<PAGE>
As filed with the Securities and Exchange Commission on JUNE 27, 1997.
REGISTRATION NO. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MATRITECH, INC.
(Exact Name of Registrant as Specified in Its Charter)
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330 NEVADA STREET
NEWTON, MASSACHUSETTS 02160
DELAWARE (617) 928-0820 04-2985132
(State or Other (Address, Including Zip Code, and (I.R.S. Employer
Jurisdiction of Telephone Number, Including Area Identification No.)
Incorporation or Code, of Registrant's Principal
Organization) Executive Offices)
STEPHEN D. CHUBB
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
MATRITECH, INC.
330 NEVADA STREET
NEWTON, MASSACHUSETTS 02160
(617) 928-0820
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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Copy to:
RUFUS C. KING, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP
125 HIGH STREET, HIGH STREET TOWER
BOSTON, MASSACHUSETTS 02110
(617) 248-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement has become effective.
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 of 1933,
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 of 1933, 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 under the Securities Act of 1933, please check the following
box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Shares Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered be Registered Offering Price Per Share(1) Aggregate Offering Price(1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01
par value per share 2,853,370 $7.531 $21,488,729.47 $6,511.74
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the average of the high and low prices of the
Common Stock as reported on the Nasdaq SmallCap Market on June 24, 1997.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION: DATED JUNE 27, 1997
MATRITECH, INC.
2,853,370 Shares of
Common Stock
$.01 Par Value Per Share
---------------
This Prospectus relates to the resale of up to 2,853,370 shares (the "Shares")
of Common Stock, $.01 par value per share (the "Common Stock"), of Matritech,
Inc. (the "Company") by certain stockholders of the Company (the "Selling
Securityholders"). See "Selling Securityholders." The Shares may be offered
from time to time in transactions on the Nasdaq SmallCap Market, in negotiated
transactions or a combination of such methods of sale, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Selling
Securityholders and certain persons who purchase shares from them, including
broker-dealers acting as principals who may resell the Shares, may be deemed
"underwriters," as that term is defined in the Securities Act of 1933, as
amended (the "Securities Act"). See "Plan of Distribution."
The Selling Securityholders acquired the Shares pursuant to (i) a private
placement of 2,200,000 shares of the Company's Common Stock which was completed
on May 30, 1997 (the "Private Placement"), (ii) placement agent compensation of
257,609 shares issued by the Company to Sunrise Securities Corp. and its
designees (the "Placement Agent"), (iii) the exercise of certain warrants to
purchase Common Stock which were issued to the Placement Agent in May 1997 in
connection with the Company's Private Placement (the "Placement Agent
Warrants"), (iv) the exercise of certain warrants to purchase Common Stock
issued in April 1997 in connection with the Company's retaining the services of
a public relations firm (the "Public Relations Warrants"), or (v) by transfer of
such securities. As of June 27, 1997 none of the Placement Agent Warrants or
Public Relations Warrants have been exercised. The Company will not receive any
of the proceeds from the sale of any of the Shares, although the Company may
receive, subject to anti-dilution adjustments and certain warrant provisions
which permit a cashless exercise, (i) $5.00 per share upon exercise of the
Placement Agent Warrants issued in May 1997, and (ii) $6.50 per share upon
exercise of the Public Relations Warrants issued in April 1997. The Company has
agreed to bear the expenses in connection with the registration of the Shares
being offered and sold by the Selling Securityholders. The Company has agreed
to indemnify certain of the Selling Securityholders against certain liabilities,
including liabilities under the Securities Act and the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
The Company's Common Stock is quoted on the Nasdaq SmallCap Market under the
symbol "NMPS" and on the Boston Stock Exchange under the symbol "MPS." On June
24, 1997, the last reported sale price for the Common Stock as reported by
Nasdaq SmallCap Market was $7.75 per share.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 7.
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No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus in connection with
the offering made hereby, and if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that information herein is correct as
of any time subsequent to the date hereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1997.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information filed by the Company with
the Commission pursuant to the informational requirements of the Exchange Act
may be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Avenue, Suite 1400, Chicago, Illinois 60611-2511. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Common Stock of the Company is traded on the Nasdaq SmallCap Market,
and such reports, proxy statements and other information may also be inspected
at the offices of The Nasdaq Stock Market, Inc., Reports Section, 1735 K Street,
N.W., Washington, D.C. 20006. The Common Stock of the Company is listed on the
Boston Stock Exchange and such material is also available for inspection at the
offices of the Boston Stock Exchange, One Boston Place, Boston, Massachusetts
02109.
The Commission also maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of such site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act with respect to the Common Stock offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information regarding the Company and the Shares
offered hereby, reference is hereby made to the Registration Statement and to
the exhibits and schedules filed therewith. Statements contained in this
Prospectus regarding the contents of any agreement or other document filed as an
exhibit to the Registration Statement are not necessarily complete, and in each
instance reference is made to the copy of such agreement filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. The Registration Statement, including the exhibits and
schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and copies of all or any part thereof may be obtained from such office upon
payment of the prescribed fees.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-12128) are incorporated by reference herein, except as superseded or modified
herein:
1. The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, filed pursuant to the Exchange Act, which contains audited
financial statements for the fiscal year ended December 31, 1996.
2. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1997, filed pursuant to the Exchange Act, which contains unaudited
financial statements for the fiscal quarter ended March 31, 1997.
- 2 -
<PAGE>
3. The description of the Company's Common Stock, $.01 par value per share,
contained in the Section entitled "Description of Registrant's Securities to
be Registered" contained in the Company's Registration Statement on Form 8-A
filed with the Commission on March 10, 1992, including any amendment or
report filed for the purpose of updating such description.
4. The Company's Report on Form 8-K filed June 4, 1997 pursuant to the Exchange
Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing
such documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus. The
Company will provide without charge to each person to whom this Prospectus is
delivered, upon the written or oral request of any such person, a copy of any
document incorporated herein by reference (other than exhibits unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to Ms. Leslie Teso, Vice President,
Finance, Treasurer and Secretary, at the principal executive offices of the
Company: 330 Nevada Street, Newton, Massachusetts 02160, telephone (617) 928-
0820. Unless the context otherwise requires, references in this Prospectus to
the "Company" or "Matritech" refers to Matritech, Inc.
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<PAGE>
PROSPECTUS SUMMARY
This Prospectus contains, in addition to historical information, forward-
looking statements that involve risks and uncertainties. The Company's actual
results could differ materially from the results discussed in the forward-
looking statements. Factors that could cause or contribute to such differences
include those discussed under "Risk Factors," as well as those discussed
elsewhere in this Prospectus.
