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Biotech / Medical : Paracelsian Inc (PRLN)
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To: John H. Farro who wrote (4116)1/28/1999 10:18:00 AM
From: Jonathan Schonsheck  Read Replies (1) of 4342
 
Robin & the Rest -

I talked with the Company about the S-3 filing, registering stock; I learned the following:

Biomar has had the contractual right to register its stock since the buy-out; it is merely exercising that right.

As Biomar goes into the capital market to seek funding, it needs to have as attractive a balance sheet as possible. Unregistered stock counts squat (technical accounting term, I think); registered stock counts as an asset.

Filing a form S-3 is a royal pain. It is perfectly ordinary, when one is being filed, to "piggyback" others who hold unregistered stock on the same filing - do it all at once, rather than piecemeal. Saves time, effort and money.

Recall that this form is not an intention to sell; it merely makes it legally permissible to sell. Put another way: if one is going to sell ever (i.e., before the end of time), the stock has to be registered sometime.

Registering is not selling. It is not stating an intent to sell. Indeed, the S-3 contains this statement: "There can be no assurance that the Selling Stockholders will sell any or all of the Shares offered by them hereunder." (p. 8)

It would be both impossible and ruinous for Biomar to (attempt to) sell. It would be career-ending for Bernie Landes to (attempt to) sell.

In my judgement, there is nothing worrisome about this filing.
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