As filed with the Securities and Exchange Commission on March 8, 2000
Registration No. 33-_____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT ON
FORM S-3
under
THE SECURITIES ACT OF 1933
BIOCONTROL TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 3841 25-1229323
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) Number)
625 Kolter Drive
Indiana, Pennsylvania 15701 (412) 349-1811
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices and principal place of
business)
___________________________________________
Fred E. Cooper, Chief Executive Officer
Biocontrol Technology, Inc.
2275 Swallow Hill Road, Building 2500, Pittsburgh, Pennsylvania 15220
(412) 429-0673
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
___________________________________________
Copy to:
M. Kathryn Sweeney, Esq.
Sweeney & Associates P.C.
7300 Penn Avenue, Pittsburgh, Pennsylvania 15208
_____________________________________________________
Approximate date of commencement of proposed sale to the public:
As soon as possible after this registration statement becomes
effective.
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 check the following box. [X]
CALCULATION OF REGISTRATION FEE
Title of Each Amount to Proposed Proposed Amount of
Class of be Maximum Maximum Registra-
Securities to be Registered Offering Aggregate tion Fee
Registered Price Per Offering
share Price
Common Stock to be
offered by The
Registrant (1) 313,000,000 (1) $0.68 (2) $212,840,000 $59,169.52
Common Stock issuable
upon the Conversion of
Preferred Stock,
Series F (3) 22,600,000 (3) $0.68 (2) $ 15,368,000 $ 4,272.30
Common Stock issuable
upon the Conversion of
the outstanding Principal
amount and other amounts
Due under the Registrant's
4% Convertible Debentures
due 2001 (3) 39,400,000 (3) $0.68 (2) $ 26,792,000 $ 7,448.18
Total Common Stock 375,000,000
Total Registration Fee $70,890.00
TOTAL OF SEPARATELY NUMBERED PAGES 29 EXHIBIT INDEX ON SEQUENTIALLY
NUMBERED PAGE 24
(1) Primary shares to be offered by the Registrant.
(2) Estimated SOLELY for purposes of calculating the registration fee pursuant
to Rule 457(c) of the Securities Act of 1933, as amended, and based on the
average of the high and low sales prices of the common stock of Registrant
on the Electronic Bulletin Board on March 1, 2000.
(3) These shares are registered on behalf of Selling Stockholders.
_____________________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933
or until this Registration Statement shall become effective on such date
as the Commission acting pursuant to Section 8(a) may determine.
_____________________
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such state.
SUBJECT TO COMPLETION DATED March 8, 2000
PRELIMINARY PROSPECTUS
375,000,000 Shares
BIOCONTROL TECHNOLOGY, INC.
Common Stock
This is an offering of shares of common stock of Biocontrol
Technology, Inc. We are offering 313,000,000 shares for sale
directly by our company. We expect that the public offering price
for those shares will be between $.45 and $.65 per share.
However, depending upon when this offering is effective, and when
we are able to sell the stock, that price range will change. On
March 2, 2000, the closing bid price of our stock was $.70 per
share. We are also registering common stock for sale on behalf
of certain preferred stockholders and debenture holders under
this prospectus. Up to 22,600,000 shares are being registered
that may be issuable upon the conversion of our outstanding
Series F convertible preferred stock, and up to 39,400,000 shares
are being registered that may be issuable upon the conversion of
the outstanding principal amount and interest due under our
$9,850,000 principal amount of 4% subordinated convertible
debentures- see the Selling Stockholders and Plan of Distribution
sections for more information.
Our common stock trades on the electronic bulletin board
under the trading symbol "BICO".
We will use the money received from selling the 313,000,000
shares of stock we are offering when we receive it--there is no
minimum that must be sold before we can use the proceeds.
Our business involves significant risks. You need to review
these risks before you consider buying our common stock. These
risks are described under the caption "Risk Factors" beginning on
page 5.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or determined if this Prospectus is truthful or complete. If anyone
tells you otherwise, it's a criminal offense.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. WE ARE OFFERING TO SELL AND
SEEKING OFFERS TO BUY SHARES OF OUR COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY
OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.
THE INFORMATION IN THIS PROSPECTUS ISN'T COMPLETE. IT MIGHT
CHANGE. WE'RE NOT ALLOWED TO SELL THE COMMON STOCK OFFERED BY
THIS PROSPECTUS UNTIL THE REGISTRATION STATEMENT WE HAVE FILED
WITH THE SEC BECOMES EFFECTIVE. THIS PROSPECTUS ISN'T AN OFFER TO
SELL OUR COMMON STOCK, AND WE ARE NOT SOLICITING OFFERS TO BUY
OUR COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT
ALLOWED.
MARCH 8, 2000
[INSIDE FRONT COVER]
AVAILABLE INFORMATION
The securities laws require us to file reports and other
information. All of our reports can be reviewed at the SEC's
web site, at www.sec.gov through the SEC's EDGAR database. You
can also review and copy any report we file with the SEC at the
SEC's Public Reference Room, which is located at 450 Fifth
Street, N.W., Washington, D.C., or at the SEC's regional
offices, including the ones located at 601 Walnut Street,
Curtis Center, Suite 1005E, Philadelphia, PA 19106-34322; and
75 Park Place, New York, NY. You can also order copies for a fee
from the SEC's Public Reference section, at 450 Fifth Street,
N.W. Washington, D.C. 20549. Our stock trades on the
electronic bulletin board.
This Prospectus omits certain information that is contained
either in the full registration statement, including exhibits, on
Form S-3, or in the reports we file with the SEC. Our most
recent financial statements and other information regarding our
operations can be found in the reports listed below, and you
should review those reports along with this Prospectus.
INCORPORATION BY REFERENCE
Our latest financial statements, as well as other important
information, are contained in the following documents, all of
which are incorporated by reference to this Prospectus. The
SEC allows us to disclose important information to you by
referring to other documents. We are also permitted to include
the following reports, which have been filed with the SEC, as
well as the reports we file with the SEC in the future, as part
of this Prospectus, without copying the reports into the
Prospectus. This is known as incorporation by reference. The
following documents are incorporated by reference:
(a) Our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
(b) Our Forms 10-Q for the quarters ended March 31, 1999; June
30, 1999; and September 30, 1999.
(c) Our Proxy Materials for the Special Meeting of
Stockholders held on February 7, 2000.
As long as this Prospectus remains effective, all of our
subsequent filings with the SEC will also be incorporated by
reference.
We will send you a copy of these documents if you ask for
them. If you want to receive copies, please contact our
Shareholder Relations department at: Shareholder Relations
Department, Biocontrol Technology, Inc., 2275 Swallow Hill
Road, Building 2500, 2nd Floor, Pittsburgh, PA 15220, by
telephone at 412-429-0673 or by fax at 412-279-1367.
Until 90 days after the effective date of this
Prospectus, all dealers effecting transactions in the
registered securities, whether or not participating in this
distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
PROSPECTUS SUMMARY
THE FOLLOWING SECTION IS ONLY A SUMMARY. YOU SHOULD CAREFULLY
READ THE MORE DETAILED INFORMATION CONTAINED IN THIS PROSPECTUS,
AND THE INFORMATION CONTAINED IN THE OTHER DOCUMENTS INCORPORATED
BY REFERENCE, INCLUDING OUR FINANCIAL INFORMATION. OUR BUSINESS
INVOLVES SIGNIFICANT RISKS - READ MORE ABOUT THEM IN THE SECTION
CAPTIONED RISK FACTORS WHICH BEGINS ON PAGE 5.
