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As filed with the Securities and Exchange Commission on March 29, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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BOSTON LIFE SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 87-0277826
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31 Newbury Street
Suite 300
Boston, Massachusetts 02116
(617) 425-0200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
S. David Hillson
President and Chief Executive Officer
Boston Life Sciences, Inc.
31 Newbury Street
Suite 300
Boston, Massachusetts 02116
(617) 425-0200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Raymond D. Agran, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103
(215) 864-8524
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement is declared effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
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
<TABLE>
<CAPTION>
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Amount Proposed maximum Proposed maximum Amount of
Title of each class of to be offering price aggregate registration
securities to be registered registered (1)(2) per unit (3) offering price (3) fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,756,433 (3) $11,380,755 $3,164
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</TABLE>
(1) Shares of Common Stock which may be offered pursuant to this Registration
Statement include 1,108,765 shares issuable upon the exercise of certain
warrants (the "Warrants").
(2) Pursuant to Rule 416, this Registration Statement shall be deemed to cover
an indeterminate number of additional shares of Common Stock issuable
pursuant to the anti-dilution provisions of the Warrants or in the event
the number of outstanding shares of the Company is increased by stock
split, stock dividend and similar transactions.
(3) In accordance with Rules 457 (c) and (g), the price shown is estimated
solely for the purposes of calculating the registration fee, and is based
upon (i) shares offered pursuant to 24,721 outstanding warrants
exercisable at $6.81 per share, 181,949 outstanding warrants exercisable
at $8.78 per share, and 22,881 outstanding warrants exercisable at $9.41
per share, and (ii) with respect to the remaining shares being registered,
as well as shares offered pursuant to 879,214 warrants at a per share
price ranging from $0.13 to $5.49 is based on the average of the reported
high and low sales prices of the Common Stock as reported on the Nasdaq
Small Cap Market on March 26, 1999, which was $6 5/32.
____________________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE 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 IS NOT AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
================================================================================
SUBJECT TO COMPLETION, DATED MARCH 29, 1999
PROSPECTUS
1,756,433 Shares
BOSTON LIFE SCIENCES, INC.
31 Newbury Street
SUITE 300
BOSTON, MA 02116
(617) 425-0200
Common Stock, $.01 par value
____________________
This Prospectus is part of a Registration Statement that we filed with the
S.E.C. It covers 1,756,433 shares of common stock. These Securities may be
offered and sold from time to time by certain of our stockholders who have
already acquired these shares or will acquire them when they exercise common
stock purchase warrants that they own. We will not receive any of the proceeds
from the sale of these Securities under the Prospectus. However, we will bear
the costs relating to the registration of the Securities, which we estimate to
be $15,000.
We do not know how the Selling Stockholders plan to sell these Securities, but
the Selling Stockholders may sell these Securities primarily on The Nasdaq
SmallCap Market of The Nasdaq Stock Market, Inc. at the market price at the time
of sale. However, the Selling Stockholders may sell the Securities in negotiated
transactions or otherwise. It is possible that the Selling Stockholders and the
brokers and dealers through whom the Securities may be sold may be considered
"underwriters". Therefore, their compensation may be considered underwriters'
compensation.
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"BLSI". On March 26, 1999, the reported closing price of the Common Stock was
$6 5/32 per share.
____________________
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS.
____________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________
The date of this Prospectus is __________, 1999.
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RISK FACTORS
Investing in our common stock is very risky. You should be able to bear a
complete loss of your investment. This prospectus, including the documents
incorporated by reference, contains forward-looking statements that involve
risks or uncertainties. Actual events or results may differ materially from
those discussed in this prospectus and in the documents incorporated by
reference. Factors that could cause or contribute to such differences include,
but are not limited to, the factors discussed below as well as those discussed
elsewhere in this prospectus and in the documents incorporated by reference.
BUSINESS RISKS
THE COMPANY IS UNCERTAIN REGARDING THE PATENTS AND PROPRIETARY RIGHTS OF ITS
PRODUCT CANDIDATES
Our patent strategy is to pursue patent protection, in the U.S. and in most
developed countries, for our compounds and technologies. Our goal is to obtain
broad patent protection for our compounds under development and their related
medical indications. Although We will seek patent protection for our
technologies, the patent application and issuance process generally takes
several years and is usually very expensive without any guarantee that a patent
will be issued. In many cases, the Company's know-how and technology may not be
patentable. If We do not obtain patent protection for our technologies, our
ability to compete and business prospects may be significantly and negatively
affected. Further, even if patents can be obtained, there can be no guarantee
that these patents will provide us with any competitive advantage. Risks
associated with protecting our patent and proprietary rights include the
following:
. Our ability to protect our technologies could be delayed or negatively
affected if the United States Patent and Trademark Office (the "USPTO")
requires clinical evidence that our technologies work.
. Our competitors may develop similar technologies or products, or duplicate
any technology developed by us.
. If patents are issued to us, our competitors may develop products which
are similar to ours but which do not infringe on our patents or products,
or a third party may successfully challenge one or more of our patents.
. Our patents may infringe on the patents or rights of other parties which
may decide not to grant a license to us.
. We may have to change our products or processes, pay licensing fees or
stop certain activities because of the patent rights of third parties
which could cause additional unexpected costs and delays.
Patent law in the fields of healthcare and biotechnology is still evolving. As a
result, future changes in patent laws might conflict with the existing or future
patent rights of others. For the same reasons, the products of others could
infringe on our patent rights. The defense and prosecution of patent claims is
both expensive and time-consuming, even if We receive a favorable outcome. If
any existing or future patent owned by or licensed to us or our collaborators
fails to protect us against competitors, it could:
. Subject us to significant liabilities to third parties,
. Require us to license rights from third parties,
. Require us to alter our products or processes or
. Require us to cease developing and/or selling certain of our technologies.
We also rely on trade secrets and proprietary know-how. We seek to protect this
information primarily through confidentiality agreements with our collaborators,
employees and consultants. There can be no guarantee that these agreements will
not be breached or that We will have adequate remedies for such breach. In
addition, our trade secrets may become known or be developed independently by
competitors.
If consultants, key employees or other third parties apply technological
information which they have developed separate from the Company to our
technologies, there may be disputes as to the ownership of such information
which may not be resolved in our favor. Our scientific advisors and other
consultants are employed by and may have consulting agreements with third
parties. Therefore, any inventions discovered by such individuals are not
likely to become our property.
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THE COMPANY HAS ALWAYS HAD LOSSES FROM ITS OPERATIONS AND EXPECTS FUTURE LOSSES
We are a development stage company. We have never generated revenues from
product sales, and We do not currently expect to generate revenues from product
sales for at least the next eighteen months. As of December 31, 1998, We have
incurred total net losses since inception of approximately $40 million. To date,
We have dedicated most of our financial resources to the research and
development of our product candidates, preclinical compounds, and other
technologies (collectively referred to herein as our "technologies"), general
and administrative expenses and costs related to obtaining and protecting
patents. We expect to incur significant operating losses for at least the next
twenty-four months, and possibly longer, primarily due to the continued progress
of our research and development programs, including preclinical studies and
clinical trials, and costs associated with making and selling our products. Our
ability to earn profits will depend on many things including:
. Successfully completing the research and development of our technologies;
. The time, cost and effort required to obtain regulatory approvals;
. Establishing collaborative arrangements for manufacturing, sales and
marketing capabilities;
. Protecting our patent and other intellectual rights;
. The ability of our licensors or collaborators to protect their patent and
other intellectual rights;
. Competing technology and market developments;
. Manufacturing costs and the costs of commercializing our products; and
. Raising enough money to finance our business.
There can be no guarantee that the Company will become profitable or that if it
becomes profitable, it will remain profitable.
THE COMPANY DEPENDS HEAVILY ON HARVARD UNIVERSITY AND ITS AFFILIATES
Most of our research and development is completed through Harvard University and
its affiliated hospitals ("Harvard and its Affiliates") under sponsored research
agreements. Researchers working at Harvard and its Affiliates invented or
discovered virtually all of our current technologies. Therefore, most of the
Company's business depends upon:
. Harvard and its Affiliates continuing to perform research and development
work under sponsored research agreements with us; and
. Our ability to maintain the licenses that We received from Harvard and its
affiliates for our current technologies.
There can be no guarantee that Harvard and its affiliates will continue to work
with us.
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THE COMPANY WILL NEED TO RELY ON FUTURE AND CERTAIN PRIOR RELATIONSHIPS IN ORDER
TO BE SUCCESSFUL
We expect that developing, clinical testing, manufacturing and commercializing
our technologies will require working with various corporate partners, joint
venturers, licensors, sub-licensees and others. There can be no guarantee that:
. We will be able to enter into such collaborations on acceptable terms and
conditions,
. That such collaborations will be successful, or
. The parties will not dispute the ownership rights to any technology
developed under such collaborations.
If any of our collaborators breach or terminate their agreement with us or
otherwise fail to conduct their activities on time, it could delay the
development or commercialization of the technology for which the parties are
collaborating. Further, We may need to undertake additional responsibilities or
to devote additional resources. The termination or cancellation of any working
arrangements could also negatively affect our patent and intellectual property
rights, as well as our financial condition and operations.
If We are not able to establish or maintain collaborative arrangements, We will
need more money to research and develop technologies on our own and may
encounter delays in introducing our products. We may also find that not
collaborating with others may negatively affect our development and
manufacturing efforts, as well as the sales of any products. We also expect to
rely on third parties to manufacture our products. There can be no assurance
that We will be able to contract with manufacturers who can fulfill our
requirements for quality, quantity and timeliness, or that We would be able to
find substitute manufacturers, if necessary. If We are unable to contract with
manufacturers on acceptable terms, it could negatively affect our ability to
conduct preclinical and clinical testing and may delay our efforts to obtain
regulatory approvals. In addition, manufacturing of our products on a commercial
scale will require us to incur significant start-up expenses and to expand our
facilities and personnel. No guarantee can be given that We can develop such
manufacturing capability or hire and train qualified personnel.
THE COMPANY DEPENDS HEAVILY ON ITS KEY PERSONNEL AND MAY NEED ADDITIONAL KEY
PERSONNEL
Our success depends significantly upon our ability to attract and retain highly
qualified scientific and management personnel. There is significant competition
for such personnel from other companies, research and academic institutions,
government entities and other organizations. We can not guarantee that We will
be successful in hiring or retaining key personnel.
If We decide to undertake internally the research and development of any of our
technologies, We may need to hire additional key management and scientific
personnel to assist the limited number of employees that We currently employ. If
We fail to attract such personnel, it could have a significant negative effect
on our ability to develop our technologies. There is significant competition for
such personnel from other companies, research and academic institutions,
government entities and other organizations. There can be no guarantee that We
will be successful in hiring or retaining the personnel required for such
activities.
THE COMPANY'S INDUSTRY IS VERY COMPETITIVE AND SUBJECT TO CHANGES IN TECHNOLOGY
The pharmaceutical industry is highly competitive. Research on the causes of,
and possible treatments for diseases for which We are trying to develop
products, including rheumatoid arthritis, cancer, Parkinson's Disease, central
nervous system disorders and autoimmune diseases are developing rapidly.
Competition from larger, more experienced and better capitalized companies will
be intense. We are pursuing areas of product development in which there is a
potential for extensive technological innovation in relatively short periods of
time. There can be no assurance that We will be able to keep pace with any new
technological developments. Factors affecting our ability to successfully
manage the technological changes occurring in the biotechnology industry as well
as our ability to successfully compete include:
. We have no sales force or marketing experience;
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. We compete with a number of pharmaceutical and biotechnology companies
which have financial, technical and marketing resources significantly
greater than ours;
. Companies with established positions in the pharmaceutical industry may be
better able to develop and market products for the treatment of those
diseases for which We are trying to develop products;
. Many of our competitors have significantly greater experience than us in
completing preclinical and clinical testing of new pharmaceutical products
and obtaining Food and Drug Administration ("FDA") and other regulatory
approvals of products;
. Our competitors may succeed in developing products that are more effective
than ours;
. Rapid technological change or developments by others may result in our
potential products becoming obsolete or uncompetitive; and
. Universities and other not-for-profit research organizations are
responsible for a significant amount of research in the field. These
institutions are becoming increasingly aware of the commercial value of
their findings and are becoming more active in seeking patent protection
and licensing arrangements to collect royalties for the use of technology
that they have developed. These institutions may also market competitive
products on their own or through joint ventures and may compete with us in
recruiting qualified personnel.
