Filed Pursuant to Rule 424(b)(3)
Registration No. 333-126687
Prospectus Supplement No. 2
to Prospectus dated August 11, 2005
PHARMAFRONTIERS CORP.
36,148,266 SHARES
We are further supplementing the prospectus dated August 11, 2005, to
provide information contained in our:
o Current Report on Form 8-K filed September 1, 2005;
o Current Report on Form 8-K filed on October 19, 2005;
o Current Report on Form 8-K filed on October 26, 2005;
o Proxy Statement, dated October 14, 2005, pursuant to Section
14(a) of the Securities Exchange Act of 1934; and
o Current Report on Form 8-K filed on November 1, 2005.
This Prospectus Supplement is not complete without, and may not be
delivered or utilized except in connection with, the Prospectus dated August 11,
2005, with respect to the resale of the 36,148,266 shares of common stock,
including any amendments or supplements thereto.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
READ CAREFULLY THIS ENTIRE PROSPECTUS, INCLUDING THE SECTION CAPTIONED "RISK
FACTORS" BEGINNING ON PAGE 3, BEFORE MAKING A DECISION TO PURCHASE OUR STOCK.
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 Supplement is November 2, 2005
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 29, 2005
----------------
PharmaFrontiers Corp.
---------------------
(Exact Name of Registrant as Specified in Its Charter)
Texas
-----
(State or Other Jurisdiction of Incorporation)
000-25513 76-0333165
--------- ----------
(Commission File Number) (I.R.S. Employer Identification No.)
2408 Timberloch Place, Suite B-7
The Woodlands, Texas 77380
-------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (281) 272-9331
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On August 29, 2005, Terry Wesner was appointed to the Board of Directors.
Mr. Wesner will serve on the Board's Nominating Committee.
Mr. Wesner has not been involved with a related transaction or relationship
as defined by Item 404(a) of Regulation S-B between the Company and him.
Additionally, there is no arrangement or understanding between Mr. Wesner and
any other person pursuant to which Mr. Wesner was selected as a director.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHARMAFRONTIERS CORP.
By: /s/ David B. McWilliams
-----------------------
David B. McWilliams,
Chief Executive Officer
DATE: September 1, 2005
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 17, 2005
--------------------
PharmaFrontiers Corp.
(Exact Name of Registrant as Specified in Its Charter)
------------------------------------------------------
Texas
-----
(State or Other Jurisdiction of Incorporation)
000-25513 76-0333165
--------- ----------
(Commission File Number) (I.R.S. Employer Identification No.)
2635 Crescent Ridge Drive
The Woodlands, Texas 77381
-------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (281) 272-9331
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
On October 17, 2005, Brooks Boveroux was elected to the Board of
Directors. Mr. Boveroux will serve on the Board's Audit Committee. Mr. Boveroux
entered into a standard director's agreement whereby he received ten year
options to purchase 52,500 shares of Company common stock at an exercise price
per share of $1.15 for agreeing to serve on the Board and the Audit Committee.
There is no other arrangement or understanding between Mr. Boveroux and any
other person pursuant to which Mr. Boveroux was selected as a director. Mr.
Boveroux has not been involved with a related transaction or relationship as
defined by Item 404(a) of Regulation S-B between the Company and him.
Item 9.01 Financial Statements and Exhibits
(c) Exhibit 99.1
The following exhibits are to be filed as part of this 8-K:
Exhibit No. Description
99.1 Press release issued October 18, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHARMAFRONTIERS CORP.
By: /s/ David B. McWilliams
---------------------------
David B. McWilliams, Chief Executive Officer
DATE: October 19, 2005
EXHIBIT LIST
Exhibit No. Description
99.1 Press release issued October 18, 2005
End of report
Exhibit 99.1
PharmaFrontiers Corp. Names Brooks Boveroux to Board of Directors
THE WOODLANDS, Texas--(BUSINESS WIRE)--Oct. 18,
2005--PharmaFrontiers Corp. (OTCBB:PFTR), a company involved in the
development and commercialization of cell therapies, announced that
Brooks Boveroux has been elected to serve as a member of its board of
directors. He will also join PharmaFrontiers' audit committee. Mr.
Boveroux, age 62, has held the post of vice president of finance for
several prominent biotechnology companies including Biogen, Inc.,
ImClone Systems, Inc. and The Liposome Company, Inc. His career spans
over two decades of senior level financial positions of both public
and private companies in the health care industry and his last
position was chief financial officer of Imcor Pharmaceutical Co., a
specialty pharmaceutical company, from which he retired in 2004.
David McWilliams, chief executive officer of PharmaFrontiers
Corp., commented, "We are pleased to have Mr. Boveroux join our board
of directors. His broad experience in finance and background in health
care and pharmaceutical organizations will add significant value and
insight to the board."
Mr. Boveroux received a Bachelor of Arts in English Literature
from Hamilton College and a Masters of Business Administration in
Finance from the Wharton Graduate Division, University of
Pennsylvania.
About PharmaFrontiers Corp.
PharmaFrontiers' strategy is to develop and commercialize cell
therapies to treat several major disease areas such as cardiac and
pancreatic conditions and Multiple Sclerosis. PharmaFrontiers owns
patented and proprietary individualized cell therapies that are in FDA
Phase I/II human dose ranging clinical trials to evaluate their safety
and effectiveness in treating MS. The company also holds the exclusive
worldwide license from the University of Chicago, through its prime
contractor relationship with Argonne National Laboratory, for patents
relating to the use of adult pluripotent stem cells derived from
patients' own circulating blood.
Safe Harbor Statement
This press release contains "forward-looking statements,"
including statements about PharmaFrontiers' growth and future
operating results, discovery and development of products, strategic
alliances and intellectual property, as well as other matters that are
not historical facts or information. These forward-looking statements
are based on management's current assumptions and expectations and
involve risks, uncertainties and other important factors, specifically
including those relating to PharmaFrontiers' ability to obtain
additional funding, develop its stem cell technologies, achieve its
operational objectives and obtain patent protection for its
discoveries that may cause PharmaFrontiers' actual results to be
materially different from any future results expressed or implied by
such forward-looking statements. PharmaFrontiers undertakes no
obligation to update or revise any such forward-looking statements,
whether as a result of new information, future events or otherwise.
CONTACT: PharmaFrontiers Corp.
