-----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, QRU5JIA/4zUt/zAySSFEwYehfHw9ybr5p0v5S7+0GcEq5pQkeksAqMlkCf9Pteq4 gEJp+a7vjy9cp8x7+FK0CQ== 0000950123-00-001773.txt : 20000302 0000950123-00-001773.hdr.sgml : 20000302 ACCESSION NUMBER: 0000950123-00-001773 CONFORMED SUBMISSION TYPE: F-1 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 20000229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NYMOX PHARMACEUTICAL CORP CENTRAL INDEX KEY: 0001018735 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: F-1 SEC ACT: SEC FILE NUMBER: 333-31310 FILM NUMBER: 557218 BUSINESS ADDRESS: STREET 1: 9900 CAVENDISH BLVD., SUITE 306 STREET 2: ST. LAURENT, QUEBEC CITY: CANADA H4M 2V2 STATE: A8 BUSINESS PHONE: 514-332-3222 MAIL ADDRESS: STREET 1: 9900 CAVENDISH BLVD., SUITE 306 STREET 2: ST. LAURENT, QUEBEC CITY: CANADA, H4M 2V2 STATE: A8 F-1 1 NYMOX PHARMACEUTICAL CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM F-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 NYMOX PHARMACEUTICAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) QUEBEC, CANADA 8071 NOT APPLICABLE (Province or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
9900 Cavendish Blvd., Suite 306 St. Laurent, QC, Canada H4M 2V2 (800) 936-9669 (Address and telephone number of Registrant's principal executive offices) Nymox Corporation 5516 Nicholson Lane, Suite 100A Kensington, MD 20895 (800) 93NYMOX (Name, address and telephone number of agent for service) Copies to: Marc J. Marotta Jack Gemmell Foley & Lardner Nymox Pharmaceutical Corporation 777 East Wisconsin Avenue 9900 Cavendish Blvd. Suite 306 Milwaukee, Wisconsin 53202-5367 St.-Laurent, QC, Canada H4M 2V2 (414) 271-2400 (514) 332-3222
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] 2 CALCULATION OF REGISTRATION FEE All financial information in this prospectus is in United States dollars unless otherwise noted.
- ----------------------- ---------------------- --------------------- ----------------------- ----------------- Title of each class Amount to be Proposed maximum Proposed maximum Amount of of securities to be registered aggregate price per aggregate offering registration fee registered unit price - ----------------------- ---------------------- --------------------- ----------------------- ----------------- Up to Common shares 4,800,000 (1) (2) $12,000,000 (3) $3,168 - ----------------------- ---------------------- --------------------- ----------------------- ----------------- Up to Common shares(4) 200,000 $4.52 $904,000 $238.66 - ----------------------- ---------------------- --------------------- ----------------------- ----------------- Up to Total 5,000,000 $12,904,000 $3,406.66 - ----------------------- ---------------------- --------------------- ----------------------- -----------------
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933. (2) The price per common share will vary based on the average daily price of Nymox's shares during the draw down periods provided for in the common stock purchase agreement described in this registration statement. The purchase price will be equal to 94% of the average daily price for each trading day within such draw down pricing periods. The agreement allows for 24 draws over a period of 30 months for amounts up to $750,000 per draw. (3) $12,000,000 represents the maximum total purchase price that Jaspas is obliged to pay Nymox under the common stock purchase agreement; the maximum net proceeds Nymox can receive is $12,000,000 less a 3% placement fee payable to its placement agents, Ladenburg Thalmann & Co. Inc., or $11,640,000. (4) These common shares represent the shares issuable on the exercise of a stock purchase warrant issued by Nymox to Jaspas on November 12, 1999 under the common stock purchase agreement. Under the warrant, Jaspas may purchase up to 100,000 shares any time between November 30, 1999 and November 30, 2004. Jaspas may purchase the remaining 100,000 shares if and only if Nymox does not draw down $7,000,000 within eighteen months of this registration statement becoming effective. __________________ The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission ("Commission"), acting pursuant to Section 8(a), may determine. 3 The information in this prospectus is incomplete and may be changed. The selling security holders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PRELIMINARY PROSPECTUS [NYMOX LOGO] NYMOX PHARMACEUTICAL CORPORATION 5,000,000 SHARES OF COMMON STOCK Jaspas Investments Limited may use this prospectus to resell up to 5,000,000 shares of NYMOX PHARMACEUTICAL CORPORATION common stock of Nymox Pharmaceutical Corporation. 9900 Cavendish Blvd. Nymox will not receive any of the proceeds from Suite 306 the sale of the shares by Jaspas. However, we will St.-Laurent, Quebec, Canada receive the sale price of any common stock that we H4M 2V2 sell to Jaspas under the common stock purchase (800) 936-9669 agreement or under the stock purchase warrant described in this prospectus. Nymox will pay the costs of registering the shares under this prospectus, including legal fees. Jaspas may offer shares of common stock of Nymox's common stock is listed on the Nasdaq Nymox to purchasers in transactions on the Nasdaq SmallCap Market under the symbol "NYMX". The SmallCap Market, in negotiated transactions, or last reported sales price for Nymox's common otherwise, or by a combination of these methods. stock on the Nasdaq SmallCap Market on ______ Jaspas may sell the shares through broker-dealers _____ was $ ________ per share. who may receive compensation from Jaspas in the form of discounts or commissions. Jaspas does not intend to effect resales in Canada or through any Canadian exchange. Jaspas is an "underwriter" within the meaning of the Securities Act of 1933 in connection with such sales.
INVESTING IN THE COMMON STOCK OF NYMOX INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 8. NEITHER THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. _________________________________________ The date of this prospectus is ___________________ , 2000. _________________________________________ 1 4 NOTE ABOUT CURRENCY This prospectus provides financial information in United States dollars unless otherwise noted. The following table sets forth the high and low noon exchange rates, the average rates (average of the exchange rates on the last day of each month during the period) and the end of period rates for one United States dollar, expressed in Canadian dollars, from Dec.31, 1995 to Dec.31, 1999 as reported by the Federal Reserve Bank of New York. The noon exchange rate was $ ________ Canadian dollars to the United States dollar on _________________, 2000. RECENT HISTORY OF THE EXCHANGE RATE FOR CANADIAN DOLLARS TO UNITED STATES DOLLARS.
- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- PERIOD ENDED Dec.31/95 Dec.31/96 Dec.31/97 Dec.31/98 Dec.31/99 - ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- Period end $1.3655 $1.3697 $1.4288 $1.5375 $1.4440 - ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- Average $1.3725 $1.3638 $1.3849 $1.4836 $1.4858 - ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- High $1.4238 $1.3822 $1.4398 $1.5770 $1.5302 - ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- Low $1.3285 $1.3310 $1.3357 $1.4075 $1.4440 - ------------------- ----------------- ----------------- ----------------- ----------------- -----------------
2 5 In this prospectus, the term "Nymox" refers to both Nymox Pharmaceutical Corporation and its wholly-owned subsidiary, Nymox Corporation and, where applicable, a predecessor private corporation, DMS Pharmaceuticals Inc. THE COMPANY Nymox is a development stage biopharmaceutical company based in Kensington, Maryland and Saint Laurent, Quebec, Canada. We specialize in the research and development of therapeutics and diagnostics for the aging population with an emphasis on Alzheimer's disease. Alzheimer's disease is a progressive, terminal brain disease of the elderly marked by an irreversible decline in mental abilities, including memory and comprehension, and often accompanied by changes in behavior and personality. It currently afflicts an estimated four million people in the United States and at least 20 million people worldwide. As the baby-boomer generation continues to age, these figures are expected to rise sharply. AD7C(TM) Test We market a proprietary diagnostic test for Alzheimer's disease, known as the AD7C(TM) Test, in the United States through our reference laboratory in Kensington, Maryland. The test is available both as a urine test, where the patient provides a first-morning urine sample for testing, and as a cerebrospinal fluid test, where a doctor draws a small sample of spinal fluid from the patient. The test measures the level of a brain protein that is elevated early in both the urine and the cerebrospinal fluid of patients with Alzheimer's disease. The test is accurate and specific to Alzheimer's disease and helps physicians make an early diagnosis of the disease. The early diagnosis of Alzheimer's disease is important to physicians, patients and their families and enables them to make informed and early social, legal and medical decisions about treatment and care. Early diagnosis of Alzheimer's disease has become increasingly important with new improvements in drug treatment and care. Even a modest delay in institutionalization can mean substantial social and financial savings. Conversely, any testing procedure that could rule out Alzheimer's disease would eliminate the tremendous uncertainty and anxiety patients and their families otherwise face and would allow physicians to focus on the other, often reversible, causes of cognitive changes. Early diagnosis as facilitated by the AD7C(TM) test represents a potentially large cost-savings in the form of a reduced number of office visits, lab tests, scans and other procedures required by the traditional methods of diagnosis. Products in Development We are in the process of developing the following products: 3 6 7C GOLD(TM) AN IMPROVED VERSION OF OUR AD7C(TM) TEST We are developing an improved version of our AD7C(TM) Test that aids physicians in the diagnosis of Alzheimer's disease. This version is known as the 7C Gold test. At present, the AD7C(TM) Test is conducted in a specialized reference laboratory to which physicians send patient samples to be tested. The 7C Gold test is designed as a kit which permits the testing of patient samples either in a general purpose medical laboratory or in a physician's office. Subject to further laboratory and clinical validation and to any necessary regulatory approvals, we intend to sell the 7C Gold test worldwide within the next 12 to 18 months. OTHER BIOCHEMICAL INDICATORS OF ALZHEIMER'S DISEASE We also hold exclusive patent rights to several other biochemical indicators for Alzheimer's disease, such as a protein referred to as 35i9 derived from the brain. We intend to use our extensive scientific, medical and commercial experience and know-how in the field of Alzheimer's disease in order to develop new diagnostic tests and treatments for the disease from these and other indicators. DRUGS TARGETING SPHERONS We are a world leader in research and development into drugs for the treatment of Alzheimer's disease that target spherons. Spherons are microscopic, compact balls of protein found in the brains of all humans from age 1. Nymox researchers believe that spherons are the cause of Alzheimer's disease and that stopping or inhibiting the transformation of spherons into senile plaques, the characteristic injury found in the brains of Alzheimer's disease patients, will stop or slow the progress of this illness. We now have several drug candidates, which have shown promise in animal and other preclinical studies and for which we plan to seek regulatory approval to begin clinical studies for humans. You should be aware that there is no consensus among researchers about the causes or possible treatments of Alzheimer's disease and that other researchers do not share this belief that Spherons are the cause of Alzheimer's disease or are a target for the development of treatments for the disease. Nymox has patents covering both methods for using spherons as targets for developing drugs and for the actual drug candidates discovered. NEW ANTIBACTERIAL AGENTS AGAINST INFECTIONS AND FOOD CONTAMINATION Outside of the area of the treatment and diagnosis of Alzheimer's disease, we are developing a new class of antibacterial agents for the treatment of urinary tract and other bacterial infections in humans which have proved highly resistant to conventional antibiotic treatments and for the treatment of E. coli 0157:H7 bacterial contamination in hamburger meat and other food and drink products. Nymox Pharmaceutical Corporation was incorporated in Canada in May, 1995 to acquire all of the common shares of DMS Pharmaceutical Inc., a private company which had been carrying on research and development since 1989 on diagnostics and drugs for brain disorders and diseases of the aged with an emphasis on Alzheimer's disease. 4 7 Nymox's principal executive offices are located at: Nymox Pharmaceutical Corporation 9900 Cavendish Boulevard, Suite 306 St.-Laurent, Quebec, Canada H4M 2V2 Phone: (800) 936-9669 Fax: (514) 332-2227 Nymox Corporation 5516 Nicholson Lane Suite 100A Kensington, Maryland 20895 Phone: (301) 984-0500 Fax: (301) 984-2286. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS You should be aware that this prospectus contains forward-looking statements about, among other things, the anticipated operations, product development, financial condition and operating results of Nymox, proposed clinical trials and proposed transactions, including collaboration agreements. By forward-looking statements, we mean any statements that are not statements of historical fact, including (but are not limited to) statements preceded by or that include the words, "believes", "expects", "anticipates", "hopes", "targets" or similar expressions. In connection with the "safe harbor" provisions in the Private Securities Litigation Reform Act of 1995, we are including this cautionary statement to identify some of the important factors that could cause Nymox's actual results or plans to differ materially from those projected in forward-looking statements made by, or on behalf of, Nymox. These factors, many of which are beyond the control of Nymox, include Nymox's ability to: - identify and capitalize on possible collaboration, strategic partnering or divestiture opportunities, - obtain suitable financing to support its operations and clinical trials, - manage its growth and the commercialization of its products, 5 8 - achieve operating efficiencies as it progresses from a development-stage to a later-stage biotechnology company, - successfully compete in its markets, - realize the results it anticipates from the clinical trials of its products, - succeed in finding and retaining joint venture and collaboration partners to assist it in the successful marketing, distribution and commercialization of its products, - achieve regulatory clearances for its products, - obtain on commercially reasonable terms adequate product liability insurance for its commercialized products, - adequately protect its proprietary information and technology from competitors and avoid infringement of proprietary information and technology of its competitors, - assure that its products, if successfully developed and commercialized following regulatory approval, are not rendered obsolete by products or technologies of competitors and - not encounter problems with third parties, including key personnel, upon whom it is dependent. Although Nymox believes that the forward-looking statements contained in this registration statement are reasonable, it cannot ensure that its expectations will be met. These statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied in these statements. Factors that could cause such differences include, but are not limited to, those discussed under "Risk Factors." RISK FACTORS 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 diagnostic test, the AD7C(TM) test. We have never made a profit. We incurred a net loss of CAN$6.9 million in 1998 and CAN$3.5 million for the first nine months of 1999. As of September 30, 1999, Nymox's accumulated deficit was CAN$21.2 million. 6 9 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 1998, a small portion of the funds came from service revenues. However, service revenues 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. 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. The pharmaceutical and diagnostic industries are driven by rapid technological and scientific developments and changing customer needs. Nymox's success depends, in large part, on its ability to respond to our customers' requirements in a timely manner by developing or acquiring rights to new products or improvements to our existing products. We are still developing many of our products and have not yet brought 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. WE FACE SIGNIFICANT AND GROWING COMPETITION. Rapidly evolving technology and intense competition are the hallmarks of modern pharmaceutical and biotechnology industries. Our competitors include: - major pharmaceutical, diagnostic, chemical and biotechnology companies, many of which have financial, technical and marketing resources significantly greater than ours; - biotechnology companies, either alone or in collaborations with large, established pharmaceutical companies to support research, development and commercialization of products that may be competitive with ours; and 7 10 - academic institutions, government agencies and other public and private research organizations which are conducting research into Alzheimer's disease and which increasingly are patenting, licensing and commercializing their products either on their own or through joint ventures. 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 AD7C(TM) testing service 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: - failure to obtain or significant delays in obtaining requisite approvals; - loss of or changes to previously obtained approvals; and - failure to comply with existing or future regulatory requirements. The operation of our clinical reference laboratory in Maryland is regulated by the Health Care Financing Administration (HCFA) under the Clinical Laboratories Improvement Act of 1988. In addition, individual states like New York and Maryland have their own requirements for reference laboratories like ours that offer diagnostic services. In addition, the United States Food and Drug Administration (FDA) has its own regulations governing in vitro diagnostic products, including some of the reagents used in clinical reference laboratories. Any changes in HCFA 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. 8 11 Our diagnostic product in development, 7C Gold, will require prior approval from the FDA before being marketed, distributed and sold in the United States. 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. 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 two-step process. 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. The commercial success of products incorporating our technologies may depend, in part, upon our ability to obtain strong patent protection. 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. 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 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. 9 12 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 20,003,804 common shares of Nymox currently issued and outstanding, not including the Shares covered by this prospectus. All but 36,600 of these shares are eligible for sale under Rule 144 or are otherwise freely tradable. Finally, 1,130,500 share options are outstanding, of which 891,000 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. A large portion of the corporation's 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 United States 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 flows in order to finance and develop Nymox's business. 10 13 TRADING MARKET FOR COMMON SHARES Nymox's common shares trade on the Nasdaq Stock Market. Nymox's common shares traded on the Nasdaq National Market from December 1, 1997 until September 16, 1999 when they began trading on the Nasdaq SmallCap Market. Nymox's common shares also traded on the Montreal Exchange from December 18, 1995 until November 19, 1999. The following tables set out the high and low reported trading prices of the common shares on the Nasdaq Stock Market during the periods indicated.
