<PAGE> 1
As filed with the Securities and Exchange Commission on June 19, 2000
Registration No. 333-34460
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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MARTEK BIOSCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-1399362
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
------------------------------------
6480 DOBBIN ROAD
COLUMBIA, MARYLAND 21045
(410) 740-0081
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
HENRY LINSERT, JR.
CHIEF EXECUTIVE OFFICER
MARTEK BIOSCIENCES CORPORATION
6480 DOBBIN ROAD
COLUMBIA, MARYLAND 21045
(410) 740-0081
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
MICHAEL J. SILVER
HOGAN & HARTSON L.L.P.
111 SOUTH CALVERT STREET, 16TH FLOOR
BALTIMORE, MARYLAND 21202
(410) 659-2700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than the securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC IS
EFFECTIVE. THIS 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.
<PAGE> 3
PROSPECTUS SUBJECT TO COMPLETION
JUNE __ , 2000
MARTEK BIOSCIENCES CORPORATION
2,865,768 SHARES OF COMMON STOCK
804,891 COMMON STOCK PURCHASE WARRANTS
The shareholders named on page 13 are offering to sell up to 2,865,768
shares of our common stock and up to 804,891 common stock purchase warrants.
Our common stock is traded on the Nasdaq Stock Market under the symbol
"MATK." On June 16, 2000, the last reported sale price of our common stock on
Nasdaq was $17.625 per share.
------------------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
------------------------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE COMMON
STOCK OR THE COMMON STOCK PURCHASE WARRANTS, NOR HAVE THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is June , 2000.
<PAGE> 4
OUR BUSINESS
Martek Biosciences Corporation was founded in 1985. Our
principal executive offices are located at 6480 Dobbin Road, Columbia, Maryland
21045, and our telephone number is (410) 740-0081. We develop, manufacture and
sell products from microalgae.
Microalgae are microplants. We have pioneered the commercial
development of microalgae into a portfolio of high value products and product
candidates consisting of the following:
- NUTRITIONAL PRODUCTS - Over the past eight years, we have developed
production methods and intellectual property for two unusual fatty
acids, docosahexaenoic acid, derived from algae and known as DHA, and
arachidonic acid, derived from fungus and known as ARA. These fatty
acids are found in cell membranes throughout the body, but are
concentrated in the brain, central nervous system, retina and heart.
Dietary DHA consumption in developed societies has dropped
dramatically over the last 50 years. DHA uses span from prevention to
therapeutics and can be delivered via foods, supplements and
pharmaceuticals. DHA and ARA together are "good fats" that may play a
beneficial roll in the development of the eyes and central nervous
systems of newborns and in promoting adult mental and cardiovascular
health.
- STABLE ISOTOPE PRODUCTS - We have developed several other product and
product candidates from microalgae including isotopically labeled
products such as amino acids and sugars. These products are sold into
the pharmaceutical industry enabling researchers the ability to
evaluate three-dimensional structures of certain proteins using
nuclear magnetic resonance, known as NMR technology.
- OTHER PRODUCTS - We are also developing new fluorescent marker
products from microalgae that have potential applications in the
diagnostics area bring greater sensitivity to existing tests and
applications. Additionally, our genomics group has developed key
intellectual property for future genetic transfer of algae that some
day may allow the expression of DHA on other high value products from
the enormous algal gene pool into common plants such as corn.
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RISK FACTORS
You should carefully consider the following risk factors, as
well as the other information in this prospectus and all of the information
incorporated by reference before purchasing our common stock.
IF OUR INFANT FORMULA LICENSEES ARE NOT SUCCESSFUL IN SELLING PRODUCTS
SUPPLEMENTED WITH OUR NUTRITIONAL OILS, WE WILL NOT GENERATE ADEQUATE PRODUCT
SALES OR ROYALTIES.
We have almost no control over the factors that will
determine most of our future revenues. Although we sell some of our product
directly to the customer, most of our product sales are derived from licenses.
The licensees use our products in the merchandise they market to the public.
