-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SZec8FZqayLWnQSqKBMzg29uoz8e66XluV+RGLFUq8ft5+HJ0T5rHkaFWABg9Cqi wFoIswj8q1gMq0nSgE1JmA== 0000892569-96-002424.txt : 19961120 0000892569-96-002424.hdr.sgml : 19961120 ACCESSION NUMBER: 0000892569-96-002424 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961115 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GISH BIOMEDICAL INC CENTRAL INDEX KEY: 0000700945 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 953046028 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16223 FILM NUMBER: 96667671 BUSINESS ADDRESS: STREET 1: 2681 KELVIN AVE CITY: IRVINE STATE: CA ZIP: 92714 BUSINESS PHONE: 7147565485 MAIL ADDRESS: STREET 1: 2681 KELVIN AVE CITY: IRVINE STATE: CA ZIP: 92714 S-3 1 GISH BIOMEDICAL, INC. - FORM S-3 1 As Filed With the Securities and Exchange Commission on November 15, 1996 Registration No. 333-________ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington. D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 GISH BIOMEDICAL, INC. (Exact name of registrant as specified in its charter) CALIFORNIA 95-3046028 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
2681 KELVIN AVENUE, IRVINE, CALIFORNIA 92714 (714) 756-5485 (Address, including zip code, and telephone number, including area code of registrant's principal executive offices) JACK BROWN CHIEF EXECUTIVE OFFICER GISH BIOMEDICAL, INC. 2681 KELVIN AVENUE, IRVINE, CALIFORNIA 92714 (714) 756-5485 (Name, address, including zip code, and telephone number, including area code of agent for service) COPY TO: MICHAEL E. FLYNN, ESQ. MATTHEW P. THULLEN, ESQ. STRADLING, YOCCA, CARLSON & RAUTH 660 NEWPORT CENTER DRIVE, SUITE 1600 NEWPORT BEACH, CALIFORNIA 92660 Approximate date of commencement of proposed sale to public: AS SOON AS PRACTICABLE 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, 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. / / 2 CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------- Proposed maximum Proposed maximum Title of securities Amount to be offering price aggregate offering Amount of to be registered registered per share (1) price (1) registration fee - -------------------------------------------------------------------------------------------------------------- Common Stock, no 240,240 $6.4375 $1,546,545 $468.65 par value shares - --------------------------------------------------------------------------------------------------------------
(1) The offering price is estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) and (g), using the average of the high and low price reported by the Nasdaq National Market for the Common Stock on November 13, 1996, which was approximately $6.4375 per share. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 2 3 PROSPECTUS SUBJECT TO COMPLETION DATED NOVEMBER 15, 1996 GISH BIOMEDICAL, INC. 240,240 SHARES OF COMMON STOCK (NO PAR VALUE) This Prospectus relates to the offer and sale of shares of common stock, no par value ("Common Stock"), of Gish Biomedical, Inc. (the "Company" or "Gish"), which may be offered hereby from time to time by the selling stockholder named herein (the "Selling Stockholder") for its own benefit. The Company will receive no part of the proceeds of sales made hereunder. See "Use of Proceeds." All expenses of registration incurred in connection with this offering are being borne by the Company, but all selling and other expenses incurred by the Selling Stockholder will be borne by such Selling Stockholder. None of the shares offered pursuant to this Prospectus have been registered prior to the filing of the Registration Statement of which this Prospectus is a part. The distribution of the shares of Common Stock offered hereby may be effected from time to time in one or more transactions. All or a portion of the shares of Common Stock offered hereby may be offered for sale, from time to time, on the Nasdaq National Market (the "Nasdaq NM") in negotiated transactions, or by a combination of these methods, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to such market prices or at negotiated prices. In addition, the Selling Stockholder may elect to distribute, pursuant to the Registration Statement of which this Prospectus is a part, the shares of Common Stock as a dividend to its stockholders. In effecting sales, brokers or dealers engaged by the Selling Stockholder may arrange for other brokers or dealers to participate. All brokers' commissions, concessions or discounts will be paid by the Selling Stockholder. See "Plan of Distribution." The Selling Stockholder and any broker executing selling orders on behalf of the Selling Stockholder may be deemed to be an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), in which event commissions received by such broker may be deemed to be underwriting commissions under the Securities Act. The Common Stock of the Company is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is listed on the Nasdaq NM under the symbol "GISH". On November 14, 1996, the last reported sale price of the Company's Common Stock on the Nasdaq NM was $6.75. SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is , 1996. 4 TABLE OF CONTENTS
PAGE Available Information...........................................................2 Incorporation of Certain Documents by Reference.................................3 The Company.....................................................................4 Risk Factors....................................................................4 Use of Proceeds.................................................................7 Selling Stockholder.............................................................8 Plan of Distribution............................................................8 Legal Matters...................................................................9 Experts.........................................................................9 Indemnification of Directors and Officers.......................................9
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices at 500 West Madison Street, Chicago, Illinois 60606 and 7 World Trade Center, New York, New York 10048. Copies of such material can also be obtained at prescribed rates from the Public Reference Section of the Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. This Prospectus does not contain all of the information set forth in the Registration Statement of which this Prospectus is a part and which the Company has filed with the Commission. For further information with respect to the Company and the securities offered hereby, reference is made to the Registration Statement, including the exhibits filed as a part thereof, copies of which can be inspected at, or obtained at prescribed rates from, the Public Reference Section of the Commission at the address set forth above. Additional updating information with respect to the Company may be provided in the future by means of appendices of supplements to this Prospectus. The Company's Common Stock is listed on the Nasdaq NM. Reports, proxy statements and other information concerning the Company can be inspected at 1735 K Street, N.W., Washington D.C. 20006-1506. 2 5 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The documents listed below have been filed by the Company with the Commission under the Exchange Act and are incorporated by reference herein: a. The Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996; b. The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996. c. All other reports filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the Company's fiscal year ended June 30, 1996; and d. The description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A, filed pursuant to Section 12 of the Exchange Act, including any amendments or reports filed for the purpose of updating such description. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Prospectus and to be part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide, without charge, to each person to whom a copy of this Prospectus is delivered, upon written or oral request of such person, a copy of any and all of the information that has been or may be incorporated by reference herein (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into such documents). Such requests should be directed to Chief Financial Officer, Gish Biomedical, Inc., 2681 Kelvin Avenue, Irvine, California 92714, telephone number (714) 756-5485. 