The following summary information is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus or incorporated
herein by reference and the financial statements which are incorporated herein
by reference.
THE COMPANY
Matritech develops, manufactures and markets innovative cancer diagnostic
products based on its proprietary nuclear matrix protein ("NMP") technology.
The nuclear matrix, a three-dimensional protein framework within the nucleus of
cells, plays a fundamental role in determining cell type by physically
organizing the contents of the nucleus, including DNA. The Company has
demonstrated that there are differences in the types and amounts of NMPs found
in cancerous and normal tissue and believes the detection of such differences in
NMPs provides important diagnostic information about cellular abnormalities,
including cancer. Using its proprietary NMP technology and expertise, the
Company:
. Has developed and obtained approval from the U.S. Food and Drug
Administration ("FDA") for the NMP22(R) Test Kit, a urine-based test for
bladder cancer;
. Has developed and is currently selling outside the United States and
conducting clinical trials in the United States for the NuMA Test Kit,
a blood-based test for colon cancer; and
. Is developing a series of additional non-invasive or minimally invasive
cancer diagnostic tests for cervical, prostate and breast cancer.
NMP22 Test Kit for Bladder Cancer. The Company's first product based on its
NMP technology, the Matritech NMP22 Test Kit for bladder cancer, was approved
for sale in the United States by the FDA in July 1996 as a prognostic indicator
for the recurrence of bladder cancer. The NMP22 Test Kit has been commercially
available in Europe since 1995 and is currently being marketed in Asia
(excluding Japan) and in many other countries outside the United States. The
Company has retained worldwide manufacturing rights for the NMP22 Test Kit as
well as marketing rights in the United States. The Company has entered into
exclusive distribution agreements for the NMP22 Test Kit in Japan and China and
has additional distribution arrangements in selected European and other
countries worldwide. Matritech's NMP22 Test Kit is currently being used by the
following organizations: Laboratory Corporation of America Holdings, Quest
Diagnostics, Inc., Urocor, Inc., Specialty Laboratories, Inc., Columbia-
Presbyterian Hospital, Cleveland Clinic Foundation and the Boston Medical Center
Corporation.
NuMA Test Kit for Colon Cancer. The Company has also developed the NuMA
Test Kit for colon cancer, a blood-based test utilizing its NMP technology for
the management of colorectal cancer patients. In October 1996, the Company
began clinical trials of this product for the purpose of providing the FDA with
data upon which to base approval for the marketing and sale of this product in
the United States. In March 1997, the Company commenced sales of the NuMA Test
Kit in certain countries outside the United States. The Company has retained
worldwide manufacturing and marketing rights for the NuMA Test Kit.
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<PAGE>
Cervical, Prostate and Breast Cancer Tests. The Company has also
identified NMPs specific to cervical, prostate and breast cancer and is
currently developing diagnostic tests for these cancers based on its proprietary
NMP technology. Matritech is collaborating with Bayer Corporation on the
development of an automated diagnostic test for its cervical cancer assay. The
Company has retained rights to certain manual applications of this technology
and resulting products and intends to commence clinical trials for a manual NMP-
based cervical cancer test. The Company plans to develop additional assays for
liver, pancreatic, stomach and renal cancers.
Patents and Proprietary Technology. Matritech's diagnostic technology is
protected by three United States patents owned by the Massachusetts Institute of
Technology ("MIT") and licensed exclusively to Matritech until the expiration of
the patents in 2006, with corresponding foreign patents granted in selected
countries in Europe and the Far East. Matritech also has corresponding patent
applications pending in Canada and Japan. The protection offered by these
patents extends to the detection and measurement of NMPs, or associated nucleic
acids, using antibody or gene probe formats, as well as to certain assay methods
exploiting NMPs. To strengthen its protection of NMP technology in the United
States, MIT voluntarily applied for the reissue of one of its patents, and the
United States Patent and Trademark Office ("PTO") has agreed to grant the
reissue.
Matritech has filed additional United States patent applications on related
NMP advances and corresponding foreign applications under the Patent Cooperation
Treaty designating Canada, Australia and selected countries in Europe and the
Far East. The Company currently has one United States patent and eleven patent
applications on file in the United States on these disclosures. The Company has
recently received Notices of Allowance from the PTO for three of its eleven
pending applications, two of which relate to the NMP tumor marker targeted by
its current products. The Company intends to file additional patent applications
in the future.
Matritech was incorporated in Delaware in 1987. The Company's facilities
are located at 330 Nevada Street, Newton, Massachusetts 02160. The Company's
telephone number is (617) 928-0820.
RISK FACTORS
The Common Stock offered hereby involves a high degree of risk. See "Risk
Factors."
THE OFFERING
SECURITIES OFFERED: 2,853,370 shares of the Company's Common Stock, $.01
par value per share.
OFFERING PRICE: All or part of the Shares offered hereby may be sold
from time to time in amounts and on terms to be
determined by the Selling Securityholders at the time
of sale.
USE OF PROCEEDS: The Company will receive no part of the proceeds from
the sale of any of the Shares by the Selling
Securityholders although the Company may receive,
subject to antidilution adjustments and
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<PAGE>
certain warrant provisions which permit a cashless
exercise, (i) $5.00 per share upon exercise of the
Placement Agent Warrants issued in May 1997, and (ii)
$6.50 per share upon exercise of the Public Relations
Warrants issued in April 1997.
SELLING SECURITYHOLDERS: The Shares being offered hereby are being offered for
the account of the Selling Securityholders specified
under the caption "Selling Securityholders."
STOCK MARKET SYMBOLS: Nasdaq SmallCap Market Boston Stock Exchange
Common Stock NMPS MPS
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<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating the Company and its
business before acquiring the Shares offered hereby. This Prospectus contains
forward-looking statements which involve risks and uncertainties. The Company's
actual results could differ materially from those anticipated in these forward-
looking statements as a result of certain factors, including those set forth in
the following risk factors and in the Company's filings with the Commission.
HISTORY OF OPERATING LOSSES AND ANTICIPATION OF FUTURE LOSSES
The Company has incurred operating losses since its inception in 1987.
Such losses have resulted principally from costs incurred in research and
development and from selling, general and administrative costs associated with
the Company's development. These costs have exceeded the Company's revenues,
which to date have been generated primarily from initial sales of the Company's
NMP22(R) Test Kit, its development agreements, government grants and interest
income. The Company expects to incur continuing operating losses in the near-
term as its marketing activities expand, it continues and initiates new clinical
trials and continues on-going research and development activities. The
Company's ability to achieve profitability depends in part on its ability to
market its existing products, obtain required regulatory approvals and develop
new products. There can be no assurance that the Company will successfully
market its existing products, obtain required regulatory approvals or develop,
commercialize, produce and market its future products or achieve or maintain
profitability.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock has been, and may continue
to be, highly volatile. The stock market has from time to time experienced
extreme price and volume fluctuations, particularly in the biotechnology sector,
which have often been unrelated to the operating performance of particular
companies. In addition, factors such as announcements of technological
innovations or new products by the Company or its competitors or third parties,
as well as market conditions in the Company's industry, may have a significant
impact on the market price of the Company's Common Stock.