THE COMPANY
Biocontrol Technology, Inc. was incorporated in the
Commonwealth of Pennsylvania in 1972 as Coratomic, Inc. We are
sometimes referred to as "BICO". Our operations are located at
625 Kolter Drive in Indiana, Pennsylvania, 15701, and our
administrative offices are located at 2275 Swallow Hill Road,
Pittsburgh, Pennsylvania, 15220.
Our primary business is the development of new devices,
which include models of a noninvasive glucose sensor,
procedures relating to the use of regional extracorporeal
hyperthermia in the treatment of cancer, and environmental
products, which help to clean up oil spills. We have several
subsidiaries that specialize in those different projects.
Diasensor.com, Inc. controls the noninvasive glucose sensor
project. IDT, Inc. handles the hyperthermia project, a
technology called the ThermoChem Systemr, that induces an
artificial fever to treat cancer. Petrol Rem, Inc. handles our
environmental products PRP, BIO-SOK and BIO-BOOM that help
clean up oil spills and other pollutants in water. Our annual
report on Form 10-K, as well as our other SEC reports that are
incorporated by reference, contain important information
regarding our company and our operations-you need to read those
reports before you decide whether to invest.
RISK FACTORS
If you invest in our stock, you will be placing your money
at a significant risk. Our projects are in the research and
development phase, and none of our current products has produced
revenue to date. You should not invest money you are not
prepared to lose - and you should carefully review the section
captioned Risk Factors that begins on page 5 before you decide
whether to invest in our stock.
THE OFFERING
Common stock we are offering 313 million shares
Common stock to be issued upon conversion of
Our Series F preferred stock 22.6 million shares
Common stock to be issued upon conversion of
Our 4% subordinated convertible debentures 39.4 million shares
Common stock outstanding after this offering,
if all shares are sold 1.331 billion shares
Use of Proceeds To fund our existing
projects, or to acquire
companies with revenues,
or short-term revenue-
generating potential. We
will also use proceeds to
fund our continuing
working capital
requirements, including
administrative expenses
and salaries. Please
review the section
captioned Use of Proceeds
for more important
information.
Our Trading Symbol BICO - we currently trade
on the electronic
bulletin board
The common stock outstanding after this offering, if all
shares are sold, is based upon the number of shares we had
outstanding as of February 29, 2000. It does not include the
31,015,662 shares of our common stock that are subject to
outstanding warrants. Those warrants have exercise prices
ranging from $.06 to $4.03 per share and expiration dates through
April 28, 2004.
SUMMARY FINANCIAL DATA
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30th
(unaudited)
1999 1998
Total Assets $25,474,473 $16,746,625
Long-Term
Obligations $ 1,333,629 $ 3,822,847
Working Capital
(Deficit) $ 5,103,943 ($ 3,835,755)
Preferred Stock $ 0 $ 0
Net Sales $ 86,936 $ 1,019,520
TOTAL REVENUES $ 305,357 $ 1,112,580
Warrant Extensions $ 0 $ 1,870,000
Benefit
(Provision) for
Income Taxes $ 0 $ 0
Net Loss ($30,478,621) ($ 7,996,197)
Net Loss Per
Common Share ($.05) ($.07)
Cash Dividends Per
Share
Preferred $ 0 $ 0
Common $ 0 $ 0
FOR THE YEARS ENDED DECEMBER 31st
1998 1997 1996 1995 1994
Total
Assets $9,835,569 $12,981,300 $14,543,991 $ 9,074,669 $6,375,778
Long-Term
Obligations $1,412,880 $ 2,697,099 $ 2,669,727 $ 175,330 $ 163,201
Working
Capital
(Deficit) ($9,899,008) $ 888,082 $ 1,785,576 $ 3,188,246 $2,612,884
Preferred
Stock $ 0 $ 0 $ 0 $ 37,900 $ 54,900
Net Sales $1,145,968 $1,155,907 $ 597,592 $ 461,257 $ 184,507
TOTAL
REVENUES $1,378,213 $1,426,134 $ 776,727 $ 755,991 $ 481,453
Warrant
Extensions $ 0 $4,046,875 $ 9,175,375 $12,523,220 $ 0
Benefit
(Provision)
for Income $ 0 $ 0 $ 0 $ 0 $ 0
Taxes
Net Loss ($22,402,644)($30,433,177)($24,045,702)($29,420,345)($11,672,123)
Net Loss
Per Common ($.08) ($.43) ($.57) ($.84) ($.43)
Share
Cash
Dividends
Per Share:
Preferred $ 0 $ 0 $ 0 $ 0 $ 0
Common $ 0 $ 0 $ 0 $ 0 $ 0
For more detailed information, you should review our Form 10-K
for the year ended December 31, 1998, as well as our Form 10-Qs
for the quarters ended March 31, 1999; June 30, 1999 and
September 30, 1999, all of which are available at www.sec.gov or
from us at the address listed on the inside front cover of this
Prospectus.
FORWARD LOOKING STATEMENTS
This Prospectus and all our other reports contain statements
that relate to matters that we anticipate will occur sometime in
the future. These statements usually relate to our anticipated
financial performance, our business prospects, our product
development, the regulatory approval process -especially the FDA
- - and our hopes for the commercial success of our products. The
Private Securities Litigation Reform Act of 1995 provides us with
a safe harbor for forward-looking statements. In order to comply
with the safe harbor, we need to point out that a variety of
factors could cause our actual results to differ from our
anticipated results. Many risks and uncertainties may affect our
operations, performance, research and development projects, and
our business. These risks and uncertainties include: additional
delays in the development and FDA marketing approval of our
noninvasive glucose sensor; delays in the manufacturing or
marketing of our other products and devices; the uncertainty of
our ability to continue to raise money to fund our operations;
the risk that competitors will have products ready to sell before
we do; the risk that our products may become obsolete; our
continuing losses and the risk that our plans to generate revenue
will be delayed or will not occur at all; the uncertainty of
insurance company reimbursement for our medical devices and the
general uncertainty surrounding the health care industry; the
risk that our patents will be challenged or infringed upon; our
limited sales and marketing experience; the uncertain outcome and
consequences of the lawsuits and investigations pending against
us; our ability to maintain a market for our common stock on the
electronic bulletin board; and the dilution of our common stock
that occurs when we sell more shares to raise money to continue
our operations.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED IN THIS
SECTION BEFORE MAKING THE DECISION TO INVEST IN OUR STOCK. YOU
SHOULD ALSO REFER TO THE OTHER INFORMATION IN THIS PROSPECTUS AND
THE DOCUMENTS INCORPORATED BY REFERENCE INCLUDING OUR FINANCIAL
STATEMENTS AND THE RELATED NOTES. THE RISKS AND UNCERTAINTIES
DESCRIBED BELOW ARE THOSE THAT WE CURRENTLY BELIEVE MAY
MATERIALLY AFFECT OUR COMPANY. ADDITIONAL RISKS AND
UNCERTAINTIES THAT WE ARE UNAWARE OF OR THAT WE CURRENTLY
CONSIDER IMMATERIAL ALSO MAY BECOME IMPORTANT FACTORS THAT AFFECT
OUR COMPANY. AN INVESTMENT IN OUR STOCK IS A HIGH RISK
INVESTMENT, AND YOU SHOULD BE PREPARED TO SUFFER A LOSS.
THIS PROSPECTUS AND THE DOCUMENTS WE INCORPORATED BY
REFERENCE ALSO CONTAIN FORWARD LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THE RISKS
FACED BY US DESCRIBED BELOW AND ELSEWHERE IN THIS PROSPECTUS AND
THE DOCUMENTS INCORPORATED BY REFERENCE.
