Filed With the Securities and Exchange Commission on February 11, 2000
Securities Act Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GUM TECH INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in its Charter)
UTAH 2067 87-0482806
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State of Other Jurisdiction of Primary Standard Industrial (IRS Employer
Incorporation or Organization Classification Code No. I.D. Number)
246 E. Watkins Street
Phoenix, Arizona 85004
(602) 252-1617
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(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Gary Kehoe, President
Gum Tech International, Inc.
246 E. Watkins Street
Phoenix, Arizona 85004
(602) 252-1617
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(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
Copies of all Communications to:
Richard B. Stagg
Snell & Wilmer L.L.P.
One Arizona Center
Phoenix, Arizona 85004-0001
(602) 382-6363
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of the Offering.
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, 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
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Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate offering Amount of
securities to be registered registered(2) per unit(2) price(1) registration fee
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Common Stock, no par value 240,000 shares $22.875 $5,490,000 $1450
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(1) In the event of a stock split, stock dividend, or similar transaction
involving the registrant"s common stock, in order to prevent dilution, the
number of shares registered will be automatically increased to cover the
additional shares in accordance with Rule 416(a) under the Securities Act
of 1933.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this registration statement shall become
effective on such date as the commission, acting pursuant to said Section 8(a),
may determine.
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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE CANNOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED 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 FEBRUARY 11, 2000
PROSPECTUS
GUM TECH INTERNATIONAL, INC.
Common Stock
240,000 Shares
Dale G. Brown, Robert S. Davidson, Charles B. Hensley, Ira D. Hill,
Eugene P. Kamper, Lawrence S. Kaye, Henry M. Landau, Peter P. Walters, and
Robert White are offering to sell up to 240,000 shares of our common stock
issuable upon exercise of warrants and options that we issued to the selling
stockholders. The selling stockholders may sell some or all of the common stock
to new purchasers through ordinary brokerage transactions, directly to market
makers of our common stock, or through any of the other means described in the
section entitled "Plan of Distribution" beginning on page 14.
The selling stockholders will receive all of the proceeds from the sale
of the common stock, less any brokerage or other expenses of sale incurred by
them. We will receive up to $2,355,650 if the selling stockholders fully
exercise their options and warrants. We are paying for the costs of registering
the resale of the shares underlying the options and warrants held by the selling
stockholders.
Our common stock is traded on the Nasdaq National Market under the
symbol "GUMM."
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BEFORE PURCHASING ANY OF THE SHARES COVERED BY THIS PROSPECTUS,
CAREFULLY READ AND CONSIDER THE RISK FACTORS INCLUDED IN THE SECTION ENTITLED
"RISK FACTORS" BEGINNING ON PAGE 7. YOU SHOULD BE PREPARED TO ACCEPT ANY AND ALL
OF THE RISKS ASSOCIATED WITH PURCHASING THE SHARES, INCLUDING A LOSS OF YOUR
ENTIRE INVESTMENT.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE SALE OF THE COMMON STOCK OR DETERMINED THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS ILLEGAL FOR ANY
PERSON TO TELL YOU OTHERWISE.
The date of this prospectus is February ___, 2000.
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TABLE OF CONTENTS
Page
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Business.................................................................... 3
Risk Factors................................................................ 7
Use of Proceeds............................................................. 10
Selling Stockholders........................................................ 11
Description of Securities................................................... 12
Plan of Distribution........................................................ 14
Legal Matters............................................................... 15
Experts..................................................................... 15
Where You Can Find More Information......................................... 15
You should rely only on the information contained or incorporated by
reference in this prospectus and in any accompanying prospectus supplement. No
one has been authorized to provide you with different information.
The common stock is not being offered in any jurisdiction where the
offer is not permitted.
You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of the documents.
Unless otherwise indicated in this prospectus "Gum Tech," "us," "we,"
"our" and similar terms refer to Gum Tech International, Inc. and its
subsidiaries. The Gum Tech name and logo and Zicam are trademarks of Gum Tech
International, Inc. Other brands, names and trademarks contained in this
prospectus are the property of their respective owners.
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BUSINESS
SUMMARY
We develop and manufacture specialty chewing gum products for branded
and private label customers, as well as products marketed under our own brand.
Specialty chewing gums include vitamins, herbals, and active over-the-counter
drug ingredients formulated to provide specific health-related benefits to the
user. We manufacture and continue to develop specialty chewing gums that are
formulated to:
* promote oral hygiene and breath freshness;
* promote weight management;
* reduce pain;
* relieve indigestion;
* contribute to energy and endurance;
* reduce the risk of osteoporosis;
* reduce tobacco cravings; and
* relieve cold and flu symptoms.
A substantial majority of sales from our gum operations currently are
attributable to products developed, manufactured, and packaged by us for
marketing and sale by major branded and private label consumer products
companies such as Breath Asure, Inc., Ranir/DCP, Inc., Heritage Consumer
Products, Herbalife International, Inc., and Pharma-Green Ltd. We are also
actively involved in discussions with other major consumer product companies
regarding the development and formulation of a variety of additional specialty
chewing gum products.
In 1998, following a significant management restructuring, we changed
our principal strategy from developing, manufacturing, and distributing our own
branded and private label gum products to developing, manufacturing, and
packaging specialty gum products for sale and distribution by major branded and
private label customers that have the capital resources and distribution
capability to promote and market specialty chewing gums on a large national and
international scale. We adopted this change in strategy primarily because we did
not have the financial resources, name recognition, and distribution capability
to successfully market and distribute its gums on a wide scale basis.
We operate the only stainless steel gum manufacturing facility in the
United States registered with the Food and Drug Administration to produce
over-the-counter (OTC) chewing gum products. Completed in 1996, we believe that
this facility is the only facility in the United States that currently is
capable of producing over-the-counter drugs in chewing gum form.
Through a joint venture with BioDelivery Technologies, Inc. (formerly
Gel Tech, Inc.), a California corporation, we are also engaged in the
manufacture, marketing, and distribution of health-related products using a
patent-pending, nasal gel technology. The initial product being developed and
marketed by this joint venture is Zicam, a nasal gel formula that has been
formulated to reduce the severity and duration of the common cold. An initial
internal study and a subsequent independent clinical study of Zicam has
indicated that use of Zicam significantly reduced the duration and severity of
the common cold. To conduct clinical studies and develop, manufacture, and
market Zicam, we entered into an operating agreement with BioDelivery
Technologies under which both parties transferred their respective interests in
the patent rights to the nasal gel technology in exchange for membership
interests in Gel Tech LLC, an Arizona limited liability company. We have a 60%
interest in the capital and profits of the joint venture and parties affiliated
with BioDelivery Technologies collectively own a 40% interest in the capital and
profits of the joint venture. In addition, as contemplated by the operating
agreement, we contributed $3.5 million to the joint venture, which will be
repaid to us prior to any distributions to other holders if Gel Tech is sold or
otherwise liquidated. Because Zicam is in the initial stages of production and
distribution, there can be no assurance that this product will be successful.
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In December 1999, we reached an agreement in principle to form a joint
venture with Swedish Match AB. The joint venture will be organized as an
independent company for the purpose of developing, manufacturing, marketing, and
distributing non-tobacco products worldwide. Under the terms of the agreement,
Swedish Match will own 51% and we will own 49% of the joint venture. We will
contribute intellectual property related to chewing gum products containing
nicotine and Swedish Match will contribute $10 million in start-up capital.
Swedish Match, based in Stockholm, Sweden, is an international group which
develops, manufactures, markets, and distributes, through its own subsidiaries
worldwide, a broad range of tobacco products within the OTP (Other Tobacco
Products) category, with smokeless tobacco as its core business along with
cigars and pipe tobacco, as well as matches and lighters. Swedish Match's
extensive range of products is sold in 140 countries, with sales for the 12
month period ended September 30, 1999 totaling approximately $1 billion.
We were incorporated in Utah in 1991. Our principal executive offices
are located at 246 E. Watkins Street, Phoenix, Arizona and its telephone number
is (602) 252-1617.
STRATEGY
We are pursuing the following business strategies:
* CONTINUE TO RESEARCH AND DEVELOP NEW SPECIALTY GUM PRODUCTS. We
possess considerable gum formulation expertise, and together with
our existing and potential customers, are developing new products
in the specialty chewing gum market. We believe we are uniquely
positioned to manufacture over-the-counter gum products because
we possess the only stainless steel gum making facility in the
United States registered with the FDA to produce over-the-counter
chewing gum products.
