-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pzo0KysbmeuGH2lGHppSoIesD0EuW93ixcJ/KeRlvBiRXngEFdZGtbRgwA+RvqII D15JW+saWm+ZAvCl9Vyduw== 0000897069-02-000519.txt : 20020725 0000897069-02-000519.hdr.sgml : 20020725 20020725113926 ACCESSION NUMBER: 0000897069-02-000519 CONFORMED SUBMISSION TYPE: 20-F/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NYMOX PHARMACEUTICAL CORP CENTRAL INDEX KEY: 0001018735 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 20-F/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12033 FILM NUMBER: 02710542 BUSINESS ADDRESS: STREET 1: 9900 CAVENDISH BLVD., SUITE 306 STREET 2: ST. LAURENT CITY: QUEBEC CANADA STATE: A8 ZIP: H4M 2V2 BUSINESS PHONE: 514-332-32 MAIL ADDRESS: STREET 1: 9900 CAVENDISH BLVD., SUITE 306 STREET 2: ST. LAURENT CITY: QUEBEC CANADA STATE: A8 ZIP: H4M 2V2 20-F/A 1 slp324.txt FORM 20-F AMENDMENT NO. 1 Form 20 - F/A (Amendment No. 1) [ ] Registration statement pursuant to section 12(b) or (g) of the Securities Exchange Act of 1934 [Fee required] or [X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee required] - For the fiscal year ended December 31, 2001 or [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 [No fee required] - For the transition period from to Nymox Pharmaceutical Corporation (Exact name of registrant as specified in its charter) Canada (Jurisdiction of incorporation or organization) 9900 Cavendish Blvd., Suite 306 St. Laurent, Quebec, Canada, H4M 2V2 Securities registered or to be registered pursuant to section 12(b) of the Act. Title of each class Name of each exchange on which registered --------------------- ----------------------------------------- None Not Applicable Securities registered or to be registered pursuant to section 12(g) of the Act Common Stock Securities registered or to be registered pursuant to section 15(d) of the Act None Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 22,297,525 shares as of December 31, 2001. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report(s)), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 [X] Item 18 [ ] 1 The registrant hereby amends its Annual Report on Form 20-F as set forth below: ITEM 3 The paragraph entitled "Share Capital" has been revised to change the title to "Capitalization," update the number of shares outstanding, correct the par value, better align the number $25,376,557 on the right side of the table, eliminate reference to "(deficit)" on the left side of the table, add "and options" next to the line item "warrants," and to make other immaterial changes. ITEM 5 The paragraph entitled "Liquidity and Capital Resources" was amended to make certain immaterial changes and to add a sentence disclosing financing available to Nymox as of June 30, 2002, under Nymox's equity line with Jaspas. ITEM 6 The "Legal Proceedings" provision is amended to clarify the reason for the discrepancy between the disclosure regarding the amount of damages claimed by AMRO in Note 7, paragraph (c) of the Consolidated Financial Statements of Nymox for the years ended December 31, 2001, 2000 and 1999 and the disclosure in the text of the Form 20-F. 2 ITEM 3 KEY INFORMATION Selected Financial Data The following table sets forth selected consolidated financial data for Nymox for the periods indicated, derived from financial statements prepared in accordance with generally accepted accounting principles ("GAAP"). We prepare our basic financial statements in accordance with Canadian GAAP and include, as a note to the statements, a reconciliation of material differences to United States GAAP. The financial statements have been audited by KPMG, LLP, Montreal, Canada as at and for the years ended December 31, 1997, 1998, 1999, 2000 and 2001. The data set forth below should be read in conjunction with the Company's consolidated financial statements and notes thereto.
NYMOX PHARMACEUTICAL CORPORATION Selected Consolidated Financial Data (In U.S. dollars(3)) Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, -------- -------- -------- -------- -------- 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- CANADIAN GAAP Current Assets $714,522 $749,510 $776,824 $2,708,543 $1,750,388 Capital Assets 3,371,524 3,412,694 1,168,316 1,279,692 983,484 Total Assets 4,192,241 4,384,716 2,140,491 3,988,235 2,733,872 Total Liabilities 747,493 323,774 833,344 301,004 202,543 Share Capital & Other 25,798,195 23,243,941 16,912,963 15,943,710 9,597,888 Shareholder's Equity 2,644,748 3,260,942 1,307,147 3,687,231 2,531,329 Total Revenues 380,609 225,867 190,203 273,565 70,055 Sales, license fees and 362,691 157,688 153,252 104,804 17,033 research contracts 3 Research & Development Expenditures(1) 1,479,602 2,073,775 1,132,941 2,087,742 1,671,412 Net Loss 3,049,504 4,023,979 3,314,296 4,783,213 3,463,905 Loss per Share $0.14 $0.19 $0.17 $0.25 $0.19 Weighted Avg. No. of Common Shares 21,873,966 20,890,735 19,886,430 19,304,435 18,370,873 U.S. GAAP(2) Net Loss 3,095,133 $4,272,308 $3,409,166 $4,979,562 $3,755,409 Loss per Share 0.14 0.20 0.17 0.26 0.20 Shareholder's Equity $2,496,104 $3,102,887 $1,139,731 $3,304,352 $2,428,052 (1) We earn investment tax credits by making qualifying research and development expenditures. These amounts shown are net of investment tax credits. (2) Reference is made to Note 10 of Nymox's audited financial statements as at and for the year ended December 31, 2001 for a reconciliation of differences between Canadian and U.S. GAAP. (3) Effective January 1, 2000, the Corporation adopted the United States dollar as its measurement currency as a result of the increasing proportion of operating, financing and investing transactions in the Canadian operations that are denominated in U.S. dollars. For Canadian GAAP purposes, the financial information for all periods presented up to December 31, 1999 has been translated into U.S. dollars at the December 31, 1999 exchange rate, which was 1.4433 Canadian dollars to the U.S. dollar. For U.S. GAAP purposes, assets and liabilities for all years presented have been translated into U.S. dollars at the ending exchange rate for the respective year and the statement of earnings at the average rate for the respective year. Reference is made to notes 2(a) and 10 of the consolidated financial statements.
Capitalization The following table sets forth our capitalization as of December 31, 2001. This table should be read in conjunction with the financial statements and related notes, and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this report. Long term debt and capital lease obligations $0 ---------------- Shareholder's Equity: Share Capital: Common stock, no par value; 22,297,525 shares issued and outstanding actual. Shares authorized for issue: unlimited $25,376,557 Warrants and options 421,638 Accumulated deficit ($23,153,447) ---------------- Total shareholder's equity $2,644,748 ================ Total capitalization $2,644,748 ================ 4 Risk Factors The following risk factors apply to Nymox and our industry. An investment in shares of common stock of Nymox involves a high degree of risk. You should carefully consider each of the risks and uncertainties described below along with all of the other information in this prospectus before deciding to invest in these shares. It is Uncertain When, if Ever, We Will Make a Profit We first began operations in 1995 and are only in the early stages of commercial marketing of our products, AlzheimAlert(TM), NicAlert(TM) and Nicometer(TM). We have never made a profit. We incurred a net loss of $4.8 million in 1998, $3.3 million in 1999, $4.0 million in 2000, and $3.0 million in 2001. As of December 31, 2001, Nymox's accumulated deficit was $23.2 million. We cannot say when, if ever, Nymox will become profitable. Profitability will depend on our uncertain ability to generate revenues