<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1997
REGISTRATION NO. 333-11995
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-3 TO
REGISTRATION STATEMENT ON FORM S-1 (FILE NO. 333-11995)
AND
POST-EFFECTIVE AMENDMENT NO. 5 ON FORM S-3 TO
REGISTRATION STATEMENT ON FORM S-1 (FILE NO. 33-97960)
UNDER THE SECURITIES ACT OF 1933
------------------------
ULTRAFEM, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3841 33-0435037
(State or other jurisdiction (Primary standard industrial (I.R.S. employer
of incorporation or classification code number) identification no.)
organization)
</TABLE>
------------------------
805 THIRD AVENUE, 17TH FLOOR
NEW YORK, NEW YORK 10022
(212) 446-1400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
JOHN W. ANDERSEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ULTRAFEM, INC.
805 THIRD AVENUE, 17TH FLOOR
NEW YORK, NEW YORK 10022
(212) 446-1400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPY TO:
GERALD ADLER, ESQ.
SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 758-9500
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /X/ (Registration No. 33-97960)
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 par value..... 539,851 $15.19 $8,200,336.69 $2,484.95
</TABLE>
(1) Does not include 4,301,303 shares of Common Stock offered in the Prospectus
included herein which were previously registered on Registration Statement
on Form S-1 (Reg. No. 33-97960) and for which the Registrant previously paid
a registration fee of $16,637.47.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended, on the
basis of the high and low prices of the Common Stock as reported on the
Nasdaq National Market on May 2, 1997.
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.
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<PAGE>
EXPLANATORY NOTE
1. The Selling Stockholder Prospectus included in this Amendment on Form S-3
was initially included in the Registrant's Registration Statement on Form S-1
(File No. 33-97960) which was declared effective by the Commission on February
22, 1996.
2. Four post-effective amendments to the Registration Statement on Form S-1
(File No. 33-97960) were filed with the Commission in combination with the
Registration Statement on Form S-1(File No. 333-11995), which was declared
effective on November 13, 1996.
3. This Amendment on Form S-3 is intended to convert the Registration
Statements on Form S-1 (File Nos. 33-97960 and 333-11995) into a Registration
Statement on Form S-3.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 6, 1997
PRELIMINARY PROSPECTUS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
4,840,927 SHARES
[LOGO]
COMMON STOCK
------------------
This Prospectus relates to the offer and sale by the holders thereof (the
"Selling Stockholders"), of 4,840,927 common stock, par value $.001 per share
(the "Common Stock"), of Ultrafem, Inc. ("Ultrafem" or the "Company") including
3,722,552 shares issuable upon conversion or exercise of certain outstanding
securities convertible into or exercisable for shares of Common Stock. (The
shares of Common Stock offered hereby are sometimes referred to herein as the
"Shares"). The Company's Common Stock is quoted on the Nasdaq National Market
under the trading symbol "UFEM." On May 5, 1997, the last reported sales price
for the Common Stock on the Nasdaq National Market was $15 1/2 per share. See
"Price Range of Common Stock."
Subject to certain agreed upon lock-up periods more fully described below,
the Shares may be sold from time to time by the Selling Stockholders directly,
or through agents designated from time to time or through dealers or
underwriters also to be designated, on terms to be determined at the time of
sale. To the extent required, the specific Shares to be sold, the names of the
Selling Stockholders, the purchase price, the public offering price, the names
of any such agents, dealers or underwriters and any applicable commission or
discount with respect to a particular offer will be set forth in an accompanying
Prospectus supplement (or, if required, a post-effective amendment to the
Registration Statement of which this Prospectus forms a part). The distribution
of the Shares may be effected in one or more transactions that may take place on
the Nasdaq National Market or the over-the-counter market, including ordinary
broker's transactions, privately negotiated transactions or through sales to one
or more dealers for resale of such securities as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Usual and customary or specifically negotiated
brokerage fees, commissions or discounts may be paid by the Selling Stockholders
in connection with such sales. Certain Selling Stockholders have agreed to
effect such sales through Hampshire Securities Corporation ("Hampshire"), one of
the underwriters that has previously underwritten public offerings of Common
Stock by the Company. See "Plan of Distribution."
The Selling Stockholders and intermediaries through whom the Shares are sold
may be deemed "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Shares, and any profits
realized or commissions received may be deemed underwriting compensation. The
Company has agreed to indemnify the Selling Stockholders against certain
liabilities, including liabilities under the Securities Act.
The Company will not receive any of the proceeds from the sale of Shares
offered hereby. Expenses of this Offering, estimated at $50,000, are payable by
the Company. The aggregate proceeds to the Selling Stockholders from the sale of
the Shares will be the purchase price of the Shares sold, less the aggregate
underwriting fees, discounts and commissions, if any. See "Selling
Stockholders."
THE SHARES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A SUBSTANTIAL DEGREE
OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY READ THE FACTORS SET FORTH UNDER
"RISK FACTORS" ON PAGE 5.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE>
[inside front cover]
[PHOTO OF PRINT ADVERTISEMENT]
THIS IS A SAMPLE PRINT ADVERTISEMENT. THE COMPANY BEGAN SELLING INSTEAD IN
AUGUST 1996;
REVENUES TO DATE HAVE BEEN LIMITED.
INTRODUCING INSTEAD A MULTI-MEDIA MARKETING CAMPAIGN AS EXCITING AS THE
PRODUCT ITSELF.
[PHOTO OF MAGAZINES]
AN EXCITING PRINT CAMPAIGN IS NOW APPEARING IN MAJOR WOMEN'S MAGAZINES,
INCLUDING THOSE PICTURED, SHOWING AUDREY CONTENTE, THE INVENTOR OF INSTEAD,
ENJOYING HER ACTIVE LIFESTYLE.
PRINT ADVERTISEMENTS for INSTEAD appeared in these magazines in October
1996.
[PHOTO OF PRODUCT PACKAGING]
1-800-INSTEAD -- THE EASY-TO-REMEMBER NUMBER CUSTOMERS CAN CALL, AND IF THEY
WISH, SPEAK TO REGISTERED NURSES. THESE NURSES WILL HAVE PERSONALLY USED THE
PRODUCT AND CAN GUIDE USERS THROUGH ANY CONCERNS THEY MAY HAVE.
INSTEAD COMES IN DISTINCTIVE, INVITINGLY DESIGNED BOXES OF 6 COUNT, 14 COUNT
AND 20 COUNT PACKAGES.
[PHOTO OF DIRECT MAIL LITERATURE]
DIRECT MAIL -- THOUSANDS OF HEALTH CARE PROFESSIONALS AND CONSUMERS WILL
RECEIVE FREE SAMPLE KITS OR DISCOUNT COUPONS. THE OUTSIDE OF THE SAMPLE KIT
BOXES AND ENVELOPES CAPITALIZE ON THE EXCITEMENT AND APPROPRIATENESS OF A WOMAN
INVENTOR IN THIS CATEGORY. THEY READ: "A MAN COULDN'T HAVE INVENTED WHAT'S
INSIDE."
[PHOTO OF INFORMERCIAL]
HOW MUCH do you KNOW about your BODY?
EDU-MERCIAL -- A THIRTY MINUTE EDU-MERCIAL HAS BEEN CREATED TO LAUNCH
INSTEAD. FOCUSING ON WOMEN'S HEALTH, IT FEATURES A FEMALE HEALTH QUIZ, FOOTAGE
OF PAST ATTITUDES TOWARDS MENSTRUATION, CANDID TESTIMONIALS FROM ENTHUSIASTIC
CONSUMERS AND ENDORSEMENTS FROM TWO OB-GYN DOCTORS AND A NURSE WHO THINK INSTEAD
IS A MAJOR BREAK-THROUGH FOR WOMEN.
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza Building,
450 Fifth Street, N.W., Washington, DC 20549, or at the Commission's regional
offices: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New
York 10048. The Common Stock is traded on the Nasdaq National Market.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and such Common Stock, reference is made
to such Registration Statement and exhibits. A copy of the Registration
Statement on file with the Commission may be obtained from the Commission's
principal office in Washington, D.C., upon payment of the fees prescribed by the
Commission.
Copies of the Registration Statement may be obtained from the Commission at
its principal office upon payment of prescribed fees. Statements contained in
this Prospectus as to the contents of any contract or other document are not
necessarily complete and, where the contract or other document has been filed as
an exhibit to the Registration Statement, each such statement is qualified in
all respects by reference to the applicable document filed with the Commission.
The Registration Statement of which this Prospectus forms a part has been filed
electronically through the Commission's Electronic Data Gathering Analysis and
Retrieval System and may be obtained through the Commission's website on the
Internet (http://www.sec.gov).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996.
2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended September 30, 1996 and December 31, 1996.
3. The Company's Proxy Statement for the Annual Meeting of Stockholders
held on February 10, 1997.
4. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission under the
Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of this Offering
shall be deemed to be incorporated by reference in this Prospectus and to be a
part of this Prospectus from the date of filing thereof. Any statement contained
in a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, a copy of any
and all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference (other than exhibits). Requests for
such copies should be directed to: Ultrafem, Inc., 805 Third Avenue, 17th Floor,
New York, New York 10022, Attention: Chief Financial Officer, telephone (212)
446-1400.
3
<PAGE>
THE OFFERING
UNLESS OTHERWISE INDICATED, THE INFORMATION IN THIS PROSPECTUS (I) GIVES
EFFECT TO THE ONE-FOR-FOUR REVERSE STOCK SPLIT EFFECTED ON JULY 28, 1995 AND
(II) IS BASED ON THE NUMBER OF SHARES OF COMMON STOCK AND OTHER SECURITIES
OUTSTANDING AS OF MARCH 31, 1997.
<TABLE>
<S> <C>
Common Stock offered by the Selling 4,840,927 shares (1)
Stockholders...............................
Common Stock outstanding prior to this 7,949,040 shares (2)
Offering...................................
Shares of Common Stock to be outstanding 11,671,592 shares (3)
after Offering.............................
Use of proceeds.............................. The Company will not receive any of the
proceeds from the sale of shares of Common
Stock by the Selling Stockholders.
Risk factors................................. The Shares offered hereby involve a high
degree of risk. See "Risk Factors."
Nasdaq National Market symbol................ UFEM
</TABLE>
- - - ------------------------
(1) Includes 1,118,375 shares of Common Stock held by the Selling Stockholders
and offered hereby and 3,722,552 shares of Common Stock issuable upon
conversion or exercise of securities convertible into or exercisable for
Common Stock held by the Selling Stockholders and offered hereby.
(2) Includes 1,118,375 shares of Common Stock held by the Selling Stockholders
and offered hereby. Excludes 5,049,583 shares of Common Stock issuable upon
the conversion or exercise of securities which are convertible into or
exercisable for Common Stock, of which 3,722,552 are held by the Selling
Stockholders and offered hereby.
