As filed with the Securities and Exchange Commission on March 31, 2000.
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
ADVANCED VIRAL RESEARCH CORP.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 5129 59-2646820
-------- ---- ----------
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial IRS Employer
incorporation or organization) Classification Code Number) Identification Number
</TABLE>
200 Corporate Boulevard South, Yonkers, New York 10701 (914) 376-7383
-------------------------------------------------------------------------
(Address and telephone number of Registrant's principal executive offices)
Shalom Z. Hirschman, M.D., President
200 Corporate Boulevard South, Yonkers, New York 10701 (914) 376-7383
----------------------------------------------------------------------
(Name, address and telephone number of agent for service)
---------------------
Copies to:
CHARLES J. RENNERT
Berman Wolfe Rennert Vogel & Mandler, P.A.
NationsBank Tower, Suite 3500, 100 Southeast Second Street
Miami, Florida 33131-2130
Phone: (305) 577-4177 Fax: (305) 373-6036
---------------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effectiveness of this registration
statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
---------------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Title of each class of Amount to offering price per aggregate offering Amount of
securities to be registered be registered share price registration fee
--------------------------- ------------- ----- ----- ----------------
<S> <C> <C> <C> <C>
Common stock par 200,000,000 $0.715 (1) $143,000,000 $37,752.00
value $0.00001 per share
Total Fee $37,752.00
</TABLE>
- ---------------
(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the closing bid and ask prices of the common stock
on March 27, 2000, as reported on the OTC Electronic Bulletin Board.
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, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
================================================================================
<PAGE>
Subject to Completion
Preliminary Prospectus dated __________, 2000.
200,000,000 SHARES
ADVANCED VIRAL RESEARCH CORP.
COMMON STOCK
Advanced Viral Research Corp. ("ADVR") may offer from time to time in
one or more offerings an aggregate of up to 200,000,000 shares of our common
stock. We may offer the common stock in separate series in amounts, at prices
and on terms to be set forth in one or more supplements to this prospectus
(each, a "prospectus supplement"). When we decide to issue common stock, we will
provide you with the specific terms and the public offering price of the common
stock in prospectus supplements. You should read this prospectus and the
prospectus supplements carefully before you invest. This prospectus may not be
used to offer or sell the common stock unless accompanied by a prospectus
supplement.
Our common stock is traded on the National Association of Securities
Dealers, Inc.'s OTC Bulletin Board under the symbol "ADVR." On March 27, 2000
the high and low bid prices for our common stock on the Bulletin Board were
$0.76 and $0.65, respectively.
See "Risk Factors" on page 2 to read about factors you should consider
before buying shares of the common stock.
--------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
--------------------
The date of this prospectus is ________, 2000.
The information in this preliminary prospectus is not complete and may
be changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
Page
-----
About this Prospectus....................................... 1
The Company................................................. 2
Risk Factors................................................ 2
Use of Proceeds............................................. 5
Plan of Distribution........................................ 5
Description of Common Stock................................. 6
Incorporation of Certain Documents by Reference............. 7
Where to Find More Information.............................. 8
Legal Matters............................................... 8
Experts..................................................... 8
i
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under this shelf process, we may from time to time sell any number of the shares
of common stock described in this prospectus in one or more offerings up to a
total of 200,000,000 shares.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional information described
below under the heading "Where To Find More Information."
The registration statement that contains this prospectus, including the
exhibits to the registration statement and the information incorporated by
reference, contains additional information about the securities offered under
this prospectus. That registration statement can be read at the Securities and
Exchange Commission, or SEC, web site or at the SEC offices mentioned below
under the heading "Where To Find More Information."
You should rely only on the information provided in this prospectus and
in any prospectus supplement, including the information incorporated by
reference. We have not authorized anyone to provide you with different
information. You should not assume that the information in this prospectus, or
any supplement to this prospectus, is accurate at any date other than the date
indicated on the cover page of these documents.
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
This prospectus includes forward-looking statements. We have based
these forward-looking statements on our current expectations and projections
about future events. Words such as "expects," "may," "will," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," and similar expressions
identify forward-looking statements. These forward-looking statements are
subject to important factors, disclosed in this prospectus, that could cause
actual results to differ materially from such expectations, including those
factors discussed in "Risk Factors."
