As filed with the Securities and Exchange Commission on March 20 , 1996
Registration No. 333-01479
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1 TO
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 of incorporation (I.R.S. Employer Identification
or organization) Number)
11431 Sunrise Gold Circle, Suite A
Rancho Cordova, California 95742
(916) 858-5100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Philip H. Coelho
President & C.E.O.
THERMOGENESIS CORP.
11431 Sunrise Gold Circle, Suite A
Rancho Cordova, CA 95742
(916) 858-5100
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
David C. Adams, Esq. Daniel B. Eng, Esq.
Weintraub Genshlea & Sproul Bartel Eng Linn & Schroder
400 Capitol Mall, Suite 1100 300 Capitol Mall, Suite 1100
Sacramento, California 95814 Sacramento, California 95814
(916) 558-6000 (916) 442-0400
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
Approximately 180 days, or as soon as practicable, after the Registration
Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
7156\5598\DMG\114471.1
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF OFFERING PRICE PER AGGREGATE OFFERING
SECURITIES TO BE AMOUNT TO BE SHARE PRICE AMOUNT OF
REGISTERED REGISTERED REGISTRATION FEE
Common Stock Offered
by Selling
Stockholders 4,400,000 $1.1875{(1)} $5,225,000 $1,801.73
Common Stock
Underlying Placement
Agent Warrant
440,000{(2)} $ .60{(4)} $ 264,000 $ 91.04
Common Stock
Underlying Warrants
1,210,000{(3)} $1.50{(4)} $1,815,000 $ 625.86
$2,518.63 *
(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 the common stock of the Company on March 1, 1996, as reported on the
National Association of Securities Dealers Automated Quotations System.
(2)Represents a warrant to purchase 8.8 units at an exercise price of $30,000
per Unit. Each Unit consists of 50,000 shares of Common Stock and a warrant
representing the right to acquire an additional 12,500 shares of Common Stock
at $1.50 per share. The Warrants issuable as part of the Units and exercisable
at $1.50 per share have been included in 1,210,000 shares to be issued upon
exercise of the Warrants listed below.
(3)Represents Warrants to purchase 1,210,000 shares at an exercise price of
$1.50 per share. Warrants were issued as part of the Units.
(4)Calculated in accordance with Rule 457(g) of the Securities Act.
* Paid previously with original filing on March 6, 1996
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
- ii -
Subject to Completion March 20 , 1996
PROSPECTUS
6,050,000 Shares
THERMOGENESIS CORP.
Common Stock
($.001 Par Value)
Of the 6,050,000 shares of Common Stock ("Common Stock") of THERMOGENESIS
CORP. ("THERMOGENESIS" or the "Company") being offered hereby (the
"Offering"), 4,400,000 shares are being offered by certain stockholders of the
Company (the "Selling Stockholders"), and 1,210,000 shares are being offered by
the Company upon the exercise of outstanding Warrants. The 4,400,000 shares
being offered by the Selling Stockholders were issued in connection with the
Company's private placement completed in December 1995. In addition, an
additional 440,000 shares may be issued upon the exercise of a warrant granted
to the placement agent in that offering to acquire an additional 8.8 Units. The
1,210,000 shares being offered by the Company upon the exercise of Warrants
were also issued in connection with that private placement. See "The Company -
Recent Financing".
The shares of Common Stock owned by the Selling Stockholders may be
offered for sale from time to time at market prices prevailing at such time or
at negotiated prices by the Selling Stockholders, and without payments of any
underwriting discounts or commission, except for usual and customary selling
commissions paid to brokers or dealers. THERMOGENESIS Common Stock is traded
and listed on the Nasdaq Stock Market, SmallCap Market, under the symbol
"KOOL". See "Description of Securities". On March 14, 1996, the
average of the high and low price for the Company's Common Stock was
$1.50, as reported on the Nasdaq SmallCap Market. The Company will not
receive any proceeds from the sale of any Common Stock by the Selling
Stockholders. See "SELLING STOCKHOLDERS". Expenses of the Offering, estimated
to be $38,018, will be paid in full by the Company.
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGE 4
THESE ARE SPECULATIVE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
UNDERWRITING DISCOUNTS
PRICE TO WARRANT AND COMMISSIONS PROCEEDS TO THE COMPANY{(2)}
HOLDERS{(1)}
Per share. . . . . . . . . $ 1.50 $ 0.00 $ 1.50
Total. . . . . . . . . . . $ 2,079,000 $ 0.00 $ 2,079,000
.
(1)Represents exercise price to Warrant holders at $1.50 per share and exercise
price for placement agent Warrant at $30,000 per Unit for 8.8 Units.
(2)Represents proceeds to the Company assuming the exercise of Warrants to
purchase up to 1,210,000 shares of Common Stock at a price of $1.50 per share,
the exercise of Warrants to purchase up to 8.8 Units at $30,000 per Unit, and
before other expenses of issuance and distribution estimated to be $38,018.
All expenses will be paid by the Company.
The date of this Prospectus is March 22, 1996.
- 1 -
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-3 under the Securities Act of
1933 (the "Securities Act"), with respect to the Common Stock offered hereby.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
periodic reports, proxy statements and other information with the Commission.
Such reports, proxy statements and other information concerning the Company may
be inspected and copies may be obtained (at prescribed rates) at the
Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional offices at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, New York, New York 10048. This Prospectus does not contain all
information set forth in the Registration Statement and Exhibits thereto which
the Company has filed with the Commission under the Securities Act and to which
reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or replaces such
statement. Any such statement shall not be deemed to constitute a part of this
Prospectus, except as so modified or replaced. There is incorporated herein by
reference the following documents previously filed with the Commission:
(1)The Company's Annual Report on Form 10-KSB for the year ended June 30, 1995,
and amendment to Annual Report on Form 10-KSBA/1 filed October 26, 1995;
(2)The Company's Quarterly Reports on Form 10-QSB for the quarters ended
September 30, 1995, and December 31, 1995;
(3) The Company's Current Reports on Form 8-K for the event date September 27,
1995; and
(4)The Company's Form 8-A for the registration of the Company's Common Stock
pursuant to Section 12(g) of the Exchange Act.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of the offering of the Common Stock offered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on written or oral
request of any such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents).
Requests should be directed to: THERMOGENESIS CORP., 11431 Sunrise Gold
Circle, Suite A, Rancho Cordova, California 95742, Attention: Charles de B.
Griffiths, Secretary; (916) 858-5100.
- 2 -
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements appearing elsewhere or incorporated by
reference in this Prospectus.