(3) Includes 1,118,375 shares of Common Stock held by the Selling Stockholders
and offered hereby, 3,722,522 shares of Common Stock issuable upon
conversion or exercise of securities which are convertible into or
exercisable for Common Stock held by the Selling Stockholders and offered
hereby. Excludes 1,327,031 shares of Common Stock issuable upon the
conversion or exercise of securities which are convertible into or
exercisable for Common Stock which are not offered hereby.
4
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION INCLUDED IN, OR INCORPORATED BY
REFERENCE INTO, THIS PROSPECTUS, THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED
CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE
SHARES OF COMMON STOCK OFFERED HEREBY. PROSPECTIVE INVESTORS ARE CAUTIONED THAT
THE STATEMENTS IN THIS PROSPECTUS THAT ARE NOT DESCRIPTIONS OF HISTORICAL FACTS
MAY BE FORWARD-LOOKING STATEMENT. SUCH STATEMENTS ARE BASED ON MANY ASSUMPTIONS
AND ARE SUBJECT TO RISKS AND UNCERTAINTIES. ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD LOOKING STATEMENTS DUE TO A
NUMBER OF FACTORS, INCLUDING, BUT NOT LIMITED TO, THOSE IDENTIFIED BELOW.
HISTORY OF LOSSES
From the Company's inception in March 1990 through June 30, 1996, the
Company had not generated any revenue, and has only recently begun generating
revenue. Revenues to date have been limited. Through December 1996, the Company
has expended more than $33.9 million for, among other things, marketing,
research and development activities, engineering and design of fully automated
manufacturing systems, clinical testing, meeting domestic and international
regulatory requirements, domestic and international applications for patent
protection, applications for domestic trademark protection, and market research.
The Company may encounter difficulties experienced by companies which have only
recently begun generating revenues, many of which may be beyond the Company's
control, such as unanticipated problems and costs related to marketing of the
Company's first commercial product, INSTEAD-Registered Trademark-.
INSTEAD-Registered Trademark- is a feminine protection product which collects,
rather than absorbs menstrual fluid, and is based on the Company's proprietary
SoftCup Technology-Registered Trademark-. Management expects to continue
incurring operating losses for the foreseeable future, until such time as the
Company derives significant revenues from the sale of
INSTEAD-Registered Trademark-. Sales of INSTEAD-Registered Trademark- commenced
in the Fall of 1996. There can be no assurance that the Company will be
profitable. See "Need for Additional Financing for Unforeseen Risks."
DEPENDENCE ON SINGLE PRODUCT
The Company's future profitability initially depends primarily on the
successful commercialization of INSTEAD-Registered Trademark- as an alternative
to currently available feminine protection products. Should the introduction of
INSTEAD-Registered Trademark- be unsuccessful for any reason, there would be a
material adverse effect on the Company's business, financial condition and
results of operation. See "-- Risks Associated with Research and Development for
Other Applications of the SoftCup Technology."
NEED FOR ADDITIONAL FINANCING FOR UNFORESEEN RISKS
The Company believes that the level of financial resources available to it
is an important factor in its ability to achieve the marketing and distribution
of INSTEAD-Registered Trademark- and in its ability to develop and eventually
bring medical products to market. If the Company is unable to raise additional
capital or arrange satisfactory working capital or additional equity financing,
the Company may be unable to complete the distribution of
INSTEAD-Registered Trademark- into the full United States market. Also, the
Company may require additional financing if unforeseen risks are encountered.
Additional financings may require the issuance of new equity securities, and
there can be no assurance that the Company will be able to obtain working
capital or additional financing at a favorable rate, if at all. See "--Risks
Associated with Research and Development for Other Applications of the SoftCup
Technology."
LACK OF MANUFACTURING EXPERIENCE; NEED TO ACHIEVE ECONOMIES OF SCALE AND LIMITED
MANUFACTURING RESOURCES
The Company has only limited experience in manufacturing quantities of
INSTEAD-Registered Trademark- for the commercial market and has not yet
manufactured INSTEAD-Registered Trademark- on a cost-efficient basis. There can
be no
5
<PAGE>
assurance that the Company will be able to manufacture quantities of
INSTEAD-Registered Trademark- for the commercial market on a cost efficient
basis, if at all. In the future the Company will be required to increase the
quantity of units it can produce, reduce per-unit manufacturing costs and
related marketing expenses and achieve high quality standards in order to
successfully market INSTEAD-Registered Trademark- on a commercial scale
throughout the full United States market. These criteria will only be satisfied
if the Company is able to either enhance significantly its existing production
capabilities or enter into arrangements with third parties capable of
manufacturing INSTEAD-Registered Trademark- on a cost-efficient basis. If the
Company encounters production difficulties or delays, including problems
involving production yield, quality control and assurance or supplies or
components, there could be a material adverse effect on the Company's business,
financial condition and results of operations. See "--History of Losses."
MARKETING RISKS; UNCERTAINTY OF CONSUMER ACCEPTANCE
The Company has incurred, and expects to continue to incur, substantial
marketing expense in launching INSTEAD-Registered Trademark- into the United
States market. The marketing risks that the Company may encounter are compounded
by the unique nature of INSTEAD-Registered Trademark-. Because
INSTEAD-Registered Trademark- is fundamentally different from nearly all
commercially available forms of feminine protection, successful introduction of
INSTEAD-Registered Trademark- will face several obstacles, including a change in
established personal hygiene regimen and educating potential consumers on how to
use INSTEAD-Registered Trademark-. Furthermore, the Company will be competing
with other products which are already familiar to the target audience, and the
Company will be required to incur substantial marketing expense in order to
introduce INSTEAD-Registered Trademark- to consumers. There can be no assurance
that the Company will develop an effective marketing or advertising campaign to
overcome these obstacles. See "--Risks Associated with Potential Competitive
Response."
NECESSITY OF REGULATORY CLEARANCES TO MARKET
The production and distribution of INSTEAD-Registered Trademark- are subject
to regulation in the United States and other countries in which
INSTEAD-Registered Trademark- may be sold. In 1993, the Food and Drug
Administration (the "FDA") cleared the Company's pre-market notification
submission under Section 510(k) of the Federal Food, Drug, and Cosmetic Act of
1938, as amended (the "FDCA"). The FDA's clearance of this notification enables
the Company to market INSTEAD-Registered Trademark- in the United States and to
export it overseas subject to the general controls provisions of the FDCA.
Subsequent to FDA clearance of this notification submission, certain
modifications, which the Company believes are minor, were made in the materials
used in INSTEAD-Registered Trademark- to improve the manufacturing process. An
applicable FDA regulation requires the filing of a new 510(k) notification when,
among other things, there is a major change or modification in the intended use
of the device, or a change or modification in material, chemical composition or
manufacturing process, that could significantly affect the device's safety or
effectiveness. A device manufacturer is responsible for making the initial
determination as to whether a proposed change to a cleared device or its
intended use necessitates the filing of a new 510(k) notification. The Company
has conducted testing subsequent to the changes, which the Company believes are
minor, in materials. The Company has been advised by its regulatory counsel,
Arent Fox Kintner Plotkin & Kahn, that no additional 510(k) notification is
required for these changes, although there can be no assurance that the FDA will
not require such a 510(k) notification. If a new 510(k) notification were to be
required by the FDA for the changes in materials of
INSTEAD-Registered Trademark-, there can be no assurance that the FDA would
clear a new 510(k) notification submitted by the Company, or that the FDA would
not prohibit the Company from selling INSTEAD-Registered Trademark- until the
510(k) notification was cleared. The FDA review time for 510(k) notifications
could be lengthy. The failure to obtain a new 510(k) clearance, if required, on
a timely basis, if at all, would have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company has also decided to label INSTEAD-Registered Trademark- with a
12 hour maximum wear time. The labeling for INSTEAD-Registered Trademark-, as
cleared by the FDA in the original 510(k) notification, included an 8 hour
maximum wear time. The Company conducted a clinical study to support the safety
of the 12 hour wear time. The
6
<PAGE>
Company does not believe a new 510(k) notification is necessary to increase the
maximum wear time to 12 hours. Prior to finalizing the change in labeling, the
Company met with the FDA on June 19, 1996. At that meeting the results of these
studies were discussed and the FDA requested that the Company submit the results
of its clinical testing, which the Company provided on July 17, 1996. On October
25, 1996 the Company received a letter from the FDA confirming that the Company
could increase the wear time of INSTEAD-Registered Trademark- to 12 hours
without filing a new 510(k) notification.
Any product with a 510(k) notification cleared by the FDA and its
manufacturer are subject to continuing regulatory review and the FDA has the
authority to, among other things, order or request restrictions on the
distribution of products or the withdrawal of products from market even after
clearance of a 510(k) submission is obtained.
The Company's manufacturing facility in Missoula, Montana is subject to the
Good Manufacturing Practices ("GMP") regulations which are promulgated by the
FDA, international quality standards and other regulatory requirements. The
failure by the Company to comply with the foregoing could adversely affect the
Company's production and financial condition.
In order to distribute INSTEAD-Registered Trademark- in foreign countries,
the Company must comply with all regulatory requirements of the countries in
which the Company intends to sell INSTEAD-Registered Trademark-, including
regulations with respect to labeling and importing into such countries and FDA
requirements for export thereto. There can be no assurance that the Company will
be able to comply with such requirements. The Company will require FDA clearance
or pre-market approval to market other applications of the SoftCup Technology in
the United States.
PRODUCT LIABILITY; POSSIBILITY OF INSUFFICIENT INSURANCE COVERAGE
Testing, manufacturing and marketing of INSTEAD-Registered Trademark- entail
an inherent risk of product liability, and such risk may be increased because
INSTEAD-Registered Trademark- is used internally. The Company presently
maintains what it believes to be a sufficient level of product liability
insurance. Such insurance is expensive and, in the future, may not continue to
be available on acceptable terms, if at all. The Company's business, financial
condition and results of operations may be materially adversely affected by a
successful product liability claim, or series of such claims, in excess of any
insurance coverage. There can be no assurance that product liability claims will
not be successfully asserted against the Company.
COMPETITION
The market for feminine protection and medical products is presently
dominated by large, long-established and well-financed companies which have
substantially greater resources than the Company. There can be no assurance that
other companies will not develop new or enhanced feminine protection products
that are either more effective than INSTEAD-Registered Trademark-, or would
render INSTEAD-Registered Trademark- obsolete or non-competitive. In addition,
there can be no assurance that existing competitive companies will not increase
their level of advertising and marketing expenditures in response to the
introduction of INSTEAD-Registered Trademark-. See "--Risks Associated with
Potential Competitive Response."
RISKS ASSOCIATED WITH POTENTIAL COMPETITIVE RESPONSE
Subsequent to the Company's initial public offering of Common Stock (the
"IPO"), the Company identified its target geography for the initial launch of
INSTEAD-Registered Trademark-, established a broker network, and established
certain key trade accounts. The initial indications from the early stages of the
launch reflect higher costs related to trade, distribution and marketing
spending levels than previously anticipated. The Company believes that this is
due to the response to the launch of INSTEAD-Registered Trademark- by companies
with competitive products. There can be no assurance that the Company's
competitors will not significantly increase their spending on promotional
activities as a reaction to the introduction of INSTEAD-Registered Trademark-.
