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As filed with the Securities and Exchange Commission on January 14, 2000
Registration No. 333-90637
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2
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.)
920 N. FRANKLIN STREET, SUITE 402
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)
PAUL F. LAVALLEE
Chief Executive Officer
AccuMed International, Inc.
920 N. Franklin Street, Suite 402
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.
920 N. Franklin Street, Suite 402
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 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 or continuous basis
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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.
CALCULATION OF REGISTRATION FEE(1)
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AGGREGATE AGGREGATE
SECURITIES TO BE AMOUNT TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE(2) PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock
Underlying
Convertible Note 250,000 shares $ 1.75 $437,500 $ 122
==============================================================================================================
TOTAL 250,000 shares $ 1.75 $437,500 $ 122
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</TABLE>
(1) Fee was paid upon filing of the Registration Statement November 9,
1999.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(c) under the Securities
Act of 1933, as amended, based on $1.75 per share, the average of the
high and low sales prices reported for the Common Stock on November 4,
1999.
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PROSPECTUS
250,000 SHARES
ACCUMED INTERNATIONAL, INC.
COMMON STOCK
This prospectus relates to sale of up to 250,000 shares of common stock
of our common stock by Xillix Technologies Corp.
Our common stock trades on the Nasdaq SmallCap Market under the symbol
"ACMI." The last reported sale price was $2.63 on January 12, 2000.
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 1.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE XILLIX MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
No underwriting commissions or discounts will be paid by AccuMed in
connection with this offering.
Our principal executive offices are located at 920 North Franklin
Street, Suite 402, Chicago, Illinois 60610. Our telephone number is (312)
642-9200.
This date of this prospectus is [_______________], 2000.
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TABLE OF CONTENTS
<TABLE>
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Page
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Risk Factors ...................................................................... 1
Forward Looking Statements ........................................................ 6
About AccuMed ..................................................................... 6
Use of Proceeds ................................................................... 9
Common Stock Market Price Data .................................................... 9
Selling Securityholder ............................................................ 10
Certain Relationships and Transactions ............................................ 10
Plan of Distribution .............................................................. 11
Legal Matters ..................................................................... 13
Experts ........................................................................... 14
Where You Can Find More Information ............................................... 14
</TABLE>
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The following are trade names and common law trademarks or registered
trademarks of AccuMed: the "ACCUMED" logo and name, "ACCELL," "TRACCELL,"
"ACCUTECH," "ACCELL-SAVANT," "ONCOMETRICS," "SPECIFIND," "MACCELL,"
"MACROVISION," "RELATIONAL CYTOPATHOLOGY REVIEW GUIDE," "IMPROVING CYTOLOGY
PROCESSES," and "AND YOU THOUGHT YOU'D SEEN IT ALL."
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RISK FACTORS
You should carefully consider the following factors and the other
information in this prospectus before deciding to invest in the shares.
IF WE FAIL TO GENERATE REVENUES IN THE AMOUNTS WE HAVE PROJECTED, OR RECEIVE
THOSE REVENUES LATER THAN WE HAVE PROJECTED, WE WILL NEED TO OBTAIN ADDITIONAL
FINANCING TO FUND OUR OPERATIONS; IF WE ARE UNABLE TO OBTAIN THIS FINANCING WE
MAY NEED TO DELAY OUR RESEARCH PROGRAMS AND SCALE BACK, OR EVEN CEASE, OUR
OPERATIONS.
We believe that our existing capital resources combined with accounts
receivable and projected internally generated revenues will be sufficient to
fund our operations during 2000. Our projected internally generated revenues
include sales of our AcCell and AcCell-Savant products, and licensing fees from
a joint venture we anticipate entering into during the first quarter of 2000. We
anticipate that we need approximately $2,500,000 to fund our proposed operations
during 2000.
In addition, AccuMed has loaned Microsulis Corporation $400,000. If the
proposed merger between AccuMed and Microsulis is not completed, Microsulis will
be required to repay those funds on April 18, 2000. See "About AccuMed - Recent
Development."
If we need to seek additional financing, we may seek to raise funds
through public or private financings, collaborative relationships or other
arrangements. Presently, we do not have any commitments for additional funds. If
we raise additional funds by selling common stock and/or securities convertible
into common stock, AccuMed's then-existing stockholders may experience a
substantial decrease in the value of their investment in our common stock.
WE EXPECT TO CONTINUE TO EXPERIENCE OPERATING LOSSES AND MAY NEVER BECOME
PROFITABLE, WHICH COULD CAUSE US TO CEASE OUR OPERATIONS.
We have incurred significant net operating losses in each fiscal
quarter since we have been in business. We expect to continue to experience
losses until the time, if ever, when AccuMed is able to sell products sufficient
to generate revenues adequate to support our operations. For the fiscal year
ended December 31, 1998, and for the nine-month period ended September 30, 1999,
AccuMed's net operating losses from continuing operations were approximately
$10,359,755 million and $1,080,118 million, respectively. As of September 30,
1999, AccuMed had an accumulated deficit of approximately $55,508,038 million.
