its affairs, including its ability to
obtain additional funds through incurrence of debt or sale of assets. See
"--Significant Capital Requirements; Need for Additional Capital."
UNCERTAINTY OF MARKET ACCEPTANCE AND INITIAL INVESTMENT IN CYTOPATHOLOGY
PRODUCTS. The Company has generated limited revenues from the sale of its
cytopathology products to date. The
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Company's success, growth and profitability will depend primarily on market
acceptance of the AcCell System 2000 and 2001 and the TracCell 2000 for use in
connection with cervical cancer screening by cytopathology laboratories. Market
acceptance will depend on the Company's ability to demonstrate to such
laboratories that the limitations associated with conventional Pap smear
screening and analysis can be cost effectively addressed by its products. There
can be no assurance that the Company can demonstrate that the high initial cost
of equipping existing laboratories with the AcCell System 2000 and the TracCell
2000 will be offset by a reduction in costs associated with increased efficiency
and decreased malpractice liability risks resulting from more accurate
diagnoses, better data management capability and better documentation of slide
review procedures. The Company believes that many clinical laboratories offer
Pap smear tests at lower gross margins than other tests in order to receive
orders for other, higher margin, laboratory tests. As a result, clinical
laboratories may be reluctant or unwilling to accept the additional costs
related to installing and utilizing the AcCell System and the TracCell 2000.
Furthermore, clinical laboratories have recently been presented with a variety
of new products claimed to improve the cervical cancer screening process either
through changing the slide preparation method, automating the re-examination or
rescreening of conventional specimens previously diagnosed as negative or
rescreening such specimens using reagents to detect certain RNA/DNA hybrid cells
claimed to indicate the presence of cervical cancer. This proliferation of
competing claims, products and approaches to cervical cancer screening may cause
market confusion which could result in a laboratory maintaining its current
equipment and practices or delaying a decision of whether to purchase the
Company's products or a competing product. See "-- Technological Change and
Competition."
LIMITED SALES, MARKETING AND DISTRIBUTION EXPERIENCE; DEPENDENCE ON
THIRD-PARTY DISTRIBUTORS. In order for the Company to increase revenues and
achieve profitability, the Company's products, particularly its current and
proposed cytopathology products, must achieve a significant degree of market
acceptance. The Company has only limited experience marketing and selling its
cytopathology products. The Company intends to distribute its cytopathology and
human clinical microbiology products both directly through its internal sales
force and through a limited number of distributors. In 1996, the Company entered
into its initial distribution arrangement and commenced direct sales efforts
with respect to cytopathology products. Pursuant to a five-year distribution
agreement (commencing May 1997), Leica has been granted exclusive third-party
distribution rights outside the Western Hemisphere for the AcCell Systems and
has a right of first negotiation with respect to TracCell 2000 and other future
cytopathology products. In September 1997, the Company and Olympus terminated
the distribution agreement entered into in May 1996 which had granted Olympus
exclusive distribution rights for the AcCell Systems in the Western Hemisphere.
While the agreement was in effect, Olympus sold very few AcCell Systems to
end-users. Furthermore, the Company has agreed to repurchase up to six AcCell
Systems per month, beginning in October 1997, from Olympus' inventory.
With respect to human, clinical microbiology products marketed under the
Sensititre trade name, the Company has entered into an exclusive, four-year
distribution agreement (commencing September 1996) for the United States with
Fisher Scientific. In December 1996, the Company entered into a Manufacturing
and License Agreement with Salcom S.r.l. ("Salcom") pursuant to which Salcom has
been granted certain exclusive rights in and to technology and related trade
secrets, know-how and patent rights relating to alamarBlue(TM) (the "Licensed
Technology") to manufacture and distribute the
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Company's alamarBlue(TM) microbiology products in parts of Europe and Japan.
Salcom is obligated to pay royalties to the Company on net sales of any product
which encompasses or incorporates the Licensed Technology until September 30,
1999, subject to certain conditions and restrictions.
The Company will be required to enter into additional distribution
arrangements in order to achieve broad distribution of its products. There can
be no assurance that the Company will be able to maintain its current
distribution arrangements or that the Company will be able to enter into and
maintain arrangements with additional distributors on acceptable terms, or on a
timely basis, if ever. The Company will be dependent upon these distributors to
assist it in promoting market acceptance of and demand for its products. In
addition, because the Company intends to rely on a limited number of
distributors, sales to these distributors could account for a significant
portion of the Company's revenues. There can be no assurance that these
distributors will devote the resources necessary to provide effective sales and
marketing support to the Company. In addition, the Company's distributors may
give higher priority to the products of other medical suppliers or their own
products, thus reducing their efforts to sell the Company's products. If any of
the Company's distributors becomes unwilling or unable to promote, market and
sell its products, the Company's business, financial condition and results of
operations would be materially adversely affected. Further, Leica and Fisher
Scientific are the exclusive distributors of the respective products in the
respective territories covered by the Company's agreements with such
distributors, and other distributors also may be granted exclusive distribution
rights. To the extent any exclusive distributor fails to adequately promote,
market and sell the Company's products, the Company may not be able to secure a
replacement distributor until after the term of the distribution contract is
complete or until such contract can otherwise be terminated.
LIMITED NUMBER OF CYTOPATHOLOGY CUSTOMERS. Due in part to a recent trend
toward consolidation of clinical laboratories, the Company expects that the
number of potential domestic customers for its cytopathology products will
decrease. Due to the relative size of the largest U.S. laboratories, it is
likely that a significant portion of the sales of the AcCell System and the
TracCell 2000 will be concentrated among a relatively small number of customers.
In order to promote acceptance in the market, the Company will need to foster an
awareness of and acceptance by these potential customers of the AcCell System
and the TracCell 2000 and of the benefits of such systems over current methods.
The Company's dependence on sales to large laboratories may strengthen the
purchasing leverage of these potential customers. There can be no assurance that
the Company will be successful in selling its products, or that any such sales
will result in sufficient revenue to allow the Company to become profitable.
UNCERTAINTY OF PROFITABLE CYTOPATHOLOGY MANUFACTURING; RELIANCE ON
THIRD-PARTY MICROBIOLOGY MANUFACTURING. The Company has developed the AcCell
System 2000 manufacturing system and marketing and sales of the AcCell System
2000 began in 1996. The Company is also currently developing the manufacturing
processes for the TracCell 2000. There can be no assurance that the Company will
be able to sell sufficient numbers of systems or develop volume manufacturing
processes that will lead to the cost-effective manufacture of the AcCell System
2000 or the TracCell 2000. The Company also faces the possibility that defects
in designs or manufacture of its products could result in product recall.
TECHNOLOGICAL CHANGE AND COMPETITION. The Company's AcCell System and
TracCell 2000, which received FDA clearance for marketing in the United States
in August 1997, face competition from companies that have developed or may be
developing competing systems. The
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Company believes that many of the Company's existing and potential competitors
possess substantially greater financial, marketing, sales, distribution and
technical resources than the Company, and more experience in research and
development, clinical trials, regulatory matters, manufacturing and marketing.
The Company is aware of two companies that currently market imaging systems to
re-examine or rescreen conventional Pap smear specimens previously diagnosed as
negative as well as two companies that are developing devices for the
preparation and analysis of Pap smear slides. The Company is aware that at least
one such company has submitted an imaging system for use as a primary means of
screening Pap smear slides under a pre-market approval application (a "PMA") to
the FDA under the United States Food, Drug and Cosmetic Act (the "FD&C Act").
Another company markets a manual rescreening test claimed to detect the presence
of cervical cancer using reagents to detect certain RNA/DNA hybrid cells. If any
company currently marketing rescreening products receives FDA clearance or
approval for use of its product as a primary screening system to replace or work
in conjunction with conventional Pap smear screening or if automated analysis
systems are developed and receive FDA clearance or approval, the use of
conventional Pap smear screening could be substantially affected and the
Company's business, financial condition and results of operations could be
materially adversely affected.
The market for the Company's current and, if developed, proposed
microbiology products is highly competitive, and the Company competes with
numerous well-established foreign and domestic companies, most of which possess
substantially greater financial, technical, marketing, personnel and other
resources than the Company and have established reputations for success in the
development, sale and service of manual and/or automated in vitro diagnostic
testing products. A significant portion of the MIC/ID testing market in the
United States is controlled by two companies, MicroScan, Inc., a wholly-owned
subsidiary of Dade International, Inc. ("MicroScan"), and bioMerieux Vitek, a
division of bioMerieux, a French company ("bioMerieux Vitek"). The ESP Product
Line faces competition from companies that have developed or may be developing
competing product lines. The Company believes that many of the Company's
existing and potential competitors possess substantially greater financial,
marketing, sales, distribution and technical resources than the Company, and
more experience in research and development, clinical trials, regulatory
matters, manufacturing and marketing. The Company is aware of at least two other
companies (including Becton, Dickinson and Company), that currently produce and
market products similar to the ESP Product Line.
The medical diagnostics industry is characterized by rapid product
development and technological advances. There can be no assurance that other
technologies or products that are functionally similar to those of the Company
are not currently available or under development, or that other companies with
expertise and resources that would encourage them to attempt to develop and
market competitive products will not develop new products that compete directly
with the Company's products. The Company's products could be rendered obsolete
or uneconomical by the introduction and market acceptance of competing products,
technological advances of the Company's current or potential competitors, or by
other approaches. There can be no assurance that the Company will be able to
compete successfully against current or future competitors or that competition,
including the development and commercialization of new products and technology,
will not have a material adverse effect on the Company's business, financial
condition and results of operations.
DELAYED OR UNSUCCESSFUL PRODUCT DEVELOPMENT. The Company's growth and
profitability will depend, in part, upon its ability to complete development of
and successfully introduce new products. The Company will likely be required to
undertake time-consuming and costly development activities and seek regulatory
approval for new products. There can be no assurance that the Company will not
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experience difficulties that could delay or prevent the successful development,
introduction and marketing of new products, that regulatory clearance or
approval of these or any new products will be granted on a timely basis, if
ever, or that the new products will adequately meet the requirements of the
applicable market or achieve market acceptance. The completion of the
development of any of the Company's products under development remains subject
to all the risks associated with the commercialization of new products based on
innovative technologies, including unanticipated technical or other problems,
manufacturing difficulties and the possible insufficiency of the funds allocated
for the completion of such development, which could result in a change in the
design, delay in the development or the abandonment of such products.
Consequently, there can be no assurance that any of the Company's products under
development will be successfully developed or manufactured or, if developed and
manufactured, that such products will meet price or performance objectives, be
developed on a timely basis or prove to be as effective as competing products.