See
"--Marketing Risks; Uncertainty of Consumer Acceptance."
7
<PAGE>
INHERENT LIMITATION OF MARKET RESEARCH AND CONSUMER USE TESTING
The Company conducted test studies for the purposes of evaluating potential
consumer interest in INSTEAD-Registered Trademark- and developing a market
strategy for INSTEAD-Registered Trademark-. Due to the inherent limitations of
market research and consumer testing to accurately indicate consumer
preferences, the results of such research and tests may not accurately reflect
INSTEAD-Registered Trademark-'s actual market potential.
RISKS INHERENT IN OBTAINING AND PROTECTING PATENTS AND PROPRIETARY TECHNOLOGY
The Company's success will depend, in part, on its ability to obtain and
protect patents and trade secrets, and operate without infringing the
proprietary rights of other companies and individuals in the United States and
abroad. A continuation patent application based on, and including the subject
matter of, a patent application for the SoftCup Technology (for use for feminine
protection during menstruation either with or without vaginal drug delivery)
originally filed by Ms. Audrey Contente, the founder of the Company, was allowed
by the United States Patent and Trademark Office (the "Patent and Trademark
Office") on December 11, 1992. The United States patent was issued on March 22,
1994 and expires on March 22, 2011. Additional patent applications are pending
in the United States on other aspects and applications of the SoftCup Technology
and certain manufacturing processes related to such technology. The Company has
also filed international patent applications with respect to the SoftCup
Technology (for use for feminine protection during menstruation either with or
without vaginal drug delivery). There can be no assurance that any additional
patents will issue or that any issued patents will provide the Company with
competitive advantages or will not be challenged by other companies or
individuals. There can be no assurance that other companies and individuals will
not independently develop similar products, duplicate the SoftCup Technology or
design around the Company's patent. In addition, the Company could incur
substantial costs in defending suits brought against it on such intellectual
property rights or in prosecuting suits that the Company brings against other
parties to protect its intellectual property rights. The Company also relies on
trade secrets and other unpatented proprietary technology. The Company seeks to
protect its trade secrets and proprietary know-how in part with confidentiality
agreements with employees and consultants. There can be no assurance that the
agreements will not be breached, that the Company will have adequate remedies
for any breach, or that the Company's trade secrets will not otherwise become
known or independently developed by competitors or that others will not
independently develop substantially equivalent proprietary products and
processes or otherwise gain access to the Company's proprietary technology.
RISKS ASSOCIATED WITH RESEARCH AND DEVELOPMENT FOR OTHER APPLICATIONS OF THE
SOFTCUP TECHNOLOGY
Although the Company is currently focusing its primary efforts and capital
resources on introducing INSTEAD-Registered Trademark- into the United States
and international markets, the Company intends to use a portion of its resources
to pursue research on potential medical and health care applications of the
SoftCup Technology. If such research leads to the development of new products,
the Company would require further additional capital and/or a strategic partner
to market and distribute such products. There can be no assurance that such
research or development will be successful, that these additional potential
applications of the SoftCup Technology will result in the Company's introduction
of other products or that any additional financing will be available or, if
available, will be on terms acceptable to the Company.
The Company's focus on research and development of medical applications of
the SoftCup Technology is contingent on many factors which are generally
difficult to identify and quantify. They are dependent on a number of factors
which are not in the Company's control, including the results of clinical trials
and other scientific findings, and the regulatory requirements of clinical
testing and market approvals. See
"--Necessity of Regulatory Clearances to Market." Accordingly, there can be no
assurance that any of the goals or timetables described in, or incorporated by
reference into, this Prospectus relating to other potential applications of the
SoftCup Technology can be met.
8
<PAGE>
DEPENDENCE ON KEY PERSONNEL
The Company's success is dependent, in large part, on the continued service
of its key management, certain scientific and technical advisors and its ability
to attract and retain qualified employees. Competition for such employees is
intense. The Company has obtained key-person life insurance policies on the
lives of John W. Andersen, the President, Chief Executive Officer and Chairman
of the Board of the Company and on Audrey Contente, Executive Vice President and
Founder of the Company who invented the SoftCup Technology. There can be no
assurance that any such key-person life insurance will continue to be available
in the future to the Company at a satisfactory premium.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's Restated Certificate of Incorporation
and Amended and Restated By-Laws could have the effect of discouraging a third
party from pursuing a non-negotiated takeover of the Company and preventing
certain changes in control. The Restated Certificate of Incorporation provides
that the Board of Directors is divided into three classes. One class of
directors is elected at each annual meeting of stockholders for a three-year
term. The Restated Certificate of Incorporation restricts certain business
combinations with an interested stockholder (typically a beneficial owner of 15%
or more of the outstanding voting shares of the Company's capital stock,
excluding certain persons). In addition, the Amended and Restated By-Laws and
the Restated Certificate of Incorporation require advance notice to the Board of
Directors of stockholder proposals or stockholder nominees for directors to be
considered at the next annual meeting of stockholders and restrict the ability
of stockholders to call meetings. The Restated Certificate of Incorporation and
Amended and Restated By-Laws also limit the ability of stockholders to remove
directors, call stockholders meetings and act by written consent and provide
that vacancies in the Board of Directors may only be filled by a majority of the
remaining directors. In addition, the Company's Restated Certificate of
Incorporation authorizes the issuance of 5,000,000 shares of preferred stock
with such designation, rights and preferences as may be determined from time to
time by the Board of Directors. The Board of Directors may, without stockholder
approval, issue preferred stock with dividend, liquidation, conversion, voting
or other rights which could adversely affect the voting power or other rights of
the holders of the Common Stock. There can be no assurance that the Company will
not issue additional shares of preferred stock in the future. These provisions
could discourage a third party from pursuing a takeover of the Company at a
price considered attractive by many stockholders, since such provisions could
have the effect of delaying an acquiring party from gaining control of the
Company and its Board of Directors. See "Description of Capital Stock--Preferred
Stock" and
"--Certain Provisions of the Company's Certificate of Incorporation and
By-Laws."
LIMITED TRADING HISTORY; VOLATILITY OF PRICE
Prior to the IPO, there had been no public trading market for the Common
Stock, and there can be no assurance that a regular trading market for the
Common Stock will continue after the Offering or that the market price for the
Common Stock will not fall. In addition, market prices of securities of many
companies in the earlier stages of development have experienced wide
fluctuations not necessarily related to the operating performance of such
companies. For example, the price of the Common Stock ranged from $14 3/8 on May
1, 1996 to $36 on May 22, 1996, closing at $19 3/8 on June 28, 1996. On October
31, 1996 the staff of the Commission informed the Company that it had commenced
an informal inquiry with respect to certain matters, which the Company believes
relates to the volatility of the price of its Common Stock in the May and June
1996 period. The Company believes it has complied with all securities laws and,
although the Commission has not requested any information from the Company, the
Company has informed the Commission that it wishes to assist the Commission with
its inquiry. While there can be no assurance as to the scope or outcome of any
inquiry by the Commission, the Company believes that this matter will not have a
material adverse effect on its business, prospects, financial condition or
results of operations. The Company further believes that factors such as
legislative, regulatory and technological
9
<PAGE>
developments and quarterly variations in financial results and market conditions
could cause the market price of the Common Stock to fluctuate substantially.
These market fluctuations may adversely affect the price of and market for the
Common Stock and could result in additional inquiries. See "Price Range of
Common Stock."
SUBSTANTIAL AMOUNT OF SHARES ELIGIBLE FOR FUTURE SALE; POTENTIAL ADVERSE EFFECT
ON MARKET PRICE OF COMMON STOCK
Upon consummation of the Offering, the Company will have 11,671,592 shares
of Common Stock outstanding. In addition, as of March 31, 1997, there has been
reserved 1,327,031 shares of Common Stock for issuance upon the conversion or
exercise of outstanding securities. The 5,910,000 shares of Common Stock sold in
the Company's underwritten public offerings, other than shares which may have
been purchased by "affiliates" of the Company, will be freely tradeable without
restriction or further registration under the Securities Act. On December 12,
1996, the Company filed a Registration Statement on Form S-8 (Reg. No.
333-17765) with respect to 1,708,612 shares of Common Stock issuable pursuant to
its stock option plans and certain options and warrants which have been granted
to employees and consultants of the Company; such Registration Statement
includes 1,312,031 shares of Common Stock issued or issuable upon conversion or
exercise of outstanding securities of the Company. Approximately 1,463,016 of
the remaining shares of Common Stock outstanding and issuable upon conversion or
exercise of outstanding securities would be "restricted securities," as that
term is defined under Rule 144 promulgated under the Securities Act ("Rule
144"), and may only be sold pursuant to a registration statement under the
Securities Act or an applicable exemption from the registration requirements of
the Securities Act, including Rule 144.
All officers, directors and certain security holders agreed with Hampshire
in connection with the IPO not to, directly or indirectly, offer, sell, contract
to sell or otherwise dispose of their shares of Common Stock, or other
securities convertible into or exercisable for shares of Common Stock, without
the prior written consent of Hampshire, prior to August 22, 1997. An aggregate
of 4,896,530 shares of Common Stock outstanding and issuable upon conversion or
exercise of outstanding securities are subject to these lock-up arrangements.
Hampshire has agreed with Jefferies & Company, Inc. ("Jefferies"), an
underwriter for the Company's second public offering of Common Stock, not to
release any of such security holders from the contractual restriction without
the prior written consent of Jefferies. The Company has, subject to certain
exceptions, agreed not to offer, issue or sell any shares of Common Stock or
securities exercisable for or convertible into shares of Common Stock until May
13, 1997 without the prior written consent of Jefferies, and until August 22,
1997 without the prior written consent of Hampshire. No predictions can be made
as to the effect, if any, that market sales of shares of existing stockholders
or the availability of such shares for future sale will have on the market price
of shares of Common Stock prevailing from time to time. The prevailing market
price of the Common Stock after the Offering could be adversely affected by
future sales of substantial amounts of Common Stock by existing stockholders.
LACK OF DIVIDENDS
The Company has generated limited revenues to date and does not expect to
pay cash dividends for the foreseeable future.
10
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of securities by the
Selling Stockholders.
PRICE RANGE OF COMMON STOCK
The Common Stock was initially offered to the public on February 22, 1996 at
a price of $10.00 per share and is quoted on the Nasdaq National Market. The
following table sets forth the range of high and low sale prices for the Common
Stock for the periods indicated as reported on the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Fiscal year 1996:
Third quarter (since February 22nd).......................................... $16 $11 1/8
Fourth quarter............................................................... 36 11 3/4
Fiscal year 1997:
First quarter................................................................ 25 3/4 14
Second quarter............................................................... 26 1/4 16 1/2
Third quarter................................................................ 21 1/4 12 1/2
Fourth quarter (through May 5)............................................... 16 1/4 13
</TABLE>
On May 5, 1997, the last sale price of the Common Stock was $15 1/2 as
reported on the Nasdaq National Market. At March 31, 1997, there were 221
stockholders of record of the Common Stock.