* PARTNER WITH MAJOR CONSUMER PRODUCT COMPANIES TO INCREASE SALES.
Since early 1998, we have pursued a strategy of partnering with
major consumer products companies that have the financial
resources and distribution capability to market and distribute
specialty chewing gum products on a national scale. We expanded
these relationships significantly during 1998 with the addition
of Breath Asure, Ranir/DCP, Heritage Consumer Products,
Pharma-Green Ltd. (an Israeli company), and EcoDenT, among
others.
* IMPROVE MANUFACTURING OPERATIONS TO ENHANCE EFFICIENCY AND
INCREASE PROFIT MARGINS. In 1998 and 1999, we expanded our
operations, including adding personnel and additional packaging
and coating equipment, to meet an expected increase in demand for
several products. Following this expansion of operations, we
continue to take steps to increase our business and to lower the
costs of manufacturing our gum products.
* CONTINUE TO EFFECTIVELY MARKET GUM TECH BRANDED PRODUCTS. While
we have changed our principal strategy to focus on contract
manufacturing for others, we continue to support several of our
own branded products and believe that these products and related
marketing efforts provide a showcase for new product concepts and
demonstrate our expertise in developing new gum formulations.
* EFFECTIVELY MANAGE THE DEVELOPMENT AND GROWTH OF THE GEL TECH LLC
JOINT VENTURE AND THE MANUFACTURING AND MARKETING OF ZICAM(TM).
Zicam is a new product that we believe represents an opportunity
for substantial growth in our revenue. In order to realize this
growth in revenue, however, we must effectively manage the
development and growth of our joint venture with BioDelivery
Technologies and Zicam must achieve significant market
acceptance. We have contributed $3.5 million to Gel Tech LLC to
fund its initial capital requirements to develop, manufacture,
and market Zicam, including the costs necessary to conduct
independent clinical research.
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PRODUCT INFORMATION
The table below describes certain information related to specific
chewing gum products currently manufactured by us for other consumer products
companies.
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PRODUCT BENEFITS TO USER MARKET DISTRIBUTED BY
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Breath Asure Dental Gum(TM) Promotes oral hygiene Oral Care Breath Asure
and breath freshness
Private label dental gums Promotes oral hygiene Oral Care Ranir/DCP
and breath freshness
AcuTrim(R) Promotes weight management OTC drug Heritage Consumer Products
Aspergum(R) Pain relief OTC drug Heritage Consumer Products
Chooz Antacid and prevents OTC drug Heritage Consumer Products
osteoporosis
Herbalife NRG(R) Improves energy & endurance Dietary supplement Herbalife
Herbalife Chew Slim(R) Promotes weight management Dietary supplement Herbalife
Pharma-Green (seven varieties) Various Dietary supplement Pharma-Green Ltd.
Brain Gum Improves brain function Dietary supplement KR Research, Inc.
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We also market the following products under the Gum Tech brand:
Ginseng, Chew & Soothe(R), CitrusSlim(R), Chromatrim(R), Calcium, Zone,
DentaHealth(R), and Love Gum(R).
MANUFACTURING AND PACKAGING
The manufacture of specialty chewing gums involves:
* storing bulk raw materials and "fine" raw materials, such as
flavor, colors and active ingredients;
* producing and mixing the gum base in large stainless steel
mixers;
* extruding the gum into selected sizes and shapes;
* coating the gum, generally with a sugarless coating solution;
* branding the product if required;
* packaging the gum in blister packages; and
* packaging the blisters, according to customer specifications, for
shipment.
All of our gum products contain one or more active ingredients which
are added either to the gum center in the mixing stage or included in the
coating solution.
Prior to commencing production of the chewing gum, we record lot
numbers for all ingredients, examine and file certificates of ingredients,
perform quality control tests, and sanitize equipment and utensils. Our
personnel conduct additional quality control tests throughout the manufacturing
process. We manufacture our products in compliance with good manufacturing
procedures requiring written standard operating procedures.
We manufacture all of our gum products, including those marketed and
distributed by others. In 1998, we added significantly to our coating and
packaging capability and secured an additional gum rolling line to meet an
anticipated increase in demand for our gums.
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COMPETITION
Although the specialty gum market is emerging as a market category
distinct from the traditional, established chewing gum market, Gum Tech and the
companies to whom we sell face significant competition in each of the four
categories in which we operate. These categories include oral care products, OTC
drugs, smoking cessation products, and dietary supplements. In the oral care
products market, we manufacture products for Breath Asure and Ranir/DCP, which
compete directly with Arm & Hammer dental gum, Trident Advantage, and V-6 dental
gum. We manufacture OTC drug-related gum products, including Aspergum, an
analgesic, Chooz, an antacid/calcium supplement, and AcuTrim, a dietary gum.
Each of these products competes generally with analgesics, antacids, and dietary
products produced and marketed by major consumer products companies. We are
evaluating opportunities in the smoking cessation market, which is currently
dominated by the Nicorette product marketed by Pharmacia and Upjohn. In the
dietary supplement market, our various gum products compete with a large number
of non-gum dietary supplement products.
Competitive factors in the chewing gum industry include price, flavor,
and name recognition resulting from media advertising. We historically have not
had the capital resources, marketing and distribution networks, product name
recognition, and advertising budget to produce or introduce chewing gum brands
that could compete effectively with the multi-national chewing gum manufacturers
and large specialty chewing gum marketers. Accordingly, we have adopted a
strategy of partnering with major branded and private label customers that
possess the resources and capabilities needed to market and distribute gum
products on a wide scale basis.
We also face significant competition from a large number of major drug
companies involved in selling cold and flu products that will compete directly
with Zicam. Most of these competitors have greater name recognition, more
established brands, wider distribution capabilities and greater financial and
marketing resources than we do.
FDA AND OTHER GOVERNMENT REGULATION
We are subject to various Federal, state and local laws affecting our
business. All of our products are subject to regulation by the FDA, including
regulations with respect to labeling of products, approval of ingredients in
products, claims made regarding the products, and disclosure of product
ingredients. In addition, some of our products are considered "drugs."
Consequently, manufacture of these products must comply with "good manufacturing
practices" mandated by the FDA, which prescribes specific requirements and
procedures for the manufacture of FDA-regulated drug products. If we fail to
comply with these requirements and procedures, the FDA has the right to restrict
the sale of or remove such products from the market. We believe that all of our
products comply with all regulatory requirements including the FDA manufacturing
standards and practices for drug products.
Our advertising claims made with respect to our products also are
subject to the jurisdiction of the FDA and the Federal Trade Commission. In both
cases, we are required to obtain scientific data to support any advertising or
labeling of health claims we make concerning our products.
In addition, our chewing gum manufacturing facility is subject to
regulation by various governmental agencies including state and local licensing,
zoning, land use, construction and environmental regulations and various health,
sanitation, safety and fire codes and standards. Suspension of certain licenses
or approvals, due to failure to comply with applicable regulations or otherwise,
could interrupt our manufacturing operations. We are also subject to federal and
state laws establishing minimum wages and regulating overtime and working
conditions.
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TRADEMARKS, TRADE NAMES, AND PROPRIETARY RIGHTS
We own a perpetual non-exclusive license to use Microdent, a
plaque-reducing agent, in our coated chewing gum products. Microdent is the
critical ingredient in the chewing gums that we manufacture and package for
Breath Asure and Ranir/DCP.
We routinely seek trademark protection from the United States Patent
Office ("USPO") and from similar agencies in foreign countries for chewing gum
brands. Despite these protections, we may not be able to successfully defend any
trademarks granted to us against claims from or use by competitors. In addition,
trademark applications may not be approved by the USPO or any similar foreign
agency.
We consider some of our chewing gum formulations and processes to be
proprietary in nature and rely upon a combination of nondisclosure agreements,
other contractual restrictions, and trade secrecy laws to protect this
proprietary information. Despite these precautions, these steps may not be
adequate to prevent misappropriation of our proprietary information and our
competitors could independently develop chewing gum formulations and processes
that are substantially equivalent or superior to those that we develop.
EMPLOYEES
As of December 31, 1999, our gum operations employed 75 individuals,
including three executive officers, 56 manufacturing and warehouse personnel,
four research and development personnel, and 12 administrative/sales personnel.
As of December 31, 1999 Gel Tech employed six executive and administrative
personnel.
