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FINAL PROSPECTUS FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 333-92719
MATRITECH, INC.
3,092,241 SHARES
OF COMMON STOCK
$.01 PAR VALUE PER SHARE
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This prospectus covers the resale of up to 3,092,241 shares of our common
stock by the selling securityholders listed inside.
The selling securityholders acquired the shares of common stock offered
under this prospectus from Matritech in one of the following ways:
* in a private placement of 900,670 units, with each unit consisting of
two shares of our common stock and a warrant to purchase one share of
our common stock, which was completed on November 22, 1999;
* through the exercise of the warrants to purchase our common stock
issued in the private placement which was completed on November 22,
1999;
* through the exercise of warrants to purchase our common stock issued
to certain designees of Sunrise Securities Corp. in a private
placement which was completed on May 30, 1997; or
* through the exercise of warrants to purchase our common stock issued
in April 1997 in connection with Matritech's retaining the services of
a public relations firm.
As of November 30, 1999 none of the selling securityholders has exercised
his or its warrants.
On October 30, 1999, Matritech amended the warrants issued in April 1997 to
reduce the exercise price from $6.50 per share to $2.50 per share. In addition,
on October 30, 1999, Matritech amended the warrants issued in May 1997 to reduce
the exercise price from $5.00 per share to $2.50 per share.
Matritech will not receive any of the proceeds from the sale of these
shares by any of the selling securityholders, although we may receive, subject
to anti-dilution adjustments, $2.50 per share upon exercise of the warrants
issued in April and May 1997 and $2.20 per share upon the exercise of the
warrants issued in November 1999. Matritech has agreed to indemnify the selling
securityholders against certain liabilities, including liabilities under the
Securities Act of 1933 and the Securities Exchange Act of 1934.
Our common stock is quoted on the Nasdaq National Market under the symbol
"NMPS." On December 7, 1999, the last reported sale price for our common stock
as reported by the Nasdaq National Market was $4.063 per share. Our executive
offices are located at 330 Nevada Street, Newton, Massachusetts 02460, and our
telephone number is (617) 928-0820.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR INFORMATION THAT SHOULD BE CONSIDERED
BEFORE INVESTING.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
THE DATE OF THIS PROSPECTUS IS JANUARY 7, 2000.
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TABLE OF CONTENTS
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MATRITECH, INC...............................................................3
RISK FACTORS.................................................................3
USE OF PROCEEDS.............................................................10
SELLING SECURITYHOLDERS.....................................................10
PLAN OF DISTRIBUTION........................................................12
LEGAL MATTERS...............................................................14
EXPERTS.....................................................................14
WHERE YOU CAN FIND MORE INFORMATION.........................................14
DOCUMENTS INCORPORATED BY REFERENCE.........................................15
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MATRITECH, INC.
Matritech develops, manufactures and markets innovative cancer diagnostic
products based on its proprietary nuclear matrix protein 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. Matritech has demonstrated that there
are differences in the types and amounts of nuclear matrix proteins found in
cancerous and normal tissue. Matritech believes that the detection of these
differences in nuclear matrix proteins, often called NMPs, provides important
diagnostic information about cellular abnormalities, including cancer. Using its
proprietary nuclear matrix protein technology and expertise, Matritech has
developed non-invasive or minimally invasive cancer diagnostic tests for bladder
and colon cancer and is developing additional tests for cervical, breast and
prostate cancer.
RISK FACTORS
An investment in the shares involves a high degree of risk. This prospectus
contains forward-looking statements which involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including the risks
described below and elsewhere in this prospectus. The following risk factors
should be considered carefully along with the detailed information in this
prospectus and in the documents referred to in this prospectus. These risks,
among others, if realized, could materially hurt our business, results of
operations and financial condition.
IF WE ARE UNSUCCESSFUL IN OBTAINING NEEDED ADDITIONAL CAPITAL, WE MAY BE
UNABLE TO CONDUCT OUR BUSINESS AS PLANNED, TO PURSUE DESIRABLE MARKETS FOR OUR
CURRENT PRODUCTS OR TO DEVELOP AND MARKET NEW PRODUCTS.
We will need additional funding to continue to market our NMP22(R) Bladder
Cancer Test Kit, to conduct research and development, to conduct clinical trials
and tO manufacture and market our products as we currently contemplate. We are
currently seeking to raise additional capital and will consider various
financing alternatives, including equity or debt financings and corporate
partnering arrangements. However, we may not be able to raise needed capital on
terms that are acceptable to us, or at all. If we do not receive additional
financing, we may be required to curtail further our expenses or take other
steps that could hurt our future performance.
