AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 2004.
REGISTRATION NO. 333-_________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ESCALON MEDICAL CORP.
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(Exact name of registrant as specified in its charter)
Pennsylvania 33-0272839
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
575 East Swedesford Road, Suite 100
Wayne, PA 19087
(610) 688-6830
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------
Richard J. DePiano
Chairman and Chief Executive Officer
Escalon Medical Corp.
575 East Swedesford Road, Suite 100
Wayne, PA 19087
(610) 688-6830
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copy to:
Kathleen M. Shay, Esquire
Duane Morris LLP
One Liberty Place
Philadelphia, PA 19103-7396
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration number of the earlier
effective registration statement for the same offering. [ ] _________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act of 1933, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
==============================================================================================
Proposed Proposed
Title of maximum maximum
securities Amount to be offering aggregate Amount of
to be registered Registered(1) price per share(2) offering price registration fee
----------------------------------------------------------------------------------------------
Common Stock, 920,000 shares $21.625 $19,895,000 $2,521
$.001 par value
==============================================================================================
(1) Pursuant to the Registration Rights Agreement dated March 16, 2004 entered
into between the Company and the selling shareholders, includes 120,000
shares purchasable upon exercise of warrants to purchase common stock of
the Company. In addition, pursuant to Rule 416 under the Securities Act of
1933 (the "Securities Act"), also includes such indeterminate number of
shares of common stock as may be issued from time to time by reason of any
stock dividend, stock split, recapitalization or other similar transaction
that is effected without the receipt of consideration and results in an
increase in the number of shares of our common stock that are outstanding.
(2) The price of $21.625 per share, which was the average of the high and low
prices of the Registrant's common stock on the Nasdaq SmallCap Market on
April 2, 2004, is set forth solely for the purposes of calculating the
registration fee in accordance with Rule 457(c) of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. The prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 8, 2004
PROSPECTUS
920,000 Shares
ESCALON MEDICAL CORP.
Common Stock
This prospectus relates to the public offering, which is not being
underwritten, of up to 920,000 shares of our common stock, which are held by
certain of our current shareholders and warrantholders. In March 2004, we issued
800,000 shares of our common stock at a purchase price of $13 per share and
warrants to purchase 120,000 shares of our common stock having an exercise price
of $15.60 per share to the selling shareholders identified in this prospectus.
Accordingly, this prospectus relates to the potential resale from time to time
of up to 920,000 shares of our common stock by the selling shareholders
identified in this prospectus.
The prices at which such shareholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. While we may receive up to $1,872,000 upon the exercise of the
warrants, we will not receive any of the proceeds from the sale of the shares.
Our common stock is listed on the Nasdaq SmallCap Market under the
symbol "ESMC." On April 6, 2004, the closing price for our common stock was
$23.39 per share.
Investing in our common stock involves risks. See "Risk Factors"
beginning on page 2 of this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORS HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by Escalon
Medical Corp. (referred to in this prospectus as "Escalon" and "we"), any
selling shareholder or by any other person. Neither the delivery of this
prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that information herein is correct as of any time subsequent to
the date hereof.
This prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any security other than the securities covered by this
prospectus, nor does it constitute an offer to or solicitation of any person in
any jurisdiction in which such offer or solicitation may not lawfully be made.
The date of this prospectus is April 8, 2004.
TABLE OF CONTENTS
PAGE
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Risk Factors........................................................... 2
Cautionary Notice Regarding Forward-Looking Statements................. 9
Information About Escalon.............................................. 9
Selling Shareholders................................................... 10
Plan of Distribution................................................... 12
Use of Proceeds........................................................ 14
Legal Matters.......................................................... 15
Experts................................................................ 15
Where You Can Find More Information.................................... 15
Incorporation by Reference............................................. 15
1
RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information contained in this
prospectus before deciding to invest in shares of our common stock.
OUR PRODUCTS ARE SUBJECT TO STRINGENT ONGOING REGULATION BY THE FOOD AND DRUG
ADMINISTRATION, KNOWN AS THE FDA, AND SIMILAR HEALTH AUTHORITIES, AND IF THE
FDA'S APPROVALS OR CLEARANCES OF OUR PRODUCTS ARE RESTRICTED OR REVOKED WE COULD
FACE DELAYS THAT WOULD IMPAIR OUR ABILITY TO GENERATE FUNDS FROM OPERATIONS.
The FDA and similar health authorities in foreign countries extensively
regulate our activities. We must obtain either 510(K) clearances or pre-market
approvals and new drug application approvals prior to marketing a product in the
United States. Foreign regulation also requires that we obtain other approvals
from foreign government agencies prior to the sale of products in those
countries. Also, we may be required to obtain FDA approval before exporting a
product or device that has not received FDA marketing clearance or approval.
We have received the necessary FDA approvals for all products that we
currently market. Any restrictions on or revocation of the FDA approvals and
clearances that we have obtained, however, would prevent the continued marketing
of the impacted products and other devices. The restrictions or revocations
could result from the discovery of previously unknown problems with the product.
