AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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QUIDEL CORPORATION
(Exact name of Registrant as specified in its charter)
10165 MCKELLAR COURT
SAN DIEGO, CA 92121
(Address, including zip code, and telephone number,
including area code, of Registrant's Principal Executive Offices)
DELAWARE 325410 94-2573850
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
incorporation or organization) Classification Code Number)
CHARLES J. CASHION
SENIOR VICE PRESIDENT, CORPORATE OPERATIONS,
CHIEF FINANCIAL OFFICER AND SECRETARY
10165 MCKELLAR COURT
SAN DIEGO, CA 92121
(858) 552-1100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
MARK W. SHURTLEFF
GIBSON, DUNN & CRUTCHER LLP
JAMBOREE CENTER, 4 PARK PLAZA
IRVINE, CALIFORNIA 92614
(949) 451-3800
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
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If the only securities being registered in this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED (1) PER SHARE (2) OFFERING PRICE REGISTRATION FEE
Common Stock, par value $.001 per share..... 2,486,514 $3.36 $8,354,687 $2,088.67
(1) Each share of Common Stock includes a right to purchase one one-thousandth
of a share of Series C Junior Participating Preferred Stock, par value $.001
per share, of the Registrant, at an exercise price of $24, pursuant to the
Rights Agreement, dated as of December 31, 1996, as amended, between the
Registrant and American Stock Transfer & Trust Company, as Rights Agent.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c) and 457(h) and based on the average of the high and
the low price of the Common Stock of the Registrant as reported on
April 17, 2001 on the Nasdaq National Market System.
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
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PROSPECTUS
QUIDEL CORPORATION
10165 MCKELLAR COURT
SAN DIEGO, CA 92121
(858) 552-1100
[QUIDEL CORPORATION LOGO]
2,486,514 SHARES OF COMMON STOCK OF QUIDEL CORPORATION
This prospectus relates to 2,486,514 shares of our common stock that may be
sold from time to time by the selling stockholders named in this prospectus. The
selling stockholders acquired these shares of our common stock through a merger
transaction between us and Litmus Concepts, Inc., a California corporation. As
part of the consideration for acquiring Litmus, we issued to former shareholders
and certain optionholders of Litmus the shares of common stock that are covered
by this prospectus.
This offering is not being underwritten. The selling stockholders may offer
the shares through public or private transactions at the market price for our
common stock at the time of the sale, a price related to the market price, a
negotiated price or such other prices as the selling stockholders determine from
time to time. See "Plan of Distribution" on page 16.
All of the net proceeds from the sale of these shares of common stock will
go to the selling stockholders. We will not receive any proceeds from sales of
these shares.
Our common stock trades on the Nasdaq National Market under the symbol
"QDEL." On April 20, 2001, the closing sale price for the common stock was
$3.75.
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THESE SECURITIES ARE SPECULATIVE AND INVOLVE RISKS. YOU SHOULD CAREFULLY
CONSIDER THE FACTORS SPECIFIED UNDER THE CAPTION "RISK FACTORS" COMMENCING ON
PAGE 4 OF THIS PROSPECTUS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION. NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES WILL NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS 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.
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THE DATE OF THIS PROSPECTUS IS , 2001
TABLE OF CONTENTS
Quidel Corporation.......................................... 3
Risk Factors................................................ 4
Special Note Regarding Forward-Looking Statements........... 11
Use of Proceeds............................................. 11
Selling Stockholders........................................ 12
Relationships with Selling Stockholders..................... 15
Plan of Distribution........................................ 16
Legal Matters............................................... 17
Experts..................................................... 17
Where You Can Find More Information......................... 17
2
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission. This prospectus provides you with a
general description of the securities being offered. Please carefully read both
this prospectus and any applicable prospectus supplement, together with
additional information described under the heading "Where You Can Find More
Information" on page 17 of this prospectus.
QUIDEL CORPORATION
We are a worldwide leader in developing, manufacturing and marketing
point-of-care rapid diagnostic tests for the detection and management of a
variety of medical conditions and illnesses. These products provide health care
professionals and consumers with accurate and cost-effective diagnostic
information at the point-of-care. Our products are sold to professionals for use
in physician's offices, hospitals, clinical laboratories, and wellness screening
centers. We also manufacture a line of products sold to consumers through
distribution partners and organizations that provide store branded products. Our
products are substantially focused on women and family health in areas such as
reproduction, infectious diseases, general health screening and diseases
associated with the elderly.
We commenced our operations in 1979 and launched our first products,
dipstick-based pregnancy tests, in 1984. Our product base has expanded through
internal development and acquisitions of other products. Our product areas are
pregnancy and ovulation, infectious disease, autoimmune diseases, osteoporosis
and urinalysis, for professional, research and home use.
We market our products in the United States of America through a network of
national and regional distributors, supported by a direct sales force. In Europe
and the rest of the world, we sell and market from regionally based subsidiaries
in the United Kingdom, Italy and Germany and through sales representation in
Australia (encompassing the Pacific Rim) and Latin America and other
international locations by channeling products through distributor organizations
and sales agents.
Our executive offices are located at 10165 McKellar Court, San Diego,
California 92121, and our telephone number is (858) 552-1100.
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RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS RELATED TO OUR COMMON STOCK
OFFERED BY THIS PROSPECTUS AND TO OUR BUSINESS AND OPERATIONS. YOU ALSO SHOULD
CAREFULLY CONSIDER THE OTHER INFORMATION IN THIS PROSPECTUS AND IN THE DOCUMENTS
INCORPORATED BY REFERENCE. SOME OF THESE FACTORS HAVE AFFECTED, IN THE PAST OR
ARE CURRENTLY AFFECTING, OUR FINANCIAL CONDITION OR OPERATING RESULTS. ALL OF
THESE FACTORS COULD AFFECT OUR FUTURE FINANCIAL CONDITION OR OPERATING RESULTS.
IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCURS, OUR BUSINESS, INCLUDING OUR
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, COULD BE HARMED. IF THAT HAPPENS,
THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR
PART OF YOUR INVESTMENT.
OUR OPERATING RESULTS MAY FLUCTUATE, WHICH COULD HAVE A NEGATIVE EFFECT ON THE
PRICE OF OUR COMMON STOCK
Fluctuations in our operating results, for any reason, that decrease sales
or profitability could cause our growth or operating results to fall below the
expectations of investors and securities analysts, and this could cause our
stock price to decline. We were not profitable for the year ended December 31,
2000, and we may not continue our revenue growth or achieve profitability.
Operating results may continue to fluctuate, in a given quarter or annual
period, from prior periods as a result of a number of factors, many of which are
outside of our control. These include:
- seasonal fluctuations in our sales of strep throat and influenza tests,
which are generally highest in fall and winter;
- changes in the level of competition;
- changes in economic conditions in our domestic and international markets;
- delays in shipments of our products to customers or from suppliers;
- manufacturing difficulties and fluctuations in our manufacturing output,
including those arising from constraints in our manufacturing capacity;
- actions of our major distributors;
- adverse product reviews or delays in product reviews by regulatory
agencies;
- the timing of significant orders;
- changes in the mix of products we sell; and
- costs, timing and the level of acceptance of new products.
