Registration No. 333- 1
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As filed with the Securities and Exchange Commission on January 29,July 14, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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FORM S-3
Registration Statement
Under The
Securities Act of 1933
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INTERNATIONAL ISOTOPES INC.
(Name of Small Business Issuer in its Charter)
TexasTEXAS 2835 74-276837
(State or other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
3100 Jim Christal RoadJIM CHRISTAL ROAD
Denton, Texas 76207-9987
(940) 484-9492
(Address and Telephone Number of Principal Executive Offices
and Principal Place of Business)
Ira Lon Morgan, ChairmanIRA LON MORGAN, CHAIRMAN
3100 Jim Christal RoadJIM CHRISTAL ROAD
Denton, Texas 76207-9987
(940) 484-9492
(Name, Address and Telephone Number of Agent for Service)
Copy to:
CurtisCOPY TO:
CURTIS R. Ashmos
Locke LiddellASHMOS
LOCKE LIDDELL & SappSAPP LLP
100 Congress, SuiteCONGRESS, SUITE 300
Austin, TexasAUSTIN, TEXAS 78701
(512) 305-4716
Approximate Date of Proposed Sale to the Public:APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
|_|[ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |X|[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|[ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|[ ]
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Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities to be Registered Share Price Registration Fee
Registered----------------------- -------------------- --------------------- --------------------- --------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED SHARE PRICE REGISTRATION FEE
REGISTERED
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Common Stock, $.01 2,752,675 $12.251,503,804 shares $9.03125 (1) $33,720,268(1) $9,947.48$13,581,230 (1) $3,775.58
par value
shares
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(1) Estimated in accordance with Rule 457(c) of the Securities Act of
1933 solely for the purpose of calculating the registration fee based upon an
assumed price of $12.25,$9.03125, the average of the high and low sales prices of the
Common Stock as reported on Nasdaq SmallCap Market on January 27,July 12, 1999.
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
SectionTHE 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
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REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) of the Securities Act ofOF THE SECURITIES ACT OF 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
SectionOR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), may determine.MAY DETERMINE.
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PROSPECTUS
2,752,675 Shares1,503,804 SHARES
INTERNATIONAL ISOTOPES INC.
Common StockCOMMON STOCK
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This Prospectus relates to the offering for resale of 2,752,6751,503,804 shares
of Common Stock, par value $.01 per share (the "Common Stock"), of International
Isotopes Inc. ("I(3)" or the "Company"). All of the Common Stock being
registered may be offered and sold from time to time by certain selling
stockholders of the Company. See "Selling Stockholders" and "Manner"Plan of
Offering.Distribution." The Company will not receive any proceeds from the sale of the
Common Stock by the Selling Stockholders.
The Company's Common Stock is quoted on the Nasdaq SmallCap Market
under the symbol "INIS" and is listed on the Boston Stock Exchange ("BSE") under
the symbol "ITL." On January 27,July 12, 1999, the last reported sale price for the
Company's Common Stock on the Nasdaq SmallCap Market was $12.25$9.1875 per share.
-----------------------------------
The securities offered hereby involve a high degree of risk.
See "Risk Factors" commencing on pageTHE SECURITIES OFFERED HEREBY INVOLVE
A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 1.
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Neither the Securities and Exchange
Commission nor any state securities commission has approved
or disapproved these securities or determined if this
Prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED
OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-----------------------------------
The Company has not authorized any person, agent or entity to give any
information or make any representation other than those contained in this
Prospectus (including material incorporated by reference herein). You should not
rely on any such information or representation as having been authorized by the
Company. This Prospectus is not an offer to sell the securities and it is not
soliciting an offer to buy the securities in any state where offers or sales are
not permitted.
The date of this Prospectus is January 29,July 13, 1999
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TABLE OF CONTENTS
Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Company. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Manner of Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . 15
Legal Matters. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 16
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Forward Looking Statements..................................................1
The Company.................................................................1
Risk Factors................................................................1
Selling Stockholders........................................................2
Plan of Distribution........................................................3
Incorporation of Certain Documents by Reference.............................4
Legal Matters...............................................................6
Experts.....................................................................6
Available Information.......................................................6
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FORWARD-LOOKING STATEMENTS
This Prospectus contains, or incorporates by reference, certain
statements that may be deemed "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements, other than statements of historical facts, that address activities,
events or developments that the Company intends, expects, projects, believes or
anticipates will or may occur in the future are forward-looking statements. Such
statements are based on experience, market trends, our perception of historical
trends, current conditions, expected future developments and other factors
believed to be appropriate. The forward-looking statements included in this
Prospectus are also subject to a number of material risks and uncertainties,
including but not limited to economic, competitive, market, governmental and
technological factors affecting the Company's operations, production, markets,
products, services and prices, and other factors discussed in our filings under
the Securities Act and the Exchange Act. Investors are cautioned that such
forward-looking statements are not guarantees of our future performance and that
actual results, developments and business decisions may differ from those
envisioned by our forward-looking statements.
THE COMPANY
International Isotopes Inc., a Texas corporation (the "Company," "We"
or "I3" ),"I(3)"), is a developmental stage Company that has begun executing plans for
operations in the production, marketing, and distribution of a full range of
products used in diagnostic and therapeutic nuclear medicine, research and
industry. Completion of the plans we have developed will establish the first
independent commercial domestic producer of a full range of finished
radiopharmaceuticals (on a contract or joint venture basis), pharmaceutical
grade radioisotopes, radioisotopes and medical devices for commercial sale to
the nuclear medicine industry for the diagnosis and therapeutic treatment of
cancer and other diseases. We are also engineering instrumentation and products
for the radiation therapy and medical imaging markets.
Our principal executive offices located at 3100 Jim Christal Road,
Denton, Texas 76207-9987. The telephone number is (940) 484-9492.