DIVIDEND POLICY
The Company has not paid any dividends on its Common Stock to date. The
payment of dividends, if any, in the future is within the discretion of the
Board of Directors and will depend on the Company's earnings, its capital
requirements and financial condition. It is the present intention of the Board
of Directors to retain all earnings, if any, for use in the Company's business
operations and, accordingly, the Board of Directors does not expect to declare
or pay any cash dividends in the foreseeable future.
11
<PAGE>
SELLING STOCKHOLDERS
This Prospectus covers the sale of the 1,118, 375 shares of Common Stock
held by the Selling Stockholders and of an additional 3,722,552 shares of Common
Stock issuable upon conversion or exercise of certain outstanding securities
convertible into or exercisable for shares of Common Stock. All of the shares
offered by the Selling Shareholders may be sold in the open market, in privately
negotiated transactions or otherwise by the holders thereof. Certain holders of
such securities are subject to a contractual restriction prohibiting the offer
and/or sale of such shares of Common Stock until August 22, 1997.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
BENEFICIAL OWNERSHIP AFTER OFFERING (1)(2)
PRIOR TO OFFERING (1)
--------------------- ----------------------
<S> <C> <C> <C> <C>
NAME NUMBER PERCENT NUMBER PERCENT
- - - ----------------------------------------------------------------------- ---------- --------- --------- -----------
Barrie Zesiger (3)..................................................... 1,051,658 12.6% 134,835 1.6%
Albert L. Zesiger (4).................................................. 1,051,658 12.6% 134,835 1.6%
BEA Associates, Inc. (5)............................................... 113,666 1.4% 0 0%
Dean Witter Foundation (6)............................................. 16,666 * 0 0%
Andrew Heiskell (6).................................................... 16,666 * 0 0%
Alfred E. Heller (6)................................................... 12,500 * 0 0%
Elizabeth Heller Mandell Trust (6)..................................... 12,500 * 0 0%
Domenic J. Mizio (6)................................................... 8,333 * 0 0%
Warren Otologic Profit Sharing Trust (6)............................... 8,333 * 0 0%
Jeffrey E. Schuss...................................................... 833 * 0 0%
Alice M. Moore (7)..................................................... 5,833 * 0 0%
Betty Jane Schuss Trust................................................ 2,041 * 1,875 *
Deborah Doolittle Trust................................................ 1,000 * 0 0%
Jeffrey Schuss Trust................................................... 1,000 * 0 0%
Jonathan Schuss Trust.................................................. 1,000 * 0 0%
Karen Sawyer Trust..................................................... 1,000 * 0 0%
Robert A. & Constantine McCabe......................................... 8,333 * 0 0%
Robert & Ellen P. Moore (7)............................................ 5,833 * 0 0%
Robert H. Bauerle...................................................... 16,900 * 0 0%
Jerry J. King.......................................................... 8,750 * 0 0%
David Theisen.......................................................... 21,875 * 0 0%
P. David Edgell........................................................ 17,500 * 0 0%
Charles W. Daniel...................................................... 17,500 * 0 0%
Jerry D. Leitman....................................................... 10,937 * 0 0%
Aubrey Dale Glasscock.................................................. 8,750 * 0 0%
John Banks Robertson, Jr............................................... 4,375 * 0 0%
Kraver & Levy (8)...................................................... 3,161 * 0 0%
Wien, Malkin & Bettex (9).............................................. 35,526 * 0 0%
Chapin School-Endowment Fund (6)....................................... 20,375 * 0 0%
Van Lobel Sels Charitable Foundation (6)............................... 30,562 * 0 0%
Planned Parenthood of New York, Inc. (6)............................... 10,187 * 0 0%
Meehan Investment Partnership I, L.P. (6).............................. 20,375 * 0 0%
Morgan Trust Company of the Bahamas Ltd. (6)........................... 20,375 * 0 0%
Wells Family, LLC (6).................................................. 31,020 * 0 0%
Mary Van Schuyler Raiser (6)........................................... 10,187 * 0 0%
Mary M. Raiser (6)..................................................... 20,375 * 0 0%
Helen L. Hunt (6)...................................................... 10,187 * 0 0%
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
BENEFICIAL OWNERSHIP AFTER OFFERING (1)(2)
PRIOR TO OFFERING (1)
--------------------- ----------------------
NAME NUMBER PERCENT NUMBER PERCENT
- - - ----------------------------------------------------------------------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C>
James and Jennifer Kuehn, Jt Ten WROS.................................. 20,375 * 0 0%
Stephen L. Rutherford.................................................. 18,337 * 0 0%
Danny Rue.............................................................. 12,225 * 0 0%
Herbert F. Boeckmann, II............................................... 120,000 1.5% 0 0%
Estate of Michael Butler............................................... 60,000 * 0 0%
James Murtha........................................................... 90,000 1.1% 0 0%
Richard Hines.......................................................... 30,000 * 0 0%
Bernard Gurtman........................................................ 60,000 * 0 0%
John Purcell........................................................... 120,000 1.5% 0 0%
Brian Shapiro.......................................................... 60,000 * 0 0%
David H. Berman, MD.................................................... 60,000 * 0 0%
Howard Kaplan.......................................................... 60,000 * 0 0%
Edward Berman.......................................................... 60,000 * 0 0%
Alan Finkelstein....................................................... 30,000 * 0 0%
Jay Kenneth Tate....................................................... 20,000 * 0 0%
James D. Tate.......................................................... 20,000 * 0 0%
Scott Maybaum.......................................................... 30,000 * 0 0%
Rodan Payroll Services................................................. 60,000 * 0 0%
Patrick J. Guarino..................................................... 10,000 * 0 0%
Calvert Social Investment Fund (10).................................... 150,000 1.9% 0 0%
Tony Bernard........................................................... 30,000 * 0 0%
Ted Lipman, MD......................................................... 30,000 * 0 0%
Brian Shea............................................................. 30,000 * 0 0%
Shlomo Marglit......................................................... 30,000 * 0 0%
Mark Nordlicht......................................................... 60,000 * 0 0%
Noam Lotan............................................................. 30,000 * 0 0%
Dr. Aharon David....................................................... 30,000 * 0 0%
Rebecca Kraitenberg.................................................... 15,000 * 0 0%
Joseph Hartman......................................................... 15,000 * 0 0%
Mikel Majore........................................................... 15,000 * 0 0%
Trinet International................................................... 30,000 * 0 0%
Dr. Michael Fuchs...................................................... 15,000 * 0 0%
Yu-Liu Chen Lee........................................................ 15,000 * 0 0%
Temple Inland Master Trust (7)......................................... 102,000 1.3% 0 0%
Arthur D. Little Employees Investment Plan (6)......................... 90,000 1.1% 0 0%
Jeffrey V. Simon (11).................................................. 157,531 1.9% 36,281 *
Dr. Jay Rinehouse...................................................... 7,500 * 0 0%
Dr. David Sandak....................................................... 7,500 * 0 0%
Lenore Fremder Defined Benefit P.P..................................... 3,750 * 0 0%
Robin Wohl............................................................. 3,750 * 0 0%
John Huber............................................................. 3,750 * 0 0%
Dr. Kenneth Lum........................................................ 3,570 * 0 0%
Walter Stump........................................................... 30,000 * 0 0%
Harvey B. Adams........................................................ 60,000 * 0 0%
Guarantee & Trust Co. TTEE FBO Jay Weissbluth PSP...................... 15,000 * 0 0%
Tradewind Fund I, LP................................................... 60,000 * 0 0%
Ryco and Co............................................................ 60,000 * 0 0%
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
BENEFICIAL OWNERSHIP AFTER OFFERING (1)(2)
PRIOR TO OFFERING (1)
--------------------- ----------------------
NAME NUMBER PERCENT NUMBER PERCENT
- - - ----------------------------------------------------------------------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C>
David Burr............................................................. 22,500 * 0 0%
Edward and Ruth Kronick................................................ 15,000 * 0 0%
Jenifer Altman Foundation (6).......................................... 15,000 * 0 0%
City of Milford Pension and Retirement Plan (6)........................ 22,500 * 0 0%
Tab Products Co. Pension Plan (7)...................................... 30,000 * 0 0%
American Medical International Pension Plan (6)........................ 90,000 1.1% 0 0%
Alza Corporation Retirement Plan (6)................................... 22,500 * 0 0%
NFIB Employee Pension Plan (6)......................................... 22,500 * 0 0%
Roanoke College (7).................................................... 30,000 * 0 0%
Brearley School General Endowment Fund (7)............................. 15,000 * 0 0%
City of Norwalk Pension and Retirement Plan (6)........................ 15,000 * 0 0%
Dr. William Lippy (6).................................................. 7,500 * 0 0%
Psychology Associates (6).............................................. 3,000 * 0 0%
Crescent Capital Company, L.L.C........................................ 15,000 * 0 0%
Alliance Capital Investment Corp....................................... 15,000 * 0 0%
Ronald J. Adams........................................................ 30,000 * 0 0%
Lauren Katz............................................................ 30,000 * 0 0%
United Mattersdorf International Organization.......................... 30,000 * 0 0%
Irene Chang............................................................ 15,000 * 0 0%
Mathers Associates..................................................... 15,000 * 0 0%
Skippack Partners...................................................... 7,500 * 0 0%
Nelson Broms (12)...................................................... 150,000 1.9% 0 0%
Emanuel & Company (13)................................................. 11,000 * 0 0%
Montana Board of Science and Technology Development.................... 140,000 1.7% 0 0%
Audrey Contente (14)................................................... 597,500 7.5% 66,250 *
Frank Cole (15)........................................................ 125,000 1.6% 18,750 *
Arthur Appleman........................................................ 12,500 * 0 0%
Hampshire Securities Corporation (16).................................. 327,500 4.0% 0 0%
Andy Yurowitz (17)..................................................... 17,500 * 0 0%
Orchard Close Ltd...................................................... 200,000 2.5% 0 0%
Demvest Equities....................................................... 20,000 * 0 0%
Arthur N. Abbey........................................................ 20,000 * 0 0%
ReProtect LLC (18)..................................................... 400,000 4.8% 0 0%
Lawrence G. Goodman (19)............................................... 1,988 * 0 0%
Jeffry S. Hoffman (19)................................................. 2,007 * 0 0%
Martin Nussbaum (19) (20).............................................. 14,425 * 10,750 *
Robert J. Jossen (19).................................................. 3,101 * 0 0%
Joseph F. Donley (19).................................................. 1,468 * 0 0%
Richard A. Goldberg (19)............................................... 1,566 * 0 0%
Andrew J. Levander (19)................................................ 3,101 * 0 0%
Joel H. Goldberg (19).................................................. 3,101 * 0 0%
James H. Nix (19)...................................................... 1,489 * 0 0%
Charles I. Weissman (19)............................................... 1,977 * 0 0%
Gerald Adler (19)...................................................... 1,468 * 0 0%
Michael J. Shapiro (19)................................................ 1,081 * 0 0%
Margery K. Neale (19).................................................. 1,468 * 0 0%
Morris Orens (19)...................................................... 1,081 * 0 0%
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
BENEFICIAL OWNERSHIP AFTER OFFERING (1)(2)
PRIOR TO OFFERING (1)
--------------------- ----------------------
NAME NUMBER PERCENT NUMBER PERCENT
- - - ----------------------------------------------------------------------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Shari L. Steinberg (19)................................................ 1,116 * 0 0%
Robert M. Friedman (19)................................................ 1,202 * 0 0%
Scott M. Zimmerman (19)................................................ 1,253 * 0 0%
Claude M. Tusk (19).................................................... 1,468 * 0 0%
Kevin O'Brien (19)..................................................... 1,390 * 0 0%
Emery Jaffe............................................................ 18,000 * 0 0%
Bozell Worldwide (22).................................................. 50,000 * 0 0%
Palmeri Tyler Wiener & Waldron......................................... 12,351 * 0 0%
</TABLE>
- - - ------------------------
* Less than one percent.
