As filed with the U.S. Securities and Exchange Commission on January 30, 2017September 18, 2018
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Chembio Diagnostics, Inc.
(Exact name
CHEMBIO DIAGNOSTICS, INC.
(Exact Name of registrantRegistrant as specifiedSpecified in its charter)Charter)
| Nevada | | 88-0425691 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
3661 Horseblock Road
Medford, New York 11763
(631) 924-1135
(Address, including zip code, and telephone number, including area code, of registrant'sRegistrant’s principal executive offices)
Richard J. Larkin
Neil A. Goldman
Chembio Diagnostics, Inc.
Chief Financial Officer and Executive Vice President
3661 Horseblock Road
Medford, New York 11763
(631) 924-1135
(Name,
(Name, address, including zip code, and telephone number, including area code, of agent for service)service for Registrant)
With a copy
with copies to:
| Alan L. Talesnick, Esq. David S. Lightstone, Esq. Haynes and Boone, LLP 1050 17th St., Suite 1800 Denver, Colorado 80265 (303) 382-6200
Michael M. Pritchard, Esq.
Haynes and Boone, LLP
1801 Broadway St., Suite 800
Denver, Colorado 80202
(303) 382-6200
| |
Approximate date of commencement of proposed sale to the public:From time to time after the date this registration statementRegistration Statement becomes effective, as determined by the selling stockholders.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 the dividend or interest reinvestment plans, check the following box: Rbox. ☑
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 this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of "large“large accelerated filer," "accelerated filer"” “accelerated filer,” “smaller reporting company” and "smaller reporting company"“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer ☐ | Accelerated filer ☑ | Non-accelerated filer ☐ | Smaller reporting company ☑ |
| | | |
Emerging growth company ☐ | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities
Large accelerated filerAct. ☐Accelerated filer R
Non-accelerated filer☐ (Do not check if a smaller reporting company) Smaller reporting company ☐
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered | | Amount to be Registered (1) | | | Proposed Maximum Offering Price Per Share (2) | | | Proposed Maximum Aggregate Offering Price (2) | | | Amount of Registration Fee | |
| Common Stock, par value $0.01 per share (including Preferred Share Purchase Rights) (3) | | | 291,066 | | | $ | 5.98 | | | $ | 1,740,574.68 | | | $ | 201.73 | |
Title of Each Class of Securities to be Registered(1) | | Amount to be Registered(2) | | | Proposed Maximum Price per Unit(3) | | | Proposed Maximum Aggregate Offering Price(4) | | | Amount of Registration Fee(5) | |
| Chembio Diagnostics, Inc.: | | | | | | | | | | | | | | | | |
| Common Stock (including Preferred Share Purchase Rights) (6) | | | | | | | | | | | | | | | | |
| Preferred Stock (6) | | | | | | | | | | | | | | | | |
| Warrants to purchase Common Stock (7) | | | | | | | | | | | | | | | | |
| Warrants to purchase Preferred Stock (7) | | | | | | | | | | | | | | | | |
| Units (8) | | | | | | | | | | | | | | | | |
| TOTAL: | | $ | 50,000,000 | | | | | | | $ | 50,000,000 | | | $ | 6,225 | |
| (1) | Pursuant to Rule 416 under the Securities ActAny securities registered hereunder may be sold separately or together with other securities registered hereunder as units. |
| (2) | Includes such indeterminate number of 1933, as amended, or the Securities Act, the shares of common stock, offered byshares of preferred stock, warrants to purchase common stock, warrants to purchase preferred stock and units that Chembio Diagnostics, Inc. may sell pursuant to this registration statement shall be deemed to coverRegistration Statement, which may not exceed the maximum aggregate offering price of $50,000,000. The securities registered hereunder also include such additional securities asindeterminate number of shares of common stock, preferred stock, warrants or units that may be issued as a resultupon conversion, exchange or exercise of stock splits, stock dividends or similar transactions.any of the securities being registered hereby. |
(2)(3) | Omitted pursuant to General Instruction II.D of Form S-3. The proposed maximum offering price per class of security will be determined from time to time by Chembio Diagnostics, Inc. in connection with, and at the time of, the issuance by Chembio Diagnostics, Inc. of the securities registered hereunder. |
| (4) | In no event will the aggregate initial offering price of the securities issued under this Registration Statement exceed the amount registered above or the equivalent thereof in one or more foreign currencies or currency units. |
| (5) | Estimated in accordance with Rule 457(o) solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act and based upon the average of the high and low sales prices of our common stock on The NASDAQ Stock Market on January 25, 2017.fee. |
(3) The common stock includes certain Preferred Share Purchase Rights, or the Rights, issued pursuant to the Rights Agreement dated as of March 8, 2016 between the Company and Action Stock Transfer Company, as Rights Agent, or the Rights Agreement.| (6) | Such indeterminate number of shares of common stock or preferred stock, as may be issued from time to time at indeterminate prices. The common stock includes certain Preferred Share Purchase Rights (the “Rights”) issued pursuant to the Rights Agreement dated as of March 8, 2016 (filed on Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed on March 8, 2016) (the “Rights Agreement”) between the Company and Action Stock Transfer Company, as Rights Agent. Until the occurrence of certain events specified in the Rights Agreement, none of which have occurred as of the filing of this Registration Statement, the Rights are not exercisable, are evidenced only by the certificates for common stock, and will be transferred along with and only with, and are not severable from, the common stock. The value attributable to the Rights, if any, is reflected in the market price of the common stock. No separate consideration will be payable for the Rights. |
| (7) | Warrants will represent rights to purchase common stock or preferred stock registered hereby. Because the warrants will provide a right only to purchase such securities offered hereunder, no additional registration fee is required. |
| (8) | Such indeterminate number of units, which will be comprised of two or more of the securities registered hereby in any combination. |
The Registrant hereby amends this Registration Statement the Rights are not exercisable, are evidenced only by the certificates for common stock, and will be transferred along with and only with, and are not severable from, the common stock. The value attributable to the Rights, if any, is reflected in the market price of the common stock. No separate consideration will be payable for the Rights.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrantRegistrant shall file a further amendment which specifically states that this registration statementRegistration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statementthis Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
| We will amend and complete the information in this prospectus. We may not sell any of these securities or accept your offer to buy any of them until the documentation filed with the SEC relating to these securities has been declared “effective” by the SEC. This prospectus is not an offer to sell these securities or our solicitation of your offer to buy these securities in any State or other jurisdiction where that would not be permitted or legal. |
The information in this prospectus is not complete and may be changed. The selling stockholders named in this prospectus may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 30, 2017SEPTEMBER 18, 2018
PROSPECTUS
Prospectus
291,066 Shares$50,000,000
Chembio Diagnostics, Inc.
Common Stock
Preferred Stock
Warrants
Units
The selling stockholders named in this prospectusWe may use this prospectus to offer and resell from time to time up to an aggregate of 291,066 shares of our common stock, which commonpreferred stock, includes underlying Preferred Share Purchase Rights.warrants and units. We will not receivemay also issue any of the proceeds from the sale of our common stock, bypreferred stock, warrants or units upon the selling stockholders.conversion, exchange or exercise of any of the securities listed above. The aggregate initial offering price of the securities that we offer will not exceed $50,000,000.
The selling stockholders have acquired or agreedWe will offer the securities in amounts, at prices and on terms to acquirebe determined by market conditions at the sharestime of common stock offered for resale hereunder from usthe offering. We will provide the specific terms of these securities in a private offering exempt from registration under the Securities Act of 1933, as amended, or the Securities Act, pursuantsupplements to a first Amended and Restated Stock Purchase Agreement, or the Amended Stock Purchase Agreement, as described in this prospectus. We are registering the offer and resale of the shares of our common stock to satisfy a provision in the Amended Stock Purchase Agreement pursuant to which we agreed to register the resale of the shares issued to the selling stockholders pursuant to the Amended Stock Purchase Agreement. This prospectus relates to the resale of (i) 261,959 shares of our common stock that have been issued to the selling stockholders pursuant to the Amended Stock Purchase Agreement, (ii) up to 7,277 shares of our common stock that have been issued in the names of the selling stockholders that we are holding back to satisfy certain potential claims under the Amended Stock Purchase Agreement and that will be transferred to the selling stockholders, if at all, on or after January 9, 2018 and (iii) up to 21,830 shares of our common stock that will become issuable to the selling stockholders, if at all, upon the achievement of certain performance goals. Any shares subject to resale hereunder will have been issued by us and acquired by the selling stockholders prior to any resale of such shares pursuant to this prospectus.
The selling stockholders named inYou should read this prospectus or their donees, pledgees, transferees or other successors-in-interest, may offer or reselland the shares from time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices.
The selling stockholders may resell the common stock to or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions. The selling stockholders will bear all commissions and discounts, if any, attributable to the sale of shares. We will bear all costs, expenses and fees in connection with the registration of the shares. For additional information on the methods of sale that may be used by the selling stockholders, see "Plan of Distribution" beginning on page 8 of this prospectus.accompanying prospectus supplement carefully before you invest.