NEAR-TERM DEPENDENCE UPON NMP22 AND NUMA TEST KITS
The Company anticipates that in the near term it will be substantially
dependent on the success of the NMP22 Test Kit, which was approved for sale in
the U.S. by the FDA in July 1996, and the NuMA Test Kit, which is currently
being sold in certain countries outside the United States and is the subject of
clinical trials being conducted by the Company for the purpose of providing the
FDA with data upon which to base approval for the marketing and sale of this
product in the United States. The Company would experience a material adverse
effect on its business, financial condition and results of operations if the
NMP22 Test Kit does not achieve wide market acceptance or if the NuMA Test Kit
is not approved for sale in the United States. The remainder of the Company's
products are in development and there can be no assurance that it will be
successful with such clinical trials and product development. See "--Risks
Associated with Extensive Government Regulation."
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<PAGE>
COMPETITION AND TECHNOLOGICAL CHANGE
Although Matritech is not aware of any other company using NMP technology
to develop diagnostic or therapeutic products, competition in the development
and marketing of cancer diagnostics and therapeutics, using a variety of
technologies, is intense. There are many pharmaceutical companies,
biotechnology companies, public and private universities and research
organizations actively engaged in the research and development of clinical
cancer diagnostic products. Many of these organizations have financial,
manufacturing, marketing and human resources greater than those of the Company.
The Company expects that certain of its assays will compete with existing
FDA-approved assays, including BTA, which has been approved for monitoring
bladder cancer, CEA, which is used primarily for monitoring colorectal and
breast cancers, PSA, which is used primarily for monitoring and screening
prostate cancer, and TRUQUANT BR RIA, which is used for monitoring breast
cancer. Matritech is also aware of a number of companies exploring the
application of oncogene technology to cancer diagnostics. The Company's
diagnostic products will also compete with more invasive or expensive procedures
such as surgery, bone scans, magnetic resonance imaging and other in vivo
imaging techniques. In addition, there can be no assurance that competing
diagnostic products based on other technologies will not be introduced by other
companies and adversely affect the competitive position of the Company, or that
products of the Company will not be rendered obsolete or non-competitive as a
result thereof.
RISKS ASSOCIATED WITH DEVELOPMENT AND TESTING OF FUTURE PRODUCTS
Other than the NMP22 and NuMA Test Kits, all of the Company's products are
under development and are not expected to be commercially available in the
United States for some time, if at all. The majority of the Company's products
under development will require significant additional research and development,
laboratory testing, clinical testing and regulatory approval prior to
commercialization. The development of the Company's products involves the use
of advanced technical methods that require both a high degree of skill and
judgment in their application. Unexpected technical difficulties may arise in
the course of the development process that the Company may be able to overcome
only with the expenditure of additional funds and time, if at all. No assurance
can be given that the Company's product development efforts will be successfully
completed, that required regulatory approvals will be obtained, or that any
future products, if and when introduced, will be successfully commercialized,
produced and marketed or achieve customer acceptance.
RISKS ASSOCIATED WITH EXTENSIVE GOVERNMENT REGULATION
The medical devices to be marketed and manufactured by the Company are
subject to extensive regulation by the FDA in the United States, and, in some
instances, by foreign governments. Pursuant to the Federal Food, Drug, and
Cosmetic Act, as amended, and the regulations promulgated thereunder (the "FDC
Act"), the FDA regulates the clinical testing, manufacture, labeling,
distribution and promotion of medical devices in the United States.
Noncompliance with applicable requirements including Good Manufacturing
Practices ("GMP") can result in, among other things, fines, injunctions, civil
penalties, recall or seizure of products, total or partial suspension of
production, failure of the government to grant premarket clearance or premarket
approval for devices, withdrawal of marketing approvals, and criminal
prosecution. The FDA also has the authority to request repair, replacement or
refund of the cost of any device manufactured or distributed by the Company.
Any products manufactured or distributed by the Company pursuant to FDA
clearances or approvals are subject to pervasive and continuing regulation by
the FDA, including recordkeeping
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<PAGE>
requirements and reporting of adverse experiences with the use of the device.
Device manufacturers are required to register their establishments and list
their devices with the FDA, and are subject to periodic inspections by the FDA
and certain state agencies. The FDC Act requires devices to be manufactured in
accordance with GMP regulations which impose certain procedural and
documentation requirements upon the Company with respect to manufacturing and
quality assurance activities.
Labeling and promotional activities are subject to scrutiny in the United
States by the FDA and, in certain instances, by the Federal Trade Commission.
For example, the NMP22 Test Kit has received FDA approval, and may be promoted
by the Company, only as a prognostic indicator. The FDA actively enforces
regulations prohibiting the promotion of devices for unapproved uses and the
promotion of devices for which premarket clearance or approval has not been
obtained. Consequently, the Company cannot promote the NMP22 Test Kit for
cancer screening or for any other unapproved use. Failure to comply with these
requirements can result in regulatory enforcement action by the FDA that would
adversely affect the Company's ability to conduct testing necessary to obtain
market clearance for these products and, consequently, could have a material
adverse effect on the Company's business, financial condition and results of
operations.
The Company and its products are also subject to a variety of state laws
and regulations in those states or localities where its products are or will be
marketed. Any applicable state or local regulations may hinder the Company's
ability to market its products in those states or localities. Manufacturers are
also subject to numerous federal, state and local laws relating to such matters
as safe working conditions, manufacturing practices, environmental protection,
fire hazard control, and disposal of hazardous or potentially hazardous
substances. There can be no assurance that the Company will not be required to
incur significant costs to comply with such laws and regulations now or in the
future or that such laws or regulations will not have a material adverse effect
upon the Company's ability to do business.