THE COMPANY
THERMOGENESIS CORP. (the "Company"), formerly known as Insta Cool Inc. of
North America, was incorporated in Delaware on September 26, 1986 and
subsequently merged with Refrigeration Systems International, Inc., a
California corporation. In January of 1995, the Company changed its name to
THERMOGENESIS CORP. to better reflect the thermodynamic segment of the
biotechnology industry that it hopes to service through development of new
products. The Company designs and sells products and devices which utilize its
proprietary thermodynamic technology for the processing of biological
substances including the cryopreservation, thawing, and harvesting of blood
components, and to a lesser extent for the preservation of perishable foods
(THERMOGENESIS Proprietary Technology). Historically, the Company's primary
revenues have been from sales of blood plasma freezers to hospitals, blood
banks and blood transfusion centers for rapid freezing of blood plasma.
Currently, the Company is manufacturing several categories of thermodynamic
devices which are being sold to the blood plasma industry under permission from
the Food and Drug Administration ("FDA"). Other potential applications and
markets for the Company's THERMOGENESIS Proprietary Technology includes medical
and pharmaceutical applications, and industrial applications. During the
fiscal years 1988 through 1995, the Company has focused its efforts on research
and development and on refining product design and application. The Company
has also continuously sought new applications for its products and technology,
including the design of a device used for the intraoperative harvesting of
autologous fibrinogen rich cryoprecipitate for use as a hemostatic agent or
tissue sealant in certain surgical and medical procedures. See "The Company
and Recent Events -Current Products and Development Efforts".
Pursuant to the terms of the private placement, the Company is registering
the Common Stock offered by the Selling Stockholders. The Company is also
registering Common Stock to be issued upon the exercise of outstanding Warrants
issued as part of the Units in the private placement pursuant to contract
terms. To the extent required under the federal securities laws, this
Prospectus may be used for resale of Common Stock upon the exercise of the
Warrants by the holders of such Warrants.
THE OFFERING
Common Stock Outstanding Before the Offering 24,765,434
Common Stock Offered to Warrant Holders 1,650,000
Common Stock Offered by Selling Stockholders 4,400,000
Common Stock Outstanding After the Offering
Assuming Exercise of the Outstanding Warrants 26,415,434
Nasdaq Symbol KOOL
RISK FACTORS
An investment in the Common Stock described herein entails a number of
very significant risks. Because of these risks, funds should only be invested
by persons able to bear the risk of and withstand the loss of their entire
investment. Prospective investors should also consider the following before
making an investment decision.
LACK OF PROFITABILITY. Except for net income of $11,246 for the year
ended June 30, 1994 on net sales of $2,678,192, the Company has not been
profitable since inception. For the year ended June 30, 1995, the Company had
a net loss of $88,296 on net sales of $3,311,880 and an accumulated deficit at
June 30, 1995, of $5,814,394. See "Annual Report on Form 10-KSB". For the
six months ended December 31, 1995, the Company had a net loss of $102,339 on
sales of $1,980,119.
DEPENDENCE UPON NEW PRODUCTS. Historically, substantially all of the
Company's revenue has been from the sales of product related to the freezing,
thawing and storing of blood plasma. Because the Company expects the blood
plasma market to have limited growth, the future success of the Company will be
dependent upon new applications of its technology, including application of
products in the biotechnology market. The Company intends to concentrate on
developing (1) an autologous fibrinogen processing device with disposable
containers; (2) a long-term sample storage and retrieval system with disposable
containers; and (3) a stem cell control rate freezer ("CRF"), storage and
retrieval system with disposable containers. See "The Company and Recent
Events - Current Products and Development Efforts." Although these three
products use technology related to the freezing, thawing and storage of blood
plasma, development of these products represents a departure from the Company's
current core business. Further, although the Company has had encouraging
discussions with experts in areas of application for these products,
development of each product is in its pre-application or initial development
phase and the Company has no contracts for sales of these three products. No
assurance can be given that each of these products can be successfully
developed, and if developed, that a market will develop for them.
POSSIBLE ADDITIONAL FINANCING. Based on current sales and projected
development costs for products currently in development, the Company believes
that it will have sufficient working capital for its operations for the 1997
fiscal year. In the event actual sales of the Company's products do not meet
the Company's expectations in any given period, or development and production
costs increase significantly, the Company may need to secure additional
financing to complete and fully implement its business objectives. There can
be no assurance that the Company will not need additional financing, and if
available, that it will be obtained on terms favorable to the Company.
Furthermore, delays in receipt of any required governmental approvals prior to
marketing products in development, or requirements for additional clinical
testing prior to approval, may result in decreased revenues and increased
development costs. See "Risk Factors -- Government Regulation Associated with
Products".
GOVERNMENT REGULATION ASSOCIATED WITH PRODUCTS. The majority of the
Company's products require permission to market in the United States from the
United States Food and Drug Administration ("FDA"), which may limit or
circumscribe applications or U.S. markets for which the Company's products may
be sold. Further, if the Company cannot establish that its product is
substantially equivalent, or superior, in safety or efficacy to a previously
approved product, delays may result in final approval from the FDA for
marketing its products. No assurance can be given that FDA permission to
market in the United States will be obtained. The Company's products might
also be required to meet certain other criteria or receive certain approvals
from other foreign governments for marketing and sales. See "The Company and
Recent Events - Current Products and Development Efforts".
RELIANCE ON PATENTS AND OTHER PROPRIETARY INFORMATION. The Company
believes that patent protection is important for products and potential
segments of its current and proposed business. The Company currently holds 4
patents, and has patents pending for an additional 3 products which the Company
markets or intends to market. See "Annual Report on Form 10-KSB". There can
be no assurance, however, as to the breadth or degree of protection afforded to
the Company or the competitive advantage derived by the Company from current
patents and future patents, if any. Although the Company believes that its
patents and the Company's existing and proposed products do not infringe upon
patents of other parties, it is possible that the Company's existing patent
rights may be challenged and found invalid or found to violate proprietary
rights of others. In the event any of the Company's products are challenged as
infringing, the Company would be required to modify the design of its product,
obtain a license or litigate the issue. There is no assurance that the Company
would be able to finance costly patent litigation, or that it would be able to
obtain licenses or modify its products in a timely manner. Failure to defend a
patent infringement action or to obtain a license or implementation of
modifications would have a material adverse effect on the Company's continued
operations.
TRADE SECRETS. The Company also relies in part on trade secrets and
proprietary know-how, and it employs various methods to protect its technology,
such as use of confidentiality agreements with employees, vendors, and
customers. However, such methods may not afford complete protection and there
can be no assurance that others will not obtain the Company's know-how, or
independently develop it.
DEPENDENCE ON KEY PERSONNEL AND OBTAINING ADDITIONAL ENGINEERING
PERSONNEL. The Company is dependent upon the experience and services of Philip
H. Coelho, President and Chief Executive Officer, and Charles de B. Griffiths,
Director of International Sales. The loss of Mr. Coelho or Mr. Griffiths would
adversely affect the Company's operations. The Company has obtained key man
life insurance covering Mr. Coelho in the amount of $1,000,000 as some
protection against this risk. Furthermore, to implement its new product
development, the Company will have to recruit and retain additional experienced
engineers. There is no assurance that the Company will be able to find and
retain engineers required to meet its self-imposed deadlines for product
development. See "The Company and Recent Events -Employees".
