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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 1996
REGISTRATION NO. 333-4257
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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
INCORPORATION OR ORGANIZATION) IDENTIFICATION 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)
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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)
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WITH COPIES OF ALL ORDERS, NOTICES AND COMMUNICATIONS TO:
RICHARD A. PEERS WILLIAM E. DORAN
HELLER, EHRMAN, WHITE & MCAULIFFE SACHNOFF & WEAVER, LTD.
525 UNIVERSITY AVENUE 30 SOUTH WACKER DRIVE, 29TH FLOOR
PALO ALTO, CALIFORNIA 94301 CHICAGO, IL 60606
(415) 324-7000 (312) 207-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
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Common Stock, $.01 par value........... 201,922 $10.00(1) $2,019,220(1) $697(4)
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Common Stock, $.01 par value........... 28,846(3) $ 7.43(2) $ 214,326(2) $ 74
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Common Stock, $.01 par value........... 28,846(3) $ 9.90(2) $ 285,575(2) $ 98
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Common Stock, $.01 par value........... 28,846(3) $12.38(2) $ 357,113(2) $122
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TOTAL:....................... 288,460(3) $2,876,234 $991(5)
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933 based on the average of the
high and low prices of the Common Stock on the Nasdaq National Market on
June 3, 1996, as reported in The Wall Street Journal.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(g) under the Securities Act of 1933 based on the exercise price
per share of warrants pursuant to which such shares may be issued by the
Registrant.
(3) In accordance with Rule 416 under the Securities Act of 1933, Common Stock
offered hereby shall also be deemed to cover additional securities to be
offered or issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(4) Of this amount, $647 has been previously paid.
(5) Of this amount, $943 has been previously paid.
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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
288,460 SHARES INCLUDING 86,538 SHARES ISSUABLE ON EXERCISE
OF OUTSTANDING WARRANTS TO PURCHASE COMMON STOCK AT AN
AVERAGE EXERCISE PRICE OF $9.90 PER SHARE.
ADVANCED POLYMER SYSTEMS, INC.
Of the 288,460 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), 86,538 shares are issuable by the
Company upon exercise of warrants (the "warrants") to purchase Common Stock and
201,922 of the Shares are currently outstanding. All of the shares are being
sold by the selling stockholder named in this Prospectus or by pledgees, donees,
transferees or other successors in interest to such selling stockholder (the
"Selling Stockholders"). See "Selling Stockholders." The Company will not
receive any of the proceeds from the sale of Shares by the Selling Stockholder;
however, the Company could receive up to $857,015 on the exercise of the
warrants.
The Company has not made any underwriting arrangements with respect to the
Shares. The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "APOS". On June 3, 1996, the closing price for the Common Stock, as
reported on the Nasdaq National Market, was $10.00.
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, directly or through
broker-dealers or underwriters who may act solely as agents, or who may acquire
the Shares as principals. Sales of the Shares may take place through the Nasdaq
National Market, including block trades or ordinary broker's transactions, or
through privately negotiated transactions, or through a combination of any such
methods of sale. 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 will pay all commissions,
transfer taxes, and other expenses associated with the sales of securities by
it. 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 on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act") with respect to the securities offered
by this Prospectus (the "Registration Statement"). 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 4)
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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.
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The date of this Prospectus is June 6, 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"), and reference is hereby
made to the Registration Statement and to the exhibits relating thereto for
further information with respect to the Company and the Shares offered hereby.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to a copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirely by such
reference. 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, Suite 1400, 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 by the Company 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 Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1996; (iii) the Company's Proxy Statement for the Annual Meeting of Shareholders
held on June 5, 1996; and (iv) 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 and to be part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated herein by reference will be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated herein by reference modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of 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. 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). The Company is continuing to provide additional information in
response to FDA comments with respect to both NDAs.
During the first two quarters of 1996 through May 3, 1996, the Company
raised $5.0 million before expenses from the private placement of Common Stock
with a strategic partner and an investor, of which $2.0 million represents
shares offered by this Prospectus.