OUR PRODUCTS AND MARKETS REQUIRE CONSIDERABLE RESOURCES TO DEVELOP, AND THIS
COULD HAVE A NEGATIVE EFFECT ON OUR PROFITS
The development, manufacture and sale of diagnostic products require a
significant investment of resources. Our increased investment in sales and
marketing activities, manufacturing scale-up and new product development is
continuing to increase our operating expenses, and our earnings will be
adversely affected if our sales and gross profits do not correspondingly
increase, or if our product development efforts are unsuccessful or delayed.
Development of new markets also requires a substantial investment of resources,
and, if adequate resources are not available, we may be required to delay or
scale back market developments.
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DELAYS IN MANUFACTURING OUR PRODUCTS COULD REQUIRE US TO SPEND CONSIDERABLE
RESOURCES AND COULD HARM CUSTOMER RELATIONSHIPS
If we experience significant demand for our products, we may require
additional capital resources to meet these demands. If we are unable to develop
necessary manufacturing capabilities, our sales could be adversely affected.
Failure to increase production volumes, if required, in a cost-effective manner,
or lower than anticipated yields or production problems encountered as a result
of changes in the manufacturing process, could result in shipment delays as well
as increased manufacturing costs, which could also have a material adverse
effect on our sales.
The majority of raw materials and purchased components used to manufacture
our products are readily available. However, some of these materials are
obtained from a sole supplier or a limited group of suppliers. The reliance on
sole or limited suppliers and the failure to maintain long-term agreements with
other suppliers involve several risks, including the inability to obtain an
adequate supply of raw materials and components and reduced control over
pricing, quality and timely delivery. Although we attempt to minimize our supply
risks by maintaining an inventory of raw materials and continuously evaluating
other sources, any interruption in supply could have a material adverse effect
on our sales or cost of sales.
In 2001, we plan to begin manufacturing our urinalysis products in Marburg,
Germany. Currently, we contract with a third party to manufacture these
products. Any delays or problems encountered in the integration of this process
could result in shipment delays and increased manufacturing costs and could have
a material adverse effect on our results of operations.
THE LOSS OF KEY DISTRIBUTORS OR AN UNSUCCESSFUL EFFORT TO DIRECTLY DISTRIBUTE
OUR PRODUCTS COULD LEAD TO REDUCED SALES
We rely primarily on a small number of key distributors to distribute our
products. The loss or termination of our relationship with any of these key
distributors could significantly disrupt our business unless suitable
alternatives can be timely found. Finding a suitable alternative may pose
challenges in our industry's competitive environment. Another suitable
distributor may not be found on satisfactory terms. We could expand our efforts
to distribute and market our products directly; however, this would require an
investment in additional sales and marketing resources, including hiring
additional field sales personnel, which would significantly increase our future
selling, general and administrative expenses. In addition, our direct sales,
marketing and distribution efforts may not be successful.
WE MAY NOT ACHIEVE EXPECTED MARKET ACCEPTANCE OF OUR PRODUCTS AMONG PHYSICIANS
AND OTHER HEALTH CARE PROVIDERS, AND THIS WILL HAVE A NEGATIVE EFFECT ON
FUTURE SALES GROWTH
Clinical reference laboratories and hospital-based laboratories are
significant competitors for our products and provide the majority of diagnostic
tests used by physicians and other health-care providers. Our future sales
depend on, among other matters, the capture of sales from these laboratories,
and if we do not capture sales as expected our sales may not grow as much as we
hope. We expect that these laboratories will compete vigorously to maintain
their dominance of the testing market. Moreover, even if we can demonstrate that
our products are more cost-effective or save time, physicians and other health
care providers may resist changing their established source for these tests.
INTENSE COMPETITION IN THE DIAGNOSTIC MARKET MAY REDUCE OUR SALES
The diagnostic test market is highly competitive. We have a large number of
multinational and regional competitors making investments in competing
technologies. A number of our competitors have a potential competitive advantage
because they have substantially greater financial, technical, research and other
resources, and larger, more established marketing, sales, distribution and
service
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organizations we have. Moreover, some competitors offer broader product lines
and have greater name recognition than we have. If our competitors' products are
more effective or more commercially attractive than ours, our sales could be
adversely affected. Competition also has a negative effect on our product prices
and, as a result, our profit margins.
TO REMAIN COMPETITIVE WE MUST CONTINUE TO DEVELOP OR OBTAIN PROPRIETARY
TECHNOLOGY RIGHTS; OTHERWISE, OTHER COMPANIES MAY INCREASE THEIR MARKET SHARE
BY SELLING PRODUCTS THAT COMPETE WITH OUR PRODUCTS
Our competitive position is heavily dependent on obtaining and protecting
our proprietary technology or obtaining licenses from others. Our sales and
profits can be significantly affected by the phase out of older products near
the end of their product life cycles, as well as the success of new product
introduction. Our ability to compete successfully in the diagnostic market
depends on continued development and introduction of new proprietary technology
and the improvement of existing technology. If we cannot continue to obtain and
protect proprietary technology, our sales and profits could be adversely
affected. Moreover, our current and future licenses may not be adequate for the
operation of our business.
Our ability to obtain patents and licenses, and their benefits, are
uncertain. We have a number of issued patents and additional applications are
pending. However, our pending patent applications may not result in the issuance
of any patents, or if issued, the patents may not have priority over others'
applications or may not offer protection against competitors with similar
technology. Moreover, any patents issued to us may be challenged, invalidated or
circumvented in the future. Further, we only have patents issued in selected
countries. Therefore, third parties can make, use, and sell products covered by
our patents in any country in which we do not have patent protection. We license
the right to use our products to our customers under label licenses that are for
research purposes only. These licenses could be contested and we cannot provide
assurance that we would either be aware of an unauthorized use or be able to
enforce the restrictions in a cost-effective manner. Also, we may not be able to
obtain licenses for technology patented by others or on commercially reasonable
terms. A failure to obtain necessary licenses could prevent us from
commercializing some of our products under development.
WE MAY BE INVOLVED IN INTELLECTUAL PROPERTY INFRINGEMENT DISPUTES WHICH ARE
COSTLY AND COULD LIMIT OUR ABILITY TO USE SOME TECHNOLOGIES IN THE FUTURE
There are a large number of patents and patent applications in our product
areas, and we believe that there may be significant litigation in our industry
regarding patent and other intellectual property rights. Our involvement in
litigation to determine rights in proprietary technology could adversely affect
our sales because:
- it would consume a substantial portion of managerial and financial
resources;
- its outcome would be inherently uncertain and a court may find the
third-party claims valid and that we have no successful defense to such
claims;
- an adverse outcome could subject us to significant liability;
- failure to obtain a necessary license upon an adverse outcome could
prevent us from selling our current products or other products we may
develop; and
- protection of our rights may not be available under the law or may be
inadequate.
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THE UNCERTAINTY AND COST OF REGULATORY APPROVAL FOR OUR PRODUCTS MAY HAVE A
NEGATIVE EFFECT ON OUR PROFITABILITY
Our sales may be negatively affected by unexpected actions of regulatory
agencies, including delays in the receipt of or failure to receive approvals or
clearances, the loss of previously received approvals or clearances, and the
placement of limits on the use of the products. The testing, manufacture and
sale of our products are subject to regulation by numerous governmental
authorities, principally the FDA and corresponding state and foreign regulatory
agencies. Our future performance depends on, among other matters, our estimates
as to when and at what cost we will receive regulatory approval for new
products. However, complying with laws and regulations of these regulatory
agencies can be a lengthy, expensive and uncertain process making the timing and
costs of approvals difficult to predict.
