<PAGE> 1
As filed with the Securities and Exchange Commission on December 3, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ZYMETX, INC.
(NAME OF ISSUER IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Delaware 2835 73-1444040
(State or Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
800 RESEARCH PARKWAY, SUITE 100
OKLAHOMA CITY, OKLAHOMA 73104
(405) 271-1314
(Address and Telephone Number of Principal Executive Offices)
PETER G. LIVINGSTON, PRESIDENT AND CHIEF EXECUTIVE OFFICER
ZYMETX, INC.
800 RESEARCH PARKWAY, SUITE 100
OKLAHOMA CITY, OKLAHOMA 73104
(405) 271-1314
(Name, Address and Telephone Number of Agent for Service)
COPIES TO:
DOUGLAS A. BRANCH, ESQ.
PHILLIPS MCFALL MCCAFFREY MCVAY & MURRAH, P.C.
12TH FLOOR, ONE LEADERSHIP SQUARE
211 N. ROBINSON
OKLAHOMA CITY, OKLAHOMA 73102
(405) 235-4100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes 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, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED(1) OFFERING PRICE PER SHARE(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.001 2,384,431 Shares $3.88 $9,251,593 $2,573.00
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low sales
prices of the Common Stock on the Nasdaq National Market on December 2,
1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
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 DECEMBER 3, 1998
2,384,431 Shares
ZYMETX, INC.
COMMON STOCK
-------------------------------
The shares (the "Shares") of common stock, par value $.001 per share
(the "Common Stock"), of ZymeTx, Inc. (the "Company") offered hereby (the
"Offering") are being sold by certain selling stockholders (the "Selling
Stockholders"). See "Selling Stockholders." The Company will not receive any of
the proceeds from the sale of the Shares by the Selling Stockholders. The costs,
expenses and fees incurred in connection with the registration of the Shares
will be paid by the Company and are estimated to be approximately $10,000.
-------------------------------
The Shares may be offered by the Selling Stockholders from time to time
in open market transactions (which may include block transactions), through the
writing of options on the Shares, or in private transactions at prices relating
to prevailing market prices or at negotiated prices. The Selling Stockholders
may effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation as to a particular broker-dealer might be
in excess of customary commissions). The Selling Stockholders and any
broker-dealer acting in connection with the sale of the Shares offered hereby
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), in which event any discounts,
concessions or commissions received by them, which are not expected to exceed
those customary in the types of transactions involved, or any profit on resales
of the Shares by them, may be deemed to be underwriting commissions or discounts
under the Securities Act.
-------------------------------
The Common Stock is listed on the Nasdaq National Market ("Nasdaq"). On
December __, 1998, the closing price of the Common Stock as reported on Nasdaq
was $___ per share.
-------------------------------
An investment in the Common Stock offered hereby involves a high degree of risk.
See "Risk Factors" for information concerning such risks.
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.
-------------------------------
THE DATE OF THIS PROSPECTUS IS _______________, 1998.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (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 can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at its regional
offices in New York (7 World Trade Center, Suite 1300, New York, New York 10048)
and 500 West Madison Street, Suite 1400 Northwestern Atrium Center, Chicago,
Illinois 60661. 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. Information on the operation of the Public Reference
Room can be obtained by calling the Commission at 1-800-SEC-0330. The Commission
also maintains a Web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission.
In addition, the Common Stock is listed on Nasdaq and reports and other
information concerning the Company can be inspected at the offices of Nasdaq.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus and
to be a part hereof the following reports and documents filed with the
Commission pursuant to the Exchange Act: (i) the Company's Form 10-KSB Annual
Report, for the fiscal year ended June 30, 1998; (ii) the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30, 1998; and (iii) the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form SB-2 (File No. 333-25257) declared effective by
the Commission on October 29, 1997.
All documents filed by the Company with the Commission pursuant to
Section 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 shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such 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, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been or
may be incorporated by reference in this Prospectus (other than exhibits to such
documents which are not specifically incorporated by reference into such
documents). Such requests should be directed to G. Carl Gibson, Vice President
and Secretary-Treasurer of the Company, at (405)271-1314.
