S-8: Initial registration statement for securities to be offered to employees pursuant to employee benefit plans
Published on April 25, 2001
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON April 25, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Cytoclonal Pharmaceutics Inc.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
75-2402409
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(I.R.S. Employer Identification No.)
2110 Research Row, Dallas, Texas 75235
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(Address of Principal Executive Offices) (Zip Code)
Cytoclonal Pharmaceutics Inc. 2000 Stock Option Plan
----------------------------------------------------
(Full Title of the Plan)
Ronald Lane Goode, Ph.D.
Cytoclonal Pharmaceutics Inc.
2110 Research Row
Suite 621
Dallas, Texas 75235
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(Name and Address of Agent For Service)
(214) 353-2922
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(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Robert H. Cohen, Esq.
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
(212) 735-8600
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CALCULATION OF REGISTRATION FEE
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(1) Shares of common stock issuable upon the exercise of options granted under
the Cytoclonal Pharmaceutics Inc. 2000 Stock Option Plan.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the 2000 Stock Option Plan.
(3) Calculated solely for the purpose of determining the registration fee
pursuant to Rule 457(h)(1) promulgated under the Securities Act of 1933 based
upon the average of the high and low price for the common stock on The Nasdaq
National Market on April 20, 2001.
EXPLANATORY NOTE
o We are filing this registration statement on Form S-8 to register
1,500,000 shares of common stock $.01 par value per share, issuable
upon the exercise of options available for grant pursuant to the
Cytoclonal Pharmaceutics Inc. 2000 Stock Option Plan (the "2000 Stock
Option Plan").
o This registration statement also registers reoffers and resales of
shares of common stock issuable upon the exercise of options granted
under the 2000 Stock Option Plan, that may constitute "control
securities" under General Instruction C to Form S-8. These control
securities may be reoffered and resold on a continuous or delayed basis
in the future under Rule 415 of the Securities Act of 1933, as amended
(the "Securities Act").
o This registration statement contains two parts. The first part contains
a "reoffer prospectus" prepared in accordance with Part I of Form S-3
(in accordance with Instruction C of Form S-8). The second part
contains information required in the registration statement pursuant to
Part II of Form S-8. Pursuant to the Note to Part I of Form S-8, the
plan information specified by Part I of Form S-8 is not required to be
filed with the Securities and Exchange Commission. Cytoclonal
Pharmaceutics Inc. will provide without charge to any person, upon
written or oral request of such person, a copy of each document
incorporated by reference in Item 3 of Part II of this registration
statement (which documents are incorporated by reference in the Section
10(a) prospectus as set forth in Form S-8), the other documents
required to be delivered to eligible employees pursuant to Rule 428(b)
under the Securities Act, and additional information about the 2000
Stock Option Plan. Requests should be directed to Daniel M. Shusterman,
Esq. At Cytoclonal Pharmaceutics Inc., 2110 Research Row, Suite 621,
Dallas, Texas 75235. The Company's telephone number is (214) 353-2922.
REOFFER PROSPECTUS
CYTOCLONAL PHARMACEUTICS INC.
870,000 SHARES OF COMMON STOCK
This reoffer prospectus is to be used for the resale of up to 870,000
shares of our common stock, beneficially owned by affiliates listed in the
"Selling Stockholders" table included in this prospectus, issuable upon the
exercise of options granted or available for grant under our 2000 Stock Option
Plan.
Selling Stockholders may sell their shares of common stock through
public or private transactions at current market prices, or at previously
negotiated prices. Although we will not receive any proceeds when the Selling
Stockholders sell their common stock to others, we may, however, receive
proceeds when the Selling Stockholders exercise their options to acquire such
common stock.
Our common stock is listed on the Nasdaq National Market under the
symbol "CYPH." On April 20, 2001, the last reported sale price of our common
stock was $3.82 per share. Our securities are a speculative investment and
involve a high degree of risk.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus is April [____], 2001.
TABLE OF CONTENTS
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WHERE YOU CAN FIND MORE INFORMATION
We are a public company. We file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any
document we file with the SEC at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public at the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange
Act of 1934 until the Selling Stockholders sell all of their shares of common
stock. This prospectus is part of a registration statement we filed with the
SEC.
1. Annual Report on Form 10-K (File No.: 0-26087), for the fiscal
year ended December 31, 2000; and
2. The description of our common stock set forth in our
registration statement filed under Section 12 of the
Securities Exchange Act of 1934 on Form 8-A on October 2,
1995, and any amendment or report filed for the purpose of
updating any such description.
You may request a copy of these filings, at no cost, by oral request or
by writing to us at the following address:
Cytoclonal Pharmaceutics Inc.
2110 Research Row
Suite 621
Dallas, Texas 75235
Attention: Daniel Shusterman, Esq.
Telephone: (214) 353-2922
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The Selling Stockholders will
not make an offer of these shares of common stock in any state where the offer
is not permitted. You should not assume that the information in this prospectus
or any supplement is accurate as of any date other than the date on the front of
those documents.
ii
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. This summary is not complete and may not contain all of the
information that you should consider before investing in the securities. You
should read the entire prospectus carefully. Unless we otherwise say so, when we
discuss our outstanding securities, we exclude all of our shares of common stock
issuable upon the exercise of currently outstanding warrants and options and the
conversion of our convertible securities.
We are a biopharmaceutical drug development company specializing in
therapeutic products for human diseases with an emphasis on the treatment and
prevention of cancer and infectious diseases. To date, we have been involved
solely in research and development activities relating to several proprietary
products and technologies that are at various stages of development. These
include Paclitaxel (the active ingredient in Taxol(R), the anti-cancer agent
marketed by Bristol-Myers Squibb), for which we have exclusive rights to patents
on a process under development for cost-efficient production. (Taxol is
currently manufactured using the bark of the Pacific Yew tree.) Further, we have
two drug design platform technologies: Quantum Core Technologies(TM) (QCT(TM))
and OASIS(TM). The Quantum Core Technology(TM) is a computer-assisted drug
design technology platform, primarily targeted to inhibition of proteins
involved in disease. OASIS(TM) is our antisense library of reagents for
regulating genes involved in disease. We also have an active pre-clinical
vaccine vector program involving Mycobacterium tuberculosis, and a program to
identify a new expression system for glucocerebrosidase, the enzyme defect in
Gaucher's disease.