from the sale of our products and the licensing of our technology that will offset the significant expenditures required for us to advance our research, protect and extend our intellectual property and develop, manufacture, license, market, distribute and sell our technology and products successfully. Similar types of expenditures in the past have helped produce the net losses reported above. We May Not Be Able to Raise Enough Capital to Develop and Market Our Products Nymox has funded its operations primarily by selling shares of its common stock. Since late 1997, a small portion of the funds came from sales. However, sales have not been, and may not be in the foreseeable future, sufficient to meet our anticipated financial requirements. We will continue to need to raise substantial amounts of capital for our business activities including our research and development programs, the conduct of clinical trials needed to obtain regulatory approvals and the marketing and sales of our products. We anticipate being able to fund our current total annual budgeted expenditures of approximately $3 million per year through our current cash position and additional financing including draw downs through our Common Stock Purchase Agreement. Clinical trials will substantially increase cash requirements. We anticipate being able to meet those requirements as they arise. Any necessary clinical trials for regulatory approval following successful initial clinical trials will require considerably more capital. We plan to raise such capital either through a new round of financing and/or through partnering with a major pharmaceutical company. Additional financing may not be available when needed, or, if available, may not be available on acceptable terms. If adequate funds on acceptable terms are not available, we may have to curtail or eliminate expenditures for research and development, testing, clinical trials, promotion and marketing for some or all of our products. We Face Challenges in Developing and Improving Our Products Our success depends on our ability to develop or acquire rights to new products or to improve our existing products. We are still developing many of our products and have not yet brought 5 them to market. We cannot assure you that we will be able to develop or acquire rights to such products and to market them successfully. Developing a treatment for Alzheimer's disease is particularly challenging. Many pharmaceutical companies, institutions and researchers are working on many different approaches and treatments. There is no consensus among researchers about the cause of this fatal illness and no guarantee that our drug development programs in this area are targeting significant factors in its cause, progression or symptoms. It is difficult to design drug candidates that can cross from the bloodstream into the brain, where the damage from Alzheimer's disease is occurring. Clinical trials to establish efficacy for drugs that slow down the progression of Alzheimer's disease over a period of months or years often require that a large number of subjects be tracked over many months or years, making them very expensive to conduct. The potentially long period from discovery and patenting through development and regulatory approval to the market can significantly reduce the patent life of an Alzheimer's disease treatment. Any marketed treatment in this area may well eventually face competition from "me-too" drugs developed by other pharmaceutical companies based on our research. We will be under constant competitive pressure to improve our products and to develop new treatments in order to protect our position in the field. Developing and improving our diagnostic products is also challenging. The science and technology of the detection and measurement of very small amounts of biochemicals in bodily fluids and tissue is evolving rapidly. We may need to make significant expenditures in research and development costs and licensing fees in order to take advantage of new technologies. If any major changes to our testing technologies used in our AlzheimAlert(TM), NicAlert(TM) and Nicometer(TM) tests are made, further validation studies will be required. Developing new diagnostic products is more challenging, requiring identification and validation of the biochemical marker being detected by the new product in the clinical context and the development and validation of the product designed to detect the marker. We Face Significant and Growing Competition The modern pharmaceutical and biotechnology industries are intensely competitive, particularly in the field of Alzheimer's disease where there is a large unmet need for an effective treatment. Currently there are four drugs with the same mechanism of action approved for sale in the United States (Aricept(R), Cognex(R), Exelon(R) and Reminyl(R)). These drugs offer some relatively short-term symptomatic relief, but do not treat the underlying causes of the illness. Over the past decade, there has been an intense research effort both in the non-profit sectors such as universities, government agencies and research institutes and in the pharmaceutical and biotechnology industry to develop new treatments for Alzheimer's disease. Treatment candidates under development include: o vaccines for Alzheimer's disease; o enzyme-blocking therapies intended to block the production of the protein found in the senile plaques characteristic of Alzheimer's disease. A number of pharmaceutical and biotechnology companies including Amgen and Bristol-Myers Squibb are working on such therapies and hope to soon be in clinical trials on humans. 6 o implantation of genetically modified cells that produce human nerve growth factor into the brains of people with Alzheimer's disease. Preliminary human testing began this year at the University of California at San Diego in conjunction with the Salk Institute for Biological Studies. There is also ongoing research into possible methods of preventing Alzheimer's disease such as taking certain cholesterol-lowering drugs called statins, estrogen replacement therapies, anti-oxidants such as vitamin E and ginkgo biloba or anti-inflammatory drugs such as ibuprofen (e.g., Advil or Motrin). The successful development of a treatment or method of preventing Alzheimer's disease could significantly impact on our ability to develop or market a competing treatment for Alzheimer's disease. The diagnostic testing industry is also highly competitive. In the area of Alzheimer's disease, Elan PLC is marketing diagnostic tests for different biochemical indicators found in blood and spinal fluid and for genetic predispositions for the illness. Other companies are attempting to develop and market other diagnostic products in this area. The introduction of other diagnostics products for Alzheimer's disease or tobacco product use that are cheaper, easier to perform, more accurate or otherwise more attractive to the physicians, health care payers or other potential customers would have a significant impact on the sales of our AlzheimAlert(TM), NicAlert(TM) or Nicometer(TM) products. We May Not Be Able to Successfully Market Our Products To increase our marketing, distribution and sales capabilities both in the United States and around the world, we will need to enter into licensing arrangements, contract sales agreements and co-marketing deals. We cannot assure you that we will be able to enter into agreements with other companies on terms acceptable to us, that any licensing arrangement will generate any revenue for the company or that the costs of engaging and retaining the services of a contract sales organization will not exceed the revenues generated. Our Products and Services May Not Receive Necessary Regulatory Approvals Our products, AlzheimAlert(TM), NicAlert(TM) and