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As filed with the Securities and Exchange Commission on November 9, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ZYMETX, INC.
(EXACT NAME OF REGISTRANT IN ITS CHARTER)
Delaware 73-1444040
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
800 RESEARCH PARKWAY, SUITE 100
OKLAHOMA CITY, OKLAHOMA 73104
(405) 271-1314
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
NORMAN R. PROULX, PRESIDENT & CHIEF EXECUTIVE OFFICER
ZYMETX, INC.
800 RESEARCH PARKWAY, SUITE 100
OKLAHOMA CITY, OKLAHOMA 73104
(405) 271-1314
(Name, address, including zip code, and telephone number,
including area code, 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: From time to
time 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
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE AGGREGATE OFFERING PRICE REGISTRATION FEE
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Common Stock, par value
$.001 in respect of:
5% Convertible Debentures 1,280,068(1)
Common Stock Warrants 180,000(1)
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Total 1,460,068 $2.66(2) $3,883,781(2) $1,026
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(1) The amount of common stock to be registered is based upon 200% of shares
issuable at an estimated conversion price of $3.124836 per share upon conversion
of 5% secured convertible debentures due October 12, 2002, plus 180,000 shares
of common stock issuable upon the exercise of outstanding warrants held by the
selling stockholders at an estimated exercise price of $3.16875. The additional
shares of common stock are being registered in the event the actual number of
shares issuable upon conversion of the debentures increases as a result of
adjustments in the conversion formula. In addition to the shares set forth in
the table above, the amount to be registered includes an indeterminate number of
shares issuable upon conversion of the debentures or exercise of the warrants as
a result of stock splits, stock dividends and similar transactions in accordance
with Rule 416 of Regulation C under the Securities Act of 1933.
(2) Estimated pursuant to Rule 476(c) for the purpose of computing the
registration fee based on the average of the high and low sales prices of the
ZymeTx, Inc. common stock on the Nasdaq National Market on November 8, 2000.
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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[RED HERRING APPEARS HERE WITH THE FOLLOWING INFORMATION:]
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities, and it is not soliciting an
offer to buy these securities, in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION DATED NOVEMBER 9, 2000
1,460,068 Shares
COMMON STOCK
ZYMETX, INC.
800 Research Parkway, Suite 100
Oklahoma City, OK 73104
(405) 271-1314
This prospectus relates to the resale of up to 1,460,068 shares of our
common stock issuable from time to time upon the possible future conversion of
debentures and exercise of warrants by Palladin Opportunity Fund, LLC and
Halifax Fund, L.P. We are registering these shares to satisfy our contractual
obligations to provide Palladin and Halifax with freely tradable shares. We will
not receive any cash proceeds from the sale of these shares by Palladin or
Halifax, and do not know when the proposed sale of the shares will occur. We
will pay all expenses of registration incurred in connection with this offering.
Our common stock is listed on the Nasdaq National Market under the
symbol "ZMTX." The last reported sales price of our common stock on November 8,
2000, was $2.53 per share. We urge you to obtain current market data.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED
BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
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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.
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The date of this prospectus is , 2000.
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TABLE OF CONTENTS
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PAGE
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<S> <C>
The Company .................................................................................................3
Risk Factors ................................................................................................4
Use of Proceeds.............................................................................................10
Selling Stockholders........................................................................................10
Prospectus Supplement.......................................................................................11
Plan of Distribution........................................................................................12
Indemnification of Directors and Officers...................................................................14
Legal Matters...............................................................................................14
Experts.....................................................................................................14
Where You Can Find More Information.........................................................................14
Documents Incorporated by Reference ........................................................................15
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THE COMPANY
Our business is the discovery, development and commercialization of
products used to diagnose and treat viruses. The scientific foundation for our
business is based upon the role of enzymes in the process of viral infection.
Our strategy is to:
o develop products that may be used to diagnose and treat a
range of viral diseases;
o earn revenues from marketing ZstatFlu, our first diagnostic
product;
o continue our diagnostic research and development program; and
o sustain a viral therapeutic research and development program.
ViraZyme(R), our core technology, exploits the subtle structural
differences and characteristics of enzymes to create products used to diagnose
and treat viral diseases. Our diagnostic technology is a proprietary two-part
compound that splits when the compound contacts a specific target enzyme. As a
result of this split, one part of the compound becomes visible to the naked eye
in the testing device, permitting the user to determine whether the virus
targeted by the test is present. For therapeutic products, we use a modified
version of the diagnostic compound that binds to a specific enzyme and prevents
the enzyme from contributing to the infection process.
The initial viral targets of our diagnostic products are respiratory
infections including influenza A and influenza B, respiratory syncytial virus or
RSV, parainfluenza and adenovirus. RSV infects humans, usually children, and is
an important cause of acute respiratory disease. Adenovirus can cause
respiratory disease, keratoconjunctivitis, diarrhea, cystitis and other
diseases.
Our principal offices are located at 800 Research Parkway, Suite 100,
Oklahoma City, Oklahoma 73104, and our telephone number is (405)271-1314.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. The risks described below are not the only ones facing
our company. Additional risks not presently known to us or that we currently
deem immaterial may also impair our business operations.
Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of our
common stock could decline due to any of these risks, and you may lose all or
part of your investment.
This prospectus also contains forward-looking statements that 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 faced by us described below and elsewhere in this
prospectus.
RISKS RELATED TO OUR BUSINESS
WE HAVE INCURRED LOSSES SINCE INCEPTION AND ANTICIPATE THAT WE WILL INCUR
CONTINUED LOSSES FOR THE FORESEEABLE FUTURE.
ZstatFlu is our only current source of product revenue and it may never
be profitable. We have incurred losses in each year since our inception in 1994.
As of June 30, 2000, we had an accumulated deficit of approximately $28.7
million. We expect to incur expenses related to our marketing and market
research activities for ZstatFlu, and further research and development related
to other product candidates.
Our ability to achieve profitability depends on a number of factors,
including our ability to further commercialize ZstatFlu. As a result, we are
unable to predict the extent of any future losses or the time required to
achieve profitability, if at all.
Our ability to introduce new products or make improvements in our
existing product line could be limited by our lack of capital resources. Also,
if our net tangible assets are less than $2,000,000 our stock will not be
eligible for listing on the Nasdaq National Market or SmallCap Market.
If we have significant losses and are unsuccessful in securing
financing, then we will have to consider other options, including selling the
company or significant assets, or dissolution.
WE DEPEND ON THE SUCCESS OF OUR PRODUCT ZSTATFLU.
We have invested a significant portion of our financial resources since
our inception to develop ZstatFlu. For the foreseeable future our ability to
achieve profitability will depend on our ability to sell ZstatFlu in sufficient
quantities and at competitive prices. If ZstatFlu is not accepted by our market
or if production costs exceed sales we may never achieve profitability.
WE CURRENTLY DEPEND ON THIRD PARTIES TO MANUFACTURE ZSTATFLU. IF THESE
MANUFACTURERS FAIL TO MEET OUR REQUIREMENTS AND THE REQUIREMENTS OF REGULATORY
AUTHORITIES, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WILL BE
HARMED.
We do not currently have the internal capability to manufacture
commercial quantities of ZstatFlu under the FDA's current Good Manufacturing
Practices. As a result, we contract with a third party to produce finished units
of ZstatFlu. If our third-party manufacturer does not satisfy our requirements
we
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would have to find an additional or alternative source of supply. This could
cause us to incur additional costs to produce ZstatFlu and may delay sales of
ZstatFlu.
Any third-party manufacturers that we may use must adhere to the FDA's
regulations on current Good Manufacturing Practices. The FDA enforces these
regulations by inspecting the production facilities. The facilities must pass
the inspection before the FDA will issue a pre-market approval of the product.
The manufacture of product at these facilities will also be subject to strict
quality control, testing and record keeping requirements.
We have no experience in the manufacture of diagnostic or therapeutic
products for clinical trials or commercial purposes. If we decide to manufacture
our products in the future, we would be subject to the regulatory requirements
described above. In addition, we would require substantial additional capital
and would be subject to delays or difficulties encountered in manufacturing our
products. No matter who manufacturers the product, we will be subject to
continuing obligations regarding the submission of safety reports and other
post-market information.
If we encounter delays or difficulties with contract manufacturers,
packagers or distributors, subsequent sales of our products could be delayed. In
addition, we may need to seek alternative sources of supply. If so, we may incur
additional costs or delays in product commercialization. If we change the source
or location of supply or modify the manufacturing process, regulatory
authorities will require us to demonstrate that the product produced by the new
source or from the modified process is equivalent to the product used in any
clinical trials that we had conducted.
We may not be able to enter into alternative supply arrangements at
commercially acceptable rates, if at all. Also, our manufacturers may not
provide quantities of product sufficient to meet our specifications or our
delivery, cost and other requirements.
THE FDA AND OTHER GOVERNMENTAL AUTHORITIES STRICTLY REGULATE OUR PRODUCTS. IF
REGULATION DELAYS THE SALE OF OUR PRODUCTS, OUR BUSINESS WOULD BE HARMED.
Federal, state, local and foreign governmental authorities strictly
regulate our research and development activities and the use and sale of our
products. Our diagnostic products are governed by FDA 510(k) application
requiring a clinical trial that compares our products to a standard.
Governmental authorities in the United States and other countries regulate the
testing, manufacturing, labeling, distribution, marketing and advertising of
therapeutic products. The FDA and comparable agencies in foreign countries
impose substantial requirements on the introduction of new diagnostic and
therapeutic products through lengthy and detailed clinical testing procedures
and other costly and time-consuming compliance procedures.
We do not expect to commercialize any therapeutic drug for several
years due to the extended testing and regulatory review process required for
therapeutic products. Our business would be harmed if we cannot obtain approval
or the approval is delayed.
WE DEPEND ON PATENTS AND PROPRIETARY RIGHTS, WHICH MAY OFFER ONLY LIMITED
PROTECTION AGAINST POTENTIAL INFRINGEMENT. IF WE ARE UNABLE TO PROTECT OUR
PATENTS AND PROPRIETARY RIGHTS, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS WILL BE HARMED.