Consequently, the FDA revocation would impair our ability to generate funds from
operations.
The FDA and comparable agencies in state and local jurisdictions and in
foreign countries impose substantial requirements upon the manufacturing and
marketing of pharmaceutical and medical device equipment and related
disposables, including the obligation to adhere to the FDA's Good Manufacturing
Practice regulations. Compliance with these regulations requires time-consuming
detailed validation of manufacturing and quality control processes, FDA periodic
inspections and other procedures. If the FDA finds any deficiencies in the
validation processes, for example, the FDA may impose restrictions on marketing
the affected products until such deficiencies are corrected.
We have received CE approval on several of our products that allows us
to sell the products in the countries comprising the European Community. In
addition to the CE Mark, however, some foreign countries may require separate
individual foreign regulatory clearances. We cannot assure you that we will be
able to obtain regulatory clearances for other products in the United States or
foreign markets.
The process for obtaining regulatory clearances and approvals and
underlying clinical studies for any new products or devices and for multiple
indications for existing products is lengthy and will require substantial
commitments of our financial resources and our management's time and effort. Any
delay in obtaining clearances or approvals or any changes in existing regulatory
requirements would materially adversely affect our business.
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A failure to comply with applicable regulations would subject us to
fines, delays or suspensions of approvals or clearances, seizures or recalls of
products, operating restrictions, injunctions or civil or criminal penalties,
which would affect adversely our business, financial condition and results of
operations.
FAILURE OF THE MARKET TO ACCEPT OUR PRODUCTS COULD ADVERSELY IMPACT OUR BUSINESS
AND FINANCIAL CONDITION.
Our business and financial condition will depend upon the market
acceptance of our products. We cannot assure you that our products will achieve
market acceptance. Market acceptance depends upon a number of factors:
- the price of the products;
- the receipt of regulatory approvals for multiple indications;
- the establishment and demonstration of the clinical safety and
efficacy of our products; and
- the advantages of our products over those marketed by our
competitors.
Any failure to achieve significant market acceptance of our products
will have a material adverse effect on our business.
THE SUCCESS OF COMPETITIVE PRODUCTS COULD HAVE AN ADVERSE EFFECT ON OUR
BUSINESS.
We face intense competition in the medical device and pharmaceutical
markets, which are characterized by rapidly changing technology, short product
life cycles, cyclical oversupply and rapid price erosion. Many of our
competitors have substantially greater financial, technical, marketing,
distribution and other resources. Our strategy is to compete primarily on the
basis of technological innovation, reliability, quality and price of our
products. Without timely introductions of new products and enhancements, our
products will become technologically obsolete over time, in which case our
revenues and operating results would suffer. The success of our new product
offerings will depend on several factors, including our ability to:
- properly identify customer needs;
- innovate and develop new technologies, services and applications;
- establishing adequate product distribution coverage;
- obtain and maintain required regulatory approvals from the FDA and
other regulatory agencies;
- protect our intellectual property;
- successfully commercialize new technologies in a timely manner;
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- manufacture and deliver our products in sufficient volumes on time;
- differentiate our offerings from our competitors' offerings;
- price our products competitively;
- anticipate competitors' announcements of new products, services or
technological innovations; and
- general market and economic conditions.
We cannot assure you that we will be able to compete effectively in
this competitive environment.
OUR PRODUCTS EMPLOY PROPRIETARY TECHNOLOGY, AND THIS TECHNOLOGY MAY INFRINGE ON
THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
We hold several United States and foreign patents for our products.
Other parties, however, hold patents relating to similar products and
technologies. We believe that we are not infringing on any patents held by
others. However, if patents held by others were adjudged valid and interpreted
broadly in an adversarial proceeding, the court or agency could deem them to
cover one or more aspects of our products or procedures. Any claims for patent
infringement or claims by us for patent enforcement would consume time, result
in costly litigation, divert technical and management personnel or require us to
develop non-infringing technology or enter into royalty or licensing agreements.
We cannot be certain that we will not be subject to one or more claims for
patent infringement, that we would prevail in any such action or that our
patents will afford protection against competitors with similar technology.
If a court determines that any of our products, including our products
used for the cannulation of blood vessels used in our vascular business segment,
infringes, directly or indirectly, a patent in a particular market, the court
may enjoin us from making, using and selling the product. Furthermore, we may be
required to pay damages or obtain a royalty-bearing license, if available, on
acceptable terms.
A SIGNIFICANT DECREASE IN THE SALE OF SILICON OIL BY BAUSCH & LOMB WOULD HAVE A
NEGATIVE IMPACT ON OUR FINANCIAL POSITION, RESULTS OF OPERATIONS AND CASH FLOWS.
