As filed with the Securities and Exchange Commission on April 7, 2004
Registration No. 333-112762
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-2
Amendment No. 1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PROVECTUS PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in its charter)
Nevada 2834 90-0233011
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(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification
Code Number) Number)
7327 Oak Ridge Highway, Suite A, Knoxville, Tennessee 37931, (865) 769-4011
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(Address, including zip code, and telephone number, including area code
of registrant's principal executive offices)
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Timothy C. Scott, Ph.D.
President
Provectus Pharmaceuticals, Inc.
7327 Oak Ridge Highway, Suite A
Knoxville, Tennessee 37931
(865) 769-4011
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Linda Crouch-McCreadie, Esq.
Baker Donelson Bearman Caldwell & Berkowitz
207 Mockingbird Lane
Suite 300
Johnson City, Tennessee 37904
(423) 928-0181
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of the registration statement until such time
that all of the shares of common stock registered hereunder have been sold.
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 check the following box: [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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
Proposed Proposed
maximum Maximum Amount of
Title of each class of securities Amount to be offering price aggregate registration
to be registered registered (1) per share offering price fee
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Common Stock, $.001 par value 1,980,004 (2) $1.46 (4) $2,890,805.84 $366.27
Common Stock, $.001 par value 395,000 (3) $1.46 (4) 576,700.00 73.07
Common Stock, $.001 par value 54,000 (3) $1.33 (5) 71,820.00 9.10
------------ ------- ------------- ----------
2,429,004 $3,539,325.84 $448.44 (6)
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
Registration Statement also covers such indeterminate number of additional
shares of the Registrant's Common Stock, $0.001 par value (the "Common Stock"),
as may be issuable upon conversion of the Registrant's 8% Convertible Debentures
(the "Convertible Debentures") and exercise of the Warrants (as hereinafter
defined) and the Other Warrants (as hereinafter defined) to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
(2) Represents 150% of (a) up to 666,667 shares of Common Stock, issuable
upon conversion of $500,000 in aggregate principal amount of the Convertible
Debentures, at a per share conversion price of $0.75, (b) up to 53,335 shares of
Common Stock issuable upon conversion of the Convertible Debentures with respect
to interest accrued thereon through the maturity date thereof on the first
anniversary of their issuance, and (c) up to 600,000 shares of Common Stock
issuable upon exercise of warrants ("Warrants") issued in connection with the
Convertible Debentures. The shares registered also include the shares, if any,
issuable to the holders of the Convertible Debentures or the Warrants as
liquidated damages or as a result of adjustments to the conversion prices of
those debentures or warrants.
(3) Represents (a) shares of Common Stock held by certain selling
shareholders and (b) shares of Common Stock issuable upon exercise of certain
other warrants ("Other Warrants") held by certain selling shareholders who are
not holders of the Convertible Debentures.
(4) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based upon
the average of the high and low sale price of the Common Stock as reported on
the OTC Electronic Bulletin Board on February 5, 2004.
(5) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based upon
the average of the high and low sale price of the Common Stock as reported on
the OTC Electronic Bulletin Board on March 31, 2004.
(6) A total of $439.34 was previously paid by Provectus Pharmaceuticals,
Inc. in connection with the filing of its Registration Statement on Form S-3
(Registration No. 333-111982) on January 16, 2004 and its Registration Statement
on Form S-2 (Registration No. 333-112762) on February 12, 2004.
------------------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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2
SUBJECT TO COMPLETION, DATED APRIL 7, 2004
PROSPECTUS
PROVECTUS PHARMACEUTICALS, INC.
2,429,004 Shares of Common Stock
This prospectus relates to the sale by the selling shareholders of
2,429,004 shares of our common stock, par value $0.001.
The selling shareholders may sell the shares from time to time at the
prevailing market price or in negotiated transactions. We will not receive any
of the proceeds from the sale of the shares by the selling shareholders. We have
agreed to pay the expenses in connection with the registration of these shares.
Each of the selling shareholders may be deemed to be an "underwriter," as
such term is defined in the Securities Act of 1933, which we refer to as the
"Securities Act."
Our common stock is quoted on the OTC Electronic Bulletin Board of the
National Association of Securities Dealers under the trading symbol "PVCT".
AS YOU REVIEW THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE MATTERS
DESCRIBED IN "RISK FACTORS" BEGINNING ON PAGE 8.
Neither the Securities and Exchange Commission, which we refer to as the
"SEC," nor any state securities commission has approved or disapproved of these
securities or passed on the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is _______ ___, 2004.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
3
TABLE OF CONTENTS
Prospectus Summary.............................................................5
Recent Developments............................................................8
Risk Factors...................................................................8
Use Of Proceeds...............................................................14
Agreements With The Convertible Debenture Holders.............................14
Description Of Other Transactions.............................................15
Selling Shareholders..........................................................16
Description Of Securities.....................................................17
Plan Of Distribution..........................................................18
Indemnification Of Officers And Directors.....................................19
Where You Can Find More Information About Us..................................21
Incorporation Of Certain Information By Reference.............................21
Experts.......................................................................22
Legal Matters.................................................................22
Exhibit "A" - Form 10KSB for fiscal year ended December 31, 2003.............A-1
..
4
Prospectus Summary
You should read the following summary together with the more detailed
information and consolidated financial statements and related notes thereto
appearing elsewhere in this prospectus and in the documents incorporated by
reference in this prospectus. You should read the entire prospectus, including
the documents incorporated by reference in this prospectus, before you invest in
our common stock. This prospectus contains forward-looking statements. The
outcome of the events described in these forward-looking statements is subject
to risks, and actual results could differ materially. Read this entire
prospectus carefully, especially the risks described under "Risk Factors."
Unless otherwise indicated, "we," "us," "our" and similar terms, as well as
references to the "Company" and "Provectus," refer to Provectus Pharmaceuticals,
Inc. and its subsidiaries and not to the selling shareholders.
Our Company
Provectus Pharmaceuticals, Inc., a Nevada corporation, and its two wholly
owned subsidiaries, Xantech Pharmaceuticals, Inc. and Pure-ific Corporation,
develop, license and market and plan to sell products in three sectors of the
healthcare industry:
o Over-the-counter products, which we refer to as "OTC products;"
o Prescription drugs; and
o medical device systems.
Through discovery and use of state-of-the-art scientific and medical
technologies, the founders of our pharmaceutical business have developed a
portfolio of patented, patentable, and proprietary technologies that support
multiple products in the prescription drug, medical device and OTC products
categories (including patented technologies for: (a) treatment of cancer; (b)
novel therapeutic medical devices; (c) enhancing contrast in medical imaging;
(d) improving signal processing during biomedical imaging; and (e) enhancing
production of biotechnology products). Our prescription drug products encompass
the areas of dermatology and oncology and involve several types of small
molecule-based drugs. Our medical device systems include therapeutic and
cosmetic lasers, while our OTC products address markets primarily involving
skincare applications. None of our prescription drug products or our medical
device systems are currently being sold as their development is not yet
complete. We have, however, initiated sales and distribution of our OTC product
Pure-ific via our website www.pureific.com, and expect to report small-scale
sales at March 31, 2004. We did not recognize revenue from these sales during
2002, as the amount of sales was immaterial. We are not currently selling our
other OTC products.
Our company faces significant risks. Because of our continuing losses, the
high probability that we will continue to incur substantial losses during the
next few years and our need for additional capital to fund our development of
pharmaceutical products, our independent accountants included a "going concern"
uncertainty in their audit report on our audited financial statements for the
year ended December 31, 2003. The "going concern" uncertainty signifies that
substantial doubt exists about our ability to continue in business. Prior to the
first quarter of 2004, we did not recognize any revenues and the revenues
recognized during the first quarter of 2004 are not sufficient to meet our
capital needs. As of December 31, 2003, our accumulated deficit was $10,753,800.
We only have four employees and our future success depends significantly on
these employees. Please see the section of this prospectus entitled "Risk
Factors" for more information about the risks faced by us.