IF ACCUMED LIQUIDATES, THERE MAY BE INSUFFICIENT FUNDS FOR ANY DISTRIBUTION
PAYMENT TO COMMON STOCK HOLDERS AFTER PAYMENT OF DEBT AND THE LIQUIDATION
PREFERENCE OF PREFERRED STOCK HOLDERS.
If AccuMed were to liquidate, proceeds from the sale of assets would be
applied first to satisfy any of our outstanding indebtedness, including trade
debt. At January 12, 2000, our only indebtedness, other than trade debt, is the
selling securityholder's convertible note in the principal amount of CND$500,000
and a repayable contribution to our subsidiary in the amount of $187,000. The
selling securityholder will need to convert its convertible note, at least in
part, if it is to sell shares in this
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offering. Any proceeds remaining after full payment of all our indebtedness
would be applied to pay the liquidation preference of our preferred stock
outstanding at liquidation. The aggregate liquidation preference of our
preferred stock outstanding at January 12, 2000 is $4,090,268.
IF WE ARE UNABLE TO GAIN MARKET ACCEPTANCE OF OUR PRODUCTS, WE MAY NEVER BECOME
PROFITABLE AND MAY NEED TO CEASE OUR OPERATIONS.
AccuMed has generated limited revenues from the sale of our products
for use in connection with cervical cancer screening by clinical laboratories
that screen or diagnose cell-based patient samples. To become profitable, we
will need primarily to develop and market the AcCell and/or AcCell-Savant in
markets requiring instruments that analyze cells or tissues objectively, like
early lung cancer detection, among many others.
We do not currently market the AcCell products actively. We
are marketing and selling AcCell products on a limited basis in order to
collect, analyze and document performance data of the products in several
primary clinical cytology laboratory market segments. We are developing the
prototype of the AcCell-Savant for clinical uses, as opposed to research use. We
began marketing the AcCell-Savant research system in 1999. Through this
marketing, we have achieved modest sales of the AcCell-Savant to academic and
research laboratories which have entered into licensing agreements providing
AccuMed a right to commercialize any intellectual property related to
applications developed by those laboratories.
IF WE ARE UNABLE TO ENTER INTO ARRANGEMENTS TO COMBINE OUR TECHNOLOGY AND
DISTRIBUTION EFFORTS WITH PARTNERS, WE MAY BE UNABLE TO GENERATE SALES NECESSARY
ACHIEVE AND SUSTAIN PROFITABILITY, AND MAY BE NEED TO CEASE OUR OPERATIONS.
We have refocused our technology and marketing approach to focus on
early lung cancer detection and other clinical needs for our instruments and
systems, as opposed to our prior focus on cervical cancer screening. In this new
corporate development approach, we intend to establish partnerships with other
technology and product distribution companies in these newly targeted markets.
We may be unable to enter into and maintain these arrangements on acceptable
terms, if ever. If we are able to enter into these types of arrangements, we
will be dependent upon those partners to assist us in promoting market
acceptance of and demand for these products in the newly targeted markets.
IF WE ARE UNABLE TO SUCCESSFULLY DEVELOP OUR ACCELL-SAVANT LUNG CANCER SCREENING
PRODUCT AND OTHER IN-DEVELOPMENT ACCELL-SAVANT PRODUCTS, WE MAY NEVER ACHIEVE
PROFITABILITY AND MAY NEED TO CEASE OUR OPERATIONS.
We expect to need to undertake time-consuming and costly development
and testing activities for the AcCell-Savant lung cancer screening product and
other currently proposed new products for early disease detection, diagnosis or
therapeutic monitoring. We may experience difficulties that could delay or
prevent the successful development, introduction and marketing of the
AcCell-Savant and other currently proposed new products. These new products may
not meet the requirements of the applicable market or achieve market acceptance.
IF WE ARE UNABLE TO MEET AND MAINTAIN REQUIREMENTS OF GOVERNMENTAL REGULATION
WITH RESPECT TO
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OUR ACCELL-SAVANT LUNG CANCER SCREENING PRODUCT AND OTHER IN-DEVELOPMENT
ACCELL-SAVANT PRODUCTS, OUR SALES MARKET WILL BE EXTREMELY LIMITED, WE MAY NEVER
ACHIEVE PROFITABILITY, AND MAY NEED TO CEASE OUR OPERATIONS.
AccuMed's products and manufacturing processes are regulated by state
and federal authorities, including the FDA and comparable authorities in certain
states and other countries. We will be unable to sell the AcCell-Savant in the
U.S., other than for research use and clinical use with restrictions, without
FDA clearance. We are currently conducting research and development with respect
to the AcCell-Savant and have not yet begun clinical trials.
FDA authorization is based on a review of the product's safety and
effectiveness for its intended uses. 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 start of clinical trials or submission of data to the receipt of regulatory
approval.
