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Filing
Table of Contents
As filed with the Securities and Exchange Commission on May 4, 2006
Registration Statement No. 333-____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNDER
THE SECURITIES ACT OF 1933
ADVENTRX Pharmaceuticals, Inc.
(Exact name of Registrant as specified in its charter)
Delaware | 84-1318182 | |
(State or other jurisdiction of | (I.R.S. Employer Identification Number) | |
incorporation or organization) |
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(Address, including zip code, and telephone number, including area code,
of Registrants principal executive offices)
San Diego, California 92121
(Address, including zip code, and telephone number, including area code,
of Registrants principal executive offices)
Carrie E. Carlander
Chief Financial Officer
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 552-0866
facsimile: (858) 552-0867
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Chief Financial Officer
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 552-0866
facsimile: (858) 552-0867
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
Venrice R. Palmer, Esq.
Charles Lee, Esq.
John H. Kim, Esq.
Bingham McCutchen LLP
Three Embarcadero Center
San Francisco, California 94111
phone: (415) 393-2000
facsimile: (415) 393-2286
email: venrice.palmer@bingham.com
charles.lee@bingham.com
john.kim@bingham.com
Charles Lee, Esq.
John H. Kim, Esq.
Bingham McCutchen LLP
Three Embarcadero Center
San Francisco, California 94111
phone: (415) 393-2000
facsimile: (415) 393-2286
email: venrice.palmer@bingham.com
charles.lee@bingham.com
john.kim@bingham.com
Approximate date of commencement of proposed sale to the 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. o
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: þ
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: o
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: o
If this Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. o
If this Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
CALCULATION
OF REGISTRATION FEE
Proposed maximum | Proposed maximum | |||||||||||||||
Title of each class of | Amount to be | offering | aggregate offering | Amount of | ||||||||||||
securities to be registered (1) | registered | price per share | price (2) | registration fee | ||||||||||||
Common stock, par
value $0.001 per
share |
2,391,996 | $10,500,862.44 | $4.39 | $1,123.59 | ||||||||||||
(1) | In addition to the common stock set forth in the table, the amount to be registered includes an indeterminate number of shares issuable pursuant to stock splits and stock dividends in accordance with Securities Act Rule 416(b). | |
(2) | Estimated solely for the purpose of determining the registration fee, based upon the average of the high and low sales prices of the common stock on the American Stock Exchange LLC on May 3, 2006, pursuant to Rule 457(c) under the Securities Act. |
The registrant hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with section 8(a) of the Securities Act of 1933, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission, acting pursuant to
said section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. No securities may 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.
SUBJECT TO COMPLETION
Dated: ________, 2006
Dated: ________, 2006
PROSPECTUS
2,391,996 Shares
Common Stock
Common Stock
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 558-0866
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 558-0866
The security holders of ADVENTRX Pharmaceuticals, Inc. (the Company) listed in this
prospectus are offering an aggregate of 2,391,996 shares of common stock, including shares
issuable upon exercise of outstanding warrants.
The shares and warrants were sold to the selling security holders in transactions exempt from
registration under the Securities Act of 1933, as amended (the Securities Act). We will not
receive any of the proceeds from the sale of the shares of common stock offered hereby although we
will receive the proceeds of sales of shares of common stock to the selling security holders upon
exercise of their warrants (except to the extent warrants are exercised on a net exercise basis).
The selling security holders may sell the shares covered by this prospectus from time to time
in transactions on the American Stock Exchange LLC, in the over-the-counter market or in negotiated
transactions. The selling security holders directly, or through agents or dealers designated from
time to time, may sell the shares of common stock offered by them at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time of sale or at
negotiated prices.
Our
common stock is listed on the American Stock Exchange LLC under the
symbol ANX. On May 3, 2006, the last reported sale price of our common stock on the American Stock Exchange
LLC was $4.50 per share.
INVESTING IN THE COMMON STOCK INVOLVES RISKS.
SEE RISK FACTORS BEGINNING ON PAGE 5.
SEE RISK FACTORS BEGINNING ON PAGE 5.
Neither the Securities and Exchange Commission nor any state securities regulator has
approved or disapproved the shares of common stock covered by this prospectus, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is ____ __, 2006
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EXHIBIT 5.1 | ||||||||
EXHIBIT 23.1 | ||||||||
EXHIBIT 23.2 |
In this prospectus, ADVENTRX, the company, we, us, and our refer to ADVENTRX
Pharmaceuticals, Inc.
You should rely only on the information contained or incorporated by reference in this
prospectus and any prospectus supplement. We have not authorized any other person to provide you
with different information. If anyone provides you with different or inconsistent information, you
should not rely on it. We will not make an offer to sell our common stock in any jurisdiction where
the offer or sale is not permitted. The information in this prospectus and any prospectus
supplement is accurate as of the date on the front cover of this prospectus or any prospectus
supplement, and the information in documents we file with the SEC and incorporate by reference into
this prospectus or any prospectus supplement, is accurate as of the date on those documents.
Special Note Regarding Forward-Looking Statements
Some of the statements under Our Company, Risk Factors and elsewhere in this
prospectus constitute forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause our actual results to be materially different from
projected results expressed or implied by the forward-looking statements. These factors include,
among others, those listed under Risk Factors and elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by terms such as may, will,
should, expects, plans, anticipates, believes, estimates, predicts, potential, or
continue or similar terms.
Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.
Our actual results could differ materially from those expressed or implied by these forward-looking
statements as a result of various factors, including the risk factors described under the heading
Risk Factors and elsewhere in this prospectus. We undertake no obligation to update publicly any
forward-looking statements for any reason, except as required by law, even as new information
becomes available or other events occur in the future.
Where You Can Find More Information About Us
We file annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission. You may read and copy any document we file with the
Commission at the Public Reference Room at the Commission, 100 F Street, N.E., Washington, D.C.
20549. Please call 1-800-SEC-0330 for
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further information concerning the Public Reference Room. The Commission also makes these
documents and other information available on its website at http://www.sec.gov. We also maintain a
website at http://www.adventrx.com. The material on our website is not a part of this prospectus
or any prospectus supplement.
We have filed with the Commission a registration statement under the Securities Act on Form
S-3 relating to the common stock offered by this prospectus. This prospectus and any prospectus
supplement constitute a part of the registration statement but do not contain all of the
information set forth in the registration statement and its exhibits. For further information, we
refer you to the registration statement and its exhibits.
The Commission allows us to incorporate by reference the information we file with it, which
means that we can disclose certain information to you by referring you to another document we have
filed with the Commission. We may furnish other information to the Commission which is not
considered to be filed and is therefore not incorporated by reference into or otherwise a part of
this prospectus, unless we indicate to the contrary. The information incorporated by reference is
an important part of this prospectus and information that we file later with the Commission will
automatically update this prospectus and replace any outdated information. We incorporate by
reference the following:
(a) | the section entitled Description of Registrants Securities contained in the Registrants Registration Statement on Form 8-A (file No. 001-32157) filed with the Commission on April 27, 2004; | ||
(b) | our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 filed with the Commission on March 16, 2006; | ||
(c) | our Current Report on Form 8-K filed with the Commission on January 30, 2006; | ||
(d) | our Current Report on Form 8-K filed with the Commission on January 31, 2006; | ||
(e) | our Current Report on Form 8-K filed with the Commission on February 6, 2006; | ||
(f) | our Current Report on Form 8-K filed with the Commission on February 15, 2006; | ||
(g) | our Current Report on Form 8-K filed with the Commission on March 1, 2006; | ||
(h) | our Current Report on Form 8-K filed with the Commission on March 20, 2006 (Items 4.02, 8.01 and 9.01), as amended by Amendment No. 1 filed with the Commission on March 27, 2006; | ||
(i) | our Current Report on Form 8-K filed with the Commission on March 20, 2006 (Items 8.01 and 9.01); | ||
(j) | our Current Report on Form 8-K filed with the Commission on April 6, 2006; | ||
(k) | our Current Report on Form 8-K filed with the Commission on April 11, 2006 as amended by Amendment No. 1; and | ||
(l) | any future filings we make with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act after the date of the initial registration statement and prior to effectiveness of the registration statement, and until we file a post-effective amendment which indicates the termination of the offering of the securities made by this prospectus. | ||
You may request a copy of these filings, at no cost, by writing or telephoning: |
Carrie E. Carlander
Chief Financial Officer
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 552-0866
Chief Financial Officer
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(858) 552-0866
We will provide exhibits to these filings at no cost only if they are specifically incorporated
into those filings.
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Our Company
We are a biopharmaceutical research and development company focused on introducing new
technologies for anticancer and antiviral treatments that improve the performance and safety of
existing drugs by addressing significant problems such as drug metabolism, toxicity,
bioavailability and resistance. We do not manufacture, market, sell or distribute any product.
Pursuant to license agreements with University of Southern California and the acquisition described
below, we have rights to drug candidates in varying stages of development. Our current drug
candidates are CoFactor, ANX-530, Selone and Thiovir. All of these drug candidates are described in
our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005.
On May 30, 2003, we merged our wholly-owned subsidiary, Biokeys, Inc., into the Company and
changed our name from Biokeys Pharmaceuticals, Inc. to ADVENTRX Pharmaceuticals, Inc. The merger
had no effect on our financial statements.
In July 2004, we formed a wholly-owned subsidiary, ADVENTRX (Europe) Ltd., in the United
Kingdom for the purpose of conducting drug trials in the European Union.
We have incurred net losses since our inception. As of December 31, 2005, our accumulated
deficit was approximately $59,964,840 . We expect to incur substantial and increasing losses for
the next several years as we continue development and possible commercialization of new products.
To date, we have funded our operations primarily through sales of equity securities.
Our business is subject to significant risks, including risks inherent in our ongoing clinical
trials, the regulatory approval processes, the results of our research and development efforts,
commercialization, and competition from other pharmaceutical companies.
Recent Developments
On April 7, 2006, we entered into an Agreement and Plan of Merger (the Merger
Agreement) among the Company, SD Pharmaceuticals, Inc., a Delaware corporation (SDP), Speed
Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (Merger
Sub), Paul Marangos and Dr. Andrew X. Chen, each as stockholders of SDP and Paul Marangos, as an
individual acting as the stockholder representative. Pursuant to the Merger Agreement, we acquired
SDP through the merger of Merger Sub into SDP and SDP will continue as the surviving corporation
and as a wholly-owned subsidiary of the Company (the Merger).
Upon the closing of the transaction on April 26, 2006, ADVENTRX acquired certain intellectual
property rights to eight oncology and infectious disease product candidates, including certain
ex-US rights to SDP-012 (ANX-530, vinorelbine emulsion). In October 2005, ADVENTRX announced it
had licensed US development and marketing rights to SDP-012 (ANX-530) from SDP. Certain product
candidates that ADVENTRX acquired as a result of the merger are based on a nano-emulsion technology
for both soluble and insoluble parenteral drugs. The nano-emulsion technology was developed by Dr.
Andrew X. Chen and is designed to enable the delivery of vein irritating or difficult to dissolve
drugs without excipient-induced adverse effects. Many of the product candidates are based on
currently approved drugs and may qualify for the 505(b)(2) regulatory process. Certain product
candidates obtained in the transaction are being evaluated by ADVENTRX as possible out-licensing
opportunities.
The SDP product portfolio consists of five anticancer and three anti-infective therapies which
are listed below:
| SDP-013 A non-allergenic, non cremophor-containing emulsion formulation of paclitaxel (Taxol) designed to eliminate the need for immunosuppressant premedication, which is recommended for paclitaxel therapy to reduce the incidence and severity of severe hypersensitivity reaction. Paclitaxel is approved to treat breast, ovarian and non-small cell lung cancers. Taxol worldwide sales were approximately $750 million in 2005. (Source: Bristol-Myers Squibb). |
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| SDP-014 A novel docetaxel (Taxotere) formulation not containing polysorbate 80 or other detergents, intended to eliminate the need for multiday immunosuppressant premedication, which is recommended for docetaxel therapy to reduce the incidence and severity of allergic reaction. Taxotere is approved to treat breast, non-small cell lung, prostate and gastric cancers. Worldwide Taxotere sales were approximately $1.6 billion in 2005. (Source: Sanofi-Aventis) | ||
| SDP-012 (vinorelbine emulsion) A novel emulsion formulation of vinorelbine tartrate designed to reduce vein irritation associated with the drug. Vinorelbine is approved to treat non-small cell lung cancer. According to IMS Health, worldwide sales of vinorelbine in 2005 were over $150 million. | ||
| SDP-111 A novel formulation of beta-elemene, a small molecule anticancer agent belonging to the triterpene family and currently approved in China for a variety of cancers. | ||
| SDP-112 An emulsion formulation of alpha-tocopheryl succinate, a form of vitamin E which has been shown to selectively facilitate apoptosis, or cell death, in cancer cells. | ||
| SDP-015 A proprietary intravenous formulation of an approved antibiotic in the macrolide family known as clarithromycin. Clarithromycin is approved for mild to moderate bacterial infections such as in community-acquired pneumonia. Only oral formulations of clarithromycin are currently available in the US. | ||
| SDP-011 A broad spectrum intranasal/topical anti-viral gel intended for use in cold and flu and other viral indications as an over-the-counter (OTC) product. | ||
| SDP-016 A novel formulation of vancomycin, a parenteral glycopeptide antibiotic approved to treat gram-positive bacterial infections. SDP-016 is designed to reduce the vein irritation and phlebitis associated with the IV-delivered drug. |
Risk Factors
Readers and prospective investors in our securities should carefully consider the
following risk factors as well as the other information contained or incorporated by reference in
this report. The risks and uncertainties described below are not the only ones facing us.
Additional risks and uncertainties that management is not aware of or focused on or that management
currently deems immaterial may also impair our business operations. This report is qualified in its
entirety by these risk factors.
If any of the following risks actually occur, the Companys financial condition and results of
operations could be materially and adversely affected. If this were to happen, the value of the
Companys securities could decline significantly, and you could lose all or part of your
investment.
We have a substantial accumulated deficit and limited working capital.
We had an accumulated deficit of $59,964,840 as of December 31, 2005. Since we presently have
no source of revenues and are committed to continuing our product research and development program,
significant expenditures and losses will continue until development of new products is completed
and such products have been clinically tested, approved by the FDA or other regulatory agencies and
successfully marketed. In addition, we fund our operations primarily through the sale of equity
securities, and have had limited working capital for our product development and other activities.
We do not believe that debt financing from financial institutions will be available until at least
the time that one of our products is approved for commercial production.
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We have no current product sales revenues or profits.
We have devoted our resources to developing a new generation of therapeutic drug products, but
such products cannot be marketed until clinical testing is completed and governmental approvals
have been obtained. Accordingly, there is no current source of revenues, much less profits, to
sustain our present activities, and no revenues will likely be available until, and unless, the new
products are clinically tested, approved by the FDA or other regulatory agencies and successfully
marketed, either by us or a marketing partner, an outcome which we are not able to guarantee.
It is uncertain that we will have access to future capital.