- ------------------- ------------------------- ------------------------------ ------------------------------ Year Quarterly Period High Sales Price Low Sales Price - ------------------- ------------------------- ------------------------------ ------------------------------ 1997 4th Quarter $8.75 $6.25 - ------------------- ------------------------- ------------------------------ ------------------------------ 1998 1st Quarter $13.625 $5.688 ------------------------- ------------------------------ ------------------------------ 2nd Quarter $8.375 $5.75 ------------------------- ------------------------------ ------------------------------ 3rd Quarter $7.375 $2.5625 ------------------------- ------------------------------ ------------------------------ 4th Quarter $6.25 $2.50 - ------------------- ------------------------- ------------------------------ ------------------------------ 1999 1st Quarter $5.875 $2.875 ------------------------- ------------------------------ ------------------------------ 2nd Quarter $4.188 $2.75 ------------------------- ------------------------------ ------------------------------ 3rd Quarter $4.750 $2.50 ------------------------- ------------------------------ ------------------------------ 4th Quarter $4.625 $2.50 - ------------------- ------------------------- ------------------------------ ------------------------------
According to information furnished to Nymox by the transfer agent for the common shares, as of January 31, 2000, total shares outstanding were 20,003,804. There were 891 holders of record of the common shares and 3,261 beneficial shareholders in total. Of these, 90 were holders of record of the common shares and 1,304 were beneficial shareholders with addresses in the United States and such holders owned an aggregate of 1,886,798 shares, representing 9.4% of the outstanding shares of common stock. SELECTED CONSOLIDATED 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"). The financial data for the years ended December 31, 1996, 1997 and 1998, has been extracted from audited financial statements included elsewhere in this registration statement. The financial data for the 1994 and 1995 (July and December) periods has been extracted from audited financial statements not included in this prospectus. The selected financial data as at and for the nine months ended September 30, 1999 has been extracted from unaudited financial statements included elsewhere in this prospectus. Such unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of the information for the period presented. 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. 11 14 Effective August 1, 1995, Nymox changed its fiscal year from a July 31 year-end to a December 31 year-end. NYMOX PHARMACEUTICAL CORPORATION Selected Consolidated Financial Data (expressed in Canadian dollars)
9 Months ending July 31, July 31, Dec. 31, Sept. 30, 1994 1995 1995 Dec. 31, Dec. 31, Dec. 31, 1999 (12 months) (12 months) (5 months) 1996 1997 1998 (Unaudited) ----------- ----------- ------------ ----------- ----------- ------------ ----------- Canadian GAAP Current Assets - 0 - 11,963 2,268,097 2,896,234 2,526,335 3,909,241 1,855,966 Capital Assets 12,576 338,953 366,155 1,317,973 1,419,462 1,846,979 1,610,772 Total Assets 239,403 350,916 2,634,252 4,214,207 3,945,797 5,756,220 3,466,738 Total Liabilities 95,376 121,589 151,297 384,226 292,330 434,440 275,667 Shareholders' Equity 194,027 229,327 2,482,955 3,829,981 3,653,467 5,321,780 3,191,071 Revenues - 0 - - 0 - - 0 - 226,940 101,110 394,837 220,912 Research & Development Expenditures (note 1) 55,325 371,939 571,215 2,116,000 2,412,349 3,013,237 1,221,866 Net Loss 58,325 377,570 693,846 3,699,064 4,999,455 6,903,611 3,479,058 Loss per Share (note 2) - 0 - 0.03 0.04 0.21 0.27 0.36 0.17 U.S. GAAP (note 3) Net Loss 71,668 393,841 1,639,194 4,330,230 5,198,988 7,385,188 3,551,140 Loss per Share (note 2) - 0 - 0.03 0.11 0.25 0.28 0.38 0.18 Shareholders' Equity 127,312 146,341 2,391,515 3,107,375 2,731,328 3,918,064 1,715,273
Notes: 1) We earn investment tax credits by making qualifying research and development expenditures. These amounts shown are net of investment tax credits. 2) For periods prior to December 31, 1995, the number of shares outstanding is assumed to be 15,000,000 representing the number of shares issued by Nymox to DMS Pharmaceuticals Inc. in September 1995. Nymox has never paid dividends on its common stock. 3) Reference is made to Note 10 of Nymox's audited financial statements as at and for the year ended December 31, 1998 for a reconciliation of differences between Canadian and U.S. GAAP. 12 15 INFORMATION ABOUT THE COMPANY DIAGNOSTIC PRODUCTS FOR ALZHEIMER'S DISEASE Alzheimer's disease is the most common cause of dementia in persons 65 years of age and older and is the fourth leading cause of death among the elderly. Despite the need for an accurate clinical test, the definitive diagnosis of the disease is possible only after the death of the patient by expert, pathologic examination of brain tissue. The Surgeon General's Report on Mental Health, released on December 13, 1999, identified the importance and the need for the early detection and diagnosis of Alzheimer's disease. The report described the current approach to Alzheimer's disease diagnosis, clinical examination and the exclusion of other common causes of its symptoms, as time- and labor-intensive, costly and largely dependent on the expertise of the examiner. As a result, the illness is currently underrecognized, especially in primary care settings, where most older patients seek care. The report joined other experts writing in the field in recognizing the need for a better, more reliable method for diagnosing the disease in living patients and in particular, the need of a simple, accurate and convenient test that could detect a biochemical change early in patients with Alzheimer's disease. We believe our AD7C(TM) provides such a test. The AD7C(TM) Test measures the level of a brain protein called neural thread protein which is elevated early in Alzheimer's disease as reported both in the scientific literature and at scientific conferences. Researchers at the Massachusetts General Hospital and Brown University led by Doctors Suzanne de la Monte and Jack Wands first found large amounts of the protein in the brains of patients known to have died with Alzheimer's disease. Subsequent research led to the characterization of the protein and the development of a highly sensitive test to detect the presence of the protein not only in brain tissue but also in the spinal fluid and urine of patients diagnosed with Alzheimer's disease. There is evidence that the protein is associated with the growth and sprouting of brain cells and accordingly one possible explanation for its increased production in the brains of patients with Alzheimer's disease may be as one of the body's responses to the widespread destruction of brain cells that occurs with AD. The protein is also associated with cell death in brain cell cultures in the laboratory and therefore may also play a role in the cell loss in the disease. Nymox believes that its AD7C(TM) test can assist a physician faced with the task of diagnosing whether a patient has Alzheimer's disease. In company funded trials to date, involving over 500 clinical samples, the test results were positive for over 80% of the patients with verified Alzheimer disease and negative in over 89% of subjects without the disease (known as a low false positive rate). The low rate of positive results for patients without the disease is important for doctors investigating patients with subtle or marginal symptoms of mental, emotional, cognitive, or behavioral changes. If the doctor can rule out Alzheimer's with more assurance, a great deal of patient and family anguish and anxiety will be avoided. A low test score will help the doctor to be more certain that Alzheimer's disease is not the cause of the patient's symptoms and to target the other, often reversible causes of the patient's symptoms, such as depression. 13 16 These trials have been confirmed by verification of the diagnosis through postmortem examination of brain tissue. To date, several studies published in scientific publications or presented at scientific conferences have confirmed the accuracy of the AD7C(TM) test. These publications include the Journal of Clinical Investigation (1997; vol.100; pages 3093-3104), the Journal of Contemporary Neurology (1998; art. 4a) and two publications in the Journal of Clinical Laboratory Analysis (1998; vol.12: 285-288) and (1998; vol.12:223-226). There can be no assurance that further studies will repeat the same level of success experienced to date. Nymox provides the AD7C(TM) test for both spinal fluid and urine samples through its reference laboratory in Kensington, Maryland. A patient provides the necessary sample to his or her doctor who then forward the sample to our laboratory where our technical staff performs the tests. We then report the results to the doctor. The AD7C(TM) test is an aid to diagnosis, to be considered together with patient history, physical examination and other relevant medical data. The test does not replace a physician's diagnosis. We believe that the appropriate use of the test leads to better, earlier and quicker diagnoses and associated cost-savings through the elimination of unnecessary and intrusive tests and examinations. Nymox is developing an improved version of the AD7C(TM) test known as 7C Gold. The 7C Gold test when completely developed will permit the testing of urine or spinal fluid samples in a general purpose medical laboratory or a doctor's office rather than in a highly specialized reference laboratory. We expect that the 7C Gold test will increase the availability and acceptance of our test while lowering its cost to the patient or health care payer. Nymox also is developing a new diagnostic test for Alzheimer's disease that detects a distinctive brain antigen referred to as 35i9 which we believe is also associated with Alzheimer's disease. DEVELOPMENT OF THERAPEUTIC PRODUCTS FOR ALZHEIMER'S DISEASE At present, there is no cure for Alzheimer's disease. There are two drugs approved by the FDA, tacrine (brand-name Cognex) and donezepil (brand-name Aricept) for the treatment of Alzheimer's disease. However, at most these drugs offer symptomatic relief for the loss of mental function associated with the disease and possibly help to delay the illness-progression. There is no consensus as to the cause of Alzheimer's disease or even whether it is one disease or many. 14 17 There is an urgent need for an effective treatment for the illness, caused in part by the rising health care, institutional and social costs for the treatment and care of Alzheimer's disease sufferers. The Surgeon General's Report on Mental Health released on December 13, 1999, put the direct health care costs for the illness in the United States at almost $18 billion for 1996. In a 1998 statement to the House Appropriations Subcommittee, the Director of the National Institute on Aging, Dr. Richard J. Hodes, estimated that the cost of care to family, caregivers and society in general was as much as $100 billion per year. These costs are expected to rise sharply as the baby boom generation ages and more people become at risk for the disease. According to Dr. Hodes, the number of Americans aged 65 or over, now some 34 million, is expected to more than double by year 2030. Within this group, the population of persons over the age of 85 is the fastest growing segment. As people live longer, they become more at risk of developing Alzheimer's disease. Nymox's research into drug treatments for Alzheimer's disease is aimed at compounds that could arrest the progression of the disease and therefore are targeted for long term use. Nymox researchers believe that spherons are the cause of senile plaques, the characteristic injury found in the brains of patients suffering from Alzheimer's disease and widely believed to be at the root of the illness. Spherons are unique, microscopic-sized balls of protein found in every person's brain from age 1. As we age, our spherons grow larger until the cells they are in can no longer hold them. Nymox researchers believe that, once freed, the spherons burst to form senile plaques and so set off a chain of events leading to the loss of brain cells and brain function associated with Alzheimer's disease. In 1998, Nymox researchers summarized their findings in the Journal of Alzheimer's Disease and in IOS Press - Drug News & Perspectives. These summaries set forth 20 important criteria of validity correlating the disappearance of spherons in old age with the appearance of senile plaques and implicating spherons as the cause of Alzheimer's disease Based on these research findings, Nymox developed proprietary screening systems and used them to discover, develop and test drug candidates to inhibit the formation of Alzheimer plaques from spherons. These candidates have the potential to slow or stop the progression of the disease. Its most promising compound, NXD-2858, has shown the capability of being taken orally and of crossing the blood-brain barrier into the brain. To date, this compound shows no significant evidence of toxicity or significant potential side effects. Nymox also has two other distinct new drug candidates, NXD-3109 and NXD-1191, neither of which demonstrate significant toxicity and both of which had positive animal testing results. Nymox also developed a unique drug screening system, based on the research that led to its AD7C(TM) test, to identify other potential drug candidates for the treatment of Alzheimer's disease. Dr. Suzanne de la Monte and other researchers at the Massachusetts General Hospital identified the gene that produces neural thread protein, the brain protein detected by Nymox's AD7C(TM) test. In this system, researchers inserted the AD7C gene into human brain cells, triggering the production of the AD7C brain protein associated with Alzheimer's disease. The genetically-altered cells then begin to sprout new growths, start to degenerate and finally die prematurely. Nymox screened compounds for their ability to impede this process of premature cell death and thus potentially slow or halt the loss of brain cells in the Alzheimer's disease brain. Nymox licensed this technology in 1997 from the Massachusetts General Hospital as part of a sponsored research and licensing agreement. 15 18 In November, 1999, Dr. Ben Wolozin of Loyola University Medical Center in Chicago reported at the annual meeting of the Society for Neuroscience his findings that some members of a class of anti-cholesterol drugs called statins may delay or prevent the onset of Alzheimer's disease. Dr. Wolozin licensed the commercial and patent rights to this discovery to Nymox. ANTI-INFECTIVES In the last ten years there has been a growing recognition of the increasing problem of antibiotic-resistant infections and the need for truly novel antibacterial drugs. A recent example of this recognition can be found in the European Commission report dated May 28, 1999, "Opinion of the Scientific Steering Committee on Antimicrobial Resistance." In the field of infectious disease treatments, Nymox has developed three new antibacterial agents: - NXB-4221 for the treatment of difficult chronic and persistent urinary tract infections; - NXB-5886 for the treatment of streptococcal infection; and - NXT-1021 for the treatment of staphylococcal infection. Urinary tract infections in women caused by bacteria such as E. coli have become increasingly resistant to conventional antibiotic treatment. Some varieties of streptococcus and staphylococcus bacteria, a common source of infection in humans, have acquired a broad immunity to antibiotic treatments. Infections from these antibiotic resistant bacteria are difficult to treat and can be life threatening. Nymox's three antibacterial agents have all shown the ability to kill their bacterial targets in culture with no signs of toxicity. E. coli contamination of food and drink is a serious public health problem worldwide and a major concern for meat processors in particular. E. coli bacteria occur normally and usually harmlessly in the gastrointestinal tracts of humans, cows and other animals. However, one mutant variety of the E. coli bacteria, E. coli 0157:H7, can cause life-threatening illness and has been implicated in cases of severe diarrhea, intestinal bleeding and kidney failure, leading, in some cases, to death in children and the elderly. E. coli contamination in hamburger meat and other food products and in drinking water affects about 100,000 people a year. 16 19 Nymox developed a potent new antibacterial agent, NXC-4720. Tests of NXC-4720 show it to be highly effective against all known substrains of E. coli 0157:H7, the bacteria implicated in these severe cases of food and drink contamination. Tests of NXC-4720 show that it destroys E. coli 0157 strains, including H7, efficiently, rapidly and at a very low dose. In 1999, we began further trials for this agent and expect to complete them in 2000. Nymox has patent rights to these and other antibacterial agents. COMPETITION In the field of Alzheimer's disease diagnosis, our AD7C(TM) Test faces growing competition which could detrimentally impact on our ability to successfully market and sell our diagnostic test. Our competitors include: - Athena Diagnostics, Inc. which is currently marketing three tests claimed to aid in the diagnosis of Alzheimer's disease: a genetic test for the rare cases of familial, early-onset Alzheimer's disease; a genetic test for a relatively common mutation of a gene said to increase the likelihood of a person with at least one of the genes contracting the disease; and a test for two proteins in the spinal fluid of patients. - Mitokor, Inc. which developed a blood test known as Mito-Load that looks for certain mutations in mitochondrial DNA said to be associated with Alzheimer's disease. Mitokor recently entered into a non-exclusive licensing agreement in Japan for the marketing and sale of its product there. - Synapse Technologies, Inc. which developed a blood test known as p97 Diagnostic that detects a protein said to be diagnostic of Alzheimer's disease. Synapse Technologies also licensed its technology for use in Japan. - NeuroLogic, Inc. announced in September, 1999 that it acquired an exclusive world-wide license to a cellular test for Alzheimer's disease. There are also a number of other proposed biochemical signs of the disease that could potentially be developed into a commercial diagnostic test as well as various scanning and imaging technologies which might compete some day for a portion of the diagnostic market for Alzheimer's disease. We also face intense competition for the development of an effective treatment for Alzheimer's disease. The market conditions for an Alzheimer's disease drug strongly favor the entry of other corporations into the area. The current market for therapeutic drugs for Alzheimer's disease is an estimated $2 billion. This market is expected to grow rapidly as new drugs enter the market and as the baby boom generation becomes more at risk for developing Alzheimer's disease. As a result, most of the major pharmaceutical companies and many biotechnology companies have ongoing research and development programs for drugs and treatments for Alzheimer's disease. Many of these companies have much greater scientific, financial and marketing resources than we have and may succeed in developing and introducing effective treatments for Alzheimer's disease before we can. At present, only one drug for Alzheimer's disease is being widely marketed in the United States, Aricept by Pfizer. Aricept only treats some of the symptoms of Alzheimer's disease by enhancing memory and other mental functions and not the underlying causes of the illness. 17 20 A similar competitive reality prevails in the field of novel anti-infectives. Over the past ten years, there has been an increasing awareness of the medical need and of emerging market opportunities for new treatments for antibiotic resistant bacterial infections. Many of the major pharmaceutical companies are developing anti-infective drugs that either modify their existing drugs or involve new anti-bacterial properties. Many biotechnology companies are developing new classes of anti-bacterial drugs. At least three major pharmaceutical companies have vaccines against bacterial infections in development. To the extent that these companies are able to develop drugs or vaccines that offer treatment for some or all of the indications for our anti-infectives, the market for our products may be adversely affected. The problem of E. coli 0157:H7 contamination of hamburger meat and other food products is also well-known and a number of companies and researchers have been pursuing various potential solutions, including irradiation with x-rays, better detection of contamination, electronic pasteurization, vaccination and competitive exclusion of the pathogenic E. coli bacteria by harmless bacteria. The development of alternative solutions to the problem of E. coli infection may adversely affect the market for our treatment for E. coli 0157:H7 infection in cattle and contamination of food products. GOVERNMENT REGULATION Any therapeutic product developed by Nymox would have to receive regulatory approval. In the United States, once a product receives regulatory approval to begin clinical testing, it must go through four distinct development and evaluation stages: - Product Evaluation. Nymox must conduct preliminary studies of potential drug candidates using various screening methods to evaluate their products for further testing, development and marketing. - Optimization of Product Formulation. The activities in this stage of development involve consultations between the Company and investigators and scientific personnel. Preliminary selection of screening candidates to become product candidates for further development and further evaluation of drug efficacy is based on a panel of research based biochemical measurements. Extensive formulation work and in vitro testing are conducted for each of various selected screening candidates and/or product candidates. 