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,
AccuMed may be required to provide the FDA with documentation from the medical
device regulatory authority of the country in which the purchaser is located. We
may be unable to obtain necessary foreign regulatory clearances and may incur
significant costs in obtaining or maintaining any foreign regulatory clearances.
Failure to comply with the applicable laws and regulatory requirements
can result in, among other things, civil and criminal fines, product recalls,
detentions, seizures, injunctions and criminal prosecutions.
IF WE FAIL TO MAINTAIN THE LISTING REQUIREMENTS, OUR COMMON STOCK COULD BE
DELISTED FROM THE NASDAQ SMALLCAP MARKET WHICH WOULD LIMIT YOUR ABILITY TO SELL
YOUR COMMON STOCK.
If the common stock is not listed on Nasdaq, trading, if any, in the
common stock would be conducted in the non-Nasdaq over-the-counter market in the
so-called "pink sheets" or the NASD's "Electronic Bulletin Board." Consequently,
the liquidity of AccuMed's common stock could be impaired. This might result in
a reduction in the number of shares be bought and sold, as well as delays in the
timing of transactions. It might also lead to reduction in security analyst
coverage, and lower prices for the common stock than might otherwise be
attained. Consequently, it might be more difficult for investors to dispose of,
or to obtain accurate quotations as to the market value of our common stock.
Delisting could also result in the common stock becoming characterized
as a low-priced or "penny" stock. This could severely limit the market liquidity
for the common stock as it would be subject to compliance with federal
securities regulations that limit the ability of broker-dealers to sell
low-priced stock. This could, in turn, impede the ability of stockholders to
sell their common stock.
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Due to AccuMed's failure to meet the continued listing requirements of
the Nasdaq National Market, Nasdaq moved trading of the common stock to the
Nasdaq SmallCap Market on February 19, 1998, pursuant to a temporary exemption
from the initial listing requirements. We met all of the requirements of Nasdaq
to remove the temporary exemption and maintain trading of the common stock on
the Nasdaq SmallCap Market, as long as AccuMed keeps on meeting Nasdaq's
requirements for continued listing.
In order to maintain listing on the Nasdaq SmallCap Market, AccuMed
will have to maintain certain minimum financial and corporate governance
requirements which generally requires:
- - net tangible assets of $2,000,000,
- - a public float of 500,000 shares with a market value of $1,000,000,
- - a $1.00 minimum bid price,
- - 300 round lot stockholders, and
- - two market makers.
We cannot assure you that AccuMed will be able to maintain compliance for
continued listing.
IF OUR COMMON STOCK PRICE REMAINS VOLATILE, YOU MAY HAVE DIFFICULTY IN
EFFECTIVELY PLANNING WHEN TO SELL YOUR COMMON STOCK.
The market price of our common stock, like that 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 effecting potential
volatility including:
- - announcements of mergers, acquisitions or dispositions of assets;
- - fluctuations in operating results;
- - announcements of technological innovations or new commercial products
by us or our competitors;
- - announcements of private placements of securities;
- - operating losses;
- - economic and other external factors.
WE HAVE NEVER PAID, AND ARE NOT PLANNING TO PAY, DIVIDENDS.
AccuMed has never paid cash or other dividends on its common stock and
does not anticipate
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paying any cash dividends on its common stock in the foreseeable future.
THE BOARD OF DIRECTORS MAY AUTHORIZE ISSUANCE OF ADDITIONAL PREFERRED STOCK
WHICH WOULD HAVE PREFERENCES OVER COMMON STOCK.
We are seeking to raise additional capital to support our continued
operations. This might be accomplished by the sale of preferred stock. AccuMed's
Certificate of Incorporation authorizes the issuance of preferred stock with
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 AccuMed's common stock. AccuMed
is currently authorized to issued a total of 5,000,000 shares of preferred
stock. We currently have outstanding 908,946 shares of Series A Convertible
Preferred Stock.
APPROXIMATELY 3,000,000 SHARES OF COMMON STOCK MAY BE SOLD IN THE PUBLIC MARKET
UPON EXERCISE OR CONVERSION OF OPTIONS, WARRANTS AND PREFERRED STOCK, WHICH
COULD DEPRESS THE MARKET VALUE OF YOUR COMMON STOCK.
Sales of substantial amounts of common stock in the public market, or
the possibility of these sales occurring, could adversely affect prevailing
market prices for the common stock or the future ability of AccuMed to raise
capital through an offering of equity securities. As of January 12, 2000,
AccuMed has outstanding 5,515,526 shares of common stock which 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, subject in the case of certain holders to the limitations applicable to
affiliates pursuant to Rule 144 under the Securities Act. After this offering,
the 250,000 shares offered may be resold immediately in the public market.
As of January 12, 2000, AccuMed has effective registrations that will
allow holders of options, warrants, and preferred stock to sell a total of
2,947,590 shares of common stock that they are entitled to acquire upon exercise
of options and warrants and conversion of preferred stock as follows:
- - 2,229,784 shares issuable upon exercise of outstanding warrants;
- - 111,811 shares issuable upon exercise of options outstanding under the
1992 and 1995 option plans;
- - 605,995 shares issuable upon conversion of outstanding preferred stock.
