As filed with the Securities and Exchange Commission on September 26, 2001
Registration No. 333 - _________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
AMERICAN BIO MEDICA CORPORATION
(Exact name of registrant as specified in its charter)
New York 14-1702188
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
122 Smith Road 12106
Kinderhook, New York (Zip Code)
(Address of principal executive offices)
800-227-1243
Stan Cipkowski
President
122 Smith Road
Kinderhook, New York 12106
(800)-227-1243
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Richard L. Burstein, Esq.
Tuczinski, Burstein & Collura, P.C.
90 State Street, Suite 1011
Albany, New York 12207
(518)-463-3990
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At
such time or times after the Registration Statement becomes effective as the
selling shareholder may determine.
If the only securities being registered on this form are to be 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, please check the following box. [X]
If this form is to be 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. [ ]
CALCULATION OF REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------
Proposed
maximum Maximum
Title of each class offering price aggregate Amount of
of securities to be registered Amount to be registered per share offering price registration fee
---------------------------------------------------------------------------------------------------------------------
Common Shares, par value $.01
per share 2,549,000 shares $0.78 (1) $1,988,220(1) $497
---------------------------------------------------------------------------------------------------------------------
Common Share purchase
warrants 1,274.500 warrants $1.05 $1,338,225 $335
---------------------------------------------------------------------------------------------------------------------
Common Shares
Underlying exercise of
warrants 1,274,500 shares $1.05 $1,338,225 $335
---------------------------------------------------------------------------------------------------------------------
Common Shares Underlying
exercise of warrants 203,920 shares $1.20 $ 244,704 $ 61
---------------------------------------------------------------------------------------------------------------------
Common Shares underlying
exercise of warrants 200,000 shares $1.50 $ 300,000 $ 75
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, on
the basis of the average of the high and low sales prices for such common
shares on September 24, 2001 as reported on the Nasdaq SmallCap Market.
(2) Pursuant to Rule 416, the Registration Statement also registers an
indeterminate number of common shares as may be issued or become issuable
upon and exercise of the Warrants in accordance with their respective terms
to prevent dilution resulting from stock splits, stock dividends or similar
transactions.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
PROSPECTUS
AMERICAN BIO MEDICA CORPORATION
4,227,420 SHARES COMMON SHARES
In this prospectus, "ABMC", "we", "us" and "our" refer to American Bio
Medica Corporation.
This is an offering of: (a) up to 4,227,420 common shares, par value
$0.01 a share, of American Bio Medica Corporation, of which 2,549,000 are common
shares of ABMC and 1,678,420 are common shares issuable upon the exercise of
common share purchase warrants and (b) up to 1,274,500 common share purchase
warrants. All of these securities are being offered by the selling shareholders.
On August 22, 2001, in a private placement exempt from registration under the
Securities Act of 1933, as amended, selling shareholders acquired (a) 2,549,000
common shares for a purchase price of $1.00 per share, and (b) 1,274,500
warrants ("Investor Warrants") to purchase one common share at an exercise price
of $1.05 per share and 203,920 warrants ("Placement Agent Warrants") to purchase
one common share at an exercise price of $1.20 per share, exercisable during a
54 month period beginning on February 22, 2002. The Investor Warrants and
Placement Agent Warrants together shall be referred to as the "Private Placement
Warrants". In addition, selling shareholders acquired 200,000 warrants to
purchase one common share at an exercise price of $1.50 per share pursuant to a
financial advisory agreement filed as an exhibit to our 10-KSB for the fiscal
year ending April 30, 2001 ("Brean Murray Warrants"). We are registering the
selling shareholders' resale of these securities pursuant to Registration Rights
Agreements between the selling shareholders and us. The registration of the
common shares, the Investor Warrants and the common shares issuable upon the
exercise of the Placement Agent Warrants and Brean Murray Warrants does not
necessarily mean that any of them will be offered or sold by the selling
shareholders. The securities may be sold directly by the selling shareholders or
through brokers, dealers or agents in private or market transactions. In
connection with any sales, the selling shareholders and any brokers, dealers or
agents participating in such sales may be deemed to be "underwriters" within the
meaning of the Securities Act. See "Selling Shareholders" and "Plan of
Distribution."
The last reported sale price of the common shares, which are listed on
The Nasdaq SmallCap Market under the symbol "ABMC," was $1.00 per share on
August 22, 2001. Our headquarters are located at 122 Smith Road, Kinderhook, New
York 12106. Our telephone number is (800) 227-1243.
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR INFORMATION THAT YOU SHOULD
CONSIDER BEFORE PURCHASING THESE SECURITIES.
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. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Public offering price...........................Market price, from time to time,
in the market in which the
shares are sold, a price related
to the market price or a
negotiated price.
Underwriting discounts and commissions..........Customary for the type of
transaction involved.
Proceeds to selling shareholders*...............Market price, from time to time,
net of customary cost for
execution of the type of
transaction.*
*The Selling Shareholders will receive all of the net proceeds from the sale of
the securities being sold in this offering. We will not receive any of the
proceeds from the sale of securities in this offering. We will receive gross
proceeds of up to $1,338,225 if all of the Investor Warrants are exercised. If
the Placement Agent Warrants and the Brean Murray Warrants are exercised on a
cash basis, we will receive an additional $544,704. Estimated expenses of
$55,000 are payable by the Company in connection with this offering.
1
The date of this Prospectus is September 26, 2001
TABLE OF CONTENTS
Page
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WHERE YOU CAN GET MORE INFORMATION............................................ 3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS..................... 4
THE COMPANY................................................................... 4
RISK FACTORS.................................................................. 5
USE OF PROCEEDS...............................................................10
SELLING SHAREHOLDERS..........................................................10
PLAN OF DISTRIBUTION..........................................................13
LEGAL MATTERS.................................................................15
EXPERTS.......................................................................15
DOCUMENTS INCORPORATED BY REFERENCE...........................................15
----------------------------
You should rely only on the information contained in this Prospectus.
Neither American Bio Medica Corporation nor any selling shareholder, broker,
dealer or agent has authorized anyone to provide you with different or
additional information. This Prospectus is not an offer to sell nor is it
seeking an offer to buy these securities in any jurisdiction where the offer or
sale is not 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 any sale of our common shares.
No action is being taken in any jurisdiction outside the United States
to permit a public offering of the common shares or possession or distribution
of this Prospectus in any such jurisdiction. Persons who come into possession of
this Prospectus in jurisdictions outside the United States are required to
inform themselves about and to observe the restrictions of that jurisdiction
related to this offering and the distribution of this Prospectus.
WHERE YOU CAN GET INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You can receive copies of such reports, proxy and
information statements, and other information, at prescribed rates, from the SEC
by addressing written requests to the SEC's Public Reference Room at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition, you may read
and copy any materials we file with the SEC at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices
of the SEC, in Washington, D.C., New York, New York and Chicago, Illinois,
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. The SEC also maintains an Internet site that
contains reports, proxy and information statements and other information
regarding issuers, such as us, that file electronically with the SEC. The
address of the SEC's Web site is http://www.sec.gov.
We have filed with the SEC a Registration Statement on Form S-3 to
register the common shares that we are offering in this Prospectus. This
Prospectus is part of the Registration Statement. This Prospectus does not
include all of the information contained in the Registration Statement. For
further information about the common shares and us offered in this Prospectus,
2
you should review the Registration Statement. You can inspect or copy the
Registration Statement, at prescribed rates, at the SEC's public reference
facilities at the address listed above.
Statements contained in this Prospectus concerning the provisions of
documents are necessarily summaries of such documents and when any such document
is an exhibit to the Registration Statement, each such statement is qualified in
its entirety by reference to the copy of such document filed with the SEC.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this Prospectus are forward-looking
statements. In addition, we may make forward-looking statements in future
filings with the Securities and Exchange Commission and in written materials,
press releases and oral statements issued by us or on our behalf.
Forward-looking statements include statements regarding the intent, belief or
current expectations of us or our officers, including statements preceded by,
followed by or including forward-looking terminology such as "may," "will,"
"should," "believe," "expect," "anticipate," "estimate," "continue," "predict"
or similar expressions, with respect to various matters.
It is important to note that our actual results could differ materially
from those anticipated from the forward-looking statements depending on various
important factors. These important factors include our history of losses and
ability to continue as a going concern, the uncertainty of acceptance of current
and new products in our markets, competition in our markets, our dependence on
our distributors and the other factors discussed in "Risk Factors" beginning on
page 5.
All forward-looking statements in this Prospectus are based on
information available to us on the date of this Prospectus. We do not undertake
to update any forward-looking statements that may be made by us or on our behalf
in this Prospectus or otherwise. In addition, please note that matters set forth
under the caption "Risk Factors" constitute cautionary statements identifying
important factors with respect to the forward-looking statements, including
certain risks and uncertainties that could cause actual results to differ
materially from those in such forward-looking statements.
THE COMPANY
We develop, manufacture and market biomedical technologies and products
intended for the immediate, onsite screening for drugs of abuse. Our Rapid Drug
Screen(TM) and Rapid One(TM) are urine-based kits that are easy to use,
cost-effective, highly accurate and reliable tests for the presence of drugs of
abuse in individuals. We own several patents that are used in the Rapid Drug
Screen.
We produce several versions of a drugs of abuse screening test, under
the name Rapid Drug Screen. The Rapid Drug Screen is a one-step test that allows
a small urine sample to be tested simultaneously for the presence or absence of
up to ten drugs of abuse (cocaine, THC (marijuana), opiates, amphetamine, PCP,
benzodiazepines, methamphetamine, barbiturates, tricyclic antidepressants and
methadone).
The competitively priced test is self-contained. This eliminates
exposure of the test administrator to the urine sample. We believe that the
Rapid Drug Screen product is easier to use than other competitive products
because it requires no mixing of reagents, pipetting or manipulation of the
test. Controlled tests conducted by an independent laboratory compared the Rapid
Drug Screen with results produced by EMIT II, a standard laboratory test, and
found greater than 99% correlation of results.
3
Our tests require marketing clearance from the Food and Drug
Administration, or FDA. Our most recent 510k marketing clearance received from
the FDA was for the nine panel test. As a result of the FDA's approval of all
nine drug tests manufactured by us, we can offer a variety of test combinations
to meet customer requirements. Included in our product offerings are nine single
tests called Rapid One, each of which detects one drug of abuse (cocaine, THC,
opiates, amphetamine, PCP, benzodiazepines, methamphetamines, barbiturates and
tricyclic antidepressants). We also have developed a methadone test that we
intend to submit to the FDA for marketing clearance.
In January 2000, we licensed the exclusive rights to distribute and
market a patented residue and/or trace drug detection system in select markets
in North and South America for a period of five years. We utilize the trademark
"Drug Detector" for this product. The Drug Detector(TM) tests surfaces for the
presence or absence of residue from marijuana, cocaine, heroin or
methamphetamines without the need for urine, hair or saliva samples.
Our headquarters are located at 122 Smith Road, Kinderhook, New York
12106. Our telephone number is 800-227-1243.
RISK FACTORS
An investment in our common shares or common share purchase warrants
involves a high degree of risk. You should carefully consider the specific
factors listed below, together with the cautionary statement under the caption
"Cautionary Statement Regarding Forward Looking Statements" and the other
information included in this Prospectus, before purchasing our common shares.
The risks described below are not the only ones that we face. Additional risks
that are not yet known to us or that we currently think are immaterial could
also impair our business, operating results or financial condition. If any of
the following risks actually occur, our business, financial condition or results
of operations could be adversely affected. In such case, the trading price of
our common shares could decline, and you may lose all or part of your
investment.
WE HAVE A LIMITED OPERATING HISTORY, WHICH MAY MAKE IT DIFFICULT TO ACCURATELY
FORECAST OUR FUTURE REVENUES AND OTHER OPERATING RESULTS.
We began selling our products in 1996. As a result, we have only a
limited operating history upon which you may evaluate our business and
prospects. Our limited operating history may make it difficult or impossible for
analysts or investors to accurately forecast regarding our future revenues and
other operating results and the price of our common stock could decline
substantially.
WE HAVE INCURRED NET LOSSES SINCE WE WERE FORMED.
Since inception in 1992, we have incurred net losses. As of April 30,
2001, we had an accumulated deficit of $13.5 million. We expect to continue to
make substantial expenditures for sales and marketing, product development and
other purposes. Our ability to achieve and maintain profitability in the future
will primarily depend on our ability to increase sales of our products, reduce
production and other costs and successfully introduce new and enhanced versions
of our existing products into the marketplace. We cannot assure you that we will
be able to increase our revenues at a rate that equals or exceeds expenditures.
Our failure to do so will result in our incurring additional losses.