Our success depends, in part, on our ability to develop and maintain a
strong patent position for our products and technologies both in the United
States and in other countries. We intend to file applications as appropriate for
patents covering the composition of matter of our drug candidates, the
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proprietary processes for producing such compositions, and the uses of our drug
candidates. We may be required to initiate litigation or other legal proceedings
to defend against claims of infringement, to enforce our patents, or to protect
our trade secrets. Any such proceedings could result in substantial cost to us
and divert our efforts.
We also rely on trade secrets, know-how and continuing technological
advancements to protect our proprietary technology. We have entered into
confidentiality agreements with our employees, consultants and advisors.
However, these parties may not honor these agreements and we may not be able to
successfully protect our rights to unpatented trade secrets and know-how. Others
may independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to our trade secrets and know-how.
To facilitate development of our proprietary technology base, we may
need to obtain licenses to patents or other proprietary rights from other
parties. If we are unable to obtain such licenses, our product development
efforts may be delayed.
We may collaborate with universities and governmental research
organizations which, as a result, may acquire certain rights to any inventions
or technical information derived from such collaboration.
We may incur substantial costs in asserting any patent rights and in
defending suits against us related to intellectual property rights. Such
disputes could substantially delay our product development or commercialization
activities. The United States Patent and Trademark Office or a private party
could institute an interference proceeding relating to our patents or patent
applications. An opposition or revocation proceeding could be instituted in the
patent offices of foreign jurisdictions. An adverse decision in any such
proceeding could result in the loss of our rights to a patent or invention.
ZSTATFLU OR ANY OF OUR OTHER PRODUCTS MAY NOT BE ACCEPTED BY THE MARKET, WHICH
WOULD HARM OUR BUSINESS AND RESULTS OF OPERATIONS.
We had limited success in realizing sales of ZstatFlu during the
1998-1999 influenza season, due to the lack of therapeutic products to treat
influenza. Sales of ZstatFlu during the 1999-2000 influenza season increased
significantly when therapeutic products were introduced. The degree of market
acceptance of ZStatFlu will depend upon a number of factors, including the
availability of third-party reimbursement, the establishment of
cost-effectiveness of ZstatFlu and its advantages over existing technologies and
products.
Even if approved by the FDA and other regulatory authorities, our other
product candidates may not achieve market acceptance and we may not receive
revenues from these products. The degree of market acceptance will depend upon a
number of factors, including:
o the receipt and timing of regulatory approvals;
o the availability of third-party reimbursement; and
o the establishment and demonstration in the medical community
of the clinical safety, efficacy and cost-effectiveness of
these candidates, as well as their advantages over existing
diagnostics and therapeutics.
We may not be able to successfully manufacture and market our products
even if they perform successfully in clinical trials. Physicians or the medical
community in general may not accept and utilize any of our products.
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We may not receive third party reimbursement for any of our future
products, which may harm our results of operations.
Our future revenues, profitability and access to capital will be
affected by the continuing efforts of governmental and private third-party
payors to contain or reduce the costs of health care through various means. We
expect a number of federal, state and foreign proposals to control the cost of
drugs and tests through governmental regulation. We are unsure of the form that
any health care reform legislation may take or what actions federal, state,
foreign, and private payors may take in response to the proposed reforms.
Therefore, we cannot predict the effect of any implemented reform on our
business.
Our ability to commercialize our products successfully will depend, in
part, on the extent to which reimbursement for the cost of such products and
related treatments will be available from government health administration
authorities, such as Medicare and Medicaid in the United States, private health
insurers and other organizations. Significant uncertainty exists as to the
reimbursement status of newly approved health care products, particularly for
indications for which there is no current effective treatment or for which
medical care typically is not sought. Adequate third-party coverage may not be
available to enable us to maintain price levels sufficient to realize an
appropriate return on our investment in product research and development. If
government and third-party payors do not provide adequate coverage and
reimbursement levels for the use of our products, our products may fail to
achieve market acceptance and our results of operations will be harmed.
WE NEED SUBSTANTIAL ADDITIONAL FUNDING AND MAY NOT HAVE ACCESS TO CAPITAL. IF WE
ARE UNABLE TO RAISE CAPITAL WHEN NEEDED, WE MAY NEED TO DELAY, REDUCE OR
ELIMINATE RESEARCH AND DEVELOPMENT PROGRAMS OR OUR COMMERCIALIZATION EFFORTS,
WHICH WOULD HARM OUR BUSINESS.
We will need to raise substantial additional funds to continue our
business activities. We have incurred losses from operations since inception and
we expect to incur additional operating losses at an increasing rate over at
least the next several years. We expect this increase to result from
o further research and development activities,
o further clinical trials,
o further development of marketing and sales capabilities, and
o payments to our licensor related to ZstatFlu and our other
product candidates.
We believe that we will require additional capital for fiscal 2002.