We do not expect to generate positive cash flow from operations for at least the next several
years. As a result, substantial additional equity or debt financing for research and development or
clinical development will be required to fund our activities. Although we have raised equity
financing in the past, including in April 2004 and July 2005, we cannot be certain that we will be
able to continue to obtain such financing on favorable or satisfactory terms, if at all, or that it
will be sufficient to meet our cash requirements. Any additional equity financing could result in
substantial dilution to stockholders, and debt financing, if available, would likely involve
restrictive covenants that preclude us from making distributions to stockholders and taking other
actions beneficial to stockholders. If adequate funds are not available, we may be required to
delay or reduce the scope of our drug development program or attempt to continue development by
entering into arrangements with collaborative partners or others that may require us to relinquish
some or all of our rights to proprietary drugs. The inability to adequately and timely fund our
capital requirements would have a material adverse effect on us.
We are not certain that we will be successful in the development of our drug candidates.
The successful development of any new drug is highly uncertain and is subject to a number of
significant risks. Our drug candidates, all of which are in a development stage, require
significant, time-consuming and costly development, testing and regulatory clearance. This process
typically takes several years and can require substantially more time. Risks include, among others,
the possibility that a drug candidate will (i) be found to be ineffective or unacceptably toxic,
(ii) have unacceptable side effects, (iii) fail to receive necessary regulatory clearances, (iv)
not achieve broad market acceptance, (v) be subject to competition from third parties who may
market equivalent or superior products, (vi) be affected by third parties holding proprietary
rights that will preclude us from marketing a drug product, or (vii) not be able to be manufactured
by manufacturers in a timely manner in accordance with required standards of quality. There can be
no assurance that the development of our drug candidates will demonstrate the efficacy and safety
of our drug candidates as therapeutic drugs, or, even if demonstrated, that there will be
sufficient advantages to their use over other drugs or treatments so as to render the drug product
commercially viable. In the past, we have been faced with limiting the scope and/or delaying the
launch of preclinical and clinical drug trials due to limited cash and personnel resources. We have
also chosen to terminate licenses of some drug candidates that were not showing sufficient promise
to justify continued expense and development. In the event that we are not successful in developing
and commercializing one or more drug candidates, investors are likely to realize a loss of their
entire investment.
We have been delayed at certain times in the past in the development of our drug products by
limited funding. In addition, if certain of our scientific and technical personnel resigned at or
about the same time, the development of our drug products would probably be delayed until new
personnel were hired and became familiar with the development programs.
Positive results in preclinical and clinical trials do not ensure that future clinical trials
will be successful or that drug candidates will receive all necessary regulatory approvals for the
marketing, distribution or sale of such drug candidates.
Success in preclinical and clinical trials does not ensure that large-scale clinical trials
will be successful. Clinical results are frequently susceptible to varying interpretations that may
delay, limit or prevent regulatory approvals. The length of time necessary to complete clinical
trials and to submit an application for marketing approval for a final decision by a regulatory
authority varies significantly and may be difficult to predict. In the past, we have terminated
licenses of drug candidates when our preclinical trials did not support or verify earlier
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preclinical data. There is a significant risk that any of our drug candidates could fail to
show satisfactory results in continued trials, and would not justify further development.
We will face intense competition from other companies in the pharmaceutical industry.
We are engaged in a segment of the pharmaceutical industry that is highly competitive and
rapidly changing. If successfully developed and approved, any of our drug candidates will likely
compete with several existing therapies. CoFactor, our leading drug candidate, would likely compete
against a well-established product, leucovorin. In addition, there are numerous companies with a
focus in oncology and/or anti-viral therapeutics that are pursuing the development of
pharmaceuticals that target the same diseases as are targeted by the drugs being developed by us.
We anticipate that we will face intense and increasing competition in the future as new products
enter the market and advanced technologies become available. We cannot assure that existing
products or new products developed by competitors will not be more effective, or more effectively
marketed and sold than those we may market and sell. Competitive products may render our drugs
obsolete or noncompetitive prior to our recovery of development and commercialization expenses.
Many of our likely competitors such as Merck and Pfizer, will also have significantly greater
financial, technical and human resources and will likely be better equipped to develop, manufacture
and market products. In addition, many of these competitors have extensive experience in
preclinical testing and clinical trials, obtaining FDA and other regulatory approvals and
manufacturing and marketing pharmaceutical products. A number of these competitors also have
products that have been approved or are in late-stage development and operate large, well-funded
research and development programs. Smaller companies may also prove to be significant competitors,
particularly through collaborative arrangements with large pharmaceutical and biotechnology
companies. Furthermore, academic institutions, government agencies and other public and private
research organizations are becoming increasingly aware of the commercial value of their inventions
and are actively seeking to commercialize the technology they have developed. Companies such as
Gilead, Roche and GlaxoSmithKline all have drugs in various stages of development that could become
competitors. Accordingly, competitors may succeed in commercializing products more rapidly or
effectively than us, which would have a material adverse effect on us.
There is no assurance that our products will have market acceptance.
Our success will depend in substantial part on the extent to which a drug product, if
eventually approved for commercial distribution, achieves market acceptance. The degree of market
acceptance will depend upon a number of factors, including (i) the receipt and scope of regulatory
approvals, (ii) the establishment and demonstration in the medical community of the safety and
efficacy of a drug product, (iii) the products potential advantages over existing treatment
methods and (iv) reimbursement policies of government and third party payors. We cannot predict or
guarantee that physicians, patients, healthcare insurers or maintenance organizations, or the
medical community in general, will accept or utilize any of our drug products.
The unavailability of health care reimbursement for any of our products will likely adversely
impact our ability to effectively market such products and whether health care reimbursement will
be available for any of our products is uncertain.
Our ability to commercialize our technology successfully will depend in part on the extent to
which reimbursement for the costs of such products and related treatments will be available from
government health administration authorities, private health insurers and other third-party payors.
Significant uncertainty exists as to the reimbursement status of newly approved medical products.
We cannot guarantee that adequate third-party insurance coverage will be available for us to
establish and maintain price levels sufficient for realization of an appropriate return on our
investments in developing new therapies. If we are successful in getting FDA approval for CoFactor,
we will be competing against a generic drug, leucovorin, which has a lower cost and a long,
established history of reimbursement. Receiving sufficient reimbursement for purchase costs of
CoFactor will be necessary to make it cost effective and competitive versus the established drug,
leucovorin. Government, private health insurers, and other third-party payors are increasingly
attempting to contain health care costs by limiting both coverage and the level of reimbursement
for new therapeutic products approved for marketing by the FDA. Accordingly, even if coverage and
reimbursement are provided by government, private health insurers, and third-party payors for use
of
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our products, the market acceptance of these products would be adversely affected if the
amount of reimbursement available for the use of our therapies proved to be unprofitable for health
care providers.
Uncertainties related to health care reform measures may affect our success.
There have been some federal and state proposals in the past to subject the pricing of health
care goods and services, including prescription drugs, to government control and to make other
changes to the U.S. health care system. None of the proposals seems to have affected any of the
drugs in our programs. However, it is uncertain if future legislative proposals would be adopted
that might affect the drugs in our programs or what actions federal, state, or private payors for
health care treatment and services may take in response to any such health care reform proposals or
legislation. Any such health care reforms could have a material adverse effect on the marketability
of any drugs for which we ultimately require FDA approval.
Further testing of our drug candidates will be required and there is no assurance of FDA
approval.
The FDA and comparable agencies in foreign countries impose substantial requirements upon the
introduction of medical products, through lengthy and detailed laboratory and clinical testing
procedures, sampling activities and other costly and time-consuming procedures. Satisfaction of
these requirements typically takes several years or more and varies substantially based upon the
type, complexity, and novelty of the product.
The effect of government regulation and the need for FDA approval will delay marketing of new
products for a considerable period of time, impose costly procedures upon our activities, and
provide an advantage to larger companies that compete with us. There can be no assurance that the
FDA or other regulatory approval for any products developed by us will be granted on a timely basis
or at all. Any such delay in obtaining or failure to obtain, such approvals would materially and
adversely affect the marketing of any contemplated products and the ability to earn product
revenue. Further, regulation of manufacturing facilities by state, local, and other authorities is
subject to change. Any additional regulation could result in limitations or restrictions on our
ability to utilize any of our technologies, thereby adversely affecting our operations.
Human pharmaceutical products are subject to rigorous preclinical testing and clinical trials
and other approval procedures mandated by the FDA and foreign regulatory authorities. Various
federal and foreign statutes and regulations also govern or influence the manufacturing, safety,
labeling, storage, record keeping and marketing of pharmaceutical products. The process of
obtaining these approvals and the subsequent compliance with appropriate U.S. and foreign statutes
and regulations are time-consuming and require the expenditure of substantial resources. In
addition, these requirements and processes vary widely from country to country.
Among the uncertainties and risks of the FDA approval process are the following: (i) the
possibility that studies and clinical trials will fail to prove the safety and efficacy of the
drug, or that any demonstrated efficacy will be so limited as to significantly reduce or altogether
eliminate the acceptability of the drug in the marketplace, (ii) the possibility that the costs of
development, which can far exceed the best of estimates, may render commercialization of the drug
marginally profitable or altogether unprofitable, and (iii) the possibility that the amount of time
required for FDA approval of a drug may extend for years beyond that which is originally estimated.
In addition, the FDA or similar foreign regulatory authorities may require additional clinical
trials, which could result in increased costs and significant development delays. Delays or
rejections may also be encountered based upon changes in FDA policy and the establishment of
additional regulations during the period of product development and FDA review. Similar delays or
rejections may be encountered in other countries.
Our success will depend on licenses and proprietary rights we receive from other parties, and
on any patents we may obtain.
Our success will depend in large part on our ability and our licensors ability to (i)
maintain license and patent protection with respect to their drug products, (ii) defend patents and
licenses once obtained, (iii) maintain trade secrets, (iv) operate without infringing upon the
patents and proprietary rights of others and (iv) obtain appropriate licenses to patents or
proprietary rights held by third parties if infringement would otherwise occur, both in the U.S.
and in foreign countries. We have obtained licenses to patents and other proprietary rights from
the University of Southern California.
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The patent positions of pharmaceutical companies, including ours, are uncertain and involve
complex legal and factual questions. There is no guarantee that we or our licensors have or will
develop or obtain the rights to products or processes that are patentable, that patents will issue
from any of the pending applications or that claims allowed will be sufficient to protect the
technology licensed to us. In addition, we cannot be certain that any patents issued to or licensed
by us will not be challenged, invalidated, infringed or circumvented, or that the rights granted
thereunder will provide competitive disadvantages to us.
Litigation, which could result in substantial cost, may also be necessary to enforce any
patents to which we have rights, or to determine the scope, validity and unenforceability of other
parties proprietary rights, which may affect our rights. U.S. patents carry a presumption of
validity and generally can be invalidated only through clear and convincing evidence. There can be
no assurance that our licensed patents would be held valid by a court or administrative body or
that an alleged infringer would be found to be infringing. The mere uncertainty resulting from the
institution and continuation of any technology-related litigation or interference proceeding could
have a material adverse effect on us pending resolution of the disputed matters.
We may also rely on unpatented trade secrets and know-how to maintain our competitive
position, which we seek to protect, in part, by confidentiality agreements with employees,
consultants and others. There can be no assurance that these agreements will not be breached or
terminated, that we will have adequate remedies for any breach, or that trade secrets will not
otherwise become known or be independently discovered by competitors.
Our license agreements can be terminated in the event of a breach.
The license agreements pursuant to which we license our core technologies for our potential
drug products permit the licensors to terminate the agreement under certain circumstances, such as
the failure by us to use our reasonable best efforts to commercialize the subject drug or the
occurrence of any other uncured material breach by us. The license agreements also provide that the
licensor is primarily responsible for obtaining patent protection for the technology licensed, and
we are required to reimburse the licensor for the costs it incurs in performing these activities.
The license agreements also require the payment of specified royalties. Any inability or failure to
observe these terms or pay these costs or royalties could result in the termination of the
applicable license agreement in certain cases. In the past, we have let lapse certain licenses for
drug candidates when we determined that the expense and risk of continued development outweighed
the likely benefits of that continued development. The termination of any license agreement could
have a material adverse effect on us.
Protecting our proprietary rights is difficult and costly.
The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and
involve complex legal and factual questions. Accordingly, we cannot predict the breadth of claims
allowed in these companies patents or whether we may infringe or be infringing these claims.
Although we have not been notified of any patent infringement, nor notified others of patent
infringement, such patent disputes are common and could preclude the commercialization of our
products. Patent litigation is costly in its own right and could subject us to significant
liabilities to third parties. In addition, an adverse decision could force us to either obtain
third-party licenses at a material cost or cease using the technology or product in dispute.
We may be unable to retain skilled personnel and maintain key relationships.
The success of our business depends, in large part, on our ability to attract and retain
highly qualified management, scientific and other personnel, and on our ability to develop and
maintain important relationships with leading research institutions and consultants and advisors.
Competition for these types of personnel and relationships is intense from numerous pharmaceutical
and biotechnology companies, universities and other research institutions. We are currently
dependent upon our scientific staff, which has a deep background in our drug candidates and the
ongoing preclinical and clinical trials. Recruiting and retaining senior employees with relevant
drug development experience in oncology and anti-viral therapeutics is costly and time-consuming.
There can be no assurance that we will be able to attract and retain such individuals on an
uninterrupted basis and on commercially acceptable terms, and the failure to do so could have a
material adverse effect on us by significantly delaying one or more of our drug development
programs. The loss of any of our senior executive officers, including our chief executive officer
and
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chief financial officer, in particular, could have a material adverse effect on the company
and the market for our common stock, particularly if such loss was abrupt or unexpected. All of
our employees are employed on an at-will basis under offer letters. We do not have non-competition
agreements with any of our employees.
We currently have no sales capability, and limited marketing capability.
We currently do not have sales personnel. We have limited marketing and business development
personnel. We will have to develop a sales force, or rely on marketing partners or other
arrangements with third parties for the marketing, distribution and sale of any drug product which
is ready for distribution. There is no guarantee that we will be able to establish marketing,
distribution or sales capabilities or make arrangements with third parties to perform those
activities on terms satisfactory to us, or that any internal capabilities or third party
arrangements will be cost-effective.
In addition, any third parties with which we may establish marketing, distribution or sales
arrangements may have significant control over important aspects of the commercialization of a drug
product, including market identification, marketing methods, pricing, composition of sales force
and promotional activities. There can be no assurance that we will be able to control the amount
and timing of resources that any third party may devote to our products or prevent any third party
from pursuing alternative technologies or products that could result in the development of products
that compete with, or the withdrawal of support for, our products.
We do not have manufacturing capabilities and may not be able to efficiently develop
manufacturing capabilities or contract for such services from third parties on commercially
acceptable terms.
We do not have any manufacturing capacity. When and if required, we will seek to establish
relationships with third-party manufacturers for the manufacture of clinical trial material and the
commercial production of drug products as we have with our current manufacturing partners. There
can be no assurance that we will be able to establish relationships with third-party manufacturers
on commercially acceptable terms or that third-party manufacturers will be able to manufacture a
drug product on a cost-effective basis in commercial quantities under good manufacturing practices
mandated by the FDA or other regulatory matters.
