-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KVbntK032ZyK6JBOmnUDq0RUMm8Qo8WhKQpIq8BAZ466PfglH/ZsZniYwxGO5xlr OFbiwbhSZzX1XEUIruXAlQ== 0000950135-98-001093.txt : 19980218 0000950135-98-001093.hdr.sgml : 19980218 ACCESSION NUMBER: 0000950135-98-001093 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980217 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORAVAX INC /DE/ CENTRAL INDEX KEY: 0000900122 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 043085209 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-45637 FILM NUMBER: 98543953 BUSINESS ADDRESS: STREET 1: 38 SIDNEY ST 4TH FLOOR CITY: CAMBRIDGE STATE: MA ZIP: 02139 BUSINESS PHONE: 6175266000 424B3 1 ORAVAX, INC 1 Filed pursuant to Rule 424(b)(3) Registration No. 333-45637 PROSPECTUS 7,294,737 SHARES [ORAVAX LOGO] COMMON STOCK ------------------------ This Prospectus covers the resale of up to 7,294,737 shares of Common Stock, $0.001 par value per share (the "Common Stock") of OraVax, Inc. ("OraVax" or the "Company") by certain stockholders of the Company (the "Selling Stockholders"). See "Selling Stockholders." 6,631,579 of the shares of Common Stock covered by this Prospectus may be issuable to the Selling Stockholders upon conversion of shares of the Series 6% Convertible Preferred Stock, $.001 par value per share ("Convertible Preferred Stock"), of the Company which were issued to the Selling Stockholders pursuant to the several Preferred Stock Investment Agreements between the Company and the Selling Stockholders, each dated as of December 23, 1997 (collectively, the "Investment Agreement"). The remaining 663,158 shares of Common Stock may be issuable to Selling Stockholders who received certain warrants (the "Convertible Preferred Stock Warrants") to acquire Convertible Preferred Stock in connection with the services of Cappello Capital Corp. as placement agent. All of the shares offered hereunder are to be sold by the Selling Stockholders. The Company will not receive any of the proceeds from the sale of the shares by the Selling Stockholders. The shares covered by this Prospectus represent 200% of the number of shares that may be issued as of the date of this Prospectus based upon a conversion price of $2.00 per share. The actual number of shares of Common Stock offered hereby is subject to adjustment and could be materially less or more than the estimated amount indicated depending upon factors which cannot be predicted by the Company at this time, including, among others, market prices prevailing at the actual date of conversion. This presentation is not intended to constitute a prediction as to the future market price of the Common Stock or as to when Selling Stockholders will elect to convert shares of Convertible Preferred Stock. The Selling Stockholders may from time to time sell the shares covered by this Prospectus on the Nasdaq National Market in ordinary brokerage transactions, in negotiated transactions, or otherwise, at market prices prevailing at the time of sale or at negotiated prices. See "Plan of Distribution." The Common Stock is traded on the Nasdaq National Market under the symbol "ORVX". ------------------------ THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ THE DATE OF THIS PROSPECTUS IS FEBRUARY 13, 1998. 2 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission pursuant to the informational requirements of the Exchange Act may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's regional offices located at Seven World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials also may be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the Company is required to file electronic versions of these documents through the Commission's Electronic Data Gathering, Analysis and Retrieval system (EDGAR). The Commission maintains a World Wide Web site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The Common Stock of the Company is traded on the Nasdaq National Market. Reports and other information concerning the Company may be inspected at the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. The Company has filed with the Commission a Registration Statement on Form S-3 (together with all amendments, supplements, exhibits and schedules thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the shares of Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement, as certain items are omitted in accordance with the rules and regulations of the Commission. For further information pertaining to the Company and the shares of Common Stock offered hereby, reference is made to the Registration Statement. Statements contained in this Prospectus regarding the contents of any agreement or other document are not necessarily complete, and in each instance reference is made to the copy of such agreement or document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. The Registration Statement, including all exhibits and schedules thereto, may be inspected without charge at the office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part thereof may be obtained from the Commission at prescribed rates. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are incorporated herein by reference: (i) The Company's Annual Report on Form 10-K for the year ended December 31, 1996, as filed with the Commission on March 31, 1997; (ii) The Company's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 1997, June 30, 1997 and September 30, 1997, as filed with the Commission on May 12, 1997, August 14, 1997 and November 12, 1997, respectively; (iii) The Company's Current Reports on Form 8-K, dated April 2, 1997 and December 23, 1997, as filed with the Commission on April 11, 1997 and January 21, 1998, respectively; and (iv) The Company's Registration Statement on Form 8-A registering the Common Stock under Section 12(g) of the Exchange Act, as filed with the Commission on May 8, 1995. All documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the termination of the offering of the Common Stock registered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document 2 3 which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom this Prospectus is delivered, upon written or oral request of such person, a copy of any or all of the foregoing documents incorporated by reference into this Prospectus (without exhibits to such documents other than exhibits specifically incorporated by reference into such documents). All such requests shall be directed to: OraVax, Inc., 38 Sidney Street, Cambridge, Massachusetts 02139, Attention: President, Telephone: (617) 494-1339. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION Certain statements in this Prospectus and in the documents incorporated herein constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 2B of the Exchange Act. For this purpose, any statements contained herein or incorporated herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "plans," "expects" and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements. These factors include those set forth in "Risk Factors" herein. 3 4 THE COMPANY OraVax, Inc. ("OraVax" or the "Company") is a leader in the discovery and development of oral vaccines and non-injected antibody products to prevent or treat diseases which infect the human body at its mucosal surfaces. Most bacteria and viral infections attack the body at its mucosal surfaces. These surfaces include the linings of the gastrointestinal, respiratory and genitourinary tracts and the surface of the eyes, an exposed surface area of over 3,600 square feet in the average adult. Consequently, the largest part of the body's immune system is at the mucosal surface and forms an important first line of defense against disease. OraVax was founded to pursue drug discovery and development utilizing the mucosal immune system. The Company has developed proprietary technology and accumulated valuable expertise in the exploitation of the mucosal immune system for drug discovery and development OraVax believes oral vaccines and non-injected antibody products that provide immunity at mucosal surfaces offer a number of important clinical and commercial advantages relative to injected products, including greater clinical efficacy, a higher level of safety, lower costs of administration and improved patient compliance. The Company was incorporated in Delaware in 1990 and has its principal offices and laboratories at 38 Sidney Street, Cambridge, Massachusetts (telephone: 617-494-1339). 4 5 RISK FACTORS The shares of Common Stock offered hereby include a high degree of risk. The following risk factors should be considered carefully in addition to the other information included or incorporated by reference in this Prospectus before purchasing the Shares offered hereby. Early Stage of Product Development. The products under development by the Company will require significant additional research and development efforts, including extensive clinical testing and regulatory approval, prior to commercial use. The Company's potential products are subject to the risks of failure inherent in the development of pharmaceutical products based on new technologies. These risks include the possibilities that the Company's therapeutic approach will not be successful, that any or all of the Company's potential products will be found to be unsafe, ineffective, toxic or otherwise fail to meet applicable regulatory standards or receive necessary regulatory clearances, that the potential products, if safe and effective, will be difficult to develop into commercially viable products, to manufacture on a large scale or be uneconomical to market, that proprietary rights of competitors or other parties will preclude the Company from marketing such products; or that competitors or other parties will market superior or equivalent products. Future Capital Needs. In addition, the Company will require substantial additional funds in order to continue its research and development programs, preclinical and clinical testing of its product candidates and to conduct full scale manufacturing and marketing of any pharmaceutical products that may be developed. The Company's capital requirements depend on numerous