As filed with the Securities and Exchange Commission on August 26, 1999
Registration No. 333-____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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AVAX TECHNOLOGIES, INC.
(Exact Name of Registrant in Its Charter)
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Delaware 13-3575874
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4520 Main Street
Suite 930
Kansas City, MO 64111
(816) 960-1333
www.avax-tech.com
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
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Copy to:
JEFFREY M. JONAS, M.D. RICHARD M. WRIGHT, JR.
President and Chief Executive Officer Gilmore & Bell, P.C.
4520 Main Street 2405 Grand Boulevard
Suite 930 Suite 1100
Kansas City, MO 64111 Kansas City, Missouri 64108
(816) 960-1333 (816) 221-1000
(Name, address, including zip code, and telephone
number, including are code, of agent for service)
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Approximate date of proposed sale to the public: From time
to time after the effective date of this registration statement.
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If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the follow 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: |_|
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<PAGE>
In accordance with SEC Rule 429, the prospectus forming a part of this
registration statement will, upon the effectiveness of this registration
statement, also constitute the prospectus under our registration statement on
Form S-3 (Registration No. 333-09349).
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of each Proposed Maximum Proposed Maximum Amount of
Class of Securities Amount Offering Price Aggregate Registration
to be Registered to be Registered Per Share(2) Offering Price(2) Fee(3)
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<S> <C> <C> <C> <C>
Common Stock 4,829,204 shares(1) $3.13 $15,115,408.52 $4,202.08
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</TABLE>
(1) In accordance with SEC Rule 429, of the 4,829,204 shares of our common
stock that are being registered, 526,560 shares are being carried forward
from our registration statement on Form S-3 (Registration No. 333-09349).
(2) Estimated for the purposes of calculating the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933, and based on the average of
the high and low prices of our common stock reported on the Nasdaq
SmallCap Market on August 23, 1999.
(3) $458.18 of the registration fee relates to the 526,560 shares of our
common stock being carried forward from our registration statement on Form
S-3 (Registration No. 333-09349), and was previously paid upon filing that
earlier registration statement.
We may amend this registration statement at any time in the future in
order to delay its effective date. We will ultimately file an amendment to this
registration statement declaring that this registration statement is immediately
effective, or that the Securities and Exchange Commission will determine when
this registration statement is effective.
1
<PAGE>
PROSPECTUS
4,829,204 Shares
AVAX TECHNOLOGIES, INC.
Common Stock
The selling stockholders listed on page 10 of this prospectus may sell up
to 4,829,204 shares of our common stock. At any time, without notifying us, the
selling stockholders can sell all or a portion of the common stock offered in
this prospectus. The selling stockholders can sell the common stock to buyers
directly or through underwriters, brokers, dealers or agents. The sale price for
the common stock may be either a price negotiated between the selling
stockholder and the buyer, or the prevailing market price of the common stock at
the time of the sale. Our common stock is listed for quotation on the Nasdaq
SmallCap Market under the symbol "AVXT." The last reported sale price of our
common stock on the Nasdaq SmallCap Market on August 23, 1999, was $3.06 per
share.
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Investing in our common stock involves a high degree of risk. You should
consider carefully the risk factors referred to on page 8 of this prospectus.
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Neither the Securities and Exchange Commission nor any state securities
regulator has approved or determined whether this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
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The date of this prospectus is September __, 1999
<PAGE>
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TABLE OF CONTENTS
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Page
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CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS.................. 3
PROSPECTUS SUMMARY.......................................................... 4
RISK FACTORS................................................................ 8
AVAILABLE INFORMATION....................................................... 8
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE........................... 8
USE OF PROCEEDS............................................................. 9
SELLING STOCKHOLDERS........................................................ 9
PLAN OF DISTRIBUTION........................................................ 11
LEGAL COUNSEL............................................................... 11
EXPERTS..................................................................... 12
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No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus and, if given or made, the information and representations must not
be relied upon as having been authorized by us or the selling stockholders. This
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy the shares by anyone in any jurisdiction in which the offer or solicitation
is not authorized, or in which the person making the offer or solicitation is
not qualified to do so, or to any person to whom it is unlawful to make the
offer or solicitation. Neither the delivery of this prospectus nor any sale made
using this prospectus will create any implication that the information contained
in this prospectus is correct as of any time after its date.
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2
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CAUTIONARY STATEMENT CONCERNING FORWARDLOOKING STATEMENTS
In this prospectus, we make statements that plan for or anticipate the
future. These forward-looking statements include statements about the future of
biotechnology products and the biopharmaceutical industry, statements about our
future business plans and strategies and other statements that are not
historical in nature. These forward-looking statements are based on our current
expectations. You will find many of these statements in the following sections:
o "Prospectus Summary" on page 4;
o "Risk Factors" on page 8; and
o "Incorporation of Certain Information by Reference" on page 8.