WE ARE SUBJECT TO NUMEROUS GOVERNMENT REGULATIONS, COMPLIANCE WITH WHICH COULD
INCREASE OUR EXPENSES
Numerous laws relating to such matters as safe working conditions,
manufacturing practices, environmental protection, fire hazard control and
disposal of hazardous or potentially hazardous substances impact our business
operations. The costs of compliance with these laws could substantially increase
our costs. Violations of these laws or laws regulating the manufacture and
marketing of our products could result in substantial costs and loss of sales or
customers. It is impossible to reliably predict the full nature and impact of
future legislation or regulatory developments relating to our industry. To the
extent the costs and procedures associated with meeting new requirements are
substantial, our business and results of operations could be adversely affected.
VIOLATION OF GOVERNMENT REGULATIONS OR VOLUNTARY QUALITY PROGRAMS COULD RESULT
IN LOSS OF SALES AND CUSTOMERS
Certain products that we manufacture are regulated by the FDA. As such, we
must register with the FDA and comply with the Quality System Regulations.
Failure to comply with these regulations can lead to sanctions by the FDA such
as observations made following inspections, warning letters, product recalls,
fines, product seizures and consent decrees. Such actions by the FDA would be
available to the public and could affect our ability to sell our products.
ISO 9001 is an internationally recognized voluntary quality standard that
requires compliance with a variety of quality requirements somewhat similar to
Quality System Regulations. The operations of our manufacturing facilities are
intended to comply with ISO 9001. Failure to comply with this voluntary standard
can lead to observations of non-compliance or even suspension of ISO
certification by the certifying unit. If we lose ISO certification, this loss
could cause some customers to purchase products from other suppliers.
WE USE HAZARDOUS MATERIALS IN OUR BUSINESS THAT MAY RESULT IN UNEXPECTED AND
SUBSTANTIAL CLAIMS AGAINST US RELATING TO HANDLING, STORAGE OR DISPOSAL
Our research and development and manufacturing activities may involve the
controlled use of hazardous materials, including chemicals and biological
materials. The risk of accidental contamination or injury from these materials
cannot be completely eliminated. Federal, state and local laws and regulations
govern the use, manufacture, storage, handling and disposal of hazardous
materials. Compliance with these laws and regulations is necessary and
expensive. Current or future environmental regulations may impair our research,
development or production efforts by imposing substantial costs on our business.
In addition, we may be required to pay fines, penalties or damages in the event
of noncompliance with these laws or the exposure of individuals to hazardous
materials. Further, any accident could partially or completely shut down our
research and manufacturing facilities and operations.
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OUR SALES COULD BE AFFECTED BY THIRD-PARTY REIMBURSEMENT POLICIES AND POTENTIAL
COST CONSTRAINTS
Our sales could be adversely affected by changes in reimbursement policies
of governmental or private health care payors. In the U.S., health care
providers such as hospitals and physicians that purchase diagnostic products
generally rely on third party payors, principally private health insurance
plans, federal Medicare and state Medicaid, to reimburse all or part of the cost
of the procedure. We believe that the overall escalating cost of medical
products and services has led to and will continue to lead to increased
pressures on the health care industry, both foreign and domestic, to reduce the
cost of products and services, including our products. Given the efforts to
control and reduce health care costs in the U.S. in recent years, there can be
no assurance that currently available levels of reimbursement will continue to
be available in the future for our existing products or products under
development. Third-party reimbursement and coverage may not be available or
adequate in either U.S. or foreign markets, current reimbursement amounts may be
decreased in the future and future legislation, regulation or reimbursement
policies of third-party payors may reduce the demand for our products or our
ability to sell our products on a profitable basis.
IF WE ARE NOT ABLE TO MANAGE OUR GROWTH STRATEGY, OUR EARNINGS MAY BE ADVERSELY
AFFECTED
We anticipate increased growth in the number of employees, the scope of
operating and financial systems and the geographic area of our operations as new
products are developed and commercialized. This growth may divert management's
attention from other aspects of our business, and will place a strain on
existing management, as well as operational, financial and management
information systems. To manage this growth, we must continue to implement and
improve our operational and financial systems and to train, motivate, retain and
manage our employees. Furthermore, we may expand into markets in which we have
less experience or incur higher costs. Should we encounter difficulties in
managing these tasks, our growth strategy may suffer and our sales and earnings
could be adversely affected.
OUR BUSINESS COULD BE NEGATIVELY AFFECTED BY THE LOSS OF KEY PERSONNEL OR OUR
INABILITY TO HIRE QUALIFIED PERSONNEL
Our future success depends in part on our ability to retain our key
technical, sales, marketing and executive personnel and our ability to identify
and hire additional qualified personnel. Competition for these personnel is
intense and if we are not able to retain existing key personnel, or identify and
hire additional qualified personnel, our business could be negatively impacted.
WE ARE EXPOSED TO RISKS OF SIGNIFICANT PRODUCT LIABILITY WHICH, IF NOT COVERED
BY INSURANCE, COULD HAVE AN ADVERSE EFFECT ON OUR PROFITS
There is a risk of product liability claims arising from our testing,
manufacturing and marketing of medical diagnostic devices, both those currently
being marketed as well as those under development. Potential product liability
claims may exceed the amount of our insurance coverage or may be excluded from
coverage under the terms of our policy. Also, if we are held liable, our
existing insurance may not be renewed at the same cost and level of coverage as
presently in effect, or may not be renewed at all. If we are held liable for a
claim against which we are not indemnified or for damages exceeding the limits
of our insurance coverage, that claim could have a material negative effect on
our results of operations.
OUR EARNINGS MAY BE ADVERSELY AFFECTED IF WE EXPERIENCE DIFFICULTIES INTEGRATING
ACQUIRED COMPANIES OR TECHNOLOGIES AFTER THE ACQUISITION
We may experience difficulties integrating our own operations with those of
companies or technologies that we have acquired or we may acquire, and there can
be no assurance that we will
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realize the benefits and cost savings that we believe the acquisition will
provide or that these benefits will be achieved within the time frame we
anticipate. The acquisitions may distract management from day-to-day business
and may require other substantial resources. We may incur restructuring and
integration costs from combining other operations or technologies with ours.
These costs may be substantial and may include costs for employee severance,
relocation and disposition of excess assets and other acquisition related costs.
These costs could have a negative effect on profits.
WE FACE RISKS RELATING TO OUR INTERNATIONAL SALES AND FOREIGN OPERATIONS
Our products are sold internationally, including to customers in Europe.