RISK FACTORS
An investment in our Common Stock is speculative and involves a
substantial degree of risk. Investors should carefully consider, along with
other information in this Prospectus, the following considerations and risks set forth in
the Company's Annual Report on Form 10-K for the year ended December 31, 1998
and other reports and documents filed by the Company from time to time with the
SEC in evaluating an investment in our Company. You should not purchase any
Common Stock unless you can afford to lose your entire investment.
Limited Operating History. During 1996 we acquired major equipment for
radioisotope production and in 1997 completed our initial equity funding,
established a management team and hired key personnel. In 1998 we acquired and
constructed facilities, acquired equipment for production, established
procedures for current good manufacturing practices (cGMP) and obtained
regulatory approvals for initial manufacturing and distribution. The Company has
not generated significant sales during this development period and we do not
expect such sales until the Spring of 1999 at the earliest. We have encountered
delays due to weather, vendors and facilities certification and may continue to
experience additional delays and unexpected expenses related to continuing
facilities construction, development, initiating manufacturing production,
marketing, distribution, regulatory matters and other unforeseen difficulties.
We cannot assure you that we will ever achieve suitable profitability.
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Future Capital Needs and Uncertainty of Additional Funding. In September
1998 we obtained a $15 million mortgage loan and a $5 million revolving line of
credit from Texas State Bank, and in December 1998 and January 1999 we raised
approximately $11.4 million through a private placement of our equity. However,
we will need substantial additional funds to enter into joint ventures, expand
finished pharmaceutical manufacturing, increase radioisotope production,
continue research and development relating to the application of our technology,
and complete the FDA approval process for our manufacturing and processing
facilities. We plan to use a substantial portion of current funds:
o for general administration and overhead, including salaries and
consulting fees,
o for acquiring facilities and leasing equipment,
o for debt reduction,
o to initiate production and commercialize our products,
o to apply for regulatory approval (if any) of our proposed products,
o to develop and test pre-radioisotope production methods and chemical
separation techniques,
o to support joint ventures, and
o to conduct additional development activities.
We may seek additional capital through a secondary public offering of our
securities (if needed); however, we cannot assure you that such offering will be
made, or if made, will be successful. If such a public offering is successful,
we still may need to seek additional capital through public or private sales of
our securities, including equity or debt securities, in order to fund our
activities on a long-term basis. We may not be able to obtain adequate funds,
whether through financial markets or collaborative arrangements with strategic
partners or from other sources, on acceptable terms when needed. If we are
unable to secure sufficient funds, we may have to delay, scale back or eliminate
certain or all of our research and development programs or license third parties
to commercialize products or technologies that we would otherwise seek to
develop ourselves. This would adversely affect our long-term profitability.
Accumulated Deficit; Anticipated Losses. From inception (in November 1995)
through September 30, 1998 we had generated $2,744,707 in revenues and had
accumulated a deficit in the amount of $7,836,929, which includes non-cash
charges of $2,300,000. The products scheduled for manufacturing and distribution
may require significant development and testing activities that, together with
projected general and administrative expenses, may cause operating losses for
the near future. We cannot assure you that our manufacturing, marketing,
distribution and development activities will be successful, or that any proposed
medical diagnostic and therapeutic products will generate net operating income.
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Debt Financing; Security Interest in Assets. We have obtained a $15
million mortgage loan and a $5 million revolving line of credit from Texas State
Bank. The $5 million revolving line of credit will be available to us to the
extent we are able to generate future accounts receivable from the sale of our
products. The loan is secured by substantially all of our assets and subjects us
to numerous restrictive covenants, financial and otherwise. If we default on the
loan, the bank would be entitled to exercise certain remedies including taking
possession of and selling our land, facilities, equipment, and intellectual
property.
Uncompleted LINAC. Our LINAC design is based on advanced designs of the
linear accelerators at the Brookhaven National Laboratory and the Los Alamos
National Laboratory, but the LINAC's configuration differs from such linear
accelerators in that it:
o is configured to operate at a significantly lower energy level (70MeV
as compared to 200MeV and 800MeV, respectively),
o utilizes modern computer technology, electronics and particle
accelerating structure,
o produces a higher beam intensity for radioisotope production (1.0mA as
compared to 0.1mA to 0.15mA, respectively), and
o utilizes three extracted beams of protons at different energy levels,
directed to six (6) targets, to produce multiple radioisotopes
simultaneously rather than one radioisotope at a time.
We have not tested the fully assembled LINAC to produce radioisotopes and
will not be able to do so until our Radioisotope Production Facility has been
completed. Certain sub assemblies and components have been successfully tested
and are being assembled, but we cannot assure you that the fully assembled tests
will be successful and that the LINAC will operate as designed. Delays in the
operation of the LINAC or its inability to operate as designed would adversely
affect our business plan and require us to purchase radioisotopes from other
sources.
Facilities Risk. We have expended approximately $35 million procuring
production equipment, designing and constructing our Radioisotope Production
Facility, Radiopharmaceutical Manufacturing Facility and Cyclotron facility and
acquiring our International Isotopes Idaho operations. Federal and state
governmental authorities have granted a majority of the necessary approvals for
operations, however, we cannot assure you that each or any of these facilities
will obtain all applicable and necessary governmental approvals, permits,
licenses and validation. If such approvals, permits, licenses and/or validation
are not obtained, we cannot assure you that our facilities will be able to
operate as intended or will produce products that are marketable. In the event
that any or all of these facilities do not become operational for any reason, we
will have expended substantial sums without any significant return on our
shareholders' investment and our financial condition and operations will be
materially adversely affected.