We also plan to register the resale of approximately 563,626 shares issuable
upon exercise of options outstanding under our 1997 stock option plan.
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that are based on
our current expectations, assumptions, estimates and projections about us and
our industry. When used in this prospectus, the words "may," "will," "expects,"
"anticipates," "believe," "estimates," "intends" and similar expressions are
intended to identify forward looking statements. These statements may be found
under the headings "Risk Factors," "About AccuMed," and "Use of Proceeds," among
others. These statements describe our beliefs concerning the future based on
currently available information.
Our actual results could differ materially from those contained in the
forward-looking statements due to a number of risks and uncertainties. Important
factors that could cause our actual results to differ materially from our
expectations expressed in the forward-looking statements are set forth under the
heading "Risk Factors" and in other sections of this prospectus. You should read
the cautionary statements made in this prospectus as being applicable to all
related forward-looking statements wherever they appear in this prospectus. We
assume no obligation to publicly update or revise these forward-looking
statements for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if
new information becomes available in the future.
ABOUT ACCUMED
OUR BUSINESS
We are developing and commercializing products for use by commercial
laboratories that review and analyze patient samples containing cells and tissue
sections from clinical specimens. Pap smears and other microscope slide-based
cellular samples are examples of cell-based or "cytology" tests. Other
diagnostic tests are based upon frozen tissue sections that are collected by
surgeons performing biopsies of patients. These types of preparations are
examples of tissue-based or "histology" tests. Another example of a series of
histology tests are based upon assessing or measuring changes in the chemical
composition of cells within tissue sections, such as "immunohistochemical"
changes.
Our products use our exclusively owned technology. AccuMed's primary
focus is developing products that improve the quality of cell-based and
tissue-based specimen analyses and increase productivity in the clinical
diagnostic laboratory. The first products AccuMed developed are for review and
analysis of both cervical and non-cervical conventional Pap smears. These
products also work with other types of specimen preparation methods including
one which produces a relatively uniform distribution of cells upon a glass
microscope slide. That method is referred to as "liquid-based preparations."
Our first product to aid pathologists and their technologists is the
AcCell Cytopathology System, an automated slide handling and data management
system embedded in a computer-aided microscope.
Although the cervical Pap test is the largest volume diagnostic test
based upon the analysis of
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human cells, the pathology laboratory routinely conducts other tests based on
samples from numerous organs and areas of the body. AccuMed is developing
products for these applications by combining our AcCell technology with other
technology for use in analyzing these samples in a manner similar to that of
qualitative and quantitative Pap tests.
Early Lung Cancer Screening. We are developing a cell and sample
analysis instrument, the AcCell-Savant, that could lead to a much more
effective, sensitive, reliable, and commercially viable early lung cancer
testing program. This could lead to diagnosing lung cancer at earlier stages
when the disease is more curable.
This cell analysis instrument facilitates the direct measurement of
cellular changes (e.g., "MAC" or Malignancy-Associated Changes) associated with
early disease development and progression. We believe these cellular tests could
be performed, with the AcCell-Savant, more sensitively, accurately, and
reproducibly than is possible with conventional methods. The instrument's
cameras and light sensors, electro- mechanical precision, ability to focus
selectively cell-by-cell and nucleus-by-nucleus on the most informative cell
populations, image processing and analysis algorithms, and statistical
calibration and classification methods gives the human experts in cell analysis
the ability to analyze multiple lung cancer markers and probes simultaneously
for improved sensitivity, specificity and positive predictive value. The
human-machine interface allows the pathologist to consider, in suspicious cases,
the objective, visual and subvisual AcCell-Savant data in their patient
diagnostic reports.
We conducted a two-year field study with the British Columbia Cancer
Agency and a consortium of hospitals. The study included approximately 1,100
patient cases at high-risk for early lung cancer. Study results show that
conventional sputum analyses have a poor sensitivity for early stage lung cancer
detection though conventional methods can result in accurate diagnoses of lung
cancer at late stages when no therapy can effectively improve the patient
outcomes. This study also demonstrated that the AcCell-Savant approach can be
several times more accurate in detecting lung cancer in its early, most curable
stage, compared to conventional sputum testing.
Our research and development efforts are geared toward developing the
lung detection product to the point where we can conduct clinical trials
required to apply for FDA clearance to market the product in the United States.
We anticipate being ready to start clinical trials in 2001.
Markets and Products. We sell our products to customers that operate
principally in the clinical laboratory segments of the healthcare market.
Currently, we are not actively marketing the AcCell as a stand-alone product. We
are marketing the AcCell-Savant systems through one employee with a focus on the
research and development markets. We have made modest sales of the AcCell-Savant
to academic and research laboratories through licensing agreements which provide
AccuMed the right to commercialize any intellectual property developed by the
laboratories related to applications of the AcCell-Savant.