Sales to foreign customers accounted for 25%, 21% and 22% of our net sales for
the year ended December 31, 2000, the nine months ended December 31, 1999, and
the year ended March 31, 1999, respectively, and are expected to continue to
account for a significant percentage of our net sales. Moreover, in
November 2001, we will commence manufacture of our urinalysis products in
Germany. International sales and manufacturing operations are subject to
inherent risks. These risks include:
- exposure to currency exchange fluctuations;
- longer payment cycles;
- greater difficulty in accounts receivable collection;
- compliance with foreign laws;
- changes in regulatory requirements;
- tariffs or other barriers;
- difficulties in obtaining export licenses;
- difficulties in staffing and managing foreign operations;
- reduced protection for, and enforcement of, intellectual property rights;
- political and economic instability;
- transportation delays; and
- potentially adverse tax consequences.
Even that portion of our international sales which is negotiated for and
paid in U.S. dollars is subject to currency risks, since changes in the values
of foreign currencies relative to the value of the U.S. dollar can render our
products comparatively more expensive. These exchange rate fluctuations could
negatively impact international sales of our products and our anticipated
foreign operations, as could changes in the general economic conditions in those
markets. In calendar 2000, the value of major European currencies dropped
against the U.S. dollar. To date, we have not reflected that change in currency
value in our selling prices. In order to maintain a competitive price for our
products in Europe, however, we may have to provide discounts or otherwise
effectively reduce our prices, resulting in a lower margin on products sold in
Europe. Continued change in the values of European currencies or changes in the
values of other foreign currencies could have a negative impact on our business,
financial condition and results of operations. Although we do not currently
hedge against exchange rate fluctuations, any measures we take to hedge against
exchange rate fluctuations may not adequately protect us from their potential
harm.
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WE RELY ON A CONTINUOUS POWER SUPPLY TO CONDUCT OUR OPERATIONS, AND CALIFORNIA'S
CURRENT ENERGY CRISIS COULD DISRUPT OUR OPERATIONS AND INCREASE OUR EXPENSES
California is in the midst of an energy crisis that could disrupt our
operations and significantly increase our expenses. In the event of an acute
power shortage, that is, when power reserves for the State of California fall
below 1.5%, California has on some occasions implemented, and may in the future
continue to implement, rolling blackouts throughout California. We currently
have a backup generator with limited capacity. We have no alternate source of
power in the event of a blackout, and our current insurance does not provide
coverage for any damages we or our customers may suffer as a result of any
interruption in our power supply. If blackouts interrupt our power supply, we
would be temporarily unable to continue operations at our facilities. Any such
interruption in our ability to continue operations at our facilities could
damage our reputation, harm our ability to retain existing customers and to
obtain new customers, and could result in lost revenue, any of which could
substantially harm our business and results of operations. Furthermore, our
utility expenses have increased substantially and could continue to be
negatively impacted by the California energy crisis.
FUTURE SALES BY EXISTING STOCKHOLDERS COULD DEPRESS THE MARKET PRICE OF OUR
COMMON STOCK AND MAKE IT MORE DIFFICULT FOR US TO SELL STOCK IN THE FUTURE
As of March 30, 2001 we had outstanding 28,147,069 shares of common stock.
We have a substantial number of shares that are issuable upon the exercise of
warrants and options. Sales of any substantial number of shares of our common
stock in the public market may have an adverse effect on the market price of our
common stock. Any sustained sales of shares by our existing or future
stockholders or any increase in the average volume of shares traded in the
public market may adversely affect the market price of our common stock. These
sales also might make it more difficult for us to sell equity or equity-related
securities in the future at a time and price that we deem appropriate.
OUR STOCK PRICE HAS FLUCTUATED AND MAY CONTINUE TO FLUCTUATE WIDELY
The market price of our common stock has fluctuated substantially in the
past. Between March 31, 2000 and March 31, 2001, the price of our common stock,
as reported on the Nasdaq National Market, has ranged from a low of $3.25 to a
high of $8.50. The market price of our common stock will continue to be subject
to significant fluctuations in the future in response to a variety of factors,
including:
- future announcements concerning our business or that of our competitors or
customers;
- the introduction of new products or changes in product pricing policies by
us or our competitors;
- litigation regarding proprietary rights or other matters;
- change in analysts' earnings estimates;
- developments in the financial markets;
- quarterly fluctuations in operating results; and
- general conditions in the POC diagnostic testing industry.
Furthermore, stock prices for many companies, and high technology companies
in particular, fluctuate widely for reasons that may be unrelated to their
operating results. Those fluctuations and general economic, political and market
conditions, such as recessions or international currency fluctuations, may
adversely affect the market price of our common stock.
In the past securities class action litigation often has been brought
against a company following periods of volatility in the market price of its
securities. Companies in high technology industries are particularly vulnerable
to this kind of litigation due to the high volatility of their stock prices.
10
Accordingly, we may in the future be the target of securities litigation.
Securities litigation could result in substantial costs and could divert our
management's attention and resources.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains some "foward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995 and information relating to us
that are based on the beliefs of our management, as well as assumptions made by
and the information currently available to our management. When used in this
prospectus, the words "estimate," "project," "believe," "anticipate," "intend,"
"expect" and similar expressions are intended to identify forward-looking
statements. These statements reflect our current views with respect to future
events and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in these forward-looking
statements, including those risks discussed in this prospectus.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. Except for
special circumstances in which a duty to update arises when prior disclosure
becomes materially misleading in light of subsequent events, we do not intend to
update any of these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common stock
by the selling stockholders.
11
SELLING STOCKHOLDERS
The shares of our common stock covered by this prospectus were issued to
former shareholders and certain optionholders of Litmus, in a transaction in
which Litmus became a wholly owned subsidiary of ours. In a series of private
transactions, we issued approximately 3,250,000 shares of our common stock to
former shareholders and certain optionholders of Litmus, pursuant to the terms
of the merger agreement between us and Litmus. Of these shares, 2,486,514 shares
are the subject of this prospectus. The remaining 763,486 shares issued in
connection with the merger are subject to an escrow agreement as security
against breaches of certain representations and warranties made by Litmus. Of
these escrowed shares, 32,580 have been released to us from escrow, due to a
cash payment made by us to a third party on behalf of Litmus for financial
advisory fees, and 730,906 remain in escrow. Under a registration rights
agreement dated December 8, 2000, we agreed to register the shares that were not
placed in escrow and maintain the effectiveness of the registration statement
until the earlier of one year from effectiveness or the date on which all the
shares covered by this prospectus have been sold. For more information on
distribution of the shares, see "Plan of Distribution" on page 16 of this
prospectus. The selling stockholders may from time to time offer and sell
pursuant to this prospectus any or all of the 2,486,514 shares of our common
stock. However, almost all of these shares are prohibited from being sold until
June 6, 2001, pursuant to lock-up agreements executed by us and certain of the
selling stockholders. The table below describes, as of March 30, 2001, the
number of shares of our common stock covered by this prospectus that each
selling stockholder beneficially owns. The term "selling stockholders" includes
the holders listed below and their transferees, pledgees, donees or other
successors. We have prepared this table based upon information furnished to us
by or on behalf of the selling stockholders.
The selling stockholders confirmed at the time they acquired the shares
listed below that they acquired the shares for investment purposes only and not
with a view toward their resale, and acknowledged the existence of restrictions
on resale that apply to these shares. This offering relates only to the sale of
shares held or to be held by the selling stockholders named in the following
table. Since the date on which they provided us with the information below, the
selling stockholders may have sold, transferred or otherwise disposed of some or
all of their shares of our common stock in transactions exempt from the
Securities Act's registration requirements.