Forward-looking statements may be identified by words or phrases such as
"believe," "expect," "anticipate," "should," "planned," "may," "estimated" and
"potential." The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. In order to comply with the terms
of the safe harbor, and because forward-looking statements involve future risks
and uncertainties, we have listed below a variety of factors that could cause
actual results and experience to differ materially from the anticipated results
or other expectations expressed in our forward-looking statements. These factors
might include:
o Uncertainty about whether our AC Vaccine(TM) technology can be
developed to produce safe, effective and commercially viable
products.
o Uncertainty about whether our products will successfully complete
the long, complex and expensive clinical trial and regulatory
approval process for approval of new drugs in the United States.
o The expenses, delays, uncertainties and complications typically
encountered by development stage biopharmaceutical businesses, many
of which are beyond our control.
o Our need to expand our limited manufacturing facilities or depend on
third parties to manufacture and distribute our products.
o Our financial and development obligations and our responsibility to
meet requisite research funding levels under our license and
research agreements in order to protect our rights to our products
and technologies.
o Our difficulty or inability to obtain or defend our patents, or
operate without infringing upon the rights of others.
o Our difficulty or inability to compete with other companies,
research institutes, hospitals and universities that are developing
and producing products and technologies similar to ours.
o Our history of operating losses, our need to raise more money before
the end of the third or fourth quarter of 2000, and the uncertainty
of our future profitability.
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PROSPECTUS SUMMARY
This is a summary of our business and this offering. You should read
carefully this entire prospectus and the documents to which we have referred you
before you make a decision about buying our common stock.
Our Business
We are a development stage biopharmaceutical company engaged in the
development and potential commercialization of products and technologies for the
treatment of cancer and other life-threatening diseases. In 1996, we identified
research being conducted by Dr. David Berd, an oncologist and professor at
Thomas Jefferson University in Philadelphia, and licensed the rights to Dr.
Berd's research. Although we have plans to build our own laboratory facilities
in the next year, we currently do not conduct our own research. We either
acquire or license medical technology (products and processes) developed
elsewhere, just as we did with Dr. Berd's research. Then, we try to bring those
treatments to the public market. We are a typical development stage biotech
company in that we are not currently making any money from our proposed
products, and we have not yet made a profit.
We are primarily focusing our efforts on the development of
immunotherapies for the treatment of cancer. Historically, chemotherapies have
been the only accepted post-surgical treatment for cancer. Chemotherapy means
the prevention or treatment of disease by administering drugs. Alternatively,
immunotherapy, which is a rapidly developing segment of the cancer therapeutic
market, is the treatment of disease or infection by stimulating the body's
immune system through a process of immunization. When you are immunized for a
particular disease or infection, you are injected with portions of or all of the
disease agent itself, which stimulates your body's immune system to fight the
foreign agent. In this way, you build up an immunity to the disease or
infection. Immunotherapies that are being developed to treat cancer are intended
to act in the same way.
A cancer cell, in the most simple terms, is an abnormal cell that your
body itself produces. Cancer is characterized by the uncontrolled growth and
spread of these abnormal cells, that escape from the control of your body's
immune system. Because your body itself produces these abnormal cells, your
immune system does not recognize the cancer cells as foreign, and therefore,
scientists believe, does not respond by attacking and destroying the abnormal
cells. Consequently, the cancer cells invade and destroy healthy tissue, which
can ultimately lead to a person's death if untreated. Cancer cells that escape
an immune system attack can then spread throughout the body by a variety of
means.
Cancers, composed of either solid tumors or blood-borne cancerous cells,
tend to spread over time to other tissues and organs in the body. Cancer may be
diagnosed at any stage of the disease, from very early (best prognosis) to very
late (worst prognosis). When cancer is detected early and has not yet spread to
other organs and tissues, surgical removal of the tumor is often effective.
While this treatment is effective in many types of cancers, in cases in which
removal of the tumor is incomplete or in which the cancer has spread, the
patient's prognosis is poor. Moreover, if the cancer is not discovered until
cancer cells from the primary tumor have already entered the blood or lymphatic
system and established new tumors at distant sites, the cells and the tumors
they form are difficult to treat with current technology. Chemotherapy and
radiation therapy have traditionally been the accepted methods of treatment in
these cases. Current chemotherapy and radiation therapy are, however, rather
crude treatments because they kill cells indiscriminately, destroying normal as
well as cancerous cells, which leads to toxic side effects and thereby limits
the usefulness of these therapies. Through our agreement with Thomas Jefferson
University and Dr. Berd, we are researching and attempting to develop a safe,
effective immunotherapy for the treatment of cancer.
We licensed from Thomas Jefferson University an issued U.S. patent and
certain U.S. and foreign patent applications covering a cancer vaccine
containing a cancer patient's own modified tumor cells, and a method for making
and using this type of vaccine. Our autologous cell vaccine (AC Vaccine) is a
vaccine made using a patient's own tumor cells, that is designed to stimulate a
patient's immune system to recognize, contain and eliminate the cancer cells.