Our future revenues will be based on the number of licenses sold, the amount of
our products that they sell and related royalty fees earned. We depend on
sizable product orders from infant formula licensees and other marketing
partners. Therefore, the relationship with each of our customers is critically
important to our business. While we have detailed contracts with each customer,
changes to product pricing, royalty rates and delivery timetables may be
required to meet demands and expectations.
In the first six months of fiscal 2000, we generated
approximately $1,000,000 in product sales and royalties received from infant
formula manufacturers that have licensed our nutritional oils. Our licensees
are responsible for all clinical tests, regulatory approvals, and marketing
related to products containing our nutritional oils. The licensees are not
required to use our nutritional oils in any of their products. They are also
not restricted under the licensing agreements from obtaining our nutritional
oils from other sources for use in their infant formula products. Some of our
licensees have introduced infant formula products containing our nutritional
oils overseas. Future revenues, however, will depend on:
- Increases in the number of licensees using our oils
in their infant formula products overseas, and
- the number of products containing our oils
introduced in the U.S. (once FDA regulation approval
is obtained, if at all)
Our customers are generally large and complex companies, and the launch cycles
of new products are typically long and unpredictable. In order to provide for
these customers, we are required to make considerable up-front investments
without any assurance of future revenues.
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IF OUR CURRENT PRODUCTION CAPACITY DOES NOT INCREASE IN THE FUTURE, WE MAY BE
UNABLE TO MEET FUTURE DEMAND FOR OUR PRODUCTS.
We believe that our plant will be able to produce our
nutritional DHA oil in sufficient quantity to meet near-term demand. However,
we are unable to predict whether we have sufficient manufacturing capacity to
meet future market requirements. We have conducted DHA production trials with
third-party manufacturers to prepare for future DHA oil demand in excess of our
current plant capacity, but we do not currently have a third party
manufacturing agreement in place. The failure to meet demand for our
nutritional oils could encourage our infant formula licensees and other
nutritional product customers to look for alternative manufacturing sources.
Our strategy for the development and manufacturing of our
products may include entering into various collaborations with corporate
partners, licensors, licensees and others. For example, in 1996, we entered
into a manufacturing agreement with a third party manufacturer for its
production of our ARA oil. Although we are able to produce ARA oil in our
Winchester, Kentucky manufacturing plant, a halt in supply from this third
party ARA oil manufacturer could mean that we are unable to meet product demand
in the short-run. If the supply shortage continued, our ability to meet
long-term product demand might also be affected.
We may not succeed in negotiating acceptable terms for the
supply of either DHA or ARA in the future. Alternatively, we may determine that
collaborative arrangements are no longer beneficial to our operations, and
instead produce this oil ourselves. Unsuccessful collaborative arrangements
could also adversely affect the development and manufacture of our products.
IF WE ARE UNABLE TO OBTAIN FDA AND OTHER GOVERNMENT APPROVALS, WE WILL BE
UNABLE TO MARKET SOME OR ALL OF OUR PRODUCTS.
A number of government authorities in the United States and
other countries regulate our products and our manufacturing and research
activities. This includes the FDA pursuant to the Federal Food, Drug and
Cosmetic Act. The FDA regulates, to varying degrees and sometimes in very
different ways, infant formulas, dietary supplements, medical foods,
nutritional products that are introduced to the body through the intestines or
by other means, and diagnostic and pharmaceutical products. Generally,
authorities regulate prescription pharmaceuticals and most diagnostic products
more rigorously than foods, such as dietary supplements. Infant formulas are
special types of food that are regulated more rigorously than most other types
of foods.
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The time required to obtain clearances from additional
foreign countries may vary. It may be longer or shorter than that required by
the FDA. Additional foreign clearances may not be obtained on a timely basis,
if at all.
Together with our licensees we are in the process of
responding to certain questions raised by the FDA in connection with evaluating
our oils for inclusion in U.S. infant formula. As part of this process, during
February 2000, we filed a generally recognized as safe ("GRAS") notification
with the FDA for the use of its DHA and ARA in infant formula. We believe that
the data establish that our sources of ARA and DHA are GRAS when used in infant
formula. We also believe that the FDA review of the GRAS notification will have
a favorable outcome. In the event that the FDA review results in a favorable
outcome, each licensee will still need to obtain a separate FDA authorization
before marketing an infant formula with our sources of DHA and ARA. We believe
that this regulatory process will take a minimum of three to six additional
months.