The inability to successfully complete development of a product or application,
or a determination by the Company, for financial, technical or other reasons,
not to complete development of any product or application, particularly in
instances in which the Company has made significant capital expenditures, could
have a material adverse effect on the Company's business, financial condition
and results of operations and could cause the Company to reassess its business
strategy. Such reassessment could lead to changes in the Company's overall
business plan, including the relative emphasis on current, as well as future,
products. See "- Government Regulation."
GOVERNMENT REGULATION. The Company's products and manufacturing
processes are regulated by state and federal authorities, including the FDA and
comparable authorities in certain states and other countries. Failure to comply
with the FD&C Act and any applicable regulatory requirements can result in,
among other things, civil and criminal fines, product recalls, detentions,
seizures, injunctions and criminal prosecutions.
United States regulatory requirements promulgated under the FD&C Act
provide that many of the Company's products may not be shipped in interstate
commerce without prior authorization from the FDA. Such authorization is based
on a review by the FDA of the product's safety and effectiveness for its
intended uses. Medical devices may be authorized by the FDA for marketing in the
United States either pursuant to a 510(k) Notification or a PMA. The process of
obtaining marketing clearance from the FDA and other applicable regulatory
authorities can be expensive, uncertain and time consuming, frequently requiring
several years from the commencement of clinical trials or submission of data to
the receipt of regulatory approval.
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A 510(k) Notification, among other things, requires an applicant to show that
its products are "substantially equivalent" in terms of safety and effectiveness
to existing products that are currently permitted to be marketed. An applicant
is permitted to begin marketing a product as to which it has submitted a 510(k)
Notification at such time as the FDA issues a written finding of substantial
equivalence. Requests for additional information may delay the market
introduction of certain of an applicant's products and, in practice, initial
clearance of products often takes substantially longer than the FDA pre-market
notification review period of 90 days.
A PMA consists of the submission to the FDA of information sufficient to
establish independently that a device is safe and effective for its intended
use. A PMA must be supported by extensive data, including preclinical and
clinical trial data, as well as extensive literature to prove the safety and
effectiveness of the device. By statute, the FDA is required to respond to a PMA
within 180 days from the date of its submission; however, the approval process
usually takes substantially longer, often as long as several years. During the
review period, the FDA may conduct extensive reviews of the Company's
facilities, deliver multiple requests for additional information and
clarifications and convene advisory panels to assist in its determination.
FDA marketing clearances, if granted, may include significant
limitations on the intended uses for which a product may be marketed. FDA
enforcement policy strictly prohibits the promotion of cleared or approved
medical devices for non-approved or "off-label" uses. In addition, product
clearances or approvals may be withdrawn for failure to comply with regulatory
standards or the occurrence of unforeseen problems following initial marketing.
Under current interpretation of FDA regulations, marketing of the AcCell
2000 in the United States does not require FDA marketing clearance. Marketing of
the TracCell 2000 in the United States, however, does require pre-marketing
clearance by the FDA, which clearance was granted to the Company in August 1997.
Under current interpretation of FDA regulations, marketing of the
Company's MIC/ID microbiology products in the United States requires FDA
marketing clearance through the 510(k) Notification process. With respect to the
Company's MIC/ID testing products, 510(k) Notifications must be filed and
cleared with respect to each antibiotic used. The Company may submit
applications to add individual antibiotics to those previously cleared as the
market warrants. However, there can be no assurance that clearances will
continue to be obtained or that obtained clearances will not be withdrawn.
At the current time, alamarBlue is marketed for use in the industrial
and research markets and therefore does not require FDA marketing clearance. The
FDA could change its interpretation of the regulations and require a 510(k)
Notification or PMA submission which, if pursued, may not be cleared, and may
contain certain significant limitations on the intended uses for which the
product is marketed.
Marketing in the United States of the Company's products under
development may require additional FDA clearances. For example, the Company's
proposed automated pre-screening, specimen mapping workstation, the TracCell
2500, if developed, may not be sold in the United States unless and until the
Company has obtained FDA marketing clearance, either through a 510(k)
Notification or a PMA. In addition, marketing of the Company's proposed KB
Reader and other proposed microbiology products, if developed, is likely to
require FDA clearance through 510(k) Notifications. The Company is currently
conducting research and development with respect to such products and has not
yet begun clinical trials. There can be no assurance that any such products will
be developed or, if developed, that such products will be cleared for
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marketing by the FDA or other applicable regulatory authorities or, if such
clearance is received, that such marketing clearance will not be withdrawn.
Sales of medical devices outside of the United States are subject to
foreign regulatory requirements that vary from country to country. The time
required to obtain clearance by a foreign country may be longer or shorter than
that required for FDA clearance, and the requirements may differ. Export sales
of certain devices that have not received FDA marketing clearance generally are
subject to both FDA certificate for product for export regulations and, in some
cases, general U.S. export regulations. In order to obtain a FDA export permit,
the Company may be required to provide the FDA with documentation from the
medical device regulatory authority of the country in which the purchaser is
located. No assurance can be given that foreign regulatory clearances will be
granted on a timely basis, if ever, or that the Company will not be required to
incur significant costs in obtaining or maintaining its foreign regulatory
clearances.
The Company intends to seek ISO 9001 qualification, an international
manufacturing quality standard. The CE mark is recognized by countries that are
members of the European Union and the European Free Trade Association and is
required to be affixed to all medical devices sold in the European Union. The
AcCell 2000 is certified as complying with CE mark requirements. However, no
assurance can be given that the Company will obtain the CE mark for any proposed
products or satisfy ISO 9001 standards, or that any product that the Company may
develop or commercialize will obtain the CE mark or will obtain any other
required regulatory clearance or approval on a timely basis, if ever.
The Company is subject to certain FDA registration, record-keeping and
reporting requirements, and certain of the Company's manufacturing facilities
are obligated to follow FDA Quality System Regulation and are subject to
periodic FDA inspection. Any failure to comply with Quality System Regulation or
any other FDA or other government regulations could have a material adverse
effect on the Company's business, financial condition and results of operations.
In July 1996, the Company received from the FDA a warning letter
regarding certain procedures used in connection with the manufacture of its
microbiology products at the Sensititre facility in the United Kingdom. In such
letter, the FDA stated that the Company manufactured sterile products at such
facility and was not in compliance with Quality System Regulations relating to
the manufacture of sterile products. On August 7, 1996, the Company submitted a
written response to the FDA asserting that the products manufactured at the
Sensititre facility are not sterile. The FDA has acknowledged in writing that
the products are not represented as sterile and accepted the Company's Quality
System Regulation responses as adequate. The FDA has indicated that it will
verify the Company's implementation during its next inspection and that import
of the Company's devices will be permitted to continue.
Federal, state and foreign regulations regarding the manufacture and
sale of healthcare products and diagnostic devices are subject to future change.
The Company cannot predict what material impact, if any, such changes might have
on its business. Future changes in regulations or enforcement policies could
impose more stringent requirements on the Company, compliance with which could
adversely affect the Company's business. Such changes may relax certain
requirements, which could prove beneficial to the Company's competitors and thus
adversely affect the Company's business. In addition, regulations of the FDA,
including Quality System Regulation, and state and foreign laws and regulations,
depend heavily on administrative interpretations, and there can be no assurance
that future interpretations made by the FDA, or other regulatory authorities,
with possible retroactive effect, will not adversely affect the Company.
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In addition to the regulations directly pertaining to the Company and
its products, many of the Company's existing and potential customers are subject
to extensive regulation and governmental oversight. Regulatory changes in the
healthcare industry that adversely affect the business of the Company's
customers could have a material adverse effect on the Company's business,
financial condition and results of operations.
There can be no assurance that the Company will be able to obtain
necessary regulatory clearances in the United States or internationally on a
timely basis, if ever. Delays in the receipt of, or failure to receive, such
clearances, the loss of previously received listings or clearances, or failure
to comply with existing or future regulatory requirements would have a material
adverse effect on the Company's business, financial condition and results of
operations.
PROTECTION OF INTELLECTUAL PROPERTY. The Company relies on a combination
of patents, licensing arrangements, trade names, trademarks, trade secrets,
know-how and proprietary technology and policies and procedures for maintaining
the secrecy of trade secrets, know-how and proprietary technology in order to
secure and protect its intellectual property rights. The Company owns 24 issued
patents (18 U.S. patents and six are foreign patents), nine of which relate to
cytopathology. The Company is prosecuting an additional 37 patent applications
(16 U.S. applications and 21 foreign applications) of which 30 applications
related to cytopathology and seven relate to microbiology.
The Company received a notice of intent to grant a European patent
relating to an issued U.S. patent with respect to a portion of the alamarBlue
microbiology technology. However, subsequently BioMerieux (one of the Company's
competitors) filed an Opposition to the grant of such European patent. The
Company filed its response to such Opposition in November 1997. There can be no
assurance that such Opposition will be overcome and that such European patent
will issue.
None of the Company's pending patent applications have been granted as
of the date of this Prospectus, and there can be no assurance that any such
patent application will result in an issued patent. The Company may, in the
future, file additional patent applications; however, there can be no assurance
that the Company will be successful in obtaining approval of any future patent
applications it files with respect to its technologies. In addition, since
patent applications in the United States are maintained in secrecy until patents
issue, and since publications of discoveries in the scientific or patent
literature tend to lag behind actual discoveries by several months, the Company
cannot be certain that the Company or other relevant patent application filer
was the first creator of inventions covered by pending patent applications or
that such persons were the first to file patent applications for such
inventions.
There also can be no assurance that any patents, patent applications and
patent licenses will adequately cover the Company's technologies. Protections
relating to portions of such technologies may be challenged or circumvented by
competitors, and other portions may be in the public domain or protectable only
under state trade secret laws.
The Company owns two U.S. trademark registrations for the trademark
"Sensititre," and owns "ESP," "EZ DRAW," and "EZ VIEW," and has filed U.S.
trademark applications for the trademarks "AcCell," "MacCell," "FluoreTone,"
"INSIGHT," "SpeciFind," "Relational Cytopathology Review Guide," "MacroVision,"
"Pathos," "AcCell Savant," "And you thought you'd seen it all" and "TracCell"
and is currently preparing one more trademark application for filing. The
Company may file additional U.S. and
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foreign trademark applications in the future. However, no trademark
registrations have yet been granted to the Company, and there can be no
assurance that any such registrations will be granted. In addition, there can be
no assurance that third parties have not or will not adopt or register marks
that are the same or substantially similar to those of the Company, or that such
third parties will not be entitled to use such marks to the exclusion of the
Company. Selecting new trademarks to resolve such situations could involve
significant costs, including the loss of goodwill already gained by the marks
previously used.