This prospectus is accompanied by our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2003.
Our principal executive office is located at 7327 Oak Ridge Highway, Suite
A, Knoxville, Tennessee 37931, telephone 865/769-4011.
5
Risk Factors
Investing in shares of our common stock involves significant risk. You
should consider the information under the caption "Risk Factors" beginning on
page 8 of this prospectus in deciding whether to purchase the common stock
offered under this prospectus.
Our History
Provectus Pharmaceuticals, Inc., formerly known as "Provectus
Pharmaceutical, Inc." and "SPM Group, Inc.," was incorporated under Colorado law
on May 1, 1978. SPM Group ceased operations in 1991, and became a
development-stage company effective January 1, 1992, with the new corporate
purpose of seeking out acquisitions of properties, businesses, or merger
candidates, without limitation as to the nature of the business operations or
geographic location of the acquisition candidate.
On April 1, 2002, SPM Group changed its name to "Provectus Pharmaceutical,
Inc." and reincorporated in Nevada in preparation for a transaction with
Provectus Pharmaceuticals, Inc., a privately-held Tennessee corporation, which
we refer to as "PPI." On April 23, 2002, an Agreement and Plan of Reorganization
between Provectus Pharmaceutical and PPI was approved by the written consent of
a majority of the outstanding shares of Provectus Pharmaceutical. As a result,
holders of 6,680,000 shares of common stock of Provectus Pharmaceutical
exchanged their shares for all of the issued and outstanding shares of PPI. As
part of the acquisition, Provectus Pharmaceutical changed its name to "Provectus
Pharmaceuticals, Inc." and PPI became a wholly owned subsidiary of Provectus.
For accounting purposes, we treat this transaction as a recapitalization of PPI.
On November 19, 2002, we acquired Valley Pharmaceuticals, Inc., a
privately-held Tennessee corporation formerly known as Photogen, Inc., by
merging our subsidiary PPI with and into Valley and naming the surviving
corporation "Xantech Pharmaceuticals, Inc." Photogen, Inc. was separated from
Photogen Technologies, Inc. in a non-prorata split-off to some of its
shareholders. The assets of Photogen, Inc. consisted primarily of the equipment
and intangibles related to its therapeutic activity. The majority shareholders
of Valley were also the majority shareholders of Provectus. Valley had no
revenues prior to the transaction with us. By acquiring Valley, we acquired our
most important intellectual property, including issued U.S. patents and
patentable inventions, with which we intend to develop:
o prescription drugs, medical and other devices (including laser
devices) in the fields of dermatology and oncology; and
o technologies for the preparation of human and animal vaccines,
diagnosis of infectious diseases and enhanced production of
genetically engineered products.
Prior to the acquisition of Valley, we were considered to be, and continue
to be, in the development stage and had not generated any revenues from the
assets we acquired.
On December 5, 2002, we acquired the assets of Pure-ific L.L.C., a Utah
limited liability company, and created a wholly owned subsidiary, Pure-ific
Corporation, to operate that business. We acquired the product formulations for
Pure-ific personal sanitizing sprays, along with the "Pure-ific" trademarks. We
intend to continue product development and begin to market a line of personal
sanitizing sprays and related products to be sold over the counter under the
"Pure-ific" brand name.
We sold small amounts of one of our products, Pure-ific, during 2003. We
did not recognize the revenue from these sales because we do not consider these
sales to be material as total sales of this product in 2003 was less than
$1,000.
6
The Offering
Securities offered 2,429,004 shares of common stock. (1)
Use of proceeds We will not receive any proceeds from the sale of the
common stock by the selling shareholders. Please see the
section of this prospectus entitled "Use of Proceeds" for
more information.
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(1) As of December 31, 2003. Includes:
o 150% of (a) up to 666,667 shares of our common stock issuable upon
conversion of $500,000 in aggregate principal amount of our one year
8% Convertible Debentures at a per share conversion price of $0.75,
(b) up to 53,335 shares of common stock issuable upon conversion of
the debentures with respect to accrued interest through the maturity
date of the debentures, and (c) up to 600,000 shares of common stock
issuable upon exercise of warrants issued in connection with the
debentures;
o 69,000 shares of common stock held by some of the selling
shareholders; and
o 380,000 shares of common stock issuable upon exercise of some other
warrants held by some of the selling shareholders who are not holders
of the debentures
The shares described in the first clause above also include the shares, if any,
we may issue to the holders of the debentures or warrants as liquidated damages
or as a result of adjustment to those debentures and warrants. For a description
of the agreements between us and the holders of the debentures, see the section
of this prospectus entitled "Agreements with the Convertible Debenture Holders."
7
Risk Factors
Before you purchase our securities, you should carefully consider the risks
described below and the other information contained in this prospectus,
including our financial statements and related notes. 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. If any of the adverse events described in this "Risk Factors"
section actually occurs, our business, results of operations and financial
condition could be materially adversely affected and you might lose all or part
of your investment.
Our independent auditors have expressed substantial doubt about our ability to
continue as a going concern.
Our independent public accountants have expressed substantial doubt about
our ability to continue as a going concern in their report on our December 31,
2003 financial statements. Currently, our continuance as a going concern is
dependent upon our ability to raise capital or achieve profitable operations.
Our technologies are in early stages of development. We have generated minimal
initial revenues from sales and operations but we do not expect to generate
sufficient revenues to enable us to be profitable for several calendar quarters.
We require additional funding to continue initial production and distribution of
OTC products in order to achieve meaningful sales volumes. In addition, we must
raise substantial additional funds in order to fully implement our integrated
business plan, including execution of the next phases in clinical development of
our pharmaceutical products and resumption of research programs currently
suspended.
Ultimately, we must achieve profitable operations if we are to be a viable
entity. We intend to proceed as rapidly as possible with the development of OTC
products that can be sold with a minimum of regulatory compliance and with the
development of revenue sources through licensing of our existing intellectual
property portfolio. We cannot assure you that we will be able to raise
sufficient capital to sustain operations before we reach an acceptable level of
revenue generation or that we will be able to achieve, or maintain, a level of
profitability sufficient to meet our operating expenses and continue as a going
concern.
Because of our limited operations and the fact that we are currently generating
limited revenue, we may be unable to pay our debts when they become due.
We currently have $1,674,959 in debt, net of a debt discount of $499,675
and $100,021 of accrued interest on our balance sheet, consisting of $1,025,959
in principal and $88,000 in accrued but unpaid interest owed to Gryffindor
pursuant to the Note; $500,000 in principal and $4,590 in accrued interest owed
to the holders of our debentures and $149,000 in principal and $7,431 in accrued
interest owed to Dr. Wachter. The amounts due to Gryffindor and to the holders
of are debentures are due in November 2004 and the amounts due to Dr. Wachter
are due in 2009. Because of the convertible nature of the debt owed to
Gryffindor and to the holders of the convertible debentures, we may not have to
repay this debt if the debt is converted into shares of our common stock.
However, we can not assure you that this debt will be converted into common
stock and we may have to repay this indebtedness. We are trying to secure
additional financing, but have not yet succeeded in doing so. Our ability to
satisfy our current debt service obligations and any additional obligations we
might incur will depend upon our future financial and operating performance,
which, in turn, is subject to prevailing economic conditions and financial,
business, competitive, legislative and regulatory factors, many of which are
beyond our control. If our cash flow and capital resources continue to be
insufficient to fund our debt service obligations, we may be forced to reduce or
delay planned acquisitions, expansion and capital expenditures, sell assets,
obtain additional equity capital or restructure our debt. Additionally, our
creditors could accelerate our payment obligations, commence foreclosure
proceedings against our assets or force us into bankruptcy or liquidation. In
such events, any proceeds may not be sufficient to pay off our creditors. We
cannot assure you that our operating results, cash flow and capital resources
will be sufficient for payment of our debt service and other obligations in the
future.
We will need additional capital to conduct our operations and develop our
products, and our ability to obtain the necessary funding is uncertain.