RISKS RELATED TO OUR BUSINESS
WE HAVE A HISTORY OF LOSSES, WE EXPECT THAT LOSSES WILL CONTINUE
FOR THE FORSEEABLE FUTURE AND OUR INDEPENDENT ACCOUNTANTS HAVE
EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
GOING CONCERN.
We have lost money in every period since we started our
current research and development projects - we had an accumulated
deficit of $143.1 million as of December 31, 1998 and $173.6
million as of September 30, 1999. We plan to invest heavily to
continue to develop our biomedical and environmental products and
to set up manufacturing and marketing of those products. As a
result, we expect to continue to lose money for the foreseeable
future. We cannot assure you that we will ever achieve or
sustain profitability or that our operating losses will not
increase in the future. We have received a report from our
independent accountants containing an explanatory paragraph
stating that our historical losses and negative cash flows from
operations raise substantial doubt about our ability to continue
as a going concern.
WE HAVE A LIMITED OPERATING HISTORY, NO SIGNIFICANT REVENUES AND
LIMITED EXPERIENCE IN MARKETING THAT MAKES AN EVALUATION OF OUR
BUSINESS DIFFICULT.
Although we have been in business for years, we have not
generated any material revenue in our recent history. The
majority of our activities have been related to the research and
development of products. Our current management team has limited
experience in manufacturing and marketing biomedical and
environmental products. Therefore, our historical financial
information is of limited value in evaluating our future
operating results. Our target markets - the health care and
environmental markets - change rapidly, and we may not have the
experience necessary to successfully market our products.
WE MAY NEED ADDITIONAL CAPITAL IN THE FUTURE TO SUPPORT OUR
OPERATIONS AND THAT ADDITIONAL FINANCING MAY NOT BE AVAILABLE TO
US.
Even if we sell all of the common stock we are offering in
this Prospectus - and we can't assure you that we will -it will
not be enough to fund our operations until - and unless - we
become profitable. We may need to raise more capital to fund our
operations and our research and development projects, and we may
not be able to find financing when we need it. If that happens,
we will not be able to continue operations long enough to bring
our products to market, or to market them long enough to become
profitable. Any additional equity financing - through sales of
our securities - will cause our existing investors to experience
additional dilution.
WE CANNOT BE SURE HOW LONG IT WILL TAKE TO BRING OUR PRODUCTS TO
MARKET OR TO BECOME PROFITABLE.
Our biomedical products, specifically the noninvasive
glucose sensor and the hyperthermia treatment device, are new
products that are not established in any market. Although we
have started to market the sensor in Europe, we cannot market the
sensor in the U.S. Until we receive FDA approval - we don't know
how much longer that will take. Our hyperthermia treatment
device is being used in one hospital, but we will not be able to
sell the device until we begin manufacturing. Even when we are
able to manufacture and sell these devices, we don't know how
long it will be before they become profitable.
WE FACE SERIOUS COMPETITION, AND WE MAY NOT BE ABLE TO COMPETE
EFFECTIVELY, ESPECIALLY IF OUR PATENTS ARE CHALLENGED OR
INFRINGED UPON.
The medical device industry and the environmental industry
are very competitive. Other companies are developing
technologies and devices that will compete with ours. These
other companies may be further along in their research and
development may be better capitalized, have more sophisticated
equipment and expertise and various other competitive advantages
compared to us. These other companies may be able to bring their
products to market before we are able to enter the market, which
would have a serious negative impact on our ability to succeed.
Many of the large biomedical companies are funding research into
noninvasive glucose measurement, and one of them might beat us to
the market. Our sensor will also compete against existing finger-
prick technology, which is already well established. If we
cannot convince diabetics that our device is superior, we will
not be able to sell our sensor. Our hyperthermia device is a new
technology, which will compete against other, well-established
forms of cancer treatment. If we cannot convince the medical
community that our product offers superior alternatives, we will
not succeed with that device.
In addition, if our patents are challenged or infringed
upon, we might not be able to enter the market without a long
legal battle to determine which patent has priority. This type
of delay and expense would hurt our ability to successfully
market our products.
WE HAVE LIMITED COMMERCIAL MANUFACTURING EXPERIENCE.
We have a contractual duty to manufacture our medical
devices. We have leased space, which has been modified, for our
manufacturing needs, but our current management team has limited
experience with large-scale commercial manufacturing. If we are
not able to hire the right people, or to provide manufacturing
expertise ourselves, we will not be able to successfully
manufacture our biomedical devices, even if they are approved for
sale in the U.S., or even if we are able to make sales.
WE ARE DEPENDENT UPON HEALTH INSURANCE REIMBURSEMENT FOR OUR
BIOMEDICAL DEVICES, AND WE MAY NOT BE ABLE TO OBTAIN THAT
REIMBURSEMENT.
Our biomedical products are subject to the reimbursement
policies of insurance companies and Medicare. The doctors and
patients who want to use our devices will not be able to pay for
them without reimbursement from their health insurance providers.
If we are not able to convince those insurance providers that our
devices are worth reimbursement, we will not succeed.
OUR COMPANY AND ITS AFFILIATES ARE SUBJECT TO CONFLICTS OF
INTEREST.
David L. Purdy, Fred E. Cooper, Anthony J. Feola and
Glenn Keeling are employed by BICO, and are also officers and/or
directors of our affiliates and subsidiaries, Diasensor.com,
Inc., Petrol Rem, Inc. and IDT, Inc. These men are subject to
competing demands and may face conflicts of interest. The good
faith and integrity of these members of management is of utmost
importance to our business and operations.
RISKS RELATED TO OUR INDUSTRY
WE DEPEND ON OUR KEY OFFICERS, AND WE WOULD SUFFER IF THEY LEFT.
We are dependent upon our key officers, David L. Purdy, our
President, Treasurer, and Chairman of the Board; and Fred E.
Cooper, our CEO. We do not have any key-man life insurance on
these men, and our business would suffer if they left for any
reason.
WE ARE DEPENDENT UPON EMPLOYEES AND INDEPENDENT CONTRACTORS WHO
ARE DIFFICULT TO REPLACE.
Because we are developing new technologies, devices and
engineering methods, we depend on certain employees and
independent contractors who may not devote their full-time
efforts to our operations. We depend on some of our employees
who have a specific expertise that is not common. We also need
independent contractors to assist us in areas where are employees
do not have the necessary expertise. If we lose the services of
any of these employees or independent contractors and are unable
to replace them, our business could suffer.
OUR PRODUCTS ARE THE TYPE THAT CAN BECOME OBSOLETE, AND NO LONGER
COMPETITIVE.
Both the medical device and environmental industries are
subject to rapid technological innovation and change. Although
we are not currently aware of any new product or technology that
would make our products obsolete, it is always possible. Future
technological developments could make our products significantly
less competitive or even no longer marketable.
WE SOMETIMES NEED SUPPLIERS AND PARTS THAT ARE DIFFICULT TO FIND.
Our products involve designs that are new, and we often need
to have component parts fabricated especially for our
experimentation, testing and development. Suppliers for these
parts are not always readily available, or available at all, so
we have to create the parts in-house. This can result in delays
in our development. If we are unable to obtain a supplier or
create the necessary parts ourselves, we have to redesign the
product, which also results in significant delays. Although we
try to minimize our dependence on custom parts when we design
products, unforeseeable problems can arise which negatively
affect our operations.
WE CANNOT SELL PRODUCTS WITHOUT GOVERNMENT APPROVAL, WHICH CAN BE
A LONG AND EXPENSIVE PROCESS.
