As filed with the Securities and Registration No. _________
Exchange Commission on May 16, 2001
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THERMOGENESIS CORP.
(Exact name of the Company as specified in its charter)
Delaware 94-3018487
-------- ----------
(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification Number)
3146 Gold Camp Drive
Rancho Cordova, California 95670
(916) 858-5100
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
Philip H. Coelho
Chief Executive Officer
THERMOGENESIS CORP.
3146 Gold Camp Drive
Rancho Cordova, CA 95670
(916) 858-5100
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
David C. Adams, Esq.
Bartel Eng & Schroder
300 Capitol Mall, Suite 1100
Sacramento, CA 95814
(916) 442-0400
Approximate date of commencement of the proposed sale to the public: As soon as
practicable, and from time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Proposed maximum
maximum aggregate Amount of
Title of each class of securities to Amount to be offering price offering price registration
be registered registered per share fee
=========================================== ================= =================== =================== ===============
- ------------------------------------------- ----------------- ------------------- ------------------- ---------------
Common Stock 3,944,047 $ 2.41(1) $9,505,153.27 $2,376.29
- ------------------------------------------- ----------------- ------------------- ------------------- ---------------
- ------------------------------------------- ----------------- ------------------- ------------------- ---------------
Common Stock Underlying Warrants 788,809(2) $ 2.88(3) $2,271,769.92 $ 567.95
Common Stock Underlying Warrants 415,000(2) $ 1.625(3) $ 674,375.00 $ 168.60
- ------------------------------------------- ----------------- ------------------- ------------------- ---------------
- ------------------------------------------- ----------------- ------------------- ------------------- ---------------
Total 5,147,856 $3,112.84
=========================================== ================= =================== =================== ===============
(1) Calculated in accordance with Rule 457(c) of the Securities Act of 1933, as
amended ("Securities Act"). Estimated for the sole purpose of calculating the
registration fee and based upon the average of the high and low price per share
of our common stock on May 15, 2001, as reported on the Nasdaq Small Cap Market.
(2) Represents the number of shares of common stock offered for resale following
the exercise of warrants.
(3) Calculated in accordance with Rule 457(g) of the Securities Act.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Subject to Completion dated May 16, 2001 PROSPECTUS
5,147,856 Shares
THERMOGENESIS CORP.
Common Stock
All of the shares of common stock of THERMOGENESIS CORP. offered are being
sold by the selling stockholders listed in this Prospectus. Of the shares being
sold by the selling stockholders, up to 1,203,809 shares may be resold upon the
exercise of outstanding warrants. The common stock and warrants were issued in a
private debt financing in December 2000 and a private placement completed in
April 2001. We will not receive any proceeds from the resale of any common stock
by the selling stockholders.
Our common stock is traded and listed on The Nasdaq SmallCap Market, under
the symbol "KOOL." On May 15, 2001, the last reported sale price for the common
stock was $2.41. There is no market for the warrants.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGE 4.
-------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON STOCK OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission becomes effective. This prospectus is not an
offer to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted or would be
unlawful prior to registration or qualification under the securities laws of any
such state.
The date of this Prospectus is _____________
2
PROSPECTUS SUMMARY
This Prospectus contains or incorporates "forward-looking statements,"
which include statements about our business strategy, our growth strategy, our
product development and marketing efforts, and anticipated trends in our
business, which are not historical facts. We may also make additional
forward-looking statements from time to time in filings that we make with the
Securities and Exchange Commission. When we use words like "believe," "expect,"
"anticipate," "project," and similar expressions, this should alert you that the
statement is forward-looking. Forward-looking statements speak only as of the
date made, based largely on expectations. These expectations are generally
subject to a number of risks and uncertainties, some of which cannot be
predicted or quantified, and which are beyond our control. Future events and
actual results may differ materially from the anticipated results expressed in,
contemplated by, or underlying our forward-looking statements. Statements in
this Prospectus, and in documents incorporated by reference into this
Prospectus, including those set forth in the caption "Risk Factors" describe
factors, among others, that could contribute to or cause differences. In light
of these risks and uncertainties, we can not give any assurances that the
forward-looking information will in fact transpire or prove to be accurate in
the future.
Our Business
We are a leading developer and manufacturer of micro-manufacturing systems
designed to harvest biopharmaceutical drugs from blood. Biopharmaceutical drugs
utilize the body's naturally occurring proteins, enzymes, growth factors,
hormones and cells to treat human diseases. Our technology platforms are
designed to micro-manufacture biopharmaceutical drugs from a single donation of
blood, in contrast to the manufacture of biopharmaceutical drugs using "pools"
of blood from thousands of donors, or by using expensive technology.
Our Strategy
Our strategy to take advantage of our market opportunity includes:
o Utilizing our expertise in the areas of thermodynamics and
cryopreservation;
o Developing new products through platform designs to build new products with
only a small incremental research and development investment;
o Become the leader in the design, development, manufacture, and sale of
medical devices which produce biopharmaceutical drugs from an autologous or
directed single donor unit of blood to reduce or eliminate contamination
and risk of infection to the recipient; and
o Develop disposable products that are used with our platform designed
products to provide a recurrent stream of revenue.
Risk Factors
For a discussion of considerations relevant to an investment in our common
stock, see the section entitled "RISK FACTORS" beginning on page 4.
3
The Offering
Common Stock Outstanding Before the Offering....................... ..31,354,576
Common Stock Offered by Selling Stockholders (a).......................1,203,809
Common Stock Outstanding After the Offering (a).......................32,558,385
Use of Proceeds We will not receive any proceeds from the
resale of common shares by the Selling
Stockholders. We will receive proceeds if
certain outstanding warrants are exercised.
Any proceeds from the exercise of warrants
will be used for working capital.
Nasdaq SmallCap Symbol......................................................KOOL
(a) Assumes that warrant holders have exercised their warrants to purchase
1,203,809 shares of common stock in the aggregate. The number of shares of
common stock that is being registered by this registration statement is the
total number of shares of common stock and shares of common stock that may be
issued upon the exercise of warrants.
4
RISK FACTORS
An investment in our common stock involves a number of very significant
risks. Because of these risks, only persons able to bear the risk of and
withstand the loss of their entire investment should invest in our common stock.
Prospective investors should also consider the following before making an
investment decision.
We Have Incurred Net Losses Since Our Inception and Expect Losses to
Continue. Except for net income of $11,246 for fiscal 1994, we have not been
profitable since our inception. For the fiscal year ended June 30, 2000, we had
a net loss of $5,818,000, and an accumulated deficit at June 30, 2000, of
$37,339,000. For the nine months ended March 31, 2001, we had a net loss of
$3,811,000. The report of independent auditors on our June 30, 2000, financial
statements includes an explanatory paragraph indicating there is substantial
doubt about our ability to continue as a going concern. Although we are
executing on our business plan to market launch new products, continuing losses
will impair our ability to fully meet our objectives for new product sales and
will further impair our ability to meet continuing operating expenses. Lack of
operating funds may result in staff reductions and curtailment of clinical
trials currently planned. See Risk Factor entitled "If We Are Unable to Raise
Funds Our Growth May Be Adversely Affected" below.
If We Are Unable to Raise Funds Our Growth May Be Adversely Affected.
