As filed with the Securities and Exchange Commission on November 11, 1999
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UnderThe Securities Act of l933
CEL-SCI CORPORATION
(Exact name of issuer as specified in its charter)
Colorado 84-0916344
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8229 Boone Blvd., Suite 802 22182
Vienna, Virginia
------------------------------------------- -----------
(Address of Principal Executive Offices) (Zip Code)
Incentive Stock Option Plans
Non-Qualified Stock Option Plans
Stock Bonus Plans
(Full Title of Plan)
Geert R. Kersten
CEL-SCI Corporation
8229 Boone Blvd., Suite 802
Vienna, Virginia 22182
(Name and address of agent for service)
(703) 506-9460
(Telephone number, including area code, of agent for service)
Copies of all communications, including all communications sent to agent
for service to:
William T. Hart, Esq.
Hart & Trinen
l624 Washington Street
Denver, Colorado 8020
(303) 839-0061
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered(1) per share(2) price fee
- -------------------------------------------------------------------------------
Common Stock Issuable 340,000 $2.44 $829,600 $231.00
Pursuant to Stock Bonus
Plans
- ------------------------------------------------------------------------------
(1) This Registration Statement also covers such additional number of shares,
presently undeterminable, as may become issuable under the Stock Bonus Plans in
the event of stock dividends, stock splits, recapitalizations or other changes
in the Company's common stock. The shares subject to this Registration Statement
are shares granted pursuant to the Company's Stock Bonus Plans all of which may
be reoffered in accordance with the provisions of Form S-8.
(2) Varied, but not less than the fair market value on the date that the options
were or are granted. Pursuant to Rule 457(g), the proposed maximum offering
price per share and proposed maximum aggregate offering price are based upon
closing price of the Company's common stock on November 9, 1999.
<PAGE>
CEL-SCI CORPORATION
Cross Reference Sheet Required Pursuant to Rule 404
PART I
INFORMATION REQUIRED IN PROSPECTUS
(NOTE: Pursuant to instructions to Form S-8, the Prospectus described below is
not filed with this Registration Statement.)
Item
No. Form S-8 Caption Caption in Prospectus
1. Plan Information
(a) General Plan Information Stock Option and Bonus Plans
(b) Securities to be Offered Stock Option and Bonus Plans
(c) Employees who may Participate Stock Option and Bonus Plans
in the Plan
(d) Purchase of Securities Pursuant Stock Option and Bonus Plans
to the Plan and Payment for
Securities Offered
(e) Resale Restrictions Resale of Shares by Affiliates
(f) Tax Effects of Plan Stock Option and Bonus Plans
Participation
(g) Investment of Funds Not Applicable.
(h) Withdrawal from the Plan; Other Information Regarding the
Assignment of Interest Plans
(i) Forfeitures and Penalties Other Information Regarding the
Plans
(j) Charges and Deductions and Other Information Regarding the
Liens Therefore Plans
2. Registrant Information and Employee Available Information,
Plan Annual Information Documents Incorporated by
Reference
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3 - Incorporation of Documents by Reference
The following documents filed by the Company with the Securities and Exchange
Commission are incorporated by reference in this Registration Statement: Annual
Report on Form l0-K for the year ending September 30, 1998, reports on Form 10-Q
for the quarters ending December 31, 1998, March 31, 1999 and June 30, 1999 and
Proxy Statement relating to the Company's April 12, 1999 Annual Meeting of
Shareholders. All reports and documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, prior to the filing of a post-effective amendment to this Registration
Statement of which this Prospectus is a part which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus and
to be a part thereof from the date of filing of such reports or documents.
Item 4 - Description of Securities
Not required.
Item 5 - Interests of Named Experts and Counsel
Not Applicable.
Item 6 - Indemnification of Directors and Officers
The Bylaws of the Company provide in substance that the Company shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative by reason of the fact that such person is or
was a director, officer, employee, fiduciary or agent of the Company, or is or
was serving at the request of the Company as a director, officer, employee,
fiduciary or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
to the full extent permitted by the laws of the state of Colorado; and that
expenses incurred in defending any such civil or criminal action, suit or
proceeding may be paid by the Company in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of such director,
officer or employee to repay such amount to the Company unless it shall
ultimately be determined that such person is entitled to be indemnified by the
Company as authorized in the Bylaws.
<PAGE>
Item 7 - Exemption from Registration Claimed
In September 1999 the Company issued 200,000 shares of its common stock
to Maximilian de Clara, an officer and director of the Company. The 200,000
shares were issued pursuant to the Company's Stock Bonus Plan. The issuance of
these shares was exempt from registration pursuant to section 4(2) of the
Securities Act of 1933.
Item 8 - Exhibits
4 - Instruments Defining Rights of
Security Holders -----------------
(a) - Common Stock Incorporated by reference to Exhibit
4(a) of the Company's Registration
Statements on Form S-l, File Nos.
2-85547-D and 33-7531.
(b) - 1998 Stock Bonus Plan
(as amended) __________________________________
5 - Opinion Regarding Legality __________________________________
l5 - Letter Regarding Unaudited Interim
Financial Information None
23 - Consent of Independent Public
Accountants and Attorneys __________________________________
24 - Power of Attorney Included in the signature page
of this Registration Statement
99 - Additional Exhibits
(Re-Offer Prospectus) __________________________________
Item 9 - Undertakings
(a) 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 l0(a)(3) of
the Securities Act of l933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; 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 in such information in the
registration statement;
Provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii)
will not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to
Section l3 or Section l5(d) of the Securities Act of l934
(2) That, for the purpose of determining any liability under the
Securities Act of l933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of l933, each filing of the
registrant's Annual Report pursuant to Section l3(a) or Section l5(d) of the
Securities Exchange Act of l934 (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section l5(d) of the
Securities Exchange Act of l934) that is incorporated by reference in the
registration statement 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes
and appoints Maximilian de Clara and Geert R. Kersten, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, 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 their substitutes or substitute may lawfully do or cause to be
done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Vienna, State of Virginia, on November 9, 1999.