(1) Assumes, with respect to any Selling Stockholder, the conversion and/or
exercise of all securities convertible or exercisable for the Common Stock
being offered hereby and held by such Selling Stockholder; and the
subsequent sale by such Selling Stockholder of the shares of Common Stock
being offered hereby. The percentage of beneficial ownership reflected in
this chart assumes that, with respect to any Selling Stockholder, only such
Selling Stockholder has converted and or exercised his, her or its
securities convertible or exercisable for shares of Common Stock, and that
no other Selling Stockholder has done so.
(2) Assumes the sale by such Selling Stockholder of all shares of Common Stock
offered hereby.
(3) Includes 550,012 of Common Stock and 390,200 shares of Common Stock issuable
upon the exercise or conversion of convertible securities of the Company,
both of which are held in accounts managed by Zesiger Capital Group LLC, an
investment advisor, for which Ms. Zesiger is Principal and Albert L.
Zesiger, Ms. Zesiger's husband, is also a Principal. Ms. Zesiger disclaims
beneficial ownership of such shares. Also includes 40,000 shares of Common
Stock and 12,500 shares of Common Stock issuable upon the exercise or
conversion of convertible securities of the Company which are owned by Mr.
Zesiger; Ms. Zesiger disclaims beneficial ownership of such shares. See also
footnote 4. Includes 16,238 shares which are issuable upon the exercise of
an outstanding option and warrant which are exercisable within 60 days of
March 31, 1997. Does not include the Optioned Shares (defined below) which
are subject to a voting trust of which Ms. Zesiger is a voting trustee. See
footnote 14. Ms. Zesiger is also a director of the Company.
(4) Includes 550,012 shares of Common Stock and 390,200 shares of Common Stock
issuable upon the exercise or conversion of convertible securities of the
Company which are held in accounts managed for certain parties through
Zesiger Capital Group LLC, an investment advisor, for which Mr. Zesiger is a
Principal. Mr. Zesiger has dispositive power with respect to such shares but
disclaims beneficial ownership of such shares. Also includes 37,708 shares
of Common Stock and 16,238 shares of Common Stock issuable upon the exercise
or conversion of convertible securities of the Company which are owned by
Ms. Zesiger, Mr. Zesiger's wife; Mr. Zesiger disclaims beneficial ownership
of such shares. Includes 12,500 shares which are issuable upon the exercise
of an outstanding warrant which is exercisable within 60 days of March 31,
1997. See also footnote 3.
(5) Includes Common Stock and convertible securities currently exercisable into
102,000 shares of Common Stock in managed accounts for which BEA Associates,
Inc., an investment advisor, has dispositive power.
(6) Zesiger Capital Group LLC, an investment advisor to such Selling
Stockholder, has dispositive power with respect to such securities.
15
<PAGE>
(7) BEA Associates, Inc., an investment advisor to such Selling Stockholder, has
dispositive power with respect to such securities.
(8) These shares of Common Stock were issued in lieu of certain amounts due
Kraver & Levy by the Company in consideration of legal services provided to
a director of the Company.
(9) These shares of Common Stock were issued in lieu of certain amounts due
Wien, Malkin & Bettex by the Company for legal services provided to the
Company.
(10) Joy Vida Jones, a director of the Company, is a trustee of Calvert Social
Investment Fund. Ms. Jones disclaims beneficial ownership of such securities
except to the extent of her investment in the fund. Does not include 7,500
shares of Common Stock beneficially owned by Ms. Jones.
(11) Mr. Simon, a former officer and director of the Company, resigned from such
positions in December 1993. Includes 106,250 shares of Common Stock which
Mr. Simon has an option to purchase from Ms. Contente. See footnote 14
below.
(12) Mr. Broms, a former officer and director of the Company, resigned in
February 1994.
(13) These shares of Common Stock are issuable upon the exercise of certain
warrants issued in connection with a 1992 private placement for which
Emanuel & Company acted as broker-dealer.
(14) Ms. Contente, an officer and director of the Company, has granted an option
to each of Jeffrey Simon and Frank Cole to purchase 106,250 shares of Common
Stock, and an option to Arthur Appleman to purchase 12,500 shares of Common
Stock, each such option at an exercise price of $2.00 per share (the
"Optioned Shares") and with an expiration date of December 1, 1998. The
Optioned Shares are subject to a voting trust, to be voted by a majority of
Ms. Contente, Ms. Zesiger and Mr. Andersen, as voting trustees. The voting
trust will terminate on the earliest of (i) the transfer of the Optioned
Shares to Messrs. Cole, Simon and Appleman, (ii) August 22, 1997 or (iii)
upon the breach of certain representations contained in the agreement.
(15) Includes 106,250 shares of Common Stock which Mr. Cole has an option to buy
from Ms. Contente. See footnote 14 above.
(16) Includes 327,500 shares of Common Stock issuable upon the exercise of the
Warrants granted to Hampshire in connection with the IPO.
(17) Includes 12,500 shares of Common Stock issuable pursuant to a warrant which
the Company has issued to Mr. Yurowitz. The warrant was issued upon Mr.
Yurowitz's surrender for cancellation of certain Class A and Class B
Warrants to purchase an aggregate of 10,000 shares of Common Stock, which
warrants were issued to him in a 1995 Unit Private Placement.
(18) Richard A. Cone, Ph.D., a director of the Company, is a Managing Director
of ReProtect, LLC, which is a research and development partner of the
Company. Does not include options to purchase 20,000 shares of Common Stock
owned by Dr. Cone.
(19) A member of Shereff, Friedman, Hoffman & Goodman, LLP, counsel to the
Company. See "Legal Matters."
(20) Mr. Nussbaum, a director of the Company, is a member of Shereff, Friedman,
Hoffman & Goodman, LLP, counsel to the Company.
(21) Charles D. Peebler, Jr., a director of the Company, is the Chief Executive
Officer of Bozell Worldwide, Inc.
16
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 70,000,000 shares of
Common Stock, par value $.001 per share, and 5,000,000 shares of Preferred
Stock, par value $.001 per share.
COMMON STOCK
As of March 31, 1997, there were 7,949,040 shares of Common Stock
outstanding held of record by 221 persons.
Holders of shares of Common Stock are entitled to one vote per share,
without cumulative voting, on all matters to be voted on by stockholders.
Therefore, the holders of more than 50% of the shares voting for the election of
directors can elect all the Directors. Subject to preferences that may be
applicable to any outstanding preferred stock, holders of Common Stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. In the event of a liquidation
or dissolution of the Company, holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities and the liquidation
preference of any outstanding preferred stock. Holders of shares of Common
Stock, as such, have no conversion, preemptive or other subscription rights, and
there are no redemption provisions applicable to the Common Stock. All of the
outstanding shares of Common Stock are, and the shares of Common Stock offered
hereby, when issued against the consideration set forth in this Prospectus, will
be, fully paid and nonassessable.
PREFERRED STOCK
The Company is authorized to issue 5,000,000 shares of the Preferred Stock,
none of which shares are outstanding as of the date of this Prospectus. The
Board of Directors of the Company has the authority at any time and from time to
time to establish and designate one or more series of preferred stock, to fix
the number of shares of any series (which number may vary between series) and to
fix the dividend rights and preferences, the redemption price (if any) and
terms, liquidation rights, sinking fund provisions (if any), conversion
provisions (if any) and the voting powers (if any). The Board of Directors,
without stockholder approval, could issue preferred stock with voting and
conversion rights that could adversely affect the voting power of holders of the
Common Stock. Certain companies have used the issuance of preferred stock as an
anti-takeover device, and the Board of Directors of the Company could, without
stockholder approval, issue preferred stock with certain voting, conversion
and/or redemption rights that could discourage any attempt to obtain control of
the Company in a transaction not approved by the Board of Directors. The Board
of Directors has authorized the issuance of 48,750 shares of Series A Preferred
Stock and previously issued 6,532.5 shares of Series A Preferred Stock. As of
the date of this Prospectus all issued and outstanding shares of Series A
Preferred Stock had been converted into Common Stock. The rights, preferences,
privileges, restrictions and other matters relating to such shares are as
follows:
DIVIDENDS. Each share of Series A Preferred Stock is entitled to receive
cumulative dividends at an annual rate of $8.00 per share. Upon conversion into
Common Stock, all cumulative dividends in arrears will be forfeited. Holders of
Series A Preferred Stock are entitled to receive such cumulative annual
dividends prior to the payment of any dividend in respect of the Common Stock
(the "Series A Preferred Stock Dividend Preference"). If the Series A Preferred
Stock Dividend Preference is not either fully paid or declared, then no
distribution shall be made on any Common Stock (although the arrearage shall
accumulate) and the Company will not redeem or purchase any Common Stock or make
monies available for a sinking fund for the redemption or purchase of any Common
Stock. Holders of Series A Preferred Stock are entitled to share in any dividend
after payment of the Series A Preferred Stock Dividend Preference in the
proportion that the number of Series A Preferred Stock outstanding bears to the
total number of all shares outstanding (whether preferred stock or Common
Stock), treating such holders as if they had converted such Series A Preferred
Stock into Common Stock.
