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As filed with the Securities and Exchange Commission on April 8, 1996
Registration No. 333-759
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ADVANCED POLYMER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2875566
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
3696 HAVEN AVENUE, REDWOOD CITY, CALIFORNIA 94063 (415) 366-2626
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
MICHAEL P.J. O'CONNELL
3696 HAVEN AVENUE, REDWOOD CITY, CALIFORNIA 94063
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with copies of all orders, notices and communications to:
Richard A. Peers
Heller, Ehrman, White & McAuliffe
525 University Avenue, Palo Alto, California 94301 (415) 324-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
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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/
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE PRICE REGISTRATION FEE
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Common Stock, $.01 par value 1,097,711 $8.26 (1) $ 9,067,093.00 (1) $3,127.00 (1)
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Common Stock, $.01 par value 197,500 $7.00 (2) $ 1,382,500.00 (2) $ 477.00
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TOTAL: 1,295,211 - $10,449,593.00 $3,604.00 (3)
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(1) Estimated solely for purpose of computing the amount of the registration
fee based on the average of the high and low prices of the Common Stock on
the Nasdaq National Market on April 4, 1996, as reported in The Wall
Street Journal.
(2) Calculated using as the offering price the exercise price of warrants
pursuant to which such shares may be issued by the Registrant.
(3) Of this amount, $2,457 was previously paid.
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.
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PROSPECTUS 1,295,211 SHARES, INCLUDING 197,500 SHARES
ISSUABLE ON EXERCISE OF OUTSTANDING WARRANTS
TO PURCHASE COMMON STOCK AT A PRICE OF
$7.00 PER SHARE (THE "WARRANTS")
ADVANCED POLYMER SYSTEMS, INC.
Of the 1,295,211 shares (the "Shares") of Common Stock, $.01 par value,
(the "Common Stock") of Advanced Polymer Systems, Inc. (the "Company" or "APS")
covered by this prospectus (the "Prospectus), 197,500 Shares are issuable by the
Company on exercise of warrants ("Warrants") to purchase Common Stock and
1,097,711 of the Shares are currently outstanding. All of the Shares may be sold
by the holders of Shares (collectively, the "Selling Stockholders") named in
this Prospectus. See "Selling Stockholders." The Company will not receive any
of the proceeds from the sale of Shares by the Selling Stockholders; however,
the Company could receive up to $1,382,500 on the exercise of the Warrants.
The Company has not made any underwriting arrangements with respect to
the Shares issuable on exercise of the Warrants. The Company's Common Stock is
traded on the Nasdaq National Market under the symbol "APOS". On April 4,
1996, the closing price for the Common Stock, as reported on the Nasdaq
National Market, was $8.38.
Shares covered by this Prospectus may be offered for sale from time to
time by the Selling Stockholders at such prices and on such terms as may then
be obtainable, in negotiated transactions, or otherwise. See "Plan of
Distribution." This Prospectus may be used by the Selling Stockholders or by
any broker-dealer who may participate in sales of securities covered hereby.
The Selling Stockholders and the brokers and dealers through whom such sales
are effected may be deemed to be underwriters under the Securities Act of 1933,
as amended (the "Securities Act"). The Selling Stockholders will pay all
commissions, transfer taxes, and other expenses associated with the sales of
securities by them. The Company has paid the expenses of the preparation of
this Prospectus. The Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities arising under the Securities
Act.
APS has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act with respect to
the securities offered by this Prospectus. As permitted by the rules and
regulations of the commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to APS and the
securities offered hereby, reference is made to the Registration Statement and
the exhibits thereto, which may be examined without charge at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of which may be obtained from
the Commission upon payment of the prescribed fees.
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SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
(See "RISK FACTORS" on Page 3.)
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is April 8, 1996
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No dealer, salesman, or any other person has been authorized to give
any information or to make any representations or projections of future
performance other than those contained in this Prospectus, and any such other
information, projections, or representations, if given or made, must not be
relied upon as having been so authorized. The delivery of this Prospectus or
any sale hereunder at any time does not imply that the information herein is
correct as of any time subsequent to its date. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction where, and to any person to whom,
it is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
This Prospectus omits certain of the information contained in the
Registration Statement covering the Common Stock that is on file with the
Securities and Exchange Commission (the "Commission"). The Company is subject
to the informational requirements of the Securities Exchange Act of 1934, as
amended (the "1934 Act") and in accordance therewith files reports, proxy
statements and other information with the Commission. Such Registration
Statement, reports, proxy statements and other information can be inspected and
copied at public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at such address. Such reports, proxy statements and other
information can also be inspected at the Commission's regional offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison,
Chicago, Illinois 60661, and at the offices of the Nasdaq Stock Market at 9513
Key West Avenue, Rockville, Maryland 20850-3389.