THE COMPANY
ZymeTx, Inc. (the "Company" or "ZymeTx"), is a development stage
biotechnology company engaged in the discovery and development of unique
products for the diagnosis and treatment of viruses. The scientific foundation
for the Company's business is based upon the role of enzymes in the process of
viral infection. The Company's strategy is: (i) to develop therapeutic and
diagnostic products for a broad range of viral diseases; and (ii) to earn
revenues from marketing "ZstatFlu(TM)", the Company's first diagnostic product,
to sustain a comprehensive viral therapeutic research and development program.
ViraZyme(TM), the Company's core technology, exploits the subtle
structural differences and characteristics of enzymes to create viral diagnostic
and therapeutic products. The Company's diagnostic technology is a proprietary
two-part compound that will split when the compound contacts a specific target
site (an enzyme). As
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<PAGE> 4
a result of this split, one part of the compound becomes visible to the naked
eye when collected in the Company's testing device, permitting the user to make
a diagnosis regarding the presence of the virus targeted by the test. For
therapeutic products, a modified version of the diagnostic compound is used that
will bind to a specific enzyme and prevent the enzyme's contribution to the
infection process.
The Company's initial viral targets are respiratory infections
including influenza A and influenza B, respiratory syncytial virus (RSV),
parainfluenza and adenovirus, as well as the non-respiratory infections herpes
simplex virus (HSV), cytomegalovirus (CMV) and human immunodeficiency virus
(HIV), which is the virus that causes acquired immune deficiency syndrome
(AIDS).
The Company was incorporated under the laws of the State of Delaware in
1994.
ViraZyme(TM), ViraSTAT(TM) and ZstatFlu(TM) are trademarks owned or
licensed by the Company.
The Company's executive offices are located at 800 Research Parkway,
Suite 100, Oklahoma City, Oklahoma 73104 and its telephone number is (405)
271-1314.
RISK FACTORS
In addition to the other information contained in this Prospectus or
incorporated by reference, prospective investors should carefully consider the
following risk factors relating to the Company and its Common Stock.
NO ASSURANCE OF MARKET ACCEPTANCE. There can be no assurance that
ZstatFlu will achieve market acceptance during the next influenza season, which
will not be expected to commence until the second quarter or third quarter of
fiscal 1999. During the 1997-1998 influenza season, the Company was not
successful in realizing sales of that product, due principally to the desire of
physicians to sample the product prior to making a purchase decision and the
short influenza season in 1998. In addition, there can be no assurance that any
of the Company's other potential products, if approved or cleared by the Food
and Drug Administration ("FDA"), will achieve market acceptance. The degree of
market acceptance of the Company's products will depend upon a number of
factors, including the receipt and timing of regulatory approvals or clearances,
the availability of third-party reimbursement and the establishment and
demonstration in the medical community of the clinical safety, efficacy and
cost-effectiveness of the Company's products and their advantages over existing
technologies and products. There can be no assurance that the Company will be
able to successfully market its potential products even if they perform
successfully in clinical trials. Furthermore, there can be no assurance that
physicians or the medical community in general will accept and utilize ZstatFlu
or any other products currently cleared or under development by the Company.
NO ASSURANCE OF SUCCESSFUL OR TIMELY DEVELOPMENT OF THE COMPANY'S
THERAPEUTIC OR OTHER DIAGNOSTIC PRODUCTS. The Company's business strategy
involves the discovery and development of products in addition to the Company's
currently FDA cleared diagnostic products, particularly therapeutic products.
These products are in early stages of research and development and further
research, development and extensive testing will be required to determine their
technical feasibility and commercial viability. Until the development process
for these products is complete, there can be no assurance that such products
will perform in the manner anticipated by the Company, be commercially viable or
even if commercially viable, that such products will receive FDA clearance. The
Company may experience delays in the commercial introduction of these products,
and such delays could be significant. The proposed development schedules for the
Company's other diagnostic and therapeutic products may be affected by a variety
of factors, many of which will not be within the control of the Company,
including technological difficulties, proprietary technology of others, possible
changes in government regulation and the availability of funding sources. Any
delay in the development, introduction and marketing of the Company's products
could result either in such products being marketed at a time when their cost
and performance characteristics would not be competitive in the marketplace or
in the shortening of their commercial lives.