Our common stock together with the associated Preferred Share Purchase Rights, is listed on The NASDAQ Stockthe Nasdaq Capital Market or NASDAQ, under the symbol "CEMI." On January 25, 2017, the last reported sale price of our common stock on NASDAQ was $5.95 per share.“CEMI.”
An investment in our common stock involves risks. See "Risk Factors" beginningWe may offer and sell these securities to or through one or more underwriters, dealers and agents, or directly to purchasers, on page 3 of this prospectus and "Risk Factors" in our most recent Annual Report on Form 10-K, which isa continuous or delayed basis.
You should refer to the risk factors included or incorporated by reference herein and that may be included in thisa prospectus supplement, and you should carefully consider that information before investing in any applicable prospectus supplement.our securities.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacydetermined that this prospectus is truthful or accuracy of this prospectus.complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2017.2018.
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FORWARD-LOOKING STATEMENTS
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RISK FACTORS
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SELLING STOCKHOLDERS
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LEGAL MATTERS
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INCORPORATION BY REFERENCE
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we have filed with the U.S. Securities and Exchange Commission, or the SEC, using a "shelf"utilizing the “shelf” registration process. The selling stockholders namedUnder this shelf process, we may sell, either separately or together, any combination of the securities described in this prospectus may resell, from time to time, in one or more offerings for cash. We may also issue any of the common stock, offered by this prospectus. Information aboutpreferred stock, warrants or units upon conversion, exchange or exercise of any of the selling stockholderssecurities mentioned above. The aggregate amount of securities that we may change over time. Whenoffer under the selling stockholdersregistration statement is $50,000,000, denominated in U.S. dollars or the equivalent in foreign currencies, currency units or composite currencies.
This prospectus provides you with a general description of the securities that we may offer. Each time we sell shares of common stock underor otherwise issue securities pursuant to this prospectus, we will if necessary and required by law, provide a prospectus supplement that will contain specific information about the offering and the specific terms of that offering. Anythe securities being offered. The prospectus supplement also may also add, to, update modify or replacechange information contained in this prospectus. If a prospectus supplement is provided and the description of the offering in the prospectus supplement varies from the information in this prospectus, you should rely on the information in the prospectus supplement. You should carefully read both this prospectus and the accompanyingapplicable prospectus supplement, iftogether with the additional information provided in any along with all offree writing prospectus or described under the heading “Where You Can Find More Information.”
The registration statement that contains this prospectus, including the exhibits to the registration statement, contains additional information incorporated by reference hereinabout us and therein, before making an investment decision.
You should rely only on the information containedsecurities offered under this prospectus. That registration statement can be read at the SEC website, our website, or incorporated by referenceat the SEC offices, which are referred to in this prospectus. prospectus under the heading “Where You Can Find More Information.”
We have not and the selling stockholders have not, authorized any other personanyone to provide you with differentany information or additional information. If anyone provides you with differentto make any representations other than those contained in this prospectus, any applicable prospectus supplement or additionalany free writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information you shouldthat others may give you. We will not rely on it. This prospectus is notmake an offer to sell nor are the selling stockholders seeking an offer to buy, the shares offered by this prospectusthese securities in any jurisdiction where the offer or sale is not permitted. No offers or sales of any of the shares of common stock are to be made in any jurisdiction in which such an offer or sale is not permitted. You should assume that the information containedappearing in this prospectus and the applicable prospectus supplement to this prospectus is accurate only as of the date on its respective cover, that the front coverinformation appearing in any applicable free writing prospectus is accurate only as of thisthe date of that free writing prospectus, orand that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, regardlessunless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus incorporates by reference, and any prospectus supplement or free writing prospectus may contain and incorporate by reference, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the time of deliveryaccuracy or completeness of this prospectusinformation and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included or any sales of the shares of common stock offered hereby.
Except where the context otherwise requires or as otherwise indicated, all referencesincorporated by reference in this prospectus, any prospectus supplement or any applicable free writing prospectus may involve estimates, assumptions and other risks and uncertainties and are subject to "Chembio,"change based on various factors, including those discussed under the "Company," "we," "us"heading “Risk Factors” contained in this prospectus, the applicable prospectus supplement and "our"any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus. Accordingly, investors should not place undue reliance on this information.
The words “we,” “our,” “us,” “and “Chembio” refer to Chembio Diagnostics, Inc. and its wholly owned subsidiary. In the discussion, unless we indicate otherwise.
Our logo is one of our common stocktrademarks. This prospectus also includes or incorporates by reference trademarks, tradenames, and related matters, these terms refer solelyservice marks that are the property of other organizations. For convenience, our logo appears in this prospectus without the ™ symbol, but those uses are not intended to Chembio Diagnostics, Inc.indicate that we will not assert, to the fullest extent under applicable law, our rights to this trademark.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated hereinany accompanying prospectus supplements contain or incorporate by reference contain forward-looking statements as defined inwithin the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. AnyThese forward-looking statements contained in this prospectus that are notrepresent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of historical fact may be forward-looking statements. When we useour beliefs concerning future events, business plans, objectives, expected operating results and the words "intends," "estimates," "predicts," "potential," "continues," "anticipates," "plans," "expects," "believes," "should," "could," "may," "will" or the negative of these terms or other comparable terminology, weassumptions upon which those statements are identifying forward-looking statements.based. Forward-looking statements involve risks and uncertainties, whichinclude, without limitation, any statement that may cause our actualpredict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to bea number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially different from those contemplated, expressed, or implied by the forward-looking statements.
The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements:
| our research and development activities; |
our ability to obtain or maintain necessary regulatory approvals for some of our products;
the timely development of competitive new products and services, and the acceptance of these products and services by new and existing customers;
| market demand for our products; |
the lack of availability of alternate third-party suppliers for certain important product components;
| compliance with regulatory impositions; |
the timely development of competitive new products and services, and the acceptance of these products and services by new and existing customers;
the willingness of users to substitute competitors’ products and services for our products and services;
| the strength of the United States economy in general and the strength of the local economies in which we conduct operations; |
new developments in health treatments or new non-diagnostic products that reduce or eliminate the demand for our products;
| geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; |
changes in consumer spending and savings habits;
| the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, or the Federal Reserve Board; inflation, interest rate, market and monetary fluctuations; availability of resources for introduction and marketing of our products; our ability to attract and retain key employees; continued funding of, and our ability to participate in, large testing programs in the U.S. and worldwide; uncertainty as well as inflation, interest rate, market and monetary fluctuations; |
| the timely development of competitive new products and services, and the acceptance of these products and services by new and existing customers; |
| the impact of changes in financial services policies, laws and regulations, including laws, regulations and policies concerning taxes, banking, securities and insurance, and the application thereof by regulatory bodies; |
| the effect of acquisitions we may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions; |
| the growth and profitability of non-interest or fee income being less than expected; |
| changes in consumer spending and savings habits; and |
| unanticipated regulatory or judicial proceedings. |
We believe that it is important to communicate our expectations of future performance to our investors. Althoughfuture profitability;
the impact of changes in financial services policies, laws and regulations, including laws, regulations and policies concerning taxes, banking, securities and insurance, and the application thereof by regulatory bodies;
the effect of acquisitions we believe thatmay make, including, without limitation, the expectations reflected infailure to achieve the forward-lookingexpected revenue growth and/or expense savings from such acquisitions;
the growth and profitability of non-interest or fee income being less than expected; and
unanticipated regulatory or judicial proceedings.
Forward-looking statements reflect our current views with respect to future events and are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Events may occur in the future that we are unablebased on assumptions and subject to accurately predict, or over which we have no control. We caution users of the financial statementsrisks and uncertainties. Given these uncertainties, you should not to place undue reliance on anythese forward-looking statements. When considering our forward-looking statements, keepWe discuss many of these risks in mindgreater detail under the risk factors and other cautionary statements in this prospectus and the documents incorporated herein by reference. The risk factors noted in this prospectus and the documents incorporated herein by reference provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those contained in any forward-looking statement. Please see "Risk Factors" beginning on page 3heading “Risk Factors” of this prospectus and in our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-QSEC filings. Also, these forward-looking statements represent our estimates and inassumptions only as of the date of the document containing the applicable statement.
You should read this prospectus, any applicableaccompanying prospectus supplement, for a discussion of certain risks related to our business and an investment in our common stock.
Except as may be required by applicable law,the documents we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this prospectus as a result of new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in this report and our other reportshave filed with the SEC that attempt to advise interested partiesare incorporated by reference and any free writing prospectus that we have authorized for use in connection with this offering completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the risks, uncertainties and other factors that may affect our business.forward-looking statements in the foregoing documents by these cautionary statements. We do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.