Historically, we have had to seek capital and to develop our products for
operations due to lack of revenues. Based on proceeds of approximately $5
million from our recent private placement (See "Recent Financing and Other
Recent Events" on page 11), we believe we will have sufficient working capital
for the next twelve months operations. However, if actual sales do not meet
expectations, or marketing, production and clinical trial costs increase
significantly, we will need additional financing to complete and implement our
long-term business objectives. Further, delays in obtaining required
governmental clearances for, or additional testing requirements prior to,
marketing our new products will result in decreased revenues and increased costs
that may require us to seek additional financing. In the event that there is a
cash shortage and we are unable to obtain a debt financing, additional equity
financing will be required. Seeking additional financing would dilute the
ownership of existing stockholders.
We Have Limited Testing Data and Must Complete Further Testing Successfully
in Order To Obtain Regulatory Permission to Initiate Human Clinical Trials
Required to Market our CryoSeal Fibrin Sealant (FS) System. The Company has
completed certain in vitro and in vivo testing of its CryoSeal FS System, and
further clinical studies are to begin in the near future in Italy, Japan,
Canada, and the United States with the CryoSeal FS System. Other in vitro
studies have occurred with the BioArchive Stem Cell System. While these studies
provide a basis to achieve regulatory permission to promote these systems for
some of the indications that management believes can be achieved, they do not
provide a basis to achieve all of the indications. Further clinical studies must
be performed. There can be no assurance that the clinical studies can be
successfully completed within the Company's expected time frame and budget, or
that the Company's products will prove effective in the required clinical
trials. If the Company is unable to conclude successfully the clinical trials of
its products in development, the Company's business, financial condition and
results of operation could be adversely affected.
Our Failure to Develop New Products Will Adversely Effect Our Future
Growth. Historically, substantially all of our sales have been from products
related to the freezing, thawing, and
5
storing of blood plasma. Because we expect this segment of the blood plasma
market to have limited growth, new products for the biotechnology market will
have to be successfully developed and marketed for future growth. We are
currently focusing on developing and marketing novel blood processing systems
such as the CryoSeal FS System for the automated production of autologous or
allogeneic blood components used as a fibrin sealant. Although this product uses
technology related to our core research, it also represents a departure from our
core blood plasma business. Further, although we have had discussions with
experts in areas of application for these products, these products are still in
their development and/or initial market phase. No assurance can be given that
all of these potential products can be successfully developed, and if developed,
that a market will also develop for them.
If We Fail to Maintain Our Nasdaq Listing, Liquidity of the Company's
Stockholders Will Be Adversely Affected. Our common stock is listed with the
Nasdaq SmallCap Market which has established certain maintenance listing
requirements that must be satisfied in order for a company's shares of common
stock to continue to be listed. Currently, our common stock meets the Nasdaq
Small Cap Market maintenance listing requirements. However, if we continue to
incur losses, this may affect our ability, among other things, to meet the net
tangible assets of $2 million requirement or minimum Bid Price of $1 per share
listing requirement as set by the Nasdaq SmallCap Market. We cannot assure that
we will always be able to meet the Nasdaq SmallCap Market listing requirements
in the future. Failure to meet the Nasdaq SmallCap Market listing requirements
could result in the delisting of our common stock from the Nasdaq SmallCap
Market which may adversely affect the liquidity of our shares.
Our Business is Heavily Regulated, Resulting in Increased Costs of
Operations and Delays in Product Sales. Most of our products require FDA
clearance to sell in the U.S. and require clearance from comparable agencies to
sell our products in foreign countries. These clearances may limit the U.S. or
foreign market in which our products may be sold or circumscribe applications
for U.S. or foreign markets in which our products may be sold. The majority of
our products related to freezing blood components are currently exempt from the
requirement to file a 510(k) pre-market application and our CryoSeal AHF System
received clearance from the FDA in February 1999. These products are currently
marketed and sold worldwide. Further, our products must be manufactured under
principals of our quality system for continued Certificate European (CE) marking
that allows our products to be marketed and sold in Europe, which are similar to
the quality system regulations of both the FDA and California Department of
Health. Failure to comply with those quality system requirements and regulations
may subject the Company to delays in production while it corrects any deficiency
found by either the FDA or the State of California during any audit of our
quality system. With limited working capital and resources, there is no
assurance that we will not be found to be out of compliance, resulting in
warning letters or, in worst case, temporary shut down of manufacturing while
the non-conformances are rectified.
Influence By the Government and Insurance Companies May Adversely Impact
Sales of Our Products. Our business may be materially affected by continuing
efforts by government, and third party payors such as medicare, medicaid, and
private health insurance plans, to reduce the costs of healthcare. For example,
in certain foreign markets the pricing and profit margins of certain healthcare
products are subject to government controls. In the U.S., we expect that there
will continue to be a number of federal and state proposals to implement similar
government control. In addition, increasing emphasis on managed care in the U.S.
will continue to place pressure on the pricing of healthcare products. As a
result, continuing effort to contain healthcare costs may result in reduced
sales or price reductions for our products. To date, we are not aware of any
direct impact on our pricing or product sales due to such efforts by governments
6
to contain healthcare costs, and we do not anticipate any immediate impact in
the near future.
Our Inability to Protect Our Patents, Trademarks, and Other Proprietary
Rights Could Adversely Impact Our Competitive Position. We believe that our
patents, trademarks, and other proprietary rights are important to our success
and our competitive position. Accordingly, we devote substantial resources to
the establishment and protection of our patents, trademarks, and proprietary
rights. We currently hold patents for products, and have patents pending for
additional products that we market or intend to market. However, our actions to
establish and protect our patents, trademarks, and other proprietary rights may
be inadequate to prevent imitation of our products by others or to prevent
others from claiming violations of their trademarks and proprietary rights by
us. If our products are challenged as infringing upon patents of other parties,
we will be required to modify the design of the product, obtain a license, or
litigate the issue, all of which may have an adverse business effect on us.
Failure to Protect Our Trade Secrets May Assist Our Competitors. We protect
our trade secrets and proprietary know-how for our products by various methods,
including the use of confidentiality agreements with employees, vendors, and
customers. However, such methods may not provide complete protection and there
can be no assurance that others will not obtain our know-how, or independently
develop the same or similar technology. We prepare and file for patent
protection on aspects of our technology which we think will be integrated into
final products early in design phases, thereby limiting the potential risks.
Competition in Our Industry is Intense and Will Likely Involve Companies
With Greater Resources Than We Have. We hope to develop a competitive advantage
in the medical applications of our products, but there are many competitors that
are substantially larger and who possess greater financial resources and
personnel than we have. Our current principal market is the users of ultra-rapid
blood plasma freezing and thawing equipment. There are four companies that sell
freezers to the blood plasma freezing industry which are larger and possess
greater financial and other resources than we do. The CryoSeal System may face
competition from major plasma fractionaters that currently sell fibrin glue
sourced from pooled plasma outside the U.S. With regard to the BioArchive
System, numerous larger and better-financed medical device manufacturers may
choose to enter this market as it develops.
We Have a Limited Marketing and Sales Force for New Products Which May
Delay Our Goal of Increased Sales Levels. We currently sell our existing medical
devices through a direct sales and marketing force, and our foreign distribution
network. Although we have entered into geographically exclusive distribution
agreements for the area of the two new platform products and we continue to seek
strategic partners, there are no assurances that the distributors will sell
significant numbers of the systems.
Our Lack of Production Experience May Delay Producing Our New Products. We
currently manufacture our blood plasma thawers and freezers that are less
technologically sophisticated products. Although we have redesigned our
manufacturing facility to accommodate the BioArchive System and the CryoSeal
System, we do not have significant experience in manufacturing those more
complex medical devices or in the manufacture of disposables. Furthermore, there
can be no assurance that our current resources and manufacturing facility could
handle a significant increase in orders for either the BioArchive System or the
CryoSeal System. If we are unable to produce enough to meet the demand for sales
of the new systems, we would need to contract with third-party manufacturers for
the
7
backlog, and there are no assurances that a third party will be available or
will produce the systems at favorable prices. Inability to have products
manufactured by third parties at a competitive price will erode anticipated
margins for such products, and negatively impact our profitability.