RISK FACTORS
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS AND FINANCIAL CONDITION
Our future operating results and financial condition depend on a number
of factors that we must successfully manage in order to achieve favorable future
operating results. The following potential risks and uncertainties, together
with those mentioned elsewhere in this prospectus, could affect our future
operating results, financial condition, and the market price of our common
stock.
WE INCURRED SIGNIFICANT LOSSES IN PREVIOUS YEARS
We began operations in February 1991 and have a limited operating
history upon which potential investors may evaluate our performance. We reported
significant losses for the last three years and for the first three quarters of
1999. Although we earned a profit for the fourth quarter of 1999, we incurred a
loss for the year ended December 31, 1999. In addition, despite achieving a
profit in the fourth quarter of 1999, our future operations may not be
profitable. The likelihood of our success must be considered relative to the
problems, difficulties, complications, and delays frequently encountered in
connection with the development and operation of a new business, the significant
change in strategy in early 1998, and the development and marketing of Zicam, a
relatively new product.
OUR RELIANCE UPON A FEW GUM CUSTOMERS MAY NEGATIVELY IMPACT OUR FINANCIAL
RESULTS
The shift in our chewing gum strategy in early 1998 to a focus on
contract manufacturing has made our chewing gum operations dependent for sales
and future growth on a few customers. These customers include Herbalife, Breath
Asure, Ranir, Heritage Consumer Products and PharmaGreen. While the decision to
partner with these firms relieves us of the direct responsibility to market
products, we become dependent on the financial resources and marketing
capabilities of third parties. Further, we are at risk for their non-payment or
late payment for amounts owed to us. While we intend to add to this portfolio of
customers to reduce the risk of non-performance by any single customer, we have
not yet been successful in that effort.
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OUR INABILITY TO PROVIDE SCIENTIFIC PROOF FOR PRODUCT CLAIMS MAY ADVERSELY
AFFECT OUR SALES
The marketing of certain of our chewing gum and nasal gel products,
including Zicam, involves claims that such products assist in weight loss,
promote dental hygiene, and reduce the duration of the common cold, among
others. Under FDA and FTC rules, we are required to obtain scientific data to
support any health claims we make concerning our products. Although we have not
provided nor been requested to provide any scientific data to the FDA in support
of claims regarding our products, we have obtained such scientific data for all
of our products. There can be no assurance that the scientific data we have
obtained in support of such claims will be deemed acceptable to the FDA or FTC,
should either agency request any such data in the future. If the FDA or the FTC
requests any supporting information, and we are unable to provide support that
is acceptable to the FDA or the FTC, either agency could force us to stop making
the claims in question or restrict us from selling the affected products.
FDA AND OTHER GOVERNMENT REGULATION MAY RESTRICT OUR ABILITY TO SELL OUR
PRODUCTS
We are subject to various federal, state and local laws affecting our
business. Our chewing gum and nasal gel products are subject to regulation by
the FDA, including regulations with respect to labeling of products, approval of
ingredients in products, claims made regarding the products, and disclosure of
product ingredients. If we do not comply with these regulations, the FDA could
force us to stop selling the affected products or incur substantial costs in
adopting measures to maintain compliance with these regulations.
Our advertising claims regarding our products are subject to the
jurisdiction of the FTC as well as the FDA. In both cases we are required to
obtain scientific data to support any advertising or labeling health claims we
make concerning our products, although no pre-clearance or filing is required to
be made with either agency. If we are unable to provide the required support for
such claims, the FTC may stop us from making such claims or require us to stop
selling the related product.
IF ZICAM DOES NOT GAIN WIDESPREAD MARKET ACCEPTANCE, OUR ANTICIPATED SALES
AND RESULTS OF OPERATIONS WILL SUFFER
In 1999, Gel Tech LLC, a joint venture in which we hold a 60% interest
in profits and capital, launched a new homeopathic cold remedy known as Zicam.
Although studies have indicated that Zicam can significantly reduce the duration
and severity of the common cold, there is no guarantee that the product will
achieve widespread acceptance by the market. If any unanticipated problem arises
concerning the efficacy of Zicam or the product fails to achieve widespread
market acceptance for any reason , our prospects for our future operating
results would be adversely affected. In addition, although initial sales of
Zicam were significant, there is no assurance that demand for this product will
continue to grow, especially following the peak of the cold season.
WE MAY BE UNABLE TO MEET DEMAND FOR OUR NEW PRODUCTS
To the extent Zicam or any other new product we introduce achieves
widespread market acceptance and generates significant demand, we may be unable
to produce and deliver sufficient quantities of the product to meet our
customers' demands on a timely basis. If so, we could lose opportunities to sell
larger quantities of the product and damage relationships with distributors
whose orders could not be timely filled. This problem, if encountered, could be
particularly damaging if we are not able to meet customer demand during the cold
season, when we expect demand for sales of Zicam to peak.
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UNANTICIPATED PROBLEMS ASSOCIATED WITH PRODUCT DEVELOPMENT COULD DELAY OR HINDER
INTRODUCTION OF NEW PRODUCTS
We may experience unanticipated difficulties in developing new products
that could delay or prevent the introduction of those products. We may be
dependent in the near future upon chewing gum products that are currently being
developed. If we are unable to develop new chewing gum products on a timely
basis, our business, operating results, and financial condition could be
materially adversely affected.
WE MAY BE UNABLE TO SUCCESSFULLY EXPAND OUR OPERATIONS
We intend to continue expanding our manufacturing and marketing
operations. Expansion will place substantial strains on our management and our
operational, accounting, and information systems. Successful management of
growth will require us to improve our financial controls, operating procedures,
and management information systems, and to train, motivate, and manage our
employees.
In addition, to the extent that actual demand for our products in the
future is less than anticipated, we may incur higher than necessary costs in
preparing for an anticipated growth in sales that does not materialize or
materializes more slowly than expected.
Failure to manage growth effectively would have a material adverse
effect on the results of our operations and our ability to execute our business
strategy.
THE LARGE NUMBER OF SHARES ELIGIBLE FOR IMMEDIATE AND FUTURE SALES MAY DEPRESS
THE PRICE OF OUR STOCK
Sales of substantial amounts of common stock in the open market or the
availability of a large number of additional shares for sale could adversely
affect the market price for the common stock. Substantially all of our
outstanding shares of common stock, as well as the shares underlying vested but
as yet unexercised warrants and options, have either been registered for public
sale or may be sold under Rule 144 promulgated under the Securities Act.
Therefore, all of these shares may be immediately sold by the holders. A
substantial increase in the volume of trading in our stock may depress the price
of our common stock.
WE MAY BE UNABLE TO PREVENT OTHERS FROM DEVELOPING SIMILAR PRODUCTS
We routinely seek trademark and patent protection from the United
States Patent Office and from similar agencies in foreign countries for chewing
gum brands and have done so for Zicam. There can be no assurance that we will be
able to successfully defend any trademarks, trade names or patents against
claims from or use by competitors or that trademark, trade name or patent
applications will be approved by the USPO or any similar foreign agency.
We consider some of our chewing gum formulations and processes to be
proprietary in nature and rely upon a combination of non-disclosure agreements,
other contractual restrictions and trade secrecy laws to protect such
proprietary information. There can be no assurance that these steps will be
adequate to prevent misappropriation of our proprietary information or that our
competitors will not independently develop chewing gum formulations and
processes that are substantially equivalent or superior to our own.
THE PRICE OF OUR STOCK MAY CONTINUE TO BE VOLATILE
The market price of our common stock has been highly volatile and may
continue to be volatile in the future. Factors such as our operating results or
public announcements may cause the market price of our stock to decline quickly.
Market prices for securities of many small capitalization companies have
experienced wide fluctuations in response to variations in quarterly operating
results, general economic indicators and other factors beyond our control.
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WE MAY INCUR SIGNIFICANT COSTS RESULTING FROM PRODUCT LIABILITY CLAIMS
We are subject to significant liability should use or consumption of
our products cause injury, illness or death. Although we carry product liability
insurance, there can be no assurance that our insurance will be adequate to
protect us against product liability claims or that insurance coverage will
continue to be available on reasonable terms.
INABILITY TO RETAIN CURRENT MANAGEMENT COULD NEGATIVELY IMPACT OUR OPERATIONS
Our operations are dependent upon our ability to hire and retain
qualified management personnel and upon the continued services of our executive
officers. The loss of the services of any of our executive officers, whether as
a result of death, disability, or otherwise, could have a material adverse
effect upon our business.