CEL-SCI CORPORATION
By: /s/ Maximilian de Clara
MAXIMILIAN DE CLARA, PRESIDENT
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Maximilian de Clara Director and President November 9, 1999
-------------------------
Maxamilian de Clara
/s/ Geert R. Kersten Director, Principal November 9, 1999
- ------------------------- Financial Officer and
Geert R. Kersten Chief Executive Officer
- ---------------------- Director
Alexaner G. Esterhazy
/s/ John M. Jacquemin Director November 9, 1999
- -------------------------
John M. Jacquemin
<PAGE>
FORM S-8
CEL-SCI Corporation
8229 Boone Blvd.
Suite 802
Vienna, Virginia 22182
EXHIBITS
<PAGE>
Exhibits
4 - Instruments Defining Rights of
Security Holders ---------------------------------
(a) - Common Stock Incorporated by reference to Exhibit
4(a) of the Company's Registration
Statements on Form S-l, File Nos.
2-85547-D and 33-7531.
(b) - 1998 Stock Bonus Plan (as amended) _________________________________
5 - Opinion Regarding Legality _________________________________
l5 - Letter Regarding Unaudited Interim
Financial Information None
23 - Consent of Independent Public
Accountants and Attorneys __________________________________
24 - Power of Attorney Included in the signature page
of this Registration Statement
99 - Additional Exhibits
(Re-Offer Prospectus) __________________________________
CEL-SCI CORPORATION
1998 STOCK BONUS PLAN
l. Purpose. The purpose of this Plan is to advance the interests of
Cel-Sci Corporation (the "Company") and its shareholders, by encouraging and
enabling selected officers, directors, consultants and key employees upon whose
judgment, initiative and effort the Company is largely dependent for the
successful conduct of its business, to acquire and retain a proprietary interest
in the Company by ownership of its stock, to keep personnel of experience and
ability in the employ of the Company and to compensate them for their
contributions to the growth and profits of the Company and thereby induce them
to continue to make such contributions in the future.
2. Definitions.
A. "Board" shall mean the board of directors of the Company.
B. "Committee" means the directors duly appointed to administer
the Plan.
C. "Plan" shall mean this Stock Bonus Plan.
D. "Bonus Share" shall mean the shares of common stock of the
Company reserved pursuant to Section 4 hereof and any such shares issued to a
Recipient pursuant to this Plan.
E. "Recipient" shall mean any individual rendering services for
the Company to whom shares are granted pursuant to this Plan.
3. Administration of Plan. The Plan shall be administered by a
committee of two or more directors appointed by the Board (the
"Committee"). The Committee shall report all action taken by it to the
Board. The Committee shall have full and final authority in its discretion,
subject to the provisions of the Plan, to determine the individuals to whom
and the time or times at which Bonus Shares shall be granted and the number
of Bonus Shares; to construe and interpret the Plan; and to make all other
determinations and take all other actions deemed necessary or advisable for
the proper administration of the Plan. All such actions and determinations
shall be conclusively binding for all purposes and upon all persons.
4. Bonus Share Reserve. There shall be established a Bonus Share
Reserve to which shall be credited 300,000 shares of the Company's common
stock. In the event that the shares of common stock of the Company should,
as a result of a stock split or stock dividend or combination of shares or
any other change, or exchange for other securities by reclassification,
reorganization, merger, consolidation, recapitalization or otherwise, be
increased or decreased or changed into or exchanged for, a different number
or kind of shares of stock or other securities of the Company or of another
corporation, the number of shares then remaining in the Bonus Share Reserve
shall be appropriately adjusted to reflect such action. Upon the grant of
shares hereunder, this reserve shall be reduced by the number of shares so
granted. Distributions of Bonus Shares may, as the Committee shall in its
sole discretion determine, be made from authorized but unissued shares or
from treasury shares. All authorized and unissued shares issued as Bonus
Shares in accordance with the Plan shall be fully paid and nonassessable
and free from preemptive rights.
<PAGE>
5. Eligibility, and Granting and Vesting of Bonus Shares. Bonus Shares
may be granted under the Plan to the Company's employees, directors and
officers, and consultants or advisors to the Company, provided however that
bona fide services shall be rendered by such consultants or advisors and
such services must not be in connection with the offer or sale of
securities in a capital-raising transaction. The Committee, in its sole
discretion, is empowered to grant to an eligible Participant a number of
Bonus Shares as it shall determine from time to time. Each grant of these
Bonus Shares shall become vested according to a schedule to be established
by the Committee directors at the time of the grant. For purposes of this
plan, vesting shall mean the period during which the recipient must remain
an employee or provide services for the Company. At such time as the
employment of the Recipient ceases, any shares not fully vested shall be
forfeited by the Recipient and shall be returned to the Bonus Share
Reserve. The Committee, in its sole discretion, may also impose
restrictions on the future transferability of the bonus shares, which
restrictions shall be set forth on the notification to the Recipient of the
grant.
The aggregate number of Bonus Shares which may be granted pursuant to this
Plan shall not exceed the amount available therefore in the Bonus Share
Reserve.
6. Form of Grants. Each grant shall specify the number of Bonus Shares
subject thereto, subject to the provisions of Section 5 hereof.
At the time of making any grant, the Committee shall advise the
Recipient by delivery of written notice, in the form of Exhibit A hereto
annexed.
7. Recipients' Representations.
A. The Committee may require that, in acquiring any Bonus Shares, the
Recipient agree with, and represent to, the Company that the Recipient is
acquiring such Bonus Shares for the purpose of investment and with no
present intention to transfer, sell or otherwise dispose of shares except
such distribution by a legal representative as shall be required by will or
the laws of any jurisdiction in winding-up the estate of any Recipient.
Such shares shall be transferable thereafter only if the proposed transfer
shall be permissible pursuant to the Plan and if, in the opinion of counsel
(who shall be satisfactory to the Committee), such transfer shall at such
time be in compliance with applicable securities laws.
<PAGE>
B. To effectuate Paragraph A above, the Recipient shall deliver to the
Committee, in duplicate, an agreement in writing, signed by the Recipient,
in form and substance as set forth in Exhibit B hereto annexed, and the
Committee shall forthwith acknowledge its receipt thereof.