3 6 THE COMPANY The Company was incorporated in California in April 1976 under the name "Gics Pharmaceuticals, Inc." In November 1981, the Company changed its name to Gish Biomedical, Inc . The Company has one operating subsidiary: Gish International, Inc. Unless the context otherwise requires, references to the "Company" herein include Gish Biomedical, Inc. and its operating subsidiary. The Company's headquarters and principal place of business are located at 2681 Kelvin Avenue, Irvine, California 92714, and its telephone number is (714) 756-5485. RISK FACTORS The following factors should be considered carefully in evaluating the Company and its business before making an investment in the Common Stock offered hereby, together with all of the other information set forth or incorporated by reference in this Prospectus. This Prospectus, including documents incorporated into this Prospectus by reference, contains certain forward-looking statements that are based on current expectations. In light of the important factors that can materially affect results, including those set forth in this paragraph and below, the inclusion of forward-looking information herein should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. The Company may encounter competitive, technological, financial and business challenges making it more difficult than expected to continue to develop and market its products; the market may not accept the Company's existing and future products; the Company may be unable to retain existing key management personnel; and there may be other material adverse changes in the Company's operations or business. Certain important factors affecting the forward-looking statements made herein include, but are not limited to (i) failure to obtain U.S. Food and Drug Administration approval for its oxygenator which is currently in development, (ii) the lack of market acceptance of its redesigned MyoManager or ambulatory infusion pump, (iii) continued downward pricing pressures in the Company's targeted markets, (iv) the continued acquisition of the Company's customers by certain of its competitors and (v) the decision by the Company to replace its distributor network with a direct sales force in certain geographic territories. Assumptions relating to budgeting, marketing, product development and other management decisions are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and business developments, the impact of which may cause the Company to alter its marketing, capital expenditure or other budgets, which may in turn affect the Company's financial position and results of operations. The reader is therefore cautioned not to place undue reliance on forward-looking statements contained herein, which speak as of the date of this Prospectus. COMPETITION The medical device industry in general, and the market for products for use in cardiovascular surgery in particular, is intensely competitive and characterized by innovation and technological advances. Product differentiation and performance, client service, reliability, cost and ease of use are important competitive considerations in the medical device industry. The Company expects that the current high levels of competition and technological change in the medical device industry in general, and the cardiovascular surgery products industry in particular, will continue to increase. Several companies offer devices which compete with devices manufactured by the Company, including Bentley Laboratories, a division of Baxter Health Care Corporation, Bard Cardiopulmonary, Inc., a division of C.A. Bard, Inc., COBE Laboratories, Inc., Sorin Biomedical, Inc., a unit of Fiat Italy, Medtronic, Inc. and Stryker Surgical. Most of the Company's competitors have longer operating histories and significantly greater financial, technical, research, marketing, sales, distribution and other resources than the Company. In addition, the Company's competitors have greater name recognition than the Company and frequently offer discounts as a competitive tactic. There can be no assurance that the Company's current competitors or potential future competitors will not succeed in developing or marketing technologies and products that are more effective or commercially attractive than those that have been and are being developed by the Company or that would render the Company's technologies and products obsolete or noncompetitive, or that such companies will not succeed in obtaining regulatory approval for, introducing or commercializing any such products prior to the Company. Any of the above competitive developments could have a material adverse effect on the Company's business, financial condition and results of operations. 4 7 RISK OF DECLINING AVERAGE SELLING PRICES The Company is currently facing and may continue to face increasing pricing pressures from its current and future competitors, especially from competitors in the cardiovascular surgery products market. As a result of such pressures, the Company has been forced to lower the prices of certain of its products in order to maintain market share. There can be no assurance that the Company will be able to maintain its market share in the cardiovascular surgery products market in the face of continuing pricing pressures. Over time, the average selling prices for the Company's products may continue to decline as the markets for these products continues to become more competitive. Any material reduction in the prices for the Company's products would negatively affect the Company's gross margin and would require the Company to increase unit sales in order to maintain net sales. RISK OF MARKET WITHDRAWAL OR PRODUCT RECALL Complex medical devices, such as the Company's products, can experience performance problems in the field that require review and possible corrective action by the manufacturer. Similar to many other medical device manufacturers, the Company periodically receives reports from users of its products relating to performance difficulties they have encountered. The Company expects that it will continue to receive customer reports regarding the performance and use of its products. There can be no assurance that component failures, manufacturing errors or design defects that could result in an unsafe condition or injury to the patient will not occur. If any such failures or defects were deemed serious, the Company could be required to withdraw or recall products, which could result in significant costs to the Company. However, there can be no assurance that market withdrawals or product recalls will not occur in the future. Any future product problems could result in market withdrawals or recalls of products, which could have a material adverse affect on the Company's business, financial condition or results of operations. The Company has recently undertaken a voluntary recall of its ambulatory infusion pumps. There can be no assurance that the Company will be able to successfully take corrective actions with respect to these pumps, nor can there be any assurance that any such corrective actions will not force the Company to incur significant costs. In addition, there can be no assurance that the current recall or any future recalls will not cause the Company to face increasing scrutiny from its customers, which could cause the Company to lose market share or incur substantial costs in order to maintain existing market share. RISKS ASSOCIATED WITH EXTENSIVE GOVERNMENT REGULATION The manufacture and sale of medical devices, including products currently sold by the Company and the Company's other potential products, are subject to extensive regulation by numerous governmental authorities in the United States, principally the FDA, and corresponding state agencies, such as the California Department of Health Services ("CDHS"). In order for the Company to market its products for clinical use in the United States, the Company must obtain clearance from the FDA of a 510(k) premarket notification or approval of a more extensive submission known as a premarket approval ("PMA") application. In addition, certain material changes to medical devices also are subject to FDA review and clearance or approval. The process of obtaining FDA and other required regulatory clearances and approvals is lengthy, expensive and uncertain, frequently requiring from one to several years from the date of FDA submission if premarket clearance or approval is obtained at all. Securing FDA clearances and approvals may require the submission of extensive clinical data and supporting information to the FDA. The