We experienced significant management and board changes in 1998 and
1999, including the appointment of a new President and a new Chief Financial
Officer. We have entered into employment agreements with our current executive
officers and have applied for key man life insurance upon certain of their
lives.
USE OF PROCEEDS
The selling stockholders will receive all of the proceeds from the sale
of the common stock offered under this prospectus. If the selling stockholders
exercise all of their warrants and options, we will receive gross proceeds of
approximately $2,355,650, which we anticipate would be used for general
corporate purposes. The selling stockholders may or may not exercise any or all
of the warrants and options.
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SELLING STOCKHOLDERS
The table below lists the selling stockholders and other information
regarding the beneficial ownership of our common stock by each of the selling
stockholders. The second column lists the number of shares of common stock
beneficially owned by each stockholder or issuable to each selling stockholder
on January 25, 2000, assuming exercise of their warrants and options to acquire
shares of our common stock. The selling stockholders are offering only the
shares of common stock that they may acquire upon exercise of all of their
warrants and options to acquire our common stock, as indicated in the third
column. As each selling stockholder resells shares of common stock, we will file
prospectus supplements as necessary to update the number of shares of common
stock that each selling stockholder intends to sell, reflecting prior resales.
The fourth column assumes the sale of all of the shares offered by this
prospectus by each selling stockholder.
The information provided in the table below has been obtained from the
selling stockholders. The selling stockholders may sell all, some or none of
their shares in this offering. See "Plan of Distribution."
NAME OF SELLING SHARES OWNED MAXIMUM NUMBER SHARES OWNED
STOCKHOLDER BEFORE OFFERING OF SHARES OFFERED AFTER OFFERING
----------- --------------- ----------------- --------------
NUMBER PERCENTAGE
------ ----------
Dale G. Brown 7,144 7,144 0 --
Robert S. Davidson 47,500 47,500 0 --
Charles B. Hensley 47,500 47,500 0 --
Ira D. Hill 14,284 14,284 0 --
Eugene P. Kamper 7,144 7,144 0 --
Lawrence S. Kaye 49,868 47,500 2,368 0.03
Henry M. Landau 47,500 47,500 0 --
Peter P. Walters 7,144 7,144 0 --
Robert White 14,284 14,284 0 --
We are registering the shares for resale by the selling stockholders in
accordance with registration rights granted or offered to the selling
stockholders. We will pay the registration and filing fees, printing expenses,
listing fees, blue sky fees, if any, and fees and disbursements of our counsel,
but the selling stockholders will pay any underwriting discounts, selling
commissions and similar expenses relating to the sale of the shares. In
addition, we have agreed to indemnify the selling stockholders, and certain
affiliated parties against certain liabilities, including liabilities under the
Securities Act, in connection with this offering. The selling stockholders have
agreed to indemnify us and our directors and officers, as well as any person
that controls us, against certain liabilities, including certain liabilities
under the Securities Act.
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<PAGE>
DESCRIPTION OF SECURITIES
We are authorized to issue up to 20,000,000 shares of common stock and
1,000,000 preferred shares. As of February 3, 2000, we had 8,829,165 shares of
outstanding common stock.
Our board of directors has the authority, without further action by the
shareholders, to issue up to 1,000,000 shares of preferred stock in one or more
series and to fix the rights, preferences, privileges and restrictions granted
to or imposed upon any series of unissued shares of preferred stock and to
determine the number of shares constituting any series and the designation of
the series, without any further vote or action by the shareholders.
The following summary of terms of the common stock and Series A
preferred stock is not complete and is subject to and qualified by reference to
our amended Articles of Incorporation, Restated Bylaws, and by the provisions of
applicable law.
COMMON STOCK
The holders of our common stock are entitled to one vote per share on
all matters on which shareholders are entitled to vote. Subject to the rights of
holders of any class or series of shares, including preferred stock, having a
preference over the common stock as to dividends or upon liquidation, the
holders of our common stock are also entitled to dividends as may be declared by
our board of directors out of funds that are lawfully available, and are
entitled upon liquidation to receive pro rata the assets that are available for
distribution to holders of common stock. Holders of the common stock have no
preemptive, subscription, or conversion rights. The common stock is not subject
to assessment and have no redemption provisions.
OPTIONS
STOCK OPTION PLAN
Pursuant to our stock option plan, we have granted to our employees,
officers, directors, and an outside consultant or reserved for issuance options
to acquire 650,500 shares of our common stock. All of the options granted to
date have exercise prices equal to the market price of the underlying common
stock on the date the respective options were granted.
WHITEHILL ORAL TECHNOLOGIES AND GEL TECH OPTIONS
We have or will grant options to acquire up to 70,000 shares of common
stock to the principals of Whitehill Oral Technologies. We granted options to
acquire 25,000 shares in June 1998 at the then market price of $11.44 per share.
We granted options to acquire an additional 25,000 shares in June 1999 at the
then current market price of $9.75 per share. We will grant options to acquire
an additional 20,000 shares in June 2000 at the then current market price of our
common stock.
We granted options to purchase 190,000 shares of common stock to the
officers of Gel Tech, L.L.C. in May 1999 in conjunction with their employment by
Gel Tech LLC. These options have an exercise price of $9.61 per share.
This prospectus registers the shares of common stock issuable upon
exercise of the 1998 and 1999 Whitehill Oral Technologies options as well as the
Gel Tech officers' options for public sale.
WARRANTS
We have issued various warrants, including the following that are still
outstanding:
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<PAGE>
1996 INITIAL PUBLIC OFFERING
In 1996, in connection with our initial public offering, we issued
warrants to acquire shares of common stock to the underwriters at a purchase
price of $8.0625 per share. Of the initial amount issued, warrants to acquire
36,132 shares of our common stock remain outstanding as of February 3, 2000.
1999 FINANCING
On June 2, 1999, we issued warrants to Fisher Capital Ltd. and Wingate
Capital Ltd. to acquire a total of 300,000 shares of our common stock at an
initial price of $12.44 per share. As of February 3, 2000, warrants to acquire
87,460 shares of our common stock remained outstanding. The warrant exercise
price and the number of shares of common stock issuable upon exercise of these
warrants will be adjusted if we issue or sell any shares of common stock for a
consideration per share less than the market price of the common stock for the
five consecutive trading days immediately preceding the date of issue or sale.
The holders of these warrants have a right to participate in any pro rata
distribution of rights to purchase stock, warrants, securities, or other
property to record holders of any class of our common stock.
INTERCONTINENTAL CAPITAL CORPORATION
In connection with the June 1999 financing by Fisher Capital Ltd. and
Wingate Capital Ltd., we issued warrants to acquire an aggregate of 60,000
shares of our common stock to Next Millennium Capital Holdings, LLC and CJB
Consulting, Inc., (collectively, "Intercontinental Capital Corporation") as
partial payment of a finder's fee. Pursuant to these warrants, 30,000 shares may
be purchased at $11.70 per share and 30,000 shares may be purchased at $15.00
per share. As of the date of this prospectus, we had the right to require
Intercontinental Capital Corporation to exercise all of these warrants.
ANTI-DILUTION OF OPTIONS AND WARRANTS
The exercise price and number of shares purchasable upon exercise of
our options and warrants are subject to adjustment upon the occurrence of a
stock split, reverse stock split, or distribution to stockholders.
CITADEL TRANSACTION
On June 2, 1999, we issued 2,000 shares of our Series A preferred stock
and $4,000,000 in aggregate principal amount of 8% Senior Secured Redeemable
Notes to Fisher Capital Ltd. and Wingate Capital Ltd. in a private placement. As
of the date of this prospectus, all 2,000 shares of our Series A preferred stock
and the entire $4,000,000 in aggregate principal amount of the 8% Notes had been
redeemed. As a result, no shares of our Series A preferred stock remain
outstanding and the entire amount due under the 8% Senior Secured Redeemable
Notes has been satisfied.
TRANSFER AGENT AND REGISTRAR
The transfer Agent and Registrar for our common stock is Corporate
Stock Transfer, Inc.
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<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders (or, subject to applicable law, their
pledgees, donees, distributees, transferees, or other successors in interest)
may sell shares from time to time in public transactions, on or off the Nasdaq
National Market, or in private transactions, at prevailing market prices or at
privately negotiated prices, including but not limited to, one or any
combination of the following types of transactions:
* ordinary brokers" transactions;
* transactions involving cross or block trades or otherwise on the
Nasdaq National Market;
* purchases by brokers, dealers or underwriters as principal and
resale by such purchasers for their own accounts pursuant to this
prospectus;
* "at the market" to or through market makers or into an existing
market for the common stock;
* in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents;
* through transactions in options, swaps or other derivatives
(whether exchange-listed or otherwise); or
* in privately negotiated transactions.