Many of the products are in research and development phases.
We cannot predict all regulatory requirements or issues that may apply to or
arise in connection with our products. The adoption of new or changes in
existing laws, regulations or policies could prevent us from achieving
compliance with regulatory requirements. Our licensees and collaborators will
also be affected by legal and regulatory adjustments. Such changes could also
affect the timing of achieving such clearances.
The FDA regulatory process may be costly and time consuming.
Therefore, we decide on a product-by-product basis whether to handle FDA
regulatory requirements independently or to assign such responsibilities to our
licensees or future collaborative partners. If the clearances are delayed or
not achieved at all, it may adversely effect our business, financial condition
and results of operations. If we lose previously received approvals or
clearances, or fail to comply with existing or future regulatory requirements,
it would have a similar adverse effect.
It is unclear how our products derived from microalgae, such
as fluorescent detection, will be regulated by the FDA. They may be treated as
either medical devices or as a combination medical device/drug product to the
extent that they are used in the diagnosis, mitigation, treatment, cure or
prevention of diseases. This more stringent classification subjects these
products to premarket clearances and regulatory approvals.
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In order to market pharmaceutical uses of products derived
from microalgae, we must first successfully complete the required clinical
testing of these products. Potential obstacles may include:
- our ability to develop the extensive data needed to
establish the safety and efficacy of our products;
and
- the possibility that authorities will begin to
regulate these drug products as biological products
or as controlled substances. This more stringent
testing would have a detrimental affect on marketing
and other requirements.
BECAUSE WE ARE IN THE EARLY STAGES OF PRODUCT DEVELOPMENT, WE NEED SIGNIFICANT
ADDITIONAL CAPITAL.
We face several risks relating to the acquisition of funding
necessary to adequately develop and market our products. We will pursue various
financing alternatives to obtain these funds, potentially including:
- equity issuances;
- asset-based borrowing;
- additional lease financing; and
- collaborative arrangements with partners.
As our business grows, we predict that we will need to raise funds to cover
manufacturing and marketing expenses. We may need to expand our existing
facilities in order to accommodate new products and increased production. It is
possible that we will have to build or purchase new facilities in order to meet
growing market needs.
Because of market variables, future funding for these
activities may not be available, or may not be available on terms conducive to
successful commercialization of our products. Our limited debt financing
arrangements require that we meet financial covenants related to our
outstanding term loans. Our ability to maintain adequate debt funding will be
largely contingent on our ability to:
- continue to comply with existing debt covenants; and
- establish additional debt financing arrangements on
satisfactory terms, if at all.
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If adequate funds are not available, we may be required to
scale back our research, development, manufacturing, and commercialization
programs. If we are forced to obtain funds through arrangements with
collaborative partners, we may have to relinquish technology or product rights
including patent and other intellectual property rights.
IF OUR HISTORY OF OPERATING LOSSES CONTINUES, THERE WILL BE UNCERTAINTY
REGARDING OUR FUTURE FINANCIAL RESULTS.
We have experienced net operating losses since our inception.
As of April 30, 2000, our cumulative net loss was $81,781,000. Many of our
products require substantial additional research, laboratory and clinical
testing, and regulatory approval.
We expect to receive most of our future revenues from sales
of products, royalty income, and licensing fees. We first realized revenues
from our products for use in molecular structure research and structure-based
drug design in 1989. We recognized revenues from license fees and sales of
sample quantities of nutritional and diagnostic products in 1992. In 1995, we
recognized our first product and royalty revenues from sales of infant formula
containing the nutritional oils DHA and ARA. In 1996, we began to realize
revenues from the sale of Neuromins(R), a dietary supplement derived from one
of our nutritional oils. The following figures represent our financial records
as of the six months ended April 30, 2000.
- Total revenue: $4,159,000.
- Research and development revenue: $730,000.
- Nutritional product sales: $2,063,000
- Stable isotope and other product sales: $1,157,000
- Royalties: $198,000
We predict that nutritional product sales and royalties will be our main
revenue generator in the future.