DOCUMENTS INCORPORATED BY REFERENCE
There are hereby incorporated in this Prospectus by reference the
following documents filed pursuant to the 1934 Act: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995; (ii) the
Company's Proxy Statement for the Annual Meeting of Shareholders held on June
14, 1995; and (iii) the description of the Company's securities contained in its
Form 8-A Registration Statements filed pursuant to Section 12 of the 1934 Act.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus has
been delivered, upon the written or oral request of such person, a copy of any
or all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents which are not specifically incorporated by reference into the
information that this Prospectus incorporates. Requests for such copies should
be directed to: Advanced Polymer Systems, Inc., 3696 Haven Avenue, Redwood
City, California 94063, Attention: Investor Relations, Telephone: (415)
366-2626.
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RECENT DEVELOPMENTS
The Company has filed two new drug applications ("NDA") with the U.S.
Food and Drug Administration ("FDA") and is awaiting final action by the FDA on
these applications. The first NDA covers a melanin-based sunscreen product for
the Company's own portfolio and the second NDA covers a prescription acne
preparation licensed to Ortho McNeil Pharmaceuticals (a Johnson & Johnson
subsidiary).
During the third and fourth quarters of 1995, the Company received
cash infusions of $7.4 million in the form of bank borrowing of $3.0 million, a
lease financing for $2.9 and subordinated debt of $1.5 million.
RISK FACTORS
The Shares of Common Stock offered hereby by the Selling Stockholders
involve a high degree of risk and prospective purchasers should carefully
consider the following factors.
History of Losses. The Company has incurred cumulative losses through
December 31, 1995 of approximately $62 million, of which approximately $9.4
million was incurred in the year ended December 31, 1995, and anticipates
that losses will continue for at least the next 12 months as the Company
continues research, development, production and marketing activities.
There can be no assurance that future revenues from product sales will be
significant, that the Company will be able to sell products at a profit or that
the Company will become profitable.
Capital Resources. On December 31, 1995, the Company had $5.2
million in cash, cash equivalents and short-term marketable securities. In the
year ended December 31, 1995, cash of approximately $8.5 million was used by
operations. The Company's existing cash, cash equivalents and short-term
marketable securities, collections of trade accounts receivable, interest income
and funds generated from operations, are expected to be sufficient to meet the
Company's near-term cash requirements assuming no changes to existing business
plans. However, if the Company's costs are higher than expected or revenues do
not meet expectations, the Company may have to pursue other opportunities to
generate additional cash to sustain and develop its business, including joint
ventures, licensing and other debt and equity financings. If such additional
funding is required, but is unavailable on commercially reasonable terms, the
Company would have to significantly reduce operating expenses, by decreasing
spending on advertising and promotion activities, outside clinical programs and
a variety of other discretionary external expenditures, which could adversely
affect operations.
New Technology; No Proof of Market Acceptance. The Company's
Microsponge(R) products are based on relatively new technologies. The Company
has successfully entrapped numerous ingredients and agents (such as sunscreens,
moisturizers, fragrances and oils) and believes its products provide greater
efficacy and increased functionality. However, commercialization of products
utilizing the Company's Microsponge delivery systems is only now beginning, and
there can be no assurance that such products will be successfully
commercialized by the Company or others.
Marketing. The Company is utilizing a combination of collaboration
agreements and independent efforts to market its Microsponge products. The
collaborative arrangements are intended to provide APS with the marketing
expertise and/or financial strength of other companies. There can be no
assurance that such collaborative arrangements will prove successful in
marketing products on behalf of the Company. The Company markets four of its
own consumer products, as well as several consumer products produced by Johnson
& Johnson Consumer Products, Inc. ("Johnson & Johnson"), through its wholly
owned subsidiary Premier, Inc. ("Premier") which the Company acquired in April
1993. Premier has had a limited history in marketing certain over-the-counter
drug and toiletry products, and there can be no certainty that Premier will be
able to continue to market products produced by the Company or others.