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Limited Sources for Raw Materials. Enriched stable isotopes, which are
used as targets (i.e. they are bombarded with protons in accelerators or
neutrons in reactors to produce radioisotopes), constitute the principal raw
materials required for the manufacture of radioisotopes. The principal United
States source for enriched stable isotopes is the Oak Ridge National Laboratory
in Oak Ridge, Tennessee, which relies on government funding for continuing
production. Although enriched stable isotopes are also currently available from
Netherlands, Russia, Israel, China and other foreign sources, we may not be able
to obtain an adequate supply of enriched stable isotopes, which could materially
adversely impact our ability to manufacture radioisotopes. While the energy and
current of the LINAC are sufficient to produce most radioisotopes from
non-enriched stable isotopes, which are abundant in supply, the production
process will require various proprietary chemical separation techniques and may
be less cost effective. Although we have developed many of these techniques, we
have not been able to test them all and some or all may be unsuccessful.
Technology Probability and Early Stage of Radioisotope and
Radiopharmaceutical Production. We will manufacture proprietary products to be
used for the production of standard radioisotopes for the radiopharmaceutical
industry and will seek joint ventures for marketing of these isotopes through
major pharmaceutical companies, hospitals, health care organizations and
radiopharmacies as well as industrial companies. In addition to the
manufacturing of proprietary products, we will investigate a variety of new
radioisotopes and radiopharmaceuticals that have application to applied
diagnostic and therapeutic methods. The primary radioisotopes we plan to produce
have been in general use in nuclear medicine and have been approved by the FDA
for distribution by various pharmaceutical companies. However, some of our
proposed future products are being developed for us by others and are in the
early developmental stage, require significant further development, testing and
regulatory clearances and are subject to the risks of failure inherent in the
development of products based on innovative technologies. We cannot predict
whether these research and development activities will result in any
commercially viable products or applications. Due to the extended testing and
regulatory review process required before marketing clearance can be obtained,
we do not expect to be able to commence commercial production of any new
radiopharmaceuticals that are classified as diagnostic or therapeutic agents or
which may require pre-market approvals for clinical use unless we can
manufacture them under our customers' approved licenses.
Government Regulation. The Texas Department of Public Health, the FDA (if
not previously approved) and comparable agencies in other countries must approve
our proposed products prior to manufacture, sale and distribution. The
regulatory process for radioisotope, pharmaceutical grade radiochemicals,
finished radiopharmaceutical products and medical devices which are classified
as diagnostic and/or therapeutic agents or that may require pre-market testing
and approval for clinical uses is lengthy and expensive. Assurance cannot be
given to you that, after the expenditure of time and funds, we will obtain
regulatory clearance for any of our proposed products. If we obtain regulatory
clearance, regulators will continue to review our products and procedures on a
periodic basis. If the regulators, after inspection, determine previously
unknown problems exist or decide that we have failed to comply with the
applicable current good manufacturing practices (cGMP) regulatory requirements,
then they will require corrective action, or may impose restrictions on the
products or order us to withdraw our products from the market until compliance
is demonstrated. In addition, each of our customers will be required to have
appropriate licenses to possess and use radioactive materials, radiochemicals,
radiopharmaceuticals and medical devices. Prior to sale, distribution and
transporting radiopharmaceuticals across state
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lines, approval from the FDA must be obtained as to which there can be no
assurance. In addition, the U.S. Department of Transportation (the "DOT")
regulates the quantity and method of shipment of radioactive materials, and sets
specifications with respect to the class of shipping containers used. Our
Radioisotope Production Facility will be subject to continual inspection for
compliance with the State of Texas regulations and current good manufacturing
practices, which require that the Company manufacture radioisotopes and maintain
manufacturing, testing and quality control records in a prescribed manner. The
Company also will be subject to regulation by the United States Environmental
Protection Agency ("EPA"), the Texas Natural Resources Conservation Commission,
and the United States Occupational Safety and Health Administration ("OSHA")
with respect to the radioactive content of water and air discharges and the
handling and disposal of radioactive waste. Our failure to obtain any such
approvals or delays thereof or our failure to comply with any such regulations
would have a material adverse effect on the Company.
Certain radioisotopes manufactured by our subsidiary, International
Isotopes Idaho Inc., are subject to the U.S. Nuclear Regulatory Commission
regulations. To the extent these regulations are or become burdensome, our
business development will be adversely affected.
Proposed Federal, State and Institutional Policy. Various federal and
state agencies and public and private institutions have guidelines that require
organizations that receive public funds to establish conflict of interest
policies which prohibit researchers from owning stock or options in a company
whose value would be affected by the outcome of the research being conducted
with the funds. Although some research underlying our patents and patent
applications was funded with grants, none of our current research is being
supported by public funds. However, these guidelines may further restrict or
preclude funding for research conducted or supervised on our behalf by
affiliates or certain of our scientific advisors at their respective affiliated
institutions. These guidelines, if adopted, may adversely affect our ability to
obtain government grant funding to support any basic research.
Limited Nature of Patent Protection. The possibility exists that
competitors are developing or will develop and distribute products similar to
ours or our customers. Partial security from competition is obtained by relying
on the protection afforded us under the United States and foreign patent laws.
Others may design similar products that, although not identical and therefore
not infringing upon the patents used by us, could function adequately and be
distributed into the same market. It is also possible that other parties have
non-patented but prior existing products or designs that have never been made
public and therefore are not known to us or the industry in general. A
competitor could introduce such a product into the market without infringing
upon our patents. If any such competing non-infringing products are produced and
distributed, our customers' profit potential could be limited, resulting in a
decrease in our contract manufacturing gross margin.
Lack of Proprietary Rights; Dependence Upon Licenses from Affiliates. Our
officers, directors and founders have granted the Company certain rights to
patents, intellectual property, technology and know how. The right to acquire
exclusive licenses under certain patents and patent applications, intellectual
property, technology, know-how, trade secrets and copyrights may be
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obtained from other affiliates on a case by case basis. We may not be able to
negotiate certain terms and conditions of these licenses in a way that is
acceptable to us. In such event, we may have expended substantial amounts in
investigating radioisotopes, radiopharmaceuticals, proprietary products or
processes without the ability to commercialize the related products.