The Company relies for protection of its trade secrets, know-how and
proprietary technology on nondisclosure and confidentiality agreements with its
employees, consultants, distributors, suppliers, researchers and advisors. There
can be no assurance that such agreements will provide meaningful protection for
the Company's trade secrets, know-how or proprietary technology in the event of
any unauthorized use or disclosure of such information. In addition, others may
obtain access to, or independently develop, technologies or know-how similar to
that of the Company.
There can be no assurance that the Company's patents, patent
applications, patent licenses, trademarks and trade secret protections will
adequately protect the Company from potential infringement or misappropriation
by third parties. Historically, the Company has been required to undertake
costly litigation to enforce its intellectual property rights. Although the
Company is not currently aware of any potential infringement, future litigation
by the Company may be necessary to enforce its patent rights, as well as to
protect its trade secrets, know-how and proprietary technology, or to determine
the scope and validity of the proprietary rights of others. Any such litigation
could result in substantial cost to and diversion of effort by the Company.
The Company's success will also depend on its ability to avoid
infringement of patent or other proprietary rights of others. The Company is not
aware that it is infringing any such rights of a third party, nor is it aware of
proprietary rights of others for which it will be required to obtain a license
in order to develop its products. However, there can be no assurance that the
Company is not infringing the proprietary rights of others, or that the Company
will not be required to defend itself against claimed infringement of the rights
of others. Adverse determinations in any such litigation could subject the
Company to significant liability to third parties, could require the Company to
seek licenses from third parties and could prevent the Company from
manufacturing, selling or using certain of its products or technologies, any of
which could have a material adverse effect on the Company.
DEPENDENCE ON SUPPLIERS. Certain key components and raw materials used
in the manufacturing of the Company's products are currently obtained from
single vendors. Although the Company believes that alternative sources for such
components and raw materials are available, any supply interruption in a
single-sourced component or raw material would have a material adverse effect on
the Company's ability to manufacture products until a new source of supply were
qualified. There can be no assurance that the Company would be successful in
qualifying additional sources on a timely basis, if ever. Failure to do so would
have a material adverse effect on the Company's business, financial condition
and results of operations. In addition, an uncorrected impurity or a supplier's
variation in a raw material, either unknown to the Company or incompatible with
the Company's manufacturing process, could have a material adverse effect on the
Company's ability to manufacture certain of its products.
DEPENDENCE ON KEY EMPLOYEES. The Company believes that its success will
depend to a significant extent upon the efforts and abilities of a small group
of executive, scientific and marketing personnel, and in particular on Peter P.
Gombrich, the Company's Chairman of the Board, Chief Executive
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Officer and President. The loss of the services of one or more of these key
personnel could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, the Company's future
success will depend upon its ability to continue to attract and retain qualified
scientific and management personnel who are in great demand. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel.
POTENTIAL FLUCTUATIONS IN FUTURE QUARTERLY RESULTS. The Company expects
that its operating results will fluctuate significantly from quarter to quarter
in the future and will depend on various factors, many of which are outside the
Company's control. These factors include the success of the marketing efforts of
the Company and its distribution partners, the likelihood, timing and costs
associated with obtaining necessary regulatory clearances or approvals, the
timing and level of expenditures associated with expansion of sales and
marketing activities and overall operations, the Company's ability to cost
effectively expand manufacturing capacity and maintain consistently acceptable
yields, the timing of establishment of strategic distribution arrangements and
the success of the activities conducted under such arrangements, changes in
demand for the Company's products, order cancellations, competition, changes in
government regulation and other factors, the timing of significant orders from
and shipments to customers, and general economic conditions. These factors are
difficult to forecast, and these or other factors could have a material adverse
effect on the Company's business, financial condition and results of operations.
Fluctuations in quarterly demand for products may adversely affect the
continuity of the Company's manufacturing operations, increase uncertainty in
operational planning, disrupt cash flow from operations and increase the
volatility of the Company's stock price. The Company's expenditures are based in
part on the Company's expectations as to future revenue levels and to a large
extent are fixed in the short term. If revenues do not meet expectations, the
Company's business, financial condition and results of operations could be
materially adversely affected. The Company believes that period to period
comparisons of its operating results are not necessarily meaningful and should
not be relied upon as indications of future performance. As a result of the
foregoing factors, it is likely that in some future quarter the Company's
revenue or operating results will be below the expectations of public market
analysts and investors. In such event, the price of the Company's Common Stock
could be materially adversely affected.
VOLATILITY OF STOCK PRICE. The market price of the shares of the
Company's Common Stock, like that of the common stock of many other medical
products and high technology companies, has in the past been, and is likely in
the future to continue to be, highly volatile. Factors such as fluctuations in
the Company's operating results, announcements of technological innovations or
new commercial products by the Company or competitors, government regulation,
changes in the current structure of the health care financing and payment
systems, developments in or disputes regarding patent or other proprietary
rights, economic and other external factors and general market conditions may
have a significant effect on the market price of the Common Stock. Moreover, the
stock market has from time to time experienced extreme price and volume
fluctuations which have particularly affected the market prices for medical
products and high technology companies and which have often been unrelated to
the operating performance of such companies. These broad market fluctuations, as
well as general economic, political and market conditions, may adversely affect
the market price of the Company's Common Stock. In the past, following periods
of volatility in the market price of a company's common stock, securities class
action litigations have occurred against the issuing company. There can be no
assurance that such litigation will not occur in the future with respect to the
Company. Such litigation could result in substantial costs and diversion of
management's attention and resources, which could have a material adverse effect
on the Company's business, financial condition and results of operations.
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Any adverse determination in such litigation could also subject the Company to
significant liabilities.
NEED TO MANAGE EXPANDING OPERATIONS. The Company will be required to
expand its operations, particularly in the areas of sales and marketing and
manufacturing. Such expansion will likely result in new and increased
responsibilities for management personnel and place significant strain upon the
Company's management, operating and financial systems and resources. To
accommodate any such growth and compete effectively, the Company may be required
to implement and/or improve its information systems, procedures and controls,
and to expand, train, motivate and manage its work force. The Company's future
success will depend to a significant extent on the ability of its current and
future management personnel to operate effectively, both independently and as a
group. There can be no assurance that the Company's personnel, systems,
procedures and controls will be adequate to support the Company's future
operations. Any failure to implement and improve the Company's operational,
financial and management systems or to expand, train, motivate or manage
employees as required by future growth, if any, could have a material adverse
effect on the Company's business, financial condition and results of operations.
RISK OF LITIGATION; RISK OF PRODUCT RECALLS; POTENTIAL UNAVAILABILITY OF
INSURANCE. Commercial screening of Pap smear tests has been characterized by
significant malpractice litigation. The Company faces a risk of exposure to
product liability, errors and omissions or other claims if the use of its AcCell
System 2000 or any future potential products, including the TracCell 2000, is
alleged to have contributed to or resulted in a false negative diagnosis. While
neither the AcCell System 2000 nor the TracCell 2000 is purported to offer any
clinical diagnosis, there can be no assurance that the Company will avoid
significant litigation. The Company also faces the possibility that defects in
designs or manufacture of its products could result in product recall.
The Company currently maintains a product liability insurance policy
providing maximum coverage of $10.0 million and per occurrence coverage of $10.0
million. The medical device industry in general has experienced increasing
difficulty in obtaining and maintaining reasonable product liability coverage,
and substantial increases in insurance premium costs in many cases have rendered
coverage economically impractical. There can be no assurance that the Company's
existing product liability insurance will be adequate or continue to be
available, or that additional product liability insurance will be available to
the Company when needed or at a reasonable cost. An inability to maintain
insurance at acceptable costs or otherwise protect against potential product
liability could prevent or inhibit the continued commercialization of the
Company's products. In addition, a product liability claim in excess of relevant
insurance coverage or a product recall could have a material adverse effect on
the Company's business, financial condition and results of operations.
ENVIRONMENTAL REGULATION. The Company is subject to a variety of local,
state, federal and foreign government regulations relating to the storage,
discharge, handling, emission, generation, manufacture and disposal of toxic,
infectious and other hazardous substances used to manufacture the Company's
products. The failure to comply with current or future regulations could result
in the imposition of substantial fines against the Company, suspension of
production, alteration of its manufacturing processes or cessation of
operations. There can be no assurance that the Company will not be required to
incur significant costs to comply with any such laws and regulations in the
future, or that such laws or regulations will not have a material adverse effect
on the Company's business, financial condition and results of operations. Any
failure by the Company to control the use, disposal, removal or storage of, or
to adequately restrict the discharge of, or assist in the cleanup of, hazardous
chemicals or hazardous, infectious or toxic substances could subject the Company
to significant liabilities, including joint and several liability under certain
statutes. The imposition
24
<PAGE> 25
of such liabilities could have a material adverse effect on the Company's
business, financial condition and results of operations.
IMPACT OF MEDICARE, MEDICAID AND OTHER THIRD-PARTY REIMBURSEMENT. In the
United States, some Pap smear screenings and MIC/ID tests are currently paid for
by the patient directly, and the level of reimbursement by third party payers
that do provide reimbursement varies considerably. Third party payers
(Medicare/Medicaid, private health insurance, health administration authorities
in foreign countries and other organizations) may affect the demand, pricing or
relative attractiveness of the Company's products and services by regulating the
frequency and maximum amount of reimbursement for Pap smear screening and MIC/ID
testing provided by such payers or by not providing any reimbursement at all.
Restrictions on reimbursement for Pap smear screening and MIC/ID testing may
limit the price that the Company can charge for its products or reduce the
demand for them. In addition, if the level of reimbursement provided by Medicare
and Medicaid is significantly below the amount laboratories and hospitals charge
patients to perform Pap smear screening and MIC/ID testing, respectively, the
size of the potential market available to the Company may be reduced. There can
be no assurance that the level of reimbursement for Pap smear screening and
MIC/ID testing will achieve, or be maintained at, levels necessary to permit the
Company to generate substantial revenues or be profitable.
In the international market, reimbursement by private third party
medical insurance providers, including governmental insurers and providers,
varies from country to country. In certain countries, the Company's ability to
achieve significant market penetration may depend upon the availability of third
party or governmental reimbursement.