Our New Products Are at Initial Market Introduction, and We Are Not Sure
the Market Will Accept Them. The market acceptance of our new products in
development will depend upon the medical community and third-party payers
accepting the products as clinically useful, reliable, accurate, and cost
effective compared to existing and future products or procedures. Market
acceptance will also depend on our ability to adequately train technicians on
how to use the CryoSeal System and the BioArchive System. Even if our new
product systems are clinically adopted, the use may not be recommended by the
medical profession or hospitals unless acceptable reimbursement from health care
and third party payers is available. Failure of either of these new systems to
achieve significant market share could have material adverse effects on our long
term business, financial condition, and results of operation.
Failure to Keep Our Senior Management Team May Adversely Affect Our
Operations. We are dependent upon the experience and services of Philip H.
Coelho, Chairman and Chief Executive Officer, and James H. Godsey, President and
Chief Operating Officer. The loss of either person would adversely affect our
operations. We have obtained key man life insurance covering Mr. Coelho in the
amount of $2,000,000 as some protection against this risk.
Product Liability and Uninsured Risks May Adversely Affect Continuing
Operations. We may be liable if any of our products cause injury, illness, or
death. We also may be required to recall certain of our products should they
become damaged or if they are defective. We are not aware of any material
product liability claim against us. Further, we maintain a general liability
policy that includes product liability coverage of $1,000,000 per occurrence and
$2,000,000 per year in the aggregate. However, a product liability claim against
us could have a material adverse effect on our business or financial condition.
The Market Price for Our Common Stock May Fall if Selling Stockholders or
Other Security Holders Sell A Substantial Amount of Their Stock. Under an
agreement with the holders of the Series B preferred stock, we registered for
resale shares of common stock to be issued upon the conversion of the Series B
preferred stock and upon the exercise of the warrants. We have also registered
additional shares of common stock that may be issued upon conversion of the
preferred stock if we elect to add accrued dividends to the conversion value of
the preferred stock. Further, if a substantial decline in the average market
price of our common stock were to occur, the conversion price would be set at a
lower price and additional shares may also be issued. Because the trading price
for our common stock may be affected by the number of shares available for
resale, the market price of our common stock could drop as a result of sales of
a large number of shares of our common stock in the market, or due to the
perception that such sales could occur.
We Could Be Required to Redeem Our Series B Convertible Preferred Stock at
a Premium Which Would Require a Large Expenditure of Capital and Could Have a
Material Adverse Affect on Our Financial Condition. The holders of our Series B
convertible preferred stock have the right to force us to repurchase their
Series B convertible preferred stock at a premium if the Company takes certain
action, deemed to be solely within the Company's control such as, causing the
Company to be delisted from the Nasdaq Market, or taking other defined action
detrimental to the Series B preferred stockholders. The repurchase of our Series
B convertible preferred stock would require a large expenditure of capital and
8
we may not have sufficient funds to satisfy the redemption. In addition, you
could face further dilution of your ownership percentage as a result of a
decline in the market price of our common stock or in the event of certain
defaults which would result in an increase in the number of shares of common
stock issuable upon conversion of the Series B convertible preferred stock. Any
such event could adversely affect the price of our stock and our ability to
raise additional capital. We have no intention of taking action that would
require such an event.
We Do Not Pay Cash Dividends. To date, we have not paid any cash dividends,
and we do not expect to pay any cash on our common stock in the foreseeable
future. The Series B convertible preferred stock carries a mandatory 6%
dividend, paid quarterly, out of funds legally available. At our election, that
dividend may be accrued to the conversion value of that series of stock in lieu
of any cash payment. With our current cash needs, we do not anticipate that the
dividend will be paid in cash and, therefore, additional shares of common stock
may be issued upon conversion.
The Conversion Price of the Series B Preferred Stock is Subject to
Readjustment That May Adversely Affect the Market Price For a Share of Common
Stock. On December 22, 2000, the conversion price for which Series B preferred
stock may be converted into shares of common stock was set at $1.6115 per share.
However, the conversion price will be adjusted on June 22, 2001 and every six
months thereafter to be the lesser of (a) 130% of the fixed conversion price of
$2.2719 or (b) 90% of the average market price for the ten days prior to such
adjustment. In a declining market, this conversion feature may have the effect
of creating additional downward pressure on the price of our common stock.
The Holders of the Series B Preferred Stock May Deliver Registered Shares
of Common Stock Against Short Positions Which May Put Downward Pressure on the
Price of a Share of Our Common Stock. The holders of the Series B preferred
stock may deliver registered common stock against a short position. Because the
conversion price represents a discount of the current trading price of a share
of common stock, a large number of sales of common stock by, or coverage of a
large short position by, the Series B Preferred stockholders will have an
adverse effect on the price of our common stock. The Series B preferred
stockholders have agreed that they will not engage in any open market
transactions in our securities, including any short sales, during the 20 trading
day period prior to any conversion price re-set date.
Adoption of New Revenue Recognition Rules May Impact Timing of Revenue
Recognition and May Cause Prior Revenue Results to be Restated. On December 3,
1999, the SEC staff issued Staff Accounting Bulleting ("SAB") No. 101, "Revenue
Recognition." The Company's existing revenue recognition policy is to recognize
revenue at the time the customer takes title to the product, generally at the
time of shipment. The Company is currently assessing the impact, if any, that
the SAB will have on its revenue recognition policy. Management is investigating
the new rules as it relates to the installation of the BioArchive system and
whether the Company practices may require the revenue recognition of the entire
system to be delayed until the installation occurs.
Dependence on Suppliers for Custom Components may Impact the Production
Schedule. The Company obtains certain custom components from one supplier. If
the supplier raises the price of the component or discontinues production, the
Company will have to find another qualified supplier to provide the component.
However, any transfer between qualified suppliers may impact the production
schedule, thus delaying revenues, and/or cause the price of the key components
to increase.
9
SUMMARY FINANCIAL INFORMATION
The following summary information is derived from the financial statements
included in our Annual Report on Form10-K for the year ended June 30, 2000 and
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, incorporated
by reference herein, and should be read in conjunction with those financial
statements and the related notes thereto.
For the Nine Months Ended
For the Year Ended June 30, March 31,
--------------------------- ---------
1998 1999 2000 2000 2001
---- ---- ---- ---- ----
Statement of Operations Data:
Revenues $4,482,000 $5,108,000 $4,211,000 $3,256,000 $4,563,000
Operating expenses $8,424,000 $6,729,000 $5,819,000 $4,183,000 $4,163,000
Net loss $(9,550,000) $(6,098,000) $(5,818,000) $(4,311,000) $(3,811,000)
Per Share Data:
Net loss before preferred stock $(9,550,000) $(6,098,000) $(5,818,000) $(4,311,000) $(3,811,000)
dividend or discount and
cumulative effect of
accounting change
Preferred stock dividend or - $(3,907,000) $(905,000) $(558,000) $(92,000)
discount
Cumulative effect of accounting - - - - $(580,000)
change
Net loss to common $(9,550,000) $(10,005,000) $(6,723,000) $(4,869,000) $(4,483,000)
stockholders
Basic and diluted net loss per $(0.54) $(0.52) $(0.30) $(0.23) $(0.15)
share before cumulative effect
of accounting change
Cumulative effect of accounting - - - - $(0.02)
change
Basic and diluted net loss per $(0.54) $(0.52) $(0.30) $(0.23) $(0.17)
common share
Shares used in computing per 17,629,876 19,242,310 22,288,912 21,454,848 26,389,540
share data
10
June 30, March 31,
-------- ---------
1999 2000 2000 2001
---- ---- ---- ----
Selected Balance Sheet Data:
Working Capital $5,085,000 $4,613,000 $5,925,000 $1,693,000
Total Assets $8,133,000 $6,735,000 $8,076,000 $5,983,000
Total Liabilities $1,413,000 $1,043,000 $ 922,000 $3,321,000
Stockholders' Equity $6,720,000 $5,692,000 $7,154,000 $5,692,000
THERMOGENESIS CORP.
