<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NYMOX PHARMACEUTICAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
QUEBEC, CANADA 8071 NOT APPLICABLE
(Province or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
9900 Cavendish Blvd., Suite 306
St. Laurent, QC, Canada H4M 2V2
(800) 936-9669
(Address and telephone number of Registrant's principal executive offices)
C.T. Corporation System
111 Eighth Ave., 13th Floor
New York, NY 10011
212-590-9200
(Name, address and telephone number of agent for service)
Copies to:
<TABLE>
<S> <C>
Marc J. Marotta Jack Gemmell
Foley & Lardner Nymox Pharmaceutical Corporation
777 East Wisconsin Avenue 9900 Cavendish Blvd. Suite 306
Milwaukee, Wisconsin 53202-5367 St.-Laurent, QC, Canada H4M 2V2
(414) 271-2400 (514) 332-3222
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
All financial information in this prospectus is in United States dollars unless
otherwise noted.
<TABLE>
<CAPTION>
- ----------------------- ---------------------- --------------------- ----------------------- -----------------
Title of each class Amount to be Proposed maximum Proposed maximum Amount of
of securities to be registered aggregate price per aggregate offering registration fee
registered unit price
- ----------------------- ---------------------- --------------------- ----------------------- -----------------
<S> <C> <C> <C> <C>
Up to
Common shares 4,800,000 (1) (2) $12,000,000 (3) $3,168
- ----------------------- ---------------------- --------------------- ----------------------- -----------------
Up to
Common shares(4) 200,000 $4.52 $904,000 $238.66
- ----------------------- ---------------------- --------------------- ----------------------- -----------------
Up to
Total 5,000,000 $12,904,000 $3,406.66
- ----------------------- ---------------------- --------------------- ----------------------- -----------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
(2) The price per common share will vary based on the average daily price of
Nymox's shares during the draw down periods provided for in the common
stock purchase agreement described in this registration statement. The
purchase price will be equal to 94% of the average daily price for each
trading day within such draw down pricing periods. The agreement allows for
24 draws over a period of 30 months for amounts up to $750,000 per draw.
(3) $12,000,000 represents the maximum total purchase price that Jaspas is
obliged to pay Nymox under the common stock purchase agreement; the maximum
net proceeds Nymox can receive is $12,000,000 less a 3% placement fee
payable to its placement agents, Ladenburg Thalmann & Co. Inc., or
$11,640,000.
(4) These common shares represent the shares issuable on the exercise of a
stock purchase warrant issued by Nymox to Jaspas on November 12, 1999 under
the common stock purchase agreement. Under the warrant, Jaspas may purchase
up to 100,000 shares any time between November 30, 1999 and November 30,
2004. Jaspas may purchase the remaining 100,000 shares if and only if Nymox
does not draw down $7,000,000 within eighteen months of this registration
statement becoming effective.
__________________
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Securities and
Exchange Commission ("Commission"), acting pursuant to Section 8(a), may
determine.
<PAGE> 3
The information in this prospectus is incomplete and may be changed. The selling
security holders may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
[NYMOX LOGO]
NYMOX PHARMACEUTICAL CORPORATION
5,000,000 SHARES OF COMMON STOCK
<TABLE>
<S> <C>
Jaspas Investments Limited may use this
prospectus to resell up to 5,000,000 shares of
NYMOX PHARMACEUTICAL CORPORATION common stock of Nymox Pharmaceutical
Corporation.
9900 Cavendish Blvd. Nymox will not receive any of the proceeds from
Suite 306 the sale of the shares by Jaspas. However, we will
St.-Laurent, Quebec, Canada receive the sale price of any common stock that we
H4M 2V2 sell to Jaspas under the common stock purchase
(800) 936-9669 agreement or under the stock purchase warrant
described in this prospectus. Nymox will pay the
costs of registering the shares under this
prospectus, including legal fees.
Jaspas may offer shares of common stock of
Nymox's common stock is listed on the Nasdaq Nymox to purchasers in transactions on the Nasdaq
SmallCap Market under the symbol "NYMX". The SmallCap Market, in negotiated transactions, or
last reported sales price for Nymox's common otherwise, or by a combination of these methods.
stock on the Nasdaq SmallCap Market on ______ Jaspas may sell the shares through broker-dealers
_____ was $ ________ per share. who may receive compensation from Jaspas in the
form of discounts or commissions. Jaspas does not
intend to effect resales in Canada or through any
Canadian exchange. Jaspas is an "underwriter"
within the meaning of the Securities Act of 1933 in
connection with such sales.
</TABLE>
INVESTING IN THE COMMON STOCK OF NYMOX INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_________________________________________
The date of this prospectus is ___________________ , 2000.
_________________________________________
1
<PAGE> 4
NOTE ABOUT CURRENCY
This prospectus provides financial information in United States dollars unless
otherwise noted. The following table sets forth the high and low noon exchange
rates, the average rates (average of the exchange rates on the last day of each
month during the period) and the end of period rates for one United States
dollar, expressed in Canadian dollars, from Dec.31, 1995 to Dec.31, 1999 as
reported by the Federal Reserve Bank of New York. The noon exchange rate was
$ ________ Canadian dollars to the United States dollar on _________________,
2000.
RECENT HISTORY OF THE EXCHANGE RATE FOR CANADIAN DOLLARS TO UNITED STATES
DOLLARS.
<TABLE>
<CAPTION>
- ------------------- ----------------- ----------------- ----------------- ----------------- -----------------
PERIOD ENDED Dec.31/95 Dec.31/96 Dec.31/97 Dec.31/98 Dec.31/99
- ------------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Period end $1.3655 $1.3697 $1.4288 $1.5375 $1.4440
- ------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Average $1.3725 $1.3638 $1.3849 $1.4836 $1.4858
- ------------------- ----------------- ----------------- ----------------- ----------------- -----------------
High $1.4238 $1.3822 $1.4398 $1.5770 $1.5302
- ------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Low $1.3285 $1.3310 $1.3357 $1.4075 $1.4440
- ------------------- ----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>
2
<PAGE> 5
In this prospectus, the term "Nymox" refers to both Nymox Pharmaceutical
Corporation and its wholly-owned subsidiary, Nymox Corporation and, where
applicable, a predecessor private corporation, DMS Pharmaceuticals Inc.
THE COMPANY
Nymox is a development stage biopharmaceutical company based in Kensington,
Maryland and Saint Laurent, Quebec, Canada.
We specialize in the research and development of therapeutics and diagnostics
for the aging population with an emphasis on Alzheimer's disease. Alzheimer's
disease is a progressive, terminal brain disease of the elderly marked by an
irreversible decline in mental abilities, including memory and comprehension,
and often accompanied by changes in behavior and personality. It currently
afflicts an estimated four million people in the United States and at least 20
million people worldwide. As the baby-boomer generation continues to age, these
figures are expected to rise sharply.
AD7C(TM) Test
We market a proprietary diagnostic test for Alzheimer's disease, known as the
AD7C(TM) Test, in the United States through our reference laboratory in
Kensington, Maryland. The test is available both as a urine test, where the
patient provides a first-morning urine sample for testing, and as a
cerebrospinal fluid test, where a doctor draws a small sample of spinal fluid
from the patient. The test measures the level of a brain protein that is
elevated early in both the urine and the cerebrospinal fluid of patients with
Alzheimer's disease. The test is accurate and specific to Alzheimer's disease
and helps physicians make an early diagnosis of the disease.
The early diagnosis of Alzheimer's disease is important to physicians, patients
and their families and enables them to make informed and early social, legal and
medical decisions about treatment and care. Early diagnosis of Alzheimer's
disease has become increasingly important with new improvements in drug
treatment and care. Even a modest delay in institutionalization can mean
substantial social and financial savings. Conversely, any testing procedure that
could rule out Alzheimer's disease would eliminate the tremendous uncertainty
and anxiety patients and their families otherwise face and would allow
physicians to focus on the other, often reversible, causes of cognitive changes.
Early diagnosis as facilitated by the AD7C(TM) test represents a potentially
large cost-savings in the form of a reduced number of office visits, lab tests,
scans and other procedures required by the traditional methods of diagnosis.
Products in Development
We are in the process of developing the following products:
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<PAGE> 6
7C GOLD(TM) AN IMPROVED VERSION OF OUR AD7C(TM) TEST
We are developing an improved version of our AD7C(TM) Test that aids
physicians in the diagnosis of Alzheimer's disease. This version is known
as the 7C Gold test. At present, the AD7C(TM) Test is conducted in a
specialized reference laboratory to which physicians send patient samples
to be tested. The 7C Gold test is designed as a kit which permits the
testing of patient samples either in a general purpose medical laboratory
or in a physician's office. Subject to further laboratory and clinical
validation and to any necessary regulatory approvals, we intend to sell the
7C Gold test worldwide within the next 12 to 18 months.
OTHER BIOCHEMICAL INDICATORS OF ALZHEIMER'S DISEASE
We also hold exclusive patent rights to several other biochemical
indicators for Alzheimer's disease, such as a protein referred to as 35i9
derived from the brain. We intend to use our extensive scientific, medical
and commercial experience and know-how in the field of Alzheimer's disease
in order to develop new diagnostic tests and treatments for the disease
from these and other indicators.
DRUGS TARGETING SPHERONS
We are a world leader in research and development into drugs for the
treatment of Alzheimer's disease that target spherons. Spherons are
microscopic, compact balls of protein found in the brains of all humans
from age 1. Nymox researchers believe that spherons are the cause of
Alzheimer's disease and that stopping or inhibiting the transformation of
spherons into senile plaques, the characteristic injury found in the brains
of Alzheimer's disease patients, will stop or slow the progress of this
illness. We now have several drug candidates, which have shown promise in
animal and other preclinical studies and for which we plan to seek
regulatory approval to begin clinical studies for humans. You should be
aware that there is no consensus among researchers about the causes or
possible treatments of Alzheimer's disease and that other researchers do
not share this belief that Spherons are the cause of Alzheimer's disease or
are a target for the development of treatments for the disease. Nymox has
patents covering both methods for using spherons as targets for developing
drugs and for the actual drug candidates discovered.
NEW ANTIBACTERIAL AGENTS AGAINST INFECTIONS AND FOOD CONTAMINATION
Outside of the area of the treatment and diagnosis of Alzheimer's disease,
we are developing a new class of antibacterial agents for the treatment of
urinary tract and other bacterial infections in humans which have proved
highly resistant to conventional antibiotic treatments and for the
treatment of E. coli 0157:H7 bacterial contamination in hamburger meat and
other food and drink products.
Nymox Pharmaceutical Corporation was incorporated in Canada in May, 1995 to
acquire all of the common shares of DMS Pharmaceutical Inc., a private company
which had been carrying on research and development since 1989 on diagnostics
and drugs for brain disorders and diseases of the aged with an emphasis on
Alzheimer's disease.
4
<PAGE> 7
Nymox's principal executive offices are located at:
Nymox Pharmaceutical Corporation
9900 Cavendish Boulevard, Suite 306
St.-Laurent, Quebec, Canada
H4M 2V2
Phone: (800) 936-9669
Fax: (514) 332-2227
Nymox Corporation
5516 Nicholson Lane Suite 100A
Kensington, Maryland 20895
Phone: (301) 984-0500
Fax: (301) 984-2286.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
You should be aware that this prospectus contains forward-looking statements
about, among other things, the anticipated operations, product development,
financial condition and operating results of Nymox, proposed clinical trials and
proposed transactions, including collaboration agreements.
By forward-looking statements, we mean any statements that are not statements of
historical fact, including (but are not limited to) statements preceded by or
that include the words, "believes", "expects", "anticipates", "hopes", "targets"
or similar expressions.
In connection with the "safe harbor" provisions in the Private Securities
Litigation Reform Act of 1995, we are including this cautionary statement to
identify some of the important factors that could cause Nymox's actual results
or plans to differ materially from those projected in forward-looking statements
made by, or on behalf of, Nymox. These factors, many of which are beyond the
control of Nymox, include Nymox's ability to:
- identify and capitalize on possible collaboration, strategic
partnering or divestiture opportunities,
- obtain suitable financing to support its operations and clinical
trials,
- manage its growth and the commercialization of its products,
5
<PAGE> 8
- achieve operating efficiencies as it progresses from a
development-stage to a later-stage biotechnology company,
- successfully compete in its markets,
- realize the results it anticipates from the clinical trials of its
products,
- succeed in finding and retaining joint venture and collaboration
partners to assist it in the successful marketing, distribution and
commercialization of its products,
- achieve regulatory clearances for its products,
- obtain on commercially reasonable terms adequate product liability
insurance for its commercialized products,
- adequately protect its proprietary information and technology from
competitors and avoid infringement of proprietary information and
technology of its competitors,
- assure that its products, if successfully developed and commercialized
following regulatory approval, are not rendered obsolete by products
or technologies of competitors and
- not encounter problems with third parties, including key personnel,
upon whom it is dependent.
Although Nymox believes that the forward-looking statements contained in this
registration statement are reasonable, it cannot ensure that its expectations
will be met. These statements involve risks and uncertainties. Actual results
may differ materially from those expressed or implied in these statements.
Factors that could cause such differences include, but are not limited to, those
discussed under "Risk Factors."
RISK FACTORS
An investment in shares of common stock of Nymox involves a high degree of risk.
You should carefully consider each of the risks and uncertainties described
below along with all of the other information in this prospectus before deciding
to invest in these shares.
IT IS UNCERTAIN WHEN, IF EVER, WE WILL MAKE A PROFIT.
We first began operations in 1995 and are only in the early stages of commercial
marketing of our diagnostic test, the AD7C(TM) test. We have never made a
profit. We incurred a net loss of CAN$6.9 million in 1998 and CAN$3.5 million
for the first nine months of 1999. As of September 30, 1999, Nymox's accumulated
deficit was CAN$21.2 million.
6
<PAGE> 9
We cannot say when, if ever, Nymox will become profitable. Profitability will
depend on our uncertain ability to generate revenues from the sale of our
products and the licensing of our technology that will offset the significant
expenditures required for us to advance our research, protect and extend our
intellectual property and develop, manufacture, license, market, distribute and
sell our technology and products successfully. Similar types of expenditures in
the past have helped produce the net losses reported above.
WE MAY NOT BE ABLE TO RAISE ENOUGH CAPITAL TO DEVELOP AND MARKET OUR PRODUCTS.
Nymox has funded its operations primarily by selling shares of its common stock.
Since late 1998, a small portion of the funds came from service revenues.
However, service revenues have not been, and may not be in the foreseeable
future, sufficient to meet our anticipated financial requirements.
We will continue to need to raise substantial amounts of capital for our
business activities including our research and development programs, the conduct
of clinical trials needed to obtain regulatory approvals and the marketing and
sales of our products. Additional financing may not be available when needed,
or, if available, may not be available on acceptable terms. If adequate funds on
acceptable terms are not available, we may have to curtail or eliminate
expenditures for research and development, testing, clinical trials, promotion
and marketing for some or all of our products.
WE FACE CHALLENGES IN DEVELOPING AND IMPROVING OUR PRODUCTS.
The pharmaceutical and diagnostic industries are driven by rapid technological
and scientific developments and changing customer needs. Nymox's success
depends, in large part, on its ability to respond to our customers' requirements
in a timely manner by developing or acquiring rights to new products or
improvements to our existing products. We are still developing many of our
products and have not yet brought them to market. We cannot assure you that we
will be able to develop or acquire rights to such products and to market them
successfully.
WE FACE SIGNIFICANT AND GROWING COMPETITION.
Rapidly evolving technology and intense competition are the hallmarks of modern
pharmaceutical and biotechnology industries. Our competitors include:
- major pharmaceutical, diagnostic, chemical and biotechnology
companies, many of which have financial, technical and marketing
resources significantly greater than ours;
- biotechnology companies, either alone or in collaborations with large,
established pharmaceutical companies to support research, development
and commercialization of products that may be competitive with ours;
and
7
<PAGE> 10
- academic institutions, government agencies and other public and
private research organizations which are conducting research into
Alzheimer's disease and which increasingly are patenting, licensing
and commercializing their products either on their own or through
joint ventures.
WE MAY NOT BE ABLE TO SUCCESSFULLY MARKET OUR PRODUCTS.
To increase our marketing, distribution and sales capabilities both in the
United States and around the world, we will need to enter into licensing
arrangements, contract sales agreements and co-marketing deals. We cannot assure
you that we will be able to enter into agreements with other companies on terms
acceptable to us, that any licensing arrangement will generate any revenue for
the company or that the costs of engaging and retaining the services of a
contract sales organization will not exceed the revenues generated.
OUR PRODUCTS AND SERVICES MAY NOT RECEIVE NECESSARY REGULATORY APPROVALS.
Our AD7C(TM) testing service and our products in development are subject to a
wide range of government regulation governing laboratory standards, product
safety and efficacy. The actual regulatory schemes in place vary from country to
country and regulatory compliance can take several years and involve substantial
expenditures.
We cannot be sure that we can obtain necessary regulatory approvals on a timely
basis, if at all, for our products in development and all of the following could
have a material adverse effect on our business:
- failure to obtain or significant delays in obtaining requisite
approvals;
- loss of or changes to previously obtained approvals; and
- failure to comply with existing or future regulatory requirements.
The operation of our clinical reference laboratory in Maryland is regulated by
the Health Care Financing Administration (HCFA) under the Clinical Laboratories
Improvement Act of 1988. In addition, individual states like New York and
Maryland have their own requirements for reference laboratories like ours that
offer diagnostic services. In addition, the United States Food and Drug
Administration (FDA) has its own regulations governing in vitro diagnostic
products, including some of the reagents used in clinical reference
laboratories. Any changes in HCFA or state law requirements or in the FDA
regulations could have a detrimental impact on our ability to offer or market
any reference laboratory services and/or on our ability to obtain reimbursement
from the Medicare and Medicaid programs and providers.
8
<PAGE> 11
Our diagnostic product in development, 7C Gold, will require prior approval from
the FDA before being marketed, distributed and sold in the United States.
Similar requirements exist in many other countries. In general, such approval
requires clinical testing as to the safety and efficacy of the device and
preparation of an approval application with extensive supporting documentation.
If approved, the device would then be subject to postmarketing record and
reporting obligations and manufacturing requirements. Obtaining these approvals
and complying with the subsequent regulatory requirements can be both
time-consuming and expensive.
In the United States, our drugs in development will require FDA approval, which
comes only at the end of a lengthy, expensive and often arduous two-step
process. We cannot predict with any certainty the amount of time the FDA will
take to approve one of our drugs or even whether any such approval will be
forthcoming. Similar requirements exist in many other countries.
PROTECTING OUR PATENTS AND PROPRIETARY INFORMATION IS COSTLY AND DIFFICULT.
We believe that patent and trade secret protection is important to our business,
and that our success will depend, in part, on our ability to obtain strong
patents, to maintain trade secret protection and to operate without infringing
the proprietary rights of others.
The commercial success of products incorporating our technologies may depend, in
part, upon our ability to obtain strong patent protection. We cannot assure you
that additional patents covering new products or improvements will be issued or
that any new or existing patents will be of commercial benefit or be valid and
enforceable if challenged.
HEALTH CARE PLANS MAY NOT COVER OR ADEQUATELY PAY FOR OUR PRODUCTS AND SERVICES.
Throughout the developed world, both public and private health care plans are
under considerable financial and political pressure to contain their costs. The
two principal methods of restricting expenditures on drugs and diagnostic
products and services are to deny coverage or, if coverage is granted, to limit
reimbursement. For single-payer government health care systems, a decision to
deny coverage or to severely restrict reimbursement for one of our products can
have an adverse effect on our business and revenues.
In the United States, where, to a significant degree, the patient population for
our products is elderly, Medicare and Medicaid are sources of reimbursement. In
general, any restriction on reimbursement, coverage or eligibility under either
program could adversely affect reimbursement to Nymox for products and services
provided to beneficiaries of the Medicare and/or Medicaid programs. Many elderly
people are covered by a variety of private health care organizations either
operating private health care plans or Medicare or Medicaid programs subject to
government regulation. These organizations are also under considerable financial
constraints and we may not be able to secure coverage or adequate reimbursement
from these organizations. Without coverage, we will have to look to the patients
themselves who may be unwilling or unable to pay for the product; in turn,
doctors may be reluctant to order or prescribe our products in the absence of
coverage of the product for the patient.
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<PAGE> 12
THE FUTURE SALE OF ELIGIBLE SHARES MAY DILUTE NYMOX'S STOCK PRICE.
The issuance of further shares and the eligibility of issued shares for sale
will dilute our common stock and may lower its share price. There are 20,003,804
common shares of Nymox currently issued and outstanding, not including the
Shares covered by this prospectus. All but 36,600 of these shares are eligible
for sale under Rule 144 or are otherwise freely tradable. Finally, 1,130,500
share options are outstanding, of which 891,000 are currently vested. The great
majority of these options expire in 6 to 10 years. These options have been
granted to employees, officers, directors and consultants of the company.
Moreover, Nymox may use its shares as currency in acquisitions.
WE FACE POTENTIAL LOSSES DUE TO FOREIGN CURRENCY EXCHANGE RISKS.
A large portion of the corporation's expenses are derived in U.S. dollars. As a
result, we are exposed to the risk of losses due to fluctuations in the exchange
rates between the United States dollar and the Canadian dollar. We protect
ourselves against this risk by maintaining cash balances in both currencies. We
do not currently engage in hedging activities. We cannot say with any assurance
that the company will not suffer losses as a result of unfavorable fluctuations
in the exchange rates between the United States dollar and Canadian dollar.
WE HAVE NEVER PAID A DIVIDEND AND ARE UNLIKELY TO DO SO IN THE FORESEEABLE
FUTURE.
Nymox has never paid any dividends and does not expect to do so in the
foreseeable future. We expect to retain any earnings or positive cash flows in
order to finance and develop Nymox's business.
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<PAGE> 13
TRADING MARKET FOR COMMON SHARES
Nymox's common shares trade on the Nasdaq Stock Market. Nymox's common shares
traded on the Nasdaq National Market from December 1, 1997 until September 16,
1999 when they began trading on the Nasdaq SmallCap Market. Nymox's common
shares also traded on the Montreal Exchange from December 18, 1995 until
November 19, 1999.
The following tables set out the high and low reported trading prices of the
common shares on the Nasdaq Stock Market during the periods indicated.
