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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 19, 1999
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
ENAMELON, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 15 KIMBALL AVENUE 13-3669775
(STATE OR OTHER JURISDICTION OF YONKERS, NEW YORK 10704 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) TELEPHONE: (914) 237-1308 IDENTIFICATION NO.)
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
_______________
DR. STEVEN R. FOX
CHIEF EXECUTIVE OFFICER
ENAMELON, INC.
15 KIMBALL AVENUE
YONKERS, NEW YORK 10704
TELEPHONE: (914) 237-1308
TELECOPIER: (914) 237-4024
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
_______________
A COPY OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO THE AGENT FOR
SERVICE SHOULD BE SENT TO:
JACK BECKER, ESQ.
SNOW BECKER KRAUSS P.C.
605 THIRD AVENUE
NEW YORK, N.Y. 10158-0125
TELEPHONE: (212) 687-3860
TELECOPIER: (212) 949-7052
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this registration statement.
_______________
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 or
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. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(2)
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<S> <C> <C> <C> <C>
Common Stock, $.001 par 1,777,768 $7.875(3) $13,999,923 $3,892
value shares(2)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
(2) Represents shares that the selling securityholders named herein may acquire
upon conversion of 500 shares of the Registrant's Series B Convertible
Preferred Stock assuming a conversion price of $5.65 per share. The number
of shares of Common Stock issuable on conversion of the Series B
Convertible Preferred Stock is equal to the quotient of (i) the product of
(w) the number of shares to be converted and (x) the sum of $1,000 plus
(N/365)(.06)($1,000)and (ii) the lower of (y) the average of the five
lowest closing sale prices of the Common Stock on the Nasdaq National
Market in the 40 trading days immediately preceding the date of conversion
or (z) 120% of the average of the closing sale prices in the last five
trading days of February 1999. For purposes of the calculation, N equals
the number of days elapsed from December 18, 1998, the purchase date of the
Series B Convertible Preferred Stock, to the date of conversion. The
conversion price would have been $5.65 if the date of conversion had been
January 13, 1999. The Registrant is required to register not less than 200%
of the number of shares issuable on conversion. This number includes an
indeterminate number of shares that may become issuable in the event of a
stock split, stock dividend or similar transaction involving the common
Stock pursuant to the antidilution provisions of the Series B Convertible
Preferred Stock.
(3) Calculated solely for the purpose of determining the registration fee
pursuant to Rule 457(g)(3) based upon the closing price of the Registrant's
Common Stock on the Nasdaq National Market on January 13, 1999.
================================================================================
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE>
PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED JANUARY 19, 1999
1,777,768 SHARES
ENAMELON, INC.
COMMON STOCK
The selling securityholders named in this prospectus are offering and selling up
to 1,777,768 shares of the common stock of Enamelon, Inc. They may acquire those
shares upon conversion of 500 shares of series B convertible preferred stock. If
the selling securityholders had converted their series B convertible preferred
stock on January 13, 1999, we would have issued them an aggregate of 888,884
shares of common stock, based on a conversion rate of 177 shares of common stock
for each share of series B convertible preferred stock. Under our agreement with
the selling securityholders, we are required to register not less than 200% of
the number of shares of common stock issuable on conversion of the series B
convertible preferred stock on the date of the registration, because the number
of shares issuable on conversion may increase. Therefore, this prospectus covers
maximum of 1,777,768 shares of common stock.
The common stock is quoted on the Nasdaq National Market under the symbol
"ENML". On January 13, 1999, the closing sale price of one share of common stock
on the Nasdaq National Market was $7.875.
Enamelon, Inc. will not receive any proceeds from the sale of the common stock.
THE COMMON STOCK IS A SPECULATIVE INVESTMENT AND INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD READ THE DESCRIPTION OF CERTAIN RISKS UNDER THE CAPTION "RISK
FACTORS" COMMENCING ON PAGE 1 BEFORE PURCHASING THE COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______________
Enamelon, Inc.
7 Cedar Brook Drive
Cranbury, New Jersey 08512
Telephone: (609) 395-6900
_______________
THE DATE OF THIS PROSPECTUS IS , 1999
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INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE SELLING SECURITYHOLDERS MAY NOT SELL
THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS PROHIBITED.
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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PAGE
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Risk Factors................................................................. 1
Limited Operating History; History of Losses............................. 1
Dependence on Initial Product............................................ 1
Uncertainty of Results of Human Clinical Studies......................... 2
Uncertainty of Market Acceptance......................................... 2
Unproven Marketing Capability............................................ 2
Uncertainty of Development of Additional Products........................ 2
U.S Government Regulation................................................ 2
Foreign Regulation....................................................... 4
Dependence on and Protection of Proprietary Technology................... 4
Competition.............................................................. 5
Evolving Product Formulations............................................ 5
Dependence on Others to Manufacture...................................... 6
Dependence on Key Personnel.............................................. 6
Ownership of Shares By Management........................................ 6
Need for Additional Financing............................................ 6
Product Liability........................................................ 6
Possible Volatility of Market Price for the Common Stock................. 7
Shares Eligible for Future Sale.......................................... 7
Dilutive Effect of Conversion of Series B Preferred Stock................ 8
Possible Adverse Effect of Other Issuances of Preferred Stock............ 8
Antitakeover Provisions of Delaware Business Combination Statute......... 8
Selling Securityholders....................................................... 9
Plan of Distribution.......................................................... 11
Information About the Company................................................. 12
Legal Matters................................................................. 13
Experts....................................................................... 13
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RISK FACTORS
Before you buy our common stock, you should be aware of the risks of investment,
including those described below. You should carefully consider these risk
factors together with all of the other information included in this prospectus,
including the information provided in the documents that we incorporate by
reference.
Some of the information in this prospectus may contain forward-looking
statements. Such statements can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "believe," "intend," "anticipate,"
"estimate," "continue" or similar words. These statements discuss future
expectations, estimate the happening of future events, anticipate our future
financial condition or state other "forward-looking" information. When
considering such forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this prospectus and the documents
that we incorporate by reference. The risk factors noted in this section and
other factors noted throughout this prospectus, including certain risks and
uncertainties, could cause our actual results to differ materially from those
contained in any forward-looking statement.