BECAUSE OUR STOCK PRICE MAY BE VOLATILE, THE SHARES HELD BY YOU MAY LOSE
THEIR VALUE RAPIDLY.
The market price of our common stock has been, and may continue to be,
highly volatile. This price has ranged between $4.094 and $0.750 in the
fifty-two week period prior to December 3, 1999. 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. Factors such as announcements of
technological innovations or new products by our competitors or disappointing
results by third parties, as well as market conditions in our industry, may
significantly impact the market price of our common stock. For example, in the
past our stock price has been affected by announcements of clinical results,
clinical or technical breakthroughs or earnings by other biotechnology companies
unrelated to us or our performance. Our stock price has also been affected by
announcements of developments at Matritech. For example, our stock price has, in
the past, reacted to announcements regarding a delay of our regulatory approval
process for a new product, fluctuating sales results and decreasing balances of
funds in the corporate treasury. Thus, as a result of events at Matritech or in
our industry, shares of Matritech stock could lose their value rapidly.
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OUR COMMON STOCK MAY BE DELISTED FROM THE NASDAQ NATIONAL MARKET, WHICH
WOULD MAKE IT MORE DIFFICULT FOR YOU TO SELL SHARES.
Our common stock is currently listed on the Nasdaq National Market. For
continued listing of our common stock on the Nasdaq National Market, we must,
among other things, maintain at least $4 million in net tangible assets and a
minimum bid price for our common stock of $1.00. If our net tangible assets fall
below $4 million, or if our common stock trades at a price of less than $1.00
for 30 consecutive business days or more, our shares may be delisted from the
Nasdaq National Market, and trading, if any, would then be conducted in a
non-Nasdaq over-the-counter market. If our shares are delisted, it could be more
difficult to sell them or to obtain accurate price information. In addition, if
our shares are delisted, they may be subject to a rule that imposes additional
sales practice requirements on broker-dealers who sell our shares to persons
other than established customers and accredited investors. For transactions
covered by this rule, the broker-dealer must make a special suitability
determination for the purchaser and must have received the purchaser's written
consent to the transaction prior to sale. Consequently, delisting, if it
occurred, may reduce the ability of broker-dealers to sell our shares and your
ability to sell your shares.
IF WE ARE UNABLE TO MARKET AND DEVELOP OUR PRODUCTS, WE WILL CONTINUE TO
INCUR OPERATING LOSSES AND INVESTORS MAY LOSE INTEREST IN OUR SHARES AND THEIR
MARKET VALUE MAY FALL.
We have incurred operating losses since we began operations in 1987. These
losses have resulted principally from costs incurred in research and development
and from selling, general and administrative costs associated with our
development. These costs have exceeded our revenues, which to date have been
generated primarily from initial sales of our NMP22 Bladder Cancer Test Kit, our
development agreements, government grants and interest income. We expect to
incur continuing operating losses in the near term. Our ability to be profitable
depends in part on our ability to market our existing products, obtain required
regulatory approvals and develop new products. We may not be able to market
successfully our existing products, obtain required regulatory approvals or
develop, commercialize, produce and market our future products or achieve or
maintain profitability.
IF OUR NMP22 BLADDER CANCER TEST KIT DOES NOT ACHIEVE WIDE MARKET
ACCEPTANCE, WE WILL NOT HAVE SIGNIFICANT NEAR-TERM PRODUCT SALES OR REVENUES.
We expect to generate substantially all of our near-term product sales from
the sale of our NMP22 Bladder Cancer Test Kits, which were approved for sale in
the United States by the FDA in 1996 and approved for sale in Japan in 1998. Our
results of operations may suffer if the NMP22 Bladder Cancer Test Kit does not
achieve wide market acceptance because NMP22 is our only source of sales
revenue. The remainder of our products still require FDA approval or are in
development and do not result in significant revenues.
IF OUR DISTRIBUTORS DO NOT SUCCESSFULLY SELL OUR PRODUCTS, OUR SALES
REVENUE WILL SUFFER.