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<PAGE> 5
NO MANUFACTURING CAPABILITY; RELIANCE ON THIRD-PARTY MANUFACTURERS. The
Company has limited experience in product manufacturing and currently has no
facility capable of manufacturing products on the scale necessary for adequate
market penetration. Because the Company does not currently have a manufacturing
facility, the Company has engaged third-party manufacturers to produce finished
units of ZstatFlu. Delays by third-party manufacturers in delivering finished
products in time for future influenza seasons could have a material adverse
effect on the Company.
LIMITATIONS ON PROTECTION OF INTELLECTUAL PROPERTY. The Company's
success will depend, in part, on its ability to obtain patents and license
patent rights, to maintain trade secret protection and to operate without
infringing on the rights of other patent holders. The patent position of
biotechnology firms for such types of patents generally is highly uncertain and
involves complex legal and factual issues. Certain competitors of the Company
may have filed applications for or have been issued patents and may obtain
additional patents and other proprietary rights relating to virus substrates,
chromogens, inhibitors or processes competitive with those of the Company.
The ultimate scope and validity of such patents are presently unknown.
If the courts uphold existing or future patents obtained by competitors as
valid, the Company may be required to obtain licenses from such competitors. The
extent to which such licenses will be available to the Company, and the costs
thereof, cannot currently be determined.
GOVERNMENT REGULATION. Regulation by Federal, state, local and foreign
governmental authorities of the Company's research and development activities,
as well as the use and sale of the Company's products at such time as they are
commercially viable, is currently, and is expected to remain, significant.
The introduction of the Company's products is governed by strict FDA
rules and regulations. The Company's diagnostic products are governed by FDA
510(k) application requiring a clinical trial that compares the Company's
products to a certain standard or to a prior cleared methodology.
The testing, manufacturing, labeling, distribution, marketing and
advertising of therapeutic products are subject to extensive regulation by
governmental regulatory authorities in the U.S. and other countries. The FDA and
comparable agencies in foreign countries impose substantial requirements on the
introduction of new pharmaceutical products through lengthy and detailed
clinical testing procedures and other costly and time-consuming compliance
procedures. The Company's therapeutic compounds will require substantial
clinical trials and FDA review as new drugs and such products are in the
discovery stage of development, requiring significant further research,
development, clinical testing and regulatory clearances. Due to the extended
testing and regulatory review process required for therapeutic products before
marketing clearance can be obtained, the Company does not expect to be able to
commercialize any therapeutic drug for at least several years, either directly
or through any potential corporate partners or licensees. A delay in obtaining
or failure to obtain such approvals could have a material adverse effect on the
Company's business and results of operations.
The Company and its third-party manufacturers are subject to good
manufacturing practices ("GMP") regulations promulgated by the FDA. The FDA will
also inspect the Company's manufacturing facilities and the facilities of its
third-party manufacturers on a routine basis for regulatory compliance with GMP
regulations. Although the Company's employees have experience with GMP
protocols, there can be no assurance that the Company or its third-party
manufacturers can satisfy these requirements. The Company would not be allowed
to manufacture its approved or cleared products in the event such GMP protocols
could not be met.
MANAGEMENT OF GROWTH AND INCREASING PRODUCTION REQUIREMENTS. The
Company's success will depend on its ability to expand and manage its operations
and facilities. There can be no assurance that the Company will be able to
manage its growth, meet the staffing requirements of manufacturing scale-up or
for current or additional collaborative relationships or successfully assimilate
and train its new employees. In addition, to manage its growth effectively, the
Company will be required to expand its management base and enhance its operating
and financial systems. If the Company continues to grow, there can be no
assurance that the management skills and systems currently in place will be
adequate or that the Company will be able to manage any additional growth
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<PAGE> 6
effectively. Failure to achieve any of these goals could have a material adverse
effect on the Company's business, financial condition or results of operations.
