As filed with the Securities and Exchange Commission on September 22, 2004
Registration Statement No. 333-[______]
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
IMMTECH INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
Delaware 39-1523370
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
(847) 573-0033
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------
T. Stephen Thompson, President
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
(847) 573-0033
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copy to: John F. Fritts, Esq.
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 10038-4892
--------------------
(Approximate date of commencement of proposed sale to the public)
From time to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
======================================= ================= ======================== ======================== ======================
Proposed maximum Proposed maximum
Title of each class of securities to Amount to be offering price per aggregate offering Amount of
be registered registered(1) share(2) price(2) registration fee(2)
--------------------------------------- ----------------- ------------------------ ------------------------ ----------------------
Common Stock, par value $0.01 per share 755,540 $9.36 $7,071,854 $896.00
--------------------------------------- ----------------- ------------------------ ------------------------ ----------------------
(1) The shares of common stock being registered hereunder are being registered
for resale by the selling stockholders named in the prospectus upon conversion
of preferred stock or exercise of outstanding warrants. In accordance with Rules
416(a) and 416(b) under the Securities Act of 1933, as amended ("Securities
Act"), the registrant is also registering hereunder an indeterminate number of
shares that may be issued and resold to prevent dilution resulting from stock
splits, stock dividends or similar transactions and an indeterminate number of
shares that may be issued as dividends on the preferred stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act. Prices are based on the average
of the high and low reported sales prices of our common stock of $9.36 on the
American Stock Exchange LLC ("AMEX") on September 16, 2004. The maximum price
per share will be determined from time to time in connection with the resale by
the selling stockholders of the shares registered under this registration
statement.
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The registrant amends this registration statement on such date or dates as may
be necessary to delay its effective date until the registrant files a further
amendment, which specifically states that this registration statement will
thereafter become effective in accordance with Section 8(a) of the Securities
Act or until this registration statement becomes effective on such date as the
Securities and Exchange Commission, acting pursuant to Section 8(a) of the
Securities Act, may determine.
Subject to completion, dated September 22, 2004.
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 it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion, dated September 22, 2004
PROSPECTUS IMMTECH INTERNATIONAL, INC. [LOGO]
755,540 Shares
Common Stock
------------
This is a public offering of 755,540 shares of our common stock. The
stockholders named under the caption "Selling Stockholders" may from time to
time offer and sell up to an 755,540 shares of our common stock. The shares sold
by selling stockholders may be sold in transactions occurring either on or off
the American Stock Exchange ("AMEX") at prevailing market prices or at
negotiated prices. Sales may be made through brokers or through dealers who are
expected to receive customary commissions or discounts. We will receive no
proceeds from the sale of shares sold by selling stockholders under this
prospectus.
Our common stock is traded on the AMEX under the symbol "IMM". The last
reported sale of our common stock on the AMEX on September 21, 2004 was $9.75.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 1 OF THIS PROSPECTUS
BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is September 22, 2004
TABLE OF CONTENTS
RISK FACTORS.............................................................. 1
ABOUT THIS PROSPECTUS.....................................................15
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION OF DOCUMENTS BY
REFERENCE.................................................................16
FORWARD-LOOKING STATEMENTS................................................18
THE COMPANY...............................................................18
USE OF PROCEEDS...........................................................19
SELLING STOCKHOLDERS......................................................19
DESCRIPTION OF CAPITAL STOCK..............................................21
PLAN OF DISTRIBUTION......................................................22
LEGAL MATTERS.............................................................24
EXPERTS...................................................................24
INTERESTS OF NAMED EXPERTS AND COUNSEL....................................24
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES...............................................................24
GLOSSARY..................................................................25
RISK FACTORS
An investment in the shares offered by this prospectus involves a high
degree of risk. In addition to the other information contained in this
prospectus, the following risk factors should be considered carefully in
evaluating our business before purchasing the shares.
There is no assurance that we will successfully develop a commercially viable
product; our most advanced product candidate is in Phase II human clinical
trials.
We are at an early stage of human clinical trials, and in some cases
pre-clinical development, required for drug approval and commercialization.
Since our formation in October 1984, we have engaged in research and development
programs, expanding our network of scientists and scientific advisors, licensing
technology agreements and advancing the commercialization of the dication
technology platform. We have generated no revenue from product sales, do not
have any products currently available for sale, and none are expected to be
commercially available for sale until after March 31, 2005, if at all. There can
be no assurance that the research we fund and manage will lead to commercially
viable products. Our most advanced programs are in Phase II human clinical
testing using our first compound DB289 for several indications including
trypanosomiasis (African sleeping sickness), PCP pneumonia, and malaria and must
undergo substantial additional regulatory review prior to commercialization.
We have a history of losses and an accumulated deficit; our future profitability
is uncertain.
We have experienced significant operating losses since our inception and
we expect to incur additional operating losses as we continue research and
development, clinical trial and commercialization efforts. As of June 30, 2004,
we had an accumulated deficit of approximately $60,337,000. Losses from
operations were approximately $12,866,000 and $1,657,000, respectively, for the
fiscal year ended March 31, 2004 and the three-month period ended June 30, 2004.
We will need substantial additional funds in future years to continue our
research and development; if financing is not available, we may be required to
reduce spending for our research programs, cease operations or pursue other
financing alternatives.
Our operations to date have consumed substantial amounts of cash. Negative
cash flow from operations is expected to continue in the foreseeable future.
Without substantial additional financing, we may be required to reduce some or
all of our research programs or cease operations. Our cash requirements may vary
materially from those now planned because of results of research and
development, results of pre-clinical and clinical testing, responses to our
grant requests, relationships with strategic partners, changes in the focus and
direction of our research and development programs, delays in the enrollment and
completion of our clinical trials, competitive and technological advances, the
FDA and foreign regulatory approval processes and other factors. In any of these
circumstances, we may require substantially more funds than we currently have
available or currently intend to raise to continue our business. We may seek to
satisfy future funding requirements through public or private offerings of
equity securities, by collaborative or other arrangements with pharmaceutical or
biotechnology
companies, issuance of debt or from other sources. Additional financing may not
be available when needed or may not be available on acceptable terms. If
adequate financing is not available, we may not be able to continue as a going
concern or may be required to delay, scale back or eliminate certain research
and development programs, relinquish rights to certain technologies or product
candidates, forego desired opportunities or license third parties to
commercialize our products or technologies that we would otherwise seek to
develop internally. Existing stockholders will experience ownership dilution if
we decide to raise additional capital by issuing equity securities.
We receive funding primarily from technology licensing, grants, research
and development programs and from sales of our equity securities. To date we
have directed most of such funds not used for general and administrative
overhead toward our research and development and commercialization programs
(including preparation of submissions to regulatory agencies for product
licensing). Until one or more of our product candidates is approved for sale,
our funding is limited to funds received from testing and research agreements,
licensing of our technology and potential fees associated with interim leasing
of our properties while we develop them for product manufacture.
We do not have employment contracts with any employees other than our CEO,
T. Stephen Thompson.
We have an employment agreement with our CEO, T. Stephen Thompson, that
renews annually in April of each year unless 30 day prior notice of non-renewal
is given by either party to the other. Mr. Thompson renewed his employment with
us this year and has not expressed any indication that he desires to leave our
employ or retire. All of our other employees are "at will" and may leave at any
time. None, however, have as of this date expressed any intention to do so. We
do not have "key-man" life insurance policies on any of our executives,
including Mr. Thompson.
Most of our business' financial aspects, including investor relations,
intellectual property control and corporate governance, are under the direct
supervision of Cecilia Chan and Gary Parks. Together with Mr. Thompson, Ms. Chan
and Mr. Parks hold institutional knowledge and business savvy that they utilize
to assist us to forge new relationships and exploit new business opportunities
without diminishing or undermining existing programs and obligations. Neither
Ms. Chan nor Mr. Parks have employment contracts with us. Neither, however, has
indicated any intention to retire or leave our employ.
Some of our proprietary intellectual property is developed by scientists who are
not employed by us.
Our business depends to a significant degree on the continuing
contributions of our key management, scientific and technical personnel, as well
as on the continued discoveries of scientists, researchers and specialists at
The University of North Carolina at Chapel Hill ("UNC"), Georgia State
University, Duke University and Auburn University (collectively, the "Scientific
Consortium") and other research groups that assist in the development of our
product candidates. Substantial amounts of our proprietary intellectual property
are developed by scientists who are employed by the universities that comprise
the Scientific Consortium and other research groups. We do not have control
over, knowledge of, or access to those
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employment arrangements. We have not been advised by any of the key members of
our company, the scientific research groups or of the Scientific Consortium of
their intention to leave their employ or the program.
There can be no assurance that the loss of certain members of management
or the scientists, researchers and technicians from the Scientific Consortium
universities would not materially adversely affect our business.
Additional research grants needed to fund our operations may not be available
or, if available, not on terms acceptable to us.
We have funded our product development and operations as of June 30, 2004
through a combination of sales of equity instruments and revenue generated from
research agreements and grants. As of June 30, 2004, our accumulated deficit was
approximately $60,337,000 of which approximately $12,117,000 was funded either
directly or indirectly with grant funds and payments from research and testing
agreements.