SHARES BENEFICIALLY
OWNED IF ALL SHARES
SHARES BENEFICIALLY NUMBER OF BEING REGISTERED
OWNED PRIOR TO OFFERING SHARES ARE SOLD(2)
------------------------ BEING ----------------------
NUMBER OF REGISTERED NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT(1) FOR SALE SHARES PERCENT(1)
-------------------- ----------- ---------- ---------- --------- ----------
Mary Lynne Ament.......................... 3,684 * 2,847 837 *
Terrence Andreasen........................ 5,577 * 4,310 1,267 *
Jason Barzilay............................ 3,928 * 3,036 892 *
Beacon Fiduciary Advisors, Inc............ 73,673 * 56,937 16,736 *
Alison P. Bisno........................... 3,684 * 2,847 837 *
Alexander Blass........................... 1,964 * 1,518 446 *
Constance Blass O'Neill Trust #3.......... 7,367 * 5,694 1,673 *
Constance Blass O'Neill, Trustee for
Amanda Beverly O'Neill.................. 2,947 * 2,278 669 *
Constance Blass O'Neill, Trustee for
Isabel Leaman O'Neill................... 2,947 * 2,278 669 *
Constance Blass O'Neill, Trustee for
John Blass O'Neill...................... 2,947 * 2,278 669 *
Constance Blass O'Neill, Trustee for
Kristen Patricia O'Neill................ 2,947 * 2,278 669 *
12
SHARES BENEFICIALLY
OWNED IF ALL SHARES
SHARES BENEFICIALLY NUMBER OF BEING REGISTERED
OWNED PRIOR TO OFFERING SHARES ARE SOLD(2)
------------------------ BEING ----------------------
NUMBER OF REGISTERED NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT(1) FOR SALE SHARES PERCENT(1)
-------------------- ----------- ---------- ---------- --------- ----------
Gus Blass II.............................. 80,538 * 62,242 18,296 *
Gus Blass III............................. 22,190 * 17,149 5,041 *
Gus Blass III Keough Account.............. 36,836 * 28,468 8,368 *
Patricia B. Blass......................... 7,367 * 5,694 1,673 *
Rebecca Blass............................. 982 * 759 223 *
Charlotte & Curt Bradbury................. 3,684 * 2,847 837 *
Marian B. Buccafurni...................... 319,617 1.14% 247,009 72,608 *
Marian Buccafurni & Paul Lawrence......... 3,684 * 2,847 837 *
Harriet Calhoun Stephens Trust............ 2,211 * 1,709 502 *
Capital Properties, Ltd................... 85,088 * 65,759 19,329 *
C.E. Unterberg, Towbin LLC................ 4,910 * 3,795 1,115 *
John Chan & Lily W. Chan.................. 3,684 * 2,847 837 *
William H. Chan, MD....................... 14,735 * 11,388 3,347 *
William H. Chan, MD & Janet Wong, DDS..... 8,840 * 6,832 2,008 *
Aulena Chaudhuri.......................... 4,169 * 3,222 947 *
Sally Chew................................ 7,367 * 5,694 1,673 *
Betsy Cohen............................... 6,098 * 4,713 1,385 *
CooperSurgical Acquisition Corp........... 1,473,453 5.23% 1,138,725 334,728 1.19%
Coral Partners............................ 3,684 * 2,847 837 *
Coral Two Corporation..................... 11,051 * 8,541 2,510 *
Steve Costella............................ 540 * 417 123 *
Eric Daniel............................... 3,684 * 2,847 837 *
Peter Davis............................... 15,750 * 12,172 3,578 *
Lou De Amicis............................. 4,065 * 3,141 924 *
Alan Dror, MD............................. 10,020 * 7,743 2,277 *
William W. R. Elder....................... 3,684 * 2,847 837 *
Webb J. Engman & Marie J. Engman.......... 1,179 911 268 *
Douglas Engman Fires & Patricia J.
Fires................................... 1,179 * 911 268 *
Leroy Fong & Julie Fong................... 3,684 * 2,847 837 *
Donald Freedlander........................ 3,684 * 2,847 837 *
Regina Gindin............................. 5,893 * 4,555 1,338 *
Richard Giss.............................. 1,473 * 1,138 335 *
Robert Giss............................... 1,473 * 1,138 335 *
Vernon Giss............................... 1,473 * 1,138 335 *
Warren Giss............................... 1,473 * 1,138 335 *
Henry & Sheila Gladstone.................. 3,684 * 2,847 837 *
Carol Green............................... 5,893 * 4,554 1,339 *
William F. Green.......................... 148 * 114 34 *
Carol Hall................................ 1,220 * 943 277 *
RMH, III Age 21 Trust..................... 982 * 759 223 *
WSW Hamilton Age 21 Trust................. 982 * 759 223 *
Robert M. Hamilton, Jr.................... 11,051 * 8,541 2,510 *
Michealle Havenhill....................... 414 * 320 94 *
Henry Heines.............................. 7,749 * 5,988 1,761 *
Mark Herrman.............................. 7,367 * 5,694 1,673 *
Gail Highberg............................. 1,584 * 1,224 360 *
13
SHARES BENEFICIALLY
OWNED IF ALL SHARES
SHARES BENEFICIALLY NUMBER OF BEING REGISTERED
OWNED PRIOR TO OFFERING SHARES ARE SOLD(2)
------------------------ BEING ----------------------
NUMBER OF REGISTERED NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT(1) FOR SALE SHARES PERCENT(1)
-------------------- ----------- ---------- ---------- --------- ----------
Thomas Ingram............................. 1,964 * 1,518 446 *
Joan Irwin................................ 737 * 569 168 *
J. Chasnoff Joint Venture #6.............. 5,893 * 4,554 1,339 *
Roland Jang............................... 18,928 * 14,628 4,300 *
Jeffrey Jones............................. 148 * 114 34 *
Stanley Keller............................ 7,367 * 5,694 1,673 *
Bill Kirsch............................... 540 * 417 123 *
The Lampert Irrevocable Trust Julie Bell,
Trustee................................. 1,473 * 1,138 335 *
Roland Lampert............................ 68,470 * 52,915 15,555 *
Ellen B. Laner Trust...................... 7,367 * 5,694 1,673 *
Leah Lawrence............................. 4,658 * 3,600 1,058 *
Paul J. Lawrence.......................... 391,790 1.39% 302,786 89,004 *
Diem Le................................... 28 * 22 6 *
Sheng Fen Li.............................. 330 * 255 75 *
Peter Ly.................................. 5,225 * 4,038 1,187 *
Douglas H. Martin......................... 2,947 * 2,278 669 *
Dennis McGee.............................. 1,989 * 1,537 452 *
Robert McGee.............................. 148 * 114 34 *
Glen McLaughlin........................... 19,054 * 14,726 4,328 *
Glen Wallace McLaughlin................... 3,684 * 2,847 837 *
MH Fund, Inc.............................. 35,363 * 27,329 8,034 *
Allen Misher.............................. 29,761 * 23,000 6,761 *
Karen Morrical............................ 1,473 * 1,138 335 *
Mark Morris............................... 2,434 * 1,881 553 *
William Muttera........................... 1,220 * 943 277 *
Teresa M. Nippes.......................... 4,065 * 3,141 924 *
Debbie Nishijima.......................... 428 * 331 97 *
Norman Family Investments LP.............. 4,715 * 3,644 1,071 *
Rebecca O'Brien........................... 4,269 * 3,299 970 *
Robert O'Callaghan........................ 589 * 455 134 *
Constance O'Neill......................... 3,928 * 3,036 892 *
David M. O'Malley......................... 4,065 * 3,141 924 *
John O'Malley............................. 73,808 * 57,040 16,768 *
John A. O'Malley, Jr...................... 4,065 * 3,141 924 *
Robert D. O'Malley........................ 4,065 * 3,141 924 *
Joseph Ogrinc............................. 295 * 228 67 *
Patrick B. Parmelee....................... 148 * 114 34 *
Perry O. Parmelee & Joan W. Parmelee,
Trustees of the Parmelee Trust U/D/T Dtd