We will require substantial capital resources in order to conduct our
operations and develop our products. We estimate that our existing capital
resources will be sufficient to fund our current and planned operations only
through August 31, 2004, and we may need additional capital at an earlier date.
We have based this estimate on assumptions that may prove to be wrong, and we
cannot assure that estimates and assumptions will remain unchanged. For example,
we are currently assuming that we will continue to operate without any
significant staff or other resources expansion. We intend to acquire additional
funding through public or private equity financings or other financing sources
that may be available. Additional financing may not be available on acceptable
terms, or at all, and our independent auditors' going concern qualification may
make it more difficult for us to obtain additional funding to meet our
objectives. As discussed in more detail below, additional equity financing could
result in significant dilution to shareholders. Further, in the event that
additional funds are obtained
8
through licensing or other arrangements, these arrangements may require us to
relinquish rights to some of our technologies, product candidates or products
that we would otherwise seek to develop and commercialize ourselves. If
sufficient capital is not available, we may be required to delay, reduce the
scope of or eliminate one or more of our product development programs, any of
which could have a material adverse effect on our business and may impair the
value of our patents and other intangible assets.
Existing shareholders may face dilution from our financing efforts.
We must raise additional capital from external sources to execute our
business plan. We plan to issue debt securities, capital stock, or a combination
of these securities. We may not be able to sell these securities, particularly
under current market conditions. Even if we are successful in finding buyers for
our securities, the buyers could demand high interest rates or require us to
agree to onerous operating covenants, which could in turn harm our ability to
operate our business by reducing our cash flow and restricting our operating
activities. If we were to sell our capital stock, we might be forced to sell
shares at a depressed market price, which could result in substantial dilution
to our existing shareholders. In addition, any shares of capital stock we may
issue may have rights, privileges, and preferences superior to those of our
common shareholders.
The prescription drug and medical device products in our internal pipeline are
at an early stage of development, and they may fail in subsequent development or
commercialization.
We are continuing to pursue clinical development of our most advanced
pharmaceutical drug products, Xantryl and Provecta, for use as treatments for
specific conditions. These products and other pharmaceutical drug and medical
device products that we are currently developing will require significant
additional research, formulation and manufacturing development, and pre-clinical
and extensive clinical testing prior to regulatory licensure and
commercialization. Pre-clinical and clinical studies of our pharmaceutical drug
and medical device products under development may not demonstrate the safety and
efficacy necessary to obtain regulatory approvals. Pharmaceutical and
biotechnology companies have suffered significant setbacks in advanced clinical
trials, even after experiencing promising results in earlier trials.
Pharmaceutical drug and medical device products that appear to be promising at
early stages of development may not reach the market or be marketed successfully
for a number of reasons, including the following:
o a product may be found to be ineffective or have harmful side effects
during subsequent pre-clinical testing or clinical trials,
o a product may fail to receive necessary regulatory clearance,
o a product may be too difficult to manufacture on a large scale,
o a product may be too expensive to manufacture or market,
o a product may not achieve broad market acceptance,
o others may hold proprietary rights that will prevent a product from
being marketed, or
o others may market equivalent or superior products.
We do not expect any pharmaceutical drug products or medical device
products that we are developing to be commercially available for at least
several years, if at all. Our research and product development efforts may not
be successfully completed and may not result in any successfully commercialized
products. Further, after commercial introduction of a new product, discovery of
problems through adverse event reporting could result in restrictions on the
product, including withdrawal from the market and, in certain cases, civil or
criminal penalties.
Our OTC products are at an early stage of introduction, and we cannot be sure
that they will be widely accepted in the marketplace or that we will have
adequate capital to market and distribute these products which are an important
factor in the future success of our business.
We recently have begun marketing GloveAid and Pure-ific, our first two OTC
products, on a limited basis. We have not recognized any revenue from these
products, as the sales of these products have not been material. We anticipate,
however, recognizing a very limited amount of revenue from small-scale sales of
these products during the first quarter of 2004. In order for these products to
become commercially successful, we must increase significantly our distribution
of them. Increasing distribution of these products requires, in turn, that we or
distributors representing us increase marketing of these products. In view of
our limited financial resources, we may be unable to afford increases in our
marketing of our OTC products sufficient to improve our distribution of our
products. Even if we can and do increase our marketing of our OTC products, we
cannot give you any assurances that we can successfully increase our
distribution of our products.
9
If we do begin increasing our distribution of our OTC products, we must
increase our production of these products in order to fill our distribution
channels. Increased production will require additional financial resources that
we do not have at present. Additionally, we may succeed in increasing production
without succeeding in increasing sales, which could leave us with excess,
possibly unsaleable, inventory.
If we are unable to successfully introduce, market and distribute these
products, our business, financial condition, results of operations and cash
flows could be materially adversely affected.
Competition in the prescription drug, medical device and OTC pharmaceuticals
markets is intense, and we may be unable to succeed if our competitors have more
funding or better marketing.
The pharmaceutical and biotechnology industries are intensely competitive.
Other pharmaceutical and biotechnology companies and research organizations
currently engage in or have in the past engaged in research efforts related to
treatment of dermatological conditions or cancers of the skin, liver and breast,
which could lead to the development of products or therapies that could compete
directly with the prescription drug, medical device and OTC products that we are
seeking to develop and market.
Many companies are also developing alternative therapies to treat cancer
and dermatological conditions and, in this regard, are our competitors. Many of
the pharmaceutical companies developing and marketing these competing products
have significantly greater financial resources and expertise than we do in:
o research and development,
o manufacturing,
o preclinical and clinical testing,
o obtaining regulatory approvals, and
o marketing.
Smaller companies may also prove to be significant competitors,
particularly through collaborative arrangements with large and established
companies. Academic institutions, government agencies and other public and
private research organizations also may conduct research, seek patent protection
and establish collaborative arrangements for research, clinical development and
marketing of products similar to ours. These companies and institutions compete
with us in recruiting and retaining qualified scientific and management
personnel as well as in acquiring technologies complementary to our programs.
In addition to the above factors, we expect to face competition in the
following areas:
o product efficacy and safety;
o the timing and scope of regulatory consents;
o availability of resources;
o reimbursement coverage;
o price; and
o patent position, including the potentially dominant patent positions
of others.
As a result of the foregoing, our competitors may develop more effective or
more affordable products or achieve earlier product commercialization than we
do.
Product Competition. Additionally, since our currently marketed products are
generally established and commonly sold, they are subject to competition from
products with similar qualities.
Our OTC product Pure-ific competes in the market with other hand sanitizing
products, including in particular, the following hand sanitizers:
o Purell (manufactured by GOJO Industries),
o Avagard D (manufactured by 3M) and
10
o a large number of generic and private-label equivalents to these
market leaders.
Our OTC product GloveAid represents a new product category that has no
direct competitors; however, other types of products, such as AloeTouch(R)
disposable gloves (manufactured by Medline Industries) target the same market
niche.
Since our prescription products Provecta and Xantryl have not yet been
approved by the FDA or introduced to the marketplace, we cannot estimate what
competition these products might face when they are finally introduced, if at
all. We cannot assure you that these products will not face significant
competition for other prescription drugs and generic equivalents.
If we are unable to secure or enforce patent rights, trademarks, trade secrets
or other intellectual property our business could be harmed.
We may not be successful in securing or maintaining proprietary patent
protection for our products or products and technologies we develop or license.
In addition, our competitors may develop products similar to ours using methods
and technologies that are beyond the scope of our intellectual property
protection, which could reduce our anticipated sales. While some of our products
have proprietary patent protection, a challenge to these patents can be subject
to expensive litigation. Litigation concerning patents, other forms of
intellectual property and proprietary technology is becoming more widespread and
can be protracted and expensive and can distract management and other personnel
from performing their duties for us.
We also rely upon trade secrets, unpatented proprietary know-how and
continuing technological innovation in order to develop a competitive position.