factors, including but not limited to the progress of its research and development programs, the progress of preclinical and clinical testing, the time and costs involved in obtaining regulatory approvals, the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, competing technological and market developments, changes in the Company's existing research relationships, the ability of the Company to establish collaborative arrangements, the development of commercialization activities and arrangements, and the purchase of additional facilities and capital equipment. Based upon its current plans, the Company believes that it has sufficient funds to fund the Company's operating expenses and meet its capital requirements through the fourth quarter of 1998. There can be no assurance, however, that changes in the Company's research and development plans, acquisitions or other events affecting the Company's operations will not result in accelerated or unexpected expenditures. Thereafter, the Company will need to raise substantial additional capital to fund its operations. There can be no assurance, however, that additional financing will be available, or if available, will be available on acceptable or affordable terms. Manufacturing Limitations. At present, the Company's ability to manufacture its products is limited to clinical trial quantities. The Company does not have the capability to manufacture commercial quantities of products. The Company's long-term strategy is to develop manufacturing facilities for producing both pilot-scale and commercial quantities of its products. To ensure compliance with current Good Manufacturing Practices ("cGMP") imposed by the FDA, OraVax will need to establish sufficient technical staff to oversee all product operations, including quality control, quality assurance, technical support and manufacturing management. The Company may enter into arrangements with contract manufacturing companies to expand its own production capacity in order to meet requirements for its product candidates. If the Company chooses to contract for manufacturing services and encounters delays or difficulties in establishing relationships with manufacturers to produce, package and distribute its finished pharmaceutical or other medical products (if any), clinical trials, market introduction and subsequent sales of such products would be adversely affected. Moreover, contract manufacturers must operate in compliance with cGMP. The Company's potential dependence upon third parties for the manufacture of its products may adversely affect the Company's profit margins and its ability to develop and deliver such products on a timely and competitive basis. Risks Associated with Collaborative Arrangements. The Company's product development strategy may require the Company to enter into various additional arrangements with corporate, government and academic collaborators, licensors, licensees and others. Therefore, the Company may be dependent upon the subsequent success of these outside parties in performing their responsibilities. There can be no assurance that the Company will be able to establish additional collaborative arrangements or license agreements that the 5 6 Company deems necessary or acceptable to develop and commercialize its potential pharmaceutical products or that such collaborative arrangements or license agreements will be successful. Patent and Proprietary Rights. The Company seeks to protect its trade secrets and proprietary know-how, in part, through confidentiality agreements with its employees, consultants, advisors and collaborators. There can be no assurance that these agreements will not be violated by the other parties, that OraVax will have adequate remedies for any breach, or that the Company's trade secrets will not otherwise become known or be independently developed by competitors. Certain of the technology that may be used in the products of OraVax is not covered by any patent applications relating to the Company's product candidates will result in patents being issued. Moreover, there can be no assurance that any such patents will afford protection against competitors with similar technology. There may be pending or issued third-party patents relating to the product candidates of OraVax. OraVax may need to acquire licenses to, or to contest validity of, any such third party patents. It is likely that significant funds would be required to defend any claim that OraVax infringes a third-party patent, and any such claim could adversely affect sales of the challenged product of OraVax until the claim is resolved. There can be no assurance that any license required under any such patent would be made available. Government Regulation. The rigorous preclinical and clinical testing requirements and regulatory approval process of the FDA and of foreign regulatory authorities can take a number of years and require the expenditure of substantial resources. The Company has limited experience in conducting and managing preclinical and clinical testing necessary to obtain government approvals. There