Company is currently awaiting clearance of 510(k) premarket notification for a new oxygenator product which the Company expects to receive by January 1997. Sales of medical devices outside of the United States are subject to international regulatory requirements that vary from country to country. The time required to obtain approval for sales internationally may be longer or shorter than that required for FDA clearance or approval, and the requirements may differ. The Company has entered into distribution agreements for the foreign distribution of its products. These agreements generally require that the foreign distributor is responsible for obtaining all necessary regulatory approvals in order to allow sales of the Company's products in a particular country. There can be no assurance that the Company's foreign distributors will be able to obtain approval in a particular country for any future products of the Company. Regulatory clearances or approvals, if granted, may include significant limitations on the indicated uses for which the product may be marketed. In addition, to obtain such clearances or approvals, the FDA and certain foreign regulatory authorities impose numerous other requirements with which medical device manufacturers must 5 8 comply. FDA enforcement policy strictly prohibits the marketing of cleared or approved medical devices for uncleared or unapproved uses. In addition, product clearances or approvals could be withdrawn for failure to comply with regulatory standards or the occurrence of unforeseen problems following the initial marketing. The Company will be required to adhere to applicable FDA regulations regarding good manufacturing practices ("GMP") and similar regulations in other countries, which include testing, control, and documentation requirements. Ongoing compliance with GMP and other applicable regulatory requirements will be monitored through periodic inspections by federal and state agencies, including FDA and CDHS, and by comparable agencies in other countries. Failure to comply with applicable regulatory requirements, including marketing products for unapproved uses, could result in, among other things, warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, refusal of the government to grant premarket clearance or premarket approval for devices, withdrawal of clearances or approvals and criminal prosecution. Changes in existing regulations or adoption of new governmental regulations or policies could prevent or delay regulatory approval of the Company's products. There can be no assurance that the Company will be able to obtain FDA 510(k) clearance or PMA approval for its potential products or other necessary regulatory approvals or clearances on a timely basis or at all. Delays in receipt of or failure to receive U.S. or foreign clearances or approvals, the loss of previously obtained clearances or approvals, or failure to comply with existing or future regulatory requirements would have a material adverse effect on the Company's business, financial condition and results of operations. PRODUCT LIABILITY RISK; LIMITED INSURANCE COVERAGE The manufacture and sale of medical products entail significant risk of product liability claims. There can be no assurance that the Company's existing annual insurance coverage limits of $5 million per occurrence and $5 million in the aggregate will be adequate to protect the Company from any liabilities it might incur in connection with the clinical trials or sales of its products. In addition, the Company may require increased product liability coverage as products under development are successfully commercialized. Such insurance is expensive and in the future may not be available on acceptable terms, or at all. A successful product liability claim or series of claims brought against the Company in excess of its insurance coverage, could have a material adverse effect on the Company's business, financial condition and results of operations. RISKS RELATING TO NEW PRODUCT DEVELOPMENT The Company's growth is dependent in part on the design and development of new products in the medical device industry. The product development process is time-consuming and costly, and there can be no assurance that product development will be successfully completed, that necessary regulatory clearances or approvals will be granted by the FDA on a timely basis, or at all, or that the potential products will achieve market acceptance. Failure by the Company to develop, obtain necessary regulatory clearances or approvals for, or successfully market potential new products could have a material adverse effect on the Company's business, financial conditions and results of operations. DEPENDENCE UPON KEY PERSONNEL The Company is dependent upon a number of key management and technical personnel. The loss of the services of one or more key employees would have a material adverse effect on the Company. The Company's success will also depend on its ability to attract and retain additional highly qualified management and technical personnel. The Company faces intense competition for qualified personnel, many of whom are often subject to competing employment offers, and there can be no assurance that the Company will be able to attract and retain such personnel. RISKS ASSOCIATED WITH HEALTHCARE REFORM PROPOSALS Political, economic and regulatory influences are subjecting the healthcare industry in the United States to fundamental change. The Clinton administration has expressed a continuing commitment to increasing access to healthcare for the uninsured, and both the President and the Congress have expressed interest in controlling the escalation of healthcare expenditures and using healthcare reimbursement policies to help control the federal deficit. Potential reforms proposed over the last several years have included mandated basic healthcare benefits, controls 6 9 on healthcare spending through limitations on the growth of private health insurance premiums and Medicare and Medicaid spending, the creation of large insurance purchasing groups and fundamental changes in the healthcare delivery system. In addition, some states in which the Company operates are also considering various healthcare reform proposals. The Company anticipates that federal and state governments will continue to review and assess alternative healthcare delivery systems and payment methodologies and public debate of these issues will likely continue in the future. Due to uncertainties regarding the ultimate features of reform initiatives and their enactment and implementation, the Company cannot predict which, if any, of such reform proposals will be adopted,when they may be adopted or what impact they may have on the Company, and there can be no assurance that the adoption of reform proposals will not have a material adverse effect on the Company's business, operating results or financial condition. In addition, the actual announcement of reform proposals and the investment community's reaction to such proposals, as well as announcements by competitors and third-party payors of their strategies to respond to such initiatives, could produce volatility in the trading and market price of the Common Stock. RISKS ASSOCIATED WITH ENVIRONMENTAL COMPLIANCE In the ordinary course of its manufacturing process, the Company uses solvents and isopropyl alcohol which are stored on-site. The waste created by the use of these products is transported off-site on a regular basis by a state-registered waste hauler. Although the Company is not aware of any claim involving violation of environmental or occupational safety and health laws and regulations, there can be no assurance that such a claim may not arise in the future, which may have a material adverse effect on the Company. CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS The Company's directors and executive officers will, in the aggregate, beneficially own approximately 24% of the Company's outstanding Common Stock following the completion of this offering. These shareholders, if acting together, would be able to control substantially all matters requiring approval by the shareholders of the Company, including the election of directors and the approval of mergers or other business combination transactions. Such concentration of ownership could discourage or prevent a change in control of the Company. ADVERSE EFFECTS OF PREFERRED STOCK ON RIGHTS OF COMMON STOCK The Board of Directors of the Company is authorized to