The method for creating and using our AC Vaccine (AC Vaccine technology)
involves the removal of a patient's
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<PAGE>
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own tumor cells, and then modifying the tumor cells by joining or combining them
with a smaller molecule called a hapten. Once the tumor cells have been modified
(haptenized), the hapten-modified cells are injected into the patient along with
an adjuvant, which is an agent that increases the immune response. This
combination is recognized as foreign by the body's immune system, which elicits
an immune response against the hapten-modified tumor cells. This approach is
based on the premise that if the patient has a strong immune response to the
hapten-modified tumor cells, this may be followed by the development of an
immune response to the unmodified tumor cells. In this way, the body's immune
system would be triggered to attack and eliminate what the body would now see as
an intruder. Before we can manufacture and market to the public any AC Vaccine,
however, our products must undergo several stages of clinical trials or tests.
Clinical trials begin when a drug is approved for testing on humans. There
are usually said to be three main phases of clinical trials that a drug must go
through before the drug is approved to be manufactured and marketed to the
public. These phases may involve testing of drugs in healthy human volunteers
(Phase 1) for assessment of safety, followed by tests of effectiveness and
safety in patients with illnesses the drug is designed to treat (Phases 2 and
3). In most instances, Phase 3 studies are the final group of studies that are
conducted before a product can be approved by the FDA for commercial use. In the
case of life-threatening illness, the study process and phases of clinical
trials may be compressed and accelerated. In some cases, Phase 2 trials are
deemed sufficient for market approval by the FDA or foreign regulatory
authorities. Pivotal registration trials are large-scale Phase 2 or 3 trials,
the data obtained from which is intended to be used to support the registration
of a drug or product for market use.
Our first AC Vaccine to undergo clinical trials is called M-Vax(TM),
because it is designed as an immunotherapy for the treatment of melanoma. We
recently completed several physician-sponsored Phase 2 clinical trials for
M-Vax. M-Vax was administered to patients with stage 3 melanoma, who had already
had their lymph nodes and lesions removed. Historically, patients with stage 3
melanoma have been treated with alpha interferon, which is a post-surgical
therapy, and currently the only FDA-approved treatment for patients with stage 3
melanoma. We believe that M-Vax is the first immunotherapy to show a substantial
increase in the survival rate for patients with stage 3 melanoma. In the Phase 2
clinical trials, over 350 melanoma patients were treated post-surgically on an
outpatient basis with M-Vax. In 62 patients with stage 3 melanoma in cases in
which there has been sufficient time for long-term follow-up, the five-year
survival rate was 55%. This compares with the historical survival rate of
approximately 22%, and the published survival rate for treatment with high dose
alpha interferon of approximately 32% in patients whom we believe are comparable
to those treated with M-Vax. In patients over 50 years old treated with M-Vax,
the five-year survival rate was approximately 71%. In the over 350 patients
treated in the Phase 2 clinical trials, we believe that only relatively minor
side effects, such as brief bouts of mild nausea in rare cases, and soreness and
swelling at the site of the injection, have been observed to date.
We met with the FDA to discuss the clinical results obtained with M-Vax,
and we used those results to support our submission of a company-sponsored
Investigational New Drug Application, which the FDA has approved. The approval
of the company-sponsored Investigational New Drug Application allows us to
proceed with a pivotal registration clinical trial which involves at least 400
patients at 25 different locations around the country. We also will conduct a
second registration trial as required by the FDA. We intend to use the results
of the two multi-center clinical trials, along with the results of the initial
clinical trials conducted at Thomas Jefferson University, as the basis for
filing an application for FDA approval to market M-Vax. We recently entered into
a letter of intent for a joint venture with a pharmaceutical group to
manufacture and market M-Vax in Australia and New Zealand. We have been informed
by Australia's Therapeutic Goods Administration that M-Vax can be marketed to
the public in Australia, subject only to licensure of a manufacturing facility.
We also may pursue a similar regulatory approach in other European and Asian
countries.