<TABLE>
<CAPTION>
- ------------------- ------------------------- ------------------------------ ------------------------------
Year Quarterly Period High Sales Price Low Sales Price
- ------------------- ------------------------- ------------------------------ ------------------------------
<S> <C> <C> <C>
1997 4th Quarter $8.75 $6.25
- ------------------- ------------------------- ------------------------------ ------------------------------
1998 1st Quarter $13.625 $5.688
------------------------- ------------------------------ ------------------------------
2nd Quarter $8.375 $5.75
------------------------- ------------------------------ ------------------------------
3rd Quarter $7.375 $2.5625
------------------------- ------------------------------ ------------------------------
4th Quarter $6.25 $2.50
- ------------------- ------------------------- ------------------------------ ------------------------------
1999 1st Quarter $5.875 $2.875
------------------------- ------------------------------ ------------------------------
2nd Quarter $4.188 $2.75
------------------------- ------------------------------ ------------------------------
3rd Quarter $4.750 $2.50
------------------------- ------------------------------ ------------------------------
4th Quarter $4.625 $2.50
- ------------------- ------------------------- ------------------------------ ------------------------------
</TABLE>
According to information furnished to Nymox by the transfer agent for the common
shares, as of January 31, 2000, total shares outstanding were 20,003,804. There
were 891 holders of record of the common shares and 3,261 beneficial
shareholders in total. Of these, 90 were holders of record of the common shares
and 1,304 were beneficial shareholders with addresses in the United States and
such holders owned an aggregate of 1,886,798 shares, representing 9.4% of the
outstanding shares of common stock.
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial data for Nymox
for the periods indicated, derived from financial statements prepared in
accordance with generally accepted accounting principles ("GAAP"). The financial
data for the years ended December 31, 1996, 1997 and 1998, has been extracted
from audited financial statements included elsewhere in this registration
statement. The financial data for the 1994 and 1995 (July and December) periods
has been extracted from audited financial statements not included in this
prospectus.
The selected financial data as at and for the nine months ended September 30,
1999 has been extracted from unaudited financial statements included elsewhere
in this prospectus. Such unaudited financial statements include all adjustments
(consisting of normal recurring adjustments) which, in the opinion of
management, are necessary for a fair presentation of the information for the
period presented.
We prepare our basic financial statements in accordance with Canadian GAAP and
include, as a note to the statements, a reconciliation of material differences
to United States GAAP.
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<PAGE> 14
Effective August 1, 1995, Nymox changed its fiscal year from a July 31 year-end
to a December 31 year-end.
NYMOX PHARMACEUTICAL CORPORATION
Selected Consolidated Financial Data
(expressed in Canadian dollars)
<TABLE>
<CAPTION>
9 Months
ending
July 31, July 31, Dec. 31, Sept. 30,
1994 1995 1995 Dec. 31, Dec. 31, Dec. 31, 1999
(12 months) (12 months) (5 months) 1996 1997 1998 (Unaudited)
----------- ----------- ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Canadian GAAP
Current Assets - 0 - 11,963 2,268,097 2,896,234 2,526,335 3,909,241 1,855,966
Capital Assets 12,576 338,953 366,155 1,317,973 1,419,462 1,846,979 1,610,772
Total Assets 239,403 350,916 2,634,252 4,214,207 3,945,797 5,756,220 3,466,738
Total Liabilities 95,376 121,589 151,297 384,226 292,330 434,440 275,667
Shareholders' Equity 194,027 229,327 2,482,955 3,829,981 3,653,467 5,321,780 3,191,071
Revenues - 0 - - 0 - - 0 - 226,940 101,110 394,837 220,912
Research & Development
Expenditures (note 1) 55,325 371,939 571,215 2,116,000 2,412,349 3,013,237 1,221,866
Net Loss 58,325 377,570 693,846 3,699,064 4,999,455 6,903,611 3,479,058
Loss per Share (note 2) - 0 - 0.03 0.04 0.21 0.27 0.36 0.17
U.S. GAAP (note 3)
Net Loss 71,668 393,841 1,639,194 4,330,230 5,198,988 7,385,188 3,551,140
Loss per Share (note 2) - 0 - 0.03 0.11 0.25 0.28 0.38 0.18
Shareholders' Equity 127,312 146,341 2,391,515 3,107,375 2,731,328 3,918,064 1,715,273
</TABLE>
Notes:
1) We earn investment tax credits by making qualifying research and
development expenditures. These amounts shown are net of investment tax
credits.
2) For periods prior to December 31, 1995, the number of shares outstanding is
assumed to be 15,000,000 representing the number of shares issued by Nymox
to DMS Pharmaceuticals Inc. in September 1995. Nymox has never paid
dividends on its common stock.
3) Reference is made to Note 10 of Nymox's audited financial statements as at
and for the year ended December 31, 1998 for a reconciliation of
differences between Canadian and U.S. GAAP.
12
<PAGE> 15
INFORMATION ABOUT THE COMPANY
DIAGNOSTIC PRODUCTS FOR ALZHEIMER'S DISEASE
Alzheimer's disease is the most common cause of dementia in persons 65 years of
age and older and is the fourth leading cause of death among the elderly.
Despite the need for an accurate clinical test, the definitive diagnosis of the
disease is possible only after the death of the patient by expert, pathologic
examination of brain tissue.
The Surgeon General's Report on Mental Health, released on December 13, 1999,
identified the importance and the need for the early detection and diagnosis of
Alzheimer's disease. The report described the current approach to Alzheimer's
disease diagnosis, clinical examination and the exclusion of other common causes
of its symptoms, as time- and labor-intensive, costly and largely dependent on
the expertise of the examiner. As a result, the illness is currently
underrecognized, especially in primary care settings, where most older patients
seek care. The report joined other experts writing in the field in recognizing
the need for a better, more reliable method for diagnosing the disease in living
patients and in particular, the need of a simple, accurate and convenient test
that could detect a biochemical change early in patients with Alzheimer's
disease. We believe our AD7C(TM) provides such a test.
The AD7C(TM) Test measures the level of a brain protein called neural thread
protein which is elevated early in Alzheimer's disease as reported both in the
scientific literature and at scientific conferences. Researchers at the
Massachusetts General Hospital and Brown University led by Doctors Suzanne de la
Monte and Jack Wands first found large amounts of the protein in the brains of
patients known to have died with Alzheimer's disease. Subsequent research led to
the characterization of the protein and the development of a highly sensitive
test to detect the presence of the protein not only in brain tissue but also in
the spinal fluid and urine of patients diagnosed with Alzheimer's disease. There
is evidence that the protein is associated with the growth and sprouting of
brain cells and accordingly one possible explanation for its increased
production in the brains of patients with Alzheimer's disease may be as one of
the body's responses to the widespread destruction of brain cells that occurs
with AD. The protein is also associated with cell death in brain cell cultures
in the laboratory and therefore may also play a role in the cell loss in the
disease.
Nymox believes that its AD7C(TM) test can assist a physician faced with the task
of diagnosing whether a patient has Alzheimer's disease. In company funded
trials to date, involving over 500 clinical samples, the test results were
positive for over 80% of the patients with verified Alzheimer disease and
negative in over 89% of subjects without the disease (known as a low false
positive rate). The low rate of positive results for patients without the
disease is important for doctors investigating patients with subtle or marginal
symptoms of mental, emotional, cognitive, or behavioral changes. If the doctor
can rule out Alzheimer's with more assurance, a great deal of patient and family
anguish and anxiety will be avoided. A low test score will help the doctor to be
more certain that Alzheimer's disease is not the cause of the patient's symptoms
and to target the other, often reversible causes of the patient's symptoms, such
as depression.
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<PAGE> 16
These trials have been confirmed by verification of the diagnosis through
postmortem examination of brain tissue. To date, several studies published in
scientific publications or presented at scientific conferences have confirmed
the accuracy of the AD7C(TM) test. These publications include the Journal of
Clinical Investigation (1997; vol.100; pages 3093-3104), the Journal of
Contemporary Neurology (1998; art. 4a) and two publications in the Journal of
Clinical Laboratory Analysis (1998; vol.12: 285-288) and (1998; vol.12:223-226).
There can be no assurance that further studies will repeat the same level of
success experienced to date.
Nymox provides the AD7C(TM) test for both spinal fluid and urine samples through
its reference laboratory in Kensington, Maryland. A patient provides the
necessary sample to his or her doctor who then forward the sample to our
laboratory where our technical staff performs the tests. We then report the
results to the doctor.
The AD7C(TM) test is an aid to diagnosis, to be considered together with patient
history, physical examination and other relevant medical data. The test does not
replace a physician's diagnosis. We believe that the appropriate use of the test
leads to better, earlier and quicker diagnoses and associated cost-savings
through the elimination of unnecessary and intrusive tests and examinations.
Nymox is developing an improved version of the AD7C(TM) test known as 7C Gold.
The 7C Gold test when completely developed will permit the testing of urine or
spinal fluid samples in a general purpose medical laboratory or a doctor's
office rather than in a highly specialized reference laboratory. We expect that
the 7C Gold test will increase the availability and acceptance of our test while
lowering its cost to the patient or health care payer.
Nymox also is developing a new diagnostic test for Alzheimer's disease that
detects a distinctive brain antigen referred to as 35i9 which we believe is also
associated with Alzheimer's disease.
DEVELOPMENT OF THERAPEUTIC PRODUCTS FOR ALZHEIMER'S DISEASE
At present, there is no cure for Alzheimer's disease. There are two drugs
approved by the FDA, tacrine (brand-name Cognex) and donezepil (brand-name
Aricept) for the treatment of Alzheimer's disease. However, at most these drugs
offer symptomatic relief for the loss of mental function associated with the
disease and possibly help to delay the illness-progression. There is no
consensus as to the cause of Alzheimer's disease or even whether it is one
disease or many.
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<PAGE> 17
There is an urgent need for an effective treatment for the illness, caused in
part by the rising health care, institutional and social costs for the treatment
and care of Alzheimer's disease sufferers. The Surgeon General's Report on
Mental Health released on December 13, 1999, put the direct health care costs
for the illness in the United States at almost $18 billion for 1996. In a 1998
statement to the House Appropriations Subcommittee, the Director of the National
Institute on Aging, Dr. Richard J. Hodes, estimated that the cost of care to
family, caregivers and society in general was as much as $100 billion per year.
These costs are expected to rise sharply as the baby boom generation ages and
more people become at risk for the disease. According to Dr. Hodes, the number
of Americans aged 65 or over, now some 34 million, is expected to more than
double by year 2030. Within this group, the population of persons over the age
of 85 is the fastest growing segment. As people live longer, they become more at
risk of developing Alzheimer's disease.
Nymox's research into drug treatments for Alzheimer's disease is aimed at
compounds that could arrest the progression of the disease and therefore are
targeted for long term use.
Nymox researchers believe that spherons are the cause of senile plaques, the
characteristic injury found in the brains of patients suffering from Alzheimer's
disease and widely believed to be at the root of the illness. Spherons are
unique, microscopic-sized balls of protein found in every person's brain from
age 1. As we age, our spherons grow larger until the cells they are in can no
longer hold them. Nymox researchers believe that, once freed, the spherons burst
to form senile plaques and so set off a chain of events leading to the loss of
brain cells and brain function associated with Alzheimer's disease. In 1998,
Nymox researchers summarized their findings in the Journal of Alzheimer's
Disease and in IOS Press - Drug News & Perspectives. These summaries set forth
20 important criteria of validity correlating the disappearance of spherons in
old age with the appearance of senile plaques and implicating spherons as the
cause of Alzheimer's disease
Based on these research findings, Nymox developed proprietary screening systems
and used them to discover, develop and test drug candidates to inhibit the
formation of Alzheimer plaques from spherons. These candidates have the
potential to slow or stop the progression of the disease. Its most promising
compound, NXD-2858, has shown the capability of being taken orally and of
crossing the blood-brain barrier into the brain. To date, this compound shows no
significant evidence of toxicity or significant potential side effects. Nymox
also has two other distinct new drug candidates, NXD-3109 and NXD-1191, neither
of which demonstrate significant toxicity and both of which had positive animal
testing results.
Nymox also developed a unique drug screening system, based on the research that
led to its AD7C(TM) test, to identify other potential drug candidates for the
treatment of Alzheimer's disease. Dr. Suzanne de la Monte and other researchers
at the Massachusetts General Hospital identified the gene that produces neural
thread protein, the brain protein detected by Nymox's AD7C(TM) test. In this
system, researchers inserted the AD7C gene into human brain cells, triggering
the production of the AD7C brain protein associated with Alzheimer's disease.
The genetically-altered cells then begin to sprout new growths, start to
degenerate and finally die prematurely. Nymox screened compounds for their
ability to impede this process of premature cell death and thus potentially slow
or halt the loss of brain cells in the Alzheimer's disease brain. Nymox licensed
this technology in 1997 from the Massachusetts General Hospital as part of a
sponsored research and licensing agreement.
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<PAGE> 18
In November, 1999, Dr. Ben Wolozin of Loyola University Medical Center in
Chicago reported at the annual meeting of the Society for Neuroscience his
findings that some members of a class of anti-cholesterol drugs called statins
may delay or prevent the onset of Alzheimer's disease. Dr. Wolozin licensed the
commercial and patent rights to this discovery to Nymox.
ANTI-INFECTIVES
In the last ten years there has been a growing recognition of the increasing
problem of antibiotic-resistant infections and the need for truly novel
antibacterial drugs. A recent example of this recognition can be found in the
European Commission report dated May 28, 1999, "Opinion of the Scientific
Steering Committee on Antimicrobial Resistance."
In the field of infectious disease treatments, Nymox has developed three new
antibacterial agents:
- NXB-4221 for the treatment of difficult chronic and persistent urinary
tract infections;
- NXB-5886 for the treatment of streptococcal infection; and
- NXT-1021 for the treatment of staphylococcal infection.
Urinary tract infections in women caused by bacteria such as E. coli have become
increasingly resistant to conventional antibiotic treatment. Some varieties of
streptococcus and staphylococcus bacteria, a common source of infection in
humans, have acquired a broad immunity to antibiotic treatments. Infections from
these antibiotic resistant bacteria are difficult to treat and can be life
threatening. Nymox's three antibacterial agents have all shown the ability to
kill their bacterial targets in culture with no signs of toxicity.
E. coli contamination of food and drink is a serious public health problem
worldwide and a major concern for meat processors in particular. E. coli
bacteria occur normally and usually harmlessly in the gastrointestinal tracts of
humans, cows and other animals. However, one mutant variety of the E. coli
bacteria, E. coli 0157:H7, can cause life-threatening illness and has been
implicated in cases of severe diarrhea, intestinal bleeding and kidney failure,
leading, in some cases, to death in children and the elderly. E. coli
contamination in hamburger meat and other food products and in drinking water
affects about 100,000 people a year.
16
<PAGE> 19
Nymox developed a potent new antibacterial agent, NXC-4720. Tests of NXC-4720
show it to be highly effective against all known substrains of E. coli 0157:H7,
the bacteria implicated in these severe cases of food and drink contamination.
Tests of NXC-4720 show that it destroys E. coli 0157 strains, including H7,
efficiently, rapidly and at a very low dose. In 1999, we began further trials
for this agent and expect to complete them in 2000. Nymox has patent rights to
these and other antibacterial agents.
COMPETITION
In the field of Alzheimer's disease diagnosis, our AD7C(TM) Test faces growing
competition which could detrimentally impact on our ability to successfully
market and sell our diagnostic test. Our competitors include:
- Athena Diagnostics, Inc. which is currently marketing three tests
claimed to aid in the diagnosis of Alzheimer's disease: a genetic test
for the rare cases of familial, early-onset Alzheimer's disease; a
genetic test for a relatively common mutation of a gene said to
increase the likelihood of a person with at least one of the genes
contracting the disease; and a test for two proteins in the spinal
fluid of patients.
- Mitokor, Inc. which developed a blood test known as Mito-Load that
looks for certain mutations in mitochondrial DNA said to be associated
with Alzheimer's disease. Mitokor recently entered into a
non-exclusive licensing agreement in Japan for the marketing and sale
of its product there.
- Synapse Technologies, Inc. which developed a blood test known as p97
Diagnostic that detects a protein said to be diagnostic of Alzheimer's
disease. Synapse Technologies also licensed its technology for use in
Japan.
- NeuroLogic, Inc. announced in September, 1999 that it acquired an
exclusive world-wide license to a cellular test for Alzheimer's
disease.
There are also a number of other proposed biochemical signs of the disease that
could potentially be developed into a commercial diagnostic test as well as
various scanning and imaging technologies which might compete some day for a
portion of the diagnostic market for Alzheimer's disease.
We also face intense competition for the development of an effective treatment
for Alzheimer's disease. The market conditions for an Alzheimer's disease drug
strongly favor the entry of other corporations into the area. The current market
for therapeutic drugs for Alzheimer's disease is an estimated $2 billion. This
market is expected to grow rapidly as new drugs enter the market and as the baby
boom generation becomes more at risk for developing Alzheimer's disease. As a
result, most of the major pharmaceutical companies and many biotechnology
companies have ongoing research and development programs for drugs and
treatments for Alzheimer's disease. Many of these companies have much greater
scientific, financial and marketing resources than we have and may succeed in
developing and introducing effective treatments for Alzheimer's disease before
we can. At present, only one drug for Alzheimer's disease is being widely
marketed in the United States, Aricept by Pfizer. Aricept only treats some of
the symptoms of Alzheimer's disease by enhancing memory and other mental
functions and not the underlying causes of the illness.
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<PAGE> 20
A similar competitive reality prevails in the field of novel anti-infectives.
Over the past ten years, there has been an increasing awareness of the medical
need and of emerging market opportunities for new treatments for antibiotic
resistant bacterial infections. Many of the major pharmaceutical companies are
developing anti-infective drugs that either modify their existing drugs or
involve new anti-bacterial properties. Many biotechnology companies are
developing new classes of anti-bacterial drugs. At least three major
pharmaceutical companies have vaccines against bacterial infections in
development. To the extent that these companies are able to develop drugs or
vaccines that offer treatment for some or all of the indications for our
anti-infectives, the market for our products may be adversely affected.
The problem of E. coli 0157:H7 contamination of hamburger meat and other food
products is also well-known and a number of companies and researchers have been
pursuing various potential solutions, including irradiation with x-rays, better
detection of contamination, electronic pasteurization, vaccination and
competitive exclusion of the pathogenic E. coli bacteria by harmless bacteria.
The development of alternative solutions to the problem of E. coli infection may
adversely affect the market for our treatment for E. coli 0157:H7 infection in
cattle and contamination of food products.
GOVERNMENT REGULATION
Any therapeutic product developed by Nymox would have to receive regulatory
approval. In the United States, once a product receives regulatory approval to
begin clinical testing, it must go through four distinct development and
evaluation stages:
- Product Evaluation.
Nymox must conduct preliminary studies of potential drug candidates using
various screening methods to evaluate their products for further testing,
development and marketing.
- Optimization of Product Formulation.
The activities in this stage of development involve consultations between
the Company and investigators and scientific personnel. Preliminary
selection of screening candidates to become product candidates for further
development and further evaluation of drug efficacy is based on a panel of
research based biochemical measurements. Extensive formulation work and in
vitro testing are conducted for each of various selected screening
candidates and/or product candidates.
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<PAGE> 21
- Clinical Screening and Evaluation.
During this phase of development, portions of which may overlap with
product evaluation and optimization of product formulation, initial
clinical screening of product candidates is undertaken and full scale
clinical trials commence.
- Final Product Development.
The activities to be undertaken in final product development include
performing final clinical evaluations, conducting large-scale experiments
to confirm the reproducibility of clinical responses, making clinical lots
for any additional extensive clinical testing that may be required,
performing any further safety studies required by the FDA, carrying out
process development work to allow pilot scale production of the product,
completing production demonstration runs for each potential product, filing
new drug applications, product license applications, investigational device
exemptions (and any necessary supplements or amendments) and undergoing
comprehensive regulatory approval programs and processes.
Nymox cannot assure you that it will successfully complete the development and
commercialization of any therapeutic products.
PROPERTY
Our laboratory facilities in Kensington, Maryland comprise 5,504 square feet of
leased space. The lease expires on March 31, 2000. Our office and research
facilities in Saint Laurent, Quebec, Canada comprise 6,923 square feet of leased
space. The lease agreement expires on August 31, 2003. Nymox owns a full
complement of equipment used in all aspects of its research and development work
and its reference laboratory. Nymox believes that its facilities are adequate
for its current needs and that additional space, if required, would be available
on commercially reasonable terms.
LEGAL PROCEEDINGS
Nymox's United States subsidiary, Nymox Corporation, commenced an action against
a former employee, Hossein Ali Ghanbari, in Montgomery County, Maryland, for
repayment of two promissory notes. On August 5, 1999, the court granted Nymox
Corporation's Motion for Partial Summary Judgment in the sum of $168,731.83.
Hossein Ali Ghanbari has made counterclaims against Nymox Corporation. On
February 3, 2000, the large majority of these counterclaims were dismissed on a
motion for summary dismissal. The remaining counterclaims allege that Nymox
Corporation allegedly defamed Ghanbari, that Nymox Corporation wrongfully
discharged Ghanbari and that Nymox Corporation failed to apply on time to the
Province of Quebec for a tax holiday for Ghanbari. Ghanbari has claimed that he
is entitled to compensatory damages totaling $10.5 million and punitive damages
totaling $10 million. Nymox Corporation denies the allegations raised in the
counterclaims, believes the counterclaims lack merit and is vigorously defending
these counterclaims.
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<PAGE> 22
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OVERVIEW
We are a development stage biopharmaceutical company that specializes in the
research and development of therapeutics and diagnostics for the aging
population with an emphasis on Alzheimer's disease.
We market and provide a clinical laboratory test, the AD7C(TM) test that is an
aid to the diagnosis of Alzheimer's disease. We have under development an
improved version of the AD7C(TM) test, 7C Gold, which, when completed and
approved, can be used in a general purpose medical laboratory or a doctor's
office rather than in a highly specialized reference laboratory.
We also have under development therapeutic agents for the treatment of
Alzheimer's disease and of certain antibiotic-resistant infections as well as
antibacterial agents for E. coli contamination of food and drink products.
We began generating revenue from sales of our AD7C(TM) test in 1997.
LIQUIDITY AND CAPITAL RESOURCES
We fund our operations and projects primarily by selling shares of Nymox's
common stock. However, since 1997, a small portion of our funding came from
service revenues. This source of funding became more significant in late 1998,
following the launch of our urinary version of the AD7C(TM) test. Since its
incorporation in May, 1995, Nymox raised the capital necessary to fund its
on-going research and development work and its marketing and sales operations
primarily through private placements of its shares.