ORGANIZATIONAL HISTORY
We were originally incorporated in the state of Texas in September 1991
under the name of Bio Pharmaceutics, Inc. In November 1991, we changed our name
to Cytoclonal Pharmaceutics Inc. We were then reincorporated in the state of
Delaware by merger into a wholly-owned Delaware subsidiary in January 1992. Our
executive offices are located at 2110 Research Row, Suite 621, Dallas, Texas
75235 and our telephone number is (214) 353-2922.
THE OFFERING
Securities Offered..............................870,000 shares of common stock
acquired or to be acquired by
the Selling Stockholders upon
the exercise of options granted
to them under our 2000 Stock
Option Plan. See "Selling
Stockholders" and "Plan of
Distribution."
Common Stock outstanding as of
March 31, 2001..................................16,164,043
Risk Factors....................................The securities offered hereby
involve a high degree of risk.
Only investors who can bear the
loss of their entire investment
should invest. See "Risk
Factors."
Use of Proceeds.................................We will not receive any of the
proceeds when the Selling
Stockholders sell their shares
of common stock. We may,
however, receive proceeds when
such Selling Stockholders
exercise their options to
purchase our common stock. We
intend to utilize the net
proceeds from the exercise of
options to fund our research and
development activities,
including paying royalties and
licensing fees, and for general
working capital purposes and
operating expenses. See "Use of
Proceeds."
Dividend Policy.................................We currently intend to retain
all future earnings to fund the
development and growth of our
business. We do not anticipate
paying cash dividends.
Nasdaq National Market Symbol..................."CYPH"
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RISK FACTORS
You should carefully consider the following factors and other information in
this prospectus before deciding to invest in the securities we are offering in
this prospectus.
INVESTORS WILL EXPERIENCE A LOSS IN THE BOOK VALUE OF THEIR COMMON STOCK DUE TO
OUR ACCUMULATED DEFICIT.
We had an accumulated deficit of $29,354,000 as of the fiscal year
ended December 31, 2000. Our statement of operations for the fiscal year ended
December 31, 2000 shows net losses of $7,345,000, which means a loss of $.51 per
share of common stock. Investors purchasing shares of our common stock will
experience a loss in the book value of their shares due to our net losses.
BECAUSE WE CONTINUE TO EXPERIENCE LOSSES DUE TO OUR RESEARCH AND DEVELOPMENT
ACTIVITIES, WE MAY HAVE DIFFICULTY IN RAISING CAPITAL AND OUR STOCKHOLDERS COULD
EXPERIENCE A DECREASE IN THE VALUE OF THEIR INVESTMENT.
From our formation in 1991 to the date of this prospectus, we have been
experiencing substantial operating losses due to our increasing research and
development activities and general and administrative expenditures. We expect to
have additional losses in the future. Although we have had revenue since 1998
from our license agreement with Bristol-Myers Squibb, it was and remains our
sole source of revenue. We cannot say with any certainty that we will have any
future revenue or, if we do have revenue, that we will be profitable. Our
failure to become profitable may make it more difficult for us to raise
additional capital on favorable terms, if at all. Such failure could have a
material adverse effect on our business.
WE WILL NEED SUBSTANTIAL FUNDS IN THE FUTURE, AND WE MAY HAVE TO ISSUE
ADDITIONAL SECURITIES TO RAISE SUCH FUNDS, WHICH WILL RESULT IN DILUTION TO THE
VALUE OF OUR SECURITYHOLDERS' INVESTMENT.
Since our formation in 1991, we have relied on loans, private
financings, our November 1995 initial public offering and the March and April
2000 warrant redemptions to allow us to continue our operations. Our cash
requirements in the future may be significantly different from our current
estimates because of changes in our research and development programs, increased
competition, advances in technology and other factors. We cannot say with any
certainty that required financing will be available to us on favorable terms, if
at all. If we decide to raise additional money by issuing more of our
securities, securityholders will experience a dilution to the value of their
securities at the time of issuance.
WE DO NOT HAVE ANY PRODUCTS TO DATE AND RELY HEAVILY ON OUR LICENSE AGREEMENTS,
THE LOSS OF ANY OF WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS
AND CAUSE A DECREASE IN THE VALUE OF OUR SECURITYHOLDERS' INVESTMENT.
We have key license and collaborative agreements with several
pharmaceutical companies and research institutions, including, but not limited
to, Bristol-Myers Squibb, Enzon, the Research &
3
Development Institute at Montana State University, the Washington State
University Research Foundation, the University of California at Los Angeles, the
University of California at San Diego, the University of British Columbia and
the University of Texas at Dallas. In general, we have annual milestone and
royalty fee obligations under these agreements. Although we are currently
compliant under these agreements and do not foresee any future noncompliance,
our industry is extremely competitive and volatile. Generally, if we fail to
satisfy such obligations or cure any other default listed in such agreements,
the other parties may terminate them. Also, we cannot give any assurance that
the other parties to our agreements will honor their obligations, or that we
will be able to extend any of the agreements if they expire. We also cannot give
any assurance that we will be able to enter into new collaborative agreements
with existing or new partners. If we are unable to make the other parties to our
agreements honor their contractual obligations or to extend our current
agreements or if we fail to enter into any additional arrangements, we may
require additional money to continue our current activities. The termination or
breach of our agreements or licenses, or our failure to enter into additional
agreements and licenses may have a material adverse effect on our business.
ALTHOUGH WE DO NOT HAVE ANY PRODUCTS TO DATE, EVEN IF WE DO HAVE THEM IN THE
FUTURE, THEY MIGHT NOT WORK OR THEY MIGHT BE TOXIC, DIFFICULT TO PRODUCE ON A
COMMERCIAL SCALE OR DISLIKED BY OUR CUSTOMERS. THIS COULD MATERIALLY ADVERSELY
AFFECT OUR BUSINESS AND CAUSE OUR SECURITYHOLDERS TO LOSE THEIR INVESTMENT.
Research and development of therapeutic drugs is a lengthy and costly
process. We cannot say with any certainty that we will be able to develop or
produce any products or, if we do, that they will work as intended, be
non-toxic, that customers will like them or that they will be capable of being
manufactured on a large scale. Furthermore, our products will be in the
biotechnology field which has historically had a large number of products which
have not been successfully developed as of yet, or if developed, such products
have been commercially, scientifically or medically unacceptable. Any of these
impediments could have a material adverse effect on our business and cause a
decrease in the value of our securityholders' investment.