issue, from time to time, without any action on the part of the Company's shareholders, up to 1,500,000 shares of Preferred Stock in one or more series, with such relative rights, preferences, privileges and restrictions as are determined by the Board of Directors at the time of issuance. Accordingly, the Board of Directors is empowered to issue Preferred Stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of Common Stock. In the event of such issuance, the Preferred Stock could be utilized as a method of discouraging, delaying or preventing a change in control of the Company. VOLATILITY OF STOCK PRICE; NO DIVIDENDS The trading price of the Common Stock has been and is likely to continue to be subject to significant fluctuations in response to variations in quarterly operating results, the gain or loss of significant contracts, changes in management, announcements of technological innovations or new products by the Company or its competitors, legislative or regulatory changes, general trends in the industry and other events and factors. In addition, the stock market has experienced extreme price and volume fluctuations which have affected the market price for any companies for reasons frequently unrelated to the operating performance of these companies. These broad market fluctuations may adversely affect the market price of the Company's Common Stock. The Company currently intends to retain any future earnings for use in its business and does not anticipate any cash dividends in the future. USE OF PROCEEDS The proceeds from the sale of the Selling Stockholder's Common Stock will belong to the Selling Stockholder. The Company will not receive any proceeds from any such sale of the Common Stock. 7 10 SELLING STOCKHOLDER The following table sets forth the name of the Selling Stockholder, the nature of any material relationship with the Company within the past three years, if applicable, the number of shares of Common Stock owned by such Selling Stockholder prior to the offering, and the number of shares and (if one percent or more) the percentage of the class to be owned by such Selling Stockholder after the offering.
Shares Owned After Offering(1) Shares Owned Shares ------------------ Name Prior to Offering Offered Number Percent - ---- ----------------- ------- ------ ------- Creative Medical Development, Inc. 240,240 240,240 -- --
(1) Assumes the Selling Stockholder sells all of the shares offered hereby. On September 13, 1995, the Company and the Selling Stockholder entered into an agreement whereby the Selling Stockholder sold substantially all of its ambulatory infusion pump assets to the Company in exchange for 240,240 shares of Common Stock and a cash payment of $600,000. This transaction was consummated on April 17, 1996. In connection with and at the consummation of this transaction, the Company entered into a one-year lease with a subsidiary of the Selling Stockholder with respect to property housing the equipment used to manufacture the assets acquired. The Company also entered into one-year employment agreements at the consummation of this transaction with the Selling Stockholder's Chief Executive Officer and Secretary/Treasurer. The agreement with the Chief Executive Officer of the Selling Stockholder provides for an annual salary of $110,000, with vacation and other benefits in accordance with the Company's general personnel policies, and further provides for stock awards which vest over the life of the agreement, as well as bonuses and options to be granted in the event certain performance targets are met. The agreement with the Secretary/Treasurer of the Selling Stockholder provides for an annual salary of $96,000, with vacation and other benefits in accordance with the Company's general personnel policies, as well as stock awards which vest over the term of the agreements and a stock bonus to be granted on the satisfaction of an administrative transition between the Company and the Selling Stockholder with respect to the ambulatory infusion pump assets sold to the Company. PLAN OF DISTRIBUTION The Company will not receive any of the proceeds from the sale of shares of Common Stock offered hereby. The Selling Stockholder may sell all or a portion of the shares of Common Stock held by it from time to time while the Registration Statement of which this Prospectus is a part remains effective. By agreement with the Selling Stockholder, the Company is obligated to maintain the effectiveness of such Registration Statement until the earlier of April 17, 1998 or the date all of the shares of Common Stock offered hereby have been sold or withdrawn from registration by the Selling Stockholder. To the extent required, the number of shares of Common Stock to be sold, the name(s) of the Selling Stockholder(s), the purchase price, the name of any agent or dealer and any applicable commissions with respect to a particular offer will be set forth in an accompanying Supplement to this Prospectus. The aggregate proceeds to the Selling Stockholder from the sale of shares of Common Stock offered by the Selling Stockholder hereby will be the prices at which such securities are sold, less any commissions. There is no assurance that the Selling Stockholder will sell any or all of the shares of Common Stock offered hereby. The shares of Common Stock may be sold by the Selling Stockholder in transactions on the Nasdaq NM, in negotiated transactions, or by a combination of these methods, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to such market prices or at negotiated prices. The Selling Stockholder may elect to engage a broker or dealer to effect sales in one or more of the following transactions: (a) block trades in which the broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction, (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus, and (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers. In addition, the Selling Stockholder may elect to distribute, pursuant to the Registration Statement of which this Prospectus is a part, the shares of Common Stock as a dividend to its stockholders. In effecting sales, brokers and dealers engaged by Selling Stockholder may 8 11 arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from the Selling Stockholder in amounts in amounts to be negotiated (and, if such broker-dealer acts as agent for the purchaser of such shares, from such purchaser). Broker-dealers may agree with the Selling Stockholder to sell a specified number of such shares at a stipulated price per share, and, to the extent such broker-dealer is unable to do so acting as agent for the Selling Stockholder, to purchase as principal any unsold shares at the price required to fulfill the broker-dealer commitment to the Selling Stockholder. Broker-dealers who acquire shares as principal may thereafter resell such shares from time to time in transactions (which may involve crosses and block transaction and sales to and through other broker-dealers, including transactions of the nature described above) in the over-the-counter market or otherwise at prices and on terms then prevailing at the time of sale, at prices then related to the then-current market price or in negotiated transactions and, in connection with such resales, may pay to or receive from the purchasers of such shares commissions as described above. The Selling Stockholder and any broker-dealers or agents that participate with the Selling Stockholder in sales of the shares of Common Stock 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 of Common Stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Pursuant to the registration agreement entered into with the Selling Stockholder, the Company has agreed to indemnify the Selling Stockholder against certain liabilities, including liabilities under the Securities Act. The Company will pay all expenses incident to the registration of the offer and sale of the shares of Common Stock to the public. All selling and other expenses incurred by the Selling Stockholder, including selling commissions and fees, are to be paid by the Selling Stockholder. LEGAL MATTERS The validity of the shares of Common Stock offered hereby will be passed upon for the Company by Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Newport Beach, California. EXPERTS The consolidated financial statements of Gish Biomedical, Inc. appearing incorporated by reference in Gish Biomedical, Inc.'s Annual Report (Form 10-K) for the year ended June 30, 1996 have been audited by Ernst & Young