We cannot assure you that we will ever develop any proprietary technology
that can be patented, or that any issued patents will provide us with any
competitive advantages or will not be challenged by any third parties.
Furthermore, it is possible that others will independently develop similar
technologies or duplicate a technology developed by us or, if patents are
issued, design around the patented aspects of a technology developed by us. It
is also possible that technology we have developed could infringe patents or
other rights owned by others who are unwilling to license their technology to us
on economically acceptable terms.
To the extent that consultants, key employees or other third parties apply
technological information independently developed by them or by others to our
proposed projects, disputes may arise as to the proprietary rights to such
information which may not be resolved in our favor. Our Scientific Advisors and
other consultants are employed by and/or have consulting agreements with third
parties and any inventions discovered by these individuals may or may not become
our property.
Dependence Upon Key Personnel and Consultants. Our operations are
dependent on Dr. I. L Morgan, Chairman and Treasurer, Mr. Carl Seidel, President
and Chief Executive Officer, Mr. Tommy Thompson, Executive Vice President and
Chief Operating Officer, Ms. Joan Gillett, Chief Financial Officer, Mr. Virgil
Simmons, Senior, Vice President International Marketing, Mr. Joe Beaver, Senior
Vice President for Production, Dr. Homer Hupf, Vice President for Research and
Radiochemistry, Mr. Gaylord King, Vice President of Radiochemistry and
Radiopharmaceutical Production, and Mr. Will Lepeska, Vice President for
Marketing. We are highly dependent upon these personnel and the loss of any of
these individuals would have a material adverse effect on us. We are also
dependent on certain founders and key shareholders for transfer of intellectual
property. We have obtained $5 million of key person life-insurance on the
Chairman and $500,000 policies on the lives of certain of the other principals.
The Company will continue to hire other operations, production, processing
and engineering personnel. Competition for qualified employees among
radioisotope, radiopharmaceutical and biotechnology companies is intense, and if
we lose any of these persons, or are unable to attract, retain and motivate
highly skilled employees required for the expansion of our activities, it would
adversely affect our business plans. There is no assurance we will be able to
retain our existing personnel or attract additional qualified employees.
Our Scientific Advisors are employed on a full time basis by other
employers, and some have consulting or other advisory arrangements with other
entities that may conflict or compete with their obligations to the Company.
Although we have consulting agreements with our advisors, inventions or
processes discovered by such persons, other than those for which we are able to
negotiate licenses, will not become our property, but will remain the property
of such persons or their full-time employers. If we fail to obtain needed
patents or licenses or proprietary information held by others, it could have a
material adverse effect on our business.
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Dependence on Third Parties; Significant Additional Funds for
Manufacturing and Marketing. Currently our manufacturing and production
facilities are sufficient for the production of the major radioisotopes,
radiochemicals, finished radiopharmaceuticals and medical devices we intend to
produce. We intend to distribute, or market directly, on a commercial scale some
of our proposed products. However, in most cases we will use corporate partners
or other entities to market our products. It is not assured that we will be able
to enter into any arrangements for marketing of our proprietary products or
acquire the additional capital to conduct such activities. Additional
manufacturing, marketing and distribution facilities will require the
expenditure of substantial additional funds and the hiring of additional
personnel.
Competition. Our business plan includes the contract manufacturing of
proprietary finished radiopharmaceutical products for others, standard
radioisotope and pharmaceutical grade radiochemical production, new radioisotope
and radiochemical development, product commercialization and medical
instrumentation development. Many companies, research institutes and
universities are working in a number of radioisotope, radiopharmaceutical or
biotechnology disciplines similar to our fields of interest. In addition, many
companies are engaged in the development of, or offer, products that may be
competitive with the proposed diagnostic and therapeutic radioisotopes and
proprietary products we intend to manufacture for others. Most of these entities
have substantially greater financial, technical, manufacturing, marketing,
distribution and/or other resources than the Company. These companies may be in
various phases of clinical testing of radioisotope and radiopharmaceutical
products intended for various diagnostic and therapeutic processes related to
brain, cardiac function and cancer diagnosis and treatment. Accordingly, other
companies may succeed in developing products earlier, or that are safer or more
effective than those we propose to develop, and in obtaining FDA clearances for
such products before our customers obtain approval.
Risk of Product Liability. As we successfully develop our products, we may
be exposed to product liability claims. We might also be required to indemnify
affiliates against any product liability claims incurred by them as a result of
products developed by the Company under licenses granted by these affiliates. We
believe we currently carry adequate product liability insurance; however, we
cannot assure you that we will in the future be able to obtain sufficient
amounts of insurance to protect us against such liability at a reasonable cost.
If we experience an uninsured or inadequately insured product liability claim,
our business and financial condition could be materially adversely affected.
Voting Control; Anti-Takeover Provisions. Our Officers and Directors
currently beneficially own, or have voting control over, approximately 38% of
the outstanding Common Shares. Our Board of Directors has the authority, without
further approval of our shareholders, to issue stock options to purchase up to
600,000 shares of Common Stock. To date the Board of Directors has granted
options to employees to purchase 453,003 shares of the 600,000 authorized by the
shareholders. Under the Company's Articles of Incorporation, the Board of
Directors is authorized to issue, without further shareholder approval, up to
five million shares of preferred stock on such terms as they may determine. The
Company's issuance of preferred stock could, under certain circumstances, have
the effect of delaying or preventing a change in control of the Company and may
create substantial dilution for holders of Common Stock.
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No Dividends. We have not paid any cash dividends on our Common Stock and
do not expect to do so in the foreseeable future.
Marketing Experience. We have personnel with marketing and sales
experience, but will need to recruit additional qualified personnel and
representatives for the purpose of marketing our complete product line. We
cannot guarantee that our marketing strategy of contract or joint venture
manufacturing of finished pharmaceuticals or medical devices and distribution
for other pharmaceutical companies will be successful.