We have limited internal marketing and sales resources and personnel. We
derive a significant portion of our sales revenue from distribution agreements
with two distributors. Konica Corporation has an exclusive right to sell our
NMP22 Bladder Cancer Test Kit in Japan. Fisher Diagnostics has a co-exclusive
right with us to sell our NMP22 Bladder Cancer Test Kit to hospitals and
commercial laboratories in the United States. Because we do not deal directly
with customers when selling through distributors, we depend on the ability of
Konica and Fisher to market actively, to forecast demand accurately and to
maintain appropriate levels of inventory. We have minimal control over our
distributors, and these distributors are under no obligation to purchase a
minimum quantity of our products. The failure or delay by a distributor in
selling our products, or any material breach of their agreements with us could
significantly reduce our revenues. We may be unable to enter into additional
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distribution relationships on favorable terms, if at all. These events could
reduce anticipated future sales growth.
OUR OPERATING RESULTS MAY FLUCTUATE, WHICH MAKES IT DIFFICULT TO PLAN OUR
EXPENSE LEVELS AND CAUSES OPERATING RESULTS TO VARY SIGNIFICANTLY.
Our future operating results may vary significantly from quarter to quarter
or from year to year for several reasons, including:
* the timing and size of orders from customers and distributors;
* regulatory approvals and the introduction of new products by us; and
* market acceptance of our products.
Our current planned expense levels are based in part upon expectations
about future revenue. Consequently, operating results may vary significantly
from quarter to quarter or year to year based on the timing of revenue. Revenue
or profits in any period will not necessarily indicate results in subsequent
periods.
WE FACE INTENSE COMPETITION AND OUR TECHNOLOGY MAY BECOME OBSOLETE.
Although we are not aware of any other company using nuclear matrix protein
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. Many pharmaceutical companies,
biotechnology companies, public and private universities and research
organizations actively engage in the research and development of clinical cancer
diagnostic products. Many of these organizations have greater financial,
manufacturing, marketing and human resources than we do.
We expect that certain of our clinical tests will compete with existing
FDA-approved clinical tests, including a test known as BTA, which has been
approved for monitoring bladder cancer, a test known as CEA, which is used
primarily for monitoring colorectal and breast cancers, a test known as PSA,
which is used primarily for monitoring and screening prostate cancer, and a test
known as TRUQUANT BR RIA, which is used for monitoring breast cancer. We are
also aware of a number of companies exploring the application of oncogene
technology to cancer diagnostics. Our 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, other
companies may introduce competing diagnostic products based on other
technologies that may adversely affect our competitive position. As a result,
our products may become obsolete or non-competitive.
IF WE ARE UNABLE TO DEVELOP AND MARKET FUTURE PRODUCTS, OUR SALES REVENUE
MAY NOT MEET EXPECTATIONS AND OUR STOCK PRICE MAY DROP.
Other than the NMP22 Bladder Cancer Test Kit, all of our products are under
development and are not expected to be commercially available in the United
States for some time. The majority of our products under development will
require significant additional research and development, laboratory testing,
clinical testing and regulatory approval prior to commercialization. The
development of our products involves the use of advanced technical methods that
require both a high degree of skill and judgment in their application. We may
encounter unexpected technical difficulties in the course of the development
process that we may be able to overcome only if we expend additional funds and
time, if at all. We may not successfully complete our product development
efforts, and we may not obtain the required regulatory approvals. In addition,
any future products, if and when introduced, may not be successfully
commercialized, produced and marketed or achieve customer acceptance. We believe
that
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the market value of our stock is based in part on an expectation of future
revenue producing products. If we are unable to develop and market future
products, or if the market believes that we are experiencing difficulty
developing future products, our stock price may drop. For example, the market
reacted negatively when we announced that one of our products would not receive
expedited FDA review.
GOVERNMENT REGULATION COULD MAKE THE DEVELOPMENT AND SALE OF OUR PRODUCTS
COSTLY AND DIFFICULT.
The FDA and, in some instances, foreign governments, extensively regulate
the medical devices that we market and manufacture. The FDA regulates the
clinical testing, manufacture, labeling, distribution and promotion of medical
devices in the United States. If we fail to comply with the FDA's requirements,
including Good Manufacturing Practices, we may face a number of consequences,
including:
* 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 that we manufacture or distribute.
Any products that we manufacture or distribute in accordance with FDA
clearances or approvals are subject to pervasive and continuing regulation by
the FDA, including:
* device manufacturers and distributors are required to comply with
recordkeeping requirements and to report 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; and
* devices are required to be manufactured in accordance with Good
Manufacturing Practices regulations which impose certain procedural
and documentation requirements on us 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 Bladder Cancer Test Kit has received FDA approval and may
be promoted by us 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, we cannot currently promote the NMP22 Bladder Cancer
Test Kit for cancer screening in the United States or for any other unapproved
use. If we fail to comply with these requirements, we may face
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regulatory enforcement action by the FDA that would prevent us from
manufacturing or selling our products, hurt our ability to conduct testing
necessary to obtain market clearance for these products and reduce our potential
sales revenues.