This summary highlights selected information contained elsewhere or incorporated by reference in this prospectus. This summary does not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire prospectus, especially the risks of investing in our common stock discussed under "Risk Factors" in this prospectus beginning
We are a leading point-of-care diagnostics company focused on page 3detecting and in our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any accompanying prospectus supplement and the risk factors discussed in the documents incorporated by reference herein.
diagnosing infectious diseases. Our Company
Chembio was formedbusiness commenced in 1985. Since inception we have been involved in developing, manufacturing, selling and distributing medical diagnostic tests, including rapid tests that detect a number of infectious diseases. Shares of our common stock trade on NASDAQ under the symbol "CEMI."
Our principal executive offices are located at 3661 Horseblock Road, Medford, New York 11763. Our telephone number is (631) 924-1135. Our website address is www.chembio.com. The information available oncontained in, or accessible through, our corporate website isdoes not constitute part of this prospectus.
The Offering
Common stock offered by the selling stockholders: Up to 291,066 shares of our common stock, consisting of (i) 261,959 shares of our common stock that have been issued to the selling stockholders pursuant to the Amended Stock Purchase Agreement, (ii) up to 7,277 shares of our common stock that have been issued and are being held back by Chembio to satisfy certain potential claims under the Amended Stock Purchase Agreement and that will be transferred to the selling stockholders, if at all, on or after January 9, 2018 and (iii) up to 21,830 shares of our common stock that will become issuable to the selling stockholders, if at all, upon the achievement of certain performance goals.
Selling stockholders: All of the shares of common stock are being offered by the selling stockholders named herein. See "Selling stockholders" for more information on the selling stockholders.
Use of proceeds: We will not receive any proceeds from the sale of the shares in this offering.RISK FACTORS
Plan of distribution: The selling stockholders named in this prospectus, or their pledgees, donees, transferees or other successors-in-interest, may offer or sell the shares from time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. The selling stockholders may resell the common stock to or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions. See "Plan of Distribution" for additional information on the methods of sale that may be used by the selling stockholders.
NASDAQ symbol: CEMI
Risk Factors: Investing in our common stock involves risks. For a discussion of certain risks associated with an investment in our common stock, please see "Risk Factors" contained in Part I, Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and the risk factors discussed in the documents incorporated by reference herein.
An investment in ourany securities offered pursuant to this prospectus and the applicable prospectus supplement involves certain risks.a high degree of risk. Before investing in ouracquiring any of such securities, you should carefully consider the risk factors set forthincorporated by reference in our most recent Annual Report on Form 10-K, orour most recent Quarterly Report on Form 10-Q and any updates in oursubsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, or Current Reports on Form 8-K together withthat we file after the date of this prospectus, and all of the other information appearing in this prospectuscontained or incorporated by reference into this prospectus, as updated by our subsequent filings under the Securities Exchange Act of 1934, as amended, and the risk factors and other information contained in the applicable prospectus supplement and any applicable free writing prospectus. The risks so described are not the only risks facing our company. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Anyoccurrence of these risks could materially and adversely affect our business, financial condition, results of operations and cash flows and could result in a loss of all or part of your investment. In any case, the value of the securities offered by means of this prospectus could decline due to any of these risks andmight cause you mayto lose all or part of your investment.investment in the offered securities.
We will not receive anyintend to use the net proceeds from the sale of securities as set forth in the applicable prospectus supplement.
DESCRIPTION OF COMMON STOCK General
This section of the prospectus describes the material terms and provisions of our common stock. When we offer to sell or otherwise issue shares of our common stock, bywe will describe the selling stockholders.
SELLING STOCKHOLDERS
General
The registration statement, of which this prospectus forms a part, relates to the registration for resale of up to an aggregate of 291,066 shares of our common stock, consisting of (i) a total of 261,959 shares of our common stock that have been issued in the aggregate to Avijit Roy and Magentiren Vajuram, each, a selling stockholder, or together, the selling stockholders, pursuant to the Amended Stock Purchase Agreement, or the Initial Shares, (ii) up to 7,277 shares of our common stock that have been issued in the names of the selling stockholders and that are being held back to satisfy certain potential claims under the Amended Stock Purchase Agreement, and that will be transferred to the selling stockholders, if at all, on or after January 9, 2018, or the Holdback Shares, and (iii) up to 21,830 shares of our common stock that will become issuable to the selling stockholders, if at all, upon the achievement of certain performance goals, or the Milestone Shares.
Under the Amended Stock Purchase Agreement, we are required to register for resale the Initial Shares, the Holdback Shares and the Milestone Shares and to take commercially reasonable steps to file a registration statement related to such resale with the SEC and to pursue the effectiveness of such registration statement as soon as reasonably possible after the closing date of the transaction, which was January 9, 2017.
The table below sets forth the names of the selling stockholders, the number of shares of common stock beneficially owned by each of them as of January 25, 2017, the number of shares of common stock being offered by each of them, the number of shares of common stock each selling stockholder will beneficially own if such selling stockholder sells all of the shares being registered and each selling stockholder's percentage of ownership of our common stock if all of their shares in the offering are sold.
The shares being offered hereby are being registered to permit public secondary trading. The selling stockholders, including their respective donees, pledgees, transferees or other successors-in-interest may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to resell all or any portion of such shares, nor are the selling stockholders obligated to resell any shares immediately, under this prospectus.
All information with respect to share ownership has been furnished by or on behalf of the selling stockholders. We believe, based on information supplied by the selling stockholders, that except as may otherwise be indicated in the notes to the table below, each of the selling stockholders has sole voting and investment power with respect to the shares of common stock owned by them. Because the selling stockholders may resell all or part of their shares, no estimates can be given as to the number of shares of common stock that will be held by each selling stockholder upon termination of any offering made hereby. For purposes of the table below, however, we have assumed that after termination of this offering none of the shares covered by this prospectus will be held by the selling stockholders.
To our knowledge, the selling stockholders have not had any position with, held any office of, or had any other material relationship with us during the past three years, except as described below under "Material Relationships" and elsewhere in this prospectus and in Chembio's other filings with the SEC.
Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. The percentages of shares beneficially owned are based on 12,296,083 shares of our common stock outstanding as of January 20, 2017 as set forth in the following table and more fully described in the applicable footnotes.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options, warrants or rights held by that person that are currently exercisable or exercisable within 60 days of January 20, 2017 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person.
| | Shares beneficially owned
prior to offering | | | |
| | | Options, warrants or rights
exercisable
within 60 | Number of
shares being | Shares beneficially
owned
after the offering |
| Name and address of selling stockholders | Number | days | offered | Number | Percent |
Avijit Roy (1) | 128,433 | - | 128,433 | - | * |
Magentiren Vajuram (2) | 162,633 | - | 162,633 | - | * |
________________________
(1) | Includes 113,880 Initial Shares, 3,638 Holdback Shares and 10,915 Milestone Shares. The Milestone Shares will be issued, if at all, prior to any resale of such shares pursuant to this prospectus. The principal address for Mr. Roy is 2-1, 2nd Floor, N-TATT Building, Jalan TP5, Taman Perindustrian UEP, Subang Jaya, 47600, Selangor Darul Ehsan, Malaysia. |
(2) | Includes 148,080 Initial Shares, 3,638 Holdback Shares and 10,915 Milestone Shares. The Milestone Shares will be issued, if at all, prior to any resale of such shares pursuant to this prospectus. The principal address for Mr. Vajuram is 2-1, 2nd Floor, N-TATT Building, Jalan TP5, Taman Perindustrian UEP, Subang Jaya, 47600, Selangor Darul Ehsan, Malaysia. |
Material Relationships
Amended Stock Purchase Agreement. On November 4, 2016, Chembio, the selling stockholders and RVR Diagnostics Sdn Bhd, a Malaysia corporation, or RVR, entered into a Stock Purchase Agreement, which agreement was amended and restated in its entirety by the Amended Stock Purchase Agreement that was entered into on December 7, 2016, between and among the same parties. Pursuant to the Amended Stock Purchase Agreement, Chembio acquired all of the stock and other equity interests in RVR from the selling stockholders in exchange for a cash payment of $1,400,000 to the selling stockholders, issuing the selling stockholders the Initial Shares, agreeing to issue the selling stockholders the Holdback Shares and the Milestone Shares and agreeing to make certain additional cash payments to the selling stockholders upon the achievement of performance goals, all as described below pursuant to the Amended Stock Purchase Agreement.
On January 9, 2017, the closing date of the transaction contemplated by the Amended Stock Purchase Agreement, an aggregate of 269,236 Initial Shares and Holdback Shares were issued in the names of the selling stockholders. Pursuant to thespecific terms of the Amended Stock Purchase Agreement,offering and the aggregate of 7,277 Holdback Shares have been held back by the Company from the selling stockholders until January 9, 2018shares in a supplement to serve as collateral for payment of any undisclosed liabilities of RVR not set forth in the Amended Stock Purchase Agreement. After January 9, 2018, Chembio may transfer the Holdback Shares to the selling shareholders or use part or all of the Holdback Shares to settle any of its other obligations under the Amended Stock Purchase Agreement, including any indemnification claims.