18 21 - Clinical Screening and Evaluation. During this phase of development, portions of which may overlap with product evaluation and optimization of product formulation, initial clinical screening of product candidates is undertaken and full scale clinical trials commence. - Final Product Development. The activities to be undertaken in final product development include performing final clinical evaluations, conducting large-scale experiments to confirm the reproducibility of clinical responses, making clinical lots for any additional extensive clinical testing that may be required, performing any further safety studies required by the FDA, carrying out process development work to allow pilot scale production of the product, completing production demonstration runs for each potential product, filing new drug applications, product license applications, investigational device exemptions (and any necessary supplements or amendments) and undergoing comprehensive regulatory approval programs and processes. Nymox cannot assure you that it will successfully complete the development and commercialization of any therapeutic products. PROPERTY Our laboratory facilities in Kensington, Maryland comprise 5,504 square feet of leased space. The lease expires on March 31, 2000. Our office and research facilities in Saint Laurent, Quebec, Canada comprise 6,923 square feet of leased space. The lease agreement expires on August 31, 2003. Nymox owns a full complement of equipment used in all aspects of its research and development work and its reference laboratory. Nymox believes that its facilities are adequate for its current needs and that additional space, if required, would be available on commercially reasonable terms. LEGAL PROCEEDINGS Nymox's United States subsidiary, Nymox Corporation, commenced an action against a former employee, Hossein Ali Ghanbari, in Montgomery County, Maryland, for repayment of two promissory notes. On August 5, 1999, the court granted Nymox Corporation's Motion for Partial Summary Judgment in the sum of $168,731.83. Hossein Ali Ghanbari has made counterclaims against Nymox Corporation. On February 3, 2000, the large majority of these counterclaims were dismissed on a motion for summary dismissal. The remaining counterclaims allege that Nymox Corporation allegedly defamed Ghanbari, that Nymox Corporation wrongfully discharged Ghanbari and that Nymox Corporation failed to apply on time to the Province of Quebec for a tax holiday for Ghanbari. Ghanbari has claimed that he is entitled to compensatory damages totaling $10.5 million and punitive damages totaling $10 million. Nymox Corporation denies the allegations raised in the counterclaims, believes the counterclaims lack merit and is vigorously defending these counterclaims. 19 22 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION OVERVIEW 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 market and provide a clinical laboratory test, the AD7C(TM) test that is an aid to the diagnosis of Alzheimer's disease. We have under development an improved version of the AD7C(TM) test, 7C Gold, which, when completed and approved, can be used in a general purpose medical laboratory or a doctor's office rather than in a highly specialized reference laboratory. 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 began generating revenue from sales of our AD7C(TM) test in 1997. 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 service revenues. 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. In December 1995, Nymox completed an initial private placement of 1,578,635 common shares at a price of CAN$2.00 per share for CAN$3,157,270 to finance its activities. On December 18, 1995, the shares of Nymox were listed on the Montreal Stock Exchange. Since then, the private placements completed by Nymox are as follows: - April 1996, 877,300 common shares at a per share price of CAN$6.00 for aggregate net proceeds of CAN$5,263,800; - May 1997, 696,491 common shares at a price of CAN$6.50 and warrants exercisable at a price of CAN$8.50 per share for a total consideration of CAN$4,527,191. In 1998, all 696,491 of these warrants were exercised for additional proceeds to Nymox of CAN$5,920,174; 20 23 - May 1998, 231,630 common shares at a price of CAN$8.50 for total proceeds of CAN$1,968,855. A total of 110,000 warrants were issued as well, exercisable at prices of CAN$8.50 per share (50,000) and CAN$10.00 per share (60,000). These warrants have since expired; - January, 1999, 190,000 common shares at CAN$8.50 per share, for total proceeds of CAN$1,615,000. A total of 95,000 warrants were issued as well, exercisable at the price of CAN$10.00 per share. These warrants have since expired; and - September, 1999, 122,000 common shares at CAN$5.00 per share, for total proceeds of CAN$610,000 In total, Nymox has raised over CAN$24 million, since its incorporation in May 1995. We expect the stock purchase agreement with Jaspas, described below in the section entitled "The Common Stock Purchase Agreement", 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. We have no financial obligations of significance other than long-term lease commitments for our premises in Canada and the United States of CAN$27,562 per month and ongoing research funding payments to a U.S. medical facility totaling $172,000 for 1999. RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1998 Revenue In the last quarter of 1998, we launched our urinary version of the AD7C(TM) test. This resulted in a 196% increase in our revenues from this service from CAN$60,135 for the nine months ending September 30, 1998 to CAN$178,496 for the same period in 1999. This increase is attributable to more sales of our AD7C(TM) test. Our 7C Gold test successfully completed its initial key validation studies in September 1999 and we plan to apply for FDA approval in 2000. We expect that approval of the 7C Gold test will have a positive impact on the acceptance of our test in the medical and health care communities and on our marketing and sales. 21 24 Expenses We were able to reduce expenses from CAN$5,510,528 for the nine months ending September 30, 1998 to CAN$3,767,349 for the same period in 1999. The two principal areas of savings were in marketing, with a reduction in expenditures from CAN$2,570,594 to CAN$1,057,545 and, to a lesser extent, in research and development, from CAN$2,198,823 to CAN$1,241,011. These savings were partly offset by a rise in general, administrative and cost of sales from CAN$608,894 to CAN$1,305,242. This rise is attributable to an increase in cost of sales of CAN$258,252 resulting from the increase in sales of the AD7C(TM) test, in professional fees of CAN$287,540, mostly legal fees, and in salaries of CAN$150,000 (re: hiring of an additional executive level employee). The result of an increase in revenue and a decrease in expenses was a decline in the net loss per share from CAN$0.27 for the nine months ending September 30, 1998 to CAN$0.17 for the nine months ending September 30, 1999. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1999, cash, short term investments and subscriptions receivable totaled CAN$1,335,765. We invested CAN$136,418 in additional capital assets in the nine months ended September 30, 1999, consisting mostly of patent costs, compared to CAN$298,169 in the same period in 1998. The decrease is attributable to a reduction in purchases of equipment. YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997 Revenue Revenues on service fees for the AD7C(TM) test amounted to Can$151,263 for the year ended December 31, 1998, compared with CAN$24,584 for the year ended December 31, 1997. More than half of these revenues were generated in the last two months of 1998 when we launched the urinary version of our AD7C(TM) urine test service through our reference laboratory service in Kensington, Maryland. All of the service fee revenue was derived in the United States. Interest revenue increased to CAN$243,574 in 1998 compared to CAN$76,526 in 1997, derived from interest earned on the cash and short-term investments received from the private placements referred to previously. Expenses Research and development expenditures amounted to CAN$3,019,015 for the year ended December 31, 1998, compared with CAN$2,562,349 for the year ended December 31, 1997. The increase is principally attributable to increased expenditures on reagents and clinical studies related to R&D in therapeutics and anti-infectives (net increase CAN$476,677) at the Rockville, Maryland laboratory during the year. In 1998, research tax credits amounted to CAN$5,778 compared to CAN$150,000 in 1997. The reduction in tax credits is attributable to the transfer of research and development activities to the United States. Marketing expenses amounted to CAN$3,240,242 for the year ended December 31, 1998 compared to CAN$1,925,654 for the year ended December 31, 1997. A major marketing effort in 1998 accounted for the increased expenditures; the effort focused specifically on mass mailings and publicity (net increase CAN$827,189) and presentations at conferences (net increase CAN$579,496). We anticipated reducing expenditures in this area in 1999 and in fact did so. 22 25 General and administrative expenses amounted to CAN$896,201 for the year ended December 31, 1998, compared with CAN$589,524 in the year ended December 31, 1997. The increase is attributable to increases in professional fees (net increase CAN$193,736) and increased costs related to shareholder relations (net increase CAN$73,146). Increases in both areas result from first time contracts in 1998 with shareholder relations and public relations firms. Net losses for the period ended December 31, 1998 were CAN$6,903,611, or CAN$0.36 per share, compared to CAN$4,999,455, or CAN$0.27 per share, for the period ended December 31, 1997. YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996 Expenses Research and development expenditures represented our most significant expenditure and amounted to CAN$2,562,349 for the year ended December 31, 1997, compared with CAN$2,356,000 for the year ended December 31, 1996. The increased expenses were largely attributable to increased expenditures related to laboratory expenses (CAN$178,000) at the Rockville, Maryland laboratory during the year. The Rockville facility was in operation for only 10 months in 1996. We also paid its third installment under its research and license agreement with Massachusetts General Hospital in the amount of CAN$311,310, which was CAN$36,000 higher than the 1996 payment. Under the agreement, we were obligated to make certain regularly scheduled payments to Massachusetts General as research grants in exchange for royalties from any sales of resulting products. Gross research and development expenditures were partially offset by research tax credits available to us in Quebec. In 1997, research tax credits amounted to CAN$150,000 compared to CAN$240,000 in 1996. The reduction was attributable to the transfer of certain research and development activities to the United States. Marketing expenses in 1997 amounted to CAN$1,925,654 for the year ended December 31, 1997 compared to CAN$1,253,894 for the year ended December 31, 1996. Expenditures in 1997 consisted largely of the costs of establishing and maintaining a sales and marketing force (CAN$1,135,000) and costs related to marketing activities such as presentations at conferences, publicity, travel, general expenses, printing and postage (CAN$790,000). Expenditures in 1996, consisted of publicity related costs in connection with pre-marketing of the AD7C(TM) test (CAN$746,000), salaries (CAN$178,000) and other costs related to marketing activities (CAN$330,000). 23 26 General and administrative expenses amounted to CAN$589,524 for the year ended December 31, 1997 compared with CAN$497,179 in the year ended December 31, 1996. The increase was attributable to legal costs and expenses related to United States public company registration and the NASDAQ listing (CAN$119,600). INFLATION We do not believe that inflation has had a significant impact on the results of our operations. 24 27 RECENT DEVELOPMENTS ACQUISITION OF A CONTROLLING INTEREST IN SEREX, INC. On January 8, 2000, we entered into an agreement to acquire a controlling interest in Serex, Inc. under a share purchase agreement with Dr. Judith Fitzpatrick, the Chief Executive Officer and majority shareholder of Serex. On March ____, 2000, we closed this acquisition. Under the share purchase agreement, we purchased 1,008,250 shares of Serex or 72.3% of the common stock of Serex from Dr. Judith Fitzpatrick in exchange for 187,951 shares of Nymox and warrants to purchase 115,662 shares of Nymox at a price of $3.70. The acquisition price was based on the closing market price for Nymox shares as of Nov. 16, 1999 wich was $3.3438. The Nymox shares and warrants we issued to Dr. Fitzpatrick are subject to restrictions on their resale or transfer both under United States securities laws, rules and regulations and under the stock purchase agreement. We agreed to file a registration statement with the Securities and Exchange Commission covering the Nymox shares and warrants by November 8, 2000. However, Dr. Fitzpatrick has also agreed that her Nymox shares would only become eligible for sale, subject to any restrictions imposed by United States securities laws, in accordance with the following schedule: - 35,000 shares immediately eligible for sale upon issuance; - 30,000 shares on April 8, 2000; 25 28 - 30,000 shares on July 8, 2000; - 30,000 shares on October 8, 2000; - 30,000 shares on January 8, 2001; and - 32,951 shares on April 8, 2001. Dr. Fitzpatrick has also agreed that she may only exercise her warrants to purchase 115,662 Nymox shares according to the following timetable: - 30,000 warrants, to be exercisable on or after January 8, 2001; - 30,000 warrants, to be exercisable on or after January 8, 2002; - 30,000 warrants, to be exercisable on or after January 8, 2003; and - 25,662 warrants, to be exercisable on or after January 8, 2004. The warrants have a five-year term beginning on January 8, 2000. Serex has issued convertible preferred shares, 10,137 to a major pharmaceutical company and 10,137 to a major diagnostic company, under a series of licensing and development agreements. The holders of these preferred shares have the right to convert their preferred shares to common shares according to a formula set out in Serex's amended articles of incorporation. At present, one preferred share would convert to ten common shares. If converted to common stock, the preferred shares would represent 14.5% of the outstanding common stock of Serex. The preferred shareholders have a right to vote with the holders of the common stock of Serex as if they had converted their preferred shares to common stock. The preferred shareholders also have a right to redeem up to 50% of their shares in certain circumstances after March 31, 2000 for a payment of $39.46 per preferred share redeemed. Thus, if the full 50% of preferred shares were redeemed, the redemption price would be $400,000. The preferred shares also have preferential rights ahead of the common shares, to any dividends and to the assets of the corporation on liquidation, dissolution or winding up of the affairs of Serex. On merger or consolidation of Serex, the preferred shareholders may, in certain circumstances, elect to treat the merger or consolidation as a liquidation and to receive the redemption price for their shares; otherwise the preferred shares would be converted into common shares based on the conversion formula and treated like the other common shares. 26 29 SEREX, INC. Serex is a privately held diagnostic company that was founded in 1983 and is based in Maywood, New Jersey. Serex developed and patented its particle valence technology, a unique, highly sensitive, new method to detect very small amounts of biochemical indicators in body fluids such as blood, urine and saliva. Serex incorporated this technology in its LabTab(TM) assay, which enables the easy and rapid testing of samples by general-purpose medical laboratories or in doctors' offices. Serex also licensed the Japanese rights to two of its principal patents to Mizuho Medy Co. Ltd. of Japan. Serex's diagnostic technology can be adapted to detect a wide range of biochemical indicators for diseases, conditions and drug use. Serex developed its NicoMeter(TM) which can reliably detect one of the metabolic products of nicotine in human urine and saliva, enabling it to determine the level of exposure to tobacco products. The urine-based NicoMeter(TM) is currently being manufactured under contract by Mizuho USA and marketed and sold under a distribution agreement dated June 10, 1999 by Jant Pharmacal Corporation. Serex is developing Nymox's 7C Gold test, using its patented diagnostic technology to detect in urine and spinal fluid the levels of the brain protein implicated in Alzheimer's disease and measured by Nymox's AD7C(TM) test. Serex has under development a test that can detect biochemical indicators of cholesterol in human saliva and therefore provide an inexpensive, convenient and reliable method of determining and monitoring cholesterol levels. In November, 1999, Serex was granted a United States patent for an antibody and for the use of the antibody in its technology in order to detect one of the biochemical indicators for the loss of bone matter, which is a sign of osteoporosis, the most common bone disease in people. Osteoporosis results from the progressive loss of bone material and can cause disabling and potentially life-threatening bone fractures in particular of the spine and the hips. It is most common in the elderly and in post-menopausal women. Serex has also used its patented technology to develop products to detect an early indicator of pregnancy and to detect a brain protein implicated in certain brain diseases. Serex also did preliminary work on tests designed to detect indicators for heart disease and for blood sugar levels in a type of diabetes and to monitor therapeutic drug levels. Since 1996, Serex has collaborated with at least three major pharmaceutical companies and two diagnostic companies under licensing and development agreements concerning the development of some of these products. These agreements contain confidentiality provisions that prohibit the disclosure of their terms. 27 30 EMPLOYMENT AGREEMENT WITH DR. JUDITH FITZPATRICK Dr. Judith Fitzpatrick has also agreed to assume a position as Vice-President for Scientific Affairs of Nymox and to continue on as Chief Executive Officer of Serex. Dr. Fitzpatrick, 53, received a Ph.D. in immunology from Mt. Sinai Medical School (City College of NY) in 1981 and from 1981 to 1984 was employed by Becton Dickinson as a Senior Scientist. She founded Serex in 1984 and has extensive experience both in the scientific and commercial aspects of the development of diagnostic tests. From 1984 to the early 1990s, she developed and supervised the manufacture of laboratory tests for drugs and proteins of interest to the life insurance industry. At one point, Serex was providing over six million tests per year. In the early 1990s, Serex switched to a strip format technology to exploit the emerging point-of-care markets. Dr. Fitzpatrick is a co-inventor of Serex's patented diagnostic system. The employment agreement between Nymox and Dr. Fitzpatrick has a term of four years, renewing automatically at the end of the term on a year-to-year basis subject termination by either party. Dr. Fitzpatrick's compensation is $125,000 a year and includes the grant of options to purchase 40,000 Nymox shares at $3.70 per share under the Nymox Share Option Plan. The agreement provides that these options shall vest as follows: - 10,000 on January 8, 2001; - 10,000 on January 8, 2002; - 10,000 on January 8, 2003; and - 10,000 on January 8, 2004. The options expire on January 7, 2009. The employment agreement envisages Dr. Fitzpatrick continuing with the development of Nymox's 7C Gold test and Serex's diagnostic products as well as participating in Nymox's research and development of treatments for Alzheimer's disease, its anti-infectives program and other scientific projects. USE OF PROCEEDS We will not realize any proceeds from the sale of the common shares by Jaspas; rather, Jaspas will receive those proceeds directly. However, we will receive cash infusions of capital if and when Jaspas purchases our common shares in accordance with the stock purchase agreement with Jaspas or with the stock purchase warrant. We intend to use the proceeds from the sale of common shares to Jaspas to fund our continuing research, our product development programs and necessary clinical trials, as well as for marketing, working capital and other general corporate purposes. 28 31 THE COMMON STOCK PURCHASE AGREEMENT SUMMARY Nymox and Jaspas Investments Limited, a British Virgin Islands corporation, signed a common stock purchase agreement dated November 1, 1999 for the future issuance and purchase of Nymox's common shares. The transaction closed on November 12, 1999. The stock purchase agreement establishes what is sometimes termed an equity line of credit or an equity draw down facility. In general, the draw down facility operates like this: the investor, Jaspas, committed up to $12 million to purchase Nymox's common shares of Nymox 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 the placement agent, Ladenburg Thalmann & Co. Inc., which introduced Jaspas to Nymox. Ladenburg Thalmann is not obligated to purchase any Nymox shares. 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; however, the aggregate total of all draws cannot exceed $12 million. 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 _____________, 2000. THE DRAW DOWN PROCEDURE AND THE STOCK PURCHASES We may make up to twenty-four draw downs during the term of the stock purchase agreement. We may request a draw down by faxing a draw down notice to Jaspas, setting out the amount of the draw down we wish to exercise and the minimum threshold price, if any, at which we are willing to sell the shares. The minimum draw down amount is $150,000. The maximum is $750,000 subject to the following limiting formulas: 29 32 - - For draw downs greater than $500,000 and up to $500,000 Maximum amount of draw down = 20% of average stock price multiplied by average trading volume multiplied by 22 where Average Stock Price = Average of the daily price of Nymox's shares for the 22 trading days PRIOR to the draw down period Average Trading Volume = Average daily trading volume for the 45 trading days PRIOR to the draw down period.
- - For draw downs greater than $500,000 and up to $750,000 If, during the 30 Trading Days prior to the draw down notice, the average daily trading volume is at least 60,000 shares and the average of the average daily price is at least $4.50 per share, then we may draw up to $750,000. The next 22 trading days immediately following the draw down notice are used to determine the actual amount of money Jaspas will provide and the number of shares Nymox will issue in return. The 23rd trading day is the draw down exercise date when the amount of the draw and the number of shares to be issued is calculated based on the following formula: number of common shares = Sum over each of the 22 trading days of 1/22 of the draw down amount divided by 94% of the daily price for Nymox shares on each trading day.
