As filed with the Securities and Exchange Commission on June 1, 2007
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
ONCOLOGIX TECH., INC.
(Formerly BESTNET COMMUNICATIONS CORP.)
(Formerly WAVETECH INTERNATIONAL, INC.)
(Exact name of registrant as specified in its charter)
Nevada 86-1006416
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(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
2850 Thornhills Ave. SE, Suite 104 Grand Rapids, Michigan 49546
(616) 977-9933
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Copies to:
Michael A. Kramarz Stephen T. Meadow, Esq.
Oncologix Tech, Inc. Firetag, Stoss & Dowdell, P.C.
2850 Thornhills Ave. SE, Suite 104 1747 East Morten, Suite 107
Grand Rapids, Michigan 49546 Phoenix, Arizona 85020
(616) 977-9933 (602) 279-9411
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become effective upon
filing with the Commission pursuant to Rule 462(e) under the Securities Act,
check the following box. [ ]
If this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box. [ ]
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1
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered(1)(2) share(3) price(3) registration fee
Common Stock,
par value $.001 per share(4) 6,746,684 $0.43 $ 2,901,074 $89.06
- -----------------------------------------------------------------------------------------------------------------------
TOTAL FEE: $89.06
- ------------------------
(1) This registration statement shall cover any additional shares of
registrant's common stock which become issuable by reason of any stock
dividend, stock split or any other similar transaction effected
without the receipt of consideration that results in an increase in
the number of shares of registrant's outstanding common stock.
(2) Represents (i) 500,000 shares of common stock issued pursuant to the
Merger Agreement between BestNet Communications Corp. and JDA; (ii)
1,445,618 shares of common stock issued to investors who previously
converted various debt and equity securities; (iii) 4,701,066 shares
of common stock issuable upon conversion of $1,166,580 in aggregate
principal amount of Convertible Promissory Notes issued to eleven
accredited investors; and (iv) 100,000 shares of common stock issued
pursuant to a consulting agreement.
(3) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(i) under the Securities Act of
1933, as amended. Amount based on the closing stock price, as quoted
on the OTC Bulletin Board on May 14, 2007, or $0.43 per share.
(4) Pursuant to Rule 457(i), there is no additional filing fee with
respect to the shares of common stock issuable upon conversion of the
notes because no additional consideration will be received by the
registrant.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED June 1, 2007
ONCOLOGIX TECH, INC.
6,746,684 SHARES OF OUR COMMON STOCK
This prospectus relates to the potential resale from time to time by the
selling security holders named herein and to be named in any accompanying
prospectus supplement of some or all of the securities acquired from us in
unregistered private offerings during the period from August 4, 2004 until May
22, 2007.
Each time the selling security holders resell securities, we will provide a
supplement to this prospectus that contains specific information about the
offering by the selling security holders and the terms of the securities. The
supplement may also add, update or change information contained in this
prospectus. You should carefully read this prospectus and the accompanying
prospectus supplement before you invest in any of such securities.
The selling security holders may offer and sell shares of our Common Stock,
$.001 par value.
We will receive no proceeds from any sale by the selling security holders
of the securities covered by this prospectus and any accompanying prospectus
supplement, but we have agreed to pay certain registration expenses.
Our common stock is quoted on the OTC Bulletin Board under the symbol
"OCLG". On May 14, 2007, the last reported sales price of our common stock was
$0.43 per share.
See " RISK FACTORS " on page 11 for information you should consider before
buying any securities hereunder.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
THE DATE OF THIS PROSPECTUS IS June 1, 2007
3
ONCLOGIX TECH, INC.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
Page
PART I. INFORMATION REQUIRED IN PROSPECTUS
WHERE YOU CAN FIND MORE INFORMATION 5
SUMMARY INFORMATION 6
THE OFFERING 10
RISK FACTORS 11
USE OF PROCEEDS 13
COMPANY OVERVIEW 13
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 15
DETERMINATION OF OFFERING PRICE 16
SELLING SECURITY HOLDERS 16
PLAN OF DISTRIBUTION 17
DESCRIPTION OF SECURITIES TO BE REGISTERED 18
INCORPORATION OF DOCUMENTS BY REFERENCE 19
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES 19
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 20
INDEMNIFICATION OF DIRECTORS AND OFFICERS 20
EXHIBITS 20
UNDERTAKINGS 21
SIGNATURES 22
4
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission, or SEC, using a "shelf" registration
process. Under this process, the selling security holders named under the
heading "Selling Security Holders" or to be named in any accompanying prospectus
supplement may sell, from time to time, in one or more offerings, the common
stock registered under the registration statement of which this prospectus is a
part. These securities were acquired from us in unregistered private offerings.
You should read this prospectus and any prospectus supplement together with
additional information described under the heading "Where You Can Find More
Information."
FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus are forward-looking
statements, as defined in the Private Securities Litigation Reform Act of 1995,
("PSLRA"). Forward-looking statements in this prospectus are being made pursuant
to the PSLRA and with the intention of obtaining the benefits of the "safe
harbor" provisions of the PSLRA. Forward-looking statements are those that do
not relate solely to historical fact. They include, but are not limited to, any
statement that may predict, forecast, indicate or imply future results,
performance, achievements or events. You can identify these statements by the
use of words like "intend," "plan," "believe," "anticipate," "project," "may,"
"will," "could," "continue," "expect" and variations of these words or
comparable words or phrases of similar meaning. They may relate to, among other
things:
o our financing plans;
o Trends affecting our financial condition;
o our growth strategy and operating strategy;
o completion of the development of our Oncosphere product and
obtaining FDA approval for its testing and use; and
o our new or future product offerings.
These forward-looking statements reflect our current views with respect
to future events and are based on assumptions and subject to risks and
uncertainties, including, but not limited to, economic, competitive,
governmental and technological factors outside of our control, that may cause
actual results to differ materially from trends, plans or expectations set forth
in the forward-looking statements. These risks and uncertainties may include
those discussed in "Risk Factors." We cannot assess the extent to which any
factor, or combination of factors, may cause actual results to differ from those
contained in forward-looking statements. Given these risks and uncertainties, we
urge you to read this prospectus completely and with the understanding that
actual future results may be materially different from what we plan or expect.