DEPENDENCE ON FOREIGN SALES. A large percentage of the Company's sales
are made to foreign countries. For the year ended June 30, 1995, foreign sales
represented 55% of the Company's total sales for the year. The Company is not
aware of any current material risks associated with foreign sales. Sales are
made in U.S. currency and, therefore, currency fluctuations do not affect
operations. See "Annual Report on Form 10-KSB".
PRODUCT LIABILITY AND UNINSURED RISKS. The Company maintains a general
liability policy which includes domestic and foreign product liability coverage
of $1,000,000 per occurrence and $2,000,000 per year in the aggregate.
Nevertheless, a partial or completely uninsured claim against the Company could
have a material adverse effect on the Company's financial condition and
operations.
POSSIBLE LOSS OF NASDAQ SMALLCAP MARKET ELIGIBILITY. While the Company's
Common Stock is included on the Nasdaq SmallCap Market, its continued inclusion
will depend on the Company's ability to meet certain eligibility requirements
established for The Nasdaq Stock Market, including maintaining a minimum of $2
million in assets. Loss of Nasdaq eligibility could result if the Company
sustains substantial material operating losses affecting its net worth.
Although the Company could seek listing on another market, any failure to
maintain listing on the Nasdaq could have an adverse effect on trading and the
value of the Company's Common Stock.
NEGATIVE IMPACT ON TRADING VALUE OF COMMON STOCK. The Company has
currently more than 24,000,000 shares outstanding, including the shares
registered hereby, almost all of which are registered and trading. Because the
trading market for the Company's common stock is affected by numerous
circumstances and events, the Company can make no prediction on the effect the
registration of the shares of common stock hereby will have on that market.
The number of shares being registered by the Company hereby could have an
adverse effect on the trading value of its Common Stock in general. See
"Description of Securities - Registration Obligation".
LACK OF CASH DIVIDENDS. To date, the Company has not paid any cash
dividends on its Common Stock and does not expect to declare or pay any cash or
other dividends on its Common Stock in the foreseeable future.
SUMMARY FINANCIAL INFORMATION
The following information has been summarized from the Company's financial
statements included in its Annual Report on Form 10-KSB for the year ended June
30, 1995, and Quarterly Reports on Form 10-QSB for the quarters ended September
30, 1995, and December 31, 1995, incorporated herein by reference, and should
be read in conjunction with such financial statements and the related notes
thereto:
For the Six Months Ended December For the Year Ended June 30,
31,
1995 1994 1995 1994
STATEMENT OF OPERATIONS DATA:
Revenues $1,980,119 $1,838,162 $3,311,880 $2,678,192
Operating expenses $2,079,813 $1,737,306 $3,704,193 $2,931,974
Net income (loss) $(102,339) $105,526 ($88,296) $11,246
Net income (loss) per common share ($0.00) $0.01 ($0.00) $0.00
Weighted average shares outstanding 21,094,000 20,715,000 20,340,000 20,247,000
December 31, June 30,
1995 1994 1995 1994
SELECTED BALANCE SHEET DATA:
Working Capital $3,197,732 $1,566,050 $1,413,156 $1,438,579
Total Assets $4,529,733 $2,837,544 $2,662,839 $2,500,399
Long Term Obligations $168,730 $ ---- $14,456 $ ---
Total Liabilities $725,246 $661,381 $662,256 $429,762
Stockholders' Equity $3,804,487 $2,176,163 $2,000,583 $2,070,637
THE COMPANY AND RECENT EVENTS
The Company, formerly known as Insta Cool Inc. of North America, was
incorporated in Delaware on September 26, 1986 and subsequently merged with
Refrigeration Systems International, Inc., a California corporation. In
January of 1995, the Company changed its name to THERMOGENESIS CORP. to better
reflect the thermodynamic segment of the biotechnology industry that it hopes
to service through development of new products. The Company designs and sells
products and devices which utilize its proprietary thermodynamic technology for
the processing of biological substances including the cryopreservation,
thawing, and harvesting of blood components, and to a lesser extent for the
preservation of perishable foods (THERMOGENESIS Proprietary Technology).
Historically, the Company's primary revenues have been from sales of blood
plasma freezers to hospitals, blood banks and blood transfusion centers for
rapid freezing of blood plasma. Currently, the Company is manufacturing
several categories of thermodynamic devices which are being sold to the blood
plasma industry under FDA permission to market in the United States. Other
potential applications and markets for the Company's THERMOGENESIS Proprietary
Technology include medical and pharmaceutical applications, and industrial
applications. During the fiscal years 1988 through 1995, the Company has
focused its efforts on research and development and on refining product design
and application. The Company has also continuously sought new applications for
its products and technology, including the design of a device used for the
intraoperative harvesting of autologous fibrinogen rich cryoprecipitate for use
as a hemostatic agent or tissue sealant in certain surgical and medical
procedures. See "The Company and Recent Events - Current Products and
Development Efforts".
HISTORICAL
Tools used by biotechnology researchers to process biological substances
and to accomplish manipulation of such substances to obtain desired results
vary and include microscopic laser scalpels, chemical formulations, sterile and
disposable containers, as well as devices that control temperatures of the
processes.
The Company's initial strategy focused product development on small niche
blood processing markets where new products could more quickly establish
credibility for the Company's proprietary thermodynamic technology. The
Company believed that by concentrating its products to serve the blood plasma
industry, many customers, such as the Red Cross or other blood transfusion
societies of various countries, would validate the Company's technology for
rapid freezing of biological substances, more specifically blood plasma. Early
products were designed and distributed to blood processing markets in a manner
that would permit the Company to attain high market share and receive more
rapid FDA 510K permission to market. See "Annual Report on Form 10-KSB".
From 1988 to 1992 the Company's products were designed to transfer heat by
causing heat transfer liquids to indirectly contact biological substances,
primarily blood plasma, contained within plastic sealed containers. Early
product designs used liquids containing chloro-flouro-carbons ("CFC") which the
Company phased out in the fall of 1992. Thereafter, the Company 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 the Company and marketed to
hospitals, blood banks, and blood transfusion centers consisted of freezers and
thawers for blood plasma. The Company continued to design and develop various
freezer models and thawers for different applications, and these products
remain the core product component of the Company's business. To expand its
market and product use, the Company changed the focus of its research and
development to the design of new products that 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 "The Company and Recent Events - Current Products and
Development Efforts".
