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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1999
REGISTRATION NO. 333-66765
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CALYPTE BIOMEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 3826 06-1226727
(State or other jurisdiction (Primary Standard Industrial (I.R.S. employer
of Classification Code Number) identification
incorporation or organization) number)
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1440 FOURTH STREET, BERKELEY, CALIFORNIA 94710,
(510) 749-5100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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WILLIAM A. BOEGER
President, Chief Executive Officer and Chairman of the Board of Directors
Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, California 94710
(510) 749-5100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
SARAH O'DOWD, ESQ.
Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
(650) 324-7000 (phone)
(650) 324-0638 (fax)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, 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 of 1933, as amended, 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 of 1933, as amended, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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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.
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SUBJECT TO COMPLETION, DATED JANUARY 13, 1999
PROSPECTUS
CALYPTE BIOMEDICAL CORPORATION
3,102,500 SHARES OF COMMON STOCK
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The stockholders of Calypte Biomedical Corporation identified on page 11 may
offer and sell the shares covered by this prospectus from time to time. The
selling stockholders will receive all of the proceeds from the sale of the
shares and will pay all underwriting discounts and selling commissions, if any,
applicable to the sale of the shares. Calypte will pay the expenses of
registration of the sale of the shares.
Our common stock trades on the Nasdaq SmallCap Market under the symbol
"CALY". On January 12, 1999, the last reported sale price of our common stock on
the Nasdaq SmallCap Market was $2.25 per share.
BEGINNING ON PAGE 2, WE HAVE LISTED SEVERAL "RISK FACTORS" WHICH YOU SHOULD
CONSIDER. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE YOU MAKE YOUR
INVESTMENT DECISION.
------------------------
The Securities and Exchange Commission and state regulatory authorities have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
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The Date of this Prospectus is , 1999
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RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, ALONG WITH THE
OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS, IN
DECIDING WHETHER TO INVEST IN OUR SHARES. THESE FACTORS, AMONG OTHERS, MAY CAUSE
ACTUAL RESULTS, EVENTS OR PERFORMANCE TO DIFFER MATERIALLY FROM THOSE EXPRESSED
IN ANY FORWARD-LOOKING STATEMENTS MADE IN THIS PROSPECTUS.
UNCERTAIN MARKET ACCEPTANCE OF OUR NEW METHOD OF DETERMINING THE PRESENCE OF
HIV ANTIBODIES. Our products incorporate a new method of determining the
presence of HIV antibodies. There can be no assurance that we will obtain:
- any significant degree of market acceptance among physicians, patients or
health care payors; or
- recommendations and endorsements by the medical community which are
essential for market acceptance of the products.
We have FDA approval to market our urine HIV-1 screening and confirmatory test
in the United States and in July, 1998 we began marketing this product. However,
to date this product has only generated limited revenues and not achieved
significant market penetration. The failure of our products to obtain market
acceptance would have a material adverse effect on us.
WE LACK EXPERIENCE SELLING AND MARKETING OUR HIV-1 URINE-BASED SCREENING
TEST. We have no experience marketing and selling our products either directly
or through our distributors. The success of our products depends upon alliances
with third-party distributors. There can be no assurance that:
- our direct selling efforts will be effective;
- our distributors will market successfully our products; or
- if our relationships with distributors terminate, we will be able to
establish relationships with other distributors on satisfactory terms, if
at all.
Any disruption in our distribution, sales or marketing network could have a
material adverse effect on us.
WE HAVE SUSTAINED LOSSES IN THE PAST AND WE EXPECT TO SUSTAIN LOSSES IN THE
FUTURE. We have incurred losses in each year since our inception. Our net loss
for the six months ended June 30, 1998 was $3.8 million. We expect operating
losses to continue as we continue our marketing and sales activities for our
first FDA-approved product and conduct additional research and development for
subsequent products.
OUR QUARTERLY RESULTS MAY FLUCTUATE DUE TO CERTAIN REGULATORY, MARKETING AND
COMPETITIVE FACTORS OVER WHICH WE HAVE LITTLE OR NO CONTROL. The factors listed
below, some of which we can not control, may cause our revenues and results of
operations to fluctuate significantly:
- actions taken by the FDA or foreign regulatory bodies relating to our
products;
- the extent to which our products gain market acceptance;
- the timing and size of distributor purchases; and
- introductions of alternative means for testing for HIV by competitors.
WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FINANCING THAT WE WILL NEED IN THE
NEXT SIX MONTHS. We believe that we will need to raise more money in the next
six months to continue to finance our operations. We may not be able to obtain
additional financing on acceptable terms, or at all. Any failure to raise
additional financing will likely place us in significant financial jeopardy.