We cannot assure you that others will not independently develop substantially
equivalent proprietary technology and techniques or otherwise gain access to our
trade secrets and technology, or that we can adequately protect our trade
secrets and technology.
If we are unable to secure or enforce patent rights, trademarks, trade
secrets or other intellectual property, our business, financial condition,
results of operations and cash flows could be materially adversely affected.
If we infringe on the intellectual property of others, our business could be
harmed.
We could be sued for infringing patents or other intellectual property that
purportedly cover products and/or methods of using such products held by persons
other than us. Litigation arising from an alleged infringement could result in
removal from the market, or a substantial delay in, or prevention of, the
introduction of our products, any of which could have a material adverse effect
on our business, financial condition, or results of operations and cash flows.
If we do not update and enhance our technologies, they will become obsolete.
The pharmaceutical market is characterized by rapid technological change,
and our future success will depend on our ability to conduct successful research
in our fields of expertise, to discover new technologies as a result of that
research, to develop products based on our technologies, and to commercialize
those products. While we believe that are current technology is adequate for our
present needs, if we fail to stay at the forefront of technological development,
we will be unable to compete effectively. Our competitors are using substantial
resources to develop new pharmaceutical technologies and to commercialize
products based on those technologies. Accordingly, our technologies may be
rendered obsolete by advances in existing technologies or the development of
different technologies by one or more of our current or future competitors.
If we lose any of our key personnel, we may be unable to successfully execute
our business plan.
Our business is presently managed by four key employees:
o H. Craig Dees, Ph.D., our Chief Executive Officer;
o Timothy C. Scott, Ph.D., our President;
o Eric A. Wachter, Ph.D., our Vice President-Pharmaceuticals; and
o Peter R. Culpepper, CPA, our Chief Financial Officer.
In addition to their responsibilities for management of our overall
business strategy, Drs. Dees, Scott and Wachter are our chief researchers in the
fields in which we are developing and planning to develop prescription drug,
medical device and OTC products. Also, as of December 31, 2003, we owe $352,500
in accrued but unpaid compensation to our employees, most of which is owed to
Drs. Dees, Scott and Wachter. The loss of any of these key employees could have
a material adverse
11
effect on our operations, and our ability to execute our business plan might be
negatively impacted. Any of these key employees may leave their employment with
us if they choose to do so, and we cannot assure you that we would be able to
hire similarly qualified executives if any of our key employees should choose to
leave.
Because we have only four employees, our management may be unable to
successfully manage our business.
In order to successfully execute our business plan, our management must
succeed in all of the following critical areas:
o Researching diseases and possible therapies in the areas of
dermatology and skin care, oncology, and biotechnology;
o Developing prescription drug, medical device and OTC products based on
our research;
o Marketing and selling developed products;
o Obtaining additional capital to finance research, development,
production and marketing of our products; and
o Managing our business as it grows.
As discussed above, we currently have only four employees, all of whom are
full-time employees. The greatest burden of succeeding in the above areas
therefore falls on Drs. Dees, Scott and Wachter. Focusing on any one of these
areas may divert their attention from our other areas of concern and could
affect our ability to manage other aspects of our business. We cannot assure you
that our management will be able to succeed in all of these areas or, even if we
do so succeed, that our business will be successful as a result. We anticipate
adding a part-time regulatory affairs officer, a part-time lab technician and a
part-time office manager within the next year. While we have not historically
had difficulty in attracting employees, our small size and limited operating
history may make it difficult for us to attract and retain employees in the
future which could further divert managements attention from the operation of
our business.
Our common stock price can be volatile because of several factors, including a
limited public float.
During the twelve-month period ended December 31, 2003, the sale price of
our common stock fluctuated from $2.00 to $0.20 per share. We believe that our
common stock is subject to wide price fluctuations because of several factors,
including:
o absence of meaningful earnings and external financing;
o a relatively thin trading market for our common stock, which causes
trades of small blocks of stock to have a significant impact on our
stock price;
o general volatility of the stock markets and the market prices of other
publicly traded companies; and
o investor sentiment regarding equity markets generally, including
public perception of corporate ethics and governance and the accuracy
and transparency of financial reporting.
We have raised substantial amounts of capital in private placements from time to
time, and if we have failed to comply with applicable laws and regulations
applicable to these private placements, we could be required to repay this
capital to investors and could be subject to legal action by the investors and
by state and federal securities regulators.
We have offered and sold securities in private placements in reliance upon
exemptions from the registration requirements of the SEC and state agencies.
These exemptions are highly technical in nature and if we inadvertently failed
to comply with the requirements of any of the exemptive provisions, investors
might have the right to rescind their purchase of our securities or sue for
damages. If one or more investors were to successfully seek rescission or
prevail in any suit, we could face severe financial demands that could
materially and adversely affect our financial position. Further, the SEC and
state agencies could take action against us that could divert management's
attention from the operation of our business, cause us to pay fines and
penalties and cause us to have to repay investors their original investment,
among other things.
12
Financings that may be available to us under current market conditions
frequently involve sales at prices below the prices at which our common stock
trades on the Over the Counter Electronic Bulletin Board, as well as the
issuance of warrants or convertible debt that require exercise or conversion
prices that are calculated in the future at a discount to the then market price
of our common stock.
Any agreement to sell, or convert debt or equity securities into, common
stock at a future date and at a price based on the then current market price
will provide an incentive to the investor or third parties to sell the common
stock short to decrease the price and increase the number of shares they may
receive in a future purchase, whether directly from us or in the market. For
example, the initial conversion rate of the debentures is equal to the lower of
(i) 75% of the average market price of our common stock for the twenty (20)
trading days ending on the twentieth trading day subsequent to the effective
date of the registration statement of which this prospectus forms a part or (ii)
$0.75 per share. If the average market price of our common stock is so low that
it causes the conversion rate on the debentures to fall below approximately
$0.73, and if the debenture holders enforce this provision of our agreement with
them, we will have to issue more shares to the debenture holders upon conversion
of the debentures and the anti-dilutive provisions contained in our agreements
with Gryffindor will become operative. If these anti-dilutive provisions become
operative, we may be required to issue a significant number of shares of common
stock to Gryffindor. We will not receive any additional proceeds from Gryffindor
for the issuance of these shares of common stock. Other financings that we may
obtain may contain similar provisions, and the existence of anti-dilutive
provisions in some of our existing financings may make it more difficult for us
to obtain financing in the future. These types of transactions which cause the
issuance of our common stock in connection with the exercise or conversion of
securities may result in substantial dilution to the remaining holders of our
common stock
Financings that may be available to us frequently involve high selling costs.
Because of our limited operating history, low market capitalization, thin
trading volume and other factors, we have historically had to pay high costs to
obtain financing and expect to continue to be required to pay high costs for any
future financings in which we may participate. For example, our past sales of
shares and our sale of the debentures have involved the payment of finder's fees
or placement agent's fees. These types of fees are typically higher for small
companies like us. Payment of fees of this type reduces the amount of cash that
we receive from a financing transaction and makes it more difficult for us to
obtain the amount of financing that we need to maintain and expand our
operations.
We have not had earnings, but if earnings were available, it is our general
policy to retain any earnings for use in our operation.
We have never declared or paid cash dividends on our common stock. We
currently intend to retain all of our future earnings, if any, for use in our
business and therefore do not anticipate paying any cash dividends on our common
stock in the foreseeable future.
Our stock price is below $5.00 per share and is treated as a "Penny Stock" which
places restrictions on broker-dealers recommending the stock for purchase.
Our common stock is defined as "penny stock" under the Securities Exchange
Act of 1934, which we refer to as the "Exchange Act," and its rules. The SEC has
adopted regulations that define "penny stock" to include common stock that has a
market price of less than $5.00 per share, subject to certain exceptions. These
rules include the following requirements:
o broker-dealers must deliver, prior to the transaction, a disclosure
schedule prepared by the SEC relating to the penny stock market;
o broker-dealers must disclose the commissions payable to the
broker-dealer and its registered representative;
o broker-dealers must disclose current quotations for the securities;
o if a broker-dealer is the sole market-maker, the broker-dealer must
disclose this fact and the broker-dealers presumed control over the
market; and
o a broker-dealer must furnish its customers with monthly statements
disclosing recent price information for all penny stocks held in the
customer's account and information on the limited market in penny
stocks.