We also believe that the technology used to develop M-Vax may have
applications in the treatment of other cancers, including ovarian, breast,
kidney, lung and colorectal cancers, as well as acute myelogenous leukemia. We
intend to fund the preclinical and initial clinical development of this
technology for at least some of these indications. Accordingly, in addition to
continuing the clinical work on M-Vax, we have also entered into a sponsored
research agreement with Thomas Jefferson University relating to the development
of additional immunotherapies based on this
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<PAGE>
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technology. For example, we are currently treating post-surgical stage 3 and
advanced patients in Phase 1 clinical trials of O-Vax(TM), which is designed as
an immunotherapy for the treatment of ovarian cancer. One of the clinical trials
is being supported by the National Cancer Institute. These Phase 1 clinical
trials are being conducted at Thomas Jefferson University under the direction of
Dr. Berd. Our initial Phase 1 clinical trial showed a positive immune response
to marked or hapten-modified tumor cells in the first nine of nine patients
treated, and has also showed a positive immune response to unmodified tumor
cells in the first eight of nine patients treated, both as measured by a delayed
type hypersensitivity test. A delayed type hypersensitivity test measures the
activity of T-lymphocytes, which are cells that are crucial in triggering the
body's immune system. Similar results have also been obtained in comparable
numbers of patients with advanced or stage 4 ovarian cancer. We believe these
results in both patient groups may be very promising, considering that, unlike
the patients treated with M-Vax, the patients administered with O-Vax initially
received chemotherapy. We were encouraged to see that the chemotherapy did not
suppress any patient's immune response to the hapten-modified tumor cells. Based
on these initial results, we will begin a program to conduct multiple Phase 2
clinical trials later this year. These trials would be in addition to the
ongoing testing at Thomas Jefferson University and the study that is being
sponsored by the National Cancer Institute. We also plan to evaluate this
vaccine technology in other cancers and to initiate similar clinical studies
where appropriate. In June 1999, we entered into a collaborative research
agreement with the University of Tokyo to evaluate the application of our AC
Vaccine technology to the treatment of breast cancer.
Additionally, in connection with our strategy to acquire, develop and
commercialize other potential biotechnology products and technologies, we have
licensed from Rutgers University and the University of Medicine and Dentistry of
New Jersey (collectively, "Rutgers"), certain patent applications relating to a
series of anticancer agents or compounds (topoisomerase inhibitor compounds),
that inhibit topoisomerase activities. Topoisomerases are key enzymes needed for
remolding DNA, a necessary function for cell division and malignant tumor
growth. These enzymes are over-produced in tumor cells. Inhibitors of these
enzymes have been proven to be clinically-useful anticancer therapies.
Additionally, in early tests, some of the Rutgers compounds have demonstrated
anti-infective properties, showing activity against fungal as well as parasitic
organisms. We also have licensed from The Texas A&M University System an issued
U.S. patent and certain patent applications relating to a series of novel cancer
fighting anti-estrogen compounds that may be especially effective against
hormone-dependent tumors. Under our agreements with Rutgers and Texas A&M, we
intend to continue to expend substantial resources on the research and
development of these compounds.
In order to control costs, we may continue to use sponsored research
agreements and contract research organizations to help us develop our
technologies. At the appropriate time we may seek corporate partners to provide
the necessary resources and expertise for further clinical development and to
manufacture, market and distribute our products. In addition, we may look into
acquiring and subsequently developing and commercializing other promising
immunotherapy, chemotherapy and auxiliary adjuvant technologies.
We were incorporated in the State of New York on January 12, 1990, under
the name Nehoc, Inc. On May 29, 1992, we changed our name to Appex Technologies,
Inc. On October 22, 1992, we merged into Walden Laboratories, Inc. ("Walden"), a
Delaware corporation, which was incorporated on September 18, 1992. On December
27, 1995, Walden sold its former leading product under development, an
over-the-counter nutritional dietary, medicinal and/or elixorative food
supplement or drug and related patents and intellectual property to a subsidiary
of Interneuron Pharmaceuticals, Inc. The company changed its name from Walden
Laboratories, Inc., to AVAX Technologies, Inc., effective March 26, 1996.
Our principal executive office is located at 4520 Main Street, Suite 930,
Kansas City, Missouri 64111. Our telephone number at that address is (816)
960-1333.
AC Vaccine, M-Vax and O-Vax are three of our trademarks.
6
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The Offering
The selling stockholders may sell their shares of common stock according
to the plan of distribution described on page 9 of this prospectus. We will not
receive any proceeds from the sale of these shares.
Risk Factors
Investing in our common stock involves a high degree of risk. Before you
make a decision about investing in our common stock, you should carefully
consider the risk factors contained in our annual report on Form 10-KSB for the
year ended December 31, 1998, as amended, which is incorporated in this
prospectus by reference, as well as the rest of the information contained in our
annual report, and our other reports filed by us with the Securities and
Exchange Commission.
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<PAGE>
RISK FACTORS
Investing in our common stock involves a high degree of risk. Before you
make a decision about investing in our common stock, you should carefully
consider the risk factors contained in our annual report on Form 10-KSB for the
year ended December 31, 1998, as amended, which is incorporated in this
prospectus by reference, as well as the rest of the information contained in our
annual report, and our other reports filed by us with the Securities and
Exchange Commission. A copy of our Form 10-KSB, as amended, will be provided to
any person receiving a copy of this prospectus upon written or oral request to
us as set forth under the heading "Incorporation of Certain Information by
Reference" below.
AVAILABLE INFORMATION
We are a "reporting company" as that term is used in the Securities
Exchange Act of 1934. As a reporting company, we are required to file reports,
proxy statements and other information with the Securities and Exchange
Commission, including the information listed below. You may read and copy any of
the reports, proxy statements and other information that we have filed with the
Securities and Exchange Commission at the Securities and Exchange Commission's
Public Reference Room, located at 450 Fifth Street, N.W., Washington, D.C.