C. William Rouse, 281-775-0608
brouse@pharmafrontierscorp.com
or
Investor Relations Contacts:
Lippert/Heilshorn & Associates
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
Bruce Voss, 310-691-7100
bvoss@lhai.com
or
Media Relations Contact:
Lippert/Heilshorn & Associates
Mark Stuart, 310-691-7100
mstuart@lhai.com
UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 20, 2005
PHARMAFRONTIERS CORP.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 000-25513 760333165
- ----------------------- ----------------------- -------------------
(State of organization) (Commission File Number) (IRS Employer
Identification No.)
2635 N. Crescent Ridge Drive
The Woodlands, Texas 77381
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (281) 272-9331
Former name or former address, if changed since last report: Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a- 12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Principal Officers;
Election of Directors; Appointment of
Principal Officers.
On October 19, 2005, Robert Gow, sent a letter to the chief executive
officer of the company requesting that he address certain concerns within five
days. Prior to the company's ability to respond, on October 20, 2005, Mr. Gow
submitted his resignation as chairman and member of the board. The board of
directors has formed a special committee comprised of independent directors to
address Mr. Gow's letter, and the special committee has commenced its review of
the circumstances surrounding the resignation and recommended to the board for
approval certain measures it believes address corporate governance concerns
raised by Mr. Gow. The special committee will continue its review and make such
further recommendations as it deems necessary and appropriate. Mr. Gow's letters
are filed herewith as Exhibits 17.1 and 17.2 and are incorporated herein by
reference. Mr. Gow had served on the board since June 2004, as well as the
nominating, compensation and audit committees.
On October 25, 2005, the board of directors unanimously elected Brooks
Boveroux, a director and member of the audit committee, as interim chairman,
succeeding Mr. Gow.
Item 9.01. Financial Statements and Exhibit
(c) Exhibits
The following exhibits are to be filed as part of this 8-K:
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
---------- -------------------------
17.1 Letter expressing concerns of director.
17.2 Letter of resignation.
99.1 Press Release dated October 26, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHARMAFRONTIERS CORP.
By: /s/ David B. McWilliams
---------------------------
David B. McWilliams,
Chief Executive Officer
DATE: October 26, 2005
EXHIBIT INDEX
Exhibit No. Description
- ------------- ----------------------
17.1 Letter expressing concerns of director.
17.2 Letter of resignation.
99.1 Press Release dated October 26, 2005.
Exhibit 17.1
ROBERT H. GOW
5 Woods Edge Lane
Houston, TX 77024
(713) 278-7344
(713) 278-7355 (Fax)
Yucabambu@aol.com (Email)
October 19, 2005
Mr. David McWilliams
Chief Executive Officer
PharmaFrontiers Corporation
2635 North Crescent Ridge Drive
The Woodlands, TX 77381
Dear Dave:
As the chairman and a member of the board of directors of PharmaFrontiers, I
have become deeply concerned with the actions of management and certain members
of the board of directors who appear to be operating under the influence of
management without exercising independent judgment.
This concern arises as the result of my understanding and firm belief (as often
emphasized to my business students at Rice) that both members of a corporation's
board of directors and its management owe the duties of a "Fiduciary" to such
corporation's shareholders. It is my further understanding that this duty, as a
Fiduciary, imposes a number of obligations including the "Duty of Due Care" the
"Duty of Loyalty" and the "Duty of Good Faith."
The Duty of Due Care requires the gathering of all material information
reasonably available before making a decision and the duty to consider all
reasonable alternatives.
The Duty of Loyalty includes the duty to promote the best interests of the
corporation and its stockholders and refrain from conduct that would deprive
them of benefits. This duty is violated where: (1) a director or officer
promotes a transaction in which he or she possesses an economic interest; (2)
a director or officer fails to disclose to other members when he is aware that
a transaction involves fraud, misrepresentation, self dealing or conflicts. A
corollary to this duty of Loyalty is the requirement that a director's
decision must be independent. This duty is violated if the director making the
decision has a personal interest in the decision, or has a relationship with
someone who possesses a financial interest in the transaction and will benefit
at the expense of the corporation.
The Duty of "Good Faith" is violated when the board or management acts with
disregard to the best interests of the shareholders, whether out of carelessness
or through manipulation by its members or management.
Mr. David McWilliams October 19, 2005
Page 2
My concerns arise from the following observations:
1. I believe the Company has not pursued a course of financing designed to
maximize the benefit of shareholders.
2. I believe the Company's management has not actively pursued a course of
action designed to increase or even preserve the value of the Company's
stock.
3. I believe the Company's management has failed to timely terminate
investment bankers that were not acting in good faith and failed to
perform as represented;
4. I believe the Company's management has not, in some cases, provided
complete and accurate information to all directors, in an attempt to
stall decision making or manipulate the decision of the board of
directors or in some cases even mislead them;
5. I believe management has circumvented the determinations to be made by
independent committees established under Sarbanes Oxley requirements,
in order to achieve personal objectives and influence decision making
within the Company.
These and other things worry me. I have devoted a great deal of time and effort
to PharmaFrontiers trying to change them. I feel frustrated at not having been
able to do so. I am concerned that some people may feel I approve of our
direction and condone this behavior because I am on the Board. I do not.
Unless something happens in the next five days to make me believe things will be
different, I must reconsider my position as a board member. I do not flatter
myself by expecting this to cause great consternation. However, I hope that, for
the sake of the Company's shareholders, you will give it due consideration.
Sincerely,
Robert H. Gow
cc: Paul Frison
Brian Rodriguez
Tony Kamin
Terry Wesner
Brooks Boveroux
Tom Pritchard
Exhibit 17.2
From: Robert H. Gow
Sent: Thursday, October 20, 2005 6:39 PM
To: David McWilliams
Cc: Paul Frison, Brian Rodriguez, Tony Kamin, Terry Wesner, Brooks Boveroux,
Thomas Pritchard
Subject:
Dave,
I am happy to talk with any member of the Board at any time; However, please
consider this communication my formal resignation as Chairman and as a member of
the Board of Directors of PharmaFrontiers, effective at this time.
Bob Gow
Exhibit 99.1
PharmaFrontiers Corp. Elects Interim Chairman
THE WOODLANDS, Texas--(BUSINESS WIRE)--Oct. 26,
2005--PharmaFrontiers Corp. (OTCBB:PFTR), a company involved in the
development and commercialization of cell therapies, announced today
that Brooks Boveroux, a director of the Company, has been unanimously
elected interim chairman of the board, effective immediately. Mr.