8. Restrictions Upon Issuance.
A. Bonus Shares shall forthwith after the making of any
representations required by Section 6 hereof, or if no representations are
required then within thirty (30) days of the date of grant, be duly issued
and transferred and a certificate or certificates for such shares shall be
issued in the Recipient's name. The Recipient shall thereupon be a
shareholder with respect to all the shares represented by such certificate
or certificates, shall have all the rights of a shareholder with respect to
all such shares, including the right to vote such shares and to receive all
dividends and other distributions (subject to the provisions of Section
7(B) hereof) paid with respect to such shares. Certificates of stock
representing Bonus Shares shall be imprinted with a legend to the effect
that the shares represented thereby are subject to the provisions of this
Agreement, and to the vesting and transfer limitations established by the
Committee, and each transfer agent for the common stock shall be instructed
to like effect with respect of such shares.
B. In the event that, as the result of a stock split or stock dividend
or combination of shares or any other change, or exchange for other
securities, by reclassification, reorganization, merger, consolidation,
recapitalization or otherwise, the Recipient shall, as owner of the Bonus
Shares subject to restrictions hereunder, be entitled to new or additional
or different shares of stock or securities, the certificate or certificates
for, or other evidences of, such new or additional or different shares or
securities, together with a stock power or other instrument of transfer
appropriately endorsed, shall also be imprinted with a legend as provided
in Section 7(A), and all provisions of the Plan relating to restrictions
herein set forth shall thereupon be applicable to such new or additional or
different shares or securities to the extent applicable to the shares with
respect to which they were distributed.
C. The grant of any Bonus Shares shall be subject to the condition
that if at any time the Company shall determine in its discretion that the
satisfaction of withholding tax or other withholding liabilities, or that
the listing, registration, or qualification of any Bonus Shares upon such
exercise upon any securities exchange or under any state or federal law, or
that the consent or approval of any regulatory body, is necessary or
desirable as a condition of, or in connection with, the issuance of any
Bonus Shares, then in any such event, such exercise shall not be effective
unless such withholding, listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company.
<PAGE>
D. Unless the Bonus Shares covered by the Plan have been registered
with the Securities and Exchange Commission pursuant to Section 5 of the
Securities Act of l933, each Recipient shall, by accepting a Bonus Share,
represent and agree, for himself and his transferees by will or the laws of
descent and distribution, that all Bonus Shares were acquired for
investment and not for resale or distribution. Upon such exercise of any
portion of an option, the person entitled to exercise the same shall, upon
request of the Committee, furnish evidence satisfactory to the Committee
(including a written and signed representation) to the effect that the
shares of stock are being acquired in good faith for investment and not for
resale or distribution. Furthermore, the Committee may, if it deems
appropriate, affix a legend to certificates representing Bonus Shares
indicating that such Bonus Shares have not been registered with the
Securities and Exchange Commission and may so notify the Company's transfer
agent. Such shares may be disposed of by a Recipient in the following
manner only: (l) pursuant to an effective registration statement covering
such resale or reoffer, (2) pursuant to an applicable exemption from
registration as indicated in a written opinion of counsel acceptable to the
Company, or (3) in a transaction that meets all the requirements of Rule
l44 of the Securities and Exchange Commission. If Bonus Shares covered by
the Plan have been registered with the Securities and Exchange Commission,
no such restrictions on resale shall apply, except in the case of
Recipients who are directors, officers, or principal shareholders of the
Company. Such persons may dispose of shares only by one of the three
aforesaid methods.
9. Limitations. Neither the action of the Company in establishing the
Plan, nor any action taken by it nor by the Committee under the Plan, nor any
provision of the Plan, shall be construed as giving to any person the right to
be retained in the employ of the Company.
Every right of action by or on behalf of the Company or by any
shareholder against any past, present or future member of the Board, or any
officer or employee of the Company arising out of or in connection with this
Plan shall, irrespective of the place where action may be brought and
irrespective of the place of residence of any such director, officer or employee
cease and be barred by the expiration of one year from whichever is the later of
(a) the date of the act or omission in respect of which such right of action
arises; or (b) the first date upon which there has been made generally available
to shareholders an annual report of the Company or any proxy statement for the
annual meeting of shareholders following the issuance of such annual report,
which annual report and proxy statement alone or together set forth, for the
related period, the number of shares issued pursuant to this Plan; and any and
all right of action by any employee (past, present or future) against the
Company arising out of or in connection with this Plan shall, irrespective of
the place where action may be brought, cease and be barred by the expiration of
one year from the date of the act or omission in respect of which such right of
action arises.
l0. Amendment, Suspension or Termination of the Plan. The Board of
Directors may alter, suspend, or discontinue the Plan, but may not, without the
approval of a majority of those holders of the Company's Common Stock voting in
person or by proxy at any meeting of the Company's shareholders, make any
alteration or amendment thereof which operates to (a) abolish the Committee,
change the qualification of its members, or withdraw the administration of the
Plan from its supervision, (b) make any material change in the class of eligible
employees as defined in paragraph 5, (c) increase the total number of shares
reserved for purposes of this Plan except as provided in paragraph 4, (d) extend
the term of the Plan or, (e) materially increase the benefits accruing to
persons participating under this Plan.
<PAGE>
Unless the Plan shall theretofore have been terminated by the Board,
the Plan shall terminate ten years after the effective date of the Plan. No
Bonus Share may be granted during any suspension or after the termination of the
Plan. No amendment, suspension, or termination of the Plan shall, without a
recipient's consent, alter or impair any of the rights or obligations under any
Bonus Share theretofore granted to such recipient under the Plan.
ll. Governing Law. The Plan shall be governed by the laws of the State
of Colorado.
l2. Expenses of Administration. All costs and expenses incurred in the
operation and administration of this Plan shall be borne by the Company.
CEL-SCI CORPORATION
By _____________________________
<PAGE>
- EXHIBIT A -
CEL-SCI CORPORATION
STOCK BONUS PLAN
TO: Recipient:
PLEASE BE ADVISED that CEL-SCI Corporation has on the date hereof
granted to the Recipient the number of Bonus Shares as set forth under and
pursuant to the Stock Bonus Plan. Before these shares are to be issued, the
Recipient must deliver to the Committee that administers the Stock Bonus
Plan an agreement in duplicate, in the form as Exhibit B hereto. The Bonus
Shares are issued subject to the following vesting and transfer
limitations.