20549. You may get information on the operation of the Public Reference Room by
calling the Securities and Exchange Commission at 1-800-732-0330. The Securities
and Exchange Commission maintains an Internet site that contains reports, proxy
and information statements, and other information regarding us and other issuers
that electronically file information with the Securities and Exchange
Commission. The address of that site is (http://www.sec.gov). Our Internet site
address is (www.avax-tech.com).
This prospectus constitutes a part of a registration statement on Form S-3
filed by us with the Securities and Exchange Commission under the Securities Act
of 1933. You may want to refer directly to the registration statement for more
information about us and our common stock. You may want to review a copy of any
contract or document filed as an exhibit to the registration statement. We are a
"small business issuer" as that term is defined in Rule 405 under the Securities
Act of 1933.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, all of which have been previously filed with the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
are incorporated by reference into this prospectus:
1. The description of our common stock contained in our registration
statement on Form 8-A;
2. Our Annual Report on Form 10-KSB for the year ended December 31, 1998;
3. Our Quarterly Report on Form 10-QSB for the three months ended June 30,
1999;
4. Our Quarterly Report on Form 10-QSB for the three months ended March 31,
1999;
5. Our Proxy Statement, as filed with the Securities and Exchange Commission
on April 22, 1999; and
6. Our reports on Form 8-K, as filed with the Securities and Exchange
Commission on January 28, 1999, March 5, 1999, April 19, 1999, April 21,
1999 and May 13, 1999, and two separate reports on Form 8-K, both filed on
June 16, 1999, and on August 18, 1999.
All documents subsequently filed by us in compliance with Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the
termination of this offering are incorporated by reference into this prospectus.
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We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of any of the
information that is incorporated by reference in this prospectus (including
exhibits that are specifically incorporated by reference in that information).
Any request should be directed to: Investor Relations, AVAX Technologies, Inc.,
4520 Main Street, Suite 930, Kansas City, MO 64111, telephone (816) 960-1333.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholders. All proceeds from the resale of those shares will go to the
selling stockholders. See "Selling Stockholders" below and "Plan of
Distribution" on page 11 of this prospectus.
We will receive proceeds from any exercise of the warrants issued in
connection with the private placement of our Series C preferred stock. If the
warrants are exercised, we intend to use the proceeds for general working
capital purposes. Proceeds, if any, from the exercise for cash of all the
warrants would be approximately $3,477,766. We cannot predict whether any of the
warrants will be exercised.
SELLING STOCKHOLDERS
In 1996 we issued an aggregate of 258,198 shares of our Series B preferred
stock in two private placement transactions. As of the date of this prospectus,
we have a continuing contractual obligation to include in the registration
statement of which this prospectus forms a part a total of 526,560 shares of our
common stock that are held by or may be acquired upon the conversion of shares
of our Series B preferred stock held by two related selling stockholders.
In addition, on March 1, 1999 we issued an aggregate of 101,300 shares of
our Series C preferred stock in a private placement to certain of the selling
stockholders listed below. The 101,300 shares of our Series C preferred stock
are convertible into approximately 3,116,923 shares of our common stock, which
shares of common stock are covered by this prospectus. In connection with this
second private placement, we also issued five-year warrants to purchase an
aggregate of up to approximately 623,385 shares of our common stock, which are
also covered by this prospectus. As of the date of this prospectus, no warrants
have been exercised.
In connection with services rendered by Paramount Capital, Inc. in
identifying and introducing us to certain investors in the Series C preferred
stock offering, we paid to Paramount cash commissions of approximately $709,100
and issued an option to acquire approximately 187,016 shares of our common stock
at an exercise price of $3.58 per share, exercisable until March 1, 2004.
Paramount also received warrants to purchase 37,400 shares of our common stock,
of which 18,700 are exercisable at $4.00 per share and the remaining 18,700 are
exercisable at $4.50 per share. The warrants are exercisable until March 1,
2004. Paramount subsequently transferred the options and warrants to certain of
the selling stockholders. The 224,416 shares of common stock subject to the
option and the warrants held by those transferees are covered by this
prospectus.
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The following table sets forth certain information with respect to the
ownership of common stock by the selling stockholders as of August 15, 1999 and
the shares offered in this prospectus by the selling stockholders.