UNCERTAINTY AND POSSIBLE NEGATIVE EFFECTS OF HEALTH CARE REFORM. The
health care industry is undergoing fundamental changes that are the result of
political, economic and regulatory influences. In the United States,
comprehensive programs have been proposed that seek to control the escalation of
health care expenditures within the economy. Reforms that have been, and may be,
considered include controls on health care spending through limitations on the
increase in private health insurance premiums and Medicare and Medicaid
spending, the creation of large insurance purchasing groups and other
fundamental changes to the health care delivery system. Health care reform
could, for example, result in a reduction in the recommended frequency of Pap
smear screening or limitations on reimbursement which would likely reduce the
demand for the Company's cytopathology products. Demand for the Company's MIC/ID
products could be similarly affected. The Company anticipates that Congress and
state legislatures will continue to review and assess cost containment measures,
alternative health care delivery systems and methods of payment, and that public
debate of these issues will likely continue. Due to uncertainties regarding the
outcome of health care reform initiatives and their enactment and
implementation, the Company cannot predict what reforms will be proposed or
adopted or the effect that such proposals or their adoption may have on the
Company. There can be no assurance that future health care legislation or other
changes in the administration or interpretation of government health care or
third party reimbursement programs will not have a material adverse effect on
the Company's business, financial condition and results of operations.
INTERNATIONAL SALES AND OPERATIONS RISKS. The Company sells microbiology
products and intends to sell its cytopathology and any future products to
customers both domestically and internationally. International sales and
operations may be limited or disrupted by the imposition of government controls,
export license requirements, political instability, trade restrictions, changes
in tariffs or difficulties in staffing and managing
25
<PAGE> 26
international operations. Foreign regulatory authorities often establish product
standards different from those in the United States and any inability to obtain
foreign regulatory approvals on a timely basis could have a material adverse
effect on the Company's international business operations. Additionally, the
Company's business, financial condition and results of operations may be
adversely affected by increases in duty rates and difficulties in obtaining
required licenses and permits. There can be no assurance that the Company will
be able to successfully commercialize its products, or any future products, in
any foreign market.
LACK OF DIVIDENDS. The Company has never paid cash or other dividends on
its Common Stock and does not anticipate paying any cash dividends on its Common
Stock in the foreseeable future. See "Dividend Policy."
AUTHORIZATION AND POTENTIAL ISSUANCE OF PREFERRED STOCK; DELAWARE
ANTI-TAKEOVER LAW. The Company's Certificate of Incorporation authorizes the
issuance of Preferred Stock with such designations, rights and preferences as
may be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
the Company's Common Stock. Although the Company does not currently intend to
issue any shares of its Preferred Stock, in the event of issuance, such shares
could be utilized, under certain circumstances, as a method of discouraging,
delaying or preventing a change in control of the Company. There can be no
assurance that the Company will not, under certain circumstances, issue shares
of its Preferred Stock. Furthermore, the Company may in the future adopt other
measures that may have the effect of delaying, deferring or preventing a change
in control of the Company. Certain of such measures may be adopted without any
further vote or action by the stockholders, although the Company has no present
plans to adopt any such measures. The Company is also afforded the protections
of Section 203 of the Delaware General Corporation Law, which could delay or
prevent a change in control of the Company, impede a merger, consolidation or
other business combination involving the Company or discourage a potential
acquiror from making a tender offer or otherwise attempting to obtain control of
the Company.
SHARES ELIGIBLE FOR FUTURE SALE. Sales of substantial amounts of Common
Stock in the public market, or the possibility of such sales occurring, could
adversely affect prevailing market prices for the Common Stock or the future
ability of the Company to raise capital through an offering of equity
securities. As of November 7, 1997, the Company has outstanding 22,681,050
shares of Common Stock, warrants to purchase 4,521,619 shares of Common Stock
(including the 1,025,000 Warrants Shares to which this Prospectus relates) and
options to purchase 2,600,511 shares of Common Stock (of which 1,591,142 options
are subject to stockholder approval of the 1997 Stock Option Plan). Of the
outstanding shares, 116,000 shares are subject to forfeiture if certain
milestones under a microbiology product development agreement are not achieved.
As of November 7, 1997, 21,934,05 shares have been sold or are available for
immediate sale in the public market pursuant to effective registration
statements or exemptions from registration under the Securities Act of 1933, as
amended (the "Securities Act"), subject in the case of certain holders to the
limitations applicable to affiliates pursuant to Rule 144 under the Securities
Act. The Company has registered the issuance of 1,240,010 shares of Common Stock
issuable upon the exercise of options outstanding pursuant to certain of the
Company's stock option plans. Such shares are available for immediate sale in
the public market upon exercise of options. In addition to the resale of the
3,770,000 Shares to be registered hereby, the resale of approximately 3,175,836
shares of Common Stock underlying immediately exercisable warrants has been
registered pursuant to currently effective
26
<PAGE> 27
registration statements.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares of
Common Stock by the Selling Securityholders. If the holders exercise the
Warrants to acquire all the Warrant Shares, the Company will receive aggregate
gross proceeds of approximately $3,281,250, at the current exercise prices which
will be used as unlocated working capital. The Company has agreed to pay certain
expenses in connection with this Offering, currently estimated to be
approximately $24,000.
27
<PAGE> 28
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is quoted on the Nasdaq National Market under
the trading symbol "ACMI." On November 7, 1997, the last reported sale price of
the Common Stock on the Nasdaq National Market was $2.06 per share. The table
below sets forth, for the periods indicated, the range of high and low sales
prices for the Common Stock on the Nasdaq National Market. At September 11,
1997, the Company had approximately 306 stockholders of record.
<TABLE>
<CAPTION>
High Low
---- ----
<S> <C> <C>
1995 FISCAL YEAR
First Quarter $ 1.75 $ 0.31
Second Quarter 1.75 0.50
Third Quarter 1.50 0.81
Fourth Quarter 1.50 0.75
TRANSITION PERIOD (1)
October 1, 1995 through December 31, 1995 $ 1.69 $ 1.00
1996 FISCAL YEAR (1)
First Quarter $ 6.25 $ 1.06
Second Quarter 9.38 4.88
Third Quarter 7.00 4.16
Fourth Quarter 5.06 2.25
1997 FISCAL YEAR
First Quarter $ 4.44 $ 2.41
Second Quarter 4.13 3.00
Third Quarter 4.25 2.25
Fourth Quarter (through November 7, 1997) 3.00 1.88
</TABLE>
- -------------------------------
(1) On December 31, 1995, the Company changed its fiscal year end from
September 30 to December 31.
28
<PAGE> 29
SELLING SECURITYHOLDERS
The following table sets forth information as of November 7, 1997 (the
"Reference Date") with respect to the beneficial ownership of shares of Common
Stock by each of the Selling Securityholders. At the Reference Date there were
22,681,050 shares of Common Stock outstanding.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED SHARES TO OWNED
NAME AND ADDRESS PRIOR TO OFFERING(1) BE SOLD IN AFTER OFFERING(1)
OF BENEFICIAL OWNER NUMBER PERCENT OFFERING NUMBER PERCENT
- ------------------- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Shannon P. Acks(2) 52,500 * 52,500 -0- -0-
American Equities Overseas,
Inc.(3) 139,655 * 5,880 133,775 *
Basil Asciutto(5)(6) 8,427 * 8,427 -0- -0-
Richard L. Baselon & Eileen
A. Baselon(7) 72,000 * 42,000 30,000 *
Andy Bello(5)(8) 720 * 720 -0- -0-
Robert Beurel(5)(9) 5,554 * 5,554 -0- -0-
Caisse Centrale des
Banques Popilaires(10) 42,000 * 42,000 -0- -0-
Leslie G. Callahan, III(11) 42,000 * 42,000 -0- -0-
Richard Campanella(5)(12) 220 * 220 -0- -0-
Clariden Bank(13) 63,000 * 63,000 -0- -0-
Norman H. Cohen(14) 10,500 * 10,500 -0- -0-
Commonwealth Associates,
Inc.(5)(15) 922,493 4.0% 20,000 902,493 3.9
Conzett Europa-Inv. Limited(16) 315,000 * 315,000 -0- -0-
Mark Danieli(5)(17) 444 * 444 -0- -0-
DW Trustees (B.V.I.) Limited(18) 21,000 * 21,000 -0- -0-
Egger & Co.(19) 105,000 * 105,000 -0- -0-
</TABLE>
29
<PAGE> 30
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED SHARES TO OWNED
NAME AND ADDRESS PRIOR TO OFFERING(1) BE SOLD IN AFTER OFFERING(1)
OF BENEFICIAL OWNER NUMBER PERCENT OFFERING NUMBER PERCENT
- ------------------- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Cornelia Eldridge(5)(20) 4,000 * 4,000 -0- -0-
Energa Capital Forbank & Co.(21) 63,000 * 63,000 -0- -0-
Kenneth R. Falchuk(22) 34,500 * 21,000 13,500 *
Michael S. Falk(5)(23) 1,604,422 6.7% 96,521 1,507,901 6.4%
Fifth Third Bank of Western
Ohio, Trustee(24) 179,500 * 63,000 116,500 *
France Finance IV(25) 134,000 * 84,000 50,000 *
Anthony Giardina(5)(26) 1,387 * 1,387 -0- -0-
Paul D. Goldenheim(27) 14,200 * 10,500 3,700 *
Zachary Gomes(28) 52,000 * 42,000 10,000 *
Jonathan D. Green(29) 120,000 * 21,000 99,000 *
Brian Greenstein(5)(30) 685 * 129 556 *
Marco Guidice(5)(31) 91 * 91 -0- -0-
Richard Galterio(5)(32) 5,114 * 114 5,000 *
The Hart Family Trust(33) 10,500 * 10,500 -0- -0-
Susan Hoffman(5)(34) 1,000 * 1,000 -0- -0-
Wilfred Huse(35) 64,500 * 21,000 43,500 *
Wilfred Huse, MD, Inc. Money
Purchase Pension Plan(36) 21,000 * 21,000 -0- -0-
Jerry L. & Deborah J.
Ivy JT Ten(37) 42,000 * 42,000 -0- -0-
James W. Jackman(38) 21,000 * 21,000 -0- -0-
William J. and Ann S.
Jackson JTROS(39) 42,000 * 42,000 -0- -0-
JF Shea Co., Inc. as Nominee
1997-7(40) 672,000 2.9 672,000 -0- -0-
</TABLE>
30
<PAGE> 31
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED SHARES TO OWNED
NAME AND ADDRESS PRIOR TO OFFERING(1) BE SOLD IN AFTER OFFERING(1)
OF BENEFICIAL OWNER NUMBER PERCENT OFFERING NUMBER PERCENT
- ------------------- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Jo-Bar Enterprises LLC(41) 122,000 * 42,000 82,000 *
Peggy Jordan(42) 42,000 * 42,000 -0- -0-
LAD Equity Partners, LP(43) 42,000 * 42,000 -0- -0-
Stephen LaBarbara(5)(44) 13,552 * 3,460 10,092 *
Vincent LaBarbara(5)(45) 6,192 * 6,192 -0- -0-
Daniel R. Lee(46) 142,000 * 42,000 100,000 *
Albert Legere(5)(47) 114 * 114 -0- -0-
Craig Leppla(5)(48) 444 * 444 -0- -0-
The Lesile Group(49) 4,317 * 1,027 3,290 *
Douglas Levine(50) 15,750 * 15,750 -0- -0-
Beth Lipman(5)(51) 7,445 * 500 6,945 *
John V. Luck(52) 21,000 * 21,000 -0- -0-
Michael R. Lyall(5)(53) 3,890 * 3,890 -0- -0-
Greg Manocherian(54) 10,500 * 10,500 -0- -0-
Jed R. Manocherian 1995
Property Trust(55) 5,250 * 5,250 -0- -0-
Mario Marsillo(5)(56) 1,030 * 1,030 -0- -0-
Patrick H. and Lee M.