We will not publicly update or revise any forward-looking statements,
whether because of new information, future events or otherwise. In light of
these risks, uncertainties, and assumptions, the forward-looking events
discussed in the prospectus might not occur.
<PAGE>
THE COMPANY
Advanced Viral Research Corp. ("ADVR") was formed in July 1985 to
engage in the production and marketing, promotion and sale of a pharmaceutical
drug with the trade name "Reticulose." Under the Federal Food, Drug, and
Cosmetic Act, as amended in 1962, the Food and Drug Administration, or FDA,
classified Reticulose as a "new drug" requiring FDA approval prior to any sale
in the United States. Reticulose (the current formulation of which is now known
as and hereinafter referred to as "Product R") has not been approved for sale or
use by the FDA or any foreign government body, and thus we have not as yet
commenced any commercial operations. We are dependent on registration and/or
approval by applicable regulatory authorities of Product R in order to commence
commercial operations.
Our operations over the last five years have been limited principally
to engaging in research, in vitro testing and analysis of Product R in the
United States, and engaging others to perform testing and analysis of Product R
on human patients overseas. The FDA has not approved human clinical trials for
Product R in the United States. We may be required, in the absence of grants or
other subsidies, to bear the expenses of the first phase of human clinical
trials to the extent the FDA permits human clinical trials to occur. We do not
know what the actual cost of such trials would be. If we need additional
financing to fund such human clinical trials, it may not be available to us,
which may force us to reduce our operations.
Our principal executive offices are located at 200 Corporate Boulevard
South, Yonkers, New York 10701, and our telephone number is (914) 376-7383. For
further information about the business and operations of ADVR, reference is made
to ADVR's reports incorporated herein by reference. See "Incorporation of
Certain Information by Reference" below.
RISK FACTORS
Our securities are highly speculative. You shouldn't purchase them
unless you can afford to lose your entire investment. You should consider very
carefully the following risk factors before you decide to purchase our
securities.
1. Because our shares are 'penny stocks,' you may be unable to resell them in
the secondary market.
A "penny stock" is an equity security with a market price of less than
$5 per share which is not listed on the Nasdaq or a national securities
exchange. Due to the extra risks involved in an investment in penny stocks,
federal securities laws and regulations require broker/dealers who recommend
penny stocks to persons other than their established customers and accredited
investors to make a special written suitability determination for the purchaser,
provide them with a disclosure schedule explaining the penny stock market and
its risks, and receive the purchaser's written agreement to the transaction
prior to the sale. These requirements limit the ability of broker/dealers to
sell penny stocks. Also, because of the extra requirements, many broker/dealers
are unwilling to sell penny stocks at all. As a result, you maybe unable to
resell the stock you buy in this offering and could lose your entire investment.
2. The exercise or conversion of our outstanding convertible securities could
have a significant negative impact on the market price of our common stock.
As of the date of this prospectus, in addition to the 343,368,290
shares of our common stock currently outstanding, the following securities are
outstanding:
2
<PAGE>
o Stock options to purchase an aggregate of 28,696,114 shares of common
stock at exercise prices ranging from $0.15 to $0.36
o Warrants to purchase an aggregate of 14,247,896 shares of common stock
at prices ranging from $0.199 to $0.864
o Convertible debentures currently estimated to be convertible into an
aggregate of approximately 29,138 shares based on the average bid and
ask price of our common stock on March 27, 2000, which was $0.715.
If all the options, warrants, and convertible debentures were fully
exercised and converted, as the case may be, there would be outstanding an
additional 42,973,148 shares of common stock. The sale or availability for sale
of this number of shares of common stock in the public market could depress the
market price of the common stock. Additionally, the sale or availability for
sale of this number of shares may lessen the likelihood that additional equity
financing will be available to us, on favorable or unfavorable terms.
3. It is unlikely that our company will be able to continue as a going concern
without a significant improvement in our financial condition, which has
constrained our ability to finance necessary research, development and
other operating expenses as needed.
Our independent certified public accountants' report on our
consolidated financial statements for the fiscal year ended December 31, 1999
includes an explanatory paragraph regarding our ability to continue as a going
concern. During the next 12 months we expect to spend approximately $9,000,000
($4,000,000 of which was raised during the first quarter of fiscal 2000) to
conduct research and development related activities, including approximately
$2,250,000 for the preparation of the IND for submission to the FDA. We
currently are unable to calculate the amount we will require in additional
funding to complete the FDA approval process, including conducting clinical
trials and filing the NDA application. Our ability to continue operations is
dependent upon our continued sale of our securities for funds to meet our cash
requirements, and as a result our ability to continue as a going concern is
doubtful.