can be no assurance that the Company will be able to obtain the necessary approvals for clinical testing or for the manufacturing and marketing of any products that it develops. Additional government regulation may be established that could prevent or delay regulatory approval of the Company's product candidates. Delays in obtaining regulatory approvals would adversely affect the marketing of any products developed by the Company and the Company's ability to receive product revenues or royalties. If regulatory approval of a potential product is granted, such approval may include significant limitations on the indications for which such product may be marketed. Even if initial regulatory approvals for the Company's product candidates are obtained, the Company, its products and its manufacturing facilities are subject to continual review and periodic inspection. The regulatory standards for manufacturing are applied stringently by the FDA. Discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions on such product or manufacturer or facility, including warning letters, fines, suspensions of regulatory approvals, product recalls, operating restrictions, delays in obtaining new product approvals, product recalls, operating restrictions, delays in obtaining new product approvals, withdrawal of the product from the market, and criminal prosecution. Other violations of FDA requirements can result in similar penalties. Uncertainty of Third-Party Reimbursement. Government and other third-party payers are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement for new products approved for marketing by the FDA and by refusing, in some cases, to provide any coverage for uses of approved products for disease indications for which the FDA has not granted marketing approval. If adequate coverage and reimbursement levels are not provided by government and third party payers for uses of the Company's products, the market acceptance of these products would be adversely affected. USE OF PROCEEDS The Company will not receive any proceeds from the sale of Common Stock by the Selling Stockholders. 6 7 THE INVESTMENT AGREEMENT PREFERRED STOCK PRIVATE PLACEMENT General On December 23, 1997, the Company completed a private placement (the "1997 Private Placement") of 6,300 shares of Convertible Preferred Stock pursuant to which it received gross proceeds of $6.3 million. The securities issuances related to the 1997 Private Placement (including shares of Common Stock issuable upon conversion of shares of Convertible Preferred Stock) are referred to herein as the "1997 Private Placement Issuances." All of the securities sold in the 1997 Private Placement were sold in private placements solely to accredited investors under the Securities Act. Summary of Transaction Terms Set forth below is a summary of the material terms of the 1997 Private Placement, which summary is qualified by reference to the full text of the underlying documents which have been previously filed as exhibits to the Company's Current Report on Form 8-K dated as of December 23, 1997. Pursuant to the terms of the Investment Agreement, the Company issued and sold in a private placement to certain accredited investors for $1,000 per share an aggregate of 6,300 shares of Convertible Preferred Stock, resulting in gross proceeds to the Company of $6.3 million in the aggregate. Each share of Convertible Preferred Stock is entitled to receive cumulative dividends at the rate of $60.00 per share per annum, payable in shares of Convertible Preferred Stock valued at $1,000 per share, when and as declared by the Company's Board of Directors. Such dividends accrue from day to day whether or not earned or declared. Each share of Convertible Preferred Stock is also entitled to a liquidation preference of $1,000 per share, plus any accrued but unpaid dividends and any amounts owing as a result of a failure by the Company to file an effective registration statement within the prescribed period (see discussion below), in preference to any other class or series of capital stock of the Company. Except to determine whether such stock is entitled to its liquidation preference under certain circumstances, and as provided by applicable law, holders of shares of Convertible Preferred Stock have no voting rights. Commencing on March 23, 1998, at least 20% and up to 50% (depending upon the price at which the Common Stock is trading) of the number of shares of Convertible Preferred Stock held of record by each holder on such day will become convertible into shares of Common Stock, and thereafter on the same day in successive months additional shares of Convertible Preferred Stock will become convertible (with the additional amount varying from 20% to 50% of the number of shares of Convertible Preferred Stock held of record by such holder on such day depending upon the price at which the Common Stock is trading). On December 23, 2002, all outstanding shares of Convertible Preferred Stock will automatically be converted into Common Stock. The number of shares of Common Stock issuable