Also, these forward-looking statements present our estimates and assumptions
only as of the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the periodic reporting requirements of the Securities
Exchange Act of 1934, or the Exchange Act, and we file annual, quarterly and
current reports, proxy statements and other information with the SEC. You may
read and copy any document we file at the SEC's Public Reference Room at 100 F
Street, N.E., Room 1580, Washington, D.C., 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from the SEC's website at:
http://www.sec.gov.
Copies of publicly available documents that we have filed with the SEC
can also be inspected and copied at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
This prospectus is a part of the registration statement that we filed
on Form S-3 with the SEC. The registration statement contains more information
about us and our common stock than is included in this prospectus, including
exhibits and schedules. You should refer to the registration statement for
additional information about us and the common stock being offered in this
prospectus. Statements that we make in this prospectus relating to any documents
filed as an exhibit to the registration statement or any document incorporated
by reference into the registration statement may not be complete and you should
review the referenced document itself for a complete understanding of its terms.
5
SUMMARY INFORMATION
The following summary information should be read by you together with
the more detailed information in other sections of this prospectus. You should
also carefully consider the factors described under Risk Factors at page 11 of
this prospectus. Throughout this prospectus, we refer to Oncologix Tech Inc. as
Oncologix, we, our, ours, and us.
ONCOLOGIX TECH INC.
We were formed in 1995 as a New Jersey corporation, under the name
"Wavetech, Inc.", through the merger of two predecessor corporations. We changed
our corporate domicile to Nevada in December 1997, by merging into a Nevada
corporation named, "Interpretel International, Inc." and subsequently changed
our name to "Wavetech International, Inc." Our business at the time was to
develop and market software for customized telephone calling card services. In
1999 we changed our business to take advantage of technological advances making
it possible to provide improved telephone services through the use of the
Internet. Our business then became the application of Internet technology to
provide worldwide long distance telephone communication and teleconferencing
services to commercial and residential consumers at prices lower than those
generally available from conventional telephone companies. In 2000, reflecting
that business change, we changed our name to "BestNet Communications Corp".
Our telephone business was never profitable and we were able to
continue it only by repeated equity and debt financings. Accordingly, during
December 2006, we determined to dispose of most of the assets of the Telephone
Segment and entered into discussions with a prospective purchaser. During
January 2007, we entered into an agreement to sell those assets for an aggregate
of $60,000, with the rights to receivables generated and deposits made prior to
January 31, 2007 to be retained by us. During February 2007, we completed the
sale of our telephone business segment. This discontinuation of the telephone
business segment has been recorded separately in the accompanying condensed
consolidated financial statement.
We entered the medical device business at the end of July 2006 through
the acquisition of JDA Medical Technologies, Inc. ("JDA"), a development stage
company, which was merged into our wholly owned subsidiary, Oncologix
Corporation. On January 22, 2007, we changed our name to Oncologix Tech Inc., to
reflect the entrance into this new market.
JDA was organized as a Maryland corporation in 2003 by Andrew S.
Kennedy, MD, David Van Echo, MD, and Mr. Jeff Franco for the commercial
exploitation of an innovative technology for treating soft tissue cancers. Dr.
Kennedy, Dr. Van Echo, and others, invented that technology while associated
with the University of Maryland, Baltimore (the "University"), which paid for
the research and development effort and which owns the technology. The principal
item acquired from JDA is the Master License Agreement covering that technology,
granted to JDA by the University in September 2003. The University has applied
for patents on the licensed technology which are still pending. No patents have
yet been issued and there is no assurance that any patents will be issued. If
the applications are denied, we will have no legal protection for the
intellectual property embodied in the technology and it will become available to
others. From the time JDA entered into the Master License Agreement until it was
acquired by us, the activities of JDA were primarily limited to research and
development activities and to seeking sources of financing. Refer to our Form
10-KSB for the year ended August 31, 2006 for further information relative to
our acquisition of JDA and the license agreement with the University.
SELECTED AND SUMMARY CONSOLIDATED FINANCIAL DATA
The following selected and summary consolidated financial data should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and our financial statements,as filed on
Form 8-K on May 31, 2007 for the year ended August 31, 2006 and the related
notes therein, as well as our Form 10-QSB for the period ended February 28,
2007. The selected consolidated statement of operations data for the fiscal
years ended August 31, 2002, 2003, 2004, 2005 and 2006 and for the six month
period ended February 28, 2007 and the period from inception (acquisition of JDA
on July 26, 2006) to February 28, 2007 are derived from information in our
financial statements not included elsewhere in this prospectus, but incorporated
by reference. Certain reclassifications have been made to conform prior
information to the presentation of fiscal 2007 information, including the
presentation of the Telephone Business, which was disposed of during February
2007, as discontinued operations for all periods presented. The Telephone
Business was a separate segment for reporting purposes during fiscal 2006 and
was our only operating business for the periods presented below as our medical
device business was, and still is, in the development stage. The
reclassifications have no effect on net income or loss.