WE DEPEND UPON THE VIABILITY OF A SINGLE PRODUCT--OUR HIV-1 URINE-BASED
SCREENING TEST. Our HIV-1 urine-based screening test product is our only
product. Accordingly, we may have to cease operations if our screening test
fails to achieve market acceptance or generate significant revenues.
OUR PRODUCT DEPENDS UPON RIGHTS TO TECHNOLOGY THAT WE HAVE LICENSED FROM
THIRD PARTY PATENT HOLDERS AND THERE CAN BE NO ASSURANCE THAT
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THE RIGHTS WE HAVE UNDER THESE LICENSING AGREEMENTS ARE SUFFICIENT OR THAT WE
CAN ADEQUATELY PROTECT THOSE RIGHTS. We currently have the right to use patent
and proprietary rights which are material to the manufacture and sale of our
HIV-1 urine-based screening test under licensing agreements with New York
University, Cambridge, Repligen, and the Texas A&M University System.
WE RELY ON SOLE SOURCE SUPPLIERS THAT WE CANNOT QUICKLY REPLACE FOR CERTAIN
COMPONENTS CRITICAL TO THE MANUFACTURE OF OUR PRODUCTS. Any delay or
interruption in the supply of these components could have a material adverse
effect on us by significantly impairing our ability to manufacture products in
sufficient quantities, particularly as we increase our manufacturing activities
in support of commercial sales.
WE HAVE LIMITED EXPERIENCE IN MANUFACTURING OUR PRODUCTS AND NO EXPERIENCE
IN MANUFACTURING OUR PRODUCTS IN COMMERCIAL QUANTITIES. We may encounter
difficulties in scaling-up production of new products, including problems
involving:
- production yields;
- quality control and assurance;
- raw material supply; and
- shortages of qualified personnel.
THE SUCCESS OF OUR PLANS TO ENTER INTERNATIONAL MARKETS MAY BE LIMITED OR
DISRUPTED DUE TO RISKS RELATED TO INTERNATIONAL TRADE AND MARKETING AND THE
CAPABILITIES OF OUR DISTRIBUTORS. We anticipate that international distributor
sales will generate a significant portion of our revenues for the next several
years. We believe that our urine-based test can provide significant benefits in
countries that do not have the facilities or personnel to safely and effectively
collect and test blood samples. The following risks may limit or disrupt our
international sales:
- the imposition of government controls;
- export license requirements;
- political instability;
- trade restrictions;
- changes in tariffs;
- difficulties in managing international operations; and
- fluctuations in foreign currency exchange rates.
Some of our distributors have limited international marketing experience.
There can be no assurance that these distributors will be able to market
successfully our products in foreign markets.
WE FACE INTENSE COMPETITION IN THE MEDICAL DIAGNOSTIC PRODUCTS MARKET AND
RAPID TECHNOLOGICAL ADVANCES BY COMPETITORS. Competition in our diagnostic
market is intense and we expect it to increase. Within the United States, our
competitors include a number of well-established manufacturers of HIV tests
using blood samples, plus at least one system for the detection of HIV
antibodies using oral fluid samples. Many of our competitors have significantly
greater financial, marketing and distribution resources than we do. Several of
these competitors may have already submitted applications to the FDA for
approval of their over-the-counter products. Our competitors may succeed in
developing or marketing technologies and products that are more effective than
ours.
These developments could render our technologies or products obsolete or
noncompetitive or otherwise have a material adverse effect on us.
OUR ABILITY TO MARKET OUR PRODUCT DEPENDS UPON OBTAINING AND MAINTAINING FDA
AND FOREIGN REGULATORY APPROVALS. Numerous governmental authorities in the
United States and other countries regulate our products. The FDA regulates our
products under federal statutes and regulations related to pre-clinical and
clinical testing, manufacturing, labeling, distribution, sale and promotion of
medical devices in the United States.
If we fail to comply with FDA regulations, or the FDA believes that we are
not in compliance with such regulations, the FDA can:
- detain or seize our products;
- issue a recall of our products;
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- prohibit marketing and sales of our products; and
- assess civil and criminal penalties against us, our officers or our
employees.
We also plan to sell our products in certain foreign countries where they
may be subject to similar local regulatory requirements. The imposition of any
of the sanctions described above could have a material adverse effect on us.
The regulatory approval process in the United States and other countries is
expensive, lengthy and uncertain. We may not obtain necessary regulatory
approvals or clearances in a timely manner, if at all. We may lose previously
obtained approvals or clearances or fail to comply with regulatory requirements.
The occurrence of any of these events would have a material adverse effect on
Calypte.
In addition, we are in the process of moving manufacturing from our
Berkeley, California facility to our facility in Alameda, California. Before we
begin to manufacture our product at the Alameda facility, we must apply for and
obtain FDA approval for that facility. Delays in receiving the FDA's approval or
other difficulties which we encounter in scaling-up our manufacturing capacity
to meet demand could have a material adverse effect on us.