If the daily price for any given trading day during the draw down period is below the threshold price set by Nymox in the draw down notice, then that day is not included in the calculation of the number of shares to be issued and the draw down amount that Jaspas is to pay to Nymox is correspondingly reduced by 1/22 for that day. Thus, if the daily price for that day is below the threshold price Nymox will not issue any shares and Jaspas will not purchase any shares for that day. The following is an example of the calculation of the draw down amount and the number of shares to be issued to Jaspas in connection with that draw down based on certain assumptions. 30 33 Sample draw down amount calculation. - Nymox provides a draw down notice to Jaspas that it wishes to draw down $400,000. - The average of daily volume weighted average price of Nymox's common shares for 22 trading days prior to the draw down notice is $3.50. - The average daily trading volume for the 45 trading days prior to the draw down notice is 25,000 shares. - The maximum dollar amount that can be drawn down is: 20% of $3.50 multiplied by 25,000 multiplied by 22 or $385,000. On these assumed facts, Nymox could draw $385,000 out of the $400,000 requested in the draw down notice. Sample calculation of number of shares Assume that the maximum draw down amount for the draw down period is $385,000 and assume that the daily volume weighted average price for Nymox's shares is as set out in the table below. The number of shares to be issued based on any trading day during the draw down period is calculated from the formula: (1/22 of the draw down amount) divided by (94% of the daily price). For the first trading day in the example in the table below, the calculation is as follows: (1/22 of $385,000) divided by (94% of $3.50 per share) or 5,319 shares. The number of shares to be issued for the draw down period in the example is calculated as follows: - for each trading day in the 22 day period, the number of shares to be issued is based on the daily price of Nymox's shares for that day and calculated using the formula above; and - the number of shares to be issued for each of the 22 trading days is then totaled to arrive at the number of shares to be issued to Jaspas at the end of the draw down period for the purchase price of $385,000, the draw down amount. 31 34
- ------------------------ -------------------------- ------------------------- ---------------------------------- 1/22 of Draw Down Number of Shares to be issued Trading Day Daily Stock Price Amount of $385,000 based on that trading day. - ------------------------ -------------------------- ------------------------- ---------------------------------- 1 $3.50 $17,500 5,319 - ------------------------ -------------------------- ------------------------- ---------------------------------- 2 $3.625 $17,500 5,136 - ------------------------ -------------------------- ------------------------- ---------------------------------- 3 $3.50 $17,500 5,319 - ------------------------ -------------------------- ------------------------- ---------------------------------- 4 $3.375 $17,500 5,516 - ------------------------ -------------------------- ------------------------- ---------------------------------- 5 $3.50 $17,500 5,319 - ------------------------ -------------------------- ------------------------- ---------------------------------- 6 $3.75 $17,500 4,965 - ------------------------ -------------------------- ------------------------- ---------------------------------- 7 $3.875 $17,500 4,804 - ------------------------ -------------------------- ------------------------- ---------------------------------- 8 $4.00 $17,500 4,654 - ------------------------ -------------------------- ------------------------- ---------------------------------- 9 $4.25 $17,500 4,380 - ------------------------ -------------------------- ------------------------- ---------------------------------- 10 $3.75 $17,500 4,965 - ------------------------ -------------------------- ------------------------- ---------------------------------- 11 $3.50 $17,500 5,319 - ------------------------ -------------------------- ------------------------- ---------------------------------- 12 $3.25 $17,500 5,728 - ------------------------ -------------------------- ------------------------- ---------------------------------- 13 $3.00 $17,500 6,206 - ------------------------ -------------------------- ------------------------- ---------------------------------- 14 $3.25 $17,500 5,728 - ------------------------ -------------------------- ------------------------- ---------------------------------- 15 $3.375 $17,500 5,516 - ------------------------ -------------------------- ------------------------- ---------------------------------- 16 $3.50 $17,500 5,319 - ------------------------ -------------------------- ------------------------- ---------------------------------- 17 $3.625 $17,500 5,136 - ------------------------ -------------------------- ------------------------- ---------------------------------- 18 $3.75 $17,500 4,965 - ------------------------ -------------------------- ------------------------- ---------------------------------- 19 $3.875 $17,500 4,804 - ------------------------ -------------------------- ------------------------- ---------------------------------- 20 $4.00 $17,500 4,654 - ------------------------ -------------------------- ------------------------- ---------------------------------- 21 $3.75 $17,500 4,965 - ------------------------ -------------------------- ------------------------- ---------------------------------- 22 $3.50 $17,500 5,319 - ------------------------ -------------------------- ------------------------- ---------------------------------- TOTAL $385,000 114,037 shares to be issued for the draw down period - ------------------------ -------------------------- ------------------------- ----------------------------------
In this fictitious example, Nymox would issue 114,037 shares for this draw down period. It would receive $385,000 less the 3% fee to the placement agent or $373,450. The delivery of the requisite number of shares and payment of the draw is effected through an escrow agent, Epstein, Becker & Green, P.C. of New York. The escrow agent pays 97% of the draw to Nymox and 3% to Ladenburg Thalmann & Co. Inc., our placement agent, in satisfaction of placement agent fees. Only one draw down can occur during this 22 day draw down period and Nymox must wait a minimum of five trading days from the end of one draw down period before issuing the next draw down notice and beginning the process again. 32 35 NECESSARY CONDITIONS BEFORE JASPAS IS OBLIGED TO PURCHASE NYMOX'S SHARES. The following conditions must be satisfied before Jaspas is obligated to purchase the common shares that Nymox wishes to sell: - A registration statement for the shares Nymox will be issuing must be declared effective by the Securities and Exchange Commission and must remain effective and available as of the draw down settlement date for making resales of the common shares purchased by Jaspas. - There can be no material adverse change in Nymox's business, operations, properties, prospects or financial condition not publicly reported since the most recent prior draw down exercise date. - No statute, rule, regulation, executive order, decree, ruling or injunction may be in effect which prohibits consummation of the transactions contemplated by the stock purchase agreement. - No litigation or proceeding adverse to Nymox, Jaspas or their affiliates, can be pending, nor any investigation by any governmental authority threatened against them seeking to restrain, prevent or change the transactions contemplated by the stock purchase agreement or seeking damages in connection with such transactions. - Trading in Nymox's common shares must not have been suspended by the Securities and Exchange Commission or the Nasdaq SmallCap Market, nor shall minimum prices have been established on securities whose trades are reported by the Nasdaq SmallCap Market. On each draw down settlement date for the sale of common shares, Nymox must deliver an opinion from its counsel about these matters. A further condition is that Jaspas may not purchase more than 19.9% of Nymox's common shares issued and outstanding on November 12, 1999, the closing date under the stock purchase agreement, without obtaining approval from Nymox shareholders for such excess issuance. RESTRICTIONS ON FUTURE FINANCINGS FOR NYMOX. The stock purchase agreement limits Nymox's ability to raise money by selling its securities for cash at a discount to the current market price for at least eighteen months. Specifically, Nymox may not sell its securities for cash at a discount to current market price until the earlier of - eighteen months from ___________________, 2000, the effective date of the registration statement of which this prospectus is a part, or, if later, the date that Nymox has drawn down at least $8,000,000 or - sixty days after Jaspas has purchased the maximum $12 million of common shares from Nymox. 33 36 There are important exceptions to this limitation. Nymox can sell its shares for cash at a discount to the current market price: - in a registered public offering of its securities underwritten by one or more established investment banks; - in one or more private placements where the purchasers do not have registration rights; - under any employee benefit plan approved by the shareholders of Nymox; - under any compensatory plan for a full-time employee or key consultant; - in connection with a strategic partnership or other business transaction, the principal purpose of which is not simply to raise money; or - for which Jaspas has given its written approval. THE WARRANTS ISSUED TO JASPAS Under the stock purchase agreement, we granted Jaspas a warrant to purchase 200,000 shares of Nymox's common shares, exercisable for a period of five (5) years from November 30, 1999, at an exercise price equal to 110% of the average daily price of the common shares on the closing date of November 12, 1999. The average daily price of Nymox's shares for that day was $4.1097; thus the exercise price for the warrant is $4.53. The warrant permits Jaspas to purchase up to 100,000 shares at any time after November 30, 1999 and before the close of business on November 30, 2004. Jaspas may purchase the remaining 100,000 shares in the warrant if and only if Nymox has not draw down at least $7,000,000 within eighteen months from the effective date of the registration statement. COSTS OF CLOSING THE TRANSACTION. At the closing of the transaction on November 12, 1999, we delivered the warrant for the 200,000 common shares and the requisite opinion of counsel to Jaspas and paid the escrow agent, Epstein Becker & Green P.C. $35,000 for Jaspas's legal, administrative and escrow costs and for the ordinary services of the escrow agent for each closing of a draw down. We also paid a placement fee of $100,000 to Ladenburg Thalmann & Co. Inc. and an additional $35,000 for its expenses. Ladenburg Thalmann & Co. Inc. will also receive warrants for a total of 160,000 common shares of Nymox with a strike price of 100% of the closing bid for Nymox shares on November 12, 1999 or $4 1/16. Ladenburg Thalmann is not obligated to purchase any Nymox shares. 34 37 TERMINATION OF THE STOCK PURCHASE AGREEMENT Jaspas may terminate the equity draw down facility under the stock purchase agreement if any of the following events occur: - Nymox suffers a material adverse change in its business operations, properties, prospects or financial condition; - the common shares of Nymox are delisted from the Nasdaq SmallCap Market unless such is in connection with the listing of such shares on a comparable stock exchange in the United States; - Nymox files for protection from creditors, or; - Nymox completes any of the financing transactions prohibited under the stock purchase agreement. INDEMNIFICATION OF JASPAS. Jaspas is entitled to customary indemnification from Nymox for any losses or liabilities suffered by it based upon material misstatements or omissions from the registration statement and the prospectus, except as they relate to information supplied by Jaspas to Nymox for inclusion in such registration statement and prospectus. JASPAS'S RESALE OF THE COMMON SHARES Jaspas has agreed that its trading and distribution activities with respect to the common shares will be in compliance with all applicable United States state and federal securities laws, rules and regulations; all Canadian securities laws, rules and regulations; and the rules and regulations of the Nasdaq SmallCap Market. Jaspas has further acknowledged that the common shares may not be traded in a Canadian province until the expiration of the period during which a purchaser resident in such province, purchasing under similar circumstances, would be required to hold the common shares, except as otherwise permitted by the laws, rules and regulations of such province. All sales by Jaspas must be made in compliance with Regulation M under the Securities and Exchange Act of 1934. To permit Jaspas to resell the common shares issued to it under the stock purchase agreement or under the warrant, Nymox agreed to register those shares and to maintain that registration. To that end, Nymox will prepare and file such amendments and supplements to the registration statement and the prospectus as may be necessary in accordance with the Securities Act and the rules and regulations promulgated thereunder, in order to keep it effective until the earlier of any of the following dates: 35 38 - the date that none of the common shares covered by the registration statement of which this prospectus is a part are or may become issued and outstanding; - the date that all of the common shares covered by the registration statement of which this prospectus is a part have been sold pursuant to such registration statement; - the date the holders of the common shares receive an opinion of counsel to Nymox, such counsel to be reasonably acceptable to Jaspas, that such common shares may be sold under the provisions of Rule 144 under the Securities Act of 1933 without limitation as to volume; - the date that all of the common shares have been otherwise transferred to persons who may trade such shares without restriction under the Securities Act of 1933 and Nymox has delivered new certificates or other evidences of ownership of such common shares without any restrictive legend; or - the date that all of such common shares may be sold without any time, volume or manner limitations under Rule 144(k) or similar provision then in effect under the Securities Act of 1933 in the opinion of counsel to Nymox, such counsel to be reasonably acceptable to Jaspas. THE NUMBER OF SHARES NYMOX WILL ISSUE TO JASPAS. The number of common shares that Nymox will issue to Jaspas depends on four key factors: - the number of draw downs Nymox exercises; - the average trading volumes for its stock for the 45 trading days prior to each draw down period; - the average stock price for its stock for the 22 trading days prior to each draw down periods; and - the average daily prices for its stock on each of the 22 days during a draw down period. The fewer the number of draw down Nymox exercises, the fewer the shares we will issue to Jaspas. The stock purchase agreement provides for 24 draw downs in a 30 month period with each draw down period consisting of 22 trading days with at least 5 trading days between each draw down period. Thus, any decision by Nymox to delay or forego any draw down opportunity may result in Nymox's being unable to exercise all 24 draw downs available in the 30 month period. The average stock price and the average trading volume prior to a draw down period determine the maximum amount of the draw down for that period. A decline in the trading volume or price of our stock may result in a reduction in the amount of money Nymox is able to draw down and a corresponding reduction in the number of shares Nymox must issue for that period. 36 39 The average daily price for each of the 22 trading days within a draw period and the draw down amount determine the number of shares Nymox will issue to Jaspas at the end of that period. Jaspas will purchase those shares at a 6% discount to the average daily price. For any given draw period, the lower the average daily price, the more common shares Jaspas will receive for the draw down amount. The table in the section of this prospectus entitled "The Common Stock Purchase Agreement" and under the headings "The Draw Down Procedure and the Stock Purchases" and "Sample Calculation of Number of Shares" illustrates how a change in the daily stock price can affect the number of shares issued for a constant amount of draw down. This table uses a constant draw down amount of $17,500 for each day. When the stock price goes down, the number of shares issued goes up. Conversely, when the stock price goes up, the number of shares issued goes down. However, lower average daily prices through the term of the stock purchase agreement may not necessarily have the effect of substantially increasing the number of shares issued. Lower stock prices during one draw period will reduce the average stock price for the next draw down period. Assuming relatively constant trading volumes, this reduction may limit the draw down amount and the number of shares Nymox can issue for that next period. Based on a review of its trading volume and stock price history and a consideration of the factors above, Nymox is registering 4,800,000 common shares for possible issuance under the stock purchase agreement and 200,000 shares underlying the warrant for common shares already delivered to Jaspas. In order to comply with the listing requirements of the Nasdaq SmallCap Market, Nymox may not issue more than 3,980,757 shares, which is 19.9% of the issued and outstanding common shares of Nymox on November 12, 1999, the date of the closing of the stock purchase agreement, without the approval of its shareholders. In the event that Nymox wishes to draw amounts under the stock purchase agreement which would cause an issuance of more than 19.9% of its issued and outstanding shares, Nymox must receive shareholder approval prior to any such draw down. SELLING SECURITY HOLDER Jaspas is engaged in the business of investing in publicly-traded equity securities for its own account. Jaspas's principal offices are located at Aeulestrasse 74, Vaduz, Liechtenstein. Investment decisions for Jaspas are made by its Board of Directors, consisting of Mr. Hans Gassner, Dr. Kurt Alig and Dr. Alex Weiderkehr. Jaspas does not own any common shares of Nymox or any other securities of Nymox as of the date of this prospectus, and other than its obligations to purchase common shares under the stock purchase agreement and the warrant for 200,000 shares issued to it on November 12, 1999, it has no other commitments or arrangements to purchase or sell any securities of Nymox. 37 40 There are no business relationships between Jaspas and Nymox other than the stock purchase agreement. Common shares registered for resale under this prospectus constitute 25% of the issued and outstanding Nymox common shares on November 12, 1999. Assuming that Nymox fully utilizes the $12 million available in the stock purchase agreement and that Jaspas sells all shares it acquired under that agreement or upon exercise of the warrant, Jaspas will no longer hold any common shares of Nymox. DIRECTORS AND OFFICERS OF NYMOX The directors and executive officers of Nymox Pharmaceutical Corporation are: Senator W. David Angus, QC, 62, Chairman and Director since May 13, 1999, is a member of the Senate of Canada, serving on the Standing Committee on Banking, Trade and Commerce. He is also a senior partner at the Montreal office of Stikeman, Elliott, Canada's global law firm, and a director of several other Canadian corporations and charitable organizations, including Air Canada, AON Reed Stenhouse, Eastern Canada Towing Ltd. and the McGill University Health Center. Dr. Paul Averback, M.D., D.A.B.P., 49, President and Director since September 1995, 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. Colin B. Bier, Ph.D., 54, Director since December 1995, is a leading authority on toxicology and pharmaceutical and biotechnological regulatory affairs and has extensive management experience in the biomedical sector. Dr. Bier was formerly Vice-President and Director of Toxicology at Bio-Research Laboratories, President and Chief Executive Officer of ITR Laboratories and has consulted, managed and been affiliated with numerous biochemical enterprises. Dr. J. Kenneth Harrington, Ph.D., 63, Director since January 1996, has over 30 years of experience with 3M's Life Sciences businesses, including the positions of Vice-President of Riker Pharmaceuticals and Group Director of 3M's European pharmaceutical divisions. Dr. Harrington is a named inventor on 42 US patents, and has been involved in over 100 successful FDA filings. 38 41 Dr. Hans Black, MD, 46, Director since May 13, 1999, has a doctorate in medicine from McGill University, and is 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. Dr. Black appears regularly on the PBS network show, Nightly Business Report, and has been a guest lecturer at Harvard, Temple and McGill Universities. Martin Barnes, 49, Director since June 1997, is Managing Editor of The Bank Credit Analyst. Prior to joining The Bank Credit Analyst Research Group in 1987, Mr. Barnes was the Chief economist at Wood Mackenzie, a leading Edinburgh brokerage firm (1977-1987) and an economist at British Petroleum in London (1973-1977). Mr. Roy M. Wolvin, 45, 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. 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. COMPENSATION The table below provides compensation information for the fiscal year ended December 31, 1999 for each executive officer of Nymox and for the directors and executive officers as a group. Summary Compensation Table (expressed in Canadian dollars)
Fiscal Year ending Fiscal Year ending Dec. 31, 1998 Dec. 31, 1999 Name and Principal Position Other Cash Other Cash Salary Compensation Salary Compensation ------ ------------ ------ ------------ Dr. Paul Averback, President and Director $150,000 - $150,000 - Mr. Roy Wolvin, Secretary-Treasurer $ 70,200 - $ 70,200 - All directors and executive officers as a group $220,200 - $220,200 -
39 42 See "Options" below for information about stock options granted to directors, executive officers and other employees. Nymox does not have written employment contracts with any of the executive officers named above. Directors of Nymox, with the exception of the President, are paid a fee of CAN$1,000 for each board meeting attendance and are reimbursed for expenses incurred in connection with their office. Nymox does not have any pension plans or other type of plans providing retirement or similar benefits for directors or executive officers. OPTIONS Options and Warrants
Total amount of common shares subject to exercisable options Purchase price Expiration Date - ------------------------------ -------------- --------------- 100,000 CAN$ 7.00 November 9, 2002 275,000 CAN$ 3.25 January 17, 2006 20,000 CAN$13.75 January 17, 2006 20,000 CAN$ 9.80 January 17, 2006 20,000 CAN$10.00 January 17, 2006 100,000 CAN$11.50 April 30, 2006 10,000 CAN$16.75 August 13, 2006 10,000 CAN$ 9.00 August 13, 2006 20,000 CAN$10.00 August 13, 2006 25,000 CAN$ 9.00 October 31, 2007 60,000 CAN$10.00 October 31, 2007 6,000 CAN$ 9.25 December 19, 2007 50,000 CAN$10.00 January 22, 2009 150,000 CAN$ 4.50 May 13, 2009 37,500 CAN$ 4.50 June 1, 2009 Warrants -------- 200,000 $ 4.5315 November 30, 2004 160,000 $4.0625 November 12, 2009