BECAUSE WE OPERATE IN AN EMERGING INDUSTRY, THE MARKET PRICE OF OUR STOCK IS
VOLATILE.
The market price of our common stock may experience a high
level of volatility, as frequently occurs with publicly traded emerging growth
companies and bioscience companies. Under current circumstances, we have
limited liquidity.
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Since our initial public offering of common stock on November 23, 1993, the
average daily trading volume in the common stock as reported on the Nasdaq
National Market has been 149,045 shares. A more active trading market may
develop in the future. Our 52-week trading price range for the week ending June
9, 2000 is $5.25 to $32.00.
BECAUSE WE HAVE LIMITED CAPITAL AND ARE HEAVILY FINANCED, WE ARE VULNERABLE TO
TAKEOVERS.
Our Board of Directors is divided into three classes with
each class of directors being elected to three-year terms on a rotating basis.
As such, only approximately one-third of the members of our board stand for
election every year. We have adopted a stockholder rights plan which may have
the effect of deterring hostile or coercive attempts to acquire the company.
The plan is effective when any person or group acquires more than 20% of our
common stock without approval of the board. Once triggered, the plan
distributes rights to stockholders enabling those stockholders to acquire
shares of our common stock, or that of an acquiror, at a substantial discount
to the public market price. We have reserved 300,000 shares of Series A Junior
Participating Preferred Stock for issuance in connection with the Stockholder
Rights Plan. We are authorized to issue an additional 4,700,000 shares of
preferred stock in one or more series, having terms fixed by the board, without
a stockholder vote. While the board has no current intentions or plans to issue
any preferred stock, issuance of these shares could also be used as an
anti-takeover device.
IF SHARES ELIGIBLE FOR FUTURE SALE ARE SOLD, OUR ABILITY TO RAISE CAPITAL MAY
BE ADVERSELY IMPACTED.
The exercise of outstanding stock options and warrants will
dilute the percentage ownership of our common stock. This risk relates to the
number of stocks options and warrants currently issued.
- As of April 30, 2000, we had 17,572,279 outstanding shares of common
stock, substantially all available for sale in the public marketplace.
- As of April 30, 2000, there were also outstanding stock options to
purchase an aggregate of 2,862,810 shares of common stock at exercise
prices ranging from $6.25 to $34.25 per share and outstanding warrants
issued in connection with the Common Stock and Warrant Purchase agreements
dated April 27, 1998, May 28, 1999, and February 8, 2000 totaling 804,891
shares at exercise prices between $7.51 and $18.76 per share.
IF WE ARE UNABLE TO KEEP UP WITH RAPIDLY EVOLVING TECHNOLOGY INHERENT IN OUR
INDUSTRY, WE WILL SUFFER SIGNIFICANT FINANCIAL HARM.
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We operate in a rapidly evolving field. Competition from
larger, more experienced and better capitalized companies, including BASF and
Hoffman-LaRoche, has been and will be intense. Our products and technologies
are vulnerable to developments by our competitors. It is crucial that we keep
pace with new technological developments. We believe we have devised the most
efficient method of producing DHA and ARA. However, there are DHA-containing
fish oils, produced and or marketed by BASF and Hoffman-LaRoche that are
potential competition and we are aware of another Company which produces DHA
from fungal sources. In addition, it is possible to derive DHA and ARA from egg
yolk lipids. We are aware of several European infant formula manufacturers that
add DHA derived from these alternative sources to their infant formula.
BECAUSE THERE IS TREMENDOUS UNCERTAINTY REGARDING PATENTS AND PROPRIETARY
TECHNOLOGY IN OUR INDUSTRY, WE ARE VULNERABLE.
Our success depends upon our ability to obtain patent and
trade secret protection and avoid infringing the proprietary rights of others.
To date, we have obtained 7 U.S. patents and a number of patents outside the
U.S. covering aspects of our nutritional oils, and 25 U.S. patents covering
various aspects of our technology. These patents will expire on various dates
between 2007 and 2015. We have other patent applications pending. In addition,
circumstances occasionally require that we rely on the licenses of patents and
technology third parties.