We realized 14.43% and 14.24% of our net revenue during the six-month
periods ended December 31, 2003 and 2002, respectively, from Bausch & Lomb's
sales of Silicone Oil. We are entitled to receive this revenue from Bausch &
Lomb, in varying amounts, through August 2005. The agreement with Bausch & Lomb,
which commenced on August 13, 2000, is structured so that we receive
consideration from Bausch & Lomb based on its adjusted gross profit from its
sales of Silicone Oil on a quarterly basis. The consideration is subject to a
factor, which steps down according to the following schedule:
From 8/13/00 to 8/12/01 100%
From 8/13/01 to 8/12/02 82%
From 8/13/02 to 8/12/03 72%
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From 8/13/03 to 8/12/04 64%
From 8/13/04 to 8/12/05 45%
The revenue associated with sale of Silicon Oil by Bausch & Lomb has no
associated expenses and consequently provides a gross margin of 100%. Any
significant reduction in this revenue can have a significant negative impact on
gross margin. Any significant decrease in Silicone Oil revenue received by us
would have an impact on our financial position, results of operations and cash
flows and our stock price could be negatively impacted.
LACK OF AVAILABILITY OF KEY SYSTEM COMPONENTS COULD RESULT IN DELAYS, INCREASED
COSTS OR COSTLY REDESIGN OF OUR PRODUCT.
Although some of the parts and components used to manufacture our
products are available from multiple sources, we currently purchase most of our
components from single sources in an effort to obtain volume discounts. Lack of
availability of any of these parts and components could result in production
delays, increased costs, or costly redesign of our products. Any loss of
availability of an essential component could result in a material adverse change
to our business, financial condition and results of operations. Some of our
suppliers are also subject to the FDA's Good Manufacturing Practice regulations.
Failure of these suppliers to comply with these regulations could result in the
delay or limitation of the supply of parts or components to us, which would
adversely affect our financial condition and results of operations.
OUR ABILITY TO MARKET AND SELL OUR PRODUCTS MAY BE ADVERSELY AFFECTED BY
LIMITATIONS ON REIMBURSEMENTS BY GOVERNMENT PROGRAMS, PRIVATE INSURANCE PLANS
AND OTHER THIRD PARTY PAYORS.
Our customers bill various third party payors, including government
programs and private insurance plans, for the health care services provided to
their patients. Third party payors may reimburse the customer, usually at a
fixed rate based on the procedure performed, or may deny reimbursement if they
determine that the use of our products was elective, unnecessary, inappropriate,
not cost-effective, experimental or used for a non-approved indication. Third
party payors may deny reimbursement notwithstanding FDA approval or clearance of
a product and may challenge the prices charged for the medical products and
services. Our ability to sell our products on a profitable basis may be
adversely impacted by denials of reimbursement or limitations on reimbursement,
compared with reimbursement available for competitive products and procedures.
New legislation that further reduces reimbursements under the capital cost
pass-through system utilized in connection with the Medicare program could also
adversely affect the marketing of our products.
FUTURE LEGISLATION OR CHANGES IN GOVERNMENT PROGRAMS MAY ADVERSELY AFFECT THE
MARKET FOR OUR PRODUCTS.
In the past several years, the federal government and Congress have
made proposals to change aspects of the delivery and financing of health care
services. We cannot predict what form any future legislation may take or its
effect on our business. Legislation that sets price limits and utilization
controls may adversely affect the rate of growth of ophthalmic and vascular
access product markets. If any future health care legislation were to adversely
impact those markets, our product marketing could also suffer, which could
adversely impact our business.
5
WE MAY BECOME INVOLVED IN PRODUCT LIABILITY LITIGATION, WHICH MAY SUBJECT US TO
LIABILITY AND DIVERT MANAGEMENT ATTENTION.
The testing and marketing of our products for applications in
ophthalmology and vascular access, our pharmaceutical products and vascular
access products entail an inherent risk of product liability, resulting in
claims based upon injuries or alleged injuries associated with a defect in the
product's performance. Some of these injuries may not become evident for a
number of years. Although we are not currently involved in any product liability
litigation, we may be a party to litigation in the future as a result of an
alleged claim. Litigation, regardless of the merits of the claim or outcome,
could consume a great deal of our time and money and would divert management
time and attention away from our core business. We maintain limited product
liability insurance coverage of $1,000,000 per occurrence and $2,000,000 in the
aggregate, with umbrella policy coverage up to $5,000,000 in excess of such
amounts. A successful product liability claim in excess of any insurance
coverage may adversely impact our financial condition and results of operations.
We cannot assure you that product liability insurance coverage will continue to
be available to us in the future on reasonable terms or at all.
OUR INTERNATIONAL SALES OPERATIONS COULD BE ADVERSELY IMPACTED BY CHANGES IN
LAWS OR POLICIES OF FOREIGN GOVERNMENTAL AGENCIES AND SOCIAL AND ECONOMIC
CONDITIONS IN THE COUNTRIES IN WHICH WE OPERATE.
We derive a portion of our revenues from sales outside the United
States. Changes in the laws or policies of governmental agencies, as well as
social and economic conditions, in the countries in which we operate could
affect our business in these countries and our results of operations. Also,
economic factors, including inflation and fluctuations in interest rates and
foreign currency exchange rates, and competitive factors, such as price
competition, business combinations of competitors or a decline in industry sales
from continued economic weakness, both in the United States and other countries
in which we conduct business, could adversely affect the our results of
operations.