LIMITED OPERATING HISTORY; HISTORY OF LOSSES. Although we were incorporated in
1992, for accounting purposes, we were a development stage company through the
fourth quarter of 1997. As such, we reported any sales as a reduction of
marketing expenses. We emerged from the development stage in the first quarter
of 1998 and began to report our sales as revenues at that time. Therefore, we
have reported only three quarters of revenue from operations. From 1992 through
December 31, 1997, we accumulated net losses of $15,462,685. We also incurred a
net loss of approximately $23,633,891 for the nine months ended September 30,
1998. Our losses during the development stage were principally the result of (1)
research and development costs, (2) the start-up and ongoing costs of
manufacturing and test marketing Enamelon(R) toothpaste, and (3) general and
administrative costs. Our losses after emerging from the development stage have
resulted principally from start-up marketing and manufacturing costs relating to
the national introduction of Enamelon(R) toothpaste in the first quarter of
1998. We believe that we will continue to incur losses into 2000. We expect
these continuing losses principally to result from (1) expenses of ongoing
clinical testing and (2) anticipated marketing and manufacturing expenses from
the expansion of national sales of Enamelon(R) toothpaste and the introduction
of new products. Our ability to operate profitably after 2000 will depend on
many factors, some of which are described below. These factors include consumer
acceptance of our products, our ability to manufacture and market our products
efficiently, the development of new products using our proprietary technologies,
and our ability to expand the claims made for our products.
DEPENDENCE ON INITIAL PRODUCT. Until we develop and begin to market additional
products, we expect to derive most of our revenues from sales of Enamelon(R)
toothpaste. Accordingly, our financial performance will depend almost entirely
on our ability to successfully market and sell Enamelon(R) toothpaste. Based
on the results of our test marketing and the initial phase of our national
marketing, we believe that Enamelon(R) toothpaste will be a commercially
viable product. These results, however, are preliminary, and the commercial
viability of Enamelon(R) toothpaste has not yet been firmly established. Even
if it is a commercially viable product, other factors, such as the following,
could limit our ability to sell Enamelon(R) toothpaste profitably:
. Whether it can be produced in time and on a scale sufficient to meet market
demand;
. Whether competitive challenges may effectively limit its marketablity;
. Whether governmental regulation may limit its profitability; or
. Whether Enamelon(R) toothpaste will be able to sustain market acceptance.
Since we do not presently market any other products, our inability to market
Enamelon(R) toothpaste profitably could have a material adverse effect on our
business and results of operations. See "Risk Factors -- Uncertainty of Market
Acceptance"
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UNCERTAINTY OF RESULTS OF HUMAN CLINICAL STUDIES. Since 1996, we have retained
independent laboratories to conduct human clinical studies to support additional
promotional claims. Although some independent laboratories have completed a few
small-scale studies, other independent laboratories are continuing to conduct
large-scale studies. We intend to use the results of these studies to establish
additional promotional claims for Enamelon(R) toothpaste concerning its
efficacy in humans. If we are able to establish those additional claims, we
believe that Enamelon(R) toothpaste will have a competitive advantage over
other toothpastes. If the results of those studies are adverse or inconclusive,
however, we will not be able to make the expected additional claims for
Enamelon(R) toothpaste, which could have an adverse affect on our ability to
market the product.
UNCERTAINTY OF MARKET ACCEPTANCE. We are dependent upon consumers' acceptance
of Enamelon(R) toothpaste as an alternative to currently well-known brand name
toothpastes. We believe that market acceptance will be dependent on a number of
factors including:
. our ability to demonstrate and communicate to consumers the added
effectiveness of Enamelon(R) toothpaste;
. the willingness of consumers to pay a premium for Enamelon(R) toothpaste;
and
. the response of our competitors to the national introduction of
Enamelon(R) toothpaste.
UNPROVEN MARKETING CAPABILITY. We believe that we will have to expend
significant resources to create consumer awareness of and demand for Enamelon(R)
toothpaste and our other remineralizing oral care products. Our ability to build
and expand our customer base will depend on the success of our marketing
efforts, including our ability to establish an effective sales organization and
strategic marketing arrangements with other companies. Through mid-1998, we had
been using an unaffiliated sales management company to supervise a network of
brokers. In July 1998, we hired a Vice President-Sales and began to hire
additional sales personnel and phase out the sales management firm that had been
responsible for directing our sales. Therefore, our sales force is largely
untested in selling our products. Their failure to successfully sell our
products and effectively manage brokers would have a material adverse effect on
our sales and profitability. In addition, we have not yet entered into any
strategic marketing arrangements with other companies.
UNCERTAINTY OF DEVELOPMENT OF ADDITIONAL PRODUCTS. Thus far, we have devoted
our product development efforts to Enamelon(R) all family toothpaste and
Enamelon(R) whitening toothpaste. We are developing other products using our
proprietary technologies, such as a toothpaste for sensitive teeth, chewing gum,
mouth rinse, professional gels and food and confectionery products. However, we
may not be able to develop such products successfully. Success in developing
new products will require, among other things:
. that the product be safe and effective;
. that it could be produced in time and on a scale to meet consumer demand;
. that production could be accomplished economically;
. that governmental authorities or competitors do not successfully challenge
the product; and
. that both our current customers as well as consumers accept and buy the
product.
U.S. GOVERNMENT REGULATION
FDA TOOTHPASTE PRODUCT REQUIREMENTS. Our toothpaste products are subject to
regulation as a drug by the United States Food and Drug Administration (the
"FDA"). The FDA has published a final monograph, Anticaries Drug Products for
Over-the-Counter Human Use (the "Final Monograph"), for over-the-counter ("OTC")
anticaries drug
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products. Anticaries drug products help prevent dental caries, or tooth decay.
The Final Monograph establishes conditions under which such products are
generally recognized as being safe and effective and not misbranded. If a
product complies with the Final Monograph, it may be manufactured and sold
without submitting it to the FDA for approval through a New Drug Application (an
"NDA"). The Final Monograph stipulates that fluoride is the only active
ingredient approved for use in such products and sets forth permitted labeling
claims for those products. If the FDA were to assert that our toothpastes do not
meet the conditions of the Final Monograph, we could be required to modify their
formulation or labeling or to withdraw them from the market until we obtained
FDA approval. Filing an NDA would require additional testing, which would be
costly and time consuming. We would need additional time for the FDA to review
the application, which it might not approve.