6
Year Ended August 31,
-----------------------------------------------------------------------------
2002 2003 2004 2005 2006
------------ ------------ ------------ ------------ ------------
Operating expenses:
General and administrative ............. $ 982,108 $ 1,104,469 $ 694,908 $ 520,432 $ 468,249
Research and development ............... -- -- -- -- 5,334,202
Depreciation and amortization .......... -- -- -- -- 243
------------ ------------ ------------ ------------ ------------
Total operating expenses ............... 982,108 1,104,469 694,908 520,432 5,802,694
------------ ------------ ------------ ------------ ------------
Loss from operations ................... (982,108) (1,104,469) (694,908) (520,432) (5,802,694)
------------ ------------ ------------ ------------ ------------
Other income (expense):
Interest income ........................ 4,514 4,815 637 970 13,700
Interest and finance charges ........... (943,937) (870,684) (661,028) (34,364) (53,241)
Foreign asset tax expense .............. (30,050) -- -- -- --
Preferred stock conversion penalty ..... (35,944) (17,847) -- -- --
Conversion expense ..................... -- -- (541,182) -- --
Relief of debt income .................. -- -- -- 20,362 --
Other income (expense) ................. (4,886) (1,231) (5,742) 2,206 (150)
------------ ------------ ------------ ------------ ------------
Total other income (expense) ........... (1,010,303) (884,947) (1,207,315) (10,826) (39,691)
------------ ------------ ------------ ------------ ------------
Net loss from continuing operations .... (1,992,411) (1,989,416) (1,902,223) (531,258) (5,842,385)
------------ ------------ ------------ ------------ ------------
Discontinued operations:
Operating loss from discontinued
operations ............................. (3,517,314) (2,841,615) (4,899,683) (242,854) (243,680)
Loss on disposal of discontinued
operations ............................. -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net loss from discontinued operations.. (3,517,314) (2,841,615) (4,899,683) (242,854) (243,680)
------------ ------------ ------------ ------------ ------------
Net loss .................................. (5,509,725) (4,831,031) (6,801,906) (774,112) (6,086,065)
Preferred stock dividends from beneficial
conversion feature ..................... 958,723 265,006 15,245 -- --
------------ ------------ ------------ ------------ ------------
Loss available to common shareholders ...... $ (6,468,448) $ (5,096,037) $ (6,817,151) $ (774,112) $ (6,086,065)
Loss per comon share, basic and diluted: ============ ============ ============ ============ ============
Continuing operations ............. $ (0.19) $ (0.10) $ (0.06) $ (0.01) $ (0.12)
Discontinued operations .......... (0.22) (0.12) (0.16) (0.01) (0.01)
------------ ------------ ------------ ------------ ------------
$ (0.41) $ (0.22) $ (0.22) $ (0.02) $ (0.13)
============ ============ ============ ============ ============
Weighted average number of shares
outstanding - basic and diluted ........ 15,933,908 23,445,307 31,479,367 42,645,471 47,690,475
============ ============ ============ ============ ============
7
Inception
Six Months (Acquistion
Ended of JDA) to
Feburary 28, February 28
2007 2007
------------ ------------
Operating expenses:
General and administrative .............. $ 605,168 $ 788,535
Research and development ................ 3,989,223 9,323,425
Depreciation and amortization ........... 7,699 7,942
------------ ------------
Total operating expenses ................ 4,602,090 10,119,902
------------ ------------
Loss from operations .................... (4,602,090) (10,119,902)
------------ ------------
Other income (expense):
Interest income ......................... 4,128 4,213
Interest and finance charges ............ (601,927) (616,938)
Foreign asset tax expense ............... -- --
Preferred stock conversion penalty ...... -- --
Conversion expense ...................... -- --
Relief of debt income ................... -- --
Other income (expense) .................. -- --
------------ ------------
Total other income (expense) ............ (597,799) (612,725)
------------ ------------
Net loss from continuing operations ..... (5,199,889) (10,732,627)
------------ ------------
Discontinued operations:
Operating loss from discontinued
operations .............................. (93,178) (172,361)
Loss on disposal of discontinued
operations .............................. (79) (79)
------------ ------------
Net loss from discontinued operations.. . (93,257) (172,440)
------------ ------------
Net loss ................................... (5,293,146) (10,905,067)
Preferred stock dividends from beneficial
conversion feature ...................... -- --
------------ ------------
Loss available to common shareholders ....... $ (5,293,146) $(10,905,067)
============ ============
Loss per comon share, basic and diluted:
Continuing operations .............. $ (0.09) $ (0.18)
Discontinued operations ........... (0.00) (0.00)
------------ ------------
$ (0.09) $ (0.18)
============ ============
Weighted average number of shares
outstanding - basic and diluted ......... 61,959,093 61,676,905
============ ============
8
Operating results of our telephone business, which is classified as discontinued
operations in the above table, are summarized as follows:
Year Ended August 31,
-----------------------------------------------------------------------
2002 2003 2004 2005 2006
----------- ----------- ----------- ----------- -----------
Revenue .................................... $ 1,097,297 $ 1,471,358 $ 2,162,856 $ 1,546,302 $ 1,174,073
Cost of revenue ............................ 1,468,448 1,287,328 1,374,343 975,805 720,403
----------- ----------- ----------- ----------- -----------
Gross margin ............................ (371,151) 184,030 788,513 570,497 453,670
General and administrative expenses ........ 869,914 764,456 684,873 626,194 557,777
Depreciation and amortization .............. 2,277,525 2,231,383 2,023,554 176,940 134,055
Loss on impairment of license .............. -- -- 2,980,290 -- --
Other operating expenses ................... (1,275) 29,806 (520) 10,217 5,518
Loss on disposal of discontinued
operations.................................. -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Loss from discontinued operations .......... $(3,517,315) $(2,841,615) $(4,899,684) $ (242,854) $ (243,680)
=========== =========== =========== =========== ===========
Period From
Inception
Six Months (Acquisition
Ended of JDA) to
Feburary 28, February 28,
2007 2007
----------- -----------
Revenue .................................... $ 351,568 $ 429,428
Cost of revenue ............................ 210,545 259,858
----------- -----------
Gross margin ............................ 141,023 169,570
General and administrative expenses ........ 206,372 299,464
Depreciation and amortization .............. 23,920 35,076
Loss on impairment of license .............. -- --
Other operating expenses ................... 3,909 7,391
Loss on disposal of discontinued
operations.................................. 79 79
----------- -----------
Loss from discontinued operations .......... $ (93,257) $ (172,440)
=========== ===========
Year Ended August 31, As of
--------------------------------------------------------------------------- Feburary 28,
2002 2003 2004 2005 2006 2007
------------ ------------ ------------ ------------ ------------ ------------
Balance Sheet Data:
Cash and cash equivalents $ 351,784 $ 226,559 $ 405,299 $ 86,651 $ 365,494 $ 815,188
Working capital (526,943) (551,636) 68,788 (28,708) (808,768) (359,636)
Total assets 9,500,400 5,719,150 923,691 458,967 668,955 1,222,083
Total liabilities 1,046,125 908,966 455,719 199,179 1,270,783 1,715,558
Accumulated deficit (23,488,980) (28,585,017) (35,402,168) (36,176,280) (42,262,345) (47,555,491)
Stockholders' equity (deficit) 8,454,275 4,810,184 467,972 259,788 (601,828) (493,475)
9
THE OFFERING
This prospectus relates to the resale by the holders (selling
shareholders) of 6,746,684 shares of our common stock (the "Offered
Securities"). The Offered Securities consist of (i) 500,000 shares of common
stock issued pursuant to the Merger Agreement between BestNet Communications
Corp. and JDA; (ii) 1,445,618 shares of common stock issued to investors who
previously converted various debt and equity securities; (iii) 4,701,066 shares
of common stock issuable upon conversion of $1,166,580 in aggregate principal
amount of Convertible Promissory Notes issued to eleven accredited investors;
and (iv) 100,000 shares of common stock issued pursuant to a consulting
agreement. The 4,701,066 shares issued upon the conversion of $1,166,580 in
aggregate principal of Convertible Promissory Notes were convertible into our
common stock at conversion prices ranging from $0.12 to $1.00.
