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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 7, 2000
REGISTRATION NO. 333-92855
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEOTHERAPEUTICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 93-0979187
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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157 TECHNOLOGY DRIVE, IRVINE, CALIFORNIA 92618
(949) 788-6700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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ALVIN J. GLASKY, PH.D., PRESIDENT AND CHIEF EXECUTIVE OFFICER
157 TECHNOLOGY DRIVE
IRVINE, CALIFORNIA 92618
(949) 788-6700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE OF AGENT FOR SERVICE)
--------------
COPIES TO:
C. CRAIG CARLSON, ESQ.
ROBERT E. RICH, ESQ.
STRADLING YOCCA CARLSON & RAUTH,
A PROFESSIONAL CORPORATION
660 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
(949) 725-4000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date 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, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate offering Amount of
to be registered registered(1) per share pricE registration fee
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<S> <C> <C> <C> <C>
common stock, $.001 par value 845,594 shares $ 11.03(3) $ 9,326,901.82 $2,462.30
- ---------------------------------------------------------------------------------------------------------------------
common stock issuable upon
exercise of closing warrants 126,839 $14.235(4) $ 1,805,553.17 $ 476.67
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common stock issuable upon
exercise of adjustable warrants 813,666(2) $ .001(4) $ 813.67 $ 0.22
- ---------------------------------------------------------------------------------------------------------------------
Total 1,786,099 $11,133,268.66 $2,939.19
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</TABLE>
(1) In the event of a stock split, stock dividend, or similar transaction
involving the Company's common stock, in order to prevent dilution, the
number of shares registered shall automatically be increased to cover the
additional shares in accordance with Rule 416(a) under the Securities
Act.
(2) The number of shares registered hereby is based on a formula included in
the adjustable warrants and represents an estimate of the number of
shares of common stock that would be issuable upon exercise of the
adjustable warrants assuming the adjustment price pursuant to the formula
was $6.75, or 50% of the closing bid price of the Company's common stock
on November 18, 1999, the trading date immediately preceding the closing
date of a securities purchase agreement between the Registrant and the
holders of the adjustable warrants.
(3) The offering price is estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) using the average of the
high and low price reported by the Nasdaq National Market for the common
stock on December 10, 1999, which was approximately $11.03 per share.
(4) The exercise price of the warrants, used for the purpose of calculating
the amount of the registration fee in accordance with Rule 457(g) under
the Securities Act.
-----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
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UP TO 1,786,099 SHARES OF
NEOTHERAPEUTICS, INC.
COMMON STOCK
Our common stock is traded on the Nasdaq National Market under the
symbol "NEOT." On ____________, 2000, the closing price of our common stock was
$__________.
This prospectus relates to the sale of up to 1,786,099 shares of our
common stock by Montrose Investments Ltd. and Strong River Investments, Ltd. We
will not receive any of the proceeds from the sale of these shares.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of the prospectus. Any representation to the contrary is a
criminal offense.
-----------
The date of this prospectus is __________ ___, 2000.
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
About NeoTherapeutics, Inc...................................................2
Risk Factors.................................................................3
Forward-Looking Statements..................................................12
Issuance of Common Stock to Selling Stockholders............................12
Use of Proceeds.............................................................13
Selling Stockholders........................................................14
Plan of Distribution........................................................15
Legal Matters...............................................................16
Experts.....................................................................17
Limitation of Liability and Disclosure of Commission Position on
Indemnification For Securities Act Liabilities...........................17
Where You Can Find More Information.........................................17
</TABLE>
ABOUT NEOTHERAPEUTICS
We are a development-stage biopharmaceutical company engaged in the
discovery and development of novel therapeutic drugs intended to treat
neurological diseases and conditions, such as memory deficits associated with
Alzheimer's disease and dementia, spinal cord injury, stroke, Parkinson's
disease, migraine, depression and obesity. We develop compounds, including our
initial proposed product Neotrofin(TM) (AIT-082, leteprinim potassium), based on
our patented technology. This technology uses small synthetic molecules to
create non-toxic compounds, for administration orally or by injection. These
compounds are capable of passing through the blood-brain barrier, a natural
barrier which protects the brain from toxins in the blood, to act rapidly upon
specific target cells in specific locations in the central nervous system,
including the brain. In animal and laboratory tests, our Neotrofin(TM) compound
appears to increase selectively the production in animals of certain
neurotrophic factors, a type of large protein, in selected areas of the brain
and in the spinal cord. These neurotrophic factors regulate nerve cell growth
and function. We attempt to develop our technology to capitalize on the
beneficial effects of these proteins, which the scientific community widely
acknowledges are closely involved in the early formation and maturation of the
central nervous system. We believe that Neotrofin(TM) could have therapeutic and
regenerative effects.
We were incorporated in Colorado in December 1987 and reincorporated in
Delaware in June 1997. Our executive offices are located at 157 Technology
Drive, Irvine, California 92618. Our telephone number is (949) 788-6700. Our web
site address is www.neotherapeutics.com. Information contained in our web site
does not constitute part of this prospectus.
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RISK FACTORS
Your investment in our common stock involves a high degree of risk. You
should consider the risks described below and the other information contained in
this prospectus carefully before deciding to invest in our common stock. If any
of the following risks actually occur, our business, financial condition and
operating results would be harmed. As a result, the trading price of our common
stock could decline, and you could lose a part or all of your investment.
OUR LOSSES WILL CONTINUE TO INCREASE AS WE EXPAND OUR DEVELOPMENT EFFORTS, BUT
OUR EFFORTS MAY NOT RESULT IN ANY MARKETABLE DRUGS IN THE NEXT FEW YEARS, OR AT
ALL.