<TABLE>
<CAPTION>
Shares Shares Percentage
Currently Amount to Owned Owned
Selling Stockholder Owned be Offered after Offering after Offering
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<S> <C> <C> <C> <C>
Centenary Investments, L.P.(1) 73,844 73,844 0 0
Essex Woodlands Health Ventures Fund
IV, L.P.(1) 1,846,152 1,846,152 0 0
Heptagon Investments LTD(1) 36,921 36,921 0 0
Investissements 90 S.A.(1) 36,921 36,921 0 0
Scott Katzmann(2) 52,443 19,384 33,059 *
Donald R. Kendall, Jr.(1) 18,460 18,460 0 0
Keys Foundation(1) 184,614 184,614 0 0
John Knox(2) 2,286 1,036 1,250 *
Martin Kratchman(2) 69,424 5,907 63,517 *
Maribel Limited(1) 36,921 36,921 0 0
Tim McInerney(2) 197,648 122,621 75,027 *
Petrus Fund, L.P.(1) 738,460 738,460 0 0
John Poppadimitropo(2) 1,036 1,036 0 0
Joseph P. Riccardo(1) 51,690 51,690 0 0
Lindsey A. Rosenwald, M.D.(3) 909,194 396,702 512,492 2.5%
Wayne L. Rubin(2) 79,677 8,293 71,384 *
Sagres Group LTD.(1), (2) 749,900 265,844 484,056 2.4%
Sextant Avax, LLC(1) 119,999 119,999 0 0
J.F. Shea & Co.(1) 221,537 221,537 0 0
David M. Steinberg(1) 14,767 14,767 0 0
The Aries Domestic Fund, L.P.(4) 225,839 175,218 50,621 *
The Aries Fund, A Cayman Island
Trust(4) 652,294 351,342 300,952 1.5%
The 1992 Houston Partnership, L.P.(1) 36,921 36,921 0 0
TIS Prager(1) 64,614 64,614 0 0
TOTAL 6,421,562 4,829,204 1,592,358 7.9%
</TABLE>
See the following page for notes to this table.
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* Represents less than 1.0 %.
(1) Includes shares of common stock issuable upon conversion of the Series C
preferred stock and shares of common stock issuable upon the exercise of
the warrants issued in connection with the private placement of the Series
C preferred stock.
(2) Includes shares of common stock issuable upon exercise of certain options
and warrants issued to Paramount Capital, Inc. for investment banking
services, that were subsequently transferred by Paramount to certain of
the selling stockholders, and upon conversion of shares of Series C
preferred stock held by those selling stockholders.
(3) Excludes 199,314 shares of common stock owned by Dr. Rosenwald's wife and
trusts in favor of his minor children, and shares of common stock owned
and issuable upon conversion of shares of Series B preferred stock held by
The Aries Fund, A Cayman Island Trust and The Aries Domestic Fund, L.P.,
two private investment funds that are managed by a company of which Dr.
Rosenwald is President. The two Aries funds are also selling stockholders,
as listed below.
(4) Includes shares of common stock issuable upon conversion of the Series B
preferred stock and shares of common stock issuable upon the exercise of
the warrants issued in connection with the private placement of the Series
B preferred stock.
PLAN OF DISTRIBUTION
We have registered the 4,829,204 shares of our common stock offered in
this prospectus on behalf of the selling stockholders. We will pay all expenses
of this registration, other than fees and expenses, if any, of counsel or other
advisors to the selling stockholders. The selling stockholders are responsible
for paying any commissions, discounts, or other brokerage fees incurred in
connection with their sale of any of the shares.
At any time, without notifying us, the selling stockholders can sell all
or a portion of the common stock offered in this prospectus. The selling
stockholders can sell the common stock to buyers directly or through
underwriters, brokers, dealers or agents. The sale price for the common stock
will be either a price negotiated between the selling stockholder and the buyer,
or the prevailing market price of the common stock at the time of the sale. The
common stock is listed for quotation on the Nasdaq SmallCap Market under the
symbol "AVXT."
We will not receive any proceeds from the sale of shares by the selling
stockholders. Under the terms of the private placements, we have agreed to
indemnify the selling stockholders against liabilities they may incur as a
result of any untrue statement of a material fact in the registration statement,
of which this prospectus is a part, or for any omission in this prospectus or
the registration statement to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were
made, not misleading. This indemnification includes liabilities that the selling
stockholders may incur under the Securities Act of 1933.
The selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance on Rule 144 under the Securities Act of
1933, if they meet the criteria and conform to the requirements of that rule.
The selling stockholders and any broker-dealers or agents that participate
with the selling stockholders in the sale of shares may be "underwriters" within
the meaning of the Securities Act of 1933. Any commissions received by
broker-dealers or agents on the sales and any profit on the resale of shares
purchased by broker-dealers or agents may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933.
Under the rules of the Securities and Exchange Commission, any person
engaged in the distribution or the resale of our common stock may not
simultaneously buy, bid for or attempt to induce any other person to buy or bid
for our common stock in the open market for a period of two business days prior
to the beginning of the distribution. The rules and regulations under the
Securities Exchange Act of 1934 may also limit the timing of purchases and sales
of shares of our common stock by the selling stockholders. We have notified the
selling stockholders they should not begin any distribution of common stock
unless they have stopped purchasing and bidding for common stock in the open
market as provided in applicable securities regulations, including, without
limitation, Regulation M.