WE MIGHT NOT HAVE ENOUGH RESOURCES TO COMPETE WITH THE BIOTECHNOLOGY LEADERS,
AND INVESTORS COULD LOSE THEIR MONEY.
We have fewer than 40 employees in the heavily regulated, competitive
and quickly changing biotechnology industry. Most of our competitors have more
personnel, research and development experience, experience in getting
governmental approval and money than we do. Our business may be materially
adversely affected if our competitors develop products before us or produce
superior products to ours.
IF COMPETITORS ARE SUCCESSFUL IN THEIR CHALLENGE OF BRISTOL-MYERS SQUIBB'S
DEVELOPMENT OF GENERIC PACLITAXEL, WE COULD BE INDIRECTLY HURT UNDER OUR LICENSE
AGREEMENT WITH BRISTOL-MYERS SQUIBB, AND OUR SECURITYHOLDERS COULD EXPERIENCE A
DECREASE IN THE VALUE OF THEIR INVESTMENT.
In June 1998, we entered into a license agreement with Bristol-Myers
Squibb, an industry leader, for the development of a Paclitaxel production
system. To date, this license agreement has been our sole source of revenue. In
June 1991, the National Cancer Institute entered into a collaborative
4
research and development agreement with Bristol-Myers Squibb to develop
Paclitaxel, and it granted Bristol-Myers Squibb the exclusive use of the
Institute's clinical data in Bristol-Myers' search for FDA approval until
December 1997. This significantly shortened the approval process and prevented
any other party from obtaining the Food & Drug Administration's approval using
the Institute's data. Bristol-Myers Squibb has since lost its right of
exclusivity under the agreement and its patented method of delivering Paclitaxel
intravenously to a patient has been successfully challenged. Because of this
successful challenge, Bristol-Myers Squibb's Paclitaxel market could suffer,
which in turn would decrease the value of our license agreement with them and
our securityholders could experience a decrease in the value of their
investment.
WE RELY ON BROAD PATENT PROTECTION FOR OUR TECHNOLOGY BUT WE MAY NOT HAVE ENOUGH
RESOURCES TO CONDUCT OR DEFEND OURSELVES FROM LONG AND EXPENSIVE LITIGATION
CLAIMS REGARDING THE BREADTH OF PATENTS, AND OUR SECURITYHOLDERS COULD
EXPERIENCE A DECREASE IN THE VALUE OF THEIR INVESTMENT.
Our success will depend on our ability to get patent protection for our
products and processes in the United States and elsewhere. We have filed and
intend to continue to file patent applications as we need them. We cannot say
with any certainty, however, that any additional patents will issue from any of
these applications or, if patents do issue, that the claims allowed will be
sufficiently broad to protect our technology. Also, we cannot say with any
certainty that any patents issued to us or licensed by us can withstand
challenges made by others or that we will be able to protect our rights. Our
business may be materially adversely affected if we are unable to obtain or
enforce patent protection.
To date, we have not been sued or threatened by parties claiming that
we have infringed their patents. Further, we do not believe that any of our
patents have been infringed by other parties, and, accordingly, we have not
taken any action to date. However, we are aware of patent applications and
issued patents belonging to our competitors, and we are uncertain whether any of
these, or any other patent applications which we do not know about, will require
us to alter or cease our potential products or processes. We cannot say with any
certainty that we will be able to obtain any licenses to technology that we will
require or, if obtainable, that the cost of them will be reasonable. Our failure
to obtain any necessary licenses to any technology could substantially hurt our
business. Expensive and drawn-out litigation may also be necessary for us to
assert any of our rights or to determine the scope and validity of rights
claimed by other parties. Litigation could be too expensive for us to pursue
without great cost and uncertainty as to the outcome. Our failure to pursue
litigation could result in the loss of our rights which could substantially hurt
our business.
WE ARE IN DIRECT COMPETITION WITH OTHER BIOPHARMACEUTICAL COMPANIES TO DEVELOP
AND PRODUCE THERAPEUTIC PRODUCTS. OUR BUSINESS WOULD BE MATERIALLY ADVERSELY
AFFECTED IF OUR TRADE SECRETS AND CONFIDENTIAL INFORMATION WERE DISCLOSED TO OUR
COMPETITORS, AND INVESTORS COULD EXPERIENCE A DECREASE IN THE VALUE OF THEIR
INVESTMENTS.
We also rely on trade secrets and confidential information which we try
to protect by entering into confidentiality agreements with other parties. We
cannot say with any certainty that any of the confidentiality agreements will be
honored or, if breached, we would have enough remedies to protect the
confidential information, or that our competitors will not independently learn
our trade secrets. The loss of our trade secrets would substantially hurt our
business.
5
WE ARE A SMALL COMPANY WITH LITTLE REVENUE, AND WE MAY NOT HAVE THE HUMAN AND
FINANCIAL RESOURCES TO WITHSTAND THE REQUIRED LENGTHY FDA TESTING AND APPROVAL
PROCESSES.
The Food & Drug Administration and other similar agencies in foreign
countries have lengthy and detailed laboratory testing and approval requirements
for therapeutic and diagnostic pharmaceutical and biological products. It often
takes companies several years and large sums of money to satisfy these
requirements, depending on the complexity and novelty of the products. Since we
are a small company within limited personnel and financial resources, we might
not be able to withstand the rigorous and time consuming FDA approval process as
compared to our larger competitors. Furthermore, since we are in the highly
competitive biopharmaceutical industry, any failure or delay in obtaining any
FDA approvals could substantially hurt our company, and investors could lose
their money. We cannot say with any certainty that the FDA or other regulatory
agencies will grant us approval for any of our products on a timely basis, if at
all.
WE HAVE LITTLE REVENUE AND MAY NOT HAVE THE FINANCIAL RESOURCES TO COMPLY WITH
OSHA, EPA AND OTHER AGENCIES' REQUIREMENTS.
We have to comply with the Occupational Safety and Health
Administration, Environmental Protection Agency, Toxic Substances Control Act,
Resource Conservation and Recovery Act and other regulatory laws. In the future,
we could also be subject to other federal, state or local regulations. OSHA or
the EPA may establish regulations which could affect our research and
development programs. We are unable to predict whether any agency will adopt any
rule which could substantially hurt our business.