Boveroux, age 62, is replacing Robert H. Gow, who has resigned from
both the board of directors and his position as chairman.
"I am pleased to be taking on the role as interim chairman of
PharmaFrontiers at this important time," said Mr. Boveroux. "My fellow
Board members and I thank Bob for his contributions to the Company and
wish him well in his future endeavors. This is an exciting time as we
prepare to implement our upcoming Phase IIb trials for Tovaxin(TM) in
Multiple Sclerosis. We are encouraged about the power of our
technology to treat this devastating disease."
Mr. Boveroux's career has spanned over two decades of senior level
financial positions with public and private companies both in the
research stage and those marketing approved products in the health
care industry. His last position was chief financial officer of Imcor
Pharmaceutical Co., a specialty pharmaceutical company, from which he
retired in 2004. Mr. Boveroux has held the post of vice president of
finance for several prominent biotechnology companies including
Biogen, Inc., ImClone Systems, Inc. and The Liposome Company, Inc.
David McWilliams, chief executive officer of PharmaFrontiers
Corp., commented, "Mr. Boveroux's leadership and experience in the
health care industry will be a key contributor as PharmaFrontiers
advances its clinical program. I believe this is the ideal time in the
Company's development to appoint a chairman who possesses a wealth of
biopharmaceutical and financial skills and experience."
About PharmaFrontiers Corp.
PharmaFrontiers' strategy is to develop and commercialize cell
therapies to treat several major disease areas such as cardiac and
pancreatic conditions and Multiple Sclerosis. PharmaFrontiers owns
patented and proprietary individualized cell therapies that are in FDA
Phase I/II human dose ranging clinical trials to evaluate their safety
and effectiveness in treating MS. The company also holds the exclusive
worldwide license from the University of Chicago, through its prime
contractor relationship with Argonne National Laboratory, for patents
relating to the use of adult pluripotent stem cells derived from
patients' own circulating blood.
Safe Harbor Statement
This press release contains "forward-looking statements,"
including statements about PharmaFrontiers' growth and future
operating results, discovery and development of products, strategic
alliances and intellectual property, as well as other matters that are
not historical facts or information. These forward-looking statements
are based on management's current assumptions and expectations and
involve risks, uncertainties and other important factors, specifically
including those relating to PharmaFrontiers' ability to obtain
additional funding, develop its stem cell technologies, achieve its
operational objectives, and obtain patent protection for its
discoveries, that may cause PharmaFrontiers' actual results to be
materially different from any future results expressed or implied by
such forward-looking statements. PharmaFrontiers undertakes no
obligation to update or revise any such forward-looking statements,
whether as a result of new information, future events or otherwise.
CONTACT: PharmaFrontiers Corp., The Woodlands
C. William Rouse, 281-775-0608
brouse@pharmafrontierscorp.com
or
Lippert/Heilshorn & Associates
Investor Relations Contacts:
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com
or
Lippert/Heilshorn & Associates
Media Relations Contact:
Mark Stuart, 310-691-7100
mstuart@lhai.com
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PHARMAFRONTIERS CORP.
---------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PHARMAFRONTIERS CORP.
2635 N. Crescent Ridge Drive
The Woodlands, TX 77381
October 14, 2005
To Our Shareholders:
You are cordially invited to attend the Special Meeting of Shareholders of
PharmaFrontiers Corp to be held at 2635 N. Crescent Ridge Drive, The Woodlands,
Texas 77381, at 3:00 p.m., Central Time, Friday, November 11, 2005. Information
about the Special Meeting, including the matter on which shareholders will act,
may be found in the notice of special meeting and proxy statement accompanying
this letter. We look forward to greeting in person as many of our shareholders
as possible.
It is important that your shares be represented and voted at the meeting.
Whether or not you plan to attend the Special Meeting, please complete, sign,
date, and promptly return the accompanying proxy in the enclosed envelope.
Alternatively, you may send your completed and signed proxy via facsimile to
(281) 872-8585. Returning the proxy does NOT deprive you of your right to attend
the Special Meeting. If you decide to attend the Special Meeting and wish to
change your proxy vote, you may do so automatically by voting in person at the
meeting. Please note, however, that if your shares are held of record by a
broker, bank or other nominee and you wish to attend and vote in person at the
meeting, you must obtain from the record holder a proxy issued in your name.
Sincerely yours,
/s/DAVID B. MCWILLIAMS
David B. McWilliams
President, CEO
PHARMAFRONTIERS CORP.
2635 N. Crescent Ridge Drive
The Woodlands, TX 77381
-----------------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
-----------------------------------------------------
The Special Meeting of Shareholders of PharmaFrontiers Corp. will be held
at 2635 N. Crescent Ridge Drive, The Woodlands, Texas 77381, at 3:00 p.m.,
Central Time, Friday, November 11, 2005, for the following purpose:
Approval to amend our Articles of Incorporation to increase the authorized
shares of common stock that we have authority to issue from 50 million
shares to 100 million shares.
This business item is described more fully in the Proxy Statement
accompanying this Notice. Only shareholders who owned our common stock at the
close of business on October 5, 2005, can vote at this meeting or any
adjournments that may take place. All shareholders are cordially invited to
attend the meeting in person. However, to assure your representation at the
meeting, you are urged to mark, sign and return the enclosed proxy as promptly
as possible in the postage-prepaid envelope for that purpose. Alternatively, you
may send your completed and signed proxy via facsimile to (281) 872-8585 Your
stock will be voted in accordance with the instructions you have given. Any
shareholder attending the meeting may vote in person even if he or she has
previously returned a proxy. Please note, however, that if your shares are held
of record by a broker, bank or other nominee and you wish to attend and vote in
person at the meeting, you must obtain from the record holder a proxy issued in
your name.
By Order of the Board of Directors,
/s/ROBERT H. GOW
Robert H. Gow
Chairman
Dated: October 14, 2005
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES WILL BE VOTED IF YOU
ARE NOT ABLE TO ATTEND THE SPECIAL MEETING.
PHARMAFRONTIERS CORP.