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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
March 31, 1996 of approximately $64 million, of which approximately $2.0 million
was incurred in the three months ended March 31, 1996, 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 March 31, 1996, the Company had $5.5 million in
cash, cash equivalents and short-term marketable securities. In the quarter
ended March 31, 1996, cash of approximately $3.7 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 seven 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 successfully market products produced by the Company or
others.
Seasonality. The business of Premier is highly seasonal. Currently, it
principally 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.
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
fourth fiscal quarter. The Company offers extended terms to retailers, and
anticipates paying amounts owed to Johnson & Johnson from the collection of
retail accounts receivable.
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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.
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.
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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 to 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 $857,015 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.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock by the Selling Stockholders as of June
4, 1996 and as adjusted to reflect the sale by the Selling Stockholders of
Shares offered by them by this Prospectus.
COMMOM STOCK COMMON STOCK
BENEFICIALLY OWNED COMMON BENEFICIALLY OWNED
PRIOR TO OFFERING(1) STOCK AFTER OFFERING
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NUMBER PERCENT SOLD(3) NUMBER PERCENT
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MeesPierson Clearing Services B.V............ 299,135(2) 1.7% 288,460 10,675 *
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(1) Applicable percentage of ownership is based on 18,163,593 shares of Common
Stock outstanding as of June 4, 1996.
(2) Includes 86,538 shares of Common Stock issuable on exercise of warrants.
(3) Includes any additional shares of Common Stock that may become issuable in
connection with the Shares by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration that results in an increase in the number of outstanding
shares of Common Stock, or pursuant to the antidilution provisions under the
Warrants.
* Less than 1%.
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 one or more transactions
from time to time that may take place through the Nasdaq National Market,
including block trades or ordinary broker's transactions, or through privately
negotiated transactions, or through a combination of such methods of sale, 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, who may act solely as agents,
or who may acquire shares as principals, and such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from the
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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 it. 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 and
the preparation and filing of the Registration Statement. The Company has not
made any underwriting arrangements with respect to the sale of Shares offered
hereby.
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 June 4, 1996, there were 18,163,593 shares of Common Stock
outstanding held of record by 635 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 right to convert their Common Stock into any other
securities, and no right to vote cumulatively for the election of directors. The
outstanding shares of Common Stock are fully paid and nonassessable.
The Company has not paid cash dividends on its Common Stock and does not
plan to pay any such dividends in the foreseeable future. Under certain lending
agreements, the Company is restricted from declaring or paying dividends on its
Common Stock.
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PREFERRED STOCK
The Board of Directors may authorize the issuance of up to 2,500,000 shares
of Preferred Stock in one or more series and fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, conversion
rights, voting rights, terms of redemption, liquidation preferences and the
number of shares constituting any series or the designation of such series,
without any further vote or action by the stockholders. The issuance of
Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of the Company without action by the shareholders and could
adversely affect the rights and powers, including voting rights, of the holders
of Common Stock. In certain circumstances, the issuance of Preferred Stock could
depress the market price of Common Stock. There are no shares of Preferred Stock
outstanding.
WARRANTS
Of the 288,460 shares offered hereby, 86,538 shares are issuable upon
exercise of warrants to purchase Common Stock. The exercise price of the
warrants is $7.43, $9.90 and $12.38 per share for every 28,846 shares,
respectively. The warrants will remain exercisable until May 1, 1999, except
under certain circumstances. The exercise price of each warrant is subject to
adjustment (i) in the event there is a subdivision or combination of the
outstanding shares of the Company's Common Stock, (ii) if the Company declares
dividends on its Common Stock payable in Common Stock or other securities of the
Company, or (iii) if the Company issues shares of its Common Stock below the
exercise price of such warrant.
LEGAL MATTERS
The legality of the issuance of the securities being offered hereby is
being passed upon for the Company by Heller, Ehrman, White & McAuliffe, Palo
Alto, California. Mr. Julian Stern, a member of Heller, Ehrman, White &
McAuliffe, who is also the Secretary of the Company, owns beneficially 179,000
shares of Common Stock (including options and warrants).
EXPERTS
The consolidated financial statements and schedules of Advanced Polymer
Systems, Inc. and subsidiaries as of December 31, 1995 and 1994 and for each of
the years in the three-year period ended December 31, 1995 have been
incorporated by reference herein and in the related Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. To the extent that KPMG Peat Marwick
LLP audits and reports on consolidated financial statements of Advanced Polymer
Systems, Inc. and subsidiaries issued at future dates, and consents to the use
of their report thereon, such consolidated financial statements also will be
incorporated by reference in the Registration Statement in reliance upon their
report and said authority.