The Food and Drug Administration, the Environmental
Protection Agency, and other state agencies control many of our
products. FDA approval is necessary to market our biomedical
products in the U.S., and we must have EPA approval to sell our
environmental products. If we do not get approval, we cannot
sell our products in the U.S. We have already received FDA
approval to market our hyperthermia device to treat ovarian,
gastrointestinal and peritoneal of cancer - the procedure using
our device is now offered at Wake Forest University Baptist
Medical Center. In February 2000, we received FDA approval to
conduct lung cancer trials at the University of Texas Medical
Branch at Galveston. We have received approval to sell our
noninvasive glucose sensor in Europe, and we are seeking that
approval for our hyperthermia product. We already have EPA
approval to sell our environmental products. We are currently
preparing a set of clinical trials for our noninvasive glucose
sensor - these trials will last approximately nine months, and we
hope to have FDA approval once the trials are completed and the
results are submitted. We have suffered significant delays in
the FDA approval in the past, and are working with outside
biomedical consultants to help us obtain FDA approval following
these clinical trials; however, we cannot assure you when or if
that will happen.
OUR PATENTS ARE IMPORTANT AND THEY COULD BE CHALLENGED OR
INFRINGED UPON.
We hold patents on many of our products, as well as
trademarks on the names of our products and procedures. We try
to file patent applications when we believe they are necessary,
both in the U.S. and in foreign countries where we seek to do
business. However, we cannot assure you that future patents will
be granted, or that our existing patents will not be challenged
or circumvented by a competitor. If any of our critical patents
are challenged, or if someone accuses us of infringing upon their
patents, it would be expensive and time-consuming to defend those
charges, and our projects could be delayed. Similarly, if
someone else infringes upon one of our patents, it would be
expensive and distracting for us to challenge them.
WE COULD BE SUBJECT TO PRODUCT LIABILITY CLAIMS.
We are engaged in activities that involve testing and
selling biomedical devices. These kinds of activities expose us
to product liability claims. We currently have $500,000 in
product liability insurance. If a claim against us is successful
and exceeds that amount, we could be liable for the balance.
RISKS RELATED TO THIS OFFERING
OUR COMMON STOCK MAY BE VOLITILE, AND YOU MAY NOT BE ABLE TO SELL
YOUR STOCK AT OR ABOVE YOUR PURCHASE PRICE.
Our stock currently trades on the electronic bulletin board,
which is not a formal stock exchange. As a result, it may be
more difficult to obtain trading information than if our stock
still traded on the Nasdaq. Because our stock price did not meet
the Nasdaq Small-Cap market requirements implemented in 1998, we
were delisted and we're no longer able to trade there. Although
we have maintained acceptable trading volume since we left
Nasdaq, we cannot assure you that our trading volume will
continue. As a result, you may be unable to sell your stock when
you want to sell it. In addition, our stock price has fluctuated
significantly, and you may not be able to sell your stock at or
above your purchase price when you are ready to sell
THE VOLATILITY OF OUR COMMON STOCK COULD EXPOSE US TO SECURITIES
LITIGATION.
In the past, following periods of volatility in the market
price of a company's securities, securities class action suits
have been filed. Due to the historic volatility of our common
stock, we may be particularly susceptible to this kind of
litigation. If it were to happen to us, the litigation would be
expensive and would divert our management's attention from
business operations. Any litigation that resulted in a finding
of liability against us would adversely affect our business,
prospects and financial condition, along with the price of our
stock. We have already been the subjects of one class action
lawsuit, which was filed in 1996. This lawsuit was filed in
connection with the disclosures surrounding our 1996 FDA panel
review, and was also related to the corresponding decline in our
stock price.
INVESTORS WILL INCUR IMMEDIATE DILUTION.
The price of our stock in this offering will be
significantly higher that its book value per share. If you buy
our stock in this offering, you will suffer an immediate and
substantial dilution in the net tangible book value per share
from the price you pay for the stock. For example, assuming you
pay $.50 per share for our stock in this offering, and all of the
stock offered is sold, you will experience a net tangible book
value dilution of $.378 per share. We also have a large number
of outstanding warrants to purchase our common stock with prices
below the estimated offering price of our stock. To the extent
those warrants are exercised, additional dilution will occur.
Please review the section captioned Dilution for more detailed
information.
OUR MANAGEMENT HAS BROAD DISCRETION IN SPENDING THE PROCEEDS OF
THIS OFFERING, AND MAY DO SO IN WAYS WITH WHICH OUR STOCKHOLDERS
DISAGREE.
When our stockholders approved the authorization of
additional shares of stock, they gave our management broad
discretion in how to spend the proceeds of stock sales. Our
management is limited only to using proceeds to fund our existing
or related projects, to acquire other companies with revenues or
short-term revenue generating potential and for general corporate
purposes, including working capital. We have not yet determined
how all of the proceeds will be used. Consequently, our board of
directors and management will have significant flexibility in
using the proceeds of this offering. Because of the number and
variety of factors that determine our use of proceeds, we cannot
assure you that the uses will not vary from our current plans, or
that all our stockholders will agree with the uses we choose.
Please review the section captioned Use of Proceeds for more
information on this topic.
WE DO NOT INTEND TO PAY DIVIDENDS.
We have no intention of paying a dividend on our common
stock. For the foreseeable future, any future earnings will be
used to continue to finance our operations.
SELLING STOCKHOLDERS
This prospectus covers the shares of common stock that may
be offered by the selling stockholders set forth below. None
of the selling stockholders have had a material relationship with
us within the last three years, and they are not affiliated with
us other than through their ownership interest in our preferred
stock or debentures. We prepared the table below based on the
information provided to us by the selling stockholders.
Any or all of the shares listed below may be offered for
sale by the selling stockholders from time to time and,
therefore, we can't give an estimate as to the number of shares
that will be held by the selling stockholders when we terminate
this offering. Unless we indicate otherwise, the selling
stockholders listed in the table have sole voting and investment
powers with respect to the shares indicated.
Selling Number of Shares Beneficial Beneficial
Stockholders Offered Ownership Ownership
Prior to Sale After Sale (3)
Series F Preferred
Nachum Stein 400,000 (1) 400,000 (1) *
Cache Capital,L.P. 1,000,000 (1) 1,000,000 (1) *
Guardian Commercial 1,800,000 (1) 1,800,000 (1) *
GPS America Fund,Ltd. 400,000 (1) 400,000 (1) *
Carpe Diem, Ltd. 400,000 (1) 400,000 (1) *
Markham Holdings 1,200,000 (1) 1,200,000 (1) *
Howard Weiss 1,000,000 (1) 1,000,000 (1) *
Lampton, Inc. 800,000 (1) 800,000 (1) *
Wayne Invest & Trade 1,000,000 (1) 1,000,000 (1) *
L&H Family Foundation 400,000 (1) 400,000 (1) *
Ashfield Investment 2,000,000 (1) 2,000,000 (1) *
Correllus Investment, 800,000 (1) 800,000 (1) *
Ltd.
Econor Investment 2,000,000 (1) 2,000,000 (1) *
Arab Commerce Bank 600,000 (1) 600,000 (1) *
Enrique DeNegri 400,000 (1) 400,000 (1) *
Musdos Hachesed 400,000 (1) 400,000 (1) *
Englewood Holdings 2,000,000 (1) 2,000,000 (1) *
Mantle International 2,000,000 (1) 2,000,000 (1) *
Clearview Int.