40 43 The total number of shares subject to options at December 31, 1999 is 1,130,500, of which options representing 891,000 are currently exercisable. Of those, the total number of shares subject to options held by directors and officers of Nymox is 325,000 of which options representing 215,000 shares are currently exercisable. There are no rights, warrants or options presently outstanding under which Nymox could issue additional common shares, with the exception of options enabling certain directors, employees and consultants of Nymox to acquire common shares under Nymox's stock option plan and of warrants entitling the holders to acquire up to 360,000 common shares of Nymox as outlined in the above table. 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 and six months of the death of an individual. On January 17, 1996, the board of directors granted options to purchase up to 400,000 common shares for a period of 10 years. Of these, options to purchase 120,000 common shares were granted to directors and officers of Nymox and options to purchase 280,000 shares were granted to consultants of Nymox. Specifically the board granted: - options to purchase 310,000 common shares of Nymox at a price of CAN$3.25 per share for a period of ten years to a total of seven beneficiaries, of which options a total of 35,000 common shares have been exercised to date; - options to two directors of Nymox to acquire 5,000 common shares of Nymox, effective as of each of the first five anniversary dates of January 17, 1996 for a total of 25,000 shares each, provided they still be associated with the Company as of the vesting dates. The vesting schedule and prices per block of shares are as follows: 41 44 January 17,1997 - 5,000 shares - CAN$13.75 per share January 17,1998 - 5,000 shares - CAN$ 9.80 per share January 17,1999 - 5,000 shares - CAN$10.00 per share January 17,2000 - 5,000 shares - CAN$10.00 per share January 17,2001 - 5,000 shares - CAN$10.00 per share; and - options to one senior executive of Nymox additional to acquire 10,000 common shares of Nymox, effective as of each of the first four anniversary dates of January 17, 1996 for a total of 40,000 additional shares, provided he still be associated with the Company as of the vesting dates. The vesting schedule and prices per block of shares are as follows: January 17,1997 - 10,000 shares - CAN$13.75 per share January 17,1998 - 10,000 shares - CAN$ 9.80 per share January 17,1999 - 10,000 shares - CAN$10.00 per share January 17,2000 - 10,000 shares - CAN$10.00 per share. Under the same plan, on April 30, 1996, the board granted options to purchase 100,000 common shares of Nymox at a price of CAN$11.50 per share for a period of ten years to three beneficiaries. On August 13, 1996, the board granted one consultant of Nymox options to acquire 10,000 common shares of the Company at a price of CAN$16.75 for a period of ten years. This consultant was granted additional options to acquire 10,000 common shares of Nymox, effective as of each of the first four anniversary dates of August 13, 1996 for a total of 40,000 additional shares, provided he is still be associated with Nymox as of the vesting dates. The vesting schedule and prices per block of shares are as follows: August 13,1997 - 10,000 shares - CAN$ 9.00 per share August 13,1998 - 10,000 shares - CAN$10.00 per share August 13,1999 - 10,000 shares - CAN$10.00 per share August 13,2000 - 10,000 shares - CAN$10.00 per share. Under the same plan, on October 31, 1997, the board granted options to purchase up to 155,000 common shares to four beneficiaries. Specifically the board granted: - options to purchase 25,000 common shares of the Company at a price of CAN$9.00 per share for a period of 10 years to five beneficiaries; - options to two directors of the Company options to acquire 5,000 common shares of Nymox, effective as of each of the first five anniversary dates of October 31, 1997, at a price of CAN$10.00 per share for a total of 25,000 additional shares each, provided they still be associated with Nymox as of the vesting dates; and 42 45 - options to a director and an executive of Nymox to acquire 10,000 common shares of Nymox, effective as of each of the first four anniversary dates of October 31, 1997, at a price of CAN$10.00 per share for a total of 40,000 additional shares each, provided they still be associated with Nymox as of the vesting dates. On December 19, 1997 and on May 13, 1999, the board granted options to purchase up to 15,500 common shares under Nymox's stock option plan to certain key employees of Nymox at a price of CAN$9.25 per share for a period of ten years, provided they still be associated with Nymox as of the vesting dates. All options granted to these employees vest over a period of three years from the date when the board granted them. Of these options, 6,000 are currently vested. On November 9, 1998, the board granted one consultant of Nymox options to acquire 100,000 common shares of the Company at a price of CAN$7.00 per share, such options to be exercisable for a period of four years from November 9, 1998. On January 22, 1999, the board granted one executive of Nymox options to acquire 50,000 common shares of Nymox at a price of $10.00 per share, such options to be exercisable for a period of 10 years from January 22, 1999. On May 13, 1999, the board granted options to purchase up to 150,000 common shares under Nymox's stock option plan for a period of ten years at a price of CAN$4.50 per share to seven beneficiaries. It also granted a director of Nymox additional options to acquire 40,000 shares at a price of CAN$10.00 per shares, vesting 10,000 shares per year, starting on May 13, 2000 and continuing to May 13, 2004, provided the director still be associated with Nymox as of the vesting dates. On May 13, 1999, the board granted one consultant of the Company options to acquire 100,000 common shares of the Company at a price of CAN$4.50 per share, such options to be exercisable for a period of 10 years from June 1, 1999. These options are subject to vesting at the rate of 12,500 per quarter commencing June 1, 1999 to March 1, 2001. To date, a total of 1,083,100 options granted to former employees and consultants to purchase common shares of the Company have expired and 108,900 were exercised prior to the expiry date. In addition, 30,000 options granted to consultants have been canceled. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS A former director and senior officer of Nymox, Hossein Ghanbari, while still with Nymox, received a loan of CAN$56,000 for the purchase of a home following his move from the United States to Canada to assume his duties with Nymox. This loan was interest free and had no fixed terms of repayment. He subsequently used additional funds of $125,000 to assist in the purchase of a home following his return to the United States from Canada to work for Nymox's United States subsidiary, Nymox Corporation. He repaid $5,000 of the $125,000 while still with Nymox Corporation. On January 22, 1999, he gave Nymox Corporation two promissory notes for these debts, payable on demand. The promissory note for the loan for CAN$56,000 was interest-free; the promissory note for the outstanding sum of $120,000 bore interest at the rate of 9% per annum. 43 46 Hossein Ghanbari is no longer with Nymox and Nymox Corporation has since obtained partial summary judgment on these promissory notes in the amount of $168,731.83. See - Information About the Company - Certain Legal Proceedings. CONTROLLING SHAREHOLDER The following table sets out as of December 31,1999 the number of common shares owned by Dr. Paul Averback, the President and CEO of Nymox and a member of the Nymox board of directors, and by all directors and officers as a group. Dr. Averback is the only person known to Nymox to own more than 10% of the common shares.
Number of Common Shares Percent of Class of Name of Shareholder owned by Shareholder Common Shares - ------------------- ----------------------- ------------------- Dr. Paul Averback 12,643,895 63.2% All directors and officers as a group 12,685,895 63.2%
In addition, as of December 31, 1999, Dr. Averback's wife owned 1,154,297 common shares (5.8%) and 9022-1433 Canada Inc., a company owned by Dr. Averback and his wife, owns 500,000 common shares (2.5%). Nymox does not know of any other shareholder who beneficially owns more than 10% of Nymox's shares. PLAN OF DISTRIBUTION GENERAL Jaspas is offering the common shares for its account as statutory underwriter, and not for the account of Nymox. Nymox will not receive any proceeds from the sale of common shares by Jaspas. Jaspas may be offering for sale up to 5,000,000 common shares acquired by it either upon exercise of the warrant for common shares or pursuant to the terms of the stock purchase agreement more fully described under the section above entitled "The Common Stock Purchase Agreement." 44 47 Jaspas has agreed to be named as a statutory underwriter within the meaning of the Securities Act of 1933 in connection with such sales of common shares and will be acting as an underwriter in its resales of the common shares under this prospectus. Jaspas has, prior to any sales, agreed not to effect any offers or sales of the common shares in any manner other than as specified in the prospectus and not to purchase or induce others to purchase common shares in violation of Regulation M under the Exchange Act. The common shares may be sold from time to time by Jaspas or by pledgees, donees, transferees or other successors in interest. Such sales may be made on the Nasdaq SmallCap Market, on the over-the-counter market or otherwise at prices and at terms then prevailing or at prices related to the then current market price, or in negotiated private transactions, or in a combination of these methods. The common shares may be sold in one or more of the following manners: - a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; - purchases by a broker or dealer for its account under this prospectus; or - ordinary brokerage transactions and transactions in which the broker solicits purchases. In effecting sales, brokers or dealers engaged by Jaspas may arrange for other brokers or dealers to participate. Except as disclosed in a supplement to this prospectus, no broker-dealer will be paid more than a customary brokerage commission in connection with any sale of the common shares by Jaspas. Brokers or dealers may receive commissions, discounts or other concessions from Jaspas in amounts to be negotiated immediately prior to the sale. The compensation to a particular broker-dealer may be in excess of customary commissions. Profits on any resale of the common shares as a principal by such broker-dealers and any commissions received by such broker-dealers may be deemed to be underwriting discounts and commissions under the Securities Act of 1933. Any broker-dealer participating in such transactions as agent may receive commissions from Jaspas (and, if they act as agent for the purchaser of such common shares, from such purchaser). Broker-dealers may agree with Jaspas to sell a specified number of common shares at a stipulated price per share, and, to the extent such a broker dealer is unable to do so acting as agent for Jaspas, to purchase as principal any unsold common shares at price required to fulfill the broker-dealer commitment to Jaspas. Broker-dealers who acquire common shares as principal may thereafter resell such common shares from time to time in transactions (which may involve crosses and block transactions and which may involve sales to and through other broker-dealers, including transactions of the nature described above) in the over-the-counter market, in negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices, and in connection with such resales may pay to or receive from the purchasers of such common shares commissions computed as described above. Such brokers or dealers and any other participating brokers or dealers may be deemed to be underwriters in connection with such sales. 45 48 In addition, any common shares covered by this prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus. Nymox will not receive any of the proceeds from the sale of these common shares, although it has paid the expenses of preparing this prospectus and the related registration statement of which it is a part, and has reimbursed Jaspas $35,000 for its legal, administrative and escrow costs. Jaspas is subject to the applicable provisions of the Exchange Act, including without limitation, Rules 10b-5 and Regulation M thereunder. Under applicable rules and regulations under the Exchange Act, any person engaged in a distribution of the common shares may not simultaneously engage in market making activities with respect to such securities for a period beginning when such person becomes a distribution participant and ending upon such person's completion of participation in a distribution, including stabilization activities in the common shares to effect covering transactions, to impose penalty bids or to effect passive market making bids. In addition, in connection with the transactions in the common shares, Nymox and Jaspas will be subject to applicable provisions of the Exchange Act and the rules and regulations under that Act, including, without limitation, the Rules set forth above, and in so far as Nymox and Jaspas are distribution participants, Regulation M. These restrictions may affect the marketability of the common shares. Jaspas will pay all commissions and certain other expenses associated with the sale of the common shares. Nymox will use its best efforts to file, during any period in which offers or sales are being made, one or more post effective amendments to the registration statement of which this prospectus is a part to describe any material information with respect to the plan of distribution not previously disclosed in this prospectus or any material change to such information in this prospectus. This obligation may include, to the extent required under the Securities Act of 1933, that a supplemental prospectus be filed, disclosing - the name of any such broker-dealers; - the number of common shares involved; - the price at which the common shares are to be sold; - the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable; 46 49 - that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, as supplemented; and - any other facts material to the transaction. The price at which Nymox will issue the common shares to Jaspas under the stock purchase agreement will be 94% of current market price, measured as the average daily price of the common shares as traded on the Nasdaq SmallCap Market, for each day in the pricing period with respect to each draw down request, all as further defined in the stock purchase agreement. Assuming an average daily price of $3.00 (based on recent daily prices of the common shares as traded on the Nasdaq SmallCap Market in December 1999), assuming Nymox uses the entire $12 million of financing available under the stock purchase agreement, and assuming that Nymox does not issue any more than the shares registered under the registration statement of which this prospectus is a part, underwriting compensation for Jaspas based on the discounted purchase price will be $765,957, or $0.18 per share. LIMITED GRANT OF REGISTRATION RIGHTS Nymox granted the registration rights to Jaspas described under the section entitled "The Common Stock Purchase Agreement". In connection with any such registration, Nymox will have no obligation: - to assist or cooperate with Jaspas in the offering or disposition of such shares; - to indemnify or hold harmless the holders of any such shares (other than Jaspas) or any underwriter designated by such holders; - to obtain a commitment from an underwriter relative to the sale of any such shares; or - to include such shares within an underwriting offering of Nymox. Nymox will assume no obligation or responsibility whatsoever to determine a method of disposition for such shares or to otherwise include such shares within the confines of any registered offering other than the registration statement of which this prospectus is a part. Nymox will use its best efforts to file, during any period during which it is required to do so under its registration rights agreement with Jaspas, one or more post-effective amendments to the registration statement of which this prospectus is a part to describe any material information with respect to the plan of distribution not previously disclosed in this prospectus or any material change to such information in this prospectus. See the section above entitled "The Common Stock Purchase Agreement." 47 50 CANADIAN FEDERAL INCOME TAX CONSIDERATIONS The following is, as of the date of this prospectus, a summary of the principal Canadian federal income tax considerations generally applicable to shareholders who receive a dividend from Nymox and who, at all relevant times, for purposes of the Income Tax Act (Canada) the ("Tax Act"), hold and will hold Nymox common shares as capital property and deal with Nymox at arm's length. Nymox's common shares will generally constitute capital property to a holder unless the holder holds such shares in the course of carrying on a business or the holder has acquired such shares in a transaction or transactions considered to be an adventure in the nature of trade. This summary is based on the current provisions of the Tax Act, the regulations under that act, counsel's understanding of current administrative and assessing policies of the Canada Customs and Revenue Agency and all specific proposals to amend the Tax Act publicly announced or released by or on behalf of the Minister of Finance (Canada) before the date of this prospectus ("Tax Proposals"). The Tax Act contains certain provisions relating to securities held by certain financial institutions (the "Mark-to-Market Rules"). This summary does not take into account these Mark-to-Market Rules or any amendments to them contained in the Tax Proposals and taxpayers that are "financial institutions" for purposes of those rules should consult their own tax advisors. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Tax Proposals, does not take into account or anticipate any changes in law, whether by legislative, governmental or judicial action, nor does it take into account tax legislation of any province, territory or foreign jurisdiction. This summary is of a general nature only and is not intended to be, nor should it be construed as, legal or tax advice to any particular holder of Nymox common shares. CANADIAN RESIDENTS The following summary is relevant to a holder of Nymox common shares who, for purposes of the Tax Act and any applicable tax treaty or convention, is resident in Canada at all relevant times. Tax Treatment of Capital Gains and Capital Losses for Canadian Residents On a disposition or deemed disposition of a Nymox common share, the holder will realize a capital gain (or capital loss) equal to the amount by which the proceeds of disposition for the Nymox common share exceed (or are less than) the aggregate of any costs of disposition and the adjusted cost base to the holder of the Nymox common share immediately before the disposition. 48 51 A holder of Nymox common shares will be required to include in income three-quarters of the amount of any capital gain (a "Taxable capital gain") and may deduct three-quarters of the amount of any capital loss (an "Allowable capital loss") against Taxable capital gains realized by the holder in the year of the disposition. Allowable capital losses in excess of Taxable capital gains may be carried back and deducted in any of the three preceding years or carried forward and deducted in any following year against taxable capital gains realized in such years to the extent and under the circumstances described in the Tax Act. A Canadian-controlled private corporation will also be subject to a refundable tax of 6 2/3% on certain investment income, including taxable capital gains realized on the disposition of Nymox common shares, that will be refunded when the corporation pays taxable dividends (at a rate of $1.00 for every $3.00 of taxable dividend paid). A capital loss realized by a holder of Nymox common shares that is a corporation, a partnership of which a corporation is a member or a trust of which a corporation is a beneficiary may be reduced by the amount of dividends received in certain circumstances. Capital gains realized by an individual may give rise to a liability for alternative minimum tax. Tax Treatment of Dividends Received by Canadian Residents In the case of a holder of Nymox common shares who is an individual, any dividends received on the common shares will be included in computing his income and will be subject to the gross-up and dividend tax credit rules normally applicable to taxable dividends paid by taxable Canadian corporations. A holder that is a corporation may be liable to pay refundable tax under Part IV of the Tax Act. However, a public corporation which is not controlled, whether because of a beneficial interest in one or more trusts or otherwise, by or for the benefit of an individual (other than a trust) or a related group of individuals (other than trusts) will not be liable to pay refundable tax under Part IV of the Tax Act. In the case of a holder of Nymox common shares that is a corporation, the amount of any capital loss otherwise determined resulting from the disposition of a Nymox common share may be reduced by the amount of dividends previously received or deemed to have been received thereon. Any such restriction will not occur where the corporate holder owned the Nymox common share for 365 days or longer and such holder (together with any persons with whom it did not deal at arm's length) did not own more than 5% of the shares of any class or series of Nymox at the time the relevant dividends were received or deemed to have been received. Analogous rules apply where a corporation is a member of a partnership or a beneficiary of a trust, which owns Nymox common shares. SHAREHOLDERS WHO ARE NOT RESIDENTS OF CANADA The following summary is relevant to a holder of Nymox common shares, who, at all relevant times, for purposes of the Tax Act and any applicable tax treaty or convention, is a non-resident or is deemed to be a non-resident of Canada and does not use and is not deemed to use or hold Nymox common shares in the course of carrying on a business in Canada. Special rules, which are not discussed below, may apply to a non-resident that is an insurer which carries on business in Canada and elsewhere. 