Nicometer(TM), and our products in development, are subject to a wide range of government regulation governing laboratory standards, product safety and efficacy. The actual regulatory schemes in place vary from country to country and regulatory compliance can take several years and involve substantial expenditures. We cannot be sure that we can obtain necessary regulatory approvals on a timely basis, if at all, for our products in development and all of the following could have a material adverse effect on our business: o failure to obtain or significant delays in obtaining requisite approvals; o loss of or changes to previously obtained approvals; and o failure to comply with existing or future regulatory requirements. We currently market AlzheimAlert(TM) as a clinical reference laboratory service provided by our government-inspected clinical reference laboratory in New Jersey. Physicians send us urine 7 samples from their patients to our laboratory where the AlzheimAlert(TM) test is performed and the results reported back to the physicians. A clinical laboratory test like AlzheimAlert(TM) does not require approval from the United States Food and Drug Administration (FDA). Our laboratory is regulated by the Centers for Medicare & Medicaid Services (CMS) under the Clinical Laboratory Improvement Amendments and is subject to inspection and certification. In addition, individual states like New York and Florida have their own requirements for reference laboratories like ours that offer diagnostic services. In addition, the FDA has its own regulations governing in vitro diagnostic products, including some of the reagents used in clinical reference laboratories. Any changes in CMS or state law requirements or in the FDA regulations could have a detrimental impact on our ability to offer or market any reference laboratory services and/or on our ability to obtain reimbursement from the Medicare and Medicaid programs and providers. We may develop a diagnostic kit based on AlzheimAlert(TM) for sale to third parties. If so, we will require prior approval from the FDA before we can market, distribute or sell such a product in the United States. We have not submitted any such product to the FDA for approval. Similar requirements exist in many other countries. In general, such approval requires clinical testing as to the safety and efficacy of the device and preparation of an approval application with extensive supporting documentation. If approved, the device would then be subject to postmarketing record and reporting obligations and manufacturing requirements. Obtaining these approvals and complying with the subsequent regulatory requirements can be both time-consuming and expensive. We currently sell NicAlert(TM) and NicoMeter(TM) as tests for tobacco product use and for research use. In May 2002, we filed a 510(k) application with the FDA for NicAlert(TM) and have not received any decision on the application. In the United States, our drugs in development will require FDA approval, which comes only at the end of a lengthy, expensive and often arduous process. We have not submitted any drugs for FDA approval. We cannot predict with any certainty the amount of time the FDA will take to approve one of our drugs or even whether any such approval will be forthcoming. Similar requirements exist in many other countries. Protecting Our Patents and Proprietary Information is Costly and Difficult We believe that patent and trade secret protection is important to our business, and that our success will depend, in part, on our ability to obtain strong patents, to maintain trade secret protection and to operate without infringing the proprietary rights of others. Obtaining and maintaining our patent position is costly. We pay for the filing, prosecution and fees of over 200 patents and patent applications in countries around the world, including the United States, Europe, Japan, Canada, Australia, New Zealand and South Korea. In the United States alone, Nymox has ten patents issued or allowed and at least fifteen patent applications pending relating to its technology. Its subsidiary, Serex Inc. has eight patents issued or allowed. Through its licensing agreement with the Massachusetts General Hospital, Nymox has licensed and paid for the prosecution of four issued patents relating to neural thread proteins. 8 We believe that we have strong patent protection for the products we sell and for our product development programs and are in the process of extending that patent protection to cover more countries or new discoveries or products. We cannot assure you that additional patents covering new products or improvements will be issued or that any new or existing patents will be of commercial benefit or be valid and enforceable if challenged. We are not currently involved in patent litigation. In the pharmaceutical and biotechnology industry patent disputes are frequent and can preclude the commercialization of products. Patent litigation is costly and the outcome often difficult to predict. It can expose us to significant liabilities to third parties and may require us to obtain third-party licenses at a material cost or cease using the technology or product in dispute. We Face Changing Market Conditions The healthcare industry is in transition with a number of changes that affect the market for therapeutic and diagnostic test products. The U.S. Federal and various state governments have under consideration a number of proposals that may have the effect of directly or indirectly limiting drug prices in the U.S. markets. Such changes may adversely affect the prices we may charge for any therapeutic drug we develop. Funding changes and budgetary considerations can lead major health care payers and providers to make changes in reimbursement policies for our AlzheimAlert(TM) product. These changes can seriously impact the potential for growth for the market for AlzheimAlert(TM), either favorably when the decision is to offer broad coverage for our test at a reasonable price or negatively when the decision is to deny coverage altogether. Changes in the healthcare delivery system have resulted in major consolidation among reference laboratories and in the formation of multi-hospital alliances, reducing the number of institutional customers for therapeutic and diagnostic test products. There can be no assurance that Nymox will be able to enter into and/or sustain contractual or other marketing or distribution arrangements on a satisfactory commercial basis with these institutional customers. Health Care Plans May Not Cover or Adequately Pay for our Products and Services Throughout the developed world, both public and private health care plans are under considerable financial and political pressure to contain their costs. The two principal methods of restricting expenditures on drugs and diagnostic products and services are to deny coverage or, if coverage is granted, to limit reimbursement. For single-payer government health care systems, a decision to deny coverage or to severely restrict reimbursement for one of our products can have an adverse effect on our business and revenues. In the United States, where, to a significant degree, the patient population for our products is elderly, Medicare and Medicaid are sources of reimbursement. In general, any restriction on reimbursement, coverage or eligibility under either program could adversely affect reimbursement to Nymox for products and services provided to beneficiaries of the Medicare and/or Medicaid programs. Many elderly people are covered by a variety of private health care organizations either operating private health care plans or Medicare or Medicaid programs subject to government regulation. These organizations are also under considerable financial constraints and we