TOOTHPASTE FOR SENSITIVE TEETH. One of the oral care drug products that we
intend to develop is an adult toothpaste for sensitive teeth. The FDA has
issued a tentative final monograph, Oral Health Care Drug Products for Over-the-
Counter Human Use (the "Tentative Final Monograph"), which proposes to recognize
the combination of sodium fluoride and potassium nitrate (an agent that
desensitizes teeth) as "generally recognized as safe and effective and not
misbranded." The FDA has also issued a policy statement that permits the
marketing of an anticaries/desensitizing drug product in accordance with the
Tentative Final Monograph, pending the issuance of a final monograph .
However, the final monograph could be different from the Tentative Final
Monograph, or the FDA could determine that our toothpaste for sensitive teeth
does not comply with the Tentative Final Monograph or the final monograph. In
either case, we could be required to modify our toothpaste formulation or
labeling or obtain NDA approval to market the product.
OTHER FDA-REGULATED PRODUCTS. Other products that we develop may be subject to
FDA regulation and different FDA regulatory requirements applicable to drugs
(including different over-the-counter monograph requirements), foods, or dietary
supplements. If the marketing of those products requires us to file an NDA or
is subject to other premarket review, their marketing may be significantly
delayed or prevented.
FDA MANUFACTURING REQUIREMENTS. The FDA also regulates manufacturing of oral
care drug products. Each domestic drug manufacturing facility must be
registered with the FDA, and each manufacturer must inform the FDA of every
drug product it has in domestic distribution and update that list regularly.
Domestic drug manufacturing facilities are subject to FDA inspection for
compliance with Good Manufacturing Practices ("GMP's"), as defined in FDA
regulations. The FDA requires compliance with GMP's at all times and in all
parts of the manufacturing process. If a domestic drug manufacturing facility
fails to comply with GMP's, then the FDA can bring an action against the
facility and, among other things, close it. The FDA can also take enforcement
action and require us to recall or discontinue the sale of the affected
products.
We have used and plan to continue to use third parties to manufacture our
products. If any such contract manufacturer fails to comply with GMP's
and the FDA closes its facility, we may not be able to timely contract with
another manufacturer. Even if we were able to find a new contract manufacturer,
we may not be able to negotiate an agreement with the new manufacturer on terms
as favorable as those of the prior manufacturer. See "Risk Factors -- Dependence
Upon Others to Manufacture."
FDA ENFORCEMENT ACTIONS. If we or our contract manufacturer do not comply with
any applicable FDA requirement, we could be subject to FDA regulatory action.
Results of such action could include seizure of affected products, injunction
against product marketing, criminal prosecution, interruption or suspension of
product manufacturing, product recalls, or decisions to stop selling the
products temporarily or permanently. Such actions could impair our ability to
market our products and could have a material adverse effect on our business.
PROMOTIONAL CLAIMS. Our competitors, the Federal Trade Commission (the "FTC"),
or other governmental and private agencies may challenge our products or product
claims. In particular, they could challenge the accuracy of our product claims
or the adequacy of the data that we used to substantiate them. If we are unable
to successfully defend or modify a challenged claim in a lawsuit or agency
proceeding, a court or agency could issue an order requiring us to stop making
the claim. An adverse finding by the Better Business Bureau in a voluntary
advertising
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dispute proceeding might also cause us to modify or discontinue challenged
claims. Resulting limitations on promotional claims could impair our ability to
market our products and could have a material adverse effect on our business.
CHANGES TO LAWS AND REGULATIONS. A complex and extensive group of laws and
regulations governs our business. Legislatures may change existing laws or enact
new laws affecting our business; agencies that administer those laws may issue
new regulations or change their interpretation of existing laws or regulations;
and courts may render decisions interpreting those laws or regulations or
changing their existing interpretations. We intend to use our best efforts to
comply with all laws and regulations that pertain to our business. However,
changes in the laws or regulations affecting our business or their
interpretation could have a material adverse effect on the way in which we
manufacture or sell our products or otherwise conduct our business.
FOREIGN REGULATION. The production and marketing of oral care products are also
subject to governmental regulation in other countries. Our products as
formulated and labeled for the United States market may not comply with foreign
regulations. In that case, we would have to reformulate or relabel the products
to comply with foreign regulations. It is possible that reformulation would be
prohibitively expensive or that we could not reformulate the products to comply
with the foreign regulations, which would have a material adverse effect on our
ability to market our products abroad.
DEPENDENCE ON AND PROTECTION OF PROPRIETARY TECHNOLOGY.
PROPRIETARY TECHNOLOGY. The American Dental Association Health Foundation has
granted us licenses to use certain patented technologies relating to a method
for the oral use of various amorphous calcium phosphate compounds to enhance the
natural activity of fluoride to prevent tooth decay. We have an exclusive
license to use of the ADAHF patented technologies to manufacture and sell
toothpaste, chewing gum and other food and confectionary products in both the
United States and foreign countries. We also have a non-exclusive license to
use the ADAHF patented technologies to manufacture and sell other oral care
products, such as oral sprays, mouth rinses, and professional gels, in foreign
countries. We pay the ADAHF a royalty of $400,000 per year under these
licenses. The ADAHF has also granted SmithKline Beecham an exclusive license to
use its patented technologies to manufacture and sell those other products in
the United States and a non-exclusive license to manufacture and sell them in
foreign countries. See "Risk Factors -- Competition."
We have also developed our own patented and proprietary technologies related to
the prevention of tooth decay. The United States Patent Office has granted us
nine patents for technologies related to the materials and methods for the
delivery of soluble calcium and phosphate to teeth to enhance their
"remineralization." In addition, the U.S. Patent Office has granted us a patent
for our dual chamber toothpaste tube, which is used to dispense Enamelon(R)
toothpaste. We have also filed applications for an additional 10 U.S. patents
and for 55 foreign patents. These applications are pending.
GENERAL. Our ability to compete effectively in the market for oral care
products depends upon (i) our ability to protect our proprietary technologies
(including the ADAHF patents) from infringement, both in the United States and
abroad, (ii) the issuance of patents on our pending applications, and (iii) the
validity of our patents and the ADAHF patents not being effectively challenged
by others. Any of the following circumstances could adversely affect our
ability to compete.
. While we intend to vigorously defend our patents, competitors could,
legally or illegally, develop or market competing products using our
technologies.
. The United States or foreign jurisdictions may not grant patents on our
pending applications.