DEPENDENCE ON PARTNERS
A substantial portion of the Company's total revenue to date has been
derived from funded development and marketing agreements with certain corporate
partners. There can be no assurance that the Company's corporate partners will
not terminate their agreements for reasons beyond the Company's control. These
agreements generally provide the Company's partners with rights, in most cases
exclusive, to market the developed products in specified territories. Revenues
from sales of such products will depend to varying degrees on the efforts and
abilities of such partners to obtain regulatory approvals and successfully
market such products. The amount and timing of resources devoted to promoting
and selling the products in these instances will be controlled by the partners
rather than Matritech, and certain partners may develop, acquire or market
products competitive with those developed by the Company. Each of the Company's
current funded development and marketing agreements may be terminated if the
Company fails to meet certain milestones. There is no assurance that the
Company will meet such milestones and failure to do so may result in termination
of the applicable agreement, which could have a material adverse effect on the
Company. To date, the Company has been dependent in part on its corporate
partners for the funding of product development and the Company expects that
this partial dependence will continue. Matritech may enter into additional
funded development and marketing agreements, but there can be no assurance that
Matritech will enter into additional agreements or that it could replace any
agreements if they were to be terminated.
In addition, the Company will rely in part on corporate partners (including
distributors) for international sales of its NMP22 Test Kit and future products,
if any. The ability of the Company to commercialize its products
internationally will depend to a significant extent on the marketing and sales
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<PAGE>
efforts of its corporate partners, over which the Company has minimal control.
There can be no assurance that such partners will devote resources to the
Company's products sufficient to achieve successful market penetration and
acceptance, that the Company will generate significant revenues from sales by
corporate partners, or that such revenues will be sufficient to offset the
Company's significant investment in research and development and other costs
associated with its products. Although the Company has the ability in certain
instances under its corporate partner agreements to terminate the corporate
partner's rights if certain performance standards are not met or other breaches
of such agreements occur, the failure or delay by a corporate partner in
marketing the Company's products, or any material breach of their agreements
with the Company, could materially adversely affect the Company's business,
financial condition and results of operations. The costs associated with
terminating a foreign distributor and pursuing potential legal remedies against
such a distributor for breach could be significant. There can be no assurance
that agreements can be entered into with prospective distributors, that such
distributors will perform under such agreements or that, if such agreements are
terminated, that additional distribution relationships can be entered into on
terms favorable to the Company, if at all.
DEPENDENCE ON PROPRIETARY TECHNOLOGY
The Company relies on a combination of patent, trade secret and trademark
laws, nondisclosure and other contractual provisions and technical measures to
protect the proprietary rights in its current and planned products. There can
be no assurance that these protections will be adequate or that the Company's
competitors will not independently develop technologies that are substantially
equivalent or superior to the Company's technology. Patent law relating to the
scope of claims in the biotechnology field is still evolving and, therefore, the
degree of future protection for the Company's proprietary rights is uncertain.
In addition, the laws of certain countries in which the Company's products are
or may be licensed or sold do not protect the Company's products and
intellectual property rights to the same extent as the laws of the United
States. Matritech believes that the use of the patents for NMP technology
licensed to the Company and the use of Matritech's trademarks and other
proprietary rights do not infringe upon the proprietary rights of third parties.
However, there can be no assurance that the Company will prevail in any
challenge of third-party intellectual property rights, that third parties will
not successfully assert infringement claims against the Company in the future or
that the Company will be able to acquire licenses to any such proprietary rights
of third parties on reasonable terms, if at all.
UNCERTAINTY OF HEALTH CARE REFORM MEASURES AND THIRD-PARTY REIMBURSEMENT
The Company's ability to successfully commercialize its planned products
will depend in part on the extent to which reimbursement for the cost of such
products will be available from government health administration authorities,
private health insurers and other third-party payors. In the case of private
insurers, the reimbursement of any medical device, either approved for
investigational use only or for research use, is at the sole discretion of the
patient's individual carrier. Even if a procedure has been approved for
reimbursement, there can be no assurance that the insurance carrier will
continue to reimburse the procedure. Health care reform is an area of
continuing national attention and a priority of many governmental officials.
Certain reform proposals, if adopted, could impose limitations on the prices the
Company will be able to charge in the United States for its products or the
amount of reimbursement available for the Company's products from governmental
agencies or third-party payors. While the Company cannot predict whether any
such legislative or regulatory proposals will be adopted or the effect such
proposals may have on its business, the announcement or adoption of such
proposals could have a material adverse effect on the Company's business,
financial condition or results of operations.
- 10 -
<PAGE>
ADDITIONAL FINANCING REQUIREMENTS
Matritech has expended, and will continue to expend in the future,
substantial funds to complete the research and development of its products, and
may need additional financing to conduct clinical trials and to manufacture and
market its products as currently contemplated. There can be no assurance that
such additional funding will be available on terms acceptable to the Company, if
at all. The Company may seek additional funding through public or private sales
of its securities, including equity securities. If adequate funds are not
available, the Company may be required to seek to obtain funds through
arrangements with collaborative partners or others that may require the Company
to relinquish manufacturing or marketing rights to certain of its technologies,
product candidates or products which the Company would otherwise pursue on its
own. The Company has no established bank financing arrangements. There can be
no assurance that the Company will be able to arrange bank or other financing on
terms acceptable to it or to enter into funded development or other agreements
to obtain such additional funds.
LIMITED MARKETING AND SALES CAPABILITY
The Company intends to market its cancer diagnostic test kits in the United
States with its own sales force. The Company has limited internal marketing and
sales resources and personnel. In order to successfully market its current and
future products in the United States and other territories in which the Company
does not, or does not intend to, use third-party distributors, the Company will
need to develop a larger marketing and sales force with appropriate technical
expertise and distribution capability. There can be no assurance that the
Company will be able to establish such marketing and sales capabilities or that
the Company will be successful in gaining market acceptance for any of its
products.
LIMITED MANUFACTURING EXPERIENCE
The Company has been manufacturing and assembling its test kits for limited
commercial sales since 1995, but has yet to manufacture the large product
volumes necessary for the Company to achieve profitability. The Company intends
to expand its manufacturing capabilities, and if the Company encounters
difficulties in scaling up production of new products, including problems
involving production yields, quality control and assurance, component supply and
shortages of qualified personnel, such problems could have a material adverse
effect on the Company's business, financial condition and results of operations.
There can be no assurance that reliable, high-volume manufacturing can be
achieved at a commercially reasonable cost. In addition, the Company is subject
to extensive government regulation of its manufacturing operations. See "--Risks
Associated with Extensive Government Regulation."
RELIANCE ON SOLE OR LIMITED SOURCES OF SUPPLY
The Company currently relies on sole suppliers for certain key components
for its test kits. In the event that the components from such suppliers should
become unavailable for any reason, the Company would seek alternative sources of
supply, which the Company would have to show to be equivalent in order to
maintain the FDA validation of its manufacturing process. Although the Company
attempts to maintain an adequate level of inventory to provide for these and
other contingencies, should its manufacturing process be disrupted as a result
of a shortage of key components or a revalidation of new components, there can
be no assurance that the Company would be able to meet its commitments to
customers. The failure of the Company to meet its commitments could have a
material adverse effect on the Company's business, financial condition and
results of operations.