WE HAVE RECEIVED A WARNING LETTER FROM THE FDA REGARDING THE SUFFICIENCY OF
OUR MANUFACTURING RECORDS AND PRODUCTION PROCEDURES AND WE MUST SATISFY THE
FDA'S CONCERNS IN ORDER TO AVOID REGULATORY ACTION AGAINST US. On November 19,
1998, we received a Warning Letter from the FDA following an inspection of our
manufacturing facility in Berkeley, California. We responded in full to the
Warning Letter on December 11, 1998 and we believe our responses should be
sufficient. However, if the FDA is not satisfied with our corrective actions, it
could take regulatory actions against us including license suspension,
revocation, and/or denial, seizure and/or injunction, and/or civil penalties.
Any such FDA action is likely to have a material adverse effect upon our ability
to conduct operations. In addition, failure to satisfy the FDA may adversely
affect receiving approval for the Alameda facility. See "Recent Developments" on
page 8.
WE MAY ENCOUNTER DIFFICULTIES, DELAYS AND UNFORSEEN EXPENSES IN ESTABLISHING
A CLINICAL REFERENCE LABORATORY THAT COULD ADVERSELY EFFECT OUR ABILITY TO
MARKET AN OVER-THE-COUNTER HIV-1 URINE SCREENING KIT In connection with seeking
approval for an over-the-counter home urine collection kit for HIV-1 testing, we
may establish a clinical reference laboratory. We may not be able to establish
the laboratory or receive the regulatory approvals required for its operation.
If the necessary regulatory approvals are obtained, the reference laboratory
would test for HIV using our urine-based HIV-1 test and receive home-collected
urine for HIV testing. In addition, we may have to offer counseling to
laboratory customers in connection with the reporting of results. A reference
laboratory, especially for HIV testing, involves a number of risks. To establish
a reference laboratory, we must:
- seek to hire and retain laboratory personnel;
- purchase necessary equipment;
- secure required permits;
- incur marketing expenses;
- obtain customers; and
- comply with government regulations.
Difficulties, delays or unforeseen expenses incurred in the course of
completing any of these tasks could have an adverse effect on our ability to
market a cost-effective over-the-counter kit for HIV-1 testing.
AS THE SMALL MANUFACTURER OF A MEDICAL DIAGNOSTIC PRODUCT, WE ARE EXPOSED TO
PRODUCT LIABILITY AND RECALL RISKS FOR WHICH INSURANCE COVERAGE IS EXPENSIVE,
LIMITED AND POTENTIALLY INADEQUATE. Calypte manufactures medical diagnostic
products which subject it to risks of product liability claims or product
recalls, particularly in the event of false positive or false negative reports.
A product recall or a successful product liability claim or claims which exceed
our insurance coverage could have a material adverse effect on us. We maintain
$10,000,000 of product liability
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insurance. However, product liability insurance is expensive. In the future we
may not be able to obtain coverage on acceptable terms, if at all. Moreover, our
insurance coverage may not adequately protect us from liabilities which we incur
in connection with clinical trials or sales of our products.
OUR CHARTER DOCUMENTS MAY INHIBIT A TAKEOVER. Certain provisions of our
Certificate of Incorporation and Bylaws could:
- discourage potential acquisition proposals;
- delay or prevent a change in control of Calypte;
- diminish stockholders' opportunities to participate in tender offers for
our common stock, including tender offers at prices above the then current
market price; or
- inhibit increases in the market price of our common stock that could
result from takeover attempts.
INVESTORS' ABILITY TO TRADE OUR COMMON STOCK MAY BE LIMITED BY TRADING
VOLUME. The trading volume in our common shares has been relatively limited. A
consistently active trading market for our common stock may not develop.
WE MAY BE REMOVED FROM THE NASDAQ SMALLCAP MARKET IF WE FAIL TO MEET CERTAIN
MAINTENANCE CRITERIA. The Nasdaq Stock Market inquired on one occasion whether
we continue to meet the net capital surplus maintenance criterion for trading on
the Nasdaq SmallCap Market. We currently meet the capital surplus requirement
but our ability to continue to do so will depend on whether we are able to
maintain a net capital surplus of at least $1,000,000. The public trading volume
of our common stock and the ability of our stockholders to sell their shares
could be significantly impaired if we fail to meet the maintenance criteria and
are removed from the Nasdaq SmallCap Market. In that case, our common stock
would trade on either the OTC bulletin board, a regional exchange or in the pink
sheets, which would likely result in an even more limited trading volume.