49 52 Dividends Paid to Non-Residents of Canada Under the Tax Act, dividends paid or credited to a non-resident are subject to withholding tax at the rate of 25% of the gross amount of the dividends. This withholding tax may be reduced or eliminated pursuant to the terms of an applicable tax treaty between Canada and the country of residence of the non-resident. For example, for persons who are resident in the United States for purposes of the Canada-United States Income Tax Convention, (the "Convention") the rate of withholding tax on dividends is reduced to 15% generally and 5% when the United States resident is a company that beneficially owns at least 10% of the voting stock of the company paying the dividends. Under the Convention, dividends paid to certain religious, scientific, charitable and other similar tax-exempt organizations and certain organizations that are resident in, and exempt from tax in, the United States are exempt from Canadian non-resident withholding tax. Provided that certain administrative procedures designed to establish with the Canadian tax authorities the right of such entities to benefit from this withholding tax exemption are complied with by the tax-exempt entities prior to the Distribution, Nymox would not be required to withhold such tax on such payment. Alternatively, the above-described tax-exempt entities may claim a refund of Canadian withholding tax otherwise withheld by Nymox on the distribution of dividends. Tax Treatment of Capital Gains of Non-Residents of Canada On a disposition or deemed disposition of a Nymox common share, a non-resident holder will realize a capital gain (or capital loss) equal to the amount by which the proceeds of disposition for the Nymox common share exceed (or are less than) the aggregate of any costs of disposition and the adjusted cost base to the non-resident holder of the Nymox common share immediately before the disposition. A non-resident of Canada is liable for Canadian income tax on a capital gain realized on the disposition of property only where that property constitutes "taxable Canadian property". Three-quarters of any capital gain from the disposition of taxable Canadian property is subject to Canadian tax. Under the Tax Act, shares of Nymox will not constitute taxable Canadian property unless, at any time, in the five years immediately preceding the disposition, the non-resident holder, persons with whom the non-resident holder did not deal at arms length, or the non-resident holder together with all such persons owned (or had a right to acquire) 25% or more of the shares of any class of Nymox. Even in circumstances where shares of Nymox are taxable Canadian property to a non-resident holder, the non-resident holder may be entitled to relief from Canadian tax on any capital gain realized on the disposition thereof pursuant to the terms of an applicable tax treaty between Canada and the country of residence of the non-resident. For example, the Convention provides that gains realized by a resident of the United States on the disposition or deemed disposition of shares of a company will generally not be subject to tax under the Tax Act, provided that the value of the shares is not derived principally from real property situated in Canada. Nymox believes that the value of its shares is not currently derived principally from real property situated in Canada and it does not expect this to change in the foreseeable future. 50 53 Provided that the Nymox common shares remain listed on a prescribed stock exchange, which includes the Nasdaq SmallCap Market System, a non-resident holder who disposes of Nymox common shares will not be required to comply with the Canadian notification procedures generally applicable to dispositions of taxable Canadian property. U.S. FEDERAL INCOME TAX CONSIDERATIONS The following is, as of the date of this prospectus, a general summary of the material U.S. federal income tax consequences that are applicable to the following persons who, under this prospectus, directly or indirectly, acquire common shares of Nymox and hold such common shares as capital assets: - citizens or residents (as specially defined for federal income tax purposes) of the United States, - corporations or partnerships created or organized in the United States or under the laws of the United States or any state, - estates the income of which is subject to the United States federal income taxation regardless of its source and - a trust, if a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of such trust or a trust that has been elected to be treated as a domestic trust (U.S. Shareholders). This discussion does not deal with: - any aspects of federal income taxation that may be relevant to a particular U.S. Shareholder based on his particular circumstances (including potential application of the alternative minimum tax or unrelated business income tax), - certain U.S. Shareholders subject to special treatment under the federal income tax laws or foreign individuals or entities, - U.S. Shareholders owning directly or by attribution 10% or more of the common shares or - any aspect of state, local or non-United States tax laws. 51 54 DIVIDENDS PAID ON COMMON SHARES Subject to the application of the rules relating to a "passive foreign investment company", referred to as a PFC, distributions paid on common shares (including any Canadian taxes withheld) to a U.S. Shareholder will be treated as ordinary income for United States federal income tax purposes to the extent of Nymox's current and accumulated earnings and profits (as computed for U.S. federal income tax purposes). Distributions in excess of such earnings and profits will be applied against the U.S. shareholders tax basis in common shares, and any distributions in excess of such tax basis will be treated as gain from the sale or exchange of such common shares. Distributions from Nymox generally will not qualify for the United States dividends-received deduction available to corporations. Canadian withholding tax withheld or paid will be eligible for credit or, at the U.S. Shareholder's election, deduction, subject to generally applicable limitations. DISPOSITION OF COMMON SHARES Subject to the applicable PFC rules discussed below, if a U.S. Shareholder holds common shares as a capital asset, any gain or loss on a sale or exchange of such shares will be capital gain or loss, which will be long-term capital gain or loss if the holding period is one year or more. Generally, the maximum tax rate for U.S. shareholders who are individuals on long term capital gain is 20%. The sale of common shares through certain brokers will be subject to the information reporting and back-up withholding rules of the United States Internal Revenue Code of 1986, as amended, referred to as the Code. PASSIVE FOREIGN INVESTMENT COMPANY For any taxable year of Nymox, if at least 75% of Nymox's gross income is "passive income" as defined in the Code, or if at least 50% of Nymox's assets, by average fair market value, are assets that produce or are held for the production of passive income, Nymox will be a PFC. The PFC determination is made on the basis of facts and circumstances that may be beyond Nymox's control. It is not possible to express an opinion as to whether or not Nymox is or will be a PFC in its current or future taxable years because this depends on, among other things, the amount and type of gross income that Nymox will earn in the future and the characterization of certain assets as passive or active, which determination cannot be made until the facts are known. If Nymox is a PFC for any taxable year during which a U.S. Shareholder owns, directly or indirectly, any common shares, the U.S. Shareholder will be subject to special U.S. federal income tax rules, set forth in Sections 1291 to 1297 of the Code, with respect to all of such U.S. Shareholder's common shares. In the absence of (i) an election by such U. S. Shareholder to treat Nymox as a "qualified electing fund" (the "Q.E.F. Election"), as discussed below, or (ii) the election to mark to market the common shares (the "Mark to Market Election"), as described below, the U.S. Shareholder would be required to report any gain on the disposition of any common shares as ordinary income rather than capital gain and to compute the tax liability on such gain as well as on any "excess distribution" as defined in the Code, as if such amounts generally had been earned pro-rata over the U.S. Shareholder's holding period for such common shares and were subject to the highest ordinary income tax rate for each taxable year of the U.S. Shareholder during such holding period. Such U.S. Shareholder would also be liable for interest, which may be non-deductible by certain U.S. Shareholders, on the foregoing tax liability as if such liability had been due with respect to each such prior year. In addition, gifts, exchanges pursuant to corporate reorganizations and the use of common shares as security for a loan may be treated as taxable dispositions, and a stepped-up basis upon the death of such a U.S. Shareholder may not be available. 52 55 The foregoing rules may be avoided if a Q.E.F. Election is in effect with respect to a U. S. Shareholder for each of the years that Nymox is a PFC during such U.S. Shareholder's holding period. A Q.E.F. Election may be made by a U.S. Shareholder on or before the due date, including extensions, for filing such U.S. Shareholder's tax return for such taxable year. Such a U.S. Shareholder would be taxed on its pro-rata share of Nymox's earnings and profits for Nymox's taxable year in which it was, or was treated as, a PFC and which ends with or within such U.S. Shareholder's taxable year, regardless of whether such amounts are actually distributed by Nymox. This may result in tax liability without a commensurate distribution with which to pay the liability. An electing U.S. Shareholder's basis in the common shares would be increased by the amounts included in income. Distributions out of earnings and profits previously included by such U.S. Shareholder generally would not be treated as a taxable dividend for United States federal income tax purposes and would result in a corresponding reduction of basis in common shares. An electing U.S. Shareholder will not be currently taxed on the undistributed ordinary income and net capital gain of Nymox for any year that Nymox is not classified as a PFC. If Nymox is a PFC, a U.S. Shareholder may avoid certain of the tax consequences described in the preceding two paragraphs if the Nymox common stock is marketable and meets the other requirements of Section 1296 of the Code, and the U.S. Shareholder elects to mark to market the common stock on an annual basis. The common stock will be marketable so long as it is regularly traded on a recognized exchange. In general, a U.S. Shareholder in a PFC who elects under Section 1296 to mark the common stock to market would include in income each year an amount equal to the excess, if any, of the fair market value of the common stock as of the close of the taxable year over the U.S. Shareholder's adjusted basis in such stock. A U.S. Shareholder who makes the Section 1296 election would also generally be allowed a deduction for the excess, if any, of the adjusted basis of the common stock over the fair market value as of the close of the taxable year. Deductions under this rule, however, are allowable only to the extent of any net mark to market gains with respect to the common stock included by the shareholder for prior taxable years. Once the Mark to Market election is made, it is binding for all subsequent years, unless the common stock ceases to be marketable, or the IRS consents to the revocation of the election. 53 56 If Nymox is a PFC, each U.S. Shareholder is strongly urged to consult with his or her tax advisor to determine whether the Q.E.F. Election or the Mark to Market Election should be made. Each requires attention to specific rules and regulations, and each may not be available to a specific U.S. shareholder. Nymox intends to notify its U.S. Shareholders within 45 days after the end of the taxable year for which Nymox believes it might be a PFC. Nymox has further undertaken (i) to provide its U.S. Shareholders with timely and accurate information as to its status as a PFC and the manner in which the Q.E.F. Election can be made and (ii) to comply with all record-keeping, reporting and other requirements so that U.S. Shareholders, at their option, may make a Q.E.F. Election. FUTURE DEVELOPMENTS The foregoing discussion is based on existing provisions of the Code, existing and proposed regulations thereunder and current administrative rulings and court decisions, all of which are subject to change. Any such changes could affect the validity of this discussion. In addition, the implementation of certain aspects of the PFC rules requires the issuance of regulations which in many instances have not been promulgated and which may have retroactive effect. There can be no assurance that current authorities will not be changed and, if so, as to the form they will take or the effect they may have on this discussion. DESCRIPTION OF NYMOX'S COMMON SHARES Nymox has only one class of capital stock, known as common shares. Nymox is authorized to issue an unlimited number of its common shares. As of the date of this prospectus, there were 20,003,804 Nymox common shares outstanding. RIGHTS OF HOLDERS OF COMMON SHARES Holders of Nymox common shares are entitled to one vote for each share held on all matters submitted to a vote of shareholders. They do not have cumulative voting rights. Holders of Nymox common shares are entitled to receive such dividends, if any, as may be declared by the board of directors of Nymox out of funds legally available for dividends. Nymox does not intend currently to pay dividends on its common shares. Upon liquidation, dissolution or winding up of Nymox, the holders of Nymox common shares are entitled to receive the assets of Nymox on a pro rata basis. Holders of Nymox common shares have no preemptive, subscription, redemption or conversion rights. 54 57 SHAREHOLDER MEETINGS Under applicable Canadian securities legislation and the Canada Business Corporations Act, a meeting of the shareholders of a company must be convened at least once every fifteen months. Meetings of the shareholders of Nymox shall be held at the registered office of Nymox or elsewhere in the municipality where the registered office is situate or, if the board so determines, elsewhere in Canada, or, if all the shareholders entitled to vote at the meeting so agree, outside of Canada. Notice of all annual and special meetings of the shareholders of Nymox must be given to shareholders entitled to vote at such meeting, setting out the place, the day and the hour of the meeting and the general nature of the business to be considered. The by-laws of Nymox provide that a quorum for the transaction of any business at any meeting of shareholders shall be persons present and holding or representing by proxy at least 33 1/3% of the shares entitled to vote at the meeting. NUMBER OF DIRECTORS Nymox's articles provide that there shall be a minimum of five directors and a maximum of fifteen directors. The board of directors fixes the exact number of directors to be proposed for election in each year. The Canada Business Corporations Act also requires that Nymox have a minimum of three directors, at least two of which are not officers or employees of Nymox or its affiliates. CANADIAN RESIDENCY REQUIREMENTS FOR DIRECTORS The Canada Business Corporations Act requires that a majority of the directors of Nymox be resident Canadians, which the act defines to mean, subject to certain exceptions, persons ordinarily resident in Canada who are either Canadian citizens or permanent residents of Canada within the meaning of that phrase in the Immigration Act (Canada). FILLING VACANCIES ON THE BOARD OF DIRECTORS The articles of Nymox provide, in accordance with the Canada Business Corporations Act, that the directors of Nymox have the right to appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders. The total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders. REMOVAL OF DIRECTORS The directors of Nymox may be removed from office by a resolution passed by a majority of the votes cast at a special meeting of shareholders. 55 58 LIMITATIONS ON LIABILITY OF OFFICERS AND DIRECTORS Nymox's bylaws provide that, subject to the limitations in the Canada Business Corporations Act, Nymox shall indemnify a director or officer, a former director or officer, or a person who acts or acted at Nymox's request as a director or officer of a body corporate of which Nymox is or was a shareholder or creditor (or a person who undertakes or has undertaken any liability on behalf of Nymox or any such body corporate) and his or her heirs and legal representatives against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he or she is a party be reason of being or having been a director or officer of Nymox or such body corporate, if he or she acted honestly and in good faith with a view to the best interests of Nymox and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds for believing that his or her conduct was lawful. The Canada Business Corporations Act permits Nymox to so indemnify such officers, directors and other persons except in respect of an action by or on behalf of Nymox or a body corporate of which Nymox is or was a shareholder or creditor to procure a judgment in its favor. AMENDMENT OF CERTAIN PROVISIONS OF THE ARTICLES; FUNDAMENTAL CHANGES The Canada Business Corporation Act requires, except in limited circumstances, the approval of not less than two-thirds of the votes of the shareholders voting in person or by proxy at a special meeting of the shareholders to amend the articles of Nymox or to amalgamate or dissolve Nymox. CERTAIN LEGAL MATTERS The validity of the common shares offered hereby will be passed upon for Nymox by Foley & Lardner, 3000 K Street, N.W., Washington, DC 20007. Foley & Lardner will rely as to all matters of Canadian laws on the opinion of Stikeman Elliott, 1155 Rene Levesque Blvd. W., Montreal, QC H3B 3V2. EXPERTS The financial statements of Nymox as at December 31, 1998 and 1997 for each of the years in the three year period ended December 31, 1998 included in this prospectus and in the registration statement have been audited by KPMG, independent auditors, and are included in this prospectus and in this registration statement in reliance upon such report, and upon the authority of KPMG as experts in accounting and auditing. 56 59 WHERE YOU CAN FIND MORE INFORMATION Nymox is subject to the informational requirements of the Exchange Act and in accordance with that Act files reports and other information with the SEC. You may inspect and copy any such reports and other information filed by Nymox with the SEC, including the registration statement on Form F-1 of which this prospectus is a part, at the public reference facilities of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the SEC's Regional Offices at Seven World Trade Center, Suite 1300, New York l0048 and Northwest Atrium Center 600 West Madison Street, Suite 1400, Chicago, IL 60561. You may obtain copies of such material, at prescribed rates, by a written request addressed to the Commission at the Public Reference Section at 450 Fifth Street, N.W. Washington, D.C. 20549. The public may obtain information on the operation of the SEC's public reference facilities by calling the SEC at 1-8OO-SEC-0330. In addition, the common shares are listed on the Nasdaq SmallCap Market and reports and other information concerning Nymox may also be inspected at the offices of the Nasdaq Stock Market, Inc., Nasdaq Listing Qualifications, 9801 Washingtonian Boulevard, Rockville, MD 20878. In addition, Nymox will provide without charge to each person to whom this prospectus is delivered, upon either the written or oral request of such person, the Annual Report to Shareholders for Nymox's latest fiscal year. Such requests should be directed to Roy Wolvin, CFO of Nymox Pharmaceutical Corporation, 9900 Cavendish Blvd., Suite 306, St. Laurent, QC, Canada H4M 2V2, telephone 1-800-936-9669. ENFORCEMENT OF CERTAIN CIVIL LIABILITIES AND AUTHORIZED REPRESENTATIVE IN THE UNITED STATES Many of Nymox's directors, officers and certain experts named in this prospectus are residents of Canada. Consequently, it may be difficult for United States investors to effect service within the United States upon Nymox's directors, officers or certain experts named in this prospectus, or to realize in the United States upon judgments of courts of the United States predicated upon civil liabilities under the Securities Act. A judgment of a court of the United States predicated solely upon such civil liabilities would probably be enforceable in Canada by the Canadian court if the United States court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or Nymox predicated solely upon such civil liabilities. The authorized agent to receive service of process in the United States is Nymox Corporation, 5516 Nicholson Lane, Suite 100A, Kensington, MD 20895, telephone 1-800-93NYMOX. 57 60 Consolidated Financial Statements of NYMOX PHARMACEUTICAL CORPORATION Years ended December 31, 1998, 1997 and 1996 F-1 61 AUDITORS' REPORT TO THE SHAREHOLDERS We have audited the consolidated balance sheets of Nymox Pharmaceutical Corporation as at December 31, 1998 and 1997 and the consolidated statements of earnings, deficit and changes in financial position for the years ended December 31, 1998, 1997 and 1996. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as at December 31, 1998 and 1997 and the results of its operations and the changes in its financial position for the years ended December 31, 1998, 1997 and 1996 in accordance with generally accepted accounting principles. KPMG Chartered Accountants Montreal, Canada February 26, 1999 F-2 62 NYMOX PHARMACEUTICAL CORPORATION Consolidated Financial Statements Years ended December 31, 1998, 1997 and 1996 FINANCIAL STATEMENTS Consolidated Balance Sheets................................................. F-4 Consolidated Statements of Earnings......................................... F-5 Consolidated Statements of Deficit.......................................... F-6 Consolidated Statements of Changes in Financial Position.................... F-7 Notes to Consolidated Financial Statements.................................. F-8
F-3 63 NYMOX PHARMACEUTICAL CORPORATION Consolidated Balance Sheets December 31, 1998 and 1997 (in Canadian dollars)
- ----------------------------------------------------------------------------------------------------------- 1998 1997 - ----------------------------------------------------------------------------------------------------------- Assets Current assets: Cash (note 3) $ 714,298 $ 507,259 Short-term investments 2,113,907 1,780,086 Accrued interest 46,082 4,200 Receivable due from a financial institution (note 6 (b)) 637,500 - Accounts receivable 74,653 - Research tax credits receivable 5,778 150,000 Notes receivables (note 4) 273,995 56,000 Other receivables 43,028 28,790 - ---------------------------------------------------------------------------------------------------------- 3,909,241 2,526,335 Capital assets (note 5) 1,846,979 1,419,462 - ----------------------------------------------------------------------------------------------------------- $ 5,756,220 $ 3,945,797 =========================================================================================================== Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 434,440 $ 292,330 Shareholders' equity: Capital stock (note 6) 23,011,556 13,852,632 Capital stock subscription -- 504,000 Deficit (17,689,776) (10,703,165 - ----------------------------------------------------------------------------------------------------------- 5,321,780 3,653,467 Commitments (note 7) Subsequent event (note 13) - ----------------------------------------------------------------------------------------------------------- $ 5,756,220 $ 3,945,797 ===========================================================================================================
See accompanying notes to consolidated financial statements. On behalf of the Board: /s/ Paul Averback Director - ----------------------- /s/ Colin Bier Director - ----------------------- F-4 64 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Earnings Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars)