We are a development stage company because we have not yet generated
revenues from sales. Our cumulative losses during the period from our inception
in 1987 through September 30, 1999, were approximately $37.6 million, almost all
of which consisted of research and development and general and administrative
expenses. Our losses are increasing. We lost approximately $6.2 million in 1997,
$11.6 million in 1998, and $13.8 million in the nine months ending September 30,
1999. We expect our losses to increase in the future as we expand our clinical
trials and increase our research and development activities. We may never
achieve significant revenues or become profitable. Even if we eventually
generate revenues from sales, we nevertheless expect to incur significant
operating losses over the next several years. Our ability to become profitable
and to achieve long-term success will depend on the time and expense necessary
to develop our proposed products.
OUR POTENTIAL DRUG PRODUCTS ARE IN AN EARLY STAGE OF CLINICAL AND PRECLINICAL
DEVELOPMENT AND MAY NOT PROVE SAFE OR EFFECTIVE ENOUGH TO OBTAIN REGULATORY
APPROVAL TO SELL ANY OF THEM.
Our proposed products are in an early stage of development. They will
require additional research and development, clinical testing and regulatory
clearances. We currently do not sell any products and do not expect to have any
products commercially available for at least two years. Our proposed products
are subject to the risks of failure inherent in the development of
pharmaceutical products based on innovative technologies. Some of these risks
are that a proposed product:
- could be ineffective or toxic;
- may fail to receive necessary regulatory clearances;
- will be uneconomical to manufacture or market;
- may not be sold because of patent or other rights of third parties;
or
- becomes unmarketable because a third party introduces an equivalent
or superior product.
Because our proposed products are still in development, our research and
development activities may not result in any commercially viable products or
applications. The scientific and medical community does not thoroughly
understand disorders of the central nervous system, our primary area of
therapeutic focus and the subject of continuing research. We cannot be certain
that our proposed products will prove to be safe or effective in treating such
disorders or any other diseases. In our
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industry, the majority of compounds fail to enter clinical studies, and the
majority of products entering clinical studies after achieving promising
preclinical results are not commercially successful.
WE MAY BE UNABLE TO OBTAIN THE FUNDING NECESSARY TO DEVELOP OUR FIRST POTENTIAL
DRUG OR FUNDING MAY NOT BE AVAILABLE ON TERMS ACCEPTABLE TO US.
We expect that we will need a minimum of $80 million to complete
development and clinical trials of Neotrofin(TM), our lead drug candidate,
before we will be able to submit it to the Food and Drug Administration for
approval for commercial sale. Our capital requirements will depend on many
factors, including:
- the progress of our research and development program;
- the progress of preclinical and clinical testing;
- the time and cost involved in obtaining regulatory approvals;
- the cost of filing, prosecuting, defending and enforcing patent
claims and other intellectual property rights;
- competing technological and market developments; and
- our ability to establish collaborative and other arrangements with
third parties, such as licensing and manufacturing agreements.
We currently are spending cash at a rate in excess of $2.0 million per
month, and we expect this rate of spending to continue for approximately the
next 12 months. We believe that our existing cash and capital resources will
satisfy our current funding requirements for approximately the next eight
months. Thereafter, we will require substantial additional funds in order to
complete the research and development activities currently contemplated and to
commercialize our proposed drug products.
We expect to seek such additional funding through public or private
financings or collaborative or other arrangements with third parties. We may not
obtain additional funds on acceptable terms, if at all. Any future equity
financing will decrease the percentage ownership of existing stockholders and
may, depending on the price at which we are able to sell the equity securities,
result in substantial economic dilution to our existing stockholders.
Alternatively, we may obtain funds by entering into arrangements with third
parties. These arrangements may require us to relinquish rights to certain of
our products or technologies that we would not otherwise relinquish.
If adequate funds are not available, we may have to delay, scale back
or eliminate one or more of our development programs. Any failure to obtain
adequate funding, or any unfavorable arrangement regarding our products or
technology, would limit our ability to develop or commercialize our products.
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WE DEPEND ON THIRD PARTIES FOR CLINICAL TESTING, MANUFACTURING AND MARKETING OF
OUR PROPOSED DRUG PRODUCTS. IF WE CANNOT OBTAIN SUCH SERVICES ON TERMS
ACCEPTABLE TO US, WE MAY FAIL TO DEVELOP SUCCESSFUL DRUG PRODUCTS AND TO
GENERATE REVENUES.
Except with respect to our Neotrofin(TM) compound, we currently do not
intend to conduct later-stage human clinical trials ourselves or to manufacture,
market or distribute any of our proposed products for commercial sale, nor do we
have the resources necessary to do so. We currently are seeking larger
pharmaceutical companies as partners to conduct such activities. However, we
intend to retain co-marketing rights to our proposed products, so that we may
promote such products to selected medical specialists while our corporate
partner promotes these products to the medical market generally.
If we are unable to enter into partnering arrangements on favorable
terms or at all, we may not be able to manufacture and market our proposed
products at prices that would permit us to make a profit. Even if we enter into
relationships with third parties on acceptable terms, patients, health care
providers and insurance companies may reject our products and we would be unable
to generate revenues.
COMPETITION FOR PATIENTS IN CONDUCTING CLINICAL TRIALS AND EXTENSIVE REGULATIONS
GOVERNING THE CONDUCT OF CLINICAL TRIALS MAY PREVENT OR DELAY APPROVAL OF A DRUG
CANDIDATE AND STRAIN OUR LIMITED FINANCIAL RESOURCES.