In the United States, we are currently permitted to sell the
AcCell-Savant for research use and clinical use with restrictions. To sell the
AcCell-Savant in the United States for other purposes, we will need to obtain
FDA clearance.
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We are exploring business arrangements with partners to combine
AcCell-Savant and/or AcCell technology with the partner's intellectual property.
These potential arrangements include supplies such as cancer-specific probes
that "stain" cancer cells differently than cells that are within normal limits.
In these arrangements, AccuMed would sell its instruments and systems for use in
combination with the partner's intellectual property and products. We are also
exploring business arrangements with partners that may further speed the
commercialization of the early lung cancer screening test by bringing additional
technology, prospective customers, distribution channels, and programmatic
funding.
RECENT DEVELOPMENT - PROPOSED MERGER
On December 23, 1999, AccuMed filed with the SEC a preliminary proxy
statement-prospectus related to a merger with Microsulis Corporation. If the
merger is completed, Microsulis will become a wholly-owned subsidiary of
AccuMed. In the merger, AccuMed will issue to the Microsulis stockholders a
minimum of 10,726,830 shares up to a maximum of 11,308,830 shares of common
stock, and five-year warrants to purchase a minimum of 2,764,646 shares and up
to a maximum of 3,014,646 shares of common stock at $6.75 per share.
AccuMed will also grant stock options to purchase 1,040,000 shares of
common stock at an exercise price of $2.50 per share to replace Microsulis stock
options. We will also grant an aggregate of 240,000 stock options exercisable at
$2.50 per share to the non-employee directors. We will also grant a total of
750,000 stock options to two executive officers exercisable at a minimum of
$2.50 per share.
As of January 12, 2000, Microsulis is indebted to AccuMed for loans in
the principal amount of $400,000 and we have agreed to loan them up to a total
of $650,000. If the merger is not completed, Microsulis will be required to
repay the loans with interest on April 18, 2000.
Microsulis markets, distributes a Microwave Endometrial Ablation (MEA)
system for treatment of menorrhagia, a condition of excessive menstrual blood
loss in women. MEA is a minimally invasive day-patient or out-patient procedure
for the treatment of menorrhagia which can be performed in approximately three
to five minutes under local anesthesia. The typical at-home recovery period is
approximately two to three days.
Microsulis has the exclusive right to distribute the MEA system in
North America, Central America and South America pursuant to a 20-year license
agreement with Microsulis PLC. Microsulis is presently marketing the MEA system
for sale in Canada.
We anticipate that the merger will be completed during the first
quarter of 2000. Completion of the merger will require accomplishing several
conditions. The most significant requirements are:
- Both parties completing and being satisfied with the results
of an investigation of the other party's business and
financial condition.
- SEC clearance of the proxy statement-prospectus.
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- Approval of the merger by the stockholders of AccuMed and
Microsulis.
USE OF PROCEEDS
AccuMed will not receive any proceeds from the sale of the shares by
the selling securityholder. If the selling securityholder fully converts its
convertible note into the shares, AccuMed will be relieved of the obligations to
repay to the holder the CND$500,000 principal amount of the convertible note.
Any resulting savings will be used by AccuMed for general corporate purposes,
including research and development, and working capital. AccuMed has agreed to
pay certain expenses in connection with this offering, currently estimated to be
approximately $21,000.
COMMON STOCK MARKET PRICE DATA
AccuMed's common stock is quoted on the Nasdaq SmallCap Market under
the trading symbol "ACMI." On January 12, 2000, the last reported sale price of
the common stock on the Nasdaq SmallCap Market was $2.63 per share. Effective
May 21, 1998, AccuMed effected a one-for-six reverse stock split on the common
stock. The tables below sets forth, for the periods indicated, the range of high
and low sales prices for the common stock on the Nasdaq SmallCap Market on a
post-reverse stock split basis. At January 12, 2000, there were approximately
5,500 beneficial owners of common stock.
<TABLE>
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High Low
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1998 FISCAL YEAR
First Quarter 13.88 3.75
Second Quarter 8.63 1.31
Third Quarter 2.06 0.56
Fourth Quarter 2.75 0.31
1999 FISCAL YEAR
First Quarter 1.91 0.59
Second Quarter 1.31 0.72
Third Quarter 1.22 0.47
Fourth Quarter 4.00 0.56
2000 FISCAL YEAR
First Quarter (through January 12) 3.13 2.50
</TABLE>
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SELLING SECURITYHOLDER
The following table sets forth information as of January 12, 2000 with
respect to the beneficial ownership common stock by the selling securityholder,
based on 5,515,526 shares outstanding. AccuMed believes that the selling
stockholder has sole voting and investment power with respect to all shares of
common stock listed as beneficially owned by it. The selling stockholder is
deemed to be the beneficial holder of securities that it can acquire by upon the
exercise of warrants and other securities convertible into common stock within
60 days following January 12, 2000. The beneficial owner's percentage ownership
is determined by including shares underlying securities which are exercisable or
convertible into common stock by the holder within 60 days following January 12,
2000 and excluding shares underlying securities held by any other person. The
percentage of shares owned after this offering is calculated assuming that
5,765,526 shares of common stock will be outstanding, which includes the
5,515,526 shares outstanding on January 12, 2000, and an additional 250,000
shares underlying the selling securityholder's convertible note which would have
to be converted in order to sell the shares. Shares listed as held by Xillix
Technologies Corp. include the 250,000 shares underlying its convertible note.