4
WE DEPEND ON DISTRIBUTORS FOR A MAJORITY OF OUR SALES AND THE LOSS OF, OR
REDUCTION IN SALES BY, OUR CURRENT DISTRIBUTORS COULD SIGNIFICANTLY HARM OUR
BUSINESS.
We derive a substantial portion of our revenues, and expect to continue
to derive a substantial portion of our revenues in the near future, from sales
by our distributors. During fiscal 2001, approximately 74% of our sales were
made to distributors. Unless and until we diversify and expand our sales force,
our success will depend significantly upon the future sales by our distributors.
The loss of or inability to replace any one or more of these distributors,
significant changes in their product requirements, delays of significant orders
or the occurrence of any sales fluctuations of our products could reduce our
revenues.
WE ONLY OFFER A LIMITED NUMBER OF PRODUCTS AND THE FAILURE OF ANY ONE OF THEM TO
ACHIEVE WIDESPREAD MARKET ACCEPTANCE WOULD SIGNIFICANTLY HARM OUR RESULTS OF
OPERATION.
We derive substantially all of our revenues from sales of a limited
number of drug testing products. The failure of any of our product offerings to
achieve and maintain a meaningful level of market penetration and customer
satisfaction would harm our revenues.
In addition, we only began selling our products in 1996, and cannot yet
predict whether they will gain widespread market acceptance. Achieving market
acceptance for our drug tests will require substantial marketing efforts and
expenditure of significant funds to inform potential distributors and customers
of the distinctive characteristics, benefits and advantages of their test kits.
Our Drug Detector has just recently been introduced into the over-the-counter
market. We have no history upon which to base market or customer acceptance of
the product. Introduction of the Drug Detector has required, and may continue to
require, substantial marketing efforts and expenditure of funds.
Even if our customers do purchase our products in meaningful
quantities, due to the variety and complexity of the environments in which these
customers operate our products may not operate as expected. This could result in
cancelled orders, delays and increased expenses. In addition, the success of
competing products and technologies, pricing pressures or manufacturing
difficulties could further reduce our profitability and the price of our common
stock.
IF WE FAIL TO KEEP UP WITH TECHNOLOGICAL FACTORS AND FAIL TO DEVELOP OUR
PRODUCTS, WE MAY BE AT A COMPETITIVE DISADVANTAGE.
We are continually seeking to refine and improve the design and
performance of our products. Our efforts remain subject to all of the risks
inherent in product development, including unanticipated technical, regulatory
or other problems that could result in material delays in product development or
commercialization or significantly increase costs. We may be required to commit
considerable additional efforts, time and resources to develop production
versions of additional products. Our success will depend upon new products
meeting targeted product costs and performance, and may also depend upon their
timely introduction into the marketplace. There can be no assurance that
development of our proposed products will be successfully completed on a timely
basis, if at all, that they will meet projected price and performance
objectives, satisfactorily perform all of the functions for which they are being
designed, or prove to be sufficiently reliable in widespread commercial
application. Moreover, there can be no assurance that unanticipated problems
will not arise with respect to technologies incorporated into our test kits or
that product defects will not become apparent after commercial introduction of
our additional test kits. In the event that we are required to remedy defects in
5
any of our products after commercial introduction, the costs to us could be
significant, which could have a material adverse effect on our revenues or
earnings.
WE FACE SIGNIFICANT COMPETITION IN THE DRUG TESTING MARKET AND POTENTIAL
TECHNOLOGICAL OBSOLESCENCE.
We face competition from other manufacturers of drug test kits such as
Roche Diagnostics, Medox Scientific, Inc. and Biosite Diagnostics. These
competitors are more well known and have far greater financial resources than
us. The markets for drug test kits and related products are highly competitive.
There can be no assurance that other companies will not attempt to develop or
market products directly competitive with the Rapid Drug Screen product line or
Rapid One. We expect other companies to develop technologies or products, which
will compete with our products.
POSSIBLE INABILITY TO FIND AND ATTRACT QUALIFIED PERSONNEL.
We will need additional skilled, sales and marketing, technical and
production personnel to grow the business. If we fail to retain our present
staff or attract additional qualified personnel our business could suffer.
WE DEPEND ON KEY PERSONNEL TO MANAGE OUR BUSINESS EFFECTIVELY.
We are dependent on the expertise and experience of our senior
management such as Robert L. Aromando Jr., Chief Executive Officer, Stan
Cipkowski, President, Douglas Casterlin, Vice President of Operations, Martin
Gould, Vice President of Technology and Keith Palmer, Chief Financial Officer,
for our future success. The loss of Messrs. Aromando, Cipkowski, Casterlin,
Gould and/or Palmer could negatively impact our business and results of
operations. We do not maintain key man insurance for any of our management
employees.
FAILURE TO EFFECTIVELY MANAGE OUR GROWTH AND EXPANSION COULD ADVERSELY AFFECT
OUR BUSINESS AND OPERATING RESULTS.
We anticipate expansion of our operations in the coming year. Any
failure to manage our growth effectively will result in less efficient
operations, which could adversely affect our operating and financial results.
To effectively manage our growth, we must, among other things:
o accurately estimate the number of employees we will require and the
areas in which they will be required; o upgrade and expand our
office infrastructure so that it is appropriate for our level of
activity;
o manage expansion into additional geographic areas; and o improve and
refine our operating and financial systems.
We expect to devote considerable resources and management time to
improving our operating and financial systems to manage our growth. Failure to
accomplish any of these objectives would impede our ability to deliver products
and services in a timely fashion, fulfill existing customer orders and attract
and retain new customers, which impediment would have a material adverse effect
on our financial condition and results of operations.
6
ANY ADVERSE CHANGES IN OUR REGULATORY FRAMEWORK COULD NEGATIVELY IMPACT OUR
BUSINESS.
Approval from the FDA is not required for the sale of the Rapid Drug
Screen in the non-clinical market, but it is required for the clinical and
over-the-counter markets. Regulatory standards may change in the future and
there is no assurance that if, and when, we apply for additional approvals from
the FDA they will be granted.
WE RELY ON INTELLECTUAL PROPERTY RIGHTS, AND WE MAY NOT BE ABLE TO OBTAIN PATENT
OR OTHER PROTECTION FOR OUR TECHNOLOGY, PRODUCTS OR SERVICES.
We rely on a combination of patent, copyright, trademark and trade
secret laws, confidentiality procedures and contractual provisions to protect
our proprietary technology, products and services. We also believe that factors
such as the technological and creative skills of our personnel, new product
developments, frequent product enhancements and name recognition are essential
to establishing and maintaining our technology leadership position.
We seek to protect our proprietary products under trade secret and
copyright laws, which afford only limited protection. We currently have ten
patents relating to the Rapid Drug Screen product line. We have applied for
additional patents on the Rapid Drug Screen and for certain trademarks in the
United States, South and Central America, European Common Market and Japan.
Certain trademarks have been registered and others are pending.
Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our products or to obtain information
that we regard as proprietary. For example, our sales were adversely affected in
fiscal 2000 and fiscal 2001 as a result of sales of products similar to ours. We
brought a lawsuit to stop these sales and incurred significant expenses in
attempting to enforce our patents. In April 2001, we settled with the defendants
in this lawsuit. We may be required to incur significant costs to protect our
intellectual property rights. In addition, the laws of some foreign countries do
not ensure that our means of protecting our proprietary rights in the United
States or abroad will be adequate. Policing and enforcement against the
unauthorized use of our intellectual property rights could entail significant
expenses and could prove difficult or impossible. Additionally, there is no
assurance that the additional patents will be granted or that additional
trademarks will be registered.
POTENTIAL ISSUANCE AND EXERCISE OF NEW WARRANTS AND EXERCISE OF OUTSTANDING
WARRANTS COULD ADVERSELY AFFECT OUR SHARE PRICE.
In connection with our sale of 1,408,450 common shares for $2,000,000
($1.42 per share) in a private placement to Seaside Partners, L.P. on April 28,
2000, we issued a 5-year warrant to Seaside to purchase 953,283 common shares of
our stock at an exercise price of $1.1689 per share. To settle a penalty owed to
Seaside because of a late effective registration statement, we adjusted the
exercise price of the 953,283 warrant shares from $1.1689 to $0.95 in February
2001. In May 2001, we issued a 5-year warrant to purchase 200,000 common shares
of our stock at an exercise price of $1.50 per share to Brean Murray & Co., Inc.
as compensation for their services as a financial advisor. On August 22, 2001,
we issued warrants, exercisable during a 54 month period beginning February 22,
2001, to purchase 1,274,500 common shares of our stock at an exercise price of
$1.05 per share in connection with the private placement of 2,549,000 shares of
common stock. We also issued, on August 22, 2001, warrants, exercisable during a
54 month period beginning February 22, 2001, to purchase a total of 203,920
common shares of our stock at an exercise price of $1.20 per share, of which
warrants to purchase 152,940 common shares were issued to Brean Murray & Co.,
Inc. as compensation for their services as placement agent and warrants to
purchase 12,745 common shares were issued to Axiom Capital Management, Inc.,
7
warrants to purchase 5,735 common shares were issued to Jeffrey Goldberg,
warrants to purchase 16,250 common shares were issued to Barry Zelin, warrants
to purchase 16,250 common shares were issued to David L. Jordon; for their
services as sub-agents of Brean Murray & Co., Inc.
The exercise of the Seaside warrant, the Brean Murray Warrants and the
Private Placement Warrants and the sale of such shares could have a significant
negative impact on the market price of the common shares and could materially
impair our ability to raise capital through the future sale of equity
securities. The warrants are subject to or contain certain anti-dilution
protection that may result in the issuance of additional shares under some
circumstances.
SUBSTANTIAL RESALE OF RESTRICTED SECURITIES MAY DEPRESS THE MARKET PRICE OF OUR
STOCK.
There are 7,329,955 common shares presently issued and outstanding as
of the date hereof that are "restricted securities" as that term is defined
under the Securities Act of 1933, as amended, (the "Securities Act") and in the
future may be sold in compliance with Rule 144 of the Securities Act, or
pursuant to a Registration Statement filed under the Securities Act. Rule 144
provides that a person holding restricted securities for a period of one year or
more may, in any three month period, sell those securities in unsolicited
brokerage transactions or in transactions with a market maker, in an amount
equal to the greater of one percent of the our outstanding common shares or the
average weekly trading volume for the prior four weeks. Sales of unrestricted
shares by affiliates of the Company are also subject to the same limitation upon
the number of shares that may be sold in any three-month period. Investors
should be aware that sales under Rule 144 or 144(k), or pursuant to a
registration statement filed under the Act, may depress the market price of our
Company's securities in any market that may develop for such shares.
WE MAY NEED ADDITIONAL FUNDING FOR OUR EXISTING AND FUTURE OPERATIONS.
We expect that with the proceeds from our August 2001 private placement
offering, our working capital will be sufficient to fund operations for at least
12 months. This estimate is based on certain assumptions and there can be no
assurance that unanticipated costs will not be incurred. Future events,
including the problems, delays, expenses and difficulties which may be
encountered in establishing and maintaining a substantial market for the Rapid
Drug Screen product line and Rapid One could make cash on hand insufficient to
fund operations. There can be no assurance that we will be able to obtain any
necessary financing on terms acceptable to us, if at all. Any financing may
result in further dilution to our existing shareholders.
In addition, we will need to secure mortgage financing by the end of
September 2001 to purchase our facility in Kinderhook, New York. We cannot be
sure we will be able to secure this mortgage financing. If we are unable to do
so, we may be required to vacate this facility. This could have a material
adverse affect on our business and results of operations.
OUR ABILITY TO RETAIN AND ATTRACT MARKET MAKERS IS IMPORTANT TO THE CONTINUED
TRADING OF OUR STOCK.
The common shares trade on the Nasdaq SmallCap Market under the symbol
"ABMC". In the event that the market makers cease to function as such, public
trading in common shares will be adversely affected or may cease entirely.
8
MANAGEMENT HAS BROAD DISCRETION IN THE WAY WE USE THE NET PROCEEDS FROM THE
AUGUST 2001 PRIVATE PLACEMENT.
Our business plan is subject to change based upon changing conditions
and opportunities. The net proceeds from the sale of the securities in the
August 2001 private placement have not been allocated for a particular purpose,
and our management will have broad discretion over the use of proceeds that we
raise in the offering. We intend to use the net proceeds for working capital,
settlement of legal fees at a discount and we may also use the net proceeds to
make investments in and acquisitions of complementary businesses, products or
technologies. You must rely on the judgment of management in the acquisition of
the proceeds, and you will not have the opportunity, as part of your investment
decisions, to assess whether these proceeds are being used appropriately.