We are also subject to a variety of state laws and regulations in those
states or localities where our products are or will be marketed. Any applicable
state or local regulations may hinder our ability to market our 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. We may be required to
incur significant costs to comply with these laws and regulations now or in the
future, which could increase future losses or reduce future profitability.
IF WE LOSE OUR PROPRIETARY TECHNOLOGY ADVANTAGE, WE COULD BE OVERWHELMED BY
COMPETITORS.
We rely on a combination of patent, trade secret and trademark laws,
nondisclosure and other contractual provisions and technical measures to protect
the proprietary rights in our current and planned products. These protections
may be inadequate, and our competitors may independently develop technologies
that are substantially equivalent or superior to our technology. Patent law
relating to the scope of claims in the biotechnology field is still evolving
and, therefore, the degree of future protection for our proprietary rights is
uncertain. In addition, the laws of certain countries in which our products are
or may be licensed or sold do not protect our products and intellectual property
rights to the same extent as the laws of the United States.
We believe that the use of the patents for nuclear matrix protein
technology licensed to us and the use of our trademarks and other proprietary
rights do not infringe upon the proprietary rights of third parties. However, we
may not prevail in any challenge of third-party intellectual property rights,
and third parties may successfully assert infringement claims against us in the
future. In addition, we may be unable to acquire licenses to any of these
proprietary rights of third parties on reasonable terms.
HEALTHCARE REFORM MEASURES AND THIRD-PARTY REIMBURSEMENT POLICIES COULD
LIMIT THE PER-PRODUCT REVENUES FOR OUR PRODUCTS.
Our ability to commercialize successfully our planned products will depend
in part on the extent to which reimbursement for the cost of our 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 previously approved for reimbursement, the
insurance carrier may decide not to continue to reimburse the procedure.
Further, even if in the future we do successfully sell our products to managed
care providers, it is possible that these sales will involve significant pricing
pressure on our products and keep our per-product revenues low. Healthcare
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 we will be able to charge in the United States for our
products or the amount of reimbursement available for our products from
governmental agencies or third-party payors. While we cannot predict whether any
of these legislative or regulatory proposals will be adopted or the effect that
these proposals may have on our business, the announcement or adoption of these
proposals could hurt our business by reducing demand for our products and could
hurt our stock price because of investor reactions.
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IF WE DO NOT DEVELOP A LARGER MARKETING AND SALES FORCE, WE WILL REMAIN
DEPENDENT ON DISTRIBUTORS, AND WE MAY FAIL TO INCREASE SALES.
We have limited internal marketing and sales resources and personnel. In
order to market successfully our current and future products in the United
States and other territories in which we do not, or do not intend to, use
third-party distributors, we will need to develop a larger marketing and sales
force with appropriate technical expertise and distribution capability. We may
be unable to establish the marketing and sales capabilities that we need, and we
may be unsuccessful in gaining market acceptance for any of our products.
IF WE ARE UNABLE TO MANUFACTURE THE PRODUCT VOLUMES WE NEED, WE WILL BE
UNABLE TO ACHIEVE PROFITABILITY.
We have been manufacturing and assembling our test kits for limited
commercial sales since 1995 but have not yet manufactured the large product
volumes necessary for us to achieve profitability. We may encounter difficulties
in scaling up production of new products, if necessary, including problems
involving:
* production yields;
* quality control and assurance;
* component supply; and
* shortages of qualified personnel.
These problems could make it very difficult to produce sufficient product
to satisfy customer needs and could result in customer dissatisfaction. We may
not be able to achieve reliable, high-volume manufacturing at a commercially
reasonable cost. In addition, numerous governmental authorities extensively
regulate our manufacturing operations. Failure to satisfy our manufacturing
needs could result in decreased sales, loss of market share and potential loss
of certain distribution rights.
IF OUR SUPPLIERS CANCEL THEIR AGREEMENTS WITH US, IT MAY BE DIFFICULT FOR
US TO FIND REPLACEMENTS FOR OUR SUPPLIERS.
We currently rely on sole suppliers for certain key components for our test
kits. If the components from these suppliers should become unavailable for any
reason, we would seek alternative sources of supply. In order to maintain the
FDA validation of our manufacturing process, we would have to show that these
alternative sources of supply are equivalent to our current sources. Although we
attempt to maintain an adequate level of inventory to provide for these and
other contingencies, if our manufacturing processes are disrupted as a result of
a shortage of key components or a revalidation of new components, we may be
unable to meet our commitments to customers. Our failure or delay in meeting our
commitments could cause sales to decrease, market share to be lost permanently,
and could result in significant expenses to obtain alternative sources of supply
with the necessary facilities and know-how.