Miller, Jr. JTWROS(57) 210,000 * 210,000 -0- -0-
Alvin Mirman(5)(58) 7,112 * 2,112 5,000 *
Mizeboume Investment Corp.(59) 21,000 * 21,000 -0- -0-
Ronand Moschetta(5)(60) 1,109 * 1,109 -0- -0-
Robert Nass(5)(61) 665 * 665 -0- -0-
Northlea Partners Ltd.(62) 342,657 1.5% 21,000 321,657 1.4
Robert O'Sullivan(5)(63) 15,579 * 8,405 7,174 *
</TABLE>
31
<PAGE> 32
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED SHARES TO OWNED
NAME AND ADDRESS PRIOR TO OFFERING(1) BE SOLD IN AFTER OFFERING(1)
OF BENEFICIAL OWNER NUMBER PERCENT OFFERING NUMBER PERCENT
- ------------------- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Robert O'Sullivan Family
Trust(5)(64) 21,000 * 21,000 -0- -0-
Thomas A. Peacock(65) 52,000 * 42,000 10,000 *
Richard Perreira(66) 500 * 500 -0- -0-
Estate of Daniel Parker(5)(67) 4,317 * 1,027 3,290 *
Robert L. Priddy(68) 1,537,410 6.6% 637,410 900,000 3.8
Eric Rand(5)(69) 9,151 * 8,595 556 *
Vincent Riccardi(5)(70) 1,458 * 91 1,367 *
Scott Rickman(5)(71) 2,000 * 2,000 -0- -0-
John Robinson(5)(72) 76,359 * 48,262 28,097 *
Wayne Rogers(73) 114,500 * 21,000 93,500 *
Keith Rosenbloom(5)(74) 21,373 * 8,831 12,542 *
Cathy Ross(5)(75) 500 * 500 -0- -0-
Royal Bank of Canada
Trust Company(76) 157,500 * 157,500 -0- -0-
Eric Rubenstein(5)(77) 889 * 889 -0- -0-
William R. Schoen(78) 31,000 * 21,000 10,000 *
Muarry Segal(5)(79) 5,562 * 1,284 4,278 *
Suzanne Schiller(80) 56,000 * 21,000 35,000 *
Edward T. Schneider(81) 66,000 * 42,000 24,000 *
Bradford Van Sicien(5)(82) 500 * 500 -0- -0-
Edmund Shea(83) 1,558 * 1,558 -0- -0-
Stephen Stein(5)(84) 500 * 500 -0- -0-
Inder Tallur(5)(85) 553 * 553 -0- -0-
Theodore Stern Money
</TABLE>
32
<PAGE> 33
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED SHARES TO OWNED
NAME AND ADDRESS PRIOR TO OFFERING(1) BE SOLD IN AFTER OFFERING(1)
OF BENEFICIAL OWNER NUMBER PERCENT OFFERING NUMBER PERCENT
- ------------------- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Purchase Plan(86) 168,000 * 168,000 -0- -0-
Robert Tucker(5)(87) 4,317 * 1,027 3,290 *
Vitali Maritime Corp.(88) 192,000 * 42,000 150,000 *
Michael Volpe(5)(89) 10,558 * 558 10,000 *
Stephen J. Warner(90) 58,929 * 21,000 37,929 *
Joyce Westmoreland(91) 41,000 * 21,000 20,000 *
David Wynn(5)(92) 590 * 590 -0- -0-
Joseph P. Wynne(5)(93) 3,890 * 3,890 -0- -0-
Kenneth Zises(94) 37,000 * 21,000 16,000 *
</TABLE>
- -----------------------
* Represents less than 1%.
(1) Unless otherwise noted, the Company believes that all persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock listed as beneficially owned by them. A person
is deemed to be the beneficial holder of securities that can be
acquired by such person within 60 days from the Reference Date upon the
exercise of warrants or Notes. Each beneficial owner's percentage
ownership is determined by including shares underlying Notes or
warrants which are exercisable by such person currently or within 60
days following the Reference Date, and excluding shares underlying
options and warrants held by any other person. The percentage of shares
owned after the Offering is calculated assuming that 25,918,732 shares
of Common Stock will be outstanding, which includes the 22,148,732
shares outstanding on the Reference Date and an additional 3,745,000
Shares underlying the Warrants and Notes which would have to be
exercised in order to sell the Shares.
(2) Shares listed as held by Ms. Acks include 12,500 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 40,000 shares underlying Notes that are not
exercisable within 60 days of the Reference Date.
(3) Shares listed as held by American Equities Overseas, Inc. include
139,655 shares underling warrants that are exercisable currently or
within 60 days following the Reference Date. The Shares offered in this
Offering by American Equities Overseas, Inc. are underlying currently
exercisable Warrants transferred to it by Commonwealth Associates. Such
Warrants were issued as compensation for the services of Commonwealth
Associates in connection with the Private Placement. American Equities
Overseas, Inc. has served as a placement agent in the sale of the
Company's securities for which it has received commissions in the forms
of cash and securities. See "Certain Relationships and Transactions."
(4) This footnote intentionally left blank.
33
<PAGE> 34
(5) Shares listed as being offered in this Offering by the Selling
Securityholder are Shares underlying Warrants issued directly to
Commonwealth Associates and subsequently transferred by it to the
Selling Securityholder. Such Warrants were issued to Commonwealth
Associates as compensation for services as placement agent in the
Private Placement. The Selling Securityholder is currently or was
formerly associated with Commonwealth Associates. Commonwealth
Associates disclaims beneficial ownership of such Shares and Warrants.
See "Certain Relationships and Transactions."
(6) Shares listed as held by Mr. Asciutto include 8,427 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(7) Shares listed as held by the Baselons include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(8) Shares listed as held by Mr. Bello include 720 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(9) Shares listed as held by Mr. Beurel include 5,554 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(10) Shares listed as held by Caisse Centrale des Banques Popilaires include
10,000 shares underlying Warrants that are exercisable currently or
within 60 days following the Reference Date and 32,000 shares underlying
Notes that are convertible within 60 days of the Reference Date.
(11) Shares listed as held by Mr. Callahan include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(12) Shares listed as held by Mr. Campanella include 220 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(13) Shares listed as held by Clariden Bank include 15,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 48,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(14) Shares listed as held by Mr. Cohen include 2,500 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 8,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(15) The number of shares owned prior to the Offering includes 380,271
shares underlying warrants and the number of shares owned after the
Offering includes 360,271 shares underlying warrants, each such
warrant is exercisable currently or within 60 days of the Reference
Date. Excludes securities held in Commonwealth Associates' trading
account. Certain of the Warrants to purchase shares are held in the name
of Commonwealth Associates for the account of its equity owners, certain
of its employees and certain officers and/or directors of its corporate
general partner. Commonwealth Associates has acted as underwriter and
placement agent in sales of the Company's
34
<PAGE> 35
securities for which it has received commissions in the form of cash and
securities. See "Certain Relationships and Transactions."
(16) Shares listed as held by Conzett Europa-Inv. Limited include 75,000
shares underlying Warrants that are exercisable currently or within 60
days following the Reference Date and 240,000 shares underlying Notes
that are convertible within 60 days of the Reference Date.
(17) Shares listed as held by Mr. Danieli include 444 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(18) Shares listed as held by DW Trustees include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(19) Shares listed as held by Egger & Co. include 25,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 80,0000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(20) Shares listed as held by Ms. Eldridge include 4,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(21) Shares listed as held by Energa Capital Forbank & Co. include 15,000
shares underlying Warrants that are exercisable currently or within 60
days following the Reference Date and 48,000 shares underlying Notes
that are convertible within 60 days of the Reference Date.
(22) Shares listed as held by Mr. Falchuk include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(23) Mr. Falk directly owns warrants to purchase up to 671,929 shares of
Common Stock which are exercisable currently or within 60 days following
the Reference Date. The number of shares listed as owned by Mr. Falk
includes an additional 542,222 shares, and 380,271 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date, held by Commonwealth Associates (excluding securities
held in Commonwealth Associates' trading account). Mr. Falk is a control
person of the corporate general partner of Commonwealth Associates and
may be deemed to be beneficial owner of securities held by Commonwealth
Associates. The number of shares also includes an additional 10,000
shares underlying warrants that are exercisable currently or within 60
days following the Reference Date held by Anne Falk, Mr. Falk's spouse.
Mr. Falk disclaims beneficial ownership of the securities held by
Commonwealth Associates except to the extent of his percentage ownership
interests in Commonwealth Associates. Warrants held directly by Mr. Falk
were transferred to him by Commonwealth Associates. Commonwealth
Associates disclaims beneficial ownership of such warrants and the
underlying warrant shares. Such warrants were issued to Commonwealth
Associates as compensation for certain services rendered to the Company.
The shares listed under the caption "Shares to be Sold in Offering"
include 20,000 shares to be sold by Commonwealth Associates in this
Offering. See "Certain Relationships and Transactions."
35
<PAGE> 36
(24) Shares listed as held by Fifth Third Bank include 15,000 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date and 48,000 shares underlying Notes that are
convertible within 60 days of the Reference Date.
(25) Shares listed as held by France Finance IV include 70,000 shares
underlying warrants that are exercisable currently or within 60 days
following the Reference Date and 64,000 shares underlying Notes that are
convertible within 60 days of the Reference Date.
(26) Shares listed as held by Mr. Giardina include 1,387 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(27) Shares listed as held by Mr. Goldenheim include 2,500 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 8,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(28) Shares listed as held by Mr. Gomes include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(29) Shares listed as held by Mr. Green include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(30) Shares listed as held by Mr. Greenstein include 685 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(31) Shares listed as held by Mr. Guidice include 91 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(32) Shares listed as held by Mr. Galterio include 5,114 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(33) Shares listed as held by The Hart Family Trust include 2,500 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date and 80,000 shares underlying Notes that are
convertible within 60 days of the Reference Date.