Vesting:
Number of Shares Date of Vesting
Transfer Limitations:
CEL-SCI CORPORATION
By ____________________________
Date ____________________
<PAGE>
- EXHIBIT B -
CEL-SCI Corporatio
8229 Boone Blvd., Suite 802
Vienna, Virginia 22182
Gentlemen:
I represent and agree that said Bonus Shares are being acquired by me
for investment and that I have no present intention to transfer, sell or
otherwise dispose of such shares, except as permitted pursuant to the Plan
and in compliance with applicable securities laws, and agree further that
said shares are being acquired by me in accordance with and subject to the
terms, provisions and conditions of said Plan, to all of which I hereby
expressly assent. These agreements shall bind and inure to the benefit of
my heirs, legal representatives, successors and assigns.
My address of record is:
and my social security number:
Very truly yours,
Receipt of the above is hereby acknowledged.
CEL-SCI CORPORATION
__________ By _____________________
Date its __________________
November 10, 1999
CEL-SCI Corporation
8229 Boone Blvd., Suite 802
Vienna, Virginia 22182
Gentlemen:
This letter will constitute an opinion upon the legality of the sale
by CEL-SCI Corporation, a Colorado corporation, of up to 340,000 shares of
Common Stock, all as referred to in the Registration Statement on Form S-8
filed by the Company with the Securities and Exchange Commission.
We have examined the Articles of Incorporation, the Bylaws and the
minutes of the Board of Directors of the Company and the applicable laws of the
State of Colorado, and a copy of the Registration Statement. In our opinion, the
Company has duly authorized the issuance of the shares of stock mentioned above
and such shares when issued will be legally issued, fully paid, and
nonassessable.
Very truly yours,
HART & TRINEN
By /s/ William T. Hart
William T. Hart
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of CEL-SCI CORPORATION on Form S-8 of our report dated December 11, 1998,
appearing in the Annual Report on Form 10-K of CEL-SCI CORPORATION for the
year ended September 30, 1998.
DELOITTE & TOUCHE LLP
Mclean, Virginia
November 8, 1999
<PAGE>
CONSENT OF ATTORNEYS
Reference is made to the Registration Statement of CEL-SCI Corporation
on Form S-8 whereby the Company proposes to sell 340,000 shares of the
Company's Common Stock. Reference is also made to Exhibit 5 included in the
Registration Statement relating to the validity of the securities proposed
to be issued and sold. We hereby consent to the use of our opinion
concerning the validity of the securities proposed to be issued and sold.
Very Truly Yours,
HART & TRINEN, L.L.P.
By /s/ William T. Hart
William T. Hart
Denver, Colorado
November 9, 1999
CEL-SCI CORPORATION
Common Stock
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus relates to shares (the "Shares") of common stock (the
"Common Stock") of CEL-SCI Corporation (the "Company") which may be issued
pursuant to certain employee incentive plans adopted by the Company. The
employee incentive plans provide for the grant, to selected employees of the
Company and other persons, of either stock bonuses or options to purchase shares
of the Company's Common Stock. Persons who received Shares pursuant to the Plans
and who are offering such Shares to the public by means of this Prospectus are
referred to as the "Selling Shareholders".
The Company has Incentive Stock Option Plans, Non-Qualified Stock
Option Plans and Stock Bonus Plans. In some cases the plans described above are
collectively referred to as the "Plans". The terms and conditions of any stock
bonus and the terms and conditions of any options, including the price of the
shares of Common Stock issuable on the exercise of options, are governed by the
provisions of the respective Plans and the stock bonus or stock option
agreements between the Company and the Plan participants.
The Selling Shareholders may offer the shares from time to time in
negotiated transactions in the over-the-counter market, at fixed prices which
may be changed from time to time, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Shareholders may effect such transactions by selling the
Shares to or through securities broker/dealers, and such broker/dealers may
receive compensation in the form of discounts, concessions, or commissions from
the Selling Shareholders and/or the purchasers of the Shares for whom such
broker/dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker/dealer might be in excess of
customary commissions). See "Selling Shareholders" and "Plan of Distribution".
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company. The Company has agreed to bear all
expenses (other than underwriting discounts, selling commissions and fees and
expenses of counsel and other advisers to the Selling Shareholders). The Company
has agreed to indemnify the Selling Shareholders against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
The date of this Prospectus is ________, 1999.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at Room 1024 of the
Commission's office at 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Commission's Regional Offices in New York (7 World Trade Center, Suite l300, New
York, New York 10048), and Chicago (Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511), and copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Certain information
concerning the Company is also available at the Internet Web Site maintained by
the Securities and Exchange Commission at www.sec.gov. This Prospectus does not
contain all information set forth in the Registration Statement of which this
Prospectus forms a part and exhibits thereto which the Company has filed with
the Commission under the Securities Act and to which reference is hereby made.
DOCUMENTS INCORPORATED BY REFERENCE
The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into this Prospectus).
Requests should be directed to:
CEL-SCI Corporation
8229 Boone Blvd., Suite 802
Vienna, Virginia 223l4
(703) 506-9460
Attention: Secretary
The following documents filed with the Commission by the Company
(Commission File No. 0-11503) are hereby incorporated by reference into this
Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1998; and
(2) The Company's reports on Form 10-Q for the quarters ended December
31, 1998, March 31, 1999 and June 30, 1999.
(3) Proxy Statement relating to the April 12, 1999 Meeting of
Shareholders.
All documents filed with the Commission by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering registered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for the purposes of this
<PAGE>
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
<PAGE>
TABLE OF CONTENTS
PAGE
THE COMPANY .......................................................... 6
DILUTION AND COMPARATIVE SHARE DATA .................................. 9
USE OF PROCEEDS ...................................................... 11
SELLING SHAREHOLDERS ................................................. 11
PLAN OF DISTRIBUTION ................................................. 14
DESCRIPTION OF COMMON STOCK .......................................... 14
GENERAL .............................................................. 15
<PAGE>
THE COMPANY
CEL-SCI Corporation was formed as a Colorado corporation in 1983 and is
involved in the research and development of certain drugs and vaccines. The
Company's first product, Multikine(TM), manufactured using the Company's
proprietary cell culture technologies, is a combination, or "cocktail", of
natural human interleukin-2 ("IL-2") and certain lymphokines and cytokines.