We design and sell products and devices which utilize our proprietary
thermodynamic technology for the processing of biological substances, including
the cryopreservation, thawing, harvesting, and archiving of blood components.
Historically, our primary revenues have been from sales of blood plasma freezers
and thawers to hospitals, blood banks, and blood transfusion centers. Currently,
we are manufacturing several categories of thermodynamic devices that are being
sold to the blood plasma industry under FDA clearance to market in the United
States. Other potential markets for our proprietary technology include surgical,
pharmaceutical, and industrial applications. Since fiscal year 1998, we focused
our efforts on research and development and refinement of a core line of
products for blood banks. Since fiscal 1994, we have developed new applications
for our products and technology, including a system for harvesting
cryoprecipitated AHF from a donor's blood plasma for use in the treatment of
hemophilia, and by some physicians as a hemostatic agent or tissue sealant in
certain surgical and medical procedures.
Our strategy has been to develop superior blood processing devices for the
niche blood processing markets where new products could quickly establish
credibility for our proprietary technology. We believe that by concentrating our
products to serve the blood plasma industry, many customers, such as the Red
Cross or other blood transfusion societies of various countries, would validate
our proprietary technology for rapid freezing of biological substances, more
specifically blood plasma. Early products, which received 510(k) permission to
market, are sold to blood banks and hospitals either directly or through our
distribution network in the 32 countries where our products are marketed. See
our "Annual Report on Form 10-K. -- Description of the Business."
From 1988 to 1992, our products were designed to transfer heat by causing
heat transfer liquids to directly contact plastic sealed containers within which
resided various blood components. Early product designs used liquids containing
chloro-flouro-carbons ("CFC") which we phased out in the fall of 1992.
Thereafter, we developed an alternative heat transfer method which automatically
interposed a thin flexible membrane between the heat transfer liquid and
biological substances which process allowed for use of non-CFC based heat
transfer liquids.
Principal products initially developed by us and marketed to hospitals,
blood banks, and blood transfusion centers consisted of freezers and thawers for
blood plasma. We have continued to design and develop various freezer models and
thawers for expanded applications, and these products remain the core products
of our current business. To expand our market and product use, we have changed
the focus of our research and development to the design of new products that
11
would be applied to different applications within the blood industry, including
surgical, pharmaceutical, and medical procedures that utilize freezing and
thawing technology as part of standard procedures. See our "Annual Report on
Form 10-K."
Our History
Our core expertise lies in the technical fields of thermodynamics and
cryopreservation, technologies that we initially applied to the development of
ultra-rapid freezers and thawers, which are currently being sold to blood banks
and hospitals in 32 countries throughout the world. Until the fourth quarter of
fiscal year 1998, our revenues had been principally derived from these products.
Following four years of intensive research and development, we began shipping in
the second quarter of fiscal year 1998 our new platform product called the
BioArchive(R) System. The BioArchive System is a computer- controlled liquid
nitrogen platform with dedicated disposables for the collection,
cryopreservation, and archive of blood and blood components. The BioArchive
System is used internationally and in the U.S. as part of a National Heart Lung
and Blood Institute study to process, cryopreserve, and archive hematopoietic
stem and progenitor cells sourced from placental cord blood. These stem cells
are then used to reconstitute the immune system of patients suffering from
leukemia, lymphoma, diverse inherited anemias, or hypoproliferative stem cell
disorders. We have entered into a period of rapid transformation as we begin to
manufacture and market micro-manufacturing systems which may generate recurring
revenues from the ongoing sale of high margin blood processing disposables.
Our strategy is to utilize our two new technology platforms - the
BioArchive Platform and the CryoSeal(TM) Platform - as the basis for developing
micro-manufacturing systems to produce biopharmaceutical drugs from either
autologous or single-directed donor blood which will compete in two major
medical markets: Wound Care and Cellular Therapy. Currently, the Company is
aggressively pursuing worldwide strategic partners in an effort to maximize the
value of its new technology platforms.
We are incorporated in Delaware, and our principal executive offices are
located at 3146 Gold Camp Drive, Rancho Cordova, California 95670 and our
telephone number is (916) 858-5100.
Recent Financing and Other Recent Events
On April 27, 2001, we completed a private placement of 3,944,047 shares of
common stock, raising an aggregate of $7,099,284, before direct expenses.
Warrants to purchase 788,809 shares of common stock at an exercise price of
$2.88 per share were also issued. On December 21, 2000, warrants to purchase
415,000 shares of common stock at an exercise price of $1.625 per share were
issued in connection with our debt placement. The net proceeds from the private
placement are being used to fund clinical trials through an independent Clinical
Research Organization to support the Company claims for the CryoSeal Fibrin
Sealant System and for general working capital. Under the terms of the private
placement, we are required to register for resale the common shares and common
shares underlying the warrants.
SUMMARY OF THE OFFERING
We are registering 5,147,856 shares of common stock for resale by the
selling stockholders of which 1,203,809 shares may be issued upon the exercise
of warrants.
12
USE OF PROCEEDS
We will receive no proceeds from the resale of the shares of common stock
by the selling stockholders. We will, however, receive proceeds if the selling
stockholders pay cash to exercise their warrants. Those proceeds, if any, will
be used for general working capital.
PLAN OF DISTRIBUTION
The selling stockholders, their pledgees, donees, transferees, or other
successors in interest may from time to time offer and sell all or a portion of
the shares in transactions on the Nasdaq SmallCap Market, or on any other
securities exchange or market on which the common stock is listed or traded, in
negotiated transactions or otherwise, at prices then prevailing or related to
the then-current market price or at negotiated prices. The selling stockholders
or their pledgees, donees, transferees, or other successors in interest may sell
their shares directly or through agents or broker-dealers acting as principal or
agent, or in block trades or pursuant to a distribution by one or more
underwriters on a firm commitment or best-efforts basis. To the extent required,
the names of any agent or broker-dealer and applicable commissions or discounts
and any other required information with respect to any particular offer will be
set forth in an accompanying Prospectus supplement. Each of the selling
stockholders and their pledgees, donees, transferees or other successors in
interest reserves the right to accept or reject, in whole or in part, any
proposed purchase of the shares to be made directly or through agents.
In connection with distributions of the shares, any selling stockholder may
enter into hedging transactions with broker-dealers and the broker-dealers may
engage in short sales of the shares in the course of hedging the positions they
assume with the selling stockholder. Any selling stockholder also may sell the
shares short and deliver the shares to close out such short positions. See "Risk
Factors-The Holders of the Series B Preferred Stock May Deliver Registered
Shares of Common Stock Against Short Positions Which May Put Downward Pressure
on the Price of the Share of Common Stock." Any selling stockholder also may
enter into options or other transactions with broker-dealers that involve the
delivery of the shares to the broker-dealers, which may then resell or otherwise
transfer such shares. Any selling stockholder also may loan or pledge the shares
to a broker-dealer and the broker-dealer may sell the shares so loaned or upon a
default may sell or otherwise transfer the pledged shares. These activities are
mitigated by the Series B preferred stock purchase agreement between us and the
Series B convertible preferred stockholders which prohibits trading in our
common stock by the Series B preferred stockholders during the period of 20
trading days prior to when the conversion price is subject to periodic
adjustment.