The dependence upon third parties for the manufacture of products may adversely affect future
costs and the ability to develop and commercialize a drug product on a timely and competitive
basis. Further, there can be no assurance that manufacturing or quality control problems will not
arise in connection with the manufacture of our drug products or that third party manufacturers
will be able to maintain the necessary governmental licenses and approvals to continue
manufacturing such products. Any failure to establish relationships with third parties for our
manufacturing requirements on commercially acceptable terms would have a material adverse effect on
us.
We are dependent in part on third parties for drug development and research facilities.
We do not possess research and development facilities necessary to conduct all of our drug
development activities. We engage consultants and independent contract research organizations to
design and conduct clinical trials in connection with the development of our drugs. As a result,
these important aspects of a drugs development will be outside our direct control. In addition,
there can be no assurance that such third parties will perform all of their obligations under
arrangements with us or will perform those obligations satisfactorily.
In the future, we anticipate that we will need to obtain additional or increased product
liability insurance coverage and it is uncertain that such increased or additional insurance
coverage can be obtained on commercially reasonable terms.
Our business will expose us to potential product liability risks that are inherent in the
testing, manufacturing and marketing of pharmaceutical products. There can be no assurance that
product liability claims will not be asserted against us. We intend to obtain additional limited
product liability insurance for our clinical trials, directly or through our marketing development
partners or contract research organization (CRO) partners, when they begin in the U.S. and to
expand our insurance coverage if and when we begin marketing commercial products. However, there
can be no assurance that we will be able to obtain product liability insurance on commercially
acceptable terms or that we will be able to maintain such insurance at a reasonable cost or in
sufficient
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amounts to protect against potential losses. A successful product liability claim or series of
claims brought against us could have a material adverse effect on us.
The market price of our shares, like that of many biotechnology companies, is highly volatile.
Market prices for our common stock and the securities of other medical and biomedical
technology companies have been highly volatile and may continue to be highly volatile in the
future. Factors such as announcements of technological innovations or new products by us or our
competitors, government regulatory action, litigation, patent or proprietary rights developments,
and market conditions for medical and high technology stocks in general can have a significant
impact on any future market for our common stock.
If we cannot satisfy AMEXs listing requirements, it may delist our common stock and we may
not have an active public market for our common stock. The absence of an active trading market
would likely make the common stock an illiquid investment.
Our common stock is quoted on the American Stock Exchange. To continue to be listed, we are
required to maintain shareholders equity of $6,000,000 among other requirements. We do not satisfy
that requirement as of December 31, 2005. The AMEX may consider delisting our common stock and
suspend trading in the common stock in which case our common stock would likely trade in the
over-the-counter market in the so-called pink sheets or, if available, the OTC Bulletin Board
Service. As a result, an investor would likely find it significantly more difficult to dispose of,
or to obtain accurate quotations as to the value of, our shares. Our ability to raise capital would
most likely also be impaired due to our ineligibility to file resale registration statements under
the Securities Act.
If our common stock is delisted, it may become subject to the SECs penny stock rules and
more difficult to sell.
SEC rules require brokers to provide information to purchasers of securities traded at less
than $5.00 and not traded on a national securities exchange or quoted on the Nasdaq Stock Market.
If our common stock becomes a penny stock that is not exempt from these SEC rules, these
disclosure requirements may have the effect of reducing trading activity in our common stock and
making it more difficult for investors to sell. The rules require a broker-dealer to deliver a
standardized risk disclosure document prepared by the SEC that provides information about penny
stocks and the nature and level of risks in the penny market. The broker must also give bid and
offer quotations and broker and salesperson compensation information to the customer orally or in
writing before or with the confirmation. The SEC rules also require a broker to make a special
written determination that the penny stock is a suitable investment for the purchaser and receive
the purchasers written agreement to the transaction before a transaction in a penny stock.
Changes in laws and regulations that affect the governance of public companies has increased
our operating expenses and will continue to do so.
Recently enacted changes in the laws and regulations affecting public companies, including the
provisions of the Sarbanes-Oxley Act of 2002 and the listing requirements for American Stock
Exchange have imposed new duties on us and on our executives, directors, attorneys and independent
accountants. In order to comply with these new rules, we have hired and expect to hire additional
personnel and use additional outside legal, accounting and advisory services, which have increased
and are likely to continue increasing our operating expenses. In particular, we expect to incur
additional administrative expenses as we implement Section 404 of the Sarbanes-Oxley Act, which
requires management to extensively evaluate and report on, and our independent registered public
accounting firm to attest to, our internal controls. For example, we have incurred significant
expenses, and expect to incur additional expenses, in connection with the evaluation,
implementation, documentation and testing of our existing and newly implemented control systems.
Management time associated with these compliance efforts necessarily reduces time available for
other operating activities, which could adversely affect operating results. If we are unable to
achieve full and timely compliance with these regulatory requirements, we could be required to
incur additional costs, expend additional money and management time on additional remedial efforts
which could adversely affect our results of operations.
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Failure to implement effective control systems, or failure to complete our assessment of the
effectiveness of our internal control over financial reporting, may subject us to regulatory
sanctions and could result in a loss of public confidence, which could harm our operating results.
Pursuant to Section 404 of the Sarbanes-Oxley Act, beginning with our fiscal year ended
December 31, 2005, we are required to include in our annual report our assessment of the
effectiveness of our internal control over financial reporting. Furthermore, our independent
registered public accounting firm is required to issue an opinion on whether our assessment of the
effectiveness of our internal control over financial reporting is fairly stated in all material
respects and separately report on whether it believes we maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2005.
If we fail to remedy any material weaknesses which are uncovered, fail to timely complete our
assessment, or if our independent registered public accounting firm cannot timely attest to our
assessment, we could be subject to regulatory sanctions and a loss of public confidence in our
internal control. In addition, any failure to implement required new or improved controls, or
difficulties encountered in their implementation, could harm our operating results or cause us to
fail to timely meet our regulatory reporting obligations.
We have engaged in and may continue to engage in further expansion through mergers and
acquisitions, which could negatively affect our business and earnings.
We have engaged in and may continue to engage in expansion through mergers and
acquisitions. There are risks associated with such expansion. These risks include, among others,
incorrectly assessing the asset quality of a prospective merger partner, encountering greater than
anticipated costs in integrating acquired businesses, facing resistance from customers or
employees, and being unable to profitably deploy assets acquired in the transaction. Additional
country- and region-specific risks are associated with transactions outside the United States. To
the extent we issue capital stock in connection with additional transactions, these transactions
and related stock issuances may have a dilutive effect on earnings per share and share ownership.
Our earnings, financial condition, and prospects after a merger or acquisition depend in part
on our ability to successfully integrate the operations of the acquired company. We may be unable
to integrate operations successfully or to achieve expected cost savings. Any cost savings which
are realized may be offset by losses in revenues or other charges to earnings.
Description Of Capital Stock
Our authorized capital stock consists of 1,000,000 shares of Preferred Stock, $0.01 par
value, and 200,000,000 shares of common stock, $0.001 par value.
Common Stock
Our common stock is quoted on the American Stock Exchange LLC under the symbol ANX.
We have never paid cash dividends on any of our securities and do not currently expect to pay
any cash dividends on our securities in the foreseeable future. There are no restrictions that
limit our ability to pay dividends on our common stock or that are likely to do so in the future
other than restrictions under the Delaware General Corporation Law and other applicable law.
As of May 1, 2006, there were 71,629,233 shares of common stock issued and outstanding which
were held of record by approximately 7,021 stockholders.
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The holders of our common stock are entitled to one vote per share held of record on all
matters submitted to a vote of the stockholders. Our certificate of incorporation does not provide
for cumulative voting in the election of directors. Subject to preferences that may be applicable
to any outstanding preferred stock, the holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time by our Board of Directors out of funds
legally available for that purpose. In the event of our liquidation, dissolution or winding up,
holders of our common stock are entitled to share ratably in all assets remaining after payment of
liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.
Holders of our common stock have no preemptive or other subscription or conversion rights. There
are no redemption or sinking fund provisions applicable to our common stock.
In the event of our voluntary or involuntary liquidation, dissolution or winding up, the
owners of shares of common stock will be entitled to share equally in any assets available for
distribution after the payment in full of all debts and distributions and after the owners of any
of our outstanding preferred stock have received their liquidation preferences in full.
American Stock Transfer & Trust Company is our stock transfer agent and it maintains all our
stockholder records. If you have questions regarding ADVENTRX stock you own, stock transfers,
address or name changes, lost stock certificates, or duplicate mailings, please contact American
Stock Transfer & Trust Transfer Company directly at the address below. If your shares are held with
a stockbroker, please contact your broker.
American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
New York, NY 10038
(800) 937-5449
www.amstock.com
email address info@amstock.com
59 Maiden Lane, Plaza Level
New York, NY 10038
(800) 937-5449
www.amstock.com
email address info@amstock.com
Preferred Stock
Our Board of Directors is authorized, without action by the stockholders, to issue preferred
stock in one or more series and to fix the rights, preferences, privileges and restrictions
thereof. These rights, preferences and privileges may include dividend rights, conversion rights,
voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of
shares constituting any series or the designation of any series, all or any of which may be greater
than the rights of the common stock.
Use of Proceeds
All of the shares of common stock and shares of common stock issuable upon exercise of warrants
offered pursuant to this prospectus are being offered by the selling security holders listed under
Selling Security Holders. We will not receive any proceeds from sales of shares of common stock
by the selling security holders. The shares offered hereby include an aggregate of 194,500 shares
issuable upon exercise of outstanding warrants held by security holders named in this prospectus.
We will receive proceeds from any exercise of these warrants (except to the extent warrants are
exercised on a net exercise basis). The proceeds, if any, will be added to our working capital and
be available for general corporate purposes.
Selling Security Holders
All of the shares of our common stock registered for sale under this prospectus (the
Registered Shares) are owned, as of the date of this prospectus, by the selling security holders
listed in the table below. We issued the Registered Shares in transactions exempt from the
registration requirements of the Securities Act. We are registering the Registered Shares for the
selling security holders who acquired their holdings either directly from us in unregistered
transactions or by transfer from an investor who acquired holdings directly from us in unregistered
transactions.
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The following table sets forth information as of May 1, 2006 with respect to the selling
security holders and the respective number of shares of common stock beneficially owned by each
selling security holder, all of which are offered pursuant to this prospectus. For purposes of
computing the number and percentage of shares beneficially owned by a selling security holder on
May 1, 2006, any shares which such person has the right to acquire within 60 days after such date
are deemed to be outstanding, but those shares are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other selling security holder:
Percent Owned | Shares | Shares Owned Upon | ||||||||||||||||||
Shares Owned Before | Before | Being | Completion Of | Percent Owned After | ||||||||||||||||
Name | Offering(1) | Offering(2) | Offered | Offering | Offering(1) | |||||||||||||||
Emisphere Technologies, Inc. |
50,000 | (3) | 0.07 | % | 50,000 | 0 | 0 | |||||||||||||
Jonathan Balk |
35,250 | 0.05 | % | 3,000 | (4) | 32,250 | 0.05 | % | ||||||||||||
LB (Swiss) Privatbank AG |
37,500 | 0.05 | % | 12,500 | (5) | 25,000 | 0.03 | % | ||||||||||||
North Sound Legacy Institutional Fund LLC |
1,005,756 | 1.39 | % | 20,000 | (6) | 985,756 | 1.37 | % | ||||||||||||
Robert J. and Sandra S. Neborsky JTWROS |
24,750 | 0.03 | % | 11,750 | (7) | 13,000 | 0.02 | % | ||||||||||||
Robert J. Neborsky |
12,250 | 0.02 | % | 12,250 | (8) | 0 | 0 | |||||||||||||
Robert J. Neborsky M.D. Inc. Combination
Retirement Trust |
507,581 | 0.71 | % | 10,000 | (9) | 497,581 | 0.69 | % | ||||||||||||
SDS Capital Group SPC, Ltd. |
595,832 | 0.83 | % | 262,500 | (10) | 333,332 | 0.46 | % | ||||||||||||
Paul J. Marangos and/or Maia Marangos, as
trustees of The Marangos Family Trust,
dated July 21, 1995 |
962,860 | (11) | 1.34 | % | 914,717 | 48,143 | 0.07 | % | ||||||||||||
Andrew X. Chen and Eiko Junii, Trustees
of The Chen Family Trust dated May 8,
2000 |
962,860 | (11) | 1.34 | % | 914,717 | 48,143 | 0.07 | % | ||||||||||||
DLA Piper Rudnick Gray Cary US LLP |
28,885 | (11) | 0.04 | % | 27,441 | 1,444 | 0 | |||||||||||||
SEED Intellectual Property Law Group, PLLC |
34,662 | (11) | 0.05 | % | 32,929 | 1,733 | 0 | |||||||||||||
Costas Loullis |
9,628 | (11) | 0.01 | % | 9,147 | 481 | 0 | |||||||||||||
Gail Loullis |
9,628 | (11) | 0.01 | % | 9,147 | 481 | 0 | |||||||||||||
Wen Bo Hu |
19,257 | (11) | 0.03 | % | 18,295 | 962 | 0 | |||||||||||||
James A. Rock |
17,194 | (11) | 0.02 | % | 16,335 | 859 | 0 | |||||||||||||
Horace Hertz |
17,193 | (11) | 0 | 16,334 | 859 | 0 | ||||||||||||||
Jack Luchese |
17,193 | (11) | 0 | 16,334 | 859 | 0 | ||||||||||||||
James Ueberroth |
17,193 | (11) | 0 | 16,334 | 859 | 0 | ||||||||||||||
Tzu-Ping Richard Lin |
1,891 | (11) | 0 | 1,797 | 94 | 0 | ||||||||||||||
Thanh Nguyen |
1,203 | (11) | 0 | 1,143 | 60 | 0 | ||||||||||||||
Dee Conger |
343 | (11) | 0 | 326 | 17 | 0 | ||||||||||||||
Angeliki Frangou |
15,000 | 0.02 | % | 15,000 | (12) | 0 | 0 |
(1) | Options and warrants to purchase our common stock that are presently exercisable or exercisable within 60 days of May 1, 2006, even if such options or warrants may otherwise be subject to restriction on exercise, are included in the total number of shares beneficially owned for the person holding those options or warrants and are considered outstanding for the purpose of calculating percentage ownership of the particular holder. | |
(2) | The percentage of ownership of common stock is based on 71,629,233 shares of common stock issued and outstanding as of May 1, 2006 and excludes all shares of common stock issuable upon the exercise of outstanding options or warrants to purchase common stock, other than the shares of common stock issuable upon the exercise of options or warrants to purchase common stock held by the named person to the extent such options or warrants are exercisable within 60 days of May 1, 2006, even if such options or warrants may otherwise be subject to restriction on exercise. | |
(3) | Consists of 50,000 shares of common stock issuable upon the exercise of warrants held by this entity, all of which will be offered. | |
(4) | Selling security holder is offering 3,000 shares of common stock out of a total of 35,250 shares held of which the remainder are not being offered hereby. | |
(5) | Consists of 12,500 shares of common stock issuable upon the exercise of warrants held by this entity, all of which will be offered. |
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(6) | Includes 8,000 shares of common stock issuable upon the exercise of warrants held by this entity, all of which will be offered. | |
(7) | Consists of 11,750 shares of common stock issuable upon the exercise of warrants held by this selling securityholder, all of which will be offered. | |
(8) | Consists of 12,250 shares of common stock issuable upon the exercise of warrants held by this person, all of which will be offered. | |
(9) | Consists of 10,000 shares of common stock issuable upon the exercise of warrants held by this selling securityholder, all of which will be offered. | |
(10) | Includes 75,000 shares of common stock issuable upon the exercise of warrants held by this entity, all of which will be offered. | |
(11) | These selling security holders acquired their common stock upon the closing of the merger of SDP described above under Recent Developments. |
| Under the Merger Agreement relating to that transaction, upon closing of the Merger, we issued an aggregate of approximately 2,099,990 shares of our common stock (the Merger Consideration Shares) to the stockholders of SDP. | ||
| Within 35 days following closing of the Merger, we are required to file with the Securities and Exchange Commission the registration statement on Form S-3 (of which this prospectus is a part) covering the resale of the Merger Consideration Shares less 5% of the Merger Consideration Shares (the Indemnity Withhold Shares), or an aggregate of 1,994,996 shares to be registered. If the registration statement does not become effective under the Securities Act by June 12, 2006, we will be obligated to make an aggregate cash payment of $100,000 to the selling security holders on a pro rata basis. | ||
| Under the Merger Agreement, we are required to use commercially reasonable efforts to cause the registration statement to become effective as soon as reasonably practicable after the closing date of the Merger, and to remain effective until the first anniversary of the closing date, subject to certain exceptions. | ||
| The Company has no obligation to maintain the effectiveness and may terminate the effectiveness of the registration statement under the Securities Act at any time after the first anniversary of the closing date of the Merger. | ||
| The Marangos Family Trust, dated 1995, and Chen Family Trust, dated 2000, two of the selling security holders under this prospectus (the Founder Holders), have agreed that on each of July 2, 2006, August 2, 2006 and September 1, 2006, a number of Merger Consideration Shares equal to 10% of the number of Merger Consideration Shares issued to each Founder Holder at the Closing shall be released from these resale restrictions and may be sold or disposed of at any time thereafter. On September 30, 2006, these resale restrictions will expire with respect to all Merger Consideration Shares held by the Founding Holders. |
(12) | Consists of 15,000 shares of common stock issuable upon the exercise of warrants held by this person, all of which will be offered. |
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Plan Of Distribution
We are registering the shares of common stock covered by this prospectus on behalf of the
selling security holders listed in this prospectus. Sales of shares may be made by selling security
holders, including their respective donees or other successors-in-interest directly to purchasers
or to or through underwriters, broker-dealers or through agents. Sales may be made from time to
time on the American Stock Exchange, any other exchange or market upon which our shares may trade
in the future or otherwise, at market prices prevailing at the time of sale, at prices related to
market prices, or at negotiated or fixed prices. The shares may be sold by one or more of, or a
combination of, the following:
| a block trade in which the broker-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 (including crosses in which the same broker acts as agent for both sides of the transaction); | ||
| purchases by a broker-dealer as principal and resale by such broker-dealer, including resales for its account, pursuant to this prospectus; | ||
| ordinary brokerage transactions and transactions in which the broker-dealer solicits purchases; | ||
| through options, swaps or derivatives; | ||
| in privately negotiated transactions; | ||
| in making short sales or in transactions to cover short sales entered into after the date of this prospectus; | ||
| put or call option transactions relating to the shares; or | ||
| any other method permitted by applicable law. |
The selling security holders may effect these transactions by selling shares directly to
purchasers or to or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions or commissions from
the selling security holders or the purchasers of shares for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). Each of the selling security holders
has advised us that they have not entered into any agreements, understandings or arrangements with
any underwriters or broker-dealers regarding the sale of their securities.
