AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 18, 2005
REGISTRATION NO. 333-112865
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ALFACELL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 325410 22-2369085
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Identification No.)
Classification Code
Number)
225 BELLEVILLE AVENUE
BLOOMFIELD, NEW JERSEY 07003
(973)748-8082
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
--------------
KUSLIMA SHOGEN
CHIEF EXECUTIVE OFFICER
ALFACELL CORPORATION
225 BELLEVILLE AVENUE, BLOOMFIELD, NEW JERSEY 07003
(973)748-8082
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------
COPIES TO:
KEVIN T. COLLINS, ESQ.
DORSEY & WHITNEY LLP
250 PARK AVENUE, NEW YORK, NEW YORK 10177
(212) 415-9200
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any 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, 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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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. |_|.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PURSUANT TO THE PROVISIONS OF RULE 429 UNDER THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT RELATES TO REGISTRATION STATEMENT NOS. 333-38136,
333-89166 AND 333-111101 FILED BY THE REGISTRANT. THE PROSPECTUS FORMING PART
OF THIS REGISTRATION STATEMENT, IN ADDITION TO SERVING AS PROSPECTUS AND
POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT NO. 333-112865, SHALL
SERVE THE PURPOSE OF A POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT
NOS. 333-38136, 333-89166 AND 333-11101 AS SPECIFIED IN RULE 429.
EXPLANATORY NOTE
On September 9, 2004 Alfacell's common stock began trading on the NASDAQ
SmallCap Market. Therefore, Alfacell is now eligible to use the Form S-3
registration statement and accordingly is amending its Registration Statement
No. 333-112865, which was originally filed and declared effective on a Form S-1
registration statement, with this Post-Effective Form S-3 registration
statement.
Alfacell has previously filed three Registration Statements, Nos.
333-38136, 333-89166 and 333-111101, in order to register shares of its Common
Stock, as well as shares of Common Stock underlying warrants held by certain
selling stockholders. Pursuant to Rule 429 under the Securities Act of 1933,
this Registration Statement also serves as a post-effective amendment to
Registration Statement Nos. 333-38136, 333-89166 and 333-111101. This
Post-Effective Registration Statement eliminates those selling stockholders who
have sold shares pursuant to such Registration Statements or pursuant to this
Registration Statement and also eliminates those selling stockholders to whom
Alfacell no longer has registration obligations. On August 16, 2004, the Company
filed post-effective amendments to Registration Statement Nos. 333-38136,
333-89166 and 333-111101 and a pre-effective amendment to Registration Statement
No. 333-112865. Of the 12,380,717 shares registered pursuant to such August 16,
2004 post-effective and pre-effective amendments, as of October 15, 2004, 86,500
shares have either been sold pursuant to the previously filed Registration
Statements or Alfacell is no longer required to register such shares.
Accordingly, this Post-Effective Amendment Registration Statement carries
forward from the four previously filed Registration Statements (i) 4,883,360
shares of Common Stock and (ii) 7,410,857 shares of Common Stock underlying
warrants, for an aggregate of 12,294,217 shares of Common Stock.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
================================================================================
SUBJECT TO COMPLETION, DATED January 18, 2005
PROSPECTUS
ALFACELL CORPORATION
12,294,217 Shares
Common Stock
---------------
Our securityholders named on page 15 of this prospectus are offering an
aggregate of 12,294,217 shares of our Common Stock.
Our Common Stock is traded on the NASDAQ SmallCap Market under the symbol
"ACEL." On January 13, 2005, the reported last sale price of our Common Stock on
the NASDAQ SmallCap Market was $3.86 per share.
INVESTING IN OUR COMMON STOCK IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is January [__], 2005
TABLE OF CONTENTS
PAGE
ALFACELL CORPORATION...........................................................1
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS.............................3
RISK FACTORS...................................................................4
USE OF PROCEEDS...............................................................13
SELLING SECURITYHOLDERS.......................................................14
PLAN OF DISTRIBUTION..........................................................20
LEGAL MATTERS.................................................................21
EXPERTS.......................................................................21
WHERE YOU CAN FIND MORE INFORMATION...........................................23
ALFACELL CORPORATION
We are a biopharmaceutical company primarily engaged in the discovery and
development of a new class of therapeutic drugs for the treatment of cancer and
other pathological conditions. Based on our proprietary Ribonuclease, or RNase,
which is a type of biological enzyme that splits RNA molecules and is the basis
of our technology platform, our drug discovery and development program consists
of novel therapeutics developed from amphibian ribonucleases. These are very
basic RNA enzymes which play important roles in nature in the development of an
organism's cells and in cell functions. RNA is an essential bio-chemical
cellular component necessary to support life. There are various types of RNA,
all of which have specific functions in a living cell. They help control several
essential biological activities, namely regulation of cell proliferation,
maturation, differentiation and cell death. Therefore, they are ideal candidates
for the development of therapeutics for cancer and other life-threatening
diseases, including HIV and autoimmune diseases, that require anti-proliferative
and apoptotic, or programmed cell death, properties. We have co-sponsored and
been a key participant in the International Ribonuclease Meetings held every
three years. This is a conference on all facets of research and development in
connection with ribonucleases that is attended by scientists from around the
world.
Alfacell Corporation was incorporated in Delaware in 1981. Our corporate
headquarters is located at 225 Belleville Avenue, Bloomfield, New Jersey 07003
and our telephone number is (973) 748-8082.
OVERVIEW
--------
ONCONASE(R), our trademark name for our flagship product, is currently in
an international, centrally randomized Phase III trial. The first part of the
trial has been completed and the second confirmatory part of the trial is
ongoing for which patient enrollment is expected to be completed in the first
calendar quarter of 2005. The primary endpoint of the trial is survival, and as
such, a sufficient number of deaths must occur in order to perform the required
statistical analyses to determine the efficacy of ONCONASE(R) in patients with
unresectable (inoperable) malignant mesothelioma. If the results of the clinical
trials are positive, we expect to file for marketing registrations (NDA and MAA)
for ONCONASE(R) within six months of completion of the statistical analyses.
However, at this time, we cannot predict with certainty when a sufficient number
of deaths will occur to achieve statistical significance. Hence, the timing of
the filing is data driven as to when we will be able to file for marketing
registrations in the US and EU. Therefore, we cannot predict with certainty what
our total cost will be associated with obtaining marketing approvals, or when
and if such approvals will be granted, and when actual sales will occur. We have
also conducted other randomized and non-randomized trials with patients with
advanced stages of solid tumors in other types of cancers.
ONCONASE(R), unlike most cancer drugs that attack all cells regardless of
their phenotype (physical characteristics), malignant versus normal, and produce
a variety of severe toxicities, is not an indiscriminate cytotoxic, or cell
killing agent, but rather, its activity is controlled through unique and
specific molecular mechanisms. ONCONASE(R) primarily affects extremely rapidly
growing malignant cells. ONCONASE(R) is a novel amphibian ribonuclease, unique
among the superfamily of pancreatic ribonuclease that has been isolated from the
eggs of the RANA PIPIENS frog, commonly called the leopard frog. We have
determined that thus far, ranpirnase, the generic name of ONCONASE(R), is the
smallest known protein belonging to the superfamily of pancreatic ribonuclease
and has been shown, on a molecular level, to re-regulate the unregulated growth
and proliferation of cancer cells.
In December 2002, we received Fast Track Designation from the FDA for
ONCONASE(R) for the treatment of malignant mesothelioma. Fast Track Designation
is an FDA program designed to expedite the review of new drugs that are intended
to treat serious or life threatening conditions and that
demonstrate the potential to address unmet medical needs. In February 2001, we
received an Orphan Medicinal Product Designation for ONCONASE(R) from the
European Agency for the Evaluation of Medicinal Products, or the EMEA. Orphan
Medicinal Product Designation is a program designed to provide marketing,
protocol and other incentives for pharmaceutical companies to develop and market
products in the European Community that address life threatening or very serious
conditions that affect not more than 5 in 10,000 persons in the European
Community. Orphan designation in Europe entitles the Company to 10 years of
marketing exclusivity, reduced filing fees and regulatory guidance from the
EMEA.
These FDA and EMEA designations for ONCONASE(R) may serve to expedite its
regulatory review, assuming the clinical trials yield a positive result. Future
clinical trials, however, may not demonstrate that ONCONASE(R) is effective.
Thus, our applications for FDA or EMEA approval to market ONCONASE(R), which are
dependent upon the success of our clinical trials, may be affected. The efficacy
and safety of ONCONASE(R) for malignant mesothelioma, will ultimately be
determined by the FDA. In the interim, our Fast Track Designation allows us to
continue to have meetings and discussions with the FDA to establish mutually
agreed upon parameters for the NDA to obtain marketing approval for ONCONASE(R),
based on the assumption that the clinical trials will continue to yield
favorable results.
Our drug discovery program forms the basis for the development of
specific recombinant RNases for chemically linking drugs and other compounds
such as monoclonal antibodies, growth factors, etc. and gene fusion products
with the goal of targeting various molecular functions. This program provides
for joint design and generation of new products with outside partners. We may
own these new products along with a partner(s), or we may grant an exclusive
license to the collaborating partner(s).