LLP, independent auditors, as set forth in their report included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Company's Articles of Incorporation provides that to the fullest extent permitted by California law, a director will not be liable for monetary damages for breach of the director's fiduciary duty of care to the Company and its stockholders. This provision in the Articles of Incorporation does not eliminate a director's fiduciary duty of care, and, in appropriate circumstances, equitable remedies such as an injunction or other forms of non-monetary relief would remain available under California law. Each director will continue to be subject to liability for (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that the director believes to be contrary to the best interests of the Company or its stockholders or involve the absence of good faith on the part of the director, (iii) any transaction from which the director derives an improper personal benefit, (iv) acts or omissions involving reckless disregard for the director's duty to the Company or its stockholders when the director was aware or should have been aware of the risk of serious injury to the Company or its stockholders, (v) acts or omissions that constitute an unexpected pattern of inattention that amounts to an abdication of the director's duty to the Company or its stockholders, (vi) improper transactions between a director and the Company, and (vii) improper distributions and loans to directors and officers. This provision does not affect 9 12 a director's responsibilities under any laws, such as the federal securities laws or state or federal environmental laws. In addition, the Company's Bylaws provide that the Company may indemnify its directors, officers, employees and other agents to the fullest extent permitted by California law. The Company is also empowered under its Bylaws to enter into indemnification contracts with its directors and officers and to purchase insurance on behalf of any person whom the Company is required or permitted to indemnify. The Company has entered into agreements with its directors and executive officers, which requires the Company to indemnify them to the fullest extent permitted by law against certain losses they may incur in legal proceedings arising in connection with their services to the Company. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. 10 13 -------------------------------------------------- -------------------------------------------------- No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy to any person in any jurisdiction in which such offer or solicitation would be unlawful or to any person to whom it is unlawful. Neither the delivery of this Prospectus nor any offer or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company or that information contained herein is correct as of any time subsequent to the date hereof. ---------------------------------------------------------- ---------------------------------------------------------- 240,240 SHARES GISH BIOMEDICAL, INC. COMMON STOCK PROSPECTUS , 1996 ---------------------------------------------------------- ---------------------------------------------------------- 14 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 14. Other Expenses of Issuance and Distribution The following sets forth the costs and expenses, all of which shall be borne by the Company, in connection with the offering of the shares of Common Stock pursuant to this Registration Statement:
Securities and Exchange Commission Fee....................... $ 469.00 Accounting Fees and Expenses................................. $ 5,000.00* Legal Fees and Expenses...................................... $10,000.00* Miscellaneous Expenses....................................... $ 3,000.00* --------- Total............................................... $18,469.00
* Estimated Item 15. Indemnification of Directors and Officers. (a) As permitted by the California General Corporation Law, the Company's Articles of Incorporation eliminates the liability of directors to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent otherwise required by the California General Corporation Law. (b) The Company's Articles of Incorporation provides that the Company will indemnify each person who was or is made a party to any proceeding by reason of the fact that such person is or was a director or officer of the Company against all expense, liability and loss reasonably incurred or suffered by such person in connection therewith to the fullest extent authorized by the California General Corporation Law. The Company's Bylaws provide for a similar indemnity to directors and officers of the Company to the fullest extent authorized by the California General Corporation Law. (c) The Company's Articles of Incorporation also gives the Company the ability to enter into indemnification agreements with each of its officers and directors. The Company has entered into indemnification agreements with each of its directors and officers. The indemnification agreements provide for the indemnification of directors and officers of the Company against any and all expenses, judgments, fines, penalties and amounts paid in settlement, to the fullest extent permitted by laws. Item 16. Exhibits. 4.1 Registration Rights Agreement dated as of April 17, 1996, by and among the Company and Creative Medical Development, Inc., a Delaware corporation. 5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional Corporation. 23.1 Consent of Stradling, Yocca, Carlson & Rauth, a Professional Corporation (included in Exhibit 5.1). 23.2 Consent of Ernst & Young LLP. 24.1 Power of Attorney (included on the signature page to the Registration Statement - see page S-1.) II-1 15 Item 17. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of 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 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 (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 of S-8, and 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 Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, 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. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the II-2 16 opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 17 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 the City of Irvine, State of California, on the 14th day of November, 1996. GISH BIOMEDICAL, INC. By: /s/ Jack W. Brown ------------------------------------- Jack W. Brown Chief Executive Officer and President POWER OF ATTORNEY We, the undersigned officers and directors of Gish Biomedical, Inc., do hereby constitute and appoint Jack W. Brown and Jeanne M. Miller, or either of them, our true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, or any related Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or 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 each of said attorneys-in-fact and agents, 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, this registration statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title Date --------- ----- ---- Chief Executive Officer, /s/ Jack W. Brown President and Director - ----------------------------- (Principal Executive Officer) November 14, 1996 Jack W. Brown Vice President and Chief Financial /s/ Jeanne M. Miller Officer - ----------------------------- (Principal Financial officer) November 14, 1996 Jeanne M. Miller President and Director (Principal Executive Officer) - ----------------------------- Director November 14, 1996 Richard A. Braun /s/ Ray R. Coulter Director November 14, 1996 - ----------------------------- Ray R. Coulter
S-1 18
/s/ Richard W. Dutrisac Director November 14, 1996 - ----------------------------- Richard W. Dutrisac /s/ James B. Glavin Director November 14, 1996 - ----------------------------- James B. Glavin /s/ John S. Hagestad Director November 14, 1996 - ----------------------------- John S. Hagestad
S-2 19 EXHIBIT INDEX
Exhibit Sequential Number Description Page Number - ----- ----------- ----------- 4.1 Registration Rights Agreement dated as of April 17, 1996, by and among the Company and Creative Medical Development, Inc., a Delaware corporation. 5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional Corporation. 23.1 Consent of Stradling, Yocca, Carlson & Rauth, a Professional Corporation (included in Exhibit 5.1). 23.2 Consent of Ernst & Young LLP. 24.1 Power of Attorney (included on signature page to the Registration Statement at page S-1).