Each selling security holder will act independently of us in making decisions regarding the
timing, manner and size of each sale of shares of common stock covered by this registration
statement.
Each of the selling security holders may enter into hedging transactions with broker-dealers
or other financial institutions. In connection with those transactions, the broker-dealers or other
financial institutions may engage in short sales of the shares or of securities convertible into or
exchangeable for the shares in the course of hedging positions they assume with the selling
security holders. Each of the selling security holders may also enter into options or other
transactions with broker-dealers or other financial institutions which require the delivery of
shares offered by this prospectus to those broker-dealers or other financial institutions. The
broker-dealer or other financial institution may then resell the shares pursuant to this prospectus
(as amended or supplemented, if required by applicable law, to reflect those transactions).
Each of the selling security holders and any broker-dealers that act in connection with the
sale of shares may be deemed to be underwriters within the meaning of Section 2(11) of the
Securities Act of 1933, as amended (the Securities Act), and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while acting as principals
may be deemed to be underwriting discounts or commissions under the Securities
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Act. Each of the selling security holders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares against liabilities,
including liabilities arising under the Securities Act. We have agreed to indemnify each of the
selling security holders and each selling security holder has agreed, severally and not jointly, to
indemnify us against some liabilities in connection with the offering of the shares, including
liabilities arising under the Securities Act.
Each selling security holder and any other persons participating in a distribution of the
securities covered by this registration statement will be subject to the prospectus delivery
requirements of the Securities Act and will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended (the Exchange Act) and the rules and regulations thereunder,
including, without limitation, Regulation M, which may restrict certain activities of, and limit
the timing of purchases and sales of securities by, selling security holders and other persons
participating in a distribution of securities. Furthermore, under Regulation M, persons engaged in
a distribution of securities are prohibited from simultaneously engaging in market making and
certain other activities with respect to such securities for a specified period of time prior to
the commencement of such distribution, subject to specified exceptions or exemptions. All of the
foregoing may affect the marketability of the securities offered hereby.
Each of the selling security holders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act rather than under this
prospectus, provided they meet the criteria and conform to the requirements of Rule 144.
Upon being notified by a selling security holder that a material arrangement has been entered
into with a broker-dealer for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, we will file a
supplement to this prospectus, if required pursuant to Rule 424(b) under the Securities Act,
disclosing:
| the name of each such selling security holder and of the participating broker-dealer(s); | ||
| the number of shares involved; | ||
| the initial price at which the shares were sold; | ||
| the commissions paid or discounts or concessions allowed to the broker-dealer(s), where applicable; | ||
| that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus; and | ||
| other facts material to the transactions. |
In addition, if required under applicable law or the rules or regulations of the Commission,
we will file a supplement to this prospectus when a selling security holder notifies us that a
donee intends to sell more than 500 shares of common stock.
We are paying all expenses and fees customarily paid by the issuer in connection with the
registration of the shares. Each of the selling security holders will bear all brokerage or
underwriting discounts or commissions paid to broker-dealers and any transfer agent fees in
connection with the sale of the shares.
17
Table of Contents
Legal Matters
The validity of the issuance of shares of common stock we are offering under this
prospectus will be passed upon for us by Bingham McCutchen LLP, San Francisco, California.
Experts
Our consolidated balance sheets as of December 31, 2005 and 2004, and the related
consolidated statements of operations, stockholders equity (deficit) and cash flows for each of
the years in the three-year period ended December 31, 2005, and for the period from June 12, 1996
(date of inception) through December 31, 2005, and managements assessment of the effectiveness of
internal control over financial reporting and the effectiveness of our internal control over
financial reporting as of December 31, 2005, have been incorporated by reference in this prospectus
and in the registration statement in reliance on the reports of J.H. Cohn LLP, independent
registered public accounting firm, given upon the authority of that firm as experts in accounting
and auditing. The report of J.H. Cohn LLP notes that the consolidated financial statements for the
period from June 12, 1996 (date of inception) through December 31, 2001, were audited by other
auditors. J.H. Cohn LLPs opinion insofar as it relates to the period from June 12, 1996 to
December 31, 2001, is based solely on the report of such other auditors.
The financial statements of SD Pharmaceuticals, Inc. as of December 31, 2005 and 2004 and for
the year ended December 31, 2005 and for the period from June 16, 2004 (date of inception) to
December 31, 2004 have been incorporated by reference in this prospectus and in the registration
statement in reliance on the report, which includes an explanatory paragraph relating to the
ability of SD Pharmaceuticals, Inc. to continue as a going concern,
of J.H. Cohn LLP, independent
registered public accounting firm, given upon the authority of that firm as experts in accounting
and auditing.
18
Table of Contents
ADVENTRX PHARMACEUTICALS, INC.
2,391,996 Shares
COMMON STOCK
PROSPECTUS
__________, 2006
19
Table of Contents
PART II
Information Not Required In Prospectus
Item 14. Other Expenses Of Issuance And Distribution
The estimated expenses in connection with the distribution of the securities being registered,
all of which are to be paid by us, are as follows:
Securities and Exchange Commission Registration Fee |
$ | 1,123.59 | ||
Legal Fees and Expenses |
$ | 20,000 | ||
Accounting Fees and Expenses |
20,000 | |||
Miscellaneous Fees and Expenses |
3,876.41 | |||
Total |
$ | 45,000 | ||
Item 15. Indemnification Of Directors And Officers
Section 145 of the Delaware General Corporation Law grants corporations the power to indemnify
their directors, officers, employees and agents in accordance with the provisions thereof. Article
VI of our by-laws provide for indemnification of our directors, officers, agents and employees to
the full extent permissible under Section 145 of the Delaware General Corporation Law. Section
102(b)(7) of the Delaware General Corporation Law authorizes a corporation to eliminate the
liability of directors for breach of fiduciary duty in certain cases. Article VI of our
certificate of incorporation eliminates such liability to the full extent permitted by Section 145.
We maintain directors and officers liability insurance coverage protecting our officers and
directors against certain liabilities.
Item 16. Exhibits
An Exhibit Index has been attached as part of this Registration Statement and is incorporated
herein by reference.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made pursuant to this
registration statement, a post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the registration
statement; or
(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), 1(ii) and (1)(iii) of this section do not apply if 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 Section 15(d) of the Securities Exchange
20
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Act of 1934 that are incorporated by reference in the registration statement or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be
part of the registration statement as of the date the filed prospectus was deemed part of and
included in the registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to
Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section
10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness
or the date of the first contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is
at that date an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement or prospectus that
is part of the registration statement will, as to a purchaser with a time of contract of sale prior
to such effective date, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in any such document
immediately prior to such effective date.
(5) That, for purposes of determining any liability under the Securities Act of 1933, each
filing of the registrants annual report pursuant to Section 13(a) or 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.
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions described in Item 15 above, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 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.
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Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on a 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 May 4, 2006.
ADVENTRX Pharmaceuticals, Inc. |
||||
By: | /s/ Carrie E. Carlander | |||
Name: | Carrie E. Carlander | |||
Title: | Chief Financial Officer | |||
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears below does hereby
constitute and appoint Evan M. Levine and Carrie E. Carlander, and each of them, with full power to
act without the other, his or her true and lawful attorney-in-fact and agent for him or her and in
his or her name, place and stead, in any and all capacities, to sign any and all amendments to this
Registration Statement including without limitation any registration statement for the same
offering 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 all 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 and necessary to be done in and about the premises in order to effectuate the same, as
fully, for all intents and purposes, as he could or might do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, 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 dates indicated.
Signature | Title | Date | ||
/s/ M. Ross Johnson
|
Director, Chairman of the Board | May 4, 2006 | ||
/s/ Evan M. Levine
|
Director, Chief Executive Officer and President (Principal Executive Officer) | May 4, 2006 | ||
/s/ Carrie E. Carlander
|
Chief Financial Officer, Senior Vice President, Finance, Treasurer and Secretary (Principal Financial Officer) | May 4, 2006 | ||
/s/ Robert A. Daniel
|
Controller (Principal Accounting Officer) | May 4, 2006 | ||
/s/ Michael M. Goldberg
|
Director | May 4, 2006 | ||
/s/ Mark J. Pykett
|
Director | May 4, 2006 | ||
/s/ Mark Bagnall
|
Director | May 4, 2006 | ||
/s/ Keith Meister
|
Director | May 4, 2006 |
22
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Exhibit Index
Exhibit | ||
Number | Description | |
2.1
|
Agreement and Plan of Merger by and among ADVENTRX Pharmaceuticals, Inc., Speed Acquisition, Inc., SD Pharmaceuticals, Inc., the Founders (as defined in said Agreement and Plan of Merger) and The Stockholder Representative Dated as of April 7, 2006 and exhibits thereto (14) | |
3.1
|
Amended and Restated Certificate of Incorporation (1) | |
3.2
|
Amended and Restated Bylaws of the Registrant (2) | |
4.1
|
Specimen common stock certificate (3) | |
4.1
|
Stock Purchase Agreement (4) (7) | |
4.2
|
Form of Warrant (4) (8) | |
4.3
|
Form of Warrant (4) (9) | |
4.10
|
Registration Rights Agreement (4) (10) | |
4.19
|
Warrant to Purchase Common Stock issued by the Registrant (4) (5) | |
4.20
|
Stock Subscription Agreement (4) (11) | |
4.21
|
Warrant to Purchase Common Stock issued by the Registrant (4)(6) | |
4.35
|
Stock Purchase Agreement (12) | |
4.36
|
Letter agreement between Biokeys Pharmaceuticals, Inc. and Emisphere Technologies, Inc. dated April 12, 2002 | |
4.37
|
Modification dated August 5, 2002 to Letter agreement between Biokeys Pharmaceuticals, Inc. and Emisphere Technologies, Inc. dated April 12, 2002 | |
4.38
|
Warrant to Purchase Common Stock issued on April 12, 2002 to Emisphere Technologies, Inc. | |
5.1
|
Opinion of Bingham McCutchen LLP | |
23.1
|
Consent of J. H. Cohn LLP (as to reports regarding the registrant) | |
23.2
|
Consent of J. H. Cohn LLP (as to report regarding SD Pharmaceuticals Inc.) | |
23.3
|
Consent of Bingham McCutchen LLP (included in Exhibit 5.1) | |
24
|
Power of Attorney (filed as part of signature page to Registration Statement) |
(1) | Incorporated by reference to exhibit 3.1 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2005. | |
(2) | Incorporated by reference to exhibit 3.6 to the Registrants Registration Statement on Form 10-SB, filed October 2, 2001, as amended. | |
(3) | Incorporated by reference to same-numbered exhibit to the Registrants Registration Statement on Form S-3 filed August 26, 2005 (File No. 333-127857). | |
(4) | Incorporated by reference to same-numbered exhibit to the Registrants Registration Statement on Form S-3 filed June 30, 2004 (File No. 333-117022). | |
(5) | This form of warrant was issued to the following selling securityholders named in Part I of this Registration Statement: Robert J. Neborsky M. Inc. Combination Retirement Trust (by transfer from original investor Craig Pierson) | |
(6) | This form of warrant was issued to the following selling securityholders named in Part I of this Registration Statement: Angeliki Frangou, Robert J. and Sandra S. Neborsky JTWROS (by transfer from original investor VP Bioventures), Robert J. Neborsky (by transfer from original investor VP Bioventures), and SDS Capital Group SPC, Ltd. (by transfer from original investor SDS Merchant Group). | |
(7) | This Stock Purchase Agreement was signed by the following selling securityholders named in Part I of this Registration Statement: LB (Swiss) Privatbank AG and North Sound Legacy Institutional Fund LLC (by transfer from original investor North Sound Legacy Fund LLC). | |
(8) | This form of warrant was issued to the following selling securityholders named in Part I of this Registration Statement: LB (Swiss) Privatbank AG, and North Sound Legacy Institutional Fund LLC (by transfer from original investor North Sound Legacy Fund LLC). |
23
Table of Contents
(9) | This form of warrant was issued to the following selling securityholders named in Part I of this Registration Statement: LB (Swiss) Privatbank AG, and North Sound Legacy Institutional Fund LLC (by transfer from original investor North Sound Legacy Fund LLC). | |
(10) | This form of registration rights agreement was issued to the following selling securityholders named in Part I of this Registration Statement: LB (Swiss) Privatbank AG, and North Sound Legacy Institutional Fund LLC (by transfer from original investor North Sound Legacy Fund LLC). | |
(11) | This form of stock subscription agreement, which includes a registration rights provision, was issued to the following selling securityholders named in Part I of this Registration Statement: Angeliki Frangou, Robert J. and Sandra S. Neborsky JTWROS (by transfer from original investor VP Bioventures), Robert J. Neborsky (by transfer from original investor VP Bioventures), and SDS Capital Group SPC, Ltd. (by transfer from original investor SDS Merchant Group). | |
(12) | This form of stock subscription agreement, which includes a registration rights provision, was issued to the following selling securityholders named in Part I of this Registration Statement: Robert J. Neborsky M. Inc. Combination Retirement Trust (by transfer from original investor Craig Pierson) and Jonathan Balk. | |
(13) | The Agreement and Plan of Merger provided for the issuance of the registrants common stock and for registration rights to the following selling securityholders named in Part I of this Registration Statement: Marangos Family Trust, dated 1995, Chen Family Trust, dated 2000, DLA Piper Rudnick Gray Cary US LLP, SEED Intellectual Property Law Group, PLLC, Costas Loullis, Gail Loullis, Wen Bo Hu, James A. Rock, Horace Hertz, Jack Luchese, James Ueberroth, Tzu-Ping Richard Lin, Thanh Nguyen, Dee Conger. | |
(14) | Incorporated by reference to Exhibit 2.1 to Amendment No. 1 to the Registrants Current Report on Form 8-K dated April 7, 2006.f |
24
Exhibit 4.35
Stock
Subscription Agreement
Biokeys
Pharmaceuticals, Inc.