Many pharmaceutical companies are conducting clinical trials in
patients with Alzheimer's disease. As a result, we must compete with them for
clinical sites, physicians and the limited number of patients with Alzheimer's
disease who fulfill the stringent requirements for participation in clinical
trials.
The rate of completion of clinical trials depends on, among other
factors, the type, novelty and complexity of the product and the rate of patient
enrollment. Patient enrollment is a function of many factors, including:
- the nature of the clinical trial;
- existence of competing clinical trials;
- size of the patient population;
- proximity of patients to clinical sites; and
- criteria for patient eligibility.
Delays in patient enrollment will increase costs and delay the
introduction of our potential products.
OUR MANAGEMENT HAS LIMITED MANUFACTURING AND MARKETING EXPERIENCE AND MAY BE
UNABLE TO MANAGE OUR GROWTH OR MANUFACTURE AND MARKET OUR PRODUCTS SUCCESSFULLY.
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To date, we have engaged exclusively in the development of
pharmaceutical technology and products. Our management has substantial
experience in pharmaceutical company operations, but has limited experience in
manufacturing or procuring products in commercial quantities or in marketing
pharmaceutical products. Our management has only limited experience in
negotiating, establishing and maintaining strategic relationships, conducting
clinical trials and other later-stage phases of the regulatory approval process.
If we receive FDA approval of any of our potential products, we may
decide to establish a commercial-scale manufacturing facility for our lead
product candidate Neotrofin(TM). The establishment of such a facility will
require substantial additional funds and personnel, and we will need to comply
with extensive regulations applicable to such a facility. These requirements and
the associated growth would strain our existing management and operations. Our
ability to manage such growth depends upon the ability of our officers and key
employees to:
- broaden our management team;
- develop additional expertise among existing management personnel;
- attract, hire and retain skilled employees; and
- implement and improve our operational, management information and
financial control systems.
OUR FAILURE TO COMPLY WITH EXTENSIVE GOVERNMENTAL REGULATION COULD PREVENT
PRODUCT APPROVAL OR CAUSE GOVERNMENTAL AUTHORITIES TO DISALLOW OUR PRODUCTS
AFTER APPROVAL AND SUBJECT US TO CRIMINAL OR CIVIL LIABILITIES.
Various agencies in the United States and abroad regulate the testing,
manufacturing, labeling, distribution, marketing and advertising of proposed
drugs and ongoing research and development activities. The U.S. Food and Drug
Administration and comparable agencies in foreign countries impose many
requirements on the introduction of new drugs through lengthy and detailed
clinical testing procedures, and other costly and time consuming compliance
procedures. These requirements make it difficult to estimate when Neotrofin(TM)
or any other potential product will be available commercially, if at all.
Our proprietary compounds will require substantial clinical trials and
FDA review as new drugs. Even if we successfully enroll patients in our clinical
trials, patients may not respond to our potential drug products. We think it is
prudent to expect setbacks. Failure to comply with the regulations applicable to
such testing may delay, suspend or cancel our clinical trials, or the FDA might
not accept the test results. The FDA or other regulatory agency may suspend
clinical trials at any time if it concludes that the trials expose subjects
participating in such trials to unacceptable health risks. Further, human
clinical testing may not show any current or future product candidate to be safe
and effective or the data derived therefrom may be unsuitable for submission to
the FDA or other regulatory agency.
We cannot predict with certainty when we might submit any of our
proposed products currently under development for regulatory review. Once we
submit a proposed product for review, the FDA or other regulatory agencies may
not issue their approvals on a timely basis, if at all. If we
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are delayed or fail to obtain such approvals, our business may be damaged. If we
fail to comply with regulatory requirements, either prior to approval or in
marketing our products after approval, we could be subject to regulatory or
judicial enforcement actions. These actions could result in:
- product recalls or seizures;
- injunctions;
- civil penalties;
- criminal prosecution;
- refusals to approve new products and withdrawal of existing
approvals; and
- enhanced exposure to product liabilities.
THE LOSS OF KEY RESEARCHERS OR MANAGERS OR THE INABILITY TO HIRE NECESSARY
PERSONNEL COULD HINDER OUR DRUG DEVELOPMENT PROCESS SIGNIFICANTLY AND MIGHT
CAUSE OUR BUSINESS TO FAIL.
Our success depends upon the contributions of our key management and
scientific personnel. Our loss of the services of any such personnel could delay
or preclude us from achieving our business objectives. Although we currently
have key-man life insurance on Dr. Alvin Glasky, our Chief Executive Officer and
Chief Scientific Officer, in the face amount of $2 million, the loss of Dr.
Glasky's services could damage our research and development efforts
substantially.
We also will need substantial additional expertise in finance and
marketing and other areas in order to achieve our business objectives.
Competition for qualified personnel among pharmaceutical companies is intense,
and the loss of key personnel, or the inability to attract and retain the
additional skilled personnel required for the expansion of our business, could
damage our business.
IF WE CANNOT PROTECT OR ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS ADEQUATELY, THE
VALUE OF OUR RESEARCH COULD DECLINE AS OUR COMPETITORS APPROPRIATE PORTIONS OF
OUR RESEARCH.
We actively pursue patent protection for our proprietary products and
technologies. We hold three U.S. patents and currently have five U.S. patent
applications pending. In addition, we have numerous foreign patents issued and
patent applications pending corresponding to our U.S. patents. However, our
patents may not protect us against our competitors. We may be required to file
suit to protect our patent or to defend our use of our patents against
infringement claims brought by others. We cannot be certain that we will have
the resources necessary to pursue or defend against such litigation or otherwise
to protect our patent rights.