In March 2001 we entered into a clinical research subcontract with UNC,
funded by a $15.1 million grant from The Gates Foundation to UNC for the study
of African sleeping sickness and leishmaniasis, under which UNC is to pay to us
$9.8 million in installments over a period not to exceed five years subject to
our achieving certain milestones. We entered into a second subcontract with UNC
under which we are to receive over $2.4 million based on a separate $2.7 million
grant from the Gates Foundation to UNC to accelerate the African sleeping
sickness study. Under the two subcontracts, as of June 30, 2004 UNC has paid to
us approximately $8,705,000 of which approximately $819,000 remained as of that
date as restricted funds on account.
In November 2003, we entered into a Testing Agreement with Medicines For
Malaria Venture, a foundation established in Switzerland ("MMV") and UNC,
pursuant to which we, with the support of MMV and UNC, are conducting a proof of
concept study of DB289, including Phase II and Phase III human clinical trials,
and will pursue drug development activities of DB289 alone, or in combination
with other anti-malarial drugs, with the goal of obtaining marketing approval of
a product for the treatment of malaria. Under the terms of the agreement, MMV
advanced to us $668,000 in fiscal year 2004 and $1,074,752 to date in fiscal
year 2005 for human clinical trials and has committed to fund additional
budgeted amounts, subject to attainment of certain milestones, for additional
clinical trials and regulatory preparation and filing costs for the approval to
market DB289 for treatment of malaria by at least one internationally accepted
regulatory body and one malaria endemic country. The latter payment,
approximately $1.075 million, is to fund maximum tolerable dose, safety and
pharmacokinetics studies in progress in France. We forecast the costs to
complete the clinical development of DB289 for treatment of Malaria to be
approximately $8.2 million over the next three years.
We will continue to apply for new grants to support continuing research
and development of our dication platform technology and other product
candidates. The process of obtaining grants is extremely competitive and there
can be no assurance that any of our grant applications will be acted upon
favorably. Some charitable organizations may request licenses to our proprietary
information or may impose price restrictions on the products we develop with
grant funds. We may not be able to negotiate terms that are acceptable to us
with such organizations. In the event we are unable to raise sufficient funds to
advance our product developments with
3
grant funds we may seek to raise additional capital with the issuance of debt or
equity securities. There can be no assurance that we will be able to place or
sell debt or equity securities on terms acceptable to us and, if we sell equity,
existing stockholders will suffer dilution (see this section, Risk Factors
entitled "Shares eligible for future sale may adversely affect our ability to
sell equity securities," and "Our outstanding options and warrants may adversely
affect our ability to consummate future equity financings due to the dilution
potential to future investors").
None of our product candidates have been approved for sale by any regulatory
agency; approval is required before we can sell drug products commercially.
All of our product candidates, including DB289 and DB075, require
additional clinical testing, regulatory approval and development of marketing
and distribution channels, all of which are expected to require substantial
additional investment prior to commercialization. There can be no assurance that
any of our product candidates will be successfully developed, prove to be safe
and effective in human clinical trials, meet applicable regulatory standards, be
approved by regulatory authorities, be capable of being produced in commercial
quantities at acceptable costs, be eligible for third party reimbursement from
governmental or private insurers, be successfully marketed or achieve market
acceptance. If we are unable to commercialize our product candidates in a timely
manner we may be required to seek additional funding, reduce or cancel some or
all of our development programs, sell or license some of our proprietary
information or cease operations.
There are substantial uncertainties related to clinical trials that may result
in the extension, modification or termination of one or more of our programs.
In order to obtain required regulatory approvals for the commercial sale
of our product candidates, we must demonstrate through human clinical trials
that our product candidates are safe and effective for their intended uses.
Prior to conducting human clinical trials we must obtain governmental approvals
from the host nation, approval from the U.S. to export our product candidate to
the test site and qualify a sufficient number of volunteer patients that meet
our trial criteria. If we do not obtain required governmental consents or if we
do not enroll a sufficient number of patients in a timely manner or at all, our
trial expenses could increase, results may be delayed or the trial may be
cancelled.
We may find, at any stage of our research and development, that product
candidates that appeared promising in earlier clinical trials do not demonstrate
safety or effectiveness in later clinical trials and therefore may not receive
regulatory approvals. Despite the positive results of our pre-clinical testing
and human clinical trials those results may not be predictive of the results of
later clinical trials and large-scale testing. Companies in the pharmaceutical
and biotechnology industries have suffered significant setbacks in various
stages of clinical trials, even after promising results had been obtained in
early-stage human clinical trials.
Completion of human clinical trials may be delayed by many factors,
including slower than anticipated patient enrollment, participant retention and
follow up, difficulty in securing sufficient supplies of clinical trial
materials or other adverse events occurring during clinical trials. For
instance, once we obtain permission to run a human trial, there are strict
medical criteria regulating who we can test. Political instability and the
minimal infrastructure in the African countries where we conduct our trials may
cause delays in enrollment and difficulty in
4
the completion of trials. In the case of African sleeping sickness, we are
subject to civil unrest in sub-Sahara Africa where local rebels could close
clinics and dramatically reduce enrollment rates, and make it difficult to
conduct trials. In another case, our PCP-trial could encounter difficulties in
finding potential patients because our initial regimen requires patients to
first fail other treatment programs in order to be eligible for our treatment.
Completion of testing, studies and trials may take several years, and the
length of time varies substantially with the type, complexity, novelty and
intended use of the product. Delays or rejections may be based upon many
factors, including changes in regulatory policy during the period of product
development. We cannot assure that any of our development programs will be
successfully completed, that any Investigational New Drug ("IND") application
filed with the FDA (or any foreign equivalent filed with the appropriate foreign
authorities) will become effective, that additional clinical trials will be
allowed by the FDA or other regulatory authorities, or that clinical trials will
commence as planned. There have been delays in our testing and development
schedules due to the aforementioned conditions and funding and patient
enrollment difficulties and there can be no assurance that our future testing
and development schedules will be met.
We do not currently have pharmaceutical manufacturing capability, which could
impair our ability to develop commercially viable products at reasonable costs.
Our ability to commercialize product candidates will depend in part upon
our ability to manufacture or have manufactured or develop manufacturing
capability to manufacture our product candidates, either directly or through
third parties, at a competitive cost and in accordance with FDA and other
regulatory requirements. We currently lack facilities and personnel to
manufacture our product candidates. There can be no assurance that we will be
able to acquire such resources, either directly or through third parties, at
reasonable costs, if we develop commercially viable products.
We have acquired a facility in which we intend to commence construction of
a pharmaceutical manufacturing facility for making finished drug products
(including formulation, tableting, and packaging of drug products) in the
Peoples' Republic of China ("PRC") with our subsidiary Immtech Hong Kong
Limited. Operation of such a facility is subject to various governmental
approvals, which may be difficult or impossible to obtain. There can be no
guarantee that products manufactured at this facility will be accepted in all
countries where we desire to sell our future products.
We are dependent on third-party relationships for critical aspects of our
business; problems that develop in these relationships may increase costs and/or
diminish our ability to develop our product candidates.
We use the expertise and resources of strategic partners and third parties
in a number of key areas, including (i) research and development, (ii)
pre-clinical and human clinical trials and (iii) manufacture of pharmaceutical
drugs. We have licensing and exclusive commercialization rights to a dicationic
pharmaceutical platform and are developing drugs intended for commercial use
based on that platform. This strategy creates risks by placing critical aspects
of our business in the hands of third parties, whom we may not be able to
control. If these third parties do not perform in a timely and satisfactory
manner, we may incur costs and delays as we seek alternate sources of such
products and services, if available. Such costs and delays may have a material
5
adverse effect on our business if the delays jeopardize our licensing
arrangements by causing us to become non-compliant with certain license
agreements.
We may seek additional third-party relationships in certain areas,
particularly in clinical testing, marketing, manufacturing and other areas where
pharmaceutical and biotechnology company collaborators will enable us to develop
particular products or geographic markets that are otherwise beyond our current
resources and/or capabilities. There is no assurance that we will be able to
obtain any such collaboration or any other research and development,
manufacturing or clinical trial arrangements. Our inability to obtain and
maintain satisfactory relationships with third parties may have a material
adverse effect on our business by slowing our ability to develop new products,
requiring us to expand our internal capabilities, increasing our overhead and
expenses, hampering future growth opportunities or causing us to delay or
terminate affected programs.
We are uncertain about the ability to protect or obtain necessary patents and
protect our proprietary information; our ability to develop and commercialize
our product candidates would be compromised without adequate intellectual
property protection.
We have spent and continue to spend considerable funds to develop our
product candidates and we are relying on the potential to exploit commercially
without competition the results of our product development. Much of our
intellectual property is licensed to us under various agreements including the
Consortium Agreement. It is the primary responsibility of the discoverer to
develop his, her or its invention confidentially, insure that the invention is
unique, and to obtain patent protection. In most cases, our role is to reimburse
patent related costs after we decide to develop any such invention. We therefore
rely on the inventors to insure that technology licensed to us is adequately
protected. Without adequate protection for our intellectual property we believe
our ability to realize profits on our future commercialized product would be
diminished. Without protection, competitors might be able to copy our work and
compete with our products without having invested in the development.