PRODUCT LIABILITY AND INSURANCE. The testing, marketing and sale of
therapeutic products and, to a lesser degree, diagnostic products, entails an
inherent risk of adverse effects and/or medical complications to patients and,
as a result, product liability claims may be asserted against the Company. A
product liability claim or product recall could have a material adverse effect
on the Company. The Company has secured limited product liability insurance in
the aggregate amount of $11.0 million for products that the Company markets.
There can be no assurance that liability will not exceed the insured amount. In
the event of a successful suit against the Company, insufficient insurance or
lack of insurance would have a material adverse effect on the Company.
UNCERTAINTIES RELATING TO CLINICAL TRIALS. The Company must demonstrate
through preclinical studies and clinical trials that its proposed therapeutic
products are safe and effective for use in each target indication before the
Company can obtain regulatory approvals for the commercial sale of those
products. These studies and trials may be very costly and time-consuming.
The rate of completion of clinical trials for either diagnostic or
therapeutic products is dependent upon, among other factors, the rate of
enrollment of patients. Failure to enroll an adequate number of clinical
patients during the appropriate season could cause significant delays and
increased costs.
The cost to the Company of conducting human clinical trials for any
potential product can vary dramatically based on a number of factors, including
whether the product is a diagnostic or a therapeutic product, the order and
timing of clinical indications pursued and the extent of development and
financial support, if any, from corporate partners.
DEPENDENCE ON CORPORATE COLLABORATIONS FOR THERAPEUTIC PRODUCTS. The
Company's strategy for the research, development and commercialization of its
potential therapeutic products may require the Company to enter into various
arrangements with corporate and academic collaborators, licensors, licensees and
others. The Company may, therefore, be dependent upon the subsequent success of
these third parties in performing their responsibilities. There can be no
assurance that the Company will be able to enter into collaborative, license or
other arrangements that the Company deems necessary or appropriate to develop
and commercialize its potential therapeutic products, or that any or all of the
contemplated benefits from such collaborative, license or other arrangements
will be realized.
TECHNOLOGY AND COMPETITION. The viral diagnostic and therapeutic field
is rapidly evolving, and the pace of technological advancement is expected to
continue. Rapid technological development may result in the Company's products
becoming obsolete before the Company recoups a significant portion of related
research, development and commercialization expenses.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered hereby.
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<PAGE> 7
SELLING STOCKHOLDERS
The following table sets forth the shares of Common Stock owned by each
of the Selling Stockholders before and after the Offering (assuming all Shares
offered hereby are sold) and the amount of Shares offered. The Selling
Stockholders have no obligation to sell the Shares offered hereby. None of the
Selling Stockholders has any relationship to the Company.
<TABLE>
<CAPTION>
Shares Owned Shares Owned
Prior to the Offering After the Offering
---------------------- Shares Being --------------------
Name Number Percent Offered Number Percent
---- ------ ------- ------- ------ -------
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U.S. Ventech Inc. (1) 456,250 6.9% 456,250 -0- --
Edward L. Gaylord (2) 156,250 2.4% 156,250 -0- --
Presbyterian Health Foundation (3) 106,646 1.6% 25,000 81,646 1.2%
Roberta E. & William J. Turner 97,125 1.5% 97,125 -0- --
Other Selling Stockholders, each owning less than 1,649,806 24.8% 1,649,806 -0- --
1% of the outstanding Common Stock prior to the
Offering (4)
</TABLE>
- ----------
(1) Includes 300,000 shares beneficially owned by Venturetec Inc.
("Venturetec"), an affiliate of US Ventech, Inc. ("USVI"). USVI
disclaims the beneficial ownership of the shares held by Venturetec,
and Venturetec disclaims beneficial ownership of the shares of Common
Stock beneficially owned by USVI. Venturetec and USVI are investment
companies organized under the laws of the British Virgin Islands. Peter
Friedli is the president of both companies and the principals of both
companies are non-U.S. financial institutions.