Multikine is being tested to determine if it is effective in improving the
immune response of cancer patients. The Company's second product, HGP-30, is
being tested by the Company's wholly-owned subsidiary, Viral Technologies, Inc.
to determine if it is an effective vaccine/treatment against the AIDS virus. The
third technology the Company is developing, L.E.A.P.S. (Ligand Epitope Antigen
Presentation System) is a T-cell modulation technology which can be used to
direct a specific immune response and which is thought to be particularly
important in the case of diseases which have no approved vaccinations such as
herpes simplex, malaria, and AIDS. The Company intends to use this new
technology to improve the cellular immune response of persons vaccinated with
HGP-30 and to develop potential treatments and/or vaccines against various
diseases. Present target diseases are AIDS, herpes simplex, malaria,
tuberculosis, prostate cancer and breast cancer.
Before human testing can begin with respect to a drug or biological
product, pre-clinical studies are conducted in laboratory animals to evaluate
the potential efficacy and the safety of a product. Human clinical studies
generally involve a three-phase process. The initial clinical evaluation, Phase
I, consists of administering the product and testing for safe and tolerable
dosage levels. Phase II trials continue the evaluation of safety and determine
the appropriate dosage for the product, identify possible side effects and risks
in a larger group of subjects, and provide preliminary indications of efficacy.
Phase III trials consist of testing for actual clinical efficacy within an
expanded group of patients at geographically dispersed test sites.
The costs associated with the clinical trials relating to the Company's
technologies, research expenditures and the Company's administrative expenses
have been funded with the public and private sales of shares of the Company's
Common Stock and borrowings from third parties, including affiliates of the
Company.
The Company does not expect to develop commercial products for several
years, if at all. The Company has had operating losses since its inception, had
an accumulated deficit of approximately $50,461,000 at June 30, 1999, and
expects to incur substantial losses for the foreseeable future.
The Company's executive offices are located at 8229 Boone Blvd., #802,
Vienna, Virginia 22182, and its telephone number is (703) 506-9460.
As of September 15, 1999 the Company had 16,985,294 shares of Common
Stock issued and outstanding.
<PAGE>
RISK FACTORS
Investors should be aware that this offering involves certain risks,
including those described below, which could adversely affect the value of their
holdings of Common Stock. The Company does not make, nor has it authorized any
other person to make, any representation about the future market value of the
Company's Common Stock. In addition to the other information contained in this
Prospectus, the following factors should be considered carefully in evaluating
an investment in the shares offered by this Prospectus
The Company Has Earned Only Limited Revenues and Has a History of Losses.
The Company has had only limited revenues since it was formed in 1983.
Since the date of its formation and through June 30, 1999 the Company incurred
net losses of approximately $50,461,000. During the years ended September 30,
1996, 1997 and 1998 the Company suffered losses of $6,326,666, $8,189,458 and
$6,442,683 respectively. The Company has relied principally upon the proceeds of
public and private sales of securities to finance its activities to date. All of
the Company's potential products are in the early stages of development, and any
commercial sale of these products will be many years away. Accordingly, the
Company expects to incur substantial losses for the foreseeable future.
There can be no assurance the Company will be profitable. At the
present time, the Company intends to use available funds to finance the
Company's operations. Accordingly, while payment of dividends rests within the
discretion of the Board of Directors, no common stock dividends have been
declared or paid by the Company. The Company does not presently intend to pay
dividends on its common stock and there can be no assurance that common stock
dividends will ever be paid.
The Company Needs Additional Capital to Finance Its Operations.
Clinical and other studies necessary to obtain approval of a new drug
can be time consuming and costly, especially in the United States, but also in
foreign countries. The different steps necessary to obtain regulatory approval,
especially that of the Food and Drug Administration ("FDA"), involve significant
costs and may require several years to complete. The Company expects that it
will need additional financing over an extended period of time in order to fund
the costs of future clinical trials, related research, and general and
administrative expenses. The Company may be forced to delay or postpone
development and research expenditures if the Company is unable to secure
adequate sources of funds. These delays in development may have an adverse
effect on the Company's ability to produce a timely and competitive product.
There can be no assurance that the Company will be able to obtain additional
funding from other sources.
Cost Estimates for Clinical Trials and Research May be Inaccurate.
The Company's estimates of the costs associated with future clinical
trials and research may be substantially lower than the actual costs of these
activities. If the Company's cost estimates are incorrect, the Company will need
additional funding for its research efforts.
<PAGE>
Products Which May Be Developed by the Company Will Require Regulatory Approval
Prior to Sale.
Therapeutic agents, drugs and diagnostic products are subject to
approval, prior to general marketing, by the FDA in the United States and by
comparable agencies in most foreign countries. The process of obtaining FDA and
corresponding foreign approvals is costly and time consuming, particularly for
pharmaceutical products such as those which might ultimately be developed by the
Company, VTI or its licensees, and there can be no assurance that such approvals
will be granted. Any failure to obtain or any delay in obtaining such approvals
may adversely affect the ability of potential licensees or the Company to
successfully market any products developed. Also, the extent of adverse
government regulations which might arise from future legislative or
administrative action cannot be predicted.
The Company is Dependent on an Unrelated Corporation to Manufacture Multikine
The Company has an agreement with an unrelated corporation for the
production, until August 2000, of Multikine for research and testing purposes.
At present, this is the Company's only source of Multikine. If this corporation
could not, for any reason, supply the Company with Multikine, the Company
estimates that it would take approximately six to ten months to obtain supplies
of Multikine under an alternative manufacturing arrangement. The Company does
not know what cost it would incur to obtain this alternative source of supply.
The Biomedical Feld in Which the Company is Involved is Undergoing Rapid and
Significant Technological Change.