USE OF PROCEEDS
We will not receive any proceeds from the common shares being sold in
this offering. The common shares will be offered and sold by the selling
shareholders for their own accounts. If all of the Investor Warrants are
exercised, the gross proceeds to us will be approximately $1,338,225. If the all
of the Placement Agent Warrants and the Brean Murray Warrants are exercised, the
gross proceeds to us will be $544,704. The Placement Agent Warrants and the
Brean Murray Warrants may be exercised using a "cashless exercise" feature
provided in the selling shareholders' warrant agreements, in which case we would
receive no cash proceeds from the exercise of those warrants. We intend to use
any such proceeds for working capital and general corporate purposes.
SELLING SHAREHOLDERS
This is an offering, by the selling shareholders named below, of: (a)
up to 4,227,420 common shares, par value $0.01 per share, of American Bio Medica
Corporation, of which 2,549,000 are common shares of ABMC and 1,678,420 are
common shares issuable upon the exercise of common share purchase warrants and
(b) up to 1,274,500 common share purchase warrants. On August 22, 2001, the
selling shareholders acquired 2,549,000 common shares at a price of $1.00 per
share and 1,274,500 warrants ("Investor Warrants") to purchase one common share
at an exercise price of $1.05 per share and 203,920 warrants ("Placement Agent
Warrants") to purchase one common share at an exercise price of $1.20 per share,
exercisable during a 54 month period beginning on February 22, 2002. In
addition, on May 2, 2001, selling shareholders acquired 200,000 warrants ("Brean
Murray Warrants") to purchase one common share at an exercise price of $1.50 per
share during a five-year period. We are registering the selling shareholders'
resale of the common shares and the common shares issuable upon exercise of the
common share purchase warrants and the Investor Warrants pursuant to
Registration Rights Agreements between the selling shareholders and us. The
registration of these securities does not necessarily mean that any of them will
be offered or sold by the selling shareholders. The following table sets forth
the names of the selling shareholders, the number of common shares beneficially
owned by them as of September 24, 2001 (including common shares underlying the
Private Placement Warrants), the number of warrants to purchase common shares
owned by them as of September 24, 2001, the number of common shares, Investor
Warrants and common shares underlying the warrants being offered by each of them
pursuant to this Prospectus, and the number and percentage of common shares
owned by them after the offering, assuming all shares and warrants offered by
them are sold and are sold to third parties:
9
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF NUMBER OF
COMMON SHARES PURCHASE COMMON SHARES NUMBER NUMBER OF
BENEFICIALLY WARRANTS ISSUABLE UPON OF NUMBER OF COMMON SHARES PERCENTAGE
OWNED BENEFICIALLY EXERCISE OF COMMON PURCHASE BENEFICIALLY BENEFICIALLY
NAME OF SELLING BEFORE THE OWNED BEFORE PURCHASE SHARES WARRANTS OWNED AFTER OWNED AFTER THE
SHAREHOLDER OFFERING THE OFFERING WARRANTS OFFERED(1) OFFERED THE OFFERING OFFERING(2)
------------------------------------------------------------------------------------------------------------------------------------
A. Brean Murray(9) 150,000 75,000 75,000 300,000 75,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Robert S. Anderson
BSSC Master Def.
Contribution P/S/P(6) 119,300 50,000 50,000 150,000 50,000 19,300 *
------------------------------------------------------------------------------------------------------------------------------------
Dan Suker W.G. Limited 100,000 50,000 50,000 150,000 50,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Norman C. Fields(11) 41,400 15,000 15,000 45,000 15,000 11,400 *
------------------------------------------------------------------------------------------------------------------------------------
David J. Rochester 10,000 5,000 5,000 15,000 5,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
GR & SA Beachley 25,000 12,500 12,500 37,500 12,500 0 *
------------------------------------------------------------------------------------------------------------------------------------
Brean Murray & Co.,
Inc. Profit Sharing
Plan 178,700 75,000 75,000 225,000 75,000 28,700 *
------------------------------------------------------------------------------------------------------------------------------------
Barry K. Fingerhut 300,000 150,000 150,000 450,000 150,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
John P. Lyden MD PC
Def. Contribution DTD
3/1/78 50,000 25,000 25,000 75,000 25,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
E. Thomas Steadman
IRA R/O BSSC 20,000 10,000 10,000 30,000 10,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
E. Thomas Steadman
IRA R/O BSSC Cust.
A/C #2 20,000 10,000 10,000 30,000 10,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
E. Thomas Steadman
IRA R/O A/C#3 BSSC 20,000 10,000 10,000 30,000 10,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
E. Thomas Steadman
IRA R/O BSSC Cust.
A/C #4 20,000 10,000 10,000 30,000 10,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
E. Thomas Steadman
IRA R/O A/C#5 BSSC 20,000 10,000 10,000 30,000 10,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Renee Sands(12) 25,000 12,500 12,500 37,500 12,500 0 *
------------------------------------------------------------------------------------------------------------------------------------
Pequod Investments,
L.P. 340,000 170,000 170,000 510,000 170,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Pequod International,
LTD. 160,000 80,000 80,000 240,000 80,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Kingsbridge Capital
LTD 150,000 75,000 75,000 225,000 75,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
M.K. Global
Technology Partners,
L.P. 25,000 12,500 12,500 37,500 12,500 0 *
------------------------------------------------------------------------------------------------------------------------------------
Aspira Capital
Management, L.P. 75,000 37,500 37,500 112,500 37,500 0 *
------------------------------------------------------------------------------------------------------------------------------------
Benny Lorenzo 200,000 100,000 100,000 300,000 100,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
John F. Murray [7] 74,000 37,000 37,000 111,000 37,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Keith E. Palmer [8] 25,000 12,500 12,500 37,500 12,500 0 *
------------------------------------------------------------------------------------------------------------------------------------
Selig Zises 150,000 75,000 75,000 225,000 75,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Eleanor M. Evans(10) 10,000 5,000 5,000 15,000 5,000 0 *
------------------------------------------------------------------------------------------------------------------------------------
Brean Murray & Co.,
Inc. (5) 0 352,940(3) 352,940(3) 352,940 0 0 *
------------------------------------------------------------------------------------------------------------------------------------
David L. Jordon(5) 350,000(14) 166,250(15) 166,250(15) 466,250(13) 0 50,000 *
------------------------------------------------------------------------------------------------------------------------------------
Barry Zelin(5) 0 16,250(4) 16,250 16,250 0 0 *
------------------------------------------------------------------------------------------------------------------------------------
Axiom Capital
Management(5) 0 12,745(4) 12,745 12,745 0 0 *
------------------------------------------------------------------------------------------------------------------------------------
Jeffrey Goldberg(5) 0 5,735(4) 5,735 5,735 0 0 *
------------------------------------------------------------------------------------------------------------------------------------
10
(1) Represents all of the common shares and common shares issuable upon
exercise of warrants to purchase common shares.
(2) Based on 17,995,548 common shares outstanding as of July 31, 2001. Assuming
all shares offered by this Prospectus are sold and are sold to third
parties.
(3) Warrants to purchase 152,940 common shares issued in consideration of Brean
Murray & Co., Inc.'s services as exclusive placement agent in the August
2001 private placement and warrants to purchase 200,000 common shares in
consideration of Brean Murray & Co., Inc.'s services as a financial
advisor.
(4) Issued in consideration of services as sub-agents for Brean Murray & Co.,
Inc. in the August 2001 private placement.
(5) In May 2001, we engaged Brean Murray & Co., Inc. to provide financial
advisory services to us for a term of one year unless earlier terminated by
the parties. Under this agreement, we agreed to issue to Brean Murray &
Co., Inc. a 5 year warrant to purchase 200,000 common shares at an exercise
price of $1.50 per share plus reasonable out-of-pocket expenses for its
services under this agreement.
Pursuant to an engagement letter between us and Brean Murray & Co., Inc.,
dated June 4, 2001, we engaged Brean Murray & Co., Inc. Pursuant to this
letter, Brean Murray & Co., Inc. received for its services (1) $178,430 as
a placement agent fee, and (2) warrants to purchase 152,940 common shares
at an exercise price of $1.20 per share, David L. Jordon received warrants
to purchase 16,250 common shares at an exercise price of $1.20 per share,
Barry Zelin received warrants to purchase 16,250 common shares at an
exercise price of $1.20 per share, Axiom Capital Management received
warrants to purchase 12,745 common shares at an exercise price of $1.20 per
share and Jeffrey Goldberg received warrants to purchase 5,735 common
shares at an exercise price of $1.20 per shares, exercisable during the 54
month period beginning on February 22, 2002 for their services as
sub-agents to Brean Murray & Co., Inc. The Brean Murray & Co., Inc. Profit
Sharing Plan purchased common shares in our August 2001 private placement
of our common shares.
(6) Robert S. Anderson is a Senior Vice President of Brean Murray & Co., Inc.
Brean Murray & Co., Inc was the exclusive placement agent in the August
2001 private placement.
(7) John F. Murray was our Chief Financial Officer and Treasurer from November
1997 until October 2000 and was one of our directors from June 1995 until
April 2000. Mr. Murray is also the beneficial owner of options to purchase
a total of 255,000 common shares of the Company as follows: 10,000 options
at an exercise price of $3.00 expiring August 29, 2002, 20,000 options at
an exercise price of $3.00 expiring February 17, 2003, 100,000 options at
an exercise price of $3.00 expiring August 18, 2003 and 125,000 options at
an exercise price of $2.50 expiring November 22, 2009.
11
(8) Keith E. Palmer has been our Chief Financial Officer, Executive Vice
President of Finance and Treasurer since October 2000. Mr. Palmer is also
the beneficial owner of options to purchase a total of 100,000 common
shares of the Company as follows: 41,500 options at an exercise price of
$0.94 expiring April 25, 2006, 30,500 options at an exercise price of $0.94
expiring April 30, 2006, and 28,000 options at an exercise price of $0.94
expiring January 10, 2011.
(9) A. Brean Murray is the President and Chief Executive Officer of Brean
Murray & Co., Inc., an investment banking company that is a wholly-owned
subsidiary of BMI Holding Co. A. Brean Murray owns 65.19% of the
outstanding voting stock of BMI Holding Co., and his wife owns 17.78% of
the outstanding voting stock of BMI Holding Co. Brean Murray & Co., Inc.
has provided financial advisory services to us since May 2001.
(10) Eleanor Evans is a relative of David Evans, Esq., who provides legal
services to us related to human resource issues.
(11) Norman Fields is a managing director of Brean Murray & Co., Inc. Brean
Murray & Co., Inc. was the exclusive placement agent in our August 2001
private placement of our common shares.
(12) Renee Sands is a relative of A. Brean Murray, the President and Chief
Executive Officer of Brean Murray & Co., Inc., the exclusive placement
agent in our August 2001 private placement of our common shares.
(13) Includes 16,250 common shares issuable upon exercise of Placement Agent
Warrants and 150,000 common shares issuable upon exercise of Investor
Warrants and 300,000 common shares.
(14) 50,000 common shares registered to Madelyn Jordon, who is David L. Jordon's
spouse.
(15) Includes 16,250 Placement Agent Warrants issued in consideration of
services as sub-agents for Brean Murray & Co., Inc. in the August 2001
private placement.
* Less than 1% of the outstanding common shares
Except for being holders of our common shares and common share purchase
warrants listed in the table above, none of the other selling shareholders has
had any position, office, or other material relationship with us in the past
three years.
PLAN OF DISTRIBUTION
The selling shareholders, or their pledgees, donees, transferees or
other successors in interest, may offer the securities covered by this
Prospectus to the public or otherwise from time to time. We are registering the
selling shareholders' resale of these securities pursuant to Registration Rights
Agreements between the selling shareholders and us. Pursuant to these
agreements, we have agreed to keep the registration statement related to this
Prospectus effective for two years. The registration of these securities does
not necessarily mean that any of them will be offered or sold by the selling
shareholders. The selling shareholders have informed us that any or all of the
securities covered by this Prospectus may be sold to purchasers directly by the
12
selling shareholders, or their pledgees, donees, transferees or other successors
in interest, or on their behalf through brokers, dealers or agents in private or
market transactions, which may involve crosses or block transactions. In
connection with any sales, the selling shareholders and any brokers, dealers or
agents participating in such sales may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of securities by them
and any discounts, concessions or commissions received by any brokers, dealers
or agents may be deemed to be underwriting discounts and commissions under the
Securities Act.
The sales may be made, from time to time, in The Nasdaq Stock Market,
on any stock exchange, in the over-the-counter market, in privately negotiated
transactions or otherwise at prices prevailing in such market, at prices related
to market prices or at negotiated or fixed prices. In effecting sales, the
selling shareholders may engage brokers, dealers and agents, and they may
arrange for other brokers, dealers or agents to participate. Brokers, dealers
and agents will receive usual and customary commissions, concessions or
discounts from the selling shareholders in amounts to be negotiated, and, if the
broker, dealer or agent acts as agent for the purchaser of the common shares,
from the purchaser.
