As filed with the Securities and Exchange Commission on December 9, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
IBAH, INC.
(Exact name of registrant as specified in charter)
Delaware 52-1670189
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Four Valley Square
512 Township Line Road
Blue Bell, PA 19422
(215) 283-0770
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
-----------------------
GERALDINE A. HENWOOD
Chief Executive Officer
IBAH, Inc.
Four Valley Square
512 Township Line Road
Blue Bell, PA 19422
(215) 283-0770
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------
Copies to:
THOMAS J. SHARBAUGH JANE HOLLINGSWORTH
Morgan, Lewis & Bockius LLP General Counsel
2000 One Logan Square IBAH, Inc.
Philadelphia, PA 19103-6993 Four Valley Square
(215) 863-5000 512 Township Line Road
Blue Bell, PA 19422
(215) 283-0770
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
============================================================================================================
Amount Proposed maximum Proposed maximum Amount of
Title of each class of to be offering price aggregate registration
securities to be registered registered per unit offering price fee
- ------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value 3,059,071 shares $6.375(1) $19,501,577.00(1) $6,725.00(2)
============================================================================================================
(1) Based on the average of the reported high and low sales prices of the
Common Stock reported on the Nasdaq National Market of The Nasdaq Stock
Market, Inc. on December 5, 1996, estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457(c).
(2) The registration fee represents one twenty-ninth of one percent of the
proposed maximum aggregate offering price.
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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
PROSPECTUS
3,059,071 Shares
IBAH, Inc.
Common Stock
------------------
The shares offered hereby (the "Shares") consist of 3,059,071 shares of
common stock, $.01 par value per share (the "Common Stock"), of IBAH, Inc., a
Delaware corporation ("IBAH" or the "Company"), which are owned by the selling
stockholders listed herein under "Selling Stockholders" (collectively, the
"Selling Stockholders"). The Shares may be offered from time to time by the
Selling Stockholders. All expenses of registration incurred in connection
herewith are being borne by the Company, but all selling and other expenses
incurred by a Selling Stockholder will be borne by that Selling Stockholder. The
Company will not receive any of the proceeds from the sale of the Shares by the
Selling Stockholders.
The Selling Stockholders have not advised the Company of any specific plans
for the distribution of the Shares covered by this Prospectus, but it is
anticipated that the Shares will be sold from time to time primarily in
transactions (which may include block transactions) on the Nasdaq National
Market of The Nasdaq Stock Market, Inc. (the "Nasdaq National Market") at the
market price then prevailing, although sales may also be made in negotiated
transactions or otherwise. The Selling Stockholders may effect such transactions
by selling the Shares to or through broker-dealers and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders or the purchasers of the Shares from whom such broker-
dealers may act as agent or to whom they sell as principal or both (which
compensation to a particular broker-dealer might be in excess of customary
commissions). The Selling Stockholders and the brokers and dealers through whom
sale of the Shares may be made may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
their commissions or discounts and other compensation may be regarded as
underwriters' compensation. See "Plan of Distribution."
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "IBAH." On December 5, 1996, the last reported closing price of the
Common Stock was $6.375 per share.
------------------
FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY
POTENTIAL INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE 4.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------
The date of this Prospectus is _________________, 1996.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as the following
regional offices of the Commission: Seven World Trade Center, 13th Floor, New
York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the
Commission by mail at prescribed rates. Requests should be directed to the
Commission's Public Reference Branch, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material also may be accessed electronically by
means of the Commission's home page on the Internet (http://www.sec.gov). In
addition, such reports, proxy statements and other information concerning the
Company can be inspected at the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all exhibits thereto, referred to as the "Registration
Statement") filed by the Company with the Commission under the Securities Act,
with respect to the securities offered hereby. 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
Commission. Reference is hereby made to the Registration Statement and to the
exhibits thereto for further information with respect to the Company and the
securities offered hereby. Copies of the Registration Statement and the exhibits
thereto are on file at the offices of the Commission and may be obtained upon
payment of the prescribed fee or may be examined without charge at the public
reference facilities of the Commission described above. Statements contained
herein concerning the provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company (File
No. 0-19892) with the Commission are incorporated by reference into this
Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31, 1995.
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996.
(c) Current Report on Form 8-K/A-1 dated October 1, 1996.