We will not receive any proceeds from the resale of this common stock
by the selling stockholders. Because the selling stockholder may sell all, a
portion or none of their shares, no estimate can be made of the aggregate number
of shares that may actually be sold by any selling stockholder or that may be
subsequently owned by any selling stockholder.
10
RISK FACTORS
BEFORE BUYING ANY OF THE SHARES OF COMMON STOCK BEING OFFERED BY THIS
PROSPECTUS, YOU SHOULD CAREFULLY READ AND CONSIDER EACH OF THE RISK FACTORS WE
HAVE DESCRIBED IN THIS SECTION.
Those interested in investing in the Company should carefully consider
the following Risk Factors pertaining to Oncologix as well as the risks and
uncertainties that are described in the Company's most recent Annual and
Quarterly Reports under the Securities Exchange Act of 1934.
Going Concern Qualification.
We have disclosed in our financial statements that the financial
statements were prepared assuming the Company will continue as a going concern.
We have incurred losses from operations over the past several years and
anticipate additional losses in the future and prior to achieving breakeven
operations. Additionally, as a result of the acquisition of JDA and the
associated License Agreement with the University of Maryland, as described in
our notes to financial statements for the year ended August 31, 2006, as filed
on Form 8-K on May 31, 2007 the Company is required, under the terms of the
amended license agreement to raise substantial funds for the development of the
technology associated with the License Agreement. Our independent auditors have
included language in their report included on our 2006 financial statements that
indicates that these matters raise doubt about our ability to continue as a
going concern. Our ability to continue as a going concern is subject to our
ability to obtain necessary funding from outside sources, including obtaining
additional funding from the sale of our securities or obtaining loans from
various financial sources where possible. The going concern qualification
increases the difficulty of meeting such goals.
Need for Additional Capital.
We will need substantial funds to complete the development,
manufacturing, and marketing of our potential future products. Consequently, we
will seek to raise further capital through not only possible public and private
offerings of equity and debt securities, but also collaborative arrangements,
strategic alliances, and equity and debt financings or from other sources. We
now estimate the need to raise at least $2,850,000 of additional funding by
April 2008 to fund anticipated expenditures to that time. We may be unable to
raise additional capital on commercially acceptable terms, if at all, and if we
raise capital through additional equity financing, the ownership interests of
existing shareholders may be diluted. Our failure to generate adequate funds
from operations or from additional sources would harm our business.
Uncertainties Regarding Healthcare Reimbursement and Reform.
Our ability to commercialize products depends in part on the extent to
which healthcare services and products are paid by governmental agencies,
private health insurers and other organizations, such as health maintenance
organizations, for the cost of such products and related treatments. Our
business could be harmed if healthcare payers and providers implement
cost-containment measures and governmental agencies implement measures that
reduce payment to our customers for their use of our products.
Industry Intensely Competitive.
The medical device industry is intensely competitive. We will compete
with both public and private medical device, biotechnology and pharmaceutical
companies that have been established longer than we have, have a greater number
of products on the market, have greater financial and other resources and have
other technological or competitive advantages. We also compete in the
development of technologies and processes and in acquiring personnel and
technology from academic institutions, government agencies, and other private
and public research organizations. We cannot be certain that one or more of our
competitors will not receive patent protection that dominates, blocks or
adversely affects our product development or business; will benefit from
significantly greater sales and marketing capabilities or will not develop
products that are accepted more widely than ours.
Intellectual Property Risk.
Our ability to obtain and maintain patent and other protection for our
products will affect our success. We have exclusive licenses to technologies
subject to patent applications in the U.S. and four foreign countries. The
patent positions of medical device companies can be highly uncertain and involve
complex legal and factual questions. Our patent rights, if granted, may not be
11
upheld in a court of law if challenged. Our patent rights may not provide
competitive advantages for our products and may be challenged, infringed upon or
circumvented by our competitors. We cannot patent our products in all countries
or afford to litigate every potential violation worldwide. Because of the large
number of patent filings in the medical device and biotechnology field, our
competitors may have filed applications or been issued patents and may obtain
additional patents and proprietary rights relating to products or processes
competitive with or similar to ours. We cannot be certain that U.S. or foreign
patents do not exist or will not issue that would harm our ability to
commercialize our products and product candidates.
Possible Failure to Comply with Government Regulations.
We, and any prospective contract manufacturers and suppliers, are
subject to extensive, complex, costly, and evolving governmental rules,
regulations and restrictions administered by the FDA, by other federal and state
agencies, and by governmental authorities in other countries. In the United
States, our products cannot be marketed until they are approved for market by
the FDA. No application for FDA approval for the marketing of our product, the
Oncosphere, has yet been made and we do not expect to be in a position to do so
for approximately two to three years. Obtaining FDA market approval involves the
submission of, among other information, the results of preclinical and clinical
studies on the product, and requires substantial time, effort and financial
resources. The FDA, and other federal and state agencies, as well as equivalent
agencies of other countries with whom we will export our products, will also
perform pre-licensing inspections of our facility, if any, and our contract
manufacturers' and suppliers' facilities. Our failure or the failure of our
contract manufacturers or suppliers to meet FDA or other agencies' requirements
would delay or preclude our ability to sell our products, potentially having an
adverse material effect on our business. Even with FDA market approval, we, as
well as our contract manufacturers and suppliers, are subject to numerous FDA
requirements covering, among other things, testing, manufacturing, quality
control, labeling and continuing review of medical products, and to permit
government inspection at all times. Failure to meet or comply with any rules,
regulations, or restrictions of the FDA or other agencies could result in fines,
unanticipated expenditures, product delays, non-approval or recall, interruption
of production, and criminal prosecution.
Exposure to Product Liability Claims.
Our design, testing, development, manufacture, and marketing of
products involve an inherent risk of exposure to product liability claims and
related adverse publicity. Insurance coverage is expensive and difficult to
obtain, and, in the future we may be unable to obtain coverage on acceptable
terms, if at all. If we are unable to obtain sufficient insurance at an
acceptable cost or if a successful product liability claim is made against us,
whether fully covered by insurance or not, our business could be harmed.
Exposure to Environmental Risks.