THE PRICE OF CALYPTE'S COMMON STOCK HAS BEEN HIGHLY VOLATILE DUE TO SEVERAL
FACTORS WHICH WILL CONTINUE TO EFFECT THE PRICE OF OUR STOCK. Our common stock
has traded as low as $.50 and as high as $4.43 between mid-October 1998 and
mid-December 1998. Some of the factors leading to this volatility include:
- price and volume fluctuations in the stock market at large which do not
relate to our operating performance;
- fluctuations in our operating results;
- announcements of technological innovations or new products which we or our
competitors make;
- FDA and international regulatory actions;
- availability of reimbursement for use of our products from private health
insurers, governmental health administration authorities and other
third-party payors;
- developments with respect to patents or proprietary rights;
- public concern as to the safety of products that we or others develop;
- changes in health care policy in the United States or abroad; and
- changes in stock market analysts' recommendations regarding Calypte, other
medical products companies or the medical product industry generally.
CALYPTE AND THE PRICE OF CALYPTE SHARES MAY BE ADVERSELY EFFECTED BY THE
PUBLIC SALE OF A SIGNIFICANT NUMBER OF THE SHARES ELIGIBLE FOR FUTURE
SALE. Nearly all outstanding shares of our common stock are freely tradable.
Sales of common stock in the public market could materially adversely affect the
market price of our common stock. Such sales also may inhibit our ability to
obtain future equity or equity-related financing on acceptable terms.
OUR RESEARCH AND DEVELOPMENT OF HIV URINE TESTS INVOLVES THE CONTROLLED USE
OF HAZARDOUS MATERIALS. There can be no assurance that our safety procedures
for handling and disposing of hazardous materials such as azide will comply with
applicable regulations. In addition, we can
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not eliminate the risk of accidental contamination or injury from these
materials. We may be held liable for damages from such an accident and that
liability could have a material adverse effect on us.
WE MAY NOT BE ABLE TO RETAIN OUR KEY EXECUTIVES AND RESEARCH AND DEVELOPMENT
PERSONNEL. As a small company with only 30 employees, our success depends on the
services of key employees in executive and research and development positions.
The loss of the services of one or more of such employees could have a material
adverse effect on us.
WE HAVE NOT COMPLETED OUR YEAR 2000 COMPLIANCE PROGRAM SO THE POTENTIAL
COSTS AND COMPLICATIONS ASSOCIATED WITH YEAR 2000 COMPLIANCE CANNOT BE
DETERMINED AT THIS TIME. Calypte has a formal Year 2000 Program focusing on
five key readiness areas: 1) hardware, addressing information technology; 2)
software, addressing business, research, financial, inventory planning,
production control, product distribution and customer support; 3) firmware,
addressing built-in microprocessors that control production and non-production
equipment; 4) third party suppliers of critical inventory; and 5) third party
service providers.
Calypte established a Year 2000 Task Force earlier this year. The task force
is systematically examining each of the five key readiness areas by 1)
identifying items with Year 2000 compliance concerns; 2) assessing the risk and
impact of noncompliance for each item identified; and 3) correcting
non-compliant items and testing the corrections to ensure readiness at both
component and system levels. Calypte is in the process of contacting key
suppliers to identify any concerns which may arise due to such suppliers'
potential non-compliance. The task force will develop contingency plans if it
discovers areas where there is a substantial possibility that Year 2000
compliance will not be achieved. Calypte has identified items with Year 2000
compliance concerns in three readiness areas: software, third party suppliers of
critical inventory and third party service providers. We expect to complete risk
assessment in each area by May 1999, and the correction, testing and the
development of contingency plans will follow. Until we have completed our risk
assessment and developed any necessary contingency plans, we will not be in a
position to identify our most reasonably likely worst case Year 2000 scenario.
We have presently completed correction and testing in the Hardware readiness
area and it is now Year 2000 compliant. As of September 30, 1998, Calypte had
spent a total of approximately $2300 on its Year 2000 program and has made
limited expenditures related to its Year 2000 program since then. Through
December 31, 1998, we have not incurred any unexpected Year 2000 related costs
and we will provide an updated total of Year 2000 program expenditures in our
Form 10-K Report for the year ended December 31, 1998.
We estimate that total Year 2000 costs to upgrade systems within Calypte
will range from $4,000 to $15,000 with the majority of costs to be incurred in
the next eighteen months. At this time we do not anticipate that Calypte will
incur significant operating expenses or be required to invest heavily in
computer system improvements because our manufacturing process does not rely
heavily on automation and our existing computer hardware has proven to be Year
2000 compliant. However, Calypte is continuing to assess and develop
alternatives that will require refinement of its cost estimate over time. There
can be no assurance that there will not be a delay in, or increased costs
associated with, our Year 2000 compliance program. Since our program is ongoing,
all potential Year 2000 complications have not yet been identified. Therefore,
the potential impact of possible complications on Calypte's financial condition
and results of operations cannot be determined at this time. If computer systems
used by Calypte or its suppliers or the product integrity of products provided
to Calypte by suppliers fail or experience significant difficulties related to
the Year 2000, Calypte's operations and financial condition could be adversely
effected.