We also rely on trade secret protection for our unpatented proprietary
technology. However, trade secrets are difficult to protect. Others could
develop substantially equivalent proprietary information or gain access to our
trade secrets and could seek to stop us from using what they claim are their
trade secrets.
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We have a policy requiring that our employees and consultants execute
proprietary information agreements upon commencement of employment or consulting
relationships. These agreements provide that all confidential information
developed or made known to the individual during the course of the relationship
shall be kept confidential except in specified circumstances. However, these
agreements may not successfully protect our trade secrets or other proprietary
information.
There has been, and we believe that there will continue to be,
significant litigation in the pharmaceutical industry regarding patent and other
intellectual property rights. If we become involved in any litigation, a
substantial portion of our financial and personnel resources could be consumed,
regardless of the outcome of such litigation.
WE ARE A SMALL COMPANY RELATIVE TO OUR PRINCIPAL COMPETITORS AND OUR LIMITED
FINANCIAL AND RESEARCH RESOURCES MAY LIMIT OUR ABILITY TO DEVELOP AND MARKET NEW
PRODUCTS.
Competition in the pharmaceuticals market is intense. Many companies,
both public and private, including well-known pharmaceutical companies, are
developing products to treat Alzheimer's disease and certain of the other
applications we are pursuing. Most of these companies have substantially greater
financial, research and development, manufacturing and marketing experience and
resources than we do. These competitors may develop pharmaceutical products that
are more effective or less costly than any products which we may develop. To
date, only one product, donepezil (Aricept(R), Pfizer, Inc.), is marketed
actively in the U.S. for the treatment of Alzheimer's disease.
Factors affecting competition in the pharmaceutical industry vary
depending on the extent to which the competitor achieves a competitive advantage
based on proprietary technology. If we establish and maintain a significant
proprietary position with respect to our proposed products, competition likely
will depend primarily on the effectiveness of the particular product and the
number, gravity and severity of its unwanted side effects as compared to
alternative products or treatments.
HOLDERS OF OUR ADJUSTABLE WARRANTS COULD ENGAGE IN SHORT SELLING TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE ADJUSTABLE
WARRANTS. IF THIS OCCURS, THE MARKET PRICE OF OUR COMMON STOCK MAY DECLINE.
The number of shares of common stock issuable upon exercise of the
adjustable warrants, if any, will be determined at two vesting dates, March 18,
2000 and May 17, 2000, according to a formula based on the average of the ten
lowest closing bid prices of our common stock during the 30 consecutive trading
days immediately preceding each vesting date. The exercise price of the shares
of common stock issuable upon exercise of the adjustable warrants is $0.001 per
share, regardless of the number of shares which may vest. A greater number of
shares of common stock are issuable the lower the price of our common stock.
Increased sales volume of our common stock could put downward pressure on the
market price of the shares. This fact could encourage holders of the adjustable
warrants to sell short our common stock prior to each vesting date under the
adjustable warrants, thereby potentially causing the market price to decline and
a greater number of shares to vest. The holders of the adjustable warrants could
then exercise their adjustable warrants and use the shares of common stock
received upon exercise to cover their short positions. The holders of the
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adjustable warrants could thereby profit by the decline in the market price of
the common stock caused by their short selling.
THE TRADING PRICE OF OUR COMMON STOCK AND THE TERMS OF OUR ADJUSTABLE WARRANTS
MUST COMPLY WITH THE LISTING REQUIREMENTS OF THE NASDAQ NATIONAL MARKET OR WE
COULD BE DELISTED AND THE LIQUIDITY OF OUR COMMON STOCK WOULD DECLINE.
Our common stock is listed on the Nasdaq National Market. To remain
listed on this market, we must meet Nasdaq's listing maintenance standards and
abide by Nasdaq's rules governing listed companies. If the price of our common
stock falls below $1.00 per share for an extended period, or if we fail to meet
other Nasdaq standards or violate Nasdaq rules, our common stock could be
delisted from the Nasdaq National Market.
Nasdaq has established certain rules regarding the issuance of "future
priced securities." These rules may apply to our adjustable warrants because
additional shares of our common stock are issuable upon exercise based on a
future price of our common stock. Nasdaq's concerns regarding our adjustable
warrants include the following:
Shareholders Must Approve Significant Issuances Of Listed Securities At
A Discount To Market Or Book Value. Nasdaq rules prohibit an issuer of listed
securities from issuing 20% or more of its outstanding capital stock at less
than the greater of book value or then current market value without obtaining
prior stockholder consent. We did not obtain stockholder consent prior to
issuing the adjustable warrant.
Public Interest Concerns. Nasdaq may terminate the listing of a
security if necessary to prevent fraudulent and manipulative acts and practices
or to protect investors and the public interest. With respect to future priced
securities, Nasdaq has indicated that it may delist a security if the returns
with respect to the future priced security become excessive compared to the
returns being earned by public investors in the issuer's securities.
Furthermore, certain requirements for continued listing, such as the
$1.00 minimum bid price requirement, are outside of our control. Accordingly,
there is a risk that Nasdaq may delist our common stock.
If our common stock is delisted, we likely would seek to list our
common stock on the Nasdaq SmallCap Market or for quotation on the American
Stock Exchange or a regional stock exchange. However, listing or quotation on
such market or exchange could reduce the market liquidity for our common stock.
If our common stock were not listed or quoted on another market or
exchange, trading of our common stock would be conducted in the over-the-counter
market on an electronic bulletin board established for unlisted securities or in
what are commonly referred to as the "pink sheets." As a result, an investor
would find it more difficult to dispose of, or to obtain accurate quotations for
the price of, our common stock.