Investments 2,000,000 (1) 2,000,000 (1) *
Burnstein & Lindsey 2,000,000 (1) 2,000,000 (1) *
4% Subordinated Debenture Holders
Farnsworth Association 100,000 (2) 100,000 (2) *
Jara Group 200,000 (2) 200,000 (2) *
Michael Koretsky 200,000 (2) 200,000 (2) *
Ted Liebowitz 2,000,000 (2) 2,000,000 (2) *
Doug Monas 100,000 (2) 100,000 (2) *
Eytan Sugarman 340,000 (2) 340,000 (2) *
Leon Kahn 200,000 (2) 200,000 (2) *
Kador Investment 400,000 (2) 400,000 (2) *
Chava Scharf 200,000 (2) 200,000 (2) *
Gross Foundation 800,000 (2) 800,000 (2) *
Mark Garfunkkel 200,000 (2) 200,000 (2) *
Brass Capital, LLC 100,000 (2) 100,000 (2) *
Jos McGuire/Wilma Rossi 200,000 (2) 200,000 (2) *
Yosef Davis 400,000 (2) 400,000 (2) *
Kurt Fichthorn 400,000 (2) 400,000 (2) *
Jaime Radusky 160,000 (2) 160,000 (2) *
Claire Brook IRA 200,000 (2) 200,000 (2) *
Starling Corporation 1,200,000 (2) 1,200,000 (2) *
Jolie Investors,LLC 17,600,000 (2) 17,600,000 (2) *
Friends of Arachim 800,000 (2) 800,000 (2) *
Amro International 1,600,000 (2) 1,600,000 (2) *
CALP II, L.P. 4,000,000 (2) 4,000,000 (2) *
Briencrest Avenue,LLC 8,000,000 (2) 8,000,000 (2) *
(1) Consists of shares of our common stock issuable upon
conversion of our Series F convertible preferred stock,
which may be converted beginning in March 2000.
(2) Consists of shares of our common stock issuable upon
conversion and for interest payments on the $9,850,000
principal amount 4% convertible subordinated debentures,
which may be converted beginning in April 2000, and are due
beginning in February 2001.
(3) Percentage of ownership of each individual or entity shown
assuming all shares registered pursuant to this prospectus
are sold, when compared to the total number of shares of
common stock outstanding as of February 29, 2000. An
asterisk (*) indicates less than one percent.
USE OF PROCEEDS
We plan to sell the 313,000,000 shares of common stock in
this offering continuously on a best-efforts basis. This means
that we will sell stock from time to time, and we have no
guarantees that we will be able to sell any stock. We do not
have an underwriter helping us sell stock, but we may use brokers
or other agents to help us sell stock, and we will pay them if
they are successful. We may not receive any proceeds from this
offering, and if we do receive any proceeds, we plan to use the
money immediately. We cannot assure you that we will be able to
raise enough money to fund any of our projects, or to keep us
operating for any length of time.
Assuming an offering price of between $.45 and $.65 per
share, we estimate that the net proceeds to us from the sale of
all 313 million shares in this offering will range from $124
million to $179 million, depending on the offering price and
after deducting the costs and expenses of the offering, including
commissions of ten percent.
Any money we receive from stock sales will be used to
continue our existing projects, including the noninvasive glucose
sensor, the hyperthermia project, our environmental products, and
other products in various stages of development. In addition, we
will use some proceeds from this offering to acquire other
companies that are related to our existing projects or have
revenue. Because our products have taken longer to reach the
market than we hoped and planned, we may acquire companies in
order to obtain revenue. These other companies may or may not be
related to our existing operations, and may have revenue-
generating potential rather than historical revenue.
We expect to use any remainder of the net proceeds from this
offering for general corporate purposes, including working
capital and administrative expenses, but we don't currently have
a specific plan for all of the proceeds. As a result, our
management and Board of Directors will have broad discretion to
allocate the proceeds from this offering. Pending those uses, we
intend to invest the net proceeds from this offering in short
term, investment grade, interest-bearing investments.
Depending upon the actual price of the stock we sell in this
offering, we may not have sufficient funds to complete the
development of any of our products and to satisfy our working
capital requirements. If the net proceeds of this offering are
insufficient at any given time, we will have to seek additional
financing. We cannot assure you that we will be able to obtain
additional financing on acceptable terms when we need the funds.
If we can't raise additional capital, we would have to cease
operations.
We will not receive any proceeds from the stock sales of the
22,600,000 shares included in this prospectus on behalf of our
Series F preferred stockholders or the 39,400,000 shares included
in this prospectus on behalf of the holders of the $9,850,000
principal amount 4% subordinated convertible debentures. If and
when the preferred stockholders or the debenture holders sell
their stock, they will receive the proceeds.
DILUTION
This section addresses the dilution of the 313,000,000
shares we are selling on behalf of the company, and does not
address the dilution that will occur to the purchasers of the
stock offered by the selling stockholders.
As of September 30, 1999, our common stock had a net
tangible book value of $8,750,419 or $.009 per share based
upon 884,970,214 shares outstanding. Net tangible book value
per share is determined by dividing the number of shares of
common stock outstanding into our total tangible assets less
total liabilities and minority interest.
If we sell all 313 million shares from this offering at a
price of $.50 per share, the net tangible book value, using
September 30, 1999 figures, would increase to $146,470,419, or
approximately $.122 per share as of September 30, 1999. We
computed these figures based on an assumed offering price of $.50
per share, which may not be the offering price, and assuming the
deduction of all offering expenses, including a ten percent
commission or fee on all sales. Making those assumptions, the
net tangible book value per share will have increased $.113 per
share to our existing stockholders, and decreased by
approximately $.378 per share to the investors who purchase stock
in this offering.
Dilution represents the difference between the offering
price and the net tangible book value per share immediately
after the completion of the offering. Dilution arises from our
arbitrary decision as to the offering price per share. Dilution
of the value of the shares purchased by the investors in this
offering will also be due to the far lower book value of the
shares presently outstanding, and in part to expenses incurred in
connection with the offering. In the table set forth below, no
attempt was made to determine the dilutive effect of the exercise
of outstanding warrants. Because this is a best efforts
offering, and we do not know how many shares we will sell, we set
up the table showing the dilution that will occur if 100%, 50%
and 10% of the total 313 million shares are sold. The following
table illustrates this dilution, rounding off the nearest
thousandth of a cent:
ASSUMING: 100%-313,000,000 50%-156,500,000 10%-31,300,000
SHARES / SOLD SHARES / SOLD SHARES / SOLD
Offering Price Per Share $0.500 $0.500 $0.500
Net Tangible Book Value Per
Share Before Offering $ .009 $ .009 $ .009
Increase Per Share Attributable
to Payment by Investors $ .113 $ .065 $ .016
Net Tangible Book Value
Per Share After Offering $ .122 $ .074 $ .025
Dilution Per Share to Investors $0.378 $0.491 $0.475
CAPITALIZATION
The following table sets forth our capitalization as of
December 31, 1997 and 1998, and is made up of the figures taken
from our audited financial statements, copies of which are
incorporated by reference from our Form 10-K for the year ended
December 31, 1998 which included a qualification regarding our
ability to continue as a going concern.