SELLING STOCKHOLDERS
The following table sets forth certain information, as of January 22,June 30, 1999, with
respect to the shares of Common Stock beneficially owned prior to the offering
and the shares being offered hereby by the stockholders listed below (the
"Selling Stockholders"). All of the shares of Common Stock offered hereby
were issued originally, or
underly other securities issued originally in transactionsa transaction not involving a
public offering. Absent the current registration, such shares may not be sold by
the Selling Stockholders, except in certain limited situations including
compliance with Rule 144 under the Securities Act.
The shares wereSelling Stockholders on May 18, 1999 acquired as
follows:
o 220,000 shares are currently reserved for issuance upon the exercise
of certain Common Stock Warrants issued to affiliatesin a private
placement $10,000,000 of the Company's underwriter, Keane Securities, in connection with the Company's
initial public offering, which closed on August 19, 1997.
o 159,416 shares were issued as of April 24, 19985% Convertible Redeemable Preferred Stock
and Warrants to MACTEC, Inc., a
Colorado company ("MACTEC"), as partial consideration for the
Company's acquisition of MAC Isotopes, Inc., a wholly-owned subsidiary
of MACTEC that produces certain reactor produced radioisotopes at a
U.S. government owned reactor in Idaho. The Company has changed the
name of MAC Isotopes, Inc.purchase up to International Isotopes Idaho Inc.
o 8,242 shares were issued as of May 14, 1998 to Bracco Diagnostics,
Inc., a Delaware corporation ("Bracco"), as partial royalty
compensation for a technology license granted by Bracco to the Company
in connection with a radiopharmaceutical product.
o 29,017 shares were issued on July 31, 1998 to Dr. Roger M. Good and
affiliates in connection with a license agreement for rights under a
certain patent and a 510(k) for the use, sale, lease, manufacture and
distribution of sputter coated I-125 spheres encapsulated in
brachytherapy seeds.
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o 912,000 shares were issued in December 1998 and January 1999 to a
total of 33 accredited investors pursuant to a private placement of
Units (the "1998 Private Placement"), each Unit consisting of 16,000410,000 shares of the Company's Common Stock at $12.50 per share, plus three
year Warrants to purchase an additional 16,000Stock. The
shares of Common Stock
at $13.75 per share.
o 912,000 shares are reserved for issuance upon exercise of the Warrants
issued in connection with the 1998 Private Placement.
o 512,000 shares were acquired by certain officers and directors for
cash or as compensation for services.
Shares of Common Stock Shares Offered
Name Beneficially Owned By This Prospectus (3)
---- ------------------ ----------------------
H. Kelly McLaughlin 18,000 (1)(2) 18,000 (2)
Walter D. O'Hearn 35,000 (1)(2) 35,000 (2)
Denise O'Hearn 10,000 (1)(2) 10,000 (2)
Mary O'Hearn 5,000 (1)(2) 5,000 (2)
Kenneth Nielson 12,000 (1)(2) 12,000 (2)
Virgil Cilli 3,000 (1)(2) 3,000 (2)
Gordon McLaren 3,000 (1)(2) 3,000 (2)
Kathleen Evans 5,000 (1)(2) 5,000 (2)
MACTEC, Inc. 159,416 159,416
Bracco Diagnostics, 8,242 (1) 8,242
Inc.
Inland Cancer Care, 29,017 (1) 29,017
nominee for the Good
Group
Auric Partners 109,000 (4) 64,000 (4)
Three Eyes Partners, 32,000 (1)(5) 32,000 (5)
Ltd.
9
Shares of Common Stock Shares Offered
Name Beneficially Owned By This Prospectus (3)
---- ------------------ ----------------------
John Paul Dejoria 80,000 (6) 80,000 (6)
Richard Dusansky 16,000 (1)(7) 16,000 (7)
Interfin Corporation 96,000 (8) 96,000 (8)
Granite Capital 160,000 (9) 160,000 (9)
Daniel Patrick 132,000 (10) 32,000 (10)
McCormack
John William 132,000 (11) 32,000 (11)
McCormack*
Megan Anne 132,000 (12) 32,000 (12)
McCormack
Elkhorn Partners 6,400 (1)(13) 6,400 (13)
Double I Investors 64,000 (1)(14) 64,000 (14)
James and Marie 112,000 (15) 112,000 (15)
Keane
James B. Skaggs 32,000 (1)(16) 32,000 (16)
The Leone Family 48,000 (1)(17) 48,000 (17)
Irrevocable Trust
Parsow Partnership, 9,600 (1)(18) 9,600 (18)
Ltd.
Patrick Mackin 32,000 (1)(19) 32,000 (19)
Peter Schwalje 8,000 (1)(20) 8,000 (20)
T&LRM Family 32,000 (1)(21) 32,000 (21)
Partnership, Ltd.
Ira Lon Morgan* 1,187,829 (22) 512,000 (22)
10
Shares of Common Stock Shares Offered
Name Beneficially Owned By This Prospectus (3)
---- ------------------ ----------------------
Tommy L. Thompson* 199,625 (23) 128,000 (23)
William Nicholson* 636,875 (24) 192,000 (24)
Carl W. Seidel* 239,055 (25) 128,000 (25)
Virgil Simmons* 245,429 (26) 64,000 (26)
Gary Schwendiman 152,000 (27) 16,000 (27)
Schwendiman 8,000 (1)(28) 8,000 (28)
Consulting
Schwendiman Global 48,000 (1)(29) 48,000 (29)
Health Sciences
Biotechnology Fund, 80,000 (30) 80,000 (30)
L.P.