The selling stockholders, any agents, dealers or underwriters that
participate with the selling stockholders in the resale of the shares of common
stock and the pledgees, donees, transferees or other successors in interest of
the selling stockholders may be deemed to be "underwriters" within the meaning
of the Securities Act, in which case any commissions received by such agents,
dealers or underwriters and a profit on the resale of the shares of common stock
purchased by them may be deemed underwriting commissions or discounts under the
Securities Act.
There is no assurance that the selling stockholders will sell any or all of
the shares.
Pursuant to registration rights agreements between us and certain of the
selling stockholders, we have agreed to pay all expenses of the Company and
selling stockholders incurred in the registration of the shares other than
brokerage commissions incurred by the selling stockholders.
13
In addition to selling their common stock under this Prospectus, the
selling stockholders may:
o transfer their common stock in other ways not involving market makers
or established trading markets, including by gift, distribution, or
other transfer; or
o sell their common stock under Rule 144 of the Securities Act.
SELLING STOCKHOLDERS
The following table identifies the selling stockholders, as of April 27,
2001, and indicates certain information known to us with respect to (i) the
number of shares of common stock held by the selling stockholders, (ii) the
amount to be offered for the selling stockholders' account, and (iii) the number
of shares and percentage of outstanding shares of common stock to be owned by
the selling stockholders after the sale of the common stock offered by the
selling stockholders. The selling stockholders are not obligated to sell their
common stock offered by this Prospectus.
The number of shares listed under "Shares to be Sold" in the table assumes
that the selling stockholders have exercised their warrants into the maximum
number of shares currently permitted and will sell all common shares in a
secondary offering pursuant to this Prospectus.
Under the Exchange Act, any person engaged in a distribution of the shares
of our common stock offered by this Prospectus may not simultaneously engage in
market making activities with respect to our common stock during the applicable
periods prior to the commencement of such distribution. In addition, and without
limiting the foregoing, each selling stockholder may be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder
including, without limitation, Regulation M. Further, the selling stockholders
may resell their shares pursuant to Rule 144.
The warrants are not registered or listed for trading on the Nasdaq Stock
Market or on any exchange.
The 1,203,809 of the shares shown as owned and offered by the stockholders
under this Prospectus may be issued upon exercise of warrants acquired by these
selling stockholders from us in a private placement and resold.
Shares Owned Shares Owned
Prior to Offering(1) Shares to be Sold After Offering
----------------- ----------------- --------------
Name of Stockholder Number Number Number Percentage
- ------------------- ------ ------ ------ ----------
Federated Kaufmann Fund 2,223,062(2) 1,666,662 556,400 1.8%
Pequot Navigator Offshore Fund, Inc. 120,000(3) 120,000 0 0
Pequot Scout Fund, LP 240,000(4) 240,000 0 *
Roy Korins 69,500(5) 60,000 9,500 *
David L. Katsky 61,750(6) 60,000 1,750 *
Stephen J. Swiatkiewicz 15,000(7) 15,000 0 *
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Bernard McElhone 30,000(8) 30,000 0 *
Atlas II, LP 2,427,910(9) 2,000,910 427,000 1.3%
David Hardie Keogh 16,665(10) 16,665 0 *
New England Venture Partners, LP 267,846(11) 177,846 90,000 *
Clarion Offshore Fund Ltd. 100,800(12) 100,800 0 *
Clarion Partners, L.P. 139,200(13) 139,200 0 *
Morton A. Cohen 133,333(14) 133,333 0 *
Clarion Capital Corporation 171,827(15) 99,996 71,831 *
Spencer Browne 427,432(16) 43,332 384,100 1.2%
Philip Coehlo 731,375(17) 44,446 686,929 2.2%
David Howell 129,000(18) 69,000 60,000 *
David Adams 22,834(19) 13,334 9,500 *
Sam Acosta 166,457(20) 13,332 153,125 *
Valor Capital Management, LP 60,000(21) 60,000 0 *
HEH Investment Partners, LP 90,000(22) 20,000 70,000 *
McEnany Holding, Inc. 133,329(23) 20,000 113,329 *
Brian and Renee Ruecker 124,874(24) 4,000 120,874 *
Footnotes to Table
* Less than one percent.
(1) The ownership includes options and warrants exercisable on or before July
15, 2001.
(2) Includes 277,777 shares issuable upon the exercise of warrants.
(3) Includes 20,000 shares issuable upon the exercise of warrants.
(4) Includes 40,000 shares issuable upon the exercise of warrants.
(5) Includes 10,000 shares issuable upon the exercise of warrants.
(6) Includes 10,000 shares issuable upon the exercise of warrants.
(7) Includes 2,500 shares issuable upon the exercise of warrants.
(8) Includes 5,000 shares issuable upon the exercise of warrants.
(9) Includes 583,485 shares issuable upon the exercise of warrants.
(10) Includes 2,777 shares issuable upon the exercise of warrants.
(11) Includes 59,641 shares issuable upon the exercise of warrants.
(12) Includes 16,800 shares issuable upon the exercise of warrants.
(13) Includes 23,200 shares issuable upon the exercise of warrants.
(14) Includes 22,222 shares issuable upon the exercise of warrants.
(15) Includes 16,666 shares issuable upon the exercise of warrants, 110,000
shares issuable upon the conversion of 22,000 shares of Series A Preferred
Stock and 26,831 shares issuable upon the conversion of 40 shares of Series
B Preferred Stock at the current conversion price of $1.6115 plus accrued
interest.
(16) Includes 15,555 shares issuable upon the exercise of warrants and 40,000
shares issuable upon the exercise of options.
(17) Includes 21,003 shares issuable upon the exercise of warrants and 316,667
shares issuable upon the exercise of options.
(18) Includes 19,000 shares issuable upon the exercise of warrants and 40,000
shares issuable upon the exercise of options. Mr. Howell is
15
the President and General Partner of New Venture Partners. (See Footnote 11
for ownership.) Mr. Howell disclaims ownership of 89.8% of New England
Venture Partners, LP.
(19) Includes 4,723 shares issuable upon the exercise of warrants.
(20) Includes 4,722 shares issuable upon the exercise of warrants and 153,125
shares issuable upon the exercise of options.
(21) Includes 10,000 shares issuable upon the exercise of warrants.
(22) Includes 20,000 shares issuable upon the exercise of warrants. Also,
includes 60,000 shares issuable upon the exercise of options and 10,000
shares issuable upon the exercise of warrants owned by Dr. Hubert Huckel.
(23) Includes 20,000 shares issuable upon the exercise of warrants. Also,
includes 43,329 shares, 60,000 shares issuable upon the exercise of options
and 10,000 shares issuable upon the exercise of warrants owned by Mr.
Patrick McEnany.
(24) Includes 4,000 shares issuable upon the exercise of warrants and 97,400
shares issuable upon the exercise of options.
Relationship with Selling Stockholders
Philip Coehlo is our Chief Executive Officer and Chairman of the Board.