may not be able to secure coverage or adequate reimbursement from these organizations. Without coverage, we will have to look to the patients themselves who may be 9 unwilling or unable to pay for the product; in turn, doctors may be reluctant to order or prescribe our products in the absence of coverage of the product for the patient. The Future Sale of Eligible Shares may Dilute Nymox's Stock Price The issuance of further shares and the eligibility of issued shares for sale will dilute our common stock and may lower its share price. There are 22,567,531 common shares of Nymox currently issued and outstanding as of May 31, 2002. All of these shares are eligible for sale under Rule 144 or are otherwise freely tradable. There are 711,860 warrants issued, which expire in 1 to 3 years. Finally, 1,638,500 share options are outstanding, of which 1,373,000 are currently vested. The great majority of these options expire in 6 to 10 years. These options have been granted to employees, officers, directors and consultants of the company. Moreover, Nymox may use its shares as currency in acquisitions. We Face Potential Losses Due to Foreign Currency Exchange Risks Nymox incurs certain expenses, principally relating to salaries and operating expenses at its Canadian head office, in Canadian dollars. All other expenses are derived in U.S. dollars. As a result, we are exposed to the risk of losses due to fluctuations in the exchange rates between the U.S. dollar and the Canadian dollar. We protect ourselves against this risk by maintaining cash balances in both currencies. We do not currently engage in hedging activities. We cannot say with any assurance that the Company will not suffer losses as a result of unfavorable fluctuations in the exchange rates between the United States dollar and Canadian dollar. We Have Never Paid a Dividend and are Unlikely to do so in the Foreseeable Future Nymox has never paid any dividends and does not expect to do so in the foreseeable future. We expect to retain any earnings or positive cash flow in order to finance and develop Nymox's business. 10 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS General We are a development stage biopharmaceutical company that specializes in the research and development of therapeutics and diagnostics for the aging population with an emphasis on Alzheimer's disease. We have begun to market the AlzheimAlert(TM) test, which we provide in our clinical reference laboratory, that is an aid to the diagnosis of Alzheimer's disease. We also have under development therapeutic agents for the treatment of Alzheimer's disease and of certain antibiotic-resistant infections as well as antibacterial agents for E. coli contamination of food and drink products. We also recently acquired a majority interest in Serex, Inc., a New Jersey company specializing in diagnostic products. AlzheimAlert(TM) is an improved version of our AD7C(TM) test, from which we began generating revenue from sales in 1997. We have incurred operating losses throughout our history. Management believes that such operating losses will continue for the next few years. The costs relating to clinical trials for our potential therapeutic products will increase expenditures and delay profitability, despite anticipated increases in sales revenue in the coming years. All figures are presented in U.S. dollars, unless otherwise stated. Liquidity And Capital Resources We fund our operations and projects primarily by selling shares of Nymox's common stock. However, since 1997, a small portion of our funding came from sales. This source of funding became more significant in late 1998, following the launch of our urinary version of the AD7C(TM) test. Since its incorporation in May, 1995, Nymox raised the capital necessary to fund its on-going research and development work and its marketing and sales operations primarily through private placements of its shares. On December 1, 1997, the shares began trading on the Nasdaq Stock Market. Nymox's common shares also traded on the Montreal Exchange from December 18, 1995 to November 19,1999. 11 Private placements completed by Nymox since December, 1995 are as follows: o December 1995, 1,578,635 common shares at a price of CAN$2.00 (US$1.38) per share for total proceeds of CAN$3,157,270 (US$2,187,536); o April 1996, 877,300 common shares at a price of CAN$6.00 (US$4.15) per share for total proceeds of CAN$5,263,800 (US$3,647,059); o May 1997, 696,491 common shares at a price of CAN$6.50 (US$4.50) and warrants exercisable at a price of CAN$8.50 (US$5.88) per share for total proceeds of CAN$4,527,191 (US$3,136,694). In 1998, all 696,491 of these warrants were exercised for additional proceeds to Nymox of CAN$5,920,174 (US$4,101,832); o May 1998, 231,630 common shares at a price of CAN$8.50 (US$5.88) for total proceeds of CAN$1,968,855 (US$1,364,134). A total of 110,000 warrants were issued as well, exercisable at a price of CAN$8.50 (US$5.88) per share (50,000) and CAN$10.00 (US$6.93) per share (60,000). These warrants have since expired; o December 1998, 135,000 common shares and January 1999, 55,000 common shares at CAN$8.50 (US$5.88) per share, for total proceeds of CAN$1,615,000 (US$1,118,963). A total of 95,000 warrants were issued as well, exercisable at the price of CAN$10.00 (US$6.93) per share. These warrants have since expired; o September 1999, 122,000 common shares at CAN$5.00 (US$3.46) per share, for total proceeds of CAN$610,000 (US$422,642). o March 2000, 821,637 common shares at an average price of $4.87 per share, for total proceeds of $4,000,000. A total of 93,334 warrants were issued as well, exercisable at a price of $9.375 per share (66,667) and $7.8125 per share (26,667). These warrants expire on March 6, 2004. o March, 2001, 200,000 common shares at $2.06 per share, for total proceeds of $412,000. A total of 100,000 warrants were issued as well, exercisable at a price of $2.06. These warrants expire on March 6, 2003. o August 3, 2001, 80,000 common shares at $2.50 per share for total proceeds of $200,000. o August 22, 2001, 140,000 common shares at $3.75 per share for total proceeds of $525,000. o October 3, 2001, 110,000 common shares at $3.75 per share for total proceeds of $412,500. o November 14, 2001, 64,100 common shares at $3.90 per share for total proceeds of $250,000. o January 24, 2002, 74,074 common shares at $4.05 per share for total proceeds of $300,000. o March 18, 2002, 195,000 common shares at $4.20 per share for total proceeds of $819,000. 12 On March 14, 2000, we became entitled to draw down on the $12 million equity line of credit with Jaspas Investments Limited, a British Virgin Islands corporation, through a common stock purchase agreement dated November 1, 1999 for the future issuance and purchase of Nymox's common shares. We expect the stock purchase agreement with Jaspas to provide significant, long-term financing that will enable us to advance our research and product development for the next three years. We plan to seek additional capital within the limits on financing contained in the common stock purchase agreement in order to accelerate product development and marketing and obtaining necessary regulatory approvals. In general, the draw down facility created by the Jaspas agreement operates as follows: the investor, Jaspas, is committed to purchase up to $12 million of Nymox's common shares over a thirty month period. Once a month, Nymox may request a draw of up to $750,000 of that money, subject to a formula based on average stock price and average trading volume, setting the maximum amount of any request for any given draw. At the end of a 22 day trading period following the draw down request, the amount of money that Jaspas will provide to Nymox and the number of shares Nymox will issue to Jaspas in return for