We have also discovered another series of proteins, collectively named
amphinases, that may have therapeutic uses. These proteins are bioactive in that
they have an effect on living cells and organisms and have both anti-cancer and
anti-viral activity. All of the proteins characterized to date are RNases. These
products are currently undergoing preclinical testing. We are currently in
discussions with potential pharmaceutical partners for the development of these
new compounds as conjugates and fusion proteins.
We are engaged in the research, development and clinical trials of our
products both independently and through research collaborations. Due to our lack
of commercially available products, we have financed our operations since
inception through the sale of our equity securities and convertible debentures
in registered offerings and private placements. Additionally, we have raised
capital through debt financings, the sale of our tax benefits and research
products, interest income and financing received from our Chief Executive
Officer. These funds provide us with the resources to acquire staff, facilities,
capital equipment, finance our technology, product development, manufacturing
and clinical trials. We have incurred losses since inception and to date we have
not consummated any licensing, marketing or development arrangements. Presently,
our cash balance is sufficient to fund our expanded operations at least through
October 31, 2005 based on our expected level of expenditures in relation to
activities in preparing ONCONASE(R) for an NDA filing and other ongoing
operations of the company. However, we continue to seek additional capital
financing through the sale of equity in private placements, sale of our tax
benefits and exercise of stock options and warrants but cannot be sure that we
will be able to raise capital on favorable terms or at all.
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this
prospectus contain forward-looking statements that are based on current
expectations, estimates and projections about our industry, management's
beliefs, and assumptions made by management. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," and variations
of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict; therefore, actual results may differ materially from
those expressed or forecasted in any forward-looking statements. The risks and
uncertainties include those noted in "Risk Factors" below and in the documents
incorporated by reference.
We undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise,
except to the extent that we are required to do so by law. We also may make
additional disclosures in our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K that we may file from time to time
with the Securities and Exchange Commission, or SEC. Please also note that we
provide a cautionary discussion of risks and uncertainties under the section
entitled "Risk Factors" in our Annual Report on Form 10-K. These descriptions
and statements are based on management's current expectations. Our actual
results may differ significantly from the results discussed in these
forward-looking statements as a result of certain factors, including those set
forth in the "Risk Factors" section and elsewhere in this prospectus.
3
RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK IS SPECULATIVE AND INVOLVES A HIGH
DEGREE OF RISK AND OUR BUSINESS IS SUBJECT TO A NUMBER OF RISKS, SOME OF WHICH
ARE DISCUSSED BELOW. OTHER RISKS ARE PRESENTED ELSEWHERE IN THIS PROSPECTUS AND
IN THE INFORMATION INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. BEFORE
DECIDING TO INVEST IN OUR COMPANY OR TO MAINTAIN OR INCREASE YOUR INVESTMENT,
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW, IN ADDITION TO THE
OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, OUR ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JULY 31, 2004, OUR QUARTERLY REPORT ON FORM 10-Q FOR
THE FISCAL QUARTER ENDED OCTOBER 31, 2004; AND IN OUR OTHER FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), INCLUDING ANY SUBSEQUENT REPORTS
FILED ON FORMS 10-K, 10-Q AND 8-K. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR,
OUR BUSINESS AND OPERATING RESULTS COULD BE HARMED. THIS COULD CAUSE THE TRADING
PRICE OF OUR COMMON STOCK TO DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR
INVESTMENT.
RISK RELATED TO OUR COMPANY
WE HAVE INCURRED LOSSES SINCE INCEPTION AND ANTICIPATE THAT WE WILL INCUR
CONTINUED LOSSES FOR THE FORESEEABLE FUTURE. WE DO NOT HAVE A CURRENT SOURCE OF
PRODUCT REVENUE AND MAY NEVER BE PROFITABLE.
We are a development stage company and since our inception our source of
working capital has been public and private sales of our stock. We incurred a
net loss of approximately $1,081,000 for the three months ended October 31,
2004. We have continued to incur losses since July 2004. We may never achieve
revenue sufficient for us to attain profitability.
We incurred net losses of approximately $5,070,000, $2,411,000 and
$2,591,000 for the fiscal years ended July 31, 2004, 2003 and 2002,
respectively.
Our profitability will depend on our ability to develop, obtain
regulatory approvals for, and effectively market ONCONASE(R) as well as entering
into strategic alliances for the development of new drug candidates from the
out-licensing of our proprietary RNase technology. The commercialization of our
pharmaceutical products involves a number of significant challenges. In
particular our ability to commercialize ONCONASE(R) depends on the success of
our clinical development programs, our efforts to obtain regulatory approval and
our sales and marketing efforts or those of our marketing partners, if any,
directed at physicians, patients and third-party payors. A number of factors
could affect these efforts including:
o Our ability to demonstrate clinically that our products have utility
and are safe;
o Delays or refusals by regulatory authorities in granting marketing
approvals;
o Our limited financial resources relative to our competitors;
o Our ability to obtain an appropriate marketing partner;
o The availability and level of reimbursement for our products by third
party payors;
o Incidents of adverse reactions to our products;
o Side effects or misuse of our products and unfavorable publicity that
could result; and
o The occurrence of manufacturing or distribution disruptions.
We will seek to generate revenue through licensing, marketing and
development arrangements prior to receiving revenue from the sale of our
products. To date we have not consummated any licensing or marketing
arrangements and we may not be able to successfully consummate any such
arrangements. We have entered into several development arrangements, which have
resulted in limited revenues for us. However, we cannot ensure that these
arrangements or future arrangements, if any, will result in
4
significant amounts of revenue for us. We, therefore, are unable to predict the
extent of any future losses or the time required to achieve profitability, if at
all.
WE NEED ADDITIONAL FINANCING TO CONTINUE OPERATIONS, WHICH MAY NOT BE AVAILABLE
ON ACCEPTABLE TERMS, IF IT IS AVAILABLE AT ALL.
We need additional financing in order to continue operations, including
completion of our current clinical trials and filing marketing registrations for
ONCONASE(R) in the United States with the FDA and in Europe with the EMEA. If
the results from our current clinical trial do not demonstrate the efficacy and
safety of ONCONASE(R) for malignant mesothelioma, our ability to raise
additional capital will be adversely affected. Even if regulatory applications
for marketing approvals are filed, we will need additional financing to continue
operations. In connection with the recent private placement from which we
realized $10.0 million in gross proceeds from an institutional investor, we plan
to expand our operations in preparing ONCONASE(R) for marketing registrations in
the US and outside the US as well as fund our ongoing operations. Presently, our
cash balance is sufficient to fund our expanded operations at least through
October 31, 2005, based on our expected level of expenditures. However, taking
into consideration all of the uncertainties related to drug development and our
industry, we continue to seek additional capital financing through the sale of
equity in private placements, sale of our net operating loss carryforwards and
exercise of stock options and warrants but cannot be sure that we will be able
to raise capital on favorable terms or at all.
WE MAY BE UNABLE TO SELL CERTAIN STATE TAX BENEFITS IN THE FUTURE AND IF WE ARE
UNABLE TO DO SO, IT WOULD ELIMINATE A SOURCE OF FINANCING THAT WE HAVE RELIED ON
IN THE PAST.
At July 31, 2004, we had federal net operating loss carryforwards of
approximately $47,326,000 that expire from 2005 to 2024. We also had research
and experimentation tax credit carryforwards of approximately $1,426,000 that
expire from 2005 to 2024. New Jersey has enacted legislation permitting certain
corporations located in New Jersey to sell state tax loss carryforwards and
state research and development credits, or net operating loss carryforwards, in
order to obtain tax benefits. The aggregate amount of net operating loss
carryforwards that New Jersey allows corporations to sell each state fiscal year
(July 1st through June 30th) is determined annually and if New Jersey reduces
such aggregate amount in any fiscal year we may be unable to sell some or all of
our available net operating loss carryforwards as we have in the past. In
addition, there is a limited market for these types of sales and we may not be
able to find someone to purchase our net operating loss carryforwards for a
reasonable price. Our historical results of operations have been improved by our
sale of net operating loss carryforwards and if we continue to generate a
limited amount of revenue and are unable in the future to sell our net operating
loss carryforwards, our results of operations will be negatively impacted.
For the state fiscal year 2005 (July 1, 2004 to June 30, 2005), we had
approximately $1,335,000 total available net operating loss carryforwards that
were saleable; of which New Jersey permitted us to sell approximately $339,000.
We received approximately $288,000 from the sale of the $339,000 of net
operating loss carryforwards, which we recognized as tax benefits for the
quarter ended October 31, 2005. For the state fiscal year 2004 (July 1, 2003 to
June 30, 2004), we had approximately $1,378,000 of total available net operating
loss carryforwards that were saleable; of which New Jersey permitted us to sell
approximately $261,000. In December 2003, we received approximately $222,000
from the sale of the $261,000 of net operating loss carryforwards, which we
recognized as tax benefits for the fiscal year ended July 31, 2004.