(34) Shares listed as held by Ms. Hoffman include 1,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(35) Shares listed as held by Mr. Huse include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(36) Shares listed as held by the Huse Money Purchase Pension Plan include
5,000 shares underlying Warrants that are exercisable currently or
within 60 days following the Reference Date and 16,000 shares underlying
Notes that are convertible within 60 days of the Reference Date.
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(37) Shares listed as held by the Ivys include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(38) Shares listed as held by Mr. Jackman include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(39) Shares listed as held by the Jacksons include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(40) Shares listed as held by JF Shea Co, Inc. include 160,000 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date and 512,000 shares underlying Notes that
are convertible within 60 days of the Reference Date.
(41) Shares listed as held by Jo-Bar Enterprises LLC include 10,000 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date and 32,000 shares underlying Notes that are
convertible within 60 days of the Reference Date.
(42) Shares listed as held by Ms. Jordan include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(43) Shares listed as held by LAD Equity Partners include 10,000 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date and 32,000 shares underlying Notes that are
convertible within 60 days of the Reference Date.
(44) Shares listed as held by Stephen LaBarbara include 13,552 shares
underlying warrants that are exercisable currently or within 60 days
following the Reference Date.
(45) Shares listed as held by Vincent LaBarbara include 6,192 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date.
(46) Shares listed as held by Mr. Lee include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(47) Shares listed as held by Mr. Legere include 114 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(48) Shares listed as held by Mr. Leppla include 444 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(49) Shares listed as held by The Lesile Group include 4,317 shares
underlying warrants that are exercisable currently or within 60 days
following the Reference Date.
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(50) Shares listed as held by Mr. Levine include 3,750 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 12,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(51) Shares listed as held by Ms. Lipman include 7,445 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(52) Shares listed as held by Mr. Luck include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(53) Shares listed as held by Mr. Lyall include 3,890 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(54) Shares listed as held by Mr. Manocherian include 2,500 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 8,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(55) Shares listed as held by Jed R. Manocherian 1995 Property Trust include
1,250 shares underlying Warrants that are exercisable currently or
within 60 days following the Reference Date and 4,000 shares underlying
Notes that are convertible within 60 days of the Reference Date.
(56) Shares listed as held by Mr. Marsillo include 1,030 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(57) Shares listed as held by the Millers include 50,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 160,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(58) Shares listed as held by Mr. Mirman include 7,112 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(59) Shares listed as held by Mizebourme Investment Corp. include 5,000
shares underlying Warrants that are exercisable currently or within 60
days following the Reference Date and 16,000 shares underlying Notes
that are convertible within 60 days of the Reference Date.
(60) Shares listed as held by Mr. Moschetta include 1,109 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(61) Shares listed as held by Mr. Nass include 665 shares underlying Warrants
that are exercisable currently or within 60 days following the Reference
Date.
(62) Shares listed as held by Northlea Partners Ltd. include 5,000 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date and 16,000 shares underlying Notes that are
convertible within 60 days of the Reference Date. Includes 34,895 shares
underlying stock options held by John D. Abeles, MD that are exercisable
currently or within 60 days following the Reference Date. Includes
253,713 shares of Common Stock held of record and
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<PAGE> 39
38,049 shares underlying warrants exercisable currently or within 60
days following the Reference Date held of record by Northlea Partners
Limited, as to which Dr. Abeles disclaims beneficial ownership except
with respect to his 1% general partnership ownership. Dr. Abeles served
as a director of the Company from 1988 until May 1997.
(63) Shares listed as held by Mr. O'Sullivan include 15,579 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(64) Shares listed as held by Robert O'Sullivan Family Trust include 5,000
shares underlying Warrants that are exercisable currently or within 60
days following the Reference Date and 16,000 shares underlying Notes
that are convertible within 60 days of the Reference Date.
(65) Shares listed as held by Mr. Peacock include 20,000 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(66) Shares listed as held by Mr. Perreira include 500 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(67) Shares listed as held by the Parker Estate include 4,317 shares
underlying warrants that are exercisable currently or within 60 days
following the Reference Date.
(68) Mr. Priddy is a director of the Company. Shares listed as held by Mr.
Priddy include 257,410 shares underlying warrants that are exercisable
currently or within 60 days following the Reference Date and 480,000
shares underlying Notes that are convertible within 60 days of the
Reference Date. Shares to be offered by Mr. Priddy include Shares
underlying 7,410 Warrants transferred to Mr. Priddy by Commonwealth
Associates. See "Certain Relationships and Transactions."
(69) Shares listed as held by Mr. Rand include 9,151 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(70) Shares listed as held by Mr. Riccardi include 1,458 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(71) Shares listed as held by Mr. Rickman include 2,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(72) Shares listed as held by Mr. Robinson include 44,359 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(73) Shares listed as held by Mr. Rogers include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(74) Shares listed as held by Mr. Rosenbloom include 21,373 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
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<PAGE> 40
(75) Shares listed as held by Ms. Ross include 500 shares underlying Warrants
that are exercisable currently or within 60 days following the Reference
Date.
(76) Shares listed as held by Royal Bank of Canada Trust Company include
37,500 shares underlying Warrants that are exercisable currently or
within 60 days following the Reference Date and 157,500 shares
underlying Notes that are convertible within 60 days of the Reference
Date.
(77) Shares listed as held by Mr. Rubenstein include 889 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(78) Shares listed as held by Mr. Schoen include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(79) Shares listed as held by Mr. Segal include 5,562 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(80) Shares listed as held by Ms. Schiller include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(81) Shares listed as held by Mr. Scneider include 10,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 32,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(82) Shares listed as held by Mr. Van Sicien include 500 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(83) Shares listed as held by Mr. Shea include 1,558 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date. See "Certain Transactions and Relationships."
(84) Shares listed as held by Mr. Stein include 500 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(85) Shares listed as held by Mr. Tallur include 553 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(86) Shares listed as held by the Stern Money Purchase Plan include 40,000
shares underlying Warrants that are exercisable currently or within 60
days following the Reference Date and 128,000 shares underlying Notes
that are convertible within 60 days of the Reference Date.
(87) Shares listed as held by Mr. Tucker include 4,317 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date.
(88) Shares listed as held by Vitali Maritime Corp. include 160,000 shares
underlying warrants that are exercisable currently or within 60 days
following the Reference Date and 32,000 shares underlying
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<PAGE> 41
Notes that are convertible within 60 days of the Reference Date.
(89) Shares listed as held by Mr. Volpe include 10,558 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(90) Shares listed as held by Mr. Warner include 42,929 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
(91) Shares listed as held by Ms. Westmoreland include 5,000 shares
underlying Warrants that are exercisable currently or within 60 days
following the Reference Date and 16,000 shares underlying Notes that are
convertible within 60 days of the Reference Date.
(92) Shares listed as held by Mr. Wynn include 590 shares underlying Warrants
that are exercisable currently or within 60 days following the Reference
Date.
(93) Shares listed as held by Mr. Wynne include 3,890 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date.
(94) Shares listed as held by Mr. Zises include 5,000 shares underlying
Warrants that are exercisable currently or within 60 days following the
Reference Date and 16,000 shares underlying Notes that are convertible
within 60 days of the Reference Date.
The Company has agreed to indemnify certain of the Selling
Securityholders and the Selling Securityholders have agreed to indemnify the
Company against certain civil liabilities, including liabilities under the
Securities Act.
Except as noted in the footnotes above and under the caption "Certain
Relationships and Transactions" below, none of the Selling Securityholders has
held any office or maintained any material relationship with the Company during
the past three years.
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<PAGE> 42
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Set forth below is certain information regarding certain relationships and
transactions between the Selling Securityholders and the Company.
Commonwealth Associates, Inc. ("Commonwealth Associates") is a principal
stockholder. On March 14, 1997, the Company consummated a private placement (the
"Private Placement") of 85 units (the "Units") each consisting of $100,000 in
principal amount of Notes and Warrants to purchase 10,000 shares of Common
Stock, for which Commonwealth Associates acted as placement agent and received
from the Company (i) cash commissions equal to 7% of the gross proceeds, (ii)
five-year Warrants to purchase 200,000 shares of Common Stock at an exercise
price of $3.125 per share (of which Warrants, Commonwealth has subsequently
transferred beneficial ownership to certain of its designees) and (iii) an
accountable expense reimbursement of $56,500 in cash.
Pursuant to a letter agreement dated as of February 14, 1995 among the
Company, AccuMed, Inc. and Commonwealth Associates, Commonwealth Associates was
paid a fee for acting as a "finder" in connection with the merger of AccuMed,
Inc. into the Company. The fee was paid in the form of $50,000 in cash, 444,444
shares of Common Stock, and a five-year warrant to purchase up to 750,000 shares
of Common Stock at an exercise price of $1.25 per share. During 1995,
Commonwealth Associates acted as placement agent for the Company in certain
private placements of Common Stock for which Commonwealth Associates received an
aggregate of (i) $353,000 in cash commissions, (ii) a non-accountable expense
allowance of $106,000, (iii) approximately $10,600 in reimbursement for the fees
and expenses of counsel, and (iv) a warrant to purchase an aggregate of 564,840
shares of the Common Stock at an exercise price of $0.625 per share. During
1995, the Company paid Commonwealth Associates an aggregate of $59,000 in cash
pursuant to a Consulting Agreement in effect from January 1, 1995 through
December 31, 1995. As reimbursement for certain expenses incurred by
Commonwealth Associates in connection with a terminated private placement of
securities for which Commonwealth Associates was to act as placement agent, the
Company (i) issued to Commonwealth Associates on December 31, 1994 a five-year
warrant to purchase an aggregate of 420,000 shares of Common Stock at an
exercise price of $0.25 per share and (ii) issued to designees of Commonwealth
Associates on December 29, 1995 five-year warrants to purchase an aggregate of
104,000 shares of Common Stock at an exercise price of $2.125 per share, which
warrants expire on October 31, 1997.
The Company issued to American Equities Overseas, Inc. ("American
Equities"), a Selling Securityholder, an immediately exercisable, five-year
warrant to purchase up to 100,000 shares of Common Stock at an exercise price of
$0.25 per share. Such warrant was issued to American Equities by the Company in
September 1995 as reimbursement for expenses incurred by American Equities in
connection with a terminated private placement in 1994 and advisory services in
connection with certain of the Company's European stockholders. In March 1996,
the Company issued to American Equities immediately exercisable five-year
warrants to purchase an aggregate of 42,500 shares of Common Stock at an
exercise price of $3.87 per share and 20,000 shares at an exercise price of
$3.42 per share, as partial compensation for its services in placing warrants to
purchase Common Stock and securities of RADCO in connection with the
capitalization of RADCO. American Equities acted as placement agent in
connection with the sale of Common Stock to certain European investors in May
1996, for which it received aggregate cash commissions of $56,250. Pursuant to
an agreement dated July 18, 1996 among
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<PAGE> 43
the Company, RADCO and American Equities, the Company paid to American Equities
a fee of $15,000 in cash upon consummation of the RADCO acquisition. As a part
of the RADCO acquisition, the Company purchased from American Equities 50,000
shares of RADCO Stock in consideration of payment of approximately $14,000 in
cash.