In December 1995, Nymox completed an initial private placement of 1,578,635
common shares at a price of CAN$2.00 per share for CAN$3,157,270 to finance its
activities.
On December 18, 1995, the shares of Nymox were listed on the Montreal Stock
Exchange. Since then, the private placements completed by Nymox are as follows:
- April 1996, 877,300 common shares at a per share price of CAN$6.00 for
aggregate net proceeds of CAN$5,263,800;
- May 1997, 696,491 common shares at a price of CAN$6.50 and warrants
exercisable at a price of CAN$8.50 per share for a total consideration
of CAN$4,527,191. In 1998, all 696,491 of these warrants were
exercised for additional proceeds to Nymox of CAN$5,920,174;
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<PAGE> 23
- May 1998, 231,630 common shares at a price of CAN$8.50 for total
proceeds of CAN$1,968,855. A total of 110,000 warrants were issued as
well, exercisable at prices of CAN$8.50 per share (50,000) and
CAN$10.00 per share (60,000). These warrants have since expired;
- January, 1999, 190,000 common shares at CAN$8.50 per share, for total
proceeds of CAN$1,615,000. A total of 95,000 warrants were issued as
well, exercisable at the price of CAN$10.00 per share. These warrants
have since expired; and
- September, 1999, 122,000 common shares at CAN$5.00 per share, for
total proceeds of CAN$610,000
In total, Nymox has raised over CAN$24 million, since its incorporation in May
1995.
We expect the stock purchase agreement with Jaspas, described below in the
section entitled "The Common Stock Purchase Agreement", to provide significant,
long-term financing that will enable us to advance our research and product
development for the next three years. We plan to seek additional capital within
the limits on financing contained in the common stock purchase agreement in
order to accelerate product development and marketing and obtaining necessary
regulatory approvals.
We have no financial obligations of significance other than long-term lease
commitments for our premises in Canada and the United States of CAN$27,562 per
month and ongoing research funding payments to a U.S. medical facility totaling
$172,000 for 1999.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998
Revenue
In the last quarter of 1998, we launched our urinary version of the AD7C(TM)
test. This resulted in a 196% increase in our revenues from this service from
CAN$60,135 for the nine months ending September 30, 1998 to CAN$178,496 for the
same period in 1999. This increase is attributable to more sales of our AD7C(TM)
test.
Our 7C Gold test successfully completed its initial key validation studies in
September 1999 and we plan to apply for FDA approval in 2000. We expect that
approval of the 7C Gold test will have a positive impact on the acceptance of
our test in the medical and health care communities and on our marketing and
sales.
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<PAGE> 24
Expenses
We were able to reduce expenses from CAN$5,510,528 for the nine months ending
September 30, 1998 to CAN$3,767,349 for the same period in 1999. The two
principal areas of savings were in marketing, with a reduction in expenditures
from CAN$2,570,594 to CAN$1,057,545 and, to a lesser extent, in research and
development, from CAN$2,198,823 to CAN$1,241,011. These savings were partly
offset by a rise in general, administrative and cost of sales from CAN$608,894
to CAN$1,305,242. This rise is attributable to an increase in cost of sales of
CAN$258,252 resulting from the increase in sales of the AD7C(TM) test, in
professional fees of CAN$287,540, mostly legal fees, and in salaries of
CAN$150,000 (re: hiring of an additional executive level employee).
The result of an increase in revenue and a decrease in expenses was a decline in
the net loss per share from CAN$0.27 for the nine months ending September 30,
1998 to CAN$0.17 for the nine months ending September 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, cash, short term investments and subscriptions
receivable totaled CAN$1,335,765. We invested CAN$136,418 in additional capital
assets in the nine months ended September 30, 1999, consisting mostly of patent
costs, compared to CAN$298,169 in the same period in 1998. The decrease is
attributable to a reduction in purchases of equipment.
YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
Revenue
Revenues on service fees for the AD7C(TM) test amounted to Can$151,263 for the
year ended December 31, 1998, compared with CAN$24,584 for the year ended
December 31, 1997. More than half of these revenues were generated in the last
two months of 1998 when we launched the urinary version of our AD7C(TM) urine
test service through our reference laboratory service in Kensington, Maryland.
All of the service fee revenue was derived in the United States.
Interest revenue increased to CAN$243,574 in 1998 compared to CAN$76,526 in
1997, derived from interest earned on the cash and short-term investments
received from the private placements referred to previously.
Expenses
Research and development expenditures amounted to CAN$3,019,015 for the year
ended December 31, 1998, compared with CAN$2,562,349 for the year ended December
31, 1997. The increase is principally attributable to increased expenditures on
reagents and clinical studies related to R&D in therapeutics and anti-infectives
(net increase CAN$476,677) at the Rockville, Maryland laboratory during the
year. In 1998, research tax credits amounted to CAN$5,778 compared to
CAN$150,000 in 1997. The reduction in tax credits is attributable to the
transfer of research and development activities to the United States.
Marketing expenses amounted to CAN$3,240,242 for the year ended December 31,
1998 compared to CAN$1,925,654 for the year ended December 31, 1997. A major
marketing effort in 1998 accounted for the increased expenditures; the effort
focused specifically on mass mailings and publicity (net increase CAN$827,189)
and presentations at conferences (net increase CAN$579,496). We anticipated
reducing expenditures in this area in 1999 and in fact did so.
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General and administrative expenses amounted to CAN$896,201 for the year ended
December 31, 1998, compared with CAN$589,524 in the year ended December 31,
1997. The increase is attributable to increases in professional fees (net
increase CAN$193,736) and increased costs related to shareholder relations (net
increase CAN$73,146). Increases in both areas result from first time contracts
in 1998 with shareholder relations and public relations firms.
Net losses for the period ended December 31, 1998 were CAN$6,903,611, or
CAN$0.36 per share, compared to CAN$4,999,455, or CAN$0.27 per share, for the
period ended December 31, 1997.
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
Expenses
Research and development expenditures represented our most significant
expenditure and amounted to CAN$2,562,349 for the year ended December 31, 1997,
compared with CAN$2,356,000 for the year ended December 31, 1996. The increased
expenses were largely attributable to increased expenditures related to
laboratory expenses (CAN$178,000) at the Rockville, Maryland laboratory during
the year. The Rockville facility was in operation for only 10 months in 1996. We
also paid its third installment under its research and license agreement with
Massachusetts General Hospital in the amount of CAN$311,310, which was
CAN$36,000 higher than the 1996 payment. Under the agreement, we were obligated
to make certain regularly scheduled payments to Massachusetts General as
research grants in exchange for royalties from any sales of resulting products.
Gross research and development expenditures were partially offset by research
tax credits available to us in Quebec. In 1997, research tax credits amounted to
CAN$150,000 compared to CAN$240,000 in 1996. The reduction was attributable to
the transfer of certain research and development activities to the United
States.
Marketing expenses in 1997 amounted to CAN$1,925,654 for the year ended December
31, 1997 compared to CAN$1,253,894 for the year ended December 31, 1996.
Expenditures in 1997 consisted largely of the costs of establishing and
maintaining a sales and marketing force (CAN$1,135,000) and costs related to
marketing activities such as presentations at conferences, publicity, travel,
general expenses, printing and postage (CAN$790,000). Expenditures in 1996,
consisted of publicity related costs in connection with pre-marketing of the
AD7C(TM) test (CAN$746,000), salaries (CAN$178,000) and other costs related to
marketing activities (CAN$330,000).
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General and administrative expenses amounted to CAN$589,524 for the year ended
December 31, 1997 compared with CAN$497,179 in the year ended December 31, 1996.
The increase was attributable to legal costs and expenses related to United
States public company registration and the NASDAQ listing (CAN$119,600).
INFLATION
We do not believe that inflation has had a significant impact on the results of
our operations.
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RECENT DEVELOPMENTS
ACQUISITION OF A CONTROLLING INTEREST IN SEREX, INC.
On January 8, 2000, we entered into an agreement to acquire a controlling
interest in Serex, Inc. under a share purchase agreement with Dr. Judith
Fitzpatrick, the Chief Executive Officer and majority shareholder of Serex. On
March 2nd, 2000, we closed this acquisition.
Under the share purchase agreement, we purchased 1,008,250 shares of Serex or
72.3% of the common stock of Serex from Dr. Judith Fitzpatrick in exchange for
187,951 shares of Nymox and warrants to purchase 115,662 shares of Nymox at a
price of $3.70. The acquisition price was based on the closing market price for
Nymox shares as of Nov. 16, 1999 which was $3.3438.
The Nymox shares and warrants we issued to Dr. Fitzpatrick are subject to
restrictions on their resale or transfer both under United States securities
laws, rules and regulations and under the stock purchase agreement. We agreed to
file a registration statement with the Securities and Exchange Commission
covering the Nymox shares and warrants by November 8, 2000. However, Dr.
Fitzpatrick has also agreed that her Nymox shares would only become eligible for
sale, subject to any restrictions imposed by United States securities laws, in
accordance with the following schedule:
- 35,000 shares immediately eligible for sale upon issuance;
- 30,000 shares on April 8, 2000;
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<PAGE> 28
- 30,000 shares on July 8, 2000;
- 30,000 shares on October 8, 2000;
- 30,000 shares on January 8, 2001; and
- 32,951 shares on April 8, 2001.
Dr. Fitzpatrick has also agreed that she may only exercise her warrants to
purchase 115,662 Nymox shares according to the following timetable:
- 30,000 warrants, to be exercisable on or after January 8, 2001;
- 30,000 warrants, to be exercisable on or after January 8, 2002;
- 30,000 warrants, to be exercisable on or after January 8, 2003; and
- 25,662 warrants, to be exercisable on or after January 8, 2004.
The warrants have a five-year term beginning on January 8, 2000.
Serex has issued convertible preferred shares, 10,137 to a major pharmaceutical
company and 10,137 to a major diagnostic company, under a series of licensing
and development agreements. The holders of these preferred shares have the right
to convert their preferred shares to common shares according to a formula set
out in Serex's amended articles of incorporation. At present, one preferred
share would convert to ten common shares. If converted to common stock, the
preferred shares would represent 14.5% of the outstanding common stock of Serex.
The preferred shareholders have a right to vote with the holders of the common
stock of Serex as if they had converted their preferred shares to common stock.
The preferred shareholders also have a right to redeem up to 50% of their shares
in certain circumstances after March 31, 2000 for a payment of $39.46 per
preferred share redeemed. Thus, if the full 50% of preferred shares were
redeemed, the redemption price would be $400,000.
The preferred shares also have preferential rights ahead of the common shares,
to any dividends and to the assets of the corporation on liquidation,
dissolution or winding up of the affairs of Serex. On merger or consolidation of
Serex, the preferred shareholders may, in certain circumstances, elect to treat
the merger or consolidation as a liquidation and to receive the redemption price
for their shares; otherwise the preferred shares would be converted into common
shares based on the conversion formula and treated like the other common shares.
26
<PAGE> 29
SEREX, INC.
Serex is a privately held diagnostic company that was founded in 1983 and is
based in Maywood, New Jersey.
Serex developed and patented its particle valence technology, a unique, highly
sensitive, new method to detect very small amounts of biochemical indicators in
body fluids such as blood, urine and saliva. Serex incorporated this technology
in its LabTab(TM) assay, which enables the easy and rapid testing of samples by
general-purpose medical laboratories or in doctors' offices. Serex also licensed
the Japanese rights to two of its principal patents to Mizuho Medy Co. Ltd. of
Japan.
Serex's diagnostic technology can be adapted to detect a wide range of
biochemical indicators for diseases, conditions and drug use.
Serex developed its NicoMeter(TM) which can reliably detect one of the metabolic
products of nicotine in human urine and saliva, enabling it to determine the
level of exposure to tobacco products. The urine-based NicoMeter(TM) is
currently being manufactured under contract by Mizuho USA and marketed and sold
under a distribution agreement dated June 10, 1999 by Jant Pharmacal
Corporation.
Serex is developing Nymox's 7C Gold test, using its patented diagnostic
technology to detect in urine and spinal fluid the levels of the brain protein
implicated in Alzheimer's disease and measured by Nymox's AD7C(TM) test.
Serex has under development a test that can detect biochemical indicators of
cholesterol in human saliva and therefore provide an inexpensive, convenient and
reliable method of determining and monitoring cholesterol levels.
In November, 1999, Serex was granted a United States patent for an antibody and
for the use of the antibody in its technology in order to detect one of the
biochemical indicators for the loss of bone matter, which is a sign of
osteoporosis, the most common bone disease in people. Osteoporosis results from
the progressive loss of bone material and can cause disabling and potentially
life-threatening bone fractures in particular of the spine and the hips. It is
most common in the elderly and in post-menopausal women.
Serex has also used its patented technology to develop products to detect an
early indicator of pregnancy and to detect a brain protein implicated in certain
brain diseases.
Serex also did preliminary work on tests designed to detect indicators for heart
disease and for blood sugar levels in a type of diabetes and to monitor
therapeutic drug levels.
Since 1996, Serex has collaborated with at least three major pharmaceutical
companies and two diagnostic companies under licensing and development
agreements concerning the development of some of these products. These
agreements contain confidentiality provisions that prohibit the disclosure of
their terms.
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<PAGE> 30
EMPLOYMENT AGREEMENT WITH DR. JUDITH FITZPATRICK
Dr. Judith Fitzpatrick has also agreed to assume a position as Vice-President
for Scientific Affairs of Nymox and to continue on as Chief Executive Officer of
Serex.
Dr. Fitzpatrick, 53, received a Ph.D. in immunology from Mt. Sinai Medical
School (City College of NY) in 1981 and from 1981 to 1984 was employed by Becton
Dickinson as a Senior Scientist. She founded Serex in 1984 and has extensive
experience both in the scientific and commercial aspects of the development of
diagnostic tests. From 1984 to the early 1990s, she developed and supervised the
manufacture of laboratory tests for drugs and proteins of interest to the life
insurance industry. At one point, Serex was providing over six million tests per
year. In the early 1990s, Serex switched to a strip format technology to exploit
the emerging point-of-care markets. Dr. Fitzpatrick is a co-inventor of Serex's
patented diagnostic system.
The employment agreement between Nymox and Dr. Fitzpatrick has a term of four
years, renewing automatically at the end of the term on a year-to-year basis
subject termination by either party. Dr. Fitzpatrick's compensation is $125,000
a year and includes the grant of options to purchase 40,000 Nymox shares at
$3.70 per share under the Nymox Share Option Plan. The agreement provides that
these options shall vest as follows:
- 10,000 on January 8, 2001;
- 10,000 on January 8, 2002;
- 10,000 on January 8, 2003; and
- 10,000 on January 8, 2004.
The options expire on January 7, 2009.
The employment agreement envisages Dr. Fitzpatrick continuing with the
development of Nymox's 7C Gold test and Serex's diagnostic products as well as
participating in Nymox's research and development of treatments for Alzheimer's
disease, its anti-infectives program and other scientific projects.
USE OF PROCEEDS
We will not realize any proceeds from the sale of the common shares by Jaspas;
rather, Jaspas will receive those proceeds directly. However, we will receive
cash infusions of capital if and when Jaspas purchases our common shares in
accordance with the stock purchase agreement with Jaspas or with the stock
purchase warrant. We intend to use the proceeds from the sale of common shares
to Jaspas to fund our continuing research, our product development programs and
necessary clinical trials, as well as for marketing, working capital and other
general corporate purposes.
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<PAGE> 31
THE COMMON STOCK PURCHASE AGREEMENT
SUMMARY
Nymox and Jaspas Investments Limited, a British Virgin Islands corporation,
signed a common stock purchase agreement dated November 1, 1999 for the future
issuance and purchase of Nymox's common shares. The transaction closed on
November 12, 1999. The stock purchase agreement establishes what is sometimes
termed an equity line of credit or an equity draw down facility.
In general, the draw down facility operates like this: the investor, Jaspas,
committed up to $12 million to purchase Nymox's common shares of Nymox over a
thirty month period. Once a month, Nymox may request a draw of up to $750,000 of
that money, subject to a formula based on average stock price and average
trading volume, setting the maximum amount of any request for any given draw. At
the end of a 22 day trading period following the draw down request, the amount
of money that Jaspas will provide to Nymox and the number of shares Nymox will
issue to Jaspas in return for that money is settled based on the formula in the
stock purchase agreement. Jaspas receives a six (6%) percent discount to the
market price for the 22 day period and Nymox receives the settled amount of the
draw down less a 3% placement fee payable to the placement agent, Ladenburg
Thalmann & Co. Inc., which introduced Jaspas to Nymox. Ladenburg Thalmann is not
obligated to purchase any Nymox shares.
The facility is based on a "use-it-or-lose" principle. We are under no
obligation to request a draw for any month. However if we do not request a draw
for a given month, we may never to be able to draw those funds again. We may
make up to a maximum of twenty-four (24) draws; however, the aggregate total of
all draws cannot exceed $12 million.
In lieu of providing Jaspas with a minimum draw down commitment, we agreed to
issue to Jaspas a stock purchase warrant to purchase up to 200,000 shares of our
common stock with an exercise price of 110% of our share price on the closing
date of November 12, 1999 or $4.53. Jaspas may purchase under the warrant up to
100,000 Nymox shares any time between November 30, 1999 and November 30, 2004.
Jaspas may purchase the remaining 100,000 shares if and only if we do not draw
down at least $7 million within 18 months of _____________, 2000.
THE DRAW DOWN PROCEDURE AND THE STOCK PURCHASES
We may make up to twenty-four draw downs during the term of the stock purchase
agreement.
We may request a draw down by faxing a draw down notice to Jaspas, setting out
the amount of the draw down we wish to exercise and the minimum threshold price,
if any, at which we are willing to sell the shares.
The minimum draw down amount is $150,000. The maximum is $750,000 subject to the
following limiting formulas:
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<PAGE> 32
- - For draw downs greater than $500,000 and up to $500,000
<TABLE>
<S> <C>
Maximum amount of draw down = 20% of average stock price multiplied by average trading volume multiplied
by 22
where
Average Stock Price = Average of the daily price of Nymox's shares for the 22 trading days PRIOR to
the draw down period
Average Trading Volume = Average daily trading volume for the 45 trading days PRIOR to the draw down
period.
</TABLE>
- - For draw downs greater than $500,000 and up to $750,000
If, during the 30 Trading Days prior to the draw down notice, the average daily
trading volume is at least 60,000 shares and the average of the average daily
price is at least $4.50 per share, then we may draw up to $750,000.
The next 22 trading days immediately following the draw down notice are used to
determine the actual amount of money Jaspas will provide and the number of
shares Nymox will issue in return. The 23rd trading day is the draw down
exercise date when the amount of the draw and the number of shares to be issued
is calculated based on the following formula:
<TABLE>
<S> <C>
number of common shares = Sum over each of
the 22 trading days of 1/22 of the
draw down amount divided by 94% of
the daily price for Nymox shares on
each trading day.
</TABLE>
If the daily price for any given trading day during the draw down period is
below the threshold price set by Nymox in the draw down notice, then that day is
not included in the calculation of the number of shares to be issued and the
draw down amount that Jaspas is to pay to Nymox is correspondingly reduced by
1/22 for that day. Thus, if the daily price for that day is below the threshold
price Nymox will not issue any shares and Jaspas will not purchase any shares
for that day.
The following is an example of the calculation of the draw down amount and the
number of shares to be issued to Jaspas in connection with that draw down based
on certain assumptions.
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<PAGE> 33
Sample draw down amount calculation.
- Nymox provides a draw down notice to Jaspas that it wishes to draw
down $400,000.
- The average of daily volume weighted average price of Nymox's common
shares for 22 trading days prior to the draw down notice is $3.50.
- The average daily trading volume for the 45 trading days prior to the
draw down notice is 25,000 shares.
- The maximum dollar amount that can be drawn down is:
20% of $3.50 multiplied by 25,000 multiplied by 22 or $385,000.
On these assumed facts, Nymox could draw $385,000 out of the $400,000 requested
in the draw down notice.
Sample calculation of number of shares
Assume that the maximum draw down amount for the draw down period is $385,000
and assume that the daily volume weighted average price for Nymox's shares is as
set out in the table below. The number of shares to be issued based on any
trading day during the draw down period is calculated from the formula:
(1/22 of the draw down amount) divided by (94% of the daily price).
For the first trading day in the example in the table below, the calculation is
as follows:
(1/22 of $385,000) divided by (94% of $3.50 per share) or 5,319 shares.
The number of shares to be issued for the draw down period in the example is
calculated as follows:
- for each trading day in the 22 day period, the number of shares to be
issued is based on the daily price of Nymox's shares for that day and
calculated using the formula above; and
- the number of shares to be issued for each of the 22 trading days is
then totaled to arrive at the number of shares to be issued to Jaspas
at the end of the draw down period for the purchase price of $385,000,
the draw down amount.
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<PAGE> 34
<TABLE>
<CAPTION>
- ------------------------ -------------------------- ------------------------- ----------------------------------
1/22 of Draw Down Number of Shares to be issued
Trading Day Daily Stock Price Amount of $385,000 based on that trading day.
