PROSPECTUS
7,671,102 Shares
AVAX TECHNOLOGIES, INC.
Common Stock
The selling stockholders listed on pages 9 and 10 of this prospectus may
sell up to 7,671,102 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 May 9, 2000, was $9.75 per share.
----------
Investing in our common stock involves a high degree of risk. You should
consider carefully the risk factors referred to on page 6 of this prospectus.
----------
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.
----------
The date of this prospectus is May 10, 2000
<PAGE>
----------------------
TABLE OF CONTENTS
----------------------
Page
----
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS....................3
PROSPECTUS SUMMARY............................................................4
RISK FACTORS..................................................................6
AVAILABLE INFORMATION.........................................................6
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.............................6
USE OF PROCEEDS...............................................................7
SELLING STOCKHOLDERS..........................................................7
PLAN OF DISTRIBUTION.........................................................11
LEGAL COUNSEL................................................................11
EXPERTS......................................................................12
--------------------
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.
-------------------------
<PAGE>
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING 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 6; and
o "Incorporation of Certain Information by Reference" on page 6.
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 U. S.
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 increasing cash requirements,
our need to raise more money before the end of 2001, and the
uncertainty of our future profitability.
3
<PAGE>
- --------------------------------------------------------------------------------
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 1995, we identified
research being conducted by Dr. David Berd, an oncologist and professor at
Thomas Jefferson University in Philadelphia, and licensed the rights and the
patents related to Dr. Berd's research. Since then, we have licensed other
patents and medical technologies (products and processes) developed elsewhere,
just as we did with Dr. Berd's research. We recently initiated our own research
to supplement that being done through research agreements with several
universities. We are a typical development stage biotech company in that we are
not currently generating any revenue 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. The National Cancer Institute
estimates that approximately 8.4 million people living in the U.S. have a
history of cancer. Throughout the past decade, approximately 13 million new
cancer cases were diagnosed. The National Institutes of Health estimates that
the overall annual cost to the health care system of treating those patients was
approximately $107 billion. The incidence of cancer continues to increase. About
1,220,100 new cancer cases are expected to be diagnosed in 2000. Cancer is the
second leading cause of death in the U.S., exceeded only by heart disease, and
we are aware of estimates that deaths from cancer will surpass cardiovascular
mortality worldwide early in the 21st Century. Although, many different types of
drugs are used to treat a variety of cancers, no one drug has been found to be a
cure for the disease. Given the need for new effective treatments for cancer, a
drug which may effectively treat cancer could have a large market potential.
Surgery, in many cases is the first treatment performed on cancer patients, and
if a treatment following surgery were to prove broadly applicable and safe, its
market potential could be significant. In addition, such a treatment would
enable the health care system to realize significant overall cost savings due to
a reduction in the number of cases of recurrent disease requiring
hospitalization and ongoing clinical and home care.
Historically, chemotherapies have been the only accepted post-surgical
treatment for cancer. Chemotherapy is the prevention or treatment of disease by
administering chemicals or drugs. Alternatively, immunotherapy, which is a
rapidly expanding segment of cancer therapy research, is the treatment of
disease or infection by stimulating the body's immune system through a process
of immunization. When a person is immunized for a particular disease or
infection, that person is injected with portions of or all of the disease agent
itself, which stimulates the body's immune system to fight the foreign agent. In
this way, he or she builds 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 the body
itself produces. Cancer is characterized by the uncontrolled growth and spread
of these abnormal cells, that escape from the control of the 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. Cancer
cells that escape an immune system attack can then spread throughout the body by
a variety of means. Consequently, the cancer cells invade and destroy healthy
tissue, which can ultimately lead to a person's death if untreated.
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
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
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 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 or elixorative food supplement
or drug and related patents and intellectual property to a subsidiary of
Interneuron Pharmaceuticals, Inc. We changed our 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. The telephone number at that address is (816)
960-1333.
AC Vaccine(TM), M-Vax(TM) and O-Vax(TM) are three of our trademarks.