5/24/93................................. 2,211 * 1,709 502 *
Robert Pena............................... 21 * 16 5 *
Lawrence S. Phillips...................... 36,836 * 28,468 8,368 *
Roxane Phillips........................... 1,473 * 1,138 335 *
Scott Read................................ 1,291 * 998 293 *
James Reinsch............................. 237 * 183 54 *
14
SHARES BENEFICIALLY
OWNED IF ALL SHARES
SHARES BENEFICIALLY NUMBER OF BEING REGISTERED
OWNED PRIOR TO OFFERING SHARES ARE SOLD(2)
------------------------ BEING ----------------------
NUMBER OF REGISTERED NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT(1) FOR SALE SHARES PERCENT(1)
-------------------- ----------- ---------- ---------- --------- ----------
Cynthia Robbins-Roth...................... 1,220 * 943 277 *
William Rohn.............................. 295 * 228 67 *
Louis Rosen & Vivan B. Rosen.............. 7,367 * 5,694 1,673 *
Hank Sakai................................ 5,893 * 4,554 1,339 *
Julie A. Saunders......................... 1,473 * 1,138 335 *
Heresh Shah............................... 6,098 * 4,713 1,385 *
Donny Shapiro............................. 186 * 144 42 *
David Shockey............................. 4,065 * 3,141 924 *
Ben Simon................................. 3,928 * 3,036 892 *
Arthur Small, Jr.......................... 5,009 * 3,871 1,138 *
J. G. Stuckey............................. 1,473 * 1,138 335 *
David Sutton.............................. 3,169 * 2,449 720 *
Bess Stephens Family Trust................ 35,363 * 27,329 8,034 *
Jackson T. Stephens Trust One............. 20,628 * 15,942 4,686 *
Warren A. Stephens & Harriet C. Stephens
Childrens Trust......................... 3,684 * 2,847 837 *
Warren A. Stephens, Trustee of the Warren
A. Stephens Trust....................... 8,840 6,832 2,008 *
Mya Myat Tun.............................. 212 * 164 48 *
Barry Waxman.............................. 3,684 * 2,847 837 *
Gordon A. Wong, MD & Merrily F. Wong...... 25,785 * 19,927 5,858 *
Gordon Wong, MD........................... 3,684 * 2,847 837 *
Elmar Zanflorin........................... 3,684 * 2,847 837 *
------------------------
* Less than 1%.
(1) Computed based on 28,147,069 shares of common stock outstanding as of
March 30, 2001.
(2) Assumes all of the shares of common stock that may be offered hereunder are
sold.
RELATIONSHIPS WITH SELLING STOCKHOLDERS
As part of our acquisition of Litmus, we entered into certain agreements
with key employees and related parties of Litmus who are among the selling
stockholders listed above. Among these are the following material agreements:
- A consulting, severance and general release agreement with Marian
Buccafurni, which provides that its terms must remain confidential.
- An employment agreement with Paul Lawrence, under which Mr. Lawrence is to
be employed as Vice President and Chief Technology Officer for two years,
with compensation consisting of an annual salary of $190,000, a signing
bonus of $50,000, and an option to purchase 200,000 shares of our common
stock.
- We paid a $1.0 million license fee to an affiliate of CooperSurgical
Acquisition Corp., for the co-exclusive right to sell Litmus products in
the U.S.
15
- In connection with the acquisition of Litmus, we leased a facility from an
affiliate of Capital Properties, Ltd. The lease is for nine years with
total future rental payments of approximately $8.6 million.
Other than these agreements, there have been no material relationships or
agreements between us and the selling stockholders within the last three years.
PLAN OF DISTRIBUTION
The selling stockholders can use this prospectus to sell the shares at any
time while the prospectus is in effect, unless the shares are subject to other
resale restrictions or we have notified the selling stockholders that the
prospectus is not available at that particular time. The selling stockholders in
their discretion will determine if, when and how they will sell the shares they
own. We do not know when or whether the selling stockholders will offer their
shares for sale to the public. However, almost 100% of our shares of common
stock subject to this prospectus are prohibited from being sold or otherwise
disposed of by certain of the former Litmus shareholders until June 6, 2001,
under lock-up agreements between these former Litmus shareholders and us. Any
sales by the selling stockholders may occur in one or more of the following
types of transactions (including block transactions):
- transactions on the Nasdaq National Market or any other organized market
or quotation system where the shares may be traded,
- privately negotiated transactions between a selling stockholder and a
purchaser, or
- transactions effected with or through a broker-dealer acting as either
agent or principal.
These transactions may involve the transfer of the shares upon exercise or
settlement of put or call options, the covering of short sales or loaning of the
shares to others to effect short sales or a combination of such methods. If a
broker-dealer is used in the sale of shares, that person may solicit potential
purchasers. The shares may also be transferred as a gift or as a result of a
pledge, or may be sold to a broker-dealer acting as principal. These persons may
then sell the shares to another person, either directly or through another
broker-dealer, subject to compliance with the requirements of the Securities
Act.
The price at which sales of the shares occur may be based on market prices
or may be negotiated between the parties to such sales, and the consideration
may be cash or another form negotiated between the parties. Transactions in the
shares may be effected by brokers, dealers or agents engaged by the selling
stockholders. Broker-dealers acting as agents or principals may be paid
compensation in the form of discounts, concessions or commissions from the
selling stockholder and/or from the purchasers of the shares, or both.
Discounts, concessions, commissions and similar selling expenses, if any, that
can be attributed to the sale of shares will be paid by the selling stockholder
and/or the purchasers. Brokers, dealers or other agents may be deemed to be
"underwriters" within the meaning of the Securities Act. Any profits on the
resale of shares by a broker-dealer acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act. The selling
stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares if liabilities are
imposed on it under the Securities Act.
The selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares, nor is there an underwriter
or coordinating broker acting in connection with a proposed sale of shares by
any selling stockholder. If we are notified by any selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares, if required, we will file a supplement to this prospectus.
16
If the selling stockholders use this prospectus for any sale of the shares,
they will be subject to the prospectus delivery requirements of the Securities
Act. For transactions effected on or through the Nasdaq National Market, those
requirements may be satisfied by our delivery of copies of this prospectus to
the Nasdaq National Market in compliance with Securities Act Rule 153. Instead
of using this prospectus for any sale of the shares, a selling stockholder may
resell shares in compliance with the criteria and requirements of Securities Act
Rule 144.