=========================================================================================================== 1998 1997 1996 - ----------------------------------------------------------------------------------------------------------- Revenue: Interest $ 243,574 $ 76,526 $ 226,940 Service fees 151,263 24,584 -- - ----------------------------------------------------------------------------------------------------------- 394,837 101,110 226,940 Expenses: Research and development 3,019,015 2,562,349 2,356,000 Less research tax credits (5,778) (150,000) (240,000) - ----------------------------------------------------------------------------------------------------------- 3,013,237 2,412,349 2,116,000 Marketing 3,240,242 1,925,654 1,253,894 General and administrative 896,201 589,524 497,179 Depreciation and amortization 135,551 158,694 78,906 Interest and bank charges 13,217 14,344 8,025 - ----------------------------------------------------------------------------------------------------------- 7,298,448 5,100,565 3,954,004 - ----------------------------------------------------------------------------------------------------------- Loss before income taxes (6,903,611) (4,999,455) (3,727,064) Income taxes (note 8) -- -- 28,000 - ----------------------------------------------------------------------------------------------------------- Net loss $(6,903,611) $(4,999,455) $(3,699,064) =========================================================================================================== Loss per share $ (0.36) $ (0.27) $ (0.21) =========================================================================================================== Weighted average number of common shares outstanding 19,304,435 18,370,873 17,654,862 ===========================================================================================================
See accompanying notes to consolidated financial statements. F-5 65 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Deficit Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars)
- ------------------------------------------------------------------------------------------------------------ 1998 1997 1996 - ------------------------------------------------------------------------------------------------------------ Deficit, beginning of year $(10,703,165) $ (5,472,710) $(1,539,686) Net loss (6,903,611) (4,999,455) (3,699,064) Share issue costs (83,000) (231,000) (233,960) - ------------------------------------------------------------------------------------------------------------ Deficit, end of year $(17,689,776) $(10,703,165) $(5,472,710) ============================================================================================================
See accompanying notes to consolidated financial statements. F-6 66 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Changes in Financial Position Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars)
- -------------------------------------------------------------------------------------------------------- 1998 1997 1996 - -------------------------------------------------------------------------------------------------------- Cash provided by (used in): Operations: Net loss $(6,903,611) $(4,999,455) $(3,699,064) Items not involving cash: Depreciation and amortization 135,551 158,694 78,906 Net change in non-cash operating working capital items (481,941) 58,421 (55,855) - -------------------------------------------------------------------------------------------------------- (7,250,001) (4,782,340) (3,676,013) Financing: Issuance of capital stock 8,654,924 4,549,941 5,280,050 Subscription to capital stock -- 504,000 -- Share issue costs (83,000) (231,000) (233,960) - -------------------------------------------------------------------------------------------------------- 8,571,924 4,822,941 5,046,090 Investments: Additions to capital assets (563,068) (260,183) (1,030,724) Notes receivable (217,995) -- -- - -------------------------------------------------------------------------------------------------------- (781,063) (260,183) (1,030,724) - -------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and short-term investments 540,860 (219,582) 339,353 Cash and short-term investments, beginning of year 2,287,345 2,506,927 2,167,574 - -------------------------------------------------------------------------------------------------------- Cash and short-term investments, end of year $ 2,828,205 $ 2,287,345 $2,506,927 ========================================================================================================
See accompanying notes to consolidated financial statements. F-7 67 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 1. ORGANIZATION AND BUSINESS ACTIVITIES: Nymox Pharmaceutical Corporation (the "Corporation"), incorporated under the Canada Business Corporations Act, is a development stage biopharmaceutical corporation which specializes in the research and development of neurological therapeutics and diagnostics for the aging population, with an emphasis on Alzheimer's disease. Since inception, the Corporation's activities have been primarily focused on developing certain pharmaceutical technologies and obtaining outside funding to support the continued development of its technologies. The Corporation is subject to a number of risks, including the successful development and marketing of its technologies. In order to achieve its business plan, the Corporation anticipates the need to raise additional capital. Management is confident that it will be able to obtain the continued financial support of its shareholders and/or new external financing to pursue its development. The Corporation is listed on the Montreal Exchange and the NASDAQ Stock Market. 2. SIGNIFICANT ACCOUNTING POLICIES: (a) Consolidation: The consolidated financial statements of the Corporation have been prepared under Canadian generally accepted accounting principles ("GAAP") and include the accounts of its wholly-owned US subsidiary, Nymox Corporation. Intercompany balances and transactions have been eliminated on consolidation. Consolidated financial statements prepared under US GAAP would differ in some respects from those prepared in Canada. A reconciliation of earnings and shareholders' equity reported in accordance with Canadian GAAP with US GAAP is presented in note 10. (b) Short-term investments: The Corporation's portfolio of short-term investments, which does not include equity securities, consists principally of government securities and commercial paper that are highly liquid and readily convertible into cash. These are recorded at the lower of cost or market value. F-8 68 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): (c) Capital assets: Capital assets are recorded at cost. Depreciation and amortization are provided using the following methods and annual rates:
======================================================================================================================= Asset Method Rate - ----------------------------------------------------------------------------------------------------------------------- Computer equipment Straight-line 20% Laboratory equipment Straight-line 20% Office equipment and fixtures Straight-line 20% ========================================================================================================================
The capitalized amount with respect to patents relates to direct costs incurred in connection with securing the patents. The cost of the patents does not necessarily reflect their present or future value and the amount ultimately recoverable is dependent upon the successful commercialization of the related products. Accordingly, patents will be amortized using the straight-line method commencing in the year of commercial production of the developed products. The capitalized amount will be amortized over the remaining years of the initial life of the patent. (d) Research and development expenditures: Research expenditures, net of research tax credits, are expensed as incurred. Development expenditures, net of tax credits, if any, are expensed as incurred, except if they meet the criteria for deferral in accordance with generally accepted accounting principles. (e) Foreign exchange: The Corporation's foreign subsidiary is considered to be an integrated foreign operation. Foreign denominated monetary assets and liabilities of the Canadian and foreign operations are translated at the rates of exchange prevailing at the balance sheet dates. Other assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing when the assets were acquired or the liabilities incurred. Sales and expenses are translated at the average exchange rate prevailing during the year, except for depreciation and amortization which are translated at the same rates as those used in the translation of the corresponding assets. Foreign exchange gains and losses are included in the determination of net earnings. F-9 69 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): (f) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (g) Loss per share: The loss per share amounts has been calculated using the weighted average number of common shares outstanding during the year. Fully diluted loss per share has not been disclosed because the effect of common shares issuable upon the exercise of options and warrants would be anti-dilutive. 3. CASH: Cash includes $542,953 of cash held in trust by the Corporation's legal counsel at December 31, 1998. This amount, which was received from the closing of various private placements in December 1998, was released to the Corporation in January 1999. 4. NOTES RECEIVABLE:
====================================================================================================================== 1998 1997 - ---------------------------------------------------------------------------------------------------------------------- Note receivable, unsecured, non-interest bearing, payable on demand $ 56,000 $56,000 Note receivable, unsecured, bearing interest at 9% per annum beginning February 1, 1999, payable on demand 217,995 - - ---------------------------------------------------------------------------------------------------------------------- $273,995 $56,000 ======================================================================================================================
The notes are receivable from a director, who was no longer associated with the Company as of March 1999. F-10 70 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 5. CAPITAL ASSETS:
====================================================================================================================== 1998 - ---------------------------------------------------------------------------------------------------------------------- Accumulated Net book Cost depreciation value - ---------------------------------------------------------------------------------------------------------------------- Computer equipment $ 78,438 $ 25,528 $ 52,910 Laboratory equipment 717,820 220,468 497,352 Office equipment and fixtures 38,956 11,687 27,269 Patents 1,276,318 6,871 1,269,447 Intellectual property rights 1 - 1 - ---------------------------------------------------------------------------------------------------------------------- $2,111,533 $264,554 $1,846,979 ======================================================================================================================
====================================================================================================================== 1997 - ---------------------------------------------------------------------------------------------------------------------- Accumulated Net book Cost depreciation value - ---------------------------------------------------------------------------------------------------------------------- Computer equipment $ 55,803 $ 15,174 $ 40,629 Laboratory equipment 734,041 217,299 516,742 Office equipment and fixtures 26,475 6,449 20,026 Patents 842,064 - 842,064 Intellectual property rights 1 - 1 - ---------------------------------------------------------------------------------------------------------------------- $1,658,384 $238,922 $1,419,462 ======================================================================================================================
6. CAPITAL STOCK:
====================================================================================================================== 1998 1997 - ---------------------------------------------------------------------------------------------------------------------- Authorized: An unlimited number of common shares Issued and outstanding: 19,727,904 common shares (1997 - 18,632,873) $23,011,556 $13,852,632 ======================================================================================================================
F-11 71 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 6. CAPITAL STOCK (CONTINUED): (a) Changes in the Corporation's capital stock are presented below:
====================================================================================================================== Shares Dollars - ---------------------------------------------------------------------------------------------------------------------- Issued and outstanding, December 31, 1996 17,929,382 $ 9,302,691 Issue of common shares for cash (b) 696,491 4,527,191 Issue of common shares pursuant to exercise of stock options 7,000 22,750 - ---------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1997 18,632,873 13,852,632 Issue of common shares for cash (b) 366,000 3,131,500 Cancellation of shares (c) (460) - Issue of common shares pursuant to exercise of warrants 696,491 5,920,174 Issue of common shares pursuant to exercise of stock options 33,000 107,250 - ---------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1998 19,727,904 $ 23,011,556 ======================================================================================================================
(b) Private placements: In 1998, the Corporation completed private placements for 366,000 common shares for total aggregate proceeds of $3,131,500. At December 31, 1998, proceeds of $637,500 for the issuance of 75,000 common shares were receivable. These funds were received by the Corporation in January 1999. In 1997, the Corporation completed a private placement of 696,491 common shares at a price of $6.50/share and received gross proceeds of $4,527,191. The share issue costs related to these private placements have been charged against the deficit. F-12 72 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 6. CAPITAL STOCK (CONTINUED): (c) Cancellation of shares: During the year, the Corporation was advised by its transfer agent that common shares of the Corporation, which had been issued on the amalgamation of the Company with Monterey Capital Inc. in 1995, were never claimed. These common shares have been cancelled. (d) Warrants: The Corporation has issued the following warrants to purchase common shares:
======================================================================================================================= Exercise Outstanding at price per Exercised December 31, Warrants share Issued to date 1998 Expiry - ----------------------------------------------------------------------------------------------------------------------- Series A $ 8.50 696,491 696,491 - - Series B 8.50 50,000 - 50,000 August 31, 1999 Series C 10.00 60,000 - 60,000 August 31, 1999 Series D 10.00 67,500 - 67,500 December 31, 1999 =======================================================================================================================
The Series A warrants were issued in connection with the 1997 private placement and were exercised in 1998. The Series B, C and D warrants were issued in connection with various private placements completed in 1998. As at December 31, 1998, none of these warrants had been exercised. (e) Stock options: The Corporation has established a stock option plan (the "Plan") for its key employees, its officers and directors, and certain consultants. The Plan is administered by the Board of Directors of the Corporation. The Board may from time to time designate individuals to whom options to purchase common shares of the Corporation may be granted, the number of shares to be optioned to each, and the option price per share. The option price per share cannot involve a discount to the market price at the time the option is granted. The total number of shares to be optioned to any one individual cannot exceed 5% of the total issued and outstanding shares and the maximum number of shares which may be optioned under the Plan cannot exceed 2,500,000 common shares without shareholder approval. F-13 73 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 6. CAPITAL STOCK (CONTINUED): (e) Stock options (continued): Changes in outstanding options were as follows for the last two fiscal periods:
======================================================================================================================= Stock options - ----------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1996 1,575,000 Granted 271,000 Exercised (7,000) Cancelled (5,000) - ----------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1997 1,834,000 Granted 125,000 Exercised (33,000) Cancelled - - ----------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1998 1,926,000 =======================================================================================================================
The weighted average exercise prices of options granted, exercised and cancelled during 1998 were $6.59/share (1997 - $9.42/share), $3.25/share (1997 - $3.25/share) and nil/share (1997 - $11.50/share), respectively. The weighted average exercise price of options exercisable at December 31, 1998 is $5.95/share (1997 - $5.10/share). At December 31, 1998, options outstanding were as follows:
======================================================================================================================= Options outstanding Exercise price per share Expiry date 25,000 $4.90 1999 30,000 $10.00 1999 100,000 $7.00 2002 40,000 $13.75 2006 40,000 $9.80 2006 110,000 $11.50 2006 10,000 $16.75 2006 40,000 $9.00 2006 5,000 $9.25 2007 1,200,000 $3.25 (i) 2006 - 2009 36,000 $9.25 (ii) 2006 - 2010 290,000 $10.00 (iii) 2006 - 2012 - ----------------------------------------------------------------------------------------------------------------------- 1,926,000 =======================================================================================================================
F-14 74 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 6. CAPITAL STOCK (CONTINUED): (d) Stock options (continued): (i) These options are effective and exercisable as follows: ======================================================================================================================= Currently 1,000,000 1999 200,000 - ----------------------------------------------------------------------------------------------------------------------- 1,200,000 =======================================================================================================================
(ii) These options are effective and exercisable as follows: ======================================================================================================================= Currently 12,000 1999 12,000 2000 12,000 - ----------------------------------------------------------------------------------------------------------------------- 36,000 =======================================================================================================================
(iii) These options become vested at various dates over the next five years. During the year, the board of directors approved an amendment to change the exercise price of these options to $10.00/share. The exercise price was previously set at the trading price of the shares on the date preceding each vesting date. These options vest as follows: ======================================================================================================================= Vested 1998 50,000 1999 90,000 2000 90,000 2001 50,000 2002 10,000 - ----------------------------------------------------------------------------------------------------------------------- 290,000 - -=======================================================================================================================
F-15 75 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) ================================================================================ 7. COMMITMENTS: (a) Operating leases: Minimum lease payments under operating leases for the Corporation's premises for the next three years are as follows: ================================================================================ 1999 $445,407 2000 151,582 2001 24,089 - -------------------------------------------------------------------------------- $621,078 ================================================================================
(b) Research funding: The Corporation is committed to make research grants to an unrelated medical facility in the U.S. in the aggregate amount of approximately $735,000 (US$516,000) in the next three years as follows: ================================================================================ 1999 $245,000 2000 245,000 2001 245,000 - -------------------------------------------------------------------------------- $735,000 ================================================================================
The Corporation has an exclusive license to patents from this facility covering rights to AD7C diagnostics and therapeutics. Under this license, the medical facility benefits from research funding and collaboration from the Corporation and is entitled to royalties of 4% on worldwide sales of the AD7C test. During the period ended December 31, 1998, an amount of approximately US$128,000 (1997 - US$172,000) was paid and expensed in connection with the research grant described above. F-16 76 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 7. COMMITMENTS (CONTINUED): (c) License agreements: In January 1999, the Corporation granted a non-exclusive license to an American corporation to utilize all proprietory technology, including its rights to patents and know-how, necessary to conduct the AD7C test in a reference laboratory. The Corporation will receive compensation under the agreement based on the number of tests conducted by the American company. The license, which is for the US territory, is for an initial term of 24 months and is subject to automatic renewal for two additional one-year terms. 8. INCOME TAXES: Details of the components of income taxes are as follows:
================================================================================================ 1998 1997 1996 - ------------------------------------------------------------------------------------------------ Loss before income taxes: Canadian operations $(2,573,106) $(2,489,752) $(3,106,405) U.S. operations (4,330,505) (2,509,703) (620,659) - ------------------------------------------------------------------------------------------------ (6,903,611) (4,999,455) (3,727,064) Basic income tax rate 38.0% 38.0% 38.0% - ------------------------------------------------------------------------------------------------ Income tax recovery at statutory rates 2,623,000 1,900,000 1,416,000 Adjustments in income taxes resulting from: Non-recognition of losses and other unclaimed deductions (2,623,000) (1,900,000) (1,416,000) Credit for losses -- -- 28,000 - ------------------------------------------------------------------------------------------------ Income taxes $ -- $ -- $ 28,000 ================================================================================================