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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of the shares.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the Securities and Exchange Commission. You may read and copy any
document we file at the SEC's public reference room at Judiciary Plaza Building,
450 Fifth Street, NW, Room 1024, Washington, D.C. 20549. You should call
1-800-SEC-0330 for more information on the public reference room. The SEC
maintains an internet site at http://www.sec.gov where certain information
regarding issuers (including Calypte) may be found.
This prospectus is part of a registration statement that we filed with the
SEC (Registration No. 333-66765). The registration statement contains more
information than this prospectus regarding Calypte and its common stock,
including certain exhibits and schedules. You can get a copy of the registration
statement from the SEC at the address listed above or from its internet site.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information may include documents filed after the date of this
prospectus which update and supersede the information you read in this
prospectus. We incorporate by reference the documents listed below, except to
the extent information in those documents is different from the information
contained in this prospectus, and all future documents filed with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
we terminate the offering of these shares.
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SEC FILING
(FILE NO. 0-20985) PERIOD/FILING DATE
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Annual Report on Form 10-K Year ended December 31, 1997
Quarterly Reports on Form 10-Q Quarter ended March 31, 1998
Quarter ended June 30, 1998
Quarter ended September 30, 1998
Current Report on Form 8-K January 4, 1999
Current Report on Form 8-K December 16, 1998
Description of common stock contained in July 10, 1996
Registration Statements on Form 8-A December 16, 1998
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You may request a copy of these documents, at no cost, by writing to:
Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, California 94710
Attention: President
Telephone: (510) 749-5100.
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FORWARD-LOOKING INFORMATION
Statements made in this prospectus or in the documents incorporated by
reference herein that are not statements of historical fact are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. A number of risks and
uncertainties, including those discussed under the caption "Risk Factors" above
and the documents incorporated by reference herein could affect such
forward-looking statements and could cause actual results to differ materially
from the statements made.
RECENT DEVELOPMENTS
On November 19, 1998, Calypte received a Warning Letter from the FDA
following an inspection of its manufacturing facility in Berkeley, California.
The observations in the Warning Letter generally concerned the adequacy of the
manufacturing records and production procedures required under the FDA's Good
Manufacturing Practices regulations. These regulations govern the type and
completeness of manufacturing, quality, storage and other records which Calypte
must prepare when it produces the HIV-urine test. Areas in which the FDA
requested that the Good Manufacturing Practices standard operating procedures be
revised included, among others, complaint handling, personnel training,
corrective actions, monitoring of production processes, environmental controls,
validations regarding the thoroughness of cleaning procedures and how equipment
should be operated. Calypte responded in full to the Warning Letter on December
11, 1998 and believes that its responses should be sufficient. However, if
Calypte receives additional inquiries from the FDA, it intends to cooperate
fully to provide the requested information and take any further appropriate
corrective actions. Calypte is in the process of moving its manufacturing to a
new facility in Alameda, California.
NEWS RELEASE ABOUT MARKET SIZE AND PROFITABILITY
On December 3, 1998, Reuters News Service reported on a recently released
study concerning the urine HIV test. The Reuters article quoted C. Fred Toney,
an analyst with Pacific Growth Equities, Inc., expressing his opinion as to
certain possible implications of the study for Calypte. The article included Mr.
Toney's estimate of the size of the market for HIV screening in blood banks and
asserted that Mr. Toney had opined about the future profitability of Calypte.
Mr. Toney owns shares that are offered by this Prospectus. Pacific Growth
Equities was the placement agent in the private placement in which the shares
offered by this Prospectus were sold by Calypte to the selling stockholders. Two
other employees of Pacific Growth Equities, Stephen J. Massocca and Todd J.
Kenck, also own shares that are offered by this Prospectus. See "Selling
Shareholders" on page 11. Calypte has no affiliation with Mr. Toney, Mr.
Massocca or Mr. Kenck and we did not encourage Mr. Toney or any other Pacific
Growth Equities employee to make any statements to the press. Mr. Toney's
statements and opinions, to the extent accurately reported, are his own
statements and opinions and not those of Calypte or Pacific Growth Equities.
Calypte has not endorsed and does not now endorse the statements attributed to
Mr. Toney in the December 3 Reuters article and this disclosure is intended to
make clear that Calypte disclaims any such endorsement.
According to the Reuters article, Mr. Toney estimated that the potential
size of the blood bank testing market was $75 million per year. Mr. Toney has
informed Calypte that this estimate was based on an estimate of the number of
blood bank screenings performed during 1993 contained in Calypte's 1997 Form
10-K and on a hypothetical price per test based on the price Mr. Toney believes
is currently paid for available HIV-1 urine-based screening tests in other
markets.