OUR PRODUCTS, IF ANY, WILL BE INNOVATIVE AND MAY NOT BE COVERED BY INSURANCE
COMPANIES OR OTHER THIRD-PARTY PAYERS WHICH MAY MAKE OUR PRODUCTS LESS
MARKETABLE TO OUR CUSTOMERS AND CAUSE A DECREASE IN THE VALUE OF OUR
SECURITYHOLDERS' INVESTMENT.
Our success in developing our products may depend, in part, on whether
we will be reimbursed by government health administration authorities, private
health insurers and other organizations. There is significant uncertainty if
costs associated with newly-approved health care products will be reimbursed. If
adequate coverage and reimbursement levels are not provided by government and
third-party payers for uses of our products, it will make it very difficult for
us to market our products to doctors and hospitals because their patients might
not be able to pay for the products without any insurance coverage or
reimbursement. We cannot say with any certainty whether sufficient insurance
coverage will be available for us to establish and maintain price levels
sufficient to realize an appropriate return on developing new products.
Government and other third-party payers are attempting to contain health care
costs more every day by limiting both coverage and the level of reimbursement of
new therapeutic and diagnostic products approved for marketing by FDA and by
refusing, in some cases, to provide any coverage of uses of approved products
for disease indications for which FDA has not granted marketing approval. Such
refusal by insurance companies and third-party payers to reimburse the costs of,
and expenses associated with, our products might have a material adverse effect
on our business.
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OUR LICENSE AGREEMENT WITH BRISTOL-MYERS SQUIBB, AN INDUSTRY LEADER, HAS, TO
DATE, BEEN OUR SOLE SOURCE OF REVENUE. OUR SECURITYHOLDERS COULD EXPERIENCE A
DECREASE IN THE VALUE OF THEIR INVESTMENTS IF SUCH AGREEMENT IS TERMINATED OR
CEASES TO GENERATE REVENUE.
In June 1998, we entered into a license agreement and a research and
development agreement with Bristol-Myers Squibb. Through December 31, 2000, we
have recognized an aggregate of $3,423,000 in revenue from the license
agreement. Such agreement has been our sole source of revenues to date. Under
the license agreement, we granted to Bristol-Myers Squibb exclusive sublicenses
under our agreements with the Research & Development Institute at Montana State
University and the Washington State University Research Foundation relating to
technologies for the production of Paclitaxel. Our license agreement with
Bristol-Myers Squibb requires them to pay us royalty and milestone payments. The
term of our license agreement with Bristol-Myers Squibb ends on the later of ten
(10) years from the first commercial sale of the licensed products or such time
as neither the making, use nor sale at the time by Bristol-Myers Squibb, its
affiliates or sublicensees does not infringe any U.S. or foreign patents or
patent applications, copyrights or trademarks owned and licensed by the Research
& Development Institute and the Washington State University Research Foundation.
Bristol-Myers Squibb may terminate the license agreement upon 90 days notice. We
cannot say with any certainty that Bristol-Myers Squibb will successfully
manufacture or market the licensed property, if at all, or that we will be able
to maintain our agreements with the Research & Development Institute or the
Washington State University Research Foundation. Although we do not have any
reason to believe Bristol-Myers Squibb is unwilling to work with us under our
license agreement with them, it is a possibility that Bristol-Myers Squibb
might, in the future, decide not to utilize our technology, use other technology
they find superior or enter into a license agreement or agreements with another
party or parties, thereby decreasing their need to utilize our technology under
our license agreement with them or even cause them to terminate the license
agreement. Our loss of the license agreement with Bristol-Myers Squibb could
have a material adverse effect on our business and stockholders could experience
a decrease in the value of their investments.
WE LACK MANUFACTURING EXPERIENCE AND FACILITIES, AND IF WE HAVE TO EXPEND
RESOURCES TO BUILD FACILITIES OR IF WE FAIL TO HIRE COMPETENT OUTSIDE
MANUFACTURERS, OUR SECURITYHOLDERS COULD EXPERIENCE A DECREASE IN THE VALUE OF
THEIR INVESTMENT.
We currently do not have facilities or personnel capable of
manufacturing any products in commercial quantities. In the future, we may
establish our own manufacturing facilities to manufacture products if it becomes
economically attractive to do so. Building and operating production facilities
would require substantial additional funds and other resources as well as
interrupt our daily operations. We cannot be sure, however, whether sufficient
funds to build satisfactory manufacturing facilities would be available on
favorable terms to us, if at all. If we cannot obtain sufficient financing, we
will most likely have to retain outside manufacturers. We cannot be sure,
however, whether we will be able to retain competent manufacturers at affordable
rates, or that the manufacturers will be able to produce and deliver our
products pursuant to our instructions concerning quality, quantity and time as
well as other factors. If we are unable to manufacture our products, if any, or
have them manufactured by others our business would be materially adversely
affected and our securityholders would experience a decrease in the value of
their investment.
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WE LACK MARKETING EXPERIENCE. IF WE FAIL TO RETAIN COMPETENT MARKETING PERSONNEL
OR OUTSIDE MARKETERS, OR IF WE HAVE INSUFFICIENT RESOURCES TO MARKET OUR
PRODUCTS, OUR SECURITYHOLDERS COULD EXPERIENCE A DECREASE IN THE VALUE OF THEIR
INVESTMENTS.
As of March 31, 2001, we had 34 employees, none of whom have any
experience in marketing pharmaceutical products. We would have to spend
significant funds and dedicate a significant amount of management resources to
develop our own sales force. We cannot say with any certainty that any funds or
resources for such purposes will be available on favorable terms, if at all.
Further, we cannot say with any certainty that, with a sales force, we would
successfully penetrate the markets for any of our products. For certain products
under development, we may seek to enter into marketing agreements with other
entities which would grant them exclusive marketing rights in return for
royalties based on sales, if any. Under some of these agreements, the other
entity may have the responsibility for all or a significant part of the
development and obtaining regulatory approval. In the event that the marketing
and development partner fails to develop a marketable product or fails to
successfully market a product, our business could be substantially hurt. The
sale of certain products outside the United States will also be dependent upon
the successful completion of arrangements with future partners, licensees or
distributors in each territory. We cannot give any assurance, however, that we
will successfully establish any additional collaborative arrangements or that,
if established, such future partners will successfully commercialize any
products, if at all.