In addition, delisting from the Nasdaq National Market and failure to
obtain listing or quotation on such other market or exchange would subject our
securities to so-called "penny stock" rules. These rules impose additional sales
practice and market-making requirements on broker-
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dealers who sell and/or make a market in such securities. Consequently, if our
common stock is delisted from the Nasdaq National Market and we fail to obtain
listing or quotation on another market or exchange, broker-dealers may be less
willing or able to sell and/or make a market in our common stock and purchasers
of our common stock may have more difficulty selling their securities in the
secondary market. In either case, the market liquidity of our common stock would
decline.
THERE ARE A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK ELIGIBLE FOR FUTURE
SALE IN THE PUBLIC MARKET. THE SALE OF THESE SHARES COULD CAUSE THE MARKET PRICE
OF OUR COMMON STOCK TO FALL.
The number of shares of our common stock eligible for future sale in
the public market include 8,967,331 shares that are outstanding as of February
3, 2000, as well as shares that may be issued upon exercise of outstanding stock
options and warrants. As of February 3, 2000, security holders held options and
warrants which, if exercised, would obligate us to issue up to an additional
4,792,127 shares of common stock. A substantial number of those shares, when
issued upon exercise, will be available for immediate resale in the public
market. In addition, we are permitted to sell up to an additional $7.5 million
of our common stock pursuant to an equity line agreement we have with a private
investor. The shares of common stock we sell under this agreement will be
available for resale in the public market. The market price of our common stock
could fall as a result of such resales.
THE ISSUANCE AND SALE OF STOCK PURSUANT TO AN EQUITY LINE AGREEMENT WE HAVE WITH
A PRIVATE INVESTOR MAY DILUTE OUR CURRENT STOCKHOLDERS.
The sale of shares of common stock pursuant to an equity line agreement
we have with a private investor may dilute our current stockholders because it
will be issued at a discount to the then-prevailing market price of our common
stock. These discounted sales could cause the market price of our common stock
to drop.
THE USE OF HAZARDOUS MATERIALS IN OUR RESEARCH AND DEVELOPMENT EFFORTS IMPOSES
CERTAIN COMPLIANCE COSTS ON US AND MAY SUBJECT US TO LIABILITY FOR CLAIMS
ARISING FROM THE USE OR MISUSE OF THESE MATERIALS.
We use hazardous materials while conducting our research and
development. We are subject to federal, state and local laws and regulations
governing the storage, use and disposal of such materials and certain waste
products. We believe that our safety procedures for handling and disposing of
such materials comply with the standards prescribed by federal, state and local
regulations. However, we cannot completely eliminate the risk of accidental
contamination or injury from these materials. If there were an accident, we
could be held liable for any damages that result. Such liability could exceed
our resources. We may incur substantially increased costs to comply with
environmental regulations if we develop our own commercial manufacturing
facility.
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THE MARKET PRICE AND VOLUME OF OUR COMMON STOCK FLUCTUATES SIGNIFICANTLY AND
COULD RESULT IN SUBSTANTIAL LOSSES FOR INDIVIDUAL INVESTORS.
Broad fluctuations in the market price or volume of our common stock
can result in substantial losses to an investor in a short period of time.
Factors that may cause the market price and trading volume of our common stock
to fluctuate include:
- timing and announcements of the results of our clinical trials, our
technological innovations or new products, or those of our
competitors;
- fluctuations in our results of operations;
- FDA and foreign regulatory actions;
- developments with respect to patents and proprietary rights;
- public concern as to the safety of products developed by us or
others;
- changes in health care policy in the United States and in foreign
countries;
- changes in stock market analyst recommendations regarding our common
stock;
- failure of our results of operations to meet the expectations of
stock market analysts and investors;
- increases in the number of outstanding shares of our common stock
resulting from sales of new shares, the conversion of shares of our
Series A preferred stock, or the exercise of warrants or stock
options;
- changes in investors' perception of the pharmaceutical industry
generally; and
- general stock market conditions.
In addition to the specific factors listed above, the stock market as a
whole experiences significant price and volume fluctuations at various times
that are unrelated to the operating performance of particular companies. These
market characteristics can exacerbate the volatility in our common stock.
OUR DIRECTORS AND EXECUTIVE OFFICERS OWN A SUBSTANTIAL PERCENTAGE OF OUR COMMON
STOCK. THEIR OWNERSHIP COULD ALLOW THEM TO EXERCISE SIGNIFICANT CONTROL OVER
CORPORATE DECISIONS AND TO IMPLEMENT CORPORATE ACTS THAT ARE NOT IN THE BEST
INTERESTS OF OUR STOCKHOLDERS AS A GROUP.
Our directors and executive officers beneficially own approximately
19.0% of our outstanding common stock as of February 3, 2000. In addition,
Montrose Investments Ltd. and Strong River Investments, Inc. have agreed that
they will vote any and all shares of our common stock that they own as
recommended by our board of directors in any meeting of our stockholders.
Therefore, our directors and executive officers, if they acted together, could
exert substantial control over matters requiring approval by our stockholders.
These matters would include the election of
11
<PAGE> 14
directors and the approval of mergers or other business combination
transactions. This concentration of ownership and voting control may discourage
or prevent someone from acquiring our business.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this
prospectus contain forward-looking statements that are based on current
expectations, estimates and projections about our industry, management's
beliefs, and assumptions made by management. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," and variations
of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict; therefore, actual results may differ materially from
those expressed or forecasted in any forward-looking statements. The risks and
uncertainties include those noted in "Risk Factors" above and in the documents
incorporated by reference. We undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
ISSUANCE OF COMMON STOCK TO THE SELLING STOCKHOLDERS
On November 19, 1999 we entered into a securities purchase agreement
with Montrose Investments Ltd., a Cayman Islands corporation, and Strong River
Investments, Inc., a British Virgin Islands corporation. Under that agreement,
we issued and sold the following securities for total cash consideration of
$10.0 million:
- a total of 845,594 shares of our common stock;
- closing warrants to purchase 126,839 shares of common stock at an
exercise price of $14.24 per share; and
- adjustable warrants to purchase a number of shares of common stock
to be determined at two vesting dates, March 18, 2000 and May 17,
2000, at an exercise price of $0.001 per share.