Calypte notes that we currently do not have FDA approval to market our test
in the blood bank market. We do not and cannot provide any assurances that our
urine test will be approved or mandated for use in blood banks by the FDA, the
Centers for Disease Control or any other body or that it will
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be used by blood banks or any other potential users. If our urine test is so
used, we do not and cannot provide any assurances as to the extent of such use
or the price for that test.
The Reuters article also reported that Mr. Toney believes Calypte could
become profitable before the end of 1999. Mr. Toney has informed us that he was
misquoted in that article. Mr. Toney informs us that in his conversations with
the Reuters reporter he had hypothesized that profitability could be possible on
such a time frame if (and only if) our urine test were to be MANDATED shortly by
the FDA and/or the Centers for Disease Control for use in screening by blood
banks. Mr. Toney did not express any opinion to Reuters or any other party as to
whether or when such a mandate would ever be imposed. Further, neither Calypte
nor Mr. Toney is aware of any pending or proposed action by FDA, the Centers for
Disease Control or any other regulatory body that would mandate the use of
Calypte's or any other urine test in connection with blood bank screening or any
other application. Calypte does not suggest by including this description of the
Reuters article that it believes any such regulatory action is imminent or
probable. Further, there can be no assurances that Calypte will become
profitable at any particular time or ever and, as indicated above, Calypte does
not by this disclosure make or endorse any particular projection of its
operating results or financial condition.
More generally, we advise investors that we do not endorse or adopt any
statements from Mr. Toney or any other source regarding the size of any
particular market, cost per test or projected revenues or earnings. We do not
believe that market size information is accurately predictive of future Calypte
revenues and we caution investors not to interpret any information they may
obtain or derive relating to or suggesting market size as a revenue projection
for Calypte.
If we from time to time make or have attributed to us any statements
regarding market size, expected cost per test or projected earnings or revenues,
those statements are forward-looking statements. Such statements are subject to
risks and uncertainties and actual events or performance may differ materially
due to a variety of factors, including those described under "Risk Factors"
beginning on page 2.
9
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of Calypte at June
30, 1998. The table also sets forth the actual capitalization pro forma and as
adjusted assuming the sale of the 3,102,500 shares offered hereby at a price of
$1.00 per share and the application of the net proceeds from such sale (after
deduction of estimated commissions and estimated offering expenses).
<TABLE>
<CAPTION>
JUNE 30, 1998
-----------------------
PRO FORMA
AND AS
ACTUAL ADJUSTED
---------- -----------
(IN THOUSANDS, EXCEPT
SHARE AND PER SHARE
DATA)
<S> <C> <C>
Long-term portion of capital lease obligations.......................................... $ 118 $ 118
Mandatorily Redeemable Series A Preferred Stock, $0.001 par value; no shares authorized; 2,036 2,036
100,000 shares issued and outstanding; aggregate redemption and liquidation value of
$1,000 plus cumulative dividends......................................................
Stockholders' equity (deficit):
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; no shares issued and -- --
outstanding, actual and as adjusted.................................................
Common Stock, $0.001 par value, 20,000,000 shares authorized; 13,414,073 shares issued 13 17
and outstanding, as of June 30, 1998; 16,516,573 shares issued and outstanding, as
adjusted(1).........................................................................
Additional paid-in capital.............................................................. 56,958 59,798
Deferred compensation................................................................... (335) (335)
Deficit accumulated during development stage............................................ (52,097) (52,097)
---------- -----------
Total stockholders' equity (deficit).................................................... 4,539 7,383
---------- -----------
---------- -----------
Total capitalization.................................................................... $ 6,693 $ 9,537
---------- -----------
---------- -----------
</TABLE>
- ------------------------
10
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders, the
number of shares of common stock owned beneficially by the selling stockholders
as of September 30, 1998 (as adjusted to give effect to the purchases under the
Purchase Agreement) and the number of shares that may be offered pursuant to
this prospectus. This information is based upon information provided by the
selling stockholders. There are currently no agreements, arrangements or
understandings with respect to the sale of any of the shares. The shares are
being registered to permit public secondary trading of the shares, and the
selling stockholders may offer the shares for resale from time to time. The
percentages of ownership set forth in the table are based on 13,428,194 shares
of Common Stock outstanding as of October 26, 1998, and assume the sale and
issuance of 3,102,500 shares of Common Stock pursuant to the Purchase Agreement.
The individuals named in parentheses in the table have certain affiliations with
the selling stockholder listed immediately above such individual. However, such
individuals disclaim beneficial ownership of the shares.