(d) The description of the Company's Common Stock which is contained in
the Company's Registration Statement on Form 8-A filed under the Exchange Act,
including any amendment or reports filed for the purpose of updating such
description.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of the filing of such reports or documents. Any statement
contained in a document, all or a portion of which is incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained or incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such
2
exhibits are specifically incorporated by reference into the documents that this
Prospectus incorporates). Written or oral requests for copies should be directed
to Leonard F. Stigliano, Chief Financial Officer, IBAH, Inc., Four Valley
Square, 512 Township Line Road, Blue Bell, PA 19422, (215) 283-0770.
THE COMPANY
The Company is a worldwide leader in providing comprehensive clinical
research and development services to complement the research and development
activities of client companies in the pharmaceutical, biotechnology, medical
device and diagnostics industries. All of the Company's services are designed to
help client companies accelerate products from discovery through development and
commercialization more efficiently and cost-effectively. The Company provides
its array of services through three primary operating divisions, Bio-Pharm
Clinical Services Division, with operations in the United States, Europe and
Australia, and Bio-Pharm Pharmaceutics Services Division and Resource Biometrics
Division with operations in the United States.
Bio-Pharm Clinical Services Division ("Clinical Services"), the core
business of the Company, is a full- service international clinical research
organization ("CRO") that began operations in 1985. This division's primary
services are designing pharmaceutical product development programs, managing
pre-clinical studies, designing and conducting clinical trials, clinical data
management and biostatistical analysis, writing reports of study findings,
health economics analysis and preparing regulatory dossier filings for market
approval of client products. The division has a worldwide staff of approximately
610 employees with operations in the United States, Australia, Belgium, Canada,
the Czech Republic, Denmark, Finland, France, Germany, the Netherlands, Spain,
Switzerland and the United Kingdom. This division also operates an office in
Russia through a joint venture with a Russian company.
Bio-Pharm Pharmaceutics Services Division ("Pharmaceutics Services")
provides traditional product formulation services, process development,
manufacture of clinical supplies and placebos, pilot plant manufacturing and
clinical trials supplies packaging, offering clients the opportunity to avoid
disruption in large-scale manufacturing by outsourcing relatively small-scale
manufacturing of clinical supplies. This division's services also include
analytical testing, shelf life stability, process validation and analysis of
other chemical and physical properties required in filing for marketing approval
of drugs. The division has approximately 50 employees. Pharmaceutics Services
commenced business in October 1993 and operates from a 20,000 square foot "Good
Manufacturing Practice" ("GMP") manufacturing facility with full pilot plant
capabilities located in suburban Philadelphia.
On April 19, 1996, the Company completed a public offering of 3,000,000
shares of Common Stock in which the Company raised approximately $18 million in
net proceeds. The shares were sold to selected institutional investors.
Resource Biometrics, Inc. ("RBI") was acquired by the Company on July 18,
1996 (the "RBI Transaction"). RBI provides software products and data services
to the pharmaceutical, biotechnology and medical device industries. RBI's
software tools are used to increase the efficiency of data cleanup, database
consolidation, data analysis and reporting. RBI has a staff of 25 employees and
operates from an office in San Francisco, California.
HGB, Inc. ("HGB"), which did business as "The Hardardt Group," was acquired
by the Company on October 1, 1996 (the "Hardardt Transaction"). HGB, which now
operates as a part of the Bio-Pharm Clinical Services Division, specialized in
clinical trial management of drug development trials for the pharmaceutical,
biotechnology, medical device and diagnostics industries.
The mailing address of the Company's principal executive office is Four
Valley Square, 512 Township Line Road, Blue Bell, Pennsylvania 19422, and its
telephone number is (215) 283-0770.
3
RISK FACTORS
In addition to the other information appearing elsewhere or incorporated by
reference in this Prospectus, prospective investors should consider the
following factors in evaluating the Company and its business before purchasing
any of the Common Stock offered hereby.