Pursuant to the Amended Stock Purchase Agreement, as promptly as practicable after December 31, 2017, but in any event no later than March 15, 2018, Chembio shall prepare and deliver a statement to the selling stockholders setting forth RVR's actual sales for the 12 months ending December 31, 2017, or the Milestone Payment Statement. RVR's actual sales in the Milestone Payment Statement will be used to determine the "Milestone Proration Amount," which is a fraction that (i) the numerator of which is the positive amount, if any, by which actual sales for calendar year 2017 are greater than $2,250,000, up to a maximum overage of $250,000, and (ii) the denominator of which is $250,000. Based on the actual sales set forth Milestone Payment Statement, the selling stockholders will be entitled to receive (i) a cash milestone payment equal to $100,000 multiplied by the Milestone Proration Amount, for a maximum cash milestone payment of $100,000, and (ii) a number of Milestone Shares equal to 21,830 multiplied by the Milestone Proration Amount, for a maximum of 21,830 Milestone Shares.
At the closing, each of the selling stockholders entered into an employment agreement with RVR, pursuant to which, among other things, each of the selling stockholders agreed to serve as an employee of RVR for the one-year period following the closing in exchange for a monthly base salary of $10,000. In addition, at the closing, John J. Sperzel III, Chembio's President, Chief Executive Officer and a member of Chembio's board of directors, Richard J. Larkin, Chembio's Chief Financial Officer and Executive Vice President, and Katherine L. Davis, Chembio's Chairman of the Board and a member of Chembio's board of directors, were appointed as the directors of RVR, with each of the selling stockholders continuing as the other two directors of RVR.
The foregoing is only a brief description of the material terms of the Amended Stock Purchase Agreement andthis prospectus. This summary does not purport to be a complete description of the rights and obligations of the parties thereunderexhaustive and is qualified in its entirety by reference to the full text of the Amended Stock Purchase Agreement, which is incorporated by reference herein.
Stock Assignment. On January 24, 2017, subsequent to the closing of the transaction under the Amended Stock Purchase Agreement, Mr. Vajuram assigned 16,954 Initial Shares, 947 Holdback Shares and 2,838 Milestone Shares issued or issuable to him pursuant to the Amended Stock Purchase Agreement to Mr. Roy in a private transaction exempt from the registration requirements of the Securities Act. The selling stockholder table set forth above reflects the assignment of these shares to Mr. Roy.
Technology Transfer and License Agreement. In February 2014, Chembio entered into a technology transfer and license agreement with RVR. The agreement grants exclusive distribution rights to RVR in certain countries in Southeast Asia and enables RVR to manufacture Chembio's DPP® HIV 1/2 Assay and DPP® HIV-Syphilis Assay, and potentially other products developed by Chembio, such as Dengue, incorporating its patented DPP® technology as indicated in the DPP® Technology & Development. The agreement was modified in September 2014 and September 2015. For additional information on Chembio's Technology Transfer and License Agreement with RVR, please see its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are incorporated herein by reference.
PLAN OF DISTRIBUTION
We are registering shares of common stock to permit the resale of these shares by the selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from the selling stockholders as a gift, pledge, partnership distribution or other transfer, from time to time. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents, or otherwise. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent's commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, at negotiated prices, or otherwise. These sales may be effected in transactions, which may involve, without limitation:
| crosses or block transactions |
o | on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
o | in the over-the-counter market; |
o | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
o | through the writing of options, whether such options are listed on an options exchange or otherwise; |
| ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| an exchange distribution in accordance with the rules of the applicable exchange; |
| privately negotiated transactions; |
| the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
| sales pursuant to Rule 144; |
| broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; |
| a combination of any such methods of sale; and |
| any other method permitted pursuant to applicable law. |
If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and deliver shares of common stock covered by a prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge common stock to broker-dealers that in turn may sell such shares. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to such prospectus.
The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. The selling stockholders reserve the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering.
The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided that it meets the criteria and conform to the requirements of that rule.
The selling stockholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to a prospectus or any amendment to such prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under such prospectus. The selling stockholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of such prospectus.
The selling stockholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be an "underwriter" within the meaning of the Securities Act with respect to any securities such entity sells pursuant to this prospectus. At the time a particular offering of the shares of common stock is made, a prospectus, if required, will be distributed which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers. If the selling stockholders are deemed to be an underwriter, the selling stockholders may be subject to certain statutory liabilities under the Securities Act and other applicable securities laws.
Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance that the selling stockholders will sell any or all of the shares of common stock registered pursuant to this registration statement.
The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. In addition, as employees of a subsidiary of Chembio, the selling stockholders will be subject to Chembio's Insider Trading Policy, which generally restricts purchases and sales of Chembio's common stock during quarterly "blackout" periods and at any other time when the selling stockholders are in possession of material nonpublic information concerning Chembio. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.
We will pay all expenses of the registration of the shares of common stock, including, without limitation, SEC filing fees and expenses of compliance with federal securities or state "blue sky" or securities laws; provided, however, that the selling stockholders will pay all discounts and commissions, if any, to underwriters, selling brokers, dealer managers and similar persons.
Once sold under the registration statement, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is intended to be a summary, and you should read it in conjunction with our articles of incorporation, as amended, andour bylaws, as amended, eachand the applicable provisions of which has been filed with the SEC.Nevada law.
CommonOur authorized capital stock
Under our articles of incorporation, as amended, we may issue up to includes 100,000,000 shares of our common stock, par value of $0.01 per share. As of January 20, 2017,September 13, 2018, there were 12,296,083 outstanding:
shares of our common stock outstanding.held by approximately 124 stockholders of record;
14,173,620 shares of common stock; and
stock options exercisable, upon vesting, to acquire 711,968 shares of common stock.
The actual number of stockholders is greater than the number of record holders and includes stockholders who are beneficial owners but hold their shares in street name by brokers and other nominees. The number of holders of record also does not include stockholders that may hold shares in trust or by other entities.
Our authorized common stock may be increased and altered from time to time in the manner prescribed by Nevada law upon the vote of at least a majority of the shares entitled to vote on the matter. Our shares of common stock are traded on NASDAQthe Nasdaq Capital Market under the symbol "CEMI."“CEMI.”
Holders of our common stock are entitled to one vote for each share held by them of record on our books in all matters to be voted on by the stockholders. Holders of our common stock are entitled to receive dividends as may be legally declared from time to time by the board of directors, and in the event of our liquidation, dissolution or winding up, to share ratably in all assets remaining after payment of liabilities and amounts owed with respect to any preferred stock or other senior securities. Declaration of dividends on common stock is subject to the discretion of the board of directors and will depend upon a number of factors, including our future earnings, capital requirements, financial condition, and/or restrictions, if any, imposed by debt instruments or senior securities. We have not declared dividends on our common stock in the past and we currently anticipate that retained earnings, if any, in the future will be applied to our expansion and development rather than the payment of dividends.
The holders of common stock have no preemptive or conversionsubscription rights and are not subject to further calls or assessments. There are no redemption or sinking fund provisions applicable to the common stock. Under our corporate documents and Nevada law, the election of directors requires a plurality of the votes cast by holders of our outstanding common stock at the annual meeting while other fundamental corporate actions, such as mergers and sales of substantial assets, or amendments orof our articles of incorporation require the approval of the holders of a majority of our outstanding common stock.
Other than the potential issuance of preferred stock as described below, there exists no provision in our articles of incorporation or our bylaws that would delay, defer or prevent a change in control of the Company.
Preferred stock
Our articles of incorporation authorize the issuance of up to 10,000,000 shares of preferred stock, par value $0.01 per share. As of January 20, 2017, we did not have any shares of preferred stock outstanding.
Under our articles of incorporation, as amended, we may issue shares of preferred stock in one or more series, as may be determined by our board of directors or a duly authorized committee thereof. Our board of directors or a duly authorized committee thereof also may establish, from time to time, the number of shares to be included in each series and may fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and may increase or decrease the number of shares of any series without any further vote or action by the stockholders. Any preferred stock we may issue will rank senior to our common stock with respect to the payment of dividends or amounts paid upon liquidation, dissolution or winding up of our Company, or both. In addition, any shares of our preferred stock may have class or series voting rights.
The issuance of additional preferred stock could adversely affect the voting power of holders of our common stock and the likelihood that holders of our common stock will receive dividend payments and payments upon liquidation and could have the effect of delaying, deferring or preventing a change in control.