A substantial number of patents have been issued to other pharmaceutical and
biotechnology companies, and other companies may have applied for patents, been
issued patents or obtained additional patents and proprietary rights relating to
products or processes competitive with ours. Patent applications in the United
States are kept secret until the patents are issued, and since publication of
discoveries in the scientific or patent literature occurs after the actual
discoveries, We cannot be certain that We, or our licensors or collaborators,
were the first creator of inventions covered by pending patent applications or
the first to file patent applications for such inventions. Consequently, there
can be no assurance that our existing patents or any patents that may be issued
to us or our licensors or collaborators in the future will provide protection
against competitive products or otherwise be commercially valuable.
IT MAY BE DIFFICULT FOR THE COMPANY TO OBTAIN FDA AND OTHER GOVERNMENTAL
APPROVALS
Our activities are regulated by a number of government authorities in the United
States and other countries, including the FDA pursuant to the Federal Food, Drug
and Cosmetic Act. The FDA regulates pharmaceutical products, including their
manufacture and labeling. Any product developed by us must undergo an extensive
regulatory approval process which includes preclinical and clinical testing of
such product to demonstrate its safety and efficacy before it can be marketed.
This regulatory process can require many years and substantial cost. Data
obtained from testing is subject to varying interpretations, which can delay,
limit or prevent FDA approval.
None of our technologies have been approved for marketing by the FDA or any of
the FDA's international equivalents. We cannot accurately predict all relevant
regulatory requirements or issues. Changes in existing regulatory requirements
could prevent or affect the timing of our ability to achieve regulatory
compliance. Federal and state laws, regulations and policies may be changed
with possible retroactive effect, and depend heavily on administrative policies
and interpretations. There can be no guarantee that any changes with respect to
Federal and state laws, regulations and policies, and, particularly, with
respect to FDA and other such regulatory bodies, will not have a significant,
negative effect on the Company. Obtaining FDA clearances can be time-consuming
and expensive, and there is no guarantee that such clearances will be granted or
that the FDA review process will not involve delays that significantly and
negatively affect our products. We may encounter similar delays in foreign
countries.
Also, regulatory clearances may have significant limitations on the uses for
which such products may be marketed. In addition, even if regulatory approval
is obtained, any marketed product and its manufacturer are subject to periodic
review and any discovery of previously unrecognized problems with a product or
manufacturer could result in suspension or limitation of approvals. If We
obtain any required clearances, there can be no assurance that the regulatory
authority will not withdraw such clearance or that We will continue to comply
with other regulatory requirements.
NONE OF THE COMPANY'S PRODUCT CANDIDATES HAVE BEEN APPROVED AND THE COMPANY HAS
NO MARKETING EXPERIENCE
Neither the FDA nor any of the FDA's international equivalents has approved any
of our technologies for marketing. The research and development of our
technologies will require extensive additional laboratory and clinical testing
prior to regulatory approval. There can be no guarantee that:
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. Our product development efforts will be successfully completed
. We will obtain required regulatory approvals
. Our technologies will be capable of being manufactured in commercial
quantities at reasonable cost; or
. New products, if introduced, will achieve market acceptance.
We do not have any experience in marketing pharmaceutical products. In order to
earn a profit on any future product, We will be required to either enter into
arrangements with third parties with respect to marketing the products or
develop internally such marketing capability. There can be no assurance that We
will be able to enter into marketing agreements with others on acceptable terms
or that We can successfully develop such capability, on our own.
THERE IS UNCERTAINTY IN THE PHARMACEUTICAL INDUSTRY REGARDING PRICING, HEALTH
CARE REIMBURSEMENT AND RELATED MATTERS
The continuing efforts of government and third party payers to contain or reduce
health care costs may negatively affect our business. For example, certain
foreign governments control pricing or profitability of prescription
pharmaceuticals. In the United States, there have been a number of federal and
state proposals to implement similar government control. In recent years,
several bills proposing comprehensive health care reform have been introduced in
Congress. In general, such proposals are designed to reform the health care
system to, among other things;
. control or reduce public and private spending on health care;
. provide for uniform health insurance benefits packages and administrative
efficiency in the health care system; and
. provide universal access to health care within the next several years.
Some of the proposals introduced in Congress would potentially limit
pharmaceutical prices and establish mandatory or voluntary refunds. Such
proposals could decrease the price that We receive for any products that We may
sell in the future. There can be no guarantee that such proposals will not
negatively affect us. In addition, there have been a number of federal and
state proposals for the government to control the prices of health care products
and services. It is uncertain if any legislative proposals will be adopted and
how federal, state or private payers for health care goods and services will
respond to any health care reforms. Such reforms may have a significant effect
on us. If such proposals have a significant negative effect on the business,
financial condition and profitability of other pharmaceutical companies which
work with us, our ability to commercialize our technologies may be negatively
affected.
Our ability to commercialize our products may depend, in part, on the extent to
which government health administration authorities, private health insurers and
others provide reimbursement for the costs of our products. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and third-party payers are increasingly challenging the prices charged
for medical products and services. There can be no guarantee that adequate
insurance coverage will be available to allow us to charge prices for products
which are adequate for us to realize an appropriate return on our cost for
developing these technologies. If adequate coverage and reimbursement are not
provided for use of our products, the market acceptance of these products will
be negatively affected. In addition, many health maintenance organizations and
other managed care companies are seeking to negotiate substantial volume
discounts for the sale of pharmaceutical products to their members thereby
reducing profit margins for manufacturers. Competitive pressures are causing
many manufacturers to accept such discount arrangements.
THE COMPANY HAS NO MANUFACTURING EXPERIENCE
We currently have no manufacturing facilities for either clinical trial or
commercial quantities of any of our technologies. To date, We have obtained the
limited amount of quantities required for clinical trials from contract
manufacturing companies. We intend to continue using contract manufacturing
arrangements with experienced firms for the supply of material for both clinical
trials and commercial sale. As a result of these arrangements, We will depend
upon third parties to produce and deliver products in accordance with all FDA
and other governmental regulations. There can be no guarantee that such parties
will constantly perform their obligations in a timely fashion, and, in
accordance with the applicable regulations. The failure by any third party to
perform their obligations may delay clinical trials, the commercialization of
products, and the ability to supply product for sale.
THE COMPANY MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS AND INSURANCE TO COVER
SUCH CLAIMS MAY BE UNAVAILABLE OR INADEQUATE
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The use of our product candidates in clinical trials and the future sale of any
resulting products may subject us to liability claims. There can be no
guarantee that any product liability claims will not significantly and
negatively affect our business or financial condition. These claims might be
made directly by consumers or by pharmaceutical companies or other sellers of
such products. While We currently have product liability insurance, there can
be no guarantee that such insurance will be sufficient to meet any liabilities
that may arise. In addition, such coverage is expensive and may be difficult to
obtain. Our existing coverage may not be adequate as our product development
activities progress. There can be no guarantee that adequate insurance coverage
will be available in the future at an acceptable cost, if at all. If We are
unable to obtain sufficient insurance coverage at an acceptable cost to protect
against potential product liability claims, it could prevent or limit our
ability to commercialize our products.
THE COMPANY MAY NEED ADDITIONAL CAPITAL IN THE FUTURE AND IS NOT CERTAIN
ADDITIONAL CAPITAL WILL BE AVAILABLE
We have experienced negative cash flows from operations since the company began
operating. To date, We have funded our business operations primarily from equity
financings. We spend a significant amount for research and development,
including preclinical studies and clinical trials of our technologies. We expect
that our current cash, cash equivalents and investment balances will be
sufficient to fund our capital requirements through at least the next twelve
months. Thereafter, We may need to raise substantial additional capital to fund
our operations. Our capital requirements will depend on many factors, including:
. Potential problems, delays, expenses and complications frequently
encountered by development stage companies;
. The progress of our research and development activities and our clinical
trials;
. Our ability to meet the terms of any current and future collaborative
research, manufacturing, marketing or other agreements;
. Our ability to obtain regulatory approvals from the FDA and other
government agencies;
. The costs and timing of obtaining regulatory approvals of our products;
. The costs of protecting our patent claims and other intellectual property
rights; and
. Changes in economic, regulatory or competitive conditions of the
pharmaceutical and biotechnology industry.
Estimates about how much funding will be required are based on a number of
assumptions, all of which are subject to change based on the results and
progress of our research and development activities. To satisfy our capital
requirements, We may raise additional funds in the public or private capital
markets. If the results of our current or future clinical trials are not
favorable, it may negatively affect our ability to raise additional funds. We
may also seek additional funding through corporate collaborations and other
financing methods. There can be no guarantee that any such funding will be
available on favorable terms, if at all. If adequate funds are not available,
We may need to significantly reduce one or more of our research or development
programs, or We may be required to obtain funds through arrangements with others
that may require us to surrender rights to some or all of our technologies. If
We are successful in obtaining additional financing, the terms of such financing
may have the effect of diluting or adversely affecting the holdings or the
rights of our common stockholders.
THERE ARE OPTIONS, WARRANTS AND PREFERRED STOCK OUTSTANDING WHICH MAY CAUSE
DILUTION TO THE STOCKHOLDERS OF THE COMPANY
As of March 25, 1999, We had granted stock options and warrants to purchase
approximately five million shares of our Common Stock at exercise prices ranging
from $0.63 - $15.00 per share. Many of these previously granted options and
warrants were issued at exercise prices below the market price of the Common
Stock. If the holders exercise these stock options and warrants, it will dilute
the percentage ownership interest of our current stockholders. In addition, the
terms upon which We would be able to obtain additional money through the sale of
our stock may be negatively affected because the holders of such outstanding
options and warrants would probably exercise them at a time when We would most
likely be able to obtain capital on terms more favorable to us than those
provided by the exercise of outstanding options and warrants.
As of March 25, 1999, We also had 14,296 and 315,416 shares of Series A and
Series C Convertible Preferred Stock outstanding, respectively, which are
currently convertible into 250,719 and 1,577,080 shares of common stock,
respectively. If the holders convert their shares of preferred stock into
common stock, it will dilute the percentage ownership interest of our current
stockholders.
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THERE HAS BEEN A LIMITED PUBLIC MARKET FOR THE COMPANY'S COMMON STOCK, THE
PRICES HAVE BEEN VOLATILE AND THE COMPANY HAS NEVER PAID DIVIDENDS TO ITS
STOCKHOLDERS
Historically, the trading volume of our Common Stock has fluctuated
significantly. At times our trading volume has been significant while at other
times our trading volume has been relatively low. The market price of our
Common Stock has been highly volatile and it may continue to be highly volatile
similar to the securities of other public biotechnology companies. Factors
which may have a significant effect on the market price of our common stock
include:
. the discovery of new technologies in fields in which We are developing
products
. the results of clinical trials
. FDA approval of new products
. Proposed government regulations and
. Issues relating to patents or proprietary rights.
The securities markets have experienced volatility that affects prices of equity
securities of biotechnology companies which is often unrelated to the
performance of such companies. Thus, changes in the market price of our common
stock may not be consistent with our actual operations or financial results. We
do not expect to pay any dividends for the foreseeable future.
YEAR 2000 COMPLIANCE MAY ADVERSELY IMPACT THE COMPANY'S FINANCIAL AND MANAGEMENT
RESOURCES
The Company has initiated planning for issues related to the upcoming new
millenium. These issues derive from the use of software and hardware with
embedded chips or processors that use two digits to refer to a year and do not
properly recognize a year that begins with "20" instead of the familiar "19."
The Company primarily operates its business applications software using the
Microsoft Office suite of products. As a result, We will primarily rely on the
software developer's representations regarding Year 2000 compliance of their
software.