Loss of Clinical Research Contracts. The Company's clients generally have
the right to terminate a clinical research contract, potentially causing periods
of excess capacity and reductions in service revenues and net income. Contracts
may be terminated for various reasons, including unexpected or undesired
results, inadequate patient enrollment or investigator recruitment, production
problems resulting in shortages of the drug being studied, adverse patient
reactions to the drug, or the client's decision to de-emphasize a particular
trial. In most instances, if a contract is terminated, the Company is entitled
to receive revenues earned to date plus a termination fee. Generally, the
termination of any one contract would not have a material adverse impact on the
Company, although such a termination may cause unusual variability in the
Company's financial results which may, in turn, result in a decline in the
market price for the Company's Common Stock. In addition, the loss of a large
contract or the simultaneous loss of multiple contracts could have a material
adverse impact on the Company's profitability and/or stock price because of
possible unplanned periods of excess capacity which could adversely affect the
Company's backlog or future revenues.
Dependence on Certain Industries and Clients. The Company provides
services primarily to the pharmaceutical and biotechnology industries.
Accordingly, the Company's revenues are substantially dependent on these
industries' expenditures on research and development. Although these
expenditures are large, the number of potential CRO clients is relatively
limited, and it is not uncommon for a CRO to derive over 10% of its revenues
from a single company. Five of the Company's clients accounted for 10% or more
of its revenues in 1993, 1994 and 1995. In 1995, two clients accounted for 10.2%
and 14.9%, respectively; in 1994, three clients accounted for 10.4%, 13.1% and
14.7%, respectively; and in 1993, four clients accounted for 12.4%, 14.9%, 16.5%
and 17.7%, respectively. Additionally, the Company's operations could be
materially and adversely affected by, among other factors, any economic downturn
in the pharmaceutical or biotechnology industries, the current trend toward
consolidation in these industries, a decrease in clients' research and
development expenditures or a change in the governmental regulations pursuant to
which these industries operate. Furthermore, management believes that the
Company has benefitted to date from the increasing tendency of pharmaceutical
and biotechnology companies to outsource the performance and analysis of large
clinical research projects to independent parties. Should this tendency be
reduced or halted entirely, the Company's operations would be materially and
adversely affected.
Fluctuations in Operating Results; Possible Volatility of Stock Price. The
Company's operating results can fluctuate as a result of factors such as the
timing of start-up expenses for new offices, acquisitions, delays experienced in
commencement or completion of clinical trials, termination of clinical trials,
mix of services and foreign exchange rate fluctuations. Because a high
percentage of the Company's operating costs are relatively fixed while revenue
recognition is subject to fluctuations, minor variations in the timing of
contracts or the progress of clinical trials may cause significant variations in
operating results. Therefore, quarterly comparisons of the Company's financial
results should not be relied upon as an indication of future performance. In
addition, the market price of the Company's Common Stock could be subject to
wide fluctuations in response to variations in operating results from quarter to
quarter, changes in earnings estimates by analysts and market conditions in the
industry and general economic conditions. Furthermore, the stock market has
experienced significant price and volume fluctuations unrelated to the operating
performance of particular companies. These market fluctuations may have an
adverse effect on the market price of the Company's Common Stock.
Heightened Competition. There has been a substantial increase in the
number and size of CROs over the past decade. The Company's business is highly
competitive and some of its competitors are larger and have substantially
greater capital, technical and other resources than the Company. Because the
Company offers services of a broad, full service nature (including clinical
program management, data management, analyses and reporting, regulatory filings,
consulting and pharmaceutical services), it may not always be price competitive
with smaller CROs that may have lower overhead costs. The Company primarily
competes against in-house research departments of pharmaceutical companies,
universities and teaching hospitals, and full-service CROs. As a result of
competitive pressures, the industry is
4
consolidating. This trend is likely to produce increased competition among the
larger CROs for both clients and acquisition candidates. In addition, the CRO
industry has attracted the attention of the investment community which could
lead to increased competition by increasing the availability of financial
resources for CROs. Increased competition may lead to price and other forms of
competition that may adversely affect the Company's profitability.
Management of Business Expansion. Since its inception, the Company's
business and operations have experienced substantial growth, including investing
in the creation of offices in Europe and Australia. The Company believes that
international expansion places a strain on operational, human and financial
resources. In order to manage this growth, the Company must continue to improve
its operating, administrative and information systems, accurately predict its
future personnel and resource needs to meet client contract commitments, track
the progress of ongoing client projects and attract and retain qualified
personnel. Other than risks associated with expansion generally, foreign
expansion also may subject the Company to additional risks of assimilating
differences in foreign business practices, hiring and retaining qualified
personnel, overcoming language barriers, limitations on asset transfers, changes
in foreign regulations and political turmoil.