<TABLE>
<CAPTION>
Shares to
Shares Beneficially Owned be Sold in Shares Beneficially Owned
Prior to Offering Offering After Offering
- ---- ---------------------------- ----------- -------------------------
NAME Number Percent Number Percent
------ ------- -------- --------
<S> <C> <C> <C> <C> <C>
Xillix Technologies Corp. 250,000 4.3 250,000 0 *
</TABLE>
- -----------------------
* Represents less than 1%.
AccuMed has agreed to indemnify the selling securityholder and the
selling securityholder has agreed to indemnify AccuMed against certain civil
liabilities, including liabilities under the Securities Act. Except as noted
under the caption "Certain Relationships and Transactions" below, the selling
securityholder has not held any office or maintained any material relationship
with AccuMed or any of its affiliates during the past three years.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Set forth below is certain information regarding certain relationships
and transactions between the selling securityholder and AccuMed during the past
three years.
On October 15, 1996, AccuMed acquired a two-thirds equity interest in
Oncometrics for aggregate consideration of $4.0 million in cash. Of the
consideration, $2.0 million was paid to the selling securityholder and former
parent corporation of Oncometrics for 1,000,000 shares of previously outstanding
common stock of Oncometrics pursuant to a Share Purchase Agreement between
AccuMed
10
<PAGE> 15
and the selling securityholder dated August 16, 1996. The remaining $2.0
million was paid to Oncometrics in consideration for 1,000,000 newly issued
shares of Oncometrics Stock pursuant to a Subscription Agreement.
Between October 15, 1996 and June 25, 1998, a Shareholders Agreement
was in effect between AccuMed and the selling securityholder pertaining to,
among other things, capital contributions and corporate governance of
Oncometrics, and restrictions and procedures for transfer of Oncometrics Stock.
As part of that agreement, the selling securityholder was entitled to nominate
one member of the Oncometrics board of directors. Pierre Leduc, President and
Chief Executive Officer of the selling securityholder, served as a director and
Secretary of Oncometrics during the term of that agreement.
On June 25, 1998, AccuMed paid a purchase price of CND$500,000 in cash
and the CND$500,000 Floating Rate Convertible Note to acquire from the selling
securityholder the remaining one-third interest in Oncometrics. Oncometrics then
became a wholly-owned subsidiary of AccuMed. The convertible note bears interest
a the rate of the Canadian Imperial Bank of Commerce prime rate plus 2%, or a
default rate of prime plus 6%, payable quarterly in arrears. The convertible
note is convertible into shares of common stock in whole or part any time on or
after June 25, 1999 at a current conversion rate of US$1.43 per share.
PLAN OF DISTRIBUTION
The selling securityholder may sell the shares:
- - in an underwritten offering or offerings,
- - through brokers and dealers,
- - "at the market" to or through a market maker or in an existing trading
market, on an exchange or otherwise, for shares,
- - in other ways not involving market makers or established trading
markets, including direct sales to purchasers, and
- - to the extent not prohibited by applicable securities law, in ways
other than pursuant to the distribution plan presented in this
prospectus.
The distribution of the shares 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 the prevailing market prices,
- - or at negotiated prices.
11
<PAGE> 16
Any underwritten offering may be on a "best efforts" or a "firm commitment"
basis.
In connection with any underwritten offering, underwriters or agents
may receive compensation from the selling securityholder for whom they may act
as agents in the form of:
- - discounts,
- - concessions,
- - 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 the shares is made, if required, a
prospectus supplement will be distributed that will set forth:
- - the name of the selling securityholder offering the shares,
- - the aggregate amount of these the shares being offered,
- - the terms of the offering,
- - the names or names of any underwriters, dealers or agents,
- - any discounts, commissions and other items constituting compensation
from the selling securityholder, and
- - any discounts, commissions or concessions allowed or reallowed or paid
to dealers.
A prospectus supplement and, if necessary, a post-effective amendments to the
registration statement of which this prospectus forms as part, will be filed
with the SEC to reflect the disclosure of additional information with respect to
the distribution of those shares of common stock.
The selling securityholder and any underwriters, dealers or agents that
participate in the distribution of the shares may be deemed to be underwriters.
In this case, and any profit on the sale of shares of common stock by the
selling securityholder and any discount, commissions or concessions received by
any underwriters, dealers or agents might be deemed to be underwriting discounts
and commissions under the Securities Act.
The sale of the shares by the selling securityholder may also be effect
from time to time by selling securityholder directly to purchasers or to or
through certain broker-dealers. Sales may be made through any broker-dealer,
acting as agent or principal, pursuant to any of the methods described below.