WE ARE DEPENDENT ON OUR MANAGEMENT AND KEY PERSONNEL TO SUCCEED.
Our principal executive officers and technical personnel have extensive
experience with our products, our research and development efforts, the
development of marketing and sales programs and the necessary support services
to be provided to our customers. Also, we compete with other companies,
universities, research entities and other organizations to attract and retain
qualified personnel. The loss of the services of any of our executive officers
or other technical personnel, or our failure to attract and retain other skilled
and experienced personnel, could have a material adverse effect on our ability
to manufacture, sell and market our products and our ability to maintain or
expand our business.
ANY ACQUISITIONS, STRATEGIC ALLIANCES, JOINT VENTURES AND DIVESTITURES THAT WE
EFFECT COULD RESULT IN FINANCIAL RESULTS THAT DIFFER FROM MARKET EXPECTATIONS.
In the normal course of business, we engage in discussions with third
parties regarding possible acquisitions, strategic alliances, joint ventures and
divestitures. As a result of any such transactions, our financial results may
differ from the investment community's expectations in a given quarter. In
addition, acquisitions and alliances may require us to integrate a different
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company culture, management team and business infrastructure. We may have
difficulty developing, manufacturing and marketing the products of a newly
acquired company in a way that enhances the performance of our combined
businesses or product lines to realize the value from expected synergies.
Depending on the size and complexity of an acquisition, our successful
integration of the entity depends on a variety of factors including the
retention of key employees and the management of facilities and employees in
separate geographical areas. These efforts require varying levels of management
resources, which may divert our attention from other business operations. If we
do not realize the expected benefits or synergies of such transactions, our
consolidated financial position, results of operations and stock price could be
negatively impacted.
THE MARKET PRICE OF OUR STOCK HAS HISTORICALLY BEEN VOLATILE, AND WE HAVE NOT
PAID CASH DIVIDENDS.
The volatility of our common stock imposes a greater risk of capital
losses on shareholders as compared to less volatile stocks. In addition, such
volatility makes it difficult to ascribe a stable valuation to a shareholder's
holdings of our common stock. The following factors have and may continue to
have a significant impact on the market price of our common stock:
- announcements of technological innovations;
- changes in marketing, product pricing and sales strategies or new
products by our competitors;
- any acquisitions, strategic alliances, joint ventures and
divestitures that we effect;
- changes in domestic or foreign governmental regulations or
regulatory requirements; and
- developments or disputes relating to patent or proprietary rights
and public concern as to the safety and efficacy of the procedures
for which our products are used.
Moreover, the possibility exists that the stock market, and in
particular the securities of technology companies such as ours, could experience
extreme price and volume fluctuations unrelated to operating performance. We
have not paid any cash dividends on our common stock and do not anticipate
paying any cash dividends in the foreseeable future.
OUR RESULTS FLUCTUATE FROM QUARTER TO QUARTER.
We have experienced quarterly fluctuations in operating results and
anticipate continued fluctuations in the future. A number of factors contribute
to these fluctuations:
- changes in the mix of products sold;
- the timing and expense of new product introductions by us or our
competitors;
- fluctuations in royalty income;
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- announcements of new strategic relationships by us or our
competitors;
- the cancellation or delays in the purchase of our products;
- the gain or loss of significant customers;
- fluctuations in customer demand for our products; and
- competitive pressures on prices at which we can sell our products.
We set spending levels in advance of each quarter based, in part, on
our expectations of product orders and shipments during that quarter. A
shortfall in revenue, therefore, in any particular quarter as compared to our
plan could have a material adverse effect on our results of operations and cash
flows. Also, our quarterly results could fluctuate due to general conditions in
the healthcare industry or global economy generally, or market volatility
unrelated to our business and operating results.
THE IMPACT OF TERRORISM OR ACTS OF WAR COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS.
Terrorist acts or acts of war, whether in the United States or abroad,
could cause damage or disruption to our operations, our suppliers, channels to
market or customers, or could cause costs to increase, or create political or
economic instability, any of which could have a material adverse effect on our
business.
OUR CHARTER DOCUMENTS AND PENNSYLVANIA LAW MAY INHIBIT A TAKEOVER.
Certain provisions of Pennsylvania law and our Bylaws could delay or
impede the removal of incumbent directors and could make it more difficult for a
third party to acquire, or could discourage a third party from attempting to
acquire, control of us. These provisions could limit the price that certain
investors might be willing to pay in the future for shares of our common stock.