9948 Hibert Street, Suite 100
San Diego, CA 92131
9948 Hibert Street, Suite 100
San Diego, CA 92131
This
letter represents an agreement between the undersigned (the
Investor) and Biokeys
Pharmaceuticals, Inc., a Delaware corporation (the Company), related to the Investors offer to
purchase shares of the Companys Common Stock, par value $0.001
per share (Common
Stock).
1.
Subscription. Subject to the terms and conditions hereof, the Investor hereby
irrevocably subscribes for and agrees to purchase shares of Common
Stock (the Subscription )
as follows:
Investors name: | ||||||
(Exact name as it should appear on the stock certificate.) | ||||||
Price per share of Common Stock (the Purchase Price): Forty Cents ($0.40) | ||||||
Number of shares of Common Stock: | ||||||
Total Purchase Price: | ||||||
In consideration of the issuance of the number of shares of Common Stock listed above (the
Shares), the Investor tenders herewith a wire transfer to the account of the Company
transmitted pursuant to the wire instructions attached hereto as
Exhibit A in the aggregate amount
of the Total Purchase Price listed above.
2.
Acceptance of Subscription. The Investor understands and agrees that this Subscription
is made subject to the unconditional right of the Company to reject this Subscription, in whole or
in part, in its sole and absolute discretion. This Agreement shall become effective upon
acceptance by the Company (the Acceptance Date). Any interest earned on funds sent to the
Company pursuant to Section 1 hereof will be for the account of the Company if the Subscription
is accepted. This Subscription is made subject to the terms and conditions set forth below.
3.
Representations and Warranties of the Investor.
(a) Exempt
Transaction; Unregistered Shares. The Investor understands that the
Shares are being offered and sold under one or more exemptions from registration provided
for under the Securities Act of 1933, as amended (the
Securities Act), and that the
Companys reliance upon such exemptions is predicated, in part, upon the Investors
representations and warranties set forth in this Agreement. The Investor acknowledges that it
is purchasing the Shares without being offered or furnished any offering literature or
prospectus. The Investor understands that neither the United States Securities and Exchange
Commission, nor any governmental agency charged with the administration of the securities
laws of any state nor any other governmental agency has passed upon or reviewed the merits
or qualifications of, or recommended or approved the offer and sale of the Shares pursuant to
the terms of this Agreement.
(b) Investment Intent; Accreditation; Authority. The Investor is acquiring the
Shares for investment for the Investors own account, not as nominee or agent, for
investment and not with a view to, or for resale in connection with, any distribution or public
offering thereof within the meaning of the Securities Act. The Investor is an accredited
investor within the meaning of the Securities Act. The Investor has the full right, power,
authority and capacity to enter into and perform this Agreement, the
terms of this Agreement
constitute valid and binding obligations of the Investor enforceable in accordance with their
terms, except as the same may be limited by equitable principles and by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the enforcement of
creditors rights.
(c) Knowledge and Experience. The Investor (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the merits and
risks of the Investors prospective investment in the Shares; (ii) has the ability to bear the
economic risks of the Investors prospective investment; (iii) has been furnished with and has
had access to such information as the Investor has considered necessary to make a
determination as to the purchase of the Shares together with such additional information as is
necessary to verify the accuracy of the information supplied; and (iv) has had all questions
which have been asked by Investor satisfactorily answered by the Company.
(d) Restricted Securities. The Investor understands that the Shares are restricted
securities as such term is defined in Rule 144 of Regulation D promulgated under the
Securities Act (Rule 144) and must be held indefinitely unless they are subsequently
registered under applicable state and federal Securities laws or an exemption from such registration is available. The Investor understands that he, she or it may resell the Shares pursuant
to Rule 144 only after the satisfaction of certain requirements, including the requirement that
the Shares be held for at least one year prior to resale.
(e) No Obligation to Register Shares. The Investor further acknowledges and
understands that, except as provided in Section 7 of this Agreement, the Company is under
no obligation to register the Shares. The Investor understands that the certificate evidencing
the Shares will be imprinted with a legend which prohibits the transfer of the Shares unless
they are registered or such registration is not required in the opinion of counsel for the
Company.
(I) Investor Questionnaire. The Investor agrees to complete, execute and deliver to
the Company with this executed Agreement a copy of the Investor Suitability Questionnaire
attached hereto as Exhibit B, the terms of which are incorporated herein.
(g) Foreign Investor Representation. If the Investor is not a U.S. person (as such
term is defined in Rule 902(k) of Regulation S promulgated under the Securities Act), such
Investor hereby represents that it has satisfied itself as to the full observance of the laws of
its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this
Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the Shares. Such Investors subscription and payment for, and its
continued beneficial ownership of the Shares, will not violate any applicable securities or
other laws of its jurisdiction.
(h) Domicile. The Investor is a bona fide resident and domiciliary (not a temporary
or transient resident) of the state indicated on Exhibit B hereto and he, she or it has no
present intention of becoming a resident of any other state or jurisdiction.
(i) No Need for Liquidity. The Investors aggregate holding of securities that are
restricted securities or otherwise not readily marketable is not excessive in view of the
Investors net worth and financial circumstances and the purchase of the Shares will not
cause such commitment to become excessive.
(j) Independent Advice. The Investor understands that the Company urges the
Investor to seek independent advice from professional advisors relating to the suitability for
the Investor of an investment in the Company in view of the Investors overall financial
needs and with respect to legal and tax implications of such an investment.
4.
Reliance. The Investor understands that the Company may rely on the foregoing representations and warranties in determining whether to accept this Subscription. If for any
reason any representations and warranties are no longer true and accurate prior to the Acceptance
Date, the Investor will give the Company prompt written notice of the inaccuracy. By signing
below, the Investor represents that the Investor has read and confirmed the truth and accuracy of
each of the foregoing representations and warranties.
5.
Indemnification. The Investor agrees to indemnify and hold harmless the Company and
each of its directors, officers, agents and affiliates from and against any and all loss,
damage or liability due to or arising out of a breach of any representation, warranty or covenant of the
undersigned contained in this Agreement.
6. Restrictive Legends and Stop-Transfer Orders.
(a) Legend. The stock certificate representing the Shares shall bear the following
legend or similar legend (as well as any legends required by applicable state and federal
corporate and securities laws):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE ACT)
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
(b) Removal of Legend and Transfer Restrictions. Any legend endorsed on a
certificate pursuant to this Section 6 and the stop transfer instructions with respect to such
legended Shares shall be removed, and the Company shall issue a certificate without such
legend to the holder of such Shares if such Shares are registered under the Securities Act, and
a prospectus meeting the requirements of Section 10 of the Securities Act is available or if
such holder satisfies the requirements of Rule 144(k) or if such holder provides the Company
with an opinion of counsel for such holder of the Securities, reasonably satisfactory to the
Company, to the effect that a sale, transfer or assignment of such Shares may be made
without registration.
7. Registration Rights.
(a)
Piggy-back Rights. If (but without any obligation to do so) the Company
proposes to register any of shares of Common Stock in connection with
any offering of shares of Common Stock solely for cash pursuant to a registration statement under the
Securities Act, other than a registration solely in connection with a transaction under
Rule 145 promulgated under the Securities Act (a
Public Offering), the Company shall
promptly give the Investor written notice of such registration, at least 10 business days
prior to the filing of any registration statement under the Securities Act. Upon the written request
of the Investor given within 5 business days after delivery of such written notice by the
Company, the Company shall, subject to the provisions of Section 7(b) below, use its best
efforts to cause to be registered under the Securities Act all of the Shares that the Investor
has requested to be registered.
(b) Underwriting. If the registration statement under which the Company gives
notice under this Section 7 is for an underwritten Public Offering, the Company shall so
advise the Investor. The right of the Investor to registration pursuant to Section 7(a) above
shall be conditioned upon the Investors participation in such underwriting and the inclusion
of the Shares in the underwriting to the extent provided herein. The Investor shall (together
with the Company and any other holders of Company securities distributing their securities
through such underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for underwriting by the Company. Notwithstanding any
other provision of this Section 7, if the underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the underwriter may exclude some or
all of the Shares from such registration and underwriting.
(c) Furnish Information. It shall be a condition to the Companys obligations to
take any action under this Section 7 that the Investor shall
furnish to the Company such information regarding itself, the Shares, and the intended method of disposition of such
securities as shall be required to effect the registration of their Shares. In that
connection, each selling Investor shall be required to represent to
the Company that all such information which is given is both complete and accurate in all material respects when made.
(d) Delay of Registration. The Investor shall have no right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or implementation of this
Section 7.
(e)
Termination of Registration Rights. The Company shall have no obligation to
register the Shares pursuant to this Section 7 with respect to any request or requests made by
any Investor on or after that date which is one year after the Acceptance Date.
8. Price Protection.
(a)
Sales of Common Stock. If at any time after the Acceptance Date and before the
date that is one year after the Acceptance Date, the Company issues or sells any shares of its
Common Stock (other than Excluded Shares (as that term is defined
below)) for a
consideration per share (the Dilutive Price) less than the Purchase Price, then the
Company will issue to the Investor a number of shares, if positive, of Common Stock
determined by the following formula:
X = (A / B) (C + D) | ||||||
Where: | X = | the number of shares of Common Stock to be issued to the Investor, rounded to the nearest whole number; | ||||
A = | the Total Purchase Price; | |||||
B = | the Dilutive Price; | |||||
C = | the number of Shares held by the Investor; and | |||||
D = | the number of shares of Common Stock issued to the Investor pursuant to this Section 8(a) prior to the date of such determination. |
Notwithstanding the foregoing, in no event will the Company be obligated to issue to the
Investor a number of shares of Common Stock pursuant to this Section 8( a) in excess of the
number determined by the following formula:
X = (A / B) C | ||||||
Where: | X = | the number of shares of Common Stock to be issued to the Investor, rounded to the nearest whole number; | ||||
A = | the Total Purchase Price; | |||||
B = | Twenty Cents ($0.20); and | |||||
C = | the number of Shares held by the Investor. |
For
purposes of this Agreement, the term Excluded
Shares means: (i) shares of Common
Stock issuable or issued after the Acceptance Date to officers, employees, consultants or
directors of the Company directly or pursuant to a stock purchase, stock option, restricted
stock or other written compensation plan or agreement approved by the Board of Directors of
the Company (the Board); (ii) shares of Common Stock issued or issuable after the
Acceptance Date, primarily for non-equity
financing purposes and as approved by the Board,
to financial institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services or customers;
(iii) shares of Common Stock issuable upon (a) exercise of outstanding warrants, options,
notes or other rights to acquire securities of the Company, (b) conversion of outstanding
shares of the Companys Preferred Stock, par value $0.01 per share or (c) exchange of
outstanding promissory notes issued by the Company; (iv) capital stock or warrants or
options to purchase capital stock issued in connection with bona fide acquisitions, mergers or
similar transactions, the terms of which are approved by the Board; or (v) shares of Common
Stock issued or issuable by way of dividend or other distribution on Excluded Shares.
(b)
Change of Control. If a Change of Control (as that term is defined below) is
consummated prior to the date that is one year after the Acceptance Date pursuant to which
the Investor, by virtue of its ownership of the Shares, is entitled to receive, either out of
the assets and funds of the Company available for the distribution to the holders of Common
Stock or from the acquiring entity or person, aggregate consideration
(the Acquisition
Consideration) with a value less than the product of (x) the number of Shares held by the
Investor immediately prior to the Change of Control and (y) the Purchase Price, then the
Company will issue to the Investor, immediately prior to the consummation of the Change of
Control, a number of shares, if positive, of Common Stock determined by the following
formula:
X | = | (A/B*C) - (C + D) | ||||
Where: | X | = | the number of shares of Common Stock to be issued to the Investor, rounded to the nearest whole number; | |||
A | = | the Total Purchase Price; | ||||
B | = | the Acquisition Consideration; | ||||
C | = | the number of Shares held by the Investor; and | ||||
D | = | the number of shares of Common Stock issued to the Investor pursuant to Section 8(a) |
For
purposes of this Agreement, the term Change of Control means (i) a sale or
disposition of all or substantially all of the assets of the Company, and (ii) a merger or
consolidation of the Company with or into any other corporation or corporations or other
entity, or any other corporate reorganization, or any transfer of beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended), directly or indirectly, of the outstanding
shares of capital stock of the Company, in a single transaction or a series of related
transactions where the shareholders of the Company immediately prior to such transaction or
series of related transactions do not retain at least fifty percent
(50%) of the voting power in
the Company or any successor or acquiring entity (as applicable).