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LIQUIDATION PREFERENCE. Upon reducing the Company's capital (which results
in a distribution of assets) or upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company (collectively, a "Liquidating Event"),
the holders of the Series A Preferred Stock shall be entitled to receive, before
any distribution of assets to the holders of the Common Stock, a liquidation
preference (the "Series A Preferred Stock Liquidation Preference"). For each
outstanding share of Series A Preferred Stock, the Series A Preferred Stock
Liquidation Preference shall be equal to the sum of (i) One Hundred Dollars
($100.00) and (ii) any unpaid Series A Preferred Stock Dividend Preference. The
Series A Preferred Stock Dividend Preference shall be paid after the Series A
Preferred Stock Liquidation Preference, and the Series A Preferred Stock
Liquidation Preference shall be distributed ratably among the holders of the
Series A Preferred Stock in proportion to the number of shares owned by each
holder of such stock. After payment of the Series A Preferred Stock Liquidation
Preference, the Company's assets available for distribution shall be distributed
among the holders of Series A Preferred Stock and Common Stock PRO RATA, based
on the number of shares of stock held by each, treating such holders of Series A
Preferred Stock as if they had converted such stock into Common Stock
immediately before such distribution. If, upon any Liquidating Event, the
amounts payable with respect to the Series A Preferred Stock and any other stock
of the Company ranking as to any such distribution on a parity with the Series A
Preferred Stock are not paid in full, the holders of the Series A Preferred
Stock and such parity stock shall share ratably in any such distribution of
assets of the Company in proportion to the full preferential amounts to which
they are entitled.
VOTING. In general, the holder of each share of the Series A Preferred
Stock shall (i) be entitled to the number of votes equal to the number of shares
of Common Stock into which such share of Series A Preferred Stock could be
converted on the record date for the vote or the date of the solicitation of any
written consent of stockholders, (ii) have voting rights and powers equal to the
voting rights and powers of the Common Stock and (iii) be entitled to notice of
any stockholders' meeting in accordance with the By-Laws of the Company.
Fractional votes shall not, however, be permitted.
RIGHT TO CONVERT. Each share of Series A Preferred Stock shall be
convertible, at any time at the option of the holder, into shares of Common
Stock at a conversion rate equal to the quotient obtained by dividing One
Hundred Dollars ($100.00) by a conversion price, initially equal to $8.00 per
share (the "Conversion Price"). The Conversion Price shall be adjusted from time
to time to protect against dilution. No fractional share shall be issued upon
the conversion of any share or shares of Series A Preferred Stock. See "--
Anti-Dilution" below.
ANTI-DILUTION. If the Company issues any shares of Common Stock or
convertible preferred stock, or rights to purchase Common Stock, warrants,
options, other rights or other securities (to the extent such other rights or
securities are convertible into or exchangeable or exercisable for shares of
Common Stock) for consideration per share less than the prevailing Conversion
Price, then the Conversion Price in effect immediately before such issuance
shall be adjusted to a price equal to the consideration per share received by
the Company. If the number of shares of Common Stock outstanding is increased by
a Common Stock dividend or by subdivision or split-up of Common Stock, then the
Conversion Price shall be appropriately decreased in proportion to such increase
in outstanding shares. If the number of shares of Common Stock outstanding is
decreased by a combination of the outstanding shares of Common Stock, then the
Conversion Price shall be appropriately increased in proportion to such decrease
in outstanding shares.
If there is any reorganization, reclassification, consolidation or merger
(including a merger in which the Company is the surviving entity) of the
Company, then each share of Series A Preferred Stock shall (in lieu of being
exercisable for shares of Common Stock), after such reorganization,
reclassification, consolidation or merger, be exercisable into the kind and
number of shares of stock or other securities or property (including cash) of
the Company or of the corporation resulting from such consolidation or surviving
such merger to which the holder of the number of shares of Common Stock
deliverable (immediately before the time of such reorganization,
reclassification, consolidation or merger) upon conversion of such Series A
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Preferred Stock would have been entitled upon such reorganization,
reclassification, consolidation or merger.
AUTOMATIC CONVERSION. Each share of Series A Preferred Stock shall
automatically convert into shares of Common Stock immediately upon (i) the
closing of the sale of the Common Stock in a firm commitment, underwritten
public offering registered under the Securities Act (other than a registration
relating solely to a transaction under Rule 145 thereunder or to an employee
benefit plan), at a public offering price equal to or exceeding $20.00 per share
of Common Stock (appropriately adjusted for any recapitalization) and the
aggregate net proceeds to the Company (before deduction for underwriters'
commissions and expenses relating to the issuance, including without limitation
fees of the Company's counsel) of which equal or exceed $15.0 million or (ii)
receipt by the Company of the affirmative vote, at a duly noticed stockholders'
meeting or pursuant to a duly solicited written consent of approval of the
holders of at least a majority of the outstanding shares of the Series A
Preferred Stock voting together as a single class, in favor of converting all of
the Series A Preferred Stock into Common Stock.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("DGCL"). Section 203 provides, with certain exceptions,
that a Delaware corporation may not engage in certain business combinations with
a person or affiliate or associate of such person who is an "interested
stockholder" for a period of three years from the date such person became an
interested stockholder unless: (i) the transaction resulting in the acquiring
person's becoming an interested stockholder, or the business combination, is
approved by the Board of Directors of the Company before the person becomes an
interested stockholder; (ii) the interested stockholder acquires 85% or more of
the outstanding voting stock of the Company in the same transaction which makes
it an interested stockholder (excluding certain employee stock option plans); or
(iii) on or after the date the person becomes an interested stockholder, the
business combination is approved by the Company's board of directors and by the
holders of at least 66 2/3% of the Company's outstanding voting stock at an
annual or special meeting, excluding shares owned by the interested stockholder.
An "interested stockholder" is defined as any person that is (x) the owner of
15% or more of the outstanding voting stock of the Company or (y) an affiliate
or associate of the Company and was the owner of 15% or more of the outstanding
voting stock of the Company at any time within the three year period immediately
prior to the date on which it is sought to be determined whether such person is
an interested stockholder.
DIRECTORS' LIABILITY
The Company's Restated Certificate of Incorporation contains provisions to
(i) eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty (other than breaches of the duty
of loyalty, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, violations under Section 174 of the
DGCL, for any transaction from which the director derived an improper personal
benefit or any act or omission occurring prior to the date when the provision
became effective) and (ii) indemnify its directors and officers to the fullest
extent permitted by Section 145 of the DGCL, including circumstances in which
indemnification is otherwise discretionary. The Company believes that these
provisions are necessary to attract and retain qualified persons as directors
and officers.
CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION AND BY-LAWS
The Company's Restated Certificate of Incorporation and Amended and Restated
By-Laws contain several provisions that may be deemed to have the effect of
making more difficult the acquisition of control of the Company by means of a
hostile tender offer, open market purchases, a proxy contest or otherwise. The
provisions of the Restated Certificate of Incorporation and the Amended and
Restated By-Laws discussed below are designed to help to ensure that holders of
Common Stock are treated fairly and
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equally in a multistep acquisition. In addition, they are intended to encourage
persons seeking to acquire control of the Company to initiate such an
acquisition through arm's-length negotiations with the Company's Board of
Directors.
CLASSIFIED BOARD OF DIRECTORS. The Company's Restated Certificate of
Incorporation provides that the Board of Directors shall be divided into three
classes of directors serving staggered terms. One class of directors will be
elected at each annual meeting of stockholders for a three-year term. Thus, at
least two annual meetings of stockholders, instead of one, generally will be
required to change the majority of the Company's Board of Directors. This may
have the effect of making it more difficult to acquire control of the Company by
means of a hostile tender offer, open market purchases, a proxy contest or
otherwise.
STOCKHOLDER MEETINGS. Subject only to the rights of holders of preferred
stock, only a majority of the Company's Board of Directors, the Chairman, the
President or Chief Executive Officer will be able to call an annual meeting of
stockholders and only a majority of the Company's Board of Directors, by
majority vote, or the Chairman, the President or the Chief Executive Officer,
will be able to call a special meeting of stockholders. In addition, subject
only to the rights of holders of preferred stock, stockholders may not take any
action by written consent.
RESTRICTIONS ON CERTAIN BUSINESS COMBINATIONS. The Company's Restated
Certificate of Incorporation provides that certain business combinations such as
mergers and stock and assets sales, with an interested stockholder (typically a
beneficial owner of more than 15% of the outstanding voting shares of the
Company's capital stock, excluding certain persons), be approved by (a) the
holders of 75% of the voting power of the then outstanding voting shares, voting
together as a single class, and (b) at least a majority of the voting power of
the then outstanding voting shares, voting as a single class, which are not
owned beneficially, directly or indirectly, by the interested stockholder,
unless the transaction is approved by a majority of certain directors or meets
certain fair price provisions.
REQUIREMENTS FOR ADVANCE NOTIFICATION OF STOCKHOLDER NOMINATIONS AND
PROPOSALS. The Company's Restated Certificate of Incorporation establishes
advance notice procedures with regard to stockholder nominations, other than by
or at the direction of the Board of Directors, of candidates for election as
directors. The Amended and Restated By-Laws establishes advance notice
procedures with regard to stockholder proposals other than by or at the
direction of the Board of Directors of business to be brought before a meeting.
VOTE REQUIRED TO AMEND OR REPEAL CERTAIN PROVISIONS OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION AND AMENDED AND RESTATED BY-LAWS. The
Company's Restated Certificate of Incorporation establishes certain super
majority voting requirements to amend or repeal certain provisions of the
Company's Restated Certificate of Incorporation and Amended and Restated
By-Laws.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, New York, New York.
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PLAN OF DISTRIBUTION
Any or all of the Shares may be sold from time to time to purchasers
directly by the Selling Stockholders. Alternatively, the Selling Stockholders
may from time to time offer the Shares through underwriters, dealers or agents
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the Selling Stockholders and/or the purchasers of the Shares
for whom they may act as agents. The Selling Stockholders and any such
underwriters, dealers or agents that participate in the distribution of the
Shares may be deemed to be underwriters under the Securities Act, and any profit
on the sale of the Shares by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. The Shares may be sold from time to time in one or
more transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. The distribution
of the Shares by the Selling Stockholders may be effected in one or more
transactions that may take place on Nasdaq National Market, including ordinary
brokers' transactions, privately-negotiated transactions or through sales to one
or more broker-dealers for resale of such shares as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Usual and customary or specifically negotiated
brokerage fees, discounts and commissions may be paid by the Selling
Stockholders in connection with such sales of securities.
At the time a particular offer of the Shares is made, to the extent
required, a supplement to this Prospectus will be distributed (or, if required,
a post-effective amendment to the Registration Statement of which this
Prospectus is a part will be filed) which will identify the specific Shares
being offered and set forth the aggregate amount of Shares being offered, the
purchase price and the terms of the offering, including the name or names of the
Selling Stockholders and of any underwriters, dealers or agents, the purchase
price paid by any underwriter for Shares purchased from the Selling Stockholder,
any discounts, commissions and other items constituting compensation from the
Selling Stockholders and/or the Company and any discounts, commissions or
concessions allowed or reallowed or paid to dealers, including the proposed
selling price to the public. In addition, an underwritten offering will require
clearance by the National Association of Securities Dealers, Inc. of the
underwriter's compensation arrangements. The Company will not receive any of the
proceeds from the sale by the Selling Stockholders of the Shares offered hereby.
All of the filing fees and other expenses of this Registration Statement will be
borne in full by the Company, other than any underwriting fees, discounts and
commissions relating to this Offering.