If still available under New Jersey law, we will attempt to sell the
remaining $996,000 of our net operating loss carryforwards, between July 1, 2005
and June 30, 2006. This amount, which is a carryover of our remaining net
operating loss carryforwards from state fiscal year 2005, may increase if we
incur
5
additional net losses and research and development credits during state fiscal
year 2006. We can not estimate, however, what percentage of our saleable net
operating loss carryforwards New Jersey will permit us to sell, how much money
we will receive in connection with the sale, if we will be able to find a buyer
for our net operating loss carryforwards or if such funds will be available in a
timely manner.
WE CANNOT PREDICT HOW LONG IT WILL TAKE US NOR HOW MUCH IT WILL COST US TO
COMPLETE OUR PHASE III TRIAL BECAUSE IT IS A SURVIVAL STUDY AND WE ARE STILL IN
PATIENT ENROLLMENT IN PART TWO OF THIS PHASE III TRIAL.
We currently have ongoing a two-part Phase III trial of ONCONASE(R) as a
treatment for malignant mesothelioma. The first part of the clinical trial has
been completed and the second, confirmatory part is still ongoing for which
patient enrollment is expected to be completed in the first calendar quarter of
2005. The primary endpoint of the Phase III clinical trial is survival, which
tracks the length of time patients enrolled in the study live. According to the
protocol, a sufficient number of patient deaths must occur in order to perform
the required statistical analyses to determine the efficacy of ONCONASE(R) in
patients with unresectable (inoperable) malignant mesothelioma. Since it is
impossible to predict with certainty when these terminal events in the Phase III
trial will occur, we do not have the capability of reasonably determining when a
sufficient number of deaths will occur, nor when we will be able to file for
marketing registrations with the FDA and EMEA.
In addition, clinical trials are very costly and time consuming. The
length of time required to complete a clinical trial depends on several factors
including the size of the patient population, the ability of patients to get to
the site of the clinical study, and the criteria for determining which patients
are eligible to join the study. Delays in patient enrollment, could delay
achieving a sufficient number of deaths required for statistical analyses, which
therefore may delay the marketing registrations. Although we believe we could
modify some of our expenditures to reduce our cash outlays in relation to our
clinical trials and other NDA related expenditures, we cannot quantify which or
the amount such expenditures might be modified. Hence, a delay in the commercial
sale of ONCONASE(R) would increase the time frame of our cash expenditure
outflows and may require us to seek additional financing. Such capital financing
may not be available on favorable terms or at all.
The FDA and comparable regulatory agencies in foreign countries impose
substantial pre-market approval requirements on the introduction of
pharmaceutical products. These requirements involve lengthy and detailed
pre-clinical and clinical testing and other costly and time consuming
procedures. Satisfaction of these requirements typically takes several years
depending on the type, complexity and novelty of the product. We cannot apply
for FDA or EMEA approval to market ONCONASE(R) until the clinical trials and all
other registration requirements have been met.
IF WE FAIL TO OBTAIN THE NECESSARY REGULATORY APPROVALS, WE WILL NOT BE ALLOWED
TO COMMERCIALIZE OUR DRUGS AND WILL NOT GENERATE PRODUCT REVENUE.
The FDA and comparable regulatory agencies in foreign countries impose
substantial pre-market approval requirements on the introduction of
pharmaceutical products. These requirements involve lengthy and detailed
pre-clinical and clinical testing and other costly and time consuming
procedures. Satisfaction of these requirements typically takes several years
depending on the level of complexity and novelty of the product. Drugs in late
stages of clinical development may fail to show the desired safety and efficacy
results despite having progressed through initial clinical testing. While
limited trials with our product have produced certain favorable results, we
cannot be certain that we will successfully complete Phase I, Phase II or Phase
III testing of any compound within any specific time period, if at all.
Furthermore, the FDA or the company may suspend clinical trials at any time on
various grounds, including a finding that the subjects or patients are being
exposed to an unacceptable health risk. In addition, we cannot apply for FDA or
EMEA approval to market ONCONASE(R) until pre-clinical and
6
clinical trials have been completed. Several factors could prevent the
successful completion or cause significant delays of these trials including an
inability to enroll the required number of patients or failure to demonstrate
the product is safe and effective in humans. Also if safety concerns develop,
the FDA and EMEA could stop our trials before completion.
In December 2002, we received Fast Track Designation from the Food and
Drug Administration, or the FDA for ONCONASE(R) for the treatment of malignant
mesothelioma. In February 2001, we received an Orphan Medicinal Product
Designation for ONCONASE(R) from the European Agency for the Evaluation of
Medicinal Products, or the EMEA.
All statutes and regulations governing the conduct of clinical trials are
subject to change by various regulatory agencies, including the FDA, in the
future, which could affect the cost and duration of our clinical trials. Any
unanticipated costs or delays in our clinical studies would delay our ability to
generate product revenues and to raise additional capital and could cause us to
be unable to fund the completion of the studies.
We may not market or sell any product for which we have not obtained
regulatory approval. We cannot assure that the FDA or other regulatory agencies
will ever approve the use of our products that are under development. Even if we
receive regulatory approval, such approval may involve limitations on the
indicated uses for which we may market our products. Further, even after
approval, discovery of previously unknown problems could result in additional
restrictions, including withdrawal of our products from the market.
If we fail to obtain the necessary regulatory approvals, we cannot market
or sell our products in the United States, or in other countries and our
long-term viability would be threatened. If we fail to achieve regulatory
approval or foreign marketing authorizations for ONCONASE(R) we will not have a
saleable product or product revenues for quite some time, if at all, and may not
be able to continue operations.
WE ARE AND WILL BE DEPENDENT UPON THIRD PARTIES FOR MANUFACTURING OUR PRODUCTS.
IF THESE THIRD PARTIES DO NOT DEVOTE SUFFICIENT TIME AND RESOURCES TO OUR
PRODUCTS OUR REVENUES AND PROFITS MAY BE ADVERSELY AFFECTED.
We do not have the required manufacturing facilities to manufacture our
products. We presently rely on third parties to perform certain of the
manufacturing processes for the production of ONCONASE(R) for use in clinical
trials. Currently, we contract with Scientific Protein Labs for the
manufacturing of ranpirnase (protein drug substance) from the oocytes, or the
unfertilized eggs, of the RANA PIPIENS frog, which is found in the Northwest
United States and is commonly called the leopard frog. We contract with Ben
Venue Corporation for the manufacturing of ONCONASE(R) and with Cardinal Health
for the labeling, storage and shipping of ONCONASE(R) for clinical trial use. We
utilize the services of these third party manufacturers solely on an as needed
basis with terms and prices customary for our industry.
Our use of manufacturers for ranpirnase and ONCONASE(R) have been
approved by the FDA. We have identified substantial alternative service
providers for the manufacturing services for which we contract. In order to
replace an existing service provider we must amend our IND to notify the FDA of
the new manufacturer. Although the FDA generally will not suspend or delay a
clinical trial as a result of replacing an existing manufacturer, the FDA has
the authority to suspend or delay a clinical trial if, among other grounds,
human subjects are or would be exposed to an unreasonable and significant risk
of illness or injury as a result of the replacement manufacturer.
7
We intend to rely on third parties to manufacture our products if they
are approved for sale by the appropriate regulatory agencies and are
commercialized. Third party manufacturers may not be able to meet our needs with
respect to the timing, quantity or quality of our products or to supply products
on acceptable terms.
BECAUSE WE DO NOT HAVE MARKETING, SALES OR DISTRIBUTION CAPABILITIES, WE EXPECT
TO CONTRACT WITH THIRD PARTIES FOR THESE FUNCTIONS AND WE WILL THEREFORE BE
DEPENDENT UPON SUCH THIRD PARTIES TO MARKET, SELL AND DISTRIBUTE OUR PRODUCTS IN
ORDER FOR US TO GENERATE REVENUES.
We currently have no sales, marketing or distribution capabilities. In
order to commercialize any product candidates for which we receive FDA approval,
we expect to rely on established third party strategic partners to perform these
functions. For example, if we are successful in our Phase III clinical trials
with ONCONASE(R), and are granted marketing approval for the commercialization
of ONCONASE(R), we will be unable to introduce the product to market without
establishing a marketing collaboration with a pharmaceutical company with those
resources. If we establish relationships with one or more biopharmaceutical or
other marketing companies with existing distribution systems and direct sales
forces to market any or all of our product candidates, we cannot assure you that
we will be able to enter into or maintain agreements with these companies on
acceptable terms, if at all. Further, it is likely that we will have limited or
no control over the manner in which product candidates are marketed or the
resources devoted to such markets.
In addition, we expect to begin to incur significant expenses in
determining our commercialization strategy with respect to one or more of our
product candidates. The determination of our commercialization strategy with
respect to a product candidate will depend on a number of factors, including:
o the extent to which we are successful in securing collaborative
partners to offset some or all of the funding obligations with respect
to product candidates;
o the extent to which our agreement with our collaborators permits us to
exercise marketing or promotion rights with respect to the product
candidate;
o how our product candidates compare to competitive products with
respect to labeling, pricing, therapeutic effect, and method of
delivery; and
o whether we are able to establish agreements with third party
collaborators, including large biopharmaceutical or other marketing
companies, with respect to any of our product candidates on terms that
are acceptable to us.
A number of these factors are outside of our control and will be
difficult to determine.
OUR PRODUCT CANDIDATES MAY NOT BE ACCEPTED BY THE MARKET.