Our Board of Directors is divided into three classes, with directors in each
class elected for three-year terms. The Bylaws impose various procedural and
other requirements that could make it more difficult for shareholders to effect
certain corporate actions. Our Board of Directors may issue shares of preferred
stock without shareholder approval on such terms and conditions, and having such
rights, privileges and preferences, as the Board may determine. The rights of
the holders of common stock will be subject to, and may be adversely affected
by, the rights of the holders of any preferred stock that may be issued in the
future. We have no current plans to issue any shares of preferred stock.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in, or incorporated by reference in, this
prospectus are forward-looking statements, made pursuant to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995, which
provide current expectations or forecasts of future events. Such statements can
be identified by the use of terminology such as "anticipate," "believe,"
"could," "estimate," "expect," "forecast," "intend," "may," "plan," "possible,"
"protect," "should," "will" and similar words or expressions. Our
forward-looking statements include certain information relating to general
business strategy, growth strategies, financial results,
8
liquidity, product development, the introduction of new products, the potential
markets and uses for our products, our regulatory filings with the United States
Food and Drug Administration (the "FDA"), the development of joint venture
opportunities, the effect of competition on the structure of the markets in
which we compete and defending ourselves in litigation matters. One must
carefully consider forward-looking statements and understand that such
statements involve a variety of risks and uncertainties, known and unknown, and
may be affected by assumptions that fail to materialize as anticipated.
Consequently, no forward-looking statement can be guaranteed, and actual results
may vary materially. It is not possible to foresee or identify all factors
affecting our forward-looking statements, and one therefore should not consider
the following list of such factors to be an exhaustive statement of all risks,
uncertainties or potentially inaccurate assumptions. We undertake no obligation
to update any forward-looking statement. Although it is not possible to create a
comprehensive list of all factors that may cause actual results to differ from
our forward-looking statements, the most important factors include, without
limitation, the risk factors set forth in the previous section.
INFORMATION ABOUT ESCALON
We operate in the health care market specializing in the development,
manufacture, marketing and distribution of ophthalmic medical devices,
pharmaceuticals and vascular access devices.
BACKGROUND
In February 1996, we acquired substantially all of the assets and
certain liabilities of Escalon Ophthalmics, Inc., a developer and distributor of
ophthalmic surgical products. Prior to this acquisition, we devoted
substantially all of our resources to research and development of ultrafast
laser systems designed for treatment of ophthalmic disorders. As a result of the
acquisition of Escalon Ophthalmics, we changed our market focus and are no
longer developing laser technology. In October 1997, we licensed our
intellectual laser properties to a privately held company in return for an
equity interest and future royalties on sales of products relating to our laser
technology. The privately held company undertook responsibility for funding and
developing the laser technology through to commercialization. The privately held
company began selling products related to the laser technology during fiscal
2002.
To further diversify our product portfolio, in January 1999, we
acquired the vascular access product line from Endologix, formerly Radiance
Medical Systems, Inc. The vascular access products use doppler technology to aid
medical personnel in locating arteries and veins in difficult circumstances.
Currently, this product line concentrates on the cardiac catheterization market.
We considered this acquisition the first step in a plan to diversity our line of
niche medical products. In January 2000, we purchased Sonomed, Inc., a privately
held manufacturer of ophthalmic ultrasound diagnostic equipment. In April 2000,
we established our wholly owned subsidiary, Escalon Digital Vision, Inc., which
entered into a joint venture with MegaVision to develop and market a digital
camera back for ophthalmic photography. We terminated the joint venture with
Megavision and commenced direct operations within our EMI business unit in
January 2002.
We initially were incorporated in California in 1987, reincorporated in
Delaware in 1999 and then reincorporated in Pennsylvania in November 2001. Our
principal executive offices are
9
located at 575 East Swedesford Road, Suite 100, Wayne, Pennsylvania 19087, and
our telephone number is (610) 688-6830.
RECENT DEVELOPMENTS
In March 2004, we issued 800,000 shares of our common stock at a
purchase price of $13 per share and warrants to purchase 120,000 shares of our
common stock having an exercise price of $15.60 per share to the selling
shareholders identified in this prospectus.
On April 8, 2004, we announced that we intend to make an exchange offer
for the ordinary shares of Drew Scientific Group PLC (London Stock Exchange:
DRW), a diagnostics company that specializes in analytical systems for
laboratory testing worldwide. We intend to offer 0.0048 shares of our common
stock in exchange for each ordinary share of Drew Scientific that is validly
tendered. The exchange offer values each Drew Scientific share at (pound)0.06
(approximately $0.11) based on the closing price of $23.25 per share of our
common stock on April 7, 2004. If all of the outstanding shares of Drew
Scientific are exchanged, we would issue approximately 284,869 shares of our
common stock in the exchange offer, which shares are not included in the shares
registered under this registration statement. The offer is subject to certain
conditions, including due diligence and any approvals required under the
British City Code on Takeovers and Mergers or other governmental approvals. We
cannot assure you that any ordinary shares of Drew Scientific will be tendered
in the exchange offer or that we will successfully complete the exchange offer
or acquire all or substantially all of the ordinary shares of Drew Scientific.
SELLING SHAREHOLDERS
The following table sets forth information with respect to the number
of shares of common stock beneficially owned by the selling shareholders named
below and as adjusted to give effect to the sale of the shares offered hereby.