There can be no assurance that any particular patent will be granted or
that issued patents will provide us, directly or through licenses, with the
intellectual property protection contemplated. Patents and licenses of patents
can be challenged, invalidated or circumvented. It is also possible that
competitors will develop similar products simultaneously. Our breach of any
license agreement or the failure to obtain a license to any technology or
process which may be required to develop or commercialize one or more of our
product candidates may have a material adverse effect on our business including
the need for additional capital to develop alternate technology, the potential
that competitors may gain unfair advantage and lessen our expectation of
potential future revenues.
The pharmaceutical and biotechnology fields are characterized by a large
number of patent filings, and a substantial number of patents have already been
issued to other pharmaceutical and biotechnology companies. Third parties may
have filed applications for, or may have been issued, certain patents and may
obtain additional patents and proprietary rights related to products or
processes competitive with or similar to those that we are attempting to develop
and commercialize. We may not be aware of all of the patents potentially adverse
to our interests that may have been issued to others. No assurance can be given
that patents do not exist, have not been filed or could not be filed or issued,
which contain claims relating to or
6
competitive with our technology, product candidates, product uses or processes.
If patents have been or are issued to others containing preclusive or
conflicting claims, then we may be required to obtain licenses to one or more of
such patents or to develop or obtain alternative technology. There can be no
assurance that the licenses or alternative technology that might be required for
such alternative processes or products would be available on commercially
acceptable terms, or at all.
Because of the substantial length of time and expense associated with
bringing new drug products to market through the development and regulatory
approval process, the pharmaceutical and biotechnology industries place
considerable importance on patent and trade secret protection for new
technologies, products and processes. Since patent applications in the United
States are confidential until patents are issued and since publication of
discoveries in the scientific or patent literature often lag behind actual
discoveries, we cannot be certain that we (or our licensors) were the first to
make the inventions covered by pending patent applications or that we (or our
licensors) were the first to file patent applications for such inventions. The
patent positions of pharmaceutical and biotechnology companies can be highly
uncertain and involve complex legal and factual questions and, therefore, the
breadth of claims allowed in pharmaceutical and biotechnology patents, or their
enforceability, cannot be predicted. There can be no assurance that any patents
under pending patent applications or any further patent applications will be
issued. Furthermore, there can be no assurance that the scope of any patent
protection will exclude competitors or provide us competitive advantages, that
any of our (or our licensors') patents that have been issued or may be issued
will be held valid if subsequently challenged, or that others, including
competitors or current or former employers of our employees, advisors and
consultants, will not claim rights in, or ownership to, our (or our licensors')
patents and other proprietary rights. There can be no assurance that others will
not independently develop substantially equivalent proprietary information or
otherwise obtain access to our proprietary information, or that others may not
be issued patents that may require us to obtain a license for, and pay
significant fees or royalties for, such proprietary information.
We rely on technology developed by others and shared with collaborators to
develop our product candidates which puts our proprietary information at risk of
unauthorized disclosure.
We rely on trade secrets, know-how and technological advancement to
maintain our competitive position. Although we use confidentiality agreements
and employee proprietary information and invention assignment agreements to
protect our trade secrets and other unpatented know-how, these agreements may be
breached by the other party thereto or may otherwise be of limited effectiveness
or enforceability.
We are licensed to commercialize technology from a dication platform
developed by a Scientific Consortium, comprised primarily of scientists employed
by universities in an academic setting. The academic world is improved by the
sharing of information. As a business, however, the sharing of information
whether through publication of research, academic lectures or general
intellectual discourse among contemporaries is not conducive to protection of
proprietary information. Our proprietary information may fall into the
possession of unintended parties without our knowledge through customary
academic information sharing.
7
At times we may enter into confidentiality agreements with other
companies, allowing them to test our technology for potential future licensing,
in return for milestone and royalty payments should any discoveries result from
the use of our proprietary information. We cannot be assured that such parties
will honor these confidentiality agreements subjecting our intellectual property
to unintended disclosure.
The pharmaceutical and biotechnology industries have experienced extensive
litigation regarding patent and other intellectual property rights. We could
incur substantial costs in defending suits that may be brought against us (or
our licensors) claiming infringement of the rights of others or in asserting our
(or our licensors') patent rights in a suit against another party. We may also
be required to participate in interference proceedings declared by the U.S.
Patent and Trademark Office or similar foreign agency for the purpose of
determining the priority of inventions in connection with our (or our
licensors') patent applications.
Adverse determinations in litigation or interference proceedings could
require us to seek licenses (which may not be available on commercially
reasonable terms) or subject us to significant liabilities to third parties, and
could therefore have a material adverse effect on our business by increasing our
expenses and having an adverse effect on our business. Even if we prevail in an
interference proceeding or a lawsuit, substantial resources, including the time
and attention of our officers, would be required.
Confidentiality agreements may not adequately protect our intellectual property
which could result in unauthorized disclosure or use of our proprietary
information.
We require our employees, consultants and third-parties with whom we share
proprietary information to execute confidentiality agreements upon the
commencement of their relationship with us. The agreements generally provide
that trade secrets and all inventions conceived by the individual and all
confidential information developed or made known to the individual during the
term of the relationship will be our exclusive property and will be kept
confidential and not disclosed to third parties except in specified
circumstances. There can be no assurance, however, that these agreements will
provide meaningful protection for our proprietary information in the event of
unauthorized use or disclosure of such information. If our unpatented
proprietary information is publicly disclosed before we have been granted patent
protection, our competitors could be unjustly enriched and we could lose the
ability to profitably develop products from such information.
Our industry has significant competition; our product candidates may become
obsolete prior to commercialization due to alternative technologies thereby
rendering our development efforts obsolete or non-competitive.
The pharmaceutical and biotechnology fields are characterized by extensive
research efforts and rapid technological progress. Competition from other
pharmaceutical and biotechnology companies and research and academic
institutions is intense and other companies are engaged in research and product
development for treatment of the same diseases that we target. New developments
in pharmaceutical and biotechnology fields are expected to continue at a rapid
pace in both industry and academia. There can be no assurance that research and
discoveries by others will not render some or all of our programs or products
non-competitive or obsolete.
8
We are aware of other companies and institutions dedicated to the
development of therapeutics similar to those we are developing, including
Aventis Pharmaceuticals, Inc., Hoffman-LaRoche Ltd., Sanofi-Synthelabo Inc.,
Pfizer Inc., and Bayer Corporation. Many of our existing or potential
competitors have substantially greater financial and technical resources than we
do and therefore may be in a better position to develop, manufacture and market
pharmaceutical products. Many of these competitors are also more experienced
performing pre-clinical testing and human clinical trials and obtaining
regulatory approvals. The current or future existence of competitive products
may also adversely affect the marketability of our product candidates.
In the event some or all of our programs are rendered non-competitive or
obsolete, we do not currently have alternative strategies to develop new product
lines or financial resources to pursue such a course of action.
There is no assurance that we will receive FDA or corollary foreign approval for
any of our product candidates for any indication; we are subject to government
regulation for the commercialization of our product candidates.
We have not made application to the FDA or any other regulatory agency to
sell commercially or label any of our product candidates. We or our test
collaborators have received licenses from the FDA to export DB289 for testing
purposes and have been approved to conduct human clinical trials for various
indications in each of the Democratic Republic of Congo, Angola, Thailand and
Peru.
All new pharmaceutical drugs, including our product candidates, are
subject to extensive and rigorous regulation by the federal government,
principally the FDA under the Federal Food, Drug and Cosmetic Act ("FDCA") and
other laws and by state, local and foreign governments. Such regulations govern,
among other things, the development, testing, manufacture, labeling, storage,
pre-market clearance or approval, advertising, promotion, sale and distribution
of pharmaceutical drugs. If drug products are marketed abroad, they are subject
to extensive regulation by foreign governments. Failure to comply with
applicable regulatory requirements may subject us to administrative or
judicially imposed sanctions such as civil penalties, criminal prosecution,
injunctions, product seizure or detention, product recalls, total or partial
suspension of production and FDA refusal to approve pending applications.
Each of our product candidates must be approved for each indication for
which we believe it to be viable. We have not yet determined from which
regulatory bodies we will seek approval for our product candidates or
indications for which approval will be sought. Once determined, the approval
process is subject to those agencies' policies and acceptance of those agencies'
approvals, if obtained, in the countries where we intend to market our product
candidates.
We have not received regulatory approval in the United States or any foreign
jurisdiction for the commercial sale of any of our product candidates.
On April 23, 2004 the FDA granted fast-track designation for DB289, our
first oral drug, for treatment of African sleeping sickness (trypanosomiasis).
Fast-track designation means, among other things, that the FDA may accept
initial late-stage data from us rather than waiting
9
for the entire Phase III clinical trial data to be submitted together for
consideration of approval to market the drug. There is not guarantee, however,
that fast-track designation will result in faster product development or
licensing approval or that our product candidates will be approved at all.