However, our actual capital requirements will depend upon numerous factors,
including:
o the cash flows provided from the sale of ZstatFlu;
o the development of further commercialization activities;
o the progress of our research and development programs;
o the progress of preclinical and clinical testing;
o the time and cost involved in obtaining regulatory approvals;
o the cost of filing, prosecuting, defending and enforcing any
patent claims and other intellectual property rights;
o the effect of competing technological and market developments;
the effect of changes and developments in our existing
licensing and other relationships; and
o the terms of any new collaborative, licensing and other
arrangements that we may establish.
We may be unable to raise sufficient funds to complete our development,
marketing and sales activities for ZstatFlu or any of our other product
candidates. Potential funding sources include:
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o public and private securities offerings;
o debt financing, such as bank loans; and
o collaborative, licensing and other arrangements with third
parties.
We may not be able to find sufficient debt or equity funding on
acceptable terms. If we cannot, we may need to delay, reduce or eliminate
research and development programs. Our sale of additional equity securities or
the expectation that we will sell additional equity securities may have an
adverse effect on the price of our common stock. In addition, collaborative
arrangements may require us to grant product development programs or licenses to
third parties for products that we might otherwise seek to develop or
commercialize ourselves.
WE FACE INTENSE COMPETITION, WHICH COULD HARM OUR BUSINESS AND RESULTS OF
OPERATIONS.
There are many entities, both public and private, including well-known,
large pharmaceutical companies, chemical companies, biotechnology companies and
research institutions, engaged in developing diagnostics and therapeutics for
applications similar to those targeted by us. Developments by these or other
entities may render our products under development non-competitive or obsolete.
Many of these companies have substantially greater resources and experience than
we have. Accordingly, our competitors may succeed in obtaining regulatory
approval for products more rapidly and more effectively than we do. Competitors
may succeed in developing products that are more effective and less costly than
any that may be developed by us and also may prove to be more successful in the
manufacture and marketing of products.
WE MAY NOT BE ABLE TO KEEP PACE WITH TECHNOLOGICAL CHANGES IN THE
BIOPHARMACEUTICAL INDUSTRY, WHICH MAY PREVENT US FROM COMMERCIALIZING OUR
PRODUCT CANDIDATES.
Our business is characterized by extensive research efforts and rapid
technological progress. New developments in molecular biology, medicinal
chemistry and other fields of biology and chemistry are expected to continue at
a rapid pace in both industry and academia. Research and discoveries by others
may render some or all of our programs or drug candidates non-competitive or
obsolete.
Our business strategy is based, in part, upon the application of our
technology platform to discover and develop diagnostic and therapeutic products
for the treatment of infectious human diseases. This strategy is subject to the
risks inherent in the development of new products using new and emerging
technologies and approaches. There are a limited number of drugs on the market
for the treatment of certain of the disease indications being targeted by us.
Unforeseen problems may develop with our technologies or applications.
We may not be able to successfully address technological challenges that we
encounter in our research and development programs and may not ultimately
develop commercially feasible products.
WE DEPEND ON KEY PERSONNEL AND MAY NOT BE ABLE TO RETAIN THESE EMPLOYEES OR
RECRUIT ADDITIONAL QUALIFIED PERSONNEL, WHICH WOULD HARM OUR BUSINESS.
Because of the specialized scientific nature of our business, we are
highly dependent upon qualified scientific, technical and managerial personnel.
Our anticipated growth and expansion into new areas and activities will require
additional expertise and the addition of new qualified personnel. There is
intense competition for qualified personnel in the pharmaceutical field. We may
not be able to attract and retain the qualified personnel necessary for the
development of our business.
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The loss of the services of existing personnel, as well as the failure
to recruit additional key scientific, technical and managerial personnel in a
timely manner would harm our research and development programs and our business.
We do not maintain key man life insurance on any of our employees.
WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS, WHICH MAY HARM OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS REGARDLESS OF THE OUTCOME.
The administration of drugs to humans, whether in clinical trials or
after marketing clearance is obtained, can result in product liability claims.
Product liability claims can be expensive, difficult to defend and may result in
large judgments or settlements against us. Although we maintain product
liability insurance, claims could exceed the coverage obtained. A successful
product liability claim in excess of our insurance coverage could harm our
business, financial condition and results of operations. In addition, any
successful claim may prevent us from obtaining adequate product liability
insurance in the future on commercially desirable terms. Even if a claim is not
successful, defending such a claim may be time-consuming and expensive.
THE RIGHTS THAT HAVE BEEN AND MAY IN THE FUTURE BE GRANTED TO HOLDERS OF OUR
COMMON STOCK MAY ADVERSELY AFFECT THE RIGHTS OF OTHER STOCKHOLDERS AND MAY
DISCOURAGE A TAKEOVER.
In February 1999, our board of directors declared a dividend
distribution of a right entitling each holder of our common stock the right to
purchase shares of our series A junior preferred stock. This plan is designed to
help insure that all our stockholders receive fair value for their shares of
common stock in the event of a proposed takeover of our company, and to guard
against the use of partial tender offers or other coercive tactics to gain
control of our company without offering fair value to the holders of our common
stock. The plan is likely to discourage a merger or tender offer involving our
securities that is not approved by our board of directors by increasing the cost
of effecting any such transaction and, accordingly, could have an adverse impact
on holders of our stock who might want to vote in favor of such a merger or
participate in such a tender offer.