(1) (1)
December 31,1997 December 31,1998
Stockholders' Equity:
Common Stock, par value $.10 per share;
authorized 975,000,000 shares; shares
issued and outstanding: 138,583,978 at
December 31, 1997 and 420,773,569
at December 31, 1998 $ 13,858,398 $ 42,077,357
Additional Paid-in Capital 104,932,920 92,725,285
Note Receivable issued for common stock (25,000) (25,000)
Warrants 6,396,994 6,396,994
Accumulated Deficit (120,699,236) (143,101,880)
----------- -----------
Total Capitalization (Deficiency) $ 4,464,076 ($ 1,927,244)
=========== ===========
December 31, 1997 December 31, 1998
(1) Does not include the effects of the
following:
Outstanding Warrants to purchase
common stock granted by the
Company, at exercise prices ranging
from $.05 to $4.03 per share,
expiring 1998 through 2003. 5,346,662 7,831,662
Note: In February 2000, our stockholders approved an increase in the number of
authorized shares of our common stock to 1.7 billion shares.
MARKET PRICE FOR COMMON STOCK
Our common stock trades on the electronic bulletin board
under the symbol "BICO". On March 2, 2000, the closing bid price
for the common stock was $.70. The following table sets forth
the high and low prices for our common stock during the calendar
periods indicated, through December 31, 1999.
Calendar Year High Low
and Quarter
1997 First Quarter $1.500 $ .625
Second Quarter $1.000 $ .3125
Third Quarter $ .719 $ .3125
Fourth Quarter $. 406 $ .0937
1998 First Quarter $ .250 $ .0937
Second Quarter $ .1875 $ .0313
Third Quarter $ .359 $ .0313
Fourth Quarter $ .126 $ .049
1999 First Quarter $ .084 $ .049
Second Quarter $ .340 $ .048
Third Quarter $ .125 $ .070
Fourth Quarter $ .099 $ .050
As of December 31, 1999, we had had approximately 80,000 holders,
including those who hold in street name, of our common stock, and
four holders of our preferred stock.
DESCRIPTION OF SECURITIES
Our authorized capital currently consists of 1,700,000,000
shares of common stock, par value $.10 per share and 500,000
shares of cumulative preferred stock, par value $10.00 per share.
Preferred Stock
Our Articles of Incorporation authorize the issuance of a
maximum of 500,000 shares of cumulative convertible preferred
stock, and authorize our Board of Directors to define the terms
of each series of preferred stock. In December 1999, our Board
of Directors authorized the creation of a Series F convertible
preferred stock. As of March 6, 2000 we had 452,000 shares of
our preferred stock outstanding.
Common Stock
Holders of our common stock are entitled to one vote per
share for each share held of record on all matters submitted to a
vote of stockholders. Holders of our common stock do not have
cumulative voting rights, and therefore the holders of a majority
of the shares of common stock voting for the election of
directors may elect all of the directors, and the holders of the
remaining common stock would not be able to elect any of the
directors. Subject to preferences that may be applicable to the
holders of our preferred stock, if any, the holders of our common
stock are entitled to receive dividends that may be declared by
our Board of Directors.
In the event of a liquidation, dissolution or winding up of
our operations, whether voluntary or involuntary, and subject to
the rights of any preferred stockholders, the holders of our
common stock would be entitled to receive, on a pro rata basis,
all of our remaining assets available for distribution to our
stockholders. The holders of our common stock have no
preemptive, redemption, conversion or subscription rights. All
of our outstanding shares of common stock are, and the shares of
common stock to be sold in this offering will be, fully paid and
nonassessable. As of February 29, 2000, there were 956,108,496
shares of our common stock outstanding.
Dividends
We have not paid cash dividends on our common stock, with the
exception of 1983, since our inception. We do not anticipate
paying any dividends at any time in the foreseeable future. We
expect to use any excess funds generated from our operations for
working capital and to continue to fund our various projects.
Our Articles of Incorporation restrict our ability to pay cash
dividends under certain circumstances. For example, our Board
can only declare dividends subject to any prior right of our
preferred stockholders to receive any accrued but unpaid
dividends. In addition, our Board can only declare a dividend to
our common stockholders from net assets that exceed any
liquidation preference on any outstanding preferred stock.
Subordinated Convertible Debentures
We issued subordinated convertible debentures that have a one-
year term and are due in 2001. The debentures earn interest at
four percent (4%) and are convertible into shares of common
stock. As of March 6, 2000, we had $9,850,000 in subordinated
debentures outstanding.
Employment Agreement Provisions Related to Changes in Control
We have employment agreements with Fred E. Cooper, David L.
Purdy, Anthony J. Feola, Glenn Keeling, and two non-executive
officer employees. The agreements provide that in the event of a
"change of control", we must issue to Mr. Cooper and Mr. Purdy
shares of common stock equal to five percent (5%), to issue to
Mr. Feola four percent (4%), to issue Mr. Keeling three percent
(3%), and to issue the two non-executive officer employees two
percent (2%) each of our outstanding shares of common stock. For
purposes of these agreements, a change of control is deemed to
occur: (i) when 20% or more of our outstanding voting stock is
acquired by any person, (ii) when one-third (1/3) or more of our
directors are not continuing directors, as defined in the
agreements, or (iii) when a controlling influence over our
management or policies is exercised by any person or by persons
acting as a group within the meaning of the federal securities
laws.
Warrants
As of February 29, 2000, we had outstanding warrants to
purchase 31,015,662 shares of our common stock. These warrants
have exercise prices ranging from $.06 to $4.03 per share and
expiration dates through April 28, 2004, and held by members of
our scientific advisory board, certain employees, officers,
directors, loan guarantors, and consultants.
Holders of warrants are not entitled to vote, to receive
dividends or to exercise any of the rights of the holders of
shares of our common stock for any purpose until the warrant
holder properly exercises the warrant and pays the exercise
price.
Transfer Agent
Chase-Mellon Shareholder Services in New York, New York acts
as our Registrar and Transfer Agent for our common stock. We act
as our own registrar and transfer agent for our preferred stock
and warrants.
PLAN OF DISTRIBUTION
This is a "best-efforts" offering, and we will not be working
with any underwriter on this offering. We may sell the shares of
common stock from time to time in one or more transactions. The
offering price will fluctuate with the market price for our
stock, so we will sell the stock at various prices. As of the
date of this Prospectus, we believe we will be able to sell the
common stock at prices ranging from $.45 per share to $.65 per
share, but we may need to sell the stock at prices above or below
that range, depending upon the market. We may sell this stock
directly, or we may hire brokers or other licensed agents to sell
it for us, in which case we will give them some consideration,
which could take the form of a commission or other payment, and
will not exceed ten percent (10%). If any brokers or dealers
who participate in this offering are deemed to be underwriters,
then any consideration they receive may be deemed to be
underwriting discounts or commissions under the federal
securities laws
If we make a particular offer that triggers certain securities
law filing requirements, we will file a supplement to this
Prospectus that sets forth the number of shares being offered and
the terms of the offering, including the name or names of any
underwriters, dealers, brokers or agents, the purchase price paid
by any underwriter for the shares and any discounts, commissions
or concessions allowed or reallowed to dealers, including the
proposed selling price to the public.
In order to comply with the securities laws of certain
jurisdictions, we may be required to sell stock only through
registered or licensed brokers or dealers. In addition, we may
not be able to sell any stock in certain states unless we
register the stock in those states or otherwise comply with
applicable state securities laws by exemption, qualification or
otherwise.
SHARES ELIGIBLE FOR FUTURE SALE
As long as this registration statement remains effective with
the SEC and we remain current in our SEC filings, the shares will
be freely transferable without restriction or further
registration unless they are acquired by one of our affiliates.
Affiliates generally include our officers and directors and any
other person or entity that controls, is controlled by, or is
under common control of BICO. Any affiliates who acquire stock
from this offering will continue to be subject to the volume
restrictions of Rule 144, as we describe below.