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 11, 2005
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Company's Board for use at
the Special Meeting of Shareholders to be held on Friday, November 11, 2005, at
3:00 p.m., Central Time (the "Special Meeting"), or at any adjournment or
postponement of this meeting, for the purpose set forth in this Proxy Statement
and in the accompanying Notice of Special Meeting of Shareholders. The Special
Meeting will be held at 2635 N. Crescent Ridge Drive, The Woodlands, Texas
77381. We intend to mail this Proxy Statement and accompanying proxy card to
shareholders on or about October 14, 2005. The Board of Directors of
PharmaFrontiers Corp., a Texas corporation, prepared this proxy statement for
the purpose of soliciting proxies for our Special Meeting of Shareholders. When
you see the term "we," "our," the "Company" or "Pharma," it refers to
PharmaFrontiers Corp., and its subsidiaries.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company's Secretary,
at the address of the Company's executive offices noted above, written notice of
revocation or a duly executed proxy bearing a later date or by attending the
Special Meeting and voting in person. Attendance at the Special Meeting will
not, by itself, revoke a proxy. Please note, however, that if your shares are
held of record by a broker, bank or other nominee and you wish to attend and
vote in person at the Special Meeting, you must obtain from the record holder a
proxy issued in your name.
Quorum; Abstentions and Broker Non-Votes
Our common stock is the only type of security entitled to vote at the
Special Meeting. Only shareholders of record at the close of business on October
5, 2005 (the "Record Date") will be entitled to notice of and to vote at the
Special Meeting. At the close of business on the Record Date, there were
20,609,545 shares of common stock outstanding and entitled to vote. Each holder
of record of shares of common stock on that date will be entitled to one vote
for each share held on all matters to be voted upon at the Special Meeting.
Shares of common stock may not be voted cumulatively.
Proxies properly executed, duly returned to the Company and not revoked
will be voted in accordance with the specifications made. Where no
specifications are given, such proxies will be voted "FOR" the amendment to the
Articles of Incorporation to increase the aggregate number of shares of common
stock authorized for issuance from 50 million to 100 million.
The required quorum for the transaction of business at the Special Meeting
is a majority of the issued and outstanding shares of the Company's common stock
entitled to vote at the Special Meeting, whether present in person or
represented by proxy. Shares of common stock represented by a properly signed
and returned proxy will be treated as present at the Special Meeting for
purposes of determining a quorum, regardless of whether the proxy is marked as
casting a vote or abstaining. Shares of stock represented by "broker non-votes"
(i.e., shares of stock held in record name by brokers or nominees as to which
(i) instructions have not been received from the beneficial owners or persons
entitled to vote; (ii) the broker or nominee does not have discretionary voting
power under applicable rules or the instrument under which it serves in such
capacity; or (iii) the record holder has indicated on the proxy card or has
executed a proxy and otherwise notified the Company that it does not have
authority to vote such shares on that matter) will be treated as present for
purposes of determining a quorum.
1
Voting
An increase in the authorized number of common shares that we have the
authority to issue from 50 million shares to 100 million shares requires the
affirmative vote of holders of a majority of the shares of common stock issued
and outstanding and entitled to vote at the Special Meeting. Abstentions and
broker non-votes will not be counted as having been voted on the proposal and
will have not effect on the proposal.
Solicitation
The cost of soliciting proxies will be borne by the Company. In addition to
soliciting shareholders by mail and through its regular employees, the Company
will request that banks and brokers and other persons representing beneficial
owners of the shares forward the proxy solicitation material to such beneficial
owners and the Company may reimburse these parties for their reasonable
out-of-pocket costs. The Company may use the services of its officers, directors
and others to solicit proxies, personally or by telephone, facsimile or
electronic mail, without additional compensation.
Shareholder Proposals
Proposals of shareholders that are intended to be presented at our 2006
Annual Meeting of Shareholders in the proxy materials for such meeting must
comply with the requirements of SEC Rule 14a-8 and must be received by our
Secretary no later than January 16, 2006, in order to be included in the Proxy
Statement and proxy materials relating to our 2006 Annual Meeting of
Shareholders. Moreover, with respect to any proposal by a shareholder not
seeking to have the proposal included in the proxy statement but seeking to have
the proposal considered at our next annual meeting, such shareholder must
provide written notice of such proposal to our Secretary at our principal
executive offices by March 16, 2006. With respect to a proposal not to be
included in the proxy statement, in the event notice is not timely given, and
the proposal is permitted at the annual meeting, the persons who are appointed
as proxies may exercise their discretionary voting authority with respect to
such proposals, if the proposal is considered at our next annual meeting, even
if the shareholders have not been advised of the proposal. In addition,
shareholders must comply in all respects with the rules and regulations of the
Securities and Exchange Commission then in effect and the procedural
requirements of our bylaws.
Dissenter's Rights
Neither Texas law nor our articles of incorporation or bylaws provide our
shareholders with dissenters' rights in connection with the amendment of the
Articles of Incorporation.
PROPOSAL - APPROVAL OF AN AMENDMENT TO INCREASE THE NUMBER OF
AUTHORIZED COMMON SHARES
Our Board of Directors proposes that you approve an amendment of our
Articles of Incorporation to increase the number of authorized common stock from
the current 50 million shares to a new total of 100 million shares. The current
issued and outstanding number of shares of common stock is 20,609,545 and there
are derivative securities outstanding that provide the right to acquire up to
25,193,262 shares of common stock. We have no current plans to issue any shares
of common stock.
Description of our Common Stock
Each share of common stock is entitled to one vote per share for the
election of directors and on all other matters submitted to a vote of
stockholders. There are no cumulative voting rights to subscribe for additional
shares, and the common stock is not subject to conversion or redemption. In the
event of liquidation, the holder of common stock will share equally in the
balance of corporate assets available for distribution to them. Subject to the
rights of holders of any other securities subsequently issued, holders of the
common stock are entitled to receive dividends when and as declared by our Board
of Directors out of funds legally available. We have not paid any dividends
since inception and have no intention to pay any dividends in the foreseeable
future. Any future dividends would be subject to the discretion of the Board of
Directors and would depend on, among other things, our future earnings, the
operating and financial condition, our capital requirements, and general
business conditions.
2
Reason for the Increase
We believe that the increase will provide better flexibility in raising
additional capital in the future. Among other things, the increase in the number
of shares of common stock will make available shares for future activities that
are consistent with our growth strategy, including, without limitation,
completing financings, establishing strategic relationships, acquiring or
investing in complementary businesses or products, and providing equity
incentives to employees.
Current holders of common stock have no preemptive rights, which means that
current stockholder do not have prior rights to purchase a new issue of common
stock in order to maintain their current ownership. The issuance of additional
shares of common stock will decrease the proportionate equity ownership of
current shareholders and, depending upon the price paid for such additional
shares, could result in dilution to current stockholders.