Additional sales practice requirements are imposed on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors. For these types of transactions, the broker-dealer must make a
special suitability determination for the purchaser and must have received the
purchaser's written consent to the transaction prior to sale. If our common
stock remains subject to these penny stock rules these disclosure requirements
may have the effect of
13
reducing the level of trading activity in the secondary market for our common
stock. As a result, fewer broker-dealers may be willing to make a market in our
stock, which could affect your ability to re-sell your shares.
Forward-Looking Statements
Some of the information contained in this prospectus and the documents
incorporated by reference into this prospectus include forward-looking
statements (as defined in Section 27A of the Securities Act and Section 21E of
the Exchange Act), which mean that they relate to events or transactions that
have not yet occurred, our expectations or estimates for our future operations,
our growth strategies or business plans or other facts that have not yet
occurred. These statements can be identified by the use of forward-looking
terminology such as "might," "may," "will," "could," "expect," "anticipate,"
"estimate," "likely," "believe," or "continue" or the negative thereof or other
variations thereon or comparable terminology. The above risk factors contain
discussions of important factors that should be considered by prospective
investors for their potential impact on forward-looking statements included in
this prospectus and in the documents incorporated by reference into this
prospectus. These important factors, among others, may cause actual results to
differ materially and adversely from the results expressed or implied by the
forward-looking statements.
Use Of Proceeds
The selling shareholders will receive the net proceeds from the sale of
shares. We will not receive any of the proceeds from any sale of the shares by
the selling shareholders. However, we will receive the proceeds from any cash
exercise of warrants to purchase some of the shares offered by this prospectus.
If all warrants are exercised for cash, we would receive proceeds of $822,100.
Any proceeds we receive will be used for working capital purposes. Please see
the section of this prospectus entitled "Agreements With The Convertible
Debenture Holders" and "Description of Other Transactions" for more information
about the warrants.
Agreements With The Convertible Debenture Holders
We are registering a portion of the shares in order to satisfy our
obligations to the holders of our debentures. Under a securities purchase
agreement, dated as of November 19, 2003, between us and the holders of the
debentures, those holders committed to purchase the debentures from us for an
aggregate of $500,000. We refer to this agreement in this prospectus as the
"Securities Purchase Agreement." We have already received the funding from the
sale of these debentures.
The debentures have a maturity date of November 30, 2004 and are
convertible into shares of our common stock at an initial conversion rate equal
to the lower of (i) 75% of the average market price for the twenty (20) trading
days ending on the twentieth trading day subsequent to the effective date of the
registration statement of which this prospectus forms a part or (ii) $0.75 per
share. This conversion price is subject to adjustment if there are certain
capital adjustments or similar transactions, such as a stock split or merger.
Interest at 8% per annum is due on the earlier to occur of the conversion of the
debenture or the maturity date. On conversion or at maturity, we have the option
to pay accrued interest in cash or shares of our common stock valued at the
conversion price in effect at that time. The option to pay interest in shares of
our common stock, however, is subject to the following conditions: the
registration statement covering the resale of such shares must be in effect at
the time of issuance and the issuance of such shares of common stock to the
holder of the debentures cannot result in the holder and its affiliates
beneficially owning more than 4.99% of the then outstanding shares of our common
stock. This limitation is further discussed below in this section.
In connection with the issuance of the debentures, we issued to the holders
thereof 500,000 warrants to purchase shares of our common stock. Each holder
received warrants to purchase one share of common stock for each dollar invested
in a debenture. In connection with the issuance of the debentures, we also
issued 100,000 warrants to a placement agent.
The warrants issued in connection with the debentures are exercisable at a
per share exercise price equal to $1.00, except for the warrants issued to the
placement agent which are exercisable at a per share exercise price equal to
$1.25. These exercise prices are also subject to adjustment if there are capital
adjustments or similar transactions, such as a stock split or merger. The
warrants provide for cashless exercise rights after one year if there is no
effective registration statement covering the resale of the holder's shares. The
warrants issued in connection with the debentures expire on November 19, 2005,
except for the warrants issued to the placement agent which expire on November
19, 2006.
The terms of the debentures and warrants specify that the beneficial owner
can convert a debenture or exercise a warrant by giving notice to us. Each
conversion or warrant exercise is subject to the following limitation: the
holder may not convert the debentures or exercise its warrant to the extent that
the conversion or exercise would result in the owner and its
14
affiliates beneficially owning more than 4.99% of our then outstanding stock
(after taking into account the shares of our common stock issuable upon the
conversion or warrant exercise). If the holder then disposes of some or all of
its holdings, it can again convert its debenture or exercise its warrant.
Pursuant to the Securities Purchase Agreement and a registration rights
agreement, we are obligated initially to register under the Securities Act 150%
of the number of shares issuable on conversion of the full aggregate principal
amount of the debentures plus interest thereon accrued through the maturity date
thereof and 150% of the number of shares of common stock issuable upon exercise
of the warrants issued in connection with the debentures. We are also obligated
to keep the registration statement of which this prospectus forms a part
effective until the earliest of the date on which the holders may sell all
shares registered on their behalf under this prospectus under Rule 144
promulgated under the Securities Act, or the date on which the holders no longer
own any of those shares.
In the Securities Purchase Agreement, we have agreed that, without the
prior consent of the holders, we will not enter into any subsequent offer or
sale of our common stock (or securities convertible into common stock) with any
third party on any date which is earlier than 90 days after the effective date
of this prospectus (plus the number of days, if any, during which the
registration statement is suspended in the interim). The holders have agreed
supplementally to waive de minimus issuances of common stock issued to our
vendors and consultants and issued in settlement of a patent interference case
against us. If we breach our obligations relating to any third party
transactions,
o the conversion price then in effect in the debentures will be adjusted
to be equal to the lowest of (x) 90% of the conversion price then in
effect or (y) 75% of the lower of (A) lowest fixed price of any
security in the new transaction or (B) the lowest conversion price
that would be applicable in the new transaction; and
o the exercise price and number of shares specified in the warrant will
be adjusted to correspond to the instruments relating to such
transaction.
We may also be required to issue additional shares with respect to portions of
debentures previously converted, based on the adjusted conversion price. In
addition, in case of breach, the debentures holders may declare us in default
and require us to immediately redeem each unconverted debenture and may exercise
other remedies as provided in the debentures.
The additional shares, if any, which might be issued to a holder on account
of any of the adjustments referred to in the preceding paragraphs are covered by
the registration statement and this prospectus.
Under the registration rights agreement, we may be obligated to pay
liquidated damages to the holders of the debentures because the registration
statement was not declared effective by February 17, 2004 or if, the
effectiveness of the registration statement is subsequently suspended for more
than the permitted periods described below. The permitted suspension periods are
up to 2 suspension periods during any consecutive 12-month period, but each
period shall not be for more than 10 days or begin less than 10 days after the
preceding suspension period ended. The date any such suspension commences,
beyond such permitted restrictions, is referred to as a "Restricted Sale Date".
The amount that we must pay to the debenture holders in respect of the
liquidated damages associated with the delays in the effective date or after a
Restricted Sale Date will be (A) 2% of the principal amount of all the
debentures during the first 30-day period, and (B) 2% of the principal amount of
all debentures for each subsequent 30-day period or partial 30-day period. After
the effective date, the principal amount of the debentures used in determining
the liquidated damages will be adjusted to equal the sum of (X) the principal
amount of all debentures not yet converted and (Y) the principal amount of the
debenture converted within the preceding 30 days but not yet sold. The debenture
holders have the right to have these liquidated damages paid in shares of common
stock (valued at the conversion price). We may make that election also if the
effective date has occurred within 150 days after the execution and delivery of
the Securities Purchase Agreement, provided the registration statement is then
currently effective. The additional shares, if any, which might be issued to a
holder of the debentures in payment of these liquidated damages are covered by
the registration statement and this prospectus.