- ------------------------ -------------------------- ------------------------- ----------------------------------
<S> <C> <C> <C>
1 $3.50 $17,500 5,319
- ------------------------ -------------------------- ------------------------- ----------------------------------
2 $3.625 $17,500 5,136
- ------------------------ -------------------------- ------------------------- ----------------------------------
3 $3.50 $17,500 5,319
- ------------------------ -------------------------- ------------------------- ----------------------------------
4 $3.375 $17,500 5,516
- ------------------------ -------------------------- ------------------------- ----------------------------------
5 $3.50 $17,500 5,319
- ------------------------ -------------------------- ------------------------- ----------------------------------
6 $3.75 $17,500 4,965
- ------------------------ -------------------------- ------------------------- ----------------------------------
7 $3.875 $17,500 4,804
- ------------------------ -------------------------- ------------------------- ----------------------------------
8 $4.00 $17,500 4,654
- ------------------------ -------------------------- ------------------------- ----------------------------------
9 $4.25 $17,500 4,380
- ------------------------ -------------------------- ------------------------- ----------------------------------
10 $3.75 $17,500 4,965
- ------------------------ -------------------------- ------------------------- ----------------------------------
11 $3.50 $17,500 5,319
- ------------------------ -------------------------- ------------------------- ----------------------------------
12 $3.25 $17,500 5,728
- ------------------------ -------------------------- ------------------------- ----------------------------------
13 $3.00 $17,500 6,206
- ------------------------ -------------------------- ------------------------- ----------------------------------
14 $3.25 $17,500 5,728
- ------------------------ -------------------------- ------------------------- ----------------------------------
15 $3.375 $17,500 5,516
- ------------------------ -------------------------- ------------------------- ----------------------------------
16 $3.50 $17,500 5,319
- ------------------------ -------------------------- ------------------------- ----------------------------------
17 $3.625 $17,500 5,136
- ------------------------ -------------------------- ------------------------- ----------------------------------
18 $3.75 $17,500 4,965
- ------------------------ -------------------------- ------------------------- ----------------------------------
19 $3.875 $17,500 4,804
- ------------------------ -------------------------- ------------------------- ----------------------------------
20 $4.00 $17,500 4,654
- ------------------------ -------------------------- ------------------------- ----------------------------------
21 $3.75 $17,500 4,965
- ------------------------ -------------------------- ------------------------- ----------------------------------
22 $3.50 $17,500 5,319
- ------------------------ -------------------------- ------------------------- ----------------------------------
TOTAL $385,000 114,037 shares to be issued for
the draw down period
- ------------------------ -------------------------- ------------------------- ----------------------------------
</TABLE>
In this fictitious example, Nymox would issue 114,037 shares for this draw down
period. It would receive $385,000 less the 3% fee to the placement agent or
$373,450.
The delivery of the requisite number of shares and payment of the draw is
effected through an escrow agent, Epstein, Becker & Green, P.C. of New York. The
escrow agent pays 97% of the draw to Nymox and 3% to Ladenburg Thalmann & Co.
Inc., our placement agent, in satisfaction of placement agent fees.
Only one draw down can occur during this 22 day draw down period and Nymox must
wait a minimum of five trading days from the end of one draw down period before
issuing the next draw down notice and beginning the process again.
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<PAGE> 35
NECESSARY CONDITIONS BEFORE JASPAS IS OBLIGED TO PURCHASE NYMOX'S SHARES.
The following conditions must be satisfied before Jaspas is obligated to
purchase the common shares that Nymox wishes to sell:
- A registration statement for the shares Nymox will be issuing must be
declared effective by the Securities and Exchange Commission and must
remain effective and available as of the draw down settlement date for
making resales of the common shares purchased by Jaspas.
- There can be no material adverse change in Nymox's business,
operations, properties, prospects or financial condition not publicly
reported since the most recent prior draw down exercise date.
- No statute, rule, regulation, executive order, decree, ruling or
injunction may be in effect which prohibits consummation of the
transactions contemplated by the stock purchase agreement.
- No litigation or proceeding adverse to Nymox, Jaspas or their
affiliates, can be pending, nor any investigation by any governmental
authority threatened against them seeking to restrain, prevent or
change the transactions contemplated by the stock purchase agreement
or seeking damages in connection with such transactions.
- Trading in Nymox's common shares must not have been suspended by the
Securities and Exchange Commission or the Nasdaq SmallCap Market, nor
shall minimum prices have been established on securities whose trades
are reported by the Nasdaq SmallCap Market.
On each draw down settlement date for the sale of common shares, Nymox must
deliver an opinion from its counsel about these matters.
A further condition is that Jaspas may not purchase more than 19.9% of Nymox's
common shares issued and outstanding on November 12, 1999, the closing date
under the stock purchase agreement, without obtaining approval from Nymox
shareholders for such excess issuance.
RESTRICTIONS ON FUTURE FINANCINGS FOR NYMOX.
The stock purchase agreement limits Nymox's ability to raise money by selling
its securities for cash at a discount to the current market price for at least
eighteen months. Specifically, Nymox may not sell its securities for cash at a
discount to current market price until the earlier of
- eighteen months from ___________________, 2000, the effective date of
the registration statement of which this prospectus is a part, or, if
later, the date that Nymox has drawn down at least $8,000,000 or
- sixty days after Jaspas has purchased the maximum $12 million of
common shares from Nymox.
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<PAGE> 36
There are important exceptions to this limitation. Nymox can sell its shares for
cash at a discount to the current market price:
- in a registered public offering of its securities underwritten by one
or more established investment banks;
- in one or more private placements where the purchasers do not have
registration rights;
- under any employee benefit plan approved by the shareholders of Nymox;
- under any compensatory plan for a full-time employee or key
consultant;
- in connection with a strategic partnership or other business
transaction, the principal purpose of which is not simply to raise
money; or
- for which Jaspas has given its written approval.
THE WARRANTS ISSUED TO JASPAS
Under the stock purchase agreement, we granted Jaspas a warrant to purchase
200,000 shares of Nymox's common shares, exercisable for a period of five (5)
years from November 30, 1999, at an exercise price equal to 110% of the average
daily price of the common shares on the closing date of November 12, 1999. The
average daily price of Nymox's shares for that day was $4.1097; thus the
exercise price for the warrant is $4.53.
The warrant permits Jaspas to purchase up to 100,000 shares at any time after
November 30, 1999 and before the close of business on November 30, 2004.
Jaspas may purchase the remaining 100,000 shares in the warrant if and only if
Nymox has not draw down at least $7,000,000 within eighteen months from the
effective date of the registration statement.
COSTS OF CLOSING THE TRANSACTION.
At the closing of the transaction on November 12, 1999, we delivered the warrant
for the 200,000 common shares and the requisite opinion of counsel to Jaspas and
paid the escrow agent, Epstein Becker & Green P.C. $35,000 for Jaspas's legal,
administrative and escrow costs and for the ordinary services of the escrow
agent for each closing of a draw down. We also paid a placement fee of $100,000
to Ladenburg Thalmann & Co. Inc. and an additional $35,000 for its expenses.
Ladenburg Thalmann & Co. Inc. will also receive warrants for a total of 160,000
common shares of Nymox with a strike price of 100% of the closing bid for Nymox
shares on November 12, 1999 or $4 1/16. Ladenburg Thalmann is not obligated to
purchase any Nymox shares.
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<PAGE> 37
TERMINATION OF THE STOCK PURCHASE AGREEMENT
Jaspas may terminate the equity draw down facility under the stock purchase
agreement if any of the following events occur:
- Nymox suffers a material adverse change in its business operations,
properties, prospects or financial condition;
- the common shares of Nymox are delisted from the Nasdaq SmallCap
Market unless such is in connection with the listing of such shares on
a comparable stock exchange in the United States;
- Nymox files for protection from creditors, or;
- Nymox completes any of the financing transactions prohibited under the
stock purchase agreement.
INDEMNIFICATION OF JASPAS.
Jaspas is entitled to customary indemnification from Nymox for any losses or
liabilities suffered by it based upon material misstatements or omissions from
the registration statement and the prospectus, except as they relate to
information supplied by Jaspas to Nymox for inclusion in such registration
statement and prospectus.
JASPAS'S RESALE OF THE COMMON SHARES
Jaspas has agreed that its trading and distribution activities with respect to
the common shares will be in compliance with all applicable United States state
and federal securities laws, rules and regulations; all Canadian securities
laws, rules and regulations; and the rules and regulations of the Nasdaq
SmallCap Market. Jaspas has further acknowledged that the common shares may not
be traded in a Canadian province until the expiration of the period during which
a purchaser resident in such province, purchasing under similar circumstances,
would be required to hold the common shares, except as otherwise permitted by
the laws, rules and regulations of such province. All sales by Jaspas must be
made in compliance with Regulation M under the Securities and Exchange Act of
1934.
To permit Jaspas to resell the common shares issued to it under the stock
purchase agreement or under the warrant, Nymox agreed to register those shares
and to maintain that registration. To that end, Nymox will prepare and file such
amendments and supplements to the registration statement and the prospectus as
may be necessary in accordance with the Securities Act and the rules and
regulations promulgated thereunder, in order to keep it effective until the
earlier of any of the following dates:
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<PAGE> 38
- the date that none of the common shares covered by the registration
statement of which this prospectus is a part are or may become issued
and outstanding;
- the date that all of the common shares covered by the registration
statement of which this prospectus is a part have been sold pursuant
to such registration statement;
- the date the holders of the common shares receive an opinion of
counsel to Nymox, such counsel to be reasonably acceptable to Jaspas,
that such common shares may be sold under the provisions of Rule 144
under the Securities Act of 1933 without limitation as to volume;
- the date that all of the common shares have been otherwise transferred
to persons who may trade such shares without restriction under the
Securities Act of 1933 and Nymox has delivered new certificates or
other evidences of ownership of such common shares without any
restrictive legend; or
- the date that all of such common shares may be sold without any time,
volume or manner limitations under Rule 144(k) or similar provision
then in effect under the Securities Act of 1933 in the opinion of
counsel to Nymox, such counsel to be reasonably acceptable to Jaspas.
THE NUMBER OF SHARES NYMOX WILL ISSUE TO JASPAS.
The number of common shares that Nymox will issue to Jaspas depends on four key
factors:
- the number of draw downs Nymox exercises;
- the average trading volumes for its stock for the 45 trading days
prior to each draw down period;
- the average stock price for its stock for the 22 trading days prior to
each draw down periods; and
- the average daily prices for its stock on each of the 22 days during a
draw down period.
The fewer the number of draw down Nymox exercises, the fewer the shares we will
issue to Jaspas. The stock purchase agreement provides for 24 draw downs in a 30
month period with each draw down period consisting of 22 trading days with at
least 5 trading days between each draw down period. Thus, any decision by Nymox
to delay or forego any draw down opportunity may result in Nymox's being unable
to exercise all 24 draw downs available in the 30 month period.
The average stock price and the average trading volume prior to a draw down
period determine the maximum amount of the draw down for that period. A decline
in the trading volume or price of our stock may result in a reduction in the
amount of money Nymox is able to draw down and a corresponding reduction in the
number of shares Nymox must issue for that period.
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<PAGE> 39
The average daily price for each of the 22 trading days within a draw period and
the draw down amount determine the number of shares Nymox will issue to Jaspas
at the end of that period. Jaspas will purchase those shares at a 6% discount to
the average daily price.
For any given draw period, the lower the average daily price, the more common
shares Jaspas will receive for the draw down amount. The table in the section of
this prospectus entitled "The Common Stock Purchase Agreement" and under the
headings "The Draw Down Procedure and the Stock Purchases" and "Sample
Calculation of Number of Shares" illustrates how a change in the daily stock
price can affect the number of shares issued for a constant amount of draw down.
This table uses a constant draw down amount of $17,500 for each day. When the
stock price goes down, the number of shares issued goes up. Conversely, when the
stock price goes up, the number of shares issued goes down.
However, lower average daily prices through the term of the stock purchase
agreement may not necessarily have the effect of substantially increasing the
number of shares issued. Lower stock prices during one draw period will reduce
the average stock price for the next draw down period. Assuming relatively
constant trading volumes, this reduction may limit the draw down amount and the
number of shares Nymox can issue for that next period.
Based on a review of its trading volume and stock price history and a
consideration of the factors above, Nymox is registering 4,800,000 common shares
for possible issuance under the stock purchase agreement and 200,000 shares
underlying the warrant for common shares already delivered to Jaspas.
In order to comply with the listing requirements of the Nasdaq SmallCap Market,
Nymox may not issue more than 3,980,757 shares, which is 19.9% of the issued and
outstanding common shares of Nymox on November 12, 1999, the date of the closing
of the stock purchase agreement, without the approval of its shareholders. In
the event that Nymox wishes to draw amounts under the stock purchase agreement
which would cause an issuance of more than 19.9% of its issued and outstanding
shares, Nymox must receive shareholder approval prior to any such draw down.
SELLING SECURITY HOLDER
Jaspas is engaged in the business of investing in publicly-traded equity
securities for its own account. Jaspas's principal offices are located at
Aeulestrasse 74, Vaduz, Liechtenstein. Investment decisions for Jaspas are made
by its Board of Directors, consisting of Mr. Hans Gassner, Dr. Kurt Alig and Dr.
Alex Weiderkehr.
Jaspas does not own any common shares of Nymox or any other securities of Nymox
as of the date of this prospectus, and other than its obligations to purchase
common shares under the stock purchase agreement and the warrant for 200,000
shares issued to it on November 12, 1999, it has no other commitments or
arrangements to purchase or sell any securities of Nymox.
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<PAGE> 40
There are no business relationships between Jaspas and Nymox other than the
stock purchase agreement.
Common shares registered for resale under this prospectus constitute 25% of the
issued and outstanding Nymox common shares on November 12, 1999.
Assuming that Nymox fully utilizes the $12 million available in the stock
purchase agreement and that Jaspas sells all shares it acquired under that
agreement or upon exercise of the warrant, Jaspas will no longer hold any common
shares of Nymox.
DIRECTORS AND OFFICERS OF NYMOX
The directors and executive officers of Nymox Pharmaceutical Corporation are:
Senator W. David Angus, QC, 62, Chairman and Director since May 13, 1999, is a
member of the Senate of Canada, serving on the Standing Committee on Banking,
Trade and Commerce. He is also a senior partner at the Montreal office of
Stikeman, Elliott, Canada's global law firm, and a director of several other
Canadian corporations and charitable organizations, including Air Canada, AON
Reed Stenhouse, Eastern Canada Towing Ltd. and the McGill University Health
Center.
Dr. Paul Averback, M.D., D.A.B.P., 49, President and Director since September
1995, is the founder of Nymox and the inventor of much of its initial
technology. Prior to founding Nymox, Dr. Averback served as President of Nymox's
predecessor, DMS Pharmaceuticals Inc. He received his M.D. in 1975 and taught
pathology at universities, including Cambridge University, England (1977-1980),
during which time he initiated his research on Alzheimer's disease. He has
practiced medicine in numerous Canadian institutions as well as in private
practice. Dr. Averback has published extensively in the scientific and medical
literature.
Dr. Colin B. Bier, Ph.D., 54, Director since December 1995, is a leading
authority on toxicology and pharmaceutical and biotechnological regulatory
affairs and has extensive management experience in the biomedical sector. Dr.
Bier was formerly Vice-President and Director of Toxicology at Bio-Research
Laboratories, President and Chief Executive Officer of ITR Laboratories and has
consulted, managed and been affiliated with numerous biochemical enterprises.
Dr. J. Kenneth Harrington, Ph.D., 63, Director since January 1996, has over 30
years of experience with 3M's Life Sciences businesses, including the positions
of Vice-President of Riker Pharmaceuticals and Group Director of 3M's European
pharmaceutical divisions. Dr. Harrington is a named inventor on 42 US patents,
and has been involved in over 100 successful FDA filings.
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<PAGE> 41
Dr. Hans Black, MD, 46, Director since May 13, 1999, has a doctorate in medicine
from McGill University, and is Chairman and Chief Investment Officer of
Interinvest Consulting Corporation, a Montreal-based global money management
firm with offices in Toronto and Boston and affiliates in Bermuda and Zurich.
Dr. Black appears regularly on the PBS network show, Nightly Business Report,
and has been a guest lecturer at Harvard, Temple and McGill Universities.
Martin Barnes, 49, Director since June 1997, is Managing Editor of The Bank
Credit Analyst. Prior to joining The Bank Credit Analyst Research Group in 1987,
Mr. Barnes was the Chief economist at Wood Mackenzie, a leading Edinburgh
brokerage firm (1977-1987) and an economist at British Petroleum in London
(1973-1977).
Mr. Roy M. Wolvin, 45, Secretary-Treasurer and Chief Financial Officer since
September 1995. Prior to September 1995, Mr. Wolvin was Account Manager, private
business, for a Canadian chartered bank. Mr. Wolvin holds a degree in Economics
from the University of Western Ontario.
Directors are elected at each annual meeting for a term of office until the next
annual meeting. Executive officers are appointed by the board of directors and
serve at the pleasure of the board. Other than Dr. Averback, no other officer or
director previously was affiliated with DMS Pharmaceuticals Inc.
There are no family relationships between any director or executive officer and
any other director or executive officer.
COMPENSATION
The table below provides compensation information for the fiscal year ended
December 31, 1999 for each executive officer of Nymox and for the directors and
executive officers as a group.
Summary Compensation Table
(expressed in Canadian dollars)
<TABLE>
<CAPTION>
Fiscal Year ending Fiscal Year ending
Dec. 31, 1998 Dec. 31, 1999
Name and Principal Position Other Cash Other Cash
Salary Compensation Salary Compensation
------ ------------ ------ ------------
<S> <C> <C> <C> <C>
Dr. Paul Averback,
President and Director $150,000 - $150,000 -
Mr. Roy Wolvin,
Secretary-Treasurer $ 70,200 - $ 70,200 -
All directors and executive
officers as a group $220,200 - $220,200 -
</TABLE>
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<PAGE> 42
See "Options" below for information about stock options granted to directors,
executive officers and other employees.
Nymox does not have written employment contracts with any of the executive
officers named above.
Directors of Nymox, with the exception of the President, are paid a fee of
CAN$1,000 for each board meeting attendance and are reimbursed for expenses
incurred in connection with their office.
Nymox does not have any pension plans or other type of plans providing
retirement or similar benefits for directors or executive officers.
OPTIONS
Options and Warrants
<TABLE>
<CAPTION>
Total amount of common shares
subject to exercisable options Purchase price Expiration Date
- ------------------------------ -------------- ---------------
<S> <C> <C>
100,000 CAN$ 7.00 November 9, 2002
275,000 CAN$ 3.25 January 17, 2006
20,000 CAN$13.75 January 17, 2006
20,000 CAN$ 9.80 January 17, 2006
20,000 CAN$10.00 January 17, 2006
100,000 CAN$11.50 April 30, 2006
10,000 CAN$16.75 August 13, 2006
10,000 CAN$ 9.00 August 13, 2006
20,000 CAN$10.00 August 13, 2006
25,000 CAN$ 9.00 October 31, 2007
60,000 CAN$10.00 October 31, 2007
6,000 CAN$ 9.25 December 19, 2007
50,000 CAN$10.00 January 22, 2009
150,000 CAN$ 4.50 May 13, 2009
37,500 CAN$ 4.50 June 1, 2009
Warrants
--------
200,000 $ 4.5315 November 30, 2004
160,000 $4.0625 November 12, 2009
</TABLE>
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<PAGE> 43
The total number of shares subject to options at December 31, 1999 is 1,130,500,
of which options representing 891,000 are currently exercisable. Of those, the
total number of shares subject to options held by directors and officers of
Nymox is 325,000 of which options representing 215,000 shares are currently
exercisable.
There are no rights, warrants or options presently outstanding under which Nymox
could issue additional common shares, with the exception of options enabling
certain directors, employees and consultants of Nymox to acquire common shares
under Nymox's stock option plan and of warrants entitling the holders to acquire
up to 360,000 common shares of Nymox as outlined in the above table.
Nymox has created a stock option plan for its key employees, its officers and
directors and certain consultants. The board of directors of Nymox administers
the plan. The board may grant options to purchase a specified number of common
shares of Nymox to a designated individual. The total number of common shares to
be optioned to any one individual cannot exceed 5% of the total number of issued
and outstanding shares and the maximum number of common shares which may be
optioned under the plan cannot exceed 2,500,000 shares without shareholder
approval.
The board fixes the option price per share for common shares that are the
subject of any option, when it grants any such option. The option price cannot
involve a discount to the market price when the option is granted. The period
during which an option is exercisable shall not exceed 10 years from the date
when the option is granted. The options may not be assigned, transferred or
pledged and expire within three months of the termination of employment and six
months of the death of an individual.
On January 17, 1996, the board of directors granted options to purchase up to
400,000 common shares for a period of 10 years. Of these, options to purchase
120,000 common shares were granted to directors and officers of Nymox and
options to purchase 280,000 shares were granted to consultants of Nymox.
Specifically the board granted:
- options to purchase 310,000 common shares of Nymox at a price of
CAN$3.25 per share for a period of ten years to a total of seven
beneficiaries, of which options a total of 35,000 common shares have
been exercised to date;
- options to two directors of Nymox to acquire 5,000 common shares of
Nymox, effective as of each of the first five anniversary dates of
January 17, 1996 for a total of 25,000 shares each, provided they
still be associated with the Company as of the vesting dates. The
vesting schedule and prices per block of shares are as follows:
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<PAGE> 44
January 17,1997 - 5,000 shares - CAN$13.75 per share
January 17,1998 - 5,000 shares - CAN$ 9.80 per share
January 17,1999 - 5,000 shares - CAN$10.00 per share
January 17,2000 - 5,000 shares - CAN$10.00 per share
January 17,2001 - 5,000 shares - CAN$10.00 per share; and
- options to one senior executive of Nymox additional to acquire 10,000
common shares of Nymox, effective as of each of the first four
anniversary dates of January 17, 1996 for a total of 40,000 additional
shares, provided he still be associated with the Company as of the
vesting dates. The vesting schedule and prices per block of shares are
as follows:
January 17,1997 - 10,000 shares - CAN$13.75 per share
January 17,1998 - 10,000 shares - CAN$ 9.80 per share
January 17,1999 - 10,000 shares - CAN$10.00 per share
January 17,2000 - 10,000 shares - CAN$10.00 per share.
Under the same plan, on April 30, 1996, the board granted options to purchase
100,000 common shares of Nymox at a price of CAN$11.50 per share for a period of
ten years to three beneficiaries.
On August 13, 1996, the board granted one consultant of Nymox options to acquire
10,000 common shares of the Company at a price of CAN$16.75 for a period of ten
years. This consultant was granted additional options to acquire 10,000 common
shares of Nymox, effective as of each of the first four anniversary dates of
August 13, 1996 for a total of 40,000 additional shares, provided he is still be
associated with Nymox as of the vesting dates. The vesting schedule and prices
per block of shares are as follows:
August 13,1997 - 10,000 shares - CAN$ 9.00 per share
August 13,1998 - 10,000 shares - CAN$10.00 per share
August 13,1999 - 10,000 shares - CAN$10.00 per share
August 13,2000 - 10,000 shares - CAN$10.00 per share.