The process of obtaining FDA or other required regulatory approvals,
including foreign approvals, often takes many years and varies substantially
based upon the type, complexity and novelty of the products involved and the
indications being studied. Furthermore, the approval process is extremely
expensive and uncertain. There can be no assurance that our product candidates
will be approved for commercial sale in the United States by the FDA or
regulatory agencies in foreign countries. The regulatory review process can take
many years and we will need to raise additional funds to complete the regulatory
review process for our current product candidates. The failure to receive FDA or
other governmental approval would have a material adverse effect on our business
by precluding us from marketing and selling such products and negatively
impacting our ability to generate future revenues. Even if regulatory approval
of a product is granted, there can be no assurance that we will be able to
obtain the labeling claims (a labeling claim is a product's description and its
FDA permitted uses) necessary or desirable for the promotion of such product.
FDA regulations prohibit the marketing or promotion of a drug for unapproved
indications. Furthermore, regulatory marketing approval may entail ongoing
requirements for post-marketing studies if regulatory approval is obtained; we
will also be subject to ongoing FDA obligations and continued regulatory review.
In particular, we, or our third party manufacturers, will be required to adhere
to Good Manufacturing Practices ("GMP"), which require us (or our third party
manufacturers) to manufacture products and maintain records in a prescribed
manner with respect to manufacturing, testing and quality control. Further, we
(or our third party manufacturers) must pass a manufacturing facilities
pre-approval inspection by the FDA or corollary agency before obtaining
marketing approval. Failure to comply with applicable regulatory requirements
may result in penalties, such as restrictions on a product's marketing or
withdrawal of the product from the market. In addition, identification of
certain side-effects after a drug is on the market or the occurrence of
manufacturing problems could cause subsequent withdrawal of approval,
reformulation of the drug, additional pre-clinical testing or clinical trials
and changes in labeling of the product.
Prior to the submission of an application for FDA approval, our
pharmaceutical drugs undergo rigorous pre-clinical and clinical testing, which
may take several years and the expenditure of substantial financial and other
resources. Before commencing clinical trials in humans in the United States, we
must submit to the FDA and receive clearance of an IND. There can be no
assurance that submission of an IND for future clinical testing of any of our
product candidates under development or other future product candidates would
result in FDA permission to commence clinical trials or that we will be able to
obtain the necessary approvals for future clinical testing in any foreign
jurisdiction. Further, there can be no assurance that if such testing of product
candidates under development is completed, any such drug compounds will be
accepted for formal review by the FDA or any foreign regulatory body or approved
by the FDA for marketing in the United States or by any such foreign regulatory
bodies for marketing in foreign jurisdictions.
10
Our most advanced programs are developing products intended for sale in
countries that may not have established pharmaceutical regulatory agencies.
Some of the intended markets for our treatment of African sleeping
sickness and malaria are in countries without developed pharmaceutical
regulatory agencies. We plan in such cases to try first to obtain regulatory
approval from a recognized pharmaceutical regulatory agency such as the FDA or
one or more European agencies and then to apply to the targeted country for
recognition of the foreign approval. Because the countries where we intend to
market treatments for African sleeping sickness and malaria are not obligated to
accept foreign regulatory approvals and because those countries do not have
standards of their own for us to rely upon, we may be required to provide
additional documentation or complete additional testing prior to distributing
our products in those countries.
There is uncertainty regarding the availability of health care reimbursement for
purchasers of our anticipated products; health care reform may negatively impact
the ability of prospective purchasers of our anticipated products to pay for
such products.
Our ability to commercialize any of our product candidates will depend in
part on the extent to which reimbursement for the costs of the resulting drug or
biologic will be available from government health administration authorities,
private health insurers, charities and others. Many of our product candidates,
including treatments for trypanosomiasis, malaria and tuberculosis, would be in
the greatest demand in developing nations, many of which do not maintain
comprehensive health care systems with the financial resources to pay for such
drugs. We do not know to what extent governments, private charities,
international organizations and others would contribute toward bringing newly
developed drugs to developing nations. Even among drugs sold in developed
countries, significant uncertainty exists as to the reimbursement status of
newly approved health care products. There can be no assurance of the
availability of third-party insurance reimbursement coverage enabling us to
establish and maintain price levels sufficient for realization of a profit on
our investment in developing pharmaceutical drugs and biologics. Government and
other third-party payers are increasingly attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new drug or
biologic products approved for marketing by the FDA and by refusing, in some
cases, to provide any coverage for uses of approved products for disease
indications for which the FDA has not granted marketing approval. If adequate
coverage and reimbursement levels are not provided by government and third-party
payers for uses of our anticipated products, the market acceptance of these
products would be adversely affected.
Health care reform proposals are continually introduced in the United
States Congress and in various state legislatures and there is no guarantee that
such proposals will not be introduced in the future. We cannot predict when any
proposed reforms will be implemented, if ever, or the effect of any implemented
reforms on our business. Implemented reforms may have a material adverse effect
on our business by reducing or eliminating the availability of third-party
reimbursement for our anticipated products or by limiting price levels at which
we are able to sell such products. If reimbursement is not available for our
products, health care providers may prescribe alternative remedies if available.
Patients, if they cannot afford our products, may do without. In addition, if we
are able to commercialize products in overseas markets, then our ability to
achieve success in such markets may depend, in part, on the health care
financing and
11
reimbursement policies of such countries. We cannot predict changes in health
care systems in foreign countries, and therefore, do not know the effects on our
business of possible changes.
Shares eligible for future sale may adversely affect our ability to sell equity
securities.
Sales of our common stock (including the issuance of shares upon
conversion of preferred stock) in the public market could materially and
adversely affect the market price of shares because prior sales have been
executed at or below our current market price. We have outstanding four series
of preferred stock that convert to common stock at prices equivalent to $4.42,
$4.00, $4.42 and $9.00, respectively, for our series A, series B, series C and
series D convertible preferred stock. Our obligation to convert the preferred
stock upon demand by the holders may depress the price of our common stock and
also make it more difficult for us to sell equity securities or equity-related
securities in the future at a time and price that we deem appropriate.
As of September 10, 2004, we had 10,874,742 shares of common stock
outstanding, plus (1) 72,400 shares of series A convertible preferred stock,
convertible into approximately 409,502 shares of common stock at the conversion
rate of 1:5.656, (2) 19,925 shares of series B Convertible Preferred stock
convertible into approximately 124,531 shares of common stock at the conversion
rate of 1:6.25, (3) 64,852 shares of series C convertible preferred stock
convertible into approximately 366,809 shares of common stock at the conversion
rate of 1:5.656, (4) 200,000 shares of series D convertible preferred stock
convertible into approximately 555,540 shares of common stock at the conversion
rate of 1:2.778, (5) 1,121,057 options to purchase shares of common stock with a
weighted-average exercise price of $8.98 per share and (6) 2,955,412 warrants to
purchase shares of common stock with a weighted-average exercise price of $7.57.
Of the shares outstanding, 8,358,302 shares of common stock are freely tradable
without restriction. All of the remaining 2,516,440 shares are restricted from
resale, except pursuant to certain exceptions under the Securities Act of 1933,
as amended (the "Securities Act").
Our outstanding options and warrants may adversely affect our ability to
consummate future equity financings due to the dilution potential to future
investors.
We have outstanding options and warrants for the purchase of shares of our
common stock with exercise prices currently below market which may adversely
affect our ability to consummate future equity financings. The holders of such
warrants and options may exercise them at a time when we would otherwise be able
to obtain additional equity capital on more favorable terms. To the extent any
such options and warrants are exercised, the value of our outstanding shares of
our common stock will be diluted.
As of September 10, 2004, we had outstanding vested options to purchase
689,933 shares of common stock at a weighted-average exercise price of $7.43 and
vested warrants to purchase 2,945,412 shares of common stock with a
weighted-average price of $7.59.
Due to the number of shares of common stock we are obligated to sell
pursuant to outstanding options and warrants described above, potential
investors may not purchase our future equity offerings at market price because
of the potential dilution such investors may suffer as a result of the exercise
of the outstanding options and warrants.
12
The market price of our common stock has experienced significant volatility.
The securities markets from time to time experience significant price and
volume fluctuations unrelated to the operating performance of particular
companies. In addition, the market prices of the common stock of many publicly
traded pharmaceutical and biotechnology companies have been and can be expected
to be especially volatile. Our common stock price in the 52-week period ended
September 20, 2004 had a low of $7.80 and high of $32.51. Announcements of
technological innovations or new products by us or our competitors, developments
or disputes concerning patents or proprietary rights, publicity regarding actual
or potential clinical trial results relating to products under development by us
or our competitors, regulatory developments in both the United States and
foreign countries, delays in our testing and development schedules, public
concern as to the safety of pharmaceutical drugs and economic and other external
factors, as well as period-to-period fluctuations in our financial results, may
have a significant impact on the market price of our common stock. The
realization of any of the risks described in these "Risk Factors" may have a
significant adverse impact on such market prices.
We routinely pay vendors in stock as consideration for their services; this may
result in shareholder dilution, additional costs and difficulty retaining
certain vendors.
In order for us to preserve our cash resources, we often pay vendors in
shares, warrants or options to purchase shares of our common stock rather than
cash. Payments for services in stock may materially and adversely affect our
shareholders by diluting the value of outstanding shares of our common stock. In
addition, in situations where we have agreed to register the shares issued to a
vendor, this will generally cause us to incur additional expenses associated
with such registration. Paying vendors in shares, warrants or options to
purchase shares of common stock may also limit our ability to contract with the
vendor of our choice should that vendor decline payment in stock.