The number of shares of common stock issuable at each vesting date
under the adjustable warrants, if any, will be determined by a formula in the
adjustable warrant and is based on the 10 lowest closing bid prices of our
common stock during the 30 consecutive trading days preceding each vesting date.
A greater number of shares of common stock are issuable the lower the price of
our common stock. However, if the average of the 10 lowest closing bid prices of
our common stock during the 30 consecutive trading days preceding a vesting date
exceeds approximately $13.25 per share, then no shares are issuable pursuant to
the adjustable warrants for that vesting date. In addition, if at any time each
of (a) the average of the closing bid prices of our common stock for 30
consecutive trading days exceeds $17.74 and (b) the closing bid price of our
common stock exceeded $17.74 for at least 10 of those 30 days, then no shares
will vest pursuant to the adjustable warrants for any subsequent vesting date.
We also have the option at the time of the first vesting date to redeem up to
one half of the shares of common stock sold to the selling stockholders on
November 19, 1999, and thereby cancel the second vesting. The adjustable
warrants expire if not exercised by August 15, 2000.
12
<PAGE> 15
A holder of the warrants cannot exercise the warrants if the exercise
would cause the holder, together with any affiliate of the holder, to have
beneficial ownership of more than 9.999% of our outstanding shares of common
stock. This restriction in the warrants can be waived by the holder of the
warrant if the holder gives us at least 61 days notice.
Pursuant to a registration rights agreement we entered into with
Montrose Investments Ltd. and Strong River Investments, Inc., we have filed a
registration statement, of which this prospectus forms a part, in order to
permit the selling stockholders to resell to the public the shares of common
stock that they purchased pursuant to the securities purchase agreement and that
they acquire upon any exercise of the warrants. The number of shares that we
have registered is based upon the actual number of shares sold to the selling
stockholders pursuant to the securities purchase agreement, the number of shares
issuable upon any exercise of the closing warrants, and an estimate of the
number of shares issuable upon exercise of the adjustable warrants. The estimate
of the number of shares issuable upon exercise of the adjustable warrants is
based on a formula included in the adjustable warrant and assumes that the
adjustment price specified in the formula was $6.75, or 50% of the closing bid
price of our common stock on November 18, 1999, the trading day immediately
preceding the closing date of the securities purchase agreement, in order to
cover potential downward movements in the market price of our common stock.
Montrose Investments Ltd. and Strong River Investments, Inc. have
agreed that they will vote any and all shares of our common stock that they own
as recommended by our board of directors in any meeting of our stockholders.
USE OF PROCEEDS
The proceeds from the sale of the common stock will belong to the
selling stockholders. We will not receive any proceeds from such sales.
13
<PAGE> 16
SELLING STOCKHOLDERS
The following table sets forth information regarding beneficial
ownership of our common stock by the selling stockholders as of February 3,
2000. The number of shares of common stock listed as beneficially owned by each
selling stockholder and potentially offered by this prospectus represents the
number of shares of common stock owned as of February 3, 2000, the number of
shares issuable upon exercise of the closing warrants, and a number of shares
issuable upon exercise of the adjustable warrants, based on certain assumptions
as to the price of our common stock. The actual number of shares issuable upon
exercise of the adjustable warrants will be determined at each of two vesting
dates, March 18, 2000 and May 17, 2000.
A holder of the warrants cannot exercise the warrants if the exercise
would cause the holder, together with any affiliate of the holder, to have
beneficial ownership of more than 9.999% of our outstanding shares of common
stock. This restriction in the warrants can be waived by the holder of the
warrant if the holder gives us at least 61 days notice.
The selling stockholders may sell up to 1,786,099 shares of our common
stock pursuant to this prospectus. That number of shares includes an estimate of
the number of shares issuable upon exercise of the adjustable warrants based on
a formula included in the adjustable warrant, and assumes that the adjustment
price specified in the formula was $6.75, or 50% of the closing bid price of our
common stock on November 18, 1999, the trading day immediately preceding the
closing date of the securities purchase agreement, in order to cover potential
downward movements in the market price of our common stock. The number of shares
offered by this prospectus is not a prediction as to the future market price of
our common stock or as to the number of shares which may vest pursuant to the
adjustable warrants. HBK Management L.L.C., of which Mr. Harlan B. Korenvaes is
managing director, has voting and investment power over the securities
beneficially owned by Montrose Investments Ltd. Enright Holding Corp., of which
Mr. Avi Vigder is managing director, has voting and investment power over the
securities beneficially owned by Strong River Investments, Inc.
<TABLE>
<CAPTION>
Shares
of Common Stock
Number of Shares Beneficially Owned
of Common Stock Number of Shares Following the Offering(5)
Beneficially Owned of Common Stock -------------------------
Name Before Offering Offered Hereby Number % of Class
- --------------------------------- ------------------ ---------------- --------- ------------
<S> <C> <C> <C> <C>
Montrose Investments Ltd. 681,348(1) 893,050(2) 195,131 2.18
Strong River Investments, Inc. 504,016(3) 893,049(4) 17,800 *
</TABLE>
- ---------------
* Less than 1%.