Our current patents cover:
- Aspects of DHA and ARA;
- Blending of DHA and ARA in products;
- Our photobioreactor system for culturing microalgae;
- Celtone(R) technology- our cell growth medium for
bacteria and yeast;
- Celtone (R) M technology- our isotopically labeled
mammalian cell growth medium; and
- Our combinatorial library of molecules, which
includes small, flexible, stable isotopically
labeled molecules for use as probes of the binding
site of any receptor.
We also rely on trade secrets and proprietary know-how, which we protect in
part by confidentiality agreements with our collaborators, employees and
consultants.
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We have filed applications for other patents in the United
States covering additional features of our nutritional oils. We have not yet
been awarded any European patents relating to our ARA-containing oil.
Accordingly, competitors may be able to produce, sell and use ARA in Europe
until patents are issued or have been invalidated using similar or identical
processes to those used by us. Failure to achieve adequate patent and trade
secret protection could affect future sales of our nutritional oils, as well as
our future royalty and license fee revenues.
BECAUSE WE HAVE NO CLINICAL AND LIMITED REGULATORY COMPLIANCE CAPABILITIES, WE
MUST INVEST HEAVILY IN THESE AREAS.
We have limited experience and capabilities in the area of
product testing. We have limited experience and capabilities in the area of
regulatory compliance with respect to our products. We will have to expend
significant sums of money to acquire and expand such capabilities. We may need
to reach collaborative arrangements with third parties to provide these
capabilities or contract with third parties to provide these capabilities.
These capabilities will be important to us for the successful commercialization
of our existing and potential future nutritional, human diagnostic and
pharmaceutical products.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public
over the Internet at the SEC's web site at http://www.sec.gov. You may also
read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-732-0330 for further information on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you
by referring you to these documents. The information incorporated by reference
is an important part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until the selling stockholders sell all of their common stock:
- Annual Report on Form 10-K for the fiscal year ended October
31, 1999, as amended;
- Quarterly Report on Forms 10-Q for the fiscal quarters ended
January 31, 2000 and April 30, 2000 respectively;
- Current Report on Form 8-K filed on April 17, 2000; and
- The description of Martek's common stock contained in Form
8-A.
To obtain a copy of these filings at no cost, you may write or
telephone us at the following address:
Chief Financial Officer
Martek Biosciences Corporation
6480 Dobbin Road
Columbia, Maryland 21045
(410) 740-0081
This prospectus contains forward-looking statements relating to future
events or our future financial performance. These statements are only
predictions and actual events or results may be materially different from our
predictions. In evaluating these statements, you should consider the various
factors identified in this prospectus, including but not limited to the matters
set forth under the heading "Risk Factors," which could cause actual results to
differ materially from those indicated by such forward-looking statements.
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You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. Neither we nor the
Selling Stockholders have authorized anyone else to provide you with different
information. Neither we nor the Selling Stockholders are making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus is accurate as of any date other
than the date on the front of the prospectus.
RECENT DEVELOPMENTS
On April 4, 2000, Martek announced that it signed a non-exclusive
license agreement with Abbott Laboratories for Martek's technology relating to
the use of long-chain polyunsaturated fatty acids in infant formulas. The
agreement provides for initial cash payments and would give Martek an ongoing
royalty upon Abbott's introduction of products using Martek's technology for
DHA and ARA.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common shares or
warrants by the selling stockholders. If all the warrants are exercised in
full, we will receive up to approximately $11.2 million, which will be used for
general corporate purposes. The selling stockholders may never exercise the
warrants in full or at all.
SELLING STOCKHOLDERS
This prospectus relates to the offering by the selling stockholders
named in this prospectus of up to 2,865,768 shares of common stock and 804,891
common stock purchase warrants. All of the selling stockholders have acquired
common stock in private placements and may acquire additional shares of common
stock upon the exercise of warrants issued in the private placements.
The following table sets forth important information with respect to
the selling stockholders as of March 17, 2000, as follows:
- the name and position or other relationship with Martek
within the past three years of the selling stockholders;
- the number of Martek's outstanding shares of common stock
beneficially owned by the selling stockholders (including
shares obtainable under warrants exercisable within sixty
(60) days of March 17, 2000) prior to this offering.