Brokers, dealers or agents may agree with the selling shareholders to
sell a specified number of securities at a stipulated price per share, and, to
the extent such broker, dealer or agent is unable to do so acting as agent for a
selling shareholder, to purchase as principal any unsold securities at the price
required to fulfill the broker's, dealer's or agent's commitment to the selling
shareholder. Brokers, dealers or agents who acquire the securities as principal
may resell those securities from time to time in transactions, which may involve
crosses and block transactions and which may involve sales to and through other
brokers, dealers or agents, including transactions of the nature described above
in The Nasdaq Stock Market, on any stock exchange, in the over-the-counter
market, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale, at prices related to market prices or at negotiated or fixed
prices., and in connection with these resales may pay to or receive from the
purchasers of securities commissions, concessions or discounts as described
above.
We are bearing all of the costs relating to the registration of the
securities. Any commissions, concessions, discounts, or other fees payable to a
broker, dealer, agent or market maker in connection with any sale of securities
will be borne by the selling shareholder. We estimate that our total expenses of
this offering, other than such commissions, concessions, discounts or other
fees, will be approximately $55,000. We will not receive any of the proceeds
from the sale of the securities by the selling shareholders. We will receive
gross proceeds of up to $1,338,225 if all of the Investor Warrants are
exercised. If the all of the Placement Agent Warrants and the Brean Murray
Warrants are exercised, the gross proceeds to us will be $544,704. The Placement
Agent Warrants and the Brean Murray Warrants may be exercised using a "cashless
exercise" feature provided in the Placement Agent warrant agreements, in which
case we would receive no cash proceeds from the exercise of those warrants. We
have agreed to indemnify the selling shareholders or contribute to losses
arising out of certain liabilities that may be incurred in connection with this
offering, including liabilities under the Securities Act. The selling
shareholders have agreed to a similar indemnification of us.
We have informed the selling shareholders that the anti-manipulation
provisions of Regulation M under the Exchange Act may apply to purchases and
sales of securities by the selling shareholders, and that there are restrictions
on market-making activities by persons engaged in the distribution of the
securities. We have also advised the selling shareholders that if a particular
offer of securities is to be made on terms constituting a material change from
the information described in this "Plan of Distribution" section of the
Prospectus, then, to the extent required, a Prospectus Supplement must be
distributed setting forth such terms and related information as required.
13
LEGAL MATTERS
The validity of the common shares and Investor Warrants offered by this
prospectus has been passed upon for us by Tuczinski, Burstein & Collura, P.C.,
90 State Street, Albany, New York 12207.
EXPERTS
The financial statements incorporated in this Prospectus by reference
from the Company's Annual Report on Form 10-KSB for the year ended April 30,
2001, have been audited by Richard A. Eisner & Company, LLP, independent
auditors, as stated in their report (which report includes an explanatory
paragraph that states the Company has experienced recurring net losses and
negative cash flows from operations that raise substantial doubt about the
Company's ability to continue as a going concern) which is incorporated in this
Prospectus by reference, and have been so incorporated in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
DOCUMENTS INCORPORATED BY REFERENCE
This Prospectus incorporates documents by reference that are not
presented in or delivered with it. The following documents, which we have filed
with the SEC, are incorporated by reference into this Prospectus:
- Our Annual Report on Form 10-KSB for the fiscal year ended April 30,
2001
- Our Quarterly Report on Form 10-QSB for the fiscal quarter ended
July 31, 2001.
- Our Proxy Statement for our Fiscal 2002 Annual Meeting of
Shareholders.
- The description of our common shares in our prospectus included in
our registration statement filed with the Securities and Exchange
Commission on November 21, 1996, on Form 10-SB under the caption
"Description of Securities" on page 18 of the prospectus and
incorporated by reference into any reports filed for the purpose of
updating such description.
In addition, all documents filed by us under Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 after the date of this
Prospectus but before termination of this offering are deemed to be incorporated
by reference into this Prospectus and will constitute a part of this Prospectus
form the date of filing of those documents.
The documents incorporated by reference into this Prospectus are
available from us upon request. We will provide to each person, including any
beneficial owner, to whom this Prospectus is delivered, at no cost to the
requester, upon your written or oral request, a copy of all of the information
that is incorporated in this Prospectus by reference, except for exhibits unless
the exhibits are specifically incorporated by reference into this prospectus.
Please submit your requests for any of such documents to: American Bio Medica
Corporation, 122 Smith Road, Kinderhook, New York 12106, Attn: Melissa A.
Decker, Assistant Secretary, (800) 227-1243.
14
AMERICAN BIO MEDICA CORPORATION
Part II
Information Not Required in Prospectus
Item 14. Other Expenses Of Issuance And Distribution
The expenses payable by us in connection with the issuance and
distribution of the securities are estimated as follows:
AMOUNT
---------
SEC Registration Fee $ 1,300
Legal Fees and Expenses $ 45,000
Accounting $ 5,000
Transfer Agent Fees $ 1,000
Miscellaneous $ 2,700
Total: $ 55,000
=========
Item 15. Indemnification of Directors and Officers
Under the New York Business Corporation Law ("NYBCL"), a corporation
may indemnify any person made, or threatened to be made, a party to any action
or proceeding, except for shareholder derivative suits, by reason of the fact
that he or she was a director or officer of the corporation, provided such
director or officer acted in good faith for a purpose which he or she reasonably
believed to be in the best interests of the corporation and, in criminal
proceedings, in addition, had no reasonable cause to believe his or her conduct
was unlawful. In the case of shareholder derivative suits, the corporation may
indemnify any person by reason of the fact that he or she was a director or
officer of the corporation if he or she acted in good faith for a purpose which
he or she reasonably believed to be in the best interests of the corporation,
except that no indemnification may be made in respect of (i) a threatened
action, or a pending action which is settled or otherwise disposed of; or (ii)
any claim, issue or matter as to which such person has been adjudged to be
liable to the corporation, unless and only to the extent that the court on which
the action was brought, or, if no action was brought, any court of competent
jurisdiction, determines upon application that, in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnity for that
portion of the settlement amount and expenses as the court deems proper.
The indemnification described above under the NYBCL is not exclusive of
other indemnification rights to which a director or officer may be entitled,
whether contained in the certificate of incorporation or by-laws, or when
authorized by (i) such certificate of incorporation or by-laws; (ii) a
resolution of shareholders; (iii) a resolution of directors; or (iv) an
agreement providing for such indemnification, provided that no indemnification
may be made to or on behalf of any director or officer if a judgment or other
final adjudication adverse to the director or officer establishes that his or
her acts were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated, or that he
or she personally gained in fact a financial profit or other advantage to which
he or she was not legally entitled.
15
Item 16. Exhibits
See Exhibit List on page E-1.
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, ABMC has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by ABMC of expenses incurred or paid by a
director, officer or controlling person of ABMC 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, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue. The Company will:
(a) file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to include any
additional or changed material information on the plan of distribution.
(b) for determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
(c) file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Kinderhook and State of New York on September 26,
2001.
AMERICAN BIO MEDICA CORPORATION
(Registrant)
By: /s/ Stan Cipkowski
---------------------------
Stan Cipkowski
President
POWER OF ATTORNEY
Each of the undersigned officers and directors of American Bio Medica
Corporation whose signature appears below hereby appoints Stan Cipkowski and
Keith E. Palmer, and each of them, as true and lawful attorney-in-fact for the
undersigned with full power of substitution, to execute in his name and on his
behalf in each capacity stated below, any and all amendments (including
post-effective amendments) to this registration statement as the
attorney-in-fact shall deem appropriate, and to cause to be filed any such
amendment (including exhibits thereto and other documents in connection
therewith) to this registration statement with the Securities and Exchange
Commission, as fully and to all intents and purposes as such person might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or any of them, may lawfully do or cause to be done by virtue
herewith.
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 September 26, 2001:
Signature Title
--------- -----
/s/ Stan Cipkowski President and Director
--------------------------------
Stan Cipkowski
/s/ Robert L. Aromando Jr. Chief Executive Officer and Chairman of
-------------------------------- the Board of Directors
Robert L. Aromando Jr.
/s/ Edmund Jaskiewicz Secretary and Director
--------------------------------
Edmund Jaskiewicz
/s/ Gerald Moore Director
--------------------------------
Gerald Moore
/s/ Denis O'Donnell, M.D. Director
--------------------------------
Denis O'Donnell, M.D.
/s/Keith E. Palmer Chief Financial Officer
-------------------------------- (Principal Financial Officer)
Keith E. Palmer
S-1
American Bio Medica Corporation
Index to Exhibits
Number Description of Exhibits
3.5 Bylaws of American Bio Medica Corporation, filed as the exhibit number
listed to the Company's 10-KSB filed on November 21, 1996 and
incorporated herein by reference
3.6 Fifth Amendment to the Certificate of Incorporated, filed as the
exhibit number listed to the Company's Form SB-2 filed on May 20, 1998
and incorporated herein by reference
4.6 Fiscal 1997 Nonstatutory Stock Option Plan, filed as part of the
Company's Proxy Statement for its Fiscal 1997 Annual Meeting of
Shareholders and incorporated herein by reference
4.14 Fiscal 1998 Nonstatutory Stock Option Plan, filed as part of the
Company's Proxy Statement for its Fiscal 1998 Annual Meeting of
Shareholders and incorporated herein by reference
4.15 Fiscal 2000 Nonstatutory Stock Option Plan, filed as part of the
Company's Proxy Statement for its Fiscal 2000 Annual Meeting of
Shareholders and incorporated herein by reference
4.17 Fiscal 2001 Nonstatutory Stock Option Plan, filed as part of the
Company's Proxy Statement for its Fiscal 2002 Annual Meeting of
Shareholders and incorporated herein by reference
4.2* Investor Registration Rights Agreement, dated August 22, 2001, among
American Bio Medica Corporation and the investors
4.3* Placement Agent Registration Rights Agreement, dated August 22, 2001,
among American Bio Medica Corporation and the placement agent and its
sub-agents
4.4* Form of Warrant Agreement and Warrant among American Bio Medica
Corporation and the investors
4.5* Form of Warrant Agreement and Warrant among American Bio Medica
Corporation and the placement agent and its sub-agents
5.1* Opinion and Consent of Tuczinski, Burstein & Collura, P.C.
10.11 Financial Advisory Agreement dated May 2, 2001 by and between Brean
Murray & Co., Inc. and the Company, filed as an exhibit to the
Company's Form 10-KSB filed on August 13, 2001 and incorporated herein
by reference
23.1* Consent of Richard A. Eisner & Company, LLP
23.2* Consent of Tuczinski, Burstein & Collura. P.C. (contained in Exhibit
5.1)
24.1* Powers of Attorney (included on page S-1)
-------------------------------------------
* Filed with this registration statement.
E-1
EXHIBIT 5.1
{TBC Letterhead}
September 25, 2001
American Bio Medica Corporation
122 Smith Road
Kinderhook, New York 12106
Re: Form S-3 Registration Statement
Ladies and Gentlemen:
We have acted as counsel for American Bio Medica Corporation (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended (the "Securities Act") of (a) 4,227,420 common shares ("Shares"), par
value $0.01 per share, of the Company, of which 2,549,000 are common shares of
ABMC and 1,678,420 are common shares issuable upon the exercise of common share
purchase warrants ("Shares") and (b) up to 1,274,500 common share purchase
warrants ("Warrants").
We have reviewed the corporate proceedings with respect to the
authorization of the issuance of the Shares and the Warrants. We have also
reviewed such questions of law, as we have deemed necessary and appropriate for
the purposes of rendering the opinion set forth below. In rendering our opinion,
we have assumed the authenticity of all documents submitted to us, the
genuineness of all signatures and the conformity to authentic originals of all
documents submitted to us as copies. We have also assumed the legal capacity for
all purposes relevant hereto of all natural person and with respect to all
parties to agreements or instruments relevant hereto other than Company, that
such parties had the requisite power and authority (corporate or otherwise), to
execute and deliver such agreements or instruments and that such agreements or
instruments are the valid, binding and enforceable obligations of such parties.
Based on the foregoing, it is our opinion that the Shares, including
the common shares issuable upon exercise of the Warrants, and Warrants, when
sold in the manner described in the Registration Statement, will be legally
issued, fully paid and nonassessable.
Our opinion expressed above is limited solely to the Business
Corporation Law of the State of New York ("BCL"), and the federal laws of the
United States of America, in each case to the extent that the same may apply to
or govern such opinion, and we express no opinion as to the laws of any other
jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Tuczinski, Burstein & Collura, P.C.