(2) Includes 93,750 shares of Common Stock beneficially owned by The
Oklahoma Publishing Co. Mr. Gaylord disclaims beneficial ownership of
such shares.
(3) Includes 20,000 shares of Common Stock subject to currently exercisable
warrants. A representative of Presbyterian Health Foundation served on
the Board of Directors of the Company from 1994 until 1997. Also,
Presbyterian Health Foundation is the lessor of the Company's
facilities in Oklahoma City.
(4) There are 238 Selling Stockholders, each of whom own beneficially less
than 1% of the outstanding shares of Common Stock, in addition to the
Selling Stockholders named in this table. All Selling Stockholders
acquired the Shares offered hereby in private placements of securities
conducted by the Company in 1996 and 1997.
PLAN OF DISTRIBUTION
The Shares may be offered by the Selling Stockholders from time to time
in open market transactions (which may include block transactions), through the
writing of options on the Shares, or in private transactions at prices relating
to prevailing market prices or at negotiated prices. The Selling Stockholders
may effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation as to a particular broker-dealer might be
in excess of customary commissions). The Selling Stockholders and any
broker-dealer acting in connection with the sale of the Shares offered hereby
may be deemed to be "underwriters" within the meaning of the Securities Act in
which event any discounts, concessions or commissions received by them, which
are not expected to exceed those customary in the types of transactions
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<PAGE> 8
involved, or any profit on resales of the Shares by them, may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Shares offered hereby may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale, or at negotiated prices.
The costs, expenses and fees incurred in connection with the
registration of the Shares will be paid by the Company.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities under the Act.
To comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Shares may not be sold
unless such Shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied
with.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws include certain provisions whereby officers and
directors of the Company are to be indemnified against certain liabilities. The
Certificate of Incorporation of the Company also limits, to the fullest extent
permitted by Delaware law, a director's liability for monetary damages for
breach of fiduciary duty, including gross negligence. Under Delaware law,
however, a director's liability cannot be limited for (i) breach of the
director's duty of loyalty; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law; (iii) the
unlawful payment of a dividend or unlawful stock purchase redemption; or (iv)
any transaction from which the director derives an improper personal benefit.
Delaware law does not eliminate a director's duty of care and this provision has
no affect on the availability of equitable remedies such as injunction or
rescission based upon a director's breach of the duty of care.
The Company has entered into indemnification agreements with each of
its current directors which provide for the indemnification of and the
advancement of expenses to such persons in instances where such persons are
named in any suit resulting from their tenure as a director of the Company. The
Company believes the limitation of liability provisions in the Certificate of
Incorporation, Bylaws and, should they become applicable, the indemnification
agreements, facilitate the Company's ability to continue to attract and retain
qualified individuals to serve as directors of the Company. The Company
maintains liability insurance for directors and officers.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Phillips McFall McCaffrey McVay & Murrah, P.C., Oklahoma City,
Oklahoma.
EXPERTS
The financial statements of ZymeTx, Inc. appearing in the Company's
Annual Report on Form 10-KSB for the year ended June 30, 1998 have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated by reference herein. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of said firm as experts in auditing and
accounting.
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<PAGE> 9
================================================================================
No dealer, salesman or other person has been authorized to give any information
or to make any representation not contained in this Prospectus and, if given or
made, such information or representation must not be relied upon as having been
authorized by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell or solicitation of an offer to buy any securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such offer in such jurisdiction. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
the information herein is correct as of any time subsequent to the date hereof
or that there has been no change in the affairs of the Company since such date.
-----------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information ...................................... 2
Incorporation of Certain Documents by Reference ............ 2
The Company ................................................ 2
Risk Factors ............................................... 3
Use of Proceeds ............................................ 5
Selling Stockholders ....................................... 6
Plan of Distribution ....................................... 6
Indemnification of Directors and Officers .................. 7
Legal Matters .............................................. 7
Experts .................................................... 7
</TABLE>
================================================================================
2,384,431 Shares
ZYMETX, INC.
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
ZYMETX, INC.