Spencer Browne and David Howell are members of our Board of Directors. New
England Venture Partners LP is an affiliate of David Howell. McEnany Holding,
Inc. is an affiliate of Pat McEnany, a Director. HEH Investment Partners, L.P.
is an affiliate of Hubert Huckel, a Director. Renee Ruecker is our Vice
President of Finance. Sam Acosta is our Vice President of Manufacturing
Operations. David Adams is a shareholder of Bartel Eng & Schroder, our outside
Counsel. Mr Adams previously served as General Counsel and was also our interim
Vice President of Regulatory Affairs and Quality Systems. None of the other
selling stockholders has had any material relationship with us within the past
three years.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of two classes: 50,000,000 shares,
$.001 par value, of common stock and 2,000,000 shares, $.001 par value, of
preferred stock. As of April 30, 2001, 31,354,576 shares of common stock were
outstanding, 158,000 shares of Series A preferred stock were outstanding, and
570 shares of Series B preferred stock were outstanding. There are no other
series of preferred stock outstanding.
Common Stock
Common stock holders have full voting rights, one vote for each share held
of record. Subject to preferential rights of Series A and Series B preferred
stockholders, common stockholders are entitled to receive dividends as may be
declared by the Board out of funds legally available therefor, and share pro
rata in any distributions to stockholders upon liquidation. Common stockholders
have no conversion, preemptive, or other subscription rights. All of the
outstanding shares of common stock are, and the common shares offered hereby
will be, validly issued, fully paid, and nonassessable.
Preferred Stock
As discussed below, we have two series of preferred stock designated. The
Board is authorized to establish other series or designations of preferred stock
with rights, preferences, privileges, and restrictions on such stock as the
Board may determine, subject to the rights of the outstanding series of
preferred stock.
16
Series A Convertible Preferred Stock
We have designated 1,200,000 shares as Series A convertible preferred
stock. Each share of Series A preferred stock has the following characteristics:
Conversion. Each share of Series A preferred stock is convertible into five
shares of common stock at the option of the holder or at our option provided
that the common stock is trading at an average price equal to or greater than
$5.00 per share for 30 consecutive trading days. Each share of Series A
preferred stock is subject to customary anti-dilution protection.
Voting Rights. Provided that more than 35% of the original number of Series
A preferred stock shares remain outstanding, the Series A preferred stockholders
are entitled to vote for one director, as a separate class, and approval by
holders of at least a majority of the Series A preferred stock, voting together
as a separate class, is required for certain events including (i) any issuance
of a new series of shares having rights, preferences, or privileges with respect
to liquidation preference, redemption or dividend rights senior or equivalent to
the Series A preferred stock, (ii) any payment or declaration of any dividends
rights or any other distribution or redemption of any of our capital stock,
(iii) sale or disposition of substantially all of our property or business or
any consolidation or merger with any entity in which we are not the survivor,
(iv) an amendment to our articles of incorporation or bylaws, and (v) any
investments of another business exceeding $1 million in the aggregate. Unless
required by law, the Series A preferred stockholders will be entitled to vote on
all other matters with the common stockholders, together as a class, on an as
converted basis. The Series A preferred stockholders have approved by a majority
vote the issuance of the Series B preferred shares on a pari passu basis with
the Series A shares.
Dividends. Each share of Series A preferred stock is entitled to receive
non-cumulative dividends at the same rate and same time as any dividends
declared on our common stock determined on an as converted basis.
Liquidation Rights. Upon liquidation, dissolution, or winding up of our
company, the holder of Series A preferred stock shall be entitled to received a
liquidation preference equal to $6.25 per share which shall increase at the rate
of 8% per share, per year, compounded annually on each anniversary date of the
issuance of the Series A preferred stock before there are any distributions to
common stockholders. After payment to Series A preferred stockholders of the
liquidation preference as adjusted, the Series A preferred stockholders shall
not be entitled to any further distribution. If upon any liquidation,
dissolution, or winding up the assets to be distributed among the Series A
preferred stockholders shall be insufficient for full payment of the liquidation
preference, then the amount to be distributed shall be distributed ratably to
the Series A preferred stockholders and any other preferred stock of equal rank.
Preemptive Rights. Each Series A preferred stockholder has preemptive
rights to purchase any new share issuance by us in order to maintain his or her
percentage share ownership interest in our company.
Series B Convertible Preferred Stock
We have designated 4,080 shares as Series B convertible preferred stock.
Each share of Series B preferred stock has the following characteristics:
17
Conversion. The Series B convertible preferred stock is currently limited
in conversion to a maximum of 4,236,000 shares, under all circumstances.
However, the conversion price is a fixed conversion price of $1.6115 which
represents the average market price of our common stock for the ten days prior
to the reset date of December 22, 2000. The conversion price will be adjusted on
June 22, 2001 and every six months thereafter to be the lesser of (a) 130% of
the fixed conversion price as stated above, or (b) 90% of the average market
price for the ten days prior to such adjustment date. If certain events occur,
such as our inability to provide the Series B preferred stockholders with common
stock on a timely basis, or our failure to pay any applicable redemption price
when due and such events are deemed not within the Company's control, meaning
they result by no action or inaction on the Company's part, the conversion price
will be adjusted to an amount equal to 70% of what it otherwise would have been
at that time. The adjusted conversion price will be in effect for the period
beginning on the date of event and for sixty days thereafter.
In addition, the conversion price will be subject to adjustment if, based
on the then current conversion price, the Series B preferred stock may be
converted into 20% or more of the common stock outstanding and we have not
previously obtained stockholder approval to issue more than 20%. In such event,
the conversion price will be adjusted to 80% of the then conversion price.
Further, due to Nasdaq SmallCap listing requirements, the Company will be
required to seek stockholder approval to allow for the conversion of the Series
B preferred stock in an amount exceeding 20% or more of its common stock
outstanding before issuance. If we fail to obtain stockholder approval, the
conversion price will be adjusted to 60% of the then conversion price by
contract, we cannot issue more than the 20% without stockholder approval.
Upon an adjustment of the conversion price, the number of shares into which
the Series B convertible preferred stock may be converted is correspondingly
adjusted. The conversion price and number of shares of common stock underlying
the Series B convertible preferred stock is also subject to adjustment for stock
splits, stock dividends, combinations, capital reorganizations, and similar
events relating to our common stock.
The holders of stock cannot convert the Series B convertible preferred
stock into common stock beyond that which would result in their holdings
exceeding more than 4.9% of the then issued and outstanding shares. This
provision was negotiated between us and the holders of the Series B Convertible
preferred stock.
Voting Rights. The Series B convertible preferred stock has no general
voting rights. However, holders of the Series B convertible preferred stock have
the right to consent to the issuance of any capital stock that is senior to the
Series B convertible preferred stock, to any amendment of our certificate of
incorporation which materially and adversely affects the Series B convertible
preferred stock, and to any amendment to the terms of the Series B convertible
preferred stock. In addition, pursuant to the purchase agreements entered into
in connection with the issuance of the Series B convertible preferred stock,
without the consent of the holders of the Series B convertible preferred stock,
we may not issue for approximately twelve months after issuance of the Series B
preferred stock, any common stock (or securities convertible into common stock),
at a price below the market price of the common stock on the date of issuance,
except in certain specified instances. For approximately twelve months after
issuance, the holders of the Series B convertible preferred stock also have a
right of first refusal to acquire any such equity securities except in specified
instances set forth in the purchase agreements.
18
Dividends. Dividends at the rate of $60 per annum per share of Series B
preferred stock (6% annual dividend) are payable in cash or, at our option, may
be added to the value of the Series B convertible preferred stock subject to
conversion and to the $1,000 per share liquidation preference of the Series B
convertible preferred stock.