Seasonality. The business of Premier is highly seasonal. Currently,
it markets and distributes two sunscreen product lines and a depilatory product
line, the sales of which are heavily weighted to the first two fiscal quarters.
Consequently, results of operations for these interim periods are not
necessarily indicative of results for the full fiscal year.
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Dependence on Key Employees. The Company's developments to date and
in the future depend greatly on the efforts of key management and technical
employees. The loss of any of these key contributors could have an adverse
impact on the progress of the Company's business.
Inventory Build-Up. The Company's exclusive distribution arrangement
with Johnson & Johnson requires Premier to increase inventory levels at the
beginning of each year sufficient to satisfy anticipated demand for sunscreen
products during the selling season. Extended terms are given to the Company on
these products by Johnson & Johnson so that accounts payable are not due until
the third fiscal quarter. The Company offers similar extended terms to
retailers, and anticipates paying amounts owed to Johnson & Johnson from retail
accounts receivable.
Government Regulation. Certain of the Company's products are subject
to regulation by numerous national and local governmental authorities in the
United States and by like regulatory authorities in other countries where the
Company intends to test and market pharmaceutical products that it may develop.
The regulatory process, which includes preclinical testing and clinical trials
to establish product safety and efficacy, can take many years and require the
expenditure of substantial resources. There can be no assurance that even
after such time and expenditure, regulatory agency approvals will be obtained.
Moreover, if regulatory agency approval of a product is granted, such approval
may entail limitations on the indicated uses for which the product may be
marketed. Further, even if such regulatory approval is obtained, a marketed
product and its manufacture are subject to continued review by regulatory
authorities.
In addition, although personal care products are not currently subject
to active regulation by the FDA in the same manner as pharmaceutical products,
more extensive regulation could occur in the future. Such regulation could
impose additional costs on the Company or slow the introduction of personal
care products utilizing the Company's delivery systems.
Competition, Markets and Technological Change. Other companies are
developing products based on enhanced delivery technologies for cosmetic,
therapeutic and industrial applications, and technological developments are
expected to occur at a rapid pace. There can be no assurance that other
technologies will not prove superior to the Company's technology. APS is in
competition with other companies that possess greater financial and technical
resources, manufacturing and marketing capabilities, and experience in testing
and obtaining any necessary regulatory approval. The Company also competes
with many companies, most with greater financial resources, in marketing
over-the-counter personal care products.
Manufacturing. Products utilizing the Company's Microsponge delivery
systems must be manufactured at a competitive cost in far greater quantities
than now produced by the Company. The Company has a manufacturing facility in
Lafayette, Louisiana, and research laboratory and pilot plant facilities in
Lafayette, Louisiana and in Redwood City, California. The Company's
manufacturing capacity is currently 750,000 to 1,000,000 pounds a year, but
successful commercialization of certain products may require manufacturing in
quantities exceeding the Company's current capacity. The Company believes it
can increase its manufacturing capacity through installation of additional
equipment, but there can be no assurance that the Company will be able to
achieve the requisite increase in manufacturing capacity within the time and at
a cost commensurate with effective product commercialization.
Patents and Trade Secrets. There can be no assurance that any patents
owned or controlled by APS will provide commercially significant protection of
the Company's technology or ensure that the Company may not be determined to
infringe valid patents of others. The Company's patents have not been tested
in court, and the validity and scope of the Company's proprietary rights could
be challenged. The Company has also received foreign patents, but since the
patent laws of foreign countries differ from those of the United States, the
degree of protection afforded by any foreign patents may be different from that
available under U.S. patent laws.
The Company also relies on trade secrets and proprietary know-how
which it seeks to protect by confidentiality agreements with its collaborators,
employees and consultants. There can be no assurance that these agreements
will not be breached, that the Company will have adequate remedies for any
breach or that the Company's trade secrets and proprietary know-how will not
otherwise become known or be discovered by competitors.
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Possible Volatility of Stock Price; Shares Eligible for Future Sale.
The market price of the Company's Common Stock has been and may continue to be
highly volatile. Future events, many of which will be beyond the control of
the Company, as well as expected quarterly fluctuations in revenues and
financial results, may have a significant impact on the market price of the
Company's Common Stock. Future sales of Shares by the Selling Stockholders or
by other current stockholders and by option holders and warrant holders who
exercise Company stock options or warrants could have a depressive effect on
the market price of the Company's Common Stock.