John Luther King and 160,000 (31) 64,000 (31)
Teresa Carter King
LKCM Investment 96,000 (32) 96,000 (32)
Partnership
Fred Smithline 148,000 (33 32,000 (33)
Stephen A. Kaplan 32,000 (1)(34) 32,000(34)
Thomas Schoonover 96,000 (35) 96,000(35)
Ralph D. McBride 32,000 (36) 32,000 (36)
Nancy C. Moore 44,000 (1)(2) 44,000 (2)
Meghan Benedict 5,000 (1)(2) 5,000 (2)
- --------------------------------------------------------------------------------
*Director or Officer/Director of the Company
11
(1) Less than 1% of Common Stock outstanding
(2) Representsoffered hereby represent shares of Common Stock issuable uponto the Selling
Stockholders as a result of (i) conversion of the Preferred Stock (ii) payment
of interest on the Preferred Stock (in lieu of cash) and (iii) exercise of Warrants
granted to the
Company's underwriter and affiliates in connection with the
Company's initial public offering, which closed on August 19, 1997.
(3)Warrants.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED PRIOR SHARES OFFERED BY THIS PERCENTAGE OWNED FOLLOWING
NAME TO THIS OFFERING PROSPECTUS OFFERING (1)
---- ------------------------- ---------------------- --------------------------
Brown Simpson 556,407 556,407 0%
Strategic Growth Fund, L.P.
Brown Simpson 947,397 947,397 0%
Strategic Growth Fund, Ltd.
- ---------------------------------------------------------------------------------------------------------------------
(1) Assumes all shares of Common Stock offered hereby are sold in this
offering. There is no assurance that the Selling Stockholders will
sell any or all of the shares of Common Stock offered hereby.
(4) Includes 32,000 shares of-2-
7
PLAN OF DISTRIBUTION
The Company is registering the Common Stock issuable upon("Registrable Securities")
on behalf of the exerciseSelling Stockholders ("Holders"). As used herein, the term
Holder means the holder of Warrants purchasedthe Registrable Securities and includes donees and
pledgees selling Registrable Securities received from a named Holder after the
date of this Prospectus. All costs, expenses and fees in connection with the
Company's 1998 Private Placement.
(5) Includes 16,000 sharesregistration of Common Stock issuable upon the exerciseRegistrable Securities offered hereby will be borne by the
Company. Brokerage commissions and similar selling expenses, if any,
attributable to the sale of Warrants purchasedRegistrable Securities will be borne by the Holders.
Sales of Registrable Securities may be effected by Holders from time to time in
one or more types of transactions (which may include block transactions) on
Nasdaq, on the BSE, in the over-the-counter market, in negotiated transactions,
through put or call options transactions relating to the Registrable Securities,
through short sales of Registrable Securities, or a combination of such methods
of sale, at market prices prevailing at the time of sale, or at negotiated
prices. Such transactions may or may not involve brokers or dealers. The Holders
have advised the Company that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their securities, nor is there an underwriter or coordinated broker
acting in connection with the Company's 1998 Private Placement.
(6) Includes 40,000 sharesproposed sale of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(7) Includes 8,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(8) Includes 48,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(9) Includes 80,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(10) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(11) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(12) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(13) Includes 3,200 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(14) Includes 32,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(15) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
Also includes 80,000 shares issuable upon Warrants granted in connection
with the Company's initial public offering.
(16) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
Also includes 16,000 shares held through Mr. Skaggs IRA account.
(17) Includes 24,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(18) Includes 4,800 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(19) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(20) Includes 3,200 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(21) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
12
(22) Includes 128,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(23) Includes 32,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(24) Includes 48,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
The shares beneficially owned includes 109,000 shares owned by Auric
Partners, of which Mr. Nicholson is a partner.
(25) Includes 32,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(26) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(27) Beneficially owned amount includes 8,000 shares owned by Schwendiman
Consulting, 48,000 shares owned by Schwendiman Global Health Sciences, and
80,000 shares owned by Biotechnology Fund, L.P., of which 4,000, 24,000,
and 40,000, respectively, are shares issuable upon the exercise of Warrants
purchased in connection with the Company's 1998 Private Placement. The
16,000 shares to be sold by Mr. Schwendiman include 8,000 shares of Common
Stock issuable upon the exercise of Warrants purchased in connection with
the Company's 1998 Private Placement.
(28) Includes 4,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(29) Includes 24,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(30) Includes 40,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(31) Beneficial ownership amount includes 96,000 shares owned by LKCM Investment
Partnership, of which Mr. King is a general partner. The amount to be sold
includes 32,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(32) Includes 48,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(33) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(34) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(35) Includes 48,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
(36) Includes 16,000 shares of Common Stock issuable upon the exercise of
Warrants purchased in connection with the Company's 1998 Private Placement.
13
MANNER OF OFFERING
The shares of Common Stock offered hereby may be sold from time to timeRegistrable Securities by the
Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made in the Nasdaq SmallCap Market, on
the Boston Stock Exchange or in the over-the-counter market or otherwise, at
prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions.Holders.
The shares of Common Stock may be
sold in one or more of the following: (a) a block trade 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; (b) purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this Prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; and (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
In affecting sales, broker-dealers engaged by the Selling Stockholders may
arrange for other broker-dealers to participate in resales.
In connection with distribution of the shares of Common Stock offered
hereby or otherwise, the Selling StockholdersHolders may enter into hedging transactions with broker-dealers.broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of sharesthe
Registrable Securities or of Common Stock registered
hereundersecurities convertible into or exchangeable for the
Registrable Securities in the course of hedging the positions they assume with
the Selling
Stockholders.Holders. The Selling Stockholders may also sell shares of Common Stock
short and redeliver the shares of Common Stock registered hereunder to close out
such short positions. The Selling StockholdersHolders may also enter into optionoptions or other transactions with
broker-dealers or other financial institutions which require the delivery to
thesuch broker-dealers or other financial institutions of Registrable Securities
offered by this Prospectus, which Registrable Securities such broker-dealer of the shares of Common Stock registered hereunder, which the
broker dealeror
other financial institution may resell or otherwise transfer pursuant to this Prospectus.Prospectus (as amended
or supplemented to reflect such transaction).