The anti-manipulation rules of Regulation M under the Securities Exchange
Act of 1934 may apply to sales of our common stock and activities of the selling
stockholder.
We have agreed to pay certain of the costs, expenses and fees of preparing,
filing and maintaining this prospectus and the registration statement of which
this prospectus is a part, but we will not receive any proceeds from sale of the
shares subject to this prospectus. We have also agreed, under a registration
rights agreement, to keep the registration statement, of which this prospectus
and any subsequent prospectuses constitute a part, effective until the earlier
of one year after effectiveness or until all the shares covered by this
registration statement have been sold. Pursuant to the registration rights
agreement, we will extend the effective period of this prospectus if, during the
effective period, we suspend the effectiveness of the prospectus for reasons
specified in the registration rights agreement with the selling stockholders.
Also pursuant to the registration rights agreement, we have agreed to indemnify
the selling stockholders, and the selling stockholders have agreed to indemnify
us, and each has agreed to indemnify other persons named or described in the
registration rights agreement, against various liabilities, including
liabilities under the federal Securities Exchange Act and state securities laws.
We intend to distribute copies of this prospectus to the record holders of
our shares covered by this prospectus promptly following the effective date of
the registration statement of which this prospectus forms a part. We also intend
to distribute copies of any supplemented or revised prospectuses to the selling
stockholders.
LEGAL MATTERS
The validity of the shares of common stock covered by this prospectus will
be passed upon by Gibson, Dunn & Crutcher LLP, 4 Park Plaza, Jamboree Center,
Irvine, California 92614.
EXPERTS
The audited consolidated financial statements and schedule of Quidel
Corporation and the audited financial statements of Litmus Concepts, Inc.
incorporated by reference in this prospectus and elsewhere in the registration
statement, to the extent and for the periods indicated in their reports, have
been audited by Arthur Andersen LLP, independent public accountants and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
The consolidated statements of operations, stockholders' equity and cash
flows incorporated by reference in this prospectus and elsewhere in the
registration statement, to the extent and for the periods indicated their
report, have been audited by Ernst and Young LLP, independent auditors, and are
included herein in reliance upon the authority of said firm as experts in giving
said report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read or copy
any document that we file with the Securities and Exchange Commission at the
Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain information about the Public Reference Room by
17
calling the Securities and Exchange Commission for more information at
1-800-SEC-0330. Our filings are also available at the Securities and Exchange
Commission's web site at http://www.sec.gov.
We filed a registration statement on Form S-3 with the Securities and
Exchange Commission that covers the sale of the shares offered in this
prospectus. This prospectus is part of that registration statement, but does not
include all of the information included in the registration statement. You
should refer to the registration statement for additional information about us
and the shares offered in this prospectus. Statements that we have made in this
prospectus relating to any document filed as an exhibit to the registration
statement or any document incorporated by reference into the registration
statement may not be complete. You should review the referenced document itself
for a complete understanding of its terms.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information that we have filed with it, which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus. Later information that we file with the Securities and Exchange
Commission automatically will update and supersede the information contained in
this prospectus. We are incorporating by reference the documents listed below
and any future filings that we will make with the Securities and Exchange
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934:
1. Our Annual Report on Form 10-K for the year ended December 31, 2000,
filed on April 2, 2001.
2. Our Proxy Statement for the Annual Meeting of Shareholders set for
May 23, 2001, filed on April 17, 2001.
3. Our Form 8-K/A filed on February 21, 2001.
4. The description of our common stock contained in the Registration
Statement on Form 8-A dated February 28, 1983, including any amendment
or report filed for the purpose of updating such description.
5. The description of our Preferred Stock Purchase Rights contained in our
Registration Statement on Form 8-A filed on January 13, 1997, including
any amendment or report filed for the purpose of updating such
description.
We will provide to you, without charge, a copy of the documents that we have
incorporated by reference in this prospectus (other than exhibits to such
documents unless those exhibits are specifically incorporated by reference into
this prospectus). Written or oral requests for documents should be directed to
Investor Relations, at 10165 McKellar Court, San Diego, CA 92121 (Telephone:
(858) 552-1100).
You should only rely on the information included in or incorporated by
reference into this prospectus. We have not authorized anyone to provide you
with additional or different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date of that document.
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC registration fee........................................ $ 2,089
Printing fees............................................... 20,200
Legal fees and expenses..................................... 50,000
Accounting fees and expenses................................ 50,000
Blue Sky fees and expenses.................................. 1,500
Miscellaneous expenses...................................... 2,000
--------
*Total...................................................... $125,789*
========
------------------------
* This amount is an estimate that is subject to future contingencies.
The foregoing expenses will be paid in 2001. Additional expenses where
material will be reported, if necessary, by amendment to this registration
statement. We will bear all the expenses listed above in connection with the
preparation and filing of the registration statement. The selling stockholders
will bear all other expenses incurred in the sale or other disposition of the
shares registered hereby, including, but not limited to, brokers' commissions
and other selling expenses, and any other out-of-pocket expenses incurred by the
selling stockholders.
ITEM 15 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of the corporation, by
reason of the fact that such person is or was a director, officer, employee or
agent 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 enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no cause to believe his
or her conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted under similar standards to
those set forth above, except that no indemnification may be made in respect to
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsection (a) and (b) of Section 145 or in the
defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses actually and reasonably incurred by him or her in connection
therewith;
II-1
that indemnification provided for by Section 145 shall not be deemed exclusive
of any other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against such officer
or director and incurred by him or her in any such capacity or arising out of
his or her status as such, whether or not the corporation would have the power
to indemnify him or her against such liabilities under Section 145.
Article 10 of Quidel's Certificate of Incorporation provides for
indemnification of directors, officers, employees and other agents to the
maximum extent permitted by the DGCL. As permitted by Section 102(b) (7) of the
DGCL, our Bylaws provide that we shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of us), and whether
brought by a third party or by us or in the right of us, by reason of the fact
that he is or was a director or officer of us or subsidiary of us or is or was
serving at the request of us as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of us, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. No indemnification shall be made in respect of
any claim, issue, or matter as to which such person shall have been adjudged to
be liable to Quidel unless and only to the extent that a court of competent
jurisdiction has determined upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
has deemed proper.
To the extent that a person who may be entitled to indemnification has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in the Bylaws, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith. Expenses
incurred in defending or settling a civil or criminal action, suit or proceeding
by an individual who may be entitled to indemnification shall be paid by us in
advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount if it ultimately is
determined that no indemnification is owed.