In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate in the
resales. The selling stockholders may enter into hedging transactions with
broker-dealers, and in connection with those transactions, broker-dealers may
engage in short sales of the shares. The selling stockholders also may sell
shares short and deliver the shares to close out such short positions. The
selling stockholders also may enter into option or other transactions with
broker-dealers that require the delivery to the broker-dealer of the shares,
which the broker-dealer may resell pursuant to this prospectus. The selling
stockholders also may pledge the shares to a broker or dealer, and upon a
default, the broker or dealer may effect sales of the pledged shares pursuant to
this prospectus.
Brokers, dealers, or agents may receive compensation in the form of
commissions, discounts, or concessions from selling stockholders in amounts to
be negotiated in connection with the sale. The selling stockholders and any
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting
compensation.
Information as to whether any underwriter that the selling stockholders
may select, or any other broker-dealer, is acting as principal or agent for the
selling stockholders, the compensation to be received by any underwriter that
the selling stockholders may select or by any broker-dealer acting as principal
or agent for the selling stockholders, and the compensation to be paid to other
broker-dealers, in the event the compensation of such other broker-dealers is in
excess of usual and customary commissions, will, to the extent required, be set
forth in a supplement to this prospectus. Any dealer or broker participating in
any distribution of the shares may be required to deliver a copy of this
prospectus, including a prospectus supplement, if any, to any person who
purchases any of the shares from or through such dealer or broker.
We have advised the selling stockholders that during such time as they
may be engaged in a distribution of the shares they are required to comply with
Regulation M promulgated under the Securities Exchange Act. With certain
exceptions, Regulation M precludes any selling stockholder, any affiliated
purchasers and any broker-dealer or other person who participates in such
distribution from bidding for or purchasing, or attempting to induce any person
14
<PAGE>
to bid for or purchase any security that is the subject of the distribution
until the entire distribution is complete. Regulation M also prohibits any bids
or purchases made in order to stabilize the price of a security in connection
with the distribution of that security. All of the foregoing may affect the
marketability of the common stock.
We will not receive any of the proceeds from the selling stockholders'
sale of their common stock.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon by Snell & Wilmer LLP, Salt Lake City, Utah.
EXPERTS
The financial statements included in our Annual Report on Form 10-KSB
for the year ended December 31, 1998, which are incorporated by reference in the
Registration Statement of which this Prospectus forms a part, have been audited
by Angell & Deering, independent auditors, as stated in their report, and have
been included in reliance upon their expertise in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and special reports and other information
with the Securities and Exchange Commission. We have also filed a Registration
Statement on Form S-3, including exhibits and schedules, under the Securities
Act with respect to the common stock to be sold in this offering. This
prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement or the
exhibits and schedules which are part of the Registration Statement. The rules
and regulations of the SEC allow us to omit certain information included in the
Registration Statement from this prospectus. Accordingly, any statements made in
this prospectus as to the contents of any contract, agreement, or other document
are not necessarily complete. With respect to each such contract, agreement, or
other document filed as an exhibit to the Registration Statement, we refer you
to the exhibit for a more complete description of the matter involved, and each
statement in this prospectus shall be deemed qualified in its entirety by this
reference. You may read and copy all or any portion of the Registration
Statement or any reports, statements, or other information in the files at the
following public reference facilities of the Securities and Exchange Commission:
WASHINGTON, D.C. NEW YORK, NEW YORK CHICAGO, ILLINOIS
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, NY 10048 Chicago, IL 60661-2511
You may obtain copies of these documents upon payment of a duplicating
fee by writing to the Securities and Exchange Commission. You may call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information on
the operation of its public reference rooms. Our filings, including the
Registration Statement, will also be available to you on the Internet web site
maintained by the Securities and Exchange Commission at http://www.sec.gov.
Our common stock is listed on the Nasdaq National Market and similar
information can be inspected and copied at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
15
<PAGE>
The SEC allows us to "incorporate by reference" the information that we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the Commission will automatically update and supersede this information. We have
filed the following documents with the Commission and they are incorporated by
reference into this prospectus:
* Our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998;
* Our Quarterly Report on Form 10-QSB for the three months ended
March 31, 1999;
* Our Quarterly Report on Form 10-QSB for the six months ended June
30, 1999;
* Our Quarterly Report on Form 10-QSB for the nine months ended
September 30, 1999;
* Proxy Statement for our Annual Meeting of Stockholders held on
August 11, 1999;
* Description of common stock contained in our Registration
Statement on Form SB-2 declared effective under the Securities
Act on November 8, 1996 (File Number 333-14667);
* All other documents subsequently filed by Gum Tech International,
Inc. pursuant to Sections 12, 13(a), 13(c), 14 and 15(d) of the
Exchange Act.
Please note that all other documents and reports filed under Sections
13(a), 13(c), and 14 or 15(d) of the Exchange Act following the date of this
prospectus and prior to the termination of this offering will be deemed to be
incorporated by reference into this prospectus and to be made a part of it from
the date of the filing of our reports and documents.
You may request free copies of these filings by writing or telephoning
us at the following address:
William J. Hemelt
Gum Tech International, Inc.
246 E. Watkins Street
Phoenix, Arizona 85004
(602) 252-1617
16
<PAGE>
====================================== ======================================
We have not authorized any dealer,
sales representative, or other person
to give any information or represent
anything not contained in this
prospectus. You must not rely on any
unauthorized information. This
prospectus does not offer to sell or GUM TECH INTERNATIONAL, INC.
buy any common stock in any
jurisdiction where it would be
unlawful. Neither the delivery of this
prospectus nor any sale made hereunder
implies, under any circumstances, that
the information presented is correct
after the date of this prospectus.
---------------
PROSPECTUS
---------------
TABLE OF CONTENTS
Page
----
Business............................3
Risk Factors........................7
Use of Proceeds....................10
Selling Stockholders...............11
Description of Securities..........12
Plan of Distribution...............14
Legal Matters......................15
Experts............................15
Where You Can Find More
Information.......................15 February __, 2000
====================================== ======================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.(1)
SEC Registration Fee..................................... $1,450
Printing Expenses........................................ $1,000
Legal Fees and Expenses.................................. $2,500
Accounting Fees.......................................... $2,000
Miscellaneous Expenses................................... $ 550
------
TOTAL.................................................. $7,500
======
- ----------
(1) All expenses are estimated except the SEC Registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 5 of the Registrant's Bylaws provides as follows:
"ARTICLE 5. INDEMNIFICATION OF DIRECTORS,
OFFICERS, AGENTS AND EMPLOYEES
5.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS. The corporation shall
indemnify any individual made a party to a proceeding because the individual is
or was a director or officer of the corporation, against liability incurred in
the proceeding, but only if such indemnification is both (i) determined
permissible and (ii) authorized, as such are defined in subsection (a) of this
section 5.1 (Such indemnification is further subject to the limitation specified
in subsection 5.1(c).)
5.1(a) DETERMINATION AND AUTHORIZATION. The corporation shall not
indemnify a director or officer under this section unless:
(1) a determination has been made in accordance with the procedures
set forth in section 16-10a-906(2) of the Act that the director
or officer met the standard of conduct set forth in subsection
(b) below; and
(2) payment has been authorized in accordance with the procedures set
forth in section 16-10a-906(4) of the Act based on a conclusion
that the expenses are reasonable, the corporation has the
financial ability to make the payment, and the financial
resources of the corporation should be devoted to this use rather
than some other use by the corporation.
5.1(b) STANDARD OF CONDUCT. The individual shall demonstrate that:
(1) his or her conduct was in good faith; and
(2) he or she reasonably believed that his or her conduct was in, or
not opposed to, the corporation's best interests; and
(3) in the case of any criminal proceeding, he or she had no
reasonable cause to believe his or her conduct was unlawful.
II-1
<PAGE>
5.1(c) NO INDEMNIFICATION IN CERTAIN CIRCUMSTANCES. The corporation
shall not indemnify a director or officer under this Section 5.1 of Article 5:
(1) in connection with a proceeding by or in the right of the
corporation in which the director or officer was adjudged liable
to the corporation; or
(2) in connection with any other proceeding charging that the
director or officer derived an improper personal benefit, whether
or not involving action in his or her official capacity, in which
proceeding he or she was adjudged liable on the basis that he or
she derived an improper personal benefit.