Our business involves the controlled use of hazardous materials,
chemicals, biologics, and radioactive compounds. Manufacturing is extremely
susceptible to product loss due to radioactive, microbial, or viral
contamination; material equipment failure; or vendor or operator error; or due
to the very nature of the product's short half-life. Although we believe that
when we become operational, our safety procedures for handling and disposing of
such materials will comply with state and federal standards there will always be
the risk of accidental contamination or injury. In addition, radioactive,
microbial, or viral contamination may cause the closure of the respective
manufacturing facility for an extended period of time. By law, radioactive
materials may only be disposed of at state-approved facilities. If we were to
become liable for an accident, or if we were to suffer an extended facility
shutdown, we could incur significant costs, damages, and penalties that could
harm our business.
Reliance on Key Personnel.
Our success will depend, to a great extent, upon the experience,
abilities and continued services of our executive officers and key scientific
personnel. If we lose the services of any of these officers or key scientific
personnel, our business could be harmed. Our success also will depend upon our
ability to attract and retain other highly qualified scientific, managerial,
sales, and manufacturing personnel and our ability to develop and maintain
relationships with key individuals in the industry. Competition for these
personnel and relationships is intense and we compete with numerous
pharmaceutical and biotechnology companies as well as with universities and
non-profit research organizations. We may not be able to continue to attract and
retain qualified personnel.
Uncertain Value of Our License from the University.
Although we believe that the patent pending on our licensed technology
has significant value, we cannot be confident that other similar technology does
not exist or will not be discovered, or that any patents, if granted, will be
enforceable.
12
Uncertainty as to our Ability to Initiate Operations and Manage Growth.
Our efforts to commercialize our medical products will result in new
and increased responsibilities for management personnel and will place a strain
upon our management, financial systems, and resources. We may be required to
continue to implement and to improve our management, operating and financial
systems, procedures and controls on a timely basis and to expand, train,
motivate and manage our employees. There can be no assurance that our personnel,
systems, procedures, and controls will be adequate to support our future
operations.
USE OF PROCEEDS
We will receive no proceeds from any sale by the selling security
holders of the securities covered by this prospectus and any accompanying
prospectus supplement, but we have agreed to pay certain registration expenses.
COMPANY OVERVIEW
As described above, we disposed of our telephone business during the
second quarter of 2007.
At present we are engaged solely in the medical device business which
we entered at the end of July 2006 through the acquisition of JDA which was
merged into our wholly owned subsidiary, Oncologix Corporation . Our medical
device business, is in the pre-clinical testing phase. We anticipate a total
expenditure of approximately $22,000,000 over the next three year period for the
activities we believe will be necessary to enable us to develop and market the
Oncosphere product to the public. These expenditures are expected to include
approximately $4,000,000 through feasibility approval, $1,000,000 to pivotal
approval (which is defined and explained under Product Research and Development
Summary, below) and $17,000,000 to commercialization. Since we anticipate no
funds from operations, we will be required to raise all necessary funds from
equity investors or lenders. The form and availability of the financing will
depend on capital markets and industry conditions at the time. There is, of
course, no assurance that funding will be available as required, or on terms
acceptable to us.
Plan of Operation
We are developing a brachytherapy (radiation therapy) device (called
the "Oncosphere" or the "Oncosphere System") for the advanced medical treatment
of soft tissue cancers of the liver. This product is based on a radioactive
micro-particle designed to deliver therapeutic radiation directly to a tumor
site by introducing the micro-particles into the artery that feeds the tumor
tissue.
Because our product is still in development and we have never engaged
in any commercial activities with respect to it, we have become a "development
stage entity" and our financial statements reflect that. This change in business
line will require substantial additional funding to support the development and
approval of the new device.
Cash Obligations for the next 12 months
Our operating losses to date have been covered by equity and debt
financing obtained from private investors, including certain present members of
our Board of Directors. Funds to meet expenditures for the next twelve months
are expected to be obtained through the private sale of convertible debt. The
additional capital required to fund future growth and expansion is expected to
be obtained through the further sale of equity or debt financing. Such financing
could dilute the equity ownership of existing shareholders and increase the
amount of interest payable in future periods.
Our current plan of operation for the next 12 months requires cash of
at least $2,850,000, which includes $600,000 to fund corporate overhead, in
addition to cash on hand, exclusive of funds required for repayment of
outstanding debt. That amount is expected to fund completion of the Development
Phases of our Oncosphere System through the Feasibility Study as described
below.
13
Product Research and Development Summary
Our present activities consist of conducting the studies and tests
necessary to obtain data in support of an application to the FDA for
authorization (an "IDE") to conduct a clinical study of the Oncosphere with
human patients. We must first conduct a number of engineering and animal
clinical studies and evaluations to collect information to support our
application. This effort is now expected to be completed within the next 4
months. We still expect the $4,000,000 we had agreed to commit to this effort
will be sufficient, but we cannot be certain that costs will not exceed this
amount. An additional $1,000,000 will be required to achieve approval for the
pivotal clinical trial which, if successful, will provide the basis for FDA
approval for use in treating patients. Of this $5,000,000, we have already
funded $2,750,000.
Based on the previous experience of our management in the development
of radiation medical devices and in obtaining FDA and radiation regulatory
approvals, we believe that we have, or can readily obtain, all of the resources
necessary to complete the required studies and evaluations. We have contracts
with outside contractors to perform various tasks and studies. While the
required expertise is highly specialized, it is available from a number of
sources and no difficulty is expected in identifying a number of qualified
contractors. We have secured contracts with key contractors to provide test
materials in sufficient quantities and acceptable quality levels to complete the
testing requirements. Suppliers of the materials used in the manufacture of the
radioactive microspheres have been identified and are able to provide materials
in sufficient quantities to support ongoing development activities. We
anticipate no difficulties in finding alternative sources of supply should that
become necessary or advisable.
The work necessary to support an application to the FDA for an IDE for
the conduct of pivotal trials is described in the following paragraphs.
The Development Phase, which involves the definition of the design and
the feasibility of manufacturing the product, has been completed. In
management's judgment, (A) a microsphere specification and design have been
defined that meet the user requirements as defined in the Product Requirements
Document; (B) It has been demonstrated that lots can be manufactured at pilot
plant scale (i.e. in quantities large enough to support an animal study and a
pivotal clinical study); and (C) a preliminary manufacturing plan, based on
reasonable assumptions, has been completed based on data that support a
commercially acceptable cost basis for commercial quantities.