upon conversion of shares of Convertible Preferred Stock will equal the liquidation preference of the shares being converted divided by the then-effective conversion price applicable to the Convertible Preferred Stock (the "Conversion Price"). The Conversion Price as of any date after March 23, 1998 will be the lowest trading price of the Common Stock during the 22 consecutive trading days immediately preceding the date of conversion reduced by the Applicable Percentage described below. The "Applicable Percentage", which is dependent upon the time elapsed after the date of issuance to the date of measurement, will be 5.000% starting on the first day of the fourth month and will increase in the subsequent 14 months to 6.125%, 7.250%, 8.375%, 9.500%, 10.625%, 11.750%, 12.875%, 14.000%, 15.125%, 16.250%, 17.375%, 18.500%, 19.750% and 21.000%, respectively. At any date after the first day of the eighteenth month after the date of issuance, the Conversion Price will be the lesser of (i) 79% of the average of the daily low trading prices of the Common Stock for the eighteenth month, (ii) 79% of the average of the daily low trading prices of the Common Stock for the twenty-fourth month, and (iii) 79% of the average of the daily low trade prices of the Common Stock for the thirtieth month (the "Conversion Cap"). The Conversion Price is at all times also subject to customary anti-dilution adjustment for events such as stock splits, stock dividends, reorganizations and certain mergers affecting the Common Stock. No holder of 7 8 Convertible Preferred Stock will be entitled to convert any share of Convertible Preferred Stock into shares of Common Stock if, following such conversion, the holder and its affiliates (within the meaning of the Exchange Act) will be the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of 10% or more of the outstanding shares of Common Stock. In addition, following conversion of the Convertible Preferred Stock into shares of Common Stock, the holders of such shares of Common Stock have agreed to be limited on resales of such shares on any trading day to the greater of (i) 10% of the average daily trading volume of the Common Stock for the five trading days preceding any such sale, (ii) 4,000 shares, and (iii) 10% of the trading volume of the Common Stock on the date of any such sale. Further, upon proper notice the Company has the right, if the Conversion Price falls below a price designated by the Company, and subject to certain other conditions, to honor any conversion request by a cash payment in lieu of the issuance of Common Stock in an amount equal to the proceeds which would otherwise have been received by the holder if conversion were in fact made into shares of Common Stock and such shares were sold at the high trade price on the date of conversion (the "Green Floor"). The Company is not obligated to issue, in the aggregate, more than 2,016,163 shares of Common Stock if issuance of a larger number of shares would constitute a breach of the rules (the "NASD Rules") of the National Association of Securities Dealers, Inc., including the stockholder approval rules of Nasdaq described above. If stockholder approval is not received prior to March 15, 1998, the Company will be obligated to redeem on or before March 30, 1998, at a premium price, a sufficient number of shares of Convertible Preferred Stock which, in the Company's reasonable judgment, will permit conversion of the remaining shares of Convertible Preferred Stock without breaching the NASD Rules. Any delay in payment will cause such redemption amount to accrue interest at the rate of 0.05% per day until paid. Subject to this requirement to effect a special redemption of the Convertible Preferred Stock, the Company has informed Nasdaq that it will exercise the Green Floor with respect to any issuance of Common Stock upon conversion of any shares of Convertible Preferred Stock which would otherwise constitute a breach of the NASD Rules. The Company has agreed to register the shares of Common Stock issuable upon conversion of the Convertible Preferred Stock for resale under the Securities Act no later than March 23, 1998. Any delay in having the related registration statement declared effective by the Commission beyond the applicable period, or any unavailability to the holders of Convertible Preferred Stock of a current prospectus after such period, will require the Company to pay to the holders, in cash, 3% of the total purchase price of the Convertible Preferred Stock, or $189,000 in the aggregate, for each 30-day period of the delay (pro rated for any shorter period). The placement agent for the issuances described above was Cappello Capital Corp. (the "Placement Agent"). In consideration for placing such securities, the Placement Agent received aggregate cash compensation of 8.5% of the gross proceeds received by the Company, or $563,000. The Placement Agent also received Convertible Preferred Stock Warrants to acquire an aggregate of 630 shares of Convertible Preferred Stock for a purchase price of $1,000 per share (subject to