Unless we are able to generate sufficient revenue or raise additional
funds when needed, it is likely that we will be unable to continue our planned
activities, even if we are making progress with our research and development
projects. The longer the duration of the regulatory approval process, the more
unlikely it is that we will be able to raise such funds on favorable terms or at
all, or that any funds raised will be sufficient to complete the FDA approval
process to achieve our goal of commercial distribution in the United States and
elsewhere. Furthermore, there is no guarantee that approval of Product R by the
FDA or any other regulatory authority, or additional financing from the sale of
our securities, will translate into any material change in our financial
condition. The extensive delays and costs of complying with the FDA regulations
makes it unlikely that we will have adequate funds to finance the necessary
clinical studies and related costs.
4. If we do not obtain the FDA's approval to conduct clinical tests of Product
R in the United States, we will not be able to complete its development and
may not be able to sell it anywhere.
Product R is the only product we are developing, We will not be able to
sell it in the United States unless we submit, and the FDA approves, a new drug
application, known as an
3
<PAGE>
"NDA." We must conduct clinical trials of Product R in humans before we submit
an NDA. However, we cannot begin clinical trials in the United States until the
FDA approves our notice of claimed investigational exemption for a new drug, or
"IND." We have not yet submitted an IND for Product R and we don't know if or
when we will submit one. The FDA will not approve our IND if we haven't
satisfied regulatory protocols and other preapproval requirements required for
the introduction of a new or unapproved drug.
If we submit an IND and the FDA approves it, we won't be able to begin
clinical testing unless we are able to obtain the additional financing we need
in order to conduct the trials. It is also possible that clinical trials, if
conducted, will not prove that Product R is safe or effective in treating
viruses of any kind, in which case we won't be able to submit an NDA and we
won't be able to sell Product R in the United States.
We haven't been able to sell Product R outside the United States
because we don't have a free sales certificate for Product R. A free sales
certificate is a document issued by the country in which a pharmaceutical
product is manufactured, certifying that the country permits the "free sale" of
the product in that country. The Bahamas, where our manufacturing facility is
located, has no procedure in place to issue a free sales certificate for any
therapeutic drug, including Product R. Most countries require that a
pharmaceutical product be at least registered and certified for free sale in the
country in which it is manufactured before allowing the registration of the
product in that country. Because we are unable to obtain a certificate from the
Bahamas, we are not able to meet registration requirements in the countries
which require the certificate, and will be unable to sell Product R in those
countries.
5. We have incurred losses since our inception, have no product revenue, and
expect to incur additional losses in the future.
Although we were formed in 1985, we are still in the development stage.
From inception through December 31, 1999, we had an accumulated deficit of
approximately $19,700,000. We expect that our deficit will continue to increase.
The only product revenues we have ever had are insignificant amounts related to
our distribution of Product R for testing purposes. We do not currently have any
source of product revenue. At this time we have no basis to believe that we will
ever generate operating revenues from the sale of Product R.
6. We depend on patents and proprietary rights, which may offer only
limited protection against potential infringement. If we are unable to
protect our patents and proprietary rights, our business, financial
condition and results of operations will be harmed.
Patent protection and trade secret protection are important to our
business and that our future will depend, in part, on our ability to maintain
trade secret protection, obtain patents and operate without infringing the
proprietary rights of others both in the United States and abroad. Litigation or
other legal proceedings may be necessary to defend against claims of
infringement, to enforce our patents, or to protect our trade secrets, and could
result in substantial cost to us and diversion of our efforts. We have currently
pending 15 patent applications with the United States Patent and Trademark
Office (the "PTO") relating to Product R and 17 foreign patent applications. In
the United States, ADVR has one patent allowed and three have been issued by the
PTO.
We also rely on trade secrets, know-how and continuing technological
advancements to protect our proprietary technology. We require all of our
employees, consultants, advisors and collaborators to enter into confidentiality
agreements that prohibit the use or disclosure of information that is deemed
confidential. The agreements also oblige our employees, consultants, advisors
and collaborators to assign to us developments, discoveries and inventions made
by such persons in connection with their work with us. However, these parties
may not honor these agreements and we may not be able to successfully protect
our rights to unpatented trade secrets and know-how. Others may independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to our trade secrets and know-how.