We intend to assess the possible effects on our operations of the Year 2000
compliance of certain relevant third parties, primarily our service providers,
by requesting confirmation from the parties regarding their Year 2000 readiness.
The Company does not expect to incur costs in its Year 2000 program that will
be material to its business, financial condition or results of operations.
Although We intend to complete all phases of our Year 2000 program by December
31, 1999, there can be no assurance We will complete our program by then, and
even if this program is successfully completed on schedule, that disruptions in
our business will be avoided.
Possible consequences of Year 2000 issues that We are unable to adequately
identify, assess or fix include but are not limited to:
. Delays in supplies from vendors,
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. Errors in processing transactions,
. Diversion of management time and effort to addressing difficulties that
emerge, and
. Loss of clinical and research data
The goal of our Year 2000 program is to plan for and reduce the risk of such
difficulties. There can be no assurance that our Year 2000 program will be
completed in a timely manner or will be successful.
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be received by the Selling
Stockholders. The Company will not receive any proceeds from the sale of the
Securities by the Selling Stockholders.
SELLING STOCKHOLDERS
The table below sets forth information regarding ownership of the Company's
Common Stock by the Selling Stockholders on March 26, 1999 and the number of
Securities to be sold by them under this Prospectus. The Securities include
shares of Common Stock which were issued or are issuable upon the exercise of
Warrants owned by the Selling Stockholders, which Warrants were acquired by
certain of the Selling Stockholders in one or more private placements by the
Company.
The Company has filed with the Commission, under the Securities Act, a
Registration Statement on Form S-3, of which this Prospectus forms a part, with
respect to the resale of the Securities from time to time on the Nasdaq Smallcap
Market or in privately-negotiated transactions and has agreed to prepare and
file such amendments and supplements to the Registration Statement as may be
necessary to keep the Registration Statement effective until the Securities are
no longer required to be registered for the sale thereof by the Selling
Stockholders.
9
<PAGE>
<TABLE>
<CAPTION>
Securities Owned Prior Securities Owned
to Offering (1)(2) After Offering (1)(2)
- --------------------------------------------------------------------------------- ----------------------------------
Shares of Shares of
Name of Selling Common Common Stock Percent of Number of Shares of Percent of
Shareholder Stock Offered Hereby Common Stock Common Stock Common Stock
- -------------------------- ------------- -------------- ------------- -------------------- ------------
<S> <C> <C> <C> <C> <C>
Mark Abeshouse 1,751 1,751 * 0 *
Aries Domestic Fund, LP 19,360 19,260 * 100 *
The Aries Trust 9,768 9,629 * 139 *
Atrix-Ventana Investment Co., L.P. 70,306 26,093 * 44,213 *
Aurora Capital(3) 1,253 1,253 * 0 *
Amnon and Caron Barness 18,637 18,637 * 0 *
Delaware Charter TTEE 17,641 17,641 * 0 *
Domaco Venture Capital Fund 17,866 17,866 * 0 *
S. Edmond Farber 9,833 9,833 * 0 *
Sean Gallager 16,489 13,187 * 3,202 *
Jim Janis 9,319 9,319 * 0 *
Eric M. Javits 1984 Irrevocable Trust(3) 5,000 5,000 * 0 *
Peter Kash 20,707 20,707 * 0 *
Jared Kash Trust 5,045 5,045 * 0 *
Colby Kash Trust 5,045 5,045 * 0 *
Peter and Donna Kash 9,629 9,629 * 0 *
Scott A. Katzmann 1.751 1,751 * 0 *
Robert Klein M.D. 37,278 37,278 * 0 *
Martin Kratchman 7,145 7,145 * 0 *
Roger S. Lash 23,197 18,637 * 4,560 *
Ronald Lazar 8,033 8,033 * 0 *
Marathon Agents 4,815 4,815 * 0 *
Jeff Bliot Margolis(3) 78,174 78,174 * 0 *
Timothy McInerney 31,135 7,510 * 23,625 *
S. Leslie Misrock 9,319 9,319 * 0 *
William and Catherine Peterson 17,866 17,866 * 0 *
Anthony G. Polak 17,641 17,641 * 0 *
R.L. Capital Partners, L.P. 17,641 17,641 * 0 *
Lindsay A. Rosenwald 104,592 104,592 * 0 *
Stephen Lawrence Ross(3) 116,310 81,310 * 35,000
Jonathan E. Rothchild 35,735 35,735 * 0 *
Wayne Rubin 3,807 3,807 * 0 *
Howard Schain 11,599 9,319 * 2,280 *
H.L. and D.M. Shaw 20,587 20,587 * 0 *
Eric L. Sichol(3) 5,000 5,000 * 0 *
Aaron Speisman 4,815 4,815 * 0 *
Suan Investments Inc. 31,869 31,869 * 0 *
Mitchel Sutin(3) 7,500 7,500 * 0 *
The Tail Wind Fund, Ltd. 744,818 744,818 5.4 0 *
United Congregations Mesors 140,088 90,088 * 50,000 *
Ronald Martin Urvater(3) 51,404 51,404 * 0 *
Ventana Growth Capital Fund V.L.P. 28,704 11,184 * 17,520 *
Michael Weiss 9,632 9,632 * 0 *
Allen and Terri Wise 4,815 4,815 * 0 *
Wolfson Descendants' 1983 Trust 96,297 96,297 * 0 *
Kenton Wood 9,319 9,319 * 0 *
Zapco Holdings, Inc. Deferred 18,637 18,637 * 0 *
Compensation Plan Trust
</TABLE>
10
<PAGE>
* Less than one percent.
(1) Assumes the exercise of all outstanding warrants owned by the Selling
Stockholders.
(2) Based on shares of Common Stock outstanding as of March 25, 1999 and
includes 1,108,765 shares of Common Stock which were issued or are issuable
upon the exercise of outstanding warrants owned by the Selling
Stockholders.
(3) Aurora Capital LLC, and its predecessor, Aurora Capital Corp, with which
the designated selling shareholder is affiliated, has provided consulting
services to the Company since January 1998. The shares of common stock
offered hereby underly warrants issued to the selling shareholders as
compensation for their services.
11
<PAGE>
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds of the sale of the securities
offered hereby. The Securities offered hereby by the Selling Stockholders may be
sold from time to time to purchasers directly by any such Selling Stockholder,
or by pledgees, donees, transferees or other successors in interest receiving
shares from a Selling Stockholder after the date of this Prospectus. As used in
this section, the terms "Selling Stockholder" shall be deemed to include
pledgees, donees, transferees or other successors in interest. Alternatively,
the Selling Stockholders may from time to time offer the Securities through
underwriters, brokers, dealers or agents who may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or the purchasers of the Securities for whom they may act as
agent (which compensation as to a particular broker-dealer might be in excess of
customary conditions). The Selling Stockholders and any such underwriters,
brokers, dealers or agents who participate in the distribution of the Securities
may be deemed to be "underwriters", and any profits on the sale of the
Securities by them and any discounts, commissions or concessions received by any
such underwriters, brokers, dealers or agents might be deemed to be underwriting
discounts and commissions under the Securities Act. To the extent the Selling
Stockholders may be deemed to be underwriters, the Selling Stockholders may be
subject to certain statutory liabilities of the Securities Act, including, but
not limited to, Prospectus delivery requirements, Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as
amended. Because Selling Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholder will
be subject to the prospectus delivery requirements of the Securities Act.
The Securities offered hereby may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices,
including in transactions on the Nasdaq SmallCap Market. The Securities may be
sold by one or more of the following methods without limitation: (i) to
underwriters who will acquire Securities for their own account and resell them
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale (any
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time); (ii) a block trade in which
the broker or dealer so engaged will attempt to sell the Securities as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; (iii) purchases by a broker or dealer as principal and resale by
such broker or dealer for its own account pursuant to this Prospectus; (iv)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (v) an exchange distribution in accordance with the rules of such
exchange; (vi) face-to-face transactions between sellers and purchasers without
a broker or dealer; (vii) through the writing of options; and (viii) other
legally available means. At any time a particular offering of Securities is
made, a revised Prospectus or Prospectus Supplement, if required, will be
distributed including the name or names of any underwriters, brokers, dealers or
agents, any discounts, commissions and other items constituting compensation
from the Selling Stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. Such revised Prospectus or Prospectus
Supplement and, if necessary, a post-effective amendment to the registration
statement of which this Prospectus is a part, will be filed with the Commission
to reflect the disclosure of additional information with respect to the
distribution of the Securities. In addition, the Securities may be sold in
private transactions to qualified institutional buyers in compliance with Rule
144A or under Rule 144 rather than pursuant to this Prospectus.
The Company is bearing all costs relating to the registration of Securities
(other than fees and expenses, if any, of counsel or other advisers to the
Selling Stockholders). Any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the Securities will be borne by
the Selling Stockholders selling such Securities.
The Company has agreed to indemnify the Selling Stockholders in certain
circumstances against certain liabilities, including liabilities arising under
the Securities Act. Each Selling Stockholder has agreed to indemnify the
Company, its directors and its officers who sign the Registration Statement
against certain liabilities, including liabilities arising under the Securities
Act.
There is no assurance that any Selling Stockholder will sell any or all of the
Securities offered by it hereunder or that any such Selling Stockholder will not
transfer, devise or gift such Securities by other means not described herein.
Underwriters participating in any offering made pursuant to this Prospectus (as
amended or supplemented from time to time) may receive underwriting discounts
and commissions, and discounts or concessions may be allowed or reallowed or
paid to dealers, and brokers or agents participating in such transaction may
receive brokerage or agent's commissions or fees.
12
<PAGE>
Upon the Company being notified by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the Act,
disclosing (i) the name of each such selling Stockholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the
price at which such shares will be or were sold, (iv) the commissions to be or
paid or discounts or concessions to be or allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
the prospectus and (vi) other facts material to the transaction.
The Selling Stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Regulation M, which may
limit the timing of purchases and sales of any of the Securities by the Selling
Stockholders and any other such person. Furthermore, Regulation M may prohibit
persons engaged in the distribution of the Securities from simultaneously
engaging in market making activities with respect to the particular Securities
for a period of up to five business days (or such other applicable period as
Regulation M may provide) prior to the commencement of such distribution. All of
the foregoing may affect the marketability of the Securities and the ability of
any person or entity to engage in market-making activities with respect to the
Securities.
In order to comply with the securities laws of certain states, if applicable,
the Securities will be sold in such jurisdictions, if required, only through
registered or licensed brokers or dealers.
13
<PAGE>
THE COMPANY
We are a development stage biotechnology company engaged in the research and
development of novel therapeutic and diagnostic products to treat chronic
debilitating diseases such as cancer, central nervous system (CNS) disorders and
autoimmune diseases. The Company was incorporated in Delaware in 1972 under the
name Greenwich Pharmaceuticals Incorporated ("Greenwich"). Effective June 15,
1995, Greenwich merged with a privately-held company named Boston Life Sciences,
Inc. (the "Merger"). Greenwich survived the Merger and changed its name to
Boston Life Sciences, Inc. On June 6, 1997 the Company's stockholders approved a
one-for-ten reverse split of the common stock effective as of June 9, 1997. Our
principal executive offices are located at 31 Newbury Street, Suite 300, Boston,
Massachusetts, and the telephone number is (617) 425-0200.
In general, our corporate strategy is to seek to (i) fund the early development
of our compounds in preclinical development and (ii) enter into corporate
partnering arrangements with established pharmaceutical or biotechnology
companies to support the continued development of our compounds and the
marketing of any products as and to the extent they receive government approval.
Additionally, since We do not currently own any laboratory or manufacturing
facilities, We contract for such services and intend to continue to do so.
The Company currently has eight technologies in its product portfolio.