the same anti-dilution protections as are applicable to the Convertible Preferred Stock). Such Convertible Preferred Stock Warrants will be exercisable for a period of five years for shares of Convertible Preferred Stock. The Company is obligated to register the shares of Common Stock issuable upon exercise and conversion of the Convertible Preferred Stock Warrants for resale under the Securities Act, and is doing so herein. The Placement Agent will retain its compensation whether or not the required shareholder approval of the 1997 Private Placement Issuances is obtained. Stockholder Approval The Company intends to seek the approval of its stockholders of the 1997 Private Placement Issuance to satisfy certain stockholder approval requirements contained in the Company's agreements with Nasdaq and with the holders of Convertible Preferred Stock. It is presently expected that this approval will be sought at a special meeting of Stockholders to be held on March 10, 1998. 8 9 THE SELLING STOCKHOLDERS The following table sets forth the name and the number of shares of Common Stock beneficially owned by each of the Selling Stockholders as of the date of this Prospectus, the number of the shares to be offered by each of the Selling Stockholders and the number and percentage of shares to be owned beneficially by each of the Selling Stockholders if all of the shares offered hereby by the Selling Stockholders are sold as described herein.
NUMBER OF SHARES OF PERCENTAGE OF COMMON STOCK NUMBER OF SHARES SHARES OF BENEFICIALLY OWNED NUMBER OF SHARES OF COMMON STOCK COMMON NAME OF PRIOR TO OF COMMON STOCK BENEFICIALLY OWNED STOCK OWNED SELLING STOCKHOLDER OFFERING(1) OFFERED HEREBY AFTER OFFERING(1) AFTER OFFERING - --------------------------------------- ------------------- ---------------- ------------------ -------------- KA INVESTMENTS......................... 1,052,631 1,052,631 -- -- ProFutures Special Equities Fund, L.P.................................. 789,473 789,473 -- -- Deere Park Capital Management, Inc. (as Nominee)............................. 526,316 526,316 -- -- Linda S. Cappello...................... 403,158 403,158 -- -- Steven Amos............................ 315,789 315,789 -- -- Leonardo, L.P.......................... 315,789 315,789 -- -- Marcy Polier........................... 315,789 315,789 -- -- Gerard K. Cappello..................... 304,210 304,210 -- -- Anvil Investment Partners, L.P......... 263,158 263,158 -- -- ELARA Ltd.............................. 263,158 263,158 -- -- OTATO LIMITED PARTNERSHIP.............. 263,158 263,158 -- -- Paul Rajewski.......................... 263,158 263,158 -- -- Marcy Polier, Trustee Marcy Polier Living Trust......................... 210,526 210,526 -- -- Lawrence K. Fleischman................. 166,316 166,316 -- -- Licap Partners......................... 157,895 157,895 -- -- Smart Technology Ventures I, LLC....... 157,895 157,895 -- -- Peter J. Cocoziello.................... 105,263 105,263 -- -- Earl E. Gales, Jr...................... 105,263 105,263 -- -- Cristina C. Garcia (IRA)............... 105,263 105,263 -- -- Teresa I. Grove, Trustee, J.F. Grove III GRAT #2.................... 105,263 105,263 -- -- Laredo Capital Partners................ 105,263 105,263 -- -- AG Super Fund International Partners, L.P.................................. 52,632 52,632 -- -- GAM Arbitrage Investments, Inc......... 52,632 52,632 -- -- Charles B. Krusen...................... 52,632 52,632 -- -- Ronald H. Means........................ 52,632 52,632 -- -- Ramius Fund, Ltd....................... 52,632 52,632 -- -- Raphael, L.P........................... 52,632 52,632 -- -- Alfred Romano.......................... 52,632 52,632 -- -- John M. Bendheim, Jr................... 26,316 26,316 -- -- Lisa G. Shine.......................... 26,316 26,316 -- -- Loretta Hirsh Shine.................... 26,316 26,316 -- -- Kenneth L. Staub, Trustee Kenneth L. Staub Trust dated 5/9/90............. 26,316 26,316 -- --
- --------------- (1) Such beneficial ownership represents an estimate of the number of shares of Common Stock issuable upon the conversion of shares of Convertible Preferred Stock beneficially owned by such person (either directly or through the exercise of Convertible Preferred Stock Warrants), assuming a price of $2.00 per share of Common Stock was used to determine the number of shares of Common Stock issuable upon conversion. The actual number of shares of Common Stock offered hereby is subject to adjustment and could by materially less or more than the estimated amount indicated depending upon factors which cannot be predicted by the Company at this time, including, among others, application of the conversion provisions based on market prices prevailing at the actual date of conversion. In order to calculate the number of shares of Convertible Preferred Stock or Convertible Preferred Stock Warrants to purchase such shares beneficially held, multiply the amount included in the column captioned "Number of Shares of Common Stock Beneficially Owned Prior to Offering" by 0.00095. This presentation is not intended to constitute a prediction as to the future market price of the Common Stock or as to when Selling Stockholders will elect to convert shares of Convertible Preferred Stock and the Convertible Preferred Stock Warrants issued in the 1997 Private Placement. 