- 11 -
<PAGE>
DEPENDENCE ON KEY PERSONNEL
The Company's success depends, in large part, upon its ability to attract
and retain highly qualified scientific and management personnel. The Company
has no employment contracts with any of its key personnel. The loss of key
personnel or the failure to recruit necessary additional personnel might impede
the achievement of developmental objectives. The Company faces competition for
such personnel from other companies, research and academic institutions,
government entities and other organizations. There can be no assurance that the
Company will be successful in hiring or retaining qualified scientific or
management personnel on acceptable terms, given the competition among numerous
pharmaceutical and biotechnology companies, government entities and research and
academic institutions for such personnel.
POTENTIAL PRODUCT LIABILITY
The testing, marketing and sale of human health care products entail an
inherent exposure to product liability, and there can be no assurance that
product liability claims will not be successfully asserted against the Company.
The Company currently has insurance covering its products. There can be no
assurance that adequate insurance coverage will continue to be available in the
future at acceptable costs, if at all, or that a product liability claim will
not be asserted against the Company in excess of the insurance coverage the
Company has purchased. Significant product liability claims could adversely
affect the Company.
RISKS OF HAZARDOUS MATERIAL CONTAMINATION
The Company's research and development activities involve the controlled
use of hazardous materials, including radioactive compounds. Although the
Company believes that its safety procedures for handling and disposing of such
materials comply with the standards prescribed by federal, state and local laws
and regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident,
the Company could be held liable for damages that result, and any such liability
could have an adverse effect on the Company's business, financial condition and
results of operations.
USE OF PROCEEDS
The Company will receive no part of the proceeds from the sale of any of
the Shares by any of the Selling Securityholders although the Company may
receive, subject to certain anti-dilution adjustments and certain warrant
provisions which permit a cashless exercise, (i) $5.00 per share upon exercise
of the Placement Agent Warrants issued in May 1997, and (ii) $6.50 per share
upon exercise of the Public Relations Warrants issued in April 1997.
- 12 -
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth certain information as of June 24, 1997 with
respect to the Shares held by each Selling Securityholder. The Shares may be
offered from time to time by any of the Selling Securityholders, their
transferees and their distributees. See "Plan of Distribution."
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Number Number of Shares
Shares Beneficially Owned of Shares Beneficially Owned
Prior to Offering Offered After Offering/(2)/
------------------------- --------- ------------------------
Name/(1)/ Number Percent/(3)/ Number Percent/(3)/
- -------- ------ ------------ ------ ------------
<S> <C> <C> <C> <C> <C>
Alfa Life Insurance Corp. 40,000 * 40,000 0 *
Alfa Mutual Fire Insurance 60,000 * 60,000 0 *
Alfa Mutual Insurance 100,000 * 100,000 0 *
Aries Domestic Fund, L.P. (4) 63,000 * 63,000 0 *
The Aries Trust (4) 117,000 * 117,000 0 *
Arthur S. DeMoss Foundation 40,000 * 40,000 0 *
Barker, Lee & Co. Limited Partnership (5) 60,900 * 48,800 12,100 *
Stanley Bienenfeld 20,000 * 20,000 0 *
Bulldog Capital Partners 20,000 * 20,000 0 *
Derek Caldwell (6) 55,503 * 55,503 0 *
Barton J. Cohen 30,000 * 30,000 0 *
Curran Companies 30,000 * 30,000 0 *
Ben Davidowitz (7) 5,000 * 5,000 0 *
Ivan Davidowitz (7) 5,000 * 5,000 0 *
William Davidowitz 10,000 * 10,000 0 *
Fiduciary Trust Global Fund, US High 157,600 * 157,600 0 *
Growth Equity Fund
FTI Small Capitalization Equity Fund 42,400 * 42,400 0 *
Sean Gallagher (8) 18,424 * 18,424 0 *
</TABLE>
- 13 -
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Number Number of Shares
Shares Beneficially Owned of Shares Beneficially Owned
Prior to Offering Offered After Offering/(2)/
------------------------- --------- ------------------------
Name/(1)/ Number Percent/(3)/ Number Percent/(3)/
- -------- ------ ------------ ------ ------------
<S> <C> <C> <C> <C> <C>
Joseph Giamanco 20,000 * 20,000 0 *
Grenadier Fund, L.P. (9) 156,100 * 18,000 138,100 *
Gross Foundation, Inc. 50,000 * 50,000 0 *
Hasenfeld Stein Pension Trust (10) 5,000 * 5,000 0 *
Hathaway Partners Investment Limited 90,000 * 90,000 0 *
Partnership
Hopewell (9) 121,400 * 12,500 108,900 *
Eli Jacobson 10,000 * 10,000 0 *
J.M.R. Barker Foundation (5) 47,800 * 38,300 9,500 *
JIBS Equities 30,000 * 30,000 0 *
Kentucky National Insurance Company (10) 5,000 * 5,000 0 *
John S. Lemak 10,000 * 10,000 0 *
Nathan Low (11) 467,700 2.5% 467,700 0 *
Ruth Low 30,000 * 30,000 0 *
Honey Myers 10,000 * 10,000 0 *
Isaac Michalovsky 5,000 * 5,000 0 *
D. Dwight Miller (12) 46,979 * 46,979 0 *
Howard P. Milstein 100,000 * 100,000 0 *
Namakagon Associates, L.P. (5) 91,100 * 72,700 18,400 *
Steven M. Oliveira 15,000 * 15,000 0 *
Pequot Scout Fund, L.P. 100,000 * 100,000 0 *
Prime Petroleum, Inc. Profit Sharing 100,000 * 100,000 0 *
Trust
</TABLE>
- 14 -
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Number Number of Shares
Shares Beneficially Owned of Shares Beneficially Owned
Prior to Offering Offered After Offering/(2)/
------------------------- --------- ------------------------
Name/(1)/ Number Percent/(3)/ Number Percent/(3)/
- -------- ------ ------------ ------ ------------
<S> <C> <C> <C> <C> <C>
Quaker Hill Associates, L.P. (5) 14,600 * 11,600 3,000 *
The Quiltex Co. Profit Sharing Plan 10,000 * 10,000 0 *
Radix Associates 20,000 * 20,000 0 *
Alan J. Rubin 20,000 * 20,000 0 *
Rutgers Casualty Insurance Company (10) 5,000 * 5,000 0 *
Paul Scharfer (13) 26,714 * 26,714 0 *
Marc Seelenfreund (14) 10,133 * 10,133 0 *
Morton Seelenfreund 10,000 * 10,000 0 *
Norman Seiden 30,000 * 30,000 0 *
State Capital Partners 30,000 * 30,000 0 *
Nachum Stein (10) 10,000 * 10,000 0 *
Richard Stone (15) 40,500 * 40,500 0 *
The Sunrise Foundation Trust 65,000 * 65,000 0 *
Alan Swerdloff (16) 37,284 * 37,284 0 *
Robert L. Swisher, Jr. 100,000 * 100,000 0 *
Nobukuni Taneya 10,000 * 10,000 0 *
Trenton Small Cap Fund 50,000 * 50,000 0 *
Triumph Fund, L.P. (9) 172,300 * 19,500 152,800 *
Upland Associates, L.P. (5) 35,600 * 28,600 7,000 *
Ronald M. Urvater - IRA 10,000 * 10,000 0 *
Westfield Performance Fund, L.P. 200,000 1.1% 200,000 0 *
Lawrence S. Zaslow (17) 10,133 * 10,133 0 *
---------
TOTAL 2,853,370
</TABLE>
- --------------------------------------------------------------------------------
* Less than 1%
- 15 -
<PAGE>
(1) The persons and entities named in the table have sole voting and investment
power with respect to all shares shown as beneficially owned by them except
as noted in the footnotes below based upon information provided to the
Company by the Selling Securityholders.