To facilitate development of our proprietary technology base, we may
need to obtain licenses to patents or other proprietary rights from other
parties. If we are unable to obtain such licenses, our product development
efforts may be delayed.
We may collaborate with universities and governmental research
organizations which, as a result, may acquire certain rights to any inventions
or technical information derived from such collaboration.
We may incur substantial costs in asserting any patent rights and in
defending suits against us related to intellectual property rights. Such
disputes could substantially delay our product development or commercialization
activities. The United States Patent and Trademark Office or a private party
could institute an interference proceeding relating to our patents or patent
applications. An opposition or revocation proceeding could be instituted in the
patent offices of foreign jurisdictions. An adverse decision in any such
proceeding could result in the loss of our rights to a patent or invention.
7. Our business could be harmed if we lose the services of the key personnel
upon whom we depend.
Advanced Viral is currently wholly dependent upon the personal efforts
and abilities of our three full-time executive officers, only one of whom,
Bernard Friedland, Chairman of the Board, has any experience in the
pharmaceutical industry. The loss or unavailability to us of the services of
Bernard Friedland or Dr. Hirschman, President and Chief Executive Officer, could
have a material negative impact on our business prospects and any potential
earning capacity, and, therefore, we have obtained "key-man" insurance on the
lives of Mr. Friedland and Dr. Hirschman in the amounts of $400,000 and
$1,000,000, respectively. If our level of operations significantly increase, the
business may depend upon our abilities to attract and hire additional management
and staff employees. It is possible that we will be unable to secure such
additional management and staff when necessary.
4
<PAGE>
8. The voting control held by present management could significantly impact
our business.
As of the date of this prospectus, our current officers and directors
beneficially owned 91,052,133 shares of our common stock, or approximately 25.3%
of the shares of common stock deemed outstanding on such date for the purposes
of the percentage calculation, including certain shares underlying options held
by Dr. Hirschman. As there are no cumulative voting rights, current management,
by virtue of their stock ownership, can be expected to influence substantially
the election of our board of directors and thereby continue to impact
substantially our business, affairs and policies.
USE OF PROCEEDS
We will use the net proceeds received from the sale of the securities
for the preparation of the IND for Product R, the continuation of clinical
trials in Argentina, ongoing research activities, and general corporate
purposes, which may include capital equipment expenditures, at the discretion of
management.
The amounts and timing of our actual expenditures for each purpose may
vary significantly depending upon numerous factors, including the status of our
product development efforts, regulatory approvals, competition, marketing and
distribution activities. Pending such uses, we intend to invest the net proceeds
of this offering in short-term, investment grade, interest-bearing securities.
PLAN OF DISTRIBUTION
We may sell the securities being offered by this prospectus:
o through agents;
o to or through underwriters;
o through dealers;
o through a block trade in which the broker or dealer engaged
to handle the block trade will attempt to sell the
securities as agent, but may position and resell a portion
of the block as principal to facilitate the transaction;
o directly to purchasers, through a specific bidding, auction
or other process; or
o through a combination of any of these methods of sale.
We may effect the distribution of the securities from time to time in
one or more transactions at a fixed price or prices, which may be changed from
time to time:
o market prices prevailing at the times of sale;
o at prices related to such prevailing market prices; or
o at negotiated prices.
We will describe the method of distribution of the securities in the
prospectus supplement.
Agents designated by us from time to time may solicit offers to
purchase the securities. We will name any agent involved in the offer or sale of
the securities and set forth any
5
<PAGE>
commissions payable by us to an agent in the prospectus supplement. Unless
otherwise indicated in the prospectus supplement, any agent will be acting on a
best efforts basis for the period of its appointment. Any agent may be deemed to
be an "underwriter" of the securities as that term is defined in the Securities
Act.
If we use an underwriter or underwriters in the sale of securities, we
will execute an underwriting agreement with the underwriter or underwriters at
the time we reach an agreement for sale. We will set forth in the prospectus
supplement the names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers. This compensation may be in the
form of discounts, concessions or commissions. Underwriters and others
participating in any offering of securities may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities. We will
describe any of these activities in the prospectus supplement.