In general, under Rule 144 as currently in effect, our
affiliates and any person (or persons whose shares are
aggregated) who has beneficially owned restricted shares for at
least two years would be entitled to sell within any three-month
period a number of shares which does not exceed the greater of
(i) one percent (1%) of the then outstanding shares of our common
stock, or (ii) the average weekly trading volume of our common
stock during the four calendar weeks preceding such sale. Rule
144 also requires those sales to be placed through a broker or
with a market maker on an unsolicited basis and requires that
there be adequate current public information available concerning
our company. A person who is deemed not to have been an affiliate
of our company at any time during the three months preceding a
sale, and who has beneficially owned restricted shares for at
least one year, would be entitled to sell such shares under Rule
144(k) without regard to any of the limitations discussed above.
Restricted shares properly sold in reliance upon Rule 144 are
thereafter freely tradable without restriction or registration
under the 1933 Act, unless thereafter held by an affiliate.
We can't make any predictions as to the effect, that sales of
our common stock or the availability of shares for sale will have
on the market price of our common stock. Nevertheless, sales of
any substantial amounts of common stock in the public market will
probably adversely affect the prevailing market price.
LEGAL PROCEEDINGS
During April 1998, we, along with our corporate
affiliates, were served with subpoenas by the U.S. Attorneys'
office for the U.S. District Court for the Western District of
Pennsylvania. The subpoenas requested certain corporate,
financial and scientific documents and we continue to provide
documents in response to their requests.
On April 30,1996, a class action lawsuit was filed
against us, Diasensor.com and our individual officers and
directors. The suit, captioned Walsingham v. Biocontrol
Technology, et al., has been certified as a class action, and
is pending in the U.S. District Court for the Western District
of Pennsylvania. The suit alleges misleading disclosures in
connection with the noninvasive glucose sensor and other
related activities. By mutual agreement of the parties, the
suit remains in the pre-trial pleading stage, and we are
unable to determine the outcome or its impact upon our
operations at this time.
We leased space in two locations in Indiana County for
our manufacturing facilities. We are still using one space,
which we have upgraded with leasehold improvements. The other
space, which we had leased as expansion space, was the subject
of a judgment proceeding. We gave up possession of the
expansion space in Indiana County in response to the filing of
such judgment for nonpayment of lease fees. In return for
possession of the space, the leaseholder agreed not to pursue
any action against us on the judgment.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Sweeney & Associates, P.C. of Pittsburgh, PA, our securities
counsel, will pass on the validity of the shares in this
offering. Thomas E. Sweeney, Jr., Esq., a former partner,
currently holds approximately 20,000 shares of our common stock
and warrants to purchase the following shares of Diasensor.com,
Inc., one of our affiliates: 40,000 shares at $.50 per share
until October 23, 2000 and 60,000 shares at $1.00 per share until
January 6, 2003.
EXPERTS
Our consolidated financial statements as of December 31, 1998,
1997 and 1996 (all of which included an explanatory paragraph
referring to an uncertainty regarding our ability to continue as
a going concern) incorporated by reference in this Prospectus,
have been audited by Thompson Dugan, independent certified public
accountants, as stated in their report appearing in our Form 10-K
for the year ended December 31, 1998 and has been included in
reliance upon that report given upon the authority of that firm
as experts in auditing and accounting.
No dealer, salesman or other
person has been authorized to give
any information or to make any
representation other than those
contained in this Prospectus and
you may not rely upon that
information. Neither the delivery
of this Prospectus nor any sale
made hereunder shall, under any
circumstances, create any
implication that there has been no
change in our affairs or
operations since the date of this
Prospectus. This Prospectus does 375,000,000 Shares
not constitute an offer to sell or
solicitation of an offer to buy
any securities offered in any
jurisdiction in which such offer
or solicitation is not qualified
to do so or to anyone to whom it
is unlawful to make such offer or BIOCONTROL TECHNOLOGY
solicitation. INC.
__________________________
TABLE OF CONTENTS Page Common Stock
Prospectus Delivery
Requirements ii
Incorporation by Reference ii
The Company 1 ____________________
Risk Factors 5
Selling Stockholders 10 P R O S P E C T U S
Use of Proceeds 11 ____________________
Dilution 12
Capitalization 13 March 8, 2000
Market Price for Common Stock 13
Description of Securities 14
Plan of Distribution 15
Shares Eligible for Future Sale 16
Legal Proceedings 16
Interests of Named
Experts and Counsel 17
Experts 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth the Company's estimated expenses
incurred in connection with the issuance and distribution of
the securities described in the Prospectus other than
underwriting discounts and commissions:
Printing and Copying $ 2,500
Legal Fees 20,000
SEC Registration Fees 70,890
Accounting Fees 5,000
------
Total $98,390
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Except as set forth herein, the Company has no provisions
for the indemnification of its officers, directors or control
persons. David L. Purdy, Fred E. Cooper, Anthony J. Feola
and Glenn Keeling have employment contracts, which
include indemnification provisions, which indemnify them to
the extent permitted by law. The Company and its affiliates
Diasensor.com, Inc., Coraflex, Inc., Petrol Rem, Inc., and IDT,
Inc. are incorporated under the Business Corporation Law of the
Commonwealth of Pennsylvania. Section 1741, et seq. of said law,
in general, provides that an officer or director shall be
indemnified against reasonable and necessary expenses incurred
in a successful defense to any action by reason of the fact
that he serves as a representative of the corporation, and may
be indemnified in other cases if he acted in good faith and in
a manner he reasonably believed was in, or not opposed to, the
best interests of the corporation, and if he had no reason to
believe that his conduct was unlawful, except that no
indemnification is permitted when such person has been
adjudged liable for recklessness or misconduct in the
performance of his duty to the corporation, unless otherwise
permitted by a court of competent jurisdiction.
Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the
opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is therefore
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person
in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
RECENT SALES OF UNREGISTERED SECURITIES
The Company recently completed sales of unregistered
securities as summarized below. Unless otherwise
indicated, all offers and sales were made pursuant to the
"private offering" exemption under Section 4(2) of the 1933
Act. Accordingly, because the shares sold constitute
"restricted securities" within the meaning of Rule 144 under
the 1933 Act, stop-transfer instructions were given to the
transfer agent, and the stock certificates evidencing the
shares bear a restrictive legend.
During 1996 through March 1998, the Company entered into
agreements with several entities, which agreed to use their
best efforts to sell the Company's common stock to foreign
investors subject to the requirements set forth in
Regulation S of the Securities Act of 1933 ("Regulation
S"). Such entities undertook to ensure compliance with
Regulation S, which among other things, limits a foreign
investor's ability to trade the Company's stock in the United
States. In addition to sales of common stock pursuant to
Regulation S, the Company has also sold convertible preferred
stock and convertible debentures. The debentures mandatorily
convert to common stock at prices, which are discounted to the
market price, but cannot be converted for periods of 45 to 90
days following the purchase of the debentures; such holding
periods were enforced via the use of stop transfer
instructions and other notices. The following funds were
raised pursuant to Regulation S offerings during the years
noted: approximately $21.6 million in 1996, approximately $22
million in 1997, and approximately $6.9 million in 1998. In
August 1998, the Company sold convertible debentures pursuant
to Regulation D; each debenture has mandatory conversion
provisions and was convertible beginning ninety days from
purchase. Proceeds of the sales were used to continue to
fund the Company's research and development projects and to
provide working capital for the Company. Beginning in December
1999, the Company sold $5,650,000 of its Series F Convertible
Preferred Stock, and $9,850,000 of its subordinated convertible
debentures in private offerings. Both the preferred stock and
the debentures have holding periods of ninety to one hundred
twenty days prior to conversion and are convertible into common
stock at prices which are discounted to the market price.