Therafectin, a potential treatment for rheumatoid arthritis, was acquired as a
result of the Merger. The balance of our technologies currently under
development were invented or discovered by researchers working at Harvard
University and its affiliated hospitals ("Harvard and its Affiliates") and have
been licensed to us.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
The Company is authorized to issue 25,000,000 shares of Common Stock and
1,000,000 shares of Preferred Stock, each with a par value $.01 per share. Under
the Company's Amended and Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), the Board of Directors is authorized, without
stockholder approval, to issue such Preferred Stock of the Company into series
with such voting rights, designations, preferences, limitations and special
rights as may be designated by the Board of Directors from time to time.
As of March 25, 1999, 329,712 shares of Preferred Stock were outstanding as
follows: 14,296 shares of Series A Convertible Preferred Stock ("Series A
Preferred"), 0 shares of Series B Convertible Preferred Stock ("Series B
Preferred") and 315,416 shares of Series C Convertible Preferred Stock ("Series
C Preferred"). The rights of the Series A Preferred, Series B Preferred and
Series C Preferred are set forth below. The Company also has adopted a
Stockholders' Rights Plan, as described below.
Shares of the Company's Common Stock are being registered under this
Registration Statement. The following is a summary description of the Company's
outstanding capital stock and is qualified in its entirety by reference to the
Company's Certificate of Incorporation, as amended from time to time, and the
Company's Amended and Restated Bylaws, as amended (the "Bylaws"), which are
exhibits to or incorporated by reference in the Registration Statement of which
this Prospectus is a part.
Common Stock
Subject to the rights and preferences of the Company's Preferred Stock, holders
of Stock, holders of shares of the Common Stock are entitled to receive
dividends, as and to the extent dividends may be declared by the Company's Board
of Directors, out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the Company, holders of shares of the
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and preferences to holders of Preferred Stock. Holders of shares
of Common Stock are entitled to one vote per share on all matters on which
Stockholders are entitled to vote. The holders of a majority of the outstanding
shares of Common Stock entitled to vote constitutes a quorum for taking action
by the stockholders. Except for matters where a higher vote is required by law,
the affirmative vote of the holders of shares of Common Stock present or
represented and entitled to vote is required to take any such action. Holders of
shares of the Common Stock have no preemptive, conversion or other subscription
rights. There are no redemption, sinking fund or call provisions applicable to
the Common Stock.
The holders of the Common Stock have certain rights under a Stockholder Rights
Plan (the "Rights Plan") which has been adopted by the Board of Directors of the
Company. Under the Rights Plan, the holders of Common Stock received one right
(the "Right") to purchase a fractional share of a new class of Preferred Stock
for each share of Common Stock owned by such holder. With certain exceptions, if
a person or a group acquires fifteen percent or more of the outstanding shares
of the Common Stock, the Rights will separate from the shares of Common Stock
and become exercisable. In certain circumstances, once the Rights are exercised,
the Rights Plan allows holders of the Rights (other than the person or group
acquiring fifteen percent of the Common Stock) to purchase shares of Common
Stock at a substantial discount. The Rights will expire in September 2001 unless
exercised by the holders or redeemed or exchanged by the Company. The Rights
Plan could make it more difficult, and therefore discourage attempts, to acquire
control of the Company. This description of the Rights Plan is qualified by
reference to the Company's Registration Statement on Form 8-A relating to the
Rights Plan, which is incorporated herein by reference and made a part hereof.
14
<PAGE>
Series A Convertible Preferred Stock
Subject to the prior and superior rights of the holders of any shares of any
series of Preferred Stock ranking superior to the shares of Series A Preferred,
and ratably with respect to the holders of any shares of any Series of Preferred
Stock ranking pari passu to the shares of Series A Preferred, with respect to
dividends and distributions, the holders of shares of Series A Preferred are
entitled to receive dividends and distributions, when and if declared by the
Board of Directors out of funds legally available therefor, in preference to the
holders of the Common Stock. If the Company declares a dividend or distribution
on the Common Stock, the holders of shares of Series A Preferred shall be
entitled to receive a dividend or distribution in the amount of the dividend or
distribution that would be received by a holder of the shares of Common Stock
into which such share of Series A Preferred is then convertible. Subject to
certain conditions in the Certificate of Incorporation, if the Company declares
a dividend or distribution on any other class or series of Preferred Stock, the
holders of shares of Series A Preferred shall be entitled to receive a dividend
or distribution in an amount in proportion to the dividend or distribution
declared on a share of such other class or series, based upon the liquidation
preference of the Company's Series A Preferred relative to that of such other
class or series.
Each share of Series A Preferred is convertible at any time by the holder into
shares of Common Stock at a ratio of 17.53771 shares of Common Stock for each
share of Series A Preferred. The Company may, under certain conditions described
in the Certificate of Incorporation, cause the conversion of the Series A
Preferred, in whole or in part, into Common Stock. The conversion rate of the
Series A Preferred is subject to adjustment in the event of a (i) dividend or
distribution in Common Stock, (ii) a forward or reverse split of the Common
Stock or (iii) issuance of securities pursuant to a reclassification of the
Common Stock. In addition, the conversion rate of the Series A Preferred will be
adjusted pursuant to certain weighted average anti-dilution provisions of the
Certificate of Incorporation in the event that the Company issues Common Stock
(or other securities convertible into Common Stock) at a price per share which
is lower than both the then effective conversion price of the Series A Preferred
and the closing bid price of the Common Stock on The Nasdaq Stock Market
immediately prior to the date of such issuance.
The Series A Preferred has no sinking fund, preemptive rights or call
obligations. Except as required by law and as described in the following
sentence, the Series A Preferred votes together with the Common Stock as one
class on an as converted basis. The affirmative vote of two-thirds of all
outstanding Series A Preferred is required to amend the Certificate of
Incorporation or Bylaws so as to adversely affect the rights of the Series A
Preferred or authorize the issuance of securities ranking senior to or on parity
with the Series A Preferred, so long as 50% of the originally issued shares of
Series A Preferred is outstanding. At present, there are less than 50% of the
originally issued shares of Series A Preferred outstanding.
In the event of a liquidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Liquidation Event"), after
payment or provision for payment of debts and other liabilities of the Company,
the holders of Series A Preferred then outstanding shall be entitled to $130.00
per share plus all declared and unpaid dividends thereon out of the assets of
the Company available for distribution, before any payment or declaration and
setting apart for payment of any amount in respect of the capital stock ranking
junior to the Series A Preferred. If the Company's assets are insufficient to
permit the payment of such amounts, then the assets shall be distributed ratably
among the holders of Series A Preferred. All shares of Series A Preferred shall
rank senior to the Common Stock upon a Liquidation Event and, unless the terms
of another series shall provide otherwise, senior to all other series of the
Company's Preferred Stock. After the payment or distribution to the holders of
the Series A Preferred of the full preferential amounts, the holders of shares
of the Common Stock and any other shares of Preferred Stock then outstanding
will be entitled to receive, pro rata an amount per share equal to $13.00 plus
accrued but unpaid dividends, if any, paid to the holders of the Series A
Preferred. After the payment or distribution pursuant to the immediately
preceding sentence, the holders of shares of the Series A Preferred, the Common
Stock and any other shares of Preferred Stock then outstanding will share any
remaining assets of the Company on an as converted, pari passu, basis.
Series B Preferred Stock and Series C Preferred Stock
The holder of each share of Series B Preferred and Series C Preferred are not
entitled to receive dividends in any fixed amount. Instead, the holders are
entitled to receive such dividends as may be declared by the Board of Directors.
Such dividends on the Series B Preferred and Series C Preferred shall not be
cumulative and no right to such dividends shall accrue unless and until declared
by the Board of Directors. The holders of shares of the Series B Preferred and
Series C Preferred are entitled to share equally in any dividend, when, as and
if declared by the Board on the Common Stock.
Each share of the Series B Preferred and the Series C Preferred initially is
convertible at any time at the option of the holder into shares of Common Stock
at a ratio of five shares of Common Stock for each share of Series B Preferred
or Series C Preferred. Beginning 270 days after the issuance of the Series B
Preferred or Series C Preferred, the Company may be required to issue up to one
additional share of Common Stock for each share of Common Stock underlying the
Series B Preferred or Series C Preferred unless the closing bid price of the
Common Stock on the Nasdaq SmallCap Market or the Nasdaq National Market System
is at or above $7.00 per share (subject to adjustment to reflect stock splits,
stock dividends, etc.) for five consecutive trading days after the date of
issuance with respect to the Series B Preferred or, with respect to the Series C
15
<PAGE>
Preferred, the date on which a registration statement covering the Common Stock
underlying the Series C Preferred shall have been declared effective by the
Securities and Exchange Commission. Each share of Series B Preferred and Series
C Preferred issued and outstanding on February 5, 2002 and February 18, 2002,
respectively, automatically shall be converted into shares of Common Stock at
the then effective conversion price.
The Series B Preferred and Series C Preferred have no sinking fund provisions,
preemptive rights or call obligations.
The Series B Preferred and the Series C Preferred may be redeemed by the Company
at any time in exchange for a cash payment for each share of Series B Preferred
and Series C Preferred equal to $21.45. In addition to the foregoing cash
payment, if such redemption occurs the Company will issue warrants to purchase a
number of shares of Common Stock equal to 2.5 multiplied by the number of shares
of Series B Preferred or Series C Preferred then held by the holder.
Except as required by law and by certain provisions of the Certificate of
Incorporation which provide for voting rights on matters where: (i) the Company
issues equity securities senior to the Series B Preferred or the Series C
Preferred or (ii) impairs or reduces the rights of the Series B Preferred or
Series C Preferred, all shares of Series B Preferred and Series C Preferred
shall be non-voting, and the holders thereof shall not be entitled to vote on
any matters until such shares of Series B Preferred and Series C Preferred are
converted into shares of Common Stock.
In the event of any liquidation, dissolution or winding up of the Company, after
payment or provision for payment of debts and other liabilities of the Company,
the holders of the shares of Series A Preferred, the holders of shares of Series
B Preferred, the holders of shares of Series C Preferred, before any
distribution payment is made upon any Common Stock, shall be entitled to
receive, on a pari passu basis, certain remaining amounts, calculated in
accordance with the provisions of the Certificate of Incorporation, filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K, as amended by the Form
10-K/A, for the fiscal year December 31, 1998 and which provisions are hereby
incorporated by reference and such description is qualified in all respects by
such reference.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed upon
for the Company by Ballard Spahr Andrews & Ingersoll, LLP, Philadelphia,
Pennsylvania.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1998 and
1997, and for each of the three years in the period ended December 31, 1998,
incorporated by reference in this Prospectus from the Annual Report on Form 10-K
as amended by the Form 10K/A for the year ended December 31, 1998, have been so
included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in auditing and
accounting.
AVAILABLE INFORMATION
This Prospectus, which constitutes a part of a Registration Statement on Form S-
3 (the "Registration Statement") filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act, omits certain
of the information set forth in the Registration Statement. Reference is hereby
made to the Registration Statement and to the exhibits thereto for further
information with respect to the Company and the Securities offered hereby.
Copies of the Registration Statement and the exhibits thereto are on file at the
offices of the Commission and may be obtained upon payment of the prescribed fee
or may be examined without charge at the public reference facilities of the
Commission described below or via the Commission's web site described below.
Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
16
<PAGE>
The Company is subject to the informational requirements of the Exchange Act,
and, accordingly, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C.
20549, and at the Commission's Regional Offices located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
documents may also be obtained from the Public Reference Room of the Commission
at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed
rates. Information regarding the operation the Public Reference Room may be
obtained by calling the Commission at 1-800-SEC-0330. The Commission maintains a
web site (http://www.sec.gov) that contains material regarding issuers that file
electronically with the Commission. In addition, the Common Stock of the Company
is traded on the Nasdaq Smallcap Market and reports and proxy statements
concerning the Company can be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, NW, Washington, D.C.
20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company (File No.
0-6533) with the Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K, as amended by the Form 10-K/A for the fiscal
year ended December 31, 1998.
(b) The Company's Definitive Proxy Statement dated May 6, 1998 for the
Company's 1998 Annual Meeting of Stockholders.
(c) Current Reports on Form 8-K filed January 26, 1999, February 5, 1999,
and February 16, 1999, and March 15, 1999.