We do not intend to pay dividends on our common stock. Until such time as we pay
cash dividends our stockholders must rely on increases in our stock price for
appreciation.
We have never declared or paid dividends on our common stock. We intend to
retain future earnings to develop and commercialize our products and therefore
we do not intend to pay cash dividends in the foreseeable future. Until such
time as we determine to pay cash dividends on our common stock, our stockholders
must rely on increases in our common stock's market price for appreciation.
If we do not effectively manage our growth, our resources, systems and controls
may be strained and our operating results may suffer.
We have recently added to our workforce and we plan to continue to
increase the size of our workforce and scope of our operations as we continue
our drug development programs and clinical trials, develop our manufacturing
facility in the PRC, and move towards commercialization of our products. This
growth of our operations will place a significant strain on our management
personnel, systems and resources. We may need to implement new and upgraded
operational and financial systems, procedures and controls, including the
improvement of our accounting and other internal management systems. These
endeavors will require
13
substantial management effort and skill, and we may require additional personnel
and internal processes to manage these efforts. If we are unable to effectively
manage our expanding operations, our revenue and operating results could be
materially and adversely affected.
Our continuing obligations as a public company under the changing laws,
regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002 and related regulations,
will increase our expenses and administrative burden.
As a public company, we incur significant legal, accounting and other
expenses. Changing laws, regulations and standards relating to corporate
governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and
related regulations implemented by the Securities and Exchange Commission and
the National Association of Securities Dealers, are creating uncertainty for
public companies, increasing legal and financial compliance costs and making
some activities more time consuming. These laws, regulations and standards are
subject to varying interpretations, in many cases due to their lack of
specificity, and, as a result, their application in practice may evolve over
time as new guidance is provided by regulatory and governing bodies. This could
result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices. We
intend to invest resources to comply with evolving laws, regulations and
standards, and this investment may result in increased general and
administrative expenses and a diversion of management's time and attention from
revenue-generating activities to compliance activities. If our efforts to comply
with new laws, regulations and standards differ from the activities intended by
regulatory or governing bodies due to ambiguities related to practice,
regulatory authorities may initiate legal proceedings against us and our
business may be harmed.
There are limitations on the liability of our directors, and we may have to
indemnify our officers and directors in certain instances.
Our certificate of incorporation limits, to the maximum extent permitted
under Delaware law, the personal liability of our directors for monetary damages
for breach of their fiduciary duties as directors. Our bylaws provide that we
will indemnify our officers and directors and may indemnify our employees and
other agents to the fullest extent permitted by law. We have entered into
indemnification agreements with our officers and directors containing provisions
that are in some respects broader than the specific indemnification provisions
under Delaware law. The indemnification agreements may require us, among other
things, to indemnify such officers and directors against certain liabilities
that may arise by reason of their status or service as directors or officers
(other than liabilities arising from willful misconduct of a culpable nature),
to advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified and to obtain directors' and officers'
insurance. Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made or
threatened to be made a party to an action by reason of the fact that he or she
was a director, officer, employee or agent of the corporation or was serving at
the request of the corporation, against expenses actually and reasonably
incurred in connection with such action if he or she acted in good faith and in
a manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Delaware law does not permit a corporation to eliminate a director's duty of
care and the
14
provisions of our certificate of incorporation have no effect on the
availability of equitable remedies, such as injunction or rescission, for a
director's breach of the duty of care.
We believe that our limitation of director liability assists us to attract
and retain qualified directors. However, in the event a director or the board
commits an act that may legally be indemnified under Delaware law, we will be
responsible to pay for such director(s) legal defense and potentially any
damages resulting therefrom. Furthermore, the limitation on director liability
may reduce the likelihood of derivative litigation against directors, and may
discourage or deter stockholders from instituting litigation against directors
for breach of their fiduciary duties, even though such an action, if successful,
might benefit us and our stockholders. Given the difficult environment and
potential for incurring liabilities currently facing directors of publicly-held
corporations, we believe that director indemnification is in our and our
stockholders best interests because it enhances our ability to retain highly
qualified directors and reduce a possible deterrent to entrepreneurial
decision-making.
Nevertheless, limitations of director liability may be viewed as limiting
the rights of stockholders, and the broad scope of the indemnification
provisions contained in our certificate of incorporation and bylaws could result
in increased expenses. Our board of directors believes, however, that these
provisions will provide a better balancing of the legal obligations of, and
protections for, directors and will contribute positively to the quality and
stability of our corporate governance. Our board of directors has concluded that
the benefit to stockholders of improved corporate governance outweighs any
possible adverse effects on stockholders of reducing the exposure of directors
to liability and broadened indemnification rights.
Product liability exposure may expose us to significant liability.
We do not have pharmaceutical products for sale and we therefor do not
carry product liability insurance. However, if we do commercialize drug products
we will face risk of exposure to product liability and other claims and lawsuits
in the event that the development or use of our technology or prospective
products is alleged to have resulted in adverse effects. We may not be able to
avoid significant liability exposure. We may not have sufficient insurance
coverage and we may not be able to obtain sufficient coverage at a reasonable
cost. An inability to obtain product liability insurance at acceptable cost or
to otherwise protect against potential product liability claims could prevent or
inhibit the commercialization of our products. A product liability claim could
hurt our financial performance. Even if we avoid liability exposure, significant
costs could be incurred, potentially damaging our financial performance. We do
carry commercial general liability insurance and clinical trials insurance which
covers our human clinical trial activities.
ABOUT THIS PROSPECTUS
This document is called a prospectus and is part of a registration
statement on Form S-3 that we filed with the U.S. Securities and Exchange
Commission ("SEC"). Under this prospectus the selling stockholders also may from
time to time collectively offer up to 755,540 shares of our common stock plus
any additional shares paid to selling stockholders as dividends on the preferred
shares that are convertible into the common stock registered hereunder or to
prevent dilution resulting from stock splits, stock dividends or similar
transactions.
15
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making, nor will
we make, an offer to sell the common stock in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in
this prospectus is current only as of the date on its cover. Our business,
financial condition, results of operations and prospects may have changed since
that date. You should read this prospectus together with the additional
information described under the heading "Where You Can Find More Information"
below.
WHERE YOU CAN FIND MORE INFORMATION;
INCORPORATION OF DOCUMENTS BY REFERENCE
We file annual, quarterly and current reports, proxy statements and other
documents with the SEC, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). You may read and copy any materials that we file with the
SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549, at 233 Broadway, 16th Floor, New York, New York 10279 and at
Northwest Atrium Center, 5000 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. You may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0330. Our reports, proxy statements and
other documents filed electronically with the SEC are available at the website
maintained by the SEC at http://www.sec.gov. We also make available free of
charge on or through our Internet website, http://www.immtech.biz, our annual,
quarterly and current reports, and, if applicable, amendments to those reports,
filed or furnished pursuant to Section 13(a) of the Exchange Act, as soon as
reasonably practicable after we electronically file such reports with the SEC.
Information on our website is not a part of this report.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the shares. This prospectus, which constitutes a
part of that registration statement, does not contain all the information
contained in that registration statement and its exhibits. For further
information with respect to the company and the shares, you should consult the
registration statement and its exhibits. The registration statement and any of
its amendments, including exhibits filed as a part of the registration statement
or an amendment to the registration statement, are available for inspection and
copying through the SEC's public reference rooms listed above.
The SEC allows us to "incorporate by reference" in this prospectus the
information that we file with them, which means we can disclose important
information to you by referring you to other documents that contain that
information. The information we incorporate by reference is considered to be
part of this prospectus and information we later file with the SEC will
automatically update and supersede the information in this prospectus. The
following documents filed by us with the SEC pursuant to Section 13 of the
Exchange Act (File No. 000-25669) and any future filings under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act made before the termination of the
offering are incorporated by reference herein:
(i) our Amended Annual Report on Form 10-K/A for the fiscal year ended
March 31, 2004, filed with the SEC on July 20, 2004;
16
(ii) our Quarterly Reports on Form 10-Q for the fiscal quarters ended
June 30, 2004, filed with the SEC on August 9, 2004;
(iii) the description of our common stock set forth in our registration
statement on Form SB-2 (Registration No. 333-64393) filed with the
SEC under Section 12 of the Exchange Act on September 28, 1998,
including any amendments or reports filed for the purpose of
updating such description;
(iv) our definitive proxy statement pursuant to Section 14(A) of the
Exchange Act for our 2003 Annual Meeting of the Shareholders filed
with the SEC on December 12, 2003;
(v) all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual
Report referenced in (i) above;
(vi) our Form 8-A pursuant to Section 12(b) of the Exchange Act filed
with the SEC on August 6, 2003;
(vii) our registration statement on Form SB-2/A filed with the SEC on
February 11, 1999; and
(viii) our amended and restated certificate of incorporation, filed as
Exhibit 3.3 to our Form 10-K (File No. 001-14907), as filed with the
SEC on June 14, 2004.