5.1(d) INDEMNIFICATION IN DERIVATIVE ACTIONS LIMITED. Indemnification
permitted under this section 5.1 in connection with a proceeding by or in the
right of the corporation is limited to reasonable expenses incurred in
connection with the proceeding.
5.2 ADVANCE OF EXPENSES FOR DIRECTORS AND OFFICER. If a determination
is made, following the procedures of section 16-10a-906(2) of the Act, that the
director or officer has met the following requirements and if an authorization
of payment is made following the procedures and standards set forth in section
16-10a-906(4) of the Act, then the corporation shall pay for or reimburse the
reasonable expenses incurred by a director or officer who is a party to a
proceeding in advance of final disposition of the proceeding, if:
5.2(a) the director or officer furnishes the corporation a written
affirmation of his or her good faith belief that he or she has met the standard
of conduct described in section 5.1;
5.2(b) the director or officer furnishes the corporation a written
undertaking, executed personally or on his or her behalf, to repay the advance
if it is ultimately determined that he or she did not meet the standard of
conduct; and
5.2(c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under section 5.1 of
these bylaws or Part 9 of the Act.
5.3 INDEMNIFICATION OF AGENTS AND EMPLOYEES WHO ARE NOT DIRECTORS OR
OFFICERS. The board of directors may indemnify and advance expenses to any
employee or agent of the corporation who is not a director or officer of the
corporation to any extent consistent with public policy, as determined by the
general or specific actions of the board of directors.
5.4 INSURANCE. By action of the board of directors, notwithstanding any
interest of the directors in such action, the corporation may purchase and
maintain liability insurance on behalf of a person who is or was a director,
officer, employee, fiduciary or agent of the corporation, against any liability
asserted against or incurred by such person in that capacity or arising from
such person's status as a director, officer, employee, fiduciary or agent,
whether or not the corporation would have the power to indemnify such person
under the applicable provisions of the Act."
II-2
<PAGE>
ITEM 16. EXHIBITS.
(a) Exhibits
Exhibit No. Title
---------- -----
3.1 Certificate of Incorporation of the Registrant and
Amendments thereto (1)
3.2 Certificate of Designations, Preferences and Rights of
Series A Convertible Preferred Stock of Gum Tech
International, Inc. dated June 2, 1999 (2)
3.3 Bylaws of the Registrant (1)
4.1 Form of Option granted to Robert S. Davidson, Charles B.
Hensley, Lawrence S. Kaye, and Henry M. Landau on January
27, 1999.
4.2 Form of Option granted to Dale G. Brown, Ira D. Hill,
Eugene P. Kamper, Peter P. Walters, and Robert White on
June 13, 1998.
4.3 Form of Option granted to Dale G. Brown, Ira D. Hill,
Eugene P. Kamper, Peter P. Walters, and Robert White on
June 14, 1999.
5.1 Opinion of Snell & Wilmer L.L.P.
23.01 Consent of Angell & Deering
- ----------
(1) Incorporated by reference to the Registrant"s Quarterly Report on Form
10-QSB filed on May 17, 1999, file number 000-27646.
(2) Incorporated by reference to the Registrant"s Current Report on Form 8-K,
file number 000-27646, filed June 2, 1999.
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes:
(a) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
(b) That subject to the terms and conditions of Section 13(a) of the
Securities Exchange Act of 1934, it will file with the Securities and Exchange
Commission such supplementary and periodic information, documents and reports as
may be prescribed by any rule or regulation of the Commission heretofore or
hereafter duly adopted pursuant to authority conferred in that section.
(c) That any post-effective amendment filed will comply with the
applicable forms, rules and regulations of the Commission in effect at the time
such post-effective amendment is filed.
(d) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(e) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form S-3 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Phoenix, Arizona, on February 11, 2000.
GUM TECH INTERNATIONAL, INC.
By /s/ Gary S. Kehoe
--------------------------
Gary S. Kehoe
President and Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ W. Brown Russell, III Chairman of the Board of February 11, 2000
- --------------------------- Directors, Director of Legal
W. Brown Russell, III and Investor Relations
/s/ William D. Boone Director February 11, 2000
- ---------------------------
William D. Boone
/s/ William J. Hemelt Secretary, Chief Financial February 11, 2000
- --------------------------- Officer (Principal Financial
William J. Hemelt Officer), Principal Accounting
Officer
/s/ Bruce A. Jorgensen Director February 11, 2000
- ---------------------------
/s/ William A. Yuan Director February 11, 2000
- ---------------------------
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Title
3.1 Certificate of Incorporation of the Registrant and Amendments
thereto (1)
3.2 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of Gum Tech International, Inc. dated
June 2, 1999 (2)
3.3 Bylaws of the Registrant (1)
4.1 Form of Option granted to Robert S. Davidson, Charles B. Hensley,
Lawrence S. Kaye, and Henry M. Landau on January 27, 1999.
4.2 Form of Option granted to Dale G. Brown, Ira D. Hill, Eugene P.
Kamper, Peter P. Walters, and Robert White on June 13, 1998.
4.3 Form of Option granted to Dale G. Brown, Ira D. Hill, Eugene P.
Kamper, Peter P. Walters, and Robert White on June 14, 1999.
5.1 Opinion of Snell & Wilmer L.L.P.
23.01 Consent of Angell & Deering
- ----------
(1) Incorporated by reference to the Registrant"s Quarterly Report on Form
10-QSB filed on May 17, 1999, file number 000-27646.
(2) Incorporated by reference to the Registrant"s Current Report on Form 8-K,
file number 000-27646, filed June 2, 1999.
Gum Tech International, Inc.
Grant of Nonqualified Stock Option
THIS GRANT, dated as of January 27,1999 (the "Date of Grant"), is delivered
by Gum Tech International, Inc., a Utah corporation ("Company"), to
(the "Grantee").
WHEREAS, Gel Tech LLC, an Arizona limited liability corporation, is a
majority-owned subsidiary of Gum Tech International and
WHEREAS, the Board of Directors of Gum Tech International has determined
that it would be in the best interest of the Company to grant the stock options
documented herein in order to induce the Grantee to serve as an officer of Gel
Tech LLC.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
SECTION 1. GRANT OF OPTION; VESTING
Subject to the terms and conditions hereinafter set forth, the Company
hereby grants to the Grantee, as of the Date of Grant but subject to the vesting
described in this Section 1, an option to purchase 47,500 shares of Stock at a
price equal to $9.61 per share, the fair market value of such shares at the time
of the grant. Such option is hereinafter referred to as the "Option" and the
shares of stock purchasable upon exercise of the Option are hereinafter referred
to as the "Option Shares." Subject to the limitations set forth in Section 2,
the Option to purchase 10,000 of the Option Shares are immediately vested as of
the Date of Grant and the Option to purchase the remainding 37,500 Option Shares
shall become vested on January 27, 2000. Subject to such further limitations as
are provided herein, that portion of the Option which vested in accordance with
this Section, shall be exercisable at any time after the vesting date.
SECTION 2. TERMINATION OF OPTION
2.1 The Option and all rights hereunder with respect thereto, to the extent
such rights shall not have been exercised, shall terminate and become null and
void at the close of the Company's business on January 26, 2004 (the "Option
Term").
2.2 In the event of the death or disability of the Grantee, the Option may
be exercised by the Grantee or the Grantee's legal representative(s) at any time
within one year of the Grantee's death or disability, but only to the extent
that the Option is exercisable by the Grantee at the date of death or
disability, provided that the Option must be exercised before the last day of
the Option Term.
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<PAGE>
2.3 In the event that Grantee is no longer an employee of the Company, Gel
Tech LLC or their affiliates, the Option may be exercised by the Grantee or the
Grantee's legal representative(s) at any time within 90 days after the Grantee
is no longer an employee, but only to the extent that the Option is exercisable
at the date the Grantee terminates employment and provided that the Option is
exercised before the last day of the Option Term.
SECTION 3. EXERCISE OF OPTIONS
3.1 The Grantee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the Secretary
of the Company written notice of intent to exercise. The notice of exercise
shall specify the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at least five
days after the giving of such notice unless an earlier time shall have been
mutually agreed upon.