We refer you to the Securities Purchase Agreement and the registration
rights agreement, and the forms of debentures and warrants, that are filed as
exhibits to the registration statement for more complete description of the
complex provisions that are summarized under this caption.
Description Of Other Transactions
We are also registering 69,000 shares held by other selling shareholders
and 380,000 shares issuable upon exercise of other warrants held by other
selling shareholders who are not holders of the debentures (or affiliates
thereof). These selling 15
shareholders acquired their beneficial interest in the common stock through
various private placements of securities. These selling shareholders are
permitted to have their shares registered for resale in the registration
statement as a result of so-called "piggy-back" registration rights, which means
that, because we are required by the registration rights agreement to file the
registration statement, holders of "piggy-back" registration rights must also be
given the opportunity to have their shares registered in the registration
statement. We refer you to the registration rights agreements relating to some
of these shares that are filed as exhibits to this registration statement for
more complete description of the provisions of those registration rights
agreements.
Selling Shareholders
The following table sets forth the shares beneficially owned, as of
December 31, 2003, by the selling shareholders prior to the offering
contemplated by this prospectus, the number of shares each selling shareholder
is offering by this prospectus and the number of shares which each would own
beneficially if all the offered shares are sold. Except Viscount Investments,
Ltd., the selling shareholders acquired their beneficial interests in the shares
being offered hereby in private placements described under the heading
"Description of Other Transactions." As compensation for its services as
placement agent for private placement of the debentures and related warrants, we
issued warrants to purchase common stock to Viscount Investments, Ltd. and its
designees in connection with that private placement.
Beneficial ownership is determined in accordance with SEC rules and
includes voting or investment power with respect to the securities. However,
each of the selling shareholders is subject to limitations on the conversion of
their debentures and the exercise of their warrants, if any. The most
significant of these limitations is that the selling shareholder may not convert
its debentures or exercise its warrants, if the conversion or exercise would
cause such holder's beneficial ownership of our common stock (excluding shares
underlying any of their unconverted debentures or unexercised warrants) to
exceed 4.99% of the outstanding shares of common stock. Also, the table below
includes the number of shares which would be issued upon conversion of a
convertible debenture in payment of all accrued interest through its maturity
date, which is more than 60 days from the date of this prospectus and shares
which might be issuable on the occurrence of events which have not yet occurred
and may not occur. Therefore, although they are included in the table below, the
number of shares of common stock for some listed persons may include shares that
may not be purchased during the 60-day period.
Beneficial
Names and Addresses Ownership Shares Registered Post-Offering %
------------------- --------- ----------------- ------------- -
Platinum Partners Value Arbitrage Fund (1) 915,000 915,000 (2)(3) 0 0
Huberfeld Family, LLC (4) 274,500 274,500 (2)(3) 0 0
Martin Stern 274,500 274,500 (2)(3) 0 0
M/S Family Foundation (5) 183,002 183,002 (2)(3) 0 0
Eliezer Rosenthal 183,002 183,002 (2)(3) 0 0
Viscount Investments, Ltd. (6) 150,000 150,000 (7) 0 0
Strategic Growth International (8) 180,000 180,000 (7) 0 0
Bruce A. Cosgrove (9) 446,876 100,000 (7) 346,876 *
George F. Matin (9) 330,955 100,000 (7) 230,955 *
Kevin Leigh (9) 53,000 24,000 29,000 *
JG Capital, Inc. (9) (10) 35,000 35,000 0 0
The Research Foundation of State University of
New York (11) 10,000 10,000 0 0
------------------
* Less than 1%
(1) The selling shareholder advised us that it is not a broker-dealer and is not
affiliated with any broker-dealer and that the only natural person that
beneficially owns the debentures and the shares of common stock issuable upon
conversion of the debentures is Mark Nordlicht.
(2) The numbers on the table reflect the actual number of shares issued or
issuable to the selling shareholder. We are registering 150% of the shares
underlying the convertible debentures held by the selling shareholder to include
other shares of our common stock which might be issuable to the selling
shareholder under the terms of the agreements between us and the selling
shareholder. See the sections of this prospectus titled "Agreements With The
Convertible Debenture Holders" for more information regarding our debentures.
(3) Includes shares of common stock issuable on conversion or payment of or as
interest on 8% Convertible Debentures Due November 30, 2004, and on exercise of
warrants and as contemplated by terms of agreements between us and the selling
shareholder.
(4) The selling shareholder advised us that it is not a broker-dealer and is not
affiliated with any broker-dealer and that the only natural person that
beneficially owns the debentures and the shares of common stock issuable upon
conversion of the debentures is Philip Huberfeld.
16
(5) The selling shareholder advised us that it is not a broker-dealer and is not
affiliated with any broker-dealer and that the only natural person that
beneficially owns the debentures and the shares of common stock issuable upon
conversion of the debentures is Shoshana Englander.
(6) The selling shareholder advised us that it is not a broker-dealer and is not
affiliated with any broker-dealer and that the only natural person that
beneficially owns the debentures and the shares of common stock issuable upon
conversion of the debentures is Josef Frand.
(7) Includes shares of common stock issuable upon the exercise of warrants.
(8) The selling shareholder advised us that it is not a broker-dealer and is not
affiliated with any broker-dealer and that the only natural persons that
beneficially own the debentures and the shares of common stock issuable upon
conversion of the debentures are Stanley Altschuler and Richard Cooper.
(9) The selling shareholder has acted as a consultant for us within the past
three years.
(10) The selling shareholder advised us that it is not a broker-dealer and is
not affiliated with any broker-dealer and that the only natural person that
beneficially owns the debentures and the shares of common stock issuable upon
conversion of the debentures is Richard Josephberg.
(11) The selling shareholder advised us that it is not a broker-dealer and is
not affiliated with any broker-dealer. The selling shareholder is a non-profit
educational corporation of the State of New York. No natural persons
beneficially own the debentures or the shares of common stock issuable upon
conversion of the debentures.
Relationship Between Provectus and the Selling Shareholders
None of the selling shareholders are affiliates or controlled by our
affiliates. None of the selling shareholders are now or were at any time in the
past an officer or director of ours or any of any of our predecessors or
affiliates. We have separate contractual obligations to file this registration
with each of the selling shareholders.
Description Of Securities
Common Stock
We are authorized to issue 100,000,000 shares of common stock, $.001 par
value per share, of which 10,867,509 shares were outstanding and held of record
as of December 31, 2003, by approximately 1,787 shareholders of record. A
significant portion of our common stock is held in either nominee name or street
name brokerage accounts. All outstanding shares of common stock are fully paid
and non-assessable. Holders of shares of our common stock are entitled to one
vote for each share held of record on all matters to be voted on by
shareholders. Holders of shares of common stock are entitled to receive
dividends when, as and if declared by our board of directors from funds legally
available therefor and to share ratably in our assets available upon
liquidation, dissolution or winding up. The holders of shares of the common
stock do not have cumulative voting rights for the election of directors and,
accordingly, the holders of more than 50% of the shares of common stock are able
to elect all directors. Our Restated Articles of Incorporation do not grant
preemptive rights. The common stock may not be redeemed except upon our consent
and the consent of the shareholders and the common stock is not subject to
liability for further calls or to assessments by Provectus. This summary does
not purport to be complete and is qualified in its entirety by reference to our
Restated Articles of Incorporation, the Securities Act and to Nevada law.