Under the same plan, on October 31, 1997, the board granted options to purchase
up to 155,000 common shares to four beneficiaries. Specifically the board
granted:
- options to purchase 25,000 common shares of the Company at a price of
CAN$9.00 per share for a period of 10 years to five beneficiaries;
- options to two directors of the Company options to acquire 5,000
common shares of Nymox, effective as of each of the first five
anniversary dates of October 31, 1997, at a price of CAN$10.00 per
share for a total of 25,000 additional shares each, provided they
still be associated with Nymox as of the vesting dates; and
42
<PAGE> 45
- options to a director and an executive of Nymox to acquire 10,000
common shares of Nymox, effective as of each of the first four
anniversary dates of October 31, 1997, at a price of CAN$10.00 per
share for a total of 40,000 additional shares each, provided they
still be associated with Nymox as of the vesting dates.
On December 19, 1997 and on May 13, 1999, the board granted options to purchase
up to 15,500 common shares under Nymox's stock option plan to certain key
employees of Nymox at a price of CAN$9.25 per share for a period of ten years,
provided they still be associated with Nymox as of the vesting dates. All
options granted to these employees vest over a period of three years from the
date when the board granted them. Of these options, 6,000 are currently vested.
On November 9, 1998, the board granted one consultant of Nymox options to
acquire 100,000 common shares of the Company at a price of CAN$7.00 per share,
such options to be exercisable for a period of four years from November 9, 1998.
On January 22, 1999, the board granted one executive of Nymox options to acquire
50,000 common shares of Nymox at a price of $10.00 per share, such options to be
exercisable for a period of 10 years from January 22, 1999.
On May 13, 1999, the board granted options to purchase up to 150,000 common
shares under Nymox's stock option plan for a period of ten years at a price of
CAN$4.50 per share to seven beneficiaries. It also granted a director of Nymox
additional options to acquire 40,000 shares at a price of CAN$10.00 per shares,
vesting 10,000 shares per year, starting on May 13, 2000 and continuing to May
13, 2004, provided the director still be associated with Nymox as of the vesting
dates.
On May 13, 1999, the board granted one consultant of the Company options to
acquire 100,000 common shares of the Company at a price of CAN$4.50 per share,
such options to be exercisable for a period of 10 years from June 1, 1999.
These options are subject to vesting at the rate of 12,500 per quarter
commencing June 1, 1999 to March 1, 2001.
To date, a total of 1,083,100 options granted to former employees and
consultants to purchase common shares of the Company have expired and 108,900
were exercised prior to the expiry date. In addition, 30,000 options granted to
consultants have been canceled.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
A former director and senior officer of Nymox, Hossein Ghanbari, while still
with Nymox, received a loan of CAN$56,000 for the purchase of a home following
his move from the United States to Canada to assume his duties with Nymox. This
loan was interest free and had no fixed terms of repayment. He subsequently used
additional funds of $125,000 to assist in the purchase of a home following his
return to the United States from Canada to work for Nymox's United States
subsidiary, Nymox Corporation. He repaid $5,000 of the $125,000 while still with
Nymox Corporation. On January 22, 1999, he gave Nymox Corporation two promissory
notes for these debts, payable on demand. The promissory note for the loan for
CAN$56,000 was interest-free; the promissory note for the outstanding sum of
$120,000 bore interest at the rate of 9% per annum.
43
<PAGE> 46
Hossein Ghanbari is no longer with Nymox and Nymox Corporation has since
obtained partial summary judgment on these promissory notes in the amount of
$168,731.83. See - Information About the Company - Certain Legal Proceedings.
CONTROLLING SHAREHOLDER
The following table sets out as of December 31,1999 the number of common shares
owned by Dr. Paul Averback, the President and CEO of Nymox and a member of the
Nymox board of directors, and by all directors and officers as a group. Dr.
Averback is the only person known to Nymox to own more than 10% of the common
shares.
<TABLE>
<CAPTION>
Number of Common Shares Percent of Class of
Name of Shareholder owned by Shareholder Common Shares
- ------------------- ----------------------- -------------------
<S> <C> <C>
Dr. Paul Averback 12,643,895 63.2%
All directors and officers as a group 12,685,895 63.2%
</TABLE>
In addition, as of December 31, 1999, Dr. Averback's wife owned 1,154,297 common
shares (5.8%) and 9022-1433 Canada Inc., a company owned by Dr. Averback and his
wife, owns 500,000 common shares (2.5%).
Nymox does not know of any other shareholder who beneficially owns more than 10%
of Nymox's shares.
PLAN OF DISTRIBUTION
GENERAL
Jaspas is offering the common shares for its account as statutory underwriter,
and not for the account of Nymox. Nymox will not receive any proceeds from the
sale of common shares by Jaspas.
Jaspas may be offering for sale up to 5,000,000 common shares acquired by it
either upon exercise of the warrant for common shares or pursuant to the terms
of the stock purchase agreement more fully described under the section above
entitled "The Common Stock Purchase Agreement."
44
<PAGE> 47
Jaspas has agreed to be named as a statutory underwriter within the meaning of
the Securities Act of 1933 in connection with such sales of common shares and
will be acting as an underwriter in its resales of the common shares under this
prospectus.
Jaspas has, prior to any sales, agreed not to effect any offers or sales of the
common shares in any manner other than as specified in the prospectus and not to
purchase or induce others to purchase common shares in violation of Regulation M
under the Exchange Act.
The common shares may be sold from time to time by Jaspas or by pledgees,
donees, transferees or other successors in interest. Such sales may be made on
the Nasdaq SmallCap Market, on the over-the-counter market or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated private transactions, or in a combination of
these methods.
The common shares may be sold in one or more of the following manners:
- a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker or dealer for its account under this prospectus;
or
- ordinary brokerage transactions and transactions in which the broker
solicits purchases.
In effecting sales, brokers or dealers engaged by Jaspas may arrange for other
brokers or dealers to participate. Except as disclosed in a supplement to this
prospectus, no broker-dealer will be paid more than a customary brokerage
commission in connection with any sale of the common shares by Jaspas. Brokers
or dealers may receive commissions, discounts or other concessions from Jaspas
in amounts to be negotiated immediately prior to the sale. The compensation to a
particular broker-dealer may be in excess of customary commissions. Profits on
any resale of the common shares as a principal by such broker-dealers and any
commissions received by such broker-dealers may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933. Any broker-dealer
participating in such transactions as agent may receive commissions from Jaspas
(and, if they act as agent for the purchaser of such common shares, from such
purchaser). Broker-dealers may agree with Jaspas to sell a specified number of
common shares at a stipulated price per share, and, to the extent such a broker
dealer is unable to do so acting as agent for Jaspas, to purchase as principal
any unsold common shares at price required to fulfill the broker-dealer
commitment to Jaspas. Broker-dealers who acquire common shares as principal may
thereafter resell such common shares from time to time in transactions (which
may involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
common shares commissions computed as described above. Such brokers or dealers
and any other participating brokers or dealers may be deemed to be underwriters
in connection with such sales.
45
<PAGE> 48
In addition, any common shares covered by this prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
prospectus.
Nymox will not receive any of the proceeds from the sale of these common shares,
although it has paid the expenses of preparing this prospectus and the related
registration statement of which it is a part, and has reimbursed Jaspas $35,000
for its legal, administrative and escrow costs.
Jaspas is subject to the applicable provisions of the Exchange Act, including
without limitation, Rules 10b-5 and Regulation M thereunder. Under applicable
rules and regulations under the Exchange Act, any person engaged in a
distribution of the common shares may not simultaneously engage in market making
activities with respect to such securities for a period beginning when such
person becomes a distribution participant and ending upon such person's
completion of participation in a distribution, including stabilization
activities in the common shares to effect covering transactions, to impose
penalty bids or to effect passive market making bids.
In addition, in connection with the transactions in the common shares, Nymox and
Jaspas will be subject to applicable provisions of the Exchange Act and the
rules and regulations under that Act, including, without limitation, the Rules
set forth above, and in so far as Nymox and Jaspas are distribution
participants, Regulation M. These restrictions may affect the marketability of
the common shares. Jaspas will pay all commissions and certain other expenses
associated with the sale of the common shares.
Nymox will use its best efforts to file, during any period in which offers or
sales are being made, one or more post effective amendments to the registration
statement of which this prospectus is a part to describe any material
information with respect to the plan of distribution not previously disclosed in
this prospectus or any material change to such information in this prospectus.
This obligation may include, to the extent required under the Securities Act of
1933, that a supplemental prospectus be filed, disclosing
- the name of any such broker-dealers;
- the number of common shares involved;
- the price at which the common shares are to be sold;
- the commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable;
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<PAGE> 49
- that such broker-dealers did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus, as supplemented; and
- any other facts material to the transaction.
The price at which Nymox will issue the common shares to Jaspas under the stock
purchase agreement will be 94% of current market price, measured as the average
daily price of the common shares as traded on the Nasdaq SmallCap Market, for
each day in the pricing period with respect to each draw down request, all as
further defined in the stock purchase agreement. Assuming an average daily price
of $3.00 (based on recent daily prices of the common shares as traded on the
Nasdaq SmallCap Market in December 1999), assuming Nymox uses the entire $12
million of financing available under the stock purchase agreement, and assuming
that Nymox does not issue any more than the shares registered under the
registration statement of which this prospectus is a part, underwriting
compensation for Jaspas based on the discounted purchase price will be $765,957,
or $0.18 per share.
LIMITED GRANT OF REGISTRATION RIGHTS
Nymox granted the registration rights to Jaspas described under the section
entitled "The Common Stock Purchase Agreement".
In connection with any such registration, Nymox will have no obligation:
- to assist or cooperate with Jaspas in the offering or disposition of
such shares;
- to indemnify or hold harmless the holders of any such shares (other
than Jaspas) or any underwriter designated by such holders;
- to obtain a commitment from an underwriter relative to the sale of any
such shares; or
- to include such shares within an underwriting offering of Nymox.
Nymox will assume no obligation or responsibility whatsoever to determine a
method of disposition for such shares or to otherwise include such shares within
the confines of any registered offering other than the registration statement of
which this prospectus is a part.
Nymox will use its best efforts to file, during any period during which it is
required to do so under its registration rights agreement with Jaspas, one or
more post-effective amendments to the registration statement of which this
prospectus is a part to describe any material information with respect to the
plan of distribution not previously disclosed in this prospectus or any material
change to such information in this prospectus. See the section above entitled
"The Common Stock Purchase Agreement."
47
<PAGE> 50
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is, as of the date of this prospectus, a summary of the principal
Canadian federal income tax considerations generally applicable to shareholders
who receive a dividend from Nymox and who, at all relevant times, for purposes
of the Income Tax Act (Canada) the ("Tax Act"), hold and will hold Nymox common
shares as capital property and deal with Nymox at arm's length.
Nymox's common shares will generally constitute capital property to a holder
unless the holder holds such shares in the course of carrying on a business or
the holder has acquired such shares in a transaction or transactions considered
to be an adventure in the nature of trade. This summary is based on the current
provisions of the Tax Act, the regulations under that act, counsel's
understanding of current administrative and assessing policies of the Canada
Customs and Revenue Agency and all specific proposals to amend the Tax Act
publicly announced or released by or on behalf of the Minister of Finance
(Canada) before the date of this prospectus ("Tax Proposals").
The Tax Act contains certain provisions relating to securities held by certain
financial institutions (the "Mark-to-Market Rules"). This summary does not take
into account these Mark-to-Market Rules or any amendments to them contained in
the Tax Proposals and taxpayers that are "financial institutions" for purposes
of those rules should consult their own tax advisors.
This summary is not exhaustive of all possible Canadian federal income tax
considerations and, except for the Tax Proposals, does not take into account or
anticipate any changes in law, whether by legislative, governmental or judicial
action, nor does it take into account tax legislation of any province, territory
or foreign jurisdiction. This summary is of a general nature only and is not
intended to be, nor should it be construed as, legal or tax advice to any
particular holder of Nymox common shares.
CANADIAN RESIDENTS
The following summary is relevant to a holder of Nymox common shares who, for
purposes of the Tax Act and any applicable tax treaty or convention, is resident
in Canada at all relevant times.
Tax Treatment of Capital Gains and Capital Losses for Canadian Residents
On a disposition or deemed disposition of a Nymox common share, the holder will
realize a capital gain (or capital loss) equal to the amount by which the
proceeds of disposition for the Nymox common share exceed (or are less than) the
aggregate of any costs of disposition and the adjusted cost base to the holder
of the Nymox common share immediately before the disposition.
48
<PAGE> 51
A holder of Nymox common shares will be required to include in income
three-quarters of the amount of any capital gain (a "Taxable capital gain") and
may deduct three-quarters of the amount of any capital loss (an "Allowable
capital loss") against Taxable capital gains realized by the holder in the year
of the disposition. Allowable capital losses in excess of Taxable capital gains
may be carried back and deducted in any of the three preceding years or carried
forward and deducted in any following year against taxable capital gains
realized in such years to the extent and under the circumstances described in
the Tax Act.
A Canadian-controlled private corporation will also be subject to a refundable
tax of 6 2/3% on certain investment income, including taxable capital gains
realized on the disposition of Nymox common shares, that will be refunded when
the corporation pays taxable dividends (at a rate of $1.00 for every $3.00 of
taxable dividend paid).
A capital loss realized by a holder of Nymox common shares that is a
corporation, a partnership of which a corporation is a member or a trust of
which a corporation is a beneficiary may be reduced by the amount of dividends
received in certain circumstances. Capital gains realized by an individual may
give rise to a liability for alternative minimum tax.
Tax Treatment of Dividends Received by Canadian Residents
In the case of a holder of Nymox common shares who is an individual, any
dividends received on the common shares will be included in computing his income
and will be subject to the gross-up and dividend tax credit rules normally
applicable to taxable dividends paid by taxable Canadian corporations. A holder
that is a corporation may be liable to pay refundable tax under Part IV of the
Tax Act. However, a public corporation which is not controlled, whether because
of a beneficial interest in one or more trusts or otherwise, by or for the
benefit of an individual (other than a trust) or a related group of individuals
(other than trusts) will not be liable to pay refundable tax under Part IV of
the Tax Act.
In the case of a holder of Nymox common shares that is a corporation, the amount
of any capital loss otherwise determined resulting from the disposition of a
Nymox common share may be reduced by the amount of dividends previously received
or deemed to have been received thereon. Any such restriction will not occur
where the corporate holder owned the Nymox common share for 365 days or longer
and such holder (together with any persons with whom it did not deal at arm's
length) did not own more than 5% of the shares of any class or series of Nymox
at the time the relevant dividends were received or deemed to have been
received. Analogous rules apply where a corporation is a member of a partnership
or a beneficiary of a trust, which owns Nymox common shares.
SHAREHOLDERS WHO ARE NOT RESIDENTS OF CANADA
The following summary is relevant to a holder of Nymox common shares, who, at
all relevant times, for purposes of the Tax Act and any applicable tax treaty or
convention, is a non-resident or is deemed to be a non-resident of Canada and
does not use and is not deemed to use or hold Nymox common shares in the course
of carrying on a business in Canada. Special rules, which are not discussed
below, may apply to a non-resident that is an insurer which carries on business
in Canada and elsewhere.
49
<PAGE> 52
Dividends Paid to Non-Residents of Canada
Under the Tax Act, dividends paid or credited to a non-resident are subject to
withholding tax at the rate of 25% of the gross amount of the dividends. This
withholding tax may be reduced or eliminated pursuant to the terms of an
applicable tax treaty between Canada and the country of residence of the
non-resident. For example, for persons who are resident in the United States for
purposes of the Canada-United States Income Tax Convention, (the "Convention")
the rate of withholding tax on dividends is reduced to 15% generally and 5% when
the United States resident is a company that beneficially owns at least 10% of
the voting stock of the company paying the dividends.
Under the Convention, dividends paid to certain religious, scientific,
charitable and other similar tax-exempt organizations and certain organizations
that are resident in, and exempt from tax in, the United States are exempt from
Canadian non-resident withholding tax. Provided that certain administrative
procedures designed to establish with the Canadian tax authorities the right of
such entities to benefit from this withholding tax exemption are complied with
by the tax-exempt entities prior to the Distribution, Nymox would not be
required to withhold such tax on such payment. Alternatively, the
above-described tax-exempt entities may claim a refund of Canadian withholding
tax otherwise withheld by Nymox on the distribution of dividends.
Tax Treatment of Capital Gains of Non-Residents of Canada
On a disposition or deemed disposition of a Nymox common share, a non-resident
holder will realize a capital gain (or capital loss) equal to the amount by
which the proceeds of disposition for the Nymox common share exceed (or are less
than) the aggregate of any costs of disposition and the adjusted cost base to
the non-resident holder of the Nymox common share immediately before the
disposition.
A non-resident of Canada is liable for Canadian income tax on a capital gain
realized on the disposition of property only where that property constitutes
"taxable Canadian property". Three-quarters of any capital gain from the
disposition of taxable Canadian property is subject to Canadian tax.
Under the Tax Act, shares of Nymox will not constitute taxable Canadian property
unless, at any time, in the five years immediately preceding the disposition,
the non-resident holder, persons with whom the non-resident holder did not deal
at arms length, or the non-resident holder together with all such persons owned
(or had a right to acquire) 25% or more of the shares of any class of Nymox.
Even in circumstances where shares of Nymox are taxable Canadian property to a
non-resident holder, the non-resident holder may be entitled to relief from
Canadian tax on any capital gain realized on the disposition thereof pursuant to
the terms of an applicable tax treaty between Canada and the country of
residence of the non-resident. For example, the Convention provides that gains
realized by a resident of the United States on the disposition or deemed
disposition of shares of a company will generally not be subject to tax under
the Tax Act, provided that the value of the shares is not derived principally
from real property situated in Canada. Nymox believes that the value of its
shares is not currently derived principally from real property situated in
Canada and it does not expect this to change in the foreseeable future.
50
<PAGE> 53
Provided that the Nymox common shares remain listed on a prescribed stock
exchange, which includes the Nasdaq SmallCap Market System, a non-resident
holder who disposes of Nymox common shares will not be required to comply with
the Canadian notification procedures generally applicable to dispositions of
taxable Canadian property.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is, as of the date of this prospectus, a general summary of the
material U.S. federal income tax consequences that are applicable to the
following persons who, under this prospectus, directly or indirectly, acquire
common shares of Nymox and hold such common shares as capital assets:
- citizens or residents (as specially defined for federal income tax
purposes) of the United States,
- corporations or partnerships created or organized in the United States
or under the laws of the United States or any state,
- estates the income of which is subject to the United States federal
income taxation regardless of its source and
- a trust, if a U.S. court is able to exercise primary supervision over
the administration of such trust and one or more U.S. persons have the
authority to control all substantial decisions of such trust or a
trust that has been elected to be treated as a domestic trust (U.S.
Shareholders).
This discussion does not deal with:
- any aspects of federal income taxation that may be relevant to a
particular U.S. Shareholder based on his particular circumstances
(including potential application of the alternative minimum tax or
unrelated business income tax),
- certain U.S. Shareholders subject to special treatment under the
federal income tax laws or foreign individuals or entities,
- U.S. Shareholders owning directly or by attribution 10% or more of the
common shares or
- any aspect of state, local or non-United States tax laws.
51
<PAGE> 54
DIVIDENDS PAID ON COMMON SHARES
Subject to the application of the rules relating to a "passive foreign
investment company", referred to as a PFC, distributions paid on common shares
(including any Canadian taxes withheld) to a U.S. Shareholder will be treated as
ordinary income for United States federal income tax purposes to the extent of
Nymox's current and accumulated earnings and profits (as computed for U.S.
federal income tax purposes). Distributions in excess of such earnings and
profits will be applied against the U.S. shareholders tax basis in common
shares, and any distributions in excess of such tax basis will be treated as
gain from the sale or exchange of such common shares. Distributions from Nymox
generally will not qualify for the United States dividends-received deduction
available to corporations. Canadian withholding tax withheld or paid will be
eligible for credit or, at the U.S. Shareholder's election, deduction, subject
to generally applicable limitations.
DISPOSITION OF COMMON SHARES
Subject to the applicable PFC rules discussed below, if a U.S. Shareholder holds
common shares as a capital asset, any gain or loss on a sale or exchange of such
shares will be capital gain or loss, which will be long-term capital gain or
loss if the holding period is one year or more. Generally, the maximum tax rate
for U.S. shareholders who are individuals on long term capital gain is 20%. The
sale of common shares through certain brokers will be subject to the information
reporting and back-up withholding rules of the United States Internal Revenue
Code of 1986, as amended, referred to as the Code.
PASSIVE FOREIGN INVESTMENT COMPANY
For any taxable year of Nymox, if at least 75% of Nymox's gross income is
"passive income" as defined in the Code, or if at least 50% of Nymox's assets,
by average fair market value, are assets that produce or are held for the
production of passive income, Nymox will be a PFC. The PFC determination is made
on the basis of facts and circumstances that may be beyond Nymox's control. It
is not possible to express an opinion as to whether or not Nymox is or will be a
PFC in its current or future taxable years because this depends on, among other
things, the amount and type of gross income that Nymox will earn in the future
and the characterization of certain assets as passive or active, which
determination cannot be made until the facts are known.
If Nymox is a PFC for any taxable year during which a U.S. Shareholder owns,
directly or indirectly, any common shares, the U.S. Shareholder will be subject
to special U.S. federal income tax rules, set forth in Sections 1291 to 1297 of
the Code, with respect to all of such U.S. Shareholder's common shares. In the
absence of (i) an election by such U. S. Shareholder to treat Nymox as a
"qualified electing fund" (the "Q.E.F. Election"), as discussed below, or (ii)
the election to mark to market the common shares (the "Mark to Market
Election"), as described below, the U.S. Shareholder would be required to report
any gain on the disposition of any common shares as ordinary income rather than
capital gain and to compute the tax liability on such gain as well as on any
"excess distribution" as defined in the Code, as if such amounts generally had
been earned pro-rata over the U.S. Shareholder's holding period for such common
shares and were subject to the highest ordinary income tax rate for each taxable
year of the U.S. Shareholder during such holding period. Such U.S. Shareholder
would also be liable for interest, which may be non-deductible by certain U.S.
Shareholders, on the foregoing tax liability as if such liability had been due
with respect to each such prior year. In addition, gifts, exchanges pursuant to
corporate reorganizations and the use of common shares as security for a loan
may be treated as taxable dispositions, and a stepped-up basis upon the death of
such a U.S. Shareholder may not be available.
52
<PAGE> 55
The foregoing rules may be avoided if a Q.E.F. Election is in effect with
respect to a U. S. Shareholder for each of the years that Nymox is a PFC during
such U.S. Shareholder's holding period. A Q.E.F. Election may be made by a U.S.