Redemption
By Us. If we are in compliance with the terms of the Series B convertible
preferred stock and our agreements with the Series B convertible preferred
stockholders, we have the right at any time to redeem the Series B convertible
preferred stock at a premium (generally, 120% of the $1,000 per share
liquidation value plus accrued and unpaid dividends), and under certain
circumstances, at the market value of the common stock into which the Series B
convertible preferred stock would otherwise be convertible. Assuming we are in
compliance with such terms and agreements, after the third anniversary of
issuance, we may redeem the Series B convertible preferred stock at its
liquidation value plus accrued and unpaid dividends.
By the Holders of the Series B Convertible Preferred Stock. If certain
events occur which are solely within our control, the holders of the Series B
convertible preferred stock have the right to request that we repurchase all or
some of their Series B convertible preferred stock at the greater of the premium
or converted market value. Those events in which holders may request repurchase
include the following:
o there is no closing bid price reported for our common stock for five
consecutive trading days;
o our common stock ceases to be listed for trading on the Nasdaq SmallCap
Market;
o the holders of the Series B convertible preferred stock are unable, for 30
or more days (whether or not consecutive), to sell their common stock
issuable upon conversion of the Series B convertible preferred stock
pursuant to an effective registration statement;
o we default under any of the agreements relating to our sale of the Series B
convertible preferred stock, including our failure to timely deliver
certificates for common stock upon conversion;
o certain business combination events;
o the adoption of any amendment to our Articles of Incorporation materially
adverse to the holders of the Series B convertible preferred stock without
the consent of the holders of a majority of the Series B convertible
preferred stock; and
o the holders of the Series B convertible preferred stock are unable to
convert all of their shares because of limitations under exchange or market
rules that require stockholder approval of certain stock issuances and we
fail to obtain such approval.
However, we may issue a Control Notice to eliminate any repurchase right if
the events are not solely within our control.
Liquidation Rights. Upon liquidation, the holders of the Series B
convertible preferred stock will be entitled to receive, before any distribution
to holders of our common stock or any other class or
19
series of our capital stock ranking junior to the Series B convertible preferred
stock, liquidation distributions equal to $1,000 per share, plus any accrued and
unpaid dividends.
Stock Options
As of April 26, 2001, we had outstanding options to purchase a total of
2,299,285 shares of common stock at exercise prices ranging from $1.125 to $4.50
per share, of which options to purchase 2,019,969 shares were exercisable. Some
of these options are subject to vesting, and in general, have a three or five
year exercise period. See our "Annual Report on Form 10-K - Notes to Financial
Statements."
Other Warrants
As of April 27, 2001, warrants to purchase a total of 3,549,734 shares
of common stock were outstanding with exercise prices ranging from $1.50 to
$3.00 per share, all of which were exercisable. Included in the number of
warrants are warrants to purchase 1,203,809 shares of common stock which are
subject to resale by this Prospectus. See our "Annual Report on Form 10-K -
Notes to Financial Statements" which is incorporated by reference in this
Prospectus.
CERTIFICATE OF INCORPORATION AND BYLAWS
Our Amended and Restated Certificate of Incorporation provides that we will
indemnify directors and officers of the company to the fullest extent permitted
by Delaware Law. Further, our bylaws provide authority for the company to
maintain a liability insurance policy that insures directors or officers against
any liability incurred by them in serving for the company.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the company
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the 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 us of expenses incurred or paid by a director, officer, or
controlling person of the company 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
it is against public policy as expressed in the Act and will be governed by
final adjudication.
TRANSFER AGENT
The transfer agent for our common stock is Computershare Transfer and
Trust, 12039 West Alameda Parkway, Suite Z-2, Lakewood 80201-1596.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements and schedule included in our Annual Report on Form 10-K for the year
ended June 30, 2000, as set forth in their report (which contains an explanatory
paragraph describing conditions that raise substantial doubt about the Company's
ability to continue as a going concern as described in Note 1 to the financial
statements),
20
which is incorporated by reference in this Prospectus and elsewhere in the
registration statement. Our financial statements and schedule are incorporated
by reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
LEGAL MATTERS
The validity of the shares of common stock offered by the selling
stockholders through this Prospectus will be passed upon for us by Bartel Eng &
Schroder. Mr. Adams, a shareholder of Bartel Eng & Schroder, beneficially owned
warrants to acquire 4,722 shares of common stock and owned outright 18,110
shares of common stock as of April 30, 2001 which represents less than one
percent of the total outstanding number of shares.
WHERE CAN YOU FIND MORE INFORMATION
Government Filings: We file annual, quarterly and special reports and other
information with the Securities and Exchange Commission. You may read and copy
any document that we file at the Commission's Public Reference Room at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at its regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and at
Northwest Atrium Center, 500 Madison Street, Suite 1400, Chicago, Illinois
60661. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
more information about the Public Reference Rooms. Most of our filings are also
available to you free of charge at the Securities and Exchange Commission's
website at http://www.sec.gov.
Stock Market: Our common stock is listed on the Nasdaq SmallCap Market and
similar information can be inspected and copied at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
Registration Statement: We have filed a registration statement under the
Securities Act of 1933, as amended, with the Securities and Exchange Commission
with respect to the common stock offered under this Prospectus, and this
Prospectus is a part of that registration statement. However, it does not
contain all of the information contained in the registration statement and the
exhibits filed with the registration statement. You should refer to the
registration statement and its exhibits for further information about us and the
common stock offered under this Prospectus.
Information Incorporated by Reference: The Securities and Exchange
Commission rules and regulations allow us to "incorporate by reference" the
information that we file with the Securities and Exchange Commission. This means
that we can disclose additional important information to you by referring to
those documents. The information incorporated by reference is an important part
of this Prospectus, and information that we file in the future with the
Securities and Exchange Commission will automatically update and supersede this
information. We have filed the following documents with the Securities and
Exchange Commission and the information contained in those documents is
incorporated by reference into this Prospectus:
(1) Annual Report on Form 10-K for the year ended June 30, 2000;
(2) Quarterly Reports on Form 10-Q for the quarter ended September 30,
2000, December 31, 2000 and March 31, 2001;
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(3) Proxy Statement for the Annual Meeting of Stockholders held on
December 14, 2000; and
(4) The description of our common stock contained in Form 8-A.
Please note that all other documents and reports filed under Sections
13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of 1934, as
amended, following the date of this Prospectus and prior to the termination of
this offering will be deemed to be incorporated by reference into this
Prospectus and will be made a part of it from the date of filing with the
Securities and Exchange Commission.
22
GLOSSARY OF CERTAIN TECHNICAL TERMS
510(k): formal notification to the Food and Drug Administration ("FDA") by
manufacturers of Class I devices to obtain clearance to market the medical
device. The device must be substantially equivalent to devices manufactured
prior to 1976.
AUTOLOGOUS: autogenous; related to self; originating within an organism itself,
as obtaining blood from the patient for use in the same patient. ----
CRYOPRECIPITATE: any precipitate (substance that is separated out of a solution
of plasma) that results from cooling, as cryoglobulin or antihemophilic factor.
CRYOPRECIPITATED AHF: a preparation of antihemophilic factor, which is obtained
from a single unit of plasma collected and processed in a closed system.
CRYOPRESERVATION: maintaining the life of excised tissue or organs by freezing
and storing at very low temperatures.
CRYOSEAL(TM): system for harvesting fibrinogen-rich cryoprecipitate from a
donor's blood plasma, a blood component that is currently licensed by the FDA
for the treatment of clotting protein deficient patients.