Pursuant to certain agreements granting registration rights to certain
Selling Stockholders, which were executed in connection with a 1995 private
placement, the Company will use its best efforts to keep the Registration
Statement, of which this Prospectus forms a part, effective under the Securities
Act for a period of five and one half years after February 22, 1996 and the
Company will pay substantially all of the expenses incident to the Offering and
sale of the Shares to the public, other than underwriting fees, discounts and
commissions. Most of the agreements which provide for registration rights to the
Selling Stockholders provide for cross-indemnification of the Selling
Stockholders and the Company, to the extent permitted by law, for losses,
claims, damages, liabilities and expenses arising, under certain circumstances,
out of any registration of the Shares. The registration rights agreements also
provide that in connection with an underwritten offering, the Company will
indemnify the underwriters thereof, their officers and directors and each person
who controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided with respect to the indemnification of the Selling
Stockholders signatory to such agreement, except with respect to information
provided by such underwriters specifically for inclusion within the appropriate
registration statement.
In order to comply with certain states securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states the Shares may not be sold unless the
Shares have been registered or qualified for sale in such state, or unless an
exemption from registration or qualification is available and is obtained.
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In addition, certain holders of Common Stock, as well as the officers and
directors of the Company, are subject to a contractual restriction prohibiting
the offer and/or sale of their shares of Common Stock or other securities of the
Company, prior to August 22, 1997, without the prior written consent of
Hampshire. Hampshire has agreed with Jefferies not to release any of such
stockholders from the contractual restriction without the prior written consent
of Jefferies.
In addition to sales pursuant to the Registration Statement of which this
Prospectus forms a part, the Shares may be sold in accordance with Rule 144.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Shereff,
Friedman, Hoffman & Goodman, LLP, New York, New York. Martin Nussbaum, a member
of Shereff, Friedman, Hoffman & Goodman, LLP, is a director of the Company and a
Selling Stockholder; certain other members of the firm are also Selling
Stockholders. See "Selling Stockholders."
EXPERTS
The financial statements as of June 30, 1996 and 1995 and for each of the
three years in the period ended June 30, 1996 and for the period March 22, 1990
(Date of Formation) through June 30, 1996, incorporated by reference into this
Prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report incorporated herein and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
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[inside back cover]
[PHOTO OF MANUFACTURING PLANT]
INSTEAD IS MANUFACTURED ON CUSTOM-DESIGNED, STATE-OF-THE-ART EQUIPMENT AT
THE ULTRAFEM MONTANA FACILITY.
[PHOTO OF PRODUCT]
INSTEAD IS A DISPOSABLE, PATENTED PRODUCT THAT COLLECTS RATHER THAN ABSORBS
MENSTRUAL FLUID. ITS FLEXIBILITY MAKES IT EASY TO INSERT AND REMOVE.
A CUP-LIKE DEVICE THAT IS INSERTED INTO THE UPPER VAGINAL CANAL UNDER A
WOMAN'S CERVIX, INSTEAD GIVES UP TO TWELVE HOURS OF SAFE, COMFORTABLE
PROTECTION.
THE SOFT, INERT MATERIAL CONFORMS TO A WOMAN'S ANATOMY TO HELP FIT
COMFORTABLY AND SECURELY.
[PHOTO OF PRODUCT DISPLAY]
SALES CALLS IN THE PACIFIC NORTHWEST TO DATE HAVE RESULTED IN COMMITMENTS
FROM RETAILERS WHICH ACCOUNT FOR MORE THAN 75% OF ACV (ALL COMMODITY VOLUME) IN
THE FOOD AND DRUG CLASSES OF TRADE.
ULTRAFEM HAS OBTAINED FDA CLEARANCE TO MARKET INSTEAD IN THE UNITED STATES
AND FDA CLEARANCE FOR EXPORT OVERSEAS.
CONSUMERS OUTSIDE THE ORIGINAL LEAD MARKET CAN PURCHASE INSTEAD BY MAIL
THROUGH A SPECIAL TOLL FREE (888-367-9636) NUMBER.
23
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NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information........................... 3
The Offering.................................... 4
Risk Factors.................................... 5
Use of Proceeds................................. 11
Price Range of Common Stock..................... 11
Dividend Policy................................. 11
Selling Stockholders............................ 12
Description of Capital Stock.................... 17
Plan of Distribution............................ 21
Legal Matters................................... 22
Experts......................................... 22
</TABLE>
4,840,927 SHARES
[LOGO]
COMMON STOCK
------------------
PROSPECTUS
, 1997
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses incurred by the Company in connection with the Offering are:
<TABLE>
<S> <C>
SEC Registration fee with IPO................................... $14,713.33
SEC Registration fee paid with second offering.................. 1,924.14
SEC Registration fee............................................ $2,484.95
Accounting fees and expenses*................................... $10,000.00
Legal fees and expenses*........................................ $10,000.00
Printing costs*................................................. $15,000.00
---------
Total........................................................... $54,122.42
---------
</TABLE>
- - - ------------------------
* Estimated
The Company will pay all expenses of the Company and the Selling
Stockholders relating to the Offering.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The indemnification of officers and directors of the Company is governed by
Section 145 of the General Corporation Law of the State of Delaware (the "DGCL")
and the Restated Certificate of Incorporation. Among other things, the DGCL
permits indemnification of a director, officer, employee or agent in civil,
criminal, administrative or investigative actions, suits or proceedings (other
than an action by or in the right of the corporation) to which such person is a
party or is threatened to be made a party by reason of the fact of such
relationship with the corporation or the fact that such person is or was serving
in a similar capacity with another entity at the request of the corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him if such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe his conduct was unlawful.
No indemnification may be made in any such suit to any person adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which the action was brought determines that,
despite the adjudication of liability, such person is under all circumstances,
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper. Under the DGCL, to the extent that a director, officer,
employee or agent is successful, on the merits or otherwise, in the defense of
any action, suit or proceeding or any claim, issue or matter therein (whether or
not the suit is brought by or in the right of the corporation), he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him. In all cases in which indemnification is permitted (unless
ordered by a court), it may be made by the corporation only as authorized in the
specific case upon a determination that the applicable standard of conduct has
been met by the party to be indemnified. The determination must be made by a
majority vote of the directors who were not parties to the action, even though
less than a quorum, or, if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or by the
stockholders. The statute authorizes the corporation to pay expenses incurred by
an officer or director in advance of a final disposition of a proceeding upon
receipt of an undertaking by or on behalf of the person to whom the advance will
be made, to repay the advances if it shall ultimately be determined that he was
not entitled to indemnification. The DGCL provides that indemnification and
advances of expenses permitted thereunder are not to be exclusive of any rights
to which those seeking indemnification or advancement of expenses may be
entitled under any By-Law, agreement, vote of stockholders or
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disinterested directors, or otherwise. The DGCL also authorizes the corporation
to purchase and maintain liability insurance on behalf of its directors,
officers, employees and agents regardless of whether the corporation would have
the statutory power to indemnify such persons against the liabilities insured.
The Restated Certificate of Incorporation of the Company (the "Certificate")
provides that no director of the Company shall be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for paying a dividend or approving a stock repurchase in violation of
Section 174 of the DGCL, (iv) for any transaction from which the director
derived an improper personal benefit or (v) for any act or omission occurring
prior to the date when the provision became effective.
The Certificate provides that directors, officers and others shall be
indemnified to the fullest extent authorized by the DGCL, as in effect (or, to
the extent indemnification is broadened, as it may be amended), against any and
all judgments, fines and amounts paid in settling or otherwise disposing of
threatened, pending or completed actions, suits or proceedings, whether civil,
criminal, administrative or investigative and expenses incurred by such person
in connection therewith. The Certificate further provides that, to the extent
permitted by law, expenses so incurred by any such person in defending a civil
or criminal action or proceeding shall, at his request, be paid by the Company
in advance of the final disposition of such action or proceeding.
The Certificate provides that the right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition shall not be exclusive of any other right which any person may have
or acquire under any statute, provision of the Certificate or Amended and
Restated By-Laws of the Company (the "By-Laws") or otherwise.
Pursuant to employment agreements with certain of its executive officers,
the Company has agreed to indemnify such executive officers (including their
respective heirs, executors and administrators) to the fullest extent permitted
by the DGCL against all expenses and liabilities reasonably incurred in
connection with or arising out of any action, suit or proceeding in which such
executive officer may be involved by reason of having been a director or officer
of the Company or any subsidiary thereof.
The Company has obtained directors and officers liability and company
reimbursement insurance which, among other things, (i) provides for payment on
behalf of its officers and directors against loss as defined in the policy
stemming from acts committed by directors and officers as such and (ii) provides
for reimbursement to the Company for such loss but only when the Company shall
be required or permitted to indemnify directors or officers for loss pursuant to
statutory or common law or pursuant to duly effective certificate of
incorporation or By-Law provisions. Coverage is afforded to the directors and
officers, the Company for reimbursement of the directors and officers and the
Company directly for securities related claims.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<C> <S>
3.1 Amendment to Restated Certificate of Incorporation.
5 Opinion of Shereff, Friedman, Hoffman & Goodman, LLP.
9.1 Voting Trust Agreement, dated as of August 8, 1994 among Audrey Contente, John
Andersen, Barrie Zesiger and Ultrafem, Inc. (incorporated by reference to Exhibit 9.1
to Registration Statement on Form S-1 (File No. 33-97960) filed with the Securities
and Exchange Commission on October 10, 1995).
</TABLE>
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<TABLE>
<C> <S>
9.2 Amendment, dated August 8, 1994 to Voting Trust Agreement, dated as of August 8, 1994
among Audrey Contente, John Andersen, Barrie Zesiger and Ultrafem, Inc. (incorporated
by reference to Exhibit 9.2 to Registration Statement on Form S-1 (File No. 33-97960)
filed with the Securities and Exchange Commission on October 10, 1995).
9.3 Amendment to Voting Trust Agreement, dated as of August 8, 1995 among Audrey Contente,
John Andersen and Barrie Zesiger (incorporated by reference to Exhibit 9.3 to
Registration Statement on Form S-1 (File No. 333-11995) and Post-Effective Amendment
No. 1 to Registration Statement on Form S-1 (Registration No. 33-97960) filed with the
Securities and Exchange Commission on September 13, 1996).
10.1 Amendment dated as of January 1, 1997 to Employment Agreement dated August 1, 1995
between Ultrafem, Inc. and Dori M. Reap.
10.2 Amendment dated as of January 1, 1997 to Employment Agreement dated November 6, 1995
between Ultrafem, Inc. and Tonya G. Hinch.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Shereff, Friedman, Hoffman & Goodman, LLP (contained in Exhibit 5).
23.3 Consent of Arent Fox Kintner Plotkin & Kahn.
24.1 Power of Attorney (included on signature page to this Registration Statement).
</TABLE>
- - - ------------------------
(b) Financial Statement Schedules.