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<PAGE> 15
- the number of shares of common stock and warrants being
offered through this prospectus; and
- the number and percentage of Martek's outstanding shares of
common stock to be beneficially owned by the selling
stockholders after the sale of common stock being offered
through this prospectus.
The selling stockholders do not have to sell all of the shares and
warrants that they own.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned Number of Warrants Shares Beneficially Owned
Prior to the Number of Shares Owned and Offered After the Offering
Selling Stockholder Offering Offered Hereby (1) Hereby Number Percentage
------------------- -------- ------------------ ------- ------ ----------
<S> <C> <C> <C> <C> <C>
Vector Later-Stage Equity 164,300 164,300 61,172 0 *
Fund II, L.P. (2)
Moore Global Investments, 721,019 721,019 162,131 0 *
Ltd.
Remington Investment 158,272 158,272 35,590 0 *
Strategies, L.P.
J. N. Whipple, III (3) 379,999 97,699 24,469 282,300 1.6
Buena Vista Partners, LLC 48,850 48,850 12,235 0 *
Vector Later Stage Equity 492,903 492,903 183,517 0 *
Fund (QP), L.P. (2)
Black Bear Fund I, L.P. 568,866 215,966 49,838 352,900 2.0
Black Bear Fund II, L.L.C. 47,559 20,877 4,818 26,682 *
Black Bear Offshore Ltd. 504,597 219,566 50,669 285,031 1.6
</TABLE>
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<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C> <C>
Black Bear Pacific Master 107,448 36,548 10,964 70,900 *
Fund Unit Trust
George Haywood 1,107,584 431,934 99,677 675,650 3.9
State of Wisconsin 2,227,612 575,912 132,903 1,651,700 9.5
Investment Board (4)
MFS Mid Cap Growth Fund 368,071 187,171 43,193 180,900 1.0
(EXOT)
MFS Mid Cap Growth Fund 183,085 100,785 23,258 82,300 *
(OTC)
MFS New Discovery Fund 143,978 143,978 33,226 0 *
(NDF)
MFS/Sun Life New 7,199 7,199 1,661 0 *
Discovery Fund (NWD)
MFS New Discovery Fund 720 720 166 0 *
(UND)
AGR Halifax Fund, Ltd. 35,994 35,994 8,306 0 *
</TABLE>
(1) Consists of shares of common stock currently owned by the selling
stockholders and offered hereby as well as shares of common stock
issuable to such selling stockholders upon exercise of warrants
currently held and offered hereby by such selling stockholders.
(2) Sandra Panem, a director of Martek since May 1995, was the President
of Vector Fund Management, L.L.C. ("VFM"), which is the general
partner of Vector Later-Stage Equity Fund II, L.P. ("VLSEF II") and
Vector Later-Stage Equity Fund II (QP), L.P. ("VSELF QP"), and a
Senior Vice President of Vector Asset Management, Inc., which is the
managing member of VFM and is the general partner of Vector Fund
Management L.P., the general partner of Vector Later-Stage Equity Fund
L.P. Ms. Panem resigned from all positions with the various Vector
entities in 1999.
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(3) Includes 36,000 shares of common stock currently owned by J.N.
Whipple, Inc., a company controlled by J.N. Whipple. Mr. Whipple
disclaims beneficial ownership of the shares of common stock held by
J. N. Whipple, Inc.
(4) The State of Wisconsin Investment Board holds the securities for the
benefit of the Wisconsin Retirement Trust.
PLAN OF DISTRIBUTION
The common stock being offered by the selling stockholders, or by
their respective pledgees, donees, transferees, or other successors in
interest, will be sold in one or more transactions (which may involve block
transactions) on the Nasdaq Stock Market or on another market on which the
common stock may from time to time be trading, in privately-negotiated
transactions, through the writing of options on the common stock, short sales
or any combination thereof. The sale price to the public may be the market
price prevailing at the time of sale, a price related to the prevailing market
price or at any other price as the selling stockholders determine from time to
time. The common stock may also be sold pursuant to Rule 144. The selling
stockholders shall have the sole and absolute discretion not to accept any
purchase offer or make any sale of common stock if they deem the purchase price
to be unsatisfactory at any particular time.