Reliance on Collaborators. The Company has entered into collaborative
agreements with certain major corporations pursuant to which such companies are
entitled to certain product and marketing rights. The Company also expects to
rely, at least in part, on additional collaborative agreements to develop and
commercialize certain future products. There can be no assurance that the
Company will be able to negotiate acceptable collaborative agreements in the
future, or that the Company's existing collaborative agreements or such future
collaborative agreements will be successful.
Anti-Takeover Provisions. The Company's Board of Directors may
authorize the issuance of up to 2,500,000 shares of Preferred Stock and fix the
rights thereof, without any vote or action by the stockholders. The issuance of
Preferred Stock may have the effect of delaying, deferring or preventing a
change of control of the Company, and the existence of this anti-takeover
provision could make the Company less attractive to any potential acquiror and
could result in stockholders receiving less for their shares than would
otherwise be available in the event of a takeover attempt.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. The Company could receive up to $1,382,500
if the Warrants are exercised in full. No assurance can be given that any of
the Warrants will be exercised. The Company expects that any net proceeds from
the exercise of the Warrants will be used for working capital and general
corporate purposes, including product development and marketing. Pending
utilization, such funds will be invested in money market and other short-term
interest bearing obligations.
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SELLING STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock by the Selling Stockholders
as of March 31, 1996 and as adjusted to reflect the sale by Selling Stockholders
of Shares offered by them by this Prospectus.
Common Stock Common Stock
Beneficially Owned Beneficially Owned
Prior to Offering (1) Common After Offering
--------------------- Stock --------------
to be
Number Percent Sold Number Percent
------ ------- ---- ------ -------
Johnson & Johnson(5)
Development Corporation
One Johnson & Johnson Plaza
New Brunswick, NJ 08933 2,355,107 (2) 13.1% 432,101 1,923,006 (2) 10.7%
LHC Corporation 356,761 2.0% 356,761 0 -
Dow Corning Corporation 200,000 1.1% 200,000 0 -
BioSource Technologies Inc. 94,000 * 94,000 0 -
Cupertino National Bank 36,674 (3) * 36,674(3) 0 -
Mees Pierson 10,675 * 10,675 0 -
First BIDCO 50,000(4) * 50,000(4) 0 -
Gulf Coast Business
and Industrial 15,000(4) * 15,000(4) 0 -
Stanford C. Finney, Jr. 20,000(4) * 20,000(4) 0 -
Rainbow Trading Partners Ltd. 30,000(4) * 30,000(4) 0 -
Rainbow Trading Venture
Partners L.P. 10,000(4) * 10,000(4) 0 -
Wilblairco Associates, L.P. 40,000(4) * 40,000(4) 0 -
TOTAL: 3,218,217 18.1% 1,295,211 1,923,006 10.7%
________________________________
* Less than 1%.
(1) Applicable percentage of ownership is based on 17,817,541 shares of
Common Stock outstanding as of March 31, 1996.
(2) Includes 200,000 shares of Common Stock issuable on exercise of a
warrant.
(3) Includes 32,500 shares of Common Stock issuable on exercise of a
warrant.
(4) Shares issuable on exercise of a warrant.
(5) Beneficially owns 13.1% of the Company's Common Stock outstanding as
of March 31, 1996.
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PLAN OF DISTRIBUTION
All or a portion of the Shares of Common Stock offered hereby by the
Selling Stockholders may be delivered and/or sold in transactions from time to
time on the over-the-counter market at prices prevailing at the time, at prices
related to such prevailing prices or at negotiated prices and/or may also be
used to cover any short positions previously established. The Selling
Stockholders may effect such transactions by selling to or through one or more
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling
Stockholders. The Selling Stockholders and any broker-dealers that participate
in the distribution may under certain circumstances be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions
received by such broker-dealers and any profits realized on the resale of
Shares by them may be deemed to be underwriting discounts and commissions under
the Securities Act. The Selling Stockholders may agree to indemnify such
broker-dealers against certain liabilities, including liabilities under the
Securities Act. In addition, the Company has agreed to indemnify the Selling
Stockholders with respect to the Shares offered hereby against certain
liabilities, including, without limitation, certain liabilities under the
Securities Act, or, if such indemnity is unavailable, to contribute toward
amounts required to be paid in respect of such liabilities.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Selling Stockholders (and, if they act as agent
for the purchaser of such Shares, from such purchaser). Broker-dealers may
agree with the Selling Stockholders to sell a specified number of Shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable
to do so acting as agent for the Selling Stockholders, to purchase as principal
any unsold Shares at the price required to fulfill the broker-dealer commitment
to the Selling Stockholders. Broker-dealers who acquire Shares as principal
may thereafter resell such Shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
Shares commissions computed as described above. To the extent required under
the Securities Act, a supplemental prospectus will be filed, disclosing (a) the
name of any such broker-dealers, (b) the number of Shares involved, (c) the
price at which such Shares are to be sold, (d) the commissions paid or
discounts or concessions allowed to such broker-dealers, where applicable, (e)
that such broker-dealers did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, as
supplemented, and (f) other facts material to the transaction.