The Selling Stockholder may also loan or pledge the shares of Common Stock
registered hereunder to a broker-dealer and the broker-dealer may sell the
shares of Common Stock so loaned or upon default the broker-dealerHolders may effect sales of the pledged shares pursuantsuch transactions by selling Registrable
Securities directly to this Prospectus. The Selling
Stockholderspurchasers or to or through broker-dealers, which may also pledge shares of Common Stock registered hereunder to a
lender other than a broker-dealer, and upon default such lender may sell the
shares of Common Stock so pledged pursuant to this Prospectus. The Selling
Stockholders may also contributeact
as agents or sell shares of Common Stock offered
hereunder to trusts or other entities for the benefit of the contributing
Selling Stockholder and members of his or her family.
Broker-dealers or agentsprincipals. Such broker-dealers may receive compensation in the
form of discounts, concessions or commissions discounts from Holders and/or concessions from the Selling Stockholderspurchasers
of Registrable Securities for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in amounts
to be negotiatedexcess of customary commissions).
The Holders and any broker-dealers that act in connection with the sale
of Common Stock. Such
broker-dealers and any other participating broker-dealers mayRegistrable Securities might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, in connection with such
sales and any commissions received by
such commission, discount or concession maybroker-dealers and any profit on the resale
-3-
8
of the Registrable Securities sold by them while acting as principals might be
deemed to be underwriting discounts or commissions under the Securities Act. In addition, any
securities covered by the Prospectus which qualify for sale under Rule 144 under
the Securities Act may be sold pursuant to Rule 144 rather than pursuant to this
Prospectus.
14
All costs, expenses and fees in connection with the registration of the
shares of Common Stock offered hereby shall be borne by the Company. Commissions
and discounts, if any, attributable to the sales of shares of Common Stock
hereunder will be borne by the Selling Stockholders. The
Selling Stockholders
may agreeCompany has agreed to indemnify any broker-dealer or agent that participates in a
transaction involving sales of shares of Common Stockeach Holder against certain liabilities,
including liabilities arising under the Securities Act. The Company
has agreedHolders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the Selling StockholdersRegistrable Securities against certain liabilities, in
connection with the offering of the shares of Common Stock hereunder,
including liabilities arising under the Securities Act.
The Holders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act.
The Holders will be subject to the prospectus delivery requirements of
the Securities Act. The Company has informed the Holders that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.
Holders also may resell all or a portion of the Registrable Securities
in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
Upon the Company being notified by a Holder that any material
arrangement has been entered into with a broker-dealer for the sale of
Registrable Securities 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 (i) the name of each such Holder and
of the participating broker-dealer(s), (ii) the number of Registrable Securities
involved, (iii) the initial price at which such Registrable Securities were
sold, (iv) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
referenced in this Prospectus and (vi) other facts material to the transactions.
In addition, upon the Company being notified by a Holder that a donee or pledgee
intends to sell more than 500 Registrable Securities, a supplement to this
Prospectus will be filed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-KSB10-K for the year ended
December 31, 1997;1998, as amended;
(2) the Company's Quarterly ReportsReport on Form 10-QSB10-Q for the three month
periods ended March 31, 1998, June 30, 1998, and September 30, 1998.1999.
-4-
9
(3) the Company's Current Report on Form 8-K filed on December 22,
1998;May 28, 1999;
and
-5-
10
(4) the description of the Company's Common Stock contained in the
Company's Registration Statement on form 8-A filed August 1, 1997, including any
amendment or report filed for the purposes of updating such description.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Common Stock
shall be deemed to be incorporated by reference in this Prospectus and to be
part hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is 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.
A copy of the documents incorporated by reference (other than exhibits
thereto) will be forwarded without charge to each person to whom this Prospectus
is delivered, upon such person's written or oral request to International
Isotopes Inc., Office of the Secretary, 3100 Jim Christal Road, Denton, Texas
76207-9987, telephone number (940) 484-9492. The Company's internet address is
ilmorgan@intiso.com.
15
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby have been
passed upon for the Company by Locke Liddell & Sapp LLP, Austin, Texas.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1996 and 1997 and 1998 and for applicablethe years then ended and the periods from inceptionNovember 1, 1995
(inception) to December 31, 19971996 and December 31, 1998 have been incorporated by
reference herein in reliance on the report of KPMG LLP, independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in auditing and accounting.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and accordingly files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other
-6-
11
information filed by the Company with the Commission can be inspected and
copied, at prescribed rates, at the Public Reference Room maintained by the
Commission at 450 Fifth Street, N.W., Washington, DC 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The Commission maintains an Internet web site at
http://www.sec.gov/ that also contains such reports, proxy statements and other
information.
The Company has filed with the Commission a Registration Statement on
Form S-3 (including all amendments thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Common Stock offered hereby. The Registration Statement has been filed
electronically with the Commission pursuant to its Electronic Data Gathering and
Retrieval ("EDGAR") system. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement.
16-7-
12
PART II
Information Not Required in Prospectus
ItemITEM 13. Other Expenses of Issuance and Distribution.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of this offering, all of which will be paid by
Registrant, are as follows:
SEC Registration Fee $ 9,947.48
Boston Stock Exchange3,775.58
Nasdaq Listing Fee $ 6,100
Nasdaq Listing Fee $12,1007,500.00
Accounting Fees and Expenses $ 6,5005,000.00
Registrant's Legal Fees and Expenses $75,000
Miscellaneous Expenses $ 5,00020,000.00
Total $114,647.48$ 36,275.58
ItemITEM 14. Indemnification of Directors and OfficersINDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the Texas Business Corporation Act ("TBCA"), the
Company's Restated Articles of Incorporation provide that the Company will
indemnify its officers, directors, employees and agents to the fullest extent
permitted by the TBCA against actions that may arise against them in such
capacities, and advance expenses in connection with any such actions.