Such sales may be made:
- - on Nasdaq or other exchanges on which the common stock is then traded,
- - in the over-the-counter market,
12
<PAGE> 17
- - 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 may also be sold in one or more of the following
transactions:
- - a block transactions, which may involve crosses, in which a
broker-dealer may sell all or a portion of the shares as agent but may
position and resell all or a portion of the block as principal to
facilitate the transaction;
- - purchases by a broker-dealer as principal and resale by that
broker-dealer for its own account pursuant to this prospectus;
- - a special offering,
- - an exchange distribution or a secondary distribution in accordance with
applicable stock exchange rules;
- - ordinary brokerage transactions; and
- - transactions in which a broker-dealer solicits purchasers.
In effecting sales, broker-dealers engaged by the selling
securityholder may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or other compensation from the selling
securityholder 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.
Participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with sales of the shares.
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 AccuMed by our counsel, Joyce L. Wallach, Esq.
13
<PAGE> 18
EXPERTS
The consolidated financial statements and schedules of AccuMed
International, Inc. and subsidiaries as of December 31, 1998 and 1997, and for
each of the years and the three-year period ended December 31, 1998 have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG, LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the Securities
and Exchange Commission in connection with this offering (File No. 333-90637).
In addition, we file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy the registration statement
and any other documents we have filed at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. You may call the SEC at
1-800-SEC-0330 for further information about the Public Reference Room. Our SEC
filings are also available to the public at the SEC's Internet site found at
"http://www.sec.gov." You can also inspect our SEC filings at the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006.
This prospectus is part of the registration statement and does not
contain all of the information included in the registration statement. Whenever
a reference is made in this prospectus to any contractor other document of
AccuMed, the reference may not be complete, and you should refer to the exhibits
that are part of the registration statement for a copy of the contract or
document.
In addition, the SEC allows us to "incorporate by reference" into this
prospectus the information we file with it. This means we can disclose important
information to you by referring you to those documents. Information incorporated
by reference is part of this prospectus. Later information filed with the SEC
will update and supersede this information.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is terminated.
- Our annual report on Form 10-K for the year ended December 31,
1998, including exhibits.
- Our quarterly reports on Form 10-Q for the fiscal quarters
ended March 31, June 30 and September 30, 1999.
- The description of our common stock and accompanying rights
contained in amendment no. 1 to our registration statement on
Form 8-A/A filed with the SEC on January 2, 1996.
We will provide to each person, including any beneficial owner, to whom
a copy of this prospectus is delivered, a copy of any or all of the information
we have incorporated by reference in
14
<PAGE> 19
this prospectus. You may request copies of this information, and we will provide
it at no cost, by writing or telephoning us at:
AccuMed International, Inc.
920 North Franklin Street, Suite 402
Chicago, Illinois 60610
Attn: Chief Executive Officer
Telephone: (312) 642-9200.
15
<PAGE> 20
ACCUMED INTERNATIONAL, INC.
250,000 Shares
Common Stock
---------------
Prospectus
---------------
_________, 2000
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NO DEALER,
SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE INFORMATION THAT IS NOT
CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT
SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OF
SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT
ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY
OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
<PAGE> 21
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 AccuMed 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>
<S> <C>
SEC registration fee $ 122
Printing and engraving expenses $ 5,500
Accounting fees and expenses $10,000
Legal fees and expenses $ 7,500
Blue Sky fees and expenses $ 500
Miscellaneous $ 378
TOTAL $24,000
=======
</TABLE>
None of these expenses will be paid by the selling securityholder
pursuant to the terms of the agreement under which the shares of common stock to
be sold hereby will be issued.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
AccuMed has provisions in its Certificate of Incorporation which
eliminate the liability of AccuMed's directors to AccuMed and its stockholders
for monetary damages to the fullest extent permissible under Delaware law and
provisions which authorize AccuMed 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.
AccuMed's Bylaws provide that AccuMed shall indemnify its directors and
officers to the fullest extent permitted by Delaware law.
AccuMed's officers and directors are covered by a director's and
officer's liability insurance policy maintained by AccuMed. Under the insurance
policy, AccuMed is entitled to be reimbursed for indemnity payments that it is
required or permitted to make to its directors and officers.
II-1
<PAGE> 22
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 increasing authorized common stock. (2)
4.5 Certificate of Amendment to Certificate of Incorporation of the
Registrant effecting reverse stock split. (3)
4.6 Specimen Certificate for common stock. (1)
4.7 Bylaws of the Registrant. (1)
4.8 Amendment No. 1 to Bylaws of the Registrant. (4)
4.9 Floating Rate Convertible Promissory Note dated June 26, 1998 made by
the Registrant in favor of Xillix Technologies Corp. in the original
principal amount of CND$500,000. (5)
5.1 Opinion of Joyce L. Wallach, Esq., counsel to the Registrant,
regarding the legality of the securities offered hereby. (6)
23.1 Consent of Joyce L. Wallach, Esq., counsel to the Registrant,
(contained in Exhibit 5.1).