WE ARE A SMALL COMPANY AND HEAVILY DEPEND UPON OUR OFFICERS, DIRECTORS AND
SCIENTISTS WHO ARE HIGHLY SKILLED IN BIOPHARMACOLOGY, ESPECIALLY OUR CHIEF
EXECUTIVE OFFICER AND PRESIDENT, RONALD LANE GOODE, PH.D. OUR BUSINESS WOULD BE
MATERIALLY ADVERSELY AFFECTED BY THE LOSS OF ANY SUCH PERSONS, AND
SECURITYHOLDERS COULD EXPERIENCE A DECREASE IN THE VALUE OF THEIR INVESTMENT.
Much of our success depends upon the continued contributions of our
executive officers, scientific and technical personnel and consultants. We are
particularly dependent upon Ronald Lane Goode, Ph.D., the Chief Executive
Officer and President, Arthur P. Bollon, Ph.D., the Vice Chairman of our Board
of Directors, Gary Frashier, our Chairman, Joan Gillett, our Vice President and
Controller, Daniel Shusterman, the Vice President of Administration and our
General Counsel, Dorit Arad, Ph.D., our Vice President of Drug Design, as well
as our senior scientists, Susan L. Berent, Ph.D., Hakim Labidi, Ph.D., Rajinder
S. Sidhu, Ph.D. and Richard M. Torczynski, Ph.D. As of March 31, 2001, we had 34
full-time employees, 24 of whom are engaged directly in research and development
activities, including 14 Ph.D.s, and 7 of whom are in executive and
administrative positions. Our employees are not governed by any collective
bargaining agreement, and we believe that our relationship with our employees is
good. We currently have an employment agreement with Dr. Goode which expires on
March 20, 2004, and an employment agreement with Dr. Bollon which expires on
November 6, 2003. The competition for qualified personnel is intense, and the
loss of services of certain key personnel could substantially hurt our business.
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OUR SCIENTISTS WORK FOR OTHER COMPANIES AND INSTITUTIONS, AND WE MAY NOT HAVE
THE RIGHT TO THEIR INVENTIONS AND DISCOVERIES, WHICH MIGHT HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS.
Our scientific collaborators and advisors are employed by companies and
institutions other than us, and some of them have consulting or other advisory
arrangements with other entities and institutions which could conflict or
compete with their obligations to us. Inventions or processes discovered by such
persons will not necessarily become our property but may remain the property of
such persons or of such persons' full-time employers. Our failure to
successfully assert our rights to any inventions or processes discovered by our
scientists might have a material adverse affect on our business.
IF WE CANNOT OBTAIN SATISFACTORY PRODUCT LIABILITY INSURANCE FOR OUR FUTURE
PRODUCTS, IF ANY, WE MAY NOT BE ABLE TO ENTER INTO MATERIAL AGREEMENTS WHICH
REQUIRE US TO HAVE SUCH INSURANCE, AND INVESTORS COULD, THEREFORE, EXPERIENCE A
DECREASE IN THE VALUE OF THEIR INVESTMENT.
To date, we have not had any product liability claims filed or
threatened against us. In the future, however, when and if we develop products,
our products could expose us to product liability claims. Although we intend to
obtain product liability insurance for our ongoing clinical trials, we cannot
say with any certainty that we will be able to obtain, maintain or increase our
insurance coverage in the future on terms favorable to us, if at all, or that
any claims against us will not be greater than the amount of such coverage.
Distributors of pharmaceutical and biological products often require minimum
product liability insurance coverage as a condition before they start purchasing
or accepting products for distribution. Our failure to satisfy such insurance
requirements could decrease our ability to achieve broad distribution of our
proposed products and have a material adverse effect on our business and
investors could experience a decrease in the value of their investment.
ALTHOUGH WE DO NOT PAY DIVIDENDS ON OUR COMMON STOCK, WE PAY ANNUAL DIVIDENDS ON
OUR SERIES A PREFERRED STOCK BY GIVING THE HOLDERS THEREOF MORE SERIES A
PREFERRED STOCK. OUR SERIES A PREFERRED STOCK IS CONVERTIBLE INTO COMMON STOCK,
AND SUCH CONVERSION WILL DILUTE THE BOOK VALUE OF THE COMMON STOCK PURCHASED IN
THIS OFFERING.
Since 1991, we have not paid any dividends on our common stock. We
intend to retain future earnings, if any, to provide funds for the operation of
our business and, accordingly, do not anticipate paying any cash dividends on
our common stock in the future. Furthermore, the terms of our outstanding series
A preferred stock do not allow for the payment of cash dividends on the common
stock unless and until all accrued and unpaid dividends on the series A
preferred stock shall have been paid or set apart for payment. Historically
speaking, we have paid dividends on our series A preferred stock with
payment-in-kind. Our series A preferred stock is convertible into an equal
number of shares of common stock. As more holders of the series A preferred
stock convert their preferred stock into common stock, investors in this
offering will experience a decline in the book value of their common stock.
9
WE ARE OBLIGATED TO INDEMNIFY OUR OFFICERS AND DIRECTORS, ABSENT CERTAIN
CIRCUMSTANCES, WHICH MAY REQUIRE US TO SPEND TIME AND MONEY OTHERWISE ALLOCATED,
AND CAUSE A DECREASE IN THE VALUE OF OUR SECURITYHOLDERS' INVESTMENT.
We are incorporated under the laws of the state of Delaware. Our
certificate of incorporation includes certain provisions permitted under the
Delaware General Corporation Law, whereby our officers and directors are
indemnified by us against certain liabilities. Our certificate of incorporation
also limits, to the fullest extent permitted by Delaware General Corporate Law,
a director's liability for monetary damages for breach of fiduciary duty,
including gross negligence, except liability for breach of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, the unlawful payment of a dividend or unlawful stock
purchase or redemption and any transaction from which the director derives an
improper personal benefit. An insurance policy, which provides for coverage for
certain liabilities of our officers and directors has been issued to us.
However, although we do not currently know of any conduct of any officer or
director which may have a material effect on our business, if such insurance
proves to be inadequate, we will have to use funds otherwise allocated to
indemnify any director. The use of funds and resources, including management's
time and energy, to properly indemnify or otherwise prepare for the defense of
any director might have a material adverse effect on our business.