11
<PAGE>
We have informed the selling stockholders that the anti-manipulation
provisions of Regulation M promulgated under the Securities Exchange Act of 1934
may apply to the sales of their shares. We have advised the selling stockholders
of the requirement for delivery of this prospectus in connection with any sale
of the common stock.
LEGAL COUNSEL
The validity of the securities being offered pursuant to this prospectus
will be passed upon for us by Gilmore & Bell, P.C., Kansas City, Missouri, our
counsel.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our Annual Report on Form 10-KSB for the year ended
December 31, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by us in connection with the
registration of the shares of common stock being offered for sale by the selling
stockholders. All amounts are estimates except the Securities and Exchange
Commission registration fee.
Securities and Exchange Commission registration fee $ 4,202.08
Legal fees and expenses 45,000.00
Accounting fees and expenses 15,000.00
Blue sky fees and expenses 5,000.00
Transfer agent fees and expenses 1,000.00
Miscellaneous 10,000.00
-------------
Total $ 80,202.08
-------------
Item 15. Indemnification of Directors and Officers
Our company was organized under the laws of the State of Delaware, and
therefore we are subject to Section 145 of the General Corporation Law of the
State of Delaware. Section 145 authorizes a court to award or a corporation's
board of directors to grant indemnification to directors and officers in terms
broad enough to include indemnification under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended.
Article Seven of our Certificate of Incorporation provides that we will
indemnify and advance expenses to our directors and officers to the fullest
extent permitted by Section 145. Article Nine of our Certificate of
Incorporation provides that the liability of our directors is eliminated to the
fullest extent permitted by Section 102(b)(7) of the Delaware General
Corporation Law.
Article V, Section 1 of our By-Laws provides for mandatory indemnification
of our directors to the fullest extent authorized by the Delaware General
Corporation Law. Article V, Section 2 of our By-Laws provides for prepayment of
expenses incurred by our directors to the fullest extent permitted by, and only
in compliance with, the Delaware General Corporate Law. Article V, Section 6 of
our By-Laws provides for permissive indemnification of our officers, employees
and agents if and to the extent authorized by our Board of Directors in
compliance with the Delaware General Corporation Law.
These provisions in the Certificate of Incorporation and the By-Laws do
not eliminate the directors' fiduciary duty, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available under Delaware law. In addition, each director will continue to
be subject to liability for breach of the director's duty of loyalty to us for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provisions also do not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. In addition, we have
obtained certain liability insurance coverage for our directors and officers.
II-1
<PAGE>
Item 16. Exhibits
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation.(1)
3.2 By-Laws.(1)
4.1 Reference is made to Exhibits 3.1 and 3.2.
4.2 Certificate of Designations of Series C Convertible Preferred
Stock.(2)
4.3 Series C Convertible Preferred Stock Warrant Purchase
Agreement.(2)
4.4 Form of Class A and Class B Common Stock Purchase Warrant
issued in connection with the Series C Convertible Preferred
Stock.(2)
5.1 Opinion of Gilmore & Bell, P.C.*
23.1 Consent of Gilmore & Bell, P.C. Included in Exhibit 5.1.
23.2 Consent of Ernst & Young LLP, Independent Auditors.*
24.1 Power of Attorney (included on the signature page hereof).
- ----------
* Filed herewith.
(1) Incorporated by reference and previously filed as an exhibit to our
registration statement on Form SB-2 filed with the Securities and Exchange
Commission (File No. 333-09349) on July 31, 1996.
(2) Incorporated by reference and previously filed as an exhibit to our Annual
Report on Form 10-KSB for the year ended December 31, 1998, filed with the
Securities and Exchange Commission on March 31, 1999.
II-2
<PAGE>
Item 17. Undertakings
We hereby undertake:
(1) To file, during any period in which we offer or sell securities, a
post-effective amendment to this registration statement to include any
additional or changed material information regarding the plan of distribution.
(2) That for determining liability under the Securities Act of 1933, we
will treat each post-effective amendment to this registration statement and each
filing of our annual report, as a new registration statement of the securities
offered, and the offering of the securities at that time will be deemed to be
the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
our company pursuant to the Delaware General Corporation Law, our Certificate of
Incorporation and our By-Laws, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission that indemnification is
against public policy as expressed in the Securities Act of 1933, and is,
therefore, unenforceable. In the event that a claim for indemnification against
liabilities arising under the Securities Act of 1933 (other than the payment by
us of expenses incurred or paid by a director, officer, or controlling person of
our company in the successful defense of any action, suit or proceeding) is
asserted by that director, officer or controlling person in connection with the
securities that we are registering, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether the indemnification by us is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of that issue.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, we certify that we have reasonable grounds to believe that we meet all
of the requirements for filing on Form S-3 and we have authorized this
registration statement to be signed on our behalf by the undersigned, thereunto
duly authorized, in the City of Kansas City, State of Missouri, on this August
25, 1999.
AVAX TECHNOLOGIES, INC.