All documents filed by the company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this registration statement
and prior to the filing of a post-effective amendment indicating that all
securities offered hereby have been sold or deregistering all securities then
remaining unsold are expressly incorporated by reference into this prospectus
and to be a part of this prospectus from the date of filing of such documents.
Statements made in this prospectus, or in any documents incorporated by
reference in this prospectus as to the contents of any contract or other
document are materially complete. For additional information we refer you to the
copy of the contract or other document filed as an exhibit to the registration
statement of which this prospectus is a part or as an exhibit to the documents
incorporated by reference.
We will provide to you a copy of any document incorporated by reference in
this prospectus and any exhibits specifically incorporated by reference in those
documents at no cost. You may request copies by contacting us at the following
address or telephone numbers: Corporate Secretary, Immtech International, Inc.,
150 Fairway Drive, Suite 150, Vernon Hills, Illinois, 60061, Telephone No.:
(847) 573-0033 or toll free (877) 898-8038.
Any statement incorporated or deemed incorporated herein by reference will
be deemed to be modified or superseded for the purpose of the registration
statement and this prospectus to the extent that a statement contained in this
prospectus or in any subsequently filed document modifies or supersedes such
statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of the registration
statement or this prospectus.
17
FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus and in the documents
incorporated by reference herein constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements frequently, but not
always, use the words "may", "intends", "plans", "believes", "anticipates" or
"expects" or similar words and may include statements concerning our strategies,
goals and plans. Forward-looking statements involve a number of significant
risks and uncertainties that could cause our actual results or achievements or
other events to differ materially from those reflected in such forward-looking
statements. Such factors include, among others described in this prospectus, the
following (i) we are in an early stage of product development, (ii) the
possibility that favorable relationships with collaborators cannot be
established or, if established, will be abandoned by the collaborators before
completion of product development, (iii) the possibility that we or our
collaborators will not successfully develop any marketable products, (iv) the
possibility that advances by competitors will cause our product candidates not
to be viable, (v) uncertainties as to the requirement that a drug product be
found to be safe and effective after extensive clinical trials and the
possibility that the results of such trials, if completed, will not establish
the safety or efficacy of our drug product candidates, (vi) risks relating to
requirements for approvals by governmental agencies, such as the Food and Drug
Administration, before products can be marketed and the possibility that such
approvals will not be obtained in a timely manner or at all or will be
conditioned in a manner that would impair our ability to market our product
candidates successfully, (vii) the risk that our patents could be invalidated or
narrowed in scope by judicial actions or that our technology could infringe upon
the patent or other intellectual property rights of third parties, (viii) the
possibility that we will not be able to raise adequate capital to fund our
operations through the process of commercializing a successful product or that
future financing will be completed on unfavorable terms, (ix) the possibility
that any products successfully developed by us will not achieve market
acceptance and (x) other risks and uncertainties that may not be described
herein. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
THE COMPANY
AN INVESTMENT IN THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION
PROVIDED UNDER "RISK FACTORS" BEGINNING ON PAGE 1. A GLOSSARY WHICH DEFINES
VARIOUS TERMS USED IN THIS PROSPECTUS BEGINS ON PAGE 25.
We are a pharmaceutical company advancing the development and
commercialization of oral drugs to treat infectious diseases, and neoplastic
(cancer) and metabolic (diabetes) disorders. We have drug development programs
that include treatments for fungal infections, malaria, tuberculosis, diabetes,
Pneumocystis carinii pneumonia ("PCP") and tropical diseases, including African
sleeping sickness (trypanosomiasis) and leishmaniasis. We hold worldwide patents
and patent applications, and licenses and rights to license technology,
primarily from a scientific
18
consortium that has granted us exclusive rights to commercialize products from,
and license rights to, the technology.
Our strategy is to develop oral drugs effective against infectious
diseases and neoplastic and metabolic disorders utilizing a dicationic
technology platform. Infectious diseases in the global population have increased
significantly during the past 20 years and are the most common cause of death
worldwide according to the World Health Organization ("WHO"). Relatively few new
drugs for treatment of infectious diseases have been brought to market during
this period. New drugs are needed to overcome the problems of multi-drug
resistance and the increasing number of new pathogens that are causing diseases
in the world. Neoplastic and metabolic disorders, including cancer and diabetes,
cause illness and death worldwide. Scientists have struggled for decades to find
effective treatments for both cancer and diabetes. In our initial laboratory
studies, the dication platform demonstrated positive therapeutic activity to
treat these two devastating disorders.
Since our formation in October 1984, we have engaged in pharmaceutical
research and drug development, expanding our scientific capabilities and
collaborative network, developing technology licensing agreements, and advancing
the commercialization of our proprietary technologies, including the development
of aromatic cations (which include dications) commencing in 1997. In addition to
our internal resources, we use the expertise and resources of strategic partners
and third parties in a number of areas, including (i) discovery research, (ii)
pre-clinical and human clinical trials and (iii) manufacture of pharmaceutical
drugs.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares
offered by the selling stockholders under this prospectus.
SELLING STOCKHOLDERS
The selling stockholders listed below acquired our series D stock in
private placements on January 15, 2004. Such selling stockholders have the right
to acquire shares (i) upon conversion of the series D stock, (ii) upon issuance
of common stock as stock dividends to holders of series D stock and (iii) upon
exercise of warrants granted to them in connection with their participation in
the series D private placement. No period of time has been fixed within which
the shares registered under this prospectus may be offered or sold. Our
obligation to keep the registration statement of which this prospectus is a part
effective expires as to the 755,540 shares on January 14, 2005, or sooner if all
selling stockholders' shares are sold.
On January 15, 2004, the selling stockholders purchased in the aggregate
200,000 shares of our series D stock for gross proceeds to us of $5,000,000.
Subject to adjustment for dilution protection, each share of series D stock is
convertible into 2.778 shares of common stock or 555,540 shares in the
aggregate. The series D stock earns an 6% per annum dividend payable
semi-annually each April 15th and October 15th, in cash or common stock at the
company's option for so long as any series D stock remains outstanding. If
common stock is to be used to pay the series D stock dividend, such common stock
is to be valued at the 10-day volume-weighted average closing-bid price
immediately prior to the date of payment. We agreed to use
19
reasonable efforts to register the resale by the selling stockholders of the
shares of common stock issuable upon conversion of the series D stock within 180
business days after the date of purchase of the series D stock, and to keep such
registration effective for the lesser of one year from the date of issuance or
until all of such shares are sold.
The following table sets forth for each selling stockholder (i) the number
of shares being registered by this prospectus, (ii) the number of shares and
percent of class beneficially owned at the date of filing, and (iii) the number
of shares and percent of class that the selling stockholder would beneficially
own if all shares registered hereunder were sold, assuming no other shares were
purchased. No selling stockholder has been an officer, director or employee of
Immtech for the past three years. Because the selling stockholders may offer
all, some or none of their shares, we cannot provide a definitive estimate of
the number of shares each will hold after such registration. This prospectus is
filed at our expense.