Transactions with Interested Persons
Under the Nevada Revised Statutes, or NRS,law, a transaction with the Company (i) in which a Company director or officer has a direct or indirect interest, or (ii) involving another corporation, firm or association in which one or more of the Company'sCompany’s directors or officers are directors or officers of the corporation, firm or association or have a financial interest in the corporation firm or association, is not void or voidable solely because of the director'sdirector’s or officer'sofficer’s interest or common role in the transaction if any one of the following circumstances exists:
| the fact of the common directorship, office or financial interest is known to the board of directors or a committee of the board of directors and a majority of disinterested directors on the board of directors (or on the committee) authorized, approved or ratified the transaction; |
| the fact of the common directorship, office or financial interest is known to the stockholders and disinterested stockholders holding a majority of the shares held by disinterested stockholders authorized, approved or ratified the transaction; |
| the fact of the common directorship, office or financial interest is not known to the director or officer at the time the transaction is brought to the board of directors for action; or |
| the transaction was fair to the Company at the time it is authorized or approved. |
the fact of the common directorship, office or financial interest is known to the stockholders and disinterested stockholders holding a majority of the shares held by disinterested stockholders authorized, approved or ratified the transaction;
11the fact of the common directorship, office or financial interest is not known to the director or officer at the time the transaction is brought to the board of directors for action; or
the transaction was fair to the Company at the time it is authorized or approved.
Control Share Acquisition Provisions
Nevada law precludes an acquirer of the shares of a Nevada corporation who crosses one of three ownership thresholds (20%, 33 1/3% or 50%) from obtaining voting rights with respect to those shares unless the disinterested holders of a majority of the shares of the Company held by disinterested stockholders vote to accord voting power to those shares. Nevada permits a corporation to opt out of the application of these control share acquisition provisions by so providing in the articles of incorporation or bylaws. The Company has opted out of the application of these control share acquisition provisions in its bylaws, as amended.
Combinations with Interested Stockholders
Under the NRS,Nevada law, except under certain circumstances, a corporation is not permitted to engage in a business combination with any "interested stockholder"“interested stockholder” for a period of two years following the date such stockholder became an interested stockholder. An "interested stockholder"“interested stockholder” is a person or entity who owns 10% or more of the outstanding shares of voting stock. Nevada permits a corporation to opt out of the application of these business combination provisions by so providing in the articles of incorporation. The Company did not opt out of the application of these business combination provisions in its articles of incorporation, as amended.
Stockholder Rights Agreement
On March 8, 2016, the Company entered into a rights agreementRights Agreement (the “Rights Agreement”) between the Company and Action Stock Transfer Corp., as rights agent, or the Rights Agreement.Agent. Pursuant to the Rights Agreement, the Company declared a dividend distribution of one preferred share purchase right, or a right,Preferred Share Purchase Right (a “Right”) for each outstanding share of our common stock, of the Companypar value $0.01, in the manner described below. The Company's board of directors set the payment date for the distribution of the Rights as March 8, 2016, and the Rights were distributed to the Company'sour shareholders of record on that date. The Rights Agreement also provides that Rights are issued with respect to any shares of our common stock that are newly issued after March 8, 2016, such as with respect to the Company’s underwritten public offering in February 2018. The description and terms of the Rights are set forth in the Rights Agreement.
Rights Initially Not Exercisable. The Rights are not exercisable until a Distribution Date (as defined below)in the Rights Agreement). Until a Right is exercised, the holder thereof, as such, has no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends.
Separation and Distribution of Rights. The Rights are to be evidenced by the certificates for shares of common stock registered in the names of the holders thereof, and not by separate rights certificates until the earlier to occur of (i) the close of business on the tenth business day following a public announcement that an Acquiring Person (as defined in the Rights Agreement) has acquired a Combined Ownership (as defined in the Rights Agreement) of 20% or more of the outstanding shares of ourthe common stock or (ii) the later of (A) the close of business on the tenth business day (or such later date as may be determined by action of the board of directors prior to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) after the date that a tender or exchange offer or intention to commence a tender or exchange offer by any person is first published, announced, sent or given within the meaning of Rule 14d-4(A) under the Securities Exchange Act of 1934, as amended, the consummation of which would result in any person having Combined Ownership of 20% or more of the outstanding shares of ourthe common stock, or (B) if such a tender or exchange offer has been published, announced, sent or given before the date of the Rights Agreement, then the close of business on the tenth business day after the date the Rights Agreement was entered into (or such later date as may be determined by action of the board of directors prior to such time as any person becomes an Acquiring Person); (the earlier of such dates referred to in (i) and (ii), which date may include any such date that is after the date of the Rights Agreement but prior to the issuance of the Rights, being called the Distribution Date).stock.
Transfer Agent
The transfer agent and registrar for the Company'sCompany’s common stock is Action Stock Transfer Corp.
DESCRIPTION OF PREFERRED STOCK General
This section of the prospectus describes the material terms and provisions of our preferred stock. When we offer to sell or otherwise issue shares of our preferred stock, we will describe the specific terms of the offering and the shares in a supplement to this prospectus. The prospectus supplement will also indicate whether the terms and provisions described in this prospectus apply to the particular series of preferred stock. This summary does not purport to be exhaustive and is qualified in its entirety by reference to our articles of incorporation, as amended, our bylaws, as amended, and the applicable provisions of Nevada law.
Our authorized capital stock includes 10,000,000 shares of our preferred stock, par value $0.01 per share. Under our Articles of Incorporation, as amended, we may issue shares of preferred stock in one or more series, as may be determined by our board of directors or a duly authorized committee. Our board of directors or a committee thereof also may establish, from time to time, the number of shares to be included in each series and may fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and may increase or decrease the number of shares of any series without any further vote or action by the stockholders.
Our board of directors is authorized to determine or fix from time to time by resolution the following terms for each series of preferred stock, which will be described in a prospectus supplement:
the distinctive serial designation of such series and the number of shares to constitute such series;
the class or voting rights, if any;
whether dividends are cumulative and, if so, the date from which dividends cumulate;
the payment date for dividends;
redemption rights, the applicable redemption prices and such other conditions of redemption;
amounts payable to holders on our liquidation, dissolution or winding up;
the amount of the sinking fund, if any;
whether the shares will be convertible or exchangeable into other equity securities, and, if so, the prices and terms of conversion and such other terms and conditions of such conversion or exchange; and
any other voting powers, designations, preferences, limitations, restrictions, and relative rights.
The preferred stock will be, when issued, fully paid and non-assessable. Holders of preferred stock will not have any preemptive or subscription rights to acquire more stock of the Company.
The transfer agent, registrar, dividend disbursing agent and redemption agent for shares of each series of preferred stock will be named in the prospectus supplement relating to such series.
The rights of holders of the preferred stock offered may be adversely affected by the rights of holders of any shares of preferred stock that may be issued in the future. The board of directors may cause shares of preferred stock to be issued in public or private transactions for any proper corporate purpose. Examples of proper corporate purposes include issuances to obtain additional financing in connection with acquisitions or otherwise, and issuances to our officers, directors and employees pursuant to benefit plans or otherwise.
Rank
Unless otherwise specified in the prospectus supplement relating to the shares of any series of preferred stock, such shares will rank on an equal basis with each other series of preferred stock and prior to the common stock as to dividends and distributions of assets.
Dividends
The holders of each series of preferred stock will be entitled to receive cash dividends if declared by our board of directors out of funds we can legally use for payment. The prospectus supplement will indicate the dividend rates and the dates on which we will pay dividends as to each series of preferred stock The rates may be fixed or variable or both. If the dividend rate is variable, the formula used to determine the dividend rate will be described in the prospectus supplement. We will pay dividends to the holders of record of each series of preferred stock as they appear on the record dates fixed by our board of directors.
Conversion or Exchange
The applicable prospectus supplement for any series of preferred stock will state the terms, if any, on which shares of that series are convertible or exchangeable into shares of our common stock or another series of our preferred stock. The terms of any such conversion or exchange and any such preferred stock will be described in the prospectus supplement relating to such series of preferred stock.
Redemption
If so specified in the applicable prospectus supplement, a series of preferred stock may be redeemable at any time, in whole or in part, at our option or at the option of the holder thereof. It also may be mandatorily redeemed subject to a mandatory redemption.
Unless we default in the payment of the redemption price, dividends will cease to accrue after the redemption date on shares of preferred stock called for redemption and all rights of holders of such shares will terminate, except for the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of each series of preferred stock will be entitled to receive distributions upon liquidation in the amount set forth in the prospectus supplement relating to such series of preferred stock. Such distributions will be made before any distribution is made on common stock or on any other securities ranking junior to the preferred stock with respect to liquidation.
If the liquidation amounts payable relating to the preferred stock of any series and any other securities ranking on a parity regarding liquidation rights are not paid in full, the holders of the preferred stock of such series and such other securities will share in any such distribution of our available assets on a ratable basis in proportion to the full liquidation preferences. Holders of such series of preferred stock will not be entitled to any other amounts from us after they have received their full liquidation preference.
Voting Rights
The holders of shares of preferred stock will have no voting rights, except as otherwise stated in the prospectus supplement and the certificate of designation establishing such series, or as required by applicable law.