The Offering
The selling stockholders may sell their shares of common stock according
to the plan of distribution described on page 11 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, 1999, 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.
- --------------------------------------------------------------------------------
5
<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, 1999, 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 a Web 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 Web site 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, 1999; and
3. Our report on Form 8-K, as filed with the Securities and Exchange
Commission on March 23, 2000.
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.
6
<PAGE>
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 common stock completed on March 10,
2000, and from any exercise of 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
$9,929,994. 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 were acquired upon the conversion of shares of our Series B
preferred stock by two related selling stockholders.
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 187,014 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 224,414 shares of common stock subject to the
option and the warrants held by those transferees are covered by this
prospectus.
On March 10, 2000, we issued an aggregate of 2,259,494 shares of our
common stock in a private placement to certain of the selling stockholders
listed below, which shares of common stock are covered by this prospectus. We
also issued five-year warrants to purchase an aggregate of up to 225,952
additional
7
<PAGE>
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 Gruntal & Co., L.L.C. in
identifying and introducing us to certain investors in the common stock
offering, we paid to Gruntal a cash commission of approximately $746,949 and
issued warrants to purchase 83,927 shares of our common stock at an exercise
price of $11.125 per share, exercisable until March 10, 2005. The shares of
common stock subject to those warrants are covered by this prospectus.
Previously, upon entering into our engagement letter with Gruntal dated December
6, 1999, we issued to Gruntal warrants to purchase 150,000 shares of our common
stock at an exercise price of $5.09 per share, exercisable until December 15,
2004, which shares are also covered by this prospectus.
In addition, pursuant to certain provisions of a letter agreement between
us and Paramount, dated January 29, 1999, entered into in connection with the
Series C preferred stock offering, we paid to Paramount a cash finder's fee of
approximately $140,000 in connection with the March 2000, private placement of
our common stock, due to the participation in this financing of certain
investors previously introduced to us by Paramount. We also issued to Paramount
warrants to purchase 10,787 shares of the our common stock at an exercise price
of $11.125 per share, exercisable until March 10, 2005. Paramount subsequently
transferred the warrants to certain of the selling stockholders. The 10,787
shares of common stock subject to the warrants held by those transferees are
covered by this prospectus.
We also issued to Mr. Roberto Marziale warrants to purchase 124,045 shares
of our common stock at an exercise price of $11.125 per share, which are
exercisable until March 10, 2005, as a finder's fee in connection with the
private placement of our common stock for his services in introducing us to
certain of the selling stockholders. Mr. Marziale subsequently transferred the
warrants to his company, Sagres Group Ltd. The 124,045 shares of common stock
subject to the warrants held by Sagres Group Ltd. are covered by this
prospectus.
8
<PAGE>
The following table sets forth certain information with respect to the
ownership of common stock by the selling stockholders as of April 10, 2000, and
the shares offered in this prospectus by the selling stockholders.