The shares beneficially owned have been determined in accordance with rules
promulgated by the Commission, and the information is not necessarily indicative
of beneficial ownership for any other purpose. The calculation of the shares
beneficially owned does not take into account the limitation on more than 9.99%
beneficial ownership contained in the terms of the warrants (as discussed below
in note 1). The information in the table below is current as of April 1, 2004.
All information contained in the table below is based upon information provided
to us by the selling shareholders and we have not independently verified this
information. The selling shareholders are not making any representation that any
shares covered by the prospectus will be offered for sale. The selling
shareholders may from time to time offer and sell pursuant to this prospectus
any or all of the common stock being registered. The following numbers may
change because of adjustments to reflect stock splits, stock dividends or
similar events involving our common stock.
Some of the selling shareholders may distribute their shares, from time
to time, to their affiliates, who may sell shares pursuant to this prospectus.
Each selling shareholder may also transfer shares owned by him by gift or
transfer, and upon any such transfer the donee would have the same right of sale
as the selling shareholder, as long as the shares are transferred in accordance
with the terms of the Registration Rights Agreement dated March 16, 2004 between
us and the selling shareholders. Pledgees, donees or transferees of or other
successors in interest to the selling shareholder, if any, will be identified in
a supplement to this prospectus. If the
10
number of shares of common stock transferred is material, the new holders of the
shares transferred will also be identified in a post-effective amendment to the
Registration Statement.
The shares being offered by the selling shareholders were acquired in
connection with a private placement on March 16, 2004.
Shares Shares
Beneficially Owned Number Beneficially Owned
Prior to Offering(1)(2) of Shares After Offering(2)(3)
----------------------- Being --------------------
Name of Selling Shareholder Number Percent Offered Number Percent
--------------------------- -------- --------- --------- -------- --------
BayStar Capital II, L.P. 28,750 * 28,750 -- --
Castle Creek Technology Partners LLC 74,750 1.5% 74,750 -- --
The Citizen's Alliance for Better 28,750 * 28,750 -- --
Neighborhoods
Colonial Fund LLC 270,250 5.4 270,250 -- --
Frorer Partners LP 46,000 * 46,000 -- --
W. Anthony Hitschler 115,000 2.3 115,000 -- --
MFN LLC 23,000 * 23,000 -- --
Polar Capital LP 11,500 * 11,500 -- --
SDS Capital Group SPC, Ltd. 115,000 2.3 115,000 -- --
SF Capital Partners 143,750 2.9 143,750 -- --
Transvest LTD 57,500 1.2 57,500 -- --
Treeline Investment Partners, L.P. 5,750 * 5,750 -- --
------------------------
* Represents less than 1% of our common stock.
(1) Includes the shares purchasable upon exercise of the warrants. The
terms of the warrants provide that the warrants are not exercisable
until September 13, 2004 and no selling shareholder may exercise
warrants for common stock if such conversion or exercise would result
in such selling shareholder beneficially owning more than 9.99% of our
outstanding common stock. Unless otherwise indicated below, each
selling shareholder has sole voting and investment power with respect
to its shares of common stock. The
11
inclusion of any shares in this table does not constitute an admission
of beneficial ownership for the selling shareholder.
(2) Based on 5,015,829 shares outstanding as of April 1, 2004.
(3) We do not know when or in what amounts the selling shareholders may
offer for sale the shares of common stock pursuant to this offering.
The selling shareholders may choose not to sell any of the shares
offered by this prospectus. Because the selling shareholders may offer
all or some of the shares of common stock pursuant to this offering,
and because, to our knowledge, there are currently no agreements,
arrangements or undertakings with respect to the sale of any of the
shares of common stock, we cannot estimate the number of shares of
common stock that the selling shareholders will hold after completion
of the offering. For purposes of this table, we have assumed that the
selling shareholder will have sold all of the shares covered by this
prospectus upon the completion of the offering.
PLAN OF DISTRIBUTION
The Selling Shareholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling shareholders may use any one or more of the
following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- settlement of short sales entered into after the date of this
prospectus;
- broker-dealers may agree with the selling shareholders to sell
a specified number of such shares at a stipulated price per
share;
- a combination of any such methods of sale;
- through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
or
12
- any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling shareholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling shareholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Each selling shareholder does not expect these commissions and
discounts relating to its sales of shares to exceed what is customary in the
types of transactions involved.
In connection with the sale of our common stock or interests therein,
the selling shareholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
shareholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The selling shareholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each selling shareholder has
informed us that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the common stock.
We are required to pay certain fees and expenses incurred by us
incident to the registration of the shares. We have agreed to indemnify the
selling shareholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
Because selling shareholders may be deemed to be "underwriters" within
the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this prospectus.
Each selling shareholder has advised us that they have not entered into any
agreements, understandings or arrangements with any underwriter or broker-dealer
regarding the sale of the resale shares. There is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the
selling shareholders.