As set forth in notes 2 and 3 below, one of the selling stockholders is a
director of Calypte and three of the other selling stockholders are employees of
Pacific Growth Equities, Inc.. Pacific Growth Equities was the underwriter for
Calypte's initial public offering and the placement agent for the sale of the
shares to certain of the selling stockholders. Calypte has agreed to pay Pacific
Growth Equities approximately $210,000 upon the closing of the sale for certain
investment advisory services and for placement agent fees in connection with
sales to certain purchasers, as well as for other advisory services unconnected
to the offering. In addition, Calypte has agreed to reimburse Pacific Growth
Equities for its reasonable out-of-pocket expenses incurred in connection with
the offering, including the reasonable fees and expenses of Pacific Growth
Equities' counsel, up to a maximum of $50,000.
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED COMMON BENEFICIALLY OWNED
PRIOR TO OFFERING STOCK AFTER OFFERING
----------------------- TO BE -----------------------
HOLDER NUMBER PERCENT SOLD NUMBER PERCENT
- ----------------------------------------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Clarion Group(1) 800,000 4.8 800,000 -- --
(Morton A. Cohen)
Atlas II, LP 810,000 4.9 610,000 200,000 1.2
(Richard Jacinto)
R. J. Capital, LP 190,000 1.2 90,000 100,000 *
(Richard Jacinto)
Winston Partners 200,000 1.2 200,000 -- --
(Peter Hurwitz)
MAC & Co. 602,500 3.6 150,000 452,500 2.7
H&Q Health Care Investors 861,576 5.2 360,000 501,576 3.0
H&Q Life Sciences Investors 572,417 3.5 240,000 332,417 2.0
Porter Partners, LP 200,000 1.2 200,000 -- --
(Jeffrey H. Porter)
Apollo Medical Partners 150,000 * 150,000 -- --
(Brandon Fradd) *
Robert Ryan, MD & Patricia Ryan 100,000 * 100,000 -- --
Stephen J. Massocca(2) 150,000 * 150,000 -- --
C. Fred Toney(2) 35,000 * 20,000 15,000 *
Todd J. Kenck(2) 7,500 * 7,500 -- --
David E. Collins (3) 95,958 * 25,000 70,958 *
--
---------- --- ---------- ----------
TOTALS 4,774,951 28.8 3,102,500 1,672,451 9.8
</TABLE>
- ------------------------
* Less than 1%
11
<PAGE>
(1) Includes 400,000 shares held by Clarion Capital Corporation, 300,000 shares
held by Clarion Partners, LP and 100,000 shares held by Clarion Offshore
Fund, Ltd.
(2) Todd J. Kenck, C. Fred Toney, and Stephen Massocca are employees of Pacific
Growth Equities. Mr. Kenck is a Vice President and an investment banker. Mr.
Toney is co-Director of Research for Pacific Growth Equities and is the
analyst who covers Calypte. He is one of six members of Pacific Growth
Equities' executive committee. Mr. Massocca is Pacific Growth Equities'
Chief Operating Officer, a member of its board of directors, and a member of
its executive committee.
(3) Stockholder is a member of the Board of Directors of Calypte and is entitled
to exercise options for the purchase of additional shares. The table
includes shares subject to options exercisable by stockholder within sixty
days of September 30, 1998.
PLAN OF DISTRIBUTION
The selling stockholders may offer their shares at various times in one or
more of the following transactions:
- on the Nasdaq SmallCap Market (or any other exchange on which the shares
may be listed);
- in the over-the-counter market;
- in negotiated transactions other than on such exchanges;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions, in covering previously established short
positions and in settlement of other transactions in standardized or
over-the-counter options; or
- in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices prevailing
at the time of sale, at prices related to such prevailing market prices , at
negotiated prices or at fixed prices. The selling stockholders may use
broker-dealers to sell their shares. The broker-dealers will either receive
discounts or commissions from the selling stockholders, or they will receive
commissions from purchasers of shares.
Under certain circumstances the selling stockholders and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of the Securities Act. Any commissions received by such
broker-dealers and any profits realized on the resale of shares by them may be
considered underwriting discounts and commissions under the Securities Act. The
selling stockholders may agree to indemnify such broker-dealers against certain
liabilities, including liabilities under the Securities Act. In addition,
Calypte has agreed to indemnify the selling stockholders with respect to the
shares offered hereby against certain liabilities, including certain liabilities
under the Securities Act. Alternatively, Calypte may contribute toward amounts
paid due to such liabilities.
Under the rules and regulations of the Exchange Act, any person engaged in
the distribution of the resale of shares may not simultaneously engage in market
making activities with respect to the Calypte's common stock for a period of two
business days prior to the commencement of such distribution. The selling
stockholders will also be subject to applicable provisions of the Exchange Act
and regulations under the Exchange Act which may limit the timing of purchases
and sales of shares of Calypte's common stock by the selling stockholders.