<TABLE>
<CAPTION>
Shares Percentage
Shares Owned Owned
Currently Amount to after after
Selling Stockholder Owned be Offered Offering Offering
--------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Afax Group Inc.(1) 98,877 98,877 0 0
Bank Julius Baer(1) 5,500 5,500 0 0
Biocapital Investments Limited
Partnership(1) 197,753 197,753 0 0
C. Blair Parners, L.P.(1) 6,188 6,188 0 0
C. Blair Partners II, L. P.(1) 43,792 43,792 0 0
C. Blair Fund, Ltd.(1) 16,020 16,020 0 0
Centenary Investments, L.P.(2) 73,844 73,844 0 0
Daniel J. Schwinn(1) 49,424 49,424 0 0
Digerati Partners, L.P.(1) 98,890 98,890 0 0
Essex Woodlands Health Ventures
Fund IV, L.P.(1), (2), (3) 1,945,029 1,945,029 0 0
Fidurhone S.A.(1) 22,000 22,000 0 0
Gesico International SA(1) 197,753 197,753 0 0
Giano Capital Limited(1) 355,956 355,956 0 0
Giano Capital US Dollars Limited(1) 187,865 187,865 0 0
Gruntal & Co., L.L.C.(4) 233,927 233,927 0 0
Hentsh Henchoz & Cie(1) 22,000 22,000 0 0
Heptagon Investments LTD(2) 36,921 36,921 0 0
Investissements 90 S.A.(2) 36,921 36,921 0 0
Scott Katzmann(5) 52,443 19,384 33,059 *
Donald R. Kendall, Jr.(2) 18,460 18,460 0 0
Keys Foundation(2) 184,614 184,614 0 0
John Knox(5) 2,286 1,036 1,250 *
Martin Kratchman(5) 69,424 5,907 63,517 *
Maidenhair Investments N.V.(1) 9,888 9,888 0 0
Maribel Limited(2) 36,921 36,921 0 0
Tim McInerney(5), (7) 197,648 129,093 68,555 *
The Medical Fund(1) 55,000 55,000 0 0
Pequot Scout Fund, L.P.(1) 296,629 296,629 0 0
Petrus Fund, L.P.(1), (2) 867,576 837,337 30,239 *
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Shares Percentage
Shares Owned Owned
Currently Amount to after after
Selling Stockholder Owned be Offered Offering Offering
--------- ---------- -------- ----------
<S> <C> <C> <C> <C>
PKB Privatbank AG, Lugano(1) 108,764 108,764 0 0
John Poppadimitropo(5) 1,036 1,036 0 0
Precept Capital(1) 110,000 110,000 0 0
Quota Fund NV(1) 108,764 108,764 0 0
Joseph P. Riccardo(2) 51,690 51,690 0 0
Lindsey A. Rosenwald, M.D.(6), (7) 919,981 401,017 518,964 2.2%
Wayne L. Rubin(5) 79,677 8,293 71,384 *
Sagres Group LTD.(2), (5), (8) 873,945 389,889 484,056 2.1%
Samorag AG(1) 296,629 296,629 0 0
Sextant Avax, LLC(2) 119,999 119,999 0 0
J.F. Shea & Co.(2) 221,537 221,537 0 0
David M. Steinberg(2) 2,460 2,460 0 0
The Aries Domestic Fund, L.P.(9) 225,839 175,218 50,621 *
The Aries Fund, A Cayman Island
Trust(9) 557,117 351,342 205,775 *
The 1992 Houston Partnership, L.P.(2) 49,964 36,921 13,043 *
TIS Prager(2) 64,614 64,614 0 0
--------- --------- --------- ---------
TOTAL 9,211,565 7,671,102 1,540,463 6.6%
</TABLE>
- ----------
* Represents less than 1.0 %.
(1) Includes shares of common stock owned and shares of common stock issuable
upon the exercise of the warrants issued in connection with the March
2000, private placement of common stock.
(2) Includes shares of common stock issued or 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.
(3) Excludes 4,938 shares of common stock issuable upon exercise of certain
options granted to James L. Currie in his capacity as a director of our
company.
(4) Includes shares of common stock issuable upon exercise of warrants issued
to Gruntal & Co., L.L.C. for placement agent services in connection with
the private placement of common stock.
(5) Includes shares of common stock issuable upon exercise of certain options
and warrants issued to Paramount Capital, Inc. for investment banking
services in connection with the Series C Preferred Stock private
placement, 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.
10
<PAGE>
(6) 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 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.
(7) Includes shares of common stock issuable upon exercise of warrants issued
to Paramount Capital, Inc. for investment banking services in connection
with the March 2000, private placement of common stock, that were
subsequently transferred by Paramount to certain of the selling
stockholders.
(8) Includes shares of common stock issuable upon exercise of warrants issued
to Mr. Roberto Marziale as a finder's fee in connection with the private
placement of common stock, that were subsequently transferred by Mr.
Marziale to his company, Sagres Group Ltd.
(9) Includes shares of common stock owned 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 7,671,102 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.
11
<PAGE>
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.
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, 1999, 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