In this section, we describe the general terms and provisions of the warrants for the purchase of preferred stock or common stock that we may issue. Warrants issued pursuant to this prospectus may be issued independently or together with any preferred stock or common stock. Warrants sold with other securities may be attached to or separate from the other securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent who will be specified in the warrant agreement and in the prospectus supplement. The warrant agent will act solely as our agent in connection with the warrants of that series and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.
This summary of some of the terms and other provisions of the warrants that may be issued is not complete and is qualified in its entirety by reference to the applicable warrant agreement and related warrant certificate and the prospectus supplement, which both will be filed with the SEC. You should refer to this prospectus, the prospectus supplement, the free writing prospectus, and the warrant agreement, including the forms of securities warrant certificate representing the securities warrants, relating to the specific warrants that we may offer for the complete terms of the warrant agreement and the warrants. For more information on how you can obtain copies of the applicable warrant agreement, if we offer warrants, see “Where You Can Find More Information.” We urge you to read the applicable warrant agreement and the applicable prospectus supplement and any other offering material in their entirety.
The applicable prospectus supplement related to an issuance of warrants will describe the following terms, where applicable, of the warrants in respect of which this prospectus is being delivered:
the title of the warrants;
the aggregate number of the warrants;
the price or prices at which the warrants will be issued;
the currency or currencies (including composite currencies) in which the price or prices of the warrants may be payable;
the designation, amount and terms of the offered securities purchasable upon exercise of the warrants;
if applicable, the date on and after which the warrants and the offered securities purchasable upon exercise of the warrants will be separately transferable;
the terms of the securities purchasable upon exercise of such warrants and the procedures and conditions relating to the exercise of such warrants;
any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;
the price or prices at which and currency or currencies in which the offered securities purchasable upon exercise of the warrants may be purchased;
the date on which the right to exercise the warrants shall commence and the date on which the right shall expire;
if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
information with respect to book-entry procedures, if any; and
any other material terms of the warrants.
The prospectus supplement relating to any warrants to purchase equity securities may also include, if applicable, a discussion of certain U.S. federal income tax and ERISA considerations.
Each warrant will entitle its holder to purchase the number of shares of preferred stock or common stock at the exercise price set forth in, or calculable as set forth in, the applicable prospectus supplement and warrant agreement.
After the close of business on the expiration date, unexercised warrants will become void. We will specify the place or places where, and the manner in which, warrants may be exercised in the applicable prospectus supplement.
Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement or free writing prospectus, we will, as soon as practicable, forward the purchased securities. If less than all of the warrants represented by the warrant certificate are exercised, a new warrant certificate will be issued for the remaining warrants.
Prior to the exercise of any warrants to purchase preferred stock or common stock, holders of the warrants will not have any of the rights of holders of the preferred stock or common stock purchasable upon exercise, including, the right to vote or to receive any payments of dividends on the preferred stock or common stock purchasable upon exercise.
In this section, we describe the general terms and provisions of the units that we may offer. We may issue units consisting of one or more of the securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit also is the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately at any time or at any time before a specified date.
The applicable prospectus supplement will specify the following terms of any units in respect of which this prospectus is being delivered:
the terms of the units and of any of the common stock, preferred stock and warrants comprising the units, including whether and under what circumstances the units may be traded separately;
a description of the terms of any unit agreement governing the units;
a description of the provisions for the payment, settlement, transfer or exchange of the units or the securities comprising those units; and
whether the units will be issued fully registered or in global form.
The description in the applicable prospectus supplement and other offering material of any units we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable unit agreement, which will be filed with the SEC if we offer units. For more information on how you can obtain copies of the applicable unit agreement if we offer units, see “Where You Can Find More Information.” We urge you to read the applicable unit agreement and the applicable prospectus supplement and any other offering material in their entirety.
We may sell the securities described in this prospectus to or through one or more agents, underwriters, dealers or directly to purchasers on a continuous or delayed basis.
The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed from time to time, at market prices prevailing at the times of sale, at prices related to such prevailing market prices or at negotiated prices.
Each time that we use this prospectus to sell our securities, we will also provide a prospectus supplement. For each series of securities, the applicable prospectus supplement will set forth the terms of the offering including:
the public offering price;
the name or names of any underwriters, dealers or agents;
the purchase price of the securities;
the proceeds from the sale of the securities to us;
any underwriting discounts, agency fees, or other compensation payable to underwriters or agents;
any discounts or concessions allowed or reallowed or repaid to dealers; and
the securities exchanges on which the securities will be listed, if any.
If we use underwriters in the sale of securities, the securities will be acquired by the underwriters for their own account. The underwriters may then resell the securities in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale or thereafter. The securities may be either offered to the public through underwriting syndicates represented by managing underwriters, or directly by underwriters. The obligations of the underwriters to purchase the securities will be subject to certain conditions. The underwriters will be obligated to purchase all the securities offered if they purchase any securities. The public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. If an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement used by the underwriter to make resales of the securities to the public.
If we use dealers in the sale of securities, we will sell securities to such dealers as principals. The dealers may then resell the securities to the public at varying prices to be determined by such dealers at the time of resale. We may solicit offers to purchase the securities directly, and we may sell the securities directly to institutional or other investors, who may be deemed underwriters within the meaning of the Securities Act with respect to any resales of those securities. The terms of these sales will be described in the applicable prospectus supplement. If we use agents in the sale of securities, unless otherwise indicated in the prospectus supplement, they will use their reasonable best efforts to solicit purchases for the period of their appointment. Unless otherwise indicated in a prospectus supplement, if we sell directly, no underwriters, dealers or agents would be involved. We will not make an offer of securities in any jurisdiction that does not permit such an offer.
We may grant underwriters who participate in the distribution of securities an option to purchase additional securities to cover overallotments, if any, in connection with the distribution. Any underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with SEC orders, rules and regulations and applicable law. To the extent permitted by applicable law and SEC orders, rules and regulations, an overallotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. To the extent permitted by applicable law and SEC orders, rules and regulations, short covering transactions involve purchases of the common stock in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the common stock originally sold by the dealer is purchased in a covering transaction to cover short positions. Those activities may cause the price of the common stock to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
Any underwriters who are qualified market makers on the Nasdaq Capital Market may engage in passive market making transactions in the common stock on the Nasdaq Capital Market in accordance with Rule 103 of Regulation M, during the business day prior to the pricing of the offering, before the commencement of offers or sales of the common stock. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general a passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded.
Underwriters, dealers and agents that participate in any distribution of securities may be deemed to be underwriters as defined in the Securities Act. Any discounts, commissions or profit they receive when they resell the securities may be treated as underwriting discounts and commissions under the Securities Act of 1933, as amended. Only underwriters named in the prospectus supplement are underwriters of the securities offered in the prospectus supplement. We may have agreements with underwriters, dealers and agents to indemnify them against certain civil liabilities, including certain liabilities under the Securities Act, or to contribute with respect to payments that they may be required to make.
We may authorize underwriters, dealers or agents to solicit offers from certain institutions whereby the institution contractually agrees to purchase the securities from us on a future date at a specific price. This type of contract may be made only with institutions that we specifically approve. Such institutions could include banks, insurance companies, pension funds, investment companies and educational and charitable institutions. The underwriters, dealers or agents will not be responsible for the validity or performance of these contracts.
Each series of securities will be a new issue of securities and will have no established trading market, other than our common stock, which is listed on the Nasdaq Capital Market. Unless otherwise specified in the applicable prospectus supplement, the securities will not be listed on any exchange. It has not presently been established whether the underwriters, if any, of the securities will make a market in the securities. If the underwriters make a market in the securities, such market making may be discontinued at any time without notice. No assurance can be given as to the liquidity of the trading market for the securities.
Agents, dealers and underwriters may be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the agents, dealers or underwriters may be required to make in respect thereof. Agents, dealers or underwriters may be customers of, engage in transactions with, or perform services for us and our subsidiaries in the ordinary course of business.
Certain matters concerning this prospectus and future offerings will be passed upon for us by Haynes and Boone, LLP, Denver, Colorado. As of the date of this prospectus, certain partners of Haynes and Boone, LLP held 29,497 shares of Common Stock.
The validity of the securities offered hereby has been passed upon for us by Ballard Spahr LLP.
Additional legal matters may be passed upon for us or any underwriters or agents by counsel that we will name in the applicable prospectus supplement.
The consolidated financial statements and schedule as of December 31, 20152017 and 20142016 and for eachthe years then ended, and management’s assessment of the two years in the period endedeffectiveness of internal control over financial reporting as of December 31, 20152017 incorporated by reference in this prospectusProspectus have been so incorporated in reliance on the reportreports of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.
LEGAL MATTERSWHERE YOU CAN FIND MORE INFORMATION
The validityThis prospectus is a part of a registration statement on Form S-3 filed by us with the SEC under the Securities Act.