IF WE ARE UNABLE TO RETAIN OUR KEY PERSONNEL, WE MAY BE UNABLE TO ACHIEVE
OUR DEVELOPMENTAL OBJECTIVES.
Our success depends, in large part, upon our ability to attract and retain
a highly qualified scientific and management team. We have no employment
contracts with any of our key personnel. The loss of key personnel or the
failure to recruit the necessary additional personnel needed for a qualified
team might impede the achievement of developmental objectives. We face
competition for qualified personnel from other companies, research and academic
institutions, government entities and other organizations. We may not be
successful in hiring or retaining qualified scientific or management
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personnel on acceptable terms, given the competition among numerous
pharmaceutical and biotechnology companies, government entities and research and
academic institutions for qualified personnel.
IF WE ARE SUED FOR PRODUCT RELATED LIABILITIES, THE COST COULD BE
PROHIBITIVE TO US.
The testing, marketing and sale of human healthcare products entail an
inherent exposure to product liability, and third parties may successfully
assert product liability claims against us. Although we currently have insurance
covering our products, we may not be able to maintain this insurance at
acceptable costs in the future, if at all. In addition, our insurance may not be
sufficient to cover large claims. Significant product liability claims could
result in large and unexpected expenses as well as a costly distraction of
management resources and potential negative publicity and reduced demand for our
product.
OUR ACTIVITIES INVOLVE THE USE OF HAZARDOUS MATERIALS, AND WE MAY BE HELD
LIABLE FOR ANY ACCIDENTAL INJURY FROM THESE HAZARDOUS MATERIALS.
Our research and development activities involve the controlled use of
hazardous materials, including radioactive compounds. Although we believe that
our safety procedures for handling and disposing of our hazardous 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 an accident, we could be held
liable for damages that result and significant and unexpected costs including
costs relating to liabilities and clean-up, costs from increased insurance
premiums or inability to obtain adequate insurance at a reasonable price and
costs from loss of operations during clean-up.
SOME OF OUR COMPUTER SYSTEMS AND SOFTWARE PRODUCTS MAY NOT PROPERLY
RECOGNIZE DATES AFTER DECEMBER 31, 1999, WHICH COULD DISRUPT OUR OPERATIONS.
Some existing computer systems and software products do not properly
recognize dates after December 31, 1999, which is known as the Year 2000
problem. The Year 2000 problem could result in miscalculations, data corruption,
system failures or disruptions of operations. We are subject to potential Year
2000 problems affecting our computer systems, our internal systems and the
systems of our material suppliers or service vendors, any of which could have a
material adverse effect on our business, financial condition and results of
operations. We have reviewed all of our information technology systems to assess
what steps, if any, are required to achieve full Year 2000 compliance. We rely
upon microprocessor-based personal computers and commercially available
applications software. These technologies were put into place recently, and our
review indicates that certain of our systems are Year 2000 compliant. We are
currently addressing the small number of information technology systems that are
not yet Year 2000 compliant, and we anticipate achieving full compliance prior
to December 31, 1999. In addition, based on our assessments to date, we
anticipate that our critical non-information technology systems, including our
telephone system, air ventilation system, security system and certain laboratory
equipment, will be Year 2000 compliant prior to December 31, 1999. We do not
anticipate that we will incur material expenses to make these systems Year 2000
compliant.
Year 2000 errors or defects in the internal systems maintained by our
material suppliers or service vendors could require us to incur unanticipated
expenses to remedy any problems or replace affected suppliers or vendors. We are
currently discussing with our material suppliers and service vendors the status
of their Year 2000 compliance. If our material suppliers or service vendors
indicate that they will not be able to address their Year 2000 problems in a
timely fashion, we may decide to suspend our business relationships with those
suppliers or vendors until they become fully Year 2000 compliant. We are
currently formulating contingency plans to address problems that may arise if we
fail to address our Year 2000 problems in a timely fashion or if our material
suppliers and vendors fail to
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address their Year 2000 problems in a timely fashion. We may be unable to
address all our Year 2000 problems in a timely fashion, and the Year 2000 issues
of third parties may result in costly expenditures by us.