. While we believe that our patents are valid and enforceable, a third party
might be able to show prior rights to our proprietary technologies or
otherwise successfully challenge our patents.
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. Competitors may be able to develop similar or equally effective products or
methods that do not infringe our patented proprietary technologies.
In addition, third parties could assert patent infringement claims against us,
either in the United States or abroad. If such a claim were successful, we
could be required to pay substantial damages or be stopped from using that
technology unless and until we had obtained a license. We might not be able to
procure such a license on acceptable terms, if at all. If we were unable to
license the necessary technology, we would have to redesign our products or stop
selling them. Any of the foregoing factors could have a material adverse effect
on our ability to compete in the oral care industry.
SECRECY OF PATENT APPLICATIONS UNTIL PATENTS ISSUED. Patent applications in the
United States are maintained in secrecy until the patent is issued. Patent
applications in foreign countries are maintained in secrecy for a limited
period after filing. Publication of discoveries in the scientific or patent
literature tends to lag behind actual discoveries and the filing of related
patent applications. Therefore, current or potential competitors or other third
parties may have filed or may file without our knowledge patent applications
covering the same claims as our patent applications. Patents issued to those
third parties on their applications could preclude the issuance of patents to us
on our applications.
POSSIBILITY OF DISCLOSURE OR DISCOVERY OF PROPRIETARY INFORMATION. Although we
require each of our employees, consultants, advisors and subcontractors to
execute confidentiality agreements, these agreements may not provide effective
protection for our unpatented proprietary information in the event of its
unauthorized use or disclosure. Furthermore, our competitors may independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to our proprietary technologies. In those cases, we may
not be able to protect our rights in our unpatented proprietary technology.
COMPETITION. The business of manufacturing and selling toothpaste and other
oral care products is very competitive. Our principal competitors include
companies with substantially greater financial, technological, marketing,
research and development and personnel resources than ours. Our toothpaste
products compete or will compete with brand name toothpastes such as Crest(R),
Colgate(R), Aquafresh(R), Mendadent(R), Arm & Hammer Dental Care(R),
Sensodyne(R), and Rembrandt(R).
In addition, our competitors may develop products that have therapeutic and/or
cost advantages over Enamelon(R) toothpaste and our other proposed products.
These products could render our products non-competitive or obsolete. Our
competitors may also challenge the validity of our patents so that they may use
the same technology in developing their own products. These factors could
affect consumers' acceptance of our products.
The American Dental Association Health Foundation has granted us a non-exclusive
license to use its patented remineralizing technology to market oral sprays,
mouth rinses and professional gels outside of the United States. See "Risk
Factors -- Dependence on and Protection of Proprietary Technology." The ADAHF
has also granted a non-exclusive license covering those products to SmithKline
Beecham, which has substantially greater financial and marketing resources than
ours. We do not believe that we will be able to compete with SmithKline in
marketing those products in foreign markets, unless we enter into a strategic
alliance with a company with resources comparable to SmithKline's. See "Risk
Factors --Dependence on and Protection of Proprietary Technology--Proprietary
Technology."
EVOLVING PRODUCT FORMULATIONS. We expect that the formulation of our toothpaste
and other products will evolve over time due to our continuing research and
product testing. As a result of this evolution, our products, and the manner in
which they are manufactured, may change. Therefore, our existing proprietary
technologies may have no application to our future products. In that event, we
may have to expend significant additional amounts on the development and testing
of these new formulations and in securing patent rights covering the new
technologies. Products using such new formulations, however, may not satisfy
FDA, FTC or other governmental regulations, or
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compliance with those regulations may be prohibitively expensive.
Notwithstanding such significant expenditures, we may not be able to effectively
market those products.
DEPENDENCE ON OTHERS TO MANUFACTURE. We are using a contract manufacturer to
manufacture our toothpaste products in the United States. If our current
manufacturer were to become unavailable, we may not be able to find a
satisfactory replacement manufacturer or the terms of our agreement with a
replacement manufacturer may not be as favorable to us as our current
manufacturer's terms. Engaging a replacement manufacturer could have a material
adverse effect on our ability to market our products effectively and our results
of operations.
We may seek to sublicense or enter into joint ventures or other strategic
partnerships with major consumer product companies or other companies (on an
exclusive or non-exclusive basis) for the manufacturing and sale of our products
abroad. These arrangements are likely to place primary manufacturing
responsibility on the other parties.
Our dependence upon others to manufacture our products could affect our future
profitability and our ability to produce products in a timely and economic
manner.
DEPENDENCE ON KEY PERSONNEL. Our success is largely dependent on the personal
efforts of three individuals:
. Dr. Steven R. Fox, Chairman of the Board and Chief Executive Officer
. Norman Usen, Vice President Product - Development and Secretary
. Anthony E. Winston, Vice President - Technology and Clinical Research
The loss of the services of any of these individuals could have a material
adverse effect on our ability to compete in the oral care industry.
Dr. Steven R. Fox: Dr. Fox is our founder. He practiced dentistry from 1978
until 1997, when he began to devote substantially all of his time to our
operations. We have an employment agreement with Dr. Fox that ends on December
31, 2003.
Norman Usen: Mr. Usen has over 30 years of experience in developing consumer
products. We have an employment agreement with him that ends on June 30, 1999.
Anthony E. Winston: Mr. Winston has over 30 years experience in technology
development and clinical research related to consumer products. We have an
employment agreement with him that which ends on January 31, 2000.
In addition, D. Brooks Cole, our President and Chief Operating Officer, has
announced his retirement effective January 30, 1999. While we are searching for
a replacement for Mr. Cole, Dr. Fox, our Chairman, will assume the duties of
President and Chief Operating Officer. Our failure to find an appropriate
replacement for Mr. Cole as President and Chief Operating Officer could have a
material adverse effect on our business and operations.
OWNERSHIP OF SHARES BY MANAGEMENT. After this offering, our directors and
executive officers will beneficially own approximately 34% of our common stock.
Therefore, they will have the ability to significantly influence the election of
our directors and any other issues submitted to the stockholders.
NEED FOR ADDITIONAL FINANCING. Although we believe that we have sufficient
funds to finance our operations through the middle of 1999, we may need
additional financing earlier. This will depend upon our ability to generate
sufficient sales of our products and the timing of required expenditures.