IF WE FAIL TO MEET NASDAQ'S MAINTENANCE REQUIREMENTS AND ARE DELISTED FROM
NASDAQ, INVESTORS MAY HAVE DIFFICULTY SELLING THEIR SECURITIES, WHICH WOULD
CAUSE A DECREASE IN THE VALUE OF THEIR INVESTMENT.
Our common stock is currently quoted on the Nasdaq National Market. Our
common stock is quoted under the symbol, "CYPH." Nasdaq has certain requirements
that every company must meet in order to have their securities quoted on the
Nasdaq National Market. Although we currently meet Nasdaq's criteria for
continued listing, we cannot say with any certainty that we will continue to
meet such criteria.
For continued inclusion on the Nasdaq National Market, a company has to
maintain the following:
o net tangible assets of $4 million,
o 750,000 public float shares (shares not held directly
or indirectly by any officer or director of the company
or by any other person who is the beneficial owner of
more than 10 percent of the total outstanding shares)
having a value of at least $5 million,
o a minimum bid price of $1.00 per share; and
o in the case of common stock, at least 400 round lot
holders.
If we are unable to meet the continued listing criteria of the Nasdaq
National Market any time in the future due to our continued operating losses or
otherwise, and our securities are delisted, trading of our securities, if any,
would be conducted in the over-the-counter market in the so-called "pink sheets"
or, if available, the NASD's Over The Counter Bulletin Board (OTCBB). As a
result, investors could find it more difficult to dispose of, or to obtain
accurate quotations as to the value of, our securities.
10
IF WE ARE DELISTED FROM NASDAQ, BROKER-DEALERS MAY BE UNWILLING TO SELL
INVESTORS' STOCK, AND INVESTORS WOULD EXPERIENCE A DECREASE IN THE VALUE OF
THEIR INVESTMENT.
If our securities are delisted from the Nasdaq National Market, they
may become subject to Rule 15g-9 under the Securities Exchange Act of 1934,
which imposes additional sales practice requirements on broker-dealers that sell
such securities. There are exceptions to Rule 15g-9 and they include
transactions meeting the safe-harbor requirements of Rules 505 or 506 under
Regulation D of the Securities Act, and transactions in which the purchaser is
an institutional accredited investor, as defined in the Securities Act, or an
established customer, as defined in the Securities Act, of the broker-dealer.
For transactions which have to comply with the requirements of Rule 15g-9 under
the Securities Exchange Act of 1934, a broker-dealer must determine whether or
not the purchaser meets a special suitability standard, and the broker-dealer
must receive the purchaser's written consent to the transaction before the sale.
These requirements could make broker-dealers unwilling or even unable to sell
our securities which could make it more difficult for our investors to resell
their securities to other parties.
IF OUR STOCK IS DELISTED BY NASDAQ AND BECOMES A "PENNY STOCK," INVESTORS MIGHT
EXPERIENCE A DECREASE IN THE VALUE OF THEIR INVESTMENTS DUE TO THE RESTRICTIONS
ON BROKER-DEALERS IN SELLING "PENNY STOCK."
The SEC defines a "penny stock" to be any equity security that has a
market price under $5.00 per share or has an exercise price under $5.00 per
share, subject to certain exceptions. Unless exempt, the rules require the
delivery, prior to any transaction in a penny stock, of SEC material telling the
purchaser certain information about the penny stock. Purchasers must also be
told about the commissions that the broker-dealers and the registered
representatives will get and they must be told about the securities current
prices. Finally, purchasers must also be given statements every month which have
to tell the purchaser about his or her securities' recent prices and about the
limitations of the penny stock market. These penny stock restrictions will not
apply to our securities if they stay quoted on the Nasdaq National Market
System, and if they have certain price and volume information provided on a
current and continuing basis or if they meet certain minimum net tangible assets
or average revenue criteria. We cannot say with any certainty, however, that our
securities will continue to meet the Nasdaq National Market requirements in the
future and if we do not, the prices of our securities could decrease and
investors could find it difficult to sell their securities. If we were to remain
exempt from the penny-stock restrictions, we still have to comply with Section
15(b)(6) under the Securities Exchange Act of 1934, which gives the SEC the
authority to stop any person who breaks the law when selling penny stock from
selling any more penny stock or from working with any broker-dealer.
WE HAVE GRANTED REGISTRATION RIGHTS TO SEVERAL PARTIES HOLDING OUR COMMON STOCK
OR WHO HAVE THE RIGHT TO PURCHASE OUR COMMON STOCK. THE REGISTRATION OF SUCH
SECURITIES WILL INCREASE THE NUMBER OF FREELY TRADEABLE SHARES OF OUR COMMON
STOCK AND MAY DECREASE THE BOOK VALUE OF OUR SECURITYHOLDERS' SHARES OF OUR
COMMON STOCK.
There will be 17,034,043 registered shares of our common stock
outstanding upon the completion of this offering. All of these shares will be
freely transferable without restriction if we continue to comply with the SEC
and certain states' registration requirements. Certain of our other
11
outstanding securities are not registered with the SEC, and are considered to be
"restricted securities" as that term is defined in Rule 144 under the Securities
Act and may only be sold in certain circumstances.
We have also granted certain investors demand and "piggy-back"
registration rights to have their common stock registered with the SEC. We will
have to pay for the expense of registration if one or more of these groups
exercise their demand registration rights or "piggy-back" registration rights.
The expense could be high. Also, because there would be a high number of shares
outstanding, we could find it more difficult to obtain future financing.
The sale, or availability for sale, of substantial amounts of common
stock in the public market pursuant to Rule 144 or registration could cause the
market price of the common stock and our other securities to decrease which
could hurt our ability to raise additional money through the sale of our
securities or through debt financing. Also, to the extent that outstanding
options and warrants are exercised, securityholders' ownership interest will
drop. Also, if and to the extent that we reduce the exercise price of
outstanding warrants or options, our stockholders could experience additional
dilution.
THE VALUE OF THE SECURITYHOLDERS' INVESTMENT MAY BE SUPPRESSED BECAUSE OUR
COMPANY MAY BE A LESS ATTRACTIVE TAKEOVER CANDIDATE DUE TO THE FACT THAT OUR
BOARD OF DIRECTORS HAS THE DISCRETION TO ISSUE 10,000,000 SHARES OF PREFERRED
STOCK SUPERIOR TO OUR COMMON STOCK WITHOUT STOCKHOLDER APPROVAL.