USE OF PROCEEDS
Matritech will receive no part of the proceeds from the sale of any of the
shares by any of the selling securityholders, although we may receive, subject
to anti-dilution adjustments, $2.50 per share upon exercise of the warrants
issued in April and May 1997 and $2.20 per share upon exercise of the warrants
issued in November 1999.
SELLING SECURITYHOLDERS
The following table sets forth certain information as of November 30, 1999
with respect to the shares of common stock of Matritech beneficially owned by
each selling securityholder. The shares may be offered from time to time by any
of the selling securityholders or by those individuals and entities to whom they
may transfer or distribute the shares. See "Plan of Distribution."
The persons and entities named in the table below have sole voting and
investment power with respect to all shares shown as beneficially owned by them
based upon information provided to Matritech by the selling securityholders.
In calculating the number of shares beneficially owned by each selling
securityholder after the offering, we have assumed that the selling
securityholders will sell all of the shares of common stock of Matritech
registered under this prospectus. The selling securityholders may sell all or
any part of their shares registered under this prospectus.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Shares of common stock issuable by us to a
person pursuant to options or warrants which may be exercised within 60 days of
November 30, 1999 are deemed to be beneficially owned and outstanding for
purposes of calculating the number of shares and the percentage beneficially
owned by that person. However, these shares are not deemed to be beneficially
owned and outstanding for purposes of computing the percentage beneficially
owned by any other person.
In calculating the percentage of shares beneficially owned by each selling
securityholder prior to and after the offering, we have based our calculations
on the number of shares of common stock deemed outstanding as of November 30,
1999, which includes:
* 23,534,657 shares of common stock outstanding as of November 30, 1999;
and
* all shares of common stock issuable upon the exercise of options and
warrants which may be exercised by that selling securityholder within
60 days of November 30, 1999.
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------- ----------------------------
Number of Number of Number of Shares
Shares Beneficially Owned Shares Beneficially Owned
Prior to Offering Offered After Offering
-------------------------------- ---------- ---------------------------
Name Number Percent Number Percent
- ---- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Derek Caldwell (1) 66,685 * 66,685 0 *
Joseph Chang (2) 15,000 * 15,000 0 *
Dennis Choy (3) 75,000 * 75,000 0 *
John L. Gallagher (4) 10,054 * 10,054 0 *
Kenbar Group, L.P. (5) 187,500 * 187,500 0 *
Nai Ping Leung (6) 37,500 * 37,500 0 *
Nathan Low (7) 255,457 1.1% 255,457 0 *
D. Dwight Miller (8) 25,637 * 25,637 0 *
Marc Seelenfreund (9) 5,530 * 5,530 0 *
Richard Stone (10) 13,573 * 13,573 0 *
Alan Swerdloff (11) 13,295 * 13,295 0 *
Veron International Limited (12) 2,387,010 9.8% 2,387,010 0 *
TOTAL 3,092,241 * 3,092,241 0 *
- ---------------------------------------------------------------------------------------------- ----------------------------
</TABLE>
*Less than 1%
(1) Mr. Caldwell's beneficial ownership includes 41,685 shares of common stock
issuable upon exercise of currently exercisable warrants issued in May 1997
and 25,000 shares of common stock issuable upon exercise of currently
exercisable warrants issued in April 1997.
(2) Mr. Chang's beneficial ownership includes 5,000 shares of common stock
issuable upon exercise of currently exercisable warrants issued in November
1999.
(3) Mr. Choy's beneficial ownership includes 25,000 shares of common stock
issuable upon exercise of currently exercisable warrants issued in November
1999.
(4) Mr. Gallagher's beneficial ownership includes 10,054 shares of common stock
issuable upon exercise of currently exercisable warrants issued in May
1997.
(5) Kenbar Group, L.P.'s beneficial ownership includes 62,500 shares of common
stock issuable upon exercise of currently exercisable warrants issued in
November 1999.
(6) Mr. Leung's beneficial ownership includes 12,500 shares of common stock
issuable upon exercise of currently exercisable warrants issued in November
1999.
(7) Mr. Low's beneficial ownership includes 130,457 shares of common stock
issuable upon exercise of currently exercisable warrants issued in May 1997
and 125,000 shares of common stock issuable upon exercise of currently
exercisable warrants issued in April 1997.
(8) Mr. Miller's beneficial ownership includes 25,637 shares of common stock
issuable upon exercise of currently exercisable warrants issued in May
1997.
(9) Mr. Seelenfreund's beneficial ownership includes 5,530 shares of common
stock issuable upon exercise of currently exercisable warrants issued in
May 1997.