(2) Assumes that the Selling Securityholders will sell all of the Shares
registered hereunder. The Selling Securityholders may sell all or any part
of their Shares pursuant to this Prospectus.
(3) The number of shares of Common Stock deemed outstanding includes (i)
18,505,027 shares of Common Stock outstanding as of June 24, 1997 and (ii)
all Common Stock underlying options, warrants and other convertible
securities which are exercisable or convertible within 60 days of June 24,
1997 by the person or entity in question.
(4) Paramount Capital Asset Management, Inc. ("Paramount"), the General Partner
of Aries Domestic Fund, L.P., also serves as the Investment Manager to The
Aries Trust. Lindsay A. Rosenwald, M.D., is the sole shareholder of
Paramount.
(5) Each of Barker, Lee & Co. Limited Partnership, J. M. R. Barker Foundation,
Namakagon Associates, L.P., Quaker Hill Associates, L.P. and Upland
Associates, L.P. are related by virtue of the fact that Dwight E. Lee is
either a General Partner or Officer of each.
(6) Mr. Caldwell's beneficial ownership includes 27,107 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agent Warrants.
(7) Does not include shares of the Company's Common Stock held by JIBS
Equities. Ivan and Ben Davidowitz each have a 25% interest in JIBS
Equities.
(8) Mr. Gallagher's beneficial ownership includes 10,054 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agent Warrants.
(9) Forstmann Leff Associates, Inc. ("FLA"), a New York corporation and a
registered investment adviser under Section 203 of the Investment Advisors
Act of 1940, is a general partner of Grenadier Fund, L.P. and Triumph Fund,
L.P. In addition FLA, by virtue of a certain investment advisory agreement
with Hopewell, may be deemed to share voting and dispositive power with
respect to the shares of the Company's Common Stock held by Hopewell.
(10) Mr. Stein is Chairman of Rutgers Casualty Insurance Company and Kentucky
National Insurance Company, subsidiaries of American European Group. In
addition, Mr. Stein is the trustee and investment manager of Hasenfeld
Stein Pension Trust.
(11) Mr. Low's beneficial ownership includes (i) 130,457 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agent Warrants,
and (ii) 150,000 shares of Common Stock issuable upon exercise of currently
exercisable Public Relations Warrants. Mr. Low is a co-trustee of The
Sunrise Foundation Trust and may be deemed to share voting and dispositive
power with respect to the shares of the Company's Common Stock which it
beneficially owns. Consequently, Mr. Low may be deemed to beneficially own
an additional 65,000 shares of the Company's Common Stock. Mr. Low
disclaims beneficial ownership of all shares of the Company's Common Stock
beneficially owned by The Sunrise Foundation Trust, except with respect to
his pecuniary interest therein, if any.
(12) Mr. Miller's beneficial ownership includes 25,637 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agent Warrants.
(13) Mr. Scharfer's beneficial ownership includes 14,578 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agents Warrants.
(14) Mr. Seelenfreud's beneficial ownership includes 5,530 shares of Common
Stock issuable upon exercise of currently exercisable Placement Agent
Warrants.
(15) Mr. Stone's beneficial ownership includes 13,573 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agent Warrants.
(16) Mr. Swerdloff's beneficial ownership includes 13,295 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agent Warrants.
(17) Mr. Zaslow's beneficial ownership includes 5,530 shares of Common Stock
issuable upon exercise of currently exercisable Placement Agent Warrants.
Except as noted below, to the best of the Company's knowledge, none of the
Selling Securityholders had any material relationship with the Company or any of
its affiliates within the three year period ending on the date of this
Prospectus.
- 16 -
<PAGE>
Sunrise Securities Corp. acted as the sole Placement Agent in the Company's
private placement of 2,200,000 shares of Common Stock which was completed on May
30, 1997. Mr. Low is the sole shareholder of Sunrise Securities Corp., and
Messrs. Caldwell, Gallagher, Miller, Scharfer, Seelenfreund (Marc), Stone,
Swerdloff and Zaslow are employees of Sunrise Securities Corp. Mr. Low is also
the sole shareholder of Sunrise Financial Group, Inc., which currently acts as a
public relations consultant to the Company. Mr. Caldwell is also an employee of
Sunrise Financial Group, Inc. Mr. Low is a co-trustee of The Sunrise Foundation
Trust.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by or for the
account of any of the Selling Securityholders or by their pledgees, donees,
distributees or transferees or other successors in interest. The Company will
not receive any of the proceeds from this offering, although the Company may
receive, subject to certain anti-dilution adjustments and certain warrant
provisions which permit a cashless exercise, (i) $5.00 per share upon exercise
of the Placement Agent Warrants issued in May 1997, and (ii) $6.50 per share
upon exercise of the Public Relations Warrants issued in April 1997. The
distribution of the Shares by the Selling Securityholders is not subject to any
underwriting agreement. The Shares may be sold hereunder directly to purchasers
by the Selling Securityholders in negotiated transactions; by or through brokers
or dealers in ordinary brokerage transactions or transactions in which the
broker solicits purchasers; block trades in which the broker or dealer will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal; transactions in which a broker or dealer purchases as
principal for resale for its own account; or through underwriters or agents.
The Shares may be sold at a fixed offering price, which may be changed, at the
prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Any brokers, dealers,
underwriters or agents may arrange for others to participate in any such
transaction and may receive compensation in the form of discounts, commissions
or concessions from the Selling Securityholders and/or the purchasers of the
Shares. Each Selling Securityholder will be responsible for payment of any and
all commissions to brokers. The Company has agreed to indemnify certain of the
Selling Securityholders against certain liabilities, including liabilities under
the Securities Act and Exchange Act.