EX-4.1 2 REGISTRATION RIGHTS AGREEMENT DATED APRIL 17, 1996 1 EXHIBIT 4.1 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is made and entered into as of April 17, 1996, by and among GISH BIOMEDICAL, INC., a California corporation (the "Company"), and CREATIVE MEDICAL DEVELOPMENT, INC., a Delaware corporation (the "Purchaser"). This Agreement is made pursuant to that certain Asset Purchase Agreement dated as of September 13, 1995 by and among the Company and the Purchaser (the "Purchase Agreement"). Pursuant to the Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement with respect to the Registrable Securities (as defined hereinafter in this Agreement). The execution and delivery of this Agreement is a condition to closing of the transactions contemplated by the Purchase Agreement. The parties hereby agree as follows: 1. DEFINITIONS. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: Advice: See the last Paragraph of Section 3 hereof. Affiliate: "Affiliate" means, with respect to any specified Person, (i) any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person or (ii) any officer or director of such other Person. For purposes of this definition, the term "control" (including the terms "controlling," "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power (whether or not exercised) to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Common Stock: The Company's presently authorized shares of common stock, no par value. Effectiveness Date: The date on which the Registration Statement relating to the Shelf Registration is first declared effective by the SEC. Effectiveness Period: See Section 2(b) hereof. Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. Initial Shelf Registration: See Section 2(b) hereof. Losses: See Section 5(a) hereof. Purchase Agreement: As such term is defined in the second paragraph of this Agreement. 2 Prospectus: The prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, including, without limitation, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. Purchasers: Creative Medical Development, Inc., a Delaware corporation. Registrable Securities: The total number of shares of Common Stock issued to the Purchaser pursuant to Section 3.1 of the Purchase Agreement, provided that any share of such Common Stock shall cease to be a Registrable Security at such time as (i) it is effectively registered under the Securities Act and disposed of in accordance with the Registration Statement covering it, (ii) it becomes saleable by the holder thereof pursuant to Rule 144(k), (iii) it is sold or otherwise transferred pursuant to Rule 144, or (iv) it is otherwise sold or transferred by the Purchaser to any Person. Registration Demand Date: The date on which the Purchaser requests in writing that the Company register such Registrable Securities on Form S-3 under the Securities Act. Registration Expenses: See Section 4 hereof. Registration Statement: Any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. Rule 144: Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder. Shelf Registration: See Section 2 hereof. Subsequent Shelf Registration: See Section (c) hereof. 2. SHELF REGISTRATION. (a) On one occasion following the date which is six months from the date hereof, the Purchaser may notify the Company in writing that it intends to offer, cause to be offered or assist in offering for public sale all of the Registrable Securities (the "Registration Demand Date"), either directly in open market transactions or through distribution to Purchaser's stockholders as a dividend. 2 3 Within (30) days after the Registration Demand Date, the Company will use its best efforts to cause all of the Registrable Securities to be registered under the Securities Act as expeditiously as possible. (b) The Company shall prepare and file with the SEC within 30 days after the Registration Demand Date, or as soon as practicable thereafter, a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Securities (the "Initial Shelf Registration"). The Initial Shelf Registration may be a Registration Statement that is filed by the Company with the SEC to register other securities of the Company. The initial Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by the Purchaser, or distribution to, and subsequent resale by, its stockholders. The Company shall use its best efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act as soon as practicable after the Registration Demand Date and to keep the Initial Shelf Registration continuously effective under the Securities Act until the date that is two (2) years from the date hereof (the "Effectiveness Period"), or such shorter period ending when (i) all Registrable Securities covered by the Initial Shelf Registration have been sold or have ceased being Registrable Securities, or (ii) a Subsequent Shelf Registration covering all of the Registrable Securities has been declared effective under the Securities Act. (c) If the Initial Shelf Registration or any Subsequent Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder), the Company shall use its best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of effectiveness amend the Shelf Registration in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional "shelf" Registration Statement pursuant to Rule 415 covering all of the Registrable Securities (a "Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed, the Company shall use its best efforts to cause the Subsequent Shelf Registration to be declared effective as soon as practicable after such filing and to keep such Registration Statement continuously effective until the end of the Effectiveness Period. (d) The Company shall supplement and amend the Shelf Registration or Subsequent Shelf Registration, as the case may be, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Purchaser. 3. REGISTRATION PROCEDURES. In connection with the Company's registration obligations under Section 2 hereof, the Company shall as expeditiously as practicable: (a) Prepare and file with the SEC the Initial Shelf Registration Statement on Form S-3 and shall use its best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided, that before filing any such Registration Statement or Prospectus or any amendments or supplements thereto (other than documents that would be incorporated or deemed to be incorporated therein by reference and that the Company is required by applicable securities laws or stock exchange requirements to file) the Company shall furnish to 3 4 the Purchaser copies of all such documents proposed to be filed, which documents will be subject to the review of the Purchaser and its counsel. (b) Prepare and file with the SEC such amendments and post-effective amendments to the Initial Shelf and any Subsequent Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable period specified in Section 2; cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or to such Prospectus as so supplemented. (c) Notify the Purchaser promptly (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC or any other Federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event which makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or which requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of any such Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. (d) Use every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment. (e) Subject to the last paragraph of this Section 3, if reasonably requested by the Purchaser (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the Company or the Purchaser agrees should be included therein as required by applicable law, (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to any Registration Statement consistent with clause (i) or (ii) above; provided, 4 