Registrant's Restated Articles of Incorporation provide that directors of the
Company will not be personally liable to Registrant or its stockholders for
monetary damages for any act or omission in his capacity as a director except as
authorized under the TBCA. The TBCA provides that a corporation may indemnify a
person who was, is, or is threatened to be made a named defendant in a
proceeding because such person is or was a director if it is determined in
accordance with the provisions of the TBCA that the person (i) conducted himself
in good faith, (ii) reasonably believed, in the case of conduct in his official
capacity as director, that his conduct was in the corporation's best interests
or, in other cases, that his conduct at least was not opposed to the
corporation's interests and (iii) in the case of any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. A director may not be
indemnified with respect to a proceeding in which the person is found liable on
the basis that personal benefit was improperly received by him, whether or not
the benefit resulted from an action taken in the person's official capacity, or
in which the person is found liable to the corporation. Officers, employees and
agents of a corporation are entitled to be indemnified by the corporation as,
and to the same extent provided for, directors of the corporation.
Registrant carries directors' and officers' liability insurance with an
aggregate policy limit of $5,000,000.
II-1
Item13
ITEM 16. Exhibits.EXHIBITS.
Exhibits
4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form SB-2 (Registration No.
333-26269)).
4.2 Form of Warrant issued to Selling Stockholders.
4.3 Certificate of Designation, Preferences and Rights of 5% Convertible
Redeemable Preferred Stock.
4.4 Securities Purchase Agreement between the CompanySelling Stockholders and Keane Securities
Co., Inc. (incorporated by reference to Exhibit 4.2 to the
Company's
Registration Statement on Form SB-2 (Registration No. 333-26269)).Company.
5. Opinion of Locke Liddell & Sapp LLP with respect to the legality of the
securities being registered hereby.
23.1 Consent of KPMG LLP
23.2 Consent of Locke Liddell & Sapp LLP (included in Exhibit 5).
24 Power of Attorney (included as part of Signature page).
ItemITEM 17. Undertakings.UNDERTAKINGS.
Insofar as indemnification for liabilities arising under Securities Act
may be permitted to directors, officers and controlling persons of Registrant
pursuant to the provisions of its Restated Articles of Incorporation, its
By-Laws, the Texas Business Corporation Act or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against liabilities (other than the payment by Registrant for expenses incurred
or paid by an officer, director or controlling person of 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, 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.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a) (3)
of the Securities Act;
(ii) 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)
II-2
14
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and
II-2
(iii) 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the 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 to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) 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 (40
or 497(b) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(b) 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 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
15
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint Ira Lon MorganIRA LON MORGAN and CarlCARL W. Seidel,SEIDEL, and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent for him and in his name, place and stead, in any and
all capacities, to sign any or all amendments to this Registration Statement and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto 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 to be done in
and about the premises in order to effectuate the same, as fully, for all
intents and purposes, as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933,
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of Denton,
State of Texas, on the 22nd8th day of January,July, 1999.
INTERNATIONAL ISOTOPES INC.
By: /s/ Ira Lon Morgan.
-------------------------------------------------------------------------
Ira Lon Morgan, Ph.D.
Chairman of the Board and Treasurer
By: /s/ Carl W. Seidel.
-------------------------------------------------------------------------
Carl W. Seidel
President, Chief Executive
Officer and Director
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In accordance with the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Title Date
--------- ----- ----SIGNATURE TITLE DATE
/s/ Carl W. Seidel President, Chief Executive January 22,July 8, 1999
- ----------------------------------------------------------- Officer, and Director (Principal
Carl W. Seidel Executive Officer)
/s/ Joan Gillett Chief Financial Officer January 22,July 8, 1999
- ----------------------------------------------------------- (Principal Financial and
Joan Gillett Accounting Officer)
/s/ Ira Lon Morgan Chairman of the Board and January 22,July 8, 1999
- ----------------------------------------------------------- Treasurer
Ira Lon Morgan, Ph.D.
/s/ Tommy L. Thompson Executive Vice President, Chief January 22,July 8, 1999
- ----------------------------------------------------------- Operating Officer and Director
Tommy L. Thompson
/s/ Virgil L. Simmons Senior Vice President and Director January 22,July 8, 1999
- -----------------------------------------------------------
Virgil L. Simmons
/s/ John M. McCormack Director January 22,July 8, 1999
- -----------------------------------------------------------
John M. McCormack
/s/ William W. Nicholson Director January 22,July 8, 1999
- -----------------------------------------------------------
William W. Nicholson
/s/ Robert J. Gary Director January 22,July 8, 1999
- -----------------------------------------------------------
Robert J. Gary
/s/ Frederick J. Bonte Director January __,July 8, 1999
- -----------------------------------------------------------
Frederick J. Bonte, M.D.
/s/ Charles LeMaistre Director January 22,July 8, 1999
- -----------------------------------------------------------
Charles LeMaistre, M.D.
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EXHIBIT INDEX
EXHIBIT NO.
4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form SB-2 (Registration No.
333-26269)).
4.2 Form of Warrant issued to Selling Stockholders.
4.3 Certificate of Designation, Preferences and Rights of 5% Convertible
Redeemable Preferred Stock.
4.4 Securities Purchase Agreement between the CompanySelling Stockholders and Keane Securities
Co., Inc. (incorporated by reference to Exhibit 4.2 to
the
Company's Registration Statement on Form SB-2
(Registration No. 333-26269)).
5.Company.
5 Opinion of Locke Liddell & Sapp LLP with respect to the legality of the
securities being registered hereby.
23.1 Consent of KPMG LLP
23.2 Consent of Locke Liddell & Sapp LLP (included in Exhibit 5).
24 Power of Attorney (included as part of Signature page).
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