The Selling Securityholder may also loan or pledge the shares registered
hereunder to a broker-dealer and the broker-dealer may sell the shares so loaned
or upon a default the broker-dealer may effect sales of the pledged shares
pursuant to this prospectus.
Pursuant to certain Subscription Agreements executed in connection with the
Private Placement, the Placement Agent Warrants and the Public Relations
Warrants, the Company has agreed, at its expense, to file the registration
statement to which this Prospectus is a part and to take certain other actions
to permit the Selling Securityholders to sell the Shares under the Securities
Act and applicable state securities laws.
- 17 -
<PAGE>
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdiction only through registered
or licensed brokers or dealers. In addition, in certain states the Shares may
not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
If and when any Shares covered by this Prospectus qualify for sale pursuant
to Rule 144 under the Securities Act, they may be sold under Rule 144 rather
than pursuant to this Prospectus.
Any Selling Securityholder and any broker-dealer, agent or underwriter that
participates with the Selling Securityholder in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act, in
which event any commissions received by such broker-dealers, agents or
underwriters 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.
The Selling Securityholders are not restricted as to the price or prices at
which they may sell Shares. Sales of such Shares at less than the market price
may depress the market price of the Company's securities. Moreover, the Selling
Securityholders are not restricted as to the number of Shares which may be sold
at any one time, and it is possible that a significant number of Shares could be
sold at the same time which may also have a depressive effect on the market
price of the Company's securities.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares offered hereby may not simultaneously
engage in market making activities with respect to the Shares for a period of
time prior to the commencement of such distribution. In addition, and without
limiting the foregoing, each Selling Securityholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rule 10b-5 and Regulation M, which
provisions may limit the timing of purchases and sales of the Shares by the
Selling Securityholder.
There is no assurance that any Selling Securityholder will sell any or all
of the Shares described herein and may transfer, devise or gift such securities
by other means not described herein.
Expenses of preparing and filing the registration statement and all post-
effective amendments will be borne by the Company.
The Company is permitted to suspend the use of this Prospectus in
connection with sales of the Shares by holders during periods of time under
certain circumstances relating to pending corporate developments and public
filings with the Commission and similar events.
LEGAL MATTERS
Certain legal matters with respect to the Shares offered hereby will be
passed upon for the Company by Testa, Hurwitz & Thibeault, LLP, Boston,
Massachusetts.
EXPERTS
The financial statements incorporated by reference in this Prospectus and
elsewhere in this Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as
- 18 -
<PAGE>
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as expected in giving said reports.
- 19 -
<PAGE>
================================================================================
No person has been authorized to
give any information or to make
any representation other than
those contained in this
Prospectus in connection with the 2,853,370 SHARES
offering made hereby, and if
given or made, such information OF
or representation must not be
relied upon as having been COMMON STOCK
authorized by the Company or by
any other person. Neither the OF
delivery of this Prospectus nor
any sale made hereunder shall, MATRITECH, INC.
under any circumstances, create
any implication that information
herein is correct as of any time
subsequent to the date hereof.
This Prospectus does not
constitute an offer to sell or a
solicitation of any person in any
jurisdiction in which such offer
or solicitation may not be
lawfully made.
----------------- ------------
TABLE OF CONTENTS PROSPECTUS
----------------- ------------
Page
Available Information........................... 2
Documents Incorporated by Reference............. 2
Prospectus Summary.............................. 4
Risk Factors.................................... 7
Use of Proceeds................................. 12
Selling Securityholders......................... 13
Plan of Distribution............................ 17
Legal Matters................................... 18
Experts......................................... 18
, 1997
-----------
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses incurred by the Company in connection with the issuance
and distribution of the securities being registered are estimated as follows:
<TABLE>
<CAPTION>
Amount
----------
<S> <C>
Securities and Exchange Commission registration fee.. $ 6,511.74
Nasdaq SmallCap Market listing fee................... $ 7,500.00
Boston Stock Exchange listing fee.................... $ 5,000.00
Legal fees and expenses.............................. $50,000.00
Accounting fees and expenses......................... $20,000.00
Miscellaneous........................................ $ 6,500.00
----------
Total............................................... $95,511.74
----------
</TABLE>
None of the above expenses will be paid by the Selling Securityholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the provisions of Section 145 of the Delaware General Corporation
Law ("DGCL") the Company has the power to indemnify certain persons, including
its officers and directors, under stated circumstances and subject to certain
limitations, for liabilities incurred in connection with services performed in
good faith for the Company or for other organizations at the request of the
Company.
Article Seventh of the Company's Amended and Restated Certificate of
Incorporation provides that no director of the Company shall be liable for
monetary damages for breach of fiduciary duty, except to the extent that the
DGCL prohibits the elimination of liability of directors for breach of fiduciary
duty.
Article Twelfth of the Company's Amended and Restated Certificate of
Incorporation provides that a director or officer of the Company (a) shall be
indemnified by the Company against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement incurred in connection with any
litigation or other legal proceeding (other than an action by or in the right of
the Company) brought against him by virtue of his position as a director or
officer of the Company if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful and (b) shall be indemnified by the Company
against all expenses (including attorneys' fees) and amounts paid in settlement
incurred in connection with any action by or in the right of the Company brought
against him by virtue of his
II-1
<PAGE>
position as a director or officer of the Company if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Company, except that no indemnification shall be made with
respect to any matter as to which such person shall have been adjudged to be
liable to the Company, unless a court determines that despite such adjudication
but in view of all of the circumstances, he is entitled to indemnification of
such expenses.
Notwithstanding the foregoing, to the extent that a director or officer has
been successful, on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, he is required to be indemnified by
the Company against all expenses (including attorneys' fees) incurred in
connection therewith. Expenses shall be advanced to a director or officer at his
request, provided that he undertakes to repay the amount advanced if it is
ultimately determined that he is not entitled to indemnification for such
expenses.
Article Twelfth of the Company's Amended and Restated Certificate of
Incorporation further provides that the indemnification provided therein is not
exclusive and provides that in the event that the DGCL is amended to expand or
limit the indemnification permitted to directors or officers, the Company must
indemnify those persons to the fullest extent permitted by such law, as so
amended.