Additional financing to sustain our operations until we become profitable may
not be available on favorable terms or at all. Such additional financing may
result in significant dilution to holders of our common stock. In addition, if
we do not receive additional financing as anticipated, we would have to curtail
or cease our operations.
6
<PAGE>
PRODUCT LIABILITY. The manufacture and sale of consumer products exposes the
manufacturer to the risk of significant damages from product liability claims.
Although we have no intention of marketing any product without a reasonable
belief in its safety and efficiency when used in accordance with the
instructions, misuse of our products could cause consumer injury. We maintain
product liability insurance against product liability claims in the amount of $6
million per occurrence and $7 million in aggregate. Those coverage limits,
however, may not be adequate, or we may not be able to procure such insurance at
acceptable costs in the future. Although we have not experienced any product
liability claims to date, a successful claim in excess of our insurance coverage
could have a material adverse effect on our business, financial condition and
results of operations.
POSSIBLE VOLATILITY OF MARKET PRICE FOR THE COMMON STOCK. From time to time and
in particular during the last several months, the stock market generally, and
the securities of small companies in particular, have experienced a high level
of price and volume volatility not necessarily related to the operating
performance of such companies. We believe that factors such as announcements of
developments in our business and technological innovations, our competitors'
announcements of technological innovations or new products, sales of our common
stock in the public market, and shortfalls or changes in our financial results
from analysts' expectations could cause the price of our common stock to
fluctuate substantially.
SHARES ELIGIBLE FOR FUTURE SALE. Future sales of Common Stock (1) by existing
stockholders pursuant to Rule 144 promulgated under the Securities Act of 1933,
as amended ("Rule 144"), (2) pursuant to registration rights granted to certain
holders of warrants to purchase common stock, or (3) pursuant to other
registrations under the Securities Act or exemptions from registration could
have an adverse effect on the price of our common stock.
As of January 13, 1999, we had approximately 10,239,780 shares of Common
Stock outstanding. In addition, we have reserved:
. 1,362,250 shares for issuance upon exercise of options granted under our
1993 Stock Option Plan,
. 446,140 shares for issuance upon exercise of options granted under our 1997
Stock Option Plan,
. 303,860 shares for issuance upon exercise of options available for grant
under our 1997 Stock Option Plan,
. 753,508 shares for issuance upon exercise of outstanding warrants, and
. 25,467 shares for issuance to a publication and 5,096 shares for issuance
upon the exercise of warrants to be granted to that publication in
consideration for certain advertising.
Of the 10,239,780 shares outstanding,
. 1,700,000 shares were sold publicly in our initial public offering,
. 17,750 shares have been sold publicly to employees or consultants pursuant
to their exercise of stock options,
. approximately 1,313,406 shares have been sold publicly pursuant to
Rule 144,
. 1,200,000 shares have been or may be sold publicly pursuant to a
registration statement declared effective by the Securities and Exchange
Commission on August 11, 1997, and
. 2,300,000 shares have been sold publicly in an offering in October 1997.
The remaining 3,708,624 shares of common stock are "restricted securities,"
as defined under Rule 144, and may be sold only pursuant to a registration
statement filed with the SEC or under an exemption from
7
<PAGE>
registration under the Securities Act. All such shares are presently eligible
for resale without restriction under Rule 144. The 1,777,768 shares offered
under this prospectus may also be freely sold without restriction or further
registration under the Securities Act. See "Plan of Distribution."
In addition, certain investors hold warrants to purchase 753,508 shares of
common stock at prices ranging from $3.60 to $8.40. If the warrants are
converted to common stock in a cashless conversion (i.e., the holder pays the
conversion price by tendering certain of the common stock having a value equal
to the conversion price), then the common stock issued would also be immediately
eligible for resale under Rule 144. If these investors exercise their
conversion rights in a cashless conversion as described above, the number of
shares to be issued would be reduced by the number of shares used to pay the
conversion price. If a holder exercises his warrants by paying cash, then he
could only sell those shares under Rule 144 or a registration statement.
Holders of warrants to purchase 613,508 shares of common stock at prices
ranging from $3.60 to $5.75 have three demand registration rights exercisable
until October 24, 2001, and unlimited piggyback registration rights exercisable
until January 23, 2003. Holders of warrants to purchase 140,000 shares of
common stock at $8.40 per share have one demand registration right and certain
unlimited piggyback registration rights exercisable until October 29, 2001. We
have obtained waivers of piggyback registration rights with respect to 707,508
shares of common stock in connection with this offering.
Sales of a substantial number of shares of common stock, or the perception
that such sales could occur, could adversely affect prevailing market prices for
our common stock. They could also impair our ability to raise capital through
the sale of our equity securities.
DILUTIVE EFFECT OF CONVERSION OF SERIES B PREFERRED STOCK. If the holders of
the series B convertible preferred stock had converted their shares on January
13, 1999, the conversion rate would have been 177 shares of common stock per
share of series B convertible preferred stock. The conversion would have
resulted in the issuance of 888,884 shares of common stock, or approximately
8.68% of the outstanding shares before conversion. Furthermore, if the market
price of our common stock were to decline, we would be required to issue
additional shares on conversion of the series B convertible preferred stock. In
that event, the selling securityholders could sell publicly up to an additional
888,884 shares of common stock under this prospectus. Accordingly, the
conversion of our series B convertible preferred stock and its immediate sale
under this prospectus could have an immediate and significant adverse effect on
the market price of our common stock and would result in substantial dilution to
other stockholders.
POSSIBLE ADVERSE EFFECT OF OTHER ISSUANCES OF PREFERRED STOCK. Our certificate
of incorporation authorizes the issuance of 5,000,000 shares of preferred stock,
with designations, rights and preferences determined from time to time by the
Board of Directors. Accordingly, the Board of Directors may, without further
stockholder approval, issue preferred stock with dividend, liquidation,
conversion, voting or other rights that could adversely affect the voting power
or other rights of the holders of common stock. In the event of issuance, the
preferred stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in persons that control us. In
particular, the terms of the preferred stock could effectively restrict our
ability to consummate a merger, reorganization, sale of all or substantially all
of our assets, liquidation or other extraordinary corporate transaction without
the approval of the holders of the preferred stock. The series B convertible
preferred stock is the only series of preferred stock outstanding.