If a dealer is used in the sale of the securities, we or an underwriter
will sell securities to the dealer, as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the
time of resale. The prospectus supplement will set forth the name of the dealer
and the terms of the transactions.
We may directly solicit offers to purchase the securities, and we may
sell directly to institutional investors or others. These persons may be deemed
to be underwriters within the meaning of the Securities Act with respect to any
resale of the securities. The prospectus supplement will describe the terms of
any direct sales, including the terms of any bidding or auction process.
Agreements we enter into with agents, underwriters and dealers may
entitle them to indemnification by us against specified liabilities, including
liabilities under the Securities Act, or to contribution by us to payments they
may be required to make in respect of these liabilities. The prospectus
supplement will describe the terms and conditions of indemnification or
contribution.
No securities may be sold under this prospectus without delivery, in
paper format, in electronic format on the internet, or both, of the applicable
prospectus supplement describing the method and terms of the offering.
DESCRIPTION OF COMMON STOCK
As of the date of this prospectus, our Certificate of Incorporation
authorize us to issue 1,000,000,000 shares of common stock, par value $0.00001
per share. As of March 27, 2000, there were outstanding 343,368,290 shares of
common stock, all of which are fully paid for and non-assessable. The holders of
common stock:
o have equal ratable rights to dividends from funds legally
available therefore, when, as and if declared by our board of
directors;
o entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs;
o do not have preemptive, subscription, or conversion rights and
there are no redemption or sinking fund provisions applicable
thereto; and
6
<PAGE>
o are entitled to one noncumulative vote per share on all matters
which stockholders may vote on at all meetings of stockholders.
American Stock Transfer & Trust Company is our transfer agent and
registrar, and is located in Brooklyn, New York.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to part of this prospectus. These documents may include periodic
reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, as well as Proxy Statements. Any documents that we
subsequently file with the SEC will automatically update and replace the
information previously filed with the SEC. Thus, for example, in the case of a
conflict or inconsistency between information set forth in this prospectus and
information incorporated by reference into this prospectus, you should rely on
the information contained in the document that was filed later.
This prospectus incorporates by reference the documents listed below
that we previously have filed with the SEC and any additional documents that we
may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 between the date of this prospectus and the termination of
the offering of the securities. These documents contain important information
about us.
1. ADVR's Annual Report on Form 10-K for the year ended December
31, 1999 filed with the Commission on March 30, 2000, as
amended; and
2. All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since December 31, 1999, if any.
You can obtain a copy of any or all of the documents incorporated by
reference in this prospectus (other than an exhibit to a documents unless that
exhibit is specifically incorporated by reference into that document) from the
SEC on its web site at http://www.sec.gov. You also can obtain these documents
from us without charge by requesting them in writing, by email or by telephone
at the following address:
Alan V. Gallantar
Chief Financial Officer
Advanced Viral Research Corp.
200 Corporate Boulevard South,
Yonkers, New York 10701
(914) 376-7383
[email protected]
7
<PAGE>
WHERE TO FIND MORE INFORMATION
We have filed with the SEC a registration statement under the
Securities Act of 1933 that registers the distribution of the securities offered
under this prospectus. The registration statement, including the attached
exhibits and schedules and the information incorporated by reference, contains
additional relevant information about us and the securities. The rules and
regulations of the SEC allow us to omit from this prospectus certain information
included in the registration statement.
In addition, we file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy this
information and the registration statement at the following locations of the
SEC:
o Public Reference Room, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20459;
o Chicago Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and
o New York Regional Office, Seven World Trade Center, 13th Floor,
New York, New York 10048.
You may also read and copy this information at the SEC's Public
Reference Room, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20459, at
prescribed rates. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
In addition, the SEC maintains an Internet World Wide Web site that
contains reports, proxy statements and other information about issuers of
securities, like us, who file such material electronically with the SEC. The
address of that web site is http://www.sec.gov. You also can inspect such
reports, proxy statements and other information about us at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006. Our common stock is traded on OTC Bulletin Board under
the symbol "ADVR."
LEGAL MATTERS
The validity of the shares offered in this prospectus will be passed
upon for Advanced Viral by Berman Wolfe Rennert Vogel & Mandler, P.A.,
NationsBank Tower, 35th Floor, 100 Southeast Second Street, Miami, Florida
33131.