The successful development of therapeutic agents and diagnostic
products from the compounds, compositions and processes licensed to the Company,
through Company financed research or as a result of possible licensing
arrangements with pharmaceutical or other companies, will depend on its ability
to be in the technological forefront of this field. There can be no assurance
that the Company will achieve or maintain such a competitive position or that
other technological developments will not cause the Company's proprietary
technologies to become uneconomical or obsolete.
The Company's Patents Might Not Protect the Company's Technology.
Certain aspects of the Company's technologies are covered by U.S. and
foreign patents. In addition, the Company has a number of patent applications
pending. There is no assurance that the applications still pending or which may
be filed in the future will result in the issuance of any patents. Furthermore,
there is no assurance as to the breadth and degree of protection any issued
patents might afford the Company. Disputes may arise between the Company and
others as to the scope and validity of these or other patents. Any defense of
the patents could prove costly and time consuming and there can be no assurance
that the Company will be in a position, or will deem it advisable, to carry on
such a defense. Other private and public concerns, including universities, may
have filed applications for, or may have been issued, patents and are expected
<PAGE>
to obtain additional patents and other proprietary rights to technology
potentially useful or necessary to the Company. The scope and validity of such
patents, if any, the extent to which the Company may wish or need to acquire the
rights to such patents, and the cost and availability of such rights are
presently unknown. Also, as far as the Company relies upon unpatented
proprietary technology, there is no assurance that others may not acquire or
independently develop the same or similar technology. The Company's first
MULTIKINE patent will expire in the year 2000. Since the Company does not know
if it will ever be able to sell MULTIKINE on a commercial basis, the Company
cannot predict what effect the expiration of this patent will have on the
Company. Notwithstanding the above, the Company believes that trade secrets and
later issued patents will protect the technology associated with Multikine past
the year 2000.
The Company's Product Liability Insurance May Not Be Adequate.
Although the Company has product liability insurance for Multikine and
its HGP-30 vaccine, the successful prosecution of a product liability case
against the Company could have a materially adverse effect upon its business if
the amount of any judgment exceeds the Company's insurance coverage.
The Loss of Management and Scientific Personnel Could Adversly Affect the
Company.
The Company is dependent for its success on the continued availability
of its executive officers. The loss of the services of any of the Company's
executive officers could have an adverse effect on the Company's business. The
Company does not carry key man life insurance on any of its officers. The
Company's future success will also depend upon its ability to attract and retain
qualified scientific personnel. There can be no assurance that the Company will
be able to hire and retain such necessary personnel.
Shares Issuable Upon the Conversion of Options, Warrants and Convertible
Securities May Depress the Price of the Company's Common Stock.
The Company has issued options to its officers, directors, employees
and consultants which allow the holders to acquire additional shares of the
Company's Common Stock. In some cases the Company has agreed that, at its
expense, it will make appropriate filings with the Securities and Exchange
Commission so that the securities issuable upon the exercise of the options will
be available for public sale. Such filings could result in substantial expense
to the Company and could hinder future financings by the Company.
Until the options expire, the holders will have an opportunity to
profit from any increase in the market price of the Company's Common Stock
without assuming the risks of ownership. Holders of the options may exercise
them at a time when the Company could obtain additional capital on terms more
favorable than those provided by the options. The exercise of the options will
dilute the voting interest of the owners of presently outstanding shares of the
Company's Common Stock and may adversely affect the ability of the Company to
obtain additional capital in the future. The sale of the shares of Common Stock
issuable upon the exercise of the options could adversely affect the market
price of the Company's stock.
<PAGE>
In addition, in connection with the sale of the Company's Series D
Preferred Stock, the Company issued Series A and Series B Warrants which
collectively allow for the purchase of 1,100,000 shares of the Company's common
stock. See "Comparative Share Data".
The issuance of common stock upon the exercise of the Series A or
Series B Warrants, as well as future sales of such common stock or of shares of
common stock held by existing stockholders, or the perception that such sales
could occur, could adversely affect the market price of the Company's common
stock.
Competition in the Research, Development and Commercialization of Products Which
May be Used in the Prevention or Treatment of Cancer and AIDS is Intense.
Major pharmaceutical and chemical companies, as well as specialized
genetic engineering firms, are developing products for these diseases. Many of
these companies have substantial financial, research and development, and
marketing resources and are capable of providing significant long-term
competition either by establishing in-house research groups or by forming
collaborative ventures with other entities. In addition, both smaller companies
and non-profit institutions are active in research relating to cancer and AIDS
and are expected to become more active in the future.
The Market Price for the Company's Common Stock is Volatile.
The market price of the Company's common stock, as well as the
securities of other biopharmaceutical and biotechnology companies, have
historically been highly volatile, and the market has from time to time
experienced significant price and volume fluctuations that are unrelated to the
operating performance of particular companies. Factors such as fluctuations in
the Company's operating results, announcements of technological innovations or
new therapeutic products by the Company or its competitors, governmental
regulation, developments in patent or other proprietary rights, public concern
as to the safety of products developed by the Company or other biotechnology and
pharmaceutical companies, and general market conditions may have a significant
effect on the market price of the Company's Common Stock.
DILUTION AND COMPARATIVE SHARE DATA
As of September 15, 1999, the Company had 16,985,294 shares of its
common stock outstanding with a net tangible book value (total assets less total
liabilities and intangible assets) of approximately $0.40 per share.
"Net tangible book value per share" is the amount that results from
subtracting the total liabilities and intangible assets of the Company from its
total assets and dividing such amount by the shares of common stock then
outstanding.
The net tangible book value of a share of the Company's common stock is
substantially less than the price which investors will pay for the shares
offered by this Prospectus. The difference between the price paid by persons who
purchase the Securities offered by this Prospectus and the net tangible book
value of the Company's common stock is the dilution attributable to each share
of common stock.
<PAGE>
The following table reflects the additional shares which may be issued
as a result of the exercise of outstanding options and warrants or the
conversion of other securities issued by the Company. By means of separate
registration statements filed with the Securities and Exchange Commission, the
shares of common stock referenced in Notes A through D are being offered for
public sale. The shares of common stock issuable upon the exercise of options
which are held by the Company's officers and directors, and which are referenced
in Note E, are being offered for sale by means of this prospectus. See "Selling
Shareholders".