(d) The description of certain of the Company's Warrants to purchase Common
Stock and certain preferred stock purchase rights related to the Rights
Plan which are contained in the Company's Registration Statements on
Form 8-A filed under the Exchange Act, including any amendment or
reports filed for the purpose of updating such descriptions.
All reports and other documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of the filing of such reports or documents. Any statement
contained in a document, all or a portion of which is incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained or incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Upon written or oral request, the Company will provide without charge to each
person, including any beneficial owner, to whom this Prospectus is delivered a
copy of any or all of such documents which are incorporated herein by reference
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus incorporates).
Written or oral requests for copies should be directed to Joseph P. Hernon,
Executive Vice President and Chief Financial Officer, 31 Newbury Street, Suite
300, Boston, Massachusetts 02116, telephone number (617) 425-0200.
17
<PAGE>
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information. If anyone provides you with different or
inconsistent information, you should not rely on it. This prospectus does not
offer to sell any shares in any jurisdiction where it is unlawful. The
information in this prospectus is current as of the date shown on the cover
page.
TABLE OF CONTENTS
- -------------------
PAGE
----
- ------------------------------------------------
Risk Factors 2
- ------------------------------------------------
Use of Proceeds 9
- ------------------------------------------------
Selling Stockholders 9
- ------------------------------------------------
Plan of Distribution 12
- ------------------------------------------------
Description of Securities 14
To be registered
- ------------------------------------------------
The Company 14
- ------------------------------------------------
Available Information 16
- ------------------------------------------------
Experts 16
- ------------------------------------------------
Legal Matters 16
- ------------------------------------------------
Incorporation of Certain 17
Documents by Reference
- ------------------------------------------------
BOSTON LIFE SCIENCES, INC
1,756,433 Shares of
Common Stock
----------
PROSPECTUS
----------
March ___,1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses of the sale and
distribution of the securities being registered, all of which are being borne by
the Company.
Securities and Exchange Commission filing fee $ 5,000
------
Printing expenses 2,000
------
Legal, accounting and other professional services 5,000
------
Miscellaneous 3,000
------
Total $ 15,000
------
All of the amounts shown are estimates except for the fee payable to the
Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Delaware General Corporation Law authorizes the Company to grant indemnities
to directors and officers in terms sufficiently broad to permit indemnification
of such persons under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933.
In addition, the Company has obtained Directors' and Officers' Liability
Insurance, which insures its officers and directors against certain liabilities
such persons may incur in their capacities as officers or directors of the
Company.
Article 6 of the Company's Amended and Restated Certificate of Incorporation
provides as follows:
SIXTH: No director of the Corporation shall be personally liable to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, as the same exists or hereafter may be amended, or (iv) for any
transaction from which the director derived an improper personal benefit. If the
Delaware General Corporation Law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the Corporation, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by all of the
amounts shown are estimates except for the fee payable to the Securities and
Exchange Commission.
Article VI of the Company's Amended and Restated By-Laws provides in relevant
part as follows:
SECTION 1. The corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding 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. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalents, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which 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 reasonable cause to believe that his conduct was unlawful.
II-1
<PAGE>
SECTION 2. The corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit 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 except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
ITEM 16. EXHIBITS
The following is a list of exhibits filed as part of this Registration
Statement.
Exhibit
Number Description and Method of Filing
- ------ --------------------------------
2.1 Amended and Restated Agreement of Merger, dated as of December 29, 1994, by
and between the Company and Greenwich Pharmaceuticals Incorporated. (1)
2.2 Amendment No. 1 to Amended and Restated Agreement of Merger, dated as of
April 6, 1995, by and between the Company and Greenwich Pharmaceuticals
Incorporated. (2)
4.1 Specimen Common Stock Certificate (3)
4.2 Purchase Agreement dated February 5, 1999 between The Tail Wind Fund, Ltd.
and the Company (4)
4.3 Registration Rights Agreement dated February 5, 1999 between The Tail Wind
Fund, Ltd. and the Company (4)
4.4 Common Stock Purchase Warrant received by The Tail Wind Fund, Ltd.
(5)
4.5 Form of Common Stock Purchase Warrant received by certain selling
shareholders.(5)
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP (5)
23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in its opinion
filed as exhibit 5 hereto)
23.2 Consent of Pricewaterhouse Coopers LLP (5)
24 Power of Attorney (included on signature pages to this Registration
Statement)
__________
(1) Incorporated by reference to Greenwich's Annual Report on Form 10-K for the
year ended December 31, 1994.
(2) Incorporated by reference to the Registration Statement of Greenwich
Pharmaceuticals Incorporated on Form S-4, Registration No. 33-91106.
(3) Incorporated by reference to Boston Life Sciences, Inc.'s Registration
Statement on Form S-3 filed with the Securities and Exchange Commission,
Registration No. 33-25955
(4) Incorporated by reference to Boston Life Sciences, Inc.'s Annual Report on
Form 10-K, as amended by the Form 10K/A for the year ended
December 31, 1998.
(5) Included herein
ITEM 17. UNDERTAKINGS
A. Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the Securities
Act of 1933;
II-2
<PAGE>
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(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.
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<PAGE>
B. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration 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. REQUEST FOR ACCELERATION OF EFFECTIVE DATE
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, Commonwealth of Massachusetts, on March 26,
1999.
BOSTON LIFE SCIENCES, INC.
By: /s/ S. David Hillson
S. David Hillson
President and Chief Executive Officer
We, the undersigned directors and officers of Boston Life Sciences, Inc., do
hereby constitute and appoint each of S. David Hillson and Joseph P. Hernon each
with full power of substitution, our true and lawful attorney-in-fact and agent
to do any and all acts and things in our names and in our behalf in our
capacities stated below, which acts and things either of them may deem necessary
or advisable to enable Boston Life Sciences, Inc. to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically, but not limited to, power and authority to
sign for any or all of us in our names, in the capacities stated below, any and
all amendments (including post-effective amendments) hereto; and we do hereby
ratify and confirm all that they shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement on Form S-3 has been signed by the following persons in the capacities
and on the dates indicated.
Signature Title Date
- ------------------------ ---------------------------------- --------------
/s/ S. David Hillson President and Chief Executive March 26, 1999
- ------------------------ Officer and Director (Principal
S. David Hillson Executive Officer)
/s/ Marc E. Lanser Director, Executive Vice President March 26, 1999
- ------------------------ and Chief Scientific Officer
Marc E. Lanser, M.D.
/s/ Joseph P. Hernon Vice President and Chief Financial March 26, 1999
- ------------------------ Officer (Principal Financial and
Joseph P. Hernon Accounting Officer)
/s/ Colin B. Bier Director March 26, 1999
- ------------------------
Colin B. Bier, Ph.D.
/s/ Edson D. de Castro Director and Chairman March 26, 1999
- ------------------------
Edson D. de Castro
/s/ Adrian M. Gerber Director March 26, 1999
- ------------------------
Adrian Gerber
II-5
<PAGE>
Signature Title Date
- -------------------------- ---------------------------------- --------------
/s/ Ira W. Lieberman Director March 26, 1999
- --------------------------
Ira W. Lieberman, Ph.D.
/s/ E. Christopher Palmer Director March 26, 1999
- --------------------------
E. Christopher Palmer, CPA
Exhibit
Number Description and Method of Filing
- ------ --------------------------------
2.1 Amended and Restated Agreement of Merger, dated as of December 29, 1994, by
and between the Company and Greenwich Pharmaceuticals Incorporated. (1)
2.2 Amendment No. 1 to Amended and Restated Agreement of Merger, dated as of
April 6, 1995, by and between the Company and Greenwich Pharmaceuticals
Incorporated. (2)
4.1 Specimen Common Stock Certificate (3)
4.2 Purchase Agreement dated February 5, 1999 between The Tail Wind Fund, Ltd.
and the Company (4)
4.3 Registration Rights Agreement dated February 5, 1999 between The Tail Wind
Fund, Ltd. and the Company (4)
4.4 Common Stock Purchase Warrant received by The Tail Wind Fund, Ltd. (5)
4.5 Form of Common Stock Purchase Warrant received by certain selling
shareholders.(5)
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP (5)
23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in its opinion
filed as exhibit 5 hereto)
23.2 Consent of Pricewaterhouse Coopers LLP (5)
24 Power of Attorney (included on signature pages to this Registration
Statement)
__________
(1) Incorporated by reference to Greenwich's Annual Report on Form 10-K for the
year ended December 31, 1994.
(2) Incorporated by reference to the Registration Statement of Greenwich
Pharmaceuticals Incorporated on Form S-4, Registration No. 33-91106.
(3) Incorporated by reference to Boston Life Sciences, Inc.'s Registration
Statement on Form S-3 filed with the Securities and Exchange Commission,
Registration No. 33-25955
(4) Incorporated by reference to Boston Life Sciences, Inc.'s Annual Report on
Form 10-K, as amended by the Form 10K/A for the year ended
December 31, 1998.
(5) Included herein
II-6
<PAGE>
EXHIBIT 4.4
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR
TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE ACT WHICH
HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (ii)
PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE ACT BUT ONLY UPON A
HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE
COMPANY, OR OTHER COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, THAT THE
PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE ACT AS
WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR STATE SECURITIES LAW.
BOSTON LIFE SCIENCES, INC.
Warrant for the Purchase of Shares of
-------------------------------------
Common Stock
------------
NO. BLSI - J-33 97,150 SHARES
FOR VALUE RECEIVED, BOSTON LIFE SCIENCES, INC., A Delaware corporation (the
"COMPANY"), hereby certifies that The Tail Wind Fund, Ltd. or its permitted
assigns, is entitled to purchase from the Company, at any time or from time to
time commencing on February 5, 1999 (the "Initial Exercise Date") and prior to
5:00 P. M., New York City time, on February 10, 2004 (the "Termination Date"),
97,150 fully paid and non-assessable shares of the Common Stock, $.01 par value
per share, of the Company for an aggregate purchase price of $467,291.50
computed on the basis of $4.810 per share [equal to the Closing Bid Price for
the Common Stock on the NASDAQ Stock Market on the Trading Day prior to the
closing date]. (Hereinafter, (i) said Common Stock, together with any other
equity securities which may be issued by the Company with respect thereto or in
substitution therefor, is referred to as the "COMMON STOCK", (ii) the shares of
the Common Stock purchasable hereunder or under any other Warrant (as
hereinafter defined) are referred to as the "WARRANT SHARES", (iii) the
aggregate purchase price payable for the Warrant Shares hereunder is referred to
as the "AGGREGATE WARRANT PRICE", (iv) the price payable for each of the Warrant
Shares hereunder is referred to as the "PER SHARE WARRANT PRICE", (v) this
Warrant, all similar Warrants issued on the date hereof and all warrants
hereafter issued in exchange or substitution for this Warrant or such similar
Warrants are referred to as the "WARRANTS" and (vi) the holder of this Warrant
is referred to as the "HOLDER" and the holder of this Warrant and all other
Warrants or Warrant Shares issued upon the exercise of any Warrant are referred
to as the "HOLDERS"). The Per Share Warrant Price and the number of Warrant
Shares purchasable on exercise of this Warrant shall be subject to adjustment as
hereinafter provided.
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<PAGE>
1. EXERCISE OF WARRANT
-------------------
(a) This Warrant may be exercised, in whole at any time or in part
from time to time, commencing on the Initial Exercise Date and prior to 5:00
P.M. New York City time, on the Termination Date by the holder by the surrender
of this Warrant (with the subscription form at the end hereof duly executed) at
the address set forth in Subsection 9(a) hereof, together with proper payment of
the Aggregate Warrant Price, or the proportionate part thereof if this Warrant
is exercised in part, with payment for Warrant Shares made by certified or
official bank check payable to the order of the Company; or
(b) If this Warrant is exercised in part, this Warrant must be
exercised for a number of whole shares of the Common Stock and the Holder is
entitled to receive a new Warrant covering the Warrant Shares which have not
been exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon surrender of this Warrant, the
Company will (i) within a reasonable time but not longer than five (5) business
days issue a certificate or certificates in the name of the Holder for the
largest number of whole shares of the Common Stock to which the Holder shall be
entitled and, if this Warrant is exercised in whole, in lieu of any fractional
share of the Common Stock to which the Holder shall be entitled, pay to the
Holder cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, if any, or the proportionate part
thereof if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.