(1) Includes 569,178 shares held by Montrose Investments Ltd. as of February 3,
2000 and 112,170 shares subject to currently exercisable warrants.
(2) Includes 422,797 shares held by Montrose Investments Ltd. as of February 3,
2000, 63,420 shares subject to a currently exercisable warrant, and 406,833
shares potentially issuable upon exercise of the adjustable warrants.
14
<PAGE> 17
(3) Includes 440,597 shares held by Strong River Investments, Inc. as of
February 3, 2000 and 63,419 shares subject to a currently exercisable
warrant.
(4) Includes 422,797 shares held by Strong River Investments, Inc. as of
February 3, 2000, 63,419 shares subject to a currently exercisable warrant,
and 406,833 shares potentially issuable upon exercise of the adjustable
warrants.
(5) Assumes the sale by the selling stockholders of all of the shares of common
stock available for resale under this Prospectus.
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of the shares of
common stock offered hereby on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholders may use any one or more of
the following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- short sales;
- broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.
The selling stockholders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling stockholder defaults on a
margin loan, the broker may, from time to time, offer and sell the pledged
shares. The selling stockholders have advised us that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares other than ordinary course
brokerage arrangements, nor is there an underwriter or coordinating broker
acting in connection with the proposed sale of shares by the selling
stockholders.
15
<PAGE> 18
Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser, in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We have agreed to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to the
selling stockholders. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
Upon notification to us by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a supplement to
this prospectus, if required, pursuant to Rule 424(b) under the Securities Act,
disclosing the following:
- the name of each such selling stockholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the price at which such shares were sold;
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
- that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this
prospectus; and
- other facts material to the transaction.
In addition, we will file a supplement to this prospectus when a
selling stockholder notifies us that a donee or pledgee intends to sell more
than 500 shares of our common stock.
We have advised the selling stockholders that the anti-manipulation
provisions of Regulation M promulgated under the Securities Exchange Act of 1934
may apply to their sales of our shares offered by this prospectus.
LEGAL MATTERS
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California, will pass on the validity of the issuance of the shares of
common stock offered by this prospectus.
16
<PAGE> 19
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in this registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report. Reference is made to said report which states
that the Company is in the development stage, as described in Note 1 to the
consolidated financial statements.
LIMITATION ON LIABILITY AND DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our bylaws provide for indemnification of our directors and officers to
the fullest extent permitted by law. Insofar as indemnification for liabilities
under the Securities Act may be permitted to directors, officers or controlling
persons of the Company pursuant to the Company's Certificate of Incorporation,
as amended, bylaws and the Delaware General Corporation Law, the Company has
been informed that in the opinion of the Commission such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, and Chicago.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public at the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them which means that we can disclose important information to you by
referring you to those documents instead of having to repeat the information in
this prospectus. The information incorporated by reference is considered to be
part of this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
the selling stockholders sell all the shares.
Our annual report on Form 10-K for the fiscal year ended December 31,
1998;
Our definitive proxy statement filed pursuant to Section 14 of the
Exchange Act in connection with our 1999 Annual Meeting of Stockholders;
Our current reports on Form 8-K filed January 28, 1999, February 9,
1999 and December 7, 1999;
Our quarterly report on Form 10-Q for the fiscal quarters ended March
31, 1999, June 30, 1999 and September 30, 1999; and
17
<PAGE> 20
The description of our common stock contained in the Registration of
Securities of Certain Successor Issuers filed pursuant to Section 12(g) of the
Exchange Act on Form 8-B on June 27, 1997, including any amendment or reports
filed for the purpose of updating such description.
You can request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
NeoTherapeutics, Inc.
Attn: Investor Relations
157 Technology Drive
Irvine, California 92618
(949) 788-6700
You should rely only on the information contained in this prospectus or
any supplement and in the documents incorporated by reference. We have not
authorized anyone else to provide you with different information. The selling
stockholders will not make an offer of these shares in any state where the offer
is not permitted. You should not assume that the information in this prospectus
or any supplement or in the documents incorporated by reference is accurate on
any date other than the date on the front of those documents.
This prospectus is part of a registration statement we filed with the
SEC (Registration No. 333-92855). That registration statement and the exhibits
filed along with the registration statement contain more information about the
shares sold by the selling stockholders. Because information about contracts
referred to in this prospectus is not always complete, you should read the full
contracts which are filed as exhibits to the registration statement. You may
read and copy the full registration statement and its exhibits at the SEC's
public reference rooms or their web site.
18
<PAGE> 21
================================================================================
1,786,099 SHARES OF COMMON STOCK
NEOTHERAPEUTICS, INC.
PROSPECTUS
_______________, 2000
================================================================================
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth the costs and expenses, all of which shall be
borne by the Registrant, in connection with the offering of the securities
pursuant to this Registration Statement:
<TABLE>
<CAPTION>
<S> <C>
Registration Fee .............................. $ 2,939.19
Accounting Fees and Expenses .................. $ 5,000.00*
Legal Fees and Expenses ....................... $ 25,000.00*
Miscellaneous ................................. $ 2,060.81*
-----------
Total ................................ $ 35,000.00*
===========
</TABLE>
* Estimated
Item 15. Indemnification of Directors and Officers.