3.2 Full payment (in U.S. dollars) by the Grantee of the option price for
the Option Shares purchased shall be made on or before the exercise date
specified in the notice of exercise in cash, certified funds or cashier's check,
or, with the prior written consent of the Company, in whole or in part through
the surrender of previously acquired shares of Stock at their fair market value
on the exercise date. Upon exercise of the Option, or any part thereof, the
Grantee may incur certain liabilities for federal, state or local taxes and the
Company may be required by law to withhold such taxes for payment to taxing
authorities. Upon determination by the Company of the amount of taxes required
to be withheld, if any, with respect to the shares to be issued pursuant to the
exercise of the Option, the Grantee shall pay all Federal, state and local tax
withholding requirements to the Company. No shares of Stock shall be delivered
upon exercise of the Option until the purchase price and any applicable taxes
are paid in full to the Company.
3.3 The Company is not required to deliver any shares of Stock pursuant to
the exercise of the Option if, in the opinion of counsel for the Company, the
issuance would violate the Securities Act of 1933 or any other applicable
federal or state securities laws or regulations.
3.4 If the Grantee fails to pay for any of the Option Shares specified in
such notice or fails to accept delivery thereof, the Grantee's right to purchase
such Option Shares may be terminated by the Company. The date specified in the
Grantee's notice as the date of exercise shall be deemed the date of exercise of
the Option, provided that payment in full for the Option Shares to be purchased
upon such exercise shall have been received by such date.
SECTION 4. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the Board shall make
such adjustment as it deems appropriate in the number and kind of shares of
Stock subject to the Option or in the option price: provided, however, that no
such adjustment shall give the Grantee any additional or reduced benefits under
the Option.
2
<PAGE>
SECTION 5. NO RIGHTS OF STOCKHOLDERS
Neither the Grantee nor any personal representative shall be, or shall have
any of the rights and privileges of, a stockholder of Company with respect to
any shares of Stock purchasable or issuable upon the exercise of the Option, in
whole or in part, prior to the date of exercise of the Option.
SECTION 6. NON-TRANSFERABILITY OF OPTION
During the Grantee's lifetime, the Option hereunder shall be exercisable
only by the Grantee or any personal representative, guardian, conservator or
legal representative of the Grantee and the Option shall not be transferable
except, in case of the death of the Grantee, by will or the laws of descent and
distribution, nor shall the Option be subject to attachment, execution or other
similar process. In the event of (a) any attempt by the Grantee to alienate,
assign, pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, Company may terminate the
Option by notice to the Grantee and it shall thereupon become null and void.
SECTION 7. EMPLOYMENT NOT AFFECTED
Neither the grant of the Option nor its exercise shall be construed as
granting to the Grantee any right with respect ot continuance of employment with
the Company, Gel Tech LLC or their affiliates.
SECTION 8. AMENDMENT OF OPTION
The Option may be amended by the Company at any time (i) if the Company
determines, in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Code or in the regulations issued
thereunder, or any federal or state securities law or other law or regualtion,
which change occurs after the Date of Grant and by its terms applies to the
Option: or (ii) other than in the circumstances described in clause (I), with
the consent of the Grantee.
SECTION 9. NOTICE
Any notice to Company provided for in this instrument shall be addressed to
it in care of its Secretary at the following address: Gum Tech International,
Inc., 246 East Watkins Street, Phoenix, Arizona 85004, and any notice to the
Grantee shall be addressed to the Grantee at Gel Tech LLC, 6340 Variel Avenue,
Suite 102B, Woodland Hills, CA 91367. Any notice shall be deemed to be duly
given if and when properly addressed and posted by registered or certified mail,
postage prepaid.
SECTION 10. GOVERNING LAW
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the law of
the State of Arizona.
3
<PAGE>
The Company has caused its duly authorized officer to execute this Grant of
Nonqualified Stock Option, and the Grantee has placed his signature hereon,
effective as of the Date of Grant.
GUM TECH INTERNATIONAL, INC.,
a Utah corporation
By:
------------------------------------
Gary Kehoe, President
ACCEPTED AND AGREED TO:
----------------------------------------
4
Gum Tech International, Inc.
Grant of Nonqualified Stock Option
Date of Grant: _____________, 1998
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Gum Tech International, Inc., a Utah corporation
("Company") to (the "Grantee"), who is a consultant of Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
SECTION 1. GRANT OF OPTION
Subject to the terms and conditions hereinafter set forth, Company, hereby
grants to the Grantee, as of the Date of Grant, an option to purchase 7,142
shares of Stock at a price equal to $11.44 per share. Such option is hereinafter
referred to as the "Option" and the shares of stock purchasable upon exercise of
the Option are hereinafter sometimes referred to as the "Option Shares."
SECTION 2. VESTING
Subject to the limitations set forth in Section 3, the Option shall become
immediately vested and exercisable on the Date of Grant.
SECTION 3. TERMINATION OF OPTION
3.1 The Option and all rights hereunder with respect thereto, to the extent
such rights shall not have been exercised, shall terminate and become null and
void on June 12, 2001 (the "Option Term").
3.2 In the event of the death of the Grantee, the Option may be exercised
by the Grantee's legal representative(s) at any time within the Option Term.
SECTION 4. EXERCISE OF OPTIONS
4.1 The grantee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the Secretary
of Company written notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least five days after
the giving of such notice unless an earlier time shall have been mutually agreed
upon.
1
<PAGE>
4.2 Full payment (in U.S. dollars) by the Grantee of the option price for
the Option Shares purchased shall be made on or before the exercise date
specified in the notice of exercise in cash, certified funds or cashier's check,
or, with the prior written consent of the Committee, in whole or in part through
the surrender of previously acquired shares of Stock at their fair market value
on the exercise date.
No shares of Stock shall be delivered upon exercise of the Option until (i)
the purchase price is paid in full in the manner herein provided or (ii) the
Company receives any approval of any governmental authority required in
connection with the Option, or the issuance of Stock under this Agreement. The
Company is not required to deliver any shares of Stock pursuant to the exercise
of the Option if, in the opinion of counsel for the Company, the issuance would
violate the Securities Act of 1933 or any other applicable federal or state
securities laws or regulations.
4.3 If the Grantee fails to pay for any of the Option Shares specified in
such notice or fails to accept delivery thereof, the Grantee's right to purchase
such Option Shares may be terminated by Company. The date specified in the
Grantee's notice as the date of exercise shall be deemed the date of exercise of
the Option, provided that payment in full for the Option Shares to be purchased
upon such exercise shall have been received by such date.
SECTION 5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the Committee shall
make such adjustment as it deems appropriate in the number and kind of shares of
Stock subject to the Option or in the option price: provided, however, that no
such adjustment shall give the Grantee any additional or reduced benefits under
the Option.
SECTION 6. NO RIGHTS OF STOCKHOLDERS
Neither the Grantee nor any personal representative shall be, or shall have
any of the rights and privileges or, a stockholder of Company with respect to
any shares of Stock purchasable or issuable upon the exercise of the Option, in
whole or in part, prior to the date of exercise of the Option.
SECTION 7. NON-TRANSFERABILITY OF OPTION
During the Grantee's lifetime, the Option hereunder shall be exercisable
only by the Grantee or any personal representative, guardian, conservator or
legal representative of the Grantee and the Option shall not be transferable
except, in case of the death of the Grantee, by will or the laws of descent and
distribution, nor shall the Option be subject to attachment, execution or other
similar process. In the event of (a) any attempt by the Grantee to alienate,
assign, pledge, hypothecate or otherwise dispose of the Option, except as
2
<PAGE>
provided for herein, or (b) the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, Company may terminate the
Option by notice to the Grantee and it shall thereupon become null and void.
SECTION 8. AMENDMENT OF OPTION
The Option may be amended by the Board only with the consent of the
Grantee.
SECTION 9. NOTICE
Any notice to Company provided for in this instrument shall be addressed to
it in care of its Secretary at the following address: Gum Tech International,
Inc., 246 East Watkins Street, Phoenix, Arizona 85004, and any notice to the
Grantee shall be addressed to the Grantee at World of Marketing, Inc., 71
Cranbury Road, Norwalk, CT 06851. Any notice shall be deemed to be duly given if
and when properly addressed and posted by registered or certified mail, postage
prepaid.
SECTION 10. GOVERNING LAW
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by an determined in accordance with the law of the
State of Arizona.
The Company has caused its duly authorized officer to execute this Grant of
Nonqualified Stock Option, and the Grantee has placed his or her signature
hereon, effective as of the Date of Grant.