The proposed amendment could, under certain circumstances, have an
anti-takeover effect, although this is not the intention of the Company. For
example, the substantial increase in the number of authorized shares could help
management frustrate efforts of shareholders seeking to remove management, could
have the effect of limiting shareholder participation in transactions such as
merger or tender offers, regardless of whether those transactions are favored by
incumbent management. In addition, the board of directors will have the ability
to issue shares privately in transactions that could frustrate proposed mergers,
tender offers, or other transactions, even if those transactions are at
substantial market premiums and are favored by majority of independent
shareholders. Such an issuance of shares of common stock would increase the
number of outstanding shares, thereby possibly diluting the interest of a party
attempting to obtain control of the Company.
Effect of Increase
Upon the filing of the amendment of our articles of incorporation, as a
general matter, approval from the stockholders will not be required to issue any
newly-authorized shares, except as otherwise required by law or applicable rules
of any market upon which our common stock may trade.
Form of Amendment of Article IV of the Articles of Incorporation.
Attached hereto as Exhibit "A" is a form of amended Article IV to the
Articles of Incorporation the only change from the existing Article IV is the
change from authorized capital stock of 60 million shares to the authorized
capital stock of 110 million shares, consisting, in part, of 100 million shares
of authorized common stock instead of 50 million shares of authorized common
stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE AMENDMENT
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 50 MILLION
SHARES TO 100 MILLION SHARES.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of October 5, 2005, certain information
with respect to shares beneficially owned by: (a) each person who is known by us
to be the beneficial owner of more than 5% of our outstanding shares of common
stock; (b) each of our directors; (c) the named executive officers as defined in
Item 402 of Regulation S-B; and (c) all current directors and executive
officers, as a group.
Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 ("Exchange Act"). Under this rule,
certain shares may be deemed to be beneficially owned by more than one person
(if, for example, persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by a person if
the person has the right to acquire shares (for example, upon exercise of an
option or warrant) within sixty days of the date as of which the information is
provided. In computing the percentage ownership of any person, the amount of
shares is deemed to include the amount of shares beneficially owned by such
person by reason of such acquisition rights. As a result, the percentage of
outstanding shares of any person as shown in the following table does not
necessarily reflect the person's actual voting power at any particular date.
3
To our knowledge, except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them.
------------------- ---------------
Number of Shares Percentage of
Name and Address of Beneficial Owner Owned (1) Class
- ------------------------------------------ ------------------- ---------------
SMI Re Limited (2) ...................... 3,572,396 15.64%
George Jarkesy, Jr. (3).................. 2,097,580 9.97%
Top Tier Investments (4)................. 1,228,837 5.96%
Warren Lau .............................. 862,748 4.19%
Terry H. Wesner (5) ..................... 575,920 2.75%
David B. McWilliams (6).................. 384,625 1.84%
Robert H. Gow ........................... 342,500 1.66%
C. William Rouse (7)..................... 238,135 1.15%
Anthony N. Kamin (8)..................... 121,667 *
Brian E. Rodriguez (9)................... 53,334 *
Paul M. Frison (10)...................... 28,333 *
All Directors and Executive Officers as
a group (7 persons) 1,744,513 8.13%
- -----------------
* Less than 1%.
(1) Ownership percentages reflected in the column "Percentage of Class" is
based on 20,609,545 shares of common stock issued and outstanding as of the
Record Date.
(2) Address: Ansbacher Bank Limited, 1 Bank Lane, Nassau, The Bahamas. Includes
2,231,091 shares of common stock that SMI Re Limited may purchase upon
exercise of warrants by December 2005.
(3) Address: 18205 Burkhardt Road, Tomball, Texas 77377. Includes 439,325
shares of common stock that Mr. Jarkesy may purchase upon exercise of
warrants by December 2005.
(4) Address: 50 California Street, Suite 3000, San Francisco, California 94111.
(5) Includes 348,625 shares of common stock that Mr. Wesner may purchase upon
exercise of options and warrants that are currently vested or will become
vested by December 2005.
(6) Includes 320,369 shares of common stock that Mr. McWilliams may purchase
upon exercise of options and warrants that are currently vested or will
become vested by December 2005.
(7) Includes 75,215 shares of common stock that Mr. Rouse may purchase upon
exercise of options and warrants that are currently vested or will become
vested by December 2005.
(8) Includes 21,667 shares of common stock that Mr. Kamin may purchase upon
exercise of stock options that are currently vested or will become vested
by December 2005.
(9) Consists of 53,333 shares of common stock that Mr. Rodriguez may purchase
upon exercise of stock options that are currently vested or will become
vested by December 2005.
(10) Consists of 28,333 shares of common stock that Mr. Frison may purchase upon
exercise of stock options that are currently vested or will become vested
by December 2005.
4
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information regarding the Company's
current directors and executive officers. The Company's executive officers are
elected by the board of directors and shall serve at the discretion of the
board. All of the current directors serve until the next annual stockholders'
meeting or until their successors have been duly elected and qualified.
Name Age Position
David B. McWilliams 62 President and Chief Executive
Officer, Director
Robert H. Gow 72 Chairman of the Board
C. William Rouse 58 Chief Financial Officer
Anthony N. Kamin 45 Director
Paul M. Frison 68 Director
Brian E. Rodriguez 35 Director
Terry H. Wesner 59 Director
David B. McWilliams was appointed President and Director in August 2004.
From June 2003 to December 2003, Mr. McWilliams served as President and chief
executive officer of Bacterial Barcodes, Inc., a molecular diagnostics company.
From May 2002 to June 2003, Mr. McWilliams served as chief executive officer of
Signase, Inc., a cancer therapy company. Mr. McWilliams served as chief
executive officer of Encysive Pharmaceuticals Inc., a cardiovascular
therapeutics company from June 1992 to March 2002. Prior to June 1992, Mr.
McWilliams served as chief executive officer of Zonagen Inc., a human
reproductive products company. Prior to that time, Mr. McWilliams was a senior
executive with Abbott Laboratories and a management consultant with McKinsey &
Co. He currently serves as a director of Novelos Therapeutics, Inc. and Fairway
Medical Systems, Inc. He also serves on the boards of the Texas Healthcare and
Bioscience Institute and the Houston Technology Center. He received an MBA in
finance from the University of Chicago, and a B.A. in chemistry, Phi Beta Kappa,
from Washington and Jefferson College.