ANTITAKEOVER PROVISIONS OF DELAWARE BUSINESS COMBINATION STATUTE. We are
subject to Section 203 of the Delaware General Corporation Law, which limits
transactions between a publicly held company and "interested stockholders"
(generally, those stockholders who, together with their affiliates and
associates, own 15% of more of a company's outstanding capital stock). This
provision of the Delaware General Corporation Law may also deter acquisitions.
8
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth the names of the selling securityholders, the
number of shares of common stock that each selling securityholder owned
beneficially as of January 13, 1999, the number of shares that each selling
securityholder may offer, and the number of shares of common stock that each
selling securityholder will own beneficially upon completion of the offering,
assuming all of the shares offered are sold.
The number of shares of common stock that each selling securityholder can
acquire on conversion of its series B convertible preferred stock will vary with
changes in the market price of our common stock. On conversion, we will issue
the number of shares of common stock equal to the quotient of (i) the product of
(w) the number of shares to be converted and (x) the sum of $1,000 plus
(N/365)(.06)($1,000)and (ii) the lower (y) the average of the five lowest
closing sale prices of the Common Stock on the Nasdaq National Market in the 40
trading days immediately preceding the date of conversion or (z) 120% of the
average of the closing sale prices in the last five trading days of February
1999. For purposes of the calculation, N equals the number of days elapsed from
December 18, 1998, the purchase date of the series B convertible preferred
stock, to the date of conversion. If the date of conversion had been January
13, 1999, the conversion price would have been $5.65, and we would have issued
approximately 177 shares of common stock for each share of series B preferred
stock. Under our agreement with the selling securityholders, we are required to
file a registration statement with the SEC covering not less than 200% of the
number of shares issuable on conversion. Therefore, each selling securityholder
may sell under this prospectus up to approximately 354 shares of common stock
for each share of series B convertible preferred stock that it owns.
In general, the series B convertible preferred stock is not convertible prior to
March 1, 1999 or for any number of shares of common stock in excess of that
number that would render a selling securityholder the beneficial owner of 5% or
more of the then issued and outstanding shares of common stock. In addition, we
are not required to issue shares of common stock on conversion of the series B
convertible preferred stock if, after the issuance, the total number of shares
of common stock issued on conversion would equal or exceed 2,047,596 shares,
which is 20% of our issued and outstanding shares on December 18, 1998.
None of the selling securityholders has, or within the past three years has had,
any position, office or other material relationship with us or any of our
predecessors or affiliates.
9
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES OF
COMMON STOCK COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED OFFERED IN THE BENEFICIALLY OWNED
BEFORE OFFERING(1) OFFERING(1) AFTER OFFERING
NAME OF SELLING ------------------------ -------------- -------------------
SECURITYHOLDER NUMBER PERCENT(2) NUMBER NUMBER PERCENT
- ---------------------------- ----------- ----------- -------------- --------- --------
<S> <C> <C> <C> <C> <C>
HFTP Investments LLC(3)(4) 444,442(5) 4.16% 888,884(6) 0 --
Fisher Capital Ltd.(7)(8) 222,221(5) 2.08% 444,442(6) 0 --
Wingate Capital Ltd.(7)(8) 222,221(5) 2.08% 444,442(6) 0 --
</TABLE>
________
(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated. For purposes of computing the
percentage of outstanding shares held by each selling securityholder on
January 13, 1999, any security that such person has the right to acquire
within 60 days after such date is deemed to be outstanding for the purpose
of computing the percentage ownership for such person, but is not deemed to
be outstanding for the purpose of computing the percentage ownership of any
other person.
(2) Except as otherwise stated, calculated based upon 10,239,780 shares of
common stock outstanding.
(3) The address of the principal business office of the selling securityholder
is c/o Promethean Investment Group, L.L.C., 750 Lexington Avenue, 22/nd/
Floor, New York, New York 10022.
(4) Promethean Investment Group L.L.C. is the investment manager of HFTP
Investments LLC ("HFTP") and consequently has voting control and investment
discretion over securities held by HFTP. Promethean Investment Group,
L.L.C. is indirectly controlled by Mr. James F. O'Brien. Mr. O'Brien
disclaims beneficial ownership of the shares beneficially owned by
Promethean Investment Group L.L.C. and HFTP.
(5) Represents the maximum number of shares of common stock into which the
series B convertible preferred stock could have been converted on January
13, 1999, based upon an assumed conversion rate of 177 shares of common
stock per share of series B convertible preferred stock.
(6) Represents the maximum number of shares of common stock that a selling
securityholder may sell under this prospectus upon conversion of the series
B convertible preferred stock.
(7) The address of the principal business office of the selling securityholder
is c/o Citadel Investment Group, L.L.C., 225 West Washington Street,
Chicago, Illinois 60606.
(8) Citadel Limited Partnership is the trading manager of each of Fischer
Capital Ltd. and Wingate Capital Ltd. (collectively, the "Citadel
Entities") and consequently has voting control and investment discretion
over securities held by the Citadel Entities. The ownership for each of
the Citadel Entities does not include the ownership information for the
other Citadel Entity. Citadel Limited Partnership and each of the Citadel
Entities disclaims ownership of the shares held by the other Citadel
Entities.
We are registering the shares for resale by the selling securityholders in
accordance with registration rights granted to the selling securityholders. We
will pay the registration and filing fees, printing expenses, listing fees, blue
sky fees, if any, and fees and disbursements of our counsel and the selling
security holders' counsel in connection with this offering, but the selling
securityholders will pay any underwriting discounts, selling commissions and
similar expenses relating to the sale of the shares. In addition, we have
agreed to indemnify the selling securityholders, underwriters who they may
select, and certain affiliated parties against certain liabilities, including
liabilities under the Securities Act, in connection with this offering. The
selling securityholders have agreed to indemnify us and our directors and
officers, as well as any person that controls us, against certain liabilities,
including liabilities under the Securities Act. Insofar as indemnification for
liabilities under the Securities Act may be permitted to our directors or
officers, or persons that control us, we have been informed that in the opinion
of the SEC such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
10
<PAGE>
PLAN OF DISTRIBUTION
The selling securityholders (or, subject to applicable law, their pledgees,
donees, distributees, transferees or other successors in interest) may sell
shares from time to time in public transactions, on or off The Nasdaq National
Market, or private transactions, at prevailing market prices or at privately
negotiated prices, including, but not limited to, one or any combination of the
following types of transactions:
. ordinary brokers' transactions;
. tranactions involving cross or block trades or otherwise on the Nasdaq
National Market;
. purchases by brokers, dealers or underwriters as principal and resale by
such purchasers for their own accounts pursuant to this prospectus;
. "at the market" to or through market makers or into an existing market for
the common stock;
. in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
. through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);
. in privately negotiated transactions; or
. to cover short sales.