5 that the Company shall not be required to take any actions under this Section 3(e) that are not, in the opinion of counsel for the Company, in compliance with applicable law. (f) Furnish to the Purchaser and its counsel, without charge, at least one conformed copy of the Registration Statement or Statements and any post-effective amendment thereto, including financial statements (but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits, unless requested in writing by the Purchaser or its counsel). (g) Deliver to the Purchaser and its counsel, without charge, as many copies of the Prospectus or Prospectuses relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus or each amendment or supplement thereto by the Purchaser in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in accordance with the methods of sale and distribution set forth therein. (h) Prior to any public offering of Registrable Securities, to register or qualify or cooperate with the Purchaser and its counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as the Purchaser, or its stockholders who have received Registrable Securities as a dividend from Purchaser, reasonably requests in writing; keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the applicable Registration Statement; provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject. (i) Upon the occurrence of any event contemplated by Section 3(c)(v) or 3(c)(vi) above, prepare a supplement or post-effective amendment to each Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the Purchaser, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company, after the effective date of a Registration Statement, which statements shall cover said 12-month periods. The Company may require the Purchaser to furnish to the Company such information regarding the distribution of its Registrable Securities as the Company may, from time to time, 5 6 reasonably request in writing and the Company may suspend its efforts to register the Registrable Securities if the Purchaser unreasonably fails to furnish such information within a reasonable time after receiving such request. The Purchaser agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof, the Purchaser will forthwith discontinue disposition of any Registrable Securities covered by the applicable Registration Statement or Prospectus until the Purchaser's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof, or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus. 4. REGISTRATION EXPENSES. All fees and expenses incident to the performance of or compliance with this Agreement by the Company (the "Registration Fees") shall be borne by the Company whether or not any of the Registration Statements become effective, except that if the Purchaser requests that the Company withdraw or terminate its obligations under Sections 2 and 3 hereunder for reasons other than the occurrence of one or more events regarding the Company, which event or events may have a material adverse affect upon the business or prospects of the Company, and the Purchaser learns of such event or events after the date of the Registration Demand Date and prior to the date of withdrawal or termination by it and such withdrawal or termination occurs with reasonable promptness thereafter, then the Company shall have no obligation to pay or otherwise bear any fees, expenses or other costs arising out of or relating to such registration. The Registration Fees shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses with respect to filings required to be made with the National Association of Securities Dealers, Inc. or with securities or Blue Sky administrators in such jurisdictions as the Purchaser may reasonably designate); (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company); (iii) messenger, telephone and delivery expenses; (iv) fees and disbursements of counsel for the Company in connection with the Shelf Registration; (v) fees and disbursements of all independent certified public accountants and all other persons retained by the Company to assist it in the preparation and filing of the Shelf Registration Statement or any Subsequent Registration Statement. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange on which similar securities issued by the Company are then listed. 5. INDEMNIFICATION. (a) Indemnification by the Company. The Company shall, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by law, the Purchaser from and against all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or form of Prospectus or in any amendment or supplement thereto or in any preliminary 6 7 prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are based solely upon information furnished in writing to the Company by the Purchaser or its counsel expressly for use therein; provided, that the Company shall not be liable to the Purchaser to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus if either (A)(i) the Purchaser failed to send or deliver a copy of the Prospectus with or prior to the delivery of written confirmation of the sale by the Purchaser of a Registrable Security to the person asserting the claim from which such Losses arise and (ii) the Prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission; or (B)(x) such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the Prospectus and (y) having previously been furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, the Purchaser thereafter fails to deliver such Prospectus as so amended or supplemented, prior to or concurrently with the sale of a Registrable Security to the person asserting the claim from which such Losses arise. (b) Indemnification by Purchaser. In connection with the filing any Registration Statement, the Purchaser shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any Registration Statement or Prospectus and hereby agrees to indemnify, to the fullest extent permitted by law, and without limitation as to time, the Company, its directors and officers, agents and employees, each person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling persons, from and against all Losses arising out of or based upon any untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary prospectus or arising out of or based upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by the Purchaser or its counsel to the Company expressly for use in such Registration Statement or Prospectus and that such information was relied upon by the Company in preparation of such Registration Statement, Prospectus or preliminary prospectus. In no event shall the liability of the Purchaser hereunder be greater in amount than the dollar amount of the proceeds received by the Purchaser upon the sale of the Registrable Securities giving rise to such indemnification obligation. (c) Conduct of Indemnification Proceedings. If any Person shall be entitled to indemnity hereunder (an "indemnified party"), such indemnified party shall give prompt notice to the party from which such indemnity is sought (the "indemnifying party") of any claim or of the commencement of any Proceeding with respect to which such indemnified party seeks indemnification or contribution pursuant hereto; provided, that the failure to so notify the indemnifying party shall not relieve the indemnifying party from any obligation or liability. All such fees and expenses (including any fees and expenses incurred in connection with investigating or preparing to defend such action or proceeding) shall be paid to the indemnified party, as incurred, within five days of written notice thereof to the indemnifying party (regardless of whether it is ultimately determined that an indemnified party is not entitled to indemnification hereunder). The indemnifying party shall not consent to entry of any judgment or enter into any settlement or otherwise seek to terminate any proceeding in which any indemnified party is or could be a party and as to which indemnification or contribution could be sought by such indemnified party under this 7 8 Section 5, unless such judgment, settlement or other termination includes as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release, in form and substance satisfactory to the indemnified party, from all liability in respect of such claim or litigation for which such indemnified party would be entitled to indemnification hereunder. The provisions of this Section 5 shall survive so long as Registrable Securities remain outstanding, notwithstanding any transfer of the Registrable Securities by the Purchaser or any termination of this Agreement. 