(10) Mr. Stone's beneficial ownership includes 13,573 shares of common stock
issuable upon exercise of currently exercisable warrants issued in May
1997.
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(11) Mr. Swerdloff's beneficial ownership includes 13,295 shares of common stock
issuable upon exercise of currently exercisable warrants issued in May
1997.
(12) Veron International Limited's beneficial ownership includes 795,670 shares
of common stock issuable upon exercise of currently exercisable warrants
issued in November 1999.
Except as noted below, to the best of our knowledge, none of the selling
securityholders had any material relationship with Matritech or any of its
affiliates within the three-year period ending on the date of this prospectus.
Sunrise Securities Corp. acted as the sole placement agent in Matritech'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, Stone and Swerdloff
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.
PLAN OF DISTRIBUTION
The shares of common stock of Matritech offered under this prospectus may
be sold from time to time by or for the account of any of the selling
securityholders or by those individuals and entities to whom they pledge,
donate, distribute or transfer their shares or other successors in interest.
Matritech will not receive any of the proceeds from the sale of these
shares by the selling securityholders, although we may receive, subject to
anti-dilution adjustments, $2.50 per share upon exercise of the warrants issued
in April and May 1997 and $2.20 per share upon exercise of the warrants issued
in November 1999.
The distribution of the shares of common stock of Matritech offered under
this prospectus by the selling securityholders is not subject to any
underwriting agreement. The shares may be sold under this prospectus 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;
* in 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;
* in transactions in which a broker or dealer purchases as principal for
resale for its own account; or
* through underwriters or agents.
The shares of common stock of Matritech offered under this prospectus 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 the prevailing market
price or at negotiated prices. Any brokers, dealers, underwriters or agents may
arrange for others to participate in any of these transactions 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. Matritech has agreed to indemnify the selling securityholders against
certain liabilities, including liabilities under the Securities Act and the
Exchange Act.
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The selling securityholder may also loan or pledge the shares registered
under this prospectus 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 using this prospectus.
In connection with the private placement which was completed on November
22, 1999, Matritech executed certain common stock and warrant purchase
agreements with certain of the selling securityholders in which Matritech 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 certain of the shares of common stock of Matritech
offered under this prospectus under the Securities Act and applicable state
securities laws.
In connection with the amendment on October 30, 1999 of the warrants
originally issued in April 1997, Matritech entered into an Amendment No. 1 to
Public Relations Warrant Agreement and Warrant Certificate with Sunrise
Financial Group, Inc. and Nathan Low. In connection with the amendment on
October 30, 1999 of the warrants originally issued in May 1997, Matritech
entered into an Amendment No. 1 to Warrant Agreement and Warrant Certificate
with certain designees of Sunrise Securities Corp. In both of these amendments,
Matritech has agreed, at its expense, to file the registration statement to
which this prospectus is a part registering the resale of all of the shares of
common stock of Matritech underlying these warrants.
In order to comply with the securities laws of individual states, if
applicable, the shares of common stock of Matritech offered under this
prospectus will be sold in those jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states these 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 of the shares covered by this prospectus qualifies for sale
under Rule 144 under the Securities Act, they may be sold under Rule 144 rather
than under this prospectus.
Any selling securityholder and any broker-dealer, agent or underwriter that
participates with the selling securityholder in the distribution of the shares
of common stock of Matritech offered under this prospectus may be considered to
be "underwriters" within the meaning of the Securities Act, in which event any
commissions received by those broker-dealers, agents or underwriters and any
profit on the resale of the shares purchased by them may be considered 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 the shares of common stock of Matritech offered under this
prospectus. Sales of shares at less than the market price may depress the market
price of Matritech'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 depress the market price of Matritech's securities.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares of common stock of Matritech offered
under this prospectus may not simultaneously engage in market making activities
with respect to the shares for a period of time prior to the commencement of the
distribution. In addition, each selling securityholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations under
the Exchange Act, including, but not limited to, Rule 10b-5 and Regulation M,
which provisions may limit the timing of purchases and sales of the shares by
the selling securityholder.
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<PAGE> 14
There is no assurance that any selling securityholder will sell any or all
of the shares described in this prospectus and may transfer, devise or gift
these securities by other means not described in this prospectus.
Expenses of preparing and filing the registration statement and all
post-effective amendments will be borne by Matritech.
Matritech is permitted to suspend the use of this prospectus in connection
with sales of the shares of common stock of Matritech offered under this
prospectus by holders during periods of time under certain circumstances
relating to pending corporate developments and public filings with the
Securities and Exchange Commission and similar events.