We have begun and are now engaged in the Pre-Clinical Testing Phase. In
this phase, animal experimentation is conducted to generate test results to
verify the design against its "product (user) requirements" and to identify the
hazards of its use in a risk analysis. This testing is required by the FDA
standards and European Standards governing the initiation of a clinical trial
for medical devices and is a necessary part of good engineering development and
safety. These results must be included in the submission to the FDA requesting
IDE submission to the FDA. The trial design and final specifications are planned
to be based on discussions with and preliminary advice from the FDA.
The animal study will be the last pre-clinical test performed before
the submission of the request for an IDE to the FDA. The purpose of the animal
study will be to:
(A) Confirm that radiation effects from the microspheres result in
the expected local effect in the liver, without adversely affecting other
tissues or organs;
(B) Document and describe any acute and chronic adverse events;
(C) Document and describe the feasibility of the delivery of
microspheres to the liver without "spilling over" or "drifting" to other
places in the body where their effect would be harmful. This study is done
by examining each organ of an animal that has been used to test the
product; and
(D) Document and describe any potential liver toxicity.
This phase will conclude with the completion of a report of an animal
study that meets industry and scientific standards to support the submission of
an IDE to the FDA requesting approval for a "pivotal clinical trial". Efforts to
complete this phase are currently underway. Completion of this phase is expected
to occur by the end of 2007.
14
Upon completion of the Pre-Clinical Testing Phase, we plan to apply to
the FDA for an IDE for the conduct of a feasibility clinical study prior to the
initiation of a "pivotal clinical trial". The feasibility clinical study will be
limited to 10-20 patients at 2-4 clinical centers to evaluate the safety of the
Oncosphere product. Upon completion of the enrollment of this limited number of
patients and subsequent follow-up, we plan to submit an additional IDE
requesting the initiation of a "pivotal clinical trial" will be submitted by
Oncologix to the FDA. This Phase will be completed when the FDA issues a letter
granting approval or conditional approval for a Pivotal Clinical Trial.
Management estimates that this will occur in the first half of 2008. Such a
letter will constitute FDA consent to treat a larger group of patients on an
experimental basis and if successful in that effort, we will then be able to
request FDA approval to market the Oncosphere to all patients with specified
diseases under a PMA.
Our other activities during that time are expected to include
participation by Dr. Andrew S. Kennedy, a member of our Board of Directors and
Chief Science and Medical Officer, in scientific presentations and papers
informing the medical community of the benefits of microarterial brachytherapy
in general and in training physicians in its application. As progress is made,
we will begin to develop manufacturing and marketing plans for the Oncosphere
and will plan to obtain financing for the necessary personnel, facilities and
other requirements for the conduct of a commercial business.
Facilities
The headquarters for our medical device business are located in
approximately 2,000 square feet of leased office space at 3725
Lawrenceville-Suwannee Road, Suwanee, Georgia, 30024. The lease requires a
monthly rent of $1,372 and expires on July 31, 2008. In addition, we occupy
approximately 150 square feet of office space in North Carolina for use by Dr.
Kennedy under a lease that expires on July 31, 2007 and requires a monthly rent
of $1,050. Our corporate headquarters are located in approximately 1,000 square
feet of leased office space at 2850 Thornhills Ave, Grand Rapids, MI 49546. This
lease requires monthly rent of $1,465 and expires October 31, 2007
We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time, other than
laboratory equipment that is necessary to produce the product that will be used
in pre-clinical testing and the human clinical studies. We will continue to use
contracted laboratory and manufacturing facilities through the remainder of the
pre-clinical testing phase.
Employees
We currently employ seven full time employees, our Chief Financial
Officer, who is located at our corporate headquarters in Michigan, four who are
employed by our subsidiary in Georgia, including its President, Chief Operating
Officer, Project Director, Director of Radiation Operations and Radiation
Saftey, our Chief Scientific and Medical Officer who is located in Cary, North
Carolina, and our Chief Executive Officer, who is located in Scottsdale,
Arizona. We anticipate hiring five new employees as we complete the Pre-Clinical
Testing Phase and approach the commencement of the pivotal clinical trials of
our Oncosphere System.
MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Common Stock
The Company's common stock is quoted on the OTC Bulletin Board under
the symbol "OCLG". The high and low bid prices of the Company's common stock as
reported for the last two fiscal years, by fiscal quarter (i.e. first quarter =
September 1 through November 30) were as follows:
High Low
FISCAL YEAR ENDED:
August 31, 2005
First Quarter $ 0.275 $ 0.18
Second Quarter $ 0.27 $ 0.16
Third Quarter $ 0.20 $ 0.10
Fourth Quarter $ 0.23 $ 0.125
FISCAL YEAR ENDED:
August 31, 2006
First Quarter $ 0.26 $ 0.17
Second Quarter $ 1.30 $ 0.15
Third Quarter $ 0.44 $ 0.27
Fourth Quarter $ 0.35 $ 0.28
FISCAL YEAR ENDED:
August 31, 2007
First Quarter $ 0.40 $ 0.20
Second Quarter $ 0.49 $0.37
The bid and ask prices of our common stock on May 14, 2007 were $0.42
and $0.43, respectively.
15
DETERMINATION OF OFFERING PRICE
The price at which the Offered Securities are sold may be based on
market prices prevailing at the time of sale, at prices relating to such
prevailing market prices, or at negotiated prices.
SELLING SECURITY HOLDERS
The table below sets forth information concerning the resale of the
shares of common stock by the selling stockholders. We will not receive any
proceeds from the resale of the common stock by the selling stockholders.
Because the selling stockholder may sell all, a portion or none of their shares,
no estimate can be made of the aggregate number of shares that may actually be
sold by any selling stockholder or that may be subsequently owned by any selling
stockholder.