This prospectus does not contain all the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the sharesSEC. For further information with respect to us and the securities offered by this prospectus, reference is made to the registration statement. Statements contained in this prospectus concerning the provisions of common stock offered hereby have been passedsuch documents are necessarily summaries of such documents and each such statement is qualified in its entirety by reference to the copy of the applicable document filed with the SEC.
We file periodic reports, proxy statements and other information with the SEC. Our filings with the SEC are available to the public over the Internet at the SEC’s website at http://www.sec.gov. Our filings with the SEC are also available to the public on our website at www.chembio.com, as well as through document retrieval services. You may read and copy any periodic reports, proxy statements or other information we file at the SEC’s public reference room in Washington, D.C., which is located at the following address: Public Reference Room, 100 F Street N.E., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for usfurther information on the operation of the SEC’s public reference rooms.
We “incorporate by Ballard Spahr LLP. Haynes and Boone, LLP will serve as our counsel. A partner of Haynes and Boone, LLP owns 29,497 shares of our common stock.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference"reference” into this prospectus the information we have filedfile with it,the SEC, which means that we can disclose important information to you by referring you to those documents. The information we incorporateincorporated by reference is an important part of this prospectus and information that we file subsequently with the SEC will automatically update this prospectus. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, subsequent toafter the date hereofinitial filing of the registration statement that contains this prospectus and prior to the effectiveness oftime that we sell all the registration statement and prior tosecurities offered by this prospectus, provided, however, that we are not incorporating any documents or portions thereof, whether specifically listed below or filed in the termination of the offering (excluding any disclosuresfuture, that are not deemed “filed” with the SEC, including any Compensation Committee report and performance graph and including information furnished and not filed):under either Item 2.02 or Item 7.01 of any Current Report on Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K:
| our(a) | Our Annual Report on Form 10-K for the year ended December 31, 20152017, filed with the SEC on March 8, 2016, along with the consolidated financial statements and related notes thereto;2018. |
| our(b) | Our Quarterly ReportReports on Form 10-Q for the quarter ended March 31, 20162018, filed with the SEC on May 12, 2016, as amended by our Amendment No. 1 to Form 10-Q filed with the SEC on June 3, 2016; |
| our Quarterly Report on Form 10-Q9, 2018, and for the quarter ended June 30, 20162018, filed with the SEC on August 11, 2016;8, 2018. |
| our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed with the SEC on November 10, 2016; |
(c) | ourOur Current Reports on Form 8-K filed withon January 8, 2019; February 8, 2018; February 9, 2018; February 13, 2018; February 27, 2018; April 26, 2018; April 27, 2018; May 9, 2018; May 16, 2018; May 25, 2018; May 30, 2018; July 19, 2018; July 30, 2018; August 8, 2018; August 13, 2018; September 17, 2018. |
| (d) | Portions of our Proxy Statement for the SECAnnual Meeting of Stockholders, held on March 8, 2016, March 14, 2016, April 7, 2016, April 22, 2016, June 14, 2016, July 25, 2016, July 27, 2016, July 29, 2016, August 3, 2016, November 9, 2016, December 13, 2016, JanuaryMay 10, 2018, that have been incorporated by reference in our 2017 and January 17, 2017 (excluding any information furnished pursuant to Item 2.02 or Item 7.01 of any such CurrentAnnual Report on Form 8-K;10-K. |
| the(e) | The description of our common stock contained in our Form 8-A as filed with the SEC on June 6, 2012;2012 pursuant to Sections 12(b) and 12(g) of the Exchange Act. |
| the(f) | The description of our Preferred Share Purchase Rights contained in our Form 8-A filed with the SEC on March 8, 2016, including any amendment to that form that we may file in the future for the purpose of updating the description of our Preferred Share Purchase Rights. |
Information contained in this prospectus modifies or supersedes, as applicable, the information contained in earlier-dated documents incorporated by reference. Information contained in later-dated documents incorporated by reference will automatically supplement, modify or supersede, as applicable, the information contained in this prospectus or in earlier-dated documents incorporated by reference.
We will furnish without charge to each person, including any beneficial owner, to whomYou may request a copy of this prospectus is delivered, upon request in writing, by telephone or via the internet, a copy of the information that has been incorporated by reference in this prospectusthese filings (other than an exhibit to these filings,a filing unless we havethat exhibit is specifically incorporated that exhibit by reference in this prospectus). You should direct any requests for copies to:into that filing) at no cost, by writing to or telephoning us at the following address and telephone number:
Chembio Diagnostic Systems,Diagnostics, Inc.
3661 Horseblock Road
Medford, New York 11763
(631) 924-1135
ATTN: Susan NorcottInvestor Relations
13
WHERE YOU CAN FIND MORE INFORMATION
This prospectus does not contain all ofYou should rely only on the information included in the registration statement and all of the exhibits and schedules thereto. For further information about Chembio, you should refer to the registration statement. Summaries of agreementscontained or other documents in this prospectus are not necessarily complete. Please refer to the exhibits to the registration statement for complete copies of such documents.
We are subject to the informational requirements of the Exchange Act, and in accordance with the requirements of the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings, including this registration statement, are available over the Internet at the SEC's website at www.sec.gov. You may also read and copy any document we file with the SEC at the Public Reference Room of the SEC at 100 F. Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the SEC at that address. Please call 1-800-SEC-0330 for further information on the operations of the Public Reference Room.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are made available free of charge on our website at www.chembio.com as soon as reasonably practicable after we electronically file such material with, or otherwise furnish it to, the SEC. Information on our website is not incorporated by reference in this prospectus and the applicable prospectus supplement. We have not authorized anyone else to provide you with additional or different information. We may only use this prospectus to sell securities if it is accompanied by a prospectus supplement or free writing prospectus. We are only offering these securities in states where the offer is permitted. You should not a partassume that the information in this prospectus or the applicable prospectus supplement is accurate as of this prospectus.any date other than the dates on the front of those documents.
CHEMBIO DIAGNOSTIC SYSTEMS, INC.
Common Stock
Preferred Stock
Warrants
Units
PROSPECTUS
291,066 Shares
Chembio Diagnostics, Inc.
Common Stock
INFORMATION NOT REQUIRED IN
THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.| Item 14. | Other Expenses of Issuance and Distribution |
The following table sets forth estimates (other than the SEC registration fee and FINRA filing fee) of the amounts of expenses to be incurred in connection with this registration statement. Allthe issuance and distribution of the amounts shown are estimates, except for the Securitiessecurities being registered, other than underwriting discounts and Exchange Commission, or the SEC, registration fee.commissions, all of which will be paid by Chembio.
| SEC registration fee | | $ | 201.73 | | | $ | 6,225 | |
| Printing and engraving expenses | | | 3,000 | * | |
| FINRA filing fee | | | $ | 8,000 | |
| Legal fees and expenses | | | | (1 | ) |
| Accounting fees and expenses | | | 10,000 | * | | | (1 | ) |
| Legal fees and expenses | | | 15,000 | * | |
| Miscellaneous expenses | | | 5,000 | * | |
| Printing expenses | | | | (1 | ) |
| Blue Sky, qualification fees and expenses | | | | (1 | ) |
| Transfer agent fees and expenses | | | | (1 | ) |
| Warrant agent fees and expenses | | | | (1 | ) |
| Other | | | | (1 | ) |
| Total | | $ | 33,201.73 | * | | $ | (1 | ) |
| | | | | | | | | | | | | |
*Estimate. | (1) | These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time and will be reflected in the applicable prospectus supplement. |
Item 15. | Indemnification of Directors and Officers. |
The Registrant’s bylaws provide that it will indemnify any of its directors, officers, other employees or agents against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such director, officer, other employee or agent in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, relating to service for or at the request of the Registrant. The Registrant will not indemnify a director, officer, other employee or agent if in relation to matters such director, officer, other employee or agent is adjudged in the action, suit or proceeding to not have acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Registrant in the performance of the individual’s duties.
The Registrant’s bylaws also provide that it will advance expenses (including attorneys’ fees) incurred by an officer or director defending an action, suit or proceeding, upon receipt of an undertaking by or on behalf of such officer or director to repay such amount if that officer of director is determined to not be entitled to indemnification. Such expenses incurred by other employees and agents may be paid in advance by the Registrant upon certain terms and conditions deemed appropriate by the board of directors of Chembio.
The Registrant’s articles of incorporation provide that no director will be personally liable to the Registrant or its stockholders for monetary damages for breach of fiduciary duty as a director, except that the director’s liability will not be eliminated or limited: (A) for acts or omissions involving intentional misconduct, fraud or a knowing violation of the law; or (B) for the payment of any distribution in violation of Nevada law.