Robert L. Priddy, a director of the Company since May 23, 1997, is the
beneficial owner of 9.9% of the common stock of Commonwealth Associates. In
January 1996, Mr. Priddy loaned the Company $250,000 evidenced by a promissory
note bearing interest at the rate of 11% per annum payable due in April 1996
(the "1996 Loan"). The 1996 Loan has been repaid in full. In consideration for
making the 1996 Loan, Mr. Priddy was issued five-year warrants to purchase up to
160,000 shares of Common Stock at $1.25 (the closing bid price for the Common
Stock on the date of issuance). On August 18, 1997, Mr. Priddy loaned the
Company $500,000 secured by a certain receivable evidenced by a Promissory Note
and Security Agreement (the "Priddy Loan"). Interest on the Priddy Loan accrues
at a rate of 12% per annum payable at maturity. The Priddy Loan is due on the
earlier of October 15, 1997 and the date on which the Company receives gross
proceeds of at least $1,000,000 million from a financing. If the Priddy Loan is
repaid prior to October 15, 1997, the Company shall pay a prepayment premium
which together with accrued interest will aggregate $10,000. In consideration of
making the Priddy Loan, the Company issued to Mr. Priddy five-year warrants to
purchase 50,000 shares of Common Stock at $2.50 per share (the last reported
sales price on the trading day immediately preceding issuance). The principal,
interest and prepayment premium due to Mr. Priddy pursuant to the Priddy Loan
was repaid in full on September 30, 1997. Mr. Priddy loaned the Company
$3,000,000 pursuant to a loan (the "Bridge Loan") in the aggregate principal
amount of $6,000,000 made pursuant to a Loan Agreement dated as of February 19,
1997 among the Company and Mr. Priddy and Edmund H. Shea, Jr. (collectively, the
"Lender"), evidenced by a Convertible Promissory Note dated as of February 19,
1997 made by the Company in favor of the Lender. Interest on the indebtedness
under the Bridge Loan accrued at a rate of 12% per annum payable at maturity.
All amounts owed to the Lender by the Company pursuant to the Bridge Loan,
including an aggregate of $130,000 representing the loan origination fee,
interest and the prepayment premium were paid in full as of March 14, 1997 with
a portion of the proceeds of the Private Placement. Mr. Priddy purchased 15
Units for an aggregate purchase price of $1,500,000 in the Private Placement.
Edmund H. Shea, Jr., a Selling Securityholder, loaned the Company
$3,000,000 pursuant the Bridge Loan in the aggregate principal amount of
$6,000,000 made pursuant to a Loan Agreement dated as of February 19, 1997 among
the Company and Mr. Priddy and Mr. Shea (collectively, the "Lender"), evidenced
by a Convertible Promissory Note dated as of February 19, 1997 made by the
Company in favor of the Lender. Interest on the indebtedness under the Bridge
Loan accrued at a rate of 12% per annum payable at maturity. All amounts owed to
the Lender by the Company pursuant to the Bridge Loan, including an aggregate of
$130,000 representing the loan origination fee, interest and the prepayment
premium were paid in full as of March 14, 1997 with a portion of the proceeds of
the Private Placement.
PLAN OF DISTRIBUTION
The Selling Securityholders may sell the Shares of Common Stock (i) in
an underwritten offering or offerings, (ii) through brokers and dealers, (iii)
"at the market" to or through a market maker or in an existing trading market,
on an exchange or otherwise, for such Shares, (iv) in other ways not involving
market makers or established trading markets, including direct sales to
purchasers and (v) to the extent not
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<PAGE> 44
prohibited by applicable securities law, in ways other than pursuant to the
distribution plan presented in this Prospectus.
The distribution of Shares of Common Stock may be effected from time to
time in one or more underwritten transactions at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Any such
underwritten offering may be on a "best efforts" or a "firm commitment" basis.
In connection with any such underwritten offering, underwriters or
agents may receive compensation from the Selling Securityholders for whom they
may act as agents in the form of discounts, concessions or compensation in the
form of discount, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents.
At any time a particular offer of Shares of Common Stock is made, if
required, a Prospectus Supplement will be distributed that will set forth the
names of the Selling Securityholder(s) offering such Shares of Common Stock, the
aggregate amount of such Shares of Common Stock being offered and the terms of
the offering, including the names or names of any underwriters, dealers or
agents, any discounts, commissions and other items constituting compensation
from the Selling Securityholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. Such Prospectus Supplement and, if
necessary, a post-effective amendments to the tea Registration Statement of
which this Prospectus forms as part, will be filed with the Commission to
reflect the disclosure of additional information with respect to the
distribution of such Shares of Common Stock.
The Selling Securityholders and any underwriters, dealers or agents that
participate int he distribution of Shares of Common Stock may be deemed to be
underwriters,and any profit on the sale of Shares of Common Stock by the Selling
Securityholders and any discount, commissions or concessions received by any
such underwriters, dealers or agents might be deemed to be underwriting
discounts and commissions under the Securities Act.
Under an agreement that may be entered into by the Company,
underwriters, dealers, and agents who participate in the distribution of Shares
of Common stock may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such underwriters, dealers or agents
may be required to make in respect thereof.
The sale of Shares of Common Stock by Selling Securityholders may also
be effect from time to time by Selling Securityholders directly to purchasers or
to or through certain broker-dealers. In connection with any such sale, any such
broker-dealer, acting as agent or s principal, may be made pursuant to any of
the methods described below. Such sales may be made on the Nasdaq or other
exchanges on which the Common Stock is then traded, in the over-the-counter
market, in negotiated transactions or otherwise at prices and at terms then
prevailing or at prices related to the then-current market prices or at prices
otherwise negotiated.
The Shares of Common Stock may also be sold in one or more of the
following transactions: (i) a block transactions (which may involve crosses) in
which a broker-dealer may sell all or a portion of such shares as agent but may
position and resell all or a portion of the block as principal to facilitate the
transaction; (ii) purchases by any such broker-dealer as principal and resale by
such broker-dealer for its own account pursuant to this Prospectus which forms a
part of the Registration Statement; (iii) a special
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<PAGE> 45
offering, an exchange distribution or a secondary distribution in accordance
with applicable stock exchange rules; and (iv) ordinary brokerage transactions
and transactions in which any such broker-dealer solicits purchasers. In
effecting sales, broker-dealers engaged by the Selling Securityholders may
arrange for to the broker-dealers to participate. Broker-dealers will receive
commissions or other compensation from the Selling Securityholders in amounts to
be negotiated immediately prior to the sale that will not exceed the customary
in the type of transactions involved. Broker-dealers may also receive
compensation from purchasers of the Shares which is not expected to exceed that
customary in the types of transactions involved.
Such brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In addition, any securities covered by this
Prospectus that qualify for sale pursuant to Rule 144 under the Securities Act
might be sold under Rule 144 rather than pursuant to this Prospectus.
LEGAL MATTERS
The legality of the securities offered by this Prospectus will be passed
upon for the Company by its General Counsel, Joyce L. Wallach, Esq.
EXPERTS
The balance sheet of Alamar Biosciences, Inc. as of September 30, 1995
and the statements of operations, stockholder's equity, and cash flows for the
year ended September 30, 1995, as incorporated by reference in the Registration
Statement of which this Prospectus forms a part, has been incorporated herein in
reliance on the report, which included an explanatory paragraph related to
Alamar Biosciences, Inc.'s ability to continue as a going concern, of Coopers &
Lybrand, L.L.P., independent accountants, given on the authority of said firm as
experts in accounting and auditing.
The consolidated financial statements of AccuMed International, Inc. and
subsidiaries as of December 31, 1996, and for the year ended December 31, 1996,
incorporated by reference herein and elsewhere in the Registration Statement of
which this Prospectus forms a part from the Company's Annual Report on Form
10-KSB for the year ended December 31, 1996, in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, included therein and
incorporated herein by reference, and upon the authority of said firm as experts
in accounting and auditing.
The balance sheets of the AIC division of Xillix Technologies Corp. as
at August 31, 1995 and December 31, 1995, and Oncometrics Imaging Corp. at May
31, 1996 and the statement of operations and deficit and cash flows for the
periods then ended, incorporated by reference herein and elsewhere in the
Registration Statement of which this Prospectus forms a part from the Company's
Amendment No. 1 on Form 8-K/A dated October 15, 1996, have been included therein
and incorporated by reference herein and elsewhere in the registration statement
of which this Prospectus forms a part in reliance upon the report of KPMG,
chartered accountants, included therein and incorporated herein by reference,
and upon the authority of said firm as experts in accounting and auditing.
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The statement of net assets sold of Difco Microbiology Systems,
Incorporated. as of December 31, 1996 and 1995, and the statement of revenue and
expenses for the years then ended, incorporated by reference herein and
elsewhere in the Registration Statement of which this Prospectus forms a part
from the Company's Amendment No. 1 on Form 8-K/A dated March 3, 1997, have been
included therein and incorporated by reference herein and elsewhere in the
Registration Statement of which this Prospectus forms a part in reliance upon
the reports of Perrin Fordree & Company, P.C., independent certified
accountants, included therein and incorporated herein by reference, and upon the
authority of said firm as experts in accounting and auditing.
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================================================================================
No dealer, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any selling
securityholder. This Prospectus does not constitute an offer to sell, or a
solicitation of any offer to buy any security other than the shares of Common
Stock offered by this Prospectus, nor does it constitute an offer to sell or a
solicitation of any offer to buy the shares of 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, 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 any implication information contained herein is correct as
of any time subsequent to the date hereof.
--------------------------------
TABLE OF CONTENTS
Page
Special Note Regarding Forward Looking Statements
Available Information..................
Additional Information.................
Incorporation of Certain Documents by Reference
Prospectus Summary.....................
The Company............................
Risk Factors...........................
Use of Proceeds........................
Selling Securityholders................
Certain Relationships and Transactions.
Plan of Distribution...................
Legal Matters..........................
Experts ...............................
================================================================================
================================================================================
3,770,000 Shares
ACCUMED INTERNATIONAL,
INC.
Common Stock
--------------
PROSPECTUS
---------------
================================================================================
<PAGE> 48
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the issuance and distribution of the securities being registered hereunder.