Percentage of Percentage of
Shares of Common Beneficial Common Stock Beneficial Common Stock
Stock Included in Ownership Before Before Offering Ownership After Owned After
Prospectus (1) Offering (3) (2) Offering (3) Offering(2)(4)
-------------- ------------ ------------ ------------ -----------
Katsinam Partners LP 1,200,000 2,038,000 3.00% 838,000 1.23%
Fred Burstein 89,508 3,145,433 4.63% 3,055,925 4.50%
Stanley Schloz 25,392 916,992 1.35% 891,600 1.31%
University of 200,000 3,340,007 4.92% 3,140,007 4.62%
Maryland
Jared Stone 240,000 567,447 * 327,447 *
Neal Walker 20,000 47,287 * 27,287 *
Dave Albert 20,000 52,016 * 32,016 *
Steve Carta 20,000 47,287 * 27,287 *
Steven Scott 100,000 100,000 * -- *
Anthony Silverman 670,417 6,676,817 9.58% 6,006,400 8.62%
Mountainview 480,718 1,130,718 1.65% 650,000 *
Opportunistic Growth
Fund
MarlinHull, LLC. 516,849 1,558,515 2.26% 1,041,666 1.51%
Wynnjam Corporation 500,000 1,558,515 2.26% 1,058,515 1.54%
Tezak Investments 375,000 815,000 1.19% 440,000 *
David Mason 128,356 128,356 * -- *
Scott Schenter 257,123 717,023 1.05% 459,900 *
John Kane 250,000 476,880 * 226,880 *
Chimney Rock 128,390 228,390 * 100,000 *
Investments
Stewart Investments 500,000 600,000 * 100,000 *
Thomas Miller 1,024,931 1,769,706 2.57% 744,775 1.08%
* Ownership below 1%
16
(1) Includes 4,701,066 shares of common stock issued upon the conversion of
convertible notes payable.
(2) Amounts and percentages are based upon 67,914,249 shares of our common
stock outstanding as of May 14, 2007, plus, for each person or entity
in this table, the shares to be issued either directly or upon exercise
of warrants or conversion of Series A Preferred Stock, as the case may
be.
(3) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as
amended, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rule, beneficial
ownership includes any shares as to which the selling stockholder has
sole or shared voting power or investment power and also any shares
that the selling stockholder has the right to acquire within 60 days.
(4) Assumes that all securities registered will be sold.
PLAN OF DISTRIBUTION
Any or all of the Offered Securities may be sold from time to time by
the selling shareholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made on one or more exchanges 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. There is no assurance that the selling stockholders will sell any
or all of the Offered Securities in this offering. The Offered Securities may be
sold in one or more of the following types of transactions:
(a) a block trade in which a selling shareholder will engage a
broker-dealer who will then attempt to sell the common stock, or 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;
(d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
(e) any combination of the foregoing, or by any other legally available
means. In effecting sales, broker-dealers engaged by the selling shareholders
may arrange for other broker-dealers to participate in the resales.
In connection with distributions of the common stock, the selling
shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the common stock in the course of hedging the positions they assume with selling
shareholders. The selling shareholders may also sell common stock short and
redeliver the common stock to close out such short positions. The selling
shareholders may also enter into option or other transactions with
broker-dealers that require the delivery to the broker-dealer of the common
stock, which the broker-dealer may resell or otherwise transfer pursuant to this
prospectus. The selling shareholders may also loan or pledge common stock to a
broker-dealer and the broker-dealer may sell the common stock so loaned or, upon
a default, the broker-dealer may effect sales of the pledged common stock
pursuant to this prospectus.
Underwriter Status. The selling stockholders, and any broker-dealers or
agents that are involved in selling the Offered Securities, may be considered to
be "underwriters" within the meaning of the Securities Act for such sales. An
underwriter is a person who has purchased shares from an issuer with a view
towards distributing the shares to the public. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be considered to be underwriting commissions or
discounts under the Securities Act. In addition, any of the Offered Securities
covered by this prospectus that qualify for sale pursuant to Rule 144
promulgated under the Securities Act may be sold in an unregistered transaction
under Rule 144 rather than pursuant to this prospectus.
Additionally, under applicable rules and regulations of the Exchange
Act, any person engaged in the distribution of the common stock may not
simultaneously engage in market-making activities with respect to our common
stock for a period of up to five business days prior to the commencement of such
distribution. In addition to those restrictions, each selling shareholder will
be subject to the Exchange Act and the rules and regulations under the Exchange
Act, including, Regulation M and Rule 10b-7, which provisions may limit the
timing of the purchases and sales of our securities by the selling shareholders.
We have agreed to indemnify the selling shareholders against certain
liabilities in connection with the offering of the common stock, including
liabilities arising under the Securities Act. The selling shareholders may agree
17
to indemnify any broker-dealer or agent that participates in transactions
involving sales of the common stock against various liabilities, including
liabilities arising under the Securities Act.
Penny Stock Rules. Our common stock is subject to the "penny stock"
rules that impose additional sales practice requirements because the price of
our common stock is below $5.00 per share. For transactions covered by these
rules, broker-dealers must make special suitability determinations for the
purchase of our common stock and must have received a purchaser's written
consent to the transaction prior to the purchase. The "penny stock" rules also
require the delivery, prior to the transaction, of a risk disclosure document
mandated by the Securities and Exchange Commission relating to the penny stock
market. Broker-dealers must also disclose:
o the commission payable to both the broker-dealer and the
registered representative,
o current quotations for the securities, and
o if the broker-dealer is the sole market maker, the
broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market.
Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks.
These rules apply to sales by broker-dealers to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together
with their spouse), unless our common stock trades above $5.00 per share.
Consequently, the "penny stock" rules may restrict the ability of broker-dealers
to sell our common stock, and may affect the ability to sell our common stock in
the secondary market as well as the price at which such sales can be made. Also,
some brokerage firms will decide not to effect transactions in "penny stocks"
and it is unlikely that any bank or financial institution will accept "penny
stock" as collateral.
Expenses of the Distribution. We will bear all of the costs and
expenses of registering under the Securities Act the sale of securities offered
by this prospectus. Commissions and discounts, if any, attributable to the sales
of the common stock will be borne by the selling shareholders.
State securities laws. In order to comply with the securities laws of
various states, if applicable, sales of the common stock made in those states
will only be made through registered or licensed brokers or dealers. In
addition, some states do not allow the securities to be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with by us and the selling shareholders. We have no obligation to obtain such
registrations or qualifications.
DESCRIPTION OF SECURITIES TO BE REGISTERED
Common Stock
In this prospectus we are registering the resale by the selling
shareholders 6,746,684 shares of common stock. Of the 6,746,684 common stock
shares being registered, 4,701,066 shares were issued upon the conversion of
$1,166,580 in aggregate principal of Convertible Promissory Notes units that
were issued to eleven accredited investors. Those notes were convertible into
our common stock at a conversion price ranging from $0.12 to $1.00.
18
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information we file
with them. This means that we can disclose information to you by referring you
to those documents. The documents that have been incorporated by reference are
an important part of the prospectus, and you should review that information in
order to understand the nature of any investment by you in the common stock.