800 RESEARCH PARKWAY, SUITE 100
OKLAHOMA CITY, OKLAHOMA 73104
(405) 271-1314
____________, 1998
================================================================================
<PAGE> 10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the Offering, all of which are to be paid by
the Registrant, are as follows:
<TABLE>
<S> <C>
Registration Fees:
Securities and Exchange Commission................. $ 2,573
Printing and engraving expenses......................... 1,000
Legal fees and expenses................................. 4,000
Accountants' fees and expenses.......................... 2,000
----------
Total............................................... $ 9,573
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware grants every
corporation the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative,
other than an action by or in the right of the corporation, by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses, including attorneys'
fees, judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding 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 corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The Delaware statute also grants every corporation the power to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust, or other
enterprise against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believe to be in or
not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
The Delaware statute provides that to the extent that a director,
officer, employee, or agent of a corporation has been successful on the merits
or otherwise in defense of any action, suit, or proceeding referred to in the
statute, or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses, including attorneys' fees, actually incurred by
him in connection therewith.
Article Seven of the Registrant's Bylaws provides that the Registrant
shall indemnify to the full extent permitted under the General Corporation Law
of the State of Delaware any director, officer, employee, or agent of the
Registrant.
Article Nine of the Registrant's Certificate of Incorporation
exculpates the directors of the Registrant from and against certain liabilities.
Article Nine provides that a director of the Registrant shall have no personal
liability
II-1
<PAGE> 11
to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (a) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) for acts or omissions specified in Section 174 of
the General Corporation Law of the State of Delaware regarding the unlawful
payment of dividends and the unlawful purchase or redemption of the Registrant's
stock, and (d) for any transaction from which the director derived an improper
personal benefit.
The Registrant has entered into indemnification agreements with each of
its current directors which provide for the indemnification of and the
advancement of expenses to such persons in instances where such persons are
named in any suit resulting from their tenure as a director of the Registrant.
The Registrant believes the limitation of liability provisions in the
Certificate of Incorporation, Bylaws and, should they become applicable, the
indemnification agreements, facilitate the Registrant's ability to continue to
attract and retain qualified individuals to serve as directors of the
Registrant.
The Registrant has liability insurance for each director and officer
for certain losses arising from claims or charges made against them while acting
in their capacities as directors or officers of the Registrant.
ITEM 16. EXHIBITS.
EXHIBIT DESCRIPTION
4.1 --- Specimen Certificate for Common Stock of registrant
(incorporated by reference to Exhibit 4.1 of the
registrant's Form SB-2 Registration Statement, No.
333-33563).
5.1 --- Opinion of Phillips McFall McCaffrey McVay & Murrah,
P.C. (filed electronically herewith).
23.1 --- Consent of Phillips McFall McCaffrey McVay & Murrah,
P.C. (filed electronically herewith).
23.2 --- Consent of Ernst & Young LLP (filed electronically
herewith).
24.1 --- Powers of Attorney (included in Signature Page).
ITEM 17. UNDERTAKINGS.
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 provisions described under Item 15, above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted against the Registrant 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 of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes to:
(1) File, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) Include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
II-2
<PAGE> 12
(ii) 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 together, represent a fundamental change in
the information in the Registration Statement; and
(iii) Include any additional or changed material
information on the plan of distribution;
Provided, however, that (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(2) For determining liability under the Securities Act of
1933, treat each post-effective amendment as a new registration statement
of the securities offered, and the offering of the securities at that
time shall be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities which remain unsold at the end of the
offering.
(4) For determining any liability under the Securities Act
of 1933, treat each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities offered in
the registration statement, and that offering of the securities at that
time as the initial bona fide offering of those securities.
II-3
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of of Oklahoma City, State of Oklahoma, on December 3,
1998.