The Selling Stockholders will pay all commissions, transfer taxes, and
other expenses associated with the sale of securities by them. The Shares
offered hereby are being registered pursuant to contractual obligations of the
Company, and the Company has paid the expenses of the preparation of this
Prospectus. The Company has not made any underwriting arrangements with
respect to the sale of Shares offered hereby on exercise of the Warrants. Upon
exercise of Warrants, the Shares will be issued by the Company directly to the
persons exercising the Warrants.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the authorized capital stock of the
Company consists of 50,000,000 shares of $0.01 par value Common Stock ("Common
Stock") and 2,500,000 shares of $0.01 par value Preferred Stock ("Preferred
Stock").
COMMON STOCK
As of March 31, 1996, there were 17,817,541 shares of Common Stock
outstanding held of record by 646 stockholders. The holders of Common Stock
are entitled to one vote for each share held of record on all matters submitted
to a vote of the stockholders. Subject to preferences that may be applicable
to any outstanding Preferred Stock, holders of Common Stock are entitled to
receive ratably such dividends as may be declared by the Board of Directors out
of funds legally available therefor. In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share ratably in all assets remaining after payment of liabilities and the
liquidation preference of any outstanding Preferred Stock. Holders of Common
Stock have no preemptive rights, no
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth various expenses in connection with the
sale and distribution of the securities being registered. All of the amounts
shown are estimates except for the Securities and Exchange Commission
Registration Fee.
Securities and Exchange Commission Registration Fee . . . . . . . . . $ 3,604
Accounting Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Legal Fees and Disbursements . . . . . . . . . . . . . . . . . . . . 10,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
-------
TOTAL: $19,147
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ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The registrant has the power to indemnify its officers and directors
against liability for certain acts pursuant to Section 145 of the General
Corporation Law of the State of Delaware. Section B of Article VI of the
registrant's Certificate of Incorporation provides:
"(1) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director
or officer, of the Corporation or is or was serving at the request of the
Corporation, as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof)
was authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Section B shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred
in defending any such proceeding in advance of its final disposition;
provided, however, that, if the General Corporation Law of the State of
Delaware requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be
made only upon delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such director of officer is not entitled
to be indemnified under this Section or otherwise. The Corporation may, by
action of its Board of Directors, provide indemnification to employees and
agents of the Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
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(2) Non-Exclusivity of Rights. The right to indemnification and
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Section B shall not be exclusive of any
other rights which any person may have or hereafter acquire under any
statute, provisions of this Certificate of Incorporation, Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise.
(3) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person against such
expense, liability or loss under Delaware General Corporation Law."
Registrant maintains directors' and officers' liability insurance in
the amount of $5,000,000 which covers civil liabilities. Such insurance helps
the Registrant to attract qualified officers and directors, by providing a
means for the Company to pay the costs and expenses involved in the event civil
litigation is brought against of one of the Registrant's officers or directors.
ITEM 16. EXHIBITS.
EXHIBIT DESCRIPTION
------- -----------
4.1 Investment Agreement between Registrant and Johnson &
Johnson Development Corporation dated May 13, 1994 (1)
4.2 Registration Rights Agreement between Registrant and Dow Corning
Corporation dated January 23, 1996 (2)
4.3 Form of Warrant to Purchase Common Stock issued to Cupertino
National Bank (2)
4.4 Form of Warrant to Purchase Common Stock issued to other
selling stockholders (2)
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
_____________________
(1) Filed as Exhibit 4.3 to Registration Statement on Form S-3 (No.
33-82562) and incorporated herein by reference.
(2) Previously filed.
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
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11
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offering therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(4) 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.
(5) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(6) To remove from the registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in Redwood City, State of California, on the 8th day of
April, 1996.