Robert H. Gow was elected Chairman of the Board in June 2004. Since 1994,
Mr. Gow has been president of Yucatan Bamboo, Inc., a privately held company
that raises and produces bamboo products. From March 1992 to July 1994, Mr. Gow
served as president and chief executive officer of SI Diamond Technology, Inc.,
a publicly held company engaged in the production of industrial coatings and
coating equipment. Between 1985 and March 1992, he devoted substantially all of
his time to the management of his personal investments. Previously, Mr. Gow
served as the president of Enterprise Technologies, Inc., a publicly held
distributor of fuel oil, a consultant to Norton Co., a publicly held
manufacturer of abrasives and diamond drilling bits; vice president of Gulf
Resources and Chemical Corp., a publicly held mining and chemical company;
president of Stratford of Texas, Inc., a public agricultural conglomerate;
president of Zapata Corp., a publicly held offshore drilling and maritime
support company; president of Champlain-Zapata Plastic Machinery, Inc., a
subsidiary of Zapata that manufactured plastic molding equipment; and supervisor
of Industrial Engineering for Norton Co. Mr. Gow graduated from the Yale School
of Engineering in 1955.
C. William Rouse has served as the Company's Chief Financial Officer since
May 2004. Prior to May 2004, Mr. Rouse was managing director of Rouse Associates
from April 1999 until May 2004. From January 1995 to April 1999 he was chief
marketing officer for Futorian Inc. and from December 1990 to January 1995 he
was a division general manager for Masco Corporation. Prior to 1990 Mr. Rouse
was president of BEI, Inc. Mr. Rouse has led several startups and turnarounds
and founded several successful companies.
Anthony N. Kamin has served as a Director of the Company since December
2004. Mr. Kamin currently serves as president of two companies: Eastwood
Investment Management, a private equity multi-strategy and multi-asset class
manager; and Interim Medical Management a management services company primarily
in the biotechnology and medical device fields. From 1998 to 2003, Kamin was a
venture partner with Venture Strategy Partners. He is a co-founder of Nobex
Corporation (oral protein and peptide delivery) and Hi Fidelity Entertainment.
He is also currently Chairman of the Board of Advisors for Devlab, a center for
technology commercialization at Northwestern University. He also serves on
boards for Illinois Technology Enterprise Center (ITEC) in Chicago, Real
American Restaurants, B2P.com, and The Cove School for children with learning
disabilities. Kamin received a Masters Degree from Yale University in
International Relations with a concentration in International Law.
Paul M. Frison has served as a director of the Company since November 2004.
Mr. Frison has been president and chief executive officer of the Houston
Technology Center since January 1999. Before helping to found the Houston
Technology Center in 1999, Frison spent 24 years as president and/or chief
executive officer building three public companies, NYSE-listed LifeMark,
5
NASDAQ-listed ComputerCraft, and LifeCell Corp. (LIFC: NASDAQ-NM). Mr. Frison
currently serves on the board of directors of the Houston Technology Center,
Micromed Technologies, Inc., The Institute of Research and Rehabilitation, The
Entrepreneurship Institute, The Houston Entrepreneurs Foundation, The Lions Eye
Foundation - Houston, Boy Scouts of America - Houston, Texas Council of AEA,
Texchange, and the Advisory Council of the University of Houston - College of
Technology. He received his B.A. from Occidental College in Los Angeles,
California.
Brian E. Rodriguez has served as a Director and Chairman of the Audit
Committee since August 2004. Mr. Rodriguez has served as an accounting and
finance consultant for Jefferson Wells International from October 2004 to the
present. From March 2002 to October, 2004, Mr. Rodriguez served as controller
and then director of Finance for JP Mobile Inc., a privately held wireless
software company based in Dallas. Mr. Rodriguez served as controller for
ChipData Incorporated from March, 2001 to March, 2002. Prior to that Mr.
Rodriguez was a consultant with Parson Consulting from April 1999 to March 2001.
Mr. Rodriguez has been a Certified Public Accountant in the State of Texas since
May 1995. Mr. Rodriguez began his career in the Business Assurance practice of
Cooper & Lybrand in Dallas, Texas. Mr. Rodriguez holds a B.B.A. from Texas A&M
University.
Terry H. Wesner has served as a director of the Company since August 2005.
Mr. Wesner has served as chief executive officer of Bernard J. Klein Publishing
and GetMath Educational Software since 1996. Before founding Bernard J. Klein
Publishing and GetMath Educational Software, Mr. Wesner was a Professor of
Mathematics and Statistics at Henry Ford Community College and continues to
remain on the faculty. He also published a successful series of thirty college
level mathematics textbooks with McGraw-Hill Publishers. Prior to this Mr.
Wesner was a member of the faculty of Harvard School of Medicine as Director of
Research for the National Diabetes Association. Mr. Wesner graduated Chi Beta
Phi from The University of Memphis with degrees in biology, mathematics and
statistics.
Director Independence
The Board of Directors has determined that each of Messrs. Gow, Rodriguez,
Kamin, Frison and Wesner are independent directors as defined in Rule 10A-3 of
the Exchange Act. As part of its analysis, the Board of Directors determined
that none of Messrs. Gow, Rodriguez, Kamin, Frison and Wesner have a direct or
indirect material relationship with the Company that would interfere with the
exercise of independent judgment.
Compensation Committee
The Compensation Committee of the Board consists of Messrs. Gow, Frison and
Kamin. Messrs. Gow, Frison and Kamin are independent directors as defined in
Rule 10A-3 of the Exchange Act. The Compensation Committee reviews and approves
salaries and incentive compensation for the Company's executive officers.
Audit Committee
The Audit Committee of the Board consists of three non-employee directors,
Messrs. Gow , Rodriguez and Wesner. Each of Messrs. Gow, Rodriguez and Wesner
are independent as defined in Rule 10A-3 of the Exchange Act. The Audit
Committee engages the Company's independent auditors, reviews the Company's
financial controls, evaluates the scope of the annual audit, reviews audit
results, consults with management and the Company's independent auditors prior
to the presentation of financial statements to shareholders and, as appropriate,
initiates inquiries into aspects of the Company's internal accounting controls
and financial affairs. The Board has determined that Mr. Rodriguez qualifies as
an "audit committee financial expert" as defined by Item 401(e) of Regulation
S-B of the Securities Act of 1933.