Shareholder on or before the due date, including extensions, for filing such
U.S. Shareholder's tax return for such taxable year. Such a U.S. Shareholder
would be taxed on its pro-rata share of Nymox's earnings and profits for Nymox's
taxable year in which it was, or was treated as, a PFC and which ends with or
within such U.S. Shareholder's taxable year, regardless of whether such amounts
are actually distributed by Nymox. This may result in tax liability without a
commensurate distribution with which to pay the liability. An electing U.S.
Shareholder's basis in the common shares would be increased by the amounts
included in income. Distributions out of earnings and profits previously
included by such U.S. Shareholder generally would not be treated as a taxable
dividend for United States federal income tax purposes and would result in a
corresponding reduction of basis in common shares. An electing U.S. Shareholder
will not be currently taxed on the undistributed ordinary income and net capital
gain of Nymox for any year that Nymox is not classified as a PFC.
If Nymox is a PFC, a U.S. Shareholder may avoid certain of the tax consequences
described in the preceding two paragraphs if the Nymox common stock is
marketable and meets the other requirements of Section 1296 of the Code, and the
U.S. Shareholder elects to mark to market the common stock on an annual basis.
The common stock will be marketable so long as it is regularly traded on a
recognized exchange.
In general, a U.S. Shareholder in a PFC who elects under Section 1296 to mark
the common stock to market would include in income each year an amount equal to
the excess, if any, of the fair market value of the common stock as of the close
of the taxable year over the U.S. Shareholder's adjusted basis in such stock. A
U.S. Shareholder who makes the Section 1296 election would also generally be
allowed a deduction for the excess, if any, of the adjusted basis of the common
stock over the fair market value as of the close of the taxable year. Deductions
under this rule, however, are allowable only to the extent of any net mark to
market gains with respect to the common stock included by the shareholder for
prior taxable years.
Once the Mark to Market election is made, it is binding for all subsequent
years, unless the common stock ceases to be marketable, or the IRS consents to
the revocation of the election.
53
<PAGE> 56
If Nymox is a PFC, each U.S. Shareholder is strongly urged to consult with his
or her tax advisor to determine whether the Q.E.F. Election or the Mark to
Market Election should be made. Each requires attention to specific rules and
regulations, and each may not be available to a specific U.S. shareholder.
Nymox intends to notify its U.S. Shareholders within 45 days after the end of
the taxable year for which Nymox believes it might be a PFC. Nymox has further
undertaken (i) to provide its U.S. Shareholders with timely and accurate
information as to its status as a PFC and the manner in which the Q.E.F.
Election can be made and (ii) to comply with all record-keeping, reporting and
other requirements so that U.S. Shareholders, at their option, may make a Q.E.F.
Election.
FUTURE DEVELOPMENTS
The foregoing discussion is based on existing provisions of the Code, existing
and proposed regulations thereunder and current administrative rulings and court
decisions, all of which are subject to change. Any such changes could affect the
validity of this discussion. In addition, the implementation of certain aspects
of the PFC rules requires the issuance of regulations which in many instances
have not been promulgated and which may have retroactive effect.
There can be no assurance that current authorities will not be changed and, if
so, as to the form they will take or the effect they may have on this
discussion.
DESCRIPTION OF NYMOX'S COMMON SHARES
Nymox has only one class of capital stock, known as common shares. Nymox is
authorized to issue an unlimited number of its common shares. As of the date of
this prospectus, there were 20,003,804 Nymox common shares outstanding.
RIGHTS OF HOLDERS OF COMMON SHARES
Holders of Nymox common shares are entitled to one vote for each share held on
all matters submitted to a vote of shareholders. They do not have cumulative
voting rights.
Holders of Nymox common shares are entitled to receive such dividends, if any,
as may be declared by the board of directors of Nymox out of funds legally
available for dividends. Nymox does not intend currently to pay dividends on its
common shares.
Upon liquidation, dissolution or winding up of Nymox, the holders of Nymox
common shares are entitled to receive the assets of Nymox on a pro rata basis.
Holders of Nymox common shares have no preemptive, subscription, redemption or
conversion rights.
54
<PAGE> 57
SHAREHOLDER MEETINGS
Under applicable Canadian securities legislation and the Canada Business
Corporations Act, a meeting of the shareholders of a company must be convened at
least once every fifteen months. Meetings of the shareholders of Nymox shall be
held at the registered office of Nymox or elsewhere in the municipality where
the registered office is situate or, if the board so determines, elsewhere in
Canada, or, if all the shareholders entitled to vote at the meeting so agree,
outside of Canada.
Notice of all annual and special meetings of the shareholders of Nymox must be
given to shareholders entitled to vote at such meeting, setting out the place,
the day and the hour of the meeting and the general nature of the business to be
considered.
The by-laws of Nymox provide that a quorum for the transaction of any business
at any meeting of shareholders shall be persons present and holding or
representing by proxy at least 33 1/3% of the shares entitled to vote at the
meeting.
NUMBER OF DIRECTORS
Nymox's articles provide that there shall be a minimum of five directors and a
maximum of fifteen directors. The board of directors fixes the exact number of
directors to be proposed for election in each year. The Canada Business
Corporations Act also requires that Nymox have a minimum of three directors, at
least two of which are not officers or employees of Nymox or its affiliates.
CANADIAN RESIDENCY REQUIREMENTS FOR DIRECTORS
The Canada Business Corporations Act requires that a majority of the directors
of Nymox be resident Canadians, which the act defines to mean, subject to
certain exceptions, persons ordinarily resident in Canada who are either
Canadian citizens or permanent residents of Canada within the meaning of that
phrase in the Immigration Act (Canada).
FILLING VACANCIES ON THE BOARD OF DIRECTORS
The articles of Nymox provide, in accordance with the Canada Business
Corporations Act, that the directors of Nymox have the right to appoint one or
more additional directors, who shall hold office for a term expiring not later
than the close of the next annual meeting of shareholders. The total number of
directors so appointed may not exceed one third of the number of directors
elected at the previous annual meeting of shareholders.
REMOVAL OF DIRECTORS
The directors of Nymox may be removed from office by a resolution passed by a
majority of the votes cast at a special meeting of shareholders.
55
<PAGE> 58
LIMITATIONS ON LIABILITY OF OFFICERS AND DIRECTORS
Nymox's bylaws provide that, subject to the limitations in the Canada Business
Corporations Act, Nymox shall indemnify a director or officer, a former director
or officer, or a person who acts or acted at Nymox's request as a director or
officer of a body corporate of which Nymox is or was a shareholder or creditor
(or a person who undertakes or has undertaken any liability on behalf of Nymox
or any such body corporate) and his or her heirs and legal representatives
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he or she is a
party be reason of being or having been a director or officer of Nymox or such
body corporate, if he or she acted honestly and in good faith with a view to the
best interests of Nymox and, in the case of a criminal or administrative action
or proceeding that is enforced by a monetary penalty, he or she had reasonable
grounds for believing that his or her conduct was lawful.
The Canada Business Corporations Act permits Nymox to so indemnify such
officers, directors and other persons except in respect of an action by or on
behalf of Nymox or a body corporate of which Nymox is or was a shareholder or
creditor to procure a judgment in its favor.
AMENDMENT OF CERTAIN PROVISIONS OF THE ARTICLES; FUNDAMENTAL CHANGES
The Canada Business Corporation Act requires, except in limited circumstances,
the approval of not less than two-thirds of the votes of the shareholders voting
in person or by proxy at a special meeting of the shareholders to amend the
articles of Nymox or to amalgamate or dissolve Nymox.
CERTAIN LEGAL MATTERS
The validity of the common shares offered hereby will be passed upon for Nymox
by Foley & Lardner, 3000 K Street, N.W., Washington, DC 20007. Foley & Lardner
will rely as to all matters of Canadian laws on the opinion of Stikeman Elliott,
1155 Rene Levesque Blvd. W., Montreal, QC H3B 3V2.
EXPERTS
The financial statements of Nymox as at December 31, 1998 and 1997 for each of
the years in the three year period ended December 31, 1998 included in this
prospectus and in the registration statement have been audited by KPMG,
independent auditors, and are included in this prospectus and in this
registration statement in reliance upon such report, and upon the authority of
KPMG as experts in accounting and auditing.
56
<PAGE> 59
WHERE YOU CAN FIND MORE INFORMATION
Nymox is subject to the informational requirements of the Exchange Act and in
accordance with that Act files reports and other information with the SEC. You
may inspect and copy any such reports and other information filed by Nymox with
the SEC, including the registration statement on Form F-1 of which this
prospectus is a part, at the public reference facilities of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and
at the SEC's Regional Offices at Seven World Trade Center, Suite 1300, New York
l0048 and Northwest Atrium Center 600 West Madison Street, Suite 1400, Chicago,
IL 60561. You may obtain copies of such material, at prescribed rates, by a
written request addressed to the Commission at the Public Reference Section at
450 Fifth Street, N.W. Washington, D.C. 20549. The public may obtain information
on the operation of the SEC's public reference facilities by calling the SEC at
1-8OO-SEC-0330. In addition, the common shares are listed on the Nasdaq SmallCap
Market and reports and other information concerning Nymox may also be inspected
at the offices of the Nasdaq Stock Market, Inc., Nasdaq Listing Qualifications,
9801 Washingtonian Boulevard, Rockville, MD 20878. In addition, Nymox will
provide without charge to each person to whom this prospectus is delivered, upon
either the written or oral request of such person, the Annual Report to
Shareholders for Nymox's latest fiscal year. Such requests should be directed to
Roy Wolvin, CFO of Nymox Pharmaceutical Corporation, 9900 Cavendish Blvd., Suite
306, St. Laurent, QC, Canada H4M 2V2, telephone 1-800-936-9669.
ENFORCEMENT OF CERTAIN CIVIL LIABILITIES AND
AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Many of Nymox's directors, officers and certain experts named in this prospectus
are residents of Canada. Consequently, it may be difficult for United States
investors to effect service within the United States upon Nymox's directors,
officers or certain experts named in this prospectus, or to realize in the
United States upon judgments of courts of the United States predicated upon
civil liabilities under the Securities Act. A judgment of a court of the United
States predicated solely upon such civil liabilities would probably be
enforceable in Canada by the Canadian court if the United States court in which
the judgment was obtained had jurisdiction, as determined by the Canadian court,
in the matter. There is substantial doubt whether an original action could be
brought successfully in Canada against any of such persons or Nymox predicated
solely upon such civil liabilities.
The authorized agent to receive service of process in the United States is C.T.
Corporation System, 111 Eighth Ave., 13th Floor, New York, NY, 10011, Telephone
212-530-9200.
57
<PAGE> 60
Consolidated Financial Statements of
NYMOX PHARMACEUTICAL
CORPORATION
Years ended December 31, 1998, 1997 and 1996
F-1
<PAGE> 61
AUDITORS' REPORT TO THE SHAREHOLDERS
We have audited the consolidated balance sheets of Nymox Pharmaceutical
Corporation as at December 31, 1998 and 1997 and the consolidated statements of
earnings, deficit and changes in financial position for the years ended December
31, 1998, 1997 and 1996. These financial statements are the responsibility of
the Corporation's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Corporation as at December 31,
1998 and 1997 and the results of its operations and the changes in its financial
position for the years ended December 31, 1998, 1997 and 1996 in accordance with
generally accepted accounting principles.
KPMG
Chartered Accountants
Montreal, Canada
February 26, 1999
F-2
<PAGE> 62
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Financial Statements
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<S> <C>
FINANCIAL STATEMENTS
Consolidated Balance Sheets................................................. F-4
Consolidated Statements of Earnings......................................... F-5
Consolidated Statements of Deficit.......................................... F-6
Consolidated Statements of Changes in Financial Position.................... F-7
Notes to Consolidated Financial Statements.................................. F-8
</TABLE>
F-3
<PAGE> 63
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Balance Sheets
December 31, 1998 and 1997
(in Canadian dollars)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
1998 1997
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash (note 3) $ 714,298 $ 507,259
Short-term investments 2,113,907 1,780,086
Accrued interest 46,082 4,200
Receivable due from a financial institution (note 6 (b)) 637,500 -
Accounts receivable 74,653 -
Research tax credits receivable 5,778 150,000
Notes receivables (note 4) 273,995 56,000
Other receivables 43,028 28,790
- ----------------------------------------------------------------------------------------------------------
3,909,241 2,526,335
Capital assets (note 5) 1,846,979 1,419,462
- -----------------------------------------------------------------------------------------------------------
$ 5,756,220 $ 3,945,797
===========================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 434,440 $ 292,330
Shareholders' equity:
Capital stock (note 6) 23,011,556 13,852,632
Capital stock subscription -- 504,000
Deficit (17,689,776) (10,703,165
- -----------------------------------------------------------------------------------------------------------
5,321,780 3,653,467
Commitments (note 7)
Subsequent event (note 13)
- -----------------------------------------------------------------------------------------------------------
$ 5,756,220 $ 3,945,797
===========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
On behalf of the Board:
/s/ Paul Averback Director
- -----------------------
/s/ Colin Bier Director
- -----------------------
F-4
<PAGE> 64
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Earnings
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
<TABLE>
<CAPTION>
===========================================================================================================
1998 1997 1996
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue:
Interest $ 243,574 $ 76,526 $ 226,940
Service fees 151,263 24,584 --
- -----------------------------------------------------------------------------------------------------------
394,837 101,110 226,940
Expenses:
Research and development 3,019,015 2,562,349 2,356,000
Less research tax credits (5,778) (150,000) (240,000)
- -----------------------------------------------------------------------------------------------------------
3,013,237 2,412,349 2,116,000
Marketing 3,240,242 1,925,654 1,253,894
General and administrative 896,201 589,524 497,179
Depreciation and amortization 135,551 158,694 78,906
Interest and bank charges 13,217 14,344 8,025
- -----------------------------------------------------------------------------------------------------------
7,298,448 5,100,565 3,954,004
- -----------------------------------------------------------------------------------------------------------
Loss before income taxes (6,903,611) (4,999,455) (3,727,064)
Income taxes (note 8) -- -- 28,000
- -----------------------------------------------------------------------------------------------------------
Net loss $(6,903,611) $(4,999,455) $(3,699,064)
===========================================================================================================
Loss per share $ (0.36) $ (0.27) $ (0.21)
===========================================================================================================
Weighted average number of common
shares outstanding 19,304,435 18,370,873 17,654,862
===========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 65
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Deficit
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
1998 1997 1996
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deficit, beginning of year $(10,703,165) $ (5,472,710) $(1,539,686)
Net loss (6,903,611) (4,999,455) (3,699,064)
Share issue costs (83,000) (231,000) (233,960)
- ------------------------------------------------------------------------------------------------------------
Deficit, end of year $(17,689,776) $(10,703,165) $(5,472,710)
============================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 66
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Changes in Financial Position
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
1998 1997 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash provided by (used in):
Operations:
Net loss $(6,903,611) $(4,999,455) $(3,699,064)
Items not involving cash:
Depreciation and amortization 135,551 158,694 78,906
Net change in non-cash operating
working capital items (481,941) 58,421 (55,855)
- --------------------------------------------------------------------------------------------------------
(7,250,001) (4,782,340) (3,676,013)
Financing:
Issuance of capital stock 8,654,924 4,549,941 5,280,050
Subscription to capital stock -- 504,000 --
Share issue costs (83,000) (231,000) (233,960)
- --------------------------------------------------------------------------------------------------------
8,571,924 4,822,941 5,046,090
Investments:
Additions to capital assets (563,068) (260,183) (1,030,724)
Notes receivable (217,995) -- --
- --------------------------------------------------------------------------------------------------------
(781,063) (260,183) (1,030,724)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and
short-term investments 540,860 (219,582) 339,353
Cash and short-term investments,
beginning of year 2,287,345 2,506,927 2,167,574
- --------------------------------------------------------------------------------------------------------
Cash and short-term investments,
end of year $ 2,828,205 $ 2,287,345 $2,506,927
========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE> 67
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND BUSINESS ACTIVITIES:
Nymox Pharmaceutical Corporation (the "Corporation"), incorporated under
the Canada Business Corporations Act, is a development stage
biopharmaceutical corporation which specializes in the research and
development of neurological therapeutics and diagnostics for the aging
population, with an emphasis on Alzheimer's disease.
Since inception, the Corporation's activities have been primarily focused
on developing certain pharmaceutical technologies and obtaining outside
funding to support the continued development of its technologies. The
Corporation is subject to a number of risks, including the successful
development and marketing of its technologies. In order to achieve its
business plan, the Corporation anticipates the need to raise additional
capital. Management is confident that it will be able to obtain the
continued financial support of its shareholders and/or new external
financing to pursue its development.
The Corporation is listed on the Montreal Exchange and the NASDAQ Stock
Market.
2. SIGNIFICANT ACCOUNTING POLICIES:
(a) Consolidation:
The consolidated financial statements of the Corporation have been
prepared under Canadian generally accepted accounting principles
("GAAP") and include the accounts of its wholly-owned US subsidiary,
Nymox Corporation. Intercompany balances and transactions have been
eliminated on consolidation.
Consolidated financial statements prepared under US GAAP would differ
in some respects from those prepared in Canada. A reconciliation of
earnings and shareholders' equity reported in accordance with Canadian
GAAP with US GAAP is presented in note 10.
(b) Short-term investments:
The Corporation's portfolio of short-term investments, which does not
include equity securities, consists principally of government
securities and commercial paper that are highly liquid and readily
convertible into cash. These are recorded at the lower of cost or
market value.
F-8
<PAGE> 68
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(c) Capital assets:
Capital assets are recorded at cost. Depreciation and amortization are
provided using the following methods and annual rates:
<TABLE>
<CAPTION>
=======================================================================================================================
Asset Method Rate
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Computer equipment Straight-line 20%
Laboratory equipment Straight-line 20%
Office equipment and fixtures Straight-line 20%
========================================================================================================================
</TABLE>
The capitalized amount with respect to patents relates to direct costs
incurred in connection with securing the patents. The cost of the
patents does not necessarily reflect their present or future value and
the amount ultimately recoverable is dependent upon the successful
commercialization of the related products. Accordingly, patents will
be amortized using the straight-line method commencing in the year of
commercial production of the developed products. The capitalized
amount will be amortized over the remaining years of the initial life
of the patent.
(d) Research and development expenditures:
Research expenditures, net of research tax credits, are expensed as
incurred. Development expenditures, net of tax credits, if any, are
expensed as incurred, except if they meet the criteria for deferral in
accordance with generally accepted accounting principles.
(e) Foreign exchange:
The Corporation's foreign subsidiary is considered to be an integrated
foreign operation. Foreign denominated monetary assets and liabilities
of the Canadian and foreign operations are translated at the rates of
exchange prevailing at the balance sheet dates. Other assets and
liabilities denominated in foreign currencies are translated at the
exchange rates prevailing when the assets were acquired or the
liabilities incurred. Sales and expenses are translated at the average
exchange rate prevailing during the year, except for depreciation and
amortization which are translated at the same rates as those used in
the translation of the corresponding assets. Foreign exchange gains
and losses are included in the determination of net earnings.
F-9
<PAGE> 69
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(f) Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of
the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
(g) Loss per share:
The loss per share amounts has been calculated using the weighted
average number of common shares outstanding during the year. Fully
diluted loss per share has not been disclosed because the effect of
common shares issuable upon the exercise of options and warrants would
be anti-dilutive.
3. CASH:
Cash includes $542,953 of cash held in trust by the Corporation's legal
counsel at December 31, 1998. This amount, which was received from the
closing of various private placements in December 1998, was released to the
Corporation in January 1999.
4. NOTES RECEIVABLE:
<TABLE>
<CAPTION>
======================================================================================================================
1998 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Note receivable, unsecured, non-interest bearing, payable on demand $ 56,000 $56,000
Note receivable, unsecured, bearing interest at 9% per annum beginning
February 1, 1999, payable on demand 217,995 -
- ----------------------------------------------------------------------------------------------------------------------
$273,995 $56,000
======================================================================================================================
</TABLE>
The notes are receivable from a director, who was no longer associated with
the Company as of March 1999.
F-10
<PAGE> 70
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
5. CAPITAL ASSETS:
<TABLE>
<CAPTION>
======================================================================================================================
1998
- ----------------------------------------------------------------------------------------------------------------------
Accumulated Net book
Cost depreciation value
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computer equipment $ 78,438 $ 25,528 $ 52,910
Laboratory equipment 717,820 220,468 497,352
Office equipment and fixtures 38,956 11,687 27,269
Patents 1,276,318 6,871 1,269,447
Intellectual property rights 1 - 1
- ----------------------------------------------------------------------------------------------------------------------
$2,111,533 $264,554 $1,846,979
======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
======================================================================================================================
1997
- ----------------------------------------------------------------------------------------------------------------------
Accumulated Net book
Cost depreciation value
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computer equipment $ 55,803 $ 15,174 $ 40,629
Laboratory equipment 734,041 217,299 516,742
Office equipment and fixtures 26,475 6,449 20,026
Patents 842,064 - 842,064
Intellectual property rights 1 - 1
- ----------------------------------------------------------------------------------------------------------------------
$1,658,384 $238,922 $1,419,462
======================================================================================================================
</TABLE>
6. CAPITAL STOCK:
<TABLE>
<CAPTION>
======================================================================================================================
1998 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Authorized:
An unlimited number of common shares
Issued and outstanding:
19,727,904 common shares (1997 - 18,632,873) $23,011,556 $13,852,632
======================================================================================================================
</TABLE>
F-11
<PAGE> 71
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
6. CAPITAL STOCK (CONTINUED):
(a) Changes in the Corporation's capital stock are presented below:
<TABLE>
<CAPTION>
======================================================================================================================
Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Issued and outstanding, December 31, 1996 17,929,382 $ 9,302,691
Issue of common shares for cash (b) 696,491 4,527,191
Issue of common shares pursuant to exercise of
stock options 7,000 22,750
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 18,632,873 13,852,632
Issue of common shares for cash (b) 366,000 3,131,500
Cancellation of shares (c) (460) -
Issue of common shares pursuant to exercise
of warrants 696,491 5,920,174
Issue of common shares pursuant to exercise
of stock options 33,000 107,250
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 19,727,904 $ 23,011,556
======================================================================================================================
</TABLE>
(b) Private placements:
In 1998, the Corporation completed private placements for 366,000
common shares for total aggregate proceeds of $3,131,500. At December
31, 1998, proceeds of $637,500 for the issuance of 75,000 common
shares were receivable. These funds were received by the Corporation
in January 1999.