9. Miscellaneous.
(a) Governing Law. This Agreement, all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the state of California, without giving effect to principles of
conflicts of law.
(b)
Jurisdiction and Venue. Any legal action or other legal proceeding relating to
this Agreement or the enforcement of any provision of this Agreement shall be brought or
otherwise commenced in any state or federal court located in the county of San Diego,
California. Each party to this Agreement: (i) expressly and irrevocably consents and submits
to the jurisdiction of each state and federal court located in the county of San Diego,
California and each appellate court located in the state of California, in connection with any
such legal proceeding; (ii) agrees that each state and federal court located in the county of
San Diego, California shall be deemed to be a convenient forum; and (iii) agrees not to
assert, by way of motion, as a defense or otherwise, in any such legal proceeding commenced
in any state or federal court located in the county of San Diego, California any claim that
such party is not subject personally to the jurisdiction of such court, that such legal
proceeding has been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this Agreement or the subject matter of this
Agreement may not be enforced in or by such court.
(c) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings relating to the subject
matter hereof. No statement, representation, warranty, covenant or agreement of any kind
not expressly set forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.
(d) Notices. All notices and other communications hereunder shall be in writing and
shall be given (and shall be deemed to have been duly given upon receipt) by delivery in
person or facsimile transmission (received at the facsimile machine to which it is transmitted
prior to 5:00 p.m., local time, on a business day in the state of California, for the party to
which it is sent), by courier or express delivery service or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in accordance with
this Section):
if to the Company: | Biokeys Pharmaceuticals, Inc. | |||
9948 Hibert Street, Suite 100 | ||||
San Diego, CA 92131 | ||||
Attention: Nicholas J. Virca | ||||
Facsimile: (858) 271-9678 |
with a copy to (not to constitute notice): | Bingham McCutchen LLP | |||
3 Embarcadero Center | ||||
San Francisco, CA 94111-4067 | ||||
Attention: Francis W. Sarena | ||||
Facsimile: (415) 393-2286 | ||||
if to the Investor: | To the address set forth in Exhibit B hereto. |
(e)
Modifications and Amendments. The terms and provisions of this Agreement
may be modified or amended only by written agreement executed by the parties hereto.
(f)
Waivers and Consents. The terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written document executed
by the party entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect to any other terms
or provisions of this Agreement, whether or not similar. Each such waiver or consent shall
be effective only in the specific instance and for the purpose for which it was given, and
shall not constitute a continuing waiver or consent.
(g)
Assignment. This Agreement may not be transferred or assigned without the
prior written consent of the Company and any such transfer or
assignment shall be made only
in accordance with applicable laws and any such consent.
(h)
Severability. In the event that any court of competent jurisdiction shall
determine that any provision, or any portion thereof, contained in
this Agreement shall be
unenforceable in any respect, then such provision shall be deemed limited to the extent that
such court deems it enforceable, and as so limited shall remain in full force and effect. In
the event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full
force and effect.
(I) Interpretation. The parties hereto acknowledge and agree that: (i) each party
and such partys counsel has reviewed the terms and provisions of this Agreement; (ii) the
rule of construction to the effect that any ambiguities are resolved against the drafting
party shall not be employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to the parties hereto and not in
favor of or against any party, regardless of which party was generally responsible for the
preparation of this Agreement. Whenever used herein, the singular number shall include the
plural, the plural shall include the singular, the use of any gender shall include all
persons.
(j) Headings and Captions. The headings and captions of the various subdivisions
of this Agreement are for convenience of reference only and shall in no way modify, or affect
the meaning or construction of any of the terms or provisions hereof.
(k)
No Waiver of Rights, Powers and Remedies. No failure or delay by a party
hereto in exercising any right, power or remedy under this Agreement, and no course of
dealing between the parties hereto, shall operate as a waiver of any such right, power or
remedy of the party. No single or partial exercise of any right, power or remedy under this
Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any
such right, power or remedy, shall preclude such party from any other or further exercise
thereof or the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such party to pursue
other available remedies. No notice to or demand on a party not expressly required under
this Agreement shall entitle the party receiving such notice or demand to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the rights of the
party giving such notice or demand to any other or further action in any circumstances
without such notice or demand.
(l)
Survival of Representations and Warranties. All representations and
warranties made by the parties hereto in this Agreement or in any other agreement, certificate
or instrument provided for or contemplated hereby, shall survive (i) the execution and
delivery hereof, (ii) any investigations made by or on behalf of the parties and (iii) the
closing of the transaction contemplated hereby.
(m)
Expenses. Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged by such party)
in connection with this Agreement and the transactions contemplated hereby whether or not
the transactions contemplated hereby are consummated.
(n)
Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this ___day of ___, 2003.
Investor: | ||||||
By: | ||||||
(signature) | ||||||
Name: | ||||||
(please print) | ||||||
Title: | ||||||
(if applicable) |
Biokeys
Pharmaceuticals, Inc. hereby accepts the foregoing Subscription
subject to the terms
and conditions hereof as of ______ ___, 2003
Biokeys
Pharmaceuticals, Inc.
By:
|
||||
Nicholas J. Virca, Chief Executive Officer |
Exhibit
A
Wire
Instructions
The
following information is provided to
assist you in routing wire transfers TO the account
of Biokeys Pharmaceuticals, Inc. at Silicon Valley Bank in the most expeditious manner.
For all
incoming foreign currency wires, please contact Silicon Valley
Banks International
Department at (408) 654-7774 for settlement instructions.
DOMESTIC WIRE TRANSFER:
Instruct
the paying financial institution or the payor to route all domestic wire transfers via
FEDWIRE to the following ABA number:
TO: | SIL VLY BK SJ | |||||
ROUTING & TRANSIT #: | 121140399 | |||||
FOR CREDIT OF: | Biokeys, Inc. | |||||
CREDIT ACCOUNT #: | 3300340922 | |||||
BY ORDER OF: | [NAME OF SENDER] |
INTERNATIONAL WIRE TRANSFER:
Instruct the paying financial institution to advise their U.S. correspondent to pay as follows:
PAY TO: | FC SILICON VALLEY BANK | |||||
3003 TASMAN DRIVE | ||||||
SANTA CLARA, CA 95054, USA | ||||||
ROUTING & TRANSIT #: | \\FW121140399 | |||||
SWIFT CODE: | SVBKUS6S | |||||
FOR CREDIT OF: | Biokeys, Inc. | |||||
FINAL CREDIT ACCOUNT #: | FNC 3300340922 | |||||
BY ORDER OF: | [NAME OF SENDER] |
IMPORTANT!!!!
Wire
instructions MUST designate the FULL TEN DIGIT ACCOUNT NUMBER listed
above. Wires received by Silicon Valley Bank with INCOMPLETE or
INVALID ACCOUNT
NUMBERS may be delayed and could possibly require return to the sending bank due to new
regulations.
Exhibit
B
Investor Suitability Questionnaire
Biokeys Pharmaceuticals, Inc. (the Company)
(All information will be treated confidentially)
(All information will be treated confidentially)
I. INDIVIDUAL INVESTORS ONLY
Personal Information
Name: |
Residence Address: |
Home Telephone Number: |
Fax Telephone Number |
Email Address: |
Social Security Number: |
Delivery Information (Applicable only if different than residence.)
Name of Institution or Destination: |
Contact Name: |
Delivery Address: |
Account Reference (if applicable): |
Contact Telephone Number: |
Contact Fax Telephone Number: |
Contact Email Address: |
Employment Information
Occupation: |
Number of Years: |
Present Employer: |
Position/Title: |
Business Address: |
Business Telephone: |
Resident Information
Set forth in the space provided below the state(s)/country(ies) in which
you have maintained your principal residence during the past three
years and the date during which
you resided in each state/country.
Are you registered to vote in, or do you have a drivers license issued by, or do you maintain a
residence in any other state? If yes, in which state(s)?
Yes | No |
Income
Do you
reasonably expect either your own income from all sources during the current
year to exceed $200,000 or the joint income of you and your spouse (if
married) from all sources during the current year to exceed $300,000?
Yes | No |
If not, please specify the amount: |
What percentage of your income as shown above is anticipated to be derived
form sources other than salary?
2
Was either your yearly income from all sources during each of the last two years in excess of $200,000 or was the joint income of you and your spouse (if married) from all sources during each of such years in excess of $300,000? |
Yes | No | |||
If no, please specify the amount for: |
Last Year: |
Year Before Last: |
F. | Net Worth | |
Will your net worth* as of the date you purchase securities of the Company, together with the net worth of your spouse, be in excess of $1,000,000? |
Yes | No |
If not, please specify amount: |
* As used in this questionnaire the term net worth means the amount by
which total assets exceed total liabilities. In computing net worth for purposes of this Item 5,
you should value your principal residence at cost, including cost of improvements, or
at that value recently appraised by an institutional lender making a secured loan or otherwise by a
certified appraiser, net of encumbrances.
G. | Education | |
Please describe your educational background and degrees obtained, if any. | ||
H. | Affiliation | |
If you have any pre-existing personal or business relationship with the Company or any of its officers, directors or controlling persons, please describe the nature and duration of such relationship. | ||
3
I. | Business and Financial Experience | |
Please describe in reasonable detail the nature and extent of your business, financial and investment experience which you believe give you the capacity to evaluate the merits and risks of the proposed investment and the capacity to protect your interests. |
Are you purchasing the securities offered for your own account and for investment purposes only? |
Yes | No | |||
If no, please state for whom you are investing and/or the reason for investing. |
4
11. ENTITY INVESTORS ONLY
Entity Name and Contact Information
Name: |
Name of Institution or Destination: |
Address: |
Account Reference (if applicable): |
Tax Identification Number (if applicable): |
Contact Name: |
Contact Telephone Number: |
Contact Fax Number: |
Contact Email Address: |
General Information
Under the laws of what jurisdiction was the Investor formed? |
Was the Investor formed for the purpose of investing in the securities being offered?
Yes | No |
Set forth in the space provided below the (i) state(s), if any, in the United
States in which you maintained your principal office during the past two years and the
dates during which you maintained your office in each state, (ii) the state(s), if any, in
which you are incorporated or otherwise organized, and (iii) the state(s), if
any, in which you still pay income taxes:
5
C. | Accredited Investor Information | |
Is the Investor a national bank or a banking institution organized under the laws of any state or any territory of the United States or the District of Columbia? |
Yes | No |
Is the Investor a savings and loan association, building and loan association, cooperative bank, homestead association, or similar institution, which is supervised and examined by any state or federal authority having supervision over such institution? |
Yes | No |
Is the Investor a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934? |
Yes | No |
Is the Investor a company (i) whose primary and predominant business is underwriting insurance and subject to the supervision by a regulatory agency under the laws of any state or territory, or (ii) registered as an investment company under the Investment Company Act of 1940, or (iii) a Small Business Investment Company licensed by the U.S. Small Business Administration? |
Yes | No |
Is the Investor a business development company within the meaning of the Investment Company Act of 1940 or the Investment Advisers Act of 1940? |
Yes | No |
Is the Investor an employee benefit plan under the Employee Retirement Income Security Act of 1974 (a Plan") with assets in excess of $5,000,000? |
Yes | No |
If the Investor is such a Plan, but if the Plans total assets do not
exceed $5,000,000, are investment decisions for the Plan made by a bank, savings and
loan association, insurance company or registered investment adviser acting as
fiduciary? (If yes, please specify the name of the fiduciary.)
Yes | No |
Name of Fiduciary: |
If the Investor is a self-directed Plan, but if the Plans total assets do not exceed
$5,000,000, are investment decisions made solely by persons or entities that can answer yes
to one or more of the questions under paragraphs (b) - (e) of Item 1,
or (c) - (k) under this Item 2? (If yes, please specify the applicable Item and
6
Paragraph.)
Yes | No | |||
Item and Paragraph: |
Is the Investor (A)(i) a tax exempt organization which is qualified under
Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, or (ii) a corporation, or (iii) a
Massachusetts or similar business trust, or (iv) a partnership, not formed for the specific purpose
of acquiring the securities offered, and (B) which has assets in excess of
$5,000,000?
Yes | No |
Is the Investor a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed by a person who
has such knowledge and experience in financial and business matters that he is capable
of evaluating the merits and risks of the prospective investment?
Yes | No |
If yes, please attach a memorandum describing such persons educational background,
professional memberships or licenses, current employment, principal business and
professional activities during the last five years, and experience as an investor in
securities. Include any additional information evidencing that such person has
sufficient knowledge and experience in financial matters that such person would be capable
of evaluating the merits and risks of investing in the securities being
offered.
Is the Investor an entity in which all of the equity owners are persons who are either
(i) entities described in paragraphs (c) through (j)above; (ii) persons
whose net worth, or joint net worth with their spouses, exceeds $1,000,000; (iii) persons whose
income without regard to that of their spouses exceeded $200,000, or whose joint income
with their spouses exceeded $300,000, in each of the last two years and who
reasonably expect such person income to exceed $200,000 or such joint income to exceed $300,000 this
year; or (iv) persons who are brokers or dealers registered pursuant to Section 15 of
the Securities Exchange Act of 1934?
Yes | No |
If an equity owner is an entity described in paragraphs
(h) or (j) under this Item 3, please provide the
information required by such paragraph.
7
The above information has been requested by the Company and will be used
solely to confirm that the Company is complying with certain securities regulations. In
furnishing the above information, the undersigned acknowledges that the Company will be relying
thereon in assessing the requirements of the Securities Act of 1933, as amended, and other
applicable securities laws.
The information contained in this questionnaire is true and
complete, and the undersigned understands that the Company and its counsel
will rely on such information for the purpose of
complying with all applicable securities laws, as discussed above. The
undersigned agrees to notify the Company promptly of any change
in the foregoing information which may occur prior to any
purchase by the undersigned of stock from the Company.
Date:
Individual
Investor:
By: |
Name: |
Entity
Investor:
By: |
Name: |
Title: |
8
Exhibit 4.36
Biokeys Pharmaceuticals, Inc
333 N. Sam Houston Pkway, Suite 1035
Houston, TX 77060
(281) 272-0000 T
(281) 272-1149 F
Houston, TX 77060
(281) 272-0000 T
(281) 272-1149 F
April 12, 2002 |
BY FEDERAL EXPRESS
Emisphere Technologies, Inc.
765 Old Saw Mill River Road
Tarrytown, NY 10591
Attention: Dr. Michael Goldberg, Chairman and Chief Executive Officer
Emisphere Technologies, Inc.
765 Old Saw Mill River Road
Tarrytown, NY 10591
Attention: Dr. Michael Goldberg, Chairman and Chief Executive Officer
Re: Preliminary
Agreement
Dear Dr. Goldberg;
This will confirm the terms of our recent discussions concerning an
agreement between Emisphere Technologies, Inc. (ETI) and Biokeys
Pharmaceuticals, Inc. (BPI), as follows:
1. Purchase of Series B Convertible Stock. ETI hereby purchases and BPI agrees
to issue and sell 200,000
shares of a new class of Series B Convertible Preferred Stock, $0.01 par value, at
a purchase of $1.50 per share or a total purchase price of $300,000. The purchase
price shall be paid by wire transfer.
2. Terms of Series B Preferred Stock. The Series B Preferred Stock
will have a liquidation preference of
$1.50 per share and will be convertible into Common Stock on a
share-for-share basis.
3. Warrants. In addition to the issuance to the preferred stock, BPI agrees to issue to ETI five-year
warrants for the purchase of BPI Common Stock at an exercise price of
$2.40 per share, with 25% warrant coverage.
4. Registration Rights. BPI agrees to register the shares of Common Stock underlying the Series B
preferred stock and the warrants within six months of the date hereof. If BPI does
not complete such registration
within such six month period, ETI will have a one-time demand registration right
beginning at the end of such six
month period, and BPI shall cause such registration statement to be prepared and
filed and use its best efforts to
make same effective promptly.
5. Option for Additional Investment. BPI hereby grants ETI the option,
exercisable during a period of 60
days commencing with the date of this Agreement, to purchase up to an
additional $4,000,000 of Series B Preferred
Stock on the same terms and conditions on those set forth above. Such option shall
be exercisable by ETIs written
notification to BPI stating the amount of Preferred B Stock it elects to purchase,
which purchase shall include
warrants at 25% warrant coverage, on the same terms as set forth
above.
6. Improvement of Terms. If, at any time during the next 60 days, BPI
receives an offer from an investor or
investor group to purchase BPI equity on terms more advantageous to such investor
than those set forth in this
Agreement with the respect to ETI, the terms and conditions stated in this letter
with respect to ETIs investment
shall be amended within ten (10) days of receipt of said offer
so that they are the
equivalent of such improved terms,
and BPI shall execute and deliver any documents required to reflect such improved
terms with respect to the Series
B Stock and the Warrants.
7. Option to Serve as Preferred Provider. During the next 60 days,
ETI shall have a right of first refusal
to serve as the preferred provider for any enhancement of any BPI product requiring
an oral delivery system, and
such option period to serve as a preferred provider shall be extended for a period
of two years from the date that ETI
makes an investment of at least $2,000,000 in BPI in accordance with Paragraph 5
above.
8. More Detailed Agreements. This Agreement is intended to serve as a preliminary agreement,
and
the parties contemplate that it will be replaced with more detailed and definitive agreements to be
prepared by the
parties and their attorneys within twenty (20) days from the date of execution of this agreement.
However, until
such detailed definitive agreements are concluded, this agreement will represent the agreement of
the parties.
9. Jurisdiction and Governing Law. This Agreement shall be governed by and construed in
accordance with the
laws of the State of New York, applicable to contracts to be fully performed within the State of
New York, without
regard to the conflicts of low principles thereof. Any controversy or claim arising out of or
relating to this
Agreement or the breach thereof, whether involving remedies at law or in equity, shall be
adjudicated in New York.
The parties consent to personal jurisdiction, service and venue in any Federal or State Court
within the Stale of New
York.
We look forward to a close and productive relationship between our two companies.
Please sign and return a copy of this letter to indicate your consent,
Sincerely yours, | ||||||||||
BIOKEYS PHARMACEUTICALS, INC. | ||||||||||
BY: | /s/ Nicholas J. Virca | |||||||||
President | ||||||||||
AGREED: | ||||||||||
EMISPHERE TECHNOLOGIES, INC. | ||||||||||
By:
|
/s/ Michael M. Goldberg | |||||||||
Authorized Officer | ||||||||||
Biokeys Prelim |
Exhibit 4.37
![(FAX TRANSMISSION)](https://cdn.kscope.io/704e8c2c27be4e7f0a568cf5ca96dbc8-a20201ora20201001.gif)
Kurman Eisenberg Corbin Lever & Goodman, LLP Attorneys at Law 675 Third Avenue New York, NY 10017 Tel: (2 12) 66 1-2150 Fax: (212) 949-6131 F A C S I M I L E T R A N S M I T T A L S H E E T Attention: This facsimile contains PRIVILEGED AND CONFIDENTIAL INFORMATION intended only for the use of the Addressee(s) named below. If you are not the intended recipient of this facsimile, or the employee or agent responsible for delivering it to the intended recipient, you are hereby notified that any dissemination or copying this facsimile is strictly prohibited. If you have received this facsimile in error, please notify us immediately by telephone at (212) 661- 2150 and return the original facsimile to U S at the address above via the US. Postal Service. We will reimburse you for all expenses incurred. Thank you. To: Warren Lau; Steven Plumb Date: Number of Pages LNCLUDING THIS PAGE: 2- (If you do not receive all pages, call (2 12) 66 1-2 150) I Client/Matter No.: ~~ 56000-000 * Message : - - 0 Original Will Not Follow. - - 0 Original Will Follow: Cl by mail 0 by hand 0 by overnight courier |
Biokevs Pharmaceuticals, Inc.
Description of Transaction with Emisphere Technologies, Inc.
In April 2002, the Company entered into a preliminary agreement (the Preliminary Agreement)
with Emisphere Technologies, Inc. (ETI) under which ETI agreed to subscribe for 200,000 shares of
a new class of Series B Convertible Preferred Stock to be authorized and issued by the
Company. The Preliminary Agreement contemplated an initial subscription payment of $300,000, which
was received by the Company, with a 60-day option to purchase up to an additional $4,000,000 of
Series B Preferred Stock. The subscription by ETI was also to include the issuance
5-year warrants entitling ETI to purchase up to 50,000 shares of the Companys Common Stock at an
exercise price of $2.50 per share for the same $300,000 initial subscription payment. The Company
also granted ETI a 60-day right of first refusal to serve as a provider of an oral delivery system
for a Company product requiring such a system, which period was extendable for an additional two
years if ETI subscribed for at least $2,000,000 of additional Series B Convertible
Shares, plus certain registration rights.
The Preliminary Agreement was to be replaced with more detailed and definitive agreements.
However, the Company and ETI have not prepared such definitive agreements, and ETI has not
exercised its options to subscribe to additional Series B Preferred Stock or to serve
as a provider of oral delivery enhancement technology. Accordingly, the Company will be required to
issue 200,000 shares of the Series B Convertible Preferred Stock and 50,000 warrants to
ETI, which issuance will take place before the end of the current fiscal year.
![(FAX CONFIRMATION)](https://cdn.kscope.io/704e8c2c27be4e7f0a568cf5ca96dbc8-a20201ora20201002.gif)
MODE = TRRNSMISSION STQRT=RUG-06 15:46 END=RUG-06 15:47 |
FILE NO.=903 |
STN NO. COMM. RBBR NO. STRT I O N NRME/TEL NO. PRGES DURRT I ON |
![(FAX CONFIRMATION)](https://cdn.kscope.io/704e8c2c27be4e7f0a568cf5ca96dbc8-a20201ora20201003.gif)
00 1 OK 8 12812721149 002 00: 00: 28 |
MODE = TRQNSMISSION STQRT=QUG-06 15:47 END=FIUG-06 15:48 |
F I L E NO.=904 STN NO. COMM. QBBR NO. STQTION NQME/TEL NO. PQGES DURQT ION 00 I OK 8 18008611175 002 00: 00: 47 |
Exhibit 4.38
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED PURSUANT TO THE
EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR
RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES
(TOGETHER, THE SECURITIES) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE ACT), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR QUALIFICATION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT
AND ANY REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE SECURITIES LAWS.
No. WC-303 | Dated as of April 12, 2002 |
Warrant to Purchase Common Stock
__________
This certifies that, for good and valuable consideration, Emisphere Technologies, Inc. (the
Holder) is entitled to purchase from ADVENTRX Pharmaceuticals, Inc., a Delaware corporation
formerly known as Biokeys Pharmaceuticals, Inc. (the
Company), Fifty Thousand (50,000) fully paid
and nonassessable shares of Common Stock, par value $0.001 per share
(Common Stock), of the
Company (as adjusted pursuant to Section 3 hereof) (the
Warrant Shares) at a price per share
equal to Two Dollars and Fifty Cents ($2.50) (as adjusted pursuant to Section 3 hereof) (the
Exercise Price), subject to the provisions and upon the terms and conditions hereinafter set
forth.
1. Exercise; Payment.
(a) Exercise Period. This Warrant may be exercised in whole or part by the Holder
during the term (as set forth in Section 9) and in compliance with the provisions of this
Warrant at any time after the date of issuance set forth above (the
Warrant Date), by the
surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A
(the Notice of Exercise) duly executed) at the principal office of the Company. If this
Warrant shall have been exercised in part, the Company shall, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common Stock called
for by this Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or at the request of the Holder, appropriate notation may be made on this Warrant and
the same returned to the Holder.
(b) Means of Exercise. Upon exercise of this Warrant, the Holder shall pay the
Company an amount equal to the product of (x) the Exercise Price
multiplied by (y) the total
number of Warrant Shares purchased pursuant to this Warrant, by wire transfer or cashiers check
payable to the order of the Company. The Holder shall be deemed to have become the
holder of record of, and shall be treated for all purposes as the record holder of, the
Warrant Shares represented thereby (and such Warrant Shares shall be deemed to have been issued)
immediately prior to the close of business on the date upon which this Warrant is exercised.
(c) Stock Certificates. In the event of the exercise of this Warrant, certificates
for the Warrant Shares so purchased shall be delivered to the Holder within a reasonable time
after exercise.
2. Stock Fully Paid; Reservation of Shares. All of the Warrant Shares issuable upon the exercise
this Warrant will, upon issuance and receipt of the Exercise Price therefor, be fully paid and
nonassessable, and free from all preemptive rights, rights of first refusal or first offer, taxes,
liens and charges with respect to the issuance thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company shall at all times have authorized and
reserved for issuance a sufficient number of shares of its Common Stock to provide for the exercise
of this Warrant.
3. Adjustment of Exercise Price and Number of Shares. The number and kind of Warrant Shares
purchasable upon the exercise of this Warrant and the Exercise Price payable therefor shall be
subject to adjustment from time to time upon the occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a result of a
subdivision or combination), or in case of any consolidation or merger of the Company with or
into another corporation (other than a Change of Control, as defined below) (any of which is a
Reorganization Transaction), the Company, or such successor corporation as the case may be,
shall execute a new warrant, providing that the Holder shall have the right to exercise such new
warrant, and procure upon such exercise and payment of the same aggregate Exercise Price, in
lieu of the Warrant Shares theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property as would be payable for the
Warrant Shares issuable upon exercise of this Warrant as if such Warrant Shares were outstanding
immediately prior to the consummation of the Reorganization Transaction. For purposes of this
Warrant, the term Change of Control shall mean (i) any acquisition of the Company by means of
merger, acquisition, or other form of corporate reorganization in which outstanding shares of
the Company are exchanged for securities or other consideration issued, or caused to be issued,
by the acquiring corporation or its subsidiary or parent (other than a reincorporation
transaction or change of domicile) and pursuant to which the holders of the outstanding voting
securities of the Company immediately prior to such consolidation, merger or other transaction
fail to hold equity securities representing a majority of the voting power of the Company or
surviving entity immediately following such consolidation, merger or other transaction
(excluding voting securities of the acquiring corporation held by such holders prior to such
transaction) or (ii) a sale of all or substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the Company shall
at any time subdivide the outstanding shares of Common Stock, or shall issue a stock dividend on
its outstanding shares of Common Stock, the number of Warrant Shares issuable upon
2
exercise of this Warrant immediately prior to such subdivision or to the issuance of such
stock dividend shall be proportionately increased, and the Exercise Price shall be
proportionately decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Warrant Shares issuable upon exercise of this
Warrant immediately prior to such combination shall be proportionately decreased, and the
Exercise Price shall be proportionately increased, effective at the close of business on the
date of such subdivision, stock dividend or combination, as the case may be.
(c) Notice of Corporate Action. If at any time:
(i) the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend (other than a cash dividend payable
out of earnings or earned surplus legally available for the payment of dividends
under the laws of the jurisdiction of incorporation of the Company) or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or property,
or to receive any other right, or
(ii) there shall be any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation, or
(iii) there shall be a voluntary or involuntary dissolution, liquidation or winding
up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i) at least
five-days prior written notice of the date on which a record date shall be selected for
such dividend, distribution or right or for determining rights to vote in respect of any
such reorganization, reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition, dissolution,
liquidation or winding up, at least five-days prior written notice of the date when the
same shall take place. Such notice in accordance with the foregoing clause also shall
specify (i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and character thereof,
and (ii) the date on which any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up. Each such written notice
shall be sufficiently given if addressed to the Holder at the last address of the Holder
appearing on the books of the Company and delivered in accordance with Section 10(d).
3
4. Transfer of Warrant and Resale of Warrant Shares.
(a) This Warrant may only be transferred in compliance with federal and state securities
laws; provided, however, that the Company may withhold its consent to transfer
or assignment of this Warrant to any person or entity who is deemed to be a competitor or
prospective competitor of the Company, such determination to be made in the reasonable judgment
of the Board of Directors of the Company.
(b) At the time of the surrender of this Warrant in connection with any transfer of this
Warrant or the resale of the Warrant Shares, the Company may require, as a condition of allowing
such transfer (i) that the Holder or transferee of this Warrant or the Warrant Shares as the
case may be, furnish to the Company a written opinion of counsel that is reasonably acceptable
to the Company to the effect that such transfer may be made without registration under the
Securities Act of 1933, as amended (the Securities
Act) or qualification under any state
securities laws, (ii) that the Holder or transferee execute and deliver to the Company an
investment representation letter in form and substance acceptable to the Company and
substantially in the form of Exhibit B hereto and (iii) that the transferee be an
accredited investor as defined in Rule 501(a) promulgated under the Securities Act. Transfer
of this Warrant and all rights hereunder, in whole or in part, in accordance with the foregoing
provisions, shall be registered on the books of the Company to be maintained for such purpose,
upon surrender of this Warrant at the principal office of the Company or the office or agency
designated by the Company, together with a written assignment of this Warrant substantially in
the form of Exhibit C hereto duly executed by the Holder or its attorney-in-fact and
funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the Holder a new warrant evidencing the portion of
this Warrant not so assigned, and this Warrant shall be deemed cancelled. This Section 4 shall
survive the exercise or expiration of the Warrant.
5. Conditions to Exercise of Warrant.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of this Warrant
shall be stamped or imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE ACT) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
(b) Removal of Legend and Transfer Restrictions. Any legend endorsed on a certificate
pursuant to this Section 5 shall be removed, and the Company shall issue a certificate without
such legend to the holder of such Warrant Shares if (i) such Warrant
4
Shares are resold pursuant to a registration statement under the Securities Act and a
prospectus meeting the requirements of Section 11 of the Securities Act is delivered or deemed
delivered to the purchaser of such Warrant Shares, (ii) if such holder satisfies the
requirements of Rule 144(k) under the Securities Act or (iii) if such holder provides the
Company with an opinion of counsel for such holder of the Warrant Shares, reasonably
satisfactory to the Company, to the effect that a sale, transfer or assignment of such Warrant
Shares may be made without registration and that upon such sale, transfer or assignment such
Warrant Shares will not be deemed restricted securities, as such term is defined in Rule 144
under the Securities Act.
6. Fractional Shares. No fractional Warrant Shares will be issued in connection with any exercise
of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment
therefor upon the basis of the Exercise Price then in effect.