12
<PAGE>
The selling stockholders will pay all commissions, transfer taxes, and other
expenses associated with the sale of securities by them. The shares offered
hereby are being registered pursuant to contractual obligations of Calypte, and
Calypte has paid the expenses of the preparation of this prospectus. We have not
made any underwriting arrangements with respect to the sale of shares offered
hereby.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
LEGAL MATTERS
Heller Ehrman White & McAuliffe of Palo Alto, California, our counsel in
connection with the offering, has issued an opinion about the validity of the
securities being offered.
EXPERTS
KPMG LLP, independent certified public accountants, audited the financial
statements of Calypte Biomedical Corporation and subsidiary, (a development
stage enterprise), incorporated by reference in this prospectus and elsewhere in
the registration statement to the extent and for the period indicated in their
report. These documents are referenced herein in reliance upon the authority of
KPMG, as experts in accounting and auditing in giving the report.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered. All of the amounts
shown are estimates except the Securities and Exchange Commission registration
fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee................ $ 957
Legal fees and expenses............................................ 30,000
Accounting fees and expenses....................................... 5,000
Miscellaneous...................................................... 6,011
Total.............................................................. $ 41,968
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a corporation to
include in its charter documents, and in agreements between the corporation and
its directors and officers, provisions expanding the scope of indemnification
beyond that specifically provided by the current law.
Article VIII of Calypte's Certificate of Incorporation provides for the
indemnification of directors to the fullest extent permissible under Delaware
law.
Article VI of Calypte's Bylaws provides for the indemnification of officers,
directors and third parties acting on behalf of the corporation if such person
acted in good faith and in a manner reasonably believed to be in and not opposed
to the best interest of the corporation, and, with respect to any criminal
action or proceeding, the indemnified party had no reason to believe his conduct
was unlawful.
Calypte has entered into indemnification agreements with its directors and
executive officers, in addition to indemnification provided for in Calypte's
Bylaws, and intends to enter into indemnification agreements with any new
directors and executive officers in the future.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------------------
<C> <S>
4.1* Common Stock Purchase Agreement between Calypte and the selling stockholders, dated November 2, 1998
5.1* Opinion of Heller Ehrman White & McAuliffe
23.1* Consent of Heller Ehrman White & McAuliffe (filed as part of Exhibit 5.1)
23.2* Consent of KPMG Peat Marwick LLP, Independent Auditors
24.1* Power of Attorney
</TABLE>
- ------------------------
* Previously filed with this Registration Statement
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;
II-1
<PAGE>
(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;
(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
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 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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 liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial BONA FIDE offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<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 Amendment No. 2 to
the Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Berkeley, State of
California, on January 13, 1999.
<TABLE>
<S> <C> <C> <C>
CALYPTE BIOMEDICAL CORPORATION
By:
<CAPTION>
/s/ WILLIAM A. BOEGER
-----------------------------------------
William A. Boeger
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD OF DIRECTORS
(PRINCIPAL EXECUTIVE OFFICER)
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement on Form S-3 has been signed below by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
/s/ WILLIAM A. BOEGER* President, Chief Executive Officer
------------------------------------------- and Chairman of Board of Directors
William A. Boeger (Principal Executive Officer) January 13, 1999
HOWARD B. URNOVITZ, PH.D.*
------------------------------------------- Chief Science Officer and Director
Howard B. Urnovitz, Ph.D. January 13, 1999
Chief Operating Officer, Vice
JOHN J. DIPIETRO President--Finance, Chief Financial
------------------------------------------- Officer and Secretary (Principal
John J. DiPietro Financial and Accounting Officer) January 13, 1999
DAVID COLLINS*
------------------------------------------- Director
David Collins January 13, 1999
JULIUS R. KREVANS, M.D.*
------------------------------------------- Director
Julius R. Krevans, M.D. January 13, 1999
MARK NOVITCH, M.D.*
------------------------------------------- Director
Mark Novitch, M.D. January 13, 1999
ZAFAR I. RANDAWA, PH.D.*
------------------------------------------- Director
Zafar I. Randawa, Ph.D. January 13, 1999
PAUL FREIMAN*
------------------------------------------- Director
Paul Freiman January 13, 1999
/s/ WILLIAM A. BOEGER
-------------------------------------------
*William A. Boeger
(Attorney-in-Fact)
</TABLE>
II-3
<PAGE>
CALYPTE BIOMEDICAL CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.1* Common Stock Purchase Agreement between Calypte and the selling stockholders, dated November 2, 1998
5.1* Opinion of Heller Ehrman White & McAuliffe
23.1* Consent of Heller Ehrman White & McAuliffe (filed as part of Exhibit 5)
23.2* Consent of KPMG Peat Marwick LLP, Independent Auditors
24.1* Power of Attorney
</TABLE>
- ------------------------
* Previously filed with this Registration Statement