By: /s/ Richard L. Burstein
-------------------------------
Richard L. Burstein
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated June 20, 2001 (with respect to Note B and Note
L[5], July 23, 2001; with respect to the last paragraph of Note J[3], July 18,
2001), incorporated by reference in the Annual Report on Form 10-KSB of the
Company for the year ended April 30, 2001, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
Our report contains an explanatory paragraph that states that the Company has
experienced recurring net losses and negative cash flows from operations that
raise substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Richard A. Eisner & Company, LLP
New York, New York
September 25, 2001
Exhibit 4.2 Investor Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made as of August
22, 2001, by and among American Bio Medica Corporation, a New York corporation
(the "Company"), and the persons signing the signature page of this Agreement
who have entered into Subscription Agreements, dated August 2001, to purchase
the Company's common stock (the "Shareholders").
RECITALS
A. Pursuant to Subscription Agreements, dated August 2001 (the
"Subscription Agreements"), the Shareholders have purchased shares (the "Common
Shares") of the Company's common stock, par value $0.01 per share ("Common
Stock"), and warrants (the "Common Stock Warrants") entitling the holders
thereof to purchase the number of shares (the "Warrant Shares") of Common Stock
as set forth therein.
B. To induce the Shareholders to purchase Common Shares and Common
Stock Warrants, the Company has agreed to provide the Shareholders with certain
registration rights described herein.
THEREFORE, in consideration of the promises and the mutual covenants
and agreements contained in the Subscription Agreements and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
Person. An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
Prospectus. The prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, including
post-effective amendments and all material incorporated by reference in
the prospectus.
Registration Statement. Any registration statement of the Company
which covers any of the Registrable Securities (as defined in Section 2
hereof) pursuant to the provisions of this Agreement, including the
registration statement and amendments and post-effective amendments
thereto, the Prospectus and supplements therein, all exhibits and all
material incorporated by reference in the registration statement.
SEC. The U.S. Securities and Exchange Commission.
Securities Act. The Securities Act of 1933, as amended.
Shares. The Common Shares and the Warrant Shares.
2. Securities Subject to this Agreement. The securities entitled to
the benefit of this Agreement are all the Shares and the Common Stock Warrants
(the "Registrable Securities"); provided, however, that the Shares and the
Common Stock Warrants shall be Registrable Securities only for so long as the
Shares and the Common Stock Warrants continue to be Restricted Securities. For
purposes of this Agreement, the Shares and the Common Stock Warrants shall be
Restricted Securities as of the date of this Agreement. The Shares and the
Common Stock Warrants shall cease to be Restricted Securities when (1) the
Company has effectively registered the Shares and the Common Stock Warrants
under the Securities Act and the Shareholders who own the Shares and the Common
Stock Warrants, have disposed of the Shares and the Common Stock Warrants in
accordance with the Registration Statement covering the Shares and the Common
Stock Warrants, (2) the Shareholders who own Shares and Common Stock Warrants,
shall be eligible to sell the Shares and the Common Stock Warrants to the public
in accordance with all applicable conditions of Rule 144 (or any similar
provisions then in force) under the Securities Act, or such Shares and Common
Stock Warrants may be sold pursuant to Rule 144(k) (or any similar provision
then in force) under the Securities Act, and are freely tradable after such sale
by the transferee, (3) the Shareholders have otherwise transferred the Shares
and the Common Stock Warrants (except as otherwise provided in Section 7(h)
hereof), or (4) such Shares or Common Stock Warrants shall have ceased to be
outstanding.
3. Registration of Registrable Securities. On or before the later of
(i) August 15, 2001 or (ii) the thirtieth business day after the date American
Bio Medica issues Common Shares and Common Stock Warrants, the Company will use
its best efforts to cause a Registration Statement to be filed with the SEC
covering the Registrable Securities. The Company shall also use its commercially
reasonable efforts to cause such Registration Statement to become effective
within 45 days after such filing (or 90 days if reviewed by the Staff of the
SEC) and, subject to the provisions of Section 2 hereof, remain effective until
two years after the last date Common Shares and Common Stock Warrants are issued
to such Shareholders pursuant to the Subscription Agreements.
4. Registration Procedures.
(a) The Company shall:
(i) furnish to the Shareholders, without charge, at least one
signed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules,
all documents incorporated by reference therein and all exhibits
(including those incorporated by reference);
(ii) deliver to the Shareholders, without charge, as many
copies of the Prospectus (including each preliminary Prospectus)
and any amendment or supplement thereto as they may reasonably
request, but only while the Company is required to cause the
Registration Statement to remain effective;
(iii) prior to any public offering of Registrable Securities,
register or qualify or cooperate with the Shareholders and their
respective counsel in connection with the registration or
qualification of the Registrable Securities for offer and sale
under the securities laws of the various states (the "Blue Sky
Laws") and do any and all other acts or things reasonably necessary
or advisable to effect the registration or qualification of the
Registrable Securities covered by the Registration Statement in the
various states; provided, however, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction
where it is not now qualified or to take any action which would
subject it to taxation or service of process in suits other than
those arising out of the offer or sale of the securities covered by
such Registration Statement in any jurisdictions where it is not
now so subject;
(iv) cooperate with the Shareholders to prepare and deliver
timely certificates representing Registrable Securities to be sold
and not bearing any restrictive legends; and issue the Registrable
Securities in the denominations and register them in the names the
Shareholders may request at least two (2) business days prior to
any sale of Registrable Securities;
(v) use its best efforts to cause a Notification Form for
Listing of Additional Shares to be filed with The Nasdaq Stock
Market with respect to the Registrable Securities being registered
or to cause similar required forms to be filed with the market on
which similar securities issued by the Company are then listed or
traded; and
(vi) make available to the Shareholders and any attorney or
accountant retained by the Shareholders for inspection all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers,
directors and employees to supply all information that the
participating Shareholders, the Shareholders' representatives,
attorneys or accountants may reasonably request in connection with
the registration; provided, that such Persons shall keep
confidential any records, information or documents that the Company
designates as confidential unless a court or administrative agency
requires the disclosure of the records, information or documents.
(b) Each of the Shareholders agrees to furnish the Company with any
information regarding the Shareholders and the distribution of the
Registrable Securities as the Company may from time to time reasonably
request.
(c) The Shareholders agree that, upon receipt of any notice from
the Company of the happening of any of the following: (i) the SEC's
issuance of any stop order denying or suspending the effectiveness of
the Registration Statement or the initiation or threatening of any
proceeding for that purpose, (ii) the Company's receipt of any stop
order denying registration or suspending the qualification of the
Registrable Securities for sale or the initiation or threatening of any
proceeding for such purpose, or (iii) the happening of any event which
makes any statement made in the Registration Statement, the Prospectus
or any document incorporated by reference therein untrue or which
requires any change in the Registration Statement, the Prospectus or
any document incorporated by reference therein to make the statements
not include an untrue statement of material fact or not omit any
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing, the Shareholders shall discontinue the disposition of
Registrable Securities until the Shareholders receive a supplemented or
amended Prospectus from the Company or until the Company advises the
Shareholders in writing that the participating Shareholders may resume
the use of the Prospectus, and have received copies of any additional
or supplemental filings which are incorporated by reference in the
Prospectus. If the Company so directs, the Shareholders will deliver to
the Company all copies, other than permanent file copies then in the
Shareholders' possession, of the Prospectus covering the Registrable
Securities at the time the Shareholders received the notice.
5. Registration Expenses. Regardless of when the Registration
Statement becomes effective, the Company shall bear all costs and expenses
incident to the Company's performance of, or compliance with, this Agreement,
including without limitation all registration and filing fees, fees and expenses
of compliance with the Blue Sky Laws, printing expenses, messenger, telephone
and delivery expenses, and fees and disbursements of counsel for the Company,
all independent certified public accountants of the Company, and fees and
expenses of other Persons retained by the Company relating to the distribution
of the Registrable Securities (all such expenses being called "Registration
Expenses"). The participating Shareholders shall in all cases bear all
discounts, fees or commissions incident to the sale of the Shareholders'
Registrable Securities and any fees of any attorney or accountant retained by
any of the Shareholders.
6. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, the
Shareholders against all losses, claims, damages, liabilities and
expenses, joint or several, to which the Shareholders may become
subject under the Securities Act or any state securities law, or any
rule or regulation promulgated under the Securities Act or otherwise
which arise out of, or are caused by, the Company's violation of the
Securities Act or any state securities laws, or any rule or regulation
promulgated under the Securities Act, including, but not limited to,
any untrue or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus or preliminary Prospectus or in
any application or other request that the Company files, including any
application or request filed under the Blue Sky Laws, or any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as the same are based upon an untrue or
alleged untrue statement or omission or alleged omission so made which
is contained in information furnished to the Company by any of the
Shareholders expressly for use therein or by any Shareholder's failure
to deliver a copy of the Registration Statement or Prospectus after the
Company has furnished the participating Shareholders with a copy of the
same. The Company will reimburse the Shareholders for any legal or
other expense the Shareholders reasonably incur in connection with
investigating or defending any such loss, claim, damage, liability,
action or proceeding. The Company will also indemnify the selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and
each Person who controls such persons (within the meaning of the
Securities Act) to the same extent as provided above with respect to
the indemnification of the Shareholders, if requested.
(b) Indemnification by the Shareholders. In connection with any
Registration Statement in which any Shareholder's Registrable
Securities are registered and sold, the participating Shareholders
shall furnish to the Company the information and affidavits as the
Company reasonably requests for use in connection with any Registration
Statement or Prospectus and agree, jointly and severally, to indemnify
and hold harmless, to the full extent permitted by law, the Company,
its officers directors and each Person who controls the Company (within
the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the Registration Statement,
Prospectus, preliminary Prospectus or any application filed under the
Blue Sky Laws or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that the untrue
statement or omission is contained in any information or affidavit so
furnished by the Shareholder to the Company specifically for inclusion
in the Registration Statement, Prospectus or application filed under
the Blue Sky Laws. The Company shall be entitled to receive indemnities
from selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as
provided above with respect to information so furnished by the Persons
specifically for inclusion in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (1) promptly notify the indemnifying
party of any claim with respect to which it seeks indemnification and
(2) permit such indemnifying party to assume the defense of such claim
with counsel reasonably satisfactory to the indemnified party. Any
Person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of the claim,
but the fees and expenses of the counsel shall be at the expense of the
Person unless (A) the indemnifying party has agreed to pay the fees or
expenses, (B) the indemnifying party shall have failed to assume the
defense of the claim and employ counsel reasonably satisfactory to the
Person, or (C) in the reasonable judgment of the Person, based upon
advice of its counsel, a conflict of interest may exist between the
Person and the indemnifying party with respect to the claims (in which
case, if the Person notifies the indemnifying party in writing that the
Person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of the claim on behalf of the Person). The
indemnifying party will not be subject to any liability for any
settlement made without its consent. The indemnifying party, however,
may not unreasonably withhold its consent. No indemnifying party will
be required to consent to the entry of any judgment or to enter into
any settlement which does not include as an unconditional term the
claimant's or plaintiff's release of the indemnified party from all
liability in respect to the claim or litigation. An indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by the indemnifying party with
respect to the claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with
respect to the claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or
counsels.
(d) Contribution. If for any reason the indemnification provided
for in the preceding clauses (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated
by the preceding clauses (a) and (b), then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of the loss, claim, damage liability or expense in the
proportion as is appropriate to reflect (1) the relative benefits
received by the indemnified party and the indemnifying party, (2) the
relative fault of the indemnified party and the indemnifying party, and
(3) any other relevant equitable considerations.
(e) The indemnities provided in this Section 6 shall survive the
Shareholders' transfer of any Registrable Securities.
7. Miscellaneous.
(a) Other Agreements. The Shareholders acknowledge that the Company
has granted registration rights to others and the rights granted in
this Agreement are subject to those rights already granted.
(b) Amendments and Waivers. No amendment, modification, supplement
or waiver of any provision of this Agreement is binding on any party
unless the party consents in writing thereto.
(c) Notices. Any notice or other communication required or which
may be given under this Agreement shall be in writing and either
delivered personally to the addressee, telegraphed, telecopied or
telexed to the addressee, sent by overnight courier to the addressee or
mailed, certified or registered mail, postage prepaid, and shall be
deemed given when so delivered personally, telegraphed, telecopied or
telexed to the addressee, or, if sent by overnight courier, on the day
delivery is guaranteed by such courier, or, if mailed, three business
days after the date of mailing, as follows:
(i) to the Shareholders, at the most current address given by
the Shareholders to the Company pursuant to the Subscription
Agreements or otherwise.
(ii) To American Bio Medica at:
American Bio Medica Corporation
122 Smith Road
Kinderhook, New York 12106
Attention: President
With a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
Attention: Neil Gold, Esq.
Any of the foregoing may change its address for notices by notice to
the other parties.