While we have no present intention to authorize or issue any series of
preferred stock, any such authorization or issuance, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could also have the effect of making it more difficult for a third
party to acquire a majority of our outstanding voting stock. The preferred stock
may have other rights, including economic rights senior to those of our common
stock, and, as a result, an issuance of additional preferred stock could
adversely affect the market value of the notes or our common stock.
THE REGISTRATION OF SHARES UNDERLYING OTHER WARRANTS TO PURCHASE OUR COMMON
STOCK MAY HAVE AN ADVERSE EFFECT ON THE MARKET PRICE FOR OUR COMMON STOCK AND
MAY IMPAIR OUR ABILITY TO RAISE ADDITIONAL FUNDS.
We are registering in a separate registration statement approximately
1,750,000 shares of our common stock as follows:
o approximately 1,600,000 shares underlying warrants held by third
parties;
o 50,000 shares of restricted common stock issued to our president,
Mr. Proulx, as compensation; and
o 101,603 shares underlying certain debentures and warrants issued to
a placement agent in connection with the sale of the debentures and
warrants to Palladin and Halifax, which includes 19,681 shares
subject to debentures and warrants issued to Rand P. Mulford, one of
our directors, who served as a representative of the placement agent
in the referenced offering.
Sales of those shares, or the perception that those sales could occur,
may have an adverse effect on the market price for our common stock and could
impair our ability to raise capital through an offering of equity securities.
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OUR STOCK PRICE MAY CONTINUE TO FLUCTUATE.
The market prices of securities of small capitalization biotechnology
companies, including ours, have historically been highly volatile. The market
has from time-to-time experienced significant price and volume fluctuations
unrelated to the operating performance of particular companies. The price of our
common stock has fluctuated greatly and may continue to fluctuate significantly
in the future due to a variety of factors, including:
o the results of other preclinical testing and clinical trials
by us or our competitors;
o technological innovations or new therapeutic products;
o governmental regulations;
o developments in patent or other proprietary rights;
o litigation;
o public concern as to the safety of products developed by us or
others;
o comments by securities analysts;
o general market conditions in our industry;
o market acceptance of ZstatFlu; and
o our financial position and operating results.
In addition, if any of the risks described in these "Risk Factors"
actually occurred, it could have a dramatic and adverse impact on the market
price of our common stock.
WE HAVE SIGNIFICANT INDEBTEDNESS AND WE MAY NOT BE ABLE TO MEET OUR OBLIGATIONS.
We are highly leveraged and have significant debt service requirements.
In October 2000, we issued $2,160,000 of secured convertible debentures due in
October 2002. The interest on the notes is payable in cash or common stock or by
adding the interest to the outstanding principal due under the debenture at our
option. The debentures are convertible to common stock at the option of the
investor for 10 days prior to periodic anniversaries of the issuance of the
debentures. We are not currently generating sufficient cash flow from operations
to pay the principal amount of the debentures on their due date. This may
require us to borrow additional funds or sell additional equity to meet this
obligation if the debenture is not converted to common stock. If we are unable
to satisfy our debt service requirements, substantial liquidity problems could
result, which would negatively impact our future prospects.
Our ability to meet our debt service obligations and to reduce our
indebtedness depends on our future operating performance and on economic,
financial, competitive, regulatory and other factors affecting our operations.
Many of these factors are beyond our control and some or all of these factors
could adversely affect our future operating performance. We historically have
been unable to generate sufficient cash flow from operations to meet our
operating needs and have relied on equity and debt financings to fund our
operations.
USE OF PROCEEDS
We will not receive any cash proceeds from the sale of these shares by
Palladin or Halifax.
SELLING STOCKHOLDERS
Palladin and Halifax may acquire the shares covered by this prospectus
by converting debentures or exercising warrants they acquired pursuant to a
purchase agreement dated October 13, 2000, among ZymeTx, Palladin and Halifax.
In the purchase agreement, Palladin and Halifax represented that they had
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no present intention to effect a distribution of those shares. However, in
accordance with the terms of the purchase agreement we agreed to register the
underlying shares of common stock for resale by Palladin and Halifax. Except for
the ownership of the debentures and warrants for the purchase of our common
stock, neither Palladin nor Halifax has had any relationship to us within the
past three years.
The following table sets forth information regarding the beneficial
ownership of the common stock owned by Palladin and Halifax as of November 8,
2000, including the number of shares of common stock that would have been
issuable to the selling stockholders on November 8, 2000 assuming:
o the conversion of all the debentures at the initial conversion
price of $3.124836, without regard to any limitations on
conversion, plus
o the conversion of 90,000 common stock purchase warrants by
each of the selling stockholders.