Nominating Committee
The Nominating Committee consists of four non-employee directors, Messrs.
Gow, Frison, Kamin and Wesner. Each of Messrs. Gow, Frison, Kamin and Wesner are
independent as defined in Rule 10A-3 of the Exchange Act. The Nominating
Committee interviews and reviews the background experience of potential members
to the Board.
6
Executive Compensation
The following tables contain compensation data for our named executive
officers for the fiscal year ending December 31, 2004.
Summary Compensation Table
--------------------------
Annual Long Term
Compensation Compensation Awards
Name and Salary Bonus Securities Underlying All Other
Principal Positions Year ($) ($) Options (#) Compensation ($)
------------------- ---- --- --- ----------- ----------------
David B. McWilliams (1) 2004 73,000 - 370,000 (2) -
2003 - - - -
2002 - - - -
Warren Lau (3) 2004 98,000 - - -
2003 - - - -
2002 - - - -
Jason Otteson (4)
2004 42,000 - - -
2003 102,000 - 24,000 -
2002 102,000 - - -
(1) Served as chief executive officer since August 2004.
(2) See "Executive Employment Contracts" for a discussion of the option.
(3) Served as chief executive officer from June 2004 through August 2004.
(4) Served as chief executive officer until June 2004.
Option Grants in Last Fiscal Year - Individual Grants
-----------------------------------------------------
Number of Securities % of Total Options Exercise/Base Price Expiration
Name Options Granted Granted to Fiscal Year ($/Share) Date
---- --------------- ---------------------- --------- ----
David B. McWilliams 370,000 32% $3.00 August 2009
Warren Lau - - - -
Jason Otteson - - - -
Options Exercises and Fiscal 2004 Year End Values
-------------------------------------------------
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at December 31 2004 at December 31 2004 (1)
---------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
David McWilliams 50,000 320,000 $ 170,000 $ 1,088,000
Warren Lau - - - -
Jason Otteson - - - -
(1) The value of "in-the-money" stock options represents the difference between
the $3.00 exercise price of such options and the fair market value of $6.40
per share of common stock as of December 31, 2004, the closing price of the
common stock reported on the OTC Bulletin Board.
7
No options were exercised during the fiscal year ended December 31, 2004.
No stock appreciation rights were outstanding as of December 31, 2004.
Executive Employment Contracts
Mr. David B. McWilliams has an existing employment agreement with the
Company that he entered into effective August 23, 2004. Mr. McWilliams current
agreement for the position of chief executive officer is at an annual salary of
$250,000 and may be terminated by the Company or Mr. McWilliams at any time for
any or no reason. Mr. McWilliams has the right to purchase 370,000 shares of
Company common stock exercisable at a price per share of $3.00, of which 10,000
shares of Company common stock shall vest on the 1st day of each month of Mr.
McWilliams employment. In January 2005, Mr. McWilliams was granted an option to
purchase 50,000 shares of common stock at a purchase price of $3.00 per share,
of which one-third vested on the date of grant, one-third shall vest on the
first anniversary of the grant date and the remaining one-third shall vest on
the second anniversary of the grant date.
Charles William "Bill" Rouse employment agreement, effective April 28,
2004, as amended, expires April 28, 2006,and provides for an annual salary of
$180,000. Pursuant to his employment agreement, Mr. Rouse acquired 150,000
shares at a purchase price of $0.10 per share in June 2004. Mr. Rouse has the
right to purchase 100,000 shares of Company common stock exercisable at a price
per share of $3.00, of which one-third shall vest on each of the first, second
and third anniversary of Mr. Rouse's employment. In January 2005, Mr. Rouse was
granted an option to purchase 50,000 shares of common stock at a purchase price
of $3.00 per share, of which one-third vested on the date of grant, one-third
shall vest on the first anniversary of the grant date and the remaining
one-third shall vest on the second anniversary of the grant date.
Related Party Transactions
There are no related party transactions other than what is disclosed
herein.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
SIGN, DATE, AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE SPECIAL
MEETING. IF YOU DECIDE TO ATTEND THE SPECIAL MEETING AND WISH TO CHANGE
YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE
MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE SPECIAL MEETING.
By Order of the Board of Directors
/s/ROBERT H. GOW
Robert H. Gow, Chairman
October 14, 2005
The Woodlands, Texas
8
EXHIBIT "A"
Article IV.
The aggregate number of shares which the Corporation shall have authority
to issue is one hundred ten million (110,000,000), consisting of one hundred
million (100,000,000) shares of common stock having $0.05 par value ("Common
Stock"), and ten million (10,000,000) shares of preferred stock having no par
value ("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time to
time in one or more classes or series, each of which class or series shall have
such distinctive designation or title as shall be determined by the Board of
Directors of the Corporation ("Board of Directors") prior to the issuance of any
shares thereof. Each such class or series of Preferred Stock shall have such
voting powers, full or limited, or no voting powers, and such preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated in such
resolution or resolutions providing for the issue of such class or series of
preferred stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof pursuant to the authority hereby
expressly vested in it, all in accordance with the laws of the State of Texas.
A-1
FORM OF PROXY
PHARMAFRONTIERS CORP.
SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 11, 2005
PHARMAFRONTIERS CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PharmaFrontiers Corp., ("the Company")
hereby acknowledges receipt of the Notice of Special Meeting of Shareholders and
appoints Robert H. Gow or David B. McWilliams and each of them, with full power
of substitution, as Proxy or Proxies to vote as specified in this Proxy all the
shares of common stock of the Company of the undersigned at the Special Meeting
of Shareholders of the Company to the held at 2635 N. Crescent Ridge Drive, The
Woodlands, Texas 77381, at 3:00 p.m., Central Time, Friday, November 11, 2005,
and any and all adjournments or postponements thereof. Either of such Proxies or
substitutes shall have and may exercise all of the powers of said Proxies
hereunder. The undersigned shareholder hereby revokes any proxy or proxies
heretofore executed for such matters.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER AS DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE AMENDMENT TO THE ARTICLES OF INCORPORATION. THE UNDERSIGNED
SHAREHOLDER MAY REVOKE THIS PROXY AT ANY TIME BEFORE IT IS VOTED BY THE
DELIVERING TO THE SECRETARY OF THE COMPANY EITHER A WRITTEN REVOCATION OF THE
PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY APPEARING AT THE
SPECIAL MEETING AND VOTING IN PERSON.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE ARTICLES OF
INCOPORATION. PLEASE MARK, SIGN, DATE, AND RETURN THIS CARD USING THE ENCLOSED
RETURN ENVELOPE.