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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.............. $ 991.00
Accounting Fees.................................................. 5,000.00
Legal Fees and Disbursements..................................... 5,000.00
Miscellaneous.................................................... $ 209.00
--------
TOTAL.................................................. $11,200.00
========
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 or 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.
(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
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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
- ------- ------------------------------------------------------------------------------------
**4.2 -- Registration Rights Agreement with MeesPierson Clearing B.V.
**4.3 -- Form of Warrant
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 (See Page II-5)
**24 -- Power of Attorney (See Page II-4)
- ---------------
** 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;
(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
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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.
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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 Amendment No. 1 to
the Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized in Redwood City, State of California, on
the 5th day of June, 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.
SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------------ -------------
* Chairman of the Board and President June 5, 1996
- ---------------------------------------- (Principal Executive Officer)
John J. Meakem, Jr.
/s/ Michael P.J. O'Connell Chief Financial Officer (Principal June 5, 1996
- ---------------------------------------- Accounting Officer)
Michael P.J. O'Connell
* Director June 5, 1996
- ----------------------------------------
Jorge Heller
* Director June 5, 1996
- ----------------------------------------
Helen C. Leong
* Director June 5, 1996
- ----------------------------------------
Peter Riepenhausen
* Director June 5, 1996
- ----------------------------------------
Toby Rosenblatt
* Director June 5, 1996
- ----------------------------------------
Gregory H. Turnbull
* Director June 5, 1996
- ----------------------------------------
Dennis Winger
* Director June 5, 1996
- ----------------------------------------
Carl Ehmann
*By: /s/ Michael P.J. O'Connell June 5, 1996
-----------------------------------
Michael P.J. O'Connell
(Attorney-in-Fact)
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ADVANCED POLYMER SYSTEMS, INC.
EXHIBIT INDEX
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGES
- ------- ------------------------------------------------------------------------ ------------
**4.2 -- Registration Rights Agreement with MeesPierson Clearing B.V.
**4.3 -- Form of Warrant
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 (See Page II-5)
**24 -- Power of Attorney (See Page II-4)
- ---------------
** Previously filed
1
June 6, 1996
10008-0000
Advanced Polymer Systems, Inc.
3696 Haven Avenue
Redwood City, California
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 filed with the Securities and Exchange Commission (the "Commission") on
May 21, 1996, as amended by Amendment No. 1 filed with the Commission on June 6,
1996 (collectively the "Registration Statement") for the purpose of registering
under the Securities Act of 1933, as amended, 201,922 currently issued and
outstanding shares of the Company's Common Stock, $.01 par value (the "Shares")
and 86,538 shares issuable upon exercise of warrants to purchase shares of the
Company s Common Stock, $.01 par value (the "Warrant Shares"), all of which are
to be sold by a stockholder of the Company.
I.
In connection with this opinion, 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 and certificates:
(a) The Certificate of Incorporation of the Company certified by the
Secretary of State of the State of Delaware as of May 1, 1996, and
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;
(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 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 the Warrant Shares and
(ii) certifying as to certain factual matters; and
(d) The Registration Statement;
(e) The Warrants; and
(f) A letter from The First National Bank of Boston, the Company s transfer
agent, dated May 21, 1996, as to the number of shares of the Company s
common stock that were outstanding on May 20, 1996.
This opinion is limited to the federal law of the United States of America
and the General Corporation Law of the State of Delaware and 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.
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2
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 and the Warrant Shares are offered and issued,
(ii) the full consideration stated in the Warrants is paid for each Warrant
Share and that such consideration in respect of each Warrant Share includes
payment of cash or other lawful consideration at least equal to the par value
thereof, (iii) appropriate certificates evidencing the Shares and the Warrant
Shares are executed and delivered by the Company, and (iv) all applicable
securities laws are complied with, it is our opinion that the Shares and the
Warrant Shares will be 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 change of law that occurs, or any facts of
which we may become aware, 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
12