Over the past seven years, the Company has developed and received FDA
permission to market several of its thermodynamic processors of blood tissues
and have three new products awaiting FDA approval. The several FDA-approved
blood processing devices have a significant share of their small niche markets
and generate the majority of the Company's annual revenues which were
approximately $3,300,000 during the 1995 fiscal year. For instance, of the 51
American Red Cross Blood Centers, 48 utilize the Company's blood plasma
freezer. These products include the Company's blood plasma freezers, blood
thawers, and portable blood plasma freezers, and blood collection and transport
containers. See Annual Report on Form 10-KSB.
Having established a presence in markets where the need to freeze and thaw
blood tissues precisely and rapidly was critical, the Company began to focus
its technology and tissue and development efforts towards harvesting fibrinogen
rich cryoprecipitate from blood for use as a hemostatic agent and tissue
adhesive for medical and surgical use. Medical literature currently documents
important practical applications for fibrinogen rich cryoprecipitate in
thirteen distinct areas, including plastic surgery, thoracic surgery,
cardiovascular surgery, orthopaedic surgery, and opthamologic surgery. The
Company's fibrinogen collecting device with its disposable container sources
the fibrinogen rich cryoprecipitate from a patient's own blood ("autologous"),
and is unique in that aspect when compared to current sources of fibrinogen
which generally rely on homologous single donations or pooled plasma.
RECENT FINANCING
In December 1995, the Company completed a private placement raising a
total of $2,200,000, before direct expenses of $242,000 and other indirect
related expenses, for net proceeds of $1,901,000, which funds are being used
for general corporate purposes that include, but are not limited to, payment of
existing accounts payable and short-term debt, testing of products, continued
research and development, production costs and inventory, advertising and
promotional materials, working capital, and increased payroll due to addition
of personnel.
Assuming the exercise of all Warrants issued as part of the Units in
the private placement, and the exercise of the placement agent warrant to
acquire an additional 8.8 Units at $30,000 per Unit, the Company would receive
an additional $2,079,000, which would be used to support general operations and
research and development. The Company does not, however, anticipate that the
Warrants will be exercised prior to expiration on July 31, 1996, based on the
current trading price of $1.50 on March 14, 1996. See "Use of
Proceeds". The Company will not receive any money from the sale of Common
Stock offered by the Selling Stockholders in this Offering. See "Summary of
the Offering"; "Selling Stockholders".
As a condition of the private placement of Units, each investor in the
private placement was required to enter into an agreement not to sell, directly
or indirectly, the Common Stock included in the Units for a period of 180 days
from the effective date of the registration statement registering such Common
Stock without the prior written approval of the placement agent, Paradise
Valley Securities, Inc. (the "Investor Lock-Up"). In giving or withholding its
approval, the placement agent will consider the effect that any such sale prior
to expiration of the Investor Lock-Up will have on the maintenance of an
orderly market for the Company's Common Stock. See "Description of Securities
- - Registration Obligation". As part of the private placement of the Units, the
Company granted purchasers of the Units a limited price protection provision
for the warrants issued as part of the Units to mitigate the effect of any
potential market decline in the trading price of the Company's Common Stock
should the Company delay in registering the Common Stock. Under the terms of
the provision, the exercise price of the warrants would be automatically reset
at $1.00 per share in the event a registration statement was not filed within
three months following the close of the private placement. The Company
complied with the registration filing requirement and the repricing provision
is of no further effect. All warrants issued as part of the Units will expire
on July 31, 1996, unless exercised by the holders thereof prior to that date.
CURRENT PRODUCTS AND DEVELOPMENT EFFORTS
The Company's core business continues to focus on plasma freezers and
thawers which have already received FDA permission to market in the United
States. However, since the Company anticipates that the plasma freezer market
will flatten when market penetration is complete (with the exception of
replacement products), it has begun to focus on the following new products and
market opportunities. See "Annual Report on Form 10-KSB".
LONG-TERM BLOOD SAMPLE STORAGE AND RETRIEVAL SYSTEM WITH DISPOSABLE
CONTAINER. The Company has built a prototype long-term storage freezer,
computer inventory system and blood sample container (the "Blood Archive and
Retrieval System") for possible use by the Japanese Red Cross for storing blood
samples for a five year period for all blood donations that occur in Japan each
year. The five-year blood sample storage program has been mandated by the
Japanese government in an effort to comply with new product liability laws in
Japan. It is estimated that 6,600,000 blood donations occur annually. The
Company has shipped the prototype Blood Archive and Retrieval System to Daido-
Hoxan, the Company's Japanese distributor, in November 1995 for tests and
performance review. The Company believes that the Japanese government will
approve a budget that will include purchases of the Blood Archive and Retrieval
System. The Company, its distributor Daido-Hoxan, and the Japanese Red Cross
are currently evaluating the equipment and proposed program. No assurance can
be given that the Company's Blood Archive and Retrieval System will ultimately
be purchased by or through the Japanese Government. See "Risk Factors -
Dependence on New Markets; Government Regulations Associated with Products".
AUTOLOGOUS FIBRINOGEN PROCESSING SYSTEM WITH DISPOSABLE CONTAINER. The
Company has completed a prototype of a system for harvesting fibrinogen rich
cryoprecipitate from a patient's own blood plasma for use as a tissue sealant
and hemostatic agent during surgery (the "Autologous Fibrinogen Device"). The
Autologous Fibrinogen Device features a transportable thermodynamic device and
sterile disposable containers within which each unit of blood plasma is
processed to obtain the fibrinogen rich cryoprecipitate.
The FDA declined to approve the use of the Autologous Fibrinogen Device
for all the surgical uses of fibrinogen as sought by the Company and, instead,
agreed to constructively review a 510K application for a few narrow uses, such
as Factor VIII deficiency (when blood is deficient in the Factor VIII clotting
protein causing hemophilia) and fibrinogenemia (when blood is deficient in the
Fibrinogen clotting protein). Further clinical data would need to be collected
and submitted in order to have the FDA permit expanded claims for efficacy.
See "Risk Factors -- Government Regulations Associated with Products". The
restriction to these few narrow uses would significantly reduce initial sales
in the United States and force the Company to rely on foreign marketing.
The Company has identified three significant opportunities to bring the
Autologous Fibrinogen Device to market in the near future, while encompassing
all the potential surgical uses in Japan, Canada and Europe where fibrinogen is
already licensed, and one major use in the United States where the Company may
have significant assistance in presenting clinical data to support the claim
for autologous fibrinogen as a tissue adhesive.
1) The Company secured an agreement in principal with Haemonetics,
Japan, a major medical device company, which contemplates that Haemonetics will
manufacture the disposable container and the applicators and pay the Company a
10% royalty on sales of those items, in addition to purchases and distribution
of the Autologous Fibrinogen Device to be manufactured by the Company.