We agreed to keep this prospectus effective until the earlier of (i)
the date on which the shares may be resold by the selling shareholders without
registration and without regard to any volume limitations by reason of Rule
144(e) under the Securities Act or any other rule of similar
13
effect or (ii) all of the shares have been sold pursuant to the prospectus or
Rule 144 under the Securities Act or any other rule of similar effect. The
resale shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states, the resale shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the resale shares may not simultaneously
engage in market making activities with respect to our common stock for a period
of two business days prior to the commencement of the distribution. In addition,
the selling shareholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M,
which may limit the timing of purchases and sales of shares of our common stock
by the selling shareholders or any other person. We will make copies of this
prospectus available to the selling shareholders and have informed them of the
need to deliver a copy of this prospectus to each purchaser at or prior to the
time of the sale.
USE OF PROCEEDS
While we may receive up to $1,872,000 upon the exercise of the
warrants, we will not receive any of the proceeds from the resale of the shares
offered under the prospectus by the selling shareholders.
LEGAL MATTERS
The validity of the issuance of the shares offered under the prospectus
has been passed upon for Escalon by Duane Morris LLP, Philadelphia,
Pennsylvania. Attorneys of Duane Morris who have recently provided substantive
legal services to Escalon owned an aggregate of 5,175 shares of our common stock
as of April 1, 2004.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K of Escalon Medical Corp. for the year ended
June 30, 2003 have been so incorporated in reliance on the report of Parente
Randolph, LLC, independent auditors, given on the authority of said firm as
experts in auditing and accounting.
14
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statement, and other information with the
Commission. Such reports, proxy statement, and other information can be read and
copied at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further
information on the Public Reference Room. The Commission maintains an internet
site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission, including our company.
We maintain an internet site at www.escalonmed.com. The reference to
our internet site does not constitute incorporation by reference of the
information contained on the internet site.
INCORPORATION BY REFERENCE
The Commission allows us to "incorporate by reference" the documents
that we file with the Commission. This means that we can disclose important
information to you by referring to you to those documents. Any information we
incorporate in this manner is considered part of this prospectus. Any
information we file with the Commission after the date of this prospectus and
until this offering is completed will automatically update and supersede the
information contained in this prospectus.
We incorporate by reference the following documents that we have filed
with the Commission and any filings that we will make with the Commission in the
future under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until this
offering is completed.
(a) Our Annual Report on Form 10-K for the fiscal year ended June
30, 2003;
(b) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2003; and
(c) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2003.
(d) Our Current Report on Form 8-K filed on March 18, 2004.
(e) Our Current Report on Form 8-K filed on April 8, 2004.
(f) The description of our common stock set forth under the
caption "Approval of the Reincorporation of the Company from Delaware to
Pennsylvania" in our proxy statement filed with the Commission pursuant to
Section 14(a) of the Exchange Act on October 1, 2001.
All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and prior to the filing of
a post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this prospectus and to be a part hereof from
the date of filing of such documents. Any statement incorporated in this
prospectus shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a
15
statement contained in this prospectus or in any other subsequently filed
document which also is or is deemed to be incorporated by reference in this
prospectus modifies or supersedes such statement and any statement contained in
this prospectus shall be deemed to be modified or superseded for all purposes to
the extent that a statement contained in any subsequently filed document that is
deemed to be incorporated by reference modifies or supersedes such statement.
We will provide without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, upon written or oral request of
such person, a copy of any or all of the documents incorporated in this
prospectus by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference herein). Such requests
should be addressed to: Richard J. DePiano, Chairman and Chief Executive
Officer, Escalon Medical Corp., 575 East Swedesford Road, Wayne, PA 19087, (610)
688-6830.
16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Registration fee......................................... $ 2,521
Legal fees and expenses.................................. 18,000*
Accountants' fees and expenses........................... 5,000*
Blue sky fees............................................ 2,000*
Miscellaneous............................................ 2,479*
---------
Total....................................... $ 30,000*
=========
-------------------
*Estimated.
The Company will bear all of the foregoing expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the provisions for indemnification of directors and
officers in the Pennsylvania Business Corporation Law (the "BCL"), the Company's
Bylaws provide for indemnification of directors and officers for all expenses,
including without limitation attorney's fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred or suffered by such person in any
threatened, pending or completed action, suit or proceeding, including without
limitation an action, suit or proceeding by or in the right of the Company,
whether civil, criminal, administrative or investigative, or through
arbitration, unless the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness.
The right to indemnification provided in the Bylaws includes the right
to have the expenses incurred by such person in defending any proceeding paid by
the Company in advance of the final disposition of the proceeding to the fullest
extent permitted by Pennsylvania law; provided that, if Pennsylvania law
continues so to require, the payment of such expenses incurred by such person in
advance of the final disposition of a proceeding may be made only upon delivery
to the Company of an undertaking, by or on behalf of such person, to repay all
amounts so advanced without interest if it is ultimately determined that such
person is not entitled to be indemnified under our Bylaws or otherwise.
Indemnification under such provisions continues as to a person who has ceased to
be a director or officer of the Company and inures to the benefit of his or her
heirs, executors and administrators.