Adverse Effect of Exchange Rate Fluctuations. Approximately 9%, 26% and
38% of the Company's net revenues for fiscal 1993, 1994 and 1995, respectively,
were derived from the Company's operations outside of North America. Because the
revenues and expenses of the Company's foreign operations are generally
denominated in local currencies, exchange rate fluctuations between local
currencies and the United States dollar will subject the Company to currency
translation risk with respect to the results of its foreign operations. In cases
where the Company contracts for a multi-country trial and a significant portion
of the contract expenses are in a different currency than the contract currency,
the Company seeks to contractually shift to its client the effect of
fluctuations in the relative values of the contract currency and the currency in
which the expenses are incurred.
Dependence Upon and Retention of Certain Personnel. The Company relies on
a number of key executives, including Geraldine A. Henwood, its Chief Executive
Officer, upon whom the Company carries a key person life insurance policy. The
Company does not have an employment agreement with Ms. Henwood. In addition, the
Company must maintain a scientific staff with technical and professional
qualifications appropriate to the services offered. The Company has sought to
recruit and retain physicians and Ph.D.s from academia and the pharmaceutical
industry. These individuals are generally highly skilled and highly compensated.
The Company believes that the loss of any of its key executives and/or key
scientific staff could have a material adverse effect on its business.
Potential Liability. Clinical trials involve a significant risk of
liability for personal injury, illness or death to patients from adverse
reactions to study drugs. Many patients in clinical trials are seriously ill and
are at a great risk of further illness or death as a result of factors other
than the participation in the clinical trial. Because of the cost, the Company
has only a limited amount of insurance to cover such potential liabilities and
relies on indemnity agreements in addition to insurance. However, these
indemnities generally do not protect the Company against certain of its own
actions such as those involving negligence or misconduct. Moreover, these
indemnities are contractual arrangements that are subject to negotiation with
individual clients and investigators, and the terms and scope of such
indemnities vary among clients, investigators and trials. The Company sometimes
indemnifies and holds harmless its clients and investigators against liabilities
incurred by such parties due to the actions or inactions of the Company.
Finally, because the financial performance of these indemnities generally is not
secured, the Company bears the risk that an indemnifying party may not have the
financial ability to fulfill its indemnification obligations. The Company could
be materially and adversely affected if it were required to pay damages or incur
defense costs in connection with a claim that is outside the scope of an
indemnity in its favor or where such an indemnity, although applicable, is not
performed in accordance with its terms.
Acquisition Risks. The Company has reviewed and is continuing to review
various acquisition candidates and has on-going discussions in the ordinary
course of business concerning possible acquisitions, both in the United States
and Europe. There can be no assurance, however, that such discussions will lead
to additional acquisitions or to an actual transaction. In July 1996, the
Company acquired RBI, a software products and data services company located in
San Francisco, California. In October 1996, the Company acquired HGB, a CRO
specializing in clinical trial management of drug development trials.
Acquisitions involve numerous risks, including difficulties in the assimilation
5
of the service, products and operations of the acquired companies, expenses
incurred in connection with the acquisition and subsequent assimilation of
operations, products and services, diversion of management's attention from
other business concerns, and the potential loss of key employees or clients of
the acquired company. Acquisitions of foreign companies also may involve the
additional risks of assimilating differences in foreign business practices and
overcoming language barriers. There can be no assurance that the Company will
have available capital to finance any such acquisitions, will not be subject to
competition with respect to acquiring target businesses and that the RBI and HGB
acquisitions or any future acquisitions will be successfully integrated into the
Company's operations. Such future acquisitions, if any, could be financed
through future equity issuances, among other methods, which would result in
dilution to existing stockholders.
Impact of Government Regulation; Compliance with Regulatory Standards. The
Company's business has resulted from the extensive regulatory framework imposed
by various governments on the approval process for new drugs, biologicals,
medical devices and diagnostics. In the United States, the historical trend has
been in the direction of increased regulation by the United States Food and Drug
Administration (the "FDA") and other governmental agencies. In the European
Community (the "EC"), the general trend has been toward coordination of common
standards for clinical testing of new drugs, leading to changes in the various
requirements imposed by each country. Generally, the level of regulation in the
EC and other foreign jurisdictions is somewhat less comprehensive and burdensome
than regulation in the United States, but there are differences, and in some
respects foreign regulation may be more burdensome than FDA requirements.