2. RESERVATION OF WARRANT SHARES; LISTING. The Company agrees that,
--------------------------------------
prior to the expiration of this Warrant, the Company will at all times (a) have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock and
other securities and properties as from time to time shall be receivable upon
the exercise of this Warrant, free and clear of all restrictions on sale or
transfer, except for the restrictions on sale or transfer set forth in the
Securities Act of 1933, as amended (the "ACT"), and restrictions created by or
on behalf of the Holder, and free and clear of all preemptive rights and rights
of first refusal; and (b) if the Company prepares and files a registration
statement covering the shares of Common Stock issued or issuable upon exercise
of this Warrant with the Securities and Exchange Commission (the "SEC") which
registration statement is declared effective by the SEC under the Act and the
Company lists its Common Stock on any national securities exchange, it will use
its best efforts to cause the shares of Common Stock subject to this Warrant to
be listed on such exchange.
3. PROTECTION AGAINST DILUTION.
---------------------------
(a) If, at any time or from time to time after the date of the
Warrant, the Company shall issue or distribute to the holders of shares of
Common Stock evidence of its indebtedness, any other securities of the Company
or any cash property or other assets (excluding a subdivision, combination or
reclassification, or dividend or distribution payable in shares of Common Stock,
referred to in Subsection 3(b), and also excluding cash dividends or cash
distributions paid out of net profits legally available therefor in the full
amount thereof, together with the value of other dividends and distributions
made substantially concurrently therewith or pursuant to a plan which includes
payment thereof, which is equivalent to not more than 5% of the Company's net
worth) (any such non-excluded event being herein called a "SPECIAL DIVIDEND"),
the Per Share Warrant Price shall be adjusted by multiplying the Per Share
Warrant Price then in effect by a fraction, the numerator of which shall be the
then current Market Price of the Common Stock less the fair market value (as
determined in good faith by the
2
<PAGE>
Company's Board of Directors) of the evidence of indebtedness, cash, securities
or property, or other assets issued or distributed in such Special Dividend
applicable to one share of Common Stock and the denominator of which shall be
the then current Market Price of the Common Stock. An adjustment made pursuant
to this Subsection 3(a) shall become effective immediately after the record date
of any such Special Dividend.
(b) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
or (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, the Per Share Warrant Price shall be adjusted to be equal
to a fraction, the numerator of which shall be the Aggregate Warrant Price and
the denominator of which shall be the number of shares of Common Stock or other
capital stock of the Company which he would have owned immediately following
such action had such Warrant been exercised immediately prior thereto. An
adjustment made pursuant to this Subsection 3(b) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(c) No adjustment in the Per Share Warrant Price shall be required in
the case of the issuance by the Company of (a) Common Stock pursuant to the
exercise of any Warrant, (b) options or warrants to purchase Common Stock
(including the exercise thereof) issued or sold to employees, officers or
directors of or consultants and advisers to the Company or any subsidiary
thereof, and (c) shares of Common Stock issued or sold pursuant to stock
purchase or stock option plans or other similar arrangements that are approved
by the Company's Board of Directors.
(d) In case of any capital reorganization or reclassification, or any
consolidation or merger to which the Company is a party other than a merger or
consolidation in which the Company is the continuing corporation, or in case of
any sale or conveyance to another entity of the property of the Company as an
entirety or substantially as an entirety, or in the case of any statutory
exchange of securities with another corporation (including any exchange effected
in connection with a merger of a third corporation into the Company), the Holder
of this Warrant shall have the right thereafter to receive on the exercise of
this Warrant the kind and amount of securities, cash or other property which the
Holder would have owned or have been entitled to receive immediately after such
reorganization, reclassification, consolidation, merger, statutory exchange,
sale or conveyance had this Warrant been exercised immediately prior to the
effective date of such reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance and in any such case, if necessary,
appropriate adjustment shall be made in the application of the provisions set
forth in this Section 3 with respect to the rights and interests thereafter of
the Holder of this Warrant to the end that the provisions set forth in this
Section 3 shall thereafter correspondingly be made applicable, as nearly as may
reasonably be, in relation to any shares or other securities or property
thereafter deliverable on the exercise of this Warrant. The above provisions of
this Subsection 3(d) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, statutory exchanges, sales or
conveyances. The issuer of any shares of stock or other securities or property
thereafter deliverable on the exercise of this Warrant shall be responsible for
all of the agreements and obligations of the Company hereunder. Notice of any
such reorganization, reclassification, consolidation, merger, statutory
exchange, sale or conveyance and of said provisions so proposed to be made,
shall be mailed to the Holders of the Warrants not less than 30 days prior to
such event. A sale of all or substantially all of the assets of the Company for
a
3
<PAGE>
consideration consisting primarily of securities shall be deemed a consolidation
or merger for the foregoing purposes.
(e) In case any event shall occur as to which the other provisions of
this Section 3 are not strictly applicable but as to which the failure to make
any adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof then, in
each such case, the Holders of Warrants representing the right to purchase a
majority of the Warrant Shares subject to all outstanding Warrants may appoint a
firm of independent public accountants of recognized national standing
reasonably acceptable to the Company, which shall give their opinion as to the
adjustment, if any, on a basis consistent with the essential intent and
principles established herein, necessary to preserve the purchase rights
represented by the Warrants. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to the Holder of this Warrant and shall make the
adjustments described therein. The fees and expenses of such independent public
accountants shall be borne by the Company.
(f) If and whenever an adjustment to the Purchase Price of the Shares
is made pursuant to Section 7.1 of the Purchase Agreement, then the Per Share
Warrant Price shall be adjusted downward to equal such lower price.
(g) No adjustment in the Per Share Warrant Price shall be required
unless such adjustment would require an increase or decrease of at least $0.05
per share of Common Stock; provided, however, that any adjustments which by
-------- -------
reason of this Subsection 3(g) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment; provided, further,
-------- --------
however, that adjustments shall be required and made in accordance with the
provisions of this Section 3 (other than this Subsection 3(g)) not later than
such times as may be required in order to preserve the tax-free nature of a
distribution to the Holder of this Warrant or Common Stock issuable upon the
exercise hereof. All calculations under this section 3 shall be made to the
nearest cent or to the nearest 1/100th of share, as the case may be. Anything
in this Section 3 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Per Share Warrant Price, in addition to those
required by this Section 3, as it in its discretion shall deem to be advisable
in order that any stock dividend, subdivision of shares or distribution of
rights to purchase stock or securities convertible or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
(h) If the Board of Directors of the Company shall declare any
dividend or other distribution with respect to the Common Stock other than a
cash distribution out of earned surplus, the Company shall mail notice thereof
to the Holders of the Warrants not less than 15 days prior to the record date
fixed for determining stockholders entitled to participate in such dividend or
other distribution.
(i) If, as a result of an adjustment made pursuant to this Section 3,
the Holder of any Warrant thereafter surrendered for exercise shall become
entitled to receive shares of two or more classes of capital stock or shares of
Common Stock and other capital stock of the Company, the Board of Directors
(whose reasonable determination shall be conclusive and shall be described in a
written notice to the Holder of any Warrant promptly after such adjustment)
shall determine the allocation of the adjusted Per Share Warrant Price between
or among shares or such classes of capital stock or shares of Common Stock and
other capital stock.
4. FULLY PAID STOCK; TAXES. The Company agrees that the shares of the
-----------------------
Common Stock represented by each and every certificate of Warrant Shares
delivered on the exercise of this Warrant will be validly issued and
outstanding, fully paid and nonassessable, and not subject
4
<PAGE>
to preemptive rights or rights of first refusal, and the Company will take all
such actions as may be necessary to assure that the par value or stated value,
if any, per share of the Common Stock is at all times equal to or less than the
then Per Share Warrant Price. The Company further covenants and agrees that it
will pay, when due and payable, any and all Federal and State stamp, original
issue or similar taxes which may be payable in respect of the issue of any
Warrant Share or any certificate thereof.
5. REGISTRATION UNDER SECURITIES ACT OF 1933. The initial holder of this
-----------------------------------------
Warrant is entitled to the benefit of certain registration rights in respect of
the Warrant Shares as provided in the Registration Rights Agreement dated as of
February 5, 1999.
6. LIMITED TRANSFERABILITY. This Warrant may not be sold, transferred,
-----------------------
assigned or hypothecated by the Holder (a) except in compliance with the
provisions of the Act and the applicable state securities "blue sky" laws, and
(b) until the first anniversary hereof except (i) to any successor firm or
corporation of The Tail Wind Fund, Ltd., (ii) to any of the officers or
employees of The Tail Wind Fund, Ltd., or any such successor firm or (iii) in
the case of an individual, pursuant to such individual's last will and testament
or the laws of descent and distribution, and is so transferable only upon the
books of the Company which it shall cause to be maintained for such purpose. The
Company may treat the registered Holder of this Warrant as he or it appears on
the Company's books at any time as the Holder for all purposes. The Company
shall permit any Holder of a Warrant or his duly authorized attorney, upon
written request during ordinary business hours, to inspect and copy or make
extracts from its books showing the registered holders of Warrants. All warrants
issued upon the transfer or assignment of this Warrant will be dated the same
date as this Warrant, and all rights of the holder thereof shall be identical to
those of the Holder.
7. LOSS, ETC., OF WARRANT. Upon receipt of evidence reasonably
----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to the Company, if lost,
stolen or destroyed, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver to the Holder a new Warrant of
like date, tenor and denomination.
8. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided herein,
------------------------------
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a stockholder, prior
to the exercise hereof.
9. COMMUNICATION. No notice or other communication under this Warrant
-------------
shall be effective unless, but any notice or other communication shall be
effective and shall be deemed to have been given if, the same is in writing and
is mailed by first-class mail, postage prepaid, addressed to:
(a) The Company at 31 Newbury Street, Suite 300, Boston, MA 02116 or
other address as the Company has designated in writing to the Holder, or
(b) the Holder at The Tail Wind Fund, Ltd., European American
Securities, Inc., One Reagent Street, 4/th/ Floor, London, SW1Y 4NS, England
Attn: Mr. David Crook and The Tail Wind Fund, Ltd., Windermere House, 404 East
Bay Street, PO Box SS-5539, Nassau, Bahamas Attn: J. McCarroll or other such
address as the Holder has designated in writing to the Company.
5
<PAGE>
10. HEADINGS. The headings of this Warrant have been inserted as a matter
--------
of convenience and shall not affect the construction hereof.
11. APPLICABLE LAW. This Warrant shall be governed by and construed in
--------------
accordance with the law of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
President and attested to by its Secretary on the dates indicated below.
BOSTON LIFE SCIENCES, INC.
By: /s/ David Hillson
-----------------------
David Hillson
President
Date: February 5, 1999
----------------------
ATTEST:
/s/ Joseph Hernon
- -------------------------
Secretary
Date: February 5, 1999
--------------------
6
<PAGE>
SUBSCRIPTION
------------
The undersigned, _______________________, pursuant to the provisions
of the foregoing Warrant, hereby agrees to Subscribe for and purchase __________
shares of the Common Stock, par value $.01 per share, of Boston Life Sciences,
Inc. covered by said Warrant, and makes payment therefor in full at the price
per share provided by said Warrant.
Dated:__________________ Signature:____________________________
Address: ____________________________
____________________________
ASSIGNMENT
----------
FOR VALUE RECEIVED______________ hereby sells, assigns and transfers
unto ______________________the foregoing Warrant and all right evidenced
thereby, and does irrevocably constitute and appoint __________________________,
attorney, to transfer said Warrant on the books of Boston Life Sciences, Inc.