EXPERTS
The Consolidated Financial Statements of Advanced Viral Research Corp.
included in this prospectus and in the registration statement, except as they
pertain to periods unaudited, have been audited by Rachlin Cohen & Holtz LLP,
independent certified public accountants, for the periods indicated in their
report appearing elsewhere in this prospectus, and are included in this
prospectus in reliance upon the report of such firm given upon the authority of
such firm as experts in accounting and auditing.
8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated costs and expenses in
connection with the sale and distribution of the securities being registered,
all of which will be paid by ADVR.
SEC registration fee............................................$37,752
Printing and mailing expenses...................................$ 5,000
Legal fees and expenses.........................................$10,000
Accounting fees and expenses....................................$ 5,000
Miscellaneous expenses..........................................$ 5,000
Total..................................................$67,752
Item 15. Indemnification of Directors and Officers
Article Ninth of our Certificate of Incorporation contains the
following provision with respect to indemnification of directors and officers:
Ninth: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented, indemnify any and all persons
whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters
referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights
to which those indemnified may be entitled under any By-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person, who has
ceased to be director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
Section 145 of the General Corporate Law of the State of Delaware (the
"DGCL") contains provisions regarding indemnification, among others, of officers
and directors. Section 145 of the DGCL provides in relevant part:
(a) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection
with such action, suit or proceeding if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon
II-1
<PAGE>
a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in
a manner which the person reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that
the person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of
such action or suit if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a present or former director or officer
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made , with respect to a
person who is a director or officer at the time of such determination,
(1) by a majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such
directors, even though less than a quorum, or (3) if there are no such
directors, or if such directors so direct, by independent legal counsel
in a written opinion, or (4) by the stockholders.
Delaware law also permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer against
any liability asserted against him and incurred by him in such capacity or
arising out of his status as such, whether or not the corporation has the power
to indemnify him against that liability under Section 145 of the DGCL.
Our Certificate of Incorporation was amended on December 30, 1987, to
limit or eliminate director liability by incorporating new Article Eleven, which
provides:
II-2
<PAGE>
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of laws, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit.
The above discussion of our Certificate of Incorporation is not
intended to be exhaustive and is respectively qualified in its entirety by such
document.
Item 16. Exhibits
The exhibits listed on the Index to Exhibits of this Registration
Statement are filed herewith or are incorporated herein by reference to
other filings.
Item 17. 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 10(a)(3) of the
Securities Act;
(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.
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 Commission 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;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by the
Registrant pursuant to section 13 or section
II-3
<PAGE>
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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
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 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 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Yonkers, State of New York on March 30, 2000.
ADVANCED VIRAL RESEARCH CORP.
By: /s/ Shalom Z. Hirschman, M.D.
------------------------------
Shalom Z. Hirschman, M.D.
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: that each person whose signature
appears below constitutes and appoints Shalom Z. Hirschman, M.D., 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 and 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 attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Shalom Z. Hirschman, M.D. President and Chief March 30, 2000
- ------------------------------- Executive Officer and director
Shalom Z. Hirschman, M.D.
/s/ Bernard Friedland Chairman of the Board and March 30, 2000
- ------------------------------- director
Bernard Friedland
/s/ Alan V. Gallantar Chief Financial Officer March 30, 2000
- -------------------------------
Alan V. Gallantar
/s/ William Bregman Secretary-Treasurer, March 30, 2000
- ------------------------------- director
William Bregman
/s/ Louis J. Silver Director March 30, 2000
- ------------------------------
Louis J. Silver
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
5.1 Opinion and Consent of the law firm of Berman Wolfe Rennert Vogel & Mandler, P.A. (1)
23.1 Consent of Rachlin Cohen & Holtz LLP, Independent Certified Public Accountants.
23.2 Opinion and Consent of the law firm of Berman Wolfe Rennert Vogel & Mandler, P.A., included in
Exhibit 5.1
24.1 Powers of Attorney of certain directors of Advanced Viral Research Corp. (2)
</TABLE>
- -------------
(1) Filed herewith.
(2) Included herein with Signatures beginning on Page II-5.
Exhibit 5.1
BERMAN WOLFE RENNERT VOGEL & MANDLER, P.A.
ATTORNEYS AND COUNSELORS
NATIONSBANK TOWER AT INTERNATIONAL PLACE
100 SOUTHEAST SECOND STREET, SUITE 3500
MIAMI, FLORIDA 33131-2130
CHARLES J. RENNERT PHONE (305) 577-4177
FAX (305) 373-6036
March 30, 2000
Advanced Viral Research Corp.