The bylaws of the Registrant provide for indemnification of the
Registrant's directors and officers to the fullest extent permitted by law.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers or controlling persons of the Registrant
pursuant to the Registrant's Certificate of Incorporation, bylaws and the
Delaware General Corporation Law (the "DGCL"), the Registrant has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in such Act and is therefore unenforceable.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may include a provision which eliminates or limits the personal
liability of a director 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 company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
relating to prohibited dividends or distributions or the repurchase or
redemption of stock or (iv) for any transaction from which the director derives
an improper personal benefit. The Registrant's Certificate of Incorporation
includes such a provision. As a result of this provision, the Registrant and its
stockholders may be unable to obtain monetary damages from a director for breach
of his or her duty of care.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibits Description
-------- -----------
<S> <C>
4.1 Securities Purchase Agreement dated as of November
19, 1999, by and among Registrant, Strong River
Investments, Inc. and Montrose Investments L.P.(1)
4.2 Registration Rights Agreement dated as of November
19, 1999, by and among Registrant, Strong River
Investments, Inc. and Montrose Investments L.P.(1)
</TABLE>
II-1
<PAGE> 23
<TABLE>
<S> <C>
4.3 Closing Warrant issued by Registrant to Montrose
Investments L.P., dated as of November 19, 1999.(1)
4.4 Closing Warrant issued by Registrant to Strong River
Investments, Inc., dated as of November 19, 1999.(1)
4.5 Adjustable warrant issued by Registrant to Montrose
Investments L.P., dated as of November 19, 1999.(1)
4.6 Adjustable warrant issued by Registrant to Strong
River Investments, Inc., dated as of November 19,
1999.(1)
5.1 Opinion of Stradling Yocca Carlson & Rauth, a
Professional Corporation.(2)
23.1 Consent of Stradling Yocca Carlson & Rauth, a
Professional Corporation (included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP.(2)
24.1 Power of Attorney (included on the signature page to
this Registration Statement).
</TABLE>
(1) Previously filed with the Commission as an Exhibit to, and incorporated
herein by reference from, the Registrant's Current Report on Form 8-K
filed with the Commission on December 7, 1999.
(2) Previously filed with the Registrant's registration statement filed
with the Commission on December 15, 1999.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(iii) Include any additional or changed information
on the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement
of the securities offered, and the offering of the securities
at that time to be deemed the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the offering.
(b) 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
II-2
<PAGE> 24
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 small business issuer 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.
II-3
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Irvine, State of California, on
February 4, 2000.
NEOTHERAPEUTICS, INC.
By: /s/ Samuel Gulko
-------------------------------------
Samuel Gulko
Chief Financial Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of NeoTherapeutics, Inc., do
hereby constitute and appoint Alvin J. Glasky, Ph.D. and Samuel Gulko, or either
of them, our true and lawful attorneys-in-fact and agents, each with full power
to sign for us or any of us in our names and in any and all capacities, any and
all amendments (including post-effective amendments) to this Registration
Statement, or any related registration statement that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and
to file the same, with all exhibits thereto and other documents required in
connection therewith, and each of them with full power to do any and all acts
and things in our names and in any and all capacities, which such
attorneys-in-fact and agents, or either of them, may deem necessary or advisable
to enable NeoTherapeutics, Inc. to comply with the Securities Act of 1933, as
amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission, in connection with this Registration Statement; and we
hereby do ratify and confirm all that the such attorneys-in-fact and agents, or
either of them, shall do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, 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>
* Chief Executive Officer, President February 4, 2000
- -------------------------------------- and Director (principal executive
Alvin J. Glasky, Ph.D. officer)
/s/ Samuel Gulko Chief Financial Officer, Secretary, February 4, 2000
- -------------------------------------- Treasurer and Director (principal
Samuel Gulko financial and accounting officer)
* Director February 4, 2000
- --------------------------------------
Mark J. Glasky
</TABLE>
II-4
<PAGE> 26
<TABLE>
<S> <C> <C>
* Director February 4, 2000
- --------------------------------------
Frank M. Meeks
* Director February 4, 2000
- --------------------------------------
Paul H. Silverman, Ph.D., D.Sc.
* Director February 4, 2000
- --------------------------------------
Carol O'Cleireacain, Ph.D.
* Director February 4, 2000
- --------------------------------------
Eric L. Nelson, Ph.D.
* Director February 4, 2000
- --------------------------------------
Stephen Runnels
* Director February 4, 2000
- --------------------------------------
Joseph Rubinfeld, Ph.D.
* Director February 4, 2000
- --------------------------------------
Armin Kessler
* Director February 4, 2000
- --------------------------------------
Ann Kessler
*By: /s/ Samuel Gulko February 4, 2000
---------------------------------
Samuel Gulko
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 27
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibits Description
- -------- -----------
<S> <C>
4.1 Securities Purchase Agreement dated as of November 19, 1999,
by and among Registrant, Strong River Investments, Inc. and
Montrose Investments L.P.(1)
4.2 Registration Rights Agreement dated as of November 19, 1999,
by and among Registrant, Strong River Investments, Inc. and
Montrose Investments L.P.(1)
4.3 Closing Warrant issued by Registrant to Montrose Investments
L.P., dated as of November 19, 1999.(1)
4.4 Closing Warrant issued by Registrant to Strong River
Investments, Inc., dated as of November 19, 1999.(1)
4.5 Adjustable warrant issued by Registrant to Montrose
Investments L.P., dated as of November 19, 1999.(1)
4.6 Adjustable warrant issued by Registrant to Strong River
Investments, Inc., dated as of November 19, 1999.(1)
5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional
Corporation.(2)
23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.(2)
24.1 Power of Attorney (included on the signature page to this
Registration Statement).
</TABLE>
(1) Previously filed with the Commission as an Exhibit to, and incorporated
herein by reference from, the Registrant's Current Report on Form 8-K
dated December 7, 1999.
(2) Previously filed with the Registrant's registration statement filed
with the Commission on December 15, 1999.
II-6