Dated:__________________ Signature:____________________________
Address: ____________________________
____________________________
PARTIAL ASSIGNMENT
------------------
FOR VALUE RECEIVED __________________ hereby assigns and transfers
unto ________________________ the right to purchase ___________ shares of the
Common Stock, par value $.01 per share, of Boston Life Sciences, Inc. covered by
the foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced thereby, and does irrevocably constitute and appoint ________________,
attorney, to transfer that part of said Warrant on the books of Boston Life
Sciences, Inc.
Dated:__________________ Signature:____________________________
Address: ____________________________
____________________________
7
<PAGE>
EXHIBIT 4.5
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO
APPLICABLE STATE SECURITIES LAWS.
BOSTON LIFE SCIENCES, INC.
Warrant for the Purchase of Shares of
--------------------------------------
Common Stock
------------
NO. BLSI - [INSERT NUMBER] [INSERT NUMBER] SHARES
FOR VALUE RECEIVED, BOSTON LIFE SCIENCES, INC., A Delaware corporation (the
"COMPANY"), hereby certifies that [INSERT NAME] or his permitted assigns, is
entitled to purchase from the Company, at any time or from time to time
commencing on [insert date] (the "Initial Exercise Date") and prior to 5:00
P. M., New York City time, on [insert date] (the "Termination Date"), [INSERT
NUMBER] fully paid and non-assessable shares of the Common Stock, $.01 par value
per share, of the Company for an aggregate purchase price of [insert price]
computed on the basis of [insert price] per share. (Hereinafter, (i) said Common
Stock, together with any other equity securities which may be issued by the
Company with respect thereto or in substitution therefor, is referred to as the
"COMMON STOCK", (ii) the shares of the Common Stock purchasable hereunder or
under any other Warrant (as hereinafter defined) are referred to as the "WARRANT
SHARES", (iii) the aggregate purchase price payable for the Warrant Shares
hereunder is referred to as the "AGGREGATE WARRANT PRICE", (iv) the price
payable for each of the Warrant Shares hereunder is referred to as the "PER
SHARE WARRANT PRICE", (v) this Warrant, all similar Warrants issued on the date
hereof and all warrants hereafter issued in exchange or substitution for this
Warrant or such similar Warrants are referred to as the "WARRANTS" and (vi) the
holder of this Warrant is referred to as the "HOLDER" and the holder of this
Warrant and all other Warrants or Warrant Shares issued upon the exercise of any
Warrant are referred to as the "HOLDERS"). The Aggregate Warrant Price is not
subject to adjustment. The Per Share Warrant Price is subject to adjustment as
hereinafter provided; in the event of any such adjustment, the number of Warrant
Shares shall be adjusted by dividing the Aggregate Warrant Price by the Per
Share Warrant Price in effect immediately after such adjustment.
<PAGE>
1. EXERCISE OF WARRANT
-------------------
(a) This Warrant may be exercised, in whole at any time or in part
from time to time, commencing on the Initial Exercise Date and prior to 5:00
P.M. New York City time, on the Termination Date by the holder by the surrender
of this Warrant (with the subscription form at the end hereof duly executed) at
the address set forth in Subsection 9(a) hereof, together with proper payment of
the Aggregate Warrant Price, or the proportionate part thereof if this Warrant
is exercised in part, with payment for Warrant Shares made by certified or
official bank check payable to the order of the Company.
(b) If this Warrant is exercised in part, this Warrant must be
exercised for a number of whole shares of the Common Stock and the Holder is
entitled to receive a new Warrant covering the Warrant Shares which have not
been exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon surrender of this Warrant, the
Company will (i) issue a certificate or certificates in the name of the Holder
for the largest number of whole shares of the Common Stock to which the Holder
shall be entitled and, if this Warrant is exercised in whole, in lieu of any
fractional share of the Common Stock to which the Holder shall be entitled, pay
to the Holder cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, if any, or the proportionate part
thereof if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.
2. RESERVATION OF WARRANT SHARES; LISTING. The Company agrees that,
--------------------------------------
prior to the expiration of this Warrant, the Company will at all times (a) have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock and
other securities and properties as from time to time shall be receivable upon
the exercise of this Warrant, free and clear of all restrictions on sale or
transfer, except for the restrictions on sale or transfer set forth in the
Securities Act of 1933, as amended (the "ACT"), and restrictions created by or
on behalf of the Holder, and free and clear of all preemptive rights and rights
of first refusal; and (b) if the Company prepares and files a registration
statement covering the shares of Common Stock issued or issuable upon exercise
of this Warrant with the Securities and Exchange Commission (the "SEC") which
registration statement is declared effective by the SEC under the Act and the
Company lists its Common Stock on any national securities exchange, it will use
its best efforts to cause the shares of Common Stock subject to this Warrant to
be listed on such exchange.
3. PROTECTION AGAINST DILUTION.
---------------------------
(a) If, at any time or from time to time after the date of the
Warrant, the Company shall issue or distribute to the holders of shares of
Common Stock evidence of its indebtedness, any other securities of the Company
or any cash property or other assets (excluding a subdivision, combination or
reclassification, or dividend or distribution payable in shares of Common Stock,
referred to in Subsection 3(b), and also excluding cash dividends or cash
distributions paid out of net profits legally available therefor in the full
amount thereof, together with the value of other dividends and distributions
made substantially concurrently therewith or pursuant to a plan which includes
payment thereof, which is equivalent to not more than 5% of the Company's net
worth) (any such non-excluded event being herein called a "SPECIAL DIVIDEND"),
the Per Share Warrant Price shall be adjusted by multiplying the Per Share
Warrant Price then in effect by a fraction, the numerator of which shall be the
then current Market Price of the Common Stock less the fair market value (as
determined in good faith by the Company's Board of Directors) of the evidence of
indebtedness, cash, securities or property, or other assets
2
<PAGE>
issued or distributed in such Special Dividend applicable to one share of Common
Stock and the denominator of which shall be the then current Market Price of the
Common Stock. An adjustment made pursuant to this Subsection 3(a) shall become
effective immediately after the record date of any such Special Dividend.
(b) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a great number of shares, (iii) combine
its outstanding shares of Common Stock into a smaller number of shares or (iv)
issue by reclassification of its Common Stock any shares of capital stock of
the Company, the Per Share Warrant Price shall be adjusted to be equal to a
fraction, the numerator of which shall be the Aggregate Warrant Price and the
denominator of which shall be the number of shares of Common Stock or other
capital stock of the Company which he would have owned immediately following
such action had such Warrant been exercised immediately prior thereto. An
adjustment made pursuant to this Subsection 3(b) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(c) Except as provided in Subsections 3(a) and 3(d), in case the
Company shall hereafter issue or sell any Common Stock, any securities
convertible into Common Stock, or any rights, options or warrants to purchase
Common Stock or any securities convertible into Common Stock, in each case for a
price per share or entitling the holders thereof to purchase Common Stock at a
price per share (determined by dividing (i) the total amount, if any, received
or receivable by the Company in consideration of the issuance or sale of such
securities plus the total consideration, if any, payable to the Company upon
exercise or conversion thereof (the "TOTAL CONSIDERATION") by (ii) the number of
additional shares of Common Stock issuable upon exercise or conversion of such
securities) less than the then current Per Share Warrant Price in effect on the
date of such issuance or sale, the Per Share Warrant Price shall be adjusted as
of the date of such issuance or sale so that the same shall equal the price
determined by dividing (i) the sum of (A) the number of shares of Common Stock
outstanding on the date of such issuance or sale multiplied by the Per Share
Warrant Price plus (B) the Total Consideration by (ii) the number of shares of
Common Stock outstanding on the date of such issuance or sale plus the maximum
number of additional shares of Common Stock issuable upon exercise or conversion
of such securities.
(d) No adjustment in the Per Share Warrant Price shall be required in
the case of the issuance by the Company of (a) Common Stock pursuant to the
exercise of any Warrant, (b) options or warrants to purchase Common Stock
(including the exercise thereof) issued or sold to employees, officers or
directors of or consultants and advisers to the Company or any subsidiary
thereof, and (c) shares of Common Stock issued or sold pursuant to stock
purchase or stock option plans or other similar arrangements that are approved
by the Company's Board of Directors.
(e) In case of any capital reorganization or reclassification, or any
consolidation or merger to which the Company is a party other than a merger or
consolidation in which the Company is the continuing corporation, or in case of
any sale or conveyance to another entity of the property of the Company as an
entirety or substantially as an entirety, or in the case of any statutory
exchange of securities with another corporation (including any exchange effected
in connection with a merger of a third corporation into the Company), the Holder
of this Warrant shall have the right thereafter to receive on the exercise of
this Warrant the kind and amount of securities, cash or other property which the
Holder would have owned or have been entitled to receive immediately after such
reorganization, reclassification, consolidation, merger, statutory
3
<PAGE>
exchange, sale or conveyance had this Warrant been exercised immediately prior
to the effective date of such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance and in any such case, if
necessary, appropriate adjustment shall be made in the application of the
provisions set forth in this Section 3 with respect to the rights and interests
thereafter of the Holder of this Warrant to the end that the provisions set
forth in this Section 3 shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares or other securities or
property thereafter deliverable on the exercise of this Warrant. The above
provisions of this Subsection 3(e) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, statutory
exchanges, sales or conveyances. The issuer of any shares of stock or other
securities or property thereafter deliverable on the exercise of this Warrant
shall be responsible for all of the agreements and obligations of the Company
hereunder. Notice of any such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance and of said provisions so
proposed to be made, shall be mailed to the Holders of the Warrants not less
than 30 days prior to such event. A sale of all or substantially all of the
assets of the Company for a consideration consisting primarily of securities
shall be deemed a consolidation or merger for the foregoing purposes.
(f) In case any event shall occur as to which the other provisions of
this Section 3 are not strictly applicable but as to which the failure to make
any adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof then, in
each such case, the Holders of Warrants representing the right to purchase a
majority of the Warrant Shares subject to all outstanding Warrants may appoint a
firm of independent public accountants of recognized national standing
reasonably acceptable to the Company, which shall give their opinion as to the
adjustment, if any, on a basis consistent with the essential intent and
principles established herein, necessary to preserve the purchase rights
represented by the Warrants. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to the Holder of this Warrant and shall make the
adjustments described therein. The fees and expenses of such independent public
accountants shall be borne by the Company.
(g) No adjustment in the Per Share Warranty Price shall be required
unless such adjustment would require an increase or decrease of at least $0.05
per share of Common Stock; provided, however, that any adjustments which by
-------- -------
reason of this Subsection 3(g) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment; provided, further,
-------- -------
however, that adjustments shall be required and made in accordance with the
provisions of this Section 3 (other than this Subsection 3(g)) not later than
such times as may be required in order to preserve the tax-free nature of a
distribution to the Holder of this Warrant or Common Stock issuable upon the
exercise hereof. All calculations under this section 3 shall be made to the
nearest cent or to the nearest 1/100th of share, as the case may be. Anything
in this Section 3 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Per Share Warrant Price, in addition to those
required by this Section 3, as it in its discretion shall deem to be advisable
in order that any stock dividend, subdivision of shares or distribution of
rights to purchase stock or securities convertible or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
4
<PAGE>
(h) Whenever the Per Share Warrant Price is adjusted as provided in
this Section 3 and upon any modification of the rights of a Holder of Warrants
in accordance with this Section 3, the Company shall promptly obtain, at its
expense, a certificate of a firm of independent public accountants of recognized
standing selected by the Board of Directors (who may be the regular auditors of
the Company) setting forth the Per Share Warrant Price and the number of Warrant
Shares after such adjustment or the effect of such modification, a brief
statement of the facts requiring such adjustment or modification and the manner
of computing the same and cause copies of such certificate to be mailed to the
Holders of the Warrants.
(i) If the Board of Directors of the Company shall declare any
dividend or other distribution with respect to the Common Stock other than a
cash distribution out of earned surplus, the Company shall mail notice thereof
to the Holders of the Warrants not less than 15 days prior to the record date
fixed for determining stockholders entitled to participate in such dividend or
other distribution.