Proceeds of the sales were used to continue to fund the Company's
projects, and to provide working capital for the Company.
UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
registration statement; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration
statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to
set forth the results of the subscription offer and the terms of
any subsequent reoffering thereof. If any public offering is to
be made on terms differing from those set forth on the cover page
of the prospectus, a post-effective amendment will be filed to
set forth the terms of such offering.
EXHIBIT TABLE
Exhibit Sequential Page No.
3.1(4) Articles of Incorp. as filed March 20, 1972... N/A
3.2(4) Amendment to Articles filed May 8,1972...... N/A
3.3(4) Restated Articles filed June 19,1975......... N/A
3.4(4) Amendment to Articles filed February 4,1980.. N/A
3.5(4) Amendment to Articles filed March 17,1981.... N/A
3.6(4) Amendment to Articles filed January 27,1982.. N/A
3.7(4) Amendment to Articles filed November 22,1982. N/A
3.8(4) Amendment to Articles filed October 30,1985.. N/A
3.9(4) Amendment to Articles filed October 30,1986. N/A
3.10(4) By-Laws...................................... N/A
3.11(5) Amendment to Articles filed December 28,1992. N/A
5.1 Legal Opinion of Sweeney & Associates P.C 27
10.1(1) Manufacturing Agreement...................... N/A
10.2(1) Research and Development Agreement........... N/A
10.3(1) Termination Agreement........................ N/A
10.4(1) Purchase Agreement........................... N/A
10.5(2) Sublicensing Agreement and Amendments........ N/A
10.6(3) Lease Agreement with 300 Indian Springs Partnership N/A
10.7(4) Lease Agreement with Indiana County.......... N/A
10.8(5) First Amendment to Purchase Agreement dated
December 8, 1992............. N/A
10.9(6) Fred E. Cooper Employment Agreement dated 11/1/94.... N/A
10.10(6)David L. Purdy Employment Agreement dated 11/1/94.... N/A
10.11(6)Anthony J. Feola Employment Agreement dated 11/1/94.... N/A
10.12(6)Glenn Keeling Employment Agreement dated 11/1/94.... N/A
16.1(7) Disclosure and Letter Regarding Change in
Certifying Accountants dated 1/25/95.......... N/A
24.1 Consents of Thompson Dugan, Independent
Certified Public Accountants............. 29
24.2 Consent of Counsel Included in Exhibit 5.1 above... 27
25.1 Power of Attorney of Fred E. Cooper....... 26
(included under "Signatures")
(1) Incorporated by reference from Exhibit with this
title filed with the Company's Form 10-K for the year ended
December 31, 1991
(2) Incorporated by reference from Exhibit with this
title to Form 8-K dated May 3, 1991
(3) Incorporated by reference from Exhibit with this
title to Form 10-K for the year ended December 31, 1990
(4) Incorporated by reference from Exhibits with this
title to Registration Statement on Form S-1 filed on December 1,
1992
(5) Incorporated by reference from Exhibits with this
title to Amendment No. 1 to Registration Statement on Form S-1
filed on February 8, 1993
(6) Incorporated by reference from Exhibit with this
title to Form 10-K for the year ended December 31, 1994
(7) Incorporated by reference from Exhibit with this
title to Form 8-K dated January 25, 1995
Exhibit 25.1
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned on
March 8, 2000.
BIOCONTROL TECHNOLOGY, INC.
___________________________
By:/s/ Fred E. Cooper
Fred E. Cooper, Director,
CEO, principal executive
officer, principal financial
officer, and principal
accounting officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual
whose signature appears below constitutes and appoints Fred
E. Cooper his true and lawful attorney-in-fact and agent with
full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this
Registration Statement, and to file the same with all
exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person,
hereby ratifying and7 confirming all that said attorney-in-
fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities indicated on the
dates indicated.
Signature Title Date
/s/ David L. Purdy President, March 8, 2000
David L. Purdy Treasurer, Director
/s/ Anthony J. Feola Senior Vice President, March 8, 2000
Anthony J. Feola Director
/s/ Glenn Keeling Director March 8, 2000
Glenn Keeling
/s/ Paul Stagg Director March 8, 2000
Paul Stagg
/s/ Stan Cottrell Director March 8, 2000
Stan Cottrell
Exhibit 5.1
SWEENEY & ASSOCIATES, P.C.
ATTORNEYS AT LAW
7300 PENN AVENUE TELEPHONE (412) 731-1000
PITTSBURGH, PA 15208 FACSIMILE (412) 731-9190
March 8, 2000
To the Board of Directors
Biocontrol Technology, Inc.
2275 Swallow Hill Road
Building 2500; 2nd Floor
Pittsburgh, PA 15220
Gentlemen:
We have examined the corporate records and proceedings of
Biocontrol Technology, Inc, a Pennsylvania corporation (the
"Company"), with respect to:
The organization of the Company;
The legal sufficiency of all corporate proceedings of
the Company taken in connection with the creation, issuance, the
form and validity, and full payment and non-assessability, of all
the present outstanding and issued common stock of the Company;
and
The legal sufficiency of all corporate proceedings of
the Company, taken in connection with the creation, issuance, the
form and validity, and full payment and non-assessability, when
issued, of shares of the Company's common stock (the "Shares"),
to be issued by the Company covered by the registration statement
(hereinafter referred to as the "Registration Statement") filed
with the Securities and Exchange Commission March 8, 2000, file
number 33-______ (in connection with which Registration Statement
this opinion is rendered.)
We have also examined such other documents and such
questions of law as we have deemed to be necessary and
appropriate, and on the basis of such examinations, we are of the
opinion:
(a) That the Company is duly organized and validly
existing under the laws of the Commonwealth of
Pennsylvania;
(b) That the Company is authorized to have outstanding
1,700,000,000 shares of common stock of which
956,108,476 shares of common stock were outstanding as
of February 29, 2000;
(c) That the Company has taken all necessary
and required corporate proceedings in connection
with the creation and issuance of the said
presently issued and outstanding shares of common
stock and that all of said stock so issued and
outstanding has been validly issued, is fully paid
and non-assessable, and is in proper form and
valid;
(d) That when the Registration Statement
shall have been declared effective by order of the
Securities and Exchange Commission, after a
request for acceleration by the Company, and the
Shares shall have been issued and sold upon the
terms and conditions set forth in the Registration
Statement, then the Shares will be validly
authorized and legally issued, fully paid and non-
assessable.
We hereby consent (1) to be named in the Registration
Statement, and in the Prospectus which constitutes a part
thereof, as the attorneys who will pass upon legal matters in
connection with the sale of the Shares, and (2) to the filing of
this opinion as Exhibit 5.1 of the Registration Statement.
Sincerely,
Sweeney & Associates, P.C.
Exhibit
24.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 25, 1999 accompanying the
consolidated financial statements of Biocontrol Technology, Inc.
and subsidiaries appearing in the 1998 Annual Report on Form 10-K
for the year ended December 31, 1998 which is incorporated by
reference in this Registration Statement on Form S-3. We consent
to the incorporation by reference in the Registration Statement
of the aforementioned report and to the use of our name as it
appears under the caption "EXPERTS". Our report on the
consolidated financial statements referred to above includes an
explanatory paragraph which discusses going concern
considerations as to Biocontrol Technology, Inc.
/s/ Thompson Dugan
Pittsburgh, Pennsylvania