The Company's Bylaws also avail directors of the Pennsylvania law
limiting directors' liability for monetary damages for any action taken or any
failure to take any action except for those cases in which they have breached or
failed to perform their fiduciary duties under the BCL and such breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness;
provided, however, that this limitation of liability for monetary damages does
not apply to the responsibilities or liabilities of a director pursuant to any
criminal statute, or to the liabilities of a director for payment of taxes
pursuant to local, Pennsylvania or federal law.
II-1
The Company maintains policies of insurance under which the Company and
its directors and officers are insured subject to specified exclusions and
deductible and maximum amounts against loss arising from any claim which may be
made against us or any of our directors or officers by reason of any breach of
duty, neglect, error, misstatement, omission or act done or alleged to have been
done while acting in our or their respective capacities.
ITEM 16. EXHIBITS
4.1 Articles of Incorporation of the Company (incorporated herein by
reference to Exhibit C to the Company's definitive proxy statement on
Schedule 14A, as filed by the Company with the Commission on October 1,
2001).
4.2 Bylaws of the Company (incorporated herein by reference to Exhibit D to
the Company's definitive proxy statement on Schedule 14A, as filed by
the Company with the Commission on October 1, 2001).
4.3 Securities Purchase Agreement dated as of March 16, 2004 (the
"Securities Purchase Agreement") between the Company and the Purchasers
signatory thereto. (Filed herewith.)
4.4 Registration Rights Agreement dated as of March 16, 2004 between the
Company and the Purchasers signatory thereto. (Filed herewith.)
4.5 Form of Warrant to Purchase Common Stock issued to each Purchaser under
the Securities Purchase Agreement. (Filed herewith.)
5.1 Opinion of Duane Morris LLP.
23.1 Consent of Duane Morris LLP (included in their opinion filed as Exhibit
5.1).
23.2 Consent of Parente Randolph, LLC.
24.1 Power of Attorney (see page II-4).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) 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 this Registration Statement (or the most
recent post-effective amendment hereto) which individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
II-2
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above 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 15(d) of the Exchange Act that
are incorporated by reference in this Registration Statement;
(b) 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; and
(c) 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.
The undersigned registrant hereby further undertakes 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
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, 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 Securities Act of 1933 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 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
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 Wayne, Pennsylvania on April 8, 2004.
ESCALON MEDICAL CORP.
By: /s/ Richard J. DePiano
----------------------------------------
Richard J. DePiano,
Chairman and Chief Executive Officer
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Richard J. DePiano and Harry M. Rimmer,
and each or both of them, as such person's true and lawful attorneys-in-fact and
agents, with full power of substitution, for him, and in his name, place and
stead, in any and all capacities to sign any or all amendments or post-effective
amendments to this Registration Statement, as well as any related registration
statement, or amendment thereto, filed pursuant to Rule 462 promulgated under
the Securities Act of 1933, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or their substitutes, may lawfully
do or cause to be done by virtue hereof.
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
--------- ----- ----
/s/ Richard J. DePiano Chairman, Chief Executive Officer April 8, 2004
------------------------------- and Director
Richard J. DePiano (principal executive officer)
/s/ Harry M. Rimmer Senior Vice President Finance, April 8, 2004
------------------------------- Secretary and Treasurer
Harry M. Rimmer (principal financial and accounting
officer)
/s/ Anthony Coppola Director April 8, 2004
-------------------------------
Anthony Coppola
II-4
/s/ Jay L. Federman, M.D. Director April 8, 2004
-------------------------------
Jay L. Federman, M.D.
/s/ William L.G. Kwan Director April 8, 2004
-------------------------------
William L.G. Kwan
/s/ Lisa A. Napolitano Director April 8, 2004
-------------------------------
Lisa A. Napolitano
/s/ Jeffrey O'Donnell Director April 8, 2004
-------------------------------
Jeffrey O'Donnell
II-5
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
4.1 Articles of Incorporation of the Company (incorporated herein
by reference to Exhibit C to the Company's definitive proxy
statement on Schedule 14A, as filed by the Company with the
Commission on October 1, 2001).
4.2 Bylaws of the Company (incorporated herein by reference to
Exhibit D to the Company's definitive proxy statement on
Schedule 14A, as filed by the Company with the Commission on
October 1, 2001).
4.3 Securities Purchase Agreement dated as of March 16, 2004 (the
"Securities Purchase Agreement") between the Company and the
Purchasers signatory thereto. (Filed herewith.)
4.4 Registration Rights Agreement dated as of March 16, 2004
between the Company and the Purchasers signatory thereto.
(Filed herewith.)
4.5 Form of Warrant to Purchase Common Stock issued to each
Purchaser under the Securities Purchase Agreement. (Filed
herewith.)
5.1 Opinion of Duane Morris LLP.
23.1 Consent of Duane Morris LLP (included in their opinion filed
as Exhibit 5.1).
23.2 Consent of Parente Randolph, LLC.
24.1 Power of Attorney (see page II-4).