None.
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 Exchange Act of 1934 that
are incorporated by reference in the registration statement.
II-3
<PAGE>
(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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of 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) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 to Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 or Registration S-X are not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) 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 (the "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 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 of 1933 and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
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 City of New York, State of New York on this 6th day of May,
1997.
ULTRAFEM, INC.
BY: /S/ JOHN W. ANDERSEN
-----------------------------------------
Name: John W. Andersen
Title: President, Chief Executive Officer
and
Chairman of the Board of Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned whose
signatures appear below constitutes and appoints John W. Andersen and Dori M.
Reap, and each of them (with full power of each of them to act alone), his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him or her and on his or her behalf, and in
his name, place and stead, in any and all capacities to execute and sign any and
all amendments or post-effective amendments to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, 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 or 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 or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof and the
registrant hereby confers like authority on its behalf.
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.
SIGNATURE TITLE DATE
- - - ------------------------------ --------------------------- -------------------
President, Chief Executive
/s/ JOHN W. ANDERSEN Officer and Chairman of
- - - ------------------------------ the Board of Directors May 6, 1997
John W. Andersen (Principal Executive
Officer)
Senior Vice President,
Finance and
/s/ DORI M. REAP Administration, Secretary
- - - ------------------------------ and Chief Financial May 6, 1997
Dori M. Reap Officer (Principal
Financial & Accounting
Officer)
/s/ AUDREY CONTENTE Executive Vice President,
- - - ------------------------------ Founder and Director May 6, 1997
Audrey Contente
/s/ RICHARD A. CONE Director
- - - ------------------------------ May 6, 1997
Richard A. Cone
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - - ------------------------------ --------------------------- -------------------
<S> <C> <C>
/s/ JOY VIDA JONES Director
- - - ------------------------------ May 6, 1997
Joy Vida Jones
/s/ MARTIN NUSSBAUM Director
- - - ------------------------------ May 6, 1997
Martin Nussbaum
/s/ CHARLES D. PEEBLER, JR. Director
- - - ------------------------------ May 6, 1997
Charles D. Peebler, Jr.
/s/ BARRIE R. ZESIGER Director
- - - ------------------------------ May 6, 1997
Barrie R. Zesiger
</TABLE>
II-6
<PAGE>
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
ULTRAFEM, INC.
(Pursuant to Section 242 of the Delaware General Corporation Law)
Ultrafem, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware does hereby certify that:
1. The name of the corporation is Ultrafem, Inc. (the "Corporation").
2. The Board of Directors of the Corporation duly adopted a
resolution proposing and declaring it advisable that the first complete
sentence of Article FOURTH of the Restated Certificate of Incorporation of the
Corporation be amended in its entirety to read as follows:
The total number of shares of all classes of capital stock that the
Corporation shall have authority to issue is 75,000,000 shares, of
which 70,000,000 shares shall be Common Stock, $.001 par value per
share (the "Common Stock"), and 5,000,000 shares shall be Preferred
Stock, $.001 par value per share (the "Preferred Stock").
3. This amendment to the Restated Certificate of Incorporation
of the Corporation was duly adopted in accordance with the applicable
provisions of Section 242 of the Delaware General Corporation Law.
4. This amendment to the Restated Certificate of Incorporation
of the Corporation shall be effective on and as of the date of filing of this
Certificate of Amendment with the office of the Secretary of State of the State
of Delaware.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed
in its name by its President and attested to by its Secretary this 12th day of
February, 1997 and the statements contained herein are affirmed as true under
penalties of perjury.
ULTRAFEM, INC.
By: /s/ John W. Andersen
-------------------------
Name: John W. Andersen
Title: President
ATTEST:
By: /s/ Dori M. Reap
---------------------
Name: Dori M. Reap
Title: Secretary
<PAGE>
[LETTERHEAD OF SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN LLP]
May 6, 1997
Ultrafem, Inc.
500 Fifth Avenue, Suite 3620
New York, NY 10110
Dear Ladies and Gentlemen:
On the date hereof, Ultrafem, Inc., a Delaware corporation (the
"Company"), intends to transmit for filing with the Securities and Exchange
Commission (the "Commission") Post-Effective Amendment No. 1 on Form S-3 to
Registration Statement on Form S-1 (Registration No. 333-11995) and
Post-Effective Amendment No. 5 on Form S-3 to Registration Statement on Form
S-1 (Registration No. 33-97960) (collectively, the "Registration Statement")
relating to the sale by by certain securityholders of an additional 527,351
shares of common stock, par value $.001 per share (the "Common Stock"), of
Company issuable upon the exercise of outstanding options and warrants to
purchase Common Stock (the "Securities") which were granted by the Company to
such holders (the "Securityholders"). An opinion regarding the balance of
the shares of Common Stock being registered on behalf of certain stockholders
was filed as exhibits to Amendment No. 4 to Registration Statement on Form
S-1 (File No. 33-97960) filed with the Commission on February 22, 1996 and
Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-11995)
and Post-Effective Amendment No. 3 to Registration Statement on Form S-1
(File No. 33-97960) filed with the Commission on November 8, 1996. This
opinion is an exhibit to the Registration Statement.
We note that we are members of the Bar of the State of New York and
do not represent ourselves to be experts in the laws of any other state or
jurisdiction. Insofar as this opinion may involve the laws of the State of
Delaware, our opinion is based solely upon our reading of the Delaware
General Corporation Law, except that our opinion as to the due incorporation
and valid existence of the Company is based solely upon a Certificate of Good
Standing dated April 29, 1997 obtained from the Secretary of State of the
State of Delaware. We have examined copies (in each case signed, certified
or otherwise proven to our satisfaction to be genuine) of the Company's
Certificate of Incorporation and all amendments thereto, its By-Laws as
presently in effect, minutes and other instruments evidencing actions taken
by its directors and stockholders, the Registration Statement and exhibits
thereto and such other documents and
<PAGE>
instruments relating to the Company and the proposed offering as we have
deemed necessary under the circumstances.
Based upon and subject to the foregoing, it is our opinion that:
1. The Company has been duly incorporated and is validly existing
under the laws of the State of Delaware and has authorized capital stock
consisting of 70,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock, par value $.001 per share.
2. The 527,351 shares of Common Stock to be sold by the
Securityholders, which are issuable upon the exercise of the Securities, have
been duly authorized and, when issued and delivered against payment therefor
in accordance with the terms of the applicable Securities, will be legally
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and as an exhibit to any application under the
securities or other laws of any state of the United States, which relate to
the offering which is the subject of this opinion, and to the reference to
this firm appearing under the heading "Legal Matters" in the prospectus which
is contained in the Registration Statement.
This opinion is furnished to you in connection with the filing of
the Registration Statement, and is not to be used, circulated, quoted or
otherwise relied upon for any other purpose, except as expressly provided in
the preceding paragraph. This opinion is as of the date hereof and we
disclaim any undertaking to update this opinion after the date hereof.
Very truly yours,
/s/ Shereff Friedman Hoffman & Goodman, LLP
SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
SFH&G:GA:SMZ:ALK
<PAGE>
EXHIBIT 10.1
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of January 1,
1997, amends the Employment Agreement (the "Agreement"), dated as of August
1, 1995, by and between Ultrafem, Inc., a Delaware corporation (the
"Company"), and Dori M. Reap (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company and Employee desire to enter into this
Amendment in order to amend certain terms of the Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Company and the
Employee hereby agree as follows:
1. The second sentence of Section 4.1(b) of the Agreement is hereby
deleted in its entirety and replaced with the following:
The Base Salary shall increase to an annual rate of $225,000 upon
the earlier to occur of (i) the formation of a Strategic
Alliance, as such term is defined herein, or (ii) the
introduction of the Feminine Protection Product, as such term is
defined herein, to at least five percent (5%) of the United
States or European market, and such Base Salary will be increased
to an annual rate of $250,000 when the second of such events is
achieved.
2. The increase in Base Salary provided for in this Amendment
shall be retroactively effective beginning January 1, 1997.
3. Except as specifically amended by this Amendment, all
provisions of the Agreement shall continue in full force and effect. After
the date hereof, any reference to this Agreement shall mean the Agreement as
amended hereby.
<PAGE>
IN WITNESS WHEREOF, the parties thereto have executed this Amendment
as of the day and year first above written.
ULTRAFEM, INC.
By: /s/ John W. Andersen
__________________________
Name: John W. Andersen
Title: Chief Executive Officer
/s/ Dori M. Reap
_______________________________
DORI M. REAP
2
<PAGE>
Exhibit 10.2
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of January 1,
1997, amends the Employment Agreement (the "Agreement"), dated as of November
6, 1995, by and between Ultrafem, Inc., a Delaware corporation (the
"Company"), and Tonya G. Hinch (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company and Employee desire to enter into this
Amendment in order to amend certain terms of the Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Company and the
Employee hereby agree as follows:
1. The second and third sentences of Section 4.1(b) of the
Agreement are hereby deleted in their entirety and replaced with the
following:
The Base Salary shall increase to an annual rate of $200,000 upon
the earlier to occur of (i) the formation of a Strategic
Alliance, as such term is defined herein, or (ii) the introduction
of the Feminine Protection Product, as such term is defined herein,
to at least five percent (5%) of the United States or European
market. The Base Salary will be increased to an annual rate of
$225,000 upon the achievement of the later of such above listed events.
2. The increase in Base Salary provided for in this Amendment
shall be retroactively effective beginning January 1, 1997.
3. Except as specifically amended by this Amendment, all
provisions of the Agreement shall continue in full force and effect. After
the date hereof, any reference to this Agreement shall mean the Agreement as
amended hereby.
<PAGE>
IN WITNESS WHEREOF, the parties thereto have executed this Amendment
as of the day and year first above written.
ULTRAFEM, INC.
By: /s/ John W. Andersen
----------------------------
Name: John W. Andersen
Title: Chief Executive Officer
/s/ Tonya G. Hinch
-------------------------------
TONYA G. HINCH
2
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 on Form S-3 to Registration Statement on Form S-1 (File No.
333-11995) and Post-Effective Amendment No. 5 on Form S-3 to Registration
Statement on Form S-1 (File No. 333-97960) of Ultrafem, Inc. of our report
dated August 12, 1996 (August 27, 1996 as to Note 7) appearing in the Annual
Report on Form 10-K of Ultrafem, Inc. for the year ended June 30, 1996.
We also consent to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
May 6, 1997
<PAGE>
[LETTERHEAD OF ARENT FOX KINTNER PLOTKIN & KAHN]
May 5, 1997
To Whom It May Concern:
We consent to the reference to Arent Fox Kintner Plotkin & Kahn in this
Registration Statement of Ultrafem, Inc., on Form S-3 (File No. 333-11995) in
the "Risk Factors" section of the prospectus of Ultrafem, Inc., which is part
of this Registration Statement.
ARENT FOX KINTNER PLOTKIN & KAHN
By: /s/ Peter S. Reichertz
------------------------------
Peter S. Reichertz