23.2 Consent of KPMG LLP.
24.1 Powers of Attorney (contained in the signature page to the
Registration Statement filed with the SEC on November 9, 1999).
</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 Registration Statement on Form S-3
(Regis. No. 333-28125) filed with the SEC on May 30, 1997.
(3) Incorporated by reference to the Registration Statement on Form S-3
(Regis. No. 333-56393) filed with the SEC on June 9, 1998.
II-2
<PAGE> 23
(4) Incorporated by reference to the Annual Report on Form 10-K for the
year ended December 31, 1997.
(5) Incorporated by reference to the Registration Statement on Form S-3
(Regis. No. 333-90637) filed with the SEC on November 9, 1999.
(6) Incorporated by reference to Pre-effective Amendment No. 1 to the
Registration Statement on Form S-3 (Regis. No. 333-90637) filed with
the SEC on December 8, 1999.
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 AccuMed pursuant to the foregoing provisions, or otherwise, AccuMed
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by AccuMed of expenses incurred or paid
by a director, officer or controlling person of AccuMed 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,
AccuMed 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-3
<PAGE> 24
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. 2 to the Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, hereunto duly authorized, in the City
of Chicago, State of Illinois on January 14, 2000.
ACCUMED INTERNATIONAL, INC.
By: /s/ Paul F. Lavallee,
--------------------------------------
Chairman, Chief Executive Officer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul F. Lavallee attorney-in-fact for the
undersigned, with the power of substitution, for the undersigned in any and all
capacities, to sign any and all amendments to this Registration Statement
(including post-effective amendments), and to file the same, with all exhibits
thereto, and other documents inc connection therewith, with the Securities and
Exchange Commission, hereby certifying and confirming all that each of said
attorneys-in-fact or his substitute or substitutes may lawfully do or causes to
be done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Paul F. Lavallee Chairman of the Board, and January 14, 2000
- ------------------------------ Chief Executive Officer, and
(Paul F. Lavallee) Principal Accounting Officer
(Principal Executive Officer and
Principal Accounting Officer)
/s/ Mark Banister* Director January 14, 2000
- ------------------------------
(Mark Banister)
</TABLE>
II-4
<PAGE> 25
<TABLE>
<S> <C> <C>
/s/ Jack H. Halperin* Director January 14, 2000
- ------------------------------
(Jack H. Halperin)
/s/ Robert L. Priddy* Director January 14, 2000
- ------------------------------
(Robert L. Priddy)
/s/ Leonard M. Schiller* Director January 14, 2000
- ------------------------------
(Leonard M. Schiller)
*By: /s/ Paul F. Lavallee
-------------------------
by power of attorney
</TABLE>
II-5
<PAGE> 26
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 increasing authorized common stock. (2)
4.5 Certificate of Amendment to Certificate of Incorporation of the
Registrant effecting reverse stock split. (3)
4.6 Specimen Certificate for common stock. (1)
4.7 Bylaws of the Registrant. (1)
4.8 Amendment No. 1 to Bylaws of the Registrant. (4)
4.9 Floating Rate Convertible Promissory Note dated June 26, 1998 made
by the Registrant in favor of Xillix Technologies Corp. in the
original principal amount of CND$500,000. (5)
5.1 Opinion of Joyce L. Wallach, Esq., counsel to the Registrant,
regarding the legality of the securities offered hereby. (6)
23.1 Consent of Joyce L. Wallach, Esq., counsel to the Registrant,
(contained in Exhibit 5.1).
23.2 Consent of KPMG LLP.
24.1 Powers of Attorney (contained in the signature page to the
Registration Statement filed with SEC on November 9,1999).
</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 Registration Statement on Form S-3
(Regis. No. 333-28125) filed with the SEC on May 30, 1997.
(3) Incorporated by reference to the Registration Statement on Form S-3
(Regis. No. 333-56393) filed with the SEC on June 9, 1998.
II-6
<PAGE> 27
(4) Incorporated by reference to the Annual Report on Form 10-K for the
year ended December 31, 1997.
(5) Incorporated by reference to the Registration Statement on Form S-3
(Regis. No. 333-90637) filed with the SEC on November 9, 1999.
(6) Incorporated by reference to Pre-effective Amendment No. 2 to the
Registration Statement on Form S-3 (Regis. No. 333-90637) filed with
the SEC on December 8, 2000.
II-7
<PAGE> 1
EXHIBIT 23.2
Consent of KPMG LLP
The Board of Directors
AccuMed International, Inc.
We consent to incorporation by reference in the registration statement on Form
S-3 (No. 333-90637) of AccuMed International, Inc. and subsidiaries of our
reports dated March 26, 1999, relating to the consolidated balance sheets of
AccuMed International, Inc. and subsidiaries as of December 31, 1998 and 1997,
and the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1998 and all related schedules, which reports appear in the December 31, 1998,
annual report on Form 10-K of AccuMed International, Inc.
/s/ KPMG LLP
Chicago, Illinois
January 13, 2000