Haemonetics would market the Autologous Fibrinogen Device in Japan, where
fibrinogen from pooled plasma is already a licensed product. Further, a
Ministry of Health and Welfare reimbursement schedule has already been approved
for autologous fibrinogen by the Japanese government, even though no practical
supply of autologous fibrinogen exists today in Japan. The Company believes
that the Japanese are uncomfortable with the only currently available supply of
fibrinogen in Japan which is sourced from pooled plasma donated by non-Japanese
donors. Based on this perception, the Company has focused development and
introduction of this product for the Japanese market, while continuing with
efforts toward clinical data collection for additional FDA approval for the
United States Market.
2) The Company has reached an agreement in principle with Organogenesis, a
Massachusetts-based company which has developed a biologically-alive skin
replacement, Graftskin (trademark) produced from cells derived from infant
foreskin and bovine collagen. The Company was informed that in clinical
trials a 61% success rate was achieved in the complete closure of ulcerated
wounds (diabetic), a disease which afflicts over 10 million Americans. In
acknowledgment of the potential benefit this product might offer to patients
with ulcerated wounds, the FDA has chosen Graftskin for expedited
review. The Company believes that bonding the Graftskin to the wound site with
autologous fibrinogen rich cryoprecipitate may increase the success rate of the
engraftment and is collaborating with Organogenesis in the design of clinical
tests to determine whether the autologous fibrinogen rich cryoprecipitate
sealant assists the engraftment. If successful, this test data would be
submitted to the FDA by the Company in support of a claim for the autologous
fibrinogen rich cryoprecipitate as a skin graft adhesive. The Company believes
that this submission could be reviewed by the FDA at the same time as the
expedited review of the skin replacement product. FDA permission to market the
Company's Autologous tissue sealant for use with Graftskin could open markets
to over 200 specialized wound care centers, 3,000 surgi-centers and 3,500
hospitals with surgery wards in the United States. Tests using the Company's
autologous fibrinogen device are, however, in preliminary stages and
conclusions about any improved engraftment efficacy are premature.
Furthermore, there is no assurance that the FDA will review the data related to
the Company's device contemporaneously with the submissions by the
Massachusetts company. See "Risk Factors -Government Regulations Associated
with the Products".
3) The Company has obtained agreement from Gail Rock, MD, Ph.D., to
organize and supervise all necessary laboratory and clinical tests to
demonstrate the safety and efficacy of the Company's Autologous Fibrinogen
Device for the Canadian Ministry of Health. Canada has licensed the use of
fibrinogen sourced from pooled plasma.
Potential additional revenues may be generated from the Autologous
Fibrinogen Device by virtue of the Company's proprietary disposable bag set
designed for processing the patient's plasma. Each use of the Autologous
Fibrinogen Device will require use of a proprietary sterile bag set that the
Company currently proposes to sell, thereby potentially creating a continuing
stream of revenues that will rise with the cumulative number of autologous
fibrinogen devices operating, and the number of procedures executed with each
device. The Company expects to license the manufacture and sale of the sterile
bags (containers) in both Japan and Europe in return for a 10% royalty on net
sales from such licenses.
The Autologous Fibrinogen Device is still in its pre-production phase and
is subject to FDA permission to market in the United States. No assurance can
be given that the FDA will grant permission to market the Autologous Fibrinogen
Device, or that a market within the United States will develop if approved.
See "Risk Factors -- Government Regulations Associated with the Products".
Initially, the Company intends to concentrate on foreign markets where
fibrinogen, sourced from pooled plasma, is currently used to market the device
pending further applications for approval by the FDA.
STEM CELL CRF STORAGE AND RETRIEVAL SYSTEM WITH DISPOSABLE CONTAINER.
Placental stem cells have been identified by Dr. Pablo Rubinstein as a superior
alternative replacement to bone marrow for the reconstitution of the immune
system. Dr. Rubinstein is director and chief scientist of the F.H. Allen
Laboratory of Immunologenetics, Lindsey F. Kimball Research Institute of the
New York Blood Center. Dr. Rubinstein directed a National Institute of Health
funded research program which demonstrated the effectiveness of stem and
progenitor cells sourced from placental blood in accomplishing reconstitution
of the immune system in patients unrelated to the donor source. For optimum
therapeutic benefit, it is necessary to harvest and inventory thousands of
cryopreserved placental stem cell donations, all of which must be genetically
typed. In conjunction with Dr. Pablo Rubinstein's research over the past few
years, the Company developed a sterile bag set for collecting, processing, and
freezing the stem cells sourced from placental blood, and is designing a
sophisticated liquid nitrogen storage system which provides controlled rate
freezing ("CRF") of the stem cells and which robotically archives up to 2,500
donations (the "Stem Cell Storage and Retrieval System") for use in an
international blood banking network. A laboratory prototype of the Stem Cell
Storage and Retrieval System is in its initial phase of development. No
assurance can be given that the Company will be able to develop a Stem Cell
Storage and Retrieval System and if developed, that a market for such system
will develop. See "Risk Factors - Dependence on New Markets; Government
Regulations Associated with the Products". The Stem Cell Storage and Retrieval
System also features a disposable clip designed to protect the stem cell bag at
below freezing temperatures and assists the recording of temperatures that may
provide revenues to the Company in addition to revenues from sales of the
system.
For a more complete discussion of the Company and its business and other
properties, refer to the Company's Annual Report on Form 10-KSB, which is
incorporated herein by reference.
EMPLOYEES
At fiscal year ended June 30, 1995, the Company employed thirty-two (32)
regular full time employees. In order to complete research and design, to
build, market and service the new products in development, the Company hired an
additional eight (8) engineers, six (6) production personnel, a sales manager,
and six (6) additional customer support, marketing and administrative
employees. At March 1, 1996, the Company employed fifty-one (51) full time
employees. The Company considers current staffing levels adequate at this
time, but may need to add additional personnel to meet shortened production
times or to handle increases in business. Similarly, any downturn in product
markets or sales might result in decreases in the number of full time
employees.
- 3 -
SUMMARY OF THE OFFERING
The Company is registering 4,400,000 shares of Common Stock on behalf of
the Selling Stockholders, and offering 1,210,000 shares of Common Stock upon
the exercise of outstanding Warrants. The Common Stock and Warrants were
issued in connection with a December 1995 private placement by the Company of
88 Units at $25,000 per Unit. Each Unit consisted of fifty thousand shares of
Common Stock and a Warrant to purchase an additional twelve thousand five
hundred (12,500) shares of Common Stock at $1.50 per share. The Company also
granted the placement agent Warrants to purchase 8.8 Units at $30,000 per Unit,
each Unit having the same terms as the Units offered in the private placement,
including the July 31, 1996 expiration of the Warrants to be issued as part of
those Units. See "The Company and Recent Events - Recent Financing".