To implement the provisions of the DGCL, our Certificate of Incorporation
and our Bylaws, we have entered into Indemnification Agreements with each of our
directors and officers. The provisions of the Indemnification Agreements
parallel the portions of the Bylaws described above. Under the Indemnification
Agreements, however, our indemnification obligation does not apply under these
additional circumstances: claims where the officer or director (a) is adjudged
to be liable to us (unless a court of competent jurisdiction determines that
indemnification is proper); (b) initiated or brought the claim voluntarily
(except certain proceedings to establish or enforce a right to indemnification);
(c) has instituted any proceedings to enforce or interpret the Indemnification
Agreements, if a court of competent jurisdiction determines that each of the
material assertions in the proceeding was not made in good faith or was
frivolous; (d) is paid directly under an insurance policy maintained by us; or
(e) is required to account for profits in fact made from the purchase or sale of
securities of us under Section 16(b) of the Exchange Act. Absent the
Indemnification Agreements, the indemnification that might be available to
directors and officers could be changed by amendment to our Certificate of
Incorporation and Bylaws. In the event of changes, after the date of such
Indemnification Agreements, in any applicable law, statute or rule which expands
the right of a Delaware corporation to indemnify a member of its board of
directors or an officer, such changes shall be, IPSO FACTO, within the purview
of the rights and obligations under the Indemnification Agreements. We may seek
directors and officers
II-2
liability insurance against the cost of defense, settlement or payment of a
judgment under certain circumstances.
ITEM 16 EXHIBITS.
Set forth below is a list of the exhibits filed as part of this Registration
Statement:
EXHIBIT NO. EXHIBIT
--------------------- ------------------------------------------------------------
2.1 Agreement and Plan of Merger dated as of October 30, 2000,
among Litmus Concepts, Inc., Quidel Corporation, and Litmus
Acquisition Corporation, as amended by that certain
amendment dated as of December 7, 2000 (incorporated by
reference to Exhibit 2.1 to Quidel's Current Report on Form
8-K filed on December 22, 2000).
4.1 Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to Quidel's Current Report on Form
8-K dated February 26, 1991).
4.2 Certificate of Designations of the Series B Preferred Stock
(incorporated by reference to Exhibit 4.1 to Quidel's
Current Report on Form 8-K dated January 5, 1995).
4.3 Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series C Junior Participating
Preferred Stock (incorporated by reference to Exhibit A of
Exhibit 1 to Quidel's Registration Statement on Form 8-A
filed on January 13, 1997).
4.4 Bylaws, as amended (incorporated by reference to Exhibit 3.2
to Quidel's Current Report on Form 8-K filed on August 9,
2000).
4.5 Rights Agreement dated as of December 31, 1996 between the
Company and American Stock Transfer & Trust Company, as
Rights Agent (incorporated by reference to Exhibit 1 to
Quidel's Registration Statement on Form 8-A filed on January
13, 1997).
4.6 Registration Rights Agreement, dated as of December 8, 2000,
by and between Quidel and Richard L. Sherman, acting as
securityholder agent for the former Litmus shareholders and
certain optionholders (incorporated by reference to Exhibit
B of Exhibit 2.1 to Quidel's Current Report on Form 8-K
filed on December 22, 2000).
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of
the securities registered hereby.*
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit
5.1).
23.2 Consent of Arthur Andersen LLP, independent public
accountants.*
23.3 Consent of Ernst & Young LLP, independent auditors.*
24.1 Power of Attorney (contained on the signature page of this
Registration Statement).
------------------------
* Filed herewith.
ITEM 17 UNDERTAKINGS.
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-3
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume or securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b), if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective 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 (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 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 as that time shall be deemed to be the initial BONA
FIDE offering thereof;
(3) To remove from registration by means of post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering. The undersigned registrant hereby 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit's plan annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons controlling the
Company pursuant to the provisions described in Item 15 above, the Company has
been informed 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 Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-4
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, as amended, I
certify that I have reasonable grounds to believe that our Corporation meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on April 20, 2001.
QUIDEL CORPORATION
By: /s/ CHARLES J. CASHION
-----------------------------------------
Charles J. Cashion
SENIOR VICE PRESIDENT CORPORATE
OPERATIONS,
CHIEF FINANCIAL OFFICER AND SECRETARY
(PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER)
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Charles
J. Cashion and Andre de Bruin his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him or her and his or her name, place and stead, at any and all capacities,
to sign any and all amendments (including post-effective amendments) to this
Registration Statement and to file the same, all with exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
with full powers and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as full to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming that all said attorneys-in-fact and agents, each acting alone, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Date: April 20, 2001
/s/ ANDRE DE BRUIN /s/ CHARLES J. CASHION
-------------------------------------------- --------------------------------------------
Andre de Bruin Charles J. Cashion
CHIEF EXECUTIVE OFFICER SENIOR VICE PRESIDENT CORPORATE OPERATIONS,
(PRINCIPAL EXECUTIVE OFFICER); CHIEF FINANCIAL OFFICER AND SECRETARY
VICE CHAIRMAN OF THE BOARD (PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER)
/s/ RICHARD C.E. MORGAN /s/ JOHN D. DIEKMAN
-------------------------------------------- --------------------------------------------
Richard C.E. Morgan John D. Diekman, DIRECTOR
CHAIRMAN OF THE BOARD
/s/ THOMAS A. GLAZE /s/ MARGARET G. MCGLYNN
-------------------------------------------- --------------------------------------------
Thomas A. Glaze, DIRECTOR Margaret G. McGlynn, DIRECTOR
II-5
/s/ MARY LAKE POLAN /s/ FAYE WATTLETON
-------------------------------------------- --------------------------------------------
Mary Lake Polan, DIRECTOR Faye Wattleton, DIRECTOR
/s/ GEORGE DUNBAR
--------------------------------------------
George Dunbar, DIRECTOR
II-6
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
--------------------- ------------------------------------------------------------
2.1 Agreement and Plan of Merger dated as of October 30, 2000,
among Litmus Concepts, Inc., Quidel Corporation, and Litmus
Acquisition Corporation, as amended by that certain
amendment dated as of December 7, 2000 (incorporated by
reference to Exhibit 2.1 to Quidel's Current Report on Form
8-K filed on December 22, 2000).
4.1 Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to Quidel's Current Report on Form
8-K dated February 26, 1991).
4.2 Certificate of Designations of the Series B Preferred Stock
(incorporated by reference to Exhibit 4.1 to Quidel's
Current Report on Form 8-K dated January 5, 1995).
4.3 Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series C Junior Participating
Preferred Stock (incorporated by reference to Exhibit A of
Exhibit 1 to Quidel's Registration Statement on Form 8-A
filed on January 13, 1997).
4.4 Bylaws, as amended (incorporated by reference to Exhibit 3.2
to Quidel's Current Report on Form 8-K filed on August 9,
2000).
4.5 Rights Agreement dated as of December 31, 1996 between the
Company and American Stock Transfer & Trust Company, as
Rights Agent (incorporated by reference to Exhibit 1 to
Quidel's Registration Statement on Form 8-A filed on January
13, 1997).
4.6 Registration Rights Agreement, dated as of December 8, 2000,
by and between Quidel and Richard L. Sherman, acting as
securityholder agent for the former Litmus shareholders and
certain optionholders (incorporated by reference to Exhibit
B of Exhibit 2.1 to Quidel's Current Report on Form 8-K
filed on December 22, 2000).
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of
the securities registered hereby.*
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit
5.1).
23.2 Consent of Arthur Andersen LLP, independent public
accountants.*
23.3 Consent of Ernst & Young LLP, independent auditors.*
24.1 Power of Attorney (contained on the signature page of this
Registration Statement).
------------------------
* Filed herewith.