Number of Note
Shares Reference
Shares outstanding as of September 15,1999(1) 16,985,294
Net tangible book value per share as of
September 15, 1999 (unaudited) $0.40
Shares issuable upon exercise of 1,100,000 A
Series A and Series B Warrants
Shares issuable upon exercise of 50,000 B
Sales Agent Warrants
Shares issuable upon exercise 285,500 C
of options granted to financial consultants
Shares issuable upon exercise of warrants
held by former holders of the
Company's Series B Preferred Stock. 82,250 D
Shares issuable upon exercise of
options and warrants granted to Company's
officers, directors, employees, consultants,
and third parties 2,946,084 E
A. In December 1997, the Company sold 10,000 shares of its Series D Preferred
Stock, 550,000 Series A Warrants and 550,000 Series B Warrants, to ten
institutional investors for $10,000,000. Each Series A Warrant allows the
holder to purchase one share of the Company's common stock for $8.62 at any
time prior to December 22, 2001. Each Series B Warrant allows the holder to
purchase one share of the Company's Common Stock for $9.31 at any time prior
to December 22, 2001. As of September 15, 1999, all Series D Preferred
Shares had been converted into 5,201,462 shares of the Company's common
stock.
<PAGE>
B. In connection with the Company's December l997 sale of Series D Preferred
Shares and Warrants Shoreline Pacific Institutional Finance, the Sales Agent
for such offering, received a commission plus warrants to purchase 50,000
shares of the Company's Common Stock (the "Sales Agent Warrants"). The Sales
Agent Warrants are exercisable at a price of $8.62 per share at any time
prior to December 22, 2001.
C. The Company has granted options for the purchase of an additional 285,500
shares of common stock to certain investor relations consultants in
consideration for services provided to the Company. The options are
exercisable at prices ranging between $2.50 and $7.31 per share and expire
between September 1999 and February 2004.
D. These warrants allow the holders to purchase up to 82,250 shares of the
Company's common stock for $4.25 per share at any time prior to December 15,
1999.
E. The options are exercisable at prices ranging from $1.94 to $11.00 per
share. The Company may also grant options to purchase additional shares
under its Incentive Stock Option and Non-Qualified Stock Option Plans.
USE OF PROCEEDS
All of the shares offered by this Prospectus are being offered by
certain owners of the Company's Common Stock (the Selling Shareholders) and were
issued by the Company in connection with the Company's employee stock bonus or
stock option plans. None of the proceeds from this offering will be received by
the Company. Expenses expected to be incurred by the Company in connection with
this offering are estimated to be approximately $10,000. The Selling
Shareholders have agreed to pay all commissions and other compensation to any
securities broker/dealers through whom they sell any of the Shares.
SELLING SHAREHOLDERS
The Company has issued (or may in the future issue) shares of its
common stock to various persons pursuant to certain employee incentive plans
adopted by the Company. The employee incentive plans provide for the grant, to
selected employees of the Company and other persons, of either stock bonuses or
options to purchase shares of the Company's Common Stock. Persons who received
Shares pursuant to the Plans and who are offering such Shares to the public by
means of this Prospectus are referred to as the "Selling Shareholders".
The Company has adopted a number of Stock Option Plans as well as a
Stock Bonus Plan. A summary description of these Plans follows. In some cases
these Plans are collectively referred to as the "Plans".
Incentive Stock Option Plans. The Company has Incentive Stock Option
Plans which collectively authorize the issuance of up to 1,100,000 shares of the
Company's Common Stock to persons that exercise options granted pursuant to the
Plan. Only Company employees may be granted options pursuant to the Incentive
Stock Option Plan.
<PAGE>
Non-Qualified Stock Option Plans. The Company has Non-Qualified Stock
Option Plans which collectively authorize the issuance of up to 2,760,000 shares
of the Company's Common Stock to persons that exercise options granted pursuant
to the Plans. The Company's employees, directors, officers, consultants and
advisors are eligible to be granted options pursuant to the Plans, provided
however that bona fide services must be rendered by such consultants or advisors
and such services must not be in connection with the offer or sale of securities
in a capital-raising transaction. The option exercise price is determined by the
Committee but cannot be less than the market price of the Company's Common Stock
on the date the option is granted.
Stock Bonus Plans. The Company has Stock Bonus Plans which collectively
allow for the issuance of up to 340,000 shares of Common Stock. Such shares may
consist, in whole or in part, of authorized but unissued shares, or treasury
shares. Under the Stock Bonus Plan, the Company's employees, directors,
officers, consultants and advisors are eligible to receive a grant of the
Company's shares, provided however that bona fide services must be rendered by
consultants or advisors and such services must not be in connection with the
offer or sale of securities in a capital-raising transaction.
Summary. The following sets forth certain information, as of September
15, 1999, concerning the stock options and stock bonuses granted by the Company.
Each option represents the right to purchase one share of the Company's Common
Stock.
Total Shares Shares Reserved Shares issued Remaining
Reserved for Outstanding as Stock Options/Shares
Name of Plan Under Plan Options Bonus Under Plans
Incentive Stock
Option Plans 1,100,000 916,384 N/A 165,449
Non-Qualified
Stock Option Plans 2,760,000 2,166,384 N/A 235,276
Stock Bonus Plans 340,000 N/A 251,811 88,189
TOTAL:
The following table summarizes the options granted to the Company's
officers, directors, employees and consultants pursuant to the Plans as of
September 15, 1999. Certain options were granted in accordance with the
Company's Salary Reduction Plan. Pursuant to the Salary Reduction Plan, any
employee of the Company was allowed to receive options (exercisable at market
price at time of grant) in exchange for a reduction in such employee's salary.