All of the amounts shown are estimates (except for the SEC registration fee).
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee..........................................$ 4,501
Printing and engraving expenses...............................$ 6,000
Accounting fees and expenses..................................$ 9,000
Legal fees and expenses.......................................$ 2,000
Blue Sky fees and expenses....................................$ 2,000
Miscellaneous.................................................$ 1,499
-------
TOTAL.........................................................$24,000
=======
</TABLE>
None of these expenses will be paid by the Selling Securityholders
pursuant to the terms of the agreements under which the shares of Common Stock
to be sold hereby were issued.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has provisions in its Certificate of Incorporation which
eliminate the liability of the Company's directors to the Company and its
shareholders for monetary damages to the fullest extent permissible under
Delaware law and provisions which authorize the Company to indemnify its
directors and agents by bylaws, agreements or otherwise, to the fullest extent
permitted by law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission. The Company's
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted by Delaware law.
The Company's officers and directors are covered by a director's and
officer's liability insurance policy maintained by the Company. Under the
insurance policy, the Company is entitled to be reimbursed for indemnity
payments that it is required or permitted to make to its directors and officers.
II-1
<PAGE> 49
ITEM 16. EXHIBITS
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1 Certificate of Incorporation of the Registrant. (1)
4.2 Certificate of Amendment to Certificate of Incorporation of the
Registrant (previously filed with this Registration Statement on May 30,
1997). 4.3 Specimen Certificate for Common Stock. (1)
4.4 Bylaws of the Registrant. (1)
4.5 Warrant Agreement among the Registrant, Commonwealth Associates and
American Stock Transfer and Trust Company as transfer agent relating to
Warrants to purchase an aggregate of 850,000 shares of Common Stock
dated March 13, 1997. (3)
4.6 Form of Warrant Certificate dated as of March 13, 1997 evidencing right
to acquire an aggregate of 850,000 shares of Common Stock issued to
several investors in a private placement consummated March 13, 1997. (3)
4.7 Form of Subscription Agreement between the Registrant and several
investors in the private placement consummated on March 13, 1997. (3)
4.8 Form of 12% Convertible Promissory Note evidencing indebtedness in the
original aggregate principal amount of $8.5 million made by the
Registrant in favor of several investors in the private placement
consummated on March 13, 1997. (3)
4.9 Stock Purchase Warrant between the Registrant and Commonwealth
Associates dated as of March 13, 1997 pertaining to Warrants to purchase
an aggregate of 200,000 shares of Common Stock and Form of Warrant
Certificate dated as of March 13, 1997 evidencing the right to acquire
an aggregate of 200,000 shares of Common Stock issued to Commonwealth
Associates and/or its designees, issued in connection with the private
placement consummated March 13, 1997.(3)
</TABLE>
<PAGE> 50
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
5.1 Opinion of Joyce L. Wallach, Esq., General Counsel to the Registrant,
regarding the legality of the securities offered hereby (previously
filed with this Registration Statement on May 30, 1997).
23.1 Consent of Joyce L. Wallach, Esq., General Counsel to the Registrant,
(contained in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG.
23.5 Consent of Perrin, Fordree & Company LLP.
24.1 Powers of Attorney (contained in the signature page previously filed
with this the Registration Statement on May 30, 1997).
</TABLE>
- ------------------------
(1) Incorporated by reference to the Registrant's Transition Report of Form
10-KSB for the transition period ended December 31, 1995.
(2) Incorporated by reference to the Registrant's Post-effective Amendment
No. 2 to the Registration Statement on Form S-3 (Regis. No. 333-04715).
(3) Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the year ended December 31, 1996.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
additional or changed material information with respect to the plan of
distribution.
(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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the Act") 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,
II-3
<PAGE> 51
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 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.
II-4
<PAGE> 52
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Pre-effective Amendment No. 1 to the Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Chicago, State of Illinois on November 13, 1997.
ACCUMED INTERNATIONAL, INC.
By: /s/ PETER P. GOMBRICH
----------------------------------------
Peter P. Gombrich, Chairman,
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this
Pre-effective Amendment No. 1 to the Registration Statement on Form S-3 has been
signed by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ PETER P. GOMBRICH Chairman of the Board, November 13, 1997
- ------------------------------- Chief Executive Officer, and
(Peter P. Gombrich) President (Principal Executive
Officer)
/s/ LEONARD R. PRANGE Chief Financial Officer November 13, 1997
- ------------------------------- and Chief Operating
(Leonard R. Prange) Officer (Principal Financial
and Accounting Officer)
Director
- -------------------------------
(J. Donald Gaines)
/s/ JACK H. HALPERIN* Director November 13, 1997
- -------------------------------
(Jack H. Halperin)
/s/ PAUL F. LAVALLEE* Director November 13, 1997
- -------------------------------
</TABLE>
II-5
<PAGE> 53
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
(Paul F. Lavallee)
/s/ JOSEPH W. PLANDOWSKI* Director November 13, 1997
- -------------------------------
(Joseph W. Plandowski)
/s/ ROBERT L. PRIDDY* Director November 13, 1997
- -------------------------------
(Robert L. Priddy)
/s/ LEONARD M. SCHILLER* Director November 13, 1997
- -------------------------------
(Leonard M. Schiller)
* By /s/ PETER P. GOMBRICH
---------------------------
attorney-in-fact
</TABLE>
II-6
<PAGE> 54
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
4.1 Certificate of Incorporation of the Registrant. (1)
4.2 Certificate of Amendment to Certificate of Incorporation of the
Registrant (previously filed with this Registration Statement on May 30,
1997).
4.3 Specimen Certificate for Common Stock. (1)
4.4 Bylaws of the Registrant. (1)
4.5 Warrant Agreement among the Registrant, Commonwealth Associates and
American Stock Transfer and Trust Company as transfer agent relating to
Warrants to purchase an aggregate of 850,000 shares of Common Stock
dated March 13, 1997. (3)
4.6 Form of Warrant Certificate dated as of March 13, 1997 evidencing right
to acquire an aggregate of 850,000 shares of Common Stock issued to
several investors in a private placement consummated March 13, 1997. (3)
4.7 Form of Subscription Agreement between the Registrant and several
investors in the private placement consummated on March 13, 1997. (3)
4.8 Form of 12% Convertible Promissory Note evidencing indebtedness in the
original aggregate principal amount of $8.5 million made by the
Registrant in favor of several investors in the private placement
consummated on March 13, 1997. (3)
4.9 Stock Purchase Warrant between the Registrant and Commonwealth
Associates dated as of March 13, 1997 pertaining to Warrants to purchase
an aggregate of 200,000 shares of Common Stock and Form of Warrant
Certificate dated as of March 13, 1997 evidencing the right to acquire
an aggregate of 200,000 shares of Common Stock issued to Commonwealth
Associates and/or its designees, issued in connection with the private
placement consummated March 13, 1997.(3)
5.1 Opinion of Joyce L. Wallach, Esq., General Counsel to the Registrant,
regarding the legality of the securities offered hereby (previously
filed with this Registration Statement on May 30, 1997).
23.1 Consent of Joyce L. Wallach, Esq., General Counsel to the Registrant,
(contained in Exhibit 5.1).
</TABLE>
II-7
<PAGE> 55
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
23.2 Consent of Coopers & Lybrand LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG.
23.5 Consent of Perrin, Fordree & Company LLP.
24.1 Powers of Attorney (contained in the signature page previously filed
with this the Registration Statement on May 30, 1997).
</TABLE>
- ------------------------
(1) Incorporated by reference to the Registrant's Transition Report of Form
10-KSB for the transition period ended December 31, 1995.
(2) Incorporated by reference to the Registrant's Post-effective Amendment
No. 2 to the Registration Statement on Form S-3 (Regis. No. 333-04715).
(3) Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the year ended December 31, 1996.
II-8
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to incorporation by reference in the Pre-effective Amendment No.1 on
Form S-3 (Regis. No. 333-28125) of our report, which included an explanatory
paragraph related to substantial doubt about the ability of Alamar Biosciences,
Inc. to continue as a going concern, dated November 19, 1995, on our audits of
the financial statements of Alamar Biosciences, Inc. including the balance sheet
as of September 30, 1995 and the statements of operations, shareholders' equity
and cash flows for the year ended September 30, 1995, which report is included
in the Annual Report on Form 10-KSB for the year ended September 30, 1995. We
also consent to the reference to our firm in the prospectus under the caption
"Experts."
/s/ Coopers & Lybrand L.L.P.
Sacramento, CA
Novmeber 13, 1997
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
AccuMed International, Inc.
We consent to incorporation by reference in the registration statement on Form
S-3 of AccuMed International, Inc. of our report dated March 28, 1997, relating
to the consolidated balance sheets of AccuMed International, Inc. and
subsidiaries as of December 31, 1996 and 1995 and the related consolidated
statements of operations, stockholder's equity and cash flows for the year
ended December 31, 1996 and for the three months ended December 31, 1995, which
report appears in the December 31, 1996 annual report on Form 10-KSB of AccuMed
International, Inc., and to the reference to our firm under the heading
"Experts" in the prospectus.
KPMG Peat Marwick LLP
Chicago, Illinois
November 13, 1997
<PAGE> 1
EXHIBIT 23.4
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
Oncometrics Imaging Corp.
We consent to incorporation by reference in the registration statement on Form
S-3 of AccuMed International, Inc. of our report dated July 18, 1996 with
respect to the balance sheets of the AIC division of Xillix Technologies Corp.
as of August 31, 1995 and December 31, 1995, and Oncometrics Imaging Corp. as at
May 31, 1996, and the related statement of operations, stockholders' equity, and
cash flows for the periods then ended, which report appears in the Form 8-K/A
dated October 15, 1996 of AccuMed International, Inc., and to the reference to
our firm under the heading "Experts" in the prospectus.
KPMG
Chartered Accountants
Vancouver, British Columbia
November 13, 1997
<PAGE> 1
EXHIBIT 23.5
INDEPENDENT AUDITOR'S CONSENT
To the Board of Directors
AccuMed International, Inc.
We consent to incorporation by reference in the registration statements (NO.
333-04715,033-98902,333-07681 and 333-28125) on Form S-3 of AccuMed
International, Inc. of our report dated March 18, 1997, relating to the
statement of net assets sold of Difco Microbiology Systems, Incorporated as of
December 31, 1996 and 1995, and the related statements of revenue and expenses
for the years then ended, which report appears in the report on the Current
Report on Form 8-K/A dated March 3, 1997 and the amendments thereto. We also
consent to the reference to our firm in the prospectus under the caption
"Experts."
PERRIN, FORDREE & COMPANY, P.C.
Troy, Michigan
November 13, 1997