Even if approved by the FDA and other regulatory authorities, our product
candidates may not achieve market acceptance, which means we would not receive
significant revenues from these products. Approval by the FDA does not
necessarily mean that the medical community will be convinced of the relative
safety, efficacy and cost-effectiveness of our products as compared to other
products. In addition, third party reimbursers such as insurance companies and
HMOs may be reluctant to reimburse expenses relating to our products.
8
WE DEPEND UPON KUSLIMA SHOGEN AND OUR OTHER KEY PERSONNEL AND MAY NOT BE ABLE TO
RETAIN THESE EMPLOYEES OR RECRUIT QUALIFIED REPLACEMENT OR ADDITIONAL PERSONNEL,
WHICH WOULD HAVE A MATERIAL ADVERSE AFFECT ON OUR BUSINESS.
We are highly dependent upon our founder, Chairman and Chief Executive
Officer, Kuslima Shogen. Kuslima Shogen's talents, efforts, personality, vision
and leadership have been, and continue to be, critical to our success. The
diminution or loss of the services of Kuslima Shogen, and any negative market or
industry perception arising from that diminution or loss, would have a material
adverse effect on our business. While our other employees have substantial
experience and have made significant contributions to our business, Kuslima
Shogen is our senior executive and also our primary supporter because she
represents the Company's primary means of accessing the capital markets.
Because of the specialized scientific nature of our business, our
continued success also is dependent upon our ability to attract and retain
qualified management and scientific personnel. There is intense competition for
qualified personnel in the pharmaceutical field. As our company grows our
inability to attract qualified management and scientific personnel could
materially adversely affect our research and development programs, the
commercialization of our products and the potential revenue from product sales.
We do not have employment contracts with Kuslima Shogen or any of our
other management and scientific personnel.
RISK RELATED TO OUR INDUSTRY
OUR PROPRIETARY TECHNOLOGY AND PATENTS MAY OFFER ONLY LIMITED PROTECTION AGAINST
INFRINGEMENT AND THE DEVELOPMENT BY OUR COMPETITORS OF COMPETITIVE PRODUCTS.
We own two patents jointly with the United States government. These
patents expire in 2016. We also own ten United States patents with expiration
dates ranging from 2006 to 2019, four European patents with expiration dates
ranging from 2009 to 2016 and one Japanese patent that expires in 2010. We also
own patent applications that are pending in the United States, Europe and Japan.
The scope of protection afforded by patents for biotechnological inventions is
uncertain, and such uncertainty applies to our patents as well. Therefore, our
patents may not give us competitive advantages or afford us adequate protection
from competing products. Furthermore, others may independently develop products
that are similar to our products, and may design around the claims of our
patents. Patent litigation and intellectual property litigation are expensive
and our resources are limited. If we were to become involved in litigation, we
might not have the funds or other resources necessary to conduct the litigation
effectively. This might prevent us from protecting our patents, from defending
against claims of infringement, or both. To date, we have not received any
threats of litigation regarding patent issues.
DEVELOPMENTS BY COMPETITORS MAY RENDER OUR PRODUCTS OBSOLETE OR NON-COMPETITIVE.
In February 2004, the Food and Drug Administration granted Eli Lilly &
Company approval to sell its Alimta(R) medication as an orphan drug to treat
patients with pleural mesothelioma. Alimta is a multi-targeted antifolate that
is based upon a different mechanism of action than ONCONASE(R). To our
knowledge, no other company is developing a product with the same mechanism of
action as ONCONASE(R). However, there may be other companies, universities,
research teams or scientists who are developing products to treat the same
medical conditions our products are intended to treat. Eli Lilly is, and some of
these other companies, universities, research teams or scientists may be more
experienced and have greater clinical, marketing and regulatory capabilities and
managerial and financial resources
9
than we do. This may enable them to develop products to treat the same medical
conditions our products are intended to treat before we are able to complete the
development of our competing product.
Our business is very competitive and involves rapid changes in the
technologies involved in developing new drugs. If others experience rapid
technological development, our products may become obsolete before we are able
to recover expenses incurred in developing our products. We will probably face
new competitors as new technologies develop. Our success depends on our ability
to remain competitive in the development of new drugs or we may not be able to
compete successfully.
WE MAY BE SUED FOR PRODUCT LIABILITY.
Our business exposes us to potential product liability that may have a
negative effect on our financial performance and our business generally. The
administration of drugs to humans, whether in clinical trials or commercially,
exposes us to potential product and professional liability risks which are
inherent in the testing, production, marketing and sale of new drugs for humans.
Product liability claims can be expensive to defend and may result in large
judgments or settlements against us, which could have a negative effect on our
financial performance and materially adversely affect our business. We maintain
product liability insurance to protect our products and product candidates in
amounts customary for companies in businesses that are similarly situated, but
our insurance coverage may not be sufficient to cover claims. Furthermore,
liability insurance coverage is becoming increasingly expensive and we cannot be
certain that we will always be able to maintain or increase our insurance
coverage at an affordable price or in sufficient amounts to protect against
potential losses. A product liability claim, product recall or other claim, as
well as any claim for uninsured liabilities or claim in excess of insured
liabilities, may significantly harm our business and results of operations. Even
if a product liability claim is not successful, adverse publicity and time and
expense of defending such a claim may significantly interfere with our business.
IF WE ARE UNABLE TO OBTAIN FAVORABLE REIMBURSEMENT FOR OUR PRODUCT CANDIDATES,
THEIR COMMERCIAL SUCCESS MAY BE SEVERELY HINDERED.
Our ability to sell our future products may depend in large part on the
extent to which reimbursement for the costs of our products is available from
government entities, private health insurers, managed care organizations and
others. Third-party payors are increasingly attempting to contain their costs.
We cannot predict actions third-party payors may take, or whether they will
limit the coverage and level of reimbursement for our products or refuse to
provide any coverage at all. Reduced or partial reimbursement coverage could
make our products less attractive to patients, suppliers and prescribing
physicians and may not be adequate for us to maintain price levels sufficient to
realize an appropriate return on our investment in our product candidates or
compete on price.
In some cases, insurers and other healthcare payment organizations try to
encourage the use of less expensive generic brands and over-the-counter, or OTC,
products through their prescription benefits coverage and reimbursement
policies. These organizations may make the generic alternative more attractive
to the patient by providing different amounts of reimbursement so that the net
cost of the generic product to the patient is less than the net cost of a
prescription brand product. Aggressive pricing policies by our generic product
competitors and the prescription benefits policies of insurers could have a
negative effect on our product revenues and profitability.
Many managed care organizations negotiate the price of medical services
and products and develop formularies for that purpose. Exclusion of a product
from a formulary can lead to its sharply reduced usage in the managed care
organization patient population. If our products are not included within an
adequate number of formularies or adequate reimbursement levels are not
provided, or if those
10
policies increasingly favor generic or OTC products, our market share and gross
margins could be negatively affected, as could our overall business and
financial condition.
The competition among pharmaceutical companies to have their products
approved for reimbursement may also result in downward pricing pressure in the
industry or in the markets where our products will compete. We may not be
successful in any efforts we take to mitigate the effect of a decline in average
selling prices for our products. Any decline in our average selling prices would
also reduce our gross margins.
In addition, managed care initiatives to control costs may influence
primary care physicians to refer fewer patients to oncologists and other
specialists. Reductions in these referrals could have a material adverse effect
on the size of our potential market and increase costs to effectively promote
our products.
We are subject to new legislation, regulatory proposals and managed care
initiatives that may increase our costs of compliance and adversely affect our
ability to market our products, obtain collaborators and raise capital.
There have been a number of legislative and regulatory proposals aimed at
changing the healthcare system and pharmaceutical industry, including reductions
in the cost of prescription products and changes in the levels at which
consumers and healthcare providers are reimbursed for purchases of
pharmaceutical products. For example, the Prescription Drug and Medicare
Improvement Act of 2003 which was recently enacted. This legislation provides a
new Medicare prescription drug benefit beginning in 2006 and mandates other
reforms. Although we cannot predict the full effects on our business of the
implementation of this new legislation, it is possible that the new benefit,
which will be managed by private health insurers, pharmacy benefit managers and
other managed care organizations, will result in decreased reimbursement for
prescription drugs, which may further exacerbate industry-wide pressure to
reduce the prices charged for prescription drugs. This could harm our ability to
market our products and generate revenues. It is also possible that other
proposals will be adopted. As a result of the new Medicare prescription drug
benefit or any other proposals, we may determine to change our current manner of
operation, provide additional benefits or change our contract arrangements, any
of which could harm our ability to operate our business efficiently, obtain
collaborators and raise capital.
RISK RELATED TO THIS OFFERING
WE HAVE ONLY RECENTLY BEEN RELISTED ON THE NASDAQ SMALLCAP MARKET AND OUR STOCK
IS THINLY TRADED AND YOU MAY NOT BE ABLE TO SELL OUR STOCK WHEN YOU WANT TO DO
SO.