<PAGE>
Name of
Option Holder Shares Subject to Options (1)
------------- -----------------------------
Maximilian de Clara 718,666
Geert R. Kersten 1,120,750
Patricia B. Prichep 229,500
M. Douglas Winship 94,500
Eyal Talor, Ph.D 130,500
Prem Sarin, Ph.D 149,500
Daniel Zimmerman, Ph.D 130,000
Michael Lueke 100,000
Employees and consultants to Company 717,667
(1) The options issued to the Company's officers and directors are exercisable
at prices ranging from $1.94 to $5.60 per share. The other options issued to
certain employees of and consultants to the Company are exercisable at prices
ranging from $1.94 to $11.00 per share.
Shares issuable upon the exercise of options granted to the Company's
officers and directors pursuant to the Plans, as well as shares issued pursuant
to the Stock Bonus Plan, are being offered by means of this Prospectus. The
following table provides certain information concerning the shareholdings of the
Company's officers and directors and the shares offered by means of this
Prospectus.
Number of Shares
Number of Number of Shares to be Beneficial-
Name of Shares Being Offered ly Owned on Com- Percent
Selling Beneficially Bonus Option pletion of the of
Shareholder Owned Shares(2) Shares(2) Offering Class
Maximilian de Clara -- 200,000 718,666 -- --
Geert R. Kersten 108,449 (1) -- 1,120,750 108,449 *
Patricia B. Prichep 3,030 -- 229,500 3,030 *
M. Douglas Winship 2,598 -- 94,500 2,598 *
Eyal Talor, Ph.D 4,290 -- 130,500 4,290 *
Prem Sarin, Ph.D 2,538 -- 149,500 2,538 *
Daniel Zimmerman, Ph.D 21,383 -- 130,000 21,383 *
Michael Lueke -- -- 100,000 -- *
* Less than 1%.
(1) Includes shares held in trusts for the benefit of Mr. Kersten's children.
(2) Represents shares issued or issuable upon exercise of stock options.
Mr. de Clara and Mr. Kersten are officers and directors of the
Company. The other persons in the foregoin tables are officers of the
Company.
<PAGE>
Each Selling Shareholder has represented that the Shares were purchased
for investment and with no present intention of distributing or reselling such
Shares. However, in recognition of the fact that holders of restricted
securities may wish to be legally permitted to sell their Shares when they deem
appropriate, the Company has filed with the Commission under the Securities Act
of 1933 a Form S-8 registration statement of which this Prospectus forms a part
with respect to the resale of the Shares from time to time in the
over-the-counter market or in privately negotiated transactions.
Certain of the Selling Shareholders, their associates and affiliates
may from time to time be employees of, customers of, engage in transactions
with, and/or perform services for the Company or its subsidiaries in the
ordinary course of business.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares offered by this Prospectus
from time to time in negotiated transactions in the over-the-counter market at
fixed prices which may be changed from time to time, at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Shareholders may effect such transactions by
selling the Shares to or through broker/dealers, and such broker/dealers may
receive compensation in the form of discounts, concessions, or commissions from
the Selling Shareholders and/or the purchasers of the Shares for which such
broker/dealers may act as agent or to whom they may sell, as principal, or both
(which compensation as to a particular broker/dealer may be in excess of
customary compensation).
The Selling Shareholders and any broker/dealers who act in connection
with the sale of the Shares hereunder may be deemed to be "underwriters" within
the meaning of ss.2(11) of the Securities Acts of 1933, and any commissions
received by them and profit on any resale of the Shares as principal might be
deemed to be underwriting discounts and commissions under the Securities Act.
The Company has agreed to indemnify the Selling Shareholders and any securities
broker/dealers who may be deemed to be underwriters against certain liabilities,
including liabilities under the Securities Act as underwriters or otherwise.
The Company has advised the Selling Shareholders that they and any
securities broker/dealers or others who may be deemed to be statutory
underwriters will be subject to the Prospectus delivery requirements under the
Securities Act of 1933. The Company has also advised each Selling Shareholder
that in the event of a "distribution" of the shares owned by the Selling
Shareholder, such Selling Shareholder, any "affiliated purchasers", and any
broker/ dealer or other person who participates in such distribution may be
subject to Rule 102 under the Securities Exchange Act of 1934 ("1934 Act") until
their participation in that distribution is completed. A "distribution" is
defined in Rule 102 as an offering of securities "that is distinguished from
ordinary trading transactions by the magnitude of the offering and the presence
of special selling efforts and selling methods". The Company has also advised
the Selling Shareholders that Rule 101 under the 1934 Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of pegging, fixing
or stabilizing the price of the Common Stock in connection with this offering.
<PAGE>
DESCRIPTION OF COMMON STOCK
The shares of Common Stock offered by this Prospectus are fully paid
and non-assessable. Holders of the Common Stock do not have preemptive rights.
Each stockholder is entitled to one vote for each share of Common stock held of
record by such stockholder. There is no right to cumulate votes for election of
directors. Upon liquidation of the Company, the assets then legally available
for distribution to holders of the Common Stock will be distributed ratably
among such shareholders in proportion to their stock holdings. Holders of Common
Stock are entitled to dividends when, as and if declared by the Board of
Directors out of funds legally available therefor.
GENERAL
The Company's Bylaws provide that the Company will indemnify its
directors and officers against expense and liabilities they incur to defend,
settle or satisfy any civil or criminal action brought against them as a result
of their being or having been Company directors or officers unless, in any such
action, they have acted with gross negligence or willful misconduct. Officers
and Directors are not entitled to be indemnified for claims or losses resulting
from a breach of their duty of loyalty to the Company, for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law or a transaction from which the director derived an improper personal
benefit. Insofar as indemnification for liabilities arising under the Securities
Act of l933 may be permitted to the Company's directors and officers, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of l933, and is, therefore, unenforceable.
No dealer, salesman, or any other person has been authorized to give
any information or to make any representations other than those contained in
this prospectus in connection with this offering and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or the selling shareholders. This prospectus does not constitute
an offer to sell, or a solicitation of any offer to buy, the securities offered
in any jurisdiction to any person to whom it is unlawful to make an offer or
solicitation. Neither the delivery of this prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the affairs of the Company since the date hereof or that
any information contained herein is correct as to any time subsequent to its
date.
All dealers effecting transactions in the registered securities,
whether or not participating in this distribution, may be required to deliver a
prospectus. This is an addition to the obligation of dealers to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