The Company will receive no proceeds from the sale of the 4,400,000 shares
of Common Stock that may be offered and sold from time to time or by the
Selling Shareholders.
USE OF PROCEEDS
Assuming Warrants to purchase all of the 1,210,000 shares are exercised,
the Company expects to receive $1,815,000 before deducting expenses of
approximately $38,018 associated with this Offering. In addition, if the
placement agent Warrants to acquire the additional 8.8 Units are exercised, the
Company will also receive $264,000. The Company intends to use any amounts
received from the exercise of these Warrants for general corporate purposes.
As of March 14, 1996, the average high and low price of one share of
Common Stock was $1.50. In light of the current market price for one
share of Common Stock, and the exercise price of the Warrants, it is unlikely
at this time that a holder of a Warrant would exercise the Warrant.
The Company will not receive any proceeds upon the sale of Common Stock by
the Selling Stockholders.
SELLING STOCKHOLDERS
The following table identifies the Selling Stockholders, as of March
15, 1996, and indicates (i) the nature of any material relationship that
such Selling Stockholders have had with the Company for the past three years,
(ii) the number of shares of Common Stock held by the Selling Stockholders,
(iii) the amount to be offered for the Selling Stockholders' account, and (iv)
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 pursuant to this Offering. The Selling Stockholders
are not obligated to sell their Common Stock offered in this Prospectus and may
choose not to sell any of their shares or only a part of their shares.
The shares of Common Stock offered by the Selling Stockholders may be
offered for sale from time to time at market prices prevailing at the time of
sale or at negotiated prices, and without payment of any underwriting discounts
or commissions except for usual and customary selling commissions paid to
brokers or dealers. The Company will not receive any proceeds from the sale of
the Common Stock by the Selling Stockholders.
Under the Exchange Act, any person engaged in a distribution of the shares
of Common Stock of the Company offered by this Prospectus may not
simultaneously engage in market making activities with respect to the Common
Stock of the Company during the applicable "cooling off" periods prior to the
commencement of such distribution. In addition, and without limiting the
foregoing, each Selling Stockholder will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder including, without
limitation, Rules 10b-6 and 10b-7, which provisions may limit the timing of
purchases and sales of Common Stock by the Selling Stockholders.
With regard to the shares offered by the Selling Stockholders such shares
may be sold on the Nasdaq Stock Market or in private transactions at prices to
be determined at the time of sale. Such shares may be offered through broker-
dealers, acting on the Selling Stockholders' behalf, who may offer the shares
at then current market prices. Any sales may be by block trade. The Selling
Stockholders and any brokers, dealers or others who participate with the
Selling Stockholders in the distribution of such shares of Common Stock may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions or fees received by such persons and any profit on the resale of
such shares purchased by such persons may be deemed to be underwriting
commissions or discounts under the Securities Act. Sales may be made by all
Selling Stockholders pursuant to the Registration Statement of which this
Prospectus is a part.
SHARES BENEFICIALLY OWNED SHARES TO BE SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING SOLD AFTER OFFERING
NAME OF BENEFICIAL OWNER NUMBER(1) PERCENTAGE NUMBER{(1)} NUMBER PERCENTAGE
Jack and Albena Acampora 305,800 1.23% 125,000 180,800 *
MAN & CO FBO
Kenneth J. Acampora, IRA 119,500 * 62,500 57,000 *
Codron Family Revocable
Trust, Ray and Rebecca
Codron, Trustees 62,500 * 62,500 0 *
Gary Boster 62,500 * 62,500 0 *
Viola F. Coelho 62,500 * 62,500 0 *
MAN & CO. IRA
Registration FBO
Robert R. Dorfler 97,500 * 62,500 35,000 *
L. Michael Howell 79,500 * 62,500 17,000 *
MAN & CO. IRA
Registration FBO
Robert Howard 92,566 * 62,500 30,066 *
John Hundley 62,500 * 62,500 0 *
Karnell Family Trust 225,000 * 125,000 100,000 *
Henry J. Roth 99,500 * 62,500 37,000 *
Neal Shindel 145,000 * 62,500 82,600 *
MAN & CO. IRA
Registration FBO
Gregory Smith 31,250 * 31,250 0 *
MAN & CO. IRA
Registration FBO
Marc Summers 156,666 * 62,500 94,166 *
Star Bank FBO
IRA Rollover #06-8580
Richard Wagner 62,500 * 62,500 0 *
MAN & CO. FBO
Ross L. Wilcox IRA 103,512 * 62,500 41,012 *
Fred Kaeffer 62,500 * 62,500 0 *
Warren Linney 142,500 * 62,500 80,000 *
Doug Linney 172,500 * 62,500 110,000 *
MAN & CO. IRA
Registration FBO
Gary D. Levine IRA 75,160 * 62,500 12,660 *
Mercedes Group Limited
Partnership 250,000 * 250,000 0 *
Thomas F. Miller 125,000 * 125,000 0 *
Lucille E. Post Revocable
Living Trust 97,500 * 62,500 35,000 *
Bert Rettner IRA 66,500 * 62,500 4,000 *
Jack and Katherine Richey 195,000 * 125,000 70,000 *
MAN & CO. IRA
Registration FBO
Mark Rosenberg 93,750 * 93,750 0 *
David Acampora 255,856 1.03% 125,000 130,866 *
MAN & CO. IRA
Registration FBO
Jerry Alcone 62,500 * 62,500 0 *
MAN & CO. IRA
Registration FBO
J. Lynton Allred IRA
Rollover 78,100 * 62,500 15,600 *
MAN & CO. IRA
Registration FBO
Ann Lyn Batcheller 62,500 * 62,500 0 *
J. Tashoff Bernton 125,000 * 125,000 0 *
Daniel and Robert Bock,
tenants in common 62,500 * 62,500 0 *
The Bridge Fund N.V.
De Ruyterkade 58A/ 137,500 * 137,500 0 *
Samuel Bronstein 62,500 * 62,500 0 *
Spencer Brown 75,300 * 62,500 12,800 *
MAN & CO. IRA
Registration FBO
Fred Burstein 93,750 * 93,750 0 *
MAN & CO. IRA
Registration FBO
Daniel Cetina 62,500 * 62,500 0 *
DMS Partnership 62,500 * 62,500 0 *
Smith Barney as IRA
Rollover Custodian for
Leonard H. Dreyer 62,500 * 62,500 0 *
Michael J. Ernemann 112,500 * 62,500 50,000 *
Robert A. Ferkula 62,500 * 62,500 0 *
Harry Franz 89,273 * 62,500 26,773 *
Michael D. Friedman 70,500 * 62,500 8,000 *
John G. Gorman, M.D.