ADVANCED POLYMER SYSTEMS, INC.
By: /S/ MICHAEL P.J. O'CONNELL
------------------------------------
Michael P.J. O'Connell
Chief Financial Officer
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.
* Chairman of the Board and President April 8, 1996
------------------------------------------ (Principal Executive Officer)
John J. Meakem, Jr.
/S/ MICHAEL P.J. O'CONNELL Chief Financial Officer April 8, 1996
------------------------------------------ (Principal Accounting Officer)
Michael P.J. O'Connell
* Director April 8, 1996
------------------------------------------
Jorge Heller
* Director April 8, 1996
------------------------------------------
Helen C. Leong
* Director April 8, 1996
------------------------------------------
Peter Riepenhausen
* Director April 8, 1996
------------------------------------------
Toby Rosenblatt
* Director April 8, 1996
------------------------------------------
Gregory H. Turnbull
* Director April 8, 1996
------------------------------------------
Dennis Winger
* Director April 8, 1996
------------------------------------------
Carl W. Ehmann
/S/ MICHAEL P.J. O'CONNELL Chief Financial Officer April 8, 1996
------------------------------------------ (Principal Accounting Officer)
*Michael P.J. O'Connell
(Attorney-in-fact)
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ADVANCED POLYMER SYSTEMS, INC.
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
4.1 Investment Agreement between Registrant and Johnson & Johnson
Development Corporation dated May 13, 1994 (1)
4.2 Registration Rights Agreement between Registrant and Dow Corning
Corporation dated January 23, 1996 (2)
4.3 Form of Warrant to Purchase Common Stock issued to Cupertino National Bank (2)
4.4 Form of Warrant to Purchase Common Stock issued to other selling stockholders (2)
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe
(included in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
_____________________
(1) Filed as Exhibit 4.3 to Registration Statement on Form S-3 (No.
33-82562) and incorporated herein by reference.
(2) Previously filed.
1
EXHIBIT 5
April 8, 1996
10008-0000
Advanced Polymer Systems, Inc.
3696 Haven Avenue
Redwood City, CA 94036
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Advanced Polymer Systems, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (Registration No. 333-759) originally filed with the Securities and
Exchange Commission (the "Commission") on February 6, 1996 and as amended by
Amendment No. 1 thereto filed with the Commission on April 8, 1996
(collectively, the "Registration Statement") for the purpose of registering
under the Securities Act of 1933, as amended, an aggregate of 1,295,211
currently issued and outstanding shares of the Company's Common Stock, $.01 par
value (the "Shares"), all of which are to be sold by certain of the Company's
stockholders.
I.
We have assumed the authenticity of all records, documents and
instruments submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
records, documents and instruments submitted to us as copies. In rendering our
opinion, we have examined the following records, documents, instruments,
certificates:
(a) The Certificate of Incorporation of the Company certified
by the Secretary of State of the State of Delaware as of
March 15, 1996, and certified to us by the Secretary of
the Company as being complete and in full force and effect
as of the date of this opinion;
(b) The Bylaws of the Company certified to us by an officer
of the Company as being complete and in full force and effect
as of the date of this opinion;
(c) A Certificate of an officer of the Company:
(i) attaching records certified to us as
2
constituting all records of proceedings and actions of the Board of
Directors of the Company and any committees of the Board of
Directors relating to the Shares and (ii) certifying as to
certain factual matters; and
(d) The Registration Statement.
This opinion is limited to the laws of the State of California, and we
disclaim any opinion as to the laws of any other jurisdiction. We further
disclaim any opinion as to any other statute, rule, regulation, ordinance,
order or other promulgation of any other jurisdiction or any regional or local
governmental body or as to any related judicial or administrative opinion. Our
opinion to the effect that all issued and outstanding Shares are fully paid and
nonassessable is based solely on the certificate identified in item (c) above
that the consideration for the Shares recited in the Board of Directors'
resolutions authorizing the sale of the Shares was received by the Company.
II.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that: (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered and sold and (ii) all applicable
securities laws are complied with, it is our opinion that the Shares are
legally issued, fully paid and nonassessable.
III.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose, or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written consent.
We disclaim any obligation to advise you of any developments that come to our
attention after the date of this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Heller Ehrman White & McAuliffe
2
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EXHIBIT 23.2
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Advanced Polymer Systems, Inc.
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
San Francisco, California
April 5, 1996