By: /s/ Jeffrey M. Jonas, M. D.
-----------------------------
Jeffrey M. Jonas, M.D.
Chief Executive Officer and President
POWER OF ATTORNEY
We, the undersigned officers and directors of AVAX Technologies, Inc.,
severally constitute Jeffrey M. Jonas, M.D., or David L. Tousley, in the order
named, our true and lawful attorney-in-fact with full power to each, to sign for
us and in our names in the capacities indicated below, the registration
statement on Form S-3 filed with this registration statement and any and all
subsequent amendments to this registration statement, and generally to do all
things in our names and on our behalf in our capacities as officers and
directors to enable AVAX Technologies, Inc. to comply with all requirements of
the Securities and Exchange Commission.
In accordance with the requirements of the Securities Act of 1933, as
amended, the registration statement has been signed by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Name & Title Date
--------- ------------ ----
<S> <C> <C>
/s/ Jeffrey M. Jonas, M.D. Jeffrey M. Jonas, M.D.
-------------------------- Chief Executive Officer,
President and Director August 25, 1999
/s/ David L. Tousley David L. Tousley
-------------------- Chief Financial Officer
and Secretary (Principal
Financial and Accounting
Officer) August 25, 1999
/s/ Edson D. de Castro Edson D. de Castro
---------------------- Director August 25, 1999
/s/ John K. A. Prendergast, Ph.D. John K. A. Prendergast, Ph.D.
--------------------------------- Director August 25, 1999
/s/ Carl Spana, Ph.D. Carl Spana, Ph.D.
--------------------- Director August 25, 1999
/s/ Michael S. Weiss Michael S. Weiss
-------------------- Director August 25, 1999
/s/ James Currie James Currie
---------------- Director August 25, 1999
</TABLE>
II-4
<PAGE>
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
EXHIBITS
TO
REGISTRATION STATEMENT
ON
FORM S-3
UNDER THE SECURITIES ACT OF 1933
-----------
AVAX TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation.(1)
3.2 By-Laws.(1)
4.1 Reference is made to Exhibits 3.1 and 3.2.
4.2 Certificate of Designations of Series C Convertible Preferred
Stock.(2)
4.3 Series C Convertible Preferred Stock Warrant Purchase
Agreement.(2)
4.4 Form of Class A and Class B Common Stock Purchase Warrant
issued in connection with the Series C Convertible Preferred
Stock.(2)
5.1 Opinion of Gilmore & Bell, P.C.*
23.1 Consent of Gilmore & Bell, P.C. Included in Exhibit 5.1.
23.2 Consent of Ernst & Young LLP, Independent Auditors.*
24.1 Power of Attorney (included on the signature page hereof).
- ----------
* Filed herewith.
(1) Incorporated by reference and previously filed as an exhibit to our
registration statement on Form SB-2 filed with the Securities and Exchange
Commission (File No. 333-09349) on July 31, 1996.
(2) Incorporated by reference and previously filed as an exhibit to our Annual
Report on Form 10-KSB for the year ended December 31, 1998, filed with the
Securities and Exchange Commission on March 31, 1999.
Exhibit 5.1
[LETTERHEAD OF GILMORE & BELL]
August 25, 1999
AVAX Technologies, Inc.
4520 Main Street, Suite 930
Kansas City, Missouri 64111
Re: AVAX Technologies, Inc. Registration Statement on Form S-3 Reg. No.
333- (the "Registration Statement")
Dear Sir/Madam:
You have requested our opinion as counsel to AVAX Technologies, Inc., a
Delaware corporation (the "Company") in connection with the preparation and
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, of the Registration Statement relating to 4,829,204 shares of
the Company's common stock, registered by the Company (the "Shares").
In so acting, we have examined originals, or copies certified or otherwise
identified to our satisfaction, and such corporate records, documents,
certificates and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. We have assumed
for purposes of this opinion that any Shares issuable upon the conversion of the
Company's Series B Preferred Stock or Series C Preferred Stock or upon the
exercise of any warrants or options to acquire Shares as described in the
Registration Statement (1) are issued upon the valid conversion or exercise of
the underlying securities, and (2) in the case of Shares issued upon the
exercise of any warrants or options, the receipt by the Company of the warrant
or option exercise price.
Based upon the foregoing, we are of the opinion as follows:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Delaware.
2. The Shares, when issued and sold in the manner contemplated by the
Registration Statement, will be validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name under the caption "Legal Counsel" in the
prospectus that is a part thereof.
Very truly yours,
/s/ Gilmore & Bell, P.C.
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333- ) and related Prospectus of AVAX
Technologies, Inc. for the registration of 4,829,204 shares of its common stock
and to the incorporation by reference therein of our report dated January 20,
1999, with respect to the financial statements of AVAX Technologies, Inc.
included in its Annual Report (Form 10-KSB) for the year ended December 31,
1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Kansas City, Missouri
August 20, 1999