1250 East Hallandale Beach Blvd., Suite 501
Hallandale, Florida 33009
Gentlemen:
Ladies and Gentlemen:
We have acted as counsel to Advanced Viral Research Corp., a Delaware
corporation ("Company") in connection with a Registration Statement on Form S-3
(the "Registration Statement"), relating to the proposed offer and sale by the
Company of up to 200,000,000 shares of the Company's common stock, $0.00001 par
value (the "Common Stock"). This opinion is furnished to you at your request to
enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, in
connection with the Registration Statement.
In connection with rendering the opinions set forth in this letter, we
have examined such corporate records of the Company, the Company's Certificate
of Incorporation and amendments thereto, its By-laws, and resolutions of the
Board of Directors, as well as made such investigation of matters of fact and
law and examined such other documents as we deem necessary for rendering the
opinions hereinafter expressed. We have also consulted with officers and
directors of the Company and have obtained such representations with respect to
the matters of fact as we have deemed necessary or advisable for purposes of
rendering the opinion hereinafter expressed.
The opinions set forth herein are subject to the following
qualifications, which are in addition to any other qualifications contained
herein:
A. We have assumed without verification the genuineness of all
signatures on all documents, the legal capacity and authority of the parties
(other than the Company) executing such documents, the accuracy and completeness
of all documents submitted to us, the authenticity of all documents submitted to
us as originals, and the conformity to original documents of all documents
submitted to us as copies (including telecopies).
B. The opinions set forth herein are based on existing laws,
ordinances, rules, regulations, court and administrative decisions as they
presently have been interpreted and we can give no assurances that our opinions
would not be different after any change in any of the foregoing occurring after
the date hereof.
<PAGE>
C. We have assumed without verification that, with respect to the
minutes of any meetings of the Board of Directors or any committees thereof of
the Company that we have examined, due notice of the meetings was given or duly
waived, the minutes accurately and completely reflect all actions taken at the
meetings and a quorum was present and acting throughout the meetings. We have
not independently verified the factual statements made to us in connection
therewith, nor the veracity of such representations.
D. We have assumed without verification the accuracy, completeness, and
authenticity of all corporate records made available to us by the Company and
statements of fact on which we are relying.
E. We express no opinion as to the effect or application of any laws or
regulations other than the internal laws of the State of Delaware and the
federal laws of the United States. As to matters governed by the laws specified
in the foregoing sentence, we have relied exclusively on the latest standard
compilations of such statutes and laws as reproduced in commonly accepted
unofficial publications available to us.
Based on the foregoing, and upon the assumption that there will be no
material changes in the documents we have examined and the matters investigated
referred to above, we are of the opinion that the 200,000,000 shares of Common
Stock included in the Registration Statement have been duly authorized and (i)
when the Registration Statement has become effective under the Securities Act of
1933, as amended (the "Securities Act") and (ii) when issued in exchange for
legal consideration of not less than $0.00001 per share, will be validly issued,
fully paid, and nonassessable.
This letter does not address any matters other than those expressly
addressed herein. This letter is given for your sole benefit and use. No one
else is entitled to rely hereupon. This letter speaks only as of the date
hereof. We undertake no responsibility to update or supplement it after such
date.
We hereby consent to your filing of this opinion as Exhibit 5 to the
Registration Statement and to reference to our firm under Legal Matters thereof.
By giving such consent we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act, or
the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ BERMAN WOLFE RENNERT VOGEL & MANDLER, P.A.
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement on Form S-3 and related Prospectus of Advanced Viral
Research Corp. for the registration of 200,000,000 shares of its common stock
and to the incorporation by reference therein of our report dated January 26,
2000 (which report contains an explanatory paragraph that describes a condition
that raises substantial doubt as to the ability of Advanced Viral Research Corp.
to continue as a going concern), with respect to the consolidated financial
statements of Advanced Viral Research Corp. included in its Annual Report (Form
10-K) for the year ended December 31, 1999, filed with the Securities and
Exchange Commission.
/s/ RACHLIN COHEN & HOLTZ LLP
-----------------------------
RACHLIN COHEN & HOLTZ LLP
Miami, Florida
March 31, 2000