LEGAL MATTERS
Several legal matters with respect to the shares of common stock of
Matritech offered under this prospectus will be passed upon for Matritech by
Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.
EXPERTS
The audited financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accounts, as indicated in their reports
with respect thereto, and are included herein in reliance upon the authority of
said firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
Matritech is subject to the informational requirements of the Exchange Act,
and in accordance with those requirements files reports, proxy statements and
other information with the Securities and Exchange Commission. The reports,
proxy statements and other information that Matritech files with the SEC under
the informational requirements of the Exchange Act may be obtained from the
SEC's Public Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549
at prescribed rates. Please call 1-800-SEC-0330 for information about the SEC's
Public Reference Room. Matritech's common stock is traded on the Nasdaq National
Market, and the reports, proxy statements and other information that Matritech
files with the SEC 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 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 the Commission's Web site is
http://www.sec.gov.
Matritech has filed with the Commission a registration statement on Form
S-3, including all amendments to the registration statement under the Securities
Act with respect to the shares of common stock of Matritech offered under this
prospectus. 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 Matritech and the shares offered under this prospectus, please see the
registration statement and the exhibits and schedules filed with the
registration statement. 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 please
see the copy of the full agreement filed as an exhibit to the registration
statement. We qualify each of these statements in all respects by the reference
to the full agreement. The registration statement, including the exhibits and
schedules to the registration statement, may be inspected at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
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<PAGE> 15
Washington, D.C. 20549 and copies of all or any part of the registration
statement may be obtained from the Commission's office upon payment of the
prescribed fees.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows Matritech 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. The following documents filed by Matritech
with the Commission, File No. 001-12128, are incorporated by reference in this
prospectus, except as superseded or modified by this prospectus:
1. Matritech's annual report on Form 10-K for the fiscal year ended December
31, 1998, filed under the Exchange Act, which contains audited financial
statements for the fiscal year ended December 31, 1998.
2. Matritech's quarterly report on Form 10-Q for the fiscal quarter ended
March 31, 1999 filed under the Exchange Act, which contains unaudited
financial statements for the fiscal quarter ended March 31, 1999.
3. Matritech's quarterly report on Form 10-Q for the fiscal quarter ended June
30, 1999 filed under the Exchange Act, which contains unaudited financial
statements for the fiscal quarter ended June 30, 1999.
4. Matritech's quarterly report on Form 10-Q for the fiscal quarter ended
September 30, 1999 filed under the Exchange Act, which contains unaudited
financial statements for the fiscal quarter ended September 30, 1999.
5. Matritech's current report on Form 8-K dated April 7, 1999.
6. Matritech's current report on Form 8-K dated November 22, 1999.
7. The description of Matritech's common stock, $.01 par value per share,
contained in the section entitled "Description of Registrant's Securities
to be Registered" contained in Matritech'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 the description of Matritech's
common stock.
All documents filed by Matritech under 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 under this prospectus are incorporated by
reference in this prospectus and made a part of this prospectus from the date
Matritech files the documents with the SEC. Any statement contained in this
prospectus or in a document incorporated or deemed to be incorporated by
reference in this prospectus shall be deemed to be modified or superseded for
purposes of this prospectus to the extent that a statement contained in this
prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated by reference in this prospectus 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.
Matritech will provide without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, upon the written or oral request of
that person, a copy of any document incorporated in this prospectus by reference
other than exhibits unless those exhibits are specifically incorporated by
reference into the documents. Requests for these copies should be directed to
Matritech, Inc., Attention: John S. Doherty, 330 Nevada Street, Newton,
Massachusetts 02460, telephone (617) 928-0820.
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<PAGE> 16
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You should rely only on the information contained in this prospectus or
information specifically incorporated by reference in this prospectus. We have
not authorized anyone to provide you with information that is different. Neither
the delivery of this prospectus, nor any sale made hereunder, shall create any
implication that the information in this prospectus is correct after the date
hereof. This prospectus is not an offer to or solicitation of any person in any
jurisdiction in which such offer or solicitation is illegal.
----------------------------
TABLE OF CONTENTS
----------------------------
Matritech, Inc...........................3
Risk Factors.............................3
Use of Proceeds.........................10
Selling Security holders................10
Plan of Distribution....................12
Legal Matters...........................14
Experts.................................14
Where You Can Find More
Information.............................14
Documents Incorporated by
Reference...............................15
================================================================================
3,092,241 SHARES
OF
COMMON STOCK
OF
MATRITECH, INC.
================================================================================
January 7, 2000