(d) Governing Law and Forum. The laws of the State of New York
shall govern this Agreement, its construction, and the determination of
any rights, duties or remedies of the parties arising out of, or
relating to, this Agreement (regardless of the laws that might
otherwise govern under applicable New York principles of conflicts of
law). The parties acknowledge that the United States District Court for
the Southern District of New York or the New York Supreme Court for the
County of Columbia shall have exclusive jurisdiction over any case or
controversy arising out of, or relating to, this Agreement and that all
litigation arising out of, or relating to, this Agreement shall be
commenced in the United States District Court for the Southern District
of New York or in the Columbia County (New York) Supreme Court. Each of
the parties consents to be subject to personal jurisdiction of the
courts of New York, including the federal courts in New York.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(f) Interpretation. The Section headings contained in this
Agreement are for the purposes of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
(g) Severability. If any provision of this Agreement is determined
to be illegal or invalid, such illegality or invalidity shall have no
effect on the other provisions of this Agreement, and all other
provisions of this Agreement shall remain valid, operative and
enforceable.
(h) Assignment. The rights granted to the Shareholders pursuant to
this Agreement shall not be assignable without the written consent of
the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AMERICAN BIO MEDICA CORPORATION
By: /s/ Stan Cipkowski
---------------------------
Stan Cipkowski
President
INVESTORS
/s/ A. Brean Murray
----------------------------------------
/s/ Robert S, Anderson
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Dan Suker W.G. Limited
/s/ A.S. Corlett
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Its: Director
/s/ Norman C. Fields
----------------------------------------
/s/ David J. Rochester
----------------------------------------
/s/ G.R. Beachley
----------------------------------------
/s/ S.A. Beachley
----------------------------------------
Brean Murray & Co., Inc. Profit Sharing Plan
/s/ A. Brean Murray
----------------------------------------
Its: President & Chief Executive Officer
/s/ Barry K. Fingerhut
----------------------------------------
/s/ David L. Jordon
----------------------------------------
/s/ John P. Lyden, MD
----------------------------------------
/s/ E. Thomas Steadman
----------------------------------------
/s/ Renee Sands
----------------------------------------
Pequod Investments, L.P.
/s/ Jonathan Gallen
----------------------------------------
Its: General Partner
Pequod International, LTD.
/s/ Jonathan Gallen
----------------------------------------
Its: Investment Advisor
Kingsbridge Capital, LTD.
/s/ Adam Gurney
----------------------------------------
Its: Director
M.K. Global Technology Partners, L.P.
/s/ Benny Lorenzo
----------------------------------------
B.L. Capital Corp.
Its: President & CEO
Aspira Capital Management, L.P.
/s/ Benny Lorenzo
----------------------------------------
B.L. Capital Corp.
Its: President & CEO
/s/ Benny Lorenzo
----------------------------------------
/s/ John F. Murray
----------------------------------------
/s/ Keith E. Palmer
----------------------------------------
/s/ Selig Zises
----------------------------------------
/s/ Eleanor M. Evans
----------------------------------------
Exhibit 4.3 Placement Agent Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made as of August
22, 2001, by and among American Bio Medica Corporation, a New York corporation
(the "Company"), and the persons signing the signature page of this Agreement
who have acted as placement agent or sub-agents (the "Placement Agents") in
connection with the August 2001 private placement of the Company's common
shares.
RECITALS
A. Pursuant to an engagement letter (the "Engagement Letter"), dated
June 4, 2001, the Placement Agents have been issued warrants (the "Common Stock
Warrants") entitling the holders thereof to purchase the number of shares (the
"Warrant Shares") of Common Stock as set forth therein.
B. The Company has agreed to provide the Placement Agents with certain
registration rights described herein.
THEREFORE, in consideration of the promises and the mutual covenants
and agreements contained in the Engagement Letter and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereby agree
as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
Person. An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
Prospectus. The prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, including
post-effective amendments and all material incorporated by reference in
the prospectus.
Registration Statement. Any registration statement of the Company
which covers any of the Registrable Securities (as defined in Section 2
hereof) pursuant to the provisions of this Agreement, including the
registration statement and amendments and post-effective amendments
thereto, the Prospectus and supplements therein, all exhibits and all
material incorporated by reference in the registration statement.
SEC. The U.S. Securities and Exchange Commission.
Securities Act. The Securities Act of 1933, as amended.
Shares. The Common Shares and the Warrant Shares.
2. Securities Subject to this Agreement. The securities entitled to
the benefit of this Agreement are all the Common Shares issuable upon exercise
of the Common Stock Warrants (the "Registrable Securities"); provided, however,
that the Common Shares issuable upon exercise of the Common Stock Warrants shall
be Registrable Securities only for so long as the Common Shares continue to be
Restricted Securities. For purposes of this Agreement, the Common Shares
issuable upon exercise of the Common Stock Warrants shall be Restricted
Securities as of the date of this Agreement. The Common Shares issuable upon
exercise of the Common Stock Warrants shall cease to be Restricted Securities
when (1) the Company has effectively registered the Common Shares issuable upon
exercise of the Common Stock Warrants under the Securities Act and the Placement
Agents who own the Common Shares issuable upon the exercise of the Common Stock
Warrants, have disposed of the Common Shares issuable upon exercise of the
Common Stock Warrants in accordance with the Registration Statement covering the
Common Shares issuable upon exercise of the Common Stock Warrants, (2) the
Placement Agents who own Common Shares issuable upon the exercise of the Common
Stock Warrants, shall be eligible to sell the Common Shares issuable upon
exercise of the Common Stock Warrants to the public in accordance with all
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act, or such Common Shares issuable upon the exercise of
the Common Stock Warrants may be sold pursuant to Rule 144(k) (or any similar
provision then in force) under the Securities Act, and are freely tradable after
such sale by the transferee, (3) the Placement Agents have otherwise transferred
the Common Shares issuable upon the exercise of the Common Stock Warrants
(except as otherwise provided in Section (h) hereof), or (4) such Common Shares
issuable upon the exercise of the Common Stock Warrants shall have ceased to be
outstanding.
3. Registration of Registrable Securities. On or before the later of
(i) August 15, 2001 or (ii) the thirtieth business day after the date American
Bio Medica issues the Common Stock Warrants, the Company will use its best
efforts to cause a Registration Statement to be filed with the SEC covering the
Registrable Securities. The Company shall also use its commercially reasonable
efforts to cause such Registration Statement to become effective within 45 days
after such filing (or 90 days if reviewed by the Staff of the SEC) and, subject
to the provisions of Section 2 hereof, remain effective until two years after
the last date Common Shares issuable upon the exercise of the Common Stock
Warrants are issued to such Placement Agents pursuant to the Engagement Letter.
4. Registration Procedures.
(a) The Company shall:
(i) furnish to the Placement Agents, without charge, at least
one signed copy of the Registration Statement and any
post-effective amendment thereto, including financial statements
and schedules, all documents incorporated by reference therein and
all exhibits (including those incorporated by reference);
(ii) deliver to the Placement Agents, without charge, as many
copies of the Prospectus (including each preliminary Prospectus)
and any amendment or supplement thereto as they may reasonably
request, but only while the Company is required to cause the
Registration Statement to remain effective;
(iii) prior to any public offering of Registrable Securities,
register or qualify or cooperate with the Placement Agents and
their respective counsel in connection with the registration or
qualification of the Registrable Securities for offer and sale
under the securities laws of the various states (the "Blue Sky
Laws") and do any and all other acts or things reasonably necessary
or advisable to effect the registration or qualification of the
Registrable Securities covered by the Registration Statement in the
various states; provided, however, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction
where it is not now qualified or to take any action which would
subject it to taxation or service of process in suits other than
those arising out of the offer or sale of the securities covered by
such Registration Statement in any jurisdictions where it is not
now so subject;
(iv) cooperate with the Placement Agents to prepare and deliver
timely certificates representing Registrable Securities to be sold
and not bearing any restrictive legends; and issue the Registrable
Securities in the denominations and register them in the names the
Placement Agents may request at least two (2) business days prior
to any sale of Registrable Securities;
(v) use its best efforts to cause a Notification Form for
Listing of Additional Shares to be filed with The Nasdaq Stock
Market with respect to the Registrable Securities being registered
or to cause similar required forms to be filed with the market on
which similar securities issued by the Company are then listed or
traded; and
(vi) make available to the Placement Agents and any attorney or
accountant retained by the Placement Agents for inspection all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers,
directors and employees to supply all information that the
participating Placement Agents, the Placement Agents'
representatives, attorneys or accountants may reasonably request in
connection with the registration; provided, that such Persons shall
keep confidential any records, information or documents that the
Company designates as confidential unless a court or administrative
agency requires the disclosure of the records, information or
documents.
(b) Each of the Placement Agents agree to furnish the Company with
any information regarding the Placement Agents and the distribution of
the Registrable Securities as the Company may from time to time
reasonably request.
(c) The Placement Agents agree that, upon receipt of any notice
from the Company of the happening of any of the following: (i) the
SEC's issuance of any stop order denying or suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose, (ii) the Company's
receipt of any stop order denying registration or suspending the
qualification of the Registrable Securities for sale or the initiation
or threatening of any proceeding for such purpose, or (iii) the
happening of any event which makes any statement made in the
Registration Statement, the Prospectus or any document incorporated by
reference therein untrue or which requires any change in the
Registration Statement, the Prospectus or any document incorporated by
reference therein to make the statements not include an untrue
statement of material fact or not omit any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, the Placement
Agents shall discontinue the disposition of Registrable Securities
until the Placement Agents receive a supplemented or amended Prospectus
from the Company or until the Company advises the Placement Agents in
writing that the participating Placement Agents may resume the use of
the Prospectus, and have received copies of any additional or
supplemental filings which are incorporated by reference in the
Prospectus. If the Company so directs, the Placement Agents will
deliver to the Company all copies, other than permanent file copies
then in the Placement Agents' possession, of the Prospectus covering
the Registrable Securities at the time the Placement Agents received
the notice.
5. Registration Expenses. Regardless of when the Registration
Statement becomes effective, the Company shall bear all costs and expenses
incident to the Company's performance of, or compliance with, this Agreement,
including without limitation all registration and filing fees, fees and expenses
of compliance with the Blue Sky Laws, printing expenses, messenger, telephone
and delivery expenses, and fees and disbursements of counsel for the Company,
all independent certified public accountants of the Company, and fees and
expenses of other Persons retained by the Company relating to the distribution
of the Registrable Securities (all such expenses being called "Registration
Expenses"). The participating Placement Agents shall in all cases bear all
discounts, fees or commissions incident to the sale of the Placement Agents'
Registrable Securities and any fees of any attorney or accountant retained by
any of the Placement Agents.
6. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, the Placement
Agents against all losses, claims, damages, liabilities and expenses,
joint or several, to which the Placement Agents may become subject
under the Securities Act or any state securities law, or any rule or
regulation promulgated under the Securities Act or otherwise which
arise out of, or are caused by, the Company's violation of the
Securities Act or any state securities laws, or any rule or regulation
promulgated under the Securities Act, including, but not limited to,
any untrue or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus or preliminary Prospectus or in
any application or other request that the Company files, including any
application or request filed under the Blue Sky Laws, or any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as the same are based upon an untrue or
alleged untrue statement or omission or alleged omission so made which
is contained in information furnished to the Company by any of the
Placement Agents expressly for use therein or by any Shareholder's
failure to deliver a copy of the Registration Statement or Prospectus
after the Company has furnished the participating Placement Agents with
a copy of the same. The Company will reimburse the Placement Agents for
any legal or other expense the Placement Agents reasonably incur in
connection with investigating or defending any such loss, claim,
damage, liability, action or proceeding. The Company will also
indemnify the selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their
officers and directors and each Person who controls such persons
(within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Placement
Agents, if requested.
(b) Indemnification by the Placement Agents. In connection with any
Registration Statement in which any Shareholder's Registrable
Securities are registered and sold, the participating Placement Agents
shall furnish to the Company the information and affidavits as the
Company reasonably requests for use in connection with any Registration
Statement or Prospectus and agree, jointly and severally, to indemnify
and hold harmless, to the full extent permitted by law, the Company,
its officers directors and each Person who controls the Company (within
the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the Registration Statement,
Prospectus, preliminary Prospectus or any application filed under the
Blue Sky Laws or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that the untrue
statement or omission is contained in any information or affidavit so
furnished by the Shareholder to the Company specifically for inclusion
in the Registration Statement, Prospectus or application filed under
the Blue Sky Laws. The Company shall be entitled to receive indemnities
from selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as
provided above with respect to information so furnished by the Persons
specifically for inclusion in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (1) promptly notify the indemnifying
party of any claim with respect to which it seeks indemnification and
(2) permit such indemnifying party to assume the defense of such claim
with counsel reasonably satisfactory to the indemnified party. Any
Person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of the claim,
but the fees and expenses of the counsel shall be at the expense of the
Person unless (A) the indemnifying party has agreed to pay the fees or
expenses, (B) the indemnifying party shall have failed to assume the
defense of the claim and employ counsel reasonably satisfactory to the
Person, or (C) in the reasonable judgment of the Person, based upon
advice of its counsel, a conflict of interest may exist between the
Person and the indemnifying party with respect to the claims (in which
case, if the Person notifies the indemnifying party in writing that the
Person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of the claim on behalf of the Person). The
indemnifying party will not be subject to any liability for any
settlement made without its consent. The indemnifying party, however,
may not unreasonably withhold its consent. No indemnifying party will
be required to consent to the entry of any judgment or to enter into
any settlement which does not include as an unconditional term the
claimant's or plaintiff's release of the indemnified party from all
liability in respect to the claim or litigation. An indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by the indemnifying party with
respect to the claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with
respect to the claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or
counsels.