Percent of
Shares Class
Shares of Shares of Percent of Remaining Remaining
Common Common Total Class of if all if all
Stock Stock Shares Shares Shares Shares
Series D Underlying Underlying Beneficially Shares Beneficially Registered Registered
Name Stock Series D Warrants Owned Registered Owned(1) are Sold are Sold
------------------------- ---------- ------------ ---------- -------------- ----------- ------------- ------------ -----------
Ching Jung Cheng 25,200 69,999 25,200 223,424 95,199 1.81% 128,225 1.04%
Cheung Yuk Chor Dickie 20,000 55,554 20,000 145,427 75,554 1.18% 69,873 *
Lao Chu 16,000 44,443 16,000 103,070 60,443 * 42,627 *
Lee Mo Chi 16,000 44,443 16,000 60,716 60,443 * 273
Liu Yuk Tong/or
Wong Gum Wing 16,000 44,443 16,000 104,190 60,443 * 43,747 *
Tsang Wai Ping Alfred 12,000 33,332 12,000 54,737 45,332 * 9,405 *
Ho Cho Sing 8,000 22,222 8,000 30,400 30,222 * 178 *
Chan Chee Wing 8,000 22,222 8,000 115,977 (2) 30,222 * 85,755 (2) *
Ma Fa On 7,480 20,777 7,480 28,384 28,257 * 127 *
Clough Investment
Partners I, L.P. 6,950 19,305 6,950 37,946 (3) 26,255 * 169 (3) *
Ernest Lau Chi Cheong 6,000 16,666 6,000 24,168 22,666 * 1,502 *
Chan Tak Chi William 5,400 15,000 5,400 59,491 20,400 * 39,091 *
Fukoku Asset
Management Ltd 4,000 11,111 4,000 68,918 15,111 * 53,807 *
Law Kar Shui 4,000 11,111 4,000 15,179 15,111 * 68 *
Leonard Samia 4,000 11,111 4,000 15,179 15,111 * 68 *
Hui Chin Ki 4,000 11,111 4,000 23,439 15,111 * 8,328 *
Cheung Shuk Kwan 3,600 10,000 3,600 172,734 (2) 13,600 1.40% 159,134 (2) 1.29%
Lau Shun Shing 3,200 8,889 3,200 12,156 12,089 * 67 *
Low Kit Yong 2,800 7,778 2,800 22,625 10,578 * 12,047 *
Lee Sau Lin 2,520 7,000 2,520 9,562 9,520 * 42 *
Pang Jin Jun 2,400 6,666 2,400 9,107 9,066 * 41 *
Clough Offshore
Fund, Ltd. 2,230 6,194 2,230 37,946 (3) 8,424 * 169 (3) *
Lau Mei Yin Amy 2,000 5,555 2,000 21,248 7,555 * 13,693 *
Donald M. Schaeffer 2,000 5,555 2,000 7,589 7,555 * 34 *
20
Percent of
Shares Class
Shares of Shares of Percent of Remaining Remaining
Common Common Total Class of if all if all
Stock Stock Shares Shares Shares Shares
Series D Underlying Underlying Beneficially Shares Beneficially Registered Registered
Name Stock Series D Warrants Owned Registered Owned(1) are Sold are Sold
------------------------- ---------- ------------ ---------- -------------- ----------- ------------- ------------ -----------
Terry Fook-Ngon Kwong 2,000 5,555 2,000 8,589 7,555 * 1,034 *
Lam Yik Kau Peter 2,000 5,555 2,000 7,589 7,555 * 34 *
Man Yau Ming 2,000 5,555 2,000 11,814 7,555 * 4,259 *
Lo Mo On 1,600 4,444 1,600 8,517 6,044 * 2,473 *
Rose Marie Lee 1,540 4,278 1,540 5,843 5,818 * 25 *
Paul & Francesca Sciaba 1,080 3,000 1,080 4,098 4,080 * 18 *
Clough Investment
Partners II, L.P. 820 2,278 820 37,946 (3) 3,098 * 169 (3) *
Yeung Lai 800 2,222 800 5,330 3,022 * 2,308 *
Dwight B. Crane 800 2,222 800 21,292 3,022 * 18,270 *
Daniel Puopolo 720 2,000 720 2,732 2,720 * 12 *
Andrew Puopolo 720 2,000 720 2,732 2,720 * 12 *
Richard DeGabriel 540 1,500 540 3,299 2,040 * 1,259 *
Cheng Wing Chiu 400 1,111 400 1,517 1,511 * 6 *
Michael J. Geoghan 400 1,111 400 1,517 1,511 * 6 *
Scott Hess 400 1,111 400 14,468 1,511 * 12,957 *
Stephen Carter 400 1,111 400 3,813 1,511 * 2,302 *
------- ---------- ------- ---------- ---------- ------
Totals 200,000 555,540 200,000 1,426,906 755,540 671,366
* Less than 1.00%.
(1) The corresponding percentages are the quotient of (x) the number of shares
beneficially owned and (y) the sum of the 10,874,742 shares of common
stock outstanding, the number shares of common stock issuable upon
conversion of series A stock, series B stock, series C stock and series D
stock and such holder's options and warrants exercisable within 60 days of
the date of September 10, 2004.
(2) Chan Chee Wing and Cheung Shuk Kwan hold 41,910 shares as Joint Tenants
with Right of Survivorship.
(3) Total number of shares for Clough Investment Partners I, L.P., Clough
Offshore Fund, Ltd. and Clough Investment Partners II, L.P.
DESCRIPTION OF CAPITAL STOCK
General
The following are the material terms of our common stock. You should
refer to the applicable provisions of Delaware law, our certificate of
incorporation as amended and our bylaws for additional information. See
"Where You Can Find More Information."
Under our amended and restated certificate of incorporation our authorized
capital stock consists of:
100,000,000 shares of common stock, par value $0.01 per share; and
5,000,000 shares of preferred stock, par value $0.01 per share.
21
As of September 10, 2004, we had 10,874,742 shares of common stock
outstanding (not including 409,502 shares of common stock reserved for
conversion of series A stock, 124,531 shares of common stock reserved for
conversion of series B stock, 366,809 shares of common stock reserved for
conversion of series C stock, 555,540 shares of common stock reserved for the
conversion of series D stock, 1,121,057 shares of common stock reserved for
exercise of outstanding options and 2,955,412 shares of common stock reserved
for exercise of outstanding warrants held by certain investors). Of the shares
of common stock outstanding, 8,358,302 shares of common stock are freely
tradable without restriction. All of the remaining 2,516,440 shares are
restricted from resale except pursuant to certain exceptions under the
Securities Act. All of the common stock underlying the outstanding series D
stock is registered by this prospectus.
Common Stock
Our common stock is traded on the AMEX under the symbol "IMM." Each share
of our common stock entitles the holder to one vote on all matters on which
holders are permitted to vote. There is no cumulative voting for election of
directors. Accordingly, the holders of a majority of the shares voted can elect
all of the nominees for director.
Subject to preferences that may be applicable to any outstanding series of
preferred stock, the holders of our common stock are entitled to dividends when,
and if, declared by the board of directors out of funds legally available for
that purpose. Upon liquidation, dissolution or winding up, subject to
preferences that may be applicable to any outstanding series of preferred stock,
the holders of our common stock are entitled to a pro rata share in any
distribution to stockholders. Our common stock has no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to our common stock. All outstanding shares of our common
stock are fully paid and non-assessable.
PLAN OF DISTRIBUTION
The distribution of the shares described in this prospectus may be
effected from time to time in one or more transactions either (a) at a fixed
price or prices which may be changed, (b) at market prices prevailing at the
time of sale, (c) at prices relating to the prevailing market prices or (d) at
negotiated prices. Selling stockholders may offer and sell the shares described
in this prospectus (i) through agents, (ii) through one or more underwriters or
dealers, (iii) through a block trade in which the broker or dealer engaged to
handle the block trade will attempt to sell the securities as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction, (iv) directly to one or more purchasers (through a specific bidding
or auction process or otherwise) or (v) through a combination of any of these
methods of sale.
To our knowledge, the selling stockholders have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the shares, nor is there an underwriter or
coordinating broker acting in connection with the proposed sales of shares by
the selling stockholders. Any shares covered by this prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus. We will pay all costs and expenses
incurred in connection with the registration of the shares offered by this
prospectus. Any brokerage commissions and similar
22
selling expenses attributable to the sale of shares by the selling stockholders
will be borne by the selling stockholders.
We have agreed to indemnify the selling stockholders and the selling
stockholders' respective officers, directors, employees and agents, and each
person who controls such selling stockholders, in certain circumstances against
certain liabilities, including liabilities arising under the Securities Act, and
the selling stockholders have agreed to indemnify us and our directors and
officers in certain circumstances against certain liabilities, including
liabilities arising under the Securities Act, in each case in connection with
this offering.
The selling stockholders may solicit offers to purchase the shares
directly and the selling stockholders may sell the shares directly to
institutional or other investors. The selling stockholders may enter into
agreements with agents, underwriters and dealers under which the selling
stockholders may agree to indemnify the agents, underwriters and dealers against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments they may be required to make with respect to these
liabilities. Some of the agents, underwriters or dealers, or their affiliates
may be customers of, engage in transactions with or perform services for the
selling stockholders in the ordinary course of business.
If any selling stockholders offers and sells shares through an underwriter
or underwriters, then the selling stockholders will execute an underwriting
agreement with the underwriter or underwriters. The names of the specific
managing underwriter or underwriters, as well as any other underwriters, and the
terms of the transactions, including compensation of the underwriters and
dealers, which may be in the form of discounts, concessions or commissions, if
any, will be described in a prospectus supplement, if applicable, which will be
used by the underwriters to make resales of the shares. If the selling
stockholders offer and sell the shares through a dealer, then the selling
stockholders or an underwriter will sell the shares to the dealer, as principal.
The dealer may then resell the shares to the public at varying prices to be
determined by the dealer at the time of resale.
The selling stockholders, dealers acting in connection with the offering
and brokers executing sell orders on behalf of one or more selling stockholders
may be deemed to be "underwriters" within the meaning of the Securities Act. In
addition, any such broker or dealer may be required to deliver a copy of this
prospectus to any person who purchases any of the shares from or through such
broker or dealer.
SUBSEQUENT EVENTS
On July 30, 2004 we completed a secondary public offering of 899,999
shares of common stock (the 899,999 shares includes the underwriters' full
exercise of its over-allotment option of 117,391 shares). Gross proceeds to us
from the offering were approximately $9.2 million.
23
LEGAL MATTERS
Legal matters in connection with the validity of the shares offered by
this prospectus will be passed upon for the company by Cadwalader, Wickersham &
Taft LLP, New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the company's Annual Report on Form 10-K/A have been audited by Deloitte &
Touche LLP, an 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.
INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
company pursuant to the foregoing provisions, the company has been advised that
in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
You should rely only on the information contained in this prospectus,
incorporated by reference herein or provided by supplement. We have not
authorized anyone else to provide you with different information. The
information contained in this prospectus is correct only as of the date of this
prospectus, regardless of the time of the delivery of this prospectus or any
sale of these securities.
24
GLOSSARY
As used in this prospectus, the following terms have the meanings set
forth below.
AIDS Acquired immune deficiency syndrome, a disease
caused by a virus.
DB289 The designation given to our lead dication.
Dication A chemical molecule with two positively charged
ends that are held together by a chemical
linker.