Changes in regulation, including, without limitation, a relaxation in regulatory
requirements or the introduction of simplified drug approval procedures, could
materially and adversely affect the demand for the services offered by the
Company. Failure to comply with applicable regulations could result in the
termination of ongoing research or the disqualifications of data, either of
which could have a material and adverse effect on the Company, including,
without limitation, damage to the Company's reputation in the CRO industry.
Uncertainty in Health Care Industry and Proposed Health Care Reform. The
health care industry is subject to changing political, economic and regulatory
influences that may affect the pharmaceutical and biotechnology industries. In
the last few years, several comprehensive health care reform proposals were
introduced in the United States Congress. The intent of the proposals was,
generally, to expand health care coverage for the uninsured and reduce growth of
total health care expenditures. Recently, one of these proposals was enacted
into law and additional health care reform proposals may continue to be
considered by the Congress. Implementation of government health care reform may
adversely affect research and development expenditures by pharmaceutical and
biotechnology companies which could decrease the business opportunities
available to the Company. Management is unable to predict the likelihood of such
or similar legislation being enacted into law or the effects such legislation
would have on the Company.
Shares Eligible for Future Sale. As of November 15, 1996, there were
approximately 7,400,000 shares of Common Stock outstanding which constituted
"restricted securities," as that term is defined under Rule 144 promulgated
under the Securities Act, substantially all of which may be sold at any time,
subject to the restrictions of Rule 144. In addition, as of November 15, 1996,
there were outstanding options to purchase 3,104,682 shares of Common Stock, of
which options to purchase 2,127,252 shares were currently exercisable. An
additional 662,324 shares were reserved for issuance under the Company's stock
option plans. All of the shares underlying options under such plans are covered
by effective registration statements. An additional 3,723,152 shares were
reserved for issuance upon the exercise of outstanding warrants, of which
3,683,152 shares have been or will be registered for resale. An additional
2,248,995 shares were reserved for issuance upon the conversion of outstanding
shares of preferred stock, which shares have been registered for resale.
Possible or actual sales made under Rule 144, or pursuant to registration or
other exemptions from registration under the Securities Act, of the
aforementioned shares of Common Stock may have an adverse effect upon the market
price of the Common Stock.
Risk of Hazardous Material Contamination. The Company's development
activities relating to the provision of services to its clients has involved and
may involve in the future the controlled use of hazardous materials. Although
the Company believes that its safety procedures for handling the disposal of
such materials comply with the standards prescribed by state and federal laws
and regulations, the risk of accidental contamination or injury from these
materials
6
cannot be completely eliminated. In the event of such an accident, the Company
could be held liable for damages that result, and any such liability could
exceed its resources.
Anti-Takeover Measures. The Company is subject to Section 203 of the
Delaware General Corporation Law which contains certain anti-takeover provisions
which prohibit a "business combination" between a corporation and an "interested
stockholder" within three years of the stockholder becoming an "interested
stockholder." The business combination provisions of Section 203 of the Delaware
General Corporation Law may have the effect of deterring merger proposals,
tender offers or other attempts to effect changes in control of the Company that
are not negotiated and approved by the Board of Directors. Additionally, the
Board of Directors has the ability to establish by resolution one or more series
of preferred stock having such number of shares, designation, preferences,
voting rights, limitations and other rights as the Board of Directors may fix,
without any further stockholder approval. The rights granted to holders of an
additional class or series of preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company which may be at a premium above the prevailing market
price. Furthermore, the Company amended its Certificate of Incorporation, as
amended (the "Certificate of Incorporation"), to include a provision
establishing a classified board of directors as permitted under the Delaware
General Corporation Law. The Board of Directors is divided into three classes of
directors, each class of which ultimately serves three-year staggered terms.
This may make it more difficult to effect a change in control of the Company's
Board of Directors, and therefore may have an anti-takeover effect.
Concentration of Ownership in Certain Officers, Directors and
Affiliated Entities. As of November 15, 1996, the Company's executive officers,
directors and their affiliates beneficially owned approximately 50% of the
outstanding shares of Common Stock. As a result, such persons have substantial
ability to influence the election of the Company's directors and the outcome of
corporate actions requiring stockholder approval. This concentration of
ownership may have the effect of delaying or preventing a change in control of
the Company.