In accordance with the terms of our registration rights agreement with
the selling stockholders, this prospectus covers the resale of 200% of the
number of shares of common stock issuable upon conversion of the principal
amount of the debentures assuming the initial conversion price. The fourth
column assumes the sale of 200% of the number of shares of common stock issuable
upon conversion of the principal amount of the debentures outstanding on
November 8, 2000 plus the sale of all shares of common stock issuable upon
conversion of the warrants held by each selling stockholder, assuming the
initial conversion prices. The selling stockholders may sell all, some or none
of their shares in this offering pursuant to this prospectus.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
PRIOR TO THE OFFERING
------------------------
COMMON STOCK
NAME NUMBER PERCENT(1) TO BE SOLD
---- ------- ---------- ----------
<S> <C> <C> <C>
Palladin Opportunity Fund LLC 410,017 4.99% 730,034
Halifax Fund, L.P. 410,017 4.99% 730,034
</TABLE>
----------
(1) Under our agreements with Palladin and Halifax, they are each
prohibited from beneficially owning more than an aggregate of 4.99% of our
common stock.
On April 13, 2001, July 13, 2001 and October 13, 2001, if and only if
the average of the closing bid prices of our common stock for the previous 15
consecutive trading days is lower than the conversion price of the debentures,
then the conversion price of the debentures will be reset to such lower average.
Under limited circumstances, three additional reset dates may occur. If any such
reset occurs, the dilution to us and our stockholders may be meaningful.
PROSPECTUS SUPPLEMENT
Palladin and Halifax may elect to convert the debentures and exercise
the warrants held by them at different times. The amount of common shares to be
issued to Palladin and Halifax upon conversion of the debentures will be
determined by the conversion rate applicable at the time of each conversion. The
current conversion rate for the debentures is one share of common stock for each
$3.124836 of debentures converted. We may, from time to time, supplement this
prospectus to reflect the number of shares of common stock to be resold by
Palladin and Halifax.
-11-
<PAGE> 13
PLAN OF DISTRIBUTION
Palladin and Halifax may sell or distribute some or all of the shares
from time to time through dealers or brokers or other agents or directly to one
or more purchasers, including pledgees, in a variety of ways, including:
o transactions that may involve crosses and block transactions
on the Nasdaq National Market or other exchanges on which the
common stock may be listed for trading;
o privately negotiated transactions, including sales pursuant to
pledges;
o in the over-the-counter market;
o in brokerage transactions;
o sales under Rule 144 rather than by using this prospectus;
o through options, swaps or derivatives;
o through any other legally permitted method; or
o in any combination of these types of transactions.
Palladin and Halifax may effect these transactions at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. Brokers,
dealers or other agents participating in these transactions may receive
compensation in the form of discounts, concessions or commissions from Palladin
and Halifax (and, if they act as agent for the purchaser of such shares, from
such purchaser). These discounts, concessions or commissions as to a particular
broker, dealer, or other agent might be in excess of those customary in the type
of transaction involved. This prospectus also may be used, with our consent, by
donees of Palladin or Halifax, or by other persons, including pledgees,
acquiring the shares and who wish to offer and sell their shares under
circumstances requiring or making desirable its use. To the extent required, we
will file, during any period in which offers or sales are being made, one or
more supplements to this prospectus to set forth the names of donees or pledgees
of Palladin or Halifax and any other material information with respect to the
plan of distribution not previously disclosed.
Palladin and Halifax and any such brokers, dealers or other agents that
participate in such distribution may be deemed to be "underwriters" within the
meaning of the Securities Act, and any discounts, commissions or concessions
received by any such brokers, dealers or other agents might be deemed to be
underwriting discounts and commissions under the Securities Act. Neither ZymeTx
nor Palladin or Halifax can presently estimate the amount of such compensation.
We know of no existing arrangements between Palladin and/or Halifax and any
other selling stockholder, broker, dealer or other agent relating to the sale or
distribution of the shares.
Under applicable rules and regulations under the Securities Exchange
Act, any person engaged in a distribution of any of the shares may not
simultaneously engage in market activities with respect to the common stock for
the applicable period under Regulation M prior to the commencement of such
distribution. In addition and without limiting the foregoing, the selling
stockholders will be subject to applicable provisions of the Securities Exchange
Act and the rules and regulations thereunder, including without limitation Rule
10b-5 and Regulation M, which provisions may limit the timing of
-12-
<PAGE> 14
purchases and sales of any of the shares by the selling stockholders. All of the
foregoing may affect the marketability of the common stock.
From time to time, one or more of the selling stockholders may pledge,
hypothecate or grant a security interest in some or all of the shares owned by
them. The pledgees, secured parties or persons to whom such securities have been
hypothecated will, upon foreclosure in the event of default, be deemed to be
selling shareholders. The number of a selling stockholder's shares offered under
this prospectus will decrease as and when it takes such actions. The plan of
distribution for such selling stockholder's shares will otherwise remain
unchanged. In addition, a selling stockholder may, from time to time, sell short
our common stock, and, in such instances, this prospectus may be delivered in
connection with such short sales and the shares offered under this prospectus
may be used to cover short sales.
A selling stockholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the common
stock in the course of hedging the positions they assume with such selling
stockholder, including, without limitation, in connection with distributions of
the common stock by such broker-dealers. A selling stockholder may enter into
option or other transactions with broker-dealers that involve the deliver of the
shares offered hereby to the broker-dealers, who may then resell or otherwise
transfer such shares. A selling stockholder may also loan or pledge the shares
offered hereby to a broker-dealer and the broker-dealer may sell the shares
offered hereby so loaned or upon a default may sell or otherwise transfer the
pledged shares offered hereby.