Information contained in this prospectus automatically updates and supersedes
previously filed information. We are incorporating by reference the documents
listed below as well as any future filings we make with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as amended, until the
completion of this offering, including those filings made between the date of
filing of the initial registration statement and prior to the effectiveness of
the registration statement.
o on Form 8-K filed on June 1, 2007, which includes (i) management's
discussion and analysis or plan of operation for the year ended August
31, 2007 and 2006 and (ii) our consolidated financial statements for
the year ended August 31, 2006.
o our annual report on Form 10-KSB for the fiscal year ended August 31,
2006;
o our quarterly reports on Form 10-QSB for the quarterly periods ended
November 30, 2006 and February 28, 2007; and
o the description of our common stock included in our Registration
Statement on Form 8-A, filed March 11, 1987.
If you would like a copy of any of these documents, at no cost, please
write or call us at:
Oncologix Tech Inc.
2850 Thornhills Ave. SE, Suite 104
Grand Rapids, Michigan 49546
Attn: Corporate Secretary
Telephone: (616) 977-9933
You should only rely upon the information included in or incorporated
by reference into this prospectus or in any prospectus supplement that is
delivered to you. We have not authorized anyone to provide you with additional
or different information. You should not assume that the information included in
or incorporated by reference into this prospectus or any prospectus supplement
is accurate as of any date later than the date on the front of the prospectus or
prospectus supplement.
WE HAVE NOT AUTHORIZED ANY PERSON TO PROVIDE YOU WITH INFORMATION
DIFFERENT FROM THAT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
THE SELLING SHAREHOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES
OF OUR COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED.
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF
THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY
SALE OF COMMON STOCK.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company's Articles of Incorporation provide the directors and
officers, to the fullest extent permitted by the laws of the State of Nevada,
that no director or officer of the Company shall be personally liable to the
Company or its shareholders for monetary damages for breach of fiduciary duty as
a director or officer, provided, however, that nothing shall eliminate or limit
the liability of a director or officer of the Company to the extent provided by
applicable laws (i) for acts or omissions which involve intentional misconduct,
fraud or knowing violation of law or (ii) for authorizing the payment of
dividends in violation of Nevada Revised Statutes Section 78.300. The limitation
of liability continues after a director or officer has ceased to occupy such
position as to acts or omissions occurring during such director's or officer's
term or terms of office. In addition, the Company's Articles of Incorporation
provide that the Company shall, to the fullest extent allowed under Nevada law,
indemnify, defend and hold harmless any person who incurs expenses, claims,
damages or liability by reason of the fact that he or she is, or was, an
officer, director, employee or agent of the Company.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the small business issuer according to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable.
19
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth our estimated costs and expenses in
connection with the offering other than commissions and discounts, if any.
SEC Registration Fee $ 89
Legal Fees and Expenses 5,000
Accounting Fees and Expenses 8,000
Miscellaneous 1,000
---------
Total $ 14,089
=========
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Articles 11 and 12 of our Articles of Incorporation provide as follows:
1. To the fullest extent permitted by the laws of the State of Nevada,
as the same exist or may hereinafter be amended, no director or officer of the
Company shall be personally liable to the Company or its shareholders for
monetary damages for breach of fiduciary duty as a director or officer,
provided, however, that nothing contained herein shall eliminate or limit the
liability of a director or officer of the Company to the extent provided by
applicable laws (i) for acts or omissions which involve intentional misconduct,
fraud or knowing violation of law or (ii) for authorizing the payment of
dividends in violation of Nevada Revised Statutes Section 78.300. The limitation
of liability provided herein shall continue after a director or officer has
ceased to occupy such position as to acts or omissions occurring during such
director's or officer's term or terms of office. No repeal, amendment or
modification of this Article, whether direct or indirect, shall eliminate or
reduce its effect with respect to any act or omission of a director or officer
of the Company occurring prior to such repeal, amendment or modification.
2. The Company shall indemnify, defend and hold harmless any person who
incurs expenses, claims, damages or liability by reason of the fact that he or
she is, or was, an officer, director, employee or agent of the Company, to the
fullest extent allowed under Nevada law.
EXHIBITS
Exhibit Page Number or
Number Description Method of Filing
------ ----------- ----------------
5 Opinion re: legality of the securities being registered Filed herewith
23 Consent of Independent Auditors, Semple Marchal & Cooper LLP Filed herewith
20
UNDERTAKINGS
1. The undersigned registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
provided, however, that paragraphs (a) and (b) shall not apply if such
information is contained in periodic reports filed by the registrant under
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended,
that is incorporated by reference into this Registration Statement.
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
2. The undersigned registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, as amended, 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. The undersigned registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the securities being
registered that remain unsold at the termination of the offering.
4. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report under Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934, as amended (and, where applicable, each
filing of an employee benefit plan's annual report under Section 15(d) of the
Securities Exchange Act of 1934, as amended) that is incorporated by reference
into this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
5. The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished under and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934, as amended;
and, where interim financial information required to be presented by Article 3
of Regulation S-X are not set forth in the prospectus, to deliver, or cause to
be delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
6. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the undersigned registrant according the foregoing
provisions, or otherwise, the undersigned registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Grand Rapids, State of Michigan, on June 1, 2007.
ONCOLOGIX TECH INC.
Date: June 1, 2007 By: /s/ Stanley L. Schloz
--------------------------------
Name: Stanley L. Schloz
Title: President
Date: June 1, 2007
By: /s/ Michael A. Kramarz
--------------------------------
Name: Michael A. Kramarz
Title: Chief Financial Officer
In accordance with the requirements of the Securities Act of 1933,
registration statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
By: /s/ Stanley L. Schloz Date: June 1, 2007
-------------------------------
Stanley L. Schloz, President and Director
By: /s/ Michael A. Kramarz Date: June 1, 2007
-------------------------------
Michael A. Kramarz, Chief Financial Officer
By: /s/ Anthony Silverman Date: June 1, 2007
-------------------------------
Anthony Silverman, Director
By: /s/ Barry Griffith Date: June 1, 2007
-------------------------------
Barry Griffith, Director
By: /s/ Andrew Kennedy Date: June 1, 2007
-------------------------------
Andrew Kennedy, MD, Director
By: /s/ Andrew Green Date: June 1, 2007
-------------------------------
Andrew Green, Director
22