In 1997, the Corporation completed a private placement of 696,491
common shares at a price of $6.50/share and received gross proceeds of
$4,527,191.
The share issue costs related to these private placements have been
charged against the deficit.
F-12
<PAGE> 72
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
6. CAPITAL STOCK (CONTINUED):
(c) Cancellation of shares:
During the year, the Corporation was advised by its transfer agent
that common shares of the Corporation, which had been issued on the
amalgamation of the Company with Monterey Capital Inc. in 1995, were
never claimed. These common shares have been cancelled.
(d) Warrants:
The Corporation has issued the following warrants to purchase common
shares:
<TABLE>
<CAPTION>
=======================================================================================================================
Exercise Outstanding at
price per Exercised December 31,
Warrants share Issued to date 1998 Expiry
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Series A $ 8.50 696,491 696,491 - -
Series B 8.50 50,000 - 50,000 August 31, 1999
Series C 10.00 60,000 - 60,000 August 31, 1999
Series D 10.00 67,500 - 67,500 December 31, 1999
=======================================================================================================================
</TABLE>
The Series A warrants were issued in connection with the 1997 private
placement and were exercised in 1998. The Series B, C and D warrants
were issued in connection with various private placements completed in
1998. As at December 31, 1998, none of these warrants had been
exercised.
(e) Stock options:
The Corporation has established a stock option plan (the "Plan") for
its key employees, its officers and directors, and certain
consultants. The Plan is administered by the Board of Directors of the
Corporation. The Board may from time to time designate individuals to
whom options to purchase common shares of the Corporation may be
granted, the number of shares to be optioned to each, and the option
price per share. The option price per share cannot involve a discount
to the market price at the time the option is granted. The total
number of shares to be optioned to any one individual cannot exceed 5%
of the total issued and outstanding shares and the maximum number of
shares which may be optioned under the Plan cannot exceed 2,500,000
common shares without shareholder approval.
F-13
<PAGE> 73
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
6. CAPITAL STOCK (CONTINUED):
(e) Stock options (continued):
Changes in outstanding options were as follows for the last two fiscal
periods:
<TABLE>
<CAPTION>
=======================================================================================================================
Stock options
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
Balance, December 31, 1996 1,575,000
Granted 271,000
Exercised (7,000)
Cancelled (5,000)
- -----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 1,834,000
Granted 125,000
Exercised (33,000)
Cancelled -
- -----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 1,926,000
=======================================================================================================================
</TABLE>
The weighted average exercise prices of options granted, exercised and
cancelled during 1998 were $6.59/share (1997 - $9.42/share),
$3.25/share (1997 - $3.25/share) and nil/share (1997 - $11.50/share),
respectively. The weighted average exercise price of options
exercisable at December 31, 1998 is $5.95/share (1997 - $5.10/share).
At December 31, 1998, options outstanding were as follows:
<TABLE>
<CAPTION>
=======================================================================================================================
Options outstanding Exercise price per share Expiry date
<S> <C> <C>
25,000 $4.90 1999
30,000 $10.00 1999
100,000 $7.00 2002
40,000 $13.75 2006
40,000 $9.80 2006
110,000 $11.50 2006
10,000 $16.75 2006
40,000 $9.00 2006
5,000 $9.25 2007
1,200,000 $3.25 (i) 2006 - 2009
36,000 $9.25 (ii) 2006 - 2010
290,000 $10.00 (iii) 2006 - 2012
- -----------------------------------------------------------------------------------------------------------------------
1,926,000
=======================================================================================================================
</TABLE>
F-14
<PAGE> 74
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
6. CAPITAL STOCK (CONTINUED):
(d) Stock options (continued):
(i) These options are effective and exercisable as follows:
<TABLE>
=======================================================================================================================
<S> <C>
Currently 1,000,000
1999 200,000
- -----------------------------------------------------------------------------------------------------------------------
1,200,000
=======================================================================================================================
</TABLE>
(ii) These options are effective and exercisable as follows:
<TABLE>
=======================================================================================================================
<S> <C>
Currently 12,000
1999 12,000
2000 12,000
- -----------------------------------------------------------------------------------------------------------------------
36,000
=======================================================================================================================
</TABLE>
(iii) These options become vested at various dates over the next five
years. During the year, the board of directors approved an
amendment to change the exercise price of these options to
$10.00/share. The exercise price was previously set at the
trading price of the shares on the date preceding each vesting
date. These options vest as follows:
<TABLE>
=======================================================================================================================
<S> <C>
Vested 1998 50,000
1999 90,000
2000 90,000
2001 50,000
2002 10,000
- -----------------------------------------------------------------------------------------------------------------------
290,000
- -=======================================================================================================================
</TABLE>
F-15
<PAGE> 75
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
================================================================================
7. COMMITMENTS:
(a) Operating leases:
Minimum lease payments under operating leases for the Corporation's
premises for the next three years are as follows:
<TABLE>
================================================================================
<S> <C>
1999 $445,407
2000 151,582
2001 24,089
- --------------------------------------------------------------------------------
$621,078
================================================================================
</TABLE>
(b) Research funding:
The Corporation is committed to make research grants to an unrelated
medical facility in the U.S. in the aggregate amount of approximately
$735,000 (US$516,000) in the next three years as follows:
<TABLE>
================================================================================
<S> <C>
1999 $245,000
2000 245,000
2001 245,000
- --------------------------------------------------------------------------------
$735,000
================================================================================
</TABLE>
The Corporation has an exclusive license to patents from this facility
covering rights to AD7C diagnostics and therapeutics. Under this
license, the medical facility benefits from research funding and
collaboration from the Corporation and is entitled to royalties of 4%
on worldwide sales of the AD7C test.
During the period ended December 31, 1998, an amount of approximately
US$128,000 (1997 - US$172,000) was paid and expensed in connection
with the research grant described above.
F-16
<PAGE> 76
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
7. COMMITMENTS (CONTINUED):
(c) License agreements:
In January 1999, the Corporation granted a non-exclusive license to an
American corporation to utilize all proprietory technology, including
its rights to patents and know-how, necessary to conduct the AD7C test
in a reference laboratory. The Corporation will receive compensation
under the agreement based on the number of tests conducted by the
American company. The license, which is for the US territory, is for
an initial term of 24 months and is subject to automatic renewal for
two additional one-year terms.
8. INCOME TAXES:
Details of the components of income taxes are as follows:
<TABLE>
<CAPTION>
================================================================================================
1998 1997 1996
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Loss before income taxes:
Canadian operations $(2,573,106) $(2,489,752) $(3,106,405)
U.S. operations (4,330,505) (2,509,703) (620,659)
- ------------------------------------------------------------------------------------------------
(6,903,611) (4,999,455) (3,727,064)
Basic income tax rate 38.0% 38.0% 38.0%
- ------------------------------------------------------------------------------------------------
Income tax recovery at statutory rates 2,623,000 1,900,000 1,416,000
Adjustments in income taxes resulting from:
Non-recognition of losses and other
unclaimed deductions (2,623,000) (1,900,000) (1,416,000)
Credit for losses -- -- 28,000
- ------------------------------------------------------------------------------------------------
Income taxes $ -- $ -- $ 28,000
================================================================================================
</TABLE>
F-17
<PAGE> 77
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
8. INCOME TAXES (CONTINUED):
The Corporation has non-capital losses carried forward and accumulated
scientific research and development expenditures which are available to
reduce future years' taxable income. The related income tax benefit of
these items will be recorded in earnings when realized. These expire as
follows:
<TABLE>
<CAPTION>
=======================================================================================================================
Federal Provincial
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Non-capital losses:
1999 $ 40,000 $ -
2000 36,000 36,000
2001 58,000 58,000
2002 920,000 -
2003 1,990,000 1,276,000
2004 1,388,000 1,090,000
2005 3,024,000 3,024,000
Scientific research and development expenditures:
(Indefinitely) 1,671,000 4,200,000
=======================================================================================================================
</TABLE>
The Corporation also has investment tax credits available in the amount of
approximately $464,000 available to reduce future years' federal taxes
payable. The benefit of these credits will be recorded when realized. These
credits expire as follows:
<TABLE>
=======================================================================================================================
<S> <C>
2005 $ 26,000
2006 290,000
2007 148,000
=======================================================================================================================
</TABLE>
In addition, the Corporation's US subsidiary has losses carried forward of
approximately US$4,900,000 which expire as follows:
<TABLE>
=======================================================================================================================
<S> <C>
2011 $ 460,000
2012 1,730,000
2018 2,710,000
=======================================================================================================================
</TABLE>
F-18
<PAGE> 78
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
9. FINANCIAL INSTRUMENTS:
(a) Foreign currency risk management:
A substantial portion of the Corporation's expenses are derived in US
dollars. This results in financial risk due to fluctuations in the
value of the Canadian dollar relative to those foreign currencies. For
the most part, this exposure is reduced to the extent that the
Corporation generates revenues in US dollars. Fluctuations in payments
made for the Corporation's expenses could cause unanticipated
fluctuations in the Corporation's operating results.
(b) Credit risk:
Financial instruments that potentially subject the Corporation to
significant concentrations of credit risk consist principally of
short-term investments. The Corporation has investment policies that
require placement of short-term investments in financial institutions
evaluated as highly creditworthy.
(c) Fair value disclosure:
The Corporation has determined that the carrying value of its
short-term financial assets and liabilities, including cash and
short-term investments, accrued interest, accounts receivable,
subscriptions receivable, notes receivables and accounts payable and
accrued liabilities, approximates fair value due to the immediate or
short-term maturity of these financial instruments.
F-19
<PAGE> 79
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
10. CANADIAN/U.S. REPORTING DIFFERENCES:
(a) Consolidated statements of earnings:
The reconciliation of earnings reported in accordance with Canadian
GAAP and with U.S. GAAP is as follows:
<TABLE>
<CAPTION>
=======================================================================================================================
1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net loss, Canadian GAAP $(6,903,611) $(4,999,455) $(3,699,064)
Adjustments:
Amortization of patents (i) (75,077) (49,533) (39,166)
Stock-based compensation - options
granted to non-employees (ii) (406,500) (150,000) (592,000)
- -----------------------------------------------------------------------------------------------------------------------
Net loss, U.S. GAAP $(7,385,188) $(5,198,988) $(4,330,230)
=======================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------
Loss per share, U.S. GAAP $ (0.38) $ (0.28) $ (0.25)
=======================================================================================================================
</TABLE>
(b) Consolidated shareholders' equity:
The reconciliation of shareholders' equity reported in accordance with
Canadian GAAP and with U.S. GAAP is as follows:
<TABLE>
<CAPTION>
=======================================================================================================================
1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholders' equity, Canadian GAAP $5,321,780 $3,653,467 $3,829,981
Adjustments:
Amortization of patents (i):
Cumulative effect to beginning
of the period (180,139) (130,606) (91,440)
Current period (75,077) (49,533) (39,166)
Stock-based compensation - options
granted to non-employees (ii):
Accumulative effect to beginning
of period (742,000) (592,000) -
Current period (406,500) (150,000) (592,000)
- -----------------------------------------------------------------------------------------------------------------------
Increase in deficit (1,403,716) (922,139) (722,606)
- -----------------------------------------------------------------------------------------------------------------------
Shareholders' equity, U.S. GAAP $3,918,064 $2,731,328 $3,107,375
=======================================================================================================================
</TABLE>
F-20
<PAGE> 80
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED):
(b) Consolidated shareholders' equity (continued):
(i) In accordance with APB Opinion 17, Intangible Assets, the patents
are amortized using the straight-line method over 17 years, the
legal life of the patents, from the date the patent was secured.
(ii) In accordance with FAS 123, Accounting for Stock-Based
Compensation, compensation related to the stock options granted
to non-employees has been recorded in the accounts based on the
fair value of the stock options at the grant date. The fair value
of the stock options was estimated as described in note 10 (c)
(3).
(c) Other disclosures required by United States GAAP:
(1) Development stage company:
The Corporation is in the process of developing unique patented
products which are subject to approval of regulatory authorities.
The Corporation has completed the research and discovery phase of
its Alzheimer's diagnostic AD7C test and is currently offering
testing services in their CLIA certified clinical reference
laboratory. It has had limited revenues to date on the sale of
its products under development. Accordingly, the Corporation is a
development stage company as defined in Statement of Financial
Accounting Standards No. 7 and the following disclosures are
required:
<TABLE>
<CAPTION>
=======================================================================================================================
Cumulative Cumulative
since the date of since the date of
inception of inception of
the Corporation the Corporation
to December 31, to December 31,
1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest revenue $ 547,040 $ 303,466
Service fees 175,847 24,584
Gross research and development expenditures 9,126,991 6,107,976
Other expenses 9,888,251 5,527,963
Cash inflow (outflow):
Operating activities (17,922,963) (10,672,962)
Investing activities (2,439,525) (1,658,462)
Financing activities 23,190,693 14,618,769
=======================================================================================================================
</TABLE>
F-21
<PAGE> 81
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED):
(c) Other disclosures required by United States GAAP (continued):
(1) Development stage company (continued):
The statement of shareholders' equity since date of inception is
presented below.
<TABLE>
<CAPTION>
=============================================================================================================
CONSIDERATION
------------------ Accumulated
Shares Cash Other deficit Total
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended July 31, 1990:
Common shares issued 2,500,000 $ 200,000 $ -- $ -- $ 200,000
Net loss -- -- -- (126,719) (126,719)
- -------------------------------------------------------------------------------------------------------------
Balance, July 31, 1990 2,500,000 200,000 -- (126,719) 73,281
Year ended July 31, 1991:
Net loss -- -- -- (24,827) (24,827)
- -------------------------------------------------------------------------------------------------------------
Balance, July 31, 1991 2,500,000 200,000 -- (151,546) 48,454
Year ended July 31, 1992:
Common shares issued 9,375 37,500 -- -- 37,500
Net loss -- -- -- (53,112) (53,112)
- -------------------------------------------------------------------------------------------------------------
Balance, July 31, 1992 2,509,375 237,500 -- (204,658) 32,842
Year ended July 31, 1993:
Common shares issued 201,250 205,000 -- -- 205,000
Common shares cancelled (500,000) -- -- -- --
Net loss -- -- -- (48,862) (48,862)
- -------------------------------------------------------------------------------------------------------------
Balance, July 31, 1993 2,210,625 442,500 -- (253,520) 188,980
Year ended July 31, 1994:
Common shares issued 2,500 10,000 -- -- 10,000
Net loss -- -- -- (71,668) (71,668)
- -------------------------------------------------------------------------------------------------------------
Balance, July 31, 1994 2,213,125 452,500 -- (325,188) 127,312
Year ended July 31, 1995:
Common shares issued 78,078 412,870 -- -- 412,870
Net loss -- -- -- (393,841) (393,841)
- -------------------------------------------------------------------------------------------------------------
Balance, July 31, 1995 2,291,203 865,370 -- (719,029) 146,341
Period ended December 31, 1995:
Adjustment necessary to
increase the number of
common shares 12,708,797 -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Adjusted number of
common shares 15,000,000 865,370 -- (719,029) 146,341
Common shares issued 2,047,082 3,157,271 936,894 -- 4,094,165
Net loss -- -- -- (1,639,194) (1,639,194)
Share issue costs -- (209,797) -- -- (209,797)
- -------------------------------------------------------------------------------------------------------------
Balance,
December 31, 1995 17,047,082 3,812,844 936,894 (2,358,223) 2,391,515
Year ended December 31, 1996:
Common shares issued 882,300 5,280,050 -- -- 5,280,050
Net loss -- -- -- (4,330,230) (4,330,230)
Share issue costs -- (233,960) -- -- (233,960)
- -------------------------------------------------------------------------------------------------------------
Balance December 31, 1996
carried forward 17,929,382 8,858,934 936,894 (6,688,453) 3,107,375
=============================================================================================================
</TABLE>
F-22
<PAGE> 82
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED):
(c) Other disclosures required by United States GAAP (continued):
(1) Development stage company (continued):
<TABLE>
<CAPTION>
=======================================================================================================================
Consideration
------------------ Accumulated
Shares Cash Other deficit Total
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1996
brought forward 17,929,382 $8,858,934 $ 936,894 $(6,688,453) $ 3,107,375
Year ended December 31, 1997:
Common shares issued 703,491 4,549,941 - - 4,549,941
Net loss - - (5,198,988) (5,198,988)
Share issue costs - (231,000) - - (231,000)
Capital stock subscription - 504,000 - - 504,000
- -----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 18,632,873 13,681,875 936,894 (11,887,441) 2,731,328
Year ended December 31, 1998:
Common shares issued 1,095,031 8,654,924 - - 8,654,924
Net loss - - - (7,385,188) (7,385,188)
Share issue costs - (83,000) - - (83,000)
- -----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 19,727,904 $22,253,799 $ 936,894 $(19,272,629) $ 3,918,064
=======================================================================================================================
</TABLE>
(2) Income taxes:
In accordance with Statement of Financial Accounting Standards
No. 109, the income tax effect of temporary differences that give
rise to the net deferred tax asset are presented below:
<TABLE>
<CAPTION>
=======================================================================================================================
1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Scientific research and experimental development $ 860,000 $ 1,100,000
Non-capital losses 2,600,000 1,594,000
Investment tax credits 464,000 590,000
Share issue costs 162,000 196,000
Less valuation allowance (4,086,000) (3,480,000)
- -----------------------------------------------------------------------------------------------------------------------
Net deferred tax asset $ - $ -
=======================================================================================================================
</TABLE>
There are no material deferred tax liabilities.
F-23
<PAGE> 83
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED):
(c) Other disclosures required by United States GAAP (continued):
(2) Income taxes (continued):
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or
all of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the
generation of future taxable income and tax planning strategies.
Since the Corporation is a development stage enterprise, the
generation of future taxable income is dependent on the
successful commercialization of its products and technologies.
(3) Stock-based compensation:
The Corporation applies APB Opinion 25, Accounting for Stock
Issued to Employees, in accounting for its stock option plan, and
accordingly, no compensation cost has been recognized for its
stock options in the financial statements. Had compensation cost
for the Corporation's stock option plan been determined based on
the fair value at the grant dates for awards under the plan
consistent with the method of FASB Statement 123, Accounting for
Stock-Based Compensation, the Corporation's net earnings and loss
per share would have been adjusted to the pro-forma amounts
indicated below for US GAAP:
<TABLE>
<CAPTION>
=======================================================================================================================
1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net loss As reported (US GAAP) $ (7,385,188) $ (5,198,988)
Pro-forma (7,385,188) (5,990,365)
Loss per share As reported (US GAAP) (0.38) (0.28)
Pro-forma (0.38) (0.33)
=======================================================================================================================
</TABLE>
The fair value of each option grant was estimated on the date of
grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions: risk-free interest rate
of 5%, dividend yield of 0%, expected volatility of 50%, and
expected life of 5 years.
(4) Short-term investments:
Short-term investments are classified as held-to-maturity as the
Corporation has the positive intent and ability to hold these
securities to maturity. As the Corporation's short-term
investments include government securities and commercial paper,
the aggregate fair value approximates carrying value and there
are no significant unrealized gross holding gains or losses.
F-24
<PAGE> 84
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED):
(c) Other disclosures required by United States GAAP (continued):
(5) Comprehensive income:
Effective January 1, 1998, the Corporation adopted Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive
Income, which establishes new rules for the reporting and display
of comprehensive income and its components. The adoption of this
statement has no impact on the Corporation's net income or
shareholders' equity.
11. SEGMENT DISCLOSURES:
Geographic segment information was as follows:
<TABLE>
<CAPTION>
=======================================================================================================================
United
Canada States
------ ------
<S> <C> <C>
Revenues:
1998 $ 243,574 $ 151,263
1997 76,526 24,584
1996 226,940 -
Net loss:
1998 (2,573,106) (4,330,505)
1997 (2,489,752) (2,509,703)
1996 (3,106,405) (620,659)
Identifiable assets:
1998 4,940,335 815,885
1997 3,579,849 365,948
=======================================================================================================================
</TABLE>
12. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE:
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the entity,
including those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.
F-25
<PAGE> 85
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
Years ended December 31, 1998, 1997 and 1996
(in Canadian dollars)
- --------------------------------------------------------------------------------
13. SUBSEQUENT EVENT:
In January 1999, the Corporation completed private placements for a total
of 55,000 common shares at $8.50 per share, and received gross proceeds of
$467,500. In connection with these private placements, the Corporation
issued an additional 27,500 Series D warrants exercisable at a price of
$10.00 per share, expiring on December 31, 1999.