From April 1999, when we were delisted from Nasdaq, until September 9,
2004, when we were relisted on the Nasdaq SmallCap Market, there was no
established trading market for our common stock. During that time, our common
stock was quoted on the OTC Bulletin Board and was thinly traded. There is no
assurance that we will be able to comply with all of the listing requirements
necessary to maintain relisted on the Nasdaq SmallCap Market. In addition, our
stock remains thinly traded and you may be unable to sell our common stock
during times when the trading market is limited.
THE PRICE OF OUR COMMON STOCK HAS BEEN, AND MAY CONTINUE TO BE, VOLATILE.
The market price of our common stock, like that of the securities of many
other development stage biotechnology companies, has fluctuated over a wide
range and it is likely that the price of our common stock will fluctuate in the
future. Over the past three years, the sale price for our common stock,
11
as reported by Nasdaq and the OTC Bulletin Board has fluctuated from a low of
$0.18 to a high of $10.07. The market price of our common stock could be
impacted by a variety of factors, including:
o announcements of technological innovations or new commercial products
by us or our competitors,
o disclosure of the results of pre-clinical testing and clinical trials
by us or our competitors,
o disclosure of the results of regulatory proceedings,
o changes in government regulation,
o developments in the patents or other proprietary rights owned or
licensed by us or our competitors,
o public concern as to the safety and efficacy of products developed by
us or others,
o litigation, and
o general market conditions in our industry.
In addition, the stock market continues to experience extreme price and
volume fluctuations. These fluctuations have especially affected the market
price of many biotechnology companies. Such fluctuations have often been
unrelated to the operating performance of these companies. Nonetheless, these
broad market fluctuations may negatively affect the market price of our common
stock.
EVENTS WITH RESPECT TO OUR SHARE CAPITAL COULD CAUSE THE PRICE OF OUR COMMON
STOCK TO DECLINE.
Sales of substantial amounts of our common stock in the open market, or
the availability of such shares for sale, could adversely affect the price of
our common stock. We had 34,994,514 shares of common stock outstanding as of
October 31, 2004. The following securities that may be exercised for, or are
convertible into, shares of our common stock were issued and outstanding as of
October 31, 2004:
o Options. Stock options to purchase 3,331,245 shares of our common
stock at a weighted average exercise price of approximately $3.56 per
share.
o Warrants. Warrants to purchase 11,564,853 shares of our common stock
at a weighted average exercise price of approximately $2.52 per share.
o Convertible Notes. Notes which will convert into 1,424,822 shares of
our common stock at an average conversion price of $0.25 per share and
warrants which are convertible into 1,624,822 shares of our common
stock at an exercise price of $1.00 per share.
The shares of our common stock that may be issued under the options,
warrants and upon conversion of the notes are currently registered with the SEC
or are eligible for sale without any volume limitations pursuant to Rule 144(k)
under the Securities Act.
OUR INCORPORATION DOCUMENTS MAY DELAY OR PREVENT (I) THE REMOVAL OF OUR CURRENT
MANAGEMENT OR (II) A CHANGE OF CONTROL THAT A STOCKHOLDER MAY CONSIDER
FAVORABLE.
We are currently authorized to issue 1,000,000 shares of preferred stock.
Our Board of Directors is authorized, without any approval of the stockholders,
to issue the preferred stock and determine the terms of the preferred stock.
This provision allows the board of directors to affect the rights of
stockholders, since the board of directors can make it more difficult for common
stockholders to replace members of the board. Because the board of directors is
responsible for appointing the members of our management, these provisions could
in turn affect any attempt to replace current management by the common
stockholders. Furthermore, the existence of authorized shares of preferred stock
might have the effect of discouraging any attempt by a person, through the
acquisition of a substantial number of shares of common stock, to acquire
control of our company. Accordingly, the accomplishment of a tender offer
12
may be more difficult. This may be beneficial to management in a hostile tender
offer, but have an adverse impact on stockholders who may want to participate in
the tender offer or inhibit a stockholder's ability to receive an acquisition
premium for his or her shares.
THE ABILITY OF OUR STOCKHOLDERS TO RECOVER AGAINST ARMUS HARRISON & CO., OR AHC,
MAY BE LIMITED BECAUSE WE HAVE NOT BEEN ABLE TO OBTAIN THE REISSUED REPORTS OF
AHC WITH RESPECT TO THE FINANCIAL STATEMENTS INCLUDED IN THIS PROSPECTUS FOR THE
FISCAL YEAR ENDED JULY 31, 2004, NOR HAVE WE BEEN ABLE TO OBTAIN AHC'S CONSENT
TO THE USE OF SUCH REPORT THEREIN.
Section 11 of the Securities Exchange Act of 1934 (the "Exchange Act")
provides that any person acquiring or selling a security in reliance upon
statements set forth in a registration statement may assert a claim against
every accountant who has with its consent been named as having prepared or
certified any part of the registration statement, or as having prepared or
certified any report or valuation that is used in connection with the
registration statement, if that part of the registration statement at the time
it is filed contains a false or misleading statement of a material fact, or
omits a material fact required to be stated therein or necessary to make the
statements therein not misleading (unless it is proved that at the time of such
acquisition such acquiring person knew of such untruth or omission).
In June 1996, AHC dissolved and ceased all operations. Therefore, we have
not been able to obtain the reissued reports of AHC with respect to the
financial statements included in this registration statement of which this
prospectus is a part nor have we been able to obtain AHC's consent to the use of
such report herein. As a result, in the event any persons seek to assert a claim
against AHC under Section 11 of the Exchange Act for any untrue statement of a
material fact contained in these financial statements or any omissions to state
a material fact required to be stated therein, such persons will be barred.
Accordingly, you may be unable to assert a claim against AHC under Section 11 of
the Exchange Act for any purchases of the Company's Common Stock made in
reliance upon statements set forth in the Form 10-K for the fiscal year ended
July 31, 2004. In addition, the ability of AHC to satisfy any claims properly
brought against it may be limited as a practical matter due to AHC's dissolution
in 1996.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our Common Stock in
this offering. Some of the shares of Common Stock to be sold in this offering
have not yet been issued and will only be issued upon the exercise of warrants.
We will receive estimated net proceeds of approximately $25,173,314 if all such
warrants are exercised. However, the warrants may not be exercised, in which
event we would not receive any proceeds. We intend to use any proceeds received
from the exercise of the warrants for general corporate purposes, including the
funding of research and development activities. We expect to incur expenses of
approximately $40,000 in connection with this offering.
13
SELLING SECURITYHOLDERS
Alfacell has previously filed three Registration Statements, Nos.
333-38136, 333-89166 and 333-111101, in order to register shares of its Common
Stock, as well as shares of Common Stock underlying warrants held by certain
selling stockholders. Pursuant to Rule 429 under the Securities Act of 1933, in
addition to serving as a post-effective amendment to Registration Statement No.
333-112865, this Registration Statement also serves as a post-effective
amendment to Registration Statement Nos. 333-38136, 333-89166 and 333-111101.
This Registration Statement eliminates those selling stockholders who have
previously sold shares pursuant to such Registration Statements and also
eliminates those selling stockholders to whom Alfacell no longer has
registration obligations. On August 16, 2004, the Company filed post-effective
amendments to Registration Statement Nos. 333-38136, 333-89166 and 333-111101
and a pre-effective amendment to Registration Statement No. 333-112865. Of the
12,380,717 shares registered pursuant to such August 16, 2004 post-effective and
pre-effective amendments, as of October 15, 2004, 86,500 shares have either been
sold pursuant to the previously filed Registration Statements or Alfacell is no
longer required to register such shares. Accordingly, this Post-Effective
Amendment Registration Statement carries forward from the four previously filed
Registration Statements (i) 4,883,360 shares of Common Stock and (ii) 7,410,857
shares of Common Stock underlying warrants, for an aggregate of 12,294,217
shares of Common Stock. Alfacell issued such shares in various private
placements from February 2000 through May 2004.
We are required to maintain the effectiveness of this registration
statement for a period of two years from the date this registration statement is
declared effective or such earlier date when all of the shares registered
hereunder have been sold or may be sold without volume limitations pursuant to
Rule 144(k) of the Securities Act of 1933, as amended.
STOCK OWNERSHIP
The table below sets forth the number of shares of Common Stock,
including those shares of Common Stock carried forward and offered by the
selling stockholders pursuant to Registration Statement Nos. 333-38136,
333-89166 and 333-111101, that are:
o owned beneficially by each of the selling stockholders;
o offered by each selling stockholder pursuant to this prospectus;
o to be owned beneficially by each selling stockholder after completion
of the offering, assuming that all of the warrants and options held by
the selling stockholders are exercised and all of the shares offered
in this prospectus are sold and that none of the other shares held by
the selling stockholders, if any, are sold; and
o the percentage to be owned by each selling stockholder after
completion of the offering, assuming that all of the warrants and
options held by the selling stockholders are exercised and all of the
shares offered in this prospectus are sold and that none of the other
shares held by the selling stockholders, if any, are sold.
For purposes of this table each selling stockholder is deemed to
beneficially own:
o the shares of Common Stock underlying all warrants and options owned
by the selling stockholders as of October 15, 2004 or which were
exercisable within 60 days after October 15, 2004, unless otherwise
indicated; and
o the issued and outstanding shares of Common Stock owned by the selling
stockholder as of October 15, 2004, unless otherwise indicated.