Preferred Stock
We are authorized to issue 25,000,000 shares of preferred stock, $.001 par
value per share, of which no shares are issued and outstanding. The shares of
preferred stock may be issued from time to time in one or more series, in any
manner permitted by law, as determined from time to time by our board of
directors, and stated in the resolution or resolutions providing for the
issuance of such shares adopted by our board of directors pursuant to authority
vested in it. Without limiting the generality of the foregoing, shares in such
series shall have voting powers, full or limited, or no voting powers, and shall
have such designations, preferences and relative, participating, optional, or
other special rights, and qualifications, limitations, or restrictions thereof,
permitted by law, as shall be stated in the resolution or resolutions providing
for the issuance of such shares adopted by our board of directors. The number of
shares of any such series so set forth in the resolution or resolutions may be
increased (but not above the total number of authorized shares of preferred
stock) or decreased (but not below the number of shares thereof then
outstanding) by further resolution or resolutions adopted by the board of
directors.
Governing Law and Organizational Documents
Shareholders' rights and related matters are governed by the laws of the
State of Nevada and our Restated Articles of Incorporation and our Bylaws. Our
Restated Articles of Incorporation may not be amended without the affirmative
vote of at least a majority of the shares entitled to vote generally in the
election of directors, voting as a single voting group. Our Bylaws
17
may be amended by either the affirmative vote of 75% of all shares outstanding
and entitled to vote generally in the election of directors, or by an
affirmative vote of a majority of our directors then holding office.
Stock Option Plans
The 2002 Stock Option Plan provides for the grant of four types of
incentive awards: stock options, stock appreciation rights, rights to purchase
restricted stock, and long-term performance awards.
Our employees and consultants, including officers and directors who also
are employees or consultants, and our directors who are not employees whose
present and potential contributions are important to our continued success are
eligible to receive awards under the plan. The purpose of a long-term incentive
plan is to direct the attention and efforts of participating employees to our
long-term performance by relating incentive compensation to the achievement of
long-term corporate economic objectives. The plan also is designed to retain,
reward and motivate participating employees by providing an opportunity for
investment in the company and the advantages inherent in ownership of our common
stock.
A total of 2,000,000 shares of our common stock may be subject to, or
issued pursuant to, awards granted under the plan. If an award under the plan is
forfeited or terminated for any reason, the shares of common stock that were
subject to the award again become available for distribution in connection with
awards under the plan. In addition, shares subject to stock appreciation rights
that are exercised for cash again become available for distribution in
connection with awards under the plan.
The plan may be administered by one or more administrators if the board of
directors deems division of administration necessary or desirable in order to
comply with applicable law. Because the board of directors has not appointed any
committees and because we have so few employees, the entire board of directors
currently is acting as the administrator of the plan.
The administrator has the exclusive discretion to select the employees,
consultants and non-employee directors who receive awards under the plan and to
determine the type, size, and terms of each award, to modify the terms of
awards, to determine when awards will be granted and paid, and to make all other
determinations which it deems necessary or desirable in the interpretation and
administration of the plan. The plan will remain in effect until all awards
under the plan either have been satisfied by the issuance of shares of our
common stock or the payment of cash or have expired or otherwise terminated or
the plan is otherwise terminated by our board of directors. However, no awards
may be granted more than ten years after the date of the shareholder's approval
of the plan. Generally, a participant's rights and interest under the plan will
not be transferable except by will or by the laws of descent and distribution.
Transfer Agent
We have retained Atlas Stock Transfer Corporation, 5899 South State Street,
Salt Lake City, UT 84107, as the transfer agent for our common stock. Atlas
Stock Transfer Corporation's telephone number is (801) 266-7151.
Plan Of Distribution
The selling shareholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded. These sales may be at fixed or negotiated prices. The selling
shareholders may use any one or more of the following methods when selling
shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales, but, if at all, only after the effectiveness of the
registration statement of the shares of common stock offered hereby;
o broker-dealers may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per share;
18
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling shareholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades. The
selling shareholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling shareholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares. We
believe that the selling shareholders have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their shares other than ordinary course brokerage arrangements, nor
is there an underwriter or coordinating broker acting in connection with the
proposed sale of shares by the selling shareholders.
Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
Selling shareholders may be, and any broker-dealers or agents that are
involved in selling the shares are, deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. If the selling shareholders
are deemed to be underwriters, the selling shareholders may be subject to
statutory and regulatory liabilities, including liabilities imposed pursuant to
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange
Act.
We are required to pay all fees and expenses incident to the registration
of the shares. Otherwise, all discounts, commissions or fees incurred in
connection with the sale of the common stock offered hereby will be paid by the
selling shareholders.
Upon our being notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing
o the name of each such selling shareholder and of the participating
broker-dealer(s);
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
o that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
o other facts material to the transaction.
To comply with the securities laws of some states, the shares will be sold
in those jurisdictions, if required, only through registered or licensed brokers
or dealers. In addition, in some states the shares may not be sold unless the
shares have been registered or qualified for sale in the state or an exemption
from registration or qualification is available and complied with.
We advised the selling shareholders that the anti-manipulative provisions
of Regulation M promulgated under the Exchange Act may apply to their sales of
the shares offered hereby.
Indemnification Of Officers And Directors
Nevada law provides that a Nevada corporation may 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
19
investigative, other than an action by or in the right of the corporation (i.e.,
a "non-derivative proceeding"), by reason of the fact that he or she 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 the
action, suit or proceeding if he or she:
o Is not liable under Section 78.138 of the Nevada Revised Statutes for
breach of his or her fiduciary duties to the corporation; or
o Acted in good faith and in a manner which he or she 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 or her conduct was unlawful.
In addition, a Nevada corporation may 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 (i.e., a "derivative proceeding"), by reason of the fact
that he or she 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 amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him or her in
connection with the defense or settlement of the action or suit if he:
o Is not liable under Section 78.138 of the Nevada Revised Statute for
breach of his or her fiduciary duties to the corporation; or
o Acted in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the
corporation.
Under Nevada law, indemnification may not be made for any claim, issue or
matter as to which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to the
corporation or for amounts paid in settlement to the corporation, unless and
only to the extent that the court in which the action or suit was brought or
other court of competent jurisdiction determines upon application that in view
of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
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 non-derivative
proceeding or any derivative proceeding, or in defense of any claim, issue or
matter therein, the corporation is obligated to indemnify him or her against
expenses, including attorneys' fees, actually and reasonably incurred in
connection with the defense.
Further, Nevada law permits a Nevada corporation to purchase and maintain
insurance or to make other financial arrangements on behalf of any person who 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 for any liability asserted against him or her and liability and
expenses incurred by him or her in his or her capacity as a director, officer,
employee or agent, or arising out of his or her status as such, whether or not
the corporation has the authority to indemnify him or her against such liability
and expenses.
Under our Restated Articles of Incorporation, we are obligated to
indemnify, to the fullest extent permitted by Nevada law, any director or
officer who was or is a party or is threatened to be made a party to, or is
involved in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding"), by
reason of the fact that the director or officer, or a person of whom he or she
is the legal representative, is or was a director or officer of Provectus, or a
member of any committee of our board of directors, or is or was serving at our
request as a director, officer, partner, trustee, employee or agent of another
corporation, limited liability company, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of the proceeding is alleged action in an official capacity as
a director, officer, partner, trustee, employee or agent or in any other
capacity while serving as a director officer, partner, trustee, employee or
agent; against all expense, liability and loss (including attorneys' fees,
judgments, fines, excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by the director or officer in
connection with the proceeding. In addition, indemnification is required to
continue as to a person who has ceased to be a director, officer, partner,
trustee, employee or agent and inures to the benefit of his or her heirs,
executors and administrators. However, subject to the exceptions detailed below,
we may indemnify a person seeking indemnification in connection with a
proceeding (or part thereof) initiated by the person seeking indemnification
only if the proceeding (or part thereof) was authorized by our board of
directors. We may indemnify any employee or agent of Provectus to an extent
greater than required by law only if and to the extent that our directors, in
their discretion, may determine.