that money is settled based on the formula in the stock purchase agreement. Jaspas receives a six (6%) percent discount to the market price for the 22 day period and Nymox receives the settled amount of the draw down less a 3% placement fee payable to its placement agents, Ladenburg Thalmann & Co. Inc. and Paul Revere Capital Corp. The facility is based on a "use-it-or-lose" principle. We are under no obligation to request a draw for any month. However if we do not request a draw for a given month, we may never to be able to draw those funds again. We may make up to a maximum of twenty-four (24) draws. At June 30, 2002 Nymox had $2.25 million of financing available under the facility. In lieu of providing Jaspas with a minimum draw down commitment, we agreed to issue to Jaspas a stock purchase warrant to purchase up to 200,000 shares of our common stock with an exercise price of 110% of our share price on the closing date of November 12, 1999 or $4.53. Jaspas may purchase under the warrant up to 100,000 Nymox shares any time between November 30, 1999 and November 30, 2004. Jaspas may purchase the remaining 100,000 shares if and only if we do not draw down at least $7 million within 18 months of March 14, 2000. 13 Since March 14, 2000, the following drawings have been made under this common stock purchase agreement, for total proceeds of $1,327,273: o August 16, 2000, 152,616 common shares at a volume weighted average price of $3.2924 per share; o October 12, 2000, 137,889 common shares at a volume weighted average price of $3.6261 per share; and o February 7, 2001, 161,696 common shares at a volume weighted average price of $2.0240 per share. o May 31, 2001, 56,108 common shares at a volume weighted average price of $1.9466 per share. Also, the Company has received total proceeds of $669,144 from the exercise of 256,900 options since 1995 as follows: o $355,536 for 158,900 shares at a per share price of $2.25. o $258,858 for 83,000 shares at a per share price of $3.12. o $16,000 for 5,000 shares at a per share price of $3.20. o $38,750 for 10,000 shares at a per share price of $3.875. Pursuant to the share purchase agreement entered into to acquire a controlling interest of Serex, Inc., a total of 256,675 additional shares and 157,952 warrants were issued in exchange for the shares of Serex (see Note 4 "Business Acquisition" in the financial statements). In total, Nymox has raised over $25 million, since its incorporation in May 1995. We have no financial obligations of significance other than long-term lease commitments for our premises in the United States and Canada of $14,414 per month in 2002 and ongoing research funding payments to a U.S. medical facility totaling $292,000 for 2002. Total commitments beyond 2002 are summarized in note 7 to the consolidated financial statements. 14 Results Of Operations YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000 Overview Since inception, the Company has focused its activities on developing certain pharmaceutical technologies and obtaining outside funding to support the continued development of its technologies. The Company has incurred losses since inception of operations. Future profitability will depend on the Company's ability to generate revenues from the sale of products and the licensing of technology sufficient to offset the expenditures required to further the Company's research and development program and ongoing operations. See Item 4 for a description of the projects in the Company pipeline. Effective January 1, 2000, the Company adopted the US dollar as its measurement currency. See note 2(a) to the consolidated financial statements. All amounts presented are in US dollars. In 2000, the Company acquired a majority interest in Serex, Inc. for a consideration comprising common shares, warrants and options having a value of approximately $1.3 million. See note 4 to the consolidated financial statements. Critical Accounting Policies In December 2001, the Securities and Exchange Commission ("SEC") released "Cautionary Advice Regarding Disclosure About Critical Accounting Policies". According to the SEC release, accounting policies are among the "most critical" if they are, in management's view, most important to the portrayal of the company's financial condition and most demanding on their calls for judgement. Our accounting policies are described in note 2 to our consolidated financial statements. We consider the following policies to be the most critical in understanding the judgements that are involved in preparing our financial statements and the matters that could impact our results of operations, financial condition and cash flows. Revenue Recognition The Corporation applies guidance from SAB 101 (Staff Accounting Bulletin 101) issued by the Securities and Exchange Commission in the recognition of revenue. The Company derives its revenue from product sales, research contracts, license fees and interest. Revenue from product sales is recognized when the product or service has been delivered or obligations as defined in the agreement are performed. Revenue from research contracts is recognized at the time research activities are performed under the agreement. Revenue from license fees, royalties and milestone payments is recognized upon the fulfillment of all obligations under the terms of the related agreement. These agreements may include upfront payments to be received by the Corporation. Upfront payments are recognized as revenue on a systematic basis over the period that the related services or obligations as defined in the agreement are performed. Interest is recognized on an accrual basis. 15 Deferred revenue presented in the balance sheet as at December 31, 2001 represents amounts billed to and received from customers in advance of revenue recognition. The Company currently markets AlzheimAlert(TM) as a service provided by our CLIA certified reference laboratory in New Jersey. Physicians send urine samples taken from their patients to our laboratory where the AlzheimAlert(TM) test is performed. The results are then reported back to the physicians. We recognize the revenues when the test has been performed. The Company sometimes enters into bulk sales of its diagnostic products to customers under which it has a continuing obligation to perform related testing services at its laboratory. Although the Company receives non-refundable upfront payments under these agreements, revenue is recognized in the period that the Company fulfils its obligation or over the term of the arrangement. For research contracts and licensing revenues, the Company usually enters into an agreement specifying the terms and obligations of the parties. Revenues from these sources are only recognized when there are no longer any obligations to be performed by the Company under the terms of the agreement. Valuation of Capital Assets The Company reviews the unamortized balance of intellectual property rights and patents on an annual basis and recognizes any impairment in carrying value when it is identified. Factors we consider important, which could trigger an impairment review include: o Significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and o Significant negative industry or economic trends. No impairment losses were recognized for the years ended December 31, 2001, 2000 and 1999. Valuation of Future Income Tax Assets Management judgement is required in determining the valuation allowance recorded against net future tax assets. We have recorded a valuation allowance of $6.4 million as of December 31, 2001, due to uncertainties related to our ability to utilize some of our future tax assets, primarily consisting of net operating losses carried forward, before they expire. In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion or all of the future