14
Because the selling stockholders may offer all or some portion of the
above-referenced securities under this prospectus or otherwise, no estimate can
be given as to the amount or percentage that will be held by the selling
stockholders upon termination of any sale. In addition, the selling stockholders
identified above may have sold, transferred or otherwise disposed of all or a
portion of such securities since the date on which information in this table is
provided, in transactions exempt from the registration requirements of the
Securities Act. Information about the selling stockholders may change from time
to time. Any changed information will be set forth in prospectus supplements, if
required.
Except as otherwise noted, none of such persons or entities has had any
material relationship with us during the past three years.
In connection with the registration of the shares of Common Stock offered
in this prospectus, we will supply prospectuses to the selling stockholders.
TOTAL SHARES
BEING
OFFERED SHARES OWNED
SHARES OWNED PURSUANT TO UPON % OF SHARES
PRIOR TO THIS COMPLETION OF OWNED AFTER
NAME(1) OFFERING(2) PROSPECTUS OFFERING OFFERING(3)
-------------------------------------- ------------ ----------- ------------- -----------
Anthony, Karen(4) 208,880 100,000 108,880 *
Bachrodt, Patrick M.(5) 100,000 100,000 0 *
Basso Holdings, Ltd.(6) 227,273 227,273 0 *
Beto, David(7) 32,500 32,500 0 *
Bowen Gas Corporation(8) 92,000 92,000 0 *
Brown, Dennis(9) 163,800 100,000 63,800 *
Caasi, Krista J.(10) 5,000 5,000 0 *
Caasi, Santiago(11) 219,328 16,664 202,664 *
Conklin, Donald(12) 460,500 110,000 350,500 1.00%
Danson, III Edward B. Family Trust(13) 120,000 50,000 70,000 *
DePeyster, Ashton(14) 155,553 61,110 94,443 *
DePeyster, Margo(15) 55,554 27,777 27,777 *
Dimzon, Delmer(16) 44,440 22,220 22,220 *
DKR Soundshore Strategic Holding Fund, Ltd(17) 227,273 227,273 0 *
DZS Computer Solutions, Inc. 197,056 50,000 147,056 *
Europa International, Inc.(18) 1,777,300 1,185,000 592,300 1.66%
Falkner, R. Jerry 52,342 52,342 0 *
Furno, Robert C. and Mary E. Furno(19) 26,000 25,000 1,000 *
Furst, Thomas(20) 100,000 80,000 20,000 *
Garg, Mukul(21) 180,012 55,556 124,456 *
Goodwin, Todd(22) 74,999 33,333 41,666 *
Gostine, Mark 90,000 90,000 0 *
Hamblett, Michael(23) 17,819 13,819 4,000 *
Jacobson Living Trust(24) 287,000 175,000 112,000 *
Kalista JTWROS, Clifford and Phyllis(25) 82,308 51,308 31,000 *
15
TOTAL SHARES
BEING
OFFERED SHARES OWNED
SHARES OWNED PURSUANT TO UPON % OF SHARES
PRIOR TO THIS COMPLETION OF OWNED AFTER
NAME(1) OFFERING(2) PROSPECTUS OFFERING OFFERING(3)
-------------------------------------- ------------ ----------- ------------- -----------
Keating, A.J. Jr., M.D. 70,000 40,000 30,000 *
Knoll Capital Fund II(26) 1,621,880 1,185,000 436,880 *
Krogh, Jeffrey A.(27) 275,000 200,000 75,000 *
Krogh, Sally J.(28) 340,000 340,000 0 *
McCash Family Limited Partnership.(29) 7,671,331 1,506,570 6,164,761 15.36%
McCash, Donna M. Irrevocable Trust(30) 1,258,538 177,222 1,081,316 3.03%
McCash, James O.(31) 2,678,032 120,000 2,558,032 7.19%
Muniz, Charles(32) 1,395,714 642,857 752,857 2.11%
Muniz, Melba(33) 1,032,714 392,857 639,857 1.81%
Neill, Carol(34) 154,200 120,000 34,200 *
Neill, Doug(35) 127,000 50,000 77,000 *
Number One Corporation 53,876 53,876 0 *
Patton, Eve M.(36) 656,667 266,667 390,000 1.11%
Pawl, Lawrence E. 100,000 100,000 0 *
Pisani, B. Michael(37) 60,000 30,000 30,000 *
Plikerd, William D.(38) 100,000 100,000 0 *
Provenzano, Matthew J. 60,000 60,000 0 *
Samet, Roger(39) 420,000 50,000 370,000 1.06%
Schiro, Anthony(40) 100,000 50,000 50,000 *
SF Capital Partners, Ltd.(41) 2,095,354 3,125,574 11,638 *
Shogen, Kuslima(42) 1,181,445 110,000 1,071,445 3.00%
Sitao, Janine(43) 156,660 33,330 123,330 *
Steger Family Foundation(44) 55,556 55,556 0 *
Stadler, Martin 180,000 110,000 70,000 *
Theresa M. Provenzano Revocable Living 40,000 40,000 0 *
Trust U/A
Tweiten, Vicki K.(45) 40,000 40,000 0 *
VFT Special Ventures Ltd.(46) 60,533 60,533 0 *
Williams, Ira(47) 119,000 100,000 19,000 *
Wood, Scott 54,000 54,000 0 *
Zaumseil, Dean R.(48) 97,000 97,000 0 *
TOTAL 27,251,437 12,294,217 15,999,078
* Represents less than one percent of Alfacell's outstanding Common Stock.
(1) The last name of the individual selling stockholder is listed first.
(2) Amounts represented include shares of Common Stock and shares of Common
Stock underlying warrants that were registered pursuant to Registration
Statements Nos. 333-38136, 333-89166 and 333-111101. Such shares are
being offered pursuant to this combined prospectus, which serves as a
post-effective amendment to such previously filed Registration
Statements.
16
(3) The percentage of stock outstanding for each stockholder after the
offering is calculated by dividing (i) (A) the number of shares of Common
Stock deemed to be beneficially held by such stockholder as of October
15, 2004, minus (B) the number of shares being offered in this offering
by such stockholder (including shares underlying options and warrants) by
(i) the sum of (A) the number of shares of Common Stock outstanding as of
October 15, 2004 plus (B) the number of shares of Common Stock issuable
upon the exercise of options and warrants held by such stockholder which
were exercisable as October 15, 2004 or which will be exercisable within
60 days after October 15, 2004 (including shares underlying options and
warrants being offered in this offering).
(4) Beneficial ownership includes an aggregate of 100,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(5) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(6) Beneficial ownership includes an aggregate of 113,637 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(7) Beneficial ownership includes an aggregate of 20,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(8) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(9) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(10) Beneficial ownership includes an aggregate of 5,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(11) Beneficial ownership includes an aggregate of 200,664 shares of Common
Stock underlying warrants and options, of which 16,664 shares are being
offered pursuant to this Registration Statement. Mr. Caasi is also the
beneficial owner of an additional 5,000 shares of Common Stock underlying
warrants which are held in the name of his minor daughter, Krista J.
Caasi.
(12) Mr. Conklin is a member of the Board of Directors of the Company.
Beneficial ownership includes an aggregate of 185,000 shares of Common
Stock underlying warrants and options, of which 110,000 shares are being
offered pursuant to this Registration Statement.
(13) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(14) Beneficial ownership includes an aggregate of 61,110 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement. Mr. DePeyster is also the beneficial owner
of an additional 27,777 shares of Common Stock, and 27,777 shares of
Common Stock underlying warrants which are held in the name of his wife,
Margo DePeyster. Mr. DePeyster disclaims beneficial ownership of the
shares held in the name of his wife.
(15) Beneficial ownership includes an aggregate of 27,777 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement. Mrs. DePeyster is also the beneficial owner
of an additional 94,443 shares of Common Stock, and 61,110 shares of
Common Stock underlying warrants which are held in the name of her
husband, Ashton DePeyster. Mrs. DePeyster disclaims beneficial ownership
of the shares held in the name of her husband.
(16) Beneficial ownership includes an aggregate of 22,220 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(17) Beneficial ownership includes an aggregate of 113,637 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(18) Beneficial ownership includes an aggregate of 592,500 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(19) Beneficial ownership includes an aggregate of 25,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(20) Beneficial ownership includes an aggregate of 40,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
17
(21) Beneficial ownership includes an aggregate of 55,556 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(22) Beneficial ownership includes an aggregate of 33,333 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(23) Beneficial ownership includes an aggregate of 13,819 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(24) Beneficial ownership includes an aggregate of 125,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(25) Clifford and Phyllis Kalista of Clifford and Phyllis Kalista JTWROS, are
employees of a broker-dealer and purchased all shares covered by this
prospectus in the ordinary course of business and, at the time of the
purchase of the shares to be resold, had no agreements or understandings,
directly or indirectly, with any person to distribute such shares.
Beneficial ownership includes an aggregate of 25,654 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(26) Beneficial ownership includes an aggregate of 592,500 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(27) Beneficial ownership includes an aggregate of 150,000 shares of Common
Stock underlying warrants and options, of which 100,000 shares are being
offered pursuant to this Registration Statement. Mr. Krogh is also the
beneficial owner of an additional 140,000 shares of Common Stock, and
200,000 shares of Common Stock underlying warrants which are held in the
name of his wife, Sally Krogh.