We have agreed to pay all of the expenses incident to the sale of the
shares by Palladin and Halifax other than commissions, concessions and discounts
of brokers, dealers or other agents. Palladin and/or Halifax may indemnify any
broker, dealer or other agent that participates in transactions involving sales
of the shares against certain liabilities, including liabilities arising under
the Securities Act. We have agreed to indemnify Palladin and/or Halifax and any
such statutory "underwriters" and controlling persons of such "underwriters"
against certain liabilities, including certain liabilities under the Securities
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.
-13-
<PAGE> 15
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our bylaws include certain provisions whereby the company's officers
and directors are to be indemnified against certain liabilities. Our certificate
of incorporation 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
o breach of the director's duty of loyalty;
o acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law;
o the unlawful payment of a dividend or unlawful stock purchase
redemption; or
o 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 effect on the availability of equitable remedies such as
injunction or rescission based upon a director's breach of the duty of care.
We have entered into indemnification agreements with each of our
current directors. These agreements 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. We
believe the limitation of liability provisions in the certificate of
incorporation, bylaws and, should they become applicable, the indemnification
agreements, facilitate our ability to continue to attract and retain qualified
individuals to serve as directors. We maintain liability insurance for directors
and officers.
LEGAL MATTERS
Phillips McFall McCaffrey McVay & Murrah, P.C., Oklahoma City,
Oklahoma, will pass upon the validity of the common stock offered by this
prospectus for ZymeTx, Inc.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our annual report on Form 10-KSB for the year ended June
30, 2000, as set forth in their report, which is incorporated by reference in
this prospectus. Our financial statements are incorporated by reference in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from commercial document retrieval services and at the
web site at http://www.sec.gov.
In addition, our common stock is listed on Nasdaq and reports and other
information concerning ZymeTx can be inspected at the Nasdaq offices.
-14-
<PAGE> 16
No dealer, salesman, or any other person has been authorized to give
any information or to make any representations or projections of future
performance other than those contained in this prospectus. Any such other
information, projections or representations must not be relied upon as having
been authorized. The delivery of this prospectus or any sale under this
prospectus at anytime does not imply that the information in this prospectus is
correct as of any time after the date of this prospectus. This prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities in any jurisdiction where, and to any person to whom, it is unlawful
to make such offer or solicitation.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to incorporate information by reference into this
prospectus, which means that we can disclose important information to you by
referring you to another document we filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
except for any information superseded by information in, or incorporated by
reference in, this prospectus. This prospectus incorporates by reference the
documents set forth below, that we have previously filed with the SEC. These
documents contain important information about our company and its finances:
<TABLE>
<CAPTION>
ZymeTx SEC Filings
File No. 0-23145 Period
---------------- ------
<S> <C>
Annual Report on Form 10-KSB Fiscal year ended June 30, 2000
Amendment No. 1 to Annual Report on Form 10-KSB
for fiscal year ended June 30, 2000 Filed October 27, 2000
Amendment No. 2 to Annual Report on Form 10-KSB
for fiscal year ended June 30, 2000 Filed November 9, 2000
Current Report on Form 8-K Filed November 9, 2000
</TABLE>
<TABLE>
<CAPTION>
ZymeTx SEC Filings
File No. 333-25257 Period
------------------ ------
<S> <C>
Registration Statement on Form SB-2 Declared effective on October 29, 1997
</TABLE>
We are also incorporating by reference additional documents that we
file with the SEC between the date of this prospectus and the termination of the
offering.
We will provide you, without charge, copies of any documents
incorporated by reference, excluding all exhibits unless we have specifically
incorporated by reference an exhibit into this prospectus. You may obtain copies
of documents incorporated by reference in this prospectus by requesting them in
writing, by e-mail or by telephone from us at the following address:
ZymeTx, Inc.
800 Research Parkway, Suite 100
Oklahoma City, OK 73104
Attention: Corporate Secretary-Treasurer
Tel: (405) 271-1314
[email protected]
You can also get more information by visiting our web site at
http://www.zymetx.com. Web site materials are not part of this prospectus.
Until 25 days after the date of this prospectus, all dealers that
effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
-15-
<PAGE> 17
================================================================================
1,460,068 Shares
ZYMETX, INC.
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
ZYMETX, INC.
800 RESEARCH PARKWAY, SUITE 100
OKLAHOMA CITY, OKLAHOMA 73104
(405) 271-1314
___________, 2000
================================================================================
<PAGE> 18
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>
SEC Registration Fees.................................. $ 1,050
Nasdaq Additional Listing Fees......................... 15,000
Printing and engraving expenses........................ 10,000
Legal fees and expenses................................ 5,000
Accountants' fees and expenses......................... 6,000
-------
Total.............................................. $37,050
=======
</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 believed 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 our bylaws provides that we shall indemnify to the
full extent permitted under the General Corporation Law of the State of Delaware
any director, officer, employee, or agent of ZymeTx.