The selling stockholders may also sell the common stock directly to
market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. Brokers acting as agents for the selling
stockholders will receive usual and customary commissions for brokerage
transactions, and market makers and block purchasers purchasing the common
stock will do so for their own account and at their own risk. It is possible
that the selling stockholders will attempt to sell shares of common stock in
block transactions to market makers or other purchasers at a price per share
which may be below the then market price. In addition, the selling stockholders
or their successors in interest may enter into hedging transactions with
broker-dealers who may engage in short sales of common stock in the course of
hedging the positions they assume with a selling stockholder. It is possible
not all, or even none, of the common stock offered hereby will be issued to, or
sold by, the selling stockholders. The selling stockholders and any brokers,
dealers or agents, upon effecting the sale of any of the common stock offered
hereby, may be deemed "underwriters" as that term is defined under the
Securities Act or the Exchange Act, or the rules and regulations thereunder.
The selling stockholders and any other persons participating in the
sale or distribution of the common stock will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder. These
rules may limit the timing of purchases and sales of any of the common stock by
the selling stockholders or any other person participating in the distribution.
Furthermore, under Regulation M, persons engaged in a distribution of
securities are prohibited
-15-
<PAGE> 18
from simultaneously engaging in market making and other market activities with
respect to the common stock for a specified period of time before the
distribution begins. These restrictions may reduce the marketability of the
common stock.
Martek has agreed to indemnify the selling stockholders, or their
respective transferees or assignees, against potentially significant
liabilities, including liabilities under the Securities Act, or to contribute
to payments these selling stockholders or their respective pledgees, donees,
transferees or other successors in interest, may be required to make.
LEGAL MATTERS
Hogan & Hartson L.L.P., Baltimore, Maryland has passed upon for Martek
certain legal matters with respect to the common shares, warrants and warrant
shares offered hereby.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our Annual Report on Form 10-K for the year ended
October 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
-16-
<PAGE> 19
===============================================================================
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE
HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH 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 THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
TABLE OF CONTENTS PAGE
Our Business .......................... 2
Risk Factors .......................... 3
Where You Can Find More Information......... 11
Recent Developments......................... 12
Use of Proceeds .......................... 12
Selling Stockholders ....................... 12
Plan of Distribution........................ 15
Legal Matters .......................... 16
Experts .......................... 16
MARTEK BIOSCIENCES CORPORATION
COMMON STOCK
AND
WARRANTS
------------
PROSPECTUS
------------
June , 2000
===============================================================================
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses to be paid by the
Company in connection with the issuance and distribution of the securities
being registered hereby. All the amounts are estimates, except the Commission
registration fee. The selling stockholders will bear the cost of all selling
commissions and underwriting discounts with respect to the sale of any
securities by them.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.................... $ 119
Legal fees and expenses ............................................... 9,000
Accounting and miscellaneous expenses.................................. 10,881
----------
Total......................................................... $ 20,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL"), a corporation may indemnify its directors, officers,
employees and agents and its former directors, officers, employees and agents
and those who serve, at the corporation's request, in such capacities with
another enterprise, against expenses (including attorney's fees), as well as
judgments, fines and settlements in nonderivative lawsuits, actually and
reasonably incurred in connection with the defense of any action, suit or
proceeding in which they or any of them were or are made parties or are
threatened to be made parties by reason of their serving or having served in
such capacity. The DGCL provides, however, that such person must have acted in
good faith and in a manner he or she reasonably believed to be in (or not
opposed to) the best interests of the corporation and, in the case of a
criminal action, such person must have had no reasonable cause to believe his
or her conduct was unlawful. In addition, the DGCL does not permit
indemnification in an action or suit by or in the right of the corporation,
where such person has been adjudged liable to the corporation, unless, and only
to the extent that, a court determines that such person fairly and reasonably
is entitled to indemnity for costs the court deems proper in light of liability
adjudication. Indemnity is mandatory to the extent a claim, issue or matter has
been successfully defended.