(28) Beneficial ownership includes an aggregate of 200,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement. Mrs. Krogh is also the beneficial owner of
an additional 125,000 shares of Common Stock and 150,000 shares of Common
Stock underlying warrants and options, which are held in the name of her
husband, Jeffrey Krogh.
(29) Beneficial ownership includes an aggregate of 5,149,769 shares of Common
Stock underlying warrants, of which 1,506,570 shares are being offered
pursuant to this Registration Statement.
(30) Beneficial ownership includes an aggregate of 688,019 shares of Common
Stock underlying warrants, of which 177,222 shares are being offered
pursuant to this Registration Statement. Mrs. McCash is also the
beneficial owner of an additional 2,108,170 shares of Common Stock, and
569,862 shares of Common Stock underlying warrants which are held in the
name of her husband, James McCash. Mrs. McCash disclaims beneficial
ownership of the shares held in the name of her husband.
(31) Beneficial ownership includes an aggregate of 569,862 shares of Common
Stock underlying warrants, of which 120,000 shares are being offered
pursuant to this Registration Statement. Mr. McCash is also the
beneficial owner of an additional 570,519 shares of Common Stock, and
688,019 shares of Common Stock underlying warrants which are held in the
name of his wife, Donna McCash Irrevocable Trust. Mr. McCash disclaims
beneficial ownership of the shares held in the name of his wife.
(32) Beneficial ownership includes an aggregate of 642,857 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement. Mr. Muniz is also the beneficial owner of an
additional 639,857 shares of Common Stock, and 392,857 shares of Common
Stock underlying warrants which are held in the name of his wife, Melba
Muniz. Mr. Muniz disclaims beneficial ownership of the shares held in the
name of his wife.
(33) Beneficial ownership includes an aggregate of 392,857 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement. Mrs. Muniz is also the beneficial owner of
an additional 752,857 shares of Common Stock, and 642,857 shares of
Common Stock underlying warrants which are held in the name of her
husband, Charles Muniz. Mrs. Muniz disclaims beneficial ownership of the
shares held in the name of her husband.
(34) Beneficial ownership includes an aggregate of 60,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement. Mrs. Neill is also the beneficial owner of
an additional 77,000 shares of Common Stock, and 50,000 shares of Common
Stock underlying warrants which are held in the name of her husband, Doug
Neill.
(35) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement. Mr. Neill is also the beneficial owner of an
18
additional 94,200 shares of Common Stock, and 60,000 shares of Common
Stock underlying warrants which are held in the name of his wife, Carol
Neill.
(36) Beneficial ownership includes an aggregate of 266,667 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(37) Beneficial ownership includes an aggregate of 30,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(38) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(39) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(40) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(41) SF Capital Partners Ltd., an affiliate of a broker-dealer, purchased all
shares covered by this prospectus in the ordinary course of business and,
at the time of the purchase of the shares to be resold, had no agreements
or understandings, directly or indirectly, with any person to distribute
such shares.
Michael A. Roth and Brian J. Stark are the founding members and direct
the management of Staro Asset Management, L.L.C., a Wisconsin limited
liability company ("Staro"). Staro acts as investment manager and has
sole power to direct the management of SF Capital Partners, Ltd., a
British Virgin Islands company ("SF Capital"), which directly holds all
of the shares of Common Stock. Through Staro, Messrs. Roth and Stark
possess sole voting and dispositive power over all of the foregoing
shares. Ownership prior to the offering excludes an aggregate of (i)
852,273 shares of Common Stock underlying warrants issued to SF Capital
on September 3, 2003 and (ii) 189,585 shares of Common Stock underlying
warrants issued to SF Capital on January 29, 2004, because the terms of
such warrants preclude SF Capital from exercising the warrants if prior
to or after such exercise, SF Capital or any of its affiliates
beneficially own or will own in excess of 4.99% of the outstanding shares
of Common Stock of the Company. The 852,273 shares of Common Stock
underlying the September warrants were previously registered pursuant to
Registration Statement No. 333-111101 and the 189,585 shares of Common
Stock underlying the Additional Warrants are being registered pursuant to
this Registration Statement.
(42) Ms. Shogen is Chairman of the Board and Chief Executive Officer of the
Company. Beneficial ownership includes an aggregate of 755,445 shares of
Common Stock underlying warrants and options, of which 110,000 shares are
being offered pursuant to this Registration Statement.
(43) Beneficial ownership includes an aggregate of 108,330 shares of Common
Stock underlying warrants and options, of which 33,330 shares are being
offered pursuant to this Registration Statement.
(44) Beneficial ownership includes an aggregate of 55,556 shares of Common
Stock underlying warrants all of which are being offered pursuant to this
Registration Statement.
(45) Beneficial ownership includes an aggregate of 20,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(46) VFT Special Ventures Ltd., an affiliate of a broker-dealer, purchased all
shares covered by this prospectus in the ordinary course of business and,
at the time of the purchase of the shares to be resold, had no agreements
or understandings, directly or indirectly, with any person to distribute
such shares.
Beneficial ownership includes an aggregate of 60,533 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(47) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
(48) Beneficial ownership includes an aggregate of 50,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to
this Registration Statement.
19
PLAN OF DISTRIBUTION
We are registering for resale by the selling stockholders and certain
transferees a total of 12,294,217 shares of Common Stock, of which 4,883,360 are
issued and outstanding and up to 7,410,857 are issuable upon exercise of
warrants.
The Selling Stockholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the Shares or Warrant Shares owned by them and, if
they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell shares of Common Stock from time to time
under this prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
Upon the Company being notified in writing by a Selling Stockholder that
any material arrangement has been entered into with a broker-dealer for the sale
of Common Stock through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, a supplement to
this prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction. In addition,
upon the Company being notified in writing by a Selling Stockholder that a donee
or pledge intends to sell more
20
than 500 shares of Common Stock, a supplement to this prospectus will be filed
if then required in accordance with applicable securities law.
The Selling Stockholders also may transfer the shares of Common Stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholders has
represented and warranted to the Company that it does not have any agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock.
The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
The validity of the shares to be offered by this prospectus will be
passed upon for us by Dorsey & Whitney, LLP, New York, New York.
EXPERTS
Our financial statements as of and for the years ended July 31, 2004 and
2003 and for the period from August 24, 1981 (the date of inception) to July 31,
2004, incorporated in this registration statement by reference from the Alfacell
Corporation Annual Report on Form 10-K for the year ended July 31, 2004 have
been audited by J.H. Cohn LLP, independent registered public accounting firm, 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. The report of J.H. Cohn LLP
with respect to our financial statements from inception to July 31, 2004 is
based on the reports of Armus Harrison & Co. and KPMG LLP, for the period from
inception to July 31, 2002. As discussed in the Alfacell Corporation Annual
Report on Form 10-K for the year ended July 31, 2004, Armus Harrison & Co.
ceased performing accounting and auditing services for the Company in 1993 and
subsequently dissolved and ceased all operations.
The financial statements for the year ended July 31, 2002, and the period
from August 24, 1981 (the date of inception) to July 31, 2002, have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing. The report of KPMG LLP with respect to our financial
statements from inception to July 31, 2002 is based on the report of Armus
Harrison & Co., incorporated by reference herein, for the period from inception
to July 31, 1992. As discussed in the Alfacell Corporation Annual Report on Form
10-K for the year ended July 31, 2004, incorporated by reference herein, Armus
Harrison & Co. ceased performing accounting and auditing services for the
Company in 1993 and subsequently dissolved and ceased all operations.
The report of KPMG LLP covering the July 31, 2002 financial statements
contains an explanatory paragraph that states that our recurring losses from
operations, working capital deficit and
21
limited liquid resources raise substantial doubt about our ability to continue
as a going concern. The financial statements do not include any adjustments that
might result from the outcome of that uncertainty.
Alfacell Corporation has agreed to indemnify and hold KPMG LLP (KPMG)
harmless against and from any and all legal costs and expenses incurred by KPMG
in successful defense of any legal action or proceeding that arises as a result
of KPMG's consent to the incorporation by reference of its audit report on the
Company's financial statements incorporated by reference in this registration
statement.
22
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the SEC to
register the sale of the shares of Common Stock offered by the selling
shareholders under the Securities Act. This prospectus, which is a part of the
registration statement, does not contain all of the information that is in the
registration statement. Statements made in this prospectus as to the content of
any contract, agreement or other document are not necessarily complete. Some
contracts, agreements, or other documents are filed as exhibits to the
registration statement or to a document incorporated by reference in this
prospectus. In those cases, investors should refer to such exhibits for more
complete descriptions.
We file annual, quarterly and special reports, proxy and information
statements and other information with the SEC. The public may read and copy, at
prescribed rates, any materials we file with the SEC, including the registration
statement and its exhibits and any documents incorporated by reference into this
prospectus, at the SEC's offices at: Public Reference Room, 450 Fifth Street,
N.W., Washington, D.C. 20549. For information on how to obtain such documents
from the SEC, investors may telephone the SEC's Public Reference Room at
1-800-SEC-0330. The SEC Internet site at http://www.sec.gov contains materials
that we file with the SEC in electronic version through the SEC's Electronic
Data Gathering, Analysis and Retrieval (EDGAR) system.