Absence of Dividends. No cash dividends have been paid on the Company's
Common Stock. The Company has no present plans to pay cash dividends to its
stockholders and, for the foreseeable future, intends to retain all of its
earnings for use in its business. The declaration of any future dividends by the
Company is within the discretion of its Board of Directors and will be dependent
on the earnings, financial condition and capital requirements of the Company, as
well as any other factors deemed relevant by its Board of Directors.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders.
7
SELLING STOCKHOLDERS
The table below sets forth certain information regarding ownership of the
Company's Common Stock by the Selling Stockholders on November 15, 1996 and the
number of Shares to be sold by them under this Prospectus. The Shares include
339,092 shares of Common Stock which were acquired by certain Selling
Stockholders in connection with the RBI Transaction and 2,719,999 shares of
Common Stock which were acquired by certain Selling Stockholders in connection
with the Hardardt Transaction.
In recognition of the fact that investors may wish to be legally permitted
to sell their Shares when they deem appropriate, the Company has filed with the
Commission, under the Securities Act, a Registration Statement, of which this
Prospectus forms a part, with respect to the resale of the Shares from time to
time on the Nasdaq National Market or in privately-negotiated transactions and
intends to prepare and file such amendments and supplements to the Registration
Statement as may be necessary to keep the Registration Statement effective until
the earlier of the sale of all the Shares offered by the Selling Stockholders
and October 1, 1999.
Name of Shares Owned Shares Being Shares Owned
Selling Stockholder Prior to Offering Offered After Offering
- --------------------------------- ------------------------ ------------ ----------------------
Number of Number of
Shares Percent(1) Shares Percent
--------- ---------- --------- -------
Judith Hardardt (2) 2,036,182 9.5% 2,036,182 -- --
Sherrin Baky (3) 678,727 3.2% 678,727 -- --
John Brega (4) 169,279 * 169,279 -- --
Michael Chinn 19,762 * 19,762 -- --
Linda Collins 19,523 * 19,523 -- --
Jason Yang 12,279 * 12,279 -- --
Raymond Kumli 12,056 * 12,056 -- --
Debra Gilmore 10,949 * 10,949 -- --
Ronald Williams 9,579 * 9,579 -- --
Scott Wheeler 9,348 * 9,348 -- --
G. Peter Shabe 8,627 * 8,627 -- --
Raj Chabra 8,232 * 8,232 -- --
Wayne Lanier 6,948 * 6,948 -- --
Ellen Krantz 4,824 * 4,824 -- --
Alfred Hurwitz 4,614 * 4,614 -- --
Peter Bick 3,755 * 3,755 -- --
Vicki Chabra 2,883 * 2,883 -- --
Nitin Kumar 2,883 * 2,883 -- --
Steven Wilson 2,686 * 2,686 -- --
Suzanne Saucy 2,593 * 2,593 -- --
8
Name of Shares Owned Shares Being Shares Owned
Selling Stockholder Prior to Offering Offered After Offering
- --------------------------------- ------------------------ ------------ ----------------------
Number of Number of
Shares Percent(1) Shares Percent
--------- ---------- --------- -------
Tahir Fatehi 2,307 * 2,307 -- --
Joyce Kennard 2,307 * 2,307 -- --
Robert Kennard 2,307 * 2,307 -- --
Vimal Kumar 2,307 * 2,307 -- --
Tara Kumar 2,307 * 2,307 -- --
Cesar Mayo 2,307 * 2,307 -- --
Robert Shapiro 2,307 * 2,307 -- --
David Pfennig 2,121 * 2,121 -- --
Carol Rockwell 2,121 * 2,121 -- --
Veena Kumar 1,730 * 1,730 -- --
Tonya Patterson 1,467 * 1,467 -- --
Christine Wilhite 1,295 * 1,295 -- --
Terry Lee 1,162 * 1,162 -- --
Scott Farmer 1,124 * 1,124 -- --
Noreen Layden 895 * 895 -- --
Gary Freeman 848 * 848 -- --
Ajit De Silva 685 * 685 -- --
Brit Harvey 630 * 630 -- --
Daniel Patterson 533 * 533 -- --
Michael Mittelbuscher 514 * 514 -- --
Sidonia Ford 438 * 438 -- --
Paula Morgan 400 * 400 -- --
Sandra Brown 323 * 323 -- --
Rita Bererra 285 * 285 -- --
Ruben Tapia 190 * 190 -- --
Priscilla Read 185 * 185 -- --
Neil Ginsberg 152 * 152 -- --
Maria Shabe 95 * 95 -- --
- ---------------------
* Less than one percent.
9
(1) Based on shares of Common Stock outstanding as of November 15, 1996.
(2) Ms. Hardardt has been an executive vice president and a director of the
Company since October 1, 1996.
(3) Ms. Baky has been an executive vice president of the Company since
October 1, 1996.
(4) Mr. Brega has been the president of Resource Biometrics Division since
July 18, 1996.
10
PLAN OF DISTRIBUTION
The Shares offered hereby by the Selling Stockholders may be sold from
time to time by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one
or more exchanges or in the over-the-counter market (including the Nasdaq
National Market), or otherwise at prices and at terms then prevailing or at
prices related to the then-current market price, or in negotiated
transactions. The Shares may be sold by one or more of the following
methods, without limitation: (a) a block trade in which the broker-dealer
so engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; and (d) face-to-face transactions between the Selling
Stockholders and purchasers without a broker-dealer. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for
other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from the Selling Stockholders in amounts
to be negotiated immediately prior to the sale. Such brokers or dealers
and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act, in connection with
such sales. In addition, any securities covered by this Prospectus that
qualify for sale pursuant to Rule 144 under the Securities Act might be
sold under Rule 144 rather than pursuant to this Prospectus.
Upon the Company being notified by any Selling Stockholder that a
material arrangement has been entered into with a broker or dealer for the
sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer,
a supplemented Prospectus will be filed, if required, pursuant to Rule
424(c) under the Securities Act, disclosing (a) the name of each such
broker-dealer, (b) the number of shares involved, (c) the price at which
such shares were sold, (d) the commissions paid or discounts or concessions
allowed to such broker-dealer(s), where applicable, (e) that such broker-
dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus, as supplemented, and
(f) other facts material to the transaction.
The Company is bearing all costs relating to the registration of the
Shares (including certain fees and expenses, if any, of counsel or other
advisers to the Selling Stockholders). Any commissions, discounts or other
fees payable to broker-dealers in connection with any sale of the Shares
will be borne by the Selling Stockholders selling such Shares.
The Company has agreed to indemnify certain Selling Stockholders,
Judith Hardardt and Sherrin Baky, in certain circumstances against certain
liabilities, including liabilities arising under the Securities Act. Such
Selling Stockholders have agreed to indemnify the Company and its directors
and officers against certain liabilities, including liabilities arising
under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Morgan, Lewis & Bockius LLP, Philadelphia,
Pennsylvania.
EXPERTS
The financial statements contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 incorporated by reference in
this Prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and
are included herein in reliance upon the authority of said firm as experts
in giving said reports.
11
===============================================================================
No dealer, sales representative or any other person has been
authorized to give any information or make any representations not contained in
this Prospectus in connection with the offer covered by this Prospectus. If
given or made, such information or representations must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any of these securities in any jurisdiction where, or to any person
whom, it is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any offer or sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company or that information contained herein is correct as of any
time subsequent to the date hereof.
-----------------------------------
TABLE OF CONTENTS
Page
----
Available Information................................................. 2
Incorporation of Certain Documents
by Reference...................................................... 2
The Company........................................................... 3
Risk Factors.......................................................... 4
Use of Proceeds....................................................... 7
Selling Stockholders.................................................. 8
Plan of Distribution.................................................. 11
Legal Matters......................................................... 11
Experts............................................................... 11
===============================================================================
===============================================================================
3,059,071 Shares
IBAH, Inc.
Common Stock
----------
PROSPECTUS
----------
,1996
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated costs and expenses of the
sale and distribution of the securities being registered, all of which are being
borne by the Company.
Registration fee................................................. $ 6,725.00
Legal fees and expenses.......................................... 10,000.00
EDGAR filing expenses............................................ 5,000.00
Miscellaneous.................................................... 10,000.00
----------
Total............................................................ $31,725.00
==========
Item 15. Indemnification of Directors and Officers
A. Section 145 of the Delaware General Corporation Law ("Section 145")
permits indemnification of directors, officers, agents and controlling persons
of a corporation under certain conditions and subject to certain limitations.
Section 145 empowers a corporation to 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, by reason of the fact that such person is or was a director,
officer or agent of the corporation or another enterprise if serving at the
request of the corporation. Depending on the character of the proceeding, a
corporation may indemnify against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner the person 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 such person's
conduct was unlawful. In the case of an action by or in the right of the
corporation, no indemnification may be made with respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court of chancery or the
court in which such action or suit was brought shall determine that despite the
adjudication of liability such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Section 145
further provides that to the extent a director or officer of a corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually or reasonably
incurred by such person in connection therewith.
B. As permitted by the Delaware General Corporation Law, the Company
has included a provision in its Certificate of Incorporation, as amended, that,
subject to certain limitations, eliminates the ability of the Company and its
stockholders to recover monetary damages from a director of the Company for
breach of fiduciary duty as a director. Article VI of the Company's By-laws
provides for indemnification of the Company's directors and officers in certain
circumstances to the fullest extent authorized by the Delaware General
Corporation Law.
C. As authorized by Section 145 of the Delaware General Corporation
Law and Article VI of the Company's By-laws, the Company maintains, on behalf of
its directors and officers, insurance protection against certain liabilities
arising out of the discharge of their duties, as well as insurance covering the
Company for indemnification payments made to its directors and officers for
certain liabilities. The premiums for such insurance are paid by the Company.
II-1
Item 16. Exhibits
The following is a list of exhibits filed as part of this Registration
Statement.
Exhibit
Number Description
- ------ -----------
5 Opinion of Morgan, Lewis & Bockius LLP regarding legality of the
Company's Common Stock being registered.
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its opinion
filed as Exhibit 5 hereto).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on signature pages to this Registration
Statement).
Item 17. 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;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) of this section do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) 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.
II-2
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against a public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Blue Bell, Pennsylvania, on December 9, 1996.
IBAH, INC.
By:/s/ Geraldine A. Henwood
------------------------------
Geraldine A. Henwood
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
EACH PERSON IN SO SIGNING ALSO MAKES, CONSTITUTES AND APPOINTS
GERALDINE A. HENWOOD AND LEONARD F. STIGLIANO, AND EACH OF THEM ACTING ALONE,
HIS OR HER TRUE AND LAWFUL ATTORNEY-IN-FACT, WITH FULL POWER OF SUBSTITUTION, TO
EXECUTE AND CAUSE TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, ANY AND
ALL AMENDMENTS AND POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT,
WITH EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH, AND HEREBY
RATIFIES AND CONFIRMS ALL THAT SAID ATTORNEY-IN-FACT OR HIS OR HER SUBSTITUTE OR
SUBSTITUTES MAY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
Signature Capacity Date
- --------- -------- ----
/s/ Geraldine A. Henwood Chief Executive Officer December 9, 1996
- ---------------------------- and Director (principal
Geraldine A. Henwood executive officer)
/s/ Leonard F. Stigliano Chief Financial Officer December 9, 1996
- ---------------------------- (principal financial and
Leonard F. Stigliano accounting officer)
/s/ Winston J. Churchill Chairman of the Board of December 9, 1996
- ---------------------------- Directors
Winston J. Churchill
/s/ Ernst-Gunter Afting Director December 9, 1996
- ----------------------------
Ernst-Gunter Afting, M.D.
/s/ Victor J. Bauer Director December 9, 1996
- ----------------------------
Victor J. Bauer, Ph.D.
/s/ Edwin A. Bescherer, Jr. Director December 9, 1996
- ----------------------------
Edwin A. Bescherer, Jr.
/s/ Martyn D. Greenacre Director December 9, 1996
- ----------------------------
Martyn D. Greenacre
/s/ Judith L. Hardardt Director December 9, 1996
- ----------------------------
Judith L. Hardardt
/s/ Sidney Jevons Director December 9, 1996
- ----------------------------
Sidney Jevons, Ph.D.
/s/ Sandra Panem Director December 9, 1996
- ----------------------------
Sandra Panem, Ph.D.
/s/ Richard L. Sherman Director December 9, 1996
- ----------------------------
Richard L. Sherman, Esq.
EXHIBIT INDEX
Exhibit Sequential
Number Description Page Number
- ------- ----------- -----------
5 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
the Company's Common Stock being registered.
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5 hereto).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on signature pages to this
Registration Statement).