Article ELEVENTH of the Company's Certificate of Incorporation
provides that the Company will indemnify its directors and officers to the full
extent permitted by law and that no director shall be liable for monetary
damages to the Registrant or its stockholders for any breach of fiduciary duty,
except to the extent provided by applicable law (i) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the DGCL, or (iv)
for any transaction from which such director derived an improper personal
benefit. In addition, under indemnification agreements with its directors, the
Registrant is obligated, to the fullest extent permissible by the DGCL, as it
currently exists or may be amended, to indemnify and hold harmless its
directors, from and against all expense, liability and loss reasonably incurred
or suffered by such directors.
II-1
<PAGE> 21
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<S> <C>
4.1* Form of certificate representing shares of Martek common
stock, par value $0.10 per share (filed as Exhibit 4.01 to
the Company's Registration Statement on Form S-1, File No.
33-68922, declared effective November 23, 1993, and
incorporated herein by reference).
5 Opinion of Hogan & Hartson L.L.P. (to be filed by amendment).
23.1* Consent of Ernst & Young LLP, as independent auditors for the
Company.
23.2 Consent of Hogan & Hartson L.L.P. (included in their opinion
filed as Exhibit 5).
24* Powers of Attorney (included in the Signature Page to this
Registration Statement).
</TABLE>
--------------------
*Filed herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities and Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
II-2
<PAGE> 22
of the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 23
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
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the County of Howard, State of Maryland on June 19, 2000.
MARTEK BIOSCIENCES CORPORATION
By: /s/ Henry Linsert, Jr.
------------------------------
Henry Linsert, Jr.
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Henry Linsert, Jr., Peter L. Buzy and Michael J. Silver, and each of them, with
full power of substitution and resubstitution and each with full power to act
without the other, his or her true and lawful attorney-in-fact and agent, for
him or her and in his or her name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto, and
all other documents in connection therewith, with the Securities and Exchange
Commission or any state, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their, his or her substitutes or substitute, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C>
Date: June 19, 2000 /s/ Henry Linsert, Jr.
----------------------
Henry Linsert, Jr.
Chief Executive Officer and Director
(Principal Executive Officer)
Date: June 19, 2000 /s/ Peter L. Buzy
-----------------
Peter L. Buzy
(Chief Financial and Accounting Officer)
Date: June 19, 2000 /s/ Jules Blake
---------------
Jules Blake
Director
Date: June 19, 2000 /s/ Gordon S. Macklin
---------------------
Gordon S. Macklin
Director
Date: June 19, 2000 /s/ Ann L. Johnson
------------------
Ann L. Johnson
Director
Date: June 19, 2000 /s/ Douglas J. MacMaster, Jr.
-----------------------------
Douglas J. MacMaster, Jr.
</TABLE>
II-4
<PAGE> 24
<TABLE>
<S> <C>
Director
Date: June 19, 2000 /s/ John H. Mahar
-----------------
John H. Mahar
Director
Date: June 19, 2000 /s/ Sandra Panem
----------------
Sandra Panem
Director
Date: June 19, 2000 /s/ Richard J. Radmer
---------------------
Richard J. Radmer
Director
Date: June 19, 2000 /s/ Eugene H. Rotberg
---------------------
Eugene H. Rotberg
Director
Date: June 19, 2000 /s/ William D. Smart
--------------------
William D. Smart
Director
</TABLE>
II-5
<PAGE> 25
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<S> <C>
4.1* Form of certificate representing shares of Martek common
stock, par value $0.10 per share (filed as Exhibit 4.01 to
the Company's Registration Statement on Form S-1, File No.
33-68922, declared effective November 23, 1993, and
incorporated herein by reference).
5 Opinion of Hogan & Hartson L.L.P. (to be filed by amendment).
23.1* Consent of Ernst & Young LLP, as independent auditors for the
Company.
23.2 Consent of Hogan & Hartson L.L.P. (included in their opinion
filed as Exhibit 5).
24* Powers of Attorney (included in the Signature Page to this
Registration Statement).
</TABLE>
--------------------
*Filed herewith.