In effecting sales, brokers or dealers engaged by the selling securityholders
may arrange for other brokers or dealers to participate in the resales. The
selling securityholders may enter into hedging transactions with broker-dealers,
and in connection with those transactions, broker-dealers may engage in short
sales of the shares. The selling securityholders also may sell shares short and
deliver the shares to close out such short positions. The selling
securityholders also may enter into option or other transactions with broker-
dealers that require the delivery to the broker-dealer of the shares, which the
broker-dealer may resell pursuant to this prospectus. The selling
securityholders also may pledge the shares to a broker or dealer, and upon a
default, the broker or dealer may effect sales of the pledged shares pursuant to
this prospectus.
Brokers, dealers or agents may receive compensation in the form of commissions,
discounts or concessions from selling securityholders in amounts to be
negotiated in connection with the sale. The selling securityholders and any
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting
compensation.
Information as to whether underwriters who the selling securityholders may
select, or any other broker-dealer, is acting as principal or agent for the
selling securityholders, the compensation to be received by underwriters that
the selling securityholders may select or by any broker-dealer acting as
principal or agent for the selling securityholders, and the compensation to be
paid to other broker-dealers, in the event the compensation of such other
broker-dealers is in excess of usual and customary commissions, will, to the
extent required, be set forth in a supplement to this prospectus. Any dealer or
broker participating in any distribution of the shares may be required to
deliver a copy of this prospectus, including a prospectus supplement, if any, to
any person who purchases any of the shares from or through such dealer or
broker.
We have advised the selling securityholders that during such time as they may be
engaged in a distribution of the shares they are required to comply with
Regulation M promulgated under the Securities Exchange Act. With certain
exceptions, Regulation M precludes any selling securityholder, any affiliated
purchasers and any broker-dealer or other person who participates in such
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security that is the subject of the distribution
until the entire distribution is complete. Regulation M also prohibits any bids
or purchases made in order to stabilize the price of a security in connection
with the distribution of that security. All of the foregoing may affect the
marketability of the common stock.
11
<PAGE>
INFORMATION ABOUT THE COMPANY
At Enamelon, Inc., we develop and market over-the-counter oral care products
that help stop cavities before they begin. Our initial product, Enamelon(R) all
family toothpaste, uses our proprietary technologies to enhance tooth
remineralization. We intend to use our proprietary technologies, which include
patented remineralizing technologies licensed from the American Dental
Association Health Foundation, to develop other remineralizing products, such as
a whitening toothpaste, a toothpaste for sensitive teeth, a mouthwash, chewing
gum, and other food and confectionery products.
We file reports, proxy statements and other information with the SEC. You may
read and copy any document we file at the Public Reference Room of the SEC at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the SEC at Seven World Trade Center, Suite 1300, New York,
New York 10048, and at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Please call 1-800-SEC-0330 for further information concerning the
Public Reference Room. Our filings also are available to the public from the
SEC's website at www.sec.gov. We distribute to our stockholders annual reports
containing audited financial statements.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information that we file
with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings that we make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
until the offering is completed:
1. Annual Report on Form 10-KSB for the fiscal year ended December 31, 1997.
2. Proxy Statement dated April 17, 1998.
3. Quarterly Reports on Form 10-QSB for the fiscal quarters ended March 31,
1998, June 30, 1998 and September 30, 1998.
4. The description of our common stock contained in our Registration Statement
on Form 8-A (File No. 0-21595) under Section 12 of the Securities Exchange Act.
5. The description of our series B Convertible preferred stock contained in our
Form 8-K, dated December 18, 1998.
You may request a copy of these filings, at no cost, by writing or calling us
at:
Enamelon, Inc.
7 Cedar Brook Drive
Cranbury, New Jersey 08512
Attention: Chief Financial Officer
Telephone: (609) 395-6900
_______________
This prospectus is part of a registration statement we filed with the SEC. You
should rely only on the information or representations provided in this
prospectus. We have not authorized anyone to provide you with different
information. The common stock will not be offered in any state where an offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the cover of this prospectus.
12
<PAGE>
LEGAL MATTERS
The validity of the shares of common stock offered hereby has been passed upon
by Snow Becker Krauss P.C., 605 Third Avenue, New York, New York 10158. SBK
Investment Partners, a partnership consisting of members of Snow Becker Krauss
P.C., owns 107,325 shares of common stock. In addition, certain members of
Snow Becker Krauss P.C. beneficially own common stock individually.
EXPERTS
The consolidated financial statements of Enamelon, Inc. at December 31, 1997 and
for the years ended December 31, 1996 and 1997, appearing in our Annual Report
on Form 10-KSB for the year ended December 31, 1997, have been audited by BDO
Seidman LLP, independent auditors, as set forth in their report thereon
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered are estimated below:
SEC registration fee............. $ 3,892
Listing fees..................... 17,500
Legal fees and expenses.......... 30,000
Printing expenses................ 10,000
Accounting fees.................. 5,000
Miscellaneous.................... 6,108
--------
Total.................. $ 72,500
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VI of the Registrant's by-laws provides that a director or officer shall
be indemnified against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement (provided such settlement is approved in advance
by the Registrant) in connection with certain actions, suits or proceedings,
whether civil, criminal, administrative or investigative if he 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, had no reasonable cause to believe his conduct was unlawful. A
similar standard of care is applicable in the case of derivative actions, except
that indemnification only extends to expenses (including attorneys' fees)
incurred in connection with the defense or settlement of such an action, except
that no person who has been adjudged to be liable to the Registrant shall be
entitled to indemnification unless a court determines that despite such
adjudication of liability but in view of all of the circumstances of the case,
the person seeking indemnification is fairly and reasonably entitled to be
indemnified for such expenses as the court deems proper.
Article 6.3 of the Registrant's by-laws further provides that directors and
officers are entitled to be paid by the Registrant the expenses incurred in
defending the proceedings specified above in advance of their final disposition,
provided that such payment will only be made upon delivery to the Registrant by
the indemnified party of an undertaking to repay all amounts so advanced if it
is ultimately determined that the person receiving such payments is not entitled
to be indemnified.