GUM TECH INTERNATIONAL, INC.,
a Utah corporation
By:
------------------------------------
Gary Kehoe, President
ACCEPTED AND AGREED TO:
----------------------------------------
3
Gum Tech International, Inc.
Grant of Nonqualified Stock Option
Date of Grant: June 14, 1999
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Gum Tech International, Inc., a Utah corporation
("Company") to (the "Grantee"), who is a consultant of Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
SECTION 1. GRANT OF OPTION
Subject to the terms and conditions hereinafter set forth, Company hereby
grants to the Grantee, as of the Date of Grant, an option to purchase 3,572
shares of Stock at a price equal to $9.75 per share. Such option is hereinafter
referred to as the "Option" and the shares of stock purchasable upon exercise of
the Option are hereinafter sometimes referred to as the "Option Shares."
SECTION 2. VESTING
Subject to the limitations set forth in Section 3, the Option shall become
immediately vested and exercisable on the Date of Grant.
SECTION 3. TERMINATION OF OPTION
3.1 The Option and all rights hereunder with respect thereto, to the extent
such rights shall not have been exercised, shall terminate and become null and
void at the close of the Company's business on June 13, 2000 (the "Option
Term").
3.2 In the event of the death of the Grantee, the Option may be exercised
by the Grantee's legal representative(s) at any time within the Option Term.
SECTION 4. EXERCISE OF OPTIONS
4.1 The grantee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the Secretary
of Company written notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least five days after
the giving of such notice unless an earlier time shall have been mutually agreed
upon.
1
<PAGE>
4.2 Full payment (in U.S. dollars) by the Grantee of the option price for
the Option Shares purchased shall be made on or before the exercise date
specified in the notice of exercise in cash, certified funds or cashier's check,
or, with the prior written consent of the Committee, in whole or in part through
the surrender of previously acquired shares of Stock at their fair market value
on the exercise date.
No shares of Stock shall be delivered upon exercise of the Option until (i)
the purchase price is paid in full in the manner herein provided or (ii) the
Company receives any approval of any governmental authority required in
connection with the Option, or the issuance of Stock under this Agreement. The
Company is not required to deliver any shares of Stock pursuant to the exercise
of the Option if, in the opinion of counsel for the Company, the issuance would
violate the Securities Act of 1933 or any other applicable federal or state
securities laws or regulations.
4.3 If the Grantee fails to pay for any of the Option Shares specified in
such notice or fails to accept delivery thereof, the Grantee's right to purchase
such Option Shares may be terminated by Company. The date specified in the
Grantee's notice as the date of exercise shall be deemed the date of exercise of
the Option, provided that payment in full for the Option Shares to be purchased
upon such exercise shall have been received by such date.
SECTION 5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the Board shall make
such adjustment as it deems appropriate in the number and kind of shares of
Stock subject to the Option or in the option price: provided, however, that no
such adjustment shall give the Grantee any additional or reduced benefits under
the Option.
SECTION 6. NO RIGHTS OF STOCKHOLDERS
Neither the Grantee nor any personal representative shall be, or shall have
any of the rights and privileges or, a stockholder of Company with respect to
any shares of Stock purchasable or issuable upon the exercise of the Option, in
whole or in part, prior to the date of exercise of the Option.
SECTION 7. NON-TRANSFERABILITY OF OPTION
During the Grantee's lifetime, the Option hereunder shall be exercisable
only by the Grantee or any personal representative, guardian, conservator or
legal representative of the Grantee and the Option shall not be transferable
except, in case of the death of the Grantee, by will or the laws of descent and
distribution, nor shall the Option be subject to attachment, execution or other
similar process. In the event of (a) any attempt by the Grantee to alienate,
assign, pledge, hypothecate or otherwise dispose of the Option, except as
2
<PAGE>
provided for herein, or (b) the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, Company may terminate the
Option by notice to the Grantee and it shall thereupon become null and void.
SECTION 8. AMENDMENT OF OPTION
The Option may be amended by the Board only with the consent of the
Grantee.
SECTION 9. NOTICE
Any notice to Company provided for in this instrument shall be addressed to
it in care of its Secretary at the following address: Gum Tech International,
Inc., 246 East Watkins Street, Phoenix, Arizona 85004, and any notice to the
Grantee shall be addressed to the Grantee at World of Marketing, Inc., 71
Cranbury Road, Norwalk, CT 06851. Any notice shall be deemed to be duly given if
and when properly addressed and posted by registered or certified mail, postage
prepaid.
SECTION 10. GOVERNING LAW
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by an determined in accordance with the law of the
State of Arizona.
The Company has caused its duly authorized officer to execute this Grant of
Nonqualified Stock Option, and the Grantee has placed his signature hereon,
effective as of the Date of Grant.
GUM TECH INTERNATIONAL, INC., a Utah corporation
By:
--------------------------------
Gary Kehoe, President
ACCEPTED AND AGREED TO:
--------------------------------
3
[LETTERHEAD OF SNELL & WILMER L.L.P.]
Febuary 11, 2000
GUM TECH INTERNATIONAL, INC.
246 East Watkins Street
Phoenix, Arizona 85004
Re: Issuance of Common Stock
Gentlemen:
We have acted as counsel to Gum Tech International, Inc., a Utah
corporation (the "Company"), in connection with its Registration Statement on
Form S-3 (the "Registration Statement") filed under the Securities Act of 1933,
as amended (the "1933 Act"), relating to the registration of up to 190,000
shares of the Company's common stock, without par value, for resale by Robert S.
Davidson, Charles B. Hensley, Lawrence S. Kaye, and Henry M. Landau which may be
acquired pursuant to the exercise of options dated January 27, 1999, as well as
up to 50,000 shares of the Company's common stock, without par value, for resale
by Dale G. Brown, Ira D. Hill, Eugene P. Kamper, Peter P. Walters, and Robert
White, which may be acquired pursuant to the exercise of options dated June 13,
1998 and June 14, 1999 (collectively, these 240,000 shares of the Company's
Common Stock are referred to hereinafter as the "Shares").
In rendering the opinions set forth herein, we have limited our factual
inquiry to (i) reliance on a certificate of the Secretary of the Company, (ii)
reliance on the facts and representations contained in the Registration
Statement, including without limitation those relating to the number of the
Company's common shares, without par value, which are authorized, issued, or
reserved for issuance upon conversion or exercise of preferred shares, warrants
and options, and (iii) such documents, corporate records and other instruments
as we have deemed necessary or appropriate as a basis for the opinions expressed
below, including without limitation a certificate issued by the Utah Division of
Corporations and Commercial Code dated May 10, 1999, attesting to the corporate
existence of the Company in the State of Utah, and telephonic verification with
such Division of Corporations and Commercial Code with respect to the Company's
continued valid existence as of the date hereof.
In our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such copies. In rendering the
opinion expressed below, we have assumed that the Shares (i) will conform in all
material respects to the description thereof set forth in the Registration
Statement, (ii) were issued and delivered in accordance with the terms of the
Agreement, and (iii) were issued pursuant to an exemption from the registration
requirements of the 1933 Act pursuant to Section 4(2) of the 1933 Act.
<PAGE>
Gum Tech International, Inc.
February 11, 2000
Page 2
Based upon the foregoing, and subject to the qualifications set forth
herein, we are of the opinion that the Shares will be, when issued, fully paid
and nonassessable.
The foregoing opinion is limited to the current internal laws of the State
of Utah (without giving effect to any conflict of law principles thereof), and
we have not considered, and express no opinion on, the laws of any other
jurisdiction. This opinion is based on the laws in effect and facts in existence
on the date of this letter, and we assume no obligation to revise or supplement
this letter should the law or facts, or both, change.
This opinion is intended solely for the use of the Company in connection
with the registration of the Shares. It may not be relied upon by any other
person or for any other purpose, or reproduced or filed publicly by any person,
without the written consent of Snell & Wilmer L.L.P.; provided, however, that we
hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the references to Snell & Wilmer L.L.P. contained in the
Registration Statement.
Very truly yours,
SNELL & WILMER L.L.P.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of Gum Tech International, Inc., of our report dated
February 5, 1999, except for the last paragraph of Note 14 as to which the date
is March 30, 1999, which appears on page F-1 of Gum Tech International, Inc.'s
Annual Report on Form 10-KSB for the year ended December 31, 1998, and the
reference to our firm under the caption "Experts" in the Prospectus contained in
said Registration Statement.
Angell & Deering
Certified Public Accountants
Denver, Colorado
February 8, 2000