Pension Plan U-A 1-1-92 62,500 * 62,500 0 *
Daniel Harkins 31,250 * 31,250 0 *
Eugene and Shirley
Hudson, JTWROS 62,500 * 62,500 0 *
Jeffrey Huls 62,500 * 62,500 0 *
Rebecca A. Huls 62,500 * 62,500 0 *
Vickie S. Huls 62,500 * 62,500 0 *
Jasminville Corp. N.V. 125,000 * 125,000 0 *
James & Betty
Kleinegger, JTWROS 62,500 * 62,500 0 *
Heartland Trust Co. TTEE for
Fargo Water 401K 62,500 * 62,500 0 *
Larry and Ann Larson
JTWROS 221,400 * 62,500 158,900 *
John Levine 228,516 * 62,500 166,016 *
Mercedes Group Limited
Partnership 62,500 * 62,500 0 *
Albert J. Naftel 62,500 * 62,500 0 *
Tom W. Parker 62,500 * 62,500 0 *
Marvin J. Pollak Trust
U/A 5-22-90 62,500 * 62,500 0 *
Dean Rosow 92,500 * 62,500 30,000 *
Bonnie Rost 69,500 * 62,500 7,000 *
William L. Schlueter 62,500 * 62,500 0 *
Jeffrey J. Scott 62,500 * 62,500 0 *
Arnold Appelbaum 162,500 * 62,500 100,000 *
Leroy Canterbury Trust
DTD 5-14-95 Leroy and
Shirley Canterbury TTEES 62,500 * 62,500 0 *
K. George Collings 62,500 * 62,500 0 *
Dean Harry Franz 125,000 * 125,000 0 *
Katharine Beaty Gaston 50,000 * 50,000 0 *
Intergalactic Growth
Fund, Inc. 125,000 * 125,000 0 *
John K. Koll 62,500 * 62,500 0 *
The Overholt Family
Partnership 31,250 * 31,250 0 *
MAN & CO. FBO
Emmett Mitchell IRA 50,000 * 31,250 18,750 *
William J. Scott 62,500 * 62,500 0 *
MAN & CO. FBO
Wayne Stern IRA 125,000 * 125,000 0 *
Richard K. Wertz, TTEE
Wertz Family Trust
DTD 1-4-90 62,500 * 62,500 0 *
Lee S. and Janet E.
Yosowitz, IRA 75,166 * 62,500 0 *
FOOTNOTES TO TABLE
* Less than one percent.
(1) Includes shares underlying Warrants, which are immediately exercisable, to
purchase one fifth of the listed shares.
DESCRIPTION OF SECURITIES
Pursuant to its Amended and Restated Certificate of Incorporation, the
Company is authorized to issue two classes of capital stock, designated as
Common Stock and Preferred Stock. The authorized Common Stock consists of
50,000,000 shares, $.001 par value, and the authorized Preferred Stock consists
of 2,000,000 shares, $.001 par value.
As of March 14, 1996, the number of shares of Common Stock
outstanding was 24,765,434. There are no shares preferred stock outstanding.
<R/>
COMMON STOCK
Holders of shares of the Common Stock have full voting rights, one vote
for each share held of record. Subject to preferential rights of holders of
any series of Preferred Stock, holders of shares of Common Stock are entitled
to receive such dividends as may be declared by the Board of Directors out of
funds legally available therefor, and share pro rata in any distributions to
stockholders upon liquidation. The holders of shares of Common Stock have no
conversion, preemptive or other subscription rights. All of the outstanding
shares of Common Stock are, and the shares offered hereby will be, validly
issued, fully paid and nonassessable.
PREFERRED STOCK
The Company's Board of Directors is authorized to establish, upon
authorization of a series or designation of Preferred Stock, the rights,
preferences, privileges, and restrictions on such stock. The Company currently
has no Preferred Stock outstanding, and the Board of Directors has not
established any rights, preferences, privileges or restrictions on such stock.
OPTIONS
As of March 5, 1996, the Company has outstanding options to
acquire 2,222,000 shares of Common Stock at exercise prices ranging from $.82
to $1.50 per share. Some of these options are subject to vesting, and in
general, have a five year exercise period.
WARRANTS
The Company issued warrants to purchase an aggregate of 85,000 shares of
Common Stock in connection with the private placement that concluded in
February 1993. Those warrants may be exercised in whole or in part any time
before February 5, 1998, at an exercise price of $.60 per share. The exercise
price may adjusted from time to time in the event the Company subdivides or
combines its outstanding Common Stock. The Company was obligated to register,
and did register the underlying Common Stock of the Warrants under the
Securities Act, upon the one-time request of holders of fifty percent (50%) of
those warrants.
The Company issued Warrants to purchase an aggregate of 1,210,000 shares
of Common Stock in connection with the private placement of Units that was
concluded in December 1996. The Warrants may be exercised in whole or in part
anytime before July 31, 1996. The 1,210,000 shares are issuable at an exercise
price of $1.50 per share. The exercise price may be adjusted from time to time
in the event the Company subdivides or combines its outstanding Common Stock.
The Company is contractually obligated to register the shares of Common Stock
underlying the Warrants with the Commission pursuant to the provisions of the
Securities Act. As part of the placement agent's compensation in the 1995
private placement of Units, additional Warrants to purchase 8.8 Units at an
exercise price of $30,000 per Unit were also issued, each Unit consisting of
fifty thousand (50,000) shares of Common Stock and a purchase Warrant to
purchase an additional twelve thousand five hundred (12,500) shares of Common
Stock, exercisable at $1.50 per share. The Warrants to be issued as part of
the Units, and exercisable at $1.50 per share, have been included in the
1,210,000 Warrants. The Warrants will expire on July 31, 1996, unless
exercised by the holders thereof prior to that date. See "The Company and
Recent Events - Recent Financing".
INVESTOR LOCK-UP
Investors in the private placement of Units were required to enter into an
agreement not to sell, directly or indirectly, the Common Stock included in the
Units purchased for a period of 180 days following the effective date of a
registration statement registering such shares for resale. The placement agent
of the private placement o f Units may waive that condition and allow for
resale earlier under certain conditions. The placement agent has advised the
Company that in giving or withholding its approval, it will consider the effect
that any such sale will have on the maintenance of an orderly market for the
Company's securities. See "The Company and Recent Events - Recent Financing".
REGISTRATION OBLIGATION
As part of the private placement of the Units, the Company agreed to
register the shares of Common Stock and shares of Common Stock underlying the
Warrants issued in the Units for resale under the Securities Act by filing with
the Commission a registration statement on Form S-3 (the "Registration
Obligation"). The Company has agreed to prepare and file such registration
statement no later than ninety (90) days following the final closing of the
private placement. In the event the registration statement on Form S-3 was not
filed within the ninety (90) day period, the exercise price of the Warrants
issued as part of the Units would have automatically been reduced, pursuant to
the terms of the Warrant, to $1.00 per share. The Company complied with its
obligation to file the registration statement, and the repricing provision is
of no further effect. The Company paid all expenses necessary to prepare and
file the registration statement. See "The Company and Recent Events - Recent
Financing".