FIBRINOGEN: a blood protein that is converted to fibrin in the clotting of
blood.
HEMOSTATIC: (1) checking the flow of blood; (2) an agent that stops the flow of
blood.
PLATELET DERIVED GROWTH FACTOR (PDGF): a substance contained in platelets and
capable of inducing proliferation of vascular cells, vascular smooth muscle
cells; its action contributes to the repair of damaged vascular walls.
PROGENITOR: a parent or ancestor.
THERMOLABILE: easily altered or decomposed by heat.
II-1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses payable by our
company in connection with the issuance and distribution of the securities being
registered hereunder. No expenses shall be borne by the selling stockholders.
All of the amounts shown are estimates, except for the SEC registration fee.
SEC registration fee $ 3,112.84
Printing and engraving expenses $ 0.00
Accounting fees and expenses *$ 20,000.00
Legal fees and expenses *$ 25,000.00
Transfer agent and registrar fees *$ 0.00
Fees and expenses for qualification
under state securities laws $ 4,645.00
Miscellaneous *$ 47,112.84
TOTAL $ 99,870.68
===========
* estimated
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits indemnification
of directors, officers, and employees of corporations under certain conditions
and subject to certain limitations. Article Eighth of our Amended and Restated
Certificate of Incorporation contain provisions for the indemnification of its
directors and officers to the fullest extent permitted by law.
Under such law, we are empowered to indemnify any person who was or is a
party or is threatened to be made a party to any proceeding (other than an
action by or in the right of our company to procure a judgment in its favor) by
reason of the fact that such person is or was an officer, director, employee or
other agent of our company or our subsidiaries, against expenses, judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with such proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in our best interests and, in the
case of a criminal proceeding, has no reasonable cause to believe the conduct of
such person was unlawful. In addition, we may indemnify, subject to certain
exceptions, any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action by or in the right of our
company to procure a judgment in our favor by reason of the fact that such
person is or was an officer, director, employee or other agent of our company or
our subsidiaries, against expenses actually and reasonably incurred by such
person in connection with the defense or settlement of such action if such
person acted in good faith and in a manner such person believed to be in the
best interest of our company and stockholders. We may advance expenses incurred
in defending any proceeding prior to final disposition upon receipt of an
undertaking by the agent to repay that amount it shall be determined that the
agent is not entitled to indemnification as authorized.
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In addition, we have director's and officer's liability insurance, which
our bylaws provide authority to maintain to insure directors or officers against
any liability incurred capacity as such, or arising out of their status as such.
Item 16. Exhibits and Financial Statement Schedules
Exhibit Description
- ------- -----------
3.1 (a) Amended and Restated Certificate of Incorporation (4)
(b) Revised Bylaws (4)
4.1 Certificate of Designation Series A Convertible Redeemable
Preferred Stock (12)
4.2 Certificate of Designation of Series B Convertible
Preferred Stock (16)
4.3 Warrant [form] (18)
5.1 Opinion of David C. Adams, General Counsel to the registrant
10.1 (a) Letter of Agreement with Liquid Carbonic, Inc. (1)
(b) Letter of Agreement with Fujitetsumo USA (1)
(c) Letter of Agreement with Fujitetsumo Japan (1)
(d) License Agreement between Stryker Corp. and
THERMOGENESIS CORP., Corp. (5)
(e) Lease of Office and Mfg. Space (4)
(f) Executive Development and Distribution Agreement
between THERMOGENESIS CORP. and Daido Hoxan Inc. (3)
(g) Administrative Office Lease (6)
(h) Employment Agreement for David C. Adams (11)
(i) Employment Agreement for James H. Godsey (11)
(j) Employment Agreement for Sam Acosta (11)
(k) Licensing/Manufacturing Agreement with On-Time Mfg. (8)
(l) License Agreement and distribution with Asahi Medical (9)
(m) License Agreement with Pall/Medsep Corporation (10)
(n) Distribution Agreement with Dideco S.P.A. (13)
(o) Employment Agreement for Philip H. Coelho (15)
(p) Employment Agreement for Renee Ruecker (15)
(q) Amendment to License Agreement with Asahi Medical (15)
(r) Subscription Agreement dated December 22, 1999 [form] (16)
(s) Employment Agreement for Dan Segal (17)
(t) Unit Purchase Agreement dated April 27, 2001 [form] (18)
23.1 Consent of Bartel Eng & Schroder is contained in exhibit 5.1.
23.2 Consent of Ernst & Young LLP, independent auditors
II-3
Footnotes to Index
(1) Incorporated by reference to Registration Statement No. 33-37242 of
THERMOGENESIS CORP., Corp. filed on February 7, 1991.
(2) Incorporated by reference to Form 8-K for July 19, 1993.
(3) Incorporated by reference to Form 8-K for June 9, 1995.
(4) Incorporated by reference to Form 10-KSB for the year ended June 30, 1994.
(5) Incorporated by reference to Form 8-K for September 27, 1995.
(6) Incorporated by reference to Form 10-QSB for the quarter ended December 31,
1995.
(7) Incorporated by reference to Form 8-K for November 27, 1996.
(8) Incorporated by reference to Form 10-KSB for the year ended June 30, 1996.
(9) Incorporated by reference to Form 8-K for May 29, 1996.
(10) Incorporated by reference to Form 8-K for March 27, 1997.
(11) Incorporated by reference to Form 10-K for the year ended June 30, 1997.
(12) Incorporated by reference to Form 8-K for January 14, 1998.
(13) Incorporated by reference to Form 8-K for February 16, 1998.
(14) Incorporated by reference to Form 10-K for the year ended June 30, 1998.
(15) Incorporated by reference to Form 10-K for the year ended June 30, 1999.
(16) Incorporated by reference to Form 8-K for December 23, 1999.
(17) Incorporated by reference to Form 10-K for the year ended June 30, 2000.
(18) Incorporated by reference to Form 10-Q for the quarter ended March 31,
2001.
Item 17. Undertakings
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any Prospectus required by Section (10)(a)(3) of the
Securities Act;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
II-4
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in the
Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii),
above, do not apply if the information required to be included in
a post-effective amendment by these paragraphs is contained in
periodic reports filed with or furnished by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post- effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
THERMOGENESIS CORP. pursuant to the foregoing provisions, or otherwise,
THERMOGENESIS CORP. has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing Form S-3 and has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Rancho Cordova, County of Sacramento, State of California, on May 14, 2001.
THERMOGENESIS CORP.
/s/ Philip H. Coelho
-----------------------------------
Philip H. Coelho, Chairman & C.E.O.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated:
/s/ Philip H. Coelho Dated: May 14, 2001
- -------------------------------------------
Philip H. Coelho, C.E.O.
and Chairman of the Board
(Principal Executive Officer)
/s/ Renee M. Ruecker Dated: May 11, 2001
- -------------------------------------------
Renee M. Ruecker, Vice President Finance
(Principal Accounting Officer and
Principal Financial Officer)
/s/ James H. Godsey Dated: May 11, 2001
- -------------------------------------------
James H. Godsey, President, C.O.O. Director
/s/ Hubert E. Huckel Dated: May 14, 2001
- -------------------------------------------
Hubert E. Huckel, Director
/s/ Patrick McEnany Dated: May 14, 2001
- -------------------------------------------
Patrick McEnany, Director
/s/ David S. Howell Dated: May 14, 2001
- -------------------------------------------
David S. Howell, Director
/s/ Spencer Browne Dated: May 14, 2001
- -------------------------------------------
Spencer Browne, Director