9 10 PLAN OF DISTRIBUTION Shares of Common Stock covered hereby may be offered and sold from time to time by the Selling Stockholders. The Selling Stockholders will act independently of the Company in making decisions with respect to the timing, manner and size of each sale. Such sales may be made in the over-the-counter market or otherwise, at prices related to the then current market price or in negotiated transactions, including pursuant to an underwritten offering or one or more of the following methods: (a) purchases by a broker-dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (b) ordinary brokerage transactions and transactions in which the broker solicits purchasers; and (c) block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction. The Company has been advised by the Selling Stockholders that they have not made any arrangements relating to the distribution of the shares covered by this Prospectus. In effecting sales, broker-dealers engaged by the Selling Stockholders may arrange for other broker-dealers to participate. Broker-dealers will receive commissions or discounts from the Selling Stockholders in amounts to be negotiated immediately prior to the sale. The Investment Agreement provides that the Company will indemnify the Selling Stockholders against certain liabilities, including liabilities under the Securities Act. In offering the shares of Common Stock covered hereby, the Selling Stockholders and any broker-dealers and any other participating broker-dealers who execute sales for the Selling Stockholders may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales, and any profits realized by the Selling Stockholders and the compensation of such broker-dealer may be deemed to be underwriting discounts and commissions. The Company has advised the Selling Stockholders that during such time as they may be engaged in a distribution of Common Stock included herein they are required to comply with Rules 10b-6 and 10b-7 under the Exchange Act and, in connection therewith, that they may not engage in any stabilization activity in connection with the Company's securities, are required to furnish to each broker-dealer through which Common Stock included herein may be offered copies of this Prospectus, and may not bid for or purchase any securities of the Company or attempt to induce any person to purchase any securities of the Company except as permitted under the Exchange Act. The Selling Stockholders have agreed to inform the Company when the distribution of the shares of Common Stock offered hereby is completed. Rule 10b-6 under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for or purchasing, for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Rule 10b-7 governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. This offering will terminate on the date on which all shares offered hereby have been sold by the Selling Stockholders. LEGAL MATTERS The validity of the shares offered hereby will be passed upon for the Company by Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109. EXPERTS The consolidated balance sheets of the Company as of December 31, 1995 and 1996 and the consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 1996, all appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1996 have been audited by Coopers & Lybrand L.L.P., independent accountants, as set forth in their report thereon included therein and incorporated herein by reference and are so incorporated herein by reference in reliance upon such firm given upon their authority as experts in accounting and auditing. 10 11 ================================================================================ NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION OF AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE HEREOF. ------------------------ TABLE OF CONTENTS
PAGE ---- Available Information................. 2 Incorporation of Certain Documents By Reference........................... 2 Special Note Regarding Forward-Looking Information......................... 3 The Company........................... 4 Risk Factors.......................... 5 Use of Proceeds....................... 6 The Investment Agreement.............. 7 The Selling Stockholders.............. 9 Plan of Distribution.................. 10 Legal Matters......................... 10 Experts............................... 10
------------------------ ================================================================================ ================================================================================ [OraVax LOGO] 7,294,737 SHARES COMMON STOCK ------------------------ PROSPECTUS ------------------------ FEBRUARY 13, 1998 ================================================================================ -----END PRIVACY-ENHANCED MESSAGE-----