(d) Contribution. If for any reason the indemnification provided
for in the preceding clauses 6(a) and 6(b) is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated
by the preceding clauses 6(a) and 6(b), then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party
as a result of the loss, claim, damage liability or expense in the
proportion as is appropriate to reflect (1) the relative benefits
received by the indemnified party and the indemnifying party, (2) the
relative fault of the indemnified party and the indemnifying party, and
(3) any other relevant equitable considerations.
(e) The indemnities provided in this Section 6 shall survive the
Placement Agents' transfer of any Registrable Securities.
7. Miscellaneous.
(a) Other Agreements. The Placement Agents acknowledge that the
Company has granted registration rights to others and the rights
granted in this Agreement are subject to those rights already granted.
(b) Amendments and Waivers. No amendment, modification, supplement
or waiver of any provision of this Agreement is binding on any party
unless the party consents in writing thereto.
(c) Notices. Any notice or other communication required or which
may be given under this Agreement shall be in writing and either
delivered personally to the addressee, telegraphed, telecopied or
telexed to the addressee, sent by overnight courier to the addressee or
mailed, certified or registered mail, postage prepaid, and shall be
deemed given when so delivered personally, telegraphed, telecopied or
telexed to the addressee, or, if sent by overnight courier, on the day
delivery is guaranteed by such courier, or, if mailed, three business
days after the date of mailing, as follows:
(i) to the Placement Agents, at the most current address given
by the Placement Agents to the Company pursuant to the Subscription
Agreements or otherwise.
(ii) To American Bio Medica at:
American Bio Medica Corporation
122 Smith Road
Kinderhook, New York 12106
Attention: President
With a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
Attention: Neil Gold, Esq.
Any of the foregoing may change its address for notices by notice to
the other parties.
(d) Governing Law and Forum. The laws of the State of New York
shall govern this Agreement, its construction, and the determination of
any rights, duties or remedies of the parties arising out of, or
relating to, this Agreement (regardless of the laws that might
otherwise govern under applicable New York principles of conflicts of
law). The parties acknowledge that the United States District Court for
the Southern District of New York or the New York Supreme Court for the
County of Columbia shall have exclusive jurisdiction over any case or
controversy arising out of, or relating to, this Agreement and that all
litigation arising out of, or relating to, this Agreement shall be
commenced in the United States District Court for the Southern District
of New York or in the Columbia County (New York) Supreme Court. Each of
the parties consents to be subject to personal jurisdiction of the
courts of New York, including the federal courts in New York.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(f) Interpretation. The Section headings contained in this
Agreement are for the purposes of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
(g) Severability. If any provision of this Agreement is determined
to be illegal or invalid, such illegality or invalidity shall have no
effect on the other provisions of this Agreement, and all other
provisions of this Agreement shall remain valid, operative and
enforceable.
(h) Assignment. The rights granted to the Placement Agents pursuant
to this Agreement shall not be assignable without the written consent
of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AMERICAN BIO MEDICA CORPORATION
By: /s/ Stan Cipkowski
---------------------------
Stan Cipkowski
President
Placement Agents:
Brean Murray & Co., Inc.
/s/ A. Brean Murray
-----------------------------
Its: President and CEO
/s/David L. Jordon
-----------------------------
/s/ Barry Zelin
-----------------------------
Axiom Capital Management
/s/ Mark Martino
-----------------------------
Its: Managing Partner
/s/ Jeffrey Goldberg
-----------------------------
Exhibit 4.4 Form of Investor Warrant
EACH SUBSCRIBER SHALL RECEIVE A WARRANT CERTIFICATE AT CLOSING WITH THE TERMS
SET FORTH HEREIN, NOT A WARRANT IN THE FORM HEREUNDER. THIS FORM OF WARRANT IS
BEING PROVIDED TO EACH SUBSCRIBER SOLELY TO SET FORTH THE TERMS OF THE WARRANT
CERTIFICATE TO BE ISSUED AT CLOSING.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SUCH ACT.
No. W-___ Warrant to Purchase ____ Shares of
Common Stock (subject to adjustment)
FORM OF WARRANT
TO PURCHASE COMMON STOCK
of
AMERICAN BIO MEDICA CORPORATION
This Warrant (the "Warrant") is issued to [Name of Purchaser] or his,
her or its permitted assigns ("Holder") by American Bio Medica Corporation, a
New York corporation (the "Company"), on August 22, 2001 (the "Warrant Issue
Date") for consideration of $____ in the aggregate, receipt of which is hereby
acknowledged.
1. Purchase Shares. Subject to the terms and conditions hereinafter
set forth, the Holder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall
notify the holder hereof in writing), to purchase from the Company up to
_____________ shares of common stock, par value $0.01 per share ("Common
Stock"), of the Company (the "Warrant Shares") at the Exercise Price (defined
below), subject to adjustment as provided in Section 8 hereof.
2. Exercise Price. The purchase price for the Warrant Shares shall be
$1.05 per Warrant Share, as adjusted from time to time pursuant to Section 7
hereof (the "Exercise Price").
3. Exercise Period. This Warrant may be exercised at any time after
February 22, 2002 until 5:00 p.m., New York City time on the earlier of: (a)
August 22, 2006; or (b) upon redemption of this Warrant in accordance with the
terms and conditions set forth in Section 4 hereof.
4. Redemption. At any time after February 22, 2002 and prior to the
exercise of this Warrant:
(a) On not less than twenty (20) days notice given at any time when
the registration statement covering the resale of the shares of Common
Stock issuable upon exercise of this Warrant required to be filed by
the Company, pursuant to the registration rights agreement, dated as of
the date hereof, by and among the Company and the persons signing the
signature page thereof (the "Registration Rights Agreement"), is
effective and which shall remain effective during such 20 day notice
period, this Warrant may be redeemed, at the option of the Company, at
a redemption price of $0.05, provided the closing price on the Nasdaq
SmallCap Market or, if applicable, any automated quotation system or
national securities exchange, of the Common Stock issuable upon
exercise of this Warrant shall equal or exceed the then Exercise Price
multiplied by three (3), for a period of twenty (20) consecutive
trading days ending at least three (3) days prior to the date of the
notice of redemption.
(b) If the conditions set forth in Section 4(a) are met, and the
Company elects to exercise its right to redeem this Warrant, it shall
mail a notice of redemption to the registered Holder of this Warrant to
be redeemed, first class, postage prepaid, not later than the thirtieth
day before the date fixed for redemption, at their last address as
shall appear on the records maintained by the Company. Any notice
mailed in the manner provided herein shall be conclusively presumed to
have been duly given whether or not the registered Holder receives such
notice.
(c) The notice of redemption shall specify (i) the redemption
price, (ii) the date fixed for redemption, and (iii) that the right to
exercise this Warrant shall terminate at 5:00 P.M. (New York time) on
the business day immediately preceding the date fixed for redemption.
The date fixed for the redemption of this Warrant shall be the
"Redemption Date." No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of the
proceedings for such redemption except as to a registered Holder (A) to
whom notice was not mailed or (B) whose notice was defective. An
affidavit of the Secretary or an Assistant Secretary of the Company
that notice of redemption has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise this Warrant shall terminate at 5:00 P.M.
(New York time) on the business day immediately preceding the
Redemption Date. On and after the Redemption Date, Holder of this
Warrant shall have no further rights except to receive, upon surrender
of the Warrant, the redemption price.
(e) From and after the Redemption Date specified, the Company
shall, at the place specified in the notice of redemption, upon
presentation and surrender to the Company by or on behalf of the
registered Holder thereof of one or more certificates evidencing this
Warrant to be redeemed, deliver or cause to be delivered to or upon the
written order of such Holder a sum in cash equal to the redemption
price of this Warrant. From and after the Redemption Date and upon the
deposit or setting aside by the Company of a sum sufficient to redeem
this Warrant, this Warrant shall expire and become void and all rights
hereunder, except the right to receive payment of the redemption price,
shall cease.
5. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(a) the surrender of the Warrant, together with a duly executed
copy of the form of Notice of Exercise attached hereto, to the
Secretary of the Company at its principal offices set forth on the
signature page hereof; and
(b) the payment in the form of a certified or bank cashier's check
payable to the order of the Company in an amount equal to the Exercise
Price multiplied by the number of Warrant Shares for which this Warrant
is being exercised.
6. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Warrant
Shares so purchased shall be issued as soon as practicable thereafter (with
appropriate restrictive legends, if applicable), and in any event within ten
(10) business days of the delivery of the Notice of Exercise.
7. Issuance of Shares. The Company covenants that the Warrant Shares,
when issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
8. Adjustment of Exercise Price and Kind and Number of Shares. The
number and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the Company
shall at any time prior to the expiration of this Warrant (i) subdivide
its Common Stock, by split-up or otherwise, or combine its Common
Stock, or (ii) issue additional shares of its Common Stock or other
equity securities as a dividend with respect to any shares of its
Common Stock; the number of shares of Common Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased
in the case of a subdivision (by stock split, stock dividend or
otherwise), or proportionately decreased in the case of a combination.
Appropriate adjustments shall also be made to the Exercise Price
payable per share, but the aggregate Exercise Price payable for the
total number of Warrant Shares purchasable under this Warrant (as
adjusted) shall remain the same. Any adjustment under this Section 7(a)
shall become effective at the close of business on the date the
subdivision or combination becomes effective, or as of the record date
of such dividend, or in the event that no record date is fixed, upon
the making of such dividend.
(b) Reclassification, Reorganization and Consolidation. In case of
any reclassification, capital reorganization, or change in the Common
Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above),
then, as a condition of such reclassification, reorganization, or
change, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be
delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total
price equal to that payable upon the exercise of this Warrant (subject
to adjustment of the Exercise Price as provided in Section 8), the kind
and amount of shares of stock and other securities and property
receivable in connection with such reclassification, reorganization, or
change by a holder of the same number of shares of Common Stock as were
purchasable by the Holder immediately prior to such reclassification,
reorganization, or change. In any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder so
that the provisions hereof shall thereafter be applicable with respect
to any shares of stock or other securities and property deliverable
upon exercise hereof, and appropriate adjustments shall be made to the
purchase price per share payable hereunder, provided the aggregate
Exercise Price shall remain the same.
(c) Notice of Adjustment. When any adjustment is required to be
made in the number or kind of shares purchasable upon exercise of the
Warrant, or in the Exercise Price, the Company shall promptly notify
the holder of such event and of the number of shares of Common Stock or
other securities or property thereafter purchasable upon exercise of
this Warrant.
(d) Issuance of New Warrant. Upon the occurrence of any of the
events listed in this Section 7 that results in an adjustment of the
type, number or exercise price of the securities underlying this
Warrant, the Holder shall have the right to receive a new warrant
reflecting such adjustment upon the Holder tendering this Warrant in
exchange. The new warrant shall otherwise have terms identical to this
Warrant.
9. Covenants and Conditions.
(a) No Impairment. Pursuant to the terms and conditions of this
Warrant, Company shall: (i) reserve an appropriate number of shares of
Company's Common Stock to facilitate the issuance of shares to Holder
pursuant to this Warrant, (ii) not amend its articles or take any other
action that would materially impair Company's ability to comply with
the terms of the Warrant or otherwise unfairly impair the rights of the
Holder, and (iii) provide Holder with at least 10 days prior written
notice of the record date for any proposed dividend or distribution by
the Company.
(b) Registration Rights. The Company and Holder shall enter into
the Registration Rights Agreement simultaneous with the execution of
this Warrant on terms mutually agreeable to both parties.
10. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
11. No Stockholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
shares of Common Stock issuable on the exercise hereof, including (without
limitation) the right to vote such shares of Common Stock, receive dividends or
other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company. However,
nothing in this Section 11 shall limit the right of the Holder to be provided
the notices required under this Warrant.