1. To approve an amendment to the Company's Articles of Incorporation to
increase the aggregate number of shares of common stock authorized for
issuance from 50 million shares to 100 million shares.
For Against Abstain
---------------------------------------
[ ] [ ] [ ]
DATED:
----------------------- ---------------------------------------
[Signature]
---------------------------------------
[Signature if jointly held]
---------------------------------------
[Printed Name]
End of Filing
UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2005.
PHARMAFRONTIERS CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 000-25513 760333165
- ------------------------ -------------------------- --------------------
(State of organization) (Commission File Number) (IRS Employer
Identification No.)
2635 N. Crescent Ridge Drive
The Woodlands, Texas 77381
- ---------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (281) 272-9331
Former name or former address, if changed since last report: Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a- 12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On October 26, 2005, Brian E. Rodriguez, submitted his resignation as a
member of the board. The circumstances surrounding his resignation are contained
in his resignation letter filed herewith as Exhibit 17.1. The Special Committee
with its independent counsel will review the reasons surrounding Mr. Rodriguez's
resignation and will provide any appropriate recommendations to the Board.
The Board of Directors has reconstituted the audit committee to consist of
Messrs. Boveroux and Wesner. Mr. Boveroux will serve as the audit committee
financial expert and Chairman.
Item 9.01. Financial Statements and Exhibit
(c) Exhibits
The following exhibits are to be filed as part of this 8-K:
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
---------- -------------------------
17.1 Letter of resignation.
99.1 Press Release dated November 1, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHARMAFRONTIERS CORP.
By: /s/ David McWilliams
--------------------
David McWilliams,
Chief Executive Officer
DATE: November 1, 2005
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
17.1 Letter of resignation.
99.1 Press Release dated November 1, 2005.
Exhibit 17.1
October 26, 2005
PharmaFrontiers Corp.
2635 N. Crescent Ridge Drive
The Woodlands, TX 77381
To the Board of Directors:
Please consider this letter as my formal notice of resignation as a member of
the board of directors of PharmaFrontiers Corporation, effective immediately. As
a director of PharmaFrontiers over the last fourteen months, I have observed a
number of irregularities, as management appears to pursue its own interests
without regard to duties of shareholders, unbridled by the board of directors.
In this regard, I share Robert Gow's views and concerns. In addition to Bob's
observations, I have on several occasions been excluded from directors' meetings
through what appeared to be concerted efforts by management to schedule meetings
at times making it impossible for me to attend. Further, I have observed that
despite specific instructions and mandates given to management by the board of
directors, management appears to be operating on its own agenda, ignoring such
mandates and instructions with no ramifications.
I believe any outside observer would conclude that the judgment of the company's
board of directors has been supplanted by the agenda of the company's officers.
I have attempted to reverse this situation, but like Bob Gow, find it impossible
to continue under the circumstances.
Sincerely,
Brian E. Rodriguez
Exhibit 99.1
PharmaFrontiers Corp. Reconstitutes Its Audit Committee
THE WOODLANDS, Texas--(BUSINESS WIRE)--Nov. 1,
2005--PharmaFrontiers Corp. (OTCBB:PFTR), a company involved in the
development and commercialization of cell therapies, announced today
that Brooks Boveroux, Chairman of the Board of Directors of the
Company, has been unanimously elected to chairman of the audit
committee, effective immediately. Mr. Boveroux, age 62, is replacing
Brian Rodriguez, who has resigned from both the board of directors and
his position as chairman of the audit committee.
"I am pleased to be taking on the role as chairman of the audit
committee at this important time," said Mr. Boveroux. "My fellow Board
members and I thank Brian for helping PharmaFrontiers achieve a
successful reverse merger and wish him well in his future endeavors.
This is an exciting time as we prepare to implement our upcoming Phase
IIb trials for Tovaxin(TM) in Multiple Sclerosis. We are encouraged
about the power of our technology to treat this devastating disease."
Mr. Boveroux's career has spanned over two decades of senior level
financial positions with public and private companies both in the
research stage and those marketing approved products in the health
care industry. His last position was chief financial officer of Imcor
Pharmaceutical Co., a specialty pharmaceutical company, from which he
retired in 2004. Mr. Boveroux has held the post of vice president of
finance for several prominent biotechnology companies including
Biogen, Inc., ImClone Systems, Inc. and The Liposome Company, Inc.
David McWilliams, chief executive officer of PharmaFrontiers
Corp., commented, "Mr. Boveroux's public company financial experience
will be a key asset to our audit committee. This is the ideal time in
the Company's development to appoint an audit committee chairman who
possesses a wealth of financial knowledge and experience."
About PharmaFrontiers Corp.
PharmaFrontiers' strategy is to develop and commercialize cell
therapies to treat several major disease areas such as cardiac and
pancreatic conditions and Multiple Sclerosis. PharmaFrontiers owns
patented and proprietary individualized cell therapies that are in FDA
Phase I/II human dose ranging clinical trials to evaluate their safety
and effectiveness in treating MS. The company also holds the exclusive
worldwide license from the University of Chicago, through its prime
contractor relationship with Argonne National Laboratory, for patents
relating to the use of adult pluripotent stem cells derived from
patients' own circulating blood.
Safe Harbor Statement
This press release contains "forward-looking statements,"
including statements about PharmaFrontiers' growth and future
operating results, discovery and development of products, strategic
alliances and intellectual property, as well as other matters that are
not historical facts or information. These forward-looking statements
are based on management's current assumptions and expectations and
involve risks, uncertainties and other important factors, specifically
including those relating to PharmaFrontiers' ability to obtain
additional funding, develop its stem cell technologies, achieve its
operational objectives, and obtain patent protection for its
discoveries, that may cause PharmaFrontiers' actual results to be
materially different from any future results expressed or implied by
such forward-looking statements. PharmaFrontiers undertakes no
obligation to update or revise any such forward-looking statements,
whether as a result of new information, future events or otherwise.
CONTACT: PharmaFrontiers Corp., The Woodlands
C. William Rouse, 281-775-0608
brouse@pharmafrontierscorp.com
or
Investor Relations Contacts:
Lippert/Heilshorn & Associates
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com
or
Media Relations Contact:
Lippert/Heilshorn & Associates
Mark Stuart, 310-691-7100
mstuart@lhai.com