tax assets will not be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income and tax planning strategies. Since the Company is a development stage enterprise, the generation of future taxable income is dependent on the successful commercialization of its products and technologies. Revenue Revenue from sales amounted to $235,288 for the year ended December 31, 2001, compared with $157,688 for the year ended December 31, 2000. The increase is attributable to higher sales volumes for both AlzheimAlert(TM) ($113,132) and NicAlert(TM) ($122,156) in 2001 compared to 2000 (AlzheimAlert(TM) $58,540 - NicAlert(TM) $99,148). The Company also earned revenue from research and licensing contracts ($127,403). Research contract revenue ($30,000) was funded by 16 the Foundation for Nutritional Advancement. A director and officer of the Foundation is also a director of the Company. License fees ($97,403) include the sale of certain rights to a third party in 2001 for which the Company has no continuing obligations. Interest revenue was $17,918 in 2001 compared to $68,179 in 2000, due to lower average cash balances. In 2001, one customer accounted for approximately 26% of revenue and, in total, 5 customers accounted for 54% of revenue in 2001. In 2000 and 1999, no single customer accounted for more than 10% of revenue. Expenses Research and development expenditures were $1,499,654 for the year ended December 31, 2001, compared with $2,084,232 for the year ended December 31, 2000. Management reduced its salary expenses in R&D by reducing staff, while advancing its development of the products in the Company's pipeline. In 2001, research tax credits amounted to $20,052 compared to $10,457 in 2000. Marketing expenditures remained relatively constant at $343,244 for the year ended December 31, 2001, in comparison to the expenditures of $363,142 for the year ended December 31, 2000. General and administrative expenses amounted to $1,087,326 for the year ended December 31, 2001, compared with $1,335,500 in the year ended December 31, 2000. The decrease is principally due to reductions in professional fees. Foreign Exchange The Company incurs expenses in the local currency of the countries in which it operates, which include the United States and Canada. Approximately 75% of 2001 expenses (75% in 2000) were in U.S. dollars. Foreign exchange fluctuations had no meaningful impact on the Company's results in 2001 or 2000. Results of Operations Net losses for the period ended December 31, 2001 were $3,049,504, or $0.14 per share, compared to $4,023,979, or $0.19 per share, for the same period in 2000. The weighted, fully diluted, average number of common shares outstanding for the period ending December 31, 2001 were 21,995,694 compared to 21,130,286 for the same period in 2000. Financial Position Liquidity and Capital Resources As of December 31, 2001, cash totaled $488,987 and receivables totaled $152,968. In November 1999, the Company signed a common share purchase agreement whereby the investor is committed to purchase up to $12 million of the Company's common shares over a thirty-month period commencing March 2000, when our F-1 registration statement was declared effective. As at December 31, 2001, four drawings have been made under this share purchase agreement, for total proceeds of $1,436,364. Specifically, on August 16, 2000, 152,616 common shares were issued at a volume weighted average price of $3.2924 per share; on October 12, 2000, 137,889 common shares were issued at a volume weighted average price of $3.6261 per share, on February 7, 2001, 161,696 common shares were issued at a volume weighted average price of $2.0240 and on May 31, 2001, 56,108 common shares were issued at a volume weighted average 17 price of $1.9466. The Company intends to access financing under this agreement when appropriate to fund its research and development. In 2001, the Company completed private placements for 594,100 common shares and received aggregate proceeds of $1,799,500. On March 6, 2001, 200,000 shares were issued at a price of $2.06 in a private placement for total proceeds of $412,000. The private placement included 100,000 warrants, which expire on March 6, 2003, exercisable at a price of $2.06. On August 3, 2001, 80,000 shares were issued at a price of $2.50 in a private placement for total proceeds of $200,000. On August 22, 2001, 140,000 shares were issued at a price of $3.75 in a private placement for total proceeds of $525,000. On October 3, 2001, 110,000 shares were issued at a price of $3.75 in a private placement for total proceeds of $412,500. On November 14, 2001, 64,100 shares were issued at a price of $3.90 in a private placement for total proceeds of $250,000. A total of $318,055 was also raised through stock option exercises at prices ranging from $2.25 to $3.875. The Company intends to raise additional capital in 2002 in order to pursue its development. To March 31, 2002, the Company completed two private placements and issued 269,074 common shares for total proceeds of $1,119,000. The Company believes that funds from operations as well as from existing equity facilities will be sufficient to meet the Company's cash requirements for the next twelve months. The Company invested $340,662 in additional capital assets in the year ended December 31, 2001, consisting mostly of patent costs, compared to $381,568 in the same period in 2000. The Company intends to raise additional capital in 2002 in order to pursue its development. However, the Company believes that funds from operations as well as from existing equity facilities will be sufficient to meet the Company's cash requirements for the next twelve months. YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999 Revenue Revenue from sales amounted to $157,688 for the year ended December 31, 2000, compared with $153,252 for the year ended December 31, 1999. Sales for fiscal 2000 include the revenue from sales of the NicAlert(TM) test of $99,148 and for the diagnostic test AlzheimAlert(TM) and its predecessor AD7C(TM) of $58,540. The price for AlzheimAlert(TM) was reduced in 2000, resulting in a drop in revenue but not in sales volume for this product. Interest revenue was $68,179 in 2000, compared to $36,951 in 1999, derived from interest earned on the Company's cash balances. The AlzheimAlert(TM) test is an improved version of this diagnostic product and we anticipate an increase in sales volume and revenue for this product in the coming years. Expenses Research and development expenditures were $2,084,232 for the year ended December 31, 2000, compared with $1,137,122 for the year ended December 31, 1999, reflecting a net increase in expenditures in the development of the products in the Company's existing pipeline of $860,380, as well as development of the potential products acquired with the acquisition of Serex Inc. of $86,730. In 2000, research tax credits amounted to $10,457 compared to $4,181 in 1999. 18 Management reduced its marketing activities resulting in a decrease in expenditures to $363,142 for the year ended December 31, 2000 compared to $942,205 for the year ended December 31, 1999. General and administrative expenses amounted to $1,335,500 for the year ended December 31, 2000, compared with $1,229,894 in the year ended December 31, 1999. The increase was principally due to the acquisition of Serex Inc. in 2000. Results of Operations Net losses for the period ended December 31, 2000 were $4,023,979, or $0.19 per share, compared to $3,314,296, or $0.17 per share, for the same period in 1999. The weighted average number of common shares outstanding for the period ending December 31, 2000 were 20,890,735 compared to 19,886,430 for the same period in 1999. The Company invested $381,568 in additional capital assets in the year ended December 31, 2000, consisting mostly of patent costs, compared to $164,783 in the same period in 1999. YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998 Revenue Revenue on sales for the AD7C(TM) test amounted to $153,252 for the year ended December 31, 1999, compared with $104,804 for the year ended December 31, 1998, reflecting an increase in sales volume for this test. All of the sales revenue was derived from our AD7C(TM) urine test service offered in our clinical reference laboratory. Interest revenue was $36,951 in 1999 compared to $168,761 in 1998, derived from interest earned on the cash and short-term investments received from the private placements referred to previously. Expenses Research and development activities were reorganized resulting in a decrease in expenditures to $1,137,122 for the year ended December 31, 1999, compared with $2,091,745 for the year ended December 31, 1998. In 1999, research tax credits amounted to $4,181 compared to $4,003 in 1997. Management reduced its marketing activities resulting in a decrease in expenditures to $942,205 for the year ended December 31, 1999 compared to $2,245,023 for the year ended December 31, 1998. General and administrative expenses amounted to $1,229,894 for the year ended December 31, 1999, compared with $550,269 in the year ended December 31, 1998. This rise is attributable to net increases in professional fees of $195,242, shareholder relations of $256,063, and in administrative personnel of $101,943. 19 Results of Operations Net losses for the period ended December 31, 1999 were $3,314,296, or $0.17 per share, compared to $4,783,213, or $0.25 per share, for the same period in 1998. Inflation We do not believe that inflation has had a significant impact on the results of our operations. 20 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES Directors and Senior Management Dr. Paul Averback, M.D., D.A.B.P., 51, President and Director since September 1995 and Chairman since June of 2001, is the founder of Nymox and the inventor of much of its initial technology. Prior to founding Nymox, Dr. Averback served as President of Nymox's predecessor, DMS Pharmaceuticals Inc. He received his M.D. in 1975 and taught pathology at universities, including Cambridge University, England (1977-1980), during which time he initiated his research on Alzheimer's disease. He has practiced medicine in numerous Canadian institutions as well as in private practice. Dr. Averback has published extensively in the scientific and medical literature. Dr. Hans Black, MD, 48, Director since May 13, 1999, has a doctorate in medicine from McGill University, and has been Chairman and Chief Investment Officer of Interinvest Consulting Corporation, a Montreal-based global money management firm with offices in Toronto and Boston and affiliates in Bermuda and Zurich, for over twenty five years. Dr. Black appears regularly on the PBS network show, Nightly Business Report, and has been a guest lecturer at Harvard, Temple and McGill Universities. Dr. Black is a member of the boards of Fonds de Recherche de l'Institut de Cardiologie de Montreal and L'Opera de Montreal, a member of the Advisory Council of The Paul H. Nitze School of Advanced International Studies of Johns Hopkins University, and is a member of the board of the NASDAQ-listed Nymox Corporation. In addition, Dr. Black serves as chairman of the board of the Quebec-based food company, Les Aliments SoYummi Inc. Jack Gemmell, 50, has been a Director since June, 2001 and is Nymox's General Counsel and Chief Information Officer. He graduated from the Faculty of Law at the University of Toronto in 1977 and was called to the bar in 1979. He practiced in private practice primarily in the area of litigation for over 19 years with before joining Nymox in July, 1998. Michael R. Sonnenreich, 64, Director since April 18, 2000, is a graduate of Harvard University Law School, and has been Senior Partner of Michael Sonenreich, since 1973, Chairman and CEO of Kikaku America International for the past fifteen years, and President and CEO of Glocal Communications Corp. Ltd. of London for the past five years. He is also Vice Chairman of PharMa International Corporation of Tokyo, Director of Asset Advisory Services of Zurich, Member of the Board of Advisors of John Hopkins University School of Advanced International Studies and Member of the Board of Overseers of Tufts University Medical School. Mr. Sonnenreich has in the past been a Board Member or a Trustee of numerous important companies and universities, and has long-term involvements with many non-profit institutions, and served as President of the National Coordinating Council on Drug Education. Professor Walter P. von Wartburg, 63, Director since April 18, 2000, is a partner in the private law practice of Law & Life Sciences in Basel, Switzerland, specializing in biotech and drug regulatory affairs. Prior to joining Law & Life Sciences, Professor von Wartburg spent 32 years in the pharmaceutical industry. Most recently, from 1996 to 1999, he was Chief Information Officer of Novartis and from 1990-1996, he was Chief of Staff of Ciba-Geigy (which merged with Sandor in 1996 to form Novartis). From 1980 to 1990, he was a member of the Executive Committee of Ciba-Geigy. He is a law graduate of the Universities of Basel, Paris, Princeton, 21 Stanford and Harvard Law School; Member of the Basel Bar Association and Professor on public health policy at the Saint Gall Graduate School of Economics, Business and Public Administration. He is author of various books and articles on drug abuse, pharmaceutical legislation, biotechnology, issues management, communications and business administration. He is also the Founder-President of the Swiss Foundation for the Mentally Handicapped "PRO MENTE SANA;" Member of the National Advisory Board of the Bioethics Institute of the Johns Hopkins University and past Chairman of the Board of the University Hospital of Basel. Michael Munzar, M.D., 48, Medical Director since June 1, 1996, received an M.D. from the Faculty of Medicine, McGill University, in 1979. He practiced medicine for over 15 years in a variety of institutional and private practice settings. He has a diverse medical background that includes most aspects of medical care, including geriatrics and psychiatry. He also has extensive business experience with the establishment, operation and management of medical facilities. Mr. Roy M. Wolvin, 47, Secretary-Treasurer and Chief Financial Officer since September 1995. Prior to September 1995, Mr. Wolvin was Account Manager, private business, for a Canadian chartered bank. Mr. Wolvin holds a degree in Economics from the University of Western Ontario. Compensation The table below provides compensation information for the fiscal year ended December 31, 2001 for each executive officer of Nymox and for the directors and executive officers as a group. Summary Compensation Table
Fiscal Year ending Fiscal Year ending Dec. 31, 2001 Dec. 31, 2000 NAME AND OTHER CASH OTHER CASH PRINCIPAL POSITION SALARY COMPENSATION SALARY COMPENSATION Dr. Paul Averback CAN$50,000 -- CAN$137,500 -- President and C.E.O. (US$31,391) (US$86,326) Mr. Roy Wolvin CAN$70,000 -- CAN$84,375 -- Secretary-Treasurer (US$43,948) (US$52,973) Mr. Jack Gemmell CAN$96,000 -- CAN$118,161 -- General Counsel (US$60,271) (US$74,184) Dr. Michael Munzar CAN$138,000 -- CAN$171,000 -- Medical Director (US$86,640) (US$107,358) All directors and senior CAN$354,000 -- CAN$511,036 -- management as a group (US$222,250) (US$320,841)
Nymox does not have written employment contracts with any of the senior management named above. 22 Directors of Nymox, with the exception of the President and our General Counsel, are paid a fee of $1,000 for each board meeting attendance and are reimbursed for expenses incurred in connection with their office. The Company does not have any pension plans or other type of plans providing retirement or similar benefits for senior management. Board Practices Directors are elected at each annual meeting for a term of office until the next annual meeting. Executive officers are appointed by the board of directors and serve at the pleasure of the board. Other than Dr. Averback, no other officer or director previously was affiliated with DMS Pharmaceuticals Inc. There are no family relationships between any director or executive officer and any other director or executive officer. Nymox does not have written contracts with any of the directors named above. The Company does not have any pension plans or other type of plans providing retirement or similar benefits for directors, nor any benefits upon termination of service as a director. Nymox's Audit Committee recommends to the Board of Directors the firm to be appointed each year as independent auditors of the company's financial statements and to perform services related to the completion of such audit and the compensation to be paid to the firm. The Audit Committee also has responsibility for: o reviewing the scope and results of the audit with the independent auditors; o reviewing with management and the independent auditors the company's interim and year-end financial condition and results of operations; o considering the adequacy of the internal accounting, bookkeeping and control procedures of the company; and o reviewing any non-audit services and special engagements to be performed by the independent auditors and considering the effect of such performance on the auditors' independence. The Audit Committee also reviews at least once each year the terms of all material transactions and arrangements between the company and its affiliates. The Chairman of the Audit Committee is Hans Black, M.D. and the other members are Michael Sonnenreich and Walter von Wartburg. Nymox's Human Resources and Compensation Committee establishes and reviews overall policy and structure with respect to compensation matters, including the determination of compensation arrangements for directors, executive officers and key employees of the company. The Committee is also responsible for the administration and award of options to purchase shares pursuant to the company's option and share purchase plans. The Chairman of the Human Resources and Compensation Committee is Professor Walter von Wartburg and the other members are Dr. Hans Black, Michael Sonnenreich and Paul Averback, M.D. (ex officio). 23 Employees In addition to the employees in its Maywood and St.-Laurent laboratories and offices, Nymox carries out its work with the assistance of an extensive group of research collaborators, out-sourced manufacturing teams, research suppliers, research institutions, service providers and research consultants. To help carrying out its marketing, Nymox has over 60 independent medical representatives detailing its products. In its Maywood and St.-Laurent laboratories and offices, for the year 2001, the company employed on the average twenty-one persons with fifteen in research and development and six in administration and marketing; for the year 2000 twenty-three persons (eighteen in research and development and five in administration and marketing); and for the year 1999, twenty-nine persons (sixteen in research and development and thirteen in administration and marketing). Share Ownership As of May 31, 2002, the numbers of common shares owned by and options granted to directors and senior officers of the Corporation were as follows:
Options Options Not Exercise Expiry Date Name Common Shares Owned Vested Vested Price M/D/Y Paul Averback, M.D. 12,650,895 Hans Black, M.D. 10,000 25,000 $3.12 05/13/09 (C$4.50) 25,000 $3.875 05/01/10 20,000 30,000 $6.93 05/01/10 (C$10.00) 10,000 $4.70 06/15/10 25,000 50,000 $4.33 11/13/11 Michael Sonnenreich 35,000 100,000 $3.875 05/01/10 25,000 50,000 $4.33 11/13/11 Walter von Wartburg 42,000 100,000 $3.875 05/01/10 25,000 50,000 $4.33 11/13/11 Jack Gemmell 10,525 50,000 $6.93 01/22/09 (C$10.00) 25,000 $3.875 05/01/10 25,000 $1.93 04/22/11 Roy Wolvin 5,000 10,000 $2.25 01/17/06 (C$3.25) 10,000 $9.53 01/17/06 (C$13.75) 10,000 $6.79 01/17/06 (C$9.80) 20,000 $6.93 01/17/06 (C$10.00) 20,000 $3.12 05/13/09 24 Options Options Not Exercise Expiry Date Name Common Shares Owned Vested Vested Price M/D/Y (C$4.50) 5,000 $1.93 04/22/11 Michael Munzar 33,925 50,000 $7.97 04/30/06 (C$11.50) 5,000 $6.24 10/31/07 (C$9.00) 30,000 $6.93 10/31/07 (C$10.00) 10,000 $6.93 10/31/07 (C$10.00) 20,000 $3.12 05/13/09 (C$4.50) 50,000 $3.90 08/25/10 35,000 $1.93 04/22/11
Options Nymox has created a stock option plan for its key employees, its officers and directors and certain consultants. The board of directors of Nymox administers the plan. The board may grant options to purchase a specified number of common shares of Nymox to a designated individual. The total number of common shares to be optioned to any one individual cannot exceed 5% of the total number of issued and outstanding shares and the maximum number of common shares which may be optioned under the plan cannot exceed 2,500,000 shares without shareholder approval. The board fixes the option price per share for common shares that are the subject of any option, when it grants any such option. The option price cannot involve a discount to the market price when the option is granted. The period during which an option is exercisable shall not exceed 10 years from the date when the option is granted. The options may not be assigned, transferred or pledged and expire within three months of the termination of employment or office with the Company and six months of the death of an individual. Legal Proceedings Amro International, S.A., a Panamanian company, served Nymox with a Statement of Claim filed with the Ontario Superior Court of Justice (Court File No. 00-CV-201587), claiming to be entitled to the issuance of 388,797 shares in accordance with repricing provisions contained in the March 2000 agreement between Amro and Nymox and to damages of $4 million for lost opportunity to sell these shares. Nymox believes that Amro's interpretation of the repricing provisions in the March 2000 agreement is incorrect and that Amro's damage claims are without merit. Nymox has filed a Statement of Defense and intends to defend the action vigorously and to consider its other options with respect to this matter. It is important to note that paragraph (c) of Note 7 to the Consolidated Financial Statements of Nymox for the years ended December 31, 2001, 2000 and 1999 states that AMRO is claiming damages of $275,000. This number was determined at the time the Financial Statements were prepared based on discussions and correspondence to reach settlement arrangements in September of 2001, which considered a 25 reduced claim of $275,000. These arrangements were never consummated and, therefore, AMRO's original claim of $4,000,000 in damages remains in effect. Dr. Fitzpatrick, a former employee, has filed a demand for arbitration with the American Arbitration Association concerning the termination of her employment with the company. She is claiming damages of up to $498,000.00 based upon alleged violations of New Jersey law and breach of an employment agreement, plus attorneys fees and costs. The company believes these claims are without merit and intends to defend the matter vigorously. 26 SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this amendment to its annual report to be signed on its behalf by the undersigned, thereunto duly authorized. NYMOX PHARMACEUTICAL CORPORATION (Registrant) /s/ Paul Averback -------------------------- Paul Averback Title: President Date: July 25, 2002 27 -----END PRIVACY-ENHANCED MESSAGE-----