12. Successors and Assigns. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and assigns.
13. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder. Any waiver or amendment effected
in accordance with this Section shall be binding upon each holder of any shares
of Common Stock purchased under this Warrant at the time outstanding (including
securities into which such shares have been converted), each future holder of
all such Shares, and the Company.
14. Notices. All notices required under this Warrant and shall be
deemed to have been given or made for all purposes (i) upon personal delivery,
(ii) upon confirmation receipt that the communication was successfully sent to
the applicable number if sent by facsimile; (iii) one day after being sent, when
sent by professional overnight courier service, or (iv) five days after posting
when sent by registered or certified mail. Notices to the Company shall be sent
to the principal office of the Company (or at such other place as the Company
shall notify the Holder hereof in writing). Notices to the Holder shall be sent
to the address of the Holder on the books of the Company (or at such other place
as the Holder shall notify the Company hereof in writing).
15. Attorneys' Fees. If any action of law or equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which it may be entitled.
16. Captions. The section and subsection headings of this Warrant are
inserted for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
17. Governing Law. This Warrant shall be governed by the laws of the
State of New York, without regard to the provisions thereof relating to conflict
of laws.
IN WITNESS WHEREOF, American Bio Medica Corporation caused this Warrant
to be executed by an officer thereunto duly authorized.
AMERICAN BIO MEDICA CORPORATION
By: /s/ Stan Cipkowski
---------------------------
Stan Cipkowski
President
Address: 122 Smith Road
Kinderhook, NY 12106
Fax Number: (518) 758-8171
NOTICE OF EXERCISE
To: American Bio Medica Corporation
Attn: Stan Cipkowski
The undersigned hereby elects to:
Purchase ____________ shares of Common Stock of American Bio Medica
Corporation, pursuant to the terms of the attached Warrant and payment of the
Exercise Price per share required under such Warrant accompanies this notice.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
____________________________________
Address:
Date:_______________________
Name in which shares should be registered:
Exhibit 4.5 Form of Placement Agent Warrant
EACH SUBSCRIBER SHALL RECEIVE A WARRANT CERTIFICATE AT CLOSING WITH THE TERMS
SET FORTH HEREIN, NOT A WARRANT IN THE FORM HEREUNDER. THIS FORM OF WARRANT IS
BEING PROVIDED TO EACH SUBSCRIBER SOLELY TO SET FORTH THE TERMS OF THE WARRANT
CERTIFICATE TO BE ISSUED AT CLOSING.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SUCH ACT.
No. W-___ Warrant to Purchase ____ Shares of
Common Stock (subject to adjustment)
FORM OF WARRANT
TO PURCHASE COMMON STOCK
of
AMERICAN BIO MEDICA CORPORATION
This Warrant (the "Warrant") is issued to [Name of Purchaser] or his,
her or its permitted assigns ("Holder") by American Bio Medica Corporation, a
New York corporation (the "Company"), on August 22, 2001 (the "Warrant Issue
Date") for consideration of $____ in the aggregate, receipt of which is hereby
acknowledged.
1. Purchase Shares. Subject to the terms and conditions hereinafter
set forth, the Holder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall
notify the holder hereof in writing), to purchase from the Company up to
_____________ shares of common stock, par value $0.01 per share ("Common
Stock"), of the Company (the "Warrant Shares") at the Exercise Price (defined
below), subject to adjustment as provided in Section 8 hereof.
2. Exercise Price. The purchase price for the Warrant Shares shall be
$1.20 per Warrant Share, as adjusted from time to time pursuant to Section 7
hereof (the "Exercise Price").
3. Exercise Period. This Warrant may be exercised at any time after
February 22, 2002 until 5:00 p.m., New York City time on the earlier of: (a)
August 22, 2006; or (b) upon redemption of this Warrant in accordance with the
terms and conditions set forth in Section 4 hereof.
4. Redemption. At any time after February 22, 2002 and prior to the
exercise of this Warrant:
(a) On not less than twenty (20) days notice given at any time when
the registration statement covering the resale of the shares of Common
Stock issuable upon exercise of this Warrant required to be filed by
the Company, pursuant to the registration rights agreement, dated as of
the date hereof, by and among the Company and the persons signing the
signature page thereof (the "Registration Rights Agreement"), is
effective and which shall remain effective during such 20 day notice
period, this Warrant may be redeemed, at the option of the Company, at
a redemption price of $0.05, provided the closing price on the Nasdaq
SmallCap Market or, if applicable, any automated quotation system or
national securities exchange, of the Common Stock issuable upon
exercise of this Warrant shall equal or exceed the then Exercise Price
multiplied by three (3), for a period of twenty (20) consecutive
trading days ending at least three (3) days prior to the date of the
notice of redemption.
(b) If the conditions set forth in Section 4(a) are met, and the
Company elects to exercise its right to redeem this Warrant, it shall
mail a notice of redemption to the registered Holder of this Warrant to
be redeemed, first class, postage prepaid, not later than the thirtieth
day before the date fixed for redemption, at their last address as
shall appear on the records maintained by the Company. Any notice
mailed in the manner provided herein shall be conclusively presumed to
have been duly given whether or not the registered Holder receives such
notice.
(c) The notice of redemption shall specify (i) the redemption
price, (ii) the date fixed for redemption, and (iii) that the right to
exercise this Warrant shall terminate at 5:00 P.M. (New York time) on
the business day immediately preceding the date fixed for redemption.
The date fixed for the redemption of this Warrant shall be the
"Redemption Date." No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of the
proceedings for such redemption except as to a registered Holder (A) to
whom notice was not mailed or (B) whose notice was defective. An
affidavit of the Secretary or an Assistant Secretary of the Company
that notice of redemption has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise this Warrant shall terminate at 5:00 P.M.
(New York time) on the business day immediately preceding the
Redemption Date. On and after the Redemption Date, Holder of this
Warrant shall have no further rights except to receive, upon surrender
of the Warrant, the redemption price.
(e) From and after the Redemption Date specified, the Company
shall, at the place specified in the notice of redemption, upon
presentation and surrender to the Company by or on behalf of the
registered Holder thereof of one or more certificates evidencing this
Warrant to be redeemed, deliver or cause to be delivered to or upon the
written order of such Holder a sum in cash equal to the redemption
price of this Warrant. From and after the Redemption Date and upon the
deposit or setting aside by the Company of a sum sufficient to redeem
this Warrant, this Warrant shall expire and become void and all rights
hereunder, except the right to receive payment of the redemption price,
shall cease.
5. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(a) the surrender of the Warrant, together with a duly executed
copy of the form of Notice of Exercise attached hereto, to the
Secretary of the Company at its principal offices set forth on the
signature page hereof; and
(b) the payment in the form of:
a certified or bank cashier's check payable to the order of the
Company in an amount equal to the Exercise Price multiplied by the
number of Warrant Shares for which this Warrant is being exercised;
or
in lieu of any cash payment, the Holder of the Warrants shall
have th right at any time and from time to time to exercise the
Warrants in full or in part by surrendering the Warrant in exchange
for the number of shares equal to the product of (x) the number of
shares as to which the Warrants are being exercised multiplied by
(y) a fraction, the numerator of which is the Market Price, (as
defined below) of the Shares less the Exercise Price and the
denominator of which is such Market Price. Solely for the purposes
of this paragraph, "Market Price" shall be the average last
reported sale price of the Common Shares as calculated over the
five (5) trading day period preceding the date on which the
Election to Purchase is surrendered to the Company.
6. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Warrant
Shares so purchased shall be issued as soon as practicable thereafter (with
appropriate restrictive legends, if applicable), and in any event within ten
(10) business days of the delivery of the Notice of Exercise.
7. Issuance of Shares. The Company covenants that the Warrant Shares,
when issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
8. Adjustment of Exercise Price and Kind and Number of Shares. The
number and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the Company
shall at any time prior to the expiration of this Warrant (i) subdivide
its Common Stock, by split-up or otherwise, or combine its Common
Stock, or (ii) issue additional shares of its Common Stock or other
equity securities as a dividend with respect to any shares of its
Common Stock; the number of shares of Common Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased
in the case of a subdivision (by stock split, stock dividend or
otherwise), or proportionately decreased in the case of a combination.
Appropriate adjustments shall also be made to the Exercise Price
payable per share, but the aggregate Exercise Price payable for the
total number of Warrant Shares purchasable under this Warrant (as
adjusted) shall remain the same. Any adjustment under this Section 7(a)
shall become effective at the close of business on the date the
subdivision or combination becomes effective, or as of the record date
of such dividend, or in the event that no record date is fixed, upon
the making of such dividend.
(b) Reclassification, Reorganization and Consolidation. In case of
any reclassification, capital reorganization, or change in the Common
Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above),
then, as a condition of such reclassification, reorganization, or
change, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be
delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total
price equal to that payable upon the exercise of this Warrant (subject
to adjustment of the Exercise Price as provided in Section 8), the kind
and amount of shares of stock and other securities and property
receivable in connection with such reclassification, reorganization, or
change by a holder of the same number of shares of Common Stock as were
purchasable by the Holder immediately prior to such reclassification,
reorganization, or change. In any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder so
that the provisions hereof shall thereafter be applicable with respect
to any shares of stock or other securities and property deliverable
upon exercise hereof, and appropriate adjustments shall be made to the
purchase price per share payable hereunder, provided the aggregate
Exercise Price shall remain the same.
(c) Notice of Adjustment. When any adjustment is required to be
made in the number or kind of shares purchasable upon exercise of the
Warrant, or in the Exercise Price, the Company shall promptly notify
the holder of such event and of the number of shares of Common Stock or
other securities or property thereafter purchasable upon exercise of
this Warrant.
(d) Issuance of New Warrant. Upon the occurrence of any of the
events listed in this Section 7 that results in an adjustment of the
type, number or exercise price of the securities underlying this
Warrant, the Holder shall have the right to receive a new warrant
reflecting such adjustment upon the Holder tendering this Warrant in
exchange. The new warrant shall otherwise have terms identical to this
Warrant.
9. Covenants and Conditions.
(a) No Impairment. Pursuant to the terms and conditions of this
Warrant, Company shall: (i) reserve an appropriate number of shares of
Company's Common Stock to facilitate the issuance of shares to Holder
pursuant to this Warrant, (ii) not amend its articles or take any other
action that would materially impair Company's ability to comply with
the terms of the Warrant or otherwise unfairly impair the rights of the
Holder, and (iii) provide Holder with at least 10 days prior written
notice of the record date for any proposed dividend or distribution by
the Company.
(b) Registration Rights. The Company and Holder shall enter into
the Registration Rights Agreement simultaneous with the execution of
this Warrant on terms mutually agreeable to both parties.
10. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
11. No Stockholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
shares of Common Stock issuable on the exercise hereof, including (without
limitation) the right to vote such shares of Common Stock, receive dividends or
other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company. However,
nothing in this Section 11 shall limit the right of the Holder to be provided
the notices required under this Warrant.
12. Successors and Assigns. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and assigns.
13. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder. Any waiver or amendment effected
in accordance with this Section shall be binding upon each holder of any shares
of Common Stock purchased under this Warrant at the time outstanding (including
securities into which such shares have been converted), each future holder of
all such Shares, and the Company.
14. Notices. All notices required under this Warrant and shall be
deemed to have been given or made for all purposes (i) upon personal delivery,
(ii) upon confirmation receipt that the communication was successfully sent to
the applicable number if sent by facsimile; (iii) one day after being sent, when
sent by professional overnight courier service, or (iv) five days after posting
when sent by registered or certified mail. Notices to the Company shall be sent
to the principal office of the Company (or at such other place as the Company
shall notify the Holder hereof in writing). Notices to the Holder shall be sent
to the address of the Holder on the books of the Company (or at such other place
as the Holder shall notify the Company hereof in writing).
15. Attorneys' Fees. If any action of law or equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which it may be entitled.
16. Captions. The section and subsection headings of this Warrant are
inserted for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
17. Governing Law. This Warrant shall be governed by the laws of the
State of New York, without regard to the provisions thereof relating to conflict
of laws.
IN WITNESS WHEREOF, American Bio Medica Corporation caused this Warrant
to be executed by an officer thereunto duly authorized.
AMERICAN BIO MEDICA CORPORATION
By: /s/ Stan Cipkowski
---------------------------
Stan Cipkowski
President
Address: 122 Smith Road
Kinderhook, NY 12106
Fax Number: (518) 758-8171
NOTICE OF EXERCISE
To: American Bio Medica Corporation
Attn: Stan Cipkowski
The undersigned hereby elects to:
Purchase ____________ shares of Common Stock of American Bio Medica
Corporation, pursuant to the terms of the attached Warrant and payment of the
Exercise Price per share required under such Warrant accompanies this notice.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
____________________________________
Address:
Date:_______________________
Name in which shares should be registered: