As filed with the Securities and Exchange Commission on December 2, 2003
Registration Statement No. 333-108278
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3/A (Amendment No. 2)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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IMMTECH INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
Delaware 39-1523370
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
(847) 573-0033
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------------------------
T. Stephen Thompson, President
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
(847) 573-0033
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to: John F. Fritts, Esq.
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038-4892
------------------------------------------
(Approximate date of commencement of proposed sale to the public)
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
======================================= ================= ======================== ======================== ======================
Proposed maximum Proposed maximum
Title of each class of securities to Amount to be offering price per aggregate offering Amount of
be registered registered(1)(3) share(2) price(2) registration fee(2)
--------------------------------------- ----------------- ------------------------ ------------------------ ----------------------
Common Stock, par value $0.01 per
share 3,748,998(3) $15.12 $56,684,849.76 $4,585.80
Common Stock, par value $0.01 per
share 70,000 $18.83 $1,318,100 $106.63
======================================= ================= ======================== ======================== ======================
(1) A portion of the shares of common stock being registered hereunder are being
registered for resale by the selling stockholders named in the prospectus upon
conversion of preferred stock or exercise of outstanding warrants. In accordance
with Rules 416(a) and 416(b) under the Securities Act of 1933, as amended
("Securities Act"), the Registrant is also registering hereunder an
indeterminate number of shares that may be issued and resold to prevent dilution
resulting from stock splits, stock dividends or similar transactions and an
indeterminate number of shares that may be issued as dividends on the preferred
stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act. Prices are based on the average
of the high and low reported sales prices of the common stock on the American
Stock Exchange LLC ("AMEX") on August 21, 2003 and October 27, 2003,
respectively. The maximum price per share will be determined from time to time
in connection with the issuance by the Registrant or resale by the Selling
Stockholders of the shares registered under this Registration Statement.
(3) Reduction to 1,531,598 shares as a result of the termination to not register
2,290,000 shares of common stock and the addition of registration of 2,600
shares recently issued pursuant to a warrant exercise.
================================================================================
The registrant amends this registration statement on such date or dates as may
be necessary to delay its effective date until the Registrant files a further
amendment, which specifically states that this Registration Statement will
thereafter become effective in accordance with Section 8(a) of the Securities
Act or until this Registration Statement becomes effective on such date as the
Securities and Exchange Commission, acting pursuant to Section 8(a) of the
Securities Act, may determine.
The information in this Prospectus is not complete and may be changed. Neither
Immtech nor the Selling Stockholders may sell these securities until the
Registration Statement filed with the Securities and Exchange Commission (the
"SEC") is effective. This Prospectus is not an offer to sell these securities
and is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
Subject to Completion, dated December 2, 2003.
PROSPECTUS
1,461,598 Shares
[LOGO] IMMTECH INTERNATIONAL, INC.
Common Stock
---------------------
This is a public offering of 1,531,598 shares ("Shares") of our Common
Stock. We may from time to time offer and sell, subject to American Stock
Exchange LLC ("AMEX") rules, up to 750,000 Shares for our own account and the
stockholders named under the caption "Selling Stockholders" may from time to
time offer and sell up to an additional 781,598 shares of the Company's Common
Stock ("Shares"). The Shares may be sold in transactions occurring either on or
off the AMEX at prevailing market prices or at negotiated prices. Sales may be
made through brokers or through dealers, who are expected to receive customary
commissions or discounts. We will receive no proceeds from the sale of Shares
sold by Selling Stockholders under this Prospectus. No period of time has been
fixed within which the Shares registered under this Prospectus may be offered or
sold. Our obligation to keep the Registration Statement of which this Prospectus
is a part effective expires as to 667,144 Shares on June 6, 2004, 41,854 Shares
on June 9, 2004, 70,000 on July 31, 2004 and 2,600 shares on November 12, 2004
or sooner if all Selling Stockholders' Shares are sold. As used in this
Prospectus, the terms "we," "us," "our," the "Company" and "Immtech" mean
Immtech International, Inc. and the term "Common Stock" means the common stock
of Immtech, $0.01 par value per share.
Our Common Stock is traded on the AMEX under the symbol "IMM". The last
reported sale price of our Common Stock on December 1, 2003 was $17.49. The
address of our principal executive offices is 150 Fairway Drive, Suite 150,
Vernon Hills, Illinois 60061, and our telephone numbers are (847) 573-0033 or
toll free (877) 898-8038.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-1 OF THIS PROSPECTUS
BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS,
INCORPORATED BY REFERENCE HEREIN OR PROVIDED BY SUPPLEMENT. WE HAVE NOT
AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THIS
PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS
PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY
SALE OF THESE SECURITIES.
TABLE OF CONTENTS
RISK FACTORS............................................................... -1
ABOUT THIS PROSPECTUS..................................................... -15
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION OF DOCUMENTS BY
REFERENCE................................................................. -15
FORWARD-LOOKING STATEMENTS................................................ -17
THE COMPANY............................................................... -18
USE OF PROCEEDS........................................................... -19
SELLING STOCKHOLDERS...................................................... -19
DESCRIPTION OF CAPITAL STOCK.............................................. -22
PLAN OF DISTRIBUTION...................................................... -22
LEGAL MATTERS............................................................. -24
EXPERTS................................................................... -24
INTERESTS OF NAMED EXPERTS AND COUNSEL.................................... -24
GLOSSARY.................................................................. -25
-ii-
RISK FACTORS
An investment in the Shares offered by this Prospectus involves a high
degree of risk. In addition to the other information contained in this
Prospectus, the following risk factors should be considered carefully in
evaluating our business before purchasing the Shares.
There is no assurance that we will successfully develop a commercially viable
product; our most advanced product candidate is in Phase II human clinical
trials.
We are at an early stage of human clinical, and in some cases
pre-clinical, development activities required for drug approval and
commercialization. Since our formation in October 1984, we have engaged in
research and development programs, expanding our network of scientists and
scientific advisors, licensing technology agreements and advancing the
commercialization of the dication technology platform. We have generated no
revenue from product sales and do not have any products currently available for
sale, and none are expected to be commercially available for sale until after
March 31, 2004, if at all. There can be no assurance that the research we fund
and manage will lead to commercially viable products. Our most advanced programs
are in the Phase II human clinical testing stage using our lead compound DB289
for several indications including Trypanosomiasis and Malaria and must undergo
substantial additional regulatory review prior to commercialization.
We have a history of losses and an accumulated deficit; our future profitability
is uncertain.
We have experienced significant operating losses since our inception and
we expect to incur additional operating losses as we continue research and
development, clinical trial and commercialization efforts. As of September 30,
2003, we had an accumulated deficit of approximately $51,421,000. Losses from
operations were $4,693,000 and $7,971,000, respectively, for the fiscal year
ended March 31, 2003 and the six-month period ended September 30, 2003.
We will need substantial additional funds in future years to continue our
research and development; if financing is not available, we may be required to
reduce spending for our research programs, cease operations or pursue other
financing alternatives.
Our operations to date have consumed substantial amounts of cash. Negative
cash flow from operations is expected to continue in the foreseeable future.
Without substantial additional financing, we may be required to reduce some or
all of our research programs or cease operations. Our cash requirements may vary
materially from those now planned because of results of research and
development, results of pre-clinical and clinical testing, responses to our
grant requests, relationships with strategic partners, changes in the focus and
direction of our research and development programs, competitive and
technological advances, the FDA and foreign regulatory process and other
factors. In any of these circumstances, we may require substantially more funds
than we currently have available or currently intend to raise to continue our
business. We may seek to satisfy future funding requirements through public or
private offerings of securities, by collaborative or other arrangements with
pharmaceutical or biotechnology companies, issuance of debt or from other
sources. Additional financing may
not be available when needed or may not be available on acceptable terms. If
adequate financing is not available, we may not be able to continue as a going
concern or may be required to delay, scale back or eliminate certain research
and development programs, relinquish rights to certain technologies or product
candidates, forego desired opportunities or license third parties to
commercialize our products or technologies that we would otherwise seek to
develop internally. To the extent we raise additional capital by issuing equity
securities, ownership dilution to existing stockholders will result.
We receive funding primarily from charitable grants, research and
development programs and from sales of our equity securities. To date we have
directed most of such funds not used for general and administrative overhead
toward our research and development and commercialization programs (including
preparation of test results for submission to regulatory agencies for product
approval). Until one or more of our product candidates is approved for sale, our
funding is limited to funds received from testing and research agreements,
licensing of our technology and potential fees associated with interim leasing
of our properties while we develop them for product manufacture.
Our CEO, T. Stephen Thompson, has been with the Company since April 9, 1991; his
relationship with the scientific community and ability to guide the research
team may not be easily replaced.
Our CEO, T. Stephen Thompson, has been pivotal in cultivating
relationships with our scientists and with the Consortium and should he depart
his absence could negatively impact our ability to maintain these important
relationships. Further, Mr. Thompson holds a wealth of institutional knowledge
which is extremely important in the development of our product candidates,
continuing relationships with research institutions and advancement of our
business. Mr. Thompson has an employment agreement with us that renews annually
unless notice is given at least 30 days prior to the end of each contract year.
Mr. Thompson has not indicated that he intends to retire or leave the Company.
Our dependence on key personnel could adversely affect our business if one or
more key individuals should depart.
Our business depends to a significant degree on the continuing
contributions of our key management, scientific and technical personnel, as well
as on the continued discoveries of scientists, researchers and specialists at
The University of North Carolina at Chapel Hill ("UNC"), Georgia State
University, Duke University and Auburn University (collectively, the "Scientific
Consortium").
We rely heavily on in-house and Consortium scientists. While the body of
science may develop without any one particular scientist, our assembled team has
a unique blend of talents to advance both the science and the business of
medicine. There can be no assurance that the loss of certain members of
management or the scientists, researchers and technicians from the Scientific
Consortium universities would not materially adversely affect our business.
Most of the financial aspects of the Company, including investor
relations, intellectual property control and corporate governance, are under the
direct supervision of two highly talented employees, Cecilia Chan and Gary
Parks. Together with Mr. Thompson, Ms. Chan and
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Mr. Parks hold a wealth of institutional knowledge and business savvy that they
utilize to assist the Company to forge new relationships and exploit new
business opportunities without diminishing or undermining existing programs and
obligations. Neither Ms. Chan nor Mr. Parks have employment contracts with the
Company, however, neither has indicated any intention to retire or leave the
Company.
We do not have employment contracts with any employees other than our CEO, T.
Stephen Thompson.
We have an employment agreement with our CEO, T. Stephen Thompson that
renews annually in April of each year unless prior notice is given by either
party to the other. Mr. Thompson renewed his employment with the Company this
year and has not expressed any indication that he desires to leave the Company
or retire. All other Company employees are "at will" employees and may leave at
any time, however, none have as of this date, expressed any intention to do so.
Much of our proprietary information is developed by scientists who are employed
by the universities that comprise the Scientific Consortium. We do not have
control over, knowledge of, or access to those employment arrangements. We have
not been advised by any of the key members of our Company or of the Scientific
Consortium of their intention to leave their employ or the program. We do not
have "key-man" life insurance policies on any of our executives, including Mr.
Thompson.
Additional research grants needed to fund our operations may not be available
or, if available, not on terms acceptable to the Company.
We have funded our product development and operations as of September 30,
2003 through a combination of sales of equity and revenue generated from
research agreements funded by grants. As of September 30, 2003, our accumulated
deficit is $51,421,000 of which approximately $9,986,000 was funded either
directly or indirectly with grant funds and payments from research and testing
agreements.
In March 2001 we entered into a clinical research subcontract with UNC,
funded by a $15.1 million grant from The Bill & Melinda Gates Foundation ("The
Gates Foundation") to UNC for the study of African sleeping sickness and
Leishmaniasis, under which UNC is to pay to us $9.8 million in installments over
a period not to exceed five years based on our achieving certain milestones. We
entered into a second subcontract with UNC under which we are to receive over
$2.4 million based on a separate $2.7 million grant from the Gates Foundation to
UNC to accelerate the African sleeping sickness study. We will continue to apply
for new grants to support continuing research and development of our dication
platform technology and other product candidates. The process of obtaining
grants is extremely competitive and there can be no assurance that any of our
grant applications will be acted upon favorably. Some charitable organizations
may request licenses to our proprietary information or may impose price
restrictions on the products we develop with grant funds. We may not be able to
negotiate terms that are acceptable to us with such organizations. In the event
we are unable to raise sufficient funds to advance our product developments with
grant funds we may seek to raise additional capital with the issuance of debt or
equity securities. There can be no assurance that we will be able to place or
sell debt or equity securities on terms acceptable to the Company and, if we
sell equity, existing stockholders may suffer dilution (see Risk Factors, this
section, entitled "Shares eligible for future sale may adversely affect our
ability to sell equity securities," and "Our
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outstanding options and warrants may adversely affect our ability to consummate
future equity financings due to the dilution potential to future investors").
None of our product candidates have been approved for sale by any regulatory
agency; approval is required before we can sell drug products commercially.
All of our product candidates, including DB289 and DB075, require
additional clinical testing, regulatory approval and development of marketing
and distribution channels, all of which are expected to require substantial
additional investment prior to commercialization. There can be no assurance that
any of our product candidates will be successfully developed, prove to be safe
and effective in human clinical trials, meet applicable regulatory standards, be
capable of being produced in commercial quantities at acceptable costs, be
eligible for third party reimbursement from governmental or private insurers, be
successfully marketed or achieve market acceptance. If we are unable to
commercialize our product candidates in a timely manner we may be required to
seek additional funding, reduce or cancel some or all of our development
programs, sell or license some of our proprietary information or cease
operations.
There are substantial uncertainties related to clinical trials that may result
in the extension, modification or termination of one or more of our programs.
In order to obtain required regulatory approvals for the commercial sale
of our product candidates, we must demonstrate through human clinical trials
that our product candidates are safe and effective for their intended uses.
Prior to conducting human clinical trials we must obtain governmental approvals
from the host nation, approval from the U.S. to export our product candidate to
the test site and qualify a sufficient number of volunteer patients that meet
our trial criteria. If we do not obtain required governmental consents or if we
do not enroll a sufficient number of patients in a timely manner or at all, our
trial expenses could increase, results may be delayed or the trial may be
cancelled.
We may find, at any stage of our research and development, that product
candidates that appeared promising in earlier clinical trials do not demonstrate
safety or effectiveness in later clinical trials and therefore do not receive
regulatory approvals. Despite the positive results of our pre-clinical testing
and human clinical trials those results may not be predictive of the results of
later clinical trials and large-scale testing. Companies in the pharmaceutical
and biotechnology industries have suffered significant setbacks in various
stages of clinical trials, even after promising results had been obtained in
early-stage human clinical trials.
Completion of the clinical trials may be delayed by many factors,
including slower than anticipated patient enrollment, difficulty in securing
sufficient supplies of clinical trial materials or adverse events occurring
during clinical trials. For instance, once we obtain permission to run a test,
there are strict criteria regulating who we can test. In the case of our Malaria
product candidate, we may encounter difficulties in finding potential patients
because our initial regimen requires patients to first fail other treatment
programs in order to be eligible for our treatment. In a second case, we were
forced to cancel a human clinical trial and relocate due to political
insurrection in our host nation.
Completion of testing, studies and trials may take several years, and the
length of time varies substantially with the type, complexity, novelty and
intended use of the product. Delays
S-4
or rejections may be based upon many factors, including changes in regulatory
policy during the period of product development. No assurance can be given that
any of our development programs will be successfully completed, that any
Investigational New Drug ("IND") application filed with the FDA (or any foreign
equivalent filed with the appropriate foreign authorities) will become
effective, that additional clinical trials will be allowed by the FDA or other
regulatory authorities, or that clinical trials will commence as planned. There
have been delays in our testing and development schedules due to funding and
patient enrollment difficulties and there can be no assurance that our future
testing and development schedules will be met.
Only one of our product candidates, DB289, has been advanced to human clinical
trials.
We currently have only one compound advanced into human clinical trials.
This product candidate has shown efficacy for treatment of many indications and
is the basis of several of our programs. If the results of future trials of
DB289 do not continue to show positive results, or if we determine to
reformulate the compound for other reasons, we may need to recommence trials
with new formulations at the Phase I safety study stage.
We do not have pharmaceutical manufacturing capability, which could impair our
ability to develop commercially viable products at reasonable costs.
Our ability to commercialize product candidates will depend in part upon
our ability to have manufactured the product candidates, either directly or
through third parties, at a competitive cost and in accordance with FDA and
other regulatory requirements. We currently lack facilities and personnel to
manufacture our product candidates. There can be no assurance that we will be
able to acquire such resources, either directly or through third parties, at
reasonable costs, if we develop commercially viable products.
We intend to commence construction of a pharmaceutical manufacturing
facility in the People's Republic of China ("PRC") with our subsidiary Immtech
Hong Kong Limited. We have recently acquired a building in which to construct
the facility, however, operation of such a facility is subject to various
governmental approvals, which may be difficult or impossible to obtain. There
can be no guarantee that products manufactured at this facility will be accepted
in the countries where we desire to sell our future products.
We are dependent on third-party relationships for critical aspects of our
business; problems that develop in these relationships may increase costs and/or
diminish our ability to develop our product candidates.
We use the expertise and resources of strategic partners and third parties
in a number of key areas, including (i) research and development, (ii)
pre-clinical and human clinical trials and (iii) manufacture of pharmaceutical
drugs. We have licensing and exclusive commercialization rights to a dicationic
pharmaceutical platform and are developing drugs intended for commercial use
based on that platform. This strategy creates risks by placing critical aspects
of our business in the hands of third parties, whom we may not be able to
control. If these third parties do not perform in a timely and satisfactory
manner, we may incur costs and delays as we seek alternate sources of such
products and services, if available. Such costs and delays may have a material
adverse effect on our business if the delays jeopardize our licensing
arrangements by causing us to become non-compliant with certain license
agreements.
S-5
We may seek additional third-party relationships in certain areas,
particularly in clinical testing, marketing, manufacturing and other areas where
pharmaceutical and biotechnology company collaborators will enable us to develop
particular products or geographic markets that are otherwise beyond our current
resources and/or capabilities. There is no assurance that we will be able to
obtain any such collaboration or any other research and development,
manufacturing or clinical trial arrangements. Our inability to obtain and
maintain satisfactory relationships with third parties may have a material
adverse effect on our business by slowing our ability to develop new products,
requiring us to expand our internal capabilities, increasing our overhead and
expenses, hampering future growth opportunities or causing us to delay or
terminate effected programs.
We are uncertain about the ability to protect or obtain necessary patents and
protect our proprietary information; our ability to develop our product
candidates would be compromised without adequate intellectual property
protection.
We have spent and continue to spend considerable funds to develop our
product candidates and we are relying on the potential to exploit commercially
without competition the results of our product development. Much of our
intellectual property is licensed to us under various agreements including the
Consortium Agreement. It is the primary responsibility of the discoverer to
develop his, her or its invention confidentially, insure that the invention is
unique, and to obtain patent protection. In most cases, our role is to reimburse
patent related costs after we determine to develop any such invention. We
therefore rely on the inventors to insure that technology licensed to us is
adequately protected. Without adequate protection for our intellectual property
we believe our ability to realize profits on our future commercialized product
would be diminished. Without protection, competitors might be able to copy our
work and compete with our products without having invested in the development.
There can be no assurance that any particular patent will be granted or
that issued patents will provide us, directly or through licenses, with the
intellectual property protection contemplated. Patents and licenses of patents
can be challenged, invalidated or circumvented. It is also possible that
competitors will develop similar products simultaneously. Our breach of any
license agreement or the failure to obtain a license to any technology or
process which may be required to develop or commercialize one or more of our
product candidates may have a material adverse effect on our business including
the need for additional capital to develop alternate technology, the potential
that competitors may gain unfair advantage and lessen our expectation of
potential future revenues.
The pharmaceutical and biotechnology fields are characterized by a large
number of patent filings, and a substantial number of patents have already been
issued to other pharmaceutical and biotechnology companies. Third parties may
have filed applications for, or may have been issued, certain patents and may
obtain additional patents and proprietary rights related to products or
processes competitive with or similar to those that we are attempting to develop
and commercialize. We may not be aware of all of the patents potentially adverse
to our interests that may have been issued to others. No assurance can be given
that patents do not exist, have not been filed or could not be filed or issued,
which contain claims relating to or competitive with our technology, product
candidates or processes. If patents have been or are issued to others containing
preclusive or conflicting claims, then we may be required to obtain
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licenses to one or more of such patents or to develop or obtain alternative
technology. There can be no assurance that the licenses or alternative
technology that might be required for such alternative processes or products
would be available on commercially acceptable terms, or at all.
Because of the substantial length of time and expense associated with
bringing new drug products to market through the development and regulatory
approval process, the pharmaceutical and biotechnology industries place
considerable importance on patent and trade secret protection for new
technologies, products and processes. Since patent applications in the United
States are confidential until patents are issued and since publication of
discoveries in the scientific or patent literature often lag behind actual
discoveries, we cannot be certain that we (or our licensors) were the first to
make the inventions covered by pending patent applications or that we (or our
licensors) were the first to file patent applications for such inventions. The
patent positions of pharmaceutical and biotechnology companies can be highly
uncertain and involve complex legal and factual questions and, therefore, the
breadth of claims allowed in pharmaceutical and biotechnology patents, or their
enforceability, cannot be predicted. There can be no assurance that any patents
under pending patent applications or any further patent applications will be
issued. Furthermore, there can be no assurance that the scope of any patent
protection will exclude competitors or provide us competitive advantages, that
any of our (or our licensors') patents that have been issued or may be issued
will be held valid if subsequently challenged, or that others, including
competitors or current or former employers of our employees, advisors and
consultants, will not claim rights in, or ownership to, our (or our licensors')
patents and other proprietary rights. There can be no assurance that others will
not independently develop substantially equivalent proprietary information or
otherwise obtain access to our proprietary information, or that others may not
be issued patents that may require us to obtain a license for, and pay
significant fees or royalties for, such proprietary information.
We rely on technology developed by others and shared with collaborators to
develop our product candidates.
We rely on trade secrets, know-how and technological advancement to
maintain our competitive position. Although we use confidentiality agreements
and employee proprietary information and invention assignment agreements to
protect our trade secrets and other unpatented know-how, these agreements may be
breached by the other party thereto or may otherwise be of limited effectiveness
or enforceability.
We are licensed to commercialize technology from a dication platform
developed by a Scientific Consortium, comprised primarily of scientists employed
by universities in an academic setting. The academic world is improved by the
sharing of information. As a business, however, the sharing of information
whether through publication of research, academic lectures or general
intellectual discourse among contemporaries is not conducive to protection of
proprietary information. Our proprietary information may fall into the
possession of unintended parties without our knowledge through customary
academic information sharing.
At times we may enter into confidentiality agreements with other
companies, allowing them to test our compounds for potential future licensing,
in return for milestone and royalty payments should any discoveries result from
the use of our proprietary information. We cannot be assured that such parties
will honor these confidentiality agreements subjecting our intellectual property
to unintended disclosure.
S-7
The pharmaceutical and biotechnology industries have experienced extensive
litigation regarding patent and other intellectual property rights. We could
incur substantial costs in defending suits that may be brought against us (or
our licensors) claiming infringement of the rights of others or in asserting our
(or our licensors') patent rights in a suit against another party. We may also
be required to participate in interference proceedings declared by the U.S.
Patent and Trademark Office or similar foreign agency for the purpose of
determining the priority of inventions in connection with our (or our
licensors') patent applications.
Adverse determinations in litigation or interference proceedings could
require us to seek licenses (which may not be available on commercially
reasonable terms) or subject us to significant liabilities to third parties, and
could therefore have a material adverse effect on our business by increasing our
expenses and having an adverse effect on our business. Even if we prevail in an
interference proceeding or a lawsuit, substantial resources, including the time
and attention of our officers, would be required.
Confidentiality agreements may not adequately protect our intellectual property.
We require our employees, consultants and third-parties with whom we share
proprietary information to execute confidentiality agreements upon the
commencement of their relationship with us. The agreements generally provide
that trade secrets and all inventions conceived by the individual and all
confidential information developed or made known to the individual during the
term of the relationship will be our exclusive property and will be kept
confidential and not disclosed to third parties except in specified
circumstances. There can be no assurance, however, that these agreements will
provide meaningful protection for our proprietary information in the event of
unauthorized use or disclosure of such information. If our unpatented
proprietary information is publicly disclosed before we have been granted patent
protection, our competitors could be unjustly enrichened and we could lose the
ability to profitably develop products from such information.
Our industry has significant competition; our product candidates may become
obsolete prior to commercialization due to alternative technologies.
The pharmaceutical and biotechnology fields are characterized by extensive
research efforts and rapid technological progress. Competition from other
pharmaceutical and biotechnology companies and research and academic
institutions is intense and other companies are engaged in research and product
development for treatment of the same diseases that we target. New developments
in pharmaceutical and biotechnology fields are expected to continue at a rapid
pace in both industry and academia. There can be no assurance that research and
discoveries by others will not render some or all of our programs or products
non-competitive or obsolete.
We are aware of other companies and institutions dedicated to the
development of therapeutics similar to those we are developing, including
Aventis Pharmaceuticals, Inc., Hoffman-LaRoche Ltd., Sanofi-Synthelabo Inc.,
Pfizer Inc., and Bayer Corporation. Many of our existing or potential
competitors have substantially greater financial and technical resources than we
do and therefore may be in a better position to develop, manufacture and market
pharmaceutical products. Many of these competitors are also more experienced
performing pre-clinical testing and human clinical trials and obtaining
regulatory approvals. The current or
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future existence of competitive products may also adversely affect the
marketability of our product candidates.
In the event some or all of our programs are rendered non-competitive or
obsolete, we do not currently have alternative strategies to develop new product
lines or financial resources to pursue such a course of action.
There is no assurance that we will receive FDA or corollary foreign approval for
any of our product candidates for any indication; we are subject to government
regulation for the commercialization of our product candidates.
We have not made application to the U.S. FDA or any other regulatory
agency to sell commercially or label any of our product candidates. We or our
test collaborators have received licenses from the FDA to export DB289 for
testing purposes and have been approved to conduct human clinical trials for
various indications in each of the Democratic Republic of Congo, Angola,
Thailand and Peru.
All new pharmaceutical drugs and biologics, including our product
candidates, are subject to extensive and rigorous regulation by the federal
government, principally the FDA under the Federal Food, Drug and Cosmetic Act
("FDCA") and other laws including, in the case of biologics, the Public Health
Services Act, and by state, local and foreign governments. Such regulations
govern, among other things, the development, testing, manufacture, labeling,
storage, pre-market clearance or approval, advertising, promotion, sale and
distribution of pharmaceutical drugs and biologics. If drug products or
biologics are marketed abroad, they are subject to extensive regulation by
foreign governments. Failure to comply with applicable regulatory requirements
may subject us to administrative or judicially imposed sanctions such as civil
penalties, criminal prosecution, injunctions, product seizure or detention,
product recalls, total or partial suspension of production and FDA refusal to
approve pending applications.
Each of our product candidates must be approved for each indication for
which we believe it to be viable. We have not yet determined from which
regulatory bodies we will seek approval for our product candidates or for which
indications. Once determined, the approval process is subject to those agencies'
policies and acceptance of those agencies' approvals, if obtained, in the
countries where we intend to market our product candidates.
We have not received regulatory approval in the United States or any foreign
jurisdiction for the commercial sale of any of our product candidates.
The process of obtaining FDA and other required regulatory approvals,
including foreign approvals, often takes many years and varies substantially
based upon the type, complexity and novelty of the products involved and the
indications being studied. Furthermore, the approval process is extremely
expensive and uncertain. There can be no assurance that our product candidates
will be approved for commercial sale in the United States by the FDA or
regulatory agencies in foreign countries. The regulatory review process can take
many years and we will need to raise additional funds to complete the regulatory
review process for our current product candidates. Therefore, the failure to
receive FDA approval would have a material adverse effect on our business by
precluding us from marketing and selling such products in the United States and
preventing us from representing to other nations that the U.S. FDA has approved
our
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products to facilitate accelerated review procedures in those nations and
therefore negatively impacting our ability to generate future revenues. Even if
regulatory approval of a product is granted, there can be no assurance that we
will be able to obtain the labeling claims (a labeling claim is a product's
description and its FDA permitted uses) necessary or desirable for the promotion
of such product. FDA regulations prohibit the marketing or promotion of a drug
for unapproved indications. Furthermore, regulatory marketing approval may
entail ongoing requirements for post-marketing studies if regulatory approval is
obtained; we will then be subject to ongoing FDA obligations and continued
regulatory review. In particular, we, or our third party manufacturers, will be
required to adhere to Good Manufacturing Practices ("GMP"), which require us (or
our third party manufacturers) to manufacture products and maintain records in a
prescribed manner with respect to manufacturing, testing and quality control.
Further, we (or our third party manufacturers) must pass a manufacturing
facilities pre-approval inspection by the FDA or corollary agency before
obtaining marketing approval. Failure to comply with applicable regulatory
requirements may result in penalties, such as restrictions on a product's
marketing or withdrawal of the product from the market. In addition,
identification of certain side effects after a drug is on the market or the
occurrence of manufacturing problems could cause subsequent withdrawal of
approval, reformulation of the drug, additional pre-clinical testing or clinical
trials and changes in labeling of the product.
Prior to the submission of an application for FDA approval, our
pharmaceutical drugs and biologics undergo rigorous pre-clinical and clinical
testing, which may take several years and the expenditure of substantial
financial and other resources. Before commencing clinical trials in humans in
the United States, we must submit to the FDA and receive clearance of an IND.
There can be no assurance that submission of an IND for future clinical testing
of any of our product candidates under development or other future product
candidates would result in FDA permission to commence clinical trials or that we
will be able to obtain the necessary approvals for future clinical testing in
any foreign jurisdiction. Further, there can be no assurance that if such
testing of product candidates under development is completed, any such drug
compounds will be accepted for formal review by the FDA or any foreign
regulatory body or approved by the FDA for marketing in the United States or by
any such foreign regulatory bodies for marketing in foreign jurisdictions.
If a product is regulated as a biologic, the FDA will require the
submission and approval of both a Product License Application ("PLA") and an
Establishment License Application ("ELA") before commercial marketing can
commence. The PLA must include detailed information about the biologic, its
manufacture and the results of product development, pre-clinical studies and
clinical trials. The FDA's time to review PLAs and ELAs averages two to five
years. The FDA may ultimately decide that the PLA and ELA do not satisfy the
regulatory criteria for approval and deny approval or require additional
clinical studies. Future federal, state, local or foreign legislation or
administrative acts could also prevent or delay regulatory approval of our
pharmaceutical drug and biologic candidates. We anticipate filing a NDA with the
FDA for compassionate use of DB289 as a treatment for Trypanosomiasis in
sub-Sahara Africa in calendar year 2005.
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Our most advanced programs are developing products intended for sale in
countries that may not have established pharmaceutical regulatory agencies.
Some of the intended markets for our treatment of African sleeping
sickness and Malaria are in countries without developed pharmaceutical
regulatory agencies. We plan in such cases to try first to obtain regulatory
approval from a recognized body such as the U.S. FDA or one or more European
agencies and then to apply to the targeted country for recognition of the
foreign approval. There can be no assurance that the governments of our intended
markets will accept foreign approvals or will not require additional
documentation or testing.
There is uncertainty regarding the availability of health care reimbursement for
purchasers of our anticipated products; health care reform may negatively impact
the ability of prospective purchasers of our anticipated products to pay for
such products.
Our ability to commercialize any of our product candidates will depend in
part on the extent to which reimbursement for the costs of the resulting drug or
biologic will be available from government health administration authorities,
private health insurers, charities and others. Many of our product candidates,
including treatments for Trypanosomiasis, Malaria and Tuberculosis, would be in
the greatest demand in developing nations, many of which do not maintain
comprehensive health care systems with the financial resources to pay for such
drugs. We do not know to what extent governments, private charities,
international organizations and others would contribute toward bringing newly
developed drugs to developing nations. Even among drugs sold in developed
countries, significant uncertainty exists as to the reimbursement status of
newly approved health care products. There can be no assurance of the
availability of third-party insurance reimbursement coverage enabling us to
establish and maintain price levels sufficient for realization of a profit on
our investment in developing pharmaceutical drugs and biologics. Government and
other third-party payers are increasingly attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new drug or
biologic products approved for marketing by the FDA and by refusing, in some
cases, to provide any coverage for uses of approved products for disease
indications for which the FDA has not granted marketing approval. If adequate
coverage and reimbursement levels are not provided by government and third-party
payers for uses of our anticipated products, the market acceptance of these
products would be adversely affected.
Health care reform proposals are continually introduced in Congress and in
various state legislatures and there is no guarantee that such proposals will
not be introduced in the future. We cannot predict when any proposed reforms
will be implemented, if ever, or the effect of any implemented reforms on our
business. Implemented reforms may have a material adverse effect on our business
by reducing or eliminating the availability of third-party reimbursement for our
anticipated products or by limiting price levels at which we are able to sell
such products. If reimbursement is not available for our products, health care
providers may prescribe alternative remedies if available. Patients, if they
cannot afford our products, may do without. In addition, if we are able to
commercialize products in overseas markets, then our ability to achieve success
in such markets may depend, in part, on the health care financing and
reimbursement policies of such countries. We cannot predict changes in health
care systems in foreign countries, and therefore, do not know the effects on our
business of possible changes.
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Shares eligible for future sale may adversely affect our ability to sell equity
securities.
Sales of our Common Stock (including the issuance of shares upon
conversion of preferred stock) in the public market could materially and
adversely affect the market price of shares because prior sales have been
executed at or below our current market price. We have three outstanding series
of outstanding preferred stock that convert to Common Stock at prices equivalent
to $4.42, $4.00, and $4.42, respectively, for our Series A, Series B and Series
C Convertible Preferred Stock. Our obligation to convert the Preferred Stock
upon demand by the holders may depress the price of our Common Stock and also
make it more difficult for us to sell equity securities or equity-related
securities in the future at a time and price that we deem appropriate.
As of December 2, 2003, we had 9,625,350 shares of Common Stock
outstanding, plus (1) 80,800 shares of Series A Convertible Preferred Stock,
convertible into approximately 457,013 shares of Common Stock at the conversion
rate of 1:5.656, (2) 19,925 shares of Series B Convertible Preferred stock
convertible into approximately 124,531 shares of Common Stock at the conversion
rate of 1:6.25, (3) 98,472 shares of Series C Convertible Preferred Stock
convertible into approximately 556,962 shares of Common Stock at the conversion
rate of 1:5.656, (4) 868,924 options to purchase shares of Common Stock with a
weighted-average exercise price of $7.77 per share and (5) 2,809,712 warrants to
purchase shares of Common Stock with a weighted-average exercise price of $7.11.
Of the shares outstanding, 6,525,687 shares of Common Stock are freely tradable
without restriction. All of the remaining 3,099,663 shares are restricted from
resale, except pursuant to certain exceptions under the Securities Act of 1933,
as amended (the "Securities Act").
Our outstanding options and warrants may adversely affect our ability to
consummate future equity financings due to the dilution potential to future
investors.
We have outstanding options and warrants for the purchase of shares of our
Common Stock with exercise prices currently below market which may adversely
affect our ability to consummate future equity financings. The holders of such
warrants and options may exercise them at a time when we would otherwise be able
to obtain additional equity capital on more favorable terms. To the extent any
such options and warrants are exercised, the outstanding shares of our Common
Stock will be diluted.
As of December 2, 2003, we have outstanding vested options to purchase
525,678 shares of Common Stock at a weighted-average exercise price of $5.24 and
vested warrants to purchase 2,722,200 shares of Common Stock with a
weighted-average price of $7.00.
Due to the number of shares of Common Stock we are obligated to sell
pursuant to outstanding options and warrants described above, potential
investors may not purchase our future equity offerings at market price because
of the potential dilution such investors may suffer as a result of the exercise
of the outstanding options and warrants.
The market price of our Common Stock has experienced significant volatility.
The securities markets from time to time experience significant price and
volume fluctuations unrelated to the operating performance of particular
companies. In addition, the
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market prices of the common stock of many publicly traded pharmaceutical and
biotechnology companies have been and can be expected to be especially volatile.
Our common stock price in the 52-week period ended December 1, 2003 had a low of
$1.58 and high of $32.51. Announcements of technological innovations or new
products by us or our competitors, developments or disputes concerning patents
or proprietary rights, publicity regarding actual or potential clinical trial
results relating to products under development by us or our competitors,
regulatory developments in both the United States and foreign countries, delays
in our testing and development schedules, public concern as to the safety of
pharmaceutical drugs or biologics and economic and other external factors, as
well as period-to-period fluctuations in our financial results, may have a
significant impact on the market price of our Common Stock. The realization of
any of the risks described in these "Risk Factors" may have a significant
adverse impact on such market prices.
We routinely pay vendors in stock as consideration for their services; this may
result in shareholder dilution, additional costs and difficulty retaining
certain vendors.
In order for us to preserve our cash resources, we often pay vendors in
shares or options to purchase shares of Immtech Common Stock rather than cash.
Payments for services in stock may materially adversely affect our shareholders
by diluting the value of outstanding shares of our Common Stock. In addition, in
situations where we have agreed to register the shares issued to a vendor, this
will generally cause us to incur additional expenses associated with such
registration. Paying vendors in shares or options to purchase shares of Immtech
Common Stock may also limit our ability to contract with the vendor of our
choice should that vendor decline payment in stock.
We do not pay dividends on our Common Stock.
We have never declared or paid dividends on our Common Stock and we do not
intend to pay any Common Stock dividends in the foreseeable future. Our Series A
Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock earn dividends of 6%, 8% and 8% per annum,
respectively, each payable semi-annually on each April 15 and October 15 while
outstanding, and which, at our option, may be paid in cash or in shares of our
Common Stock. On April 15, 2002, October 15, 2002, April 15, 2003 and October
15, 2003, we paid dividends to the holders of our Series A Convertible Preferred
Stock in shares of Common Stock and on October 15, 2002, April 15, 2003 and
October 15, 2003, we paid dividends to the holders of our Series B Convertible
Preferred Stock in shares of Common Stock, and on October 15, 2003 we paid
dividends to the holders of our Series C Convertible Preferred Stock in shares
of Common Stock, in all cases with fractional shares paid in cash.
There are limitations on the liability of our directors, and we may have to
indemnify our officers and directors in certain instances.
Our Certificate of Incorporation limits, to the maximum extent permitted
under Delaware law, the personal liability of our directors for monetary damages
for breach of their fiduciary duties as directors. Our Bylaws provide that we
will indemnify our officers and directors and may indemnify our employees and
other agents to the fullest extent permitted by law. We have entered into
indemnification agreements with our officers and directors containing provisions
that are in some respects broader than the specific indemnification provisions
under Delaware
S-13
law. The indemnification agreements may require us, among other things, to
indemnify such officers and directors against certain liabilities that may arise
by reason of their status or service as directors or officers (other than
liabilities arising from willful misconduct of a culpable nature), to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified and to obtain directors' and officers' insurance.
Section 145 of the Delaware General Corporation Law provides that a corporation
may indemnify a director, officer, employee or agent made or threatened to be
made a party to an action by reason of the fact that he or she was a director,
officer, employee or agent of the corporation or was serving at the request of
the corporation, against expenses actually and reasonably incurred in connection
with such action if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. Delaware law does
not permit a corporation to eliminate a director's duty of care and the
provisions of our Certificate of Incorporation have no effect on the
availability of equitable remedies, such as injunction or rescission, for a
director's breach of the duty of care.
We believe that our limitation of director liability assists us to attract
and retain qualified directors. However, in the event a director or the board
commits an act that may legally be indemnified under Delaware law, the Company
will be responsible to pay for such director(s) legal defense and potentially
any damages resulting therefrom. Furthermore, the limitation on director
liability may reduce the likelihood of derivative litigation against directors,
and may discourage or deter stockholders from instituting litigation against
directors for breach of their fiduciary duties, even though such an action, if
successful, might benefit the Company and its stockholders. Given the difficult
environment and potential for incurring liabilities currently facing directors
of publicly-held corporations, we believe that director indemnification is in
the best interests of the Company and its stockholders, because it enhances our
ability to retain highly qualified directors and reduce a possible deterrent to
entrepreneurial decision-making.
Nevertheless, limitations of director liability may be viewed as limiting
the rights of stockholders, and the broad scope of the indemnification
provisions contained in our Certificate of Incorporation and Bylaws could result
in increased expense to the Company. The Board of Directors believes, however,
that these provisions will provide a better balancing of the legal obligations
of, and protections for, directors and will contribute positively to the quality
and stability of our corporate governance. The Board of Directors has concluded
that the benefit to stockholders of improved corporate governance outweighs any
possible adverse effects on stockholders of reducing the exposure of directors
to liability and broadened indemnification rights.
Product liability exposure may expose us to significant liability.
We do not have pharmaceutical products for sale and we therefor do not
carry product liability insurance. However, if we do commercialize drug products
we will face risk of exposure to product liability and other claims and lawsuits
in the event that the development or use of our technology or prospective
products is alleged to have resulted in adverse effects. We may not be able to
avoid significant liability exposure. We may not have sufficient insurance
coverage and we may not be able to obtain sufficient coverage at a reasonable
cost. An inability to obtain product liability insurance at acceptable cost or
to otherwise protect against potential
S-14
product liability claims could prevent or inhibit the commercialization of our
products. A product liability claim could hurt our financial performance. Even
if we avoid liability exposure, significant costs could be incurred, potentially
damaging our financial performance. We do carry commercial general liability
insurance and clinical trials insurance which covers our human clinical trial
activities.
ABOUT THIS PROSPECTUS
This document is called a Prospectus and is part of a registration
statement on Form S-3 (the "Registration Statement") that we filed with the SEC.
Under this Prospectus, we may from time to time sell any combination of the
securities described in this Prospectus in one or more offerings. The Company's
offerings may total up to 750,000 Shares. In addition, the Selling Stockholders
also may from time to time collectively offer up to 781,598 Shares of our Common
Stock plus any additional shares paid to Selling Stockholders as dividends on
the preferred shares that are convertible into the Common Stock registered
hereunder.
You should rely only on the information contained or incorporated by
reference in this prospectus. 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 are not making, nor will
we make, an offer to sell the common stock in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in
this prospectus is current only as of the date on its cover. Our business,
financial condition, results of operations and prospects may have changed since
that date. You should read this Prospectus together with the additional
information described under the heading "Where You Can Find More Information"
below.
WHERE YOU CAN FIND MORE INFORMATION;
INCORPORATION OF DOCUMENTS BY REFERENCE
We file annual, quarterly and current reports, proxy statements and other
documents with the Securities and Exchange Commission (the "SEC"), under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). You may read
and copy any materials that we file with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549, at 233 Broadway, 16th
Floor, New York, New York 10279 and at Northwest Atrium Center, 5000 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Our reports, proxy statements and other documents filed
electronically with the SEC are available at the website maintained by the SEC
at http://www.sec.gov. We also make available free of charge on or through our
Internet website, http://www.immtech-international.com, our annual, quarterly
and current reports, and, if applicable, amendments to those reports, filed or
furnished pursuant to Section 13(a) of the Exchange Act, as soon as reasonably
practicable after we electronically file such reports with the SEC. Information
on our website is not a part of this report.
We have filed with the SEC a registration statement on Form S-3 (the
"Registration Statement") under the Securities Act with respect to the Shares.
This Prospectus, which constitutes a part of that Registration Statement, does
not contain all the information contained in
S-15
that Registration Statement and its exhibits. For further information with
respect to the Company and the Shares, you should consult the Registration
Statement and its exhibits. The Registration Statement and any of its
amendments, including exhibits filed as a part of the Registration Statement or
an amendment to the Registration Statement, are available for inspection and
copying through the SEC's public reference rooms listed above.
The SEC allows us to "incorporate by reference" in this Prospectus the
information that we file with them, which means we can disclose important
information to you by referring you to other documents that contain that
information. The information we incorporate by reference is considered to be
part of this Prospectus and information we later file with the SEC will
automatically update and supersede the information in this Prospectus. The
following documents filed by us with the SEC pursuant to Section 13 of the
Exchange Act (File No. 000-25669) and any future filings under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act made before the termination of the
offering are incorporated by reference herein:
(i) our Amended Annual Report on Form 10-K/A for the fiscal year ended
March 31, 2003, filed with the SEC on October 15, 2003;
(ii) our Quarterly Reports on Form 10-Q for the fiscal quarters ended
June 30, 2003 and September 30, 2003, filed with the SEC on August
14, 2003 and November 14, 2003, respectively;
(iii) the description of our Common Stock contained in our registration
statement filed with the SEC via Edgar under Section 12 of the
Exchange Act on April 29, 1999, including any amendments or reports
filed for the purpose of updating such description;
(iv) our definitive Proxy Statement pursuant to Section 14(A) of the
Exchange Act for our 2002 Annual Meeting of the Shareholders;
(v) all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual
Report referenced in (i) above;
(vi) our Form 8-A pursuant to Section 12(b) of the Exchange Act filed
with the SEC on August 6, 2003;
(vii) our Registration Statement on Form SB-2/A filed with the SEC on
February 11, 1999; and
(viii) our Certificate of Incorporation, as amended, filed as Exhibit 3.1
to the above referenced Registration Statement on Form SB-2/A.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment indicating that
all securities offered hereby have been sold or deregistering all securities
then remaining unsold are expressly incorporated by reference into this
Prospectus and to be a part of this Prospectus from the date of filing of such
documents.
Statements made in this Prospectus, or in any documents incorporated by
reference in this Prospectus as to the contents of any contract or other
document are materially complete. For
S-16
additional information we refer you to the copy of the contract or other
document filed as an exhibit to the Registration Statement of which this
Prospectus is a part or as an exhibit to the documents incorporated by
reference.
We will provide to you a copy of any document incorporated by reference in
this Prospectus and any exhibits specifically incorporated by reference in those
documents at no cost. You may request copies by contacting us at the following
address or telephone numbers: Corporate Secretary, Immtech International, Inc.,
150 Fairway Drive, Suite 150, Vernon Hills, Illinois, 60061, Telephone No.:
(847) 573-0033 or toll free (877) 898-8038.
Any statement incorporated or deemed incorporated herein by reference will
be deemed to be modified or superseded for the purpose of the Registration
Statement and this Prospectus to the extent that a statement contained in this
Prospectus or in any subsequently filed document modifies or supersedes such
statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of the Registration
Statement or this Prospectus.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Prospectus and in the documents
incorporated by reference in this Prospectus constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact may be deemed
to be forward-looking statements. Forward-looking statements frequently, but not
always, use the words "intends," "plans," "believes," "anticipates" or "expects"
or similar words and may include statements concerning our strategies, goals and
plans. Forward-looking statements involve a number of significant risks and
uncertainties that could cause our actual results or achievements or other
events to differ materially from those reflected in such forward-looking
statements. Such factors include, among others described in the Prospectus, the
following: (i) we are in an early stage of product development, (ii) our
technology is in the research and development stage and therefore its potential
benefits for human therapy are unproven, (iii) the possibility that favorable
relationships with collaborators cannot be established or, if established, will
be abandoned by the collaborators before completion of product development, (iv)
the possibility that we or our collaborators will not successfully develop any
marketable products, (v) the possibility that advances by competitors will cause
our product candidates not to be viable, (vi) uncertainties as to the
requirement that a drug product may not be found to be safe and effective after
extensive clinical trials and the possibility that the results of such trials,
if completed, will not establish the safety or efficacy of our drug product
candidates, (vii) risks relating to requirements for approvals by governmental
agencies, such as the Food and Drug Administration, before products can be
marketed and the possibility that such approvals will not be obtained in a
timely manner or at all or will be conditioned in a manner that would impair our
ability to market our product candidates successfully, (viii) the risk that our
patents could be invalidated or narrowed in scope by judicial actions or that
our technology could infringe upon the patent or other intellectual property
rights of third parties, (ix) the possibility that we will not be able to raise
adequate capital to fund our operations through the process of commercializing a
successful product or that future financing will be completed on unfavorable
terms, (x) the possibility that any products successfully developed by us will
not achieve market acceptance and (xi) other risks and uncertainties that
S-17
may not be described herein. We undertake no obligation except as required by
securities law to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise in this Prospectus.
THE COMPANY
AN INVESTMENT IN THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
INFORMATION PROVIDED UNDER "RISK FACTORS" BEGINNING ON PAGE S-1. A
GLOSSARY WHICH DEFINES VARIOUS TERMS USED IN THIS PROSPECTUS BEGINS ON
PAGE S-25.
We are a pharmaceutical company focused on the development and
commercialization of oral drugs to treat infectious diseases. The Company has
development programs that include fungal infections, Malaria, Tuberculosis,
Hepatitis C, Pneumocystis carinii pneumonia ("PCP") and tropical medicine
diseases, including African sleeping sickness (a parasitic disease also known as
Trypanosomiasis) and Leishmaniasis (a parasitic disease that destroys the
liver). We hold worldwide patents, patent applications, licenses and rights to
license worldwide patents, patent applications and technologies from a
scientific consortium and exclusive rights to commercialize products from those
patents and licenses that are integral to our business.
Since our formation in October 1984, we have engaged in research and
development programs, expanding our network of scientists and scientific
advisors, licensing technology agreements and advancing the commercialization of
the dication technology platform. We use the expertise and resources of
strategic partners and third parties in a number of areas, including (i)
research and development, (ii) pre-clinical and human clinical trials and (iii)
manufacture of pharmaceutical drugs. We have licensing and exclusive
commercialization rights to a dicationic pharmaceutical platform and are
developing drugs intended for commercial use based on that platform. Dication
pharmaceutical drugs work by blocking life-sustaining enzymes from binding to
key sites in the "minor groove" of an organism's deoxyribonucleic acid ("DNA"),
killing the infectious organisms that cause fungal, parasitic, bacterial and
viral diseases. The key site on an organism's DNA is an area where enzymes
interact with the infectious organism's DNA as part of their normal life cycle.
Structurally, dications are chemical molecules that have two positively charged
ends held together by a chemical linker. The composition of the dications, with
positive charges on both ends (shaped like molecular barbells), allows dications
to bind (similar to a band-aid) to the negatively charged key sites of an
infectious organism's DNA. The bound dications block life sustaining enzymes
from attaching to the DNA's key sites, thereby killing the infectious organism.
The dication technology is the result of a research program developed by
scientists at UNC, Georgia State University, Duke University and Auburn
University (collectively, the "Scientific Consortium"). We entered into an
agreement with the Scientific Consortium, dated January 15, 1997, as amended,
and a License Agreement, dated as of January 28, 2002 (collectively, the
"Consortium Agreement"), to commercialize product candidates resulting from the
Scientific Consortium's research, including the dication technology.
S-18
USE OF PROCEEDS
We intend to use the proceeds of the sale of Shares under this Prospectus
by the Company for general corporate purposes, including for research and
development and commercialization efforts. We will not receive any of the
proceeds from the sale of the Shares offered by the Selling Stockholders under
this Prospectus.
SELLING STOCKHOLDERS
The Selling Stockholders other than Gabriele Group LLC ("Gabriele") and
Mr. John Vaccaro ("Mr. Vaccaro") listed below acquired our Series C Stock in
private placements between June 6-9, 2003. Such Selling Stockholders have the
right to acquire Shares (i) upon conversion of the Series C Stock or (ii) upon
issuance of Common Stock as stock dividends to holders of Series C Stock,
granted to them in connection with their participation in the private
placements.
Between June 6-9, 2003, the Selling Stockholders purchased in the
aggregate 125,352 shares of our Series C Stock for gross proceeds to us of
$3,133,800. We completed our offering of Series C Stock as of June 9, 2003.
Subject to adjustment for dilution protection, each share of Series C Stock is
convertible into 5.656 shares of Common Stock, 708,998 shares in the aggregate.
The Series C Stock earns an 8% per annum dividend payable semi-annually each
April 15th and October 15th, in cash or Common Stock at the Company's option for
so long as any Series C Stock remains outstanding. If Common Stock is to be used
to pay the Series C Stock dividend, such Common Stock is to be valued at the
10-day volume-weighted average closing-bid price immediately prior to the date
of payment. We agreed to use reasonable efforts to register the resale by the
Selling Stockholders of the Shares of Common Stock issuable upon conversion of
the Series C Stock within 180 days after the date of purchase of the Series C
Stock, and to keep such registration effective for the lesser of one year or
until all of such Shares are sold.
On July 31, 2002 we entered into an agreement with Gabriele to provide to
us management consulting services in connection with our Series B private
placement offering. We issued to Gabriele 40,000 shares of our Common Stock and
three warrants, each to purchase 10,000 shares of our Common Stock exercisable
at $6.00 per share; the warrants vest when the market price of our Common Stock
meets or exceeds $10, $15 and $20 for a period of 20 consecutive trading days,
respectively, or if the valuation of our Common Stock in a merger or acquisition
meets or exceeds $10, $15 and $20 per share, respectively.
On April 26, 1999, we entered into a consulting arrangement with Mr.
Vaccaro for services to be provided to assist the Company to list its Common
Stock on to the NASDAQ SmallCap Market. For his services, Mr. Vaccaro was
granted a warrant to purchase 2,600 shares of Common Stock exercisable at $16.00
per share of Common Stock upon such listing.
The following table sets forth for each Selling Stockholder (i) the number
of Shares being registered by this Prospectus, (ii) the number of shares and
percent of class beneficially owned at the date of filing, and (iii) the number
of shares and percent of class that the Selling Stockholder would beneficially
own if all shares registered hereunder were sold, assuming no other shares were
purchased. No Selling Stockholder has been an officer, director or employee of
Immtech
S-19
for the past three years. Because the Selling Stockholders may offer all, some
or none of their Shares, we cannot provide a definitive estimate of the number
of Shares they will hold after such registration. This Prospectus is filed at
our expense.
Percent of
Shares Class
Percent of Remaining Remaining
Class of if all if all
Shares Shares Shares Shares
Series C Shares of Beneficially Shares Beneficially Registered Registered
Name Stock Common Owned Registered Owned(1) are Sold are Sold
------------------------- ----------- ----------- -------------- ------------ -------------- ------------- -------------
Gabriele Group LLC 0 70,000 70,000 70,000 * % 0 * %
Vivienne Lee 9,200 52,036 143,603 52,036 1.49% 91,567 * %
Ma Fa On 6,400 36,199 36,450 36,199 * % 251 * %
Tao Wai Ling 5,800 32,805 33,032 32,805 * % 227 * %
Cheung Ming Tak 5,800 32,805 46,032 32,805 * % 13,227 * %
Cheung Shuk Kwan 4,800 27,149 27,337 27,149 * % 188 * %
Monet Capital Fund I, LP 4,800 27,149 62,337 27,149 * % 35,188 * %
Tsang Wai Ping Alfred 4,400 24,887 37,592 24,887 * % 12,705 * %
Sanford Goldfarb 4,000 22,624 24,781 22,624 * % 2,157 * %
Lau Chu 4,000 22,624 42,085 22,624 * % 19,461 * %
Cheung Yuk Chor Dickie 4,000 22,624 48,669 22,624 * % 26,045 * %
Donald H. Wong 3,400 19,231 46,842 19,231 * % 27,611 * %
Chan Chee Wing 3,200 18,100 19,915 18,100 * % 1,815 * %
Tefa Capital, Inc. 3,200 18,100 18,225 18,100 * % 125 * %
Liu Yuk Tong and Wong
Gum Wing Caroline 3,000 16,968 35,229 16,968 * % 18,261 * %
Val Busler 2,800 15,837 15,947 15,837 * % 110 * %
Li Lo Kwong 2,600 14,706 25,694 14,706 * % 10,988 * %
Jerry Sorkin 2,600 14,706 17,808 14,706 * % 3,102 * %
Lau Kin Yip 2,400 13,575 13,669 13,575 * % 94 * %
Ho Siu Man 2,120 11,991 12,074 11,991 * % 83 * %
Lau Mei Yin Amy 2,080 11,765 11,846 11,765 * % 81 * %
Shum Kit Ching 2,080 11,765 11,846 11,765 * % 81 * %
Fukoku Asset Management
Ltd. 2,000 11,312 51,541 11,312 * % 40,229 * %
John R. Harrington and
John R. Harrington,
Jr. Trust 3,800 21,493 104,980 21,493 1.12% 83,987 * %
Hui Chin Ki 2,000 11,312 11,460 11,312 * % 148 * %
Mao Frank Tsao Yu 2,000 11,312 11,390 11,312 * % 78 * %
Richard M. Schaeffer 2,000 11,312 11,390 11,312 * % 78 * %
Wingpearl Investments
Ltd. 2,000 11,312 39,768 11,312 * % 28,378 * %
Mak Wah 1,920 10,860 10,935 10,860 * % 75 * %
John J. Orlando 1,800 10,181 28,402 10,181 * % 18,221 * %
S-20
Percent of
Shares Class
Percent of Remaining Remaining
Class of if all if all
Shares Shares Shares Shares
Series C Shares of Beneficially Shares Beneficially Registered Registered
Name Stock Common Owned Registered Owned(1) are Sold are Sold
------------------------- ----------- ----------- -------------- ------------ -------------- ------------- -------------
Target Profits
Securities Limited 1,768 10,000 10,069 10,000 * % 69 * %
Chan Yu Ching 1,768 10,000 10,069 10,000 * % 69 * %
Wong Hon Fai Jones 1,768 10,000 16,220 10,000 * % 6,220 * %
John Neal 1,768 10,000 10,069 10,000 * % 69 * %
Lee Hon Kit Raymond 1,600 9,050 12,647 9,050 * % 3,597 * %
Ho Cho Chuen 1,600 9,050 9,112 9,050 * % 62 * %
Li Wai Yin 1,600 9,050 9,112 9,050 * % 62 * %
Thomas J. Krupp II 1,200 6,787 6,834 6,787 * % 47 * %
Raymond Carbone 1,000 5,656 5,695 5,656 * % 39 * %
Richard H. Harrington 1,000 5,656 15,695 5,656 * % 10,039 * %
Scott Hess 1,000 5,656 10,728 5,656 * % 5,072 * %
John Ketcham 1,000 5,656 5,695 5,656 * % 39 * %
Michael Strada 1,000 5,656 5,695 5,656 * % 39 * %
Chan Pui Ling Juliana 800 4,525 4,556 4,525 * % 31 * %
Dwight B. Crane 800 4,525 18,229 4,525 * % 13,704 * %
James M. Florsheim Trust
Account #1 800 4,525 11,902 4,525 * % 7,377 * %
Sum Lan Hing 480 2,715 2,733 2,715 * % 18 * %
John A. Vaccaro 0 2,600 2,600 2,600 * % 0 * %
John J. Coonan 400 2,262 8,735 2,262 * % 6,473 * %
Yeung Lai 400 2,262 2,277 2,262 * % 15 * %
Stephen Carter 400 2,262 2,277 2,262 * % 15 * %
Ho Mei Yee 400 2,262 2,277 2,262 * % 15 * %
Lam Yuk Ying 400 2,262 2,277 2,262 * % 15 * %
Michael Dundas 400 2,262 2,277 2,262 * % 15 * %
Lau Wai Wah Richard 400 2,262 2,277 2,262 * % 15 * %
Lo Mo On 400 2,262 2,277 2,262 * % 15 * %
Salvatore Picciallo 400 2,262 2,277 2,262 * % 15 * %
Michael Volpe 400 2,262 5,735 2,262 * % 3,473 * %
Martin Boyle 200 1,131 8,057 1,131 * % 6,926 * %
---------- ----------- ------------- -----------
Totals 125,352 781,598 279,282 1,598
========== =========== ============= ===========
(1) The corresponding percentages are the quotient of (x) the number of shares
beneficially owned and (y) the sum of the 9,625,350 shares of Common
Stock outstanding, the number shares of Common Stock issuable upon
conversion of Series A Stock, Series B Stock and Series C Stock and such
holder's options and warrants exercisable within 60 days of the date of
December 1, 2003.
* Less than 1.00%.
S-21
DESCRIPTION OF CAPITAL STOCK
General
The following are the material terms of our Common Stock. You should refer
to the applicable provisions of Delaware law, our Certificate of Incorporation
as amended and our Bylaws for additional information. See "Where You Can Find
More Information."
Under our Certificate of Incorporation, as amended, our authorized capital
stock consists of:
30,000,000 shares of Common Stock; and
5,000,000 shares of Preferred Stock, par value $0.01 per share.
As of October 29, 2003, we had 9,625,350 shares of Common Stock
outstanding (not including 457,013 shares of Common Stock reserved for
conversion of Series A Stock, 124,531 Shares of Common Stock reserved for
conversion of Series B Stock, 556,962 Shares of Common Stock reserved for
conversion of Series C Stock, 868,924 shares of Common Stock reserved for
exercise of outstanding options and 2,809,712 shares of Common Stock reserved
for exercise of outstanding warrants held by certain investors). Of the shares
of Common Stock outstanding, 6,525,687 shares of Common Stock are freely
tradable without restriction. All of the remaining 3,099,663 shares are
restricted from resale except pursuant to certain exceptions under the
Securities Act. All of the Common Stock underlying the outstanding Series C
Stock is registered by this Prospectus.
Common Stock
Our Common Stock is traded on the American Stock Exchange LLC ("AMEX")
under the symbol "IMM." Each share of our Common Stock entitles the holder to
one vote on all matters on which holders are permitted to vote. There is no
cumulative voting for election of directors. Accordingly, the holders of a
majority of the shares voted can elect all of the nominees for director.
Subject to preferences that may be applicable to any outstanding series of
preferred stock, the holders of our Common Stock are entitled to dividends when,
and if, declared by the Board of Directors out of funds legally available for
that purpose. Upon liquidation, dissolution or winding up, subject to
preferences that may be applicable to any outstanding series of Preferred Stock,
the holders of our Common Stock are entitled to a pro rata share in any
distribution to stockholders. Our Common Stock has no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to our Common Stock. All outstanding shares of our Common
Stock are fully paid and non-assessable.
PLAN OF DISTRIBUTION
The distribution of the Shares described in this Prospectus may be
effected from time to time in one or more transactions either (a) at a fixed
price or prices, which may be changed, (b) at market prices prevailing at the
time of sale, (c) at prices relating to the prevailing market prices or (d) at
negotiated prices. We (subject to AMEX rules), and any Selling Stockholders,
S-22
may offer and sell the Shares described in this Prospectus (i) through agents,
(ii) through one or more underwriters or dealers, (iii) through a block trade in
which the broker or dealer engaged to handle the block trade will attempt to
sell the securities as agent, but may position and resell a portion of the block
as principal to facilitate the transaction, (iv) directly to one or more
purchasers (through a specific bidding or auction process or otherwise), (v) in
"at the market offerings," within the meaning of Rule 415(a)(4) of the
Securities Act, (vi) through a combination of any of these methods of sale, or
(vii) at a fixed exchange ratio in return for other of our securities.
To our knowledge, the Selling Stockholders have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the Shares, nor is there an underwriter or
coordinating broker acting in connection with the proposed sales of Shares by
the Selling Stockholders. Any Shares covered by this Prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than pursuant to this Prospectus. We will pay all costs and expenses
incurred in connection with the registration of the Shares offered by this
Prospectus. Any brokerage commissions and similar selling expenses attributable
to the sale of Shares by the Selling Stockholders will be borne by the Selling
Stockholders.
We have agreed to indemnify the Selling Stockholders and the Selling
Stockholders' respective officers, directors, employees and agents, and each
person who controls such Selling Stockholders, in certain circumstances against
certain liabilities, including liabilities arising under the Securities Act, and
the Selling Stockholders have agreed to indemnify us and our directors and
officers in certain circumstances against certain liabilities, including
liabilities arising under the Securities Act, in each case in connection with
this offering.
We or the Selling Stockholders may solicit offers to purchase the Shares
directly and we or the Selling Stockholders may sell the Shares directly to
institutional or other investors. We or the Selling Stockholders may enter into
agreements with agents, underwriters and dealers under which we or the Selling
Stockholders may agree to indemnify the agents, underwriters and dealers against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments they may be required to make with respect to these
liabilities. Some of the agents, underwriters or dealers, or their affiliates
may be customers of, engage in transactions with or perform services for us or
the Selling Stockholders in the ordinary course of business.
If we or any Selling Stockholders offer and sell Shares through an
underwriter or underwriters, then we or the Selling Stockholders will execute an
underwriting agreement with the underwriter or underwriters. The names of the
specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transactions, including compensation of the
underwriters and dealers, which may be in the form of discounts, concessions or
commissions, if any, will be described in a prospectus supplement, if
applicable, which will be used by the underwriters to make resales of the
Shares. If the Selling Stockholders offer and sell the Shares through a dealer,
then the Selling Stockholders or an underwriter will sell the Shares to the
dealer, as principal. The dealer may then resell the Shares to the public at
varying prices to be determined by the dealer at the time of resale.
We may engage in at the market offerings of our common stock. An at the
market offering is an offering of our common stock at other than a fixed price
to or through a market
S-23
maker. Under Rule 415(a)(4) of the Securities Act, the total value of at the
market offerings made under this prospectus may not exceed 10% of the aggregate
market value of our common stock held by non-affiliates. Any underwriter that we
engage for an at the market offering would be named in a post-effective
amendment to the registration statement containing this prospectus. Additional
details of our arrangement with the underwriter, including commissions or fees
paid by us and whether the underwriter is acting as principal or agent, would be
described in the related prospectus supplement.
We may grant underwriters who participate in the distribution of the
Shares an option to purchase additional Shares to cover over-allotments, if any,
in connection with the distribution.
The Selling Stockholders, dealers acting in connection with the offering
and brokers executing sell orders on behalf of one or more Selling Stockholders
may be deemed to be "underwriters" within the meaning of the Securities Act. In
addition, any such broker or dealer may be required to deliver a copy of this
Prospectus to any person who purchases any of the Shares from or through such
broker or dealer.
LEGAL MATTERS
Legal matters in connection with the validity of the Shares offered by
this Prospectus will be passed upon for the Company by Cadwalader, Wickersham &
Taft LLP, New York, New York.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, the Company has been advised that
in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
S-24
GLOSSARY
As used in this Prospectus, the following terms have the meanings set
forth below.
AIDS Acquired immune deficiency syndrome, a disease
caused by a virus.
DB289 The designation given to our lead dication.
Dication A chemical molecule with two positively charged
ends that are held together by a chemical
linker. Dications bind to the DNA of infectious
organisms.
DNA A type of molecule made up of polymerized
deoxyribonucleotides linked together by
phosphate bonds.
ELA Establishment License Application.
FDA U.S. Food and Drug Administration.
FDCA Federal Food, Drug, and Cosmetic Act as Amended.
HCV Hepatitis C virus, or HCV, is one of the viruses
that causes acute and chronic hepatitis. Persons
who are chronically infected with Hepatitis C
are at an increased risk for the development of
cirrhosis and liver cancer.
HIV HIV is the human immunodeficiency virus most
researchers believe causes AIDS.
IND Investigational New Drug Application, or IND, is
a document required to be filed with the FDA
prior to performing clinical studies on human
subjects in the United States.
Leishmaniasis An infection caused by a protozoal parasite that
affects the skin and abdominal organs, causing
ulcers or skin disorders that resemble leprosy.
PCP Pneumocystis carinii pneumonia ("PCP") is a
protozoal infection of the lungs, and most
common of the AIDS-associated diseases.
Phase I Clinical testing in which the safety and
pharmacological profile of a new drug is
established in humans.
Phase II Clinical testing in which the effectiveness of a
new drug is established in humans. This includes
establishing the dose amount and frequency
required to achieve a therapeutic effect, the
metabolic rate of the administered drug and the
toxicity profile in specific patient
populations.
PLA Product License Application.
TB A disease caused by bacteria, Mycobacterium
tuberculosis, that is transmitted by breathing
in or eating infected droplets, usually
affecting the lungs, although infection of other
organ systems can occur.
Trypanosomiasis An infection caused by a protozoal parasite and
transmitted usually by insect bites. Also known
as African sleeping sickness.
=======================================
S-25
TABLE OF CONTENTS
RISK FACTORS..................... -1 IMMTECH INTERNATIONAL,
ABOUT THIS PROSPECTUS........... -15 INC.
WHERE YOU CAN FIND MORE
INFORMATION; INCORPORATION OF
DOCUMENTS BY REFERENCE.......... -15
FORWARD-LOOKING STATEMENTS...... -17 1,531,598 Shares
THE COMPANY..................... -18 Common Stock
USE OF PROCEEDS................. -19
SELLING STOCKHOLDERS............ -19
DESCRIPTION OF CAPITAL STOCK.... -22
PLAN OF DISTRIBUTION............ -22
LEGAL MATTERS................... -24 -----------------------------------
EXPERTS......................... -24 PROSPECTUS
INTERESTS OF NAMED EXPERTS AND
COUNSEL......................... -24 -----------------------------------
GLOSSARY........................ -25
December 2, 2003
============
ALL DEALERS THAT EFFECT TRANSACTIONS
IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY
BE REQUIRED TO DELIVER A PROSPECTUS
UNTIL THE LATER OF JANUARY 11, 2003
OR 40 DAYS AFTER THE EFFECTIVE DATE
OF THIS PROSPECTUS OR ANY POST-
EFFECTIVE AMENDMENT TO THIS
PROSPECTUS. THIS IS IN ADDITION TO
THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
==================================== ========================================
S-26
------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth our estimates of the expenses to be
incurred in connection with the offering of the Shares of Common Stock being
offered hereby:
SEC registration fee: $ 4,692.43(1)
Printing expenses: $ 3,000.00(2)
Legal fees and expenses: $35,000.00(2)
Accounting fees and expenses: $15,000.00(2)
Miscellaneous expenses: $ 5,000.00(2)
------------
TOTAL: $62,692.43(2)
============
------------
(1) Includes $4,585.80, paid on August 27, 2003, and $106.63, paid on October
31, 2003.
(2) Estimated.
We will pay all costs and expenses incurred in connection with the
registration of the Shares. Any brokerage commissions and similar selling
expenses attributable to the sale of Shares by the Selling Stockholders will be
borne by the Selling Stockholders.
Item 15. Indemnification of Directors and Officers.
Limitation of Director's Liability
Our Certificate of Incorporation, as amended, and Bylaws reduce the
liability of directors to the fullest extent permissible under Delaware law.
Delaware law permits a corporation to limit the personal liability of a director
to the corporation or its shareholders for monetary damages for breach of
certain fiduciary duties as a director, provided that the director's liability
may not be eliminated or limited for: (a) breaches of the director's duty of
loyalty to the corporation or its shareholders; (b) acts or omissions not in
good faith or involving intentional misconduct or knowing violations of law; (c)
the payment of unlawful dividends or unlawful stock repurchases or redemptions;
or (d) transactions in which the director received an improper personal benefit.
A director's liability may also not be limited for violation of, or otherwise
relieve the corporation or its directors from the necessity of complying with,
federal or state securities laws or affect the availability of non-monetary
remedies such as injunctive relief or rescission.
Indemnification of Officers and Directors
The provisions of our Bylaws relating to indemnification require that we
indemnify our directors and executive officers to the fullest extent permitted
under Delaware law, provided that
S-27
we may modify the extent of such indemnification by individual contracts with
our directors and executive officers, and provided, further, that we will not be
required to indemnify any director or executive officer in connection with a
proceeding initiated by such person, with certain exceptions. Delaware law, our
Bylaws, and any indemnity agreements may also permit indemnification for
liabilities arising under the Securities Act or the Exchange Act.
Item 16. Exhibits and Financial Statement Schedules.
See the Exhibit Index immediately following the Signature Page to this
Registration Statement.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions described in Item 15 above, or otherwise, the
Company has been advised that in the opinion of the SEC 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 Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering price
may be reflected in the form of prospectus filed with the Commission under
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
S-28
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by us pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered by this Registration
Statement, 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's Annual Report under Section 13(a) or 15(d) of the Exchange Act that
is incorporated by reference into this Registration Statement shall be deemed to
be a new Registration Statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
S-29
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Company certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, hereunto
duly authorized, in the City of Vernon Hills, State of Illinois, on December 2,
2003.
IMMTECH INTERNATIONAL, INC.
By: /s/ T. Stephen Thompson
-----------------------------------
T. Stephen Thompson
President, Chief Executive Officer
and Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints T. Stephen Thompson his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and the documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates stated.
Signatures Title Date
------------------------------ ------------------------------ -----------
/s/ T. Stephen Thompson President, Chief Executive December 2, 2003
--------------------------- Officer and Director
T. Stephen Thompson (Principal Executive Officer)
/s/ Gary C. Parks Chief Financial Officer,
-------------------------- Treasurer and Secretary December 2, 2003
Gary C. Parks (Principal Financial and
Accounting Officer)
/s/ Cecilia Chan Executive Vice President and December 2, 2003
-------------------------- Director
Cecilia Chan
/s/ Harvey R. Colten, M.D. Director December 2, 2003
--------------------------
Harvey R. Colten, M.D.
Director December 2, 2003
--------------------------
Judy Lau
Director December 2, 2003
--------------------------
Dr. Levi H.K. Lee
/s/ Eric L. Sorkin Director December 2, 2003
--------------------------
Eric L. Sorkin
/s/ Frederick W. Wackerle Director December 2, 2003
--------------------------
Frederick W. Wackerle
By: /s/ T. Stephen Thompson
--------------------------
T. Stephen Thompson
Attorney-In-Fact
Index to Exhibits
Exhibit Description
4.1(1) Form of Common Stock Certificate
4.2(2) Certificate of Designation, Series A Convertible Preferred Stock
4.3 (3) Certificate of Designation, Series B Convertible Preferred Stock
4.4(4) Certificate of Designation, Series C Convertible Preferred Stock
4.5(4) Form of Regulation D Subscription Agreement for June 6-9, 2003
Private Placements
4.6(4) Form of Regulation S Subscription Agreement for June 6-9, 2003
Private Placements
5.1(5) Opinion of Cadwalader, Wickersham & Taft
23.1(6) Consent of Deloitte & Touche LLP dated December 1, 2003
23.2(5) Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.1)
24.1(6) Powers of Attorney (included on Signature Page to this
Registration Statement)
(1) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on Form SB-2 (Registration Statement No. 333-64393), as filed
with the Securities and Exchange Commission on March 30, 1999.
(2) Incorporated by reference to the Company's Current Report on Form 8-K, as
filed with the Securities and Exchange Commission on February 14, 2002.
(3) Incorporated by reference to the Company's Current Report on Form 8-K, as
filed with the Securities and Exchange Commission on September 25, 2002.
(4) Incorporated by reference to the Company's Current Report on Form 8-K, as
filed with the Securities and Exchange Commission on June 10, 2003.
(5) Incorporated by reference to the Company's Registration Statement on Form
S-3 (Registration Statement No. 333-108278) as filed with the Securities
and Exchange Commission on August 27, 2003.
(6) Filed herewith.