VOTING RIGHTS; DIVIDENDS
The holders of Common Stock will be entitled to one vote for each share
held of record on each matter submitted to a vote of shareholders. Further,
the holders of Common Stock will be entitled to receive ratable dividends when
and as declared by the Board of Directors from funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, the holders of Common Stock will be entitled to share ratably in all
assets remaining after payment to holders of any series of preferred stock or
of any other senior securities outstanding at such time. It is anticipated
that the Company will not be declaring dividends in the near future.
CERTIFICATE OF INCORPORATION AND BYLAWS
The Company's Amended and Restated Certificate of Incorporation provides
for the indemnification of directors and officers for certain acts to the
fullest extent permitted by Delaware Law. Further, the Company's bylaws
provide authority for the Company to maintain a liability insurance policy
which insures directors or officers against any liability incurred by them in
their capacity as such.
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, the Company has
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 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 Act and will be governed by the final adjudication
of such issue.
TRANSFER AGENT
The Trust Company of New Jersey, Thirty-Five Journal Square, Jersey City,
New Jersey 07306 is the transfer agent for the Company's Common Stock.
EXPERTS
The financial statements of THERMOGENESIS CORP. appearing in THERMOGENESIS
CORP.'s Annual Report (Form 10-KSB) for the year ended June 30, 1995, have been
audited by Ernst & Young, LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
The legality of the shares of Common Stock offered by the Company and the
selling stockholders by this Prospectus will be passed upon for the Company by
Weintraub Genshlea & Sproul of Sacramento, California.
- 4 -
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 the
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 $ 2,518.63
Printing and engraving expenses *$ 500.00
Accounting fees and expenses *$ 15,000.00
Legal fees and expenses *$ 20,000.00
Transfer agent and registrar fees*$ -0-
Fees and expenses for qualification
under state securities laws $ -0-
Miscellaneous *$ -0-
TOTAL $ 38.018.63
* 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 the
Company's 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, the Company is 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 the 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 the Company or its 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 the best interests of the
Company and, in the case of a criminal proceeding, has no reasonable cause to
believe the conduct of such person was unlawful. In addition, the Company 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 the 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 the Company or its 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 the Company and its shareholders. The
Company 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.
In addition, although the Company does not have director's and officer's
insurance, the Company's bylaws provide the Company authority to maintain a
liability insurance policy which insures directors or officers against any
liability incurred by them in their capacity as such, or arising out of their
status as such. The Company intends to seek such insurance in the future.
Item 16. Exhibits and Financial Statement Schedules
EXHIBIT DESCRIPTION
1.01 Unit Placement Agreement
3.1 (a) Amended and Restated Certificate of Incorporation (5)
(b) Revised Bylaws (5)
5.1 Opinion of Weintraub Genshlea & Sproul counsel *
to the registrant
10.1 (a) Letter of Agreement between Liquid Carbonic, Inc.
Canada and THERMOGENESIS, CORP. (2)
(b) Letter of Agreement between Fujitetsumo USA and
THERMOGENESIS, CORP. (2)
(c) Letter of Agreement between Fujitetsumo Japan
and THERMOGENESIS, CORP. (2)
(d) Letter of Agreement between THERMOGENESIS, CORP.
and Liquid Carbonic, Inc. Sale of Convertible
Debenture (3)
(e) License Agreement between Stryker Corp. and
THERMOGENESIS, CORP. (7)
(f) Lease of Office and Mfg. Space (5)
(g) Executive Development and Distribution Agreement
between THERMOGENESIS and Daido Hoxan Inc. (4)
(h) Administrative Office Lease (8)
(i) Employment Agreement for Philip H. Coelho (5)
(j) Employment Agreement for Charles de B. Griffiths (5)
11.1 Statement of Computation of Net Income (Loss) Per Share (6)
23.1 Consent of Weintraub Genshlea & Sproul is contained in
Exhibit 5.1 *
23.2 Consent of Ernst & Young, LLP is contained in Part II,
page II-4 of the registration statement
24.1 Power of Attorney contained on Signature Page, Part II,
page II-5, as originallly filed on March 6, 1996.
FOOTNOTES TO INDEX
(1) Incorporated by reference to Registration Stmt No. 33-12210-A of
THERMOGENESIS, CORP. filed on June 4, 1987.
(2) Incorporated by reference to Registration Statement No. 33-37242 of
THERMOGENESIS, CORP. filed on Feb. 7, 1991.
(3) Incorporated by reference to Form 8-K for July 19, 1993
(4) Incorporated by reference to Form 8-K for June 9, 1995.
(5) Incorporated by reference to Form 10-KSB for the year ended
June 30, 1994
(6) Incorporated by reference to Form 10-KSB for the year ended
June 30, 1995
(7) Incorporated by reference to Form 8-K for September 27, 1995
(8) Incorporated by reference to Form 10-QSB for the quarter ended
December 31, 1995
* Filed herewith by pre-effective amendment number 1 to Form S-3
Item 17. Undertakings
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 to include any material
information with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such information in the
registration statement;
(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 which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company 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.
For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
satement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus 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.
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 33-31479) and related Prospectus of
THERMOGENESIS CORP. for the registration of 6,050,000 shares of its common
stock and to the incorporation by reference therein of our report dated
August 23, 1995, with respect to the financial statements of THERMOGENESIS
CORP. included in its Annual Report (Form 10-KSB) for the year ended
June 30, 1995, filed with the Securities and Exchange Commission.
Sacramento, California
March 15, 1996 ERNST & YOUNG, LLP
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 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 Rancho Cordova, County of Sacramento, State of California,
on the 15th day of March, 1996.
THERMOGENESIS CORP.
Philip H. Coelho, C.E.O. and
President
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: March 15, 1996
Philip H. Coelho, C.E.O. , President,
and Chairman of the Board
(Principal Executive Officer)
s/Philip H. Coelho Dated: March 15, 1996
Charles de B. Griffiths, V.P.,
Secretary, and Director
(by Philip H. Coelho)**
s/Philip H. Coelho Dated: March 15, 1996
Merrill K. Parker, Controller
(Principal Accounting Officer
and Principal Financial Officer)
(by Philip H. Coelho)**
s/Philip H. Coelho Dated: March 15, 1996
Sid V. Engler , Director
(by Philip H. Coelho)**
s/Philip H. Coelho Dated: March 15, 1996
Noel K. Atkinson, Director
(by Philip H. Coelho)**
**Signed pursuant to power of attorney contained on the signature page and
filed withth registration statement on Form S-3 filed with the
Commission on March 6, 1996.