Our certificate of incorporation authorizes our board of directors to
issue a maximum of 10,000,000 shares of preferred stock on terms which may be
determined by them without getting stockholder approval. Of these 10,000,000
shares, 4,000,000 shares have already been designated as series A preferred
stock, of which 772,842 remain outstanding as of March 31, 2001. The series A
preferred stock may be converted by the holder into an equal number of shares of
common stock. Also, the terms of the series A preferred stock include dividend
and liquidation preferences which could also hurt the rights of holders of the
common stock being offered hereby. Each share of series A preferred stock is
entitled to one vote on all matters on which the common stock has the right to
vote. Holders of series A preferred stock are entitled to vote as a separate
class on any proposed adverse change in their rights, preferences or privileges
and any increase in the number of authorized shares of series A preferred stock.
Further, the terms of any additional series of preferred stock, which may also
include priority claims to assets and dividends, as well as special voting
rights, could hurt the rights of the holders of the common stock being offered
hereby. Other than the series A preferred stock, we have not issued any other
preferred stock, and we do not plan to issue any additional preferred stock
other than payment- in-kind dividends. Investors should also know that if too
much preferred stock is outstanding, it could make it more difficult for a third
party to take control of our business or to remove our board of directors and
executive officers. Hostile bids for control of a company usually result in the
market prices for a company's securities to increase. It would also dilute or
subordinate the rights of holders of common stock and cause the market price of
the common stock to drop.
12
USE OF PROCEEDS
We will not receive any proceeds when the Selling Stockholders' sell
their common stock to others. However, we may receive proceeds when the Selling
Stockholders exercise their options to acquire such common stock. We intend to
use any such proceeds for research and development and other general corporate
purposes.
DETERMINATION OF OFFERING PRICE
The Selling Stockholders may sell their shares of common stock through
public or private transactions at current market prices, or at previously
negotiated prices.
SELLING STOCKHOLDERS
The shares of common stock to which this prospectus relates are being
registered for reoffers and resales by the Selling Stockholders who have
acquired or may acquire such common stock pursuant to the exercise of options
granted under our 2000 Stock Option Plan. The Selling Stockholders named below
may resell all, a portion or none of their shares of common stock, from time to
time.
Participants under our 2000 Stock Option Plan who are deemed to be
"affiliates" of Cytoclonal Pharmaceutics Inc. and who may acquire common stock
under our 2000 Stock Option Plan may be added to the Selling Stockholders listed
below from time to time by use of a prospectus supplement filed pursuant to Rule
424(b) under the Securities Act. An "affiliate" is defined in Rule 405 under the
Securities Act as a "person that directly, or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with"
Cytoclonal Pharmaceutics Inc.
The table below sets forth with respect to each Selling Stockholder who
is an affiliate of Cytoclonal Pharmaceutics Inc., the number of shares of common
stock beneficially owned before the sale of the common stock offered hereby, the
number of shares of common stock to be sold hereby, the number of shares of
common stock beneficially owned after the sale of the common stock offered
hereby, and the percent of the outstanding shares of common stock owned before
and after the sale of the common stock offered hereby.
13
- ----------
*Represents less than 1%.
(1) Does not include shares of common stock that may be acquired by the Selling
Stockholders upon exercise of options which have not vested within 60 days
of this prospectus. The inclusion in this prospectus of the stated number
of shares does not constitute a commitment to sell any or all of such
shares. The number of shares of common stock offered shall be determined
from time to time by each Selling Stockholder at his or her sole
discretion.
(2) Includes shares of common stock underlying options granted to the Selling
Stockholders under the 2000 Stock Option Plan, whether or not exercisable
as of, or within 60 days of, the date of this prospectus.
(3) Based on an aggregate of 16,164,043 shares of common stock issued and
outstanding as of March 31, 2001.
14
(4) Includes options to purchase 200,000 shares of common stock. Does not
include options to purchase an additional 200,000 shares of common stock
not exercisable within 60 days hereof.
(5) Includes 167,400 shares of common stock and options to purchase 602,500
shares of common stock. Does not include options to purchase 12,500 shares
of common stock not exercisable within 60 days hereof.
(6) Includes options to purchase 98,500 shares of common stock. Does not
include options to purchase 75,000 shares of common stock not exercisable
within 60 days hereof.
(7) Includes options to purchase 25,000 shares of common stock. Does not
include options to purchase 50,000 shares of common stock not exercisable
within 60 days hereof.
(8) Includes options to purchase 162,500 shares of common stock. Does not
include options to purchase 5,000 shares of common stock not exercisable
within 60 days hereof.
(9) Includes options to purchase 158,500 shares of common stock. Does not
include options to purchase 5,000 shares of common stock not exercisable
within 60 days hereof.
(10) Includes 2,500 shares of common stock and options to purchase 158,500
shares of common stock. Does not include options to purchase 5,000 shares
of common stock not exercisable within 60 days hereof.
(11) Does not include options to purchase 35,000 shares of common stock not
exercisable within 60 days hereof.
(12) Includes 1,000 shares of common stock. Does not include options to purchase
50,000 shares of common stock not exercisable within 60 days hereof.
15
PLAN OF DISTRIBUTION
The shares of common stock to which this prospectus pertains may be
sold or transferred for value by the Selling Stockholders, or by pledges,
donees, transferees or other successors in interest to the Selling Stockholders,
in one or more transactions on the Nasdaq National Market, in negotiated
transactions or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Stockholders may effect
such transactions by selling their shares of common stock to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholders
and/or the purchasers of the shares of common stock for whom such broker-dealers
may act as agent (which compensation may be less than or in excess of customary
commissions). The Selling Stockholders and any broker-dealers that participate
in the distribution of the shares of common stock may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and any profit on the resale of the shares of
common stock sold by them may be deemed to be underwriting discounts and
commissions under the Securities Act. The sale of the shares of common stock by
the Selling Stockholders is subject to the prospectus delivery requirements of
the Securities Act.
We have advised the Selling Stockholders that the anti-manipulation
rules of Regulation M under the Securities Exchange Act of 1934 may apply to
sales of shares in the market and to the activities of the Selling Stockholders
and their affiliates. In addition, we will make copies of this reoffer
prospectus available to the Selling Stockholders and have informed them of the
possible need for delivery of copies of this reoffer prospectus to purchasers on
or prior to sales of the shares offered under this reoffer prospectus. The
Selling Stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any such broker, and any profits
received on the resale of such shares, may be deemed to be underwriting
discounts and commissions under the Securities Act if any such broker-dealers
purchase shares as principal.