Article Nine of our certificate of incorporation exculpates the
directors of ZymeTx from and against certain liabilities. Article Nine provides
that a director of ZymeTx shall have no personal liability to ZymeTx or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (a) for any
<PAGE> 19
breach of the director's duty of loyalty to ZymeTx 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 ZymeTx stock,
and (d) for any transaction from which the director derived an improper personal
benefit.
ZymeTx 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 ZymeTx. We believe the
limitation of liability provisions in the certificate of incorporation, bylaws
and, should they become applicable, the indemnification agreements, facilitate
ZymeTx's ability to continue to attract and retain qualified individuals to
serve as directors of ZymeTx.
Zymetx 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 ZymeTx.
ITEM 16. EXHIBITS.
EXHIBIT DESCRIPTION
5.1 Opinion of Phillips McFall McCaffrey McVay & Murrah, P.C.
(filed electronically herewith).
10.1 Purchase Agreement, dated October 13, 2000, by and among
ZymeTx, Inc., Palladin Opportunity Fund LLC and Halifax Fund,
L.P. (incorporated by reference to Exhibit 10.20 of our Annual
Report on Form 10-KSB for fiscal year ended June 30, 2000).
10.2 Form of 5% Senior Secured Convertible Debenture Due October
12, 2002 (incorporated by reference to Exhibit 4.1 of our
Annual Report on Form 10-KSB for fiscal year ended June 30,
2000).
10.3 Form of common stock purchase warrant dated October 13, 2000,
issued in connection with the Purchase Agreement (incorporated
by reference to Exhibit 10.21 of our Annual Report on Form
10-KSB for fiscal year ended June 30, 2000).
10.4 Registration Rights Agreement dated October 13, 2000, issued
in connection with the Purchase and Security Agreement
(incorporated by reference to Exhibit 10.22 of our Annual
Report on Form 10-KSB for fiscal year ended June 30, 2000).
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 on Signature Page of Registration
Statement).
ITEM 17. UNDERTAKINGS.
(a) ZymeTx hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement
to include any additional or changed material information on the plan
of distribution.
(2) That, for determining liability under the Securities Act,
each post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered, and the offering of the
securities at that time shall be the initial bona fide offering.
(3) To file a post-effective amendment to remove from
registration any of the securities which remain unsold at the end of
the offering.
<PAGE> 20
(b) ZymeTx further undertakes that, for purposes of determining any
liability under the Securities Act, each filing of its annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, ZymeTx has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE> 21
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 November 9,
2000.
ZYMETX, INC.,
a Delaware corporation
By: /s/ Norman R. Proulx
-------------------------------
Norman R. Proulx
President & Chief Executive
Officer
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Norman R. Proulx 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/ Norman R. Proulx President; Chief Executive November 9, 2000
-------------------------------------------------- Officer; Director
Norman R. Proulx
Principal Executive Officer
/s/ G. Carl Gibson Vice President; November 9, 2000
-------------------------------------------------- Secretary-Treasurer; Controller
G. Carl Gibson
Principal Financial and Accounting Officer
/s/ William I. Bergman Director November 9, 2000
--------------------------------------------------
William I. Bergman.
/s/ J. Vernon Knight, M.D. Director November 9, 2000
--------------------------------------------------
J. Vernon Knight, M.D.
/s/ David E. Rainbolt Director November 9, 2000
--------------------------------------------------
David E. Rainbolt
/s/ Christopher M. Salyer Director November 9, 2000
--------------------------------------------------
Christopher M. Salyer
/s/ Gilbert M. Schiff, M.D. Director November 9, 2000
--------------------------------------------------
Gilbert M. Schiff, M.D.
/s/ William G. Thurman, M.D. Director November 9, 2000
--------------------------------------------------
William G. Thurman, M.D.
/s/ James R. Tolbert III Director November 9, 2000
--------------------------------------------------
James R. Tolbert III
</TABLE>
<PAGE> 22
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
5.1 Opinion of Phillips McFall McCaffrey McVay & Murrah, P.C. (filed
electronically herewith).
10.1 Purchase Agreement, dated October 13, 2000, by and among ZymeTx, Inc.,
Palladin Opportunity Fund LLC and Halifax Fund, L.P. (incorporated by
reference to Exhibit 10.20 of our Annual Report on Form 10-KSB for
fiscal year ended June 30, 2000).
10.2 Form of 5% Senior Secured Convertible Debenture Due October 12, 2002
(incorporated by reference to Exhibit 4.1 of our Annual Report on Form
10-KSB for fiscal year ended June 30, 2000).
10.3 Form of common stock purchase warrant dated October 13, 2000, issued in
connection with the Purchase Agreement (incorporated by reference to
Exhibit 10.21 of our Annual Report on Form 10-KSB for fiscal year ended
June 30, 2000).
10.4 Registration Rights Agreement dated October 13, 2000, issued in
connection with the Purchase and Security Agreement (incorporated by
reference to Exhibit 10.22 of our Annual Report on Form 10-KSB for
fiscal year ended June 30, 2000).
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 on Signature Page of Registration
Statement).
</TABLE>