In addition to the indemnification provided by Section 145 of the DGCL, the
Company has entered into an Indemnity Agreement with each of its directors
pursuant to which the Company agrees to indemnify that director for (1) all
expenses, liabilities, judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with any legal action, suit or proceeding
against the director by reason of the fact that he was an agent of the Company
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
proceedings had no reasonable cause to believe his conduct was unlawful, and (2)
all expenses incurred in connection with the investigation, defense, settlement
or appeal of any legal action or proceeding brought against the director by or
in the right of the Company by reason of any action taken or not taken by him in
his capacity as a director of the Company if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company. The Company is not obligated under the terms of the Indemnity
Agreements to indemnify its directors (a) for expenses or liabilities paid
directly to the directors by directors' and officers' insurance, (b) on account
of any claims against the directors for an accounting of profits made from the
purchase or sale by directors of securities of the Company pursuant to Section
16(b) of the Exchange Act, as amended, (c) if indemnification would not be
lawful.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
<S> <C>
4.1 Specimen Common Stock Certificate (filed as Exhibit 4.2 to the
Company's Registration Statement No. 33-46158 on Form S-1 and
incorporated herein by reference).
4.2 Placement Manager Agreement dated May 28, 1997 between the Company and
Sunrise Securities Corp. (filed as Exhibit 4.1 to the Company's Form 8-
K, filed on June 4, 1997 and incorporated herein by reference).
4.3 Form of Warrant Agreement used for the Placement Agent Warrants and
Public Relations Warrants (filed as Exhibit 4.2 to the Company's Form
8-K, filed on June 4, 1997 and
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
incorporated herein by reference).
4.4 Form of Subscription Agreement between the Company and the several
purchasers (filed as Exhibit 4.3 to the Company's Form 8-K, filed on
June 4, 1997 and incorporated herein by reference).
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (contained in Exhibit
5.1).*
24.1 Power of Attorney (included on page II-5 of the Registration
Statement).*
</TABLE>
- -----------------
* Filed herewith.
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 of 1933;
(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;
(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 Commission by the registrant pursuant to Section 13 or Section 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 of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the
II-3
<PAGE>
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 post-effective amendment any of
the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, 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
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 Securities Act
of 1933 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 of 1933 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 Newton, Commonwealth of Massachusetts, on June
27, 1997.
Matritech, Inc.
By: /s/ Stephen D. Chubb
--------------------------------------------
Stephen D. Chubb
Director, Chairman and Chief Executive Officer
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Matritech, Inc.,
hereby severally constitute and appoint Stephen D. Chubb, David L. Corbet and
Leslie R. Teso, and each of them singly, our true and lawful attorneys, with
full power to them and each of them singly, to sign for us in our names in the
capacities indicated below, all pre-effective and post-effective amendments to
this registration statement, and generally to do all things in our names and on
our behalf in such capacities to enable Matritech, Inc. to comply with the
provisions of the Securities Act of 1933, and all requirements of the Securities
and Exchange Commission.
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>
/s/ Stephen D. Chubb Director, Chairman and Chief June 27, 1997
- --------------------------- Executive Officer (Principal
STEPHEN D. CHUBB Executive and Financial Officer)
/s/ David L. Corbet Director, President and Chief June 27, 1997
- --------------------------- Operating Officer
DAVID L. CORBET
/s/ Leslie R. Teso Vice President, Finance, June 27, 1997
- --------------------------- Secretary and Treasurer
LESLIE R. TESO (Principal Accounting Officer)
/s/ Thomas R. Morse Director June 27, 1997
- ---------------------------
THOMAS R. MORSE
Director June , 1997
- --------------------------- ---
DAVID RUBINFIEN
/s/ T. Stephen Thompson Director June 27, 1997
- ---------------------------
T. STEPHEN THOMPSON
/s/ C. William Zadel Director June 25, 1997
- ---------------------------
C. WILLIAM ZADEL
/s/ J. Robert Buchanan Director June 25, 1997
- ---------------------------
J. ROBERT BUCHANAN
</TABLE>
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<PAGE>
EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
<C> <S>
4.1 Specimen Common Stock Certificate (filed as Exhibit 4.2 to the
Company's Registration Statement No. 33-46158 on Form S-1 and
incorporated herein by reference).
4.2 Placement Manager Agreement dated May 28, 1997 between the Company
and Sunrise Securities Corp. (filed as Exhibit 4.1 to the
Company's Form 8-K, filed on June 4, 1997 and incorporated herein
by reference).
4.3 Form of Warrant Agreement used for the Placement Agent Warrants
and Public Relations Warrants (filed as Exhibit 4.2 to the
Company's Form 8-K, filed on June 4, 1997 and incorporated herein
by reference).
4.4 Form of Subscription Agreement between the Company and the several
purchasers (filed as Exhibit 4.3 to the Company's Form 8-K, filed
on June 4, 1997 and incorporated herein by reference).
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (contained in Exhibit
5.1)*
24.1 Power of Attorney (included on page II-5 of the Registration
Statement)*
</TABLE>
- --------------------
* Filed herewith.
<PAGE>
Exhibit 5.1
TESTA, HURWITZ & THIBEAULT, LLP
ATTORNEYS AT LAW
HIGH STREET TOWER, 125 HIGH STREET
OFFICE (617) 248-7000 BOSTON, MASSACHUSETTS 02110 FAX (617) 248-7100
June 27, 1997
Matritech, Inc.
330 Nevada Street
Newton, MA 02160
RE: Form S-3 Registration Statement
Ladies and Gentlemen:
We are counsel to Matritech, Inc., a Delaware corporation (the "Company"),
and have represented the Company in connection with the preparation and filing
of the Company's Form S-3 Registration Statement (the "Registration Statement"),
covering the sale to the public of up to 2,853,370 shares of the Company's
Common Stock, $.01 par value per share, being sold by certain stockholders of
the Company (the "Shares"). Terms not otherwise defined herein shall have the
meaning assigned to them in the Registration Statement.
We have reviewed the corporate proceedings taken by the Board of Directors of
the Company with respect to the authorization and issuance of the Shares. We
have also examined and relied upon originals or copies, certified or otherwise
authenticated to our satisfaction, of all corporate records, documents,
agreements or other instruments of the Company and have made all investigations
of law and have discussed with the Company's officers all questions of fact that
we have deemed necessary or appropriate.
Based upon and subject to the foregoing, we are of the opinion that when the
Shares to be sold by the Selling Securityholders pursuant to the Prospectus have
been paid for in accordance with the terms described in the Prospectus, such
shares of Common Stock will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm in the Prospectus
contained in the Registration Statement under the caption "Legal Matters."
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
TESTA, HURWITZ & THIBEAULT, LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated January 31, 1997
included in Matritech, Inc.'s Form 10-K for the year ended December 31, 1996 and
to all references to our Firm included in this Registration Statement.
Arthur Andersen LLP
Boston, Massachusetts
June 26, 1997