Any securities covered by this reoffer prospectus which qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under those rules
rather than pursuant to this reoffer prospectus.
Upon us being notified by a Selling Stockholder that any material
arrangement has been entered into with a broker or dealer for the sale of shares
of common stock through a secondary distribution, or a purchase by a
supplemented prospectus will be filed, if required, pursuant to Rule 424(b)
under the Securities Act, disclosing (i) the name of each such Selling
Stockholder and the participating broker-dealers, (ii) the number of shares of
Common Stock involved, (iii) the price at which such shares are being sold, (iv)
the commissions paid or the discounts or concessions allowed to such
broker-dealers, (v) where applicable, that such broker-dealers did not conduct
any investigation to verify the information set out or incorporated by reference
in the Prospectus, as supplemented, and (vi) other facts material to the
transactions.
In addition to any such number of shares of common stock sold
hereunder, a Selling Stockholder may, at the same time, sell any shares of
common stock, including the shares of common stock to which this prospectus
pertains, owned by him or her in compliance with all of the requirements
16
of Rule 144 promulgated under the Securities Act, regardless of whether such
shares are covered by this prospectus.
There is no assurance that any of the Selling Stockholders will sell
any or all of the shares of common stock offered hereby.
We will pay all expenses in connection with this offering other than
commissions and discounts of underwriters, dealers or agents. All selling and
other expenses incurred by individual Selling Stockholders will be borne by such
Selling Stockholders.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
us by Morrison Cohen Singer & Weinstein, LLP, New York, New York, a partner of
which holds options to acquire shares of common stock of the Company.
EXPERTS
The balance sheets as of December 31, 2000 and 1999 and the related
statements of operations, changes in stockholders' equity and cash flows for
each of the years in the three-year period ended December 31, 2000 included in
the Annual Report on Form 10-K for the fiscal year ended December 31, 2000 which
is incorporated by reference in this prospectus have been audited by, and are
incorporated by reference herein in reliance upon the report of Richard A.
Eisner & Company, LLP, independent auditors, given on the authority of that firm
as experts in accounting and auditing.
NO RELIANCE ON INFORMATION NOT CONTAINED IN PROSPECTUS
No dealer, salesperson or any other individual has been authorized to
give any information or to make any representations not contained in this
prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by us or the Selling Stockholders. This
prospectus does not constitute an offer to sell, or a solicitation to buy, any
security by any person in any jurisdiction in which such offer or solicitation
is unlawful. Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances imply that the information in this prospectus is
correct as of any time subsequent to the date of this prospectus.
17
870,000 SHARES
CYTOCLONAL PHARMACEUTICS INC.
COMMON STOCK
----------
PROSPECTUS
----------
April [___], 2001
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Cytoclonal Pharmaceutics Inc. incorporates by reference the documents
listed below into this Registration Statement on Form S-8. All documents
subsequently filed by Cytoclonal Pharmaceutics Inc. pursuant to Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
part thereof from the date of filing of such documents:
1. Annual Report on Form 10-K (File No.: 0-26087), for the fiscal
year ended December 31, 2000; and
2. The description of our common stock set forth in our
registration statement filed under Section 12 of the
Securities Exchange Act of 1934 on Form 8-A on October 2,
1995, and any amendment or report filed for the purpose of
updating any such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the securities offered hereby will be passed upon by
Morrison Cohen Singer & Weinstein, LLP, New York, New York, a partner of which
holds options to acquire shares of common stock being registered in this
offering.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation and By-Laws of the Registrant provides
that Cytoclonal Pharmaceutics Inc. shall indemnify any person to the full extent
permitted by the Delaware General Corporation Law (the "GCL"). Section 145 of
the GCL, relating to indemnification, is hereby incorporated herein by
reference.
Insofar as indemnification for liabilities under the Securities Act may
be permitted to Directors, officers or controlling persons of Cytoclonal
Pharmaceutics Inc. pursuant to Cytoclonal Pharmaceutics Inc.'s By-Laws and the
Delaware General Corporation Law, Cytoclonal Pharmaceutics Inc. has been
informed 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.
Cytoclonal Pharmaceutics Inc.'s Certificate of Incorporation includes
certain provisions permitted pursuant to Delaware law whereby officers and
Directors of Cytoclonal Pharmaceutics Inc. are to be indemnified against certain
liabilities. Cytoclonal Pharmaceutics Inc.'s Restated Certificate of
Incorporation also limits, to the fullest extent permitted by Delaware law, a
director's liability for
II-1
monetary damages for breach of fiduciary duty, including gross negligence,
except liability 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 or redemption and (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 effect on the availability of equitable
remedies such as injunction or rescission based upon a director's breach of the
duty of care. In addition, Cytoclonal Pharmaceutics Inc. has obtained an
insurance policy providing coverage for certain liabilities of its officers and
Directors.
In accordance with Section 102(a)(7) of the GCL, the Certificate of
Incorporation of the Registrant eliminates the personal liability of directors
to Cytoclonal Pharmaceutics Inc. or its stockholders for monetary damages for
breach.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
No. Description
--- -----------
5.1 Opinion of Morrison Cohen Singer & Weinstein, LLP
23.1 Consent of Morrison Cohen Singer & Weinstein, LLP (included in Exhibit
5.1 hereto)
23.2 Consent of Richard A. Eisner & Company, LLP
24.1 Powers of Attorney (included on the signature page of this
Registration Statement)
99.1 Cytoclonal Pharmaceutics Inc. 2000 Stock Option Plan. (Filed as
Exhibit 10.40 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000 filed with the Securities and
Exchange Commission on April 2, 2001)
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
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(ii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 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.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and 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 Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on this 24th day of
April, 2001.
CYTOCLONAL PHARMACEUTICS INC.
By: /s/ RONALD LANE GOODE, PH.D.
---------------------------------------
Name: Ronald Lane Goode, Ph.D.
Title: President and Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ronald Lane Goode, Ph.D., with the power
of substitution, his attorney-in-fact, to sign any amendments to this
Registration Statement and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact, or his
substitute, may do or choose 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 dates indicated:
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EXHIBIT INDEX