ZYMETX, INC.,
a Delaware corporation
By: /s/ Peter G. Livingston
---------------------------------
Peter G. Livingston
President and Chief Executive Officer
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Peter G. Livingston and G. Carl Gibson as
his true and lawful attorney-in-fact and agent, with full power of substitution,
for him, and in his name, place and stead, in any and all capacities to sign any
or all amendments or post-effective amendment to this Registration Statement,
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
the said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Peter G. Livingston President; Chief Executive December 3, 1998
- -------------------------------------- Officer; Director
Peter G. Livingston
Principal Executive Officer
/s/ G. Carl Gibson Vice President; Secretary- December 3, 1998
- -------------------------------------- Treasurer; Controller
G. Carl Gibson
Principal Financial and Accounting Officer
/s/ William I. Bergman Director December 3, 1998
- --------------------------------------
William I. Bergman
/s/ J. Vernon Knight, M.D. Director December 3, 1998
- --------------------------------------
J. Vernon Knight, M.D.
/s/ David E. Rainbolt Director December 3, 1998
- --------------------------------------
David E. Rainbolt
/s/ Christopher M. Salyer Director December 3, 1998
- --------------------------------------
Christopher M. Salyer
/s/ Gilbert M. Schiff, M.D. Director December 3, 1998
- --------------------------------------
Gilbert M. Schiff, M.D.
/s/ William G. Thurman, M.D. Director December 3, 1998
- --------------------------------------
William G. Thurman, M.D.
</TABLE>
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<S> <C>
4.1 --- Specimen Certificate for Common Stock of registrant
(incorporated by reference to Exhibit 4.1 of the
registrant's Form SB-2 Registration Statement, No.
333-33563).
5.1 --- Opinion of Phillips McFall McCaffrey McVay & Murrah,
P.C. (filed electronically herewith).
23.1 --- Consent of Phillips McFall McCaffrey McVay & Murrah,
P.C. (filed electronically herewith).
23.2 --- Consent of Ernst & Young LLP (filed electronically
herewith).
24.1 --- Powers of Attorney (included in Signature Page).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
December 3, 1998
ZymeTx, Inc.
800 Research Parkway, Suite 100
Oklahoma City, OK 73104
Re: ZymeTx, Inc. (the "Company")
Form S-3 Registration Statement
Gentlemen:
We have acted as counsel to the Company in connection with the
preparation of the Registration Statement on Form S-3 (the "Registration
Statement"), to be filed by the Company with the Securities and Exchange
Commission (the "Commission"), for the purpose of registering under the
Securities Act of 1933, as amended, an aggregate of 2,384,431 shares (the
"Shares") of the Company's common stock, $.001 par value (the "Common Stock"),
to be sold by certain selling stockholders.
Based on the foregoing, and assuming that the Registration Statement
becomes and remains effective during the period when the shares are offered and
sold and that all applicable securities laws are complied with, we are of the
opinion that the shares of Common Stock to be issued will be legally issued,
fully paid and nonassessable.
We are members of the bar of the State of Oklahoma and do not hold
ourselves out as experts on, or as generally familiar with, or qualified to
express opinions under law other than the law of the State of Oklahoma, the
corporation law of the State of Delaware, and the law of the United States and
the opinion given herein is limited thereto.
Very truly yours,
PHILLIPS MCFALL MCCAFFREY MCVAY
& MURRAH, P.C.
<PAGE> 1
Exhibit 23.1
CONSENT OF COUNSEL
Phillips McFall McCaffrey McVay & Murrah, P.C., hereby consents to the
filing of its opinion of counsel as an exhibit to the Form S-3 Registration
Statement of ZymeTx, Inc. (the "Company") for the registration of 2,384,431
shares of common stock, par value $.001 per share, of the Company.
PHILLIPS MCFALL MCCAFFREY MCVAY & MURRAH, P.C.
/s/ Phillips McFall McCaffrey McVay & Murrah, P.C.
Oklahoma City, Oklahoma
December 3, 1998
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-___________) and related Prospectus of
ZymeTx, Inc. for the registration of 2,384,431 shares of its common stock and
to the incorporation by reference therein of our report dated August 25, 1998,
with respect to the financial statements of ZymeTx, Inc. included in its Annual
Report (Form 10-KSB) for the year ended June 30, 1998, filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
Oklahoma City, Oklahoma
December 3, 1998