(j) If, as a result of an adjustment made pursuant to this Section 3,
the Holder of any Warrant thereafter surrendered for exercise shall become
entitled to receive shares of two or more classes of capital stock or shares of
Common Stock and other capital stock of the Company, the Board of Directors
(whose determination shall be conclusive and shall be described in a written
notice to the Holder of any Warrant promptly after such adjustment) shall
determine the allocation of the adjusted Per Share Warrant Price between or
among shares or such classes of capital stock or shares of Common Stock and
other capital stock.
4. FULLY PAID STOCK; TAXES. The Company agrees that the shares of the
-----------------------
Common Stock represented by each and every certificate of Warrant Shares
delivered on the exercise of this Warrant be validly issued and outstanding,
fully paid and nonassessable, and not subject to preemptive rights or rights of
first refusal, and the Company will take all such actions as may be necessary to
assure that the par value or stated value, if any, per share of the Common Stock
is at all times equal to or less than the then Per Share Warrant Price. The
Company further covenants and agrees that it will pay, when due and payable, any
and all Federal and State stamp, original issue or similar taxes which may be
payable in respect of the issue of any Warrant Share or any certificate thereof.
5. REGISTRATION UNDER SECURITIES ACT OF 1933.
-----------------------------------------
(a) The Company agrees that if, at any time during the period
commencing on the date hereof and ending on the Termination Date, the Holder
and/or the Holders of any other Warrants and Warrant Shares which have not
previously been registered under the Act or which are not freely transferable
without registration under the Act due to the lapse of time or otherwise and who
or which shall hold greater than 50% of the Warrant Shares issued or is issuable
upon the exercise of the Warrants, shall request that the Company file a
registration statement under the Act covering not less than 50% of the shares of
the Warrant Shares issued or issuable upon the exercise of the Warrants, the
Company will (i) promptly notify each Holder of the Warrants and each holder of
Warrant Shares that such registration statement will be filed and that the
Warrant Shares which are then held, and/or may be acquired upon exercise of the
Warrants by the Holder and such holders will be included in such registration
statement at the Holder's and such holders' request, (ii) cause such
registration statement to cover all such Warrant Shares which it has been so
requested to include, (iii) use its best efforts to cause such registration
statement to become effective as soon as practicable and (iv) take all other
action necessary under any Federal or state law or regulation of any
governmental authority to permit all such Common Stock which it has been so
requested to include in such registration statement to be sold or otherwise
disposed of, and will use its best efforts to maintain such compliance with
5
<PAGE>
each such Federal and state law and regulation of any governmental authority for
the period necessary for such Holders to effect the proposed sale of other
disposition; provided, however, that such period and the period during which the
Company is required to keep the registration statement effective in connection
with this Section 5(a) shall not exceed the earlier of (A) 120 days from the
date of effectiveness of such registration statement under the Act and (B) the
date upon which the Holders have completed the sale or other disposition of the
Warrant Shares. The Company shall be required to effect a registration or
qualification pursuant to this Subsection 5(a) on one occasion only.
(b) The Company agrees that if, at any time and from time to time
during the period commencing on the date hereof and ending on the Termination
Date, the Board of Directors of the Company shall authorize the filing of a
registration statement under the Act (other than the initial public offering of
the Company's Common Stock and otherwise than pursuant to Subsection 5(a)
hereof, or other than a registration statement on Form S-8, S-4 or other form
which does not include substantially the same information as would be required
in a form for the general registration of securities) in connection with the
proposed offer of any of its securities by it or any of its stockholders, the
Company will (i) promptly notify each Holder of the Warrants and each holder of
Warrant Shares that such registration statement will be filed and that the
Warrant Shares which are then held, and/or may be acquired upon exercise of the
Warrants by the Holder and such holders will be included in such registration
statement at the Holder's and such holders' request, (ii) cause such
registration statement to cover all of such Common Stock which it has been so
requested to include, (iii) use its best efforts to cause such registration
statement to become effective as soon as practicable and (iv) take all other
action necessary under any Federal or state law or regulation of any
governmental authority to permit all such Common Stock which it has been so
requested to include in such registration statement to be sold or otherwise
disposed of, and will use its best efforts to maintain such compliance with each
such Federal and state law and regulation of any governmental authority for the
period necessary for the Holder and such Holders to effect the proposed sale or
other disposition; provided, however, that such period and the period during
which the Company is required to keep the registration statement effective in
connection with this Section 5(b) shall not exceed the earlier of (A) 120 days
from the date of effectiveness of such registration statement under the Act and
(B) the date upon which the Holders have completed the sale or other disposition
of the Warrant Shares; provided, further, however that such period shall be
extended for a period of time, not to exceed 120 days, equal to the period the
Holders refrain from selling or disposing of any Warrant Shares in such
registration at the request of the underwriter.
(c) Whenever the Company is required pursuant to the provisions of
this Section 5 to include in a registration statement Warrant Shares, the
Company shall (i) furnish each Holder of any such Warrant Shares and each
underwriter of such Common Stock with such copies of the prospectus, including
the preliminary prospectus, conforming to the Act (and such other documents as
each such Holder or each such underwriter may reasonably request) in order to
facilitate the sale or distribution of such Common Stock, (ii) use its best
efforts to register or qualify such Common Stock under the blue sky laws (to the
extent applicable) of such jurisdiction or laws (to the extent applicable) of
such jurisdiction or jurisdictions as the Holders of any Common Stock and each
underwriter of such Common Stock being sold by such Holders shall reasonably
request and (iii) take such other actions as may be reasonably necessary or
advisable to enable such Holders and such underwriters to consummate the sale or
distribution in such jurisdiction or jurisdictions in which such Holders shall
have reasonably requested that such Common Stock be sold; provided, however that
the foregoing "piggyback" registration right shall be subject to the cutback in
the sole discretion of the underwriter for the Company.
6
<PAGE>
(d) The Company shall pay all expenses incurred in connection with any
registration statement or other action pursuant to the provision of this Section
5, other than underwriting discounts and applicable transfer taxes relating to
the Warrant Shares.
(e) The Company will indemnify the holders of Warrant Shares which are
included in each registration statement referred to in Subsection 5(a) and 5(b),
and the underwriters of such Common Stock, substantially to the same extent as
is customary for indemnification and contribution provisions in favor or
underwriters and selling shareholders of similar offerings, and such Holders
will indemnify the Company (and the underwriters, if applicable) with respect to
information furnished by them in writing to the Company for inclusion therein
substantially to the same extent as the underwriters indemnify the Company.
(f) If the Company shall at any time have completed a public offering
of shares of its Common Stock, it shall thereafter take such steps as may be
necessary to register it's Common Stock, as the case may be, under Section 12 of
the Securities Exchange Act of 1934, as amended, use its best efforts to
maintain such status, and to file with the Securities and Exchange Commission
all current reports and the information as may be necessary to enable the Holder
to effect sales of its shares in reliance upon Rule 144 promulgated under the
Act.
6. LIMITED TRANSFERABILITY. This Warrant may not be sold, transferred,
------------------------
assigned or hypothecated by the Holder (a) except in compliance with the
provisions of the Act and the applicable state securities "blue sky" laws, and
(b) until the first anniversary hereof except (i) to any successor firm or
corporation of Paramount Capital, Inc., (ii) to any of the officers or employees
of Paramount Capital, Inc., or any such successor firm or (iii) in the case of
an individual, pursuant to such individual's last will and testament or the laws
of descent and distribution, and is so transferable only upon the books of the
Company which it shall cause to me maintained for such purpose. The Company may
treat the registered Holder of this Warrant as he or it appears on the Company's
books at any time as the Holder for all purposes. The Company shall permit any
Holder of a Warrant or his duly authorized attorney, upon written request
during ordinary business hours, to inspect and copy or make extracts from its
books showing the registered holders of Warrants. All warrants issued upon the
transfer or assignment of this Warrant will be dated the same date as this
Warrant, and all rights of the holder thereof shall be identical to those of the
Holder.
7. LOSS, ETC., OF WARRANT. Upon receipt of evidence satisfactory to the
----------------------
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
8. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided herein,
------------------------------
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a stockholder, prior
to the exercise hereof.
7
<PAGE>
9. COMMUNICATION. No notice or other communication under this Warrant
-------------
shall be effective unless, but any notice or other communication shall be
effective and shall be deemed to have been given if, the same is in writing and
is mailed by first-class mail, postage prepaid, addressed to:
(a) The Company at 31 Newbury Street, Suite 300, Boston,
Massachusetts 02116 or other address as the Company has designated in writing to
the Holder, or
(b) the Holder at [insert address] or other such address as the Holder
has designated in writing to the Company.
10. HEADINGS. The headings of this Warrant have been inserted as a matter
--------
of convenience and shall not affect the construction hereof.
11. APPLICABLE LAW. This Warrant shall be governed by and construed in
--------------
accordance with the law of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
President and attested to by its Chief Financial Officer this [insert date].
BOSTON LIFE SCIENCES, INC.
By:_______________________
Chief Executive Officer
ATTEST:
_______________________
Chief Financial Officer
8
<PAGE>
SUBSCRIPTION
------------
The undersigned, _______________________, pursuant to the provisions
of the foregoing Warrant, hereby agrees to Subscribe for and purchase
________________ shares of the Common Stock, par value $.01 per share, of Boston
Life Sciences, Inc. covered by said Warrant, and makes payment therefor in full
at the price per share provided by said Warrant.
Dated:__________________ Signature:______________________________
Address:________________________________
________________________________
ASSIGNMENT
----------
FOR VALUE RECEIVED______________ hereby sells, assigns and transfers
unto ______________________the foregoing Warrant and all right evidenced
thereby, and does irrevocably constitute and appoint ________________________,
attorney, to transfer said Warrant on the books of Boston Life Sciences, Inc.
Dated:__________________ Signature:______________________________
Address:________________________________
________________________________
PARTIAL ASSIGNMENT
------------------
FOR VALUE RECEIVED __________________ hereby assigns and transfers
unto ________________________ the right to purchase ___________ shares of the
Common Stock, par value $.01 per share, of Boston Life Sciences, Inc. covered by
the foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced thereby, and does irrevocably constitute and appoint
____________________________, attorney, to transfer that part of said Warrant on
the books of Boston Life Sciences, Inc.
Dated:__________________ Signature:______________________________
Address:________________________________
________________________________
9
<PAGE>
Exhibit 5
March 26, 1999
Boston Life Sciences, Inc.
31 Newbury Street
Suite 300
Boston, MA 02116
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as special counsel to Boston Life Sciences, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 1,756,433 shares of common stock of the Company, par value $.01
per share (the "Shares"), proposed to be sold by certain Selling Stockholders
named in the Registration Statement on Form S-3 (the "Registration Statement").
In rendering our opinion, we have reviewed and relied upon such
certificates, documents, corporate records and other instruments as in our
judgment are necessary or appropriate to enable us to render the opinion
expressed below. In giving this opinion, we are assuming the authenticity of
all instruments presented to us as originals, the conformity with the originals
of all instruments presented to us as copies and the genuineness of all
signatures.
Based on the foregoing, we are of the opinion that the Shares to be
sold by the Selling Stockholders have been duly authorized and, when duly
executed, delivered, issued and paid for, will be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement with respect to the offering of the Shares and the
reference to the firm in the section of the Registration Statement entitled
"Legal Matters."
This opinion is limited to the matters expressly stated herein. No
implied opinion may be inferred to extend this opinion beyond the matters
expressly stated herein. We do not undertake to advise you or anyone else of
any changes in the opinions expressed herein resulting from changes in law,
changes in facts or any other matters that hereafter might occur or be brought
to our attention.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Boston Life Sciences, Inc., (the "Company") on Form S-3 for 1,756,433 shares of
common stock of our report dated March 11, 1999, on our audits of the
consolidated financial statements of the Company as of December 31, 1998 and
1997, and for each of the three years in the period ended December 31, 1998,
which report is included in the Company's Annual Report on Form 10-K/A for the
year ended December 31, 1998.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 26, 1999