DNA A type of molecule made up of polymerized
deoxyribonucleotides linked together by
phosphate bonds.
FDA U.S. Food and Drug Administration.
FDCA Federal Food, Drug, and Cosmetic Act as Amended.
HCV Hepatitis C virus, or HCV, is one of the viruses
that causes acute and chronic hepatitis. Persons
who are chronically infected with hepatitis C
are at an increased risk for the development of
cirrhosis and liver cancer.
HIV HIV is the human immunodeficiency virus most
researchers believe causes AIDS.
IND Investigational New Drug Application, or IND, is
a document required to be filed with the FDA
prior to performing clinical studies on human
subjects in the United States.
Leishmaniasis An infection caused by a protozoal parasite that
affects the skin and abdominal organs, causing
ulcers or skin disorders that resemble leprosy.
PCP Pneumocystis carinii pneumonia ("PCP") is a
protozoal infection of the lungs, and most
common of the AIDS-associated diseases.
Phase I Clinical testing in which the safety and
pharmacological profile of a new drug is
established in humans.
Phase II Clinical testing in which the effectiveness of a
new drug is established in humans. This includes
establishing the dose amount and frequency
required to achieve a therapeutic effect, the
metabolic rate of the administered drug and the
toxicity profile in specific patient
populations.
Phase III Commonly referred to as pivotal studies
(however, in certain circumstances, Phase II
trials can serve as pivotal). When Phase II
evaluations demonstrate that a dose range of the
drug has a therapeutic effect and an acceptable
safety profile, Phase III trials are undertaken
in large patient populations to further evaluate
dosage, to provide substantial evidence of
clinical efficacy and to further test for safety
in an expanded and diverse patient population at
multiple, geographically-dispersed clinical
trial sites.
TB A disease caused by bacteria, Mycobacterium
tuberculosis, that is transmitted by breathing
in or eating infected droplets, usually
affecting the lungs, although infection of other
organ systems can occur.
Trypanosomiasis An infection caused by a protozoal parasite and
transmitted usually by insect bites. Also known
as African sleeping sickness.
25
====================================== ========================================
TABLE OF CONTENTS
RISK FACTORS.................... 1
ABOUT THIS PROSPECTUS...........15 IMMTECH INTERNATIONAL,
WHERE YOU CAN FIND MORE INC.
INFORMATION; INCORPORATION OF
DOCUMENTS BY REFERENCE..........16
FORWARD-LOOKING STATEMENTS......18
THE COMPANY.....................18 755,540 Shares
USE OF PROCEEDS.................19 Common Stock
SELLING STOCKHOLDERS............19
DESCRIPTION OF CAPITAL STOCK....21 -----------------------------------
PLAN OF DISTRIBUTION............22 PROSPECTUS
LEGAL MATTERS...................23
EXPERTS.........................24 -----------------------------------
INTERESTS OF NAMED EXPERTS AND
COUNSEL.........................24
GLOSSARY........................25
September 22, 2004
ALL DEALERS THAT EFFECT
TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN
THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS UNTIL THE
LATER OF NOVEMBER 1, 2004 OR 40 DAYS
AFTER THE EFFECTIVE DATE OF THIS
PROSPECTUS OR ANY POST-EFFECTIVE
AMENDMENT TO THIS PROSPECTUS. THIS
IS IN ADDITION TO THE DEALERS'
OBLIGATION TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
====================================== ========================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth our estimates of the expenses to be
incurred in connection with the offering of the shares of common stock being
offered hereby:
SEC registration fee: $ 896.00
Printing expenses: $ 2,000.00(1)
Legal fees and expenses: $20,000.00(1)
Accounting fees and expenses: $10,000.00(1)
Miscellaneous expenses: $ 5,000.00(1)
-------------
TOTAL: $37,896.50(1)
=============
------------------
(1) Estimated.
We will pay all costs and expenses incurred in connection with the
registration of the shares. Any brokerage commissions and similar selling
expenses attributable to the sale of shares by the selling stockholders will be
borne by the selling stockholders.
Item 15. Indemnification of Directors and Officers.
Limitation of Director's Liability
Our amended and restated certificate of incorporation and bylaws reduce
the liability of directors to the fullest extent permissible under Delaware law.
Delaware law permits a corporation to limit the personal liability of a director
to the corporation or its shareholders for monetary damages for breach of
certain fiduciary duties as a director, provided that the director's liability
may not be eliminated or limited for: (a) breaches of the director's duty of
loyalty to the corporation or its shareholders; (b) acts or omissions not in
good faith or involving intentional misconduct or knowing violations of law; (c)
the payment of unlawful dividends or unlawful stock repurchases or redemptions;
or (d) transactions in which the director received an improper personal benefit.
A director's liability may also not be limited for violation of, or otherwise
relieve the corporation or its directors from the necessity of complying with,
federal or state securities laws or affect the availability of non-monetary
remedies such as injunctive relief or rescission.
Indemnification of Officers and Directors
The provisions of our bylaws relating to indemnification require that we
indemnify our directors and executive officers to the fullest extent permitted
under Delaware law, provided that we may modify the extent of such
indemnification by individual contracts with our directors and
II-1
executive officers, and provided, further, that we will not be required to
indemnify any director or executive officer in connection with a proceeding
initiated by such person, with certain exceptions. Delaware law, our bylaws, and
any indemnity agreements may also permit indemnification for liabilities arising
under the Securities Act or the Exchange Act.
Item 16. Exhibits and Financial Statement Schedules.
See the Exhibit Index immediately following the Signature Page to this
registration statement.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
company pursuant to the provisions described in Item 15 above, or otherwise, the
company has been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the company of expenses incurred or paid
by a director, officer or controlling person of the company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering price may be reflected in the form of
prospectus filed with the SEC under Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement.
II-2
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by us pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered by this registration
statement, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's Annual Report under Section 13(a) or 15(d) of the Exchange Act that
is incorporated by reference into this registration statement shall be deemed to
be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the company certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, hereunto
duly authorized, in the City of Vernon Hills, State of Illinois, on September
22, 2004.
IMMTECH INTERNATIONAL, INC.
By: /s/ T. Stephen Thompson
-----------------------------------------------
T. Stephen Thompson
President, Chief Executive Officer and Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints T. Stephen Thompson his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto, and the documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this registration statement was signed by the following persons in the
capacities and on the dates stated.
Signatures Title Date
----------------------------------------- --------------------------------------------------- -----------------------
/s/ T. Stephen Thompson President, Chief Executive Officer and Director
------------------------------------ (Principal Executive Officer) September 22, 2004
T. Stephen Thompson
/s/ Gary C. Parks Chief Financial Officer, Treasurer and Secretary
------------------------------------ (Principal Financial and Accounting Officer) September 22, 2004
Gary C. Parks
/s/ Cecilia Chan
------------------------------------
Cecilia Chan Executive Vice President and Director September 22, 2004
/s/ Harvey R. Colten, M.D.
------------------------------------
Harvey R. Colten, M.D. Director September 22, 2004
/s/ Judy Lau
------------------------------------
Judy Lau Director September 22, 2004
/s/ Levi H.K. Lee
------------------------------------
Levi H.K. Lee, M.D. Director September 22, 2004
/s/ Eric L. Sorkin
------------------------------------
Eric L. Sorkin Director September 22, 2004
/s/ Frederick W. Wackerle
------------------------------------
Frederick W. Wackerle Director September 22, 2004
By: /s/ T. Stephen Thompson
--------------------------------------
T. Stephen Thompson
Attorney-In-Fact
Index to Exhibits
-----------------
Exhibit Description
------- -----------
4.1(1) Form of Common Stock Certificate
4.2(2) Certificate of Designation, Series A Convertible Preferred Stock
4.3(3) Certificate of Designation, Series B Convertible Preferred Stock
4.4(4) Certificate of Designation, Series C Convertible Preferred Stock
4.4(5) Certificate of Designation, Series D Convertible Preferred Stock
4.5(5) Form of Regulation D Subscription Agreement for January 15, 2004
Private Placements
4.6(5) Form of Regulation S Subscription Agreement for January 15, 2004
Private Placements
5.1(6) Opinion of Cadwalader, Wickersham & Taft LLP dated
September 22, 2004
23.1(6) Consent of Deloitte & Touche LLP dated September 21, 2004
23.2(6) Consent of Cadwalader, Wickersham & Taft LLP (included in
Exhibit 5.1)
24.1(6) Powers of Attorney (included on Signature Page to this
Registration Statement)
(1) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on Form SB-2 (Registration Statement No. 333-64393), as filed
with the Securities and Exchange Commission on March 30, 1999.
(2) Incorporated by reference to the Company's Current Report on Form 8-K, as
filed with the Securities and Exchange Commission on February 14, 2002.
(3) Incorporated by reference to the Company's Current Report on Form 8-K, as
filed with the Securities and Exchange Commission on September 25, 2002.
(4) Incorporated by reference to the Company's Current Report on Form 8-K, as
filed with the Securities and Exchange Commission on June 10, 2003.
(5) Incorporated by reference to the Company's Current Report on Form 8-K, as
filed with the Securities and Exchange Commission on January 21, 2004.
(6) Filed herewith.