20
If we do not pay a claim for indemnification under the our Restated
Articles of Incorporation in full within 30 days after a written claim has been
received by us, the claimant may at any time thereafter bring suit against us to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant also will be entitled to be paid the expense of prosecuting such
claim. With some exceptions, we may defend against an action brought for this
purpose that the claimant has not met the standards of conduct which make it
permissible under Chapter 78 of the Nevada Revised Statutes for us to indemnify
the claimant for the amount claimed, but the burden of proving such defense is
on us. Neither our failure (including the failure of our board of directors,
independent legal counsel or our shareholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable standard of
conduct set forth in Chapter 78 of the Nevada Revised Statutes, nor an actual
determination by us (including our board of directors, independent legal counsel
or our shareholders) that the claimant has not met such applicable standard of
conduct is a defense to the action or creates a presumption that the claimant
has not met the applicable standard of conduct.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Provectus
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the SEC this indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
Where You Can Find More Information About Us
We file reports, proxy statements, information statements and other
information with the SEC. You may read and copy this information, for a copying
fee, 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 more information on its
public reference rooms. Our SEC filings are also available to the public from
commercial document retrieval services, and at the web site maintained by the
SEC at http://www.sec.gov.
Our Internet address is http://www.pvct.com. We have made available,
through a link to the SEC's Web site, electronic copies of the materials we file
with the SEC (including our annual reports on Form 10-KSB, our quarterly reports
on Form 10-QSB, our current reports on Form 8-K, the Section 16 reports filed by
our executive officers, directors and 10% shareholders and amendments to those
reports). To receive paper copies of our SEC materials, please contact us by
U.S. mail, telephone, facsimile or electronic mail at the following address:
Provectus Pharmaceuticals, Inc.
Attention: President
7327 Oak Ridge Highway, Suite A
Knoxville, TN 37931
Telephone: 865/769-4011
Facsimile: 865/769-4013
Electronic mail: info@pvct.com
We have filed the registration statement under the Securities Act, with
respect to the securities offered pursuant to this prospectus. This prospectus
does not contain all of the information set forth in the registration statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. For further information, reference is made to the registration
statement and the exhibits filed as a part thereof, which may be found at the
locations and website referred to above.
Incorporation Of Certain Information By Reference
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring to those documents. The information incorporated
by reference is an important part of this prospectus. We incorporate by
reference the following documents we filed with the SEC:
o Our Annual Report on Form 10-KSB for the fiscal year ended December
31, 2003.
o Our Definitive Proxy Statement to Shareholders, dated April 30, 2003.
We are also incorporating by reference additional documents that we may
file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
prior to the termination of this offering.
21
If you are a shareholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through the SEC or us.
Documents incorporated by reference are available from us without charge, except
exhibits, unless we have specifically incorporated by reference an exhibit into
a document that this prospectus incorporates. Shareholders may obtain documents
incorporated by reference into this prospectus by requesting them in writing or
by telephone from:
Provectus Pharmaceuticals, Inc.
ATTN: Investor Relations
7327 Oak Ridge Highway, Suite A
Knoxville, Tennessee 37931
(865) 769-4011
Experts
The financial statements attached to and incorporated by reference in this
prospectus have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their report (which
contains an explanatory paragraph regarding our ability to continue as a going
concern) attached to and incorporated herein by reference, and are attached to
and incorporated herein in reliance upon such report given upon the authority of
said firm as experts in auditing and accounting.
Legal Matters
The validity of the shares we are offering will be passed upon for us by
Baker, Donelson, Bearman, Caldwell & Berkowitz, 207 Mockingbird Lane, P.O. Box
3038, Johnson City, Tennessee 37602.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with this offering are as set forth in
the following table. All amounts except the Securities and Exchange Commission
("SEC") registration fee are estimated.
SEC Registration Fee $ 448.44
Printing and Engraving Expenses 2,500.00
Accounting Fees and Expenses 8,000.00
Legal Fees and Expenses 50,000.00
Miscellaneous 1,500.56
------------
Total $ 62,449.00
Item 15. Indemnification of Officers and Directors.
See "Indemnification Of Officers And Directors" in the prospectus.
Item 16. Exhibits
The following exhibits are filed as part of this Registration Statement.
Exhibit No. Description
4.1* Form of 8% Convertible Debenture (Annex I to Securities Purchase
Agreement, as hereinafter defined)
4.2* Form of Warrant (Annex VI to Securities Purchase Agreement)
4.3* Registration Rights Agreement dated as of November 19, 2003 by and
among the Company and the investors named therein (Annex IV to
Securities Purchase Agreement)
4.4* Registration Rights Agreement dated as of September 4, 2003 by and
among the Company and Bruce A. Cosgrove and George F. Matin
4.5* Form of Warrant issued to selling shareholders other than holders of
8% Convertible Debentures
4.6* Registration Rights Agreement dated as of December 26, 2003 by and
between the Company and The Research Foundation of State University of
New York
5.1* Opinion of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C.
10.1* Securities Purchase Agreement dated as of November 19, 2003 by and
among the Company and the lenders named therein (the "Securities
Purchase Agreement")
13.1** Annual Report on Form 10-KSB for the fiscal year ended December 31,
2003
23.1* Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C.
(included in Exhibit 5.1)
23.2 Consent of BDO Seidman, LLP
24.1 Power of Attorney (included on Page II-4 of this Registration
Statement).
---------------------------------------------------
* Previously filed.
** Previously filed with the SEC on March 30, 2004.
II-1
Item 17. 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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act"),
(b) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement,
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that clauses (a) and (b) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed with or furnished to the SEC by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed 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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this 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 liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the SEC 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.
II-2
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus 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) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's 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 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.
II-3
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amended Registration Statement on Form S-2 to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of
Knoxville, State of Tennessee on April 5, 2004.
Provectus Pharmaceuticals, Inc.
By: /s/ Timothy C. Scott
----------------------------------------
Timothy C. Scott, Ph.D.
President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints H. Craig
Dees, Ph.D. and Timothy C. Scott, Ph.D., and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to the Registration Statement on Form S-2 filed by Provectus
Pharmaceuticals, Inc. (the "Company") with the U.S. Securities and Exchange
Commission (the "SEC"), and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the SEC; granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person thereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 2004:
Signatures Title
---------- -----
/s/ H. Craig Dees Chief Executive Officer and a Director (Principal
---------------------------- executive officer)
H. Craig Dees, Ph.D.
/s/ Peter R. Culpepper Chief Financial Officer
----------------------------
Peter R. Culpepper, C.P.A.
/s/ Timothy C. Scott President and Director
----------------------------
Timothy C. Scott, Ph.D.
/s/ Eric A. Wachter Director
----------------------------
Eric A. Wachter, Ph.D.
/s/ Stuart Fuchs Director
----------------------------
Stuart Fuchs
II-4
EXHIBIT INDEX
Exhibit No. Description
4.1* Form of 8% Convertible Debenture (Annex I to Securities Purchase
Agreement, as hereinafter defined)
4.2* Form of Warrant (Annex VI to Securities Purchase Agreement)
4.3* Registration Rights Agreement dated as of November 19, 2003 by and
among the Company and the investors named therein (Annex IV to
Securities Purchase Agreement)
4.4* Registration Rights Agreement dated as of September 4, 2003 by and
among the Company and Bruce A. Cosgrove and George F. Matin
4.5* Form of Warrant issued to selling shareholders other than holders of
8% Convertible Debentures
4.6* Registration Rights Agreement dated as of December 26, 2003 by and
between the Company and The Research Foundation of State University of
New York
5.1* Opinion of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C.
10.1* Securities Purchase Agreement dated as of November 19, 2003 by and
among the Company and the lenders named therein (the "Securities
Purchase Agreement")
13.1** Annual Report on Form 10-KSB for the fiscal year ended December 31,
2003
23.1* Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C.
(included in Exhibit 5.1)
23.2 Consent of BDO Seidman, LLP
24.1 Power of Attorney (included on Page II-4 of this Registration
Statement).
-----------------------------------------
* Previously filed.
** Previously filed with the SEC on March 30, 2004.