F-26
<PAGE> 86
Consolidated Financial Statements of
(Unaudited)
NYMOX PHARMACEUTICAL
CORPORATION
Periods ended September 30, 1999 and 1998
F-27
<PAGE> 87
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Financial Statements
(Unaudited)
Periods ended September 30, 1999, 1998 and 1997
<TABLE>
<S> <C>
FINANCIAL STATEMENTS
Consolidated Balance Sheets....................................................... F-29
Consolidated Statements of Earnings............................................... F-30
Consolidated Statements of Deficit................................................ F-31
Consolidated Statements of Cash Flows............................................. F-32
Notes to Consolidated Financial Statements........................................ F-33
</TABLE>
F-28
<PAGE> 88
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Balance Sheets
(Unaudited)
September 30, 1999 and 1998, with comparative figures as at December 31, 1998
(in Canadian dollars)
<TABLE>
<CAPTION>
=======================================================================================================================
September 30, September 30, December 31,
1999 1998 1998
- -----------------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Audited)
<S> <C> <C> <C>
Assets
Current assets:
Cash $ 663,415 $ 837,253 $ 714,298
Short-term investments 262,350 2,942,572 2,113,907
Accrued interest 22,641 119,262 46,082
Receivable from a financial institution 410,000 - 637,500
Accounts receivable 60,822 56,042 74,653
Notes receivable 265,075 278,024 273,995
Research tax credits receivable 24,923 5,347 5,778
Other receivables - 26,000 43,028
Prepaid expenses 146,740 - -
- -----------------------------------------------------------------------------------------------------------------------
1,855,966 4,264,500 3,909,241
Capital assets 1,610,772 1,606,675 1,846,979
- -----------------------------------------------------------------------------------------------------------------------
$ 3,466,738 $ 5,871,175 $ 5,756,220
- -----------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 275,667 $ 89,166 $ 434,440
Shareholders' equity:
Capital stock 24,410,480 21,831,103 23,011,556
Deficit (21,219,409) (16,049,094) (17,689,776)
- -----------------------------------------------------------------------------------------------------------------------
3,191,071 5,782,009 5,321,780
- -----------------------------------------------------------------------------------------------------------------------
$ 3,466,738 $ 5,871,175 $ 5,756,220
=======================================================================================================================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
F-29
<PAGE> 89
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Earnings
(Unaudited)
Periods ended September 30, 1999, 1998 and 1997
(in Canadian dollars)
<TABLE>
<CAPTION>
=======================================================================================================================
Three Months Ended September 30, Nine Months Ended September 30,
- -----------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Service fees $ 27,004 $ 26,762 $ - $ 178,496 $ 60,135 $ 18,927
Interest 16,524 88,838 25,386 42,416 187,464 46,855
- -----------------------------------------------------------------------------------------------------------------------
43,528 115,600 25,386 220,912 247,599 65,782
Expenses:
Research and development 389,693 924,641 1,026,682 1,241,011 2,198,823 2,039,761
Less investment tax credits (17,279) (13,315) (46,500) (19,145) (18,662) (144,500)
- -----------------------------------------------------------------------------------------------------------------------
372,414 911,326 980,182 1,221,866 2,180,161 1,895,261
General, administrative and
cost of sales 529,692 133,988 77,645 1,305,242 608,894 470,783
Marketing 293,326 902,597 370,512 1,057,545 2,570,594 1,442,639
Depreciation and amortization 71,013 41,659 40,834 168,138 128,230 119,781
Interest and bank charges 11,351 18,073 5,310 14,558 22,649 11,070
- -----------------------------------------------------------------------------------------------------------------------
1,277,796 2,007,643 1,474,483 3,767,349 5,510,528 3,939,534
Gain on disposal of capital assets - - - (67,379) - -
- -----------------------------------------------------------------------------------------------------------------------
Net loss $(1,234,268) $(1,892,043) $(1,449,097) $(3,479,058) $(5,262,929) $(3,873,752)
=======================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------
Loss per share $ (0.06) $ (0.10) $ (0.08) $ (0.17) $ (0.27) $ (0.21)
=======================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------
Weighted average number of
common shares outstanding 19,932,804 19,592,274 18,631,783 19,847,612 19,239,411 18,234,967
=======================================================================================================================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
F-30
<PAGE> 90
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Deficit
(Unaudited)
Periods ended September 30, 1999, 1998 and 1997
(in Canadian dollars)
<TABLE>
<CAPTION>
=======================================================================================================================
Three Months Ended September 30, Nine Months Ended September 30,
- -----------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Deficit, beginning of
period $(19,985,141) $(14,157,051) $(8,007,365) $(17,689,776) $(10,703,165) $(5,472,710)
Net loss (1,234,268) (1,892,043) (1,449,097) (3,479,058) (5,262,929) (3,873,752)
Share issue costs - - (121,000) (50,575) (83,000) (231,000)
- -----------------------------------------------------------------------------------------------------------------------
Deficit, end of period $(21,219,409) $(16,049,094) $(9,577,462) $(21,219,409) $(16,049,094) $(9,577,462)
=======================================================================================================================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
F-31
<PAGE> 91
NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
Periods ended September 30, 1999, 1998 and 1997
(in Canadian dollars)
<TABLE>
<CAPTION>
=======================================================================================================================
Three Months Ended September 30, Nine Months Ended September 30,
- -----------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $(1,234,268) $(1,892,043) $(1,449,097) $(3,479,058) $(5,262,929) $(3,873,752)
Items not involving cash:
Depreciation and
amortization 71,013 41,659 40,834 168,138 128,230 119,781
Gain on disposal of
capital assets - - - (67,379) - -
Net change in non-cash
operating working
capital items (197,982) (156,387) (119,645) (7,938) (447,270) (286,320)
- -----------------------------------------------------------------------------------------------------------------------
(1,361,237) (2,006,771) (1,527,908) (3,386,237) (5,581,969) (4,040,291)
Cash flows from financing activities:
Issuance of capital stock 642,499 - - 1,398,924 7,474,471 4,549,463
Share issue costs - - (121,000) (50,575) (83,000) (231,000)
- -----------------------------------------------------------------------------------------------------------------------
642,499 - (121,000) 1,348,349 7,391,471 4,318,463
Cash flows from investing activities:
Additions to capital assets (87,278) (90,359) (41,119) (137,457) (317,022) (256,155)
Proceeds on disposal of capital
assets - - - 272,905 - -
- -----------------------------------------------------------------------------------------------------------------------
(87,278) (90,359) (41,119) 135,448 (317,022) (256,155)
- -----------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and
short-term investments (806,016) (2,097,130) (1,690,027) (1,902,440) 1,492,480 22,017
Cash and short-term investments,
beginning of period 1,731,781 5,876,955 4,218,971 2,828,205 2,287,345 2,506,927
- -----------------------------------------------------------------------------------------------------------------------
Cash and short-term investments,
end of period $ 925,765 $ 3,779,825 $ 2,528,944 $ 925,765 $ 3,779,825 $ 2,528,944
=======================================================================================================================
Supplemental disclosure to
statement of cash flows:
Income taxes paid $ - $ - $ - $ - $ - $ -
Interest paid 11,351 18,073 5,310 14,558 22,649 11,070
=======================================================================================================================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
F-32
<PAGE> 92
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
Periods ended September 30, 1999, 1998 and 1997
(in Canadian dollars)
- --------------------------------------------------------------------------------
Nymox Pharmaceutical Corporation (the "Corporation"), incorporated under
the Canada Business Corporations Act, is a development stage
biopharmaceutical corporation which specializes in the research and
development of neurological therapeutics and diagnostics for the aging
population, with an emphasis on Alzheimer's disease.
Since inception, the Corporation's activities have been primarily focused
on developing certain pharmaceutical technologies and obtaining outside
funding to support the continued development of its technologies. The
Corporation is subject to a number of risks, including the successful
development and marketing of its technologies. In order to achieve its
business plan, the Corporation anticipates the need to raise additional
capital.
The Corporation is listed on the Montreal Exchange and on the NASDAQ Stock
Market.
1. BASIS OF PRESENTATION:
(a) Consolidation:
The consolidated financial statements of the Corporation have been
prepared under Canadian generally accepted accounting principles and
include the accounts of its wholly-owned US subsidiary. Significant
intercompany balances and transactions have been eliminated on
consolidation.
(b) Interim financial statements:
The unaudited consolidated balance sheets as at September 30, 1999 and
1998, and the unaudited consolidated statements of earnings and
deficit and cash flows for the periods ended September 30, 1999, 1998
and 1997 reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of the
interim periods presented. There are no adjustments in these interim
financial statements other than normal recurring adjustments.
F-33
<PAGE> 93
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
(Unaudited)
Periods ended September 30, 1999, 1998 and 1997
(in Canadian dollars)
- --------------------------------------------------------------------------------
2. CANADIAN/U.S. REPORTING DIFFERENCES:
(a) Consolidated statements of earnings:
The reconciliation of earnings reported in accordance with Canadian
GAAP with U.S. GAAP is as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
- -----------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net loss, Canadian
GAAP $(1,234,268) $(1,892,043) $(1,449,097) $(3,479,058) $(5,262,929) $(3,873,752)
Adjustments:
Amortization of
patents (26,066) (16,429) (12,322) (72,082) (46,418) (36,967)
- -----------------------------------------------------------------------------------------------------------------------
Net loss, U.S. GAAP $(1,260,334) $(1,908,472) $(1,461,419) $(3,551,140) $(5,309,347) $(3,910,719)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Loss per share,
U.S. GAAP $ (0.06) $ (0.10) $ (0.08) $ (0.18) $ (0.28) $ (0.21)
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
F-34
<PAGE> 94
NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements, Continued
(Unaudited)
Periods ended September 30, 1999, 1998 and 1997
(in Canadian dollars)
- --------------------------------------------------------------------------------
2. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED):
(b) Consolidated shareholders' equity:
The reconciliation of shareholders' equity reported in accordance with
Canadian GAAP with U.S. GAAP is as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
September 30, December 31,
- -----------------------------------------------------------------------------------------------------------------------
1999 1998 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholders' equity, Canadian GAAP $ 3,191,071 $ 5,782,009 $ 5,321,780
Adjustments:
(i) Amortization of patents:
Cumulative effect to beginning of the period (255,216) (180,139) (180,139)
Current period (72,082) (46,418) (75,077)
- -----------------------------------------------------------------------------------------------------------------------
(327,298) (226,557) (255,216)
(ii) Stock-based compensation:
Cumulative effect to beginning of period (1,148,500) (742,000) (742,000)
Current period - - (406,500)
- -----------------------------------------------------------------------------------------------------------------------
(1,148,500) (742,000) (1,148,500)
- -----------------------------------------------------------------------------------------------------------------------
Increase in deficit (1,475,798) (968,557) (1,403,716)
- -----------------------------------------------------------------------------------------------------------------------
Shareholders' equity, U.S. GAAP $ 1,715,273 $ 4,813,452 $ 3,918,064
</TABLE>
3. SEGMENT DISCLOSURES:
Geographic segment information was as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
United
Canada States
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues:
1999 $ 42,416 $ 178,496
1998 187,464 60,135
1997 46,855 18,927
Net loss:
1999 (2,597,630) (881,428)
1998 (1,958,719) (3,304,210)
1997 (2,049,373) (1,824,379)
Identifiable assets:
September 30, 1999 2,900,575 566,163
September 30, 1998 5,160,095 711,080
December 31, 1998 4,940,335 815,885
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
F-35
<PAGE> 95
<TABLE>
<S> <C>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN ________________________
CONNECTION WITH THIS OFFERING TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. 5,000,000 Common Shares
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE offered by
SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY Jaspas Investments Ltd.
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO ________________________
CHANGE IN THE CIRCUMSTANCES OF NYMOX OR THE FACTS HEREIN SET
FORTH SINCE THE DATE HEREOF.
_________________________________________________
</TABLE>
<TABLE>
<CAPTION>
NYMOX
PHARMACEUTICAL
TABLE OF CONTENTS CORPORATION
PAGE
<S> <C> <C>
Note About Currency........................................ 2
The Company................................................ 3
Cautionary Statement Regarding Forward-looking
Statements................................................. 5 ________________________
Risk Factors............................................... 6
Trading Market for Common Shares........................... 11 P R O S P E C T U S
Selected Consolidated Financial Data....................... 11 ________________________
Information about the Company.............................. 13
Management's Discussion and Analysis of Results
of Operations and Financial Condition...................... 20
Recent Developments........................................ 25
Use of Proceeds............................................ 28
The Common Stock Purchase Agreement........................ 29
Selling Security Holder.................................... 37
Directors and Officers of Nymox............................ 38 _________________ , 1999
Compensation............................................... 39
Options.................................................... 40
Interest of Management in Certain Transactions............. 43
Controlling Shareholder.................................... 44
Plan of Distribution....................................... 44
Canadian Federal Income Tax Considerations................. 48
U.S. Federal Income Tax Considerations..................... 51
Description of Nymox's Common Shares....................... 54
Certain Legal Matters...................................... 56
Experts.................................................... 56
Where You Can Find More Information........................ 57
Enforcement of Certain Civil Liabilities and
Authorized Representative in the United States............. 57
</TABLE>
<PAGE> 96
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13: Other Expenses of Issuance and Distribution
The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the preparation and filing of this registration
statement.
<TABLE>
<S> <C>
SEC Registration Fee $ 3,406
Legal Fees and Expenses $30,000
Accountants Fees $ 5,000
-------
TOTAL $38,406
</TABLE>
The estimated expenses reflected herein do not include the reimbursement of
$35,000 by Nymox to Jaspas, primarily related to legal fees in preparation of
the stock purchase agreement and associated escrow costs.
Item 14: Indemnification of Directors and Officers
Nymox maintains Directors' and Officers' Liability Insurance (the "Policy") for
its own benefit and for the benefit of its subsidiaries and their respective
directors and officers. Subject to the limitations therein set forth, the Policy
extends coverage to directors and officers for any loss (as defined in the
Policy) incurred in connection with the performance of their duties and to Nymox
and its subsidiaries for any loss for which they have indemnified their
respective directors or officers as permitted by law.
Section 124 of the Canada Business Corporations Act ("CBCA") provides, in
pertinent part:
124. (1) Indemnification. - Except in respect of an action by or on
behalf of the corporation or body corporate to procure a judgment in
its favor, a corporation may indemnify a director or officer of the
corporation, a former director or officer of the corporation or a
person who acts or acted at the corporation's request as a director or
officer of a body corporate of which the corporation is or was a
shareholder or creditor, and his heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding
to which he is made a party by reason of being or having been a
director or officer of such corporation or body corporate, if,
(a) he acted honestly and in good faith with a view to the best
interests of the corporation; and
{b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing that his conduct was lawful.
(2) Indemnification in derivative actions. - A corporation may, with
the approval of the court, indemnify a person referred to in
subsection (1) in respect of an action by or on behalf of the
corporation or body corporate to procure a judgment in its favor, to
which he is made a party by reason of being or having been a director
or an officer of the corporation or body corporate, against all costs,
charges and expenses reasonably incurred by him in connection with
such action if he fulfills the conditions set out in clauses (1)(a)
and (b).
II-1
<PAGE> 97
(3) Indemnity as of right. - Notwithstanding anything in this section,
a person referred to in subsection (1) is entitled to indemnify from
the corporation in respect of all costs, charges and expenses
reasonably incurred by him in connection with the defense of any
civil, criminal or administrative action or proceeding to which he is
made a party by reason of being or having been a director or officer
of the corporation or body corporate, if the person seeking indemnity,
(a) was substantially successful on the merits in his defense of
the action or proceeding; and
(b) fulfills the conditions set out in clauses (1)(a) and (b).
(4) Directors' and officers' insurance. - A corporation may purchase
and maintain insurance for the benefit of any person referred to in
subsection (1) against any liability incurred by him,
(a) in his capacity as a director or officer of the corporation,
except where the liability relates to his failure to act honestly
and in good faith with a view to the best interests of the
corporation; or
(b) in his capacity as a director or officer of another body
corporate where he acts or acted in that capacity at the
corporation's request, except where the liability relates to his
failure to act honestly and in good faith with a view to the best
interests of the body corporate.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the United States Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
Item 15. Recent Sales of Unregistered Securities
All recent sales of unregistered shares were pursuant to exemptions from
registration under applicable Canadian and Quebec securities laws and were not
made to persons resident in the United States.
- April 1996, 877,300 common shares at a per share price of CAN$6.00 for
aggregate net proceeds of CAN$5,263,800 with Prampton Company Ltd.
(200,000 shares), Murray Lester Investments (120,000 shares), Gestion
3B+M Inc. (100,000 shares) and a group of individual Canadian and
overseas investors (457,300 shares);
- May 1997, 696,491 common shares at a price of CAN$6.50 and warrants
exercisable at a price of CAN$8.50 per share for a total consideration
of CAN$4,527,191 with the Caisse de Depot et Placement du Quebec
(307,692 shares), Abrar Corp. (85,538 shares) and a group of
individual Canadian and overseas investors (303,261 shares). In 1998,
all 696,491 of these warrants were exercised for additional proceeds
to Nymox of CAN$5,920,174;
II-2
<PAGE> 98
- May 1998, 231,630 common shares at a price of CAN$8.50 for total
proceeds of CAN$1,968,855 with Dr. Stephan Eschmann (76,500 shares)
and a group of individual Canadian and overseas investors (155,130
shares). A total of 110,000 warrants were issued as well, exercisable
at prices of CAN$8.50 per share (50,000) and CAN$10.00 per share
(60,000). These warrants have since expired;
- January, 1999, 190,000 common shares at CAN$8.50 per share, for total
proceeds of CAN$1,615,000 with Sparks Inc. (75,000 shares), Dr.
Stephan Eschmann (70,000 shares), and a group of individual Canadian
and overseas investors (45,000 shares). A total of 95,000 warrants
were issued as well, exercisable at the price of CAN$10.00 per share.
These warrants have since expired; and
- September, 1999, 122,000 common shares at CAN$5.00 per share, for
total proceeds of CAN$610,000 with Dr. Stephan Eschmann (82,000
shares) and Mr. Michael Braeuel (40,000 shares).
Item 16. Exhibits and Financial Statement Schedules
<TABLE>
<CAPTION>
- ------------------ ------------------------------------------------------------------- ----------------------
Exhibit No. Description
- ------------------ ------------------------------------------------------------------- ----------------------
<S> <C> <C>
2.0 Common Stock Purchase Agreement between NymoxPharmaceutical Previously Filed
Corporation and Jaspas Investments Limited dated November 1, 1999
- ------------------ ------------------------------------------------------------------- ----------------------
2.1 Registration Rights Agreement between Nymox Pharmaceutical Previously Filed
Corporation and Jaspas Investments Limited dated November 1, 1999
- ------------------ ------------------------------------------------------------------- ----------------------
2.2 Escrow Agreement among Nymox Pharmaceutical Corporation, Jaspas Previously Filed
Investments Limited and Epstein, Becker & Green, P.C. dated
November 1, 1999
- ------------------ ------------------------------------------------------------------- ----------------------
2.3 Stock Purchase Warrant to purchase common shares issued to
Jaspas Filed Herewith Investments Limited dated November 1,
1999
- ------------------ ------------------------------------------------------------------- ----------------------
3.0 Articles of Incorporation of Nymox Pharmaceutical Corporation Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
3.1 Bylaws of Nymox Pharmaceutical Corporation Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
5.1 Opinion of Foley & Lardner Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
5.2 Opinion of Stikeman, Elliott Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
10.1 Employment Agreement between Nymox Pharmaceutical Corporation and Previously Filed
Dr. Judith Fitzpatrick
- ------------------ ------------------------------------------------------------------- ----------------------
23.1 Consent of KPMG Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
23.2 Consent of Foley & Lardner Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
23.3 Consent of Stikeman, Elliott Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
24.0 Power of Attorney Filed Herewith as part
of the Signature Page
- ------------------ ------------------------------------------------------------------- ----------------------
27.0 Financial Data Schedule Previously Filed
99.0 Press release by Nymox Pharmaceutical Corporation dated Previously Filed
November 12, 1999 announcing the transaction
with Jaspas Investments Limited
- ------------------ ------------------------------------------------------------------- ----------------------
</TABLE>
II-3
<PAGE> 99
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended ("Securities Act").
(ii) To reflect in the prospectus included in this registration statement
any facts or events arising after the effective date of this
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 this registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Securities and
Exchange Commission ("SEC") pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(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 this registration
statement.
2. To remove from registration by means of a post-effective amendment any of the
securities being registered, which remain unsold at the termination of the
offering.
3. To file a post-effective amendment to this registration statement to include
any financial statements required by Rule 3-19 of Regulation S-X under the
Securities Exchange Act of 1934 throughout the offering.
4. For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
II-4
<PAGE> 100
5. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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 Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form F-1 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Montreal, Country of Canada, on February ___________, 2000.
Nymox Pharmaceutical Corporation
By: /s/ Paul Averback
--------------------------------------
Paul Averback, M.D.
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated. Each person whose signature appears below constitutes
and appoints Paul Averback, M.D. and Roy Wolvin, or each of them individually,
his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Signature Title Date
/s/ Paul Averback
- --------------------------- President, Chief Executive March 7, 2000
Paul Averback, M.D. Officer and Director
(Principal Executive Officer)
/s/ Roy Wolvin
- --------------------------- Chief Financial Officer, March 7, 2000
Roy Wolvin Secretary and Treasurer
(Chief Accounting Officer)
/s/ W. David Angus
- --------------------------- Chairman and Director March 7, 2000
W. David Angus, QC
/s/ Colin Bier
- --------------------------- Director March 7, 2000
Colin Bier, Ph.D.
/s/ Hans Black
- --------------------------- Director March 7, 2000
Hans Black, M.D.
/s/ Martin Barnes
- --------------------------- Director March 7, 2000
Martin Barnes
/s/ J. Kenneth Harrington
- --------------------------- Director March 7, 2000
J. Kenneth Harrington, Ph.D.
NYMOX CORPORATION
(Authorized Representative in the United States)
By: /s/ Roy Wolvin
---------------------- March 7, 2000
Roy Wolvin
Secretary-Treasurer
II-5
<PAGE> 101
EXHIBIT INDEX
<TABLE>
<CAPTION>
- ------------------ ------------------------------------------------------------------- ----------------------
Exhibit No. Description
- ------------------ ------------------------------------------------------------------- ----------------------
<S> <C> <C>
2.0 Common Stock Purchase Agreement between Nymox Pharmaceutical Previously Filed
Corporation and Jaspas Investments Limited dated November 1, 1999
- ------------------ ------------------------------------------------------------------- ----------------------
2.1 Registration Rights Agreement between Nymox Pharmaceutical Previously Filed
Corporation and Jaspas Investments Limited dated November 1, 1999
- ------------------ ------------------------------------------------------------------- ----------------------
2.2 Escrow Agreement among Nymox Pharmaceutical Corporation, Jaspas Previously Filed
Investments Limited and Epstein, Becker & Green, P.C. dated
November 1, 1999
- ------------------ ------------------------------------------------------------------- ----------------------
2.3 Stock Purchase Warrant to purchase common shares issued to Previously Filed
Jaspas Investments Limited dated November 1, 1999
- ------------------ ------------------------------------------------------------------- ----------------------
3.0 Articles of Incorporation of Nymox Pharmaceutical Corporation Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
3.1 Bylaws of Nymox Pharmaceutical Corporation Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
5.1 Opinion of Foley & Lardner Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
5.2 Opinion of Stikeman, Elliott Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
10.1 Employment Agreement between Nymox Pharmaceutical Corporation and Previously Filed
Dr. Judith Fitzpatrick
- ------------------ ------------------------------------------------------------------- ----------------------
23.1 Consent of KPMG Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
23.2 Consent of Foley & Lardner Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
23.3 Consent of Stikeman, Elliott Previously Filed
- ------------------ ------------------------------------------------------------------- ----------------------
24.0 Power of Attorney Filed Herewith
As Part of the
Signature Page
- ------------------ ------------------------------------------------------------------- ----------------------
27.0 Financial Data Schedule Previously Filed
99.0 Press release by Nymox Pharmaceutical Corporation dated Previously Filed
November 12, 1999 announcing the transaction with Jaspas
Investments Limited
- ------------------ ------------------------------------------------------------------- ----------------------
</TABLE>
II-6