We are allowed by the SEC to "incorporate by reference" information filed
with the SEC, which means that we can disclose important information to people
by referring them to other documents that we file with the SEC. The information
incorporated by reference is considered to be part of this prospectus. We have
filed the following documents with the SEC pursuant to the Exchange Act and are
incorporating them by reference into this prospectus:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
July 31, 2004;
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended
October 31, 2004;
(c) the Company's Current Reports on Form 8-K filed on September 9,
2004 and November 26, 2004; and
(d) the description of Capital Stock contained in our Registration
Statement on Form S-1 filed with the SEC (No. 333-112865).
We also incorporate all documents we subsequently file with the SEC
pursuant to Section 13(a), 13(c), 14, or 15(d) of the Exchange Act after the
date of this prospectus and prior to the termination of this offering. The
information in these documents will update and supersede the information in this
prospectus.
You can request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Alfacell Corporation
225 Belleville Avenue
Bloomfield, New Jersey 07003
(973)748-8082
23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an itemized estimate of fees and expenses
payable by the Registrant in connection with the offering of the securities
described in this registration statement:
SEC registration fee $ 5,000
Blue Sky $ 2,000
Legal fees and expenses $15,000
Accounting fees and expenses $15,000
Printing expenses $ 1,000
Miscellaneous $ 2,000
-------
Total $40,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the General Corporation Law of Delaware a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation), by reason of the fact that he or she is or was our
director, officer, employee or agent, or is or was serving at our request
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to our best interests, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful.
In addition, the Delaware GCL also provides that we also may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in our right to procure a
judgment in our favor by reason of the fact that he or she is or was our
director, officer, employee or agent, or is or was serving at our request as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to our best
interests. However, in such an action by or on our behalf, no indemnification
may be made in respect of any claim, issue or matter as to which the person is
adjudged liable to us unless and only to the extent that the court determines
that, despite the adjudication of liability but in view of all the
circumstances, the person is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper.
Our certificate of incorporation is consistent with the Delaware GCL and
our by-laws provide that each of our directors, officers, employees and agents
shall be indemnified to the extent permitted by the Delaware GCL.
We have entered into indemnification agreements with each of our
directors. The indemnity agreements are consistent with our by-laws and our
policy to indemnify directors to the fullest extent permitted by law. The
indemnity agreements provide for indemnification of directors for liabilities
arising out of claims against such persons acting as our directors (or any
entity controlling, controlled by or under common control with us) due to any
actual or alleged breach of duty, neglect, error, misstatement,
II-1
misleading statement, omission or other act done, or suffered or wrongfully
attempted by such directors, except as prohibited by law. The indemnity
agreements also provide for the advancement of costs and expenses, including
attorneys' fees, reasonably incurred by directors in defending or investigating
any action, suit, proceeding or claim, subject to an undertaking by such
directors to repay such amounts if it is ultimately determined that such
directors are not entitled to indemnification. The indemnity agreements cover
future acts and omissions of directors for which actions may be brought.
The indemnity agreements also provide that directors, officers, employees
and agents are entitled to indemnification against all expenses (including
attorneys' fees) reasonably incurred in seeking to collect an indemnity claim or
to obtain advancement of expenses from us. The rights of directors under the
indemnity agreements are not exclusive of any other rights directors may have
under Delaware GCL, any liability insurance policies that may be obtained, our
by-laws or otherwise. We would not be required to indemnify a director for any
claim based upon the director gaining in fact a personal profit or advantage to
which such director was not legally entitled, any claim for an accounting of
profits made in connection with a violation of Section 16(b) of the Securities
Exchange Act of 1934 or a similar state or common law provision or any claim
brought about or contributed to by the dishonesty of the director.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered we will, unless in the opinion of our 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.
ITEM 16. EXHIBITS
Filed
Herewith
or
Exhibit Incorporation
No. Item Title by Reference
------- ---------- -------------
3.1 Certificate of Incorporation, dated June 12, 1981
(incorporated by reference to Exhibit 3.1 to Registrant's
Registration Statement on Form S-1, File No. 333-112865,
filed on February 17, 2004) *
3.2 Amendment to Certificate of Incorporation, dated February
18, 1994 (incorporated by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form S-1, File No.
333-112865, filed on February 17, 2004) *
3.3 Amendment to Certificate of Incorporation, dated December
26, 1997 (incorporated by reference to Exhibit 3.3 to
Registrant's Registration Statement on Form S-1, File No.
333-112865, filed on February 17, 2004) *
3.4 Amendment to Certificate of Incorporation, dated January
14, 2004 (incorporated by reference to Exhibit 3.4 to
Registrant's Registration Statement on Form S-1, File No.
333-112865, filed on February 17, 2004) *
3.5 Certificate of Designation for Series A Preferred Stock,
dated September 2, 2003 (incorporated by reference to
Exhibit 3.5 to Registrant's Registration Statement on Form
S-1, File No. 333-112865, filed on February 17, 2004) *
II-2
Filed
Herewith
or
Exhibit Incorporation
No. Item Title by Reference
------- ---------- -------------
4.1 Securities Purchase Agreement and Warrant Agreement used in
September 2003 private placement and Form of Warrant
Certificate issued on January 16, 2004 and January 29, 2004
to SF Capital Partners Ltd. (incorporated by reference to
Exhibit 10.25 to Registrant's Annual Report on Form 10-K,
filed on October 29, 2003) *
4.2 Registration Rights Agreement used in September 2003
private placement with SF Capital Partners Ltd.
(incorporated by reference to Exhibit 10.26 to Registrant's
Annual Report on Form 10-K, filed on October 29, 2003) *
4.3 Form of Securities Purchase Agreement used in May 2004
private placement with Knoll Capital Fund II, Europa
International, Inc. and Clifford and Phyllis Kalista JTWROS
(incorporated by reference to Exhibit 4.3 to Registration
Statement on Form S-1, File No. 333-112865, filed on May
18, 2004) *
4.4 Form of Registration Rights Agreement used in May 2004
private placement with Knoll Capital Fund II, Europa
International, Inc. and Clifford and Phyllis Kalista
JTWROS (incorporated by reference to Exhibit 4.4 to
Registration Statement on Form S-1, File No.
333-112865, filed on May 18, 2004) *
4.5 Form of Warrant Certificate issued on May 11, 2004 to Knoll
Capital Fund II, Europa International, Inc. and Clifford
and Phyllis Kalista JTWROS (incorporated by reference to
Exhibit 4.5 to Registration Statement on Form S-1, File No.
333-112865, filed on May 18, 2004) *
5.1 Opinion of Dorsey & Whitney LLP (incorporated by reference
to Exhibit 5.1 to Registration Statement on Form S-1, File
No. 333-112865, filed on May 18, 2004) *
23.1 Consent of J.H. Cohn LLP +
23.2 Consent of KPMG LLP +
23.3 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1) *
* Previously filed; incorporated herein by reference
+ Filed herewith
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
II-3
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in the volume and price represent no more than
a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in the periodic reports filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ALFACELL CORPORATION
Dated: January 18, 2005
By: /s/ KUSLIMA SHOGEN
------------------------------
Kuslima Shogen, Chief Executive
Officer and Chairman of the Board
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the indicated capacities
on January 18, 2005.
/s/ Kuslima Shogen *
--------------------------------------- -----------------------------------
Kuslima Shogen, Chief Executive James J. Loughlin, Director
Officer, Principal Executive Officer
and Chairman of the Board
* /s/ Andrew Savadelis
--------------------------------------- -----------------------------------
John P. Brancaccio, C.P.A., Director Andrew P. Savadelis, Director,
Chief Financial Officer and
Principal Financial Officer
* *
--------------------------------------- -----------------------------------
Stephen K. Carter, M.D., Director Paul M. Weiss, Ph.D., Director
*
---------------------------------------
Donald R. Conklin, Director
* The undersigned by signing her name hereto, does hereby sign this Registration
Statement or amendment thereto on behalf of the above indicated directors and
officers of Alfacell Corporation pursuant to the power of attorney executed on
behalf of each such director.
/s/ Kuslima Shogen
---------------------------------------
Kuslima Shogen, Chief Executive Officer
and Chairman of the Board
II-5
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Kuslima Shogen and Andrew P. Savadelis as
his or her true and lawful attorney-in-fact and agents, with full power of
substitution, for him or her and in his or her name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement (or any other registration statement
for the same offering that is effective upon filing pursuant to Rule 462(b)
under the Securities Act of 1933) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorney-in-fact and agents, or his or her substitute or substitutes, may do or
cause to be done by virtue hereof. Pursuant to the requirements of the
Securities Act, this Registration Statement has been signed by the following
person in the indicated capacities on January 14, 2005.
/s/ DAVID SIDRANSKY, M.D.
---------------------------------------
David Sidransky, M.D., Director
II-6
EXHIBIT INDEX
23.1 Consent of J.H. Cohn LLP
23.2 Consent of KPMG LLP