Nevada law permits a Nevada corporation, such as Chembio,the Registrant, to indemnify its directors and officers in certain circumstances. Specifically, Section 78.7502 of the NRSNevada Revised Statutes provides as follows:
“(1) A corporation may 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, except an action by or in the right of the corporation, by reason of the fact that hethe person is or was a director, or officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, or officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys'attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by himthe person in connection with suchthe action, suit or proceeding if he:the person: (a) is not liable pursuant to NRSNevada Revised Statutes 78.138 or (b) acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, 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 equivalent, does not, of itself, create a presumption that the person is liable pursuant to NRSNevada Revised Statutes 78.138 or did not act in good faith and in a manner which he reasonableor she reasonably believed to be in or not opposed to the bestsbest interests of the corporation, or that, with respect to any criminal action or proceedings,proceeding, he or she had reasonable cause to believe that histhe conduct was unlawful.
(2) A corporation may 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 hethe person is or was a director, or officer, employee or agent of the corporation, or is or was serving at the request of the corporation or is or was serving at the request of the corporation as a director, or officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys'attorneys’ fees actually and reasonably incurred by himthe person in connection with the defense or settlement of the action or suit if hethe person: (a) is not liable pursuant to NRSNevada Revised Statutes 78.138 or (b) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person shall havehas been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable for negligence or misconduct in the performance of his duty to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which suchthe action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses whichas the court shall deemdeems proper.
(3) To the extent that a director, officer, employee or officeragent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (1) orand (2) of this section,, or in the defense of any claim, issue or matter therein, the corporation shall indemnify him or her against expenses, including attorneys'attorneys’ fees, actually and reasonably incurred by him in connection therewith.
Our bylaws provide that we will indemnify any of our directors or officers against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by himher in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, relating to service for or at the request of the Company. The Company will not indemnify a director or officer if in relation to matters such director or officer is adjudged in the action, suit or proceeding to be liable for negligence or misconduct in the performance of their duties.
Our articles of incorporation, as amended, also provide that no director will be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except that the director's liability will not be eliminated or limited: (A) for acts or omissions involving intentional misconduct, fraud or a knowing violation of the law; or (B) for the payment of any distribution in violation of Nevada law.
We maintain a general liability insurance policy that covers certain liabilities of our director and officers arising out of claims based on acts or omissions in the person's capacity as a director or officer.
Item 16. Exhibits.
A list of exhibits filed herewith is contained in the Exhibit Index that immediately precedes such exhibits and is incorporated by reference herein.
Item 17. Undertakings.defense.”
Exhibit No. | The undersigned registrant hereby undertakes: | Description |
| 1.1* | | Form of Underwriting Agreement |
| 3.1** | | Articles of Incorporation, as amended |
| 3.2** | | Amended And Restated Bylaws |
| 4.5** | | Rights Agreement dated as of March 8, 2016 between Chembio Diagnostics, Inc. and Action Stock Transfer Corp., as Rights Agent |
| 4.6* | | Form of Warrant under Rights Agreement |
| 5.1 | | Opinion of Ballard Spahr LLP |
| 8.1* | | Opinion as to certain federal income tax matters |
| 23.1 | | Consent of BDO USA, LLP |
| 23.2 | | Consent of Ballard Spahr LLP (included in Exhibit 5.1) |
| 24 | | Power of Attorney of certain officers and directors (located on the signature page to the Registration Statement) |
| * | To be filed, as applicable, by amendment or as an exhibit to a document incorporated by reference herein for the specific offering of securities, if any, to which it relates. |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement,Undertakings |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
(a) The undersigned Registrant hereby undertakes:(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(ii) | 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 SEC 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; |
(A) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
(iii) | To(B) 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 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(C) 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 the undertakings set forth in paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SECCommission by the registrantRegistrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
| (2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(2)That, for the purpose of determining any liability under the Securities Act of 1933, as amended, 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) | (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. |
| (4) | (4) That, for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser: |
(i) | Each prospectus filed by the registrant(A) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
(ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of the registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933, as amended, shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however,, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
|
| (5) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities: |
The(5) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933, as amended, to any purchaser in the initial distribution of the securities, the undersigned registrantRegistrant undertakes that in a primary offering of securities of the undersigned registrantRegistrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrantRegistrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) | Any preliminary prospectus or prospectus of the undersigned registrant17
(A) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(B) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant;(C) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant(D) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser. |
| (b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (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, as amended), that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | Insofar as indemnification for liabilities arising under the Securities Act 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 SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the 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(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue. |
Pursuant to the requirements of the Securities Act of 1933,
as amended, the
registrantRegistrant 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 Medford, Statestate of New York, on
January 30, 2017. September 18, 2018.
CHEMBIO DIAGNOSTICS, INC.
| CHEMBIO DIAGNOSTICS, INC. |
| | |
| By: | /s/ John J. Sperzel III |
| | John J. Sperzel III |
| | President and Chief Executive Officer |
By: /s/ John J. Sperzel III
Name: John J. Sperzel III
Title: President, Chief Executive Officer and Director
Power of Attorney
Each person whose signature appears below constitutes and appoints John J. Sperzel III his or her true and lawful attorney-in-fact, with full power of substitution, and with the authority to execute in the name of each such person, any and all amendments (including, without limitation, post-effective amendments) to this registration statement, to sign any and all additional registration statements relating to the same offering of securities as this registration statement that are filed pursuant to Rule 462(b) of the Securities Act, and to file such registration statements with the SEC, together with any exhibits thereto and other documents therewith, necessary or advisable to enable the registrant to comply with the Securities Act, and any rules, regulations and requirements of the SEC in respect thereof, which amendments may make such other changes in the registration statement as the aforesaid attorney-in-fact executing the same deems appropriate.POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statementRegistration Statement has been signed by the following persons in the capacities and on the datesdate indicated. Each person whose signature appears below, hereby makes, constitutes and appoints John J. Sperzel III and Neil A. Goldman, or either of them, as their respective true and lawful attorney, with full power to sign for such person and in such person’s name and capacity indicated below, and with full power of substitution, any and all amendments, including post-effective amendments, to this Registration Statement, hereby ratifying and confirming such person’s signature as it may be signed by said attorney to any and all amendments.
SignatureName | | Title | | Date |
| | | | |
/s/ John J. Sperzel III | | President, Chief Executive Officer, and Director
| | January 30, 2017September 17, 2018 |
| John J. Sperzel III | | (Principal Executive Officer)President and Director (principal executive officer) | | |
| | | | | |
/s/ Richard J. Larkin Neil A. Goldman | | Chief Financial Officer and Executive Vice President | | January 30, 2017September 18, 2018 |
Richard J. LarkinNeil A. Goldman | | (Principal Financial Officer and Principal Accounting Officer)principal financial officer & accounting officer) | | |
| | | | | |
/s/ Katherine L. Davis | | Chairman of the Board and Director | | January 30, 2017September 18, 2018 |
| Katherine L. Davis | | | | |
| | | | | |
/s/ Gary Meller Gail S. Page | | Director | | January 30, 2017September 17, 2018 |
Dr. Gary MellerGail S. Page | | | | |
| | | | | |
/s/ Pete Kissinger Mary Lake Polan | | Director | | January 30, 2017September 17, 2018 |
Pete Kissinger.Mary Lake Polan | | | | |
| | | | | |
| /s/ John Potthoff | | Director | | September 17, 2018 |
| John Potthoff | | | | |
EXHIBIT INDEX
Exhibit No. | | Exhibit Description |
4.1 | | Description |
| 1.1* | | Form of Underwriting Agreement |
| | Articles of Incorporation, as amended (incorporated by reference to the Company's Quarterly Report on Form 10-Q filed with the SEC on July 29, 2010).amended |
4.2 | | Amended And Restated Bylaws as amended (incorporated by reference to the Company's (i) registration statement on Form SB-2 (File No. 333-85787) filed with the SEC on August 23, 1999, (ii) current report on Form 8-K filed with the SEC on May 14, 2004, (iii) current report on Form 8-K filed with the SEC on December 20, 2007 and (iv) current report on Form 8-K filed with the SEC on April 18, 2008). |
4.3 | | Rights Agreement, dated as of March 8, 2016 (incorporated by reference to the Company's Form 8-A filed with the SEC on April 7, 2016). between Chembio Diagnostics, Inc. and Action Stock Transfer Corp., as Rights Agent |
| 4.6* | | Form of Warrant under Rights Agreement |
4.4 | | Amended and Restated Stock Purchase Agreement, dated as of December 7, 2016 (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on January 10, 2017). |
| | |
*5.1 | | Opinion of Ballard Spahr LLP. LLP |
*23.18.1* | | Opinion as to certain federal income tax matters |
| | Consent of BDO USA, LLP.LLP |
*23.2 | | Consent of Ballard Spahr LLP (included in the opinion filed as Exhibit 5.1). |
*24.124 | | PowersPower of Attorney (includedof certain officers and directors (located on the signature page hereto).
to the Registration Statement) |
_____________________
* Filed herewith.
| * | To be filed, as applicable, by amendment or as an exhibit to a document incorporated by reference herein for the specific offering of securities, if any, to which it relates. |