Article 6.4 of the Registrant's by-laws provides that the right to
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in the Article will not be
exclusive of any other right which any person may have or acquire under the by-
laws, or any statute or agreement or otherwise.
Finally, Article 6.6 of the Registrant's by-laws provides that the Registrant
may maintain insurance, at its expense, to reimburse itself and directors and
officers of the Registrant and of its direct and indirect subsidiaries against
any expense, liability or loss, whether or not the Registrant would have the
power to indemnify such persons against such expense, liability or loss under
the provisions of Article VI of the by-laws. The Registrant maintains and has
such insurance in effect.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Securities Act") may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification
II-1
<PAGE>
is against public policy as expressed in the Securities Act
and is therefore unenforceable.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- --------------------------------------------------------------
<C> <S>
4.1 Securities Purchase Agreement./1/
4.2 Certificate of Designations, Preference and Rights of Series B
Convertible Preferred Stock./ 1/
4.3 Registration Rights Agreement./1/
5.1 Opinion of Snow Becker Krauss, P.C.
23.1 Consent of Snow Becker Krauss P.C. (included in Exhibit 5.1).
23.2 Consent of BDO Seidman LLP, independent auditors.
</TABLE>
__________
/1/ Incorporated by reference to the Registrant's Current Report on Form 8-K,
dated December 18, 1998.
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING
The undersigned small business issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a post-
effective amendment to this registration statement to:
(i) Include any prospectus required by section l0(a) (3) of the
Securities Act.
(ii) Reflect in the prospectus any facts or events which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registrant 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) 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.
(2) For determining any liability under the Securities Act, each such post-
effective amendment shall be deemed a new registration statement relating to the
securities offered therein, and the offering of such securities at that time to
be the initial bona fide offering thereof.
(3) Remove from registration by means of a post-effective amendment any of the
securities being registered that remain unsold at the termination of the
offering.
(e) REQUEST FOR ACCELERATION OF EFFECTIVE DATE
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and
II-2
<PAGE>
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of the expenses incurred or paid by a director,
officer, or controlling person of the small business issuer 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
small business issuer will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
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 to the
Registration Statement to be signed on its behalf by the undersigned, hereunto
duly authorized, in the City of Yonkers, State of New York, on January 15, 1998.
ENAMELON, INC.
By /s/ Dr. Steven R. Fox
----------------------
Dr. Steven R. Fox
Chief Executive Officer
and Chairman
POWER OF ATTORNEY
Each of the undersigned hereby authorizes Dr. Steven R. Fox as his Attorney-in-
Fact to execute in the name of each such person and to file such Amendments
(including Post-Effective Amendments) to this Registration Statement as the
Registrant deems appropriate and appoints such person as Attorney-in-Fact to
sign on his behalf individually and in each capacity stated below and to file
all Amendments, Exhibits, Supplements and Post-Effective Amendments to this
Registration Statement.
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 stated:
SIGNATURES
<TABLE>
<S> <C> <C>
/s/ Dr. Steven R. Fox Chairman of the Board of Directors and Chief January 15, 1999
- -------------------------- Executive Officer (Principal Executive
Dr. Steven R. Fox Officer)
/s/ Edwin Diaz Treasurer, Vice President - Finance and January 15, 1999
- -------------------------- Chief Financial Officer (Principal Financial
Edwin Diaz Officer)
/s/ Dr. Bert D. Gaster Director January 15, 1999
- --------------------------
Dr. Bert D. Gaster
/s/ Richard A. Gotterer Director January 15, 1999
- --------------------------
Richard A. Gotterer
/s/ Eric D. Horodas Director January 15, 1999
- --------------------------
Eric D. Horodas
/s/ Dr. S.N. Bhaskar Director January 15, 1999
- --------------------------
Dr. S.N. Bhaskar
/s/ Walter W. Williams Director January 15, 1999
- --------------------------
Walter W. Williams
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------ ------------------------------------------------------------ ----
<S> <C> <C>
4.1 Securities Purchase Agreement./1/
4.2 Certificate of Designations, Preferences and Rights of Series B
Convertible Preferred Stock./1/
4.3 Registration Rights Agreement./1/
5.1 Opinion of Snow Becker Krauss, P.C.
23.1 Consent of Snow Becker Krauss P.C. (included in Exhibit 5.1)
23.2 Consent of BDO Seidman LLP, independent auditors.
</TABLE>
__________
/1/ Incorporated by reference to the Registrant's Current Report on Form 8-K,
dated December 18, 1998.
<PAGE>
EXHIBIT 5.1
SNOW BECKER KRAUSS P.C.
605 Third Avenue
New York, New York 10158
Telephone: 212-687-3860
Fax: 212-949-4240
January 15, 1999
Board of Directors
Enamelon, Inc.
15 Kimball Avenue
Yonkers, New York 10704
Gentlemen:
You have requested our opinion, as counsel for Enamelon, Inc., a Delaware
corporation (the "Company"), in connection with the registration statement on
Form S-3 (the "Registration Statement"), under the Securities Act of 1933 (the
"Act"), filed by the Company with the Securities and Exchange Commission for the
sale by the selling securityholders named in the Registration Statement of up to
1,777,196 shares of common stock, $0.01 par value (the "Common Stock"), that
they may acquire upon conversion of the Company's Series B Convertible Preferred
Stock as described in the Registration Statement (the "Registered Shares").
We have examined such records and documents and made such examinations of
law as we have deemed relevant in connection with this opinion. Based upon the
foregoing, it is our opinion that:
1. The Company has been duly organized, is validly existing and in good
standing under the laws of the state of Delaware.
2. The Registered Shares have been duly authorized.
3. When issued in accordance with the terms of the Certificate of
Designations, Preferences and Rights authorizing the issuance of the
Series B Convertible Preferred Stock, the Registered Shares 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 to the reference to our firm under the caption "Legal
Matters" in the Registration Statement. In so doing, we do not admit that we are
in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Snow Becker Krauss P.C.
SNOW BECKER KRAUSS P.C.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 30, 1998, relating to the
consolidated financial statements of Enamelon, Inc. appearing in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1997.
We also consent to the reference to us under the caption "Experts" in such
Prospectus.
/S/ BDO Seidman, LLP
BDO Seidman, LLP
Woodbridge, New Jersey
January 15, 1999