6. CERTAIN RESTRICTIONS; RULE 144; AND FORM S-3. (a) As to the shares of Common Stock (including, without limitation, the Registrable Securities) issued by the Company to the Purchaser under the Purchase Agreement, which the Purchaser acknowledges are being issued by the Company in reliance on Regulation D under the Act (the "Restricted Shares"), the Purchaser covenants and agrees as follows: (i) The Purchaser agrees in no event to make any disposition of all or any part of the Restricted Shares, other than pursuant to the Shelf Registration Statement, unless and until (i) the Purchaser shall have notified the Company of the proposed disposition; (ii) the Purchaser shall have furnished the Company with an opinion of counsel reasonably acceptable to the Company to the effect that such disposition will not require and will be exempt from registration of the Restricted Shares under the Act; and (iii) such opinion of counsel shall have been concurred in by the Company's counsel and the Company shall have advised the Purchaser of such concurrence. (ii) The Purchaser understands and agrees that certificates evidencing the Restricted Shares will bear the following legend or a legend substantially similar thereto: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"); THEY HAVE BEEN ACQUIRED BY THE HOLDER FOR INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THESE SECURITIES ARE FIRST REGISTERED UNDER THE ACT OR THE HOLDER FURNISHES THE ISSUER WITH AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED TRANSACTION IS EXEMPT FROM REGISTRATION UNDER SUCH ACT. (b) Until the earlier of (i) the third anniversary of the date hereof, or (ii) the date all of the Registrable Securities have been sold or otherwise transferred for value by the Purchaser, the Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act, and if at any time the Company is not required to file such reports, it will, upon the request of the Purchaser, make publicly available other information so long as necessary to permit sales pursuant to Rule 144 under the Securities Act. Upon the request of the Purchaser, the Company shall deliver to such holder a written statement as to whether it has complied with such filing requirements. Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to require the Company to register any of its securities under any section of the Exchange Act. 8 9 (c) The Company shall file the reports required to be filed by it under the Exchange Act and shall comply with all other requirements set forth in the instructions to Form S-3 in order to allow the Company to be eligible to file registration statements on Form S-3. 7. MISCELLANEOUS. (a) Remedies. In the event of a breach by the Company of its obligations under this Agreement, the Purchaser will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Purchaser. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier or (iii) one business day after being deposited with a reputable next-day courier, postage prepaid, to the parties as follows: (x) if to the Purchaser, at the most current address given by the Purchaser to the Company in accordance with the provisions of this Section 7(c); and (y) if to the Company, to Gish Biomedical, Inc., 2681 Kelvin Avenue, Irvine, California 92714-5821, Attention: Chief Financial Officer. or to such other address as any party may have furnished to the other parties in writing in accordance herewith. (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. 9 10 (h) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. (i) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the Registrable Shares sold pursuant to the Purchase Agreement. Except as provided in the Purchase Agreement or this Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and understandings among the parties with respect to such registration rights. (j) Further Assurances. Each of the parties hereto shall use all reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things reasonably necessary, proper or advisable under applicable law, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and the other documents contemplated hereby and consummate and make effective the transactions contemplated hereby. (k) Termination. This Agreement and the obligations of the parties hereunder shall terminate at the end of the Effectiveness Period, except for any liabilities or obligations under Sections 4 or 5 above, and the restrictions in Section 6(a), which shall remain in effect in accordance with their terms. 10 11 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. GISH BIOMEDICAL, INC. By: ------------------------------ Name: ------------------------------ Title: ----------------------------- CREATIVE MEDICAL DEVICES, INC. By: ------------------------------ Name: ------------------------------ Title: ----------------------------- 11 EX-5.1 3 OPINION OF STRADLING, YOCCA, CARLSON & RUTH 1 EXHIBIT 5.1 [STRADLLING, YOCCA, CARLSON & RAUTH LETTERHEAD] November 14, 1996 Gish Biomedical, Inc. 2681 Kelvin Avenue Irvine, California 92714 RE: Registration Statement on Form S-3 Gentlemen: At your request, we have examined the form of Registration Statement on Form S-3 (the "Registration Statement"), being filed by Gish Biomedical, Inc., a California corporation (the "Company"), with the Securities and Exchange Commission on November 15, 1996, in connection with the registration under the Securities Act of 1933, as amended, of 240,240 shares of Common Stock, no par value, of the Company (the "Common Stock"). The shares of Common Stock may be offered for resale from time to time by and for the account of the stockholder of the Company named in the Registration Statement. We have reviewed the corporate action of the Company in connection with this matter and have examined such documents, corporate records and other instruments as we have deemed necessary for the purposes of this opinion. Based upon the foregoing and such issues of law as we deem relevant, it is our opinion that the 240,240 shares of Common Stock covered by the Registration Statement have been duly authorized and validly issued, and are fully paid and nonassessable. We consent to the use of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption "Legal Matters" in the Prospectus, which is a part of the Registration Statement, and any amendment thereto. Respectfully Submitted, STRADLING, YOCCA, CARLSON & RAUTH EX-23.2 4 CONSENT OF ERNST & YOUNG 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of Gish Biomedical, Inc. for the registration of 240,240 shares of its common stock and to the incorporation by reference therein of our report dated August 23, 1996, with respect to the consolidated financial statements and schedules of Gish Biomedical, Inc. included in its Annual Report (Form 10-K) for the year ended June 30, 1996 filed with the Securities and Exchange Commission. Ernst & Young, LLP Orange County, California November 13, 1996 -----END PRIVACY-ENHANCED MESSAGE-----