7. Rights of Stockholders. The Holder shall not be entitled to vote or receive dividends or be
deemed the holder of Warrant Shares or any other securities of the Company which may at any time be
issuable on the exercise of this Warrant for any purpose, nor shall anything contained herein be
construed to confer upon the Holder any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive dividends or subscription rights or otherwise with respect
to the Warrant Shares until this Warrant shall have been exercised and the Warrant Shares
purchasable upon the exercise of this Warrant shall have become deliverable, as provided in this
Warrant.
8. Registration Rights.
(a) Piggy-back Rights. If (but without any obligation to do so) the Company
proposes to register any shares of Common Stock solely for cash pursuant to a registration
statement under the Securities Act, other than a registration solely for the sale of securities
to participants in a Company stock or other incentive plan or in connection with a transaction
under Rule 145 promulgated under the Securities Act (a
Public Offering), the Company shall
promptly give the Holder written notice of such Public Offering, at least 10 business days prior
to the filing of the registration statement under the Securities Act regarding such Public
Offering. Upon the written request of the Holder given within 5 business days after delivery of
such written notice by the Company, the Company shall, subject to the provisions of this Section
8, use commercially reasonable efforts to cause to be registered for resale under the Securities
Act all of the Warrant Shares that the Holder has requested to be registered on such
registration statement, provided, that the Company shall have no obligation to register
such shares if applicable rules, regulations or other requirements of the Securities and
Exchange Commission prohibit the Company from including such Warrant Shares on such registration
statement on the form thereof used by the Company or require that the registration statement be
for (or meet all of the requirements of) a primary offering if such registration statement
pertains to a secondary offering.
5
(b) Underwriting. If the registration statement under which the Company gives
notice under this Section 8 is for an underwritten Public Offering, the Company shall so advise
the Holder. The right of the Holder to registration pursuant to Section 8(a) above shall be
conditioned upon the Holders participation in such underwriting and the inclusion of the
Warrant Shares in the underwriting to the extent provided herein. The Holder shall (together
with the Company and any other holders of Company securities distributing their securities
through such underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for underwriting by the Company. Notwithstanding any other
provision of this Section 8, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may exclude some or all
of the Warrant Shares from such registration and underwriting.
(c) Furnish Information. It shall be a condition to the Companys obligations to
take any action under this Section 8 that the Holder shall promptly furnish to the Company such
information regarding itself, the Warrant Shares, and the intended method of disposition of such
Warrant Shares as shall be required to effect the registration of any Warrant Shares. In that
connection, the Holder shall be required to represent to the Company that all such information
which is given is both complete and accurate in all material respects when made.
(d) Delay of Registration. The Holder shall have no right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or implementation of this
Section 8.
(e) Termination of Registration Rights. The Company shall have no obligation to
register Warrant Shares pursuant to this Section 8 with respect to any request or requests made
by any Holder on or after that date which is one year after the date such Warrant Shares were
deemed to be acquired for purposes of determining the holding period of such Warrant Shares
under Rule 144 of the Securities Act.
9. (a) Term of Warrant. This Warrant shall become exercisable on the Warrant Date and shall no
longer be exercisable as of the earlier of (i) 5:00 p.m., San Diego, California local time, on the
date that is the five-year anniversary of the Warrant Date; (ii) immediately prior to the
consummation of a Change of Control and (iii) 5:00 p.m., San Diego, California local time, on the
Call Termination Date (as defined below).
6
(b) Notwithstanding Section 9(a), the Company may, by at least 10-days prior written
notice to the Holder (the Termination Notice) which Termination Notice shall state the date
this Warrant shall terminate (the Call Termination
Date), shall terminate this Warrant, at any
time, provided that the average Market Price over a 10-consecutive-trading-day period is
equal to or greater than the product of (x) 2 multiplied by (y) the Exercise Price,
provided, however, that the Company may not deliver a Termination Notice unless
a registration statement registering the Warrant Shares has been declared effective and is
effective from the date of delivery of the Termination Notice until the date this Warrant shall
terminate as set forth in the Termination Notice. Nothing in this Section 9 shall prevent the
exercise of the Warrants at any time prior to the termination of this Warrant. For purposes of
this Section 9(b) the term Market Price means (i) the closing price of a share of Common Stock
on the principal stock exchange or market (including the Nasdaq National Market, AMEX, OTCCBB
and NYSE) on which shares of Common Stock are then listed or admitted to trading, or quoted, as
applicable (the Listing Market), or (ii) if no sale takes place on such day on the Listing
Market, the last reported closing price on the Listing Market.
10. Miscellaneous.
(a) This Warrant is being delivered in the State of California and shall be construed and
enforced in accordance with and governed by the laws of the State of California, without giving
effect to principles of conflicts of laws.
(b) The headings in this Warrant are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof.
(c) The terms of this Warrant shall be binding upon and shall inure to the benefit of any
successors or assigns of the Company and of the Holder and of the Warrant Shares issued or
issuable upon the exercise hereof.
(d) Any notice provided for or permitted under this Warrant shall be treated as having been
given (i) upon receipt, when delivered personally, (ii) one day after sending, when sent by
commercial overnight courier with written verification of receipt, (iii) upon confirmed
transmission when sent via facsimile on a business day prior to 5:00 pm (Pacific time) or, if
sent after 5:00 pm (Pacific time), the next business day after confirmed transmission or (iv)
three business days after deposit with the United States Postal Service, when mailed postage
prepaid by certified or registered mail, return receipt requested, addressed, if to the Company,
at 6725 Mesa Ridge Road, Suite 100, San Diego, CA 92121, (f) (858) 552-0876, Attention:
President, or, if to the Holder, at such address or facsimile number as the Holder shall have
furnished to the Company in writing, or at such other place of which the other party has been
notified in accordance with the provisions of this Section 10(d).
(e) This Warrant constitutes the full and entire understanding and agreement between the
parties with regard to the subjects hereof.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and
7
amount to the Company or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company at the Holders expense will execute and deliver to
the holder of record, in lieu thereof, a new Warrant of like date and tenor.
(g) This Warrant and any provision hereof may be amended, waived or terminated only by an
instrument in writing signed by the Company and the Holder.
(h) Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to
the foregoing terms and conditions.
8
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized
officer, all as of the day and year first above written.
ADVENTRX Pharmaceuticals, Inc., a Delaware corporation formerly known as Biokeys Pharmaceuticals, Inc. |
||||
By: | /s/ Evan M. Levine | |||
Evan M. Levine | ||||
President & CEO | ||||
Signature Page to Warrant to Purchase Common Stock
Exhibit A
Notice of Exercise
TO:
|
ADVENTRX Pharmaceuticals, Inc. | |
6725 Mesa Ridge Road, Suite 100 | ||
San Diego, CA 92121 |
The undersigned hereby elects to purchase ___shares of Common Stock, par value
$0.001 per share (Common Stock), of ADVENTRX Pharmaceuticals, Inc., a Delaware corporation
formerly known as Biokeys Pharmaceuticals, Inc. (the
Company) pursuant to the terms of Section
1(b) of the Warrant to Purchase Common Stock dated April 12,
2002, (the Warrant), and tenders
herewith payment of the Exercise Price (as such term is defined in the Warrant) therefor.
Please issue a certificate or certificates representing said ___shares of Common Stock
in the name of the undersigned or in such other name as is specified below:
Name: | ||||||
Address: | ||||||
The undersigned hereby represents and warrants that the aforesaid shares of Common Stock are
being acquired for the account of the undersigned for investment and not with a view to, or for
resale, in connection with the distribution thereof, and that the undersigned has no present
intention of distributing or reselling such shares.
By: | ||||
Name: | ||||
Title: | ||||
Date: | ||||
Exhibit B
Form Of Investment Representation Letter
In connection with the acquisition of [warrants (the Warrants) to purchase ___
shares of Common Stock of ADVENTRX Pharmaceuticals, Inc. (the Company), par value $0.001
per share (the Common Stock)][___shares of Common Stock of ADVENTRX
Pharmaceuticals, Inc. (the Company), par value $0.001 per share (the Common
Stock)], by ___(the Holder) from ___, the Holder hereby
represents and warrants to the Company as follows:
The Holder (i) is an Accredited Investor as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the Act); and (ii) has the
ability to bear the economic risks of such Holders prospective investment, including a complete
loss of Holders investment in the Warrants and the shares of Common Stock issuable upon the
exercise thereof (collectively, the Securities).
The Holder, by acceptance of the Warrants, represents and warrants to the Company that the Warrants
and all securities acquired upon any and all exercises of the Warrants are purchased for the
Holders own account, and not with view to distribution of either the Warrants or any securities
purchasable upon exercise thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under the Act, (ii) the
Securities are restricted securities and the certificate(s) representing the Securities shall
bear the following legend, or a similar legend to the same effect, until (i) in the case of the
shares of Common Stock underlying the Warrants, such shares shall have been registered for resale
by the Holder under the Act and effectively been disposed of in accordance with a registration
statement that has been declared effective; or (ii) in the opinion of counsel for the Company such
Securities may be sold without registration under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT),
AND ALL SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS
CERTIFICATE. [NEITHER] THE SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO
COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE
EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT.
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter to be executed in
its corporate name by its duly authorized officer this
___day of ___200 .
[Name]
By: |
||||
Name: |
||||
Title:
|
Exhibit C
Assignment Form
FOR VALUE RECEIVED, the undersigned owner of this Warrant for the purchase of shares of Common
Stock of ADVENTRX Pharmaceuticals, Inc., a Delaware corporation formerly known as Biokeys
Pharmaceuticals, Inc. (the Company) hereby sells, assigns and transfers unto the assignee named
below all of the rights of the undersigned under this Warrant, with respect to the number of shares
of Common Stock set forth below:
(Name and Address of Assignee) |
||
(Number of Shares of Common Stock) |
and does hereby irrevocably constitute and appoint ___attorney-in-fact to register such
transfer on the books of the Company, maintained for the purpose, with full power of substitution
in the premises.
Dated |
||
(Print Name and Title) |
||
(Signature) |
||
(Witness) |
NOTICE: The signature on this assignment must correspond with the name as written upon the face of
the Warrant in every particular, without alteration or enlargement or any change whatsoever.
Exhibit 5.1
May 4, 2006
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
Attention: | Ms. Carrie E. Carlander |
|
Chief Financial Officer |
Resale Registration Statement on Form S-3 of
ADVENTRX Pharmaceuticals, Inc. on Behalf of Selling Securityholders
ADVENTRX Pharmaceuticals, Inc. on Behalf of Selling Securityholders
Ladies and Gentlemen:
We have acted as counsel to ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (the Company),
in connection with the registration under the Securities Act of 1933, as amended (the Act), of
shares (the Shares) of the Companys Common Stock, par value $0.001 per share, pursuant to a
Registration Statement on Form S-3 (the Registration Statement) to be filed by the Company with
the Securities and Exchange Commission on or about the date of this opinion, on behalf of selling
stockholders. The Shares were issued a) on April 26, 2006 upon the closing of the Companys merger
with SD Pharmaceuticals, Inc. pursuant to the Agreement and Plan of Merger by and among ADVENTRX
Pharmaceuticals, Inc., Speed Acquisition, Inc., SD Pharmaceuticals, Inc., the Founders (as defined
in said Agreement and Plan of Merger) and The Stockholder Representative Dated as of April 7, 2006;
or b) in prior private financings by the Company or have been or will be issued upon exercise of
warrants issued in such private financings.
As to all matters of fact (including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind) we have entirely relied upon certificates of officers of
the Company, and have assumed, without independent inquiry, the accuracy of those certificates.
As counsel to the Company, in rendering the opinions hereinafter expressed, we have examined and
relied upon originals or copies, certified or otherwise authenticated to our satisfaction, of such
corporate records, agreements,
ADVENTRX Pharmaceuticals, Inc.
May 4, 2006
Page 2
May 4, 2006
Page 2
documents and instruments as we have deemed necessary or advisable for purposes of this opinion,
including the following documents and instruments:
A. The Certificate of Incorporation of the Company, as amended, certified by the Delaware Secretary
of State on April 18, 2006.
B. A Certificate of Good Standing of the Company, issued by the Delaware Secretary of State on
April 17, 2006.
C. The By-Laws of the Company, certified by the Secretary of the Company on May 4, 2006.
D. Records of proceedings and actions of the Board of Directors of the Company, certified by the
Secretary of the Company on May 4, 2006.
We have assumed the genuineness of all signatures, the conformity to the originals of all documents
reviewed by us as copies, the authenticity and completeness of all original documents reviewed by
us in original or copy form and the legal competence of each individual executing a document. We
have also assumed that the registration requirements of the Act and all applicable requirements of
state laws regulating the sale of securities will have been duly satisfied. We have also assumed
that with respect to any Shares to be issued upon the exercise of warrants, the Company will
receive the specified consideration for the Shares as set forth in such warrants and any other
agreements pursuant to which said warrants were issued.
This opinion is limited solely to the Delaware General Corporation Law and applicable provisions of
the Delaware Constitution, as applied by courts located in Delaware (collectively, the Law), and
the reported judicial decisions interpreting the Law.
Subject to the foregoing, it is our opinion that such of the Shares as have been issued have been
duly authorized and are legally and validly issued, fully paid and nonassessable, and such of the
Shares as are issuable in the future have been duly authorized and will be validly issued, fully
paid and nonassessable when issued pursuant to the terms of the warrants and other agreements
pursuant to which such Shares are issuable.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and as
an exhibit to any further registration statement to be filed
ADVENTRX Pharmaceuticals, Inc.
May 4, 2006
Page 3
May 4, 2006
Page 3
pursuant to Rule 462(b) under the Securities Act with respect to the Shares, and to the reference
to this firm under the heading Legal Matters in any prospectus constituting a part of the Registration Statement. In giving our consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/BINGHAM McCUTCHEN LLP
BINGHAM McCUTCHEN LLP
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-3 of our
reports dated March 10, 2006 on our audits of the consolidated financial statements of ADVENTRX
Pharmaceuticals, Inc. and Subsidiary as of December 31, 2005 and 2004 and for each of the years in
the three-year period ended December 31, 2005 and for the period from June 12, 1996 (date of
inception) to December 31, 2005, and on our audits of the effectiveness of the Companys internal
control over financial reporting and of managements assessment of the Companys internal control
over financial reporting as of December 31, 2005, which reports appear in the Annual Report on Form
10-K of ADVENTRX Pharmaceuticals, Inc. for the year ended December 31, 2005. We also consent to
the reference to our firm under the caption Experts.
/s/ J.H. Cohn LLP
San Diego, California
April 27, 2006
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-3 of our
report dated April 14, 2006 on our audits of the financial statements of SD Pharmaceuticals, Inc.
as of December 31, 2005 and 2004 and for the year ended December 31, 2005 and for the period from
June 16, 2004 (date of inception) to December 31, 2004, which report is included in ADVENTRX
Pharmaceuticals, Incs From 8-K/A filed on May 1, 2006. We also consent to the reference to our
firm under the caption Experts.
/s/ J.H. Cohn LLP
San Diego, California
April 27, 2006