F-17 77 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 8. INCOME TAXES (CONTINUED): The Corporation has non-capital losses carried forward and accumulated scientific research and development expenditures which are available to reduce future years' taxable income. The related income tax benefit of these items will be recorded in earnings when realized. These expire as follows:
======================================================================================================================= Federal Provincial - ----------------------------------------------------------------------------------------------------------------------- Non-capital losses: 1999 $ 40,000 $ - 2000 36,000 36,000 2001 58,000 58,000 2002 920,000 - 2003 1,990,000 1,276,000 2004 1,388,000 1,090,000 2005 3,024,000 3,024,000 Scientific research and development expenditures: (Indefinitely) 1,671,000 4,200,000 =======================================================================================================================
The Corporation also has investment tax credits available in the amount of approximately $464,000 available to reduce future years' federal taxes payable. The benefit of these credits will be recorded when realized. These credits expire as follows: ======================================================================================================================= 2005 $ 26,000 2006 290,000 2007 148,000 =======================================================================================================================
In addition, the Corporation's US subsidiary has losses carried forward of approximately US$4,900,000 which expire as follows: ======================================================================================================================= 2011 $ 460,000 2012 1,730,000 2018 2,710,000 =======================================================================================================================
F-18 78 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 9. FINANCIAL INSTRUMENTS: (a) Foreign currency risk management: A substantial portion of the Corporation's expenses are derived in US dollars. This results in financial risk due to fluctuations in the value of the Canadian dollar relative to those foreign currencies. For the most part, this exposure is reduced to the extent that the Corporation generates revenues in US dollars. Fluctuations in payments made for the Corporation's expenses could cause unanticipated fluctuations in the Corporation's operating results. (b) Credit risk: Financial instruments that potentially subject the Corporation to significant concentrations of credit risk consist principally of short-term investments. The Corporation has investment policies that require placement of short-term investments in financial institutions evaluated as highly creditworthy. (c) Fair value disclosure: The Corporation has determined that the carrying value of its short-term financial assets and liabilities, including cash and short-term investments, accrued interest, accounts receivable, subscriptions receivable, notes receivables and accounts payable and accrued liabilities, approximates fair value due to the immediate or short-term maturity of these financial instruments. F-19 79 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 10. CANADIAN/U.S. REPORTING DIFFERENCES: (a) Consolidated statements of earnings: The reconciliation of earnings reported in accordance with Canadian GAAP and with U.S. GAAP is as follows:
======================================================================================================================= 1998 1997 1996 - ----------------------------------------------------------------------------------------------------------------------- Net loss, Canadian GAAP $(6,903,611) $(4,999,455) $(3,699,064) Adjustments: Amortization of patents (i) (75,077) (49,533) (39,166) Stock-based compensation - options granted to non-employees (ii) (406,500) (150,000) (592,000) - ----------------------------------------------------------------------------------------------------------------------- Net loss, U.S. GAAP $(7,385,188) $(5,198,988) $(4,330,230) ======================================================================================================================= - ----------------------------------------------------------------------------------------------------------------------- Loss per share, U.S. GAAP $ (0.38) $ (0.28) $ (0.25) =======================================================================================================================
(b) Consolidated shareholders' equity: The reconciliation of shareholders' equity reported in accordance with Canadian GAAP and with U.S. GAAP is as follows:
======================================================================================================================= 1998 1997 1996 - ----------------------------------------------------------------------------------------------------------------------- Shareholders' equity, Canadian GAAP $5,321,780 $3,653,467 $3,829,981 Adjustments: Amortization of patents (i): Cumulative effect to beginning of the period (180,139) (130,606) (91,440) Current period (75,077) (49,533) (39,166) Stock-based compensation - options granted to non-employees (ii): Accumulative effect to beginning of period (742,000) (592,000) - Current period (406,500) (150,000) (592,000) - ----------------------------------------------------------------------------------------------------------------------- Increase in deficit (1,403,716) (922,139) (722,606) - ----------------------------------------------------------------------------------------------------------------------- Shareholders' equity, U.S. GAAP $3,918,064 $2,731,328 $3,107,375 =======================================================================================================================
F-20 80 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED): (b) Consolidated shareholders' equity (continued): (i) In accordance with APB Opinion 17, Intangible Assets, the patents are amortized using the straight-line method over 17 years, the legal life of the patents, from the date the patent was secured. (ii) In accordance with FAS 123, Accounting for Stock-Based Compensation, compensation related to the stock options granted to non-employees has been recorded in the accounts based on the fair value of the stock options at the grant date. The fair value of the stock options was estimated as described in note 10 (c) (3). (c) Other disclosures required by United States GAAP: (1) Development stage company: The Corporation is in the process of developing unique patented products which are subject to approval of regulatory authorities. The Corporation has completed the research and discovery phase of its Alzheimer's diagnostic AD7C test and is currently offering testing services in their CLIA certified clinical reference laboratory. It has had limited revenues to date on the sale of its products under development. Accordingly, the Corporation is a development stage company as defined in Statement of Financial Accounting Standards No. 7 and the following disclosures are required:
======================================================================================================================= Cumulative Cumulative since the date of since the date of inception of inception of the Corporation the Corporation to December 31, to December 31, 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Interest revenue $ 547,040 $ 303,466 Service fees 175,847 24,584 Gross research and development expenditures 9,126,991 6,107,976 Other expenses 9,888,251 5,527,963 Cash inflow (outflow): Operating activities (17,922,963) (10,672,962) Investing activities (2,439,525) (1,658,462) Financing activities 23,190,693 14,618,769 =======================================================================================================================
F-21 81 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED): (c) Other disclosures required by United States GAAP (continued): (1) Development stage company (continued): The statement of shareholders' equity since date of inception is presented below.
============================================================================================================= CONSIDERATION ------------------ Accumulated Shares Cash Other deficit Total - ------------------------------------------------------------------------------------------------------------- Year ended July 31, 1990: Common shares issued 2,500,000 $ 200,000 $ -- $ -- $ 200,000 Net loss -- -- -- (126,719) (126,719) - ------------------------------------------------------------------------------------------------------------- Balance, July 31, 1990 2,500,000 200,000 -- (126,719) 73,281 Year ended July 31, 1991: Net loss -- -- -- (24,827) (24,827) - ------------------------------------------------------------------------------------------------------------- Balance, July 31, 1991 2,500,000 200,000 -- (151,546) 48,454 Year ended July 31, 1992: Common shares issued 9,375 37,500 -- -- 37,500 Net loss -- -- -- (53,112) (53,112) - ------------------------------------------------------------------------------------------------------------- Balance, July 31, 1992 2,509,375 237,500 -- (204,658) 32,842 Year ended July 31, 1993: Common shares issued 201,250 205,000 -- -- 205,000 Common shares cancelled (500,000) -- -- -- -- Net loss -- -- -- (48,862) (48,862) - ------------------------------------------------------------------------------------------------------------- Balance, July 31, 1993 2,210,625 442,500 -- (253,520) 188,980 Year ended July 31, 1994: Common shares issued 2,500 10,000 -- -- 10,000 Net loss -- -- -- (71,668) (71,668) - ------------------------------------------------------------------------------------------------------------- Balance, July 31, 1994 2,213,125 452,500 -- (325,188) 127,312 Year ended July 31, 1995: Common shares issued 78,078 412,870 -- -- 412,870 Net loss -- -- -- (393,841) (393,841) - ------------------------------------------------------------------------------------------------------------- Balance, July 31, 1995 2,291,203 865,370 -- (719,029) 146,341 Period ended December 31, 1995: Adjustment necessary to increase the number of common shares 12,708,797 -- -- -- -- - ------------------------------------------------------------------------------------------------------------- Adjusted number of common shares 15,000,000 865,370 -- (719,029) 146,341 Common shares issued 2,047,082 3,157,271 936,894 -- 4,094,165 Net loss -- -- -- (1,639,194) (1,639,194) Share issue costs -- (209,797) -- -- (209,797) - ------------------------------------------------------------------------------------------------------------- Balance, December 31, 1995 17,047,082 3,812,844 936,894 (2,358,223) 2,391,515 Year ended December 31, 1996: Common shares issued 882,300 5,280,050 -- -- 5,280,050 Net loss -- -- -- (4,330,230) (4,330,230) Share issue costs -- (233,960) -- -- (233,960) - ------------------------------------------------------------------------------------------------------------- Balance December 31, 1996 carried forward 17,929,382 8,858,934 936,894 (6,688,453) 3,107,375 =============================================================================================================
F-22 82 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED): (c) Other disclosures required by United States GAAP (continued): (1) Development stage company (continued):
======================================================================================================================= Consideration ------------------ Accumulated Shares Cash Other deficit Total - ----------------------------------------------------------------------------------------------------------------------- Balance December 31, 1996 brought forward 17,929,382 $8,858,934 $ 936,894 $(6,688,453) $ 3,107,375 Year ended December 31, 1997: Common shares issued 703,491 4,549,941 - - 4,549,941 Net loss - - (5,198,988) (5,198,988) Share issue costs - (231,000) - - (231,000) Capital stock subscription - 504,000 - - 504,000 - ----------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1997 18,632,873 13,681,875 936,894 (11,887,441) 2,731,328 Year ended December 31, 1998: Common shares issued 1,095,031 8,654,924 - - 8,654,924 Net loss - - - (7,385,188) (7,385,188) Share issue costs - (83,000) - - (83,000) - ----------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1998 19,727,904 $22,253,799 $ 936,894 $(19,272,629) $ 3,918,064 =======================================================================================================================
(2) Income taxes: In accordance with Statement of Financial Accounting Standards No. 109, the income tax effect of temporary differences that give rise to the net deferred tax asset are presented below:
======================================================================================================================= 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Scientific research and experimental development $ 860,000 $ 1,100,000 Non-capital losses 2,600,000 1,594,000 Investment tax credits 464,000 590,000 Share issue costs 162,000 196,000 Less valuation allowance (4,086,000) (3,480,000) - ----------------------------------------------------------------------------------------------------------------------- Net deferred tax asset $ - $ - =======================================================================================================================
There are no material deferred tax liabilities. F-23 83 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED): (c) Other disclosures required by United States GAAP (continued): (2) Income taxes (continued): In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and tax planning strategies. Since the Corporation is a development stage enterprise, the generation of future taxable income is dependent on the successful commercialization of its products and technologies. (3) Stock-based compensation: The Corporation applies APB Opinion 25, Accounting for Stock Issued to Employees, in accounting for its stock option plan, and accordingly, no compensation cost has been recognized for its stock options in the financial statements. Had compensation cost for the Corporation's stock option plan been determined based on the fair value at the grant dates for awards under the plan consistent with the method of FASB Statement 123, Accounting for Stock-Based Compensation, the Corporation's net earnings and loss per share would have been adjusted to the pro-forma amounts indicated below for US GAAP:
======================================================================================================================= 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Net loss As reported (US GAAP) $ (7,385,188) $ (5,198,988) Pro-forma (7,385,188) (5,990,365) Loss per share As reported (US GAAP) (0.38) (0.28) Pro-forma (0.38) (0.33) =======================================================================================================================
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: risk-free interest rate of 5%, dividend yield of 0%, expected volatility of 50%, and expected life of 5 years. (4) Short-term investments: Short-term investments are classified as held-to-maturity as the Corporation has the positive intent and ability to hold these securities to maturity. As the Corporation's short-term investments include government securities and commercial paper, the aggregate fair value approximates carrying value and there are no significant unrealized gross holding gains or losses. F-24 84 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 10. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED): (c) Other disclosures required by United States GAAP (continued): (5) Comprehensive income: Effective January 1, 1998, the Corporation adopted Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, which establishes new rules for the reporting and display of comprehensive income and its components. The adoption of this statement has no impact on the Corporation's net income or shareholders' equity. 11. SEGMENT DISCLOSURES: Geographic segment information was as follows:
======================================================================================================================= United Canada States ------ ------ Revenues: 1998 $ 243,574 $ 151,263 1997 76,526 24,584 1996 226,940 - Net loss: 1998 (2,573,106) (4,330,505) 1997 (2,489,752) (2,509,703) 1996 (3,106,405) (620,659) Identifiable assets: 1998 4,940,335 815,885 1997 3,579,849 365,948 =======================================================================================================================
12. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE: The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 Issue may be experienced before, on, or after January 1, 2000, and, if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 Issue affecting the entity, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. F-25 85 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued Years ended December 31, 1998, 1997 and 1996 (in Canadian dollars) - -------------------------------------------------------------------------------- 13. SUBSEQUENT EVENT: In January 1999, the Corporation completed private placements for a total of 55,000 common shares at $8.50 per share, and received gross proceeds of $467,500. In connection with these private placements, the Corporation issued an additional 27,500 Series D warrants exercisable at a price of $10.00 per share, expiring on December 31, 1999. F-26 86 Consolidated Financial Statements of (Unaudited) NYMOX PHARMACEUTICAL CORPORATION Periods ended September 30, 1999 and 1998 F-27 87 NYMOX PHARMACEUTICAL CORPORATION Consolidated Financial Statements (Unaudited) Periods ended September 30, 1999, 1998 and 1997 FINANCIAL STATEMENTS Consolidated Balance Sheets....................................................... F-29 Consolidated Statements of Earnings............................................... F-30 Consolidated Statements of Deficit................................................ F-31 Consolidated Statements of Cash Flows............................................. F-32 Notes to Consolidated Financial Statements........................................ F-33
F-28 88 NYMOX PHARMACEUTICAL CORPORATION Consolidated Balance Sheets (Unaudited) September 30, 1999 and 1998, with comparative figures as at December 31, 1998 (in Canadian dollars)
======================================================================================================================= September 30, September 30, December 31, 1999 1998 1998 - ----------------------------------------------------------------------------------------------------------------------- (Unaudited) (Unaudited) (Audited) Assets Current assets: Cash $ 663,415 $ 837,253 $ 714,298 Short-term investments 262,350 2,942,572 2,113,907 Accrued interest 22,641 119,262 46,082 Receivable from a financial institution 410,000 - 637,500 Accounts receivable 60,822 56,042 74,653 Notes receivable 265,075 278,024 273,995 Research tax credits receivable 24,923 5,347 5,778 Other receivables - 26,000 43,028 Prepaid expenses 146,740 - - - ----------------------------------------------------------------------------------------------------------------------- 1,855,966 4,264,500 3,909,241 Capital assets 1,610,772 1,606,675 1,846,979 - ----------------------------------------------------------------------------------------------------------------------- $ 3,466,738 $ 5,871,175 $ 5,756,220 - ----------------------------------------------------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 275,667 $ 89,166 $ 434,440 Shareholders' equity: Capital stock 24,410,480 21,831,103 23,011,556 Deficit (21,219,409) (16,049,094) (17,689,776) - ----------------------------------------------------------------------------------------------------------------------- 3,191,071 5,782,009 5,321,780 - ----------------------------------------------------------------------------------------------------------------------- $ 3,466,738 $ 5,871,175 $ 5,756,220 =======================================================================================================================
See accompanying notes to unaudited consolidated financial statements. F-29 89 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Earnings (Unaudited) Periods ended September 30, 1999, 1998 and 1997 (in Canadian dollars)
======================================================================================================================= Three Months Ended September 30, Nine Months Ended September 30, - ----------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1999 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Revenues: Service fees $ 27,004 $ 26,762 $ - $ 178,496 $ 60,135 $ 18,927 Interest 16,524 88,838 25,386 42,416 187,464 46,855 - ----------------------------------------------------------------------------------------------------------------------- 43,528 115,600 25,386 220,912 247,599 65,782 Expenses: Research and development 389,693 924,641 1,026,682 1,241,011 2,198,823 2,039,761 Less investment tax credits (17,279) (13,315) (46,500) (19,145) (18,662) (144,500) - ----------------------------------------------------------------------------------------------------------------------- 372,414 911,326 980,182 1,221,866 2,180,161 1,895,261 General, administrative and cost of sales 529,692 133,988 77,645 1,305,242 608,894 470,783 Marketing 293,326 902,597 370,512 1,057,545 2,570,594 1,442,639 Depreciation and amortization 71,013 41,659 40,834 168,138 128,230 119,781 Interest and bank charges 11,351 18,073 5,310 14,558 22,649 11,070 - ----------------------------------------------------------------------------------------------------------------------- 1,277,796 2,007,643 1,474,483 3,767,349 5,510,528 3,939,534 Gain on disposal of capital assets - - - (67,379) - - - ----------------------------------------------------------------------------------------------------------------------- Net loss $(1,234,268) $(1,892,043) $(1,449,097) $(3,479,058) $(5,262,929) $(3,873,752) ======================================================================================================================= - ----------------------------------------------------------------------------------------------------------------------- Loss per share $ (0.06) $ (0.10) $ (0.08) $ (0.17) $ (0.27) $ (0.21) ======================================================================================================================= - ----------------------------------------------------------------------------------------------------------------------- Weighted average number of common shares outstanding 19,932,804 19,592,274 18,631,783 19,847,612 19,239,411 18,234,967 =======================================================================================================================
See accompanying notes to unaudited consolidated financial statements. F-30 90 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Deficit (Unaudited) Periods ended September 30, 1999, 1998 and 1997 (in Canadian dollars)
======================================================================================================================= Three Months Ended September 30, Nine Months Ended September 30, - ----------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1999 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Deficit, beginning of period $(19,985,141) $(14,157,051) $(8,007,365) $(17,689,776) $(10,703,165) $(5,472,710) Net loss (1,234,268) (1,892,043) (1,449,097) (3,479,058) (5,262,929) (3,873,752) Share issue costs - - (121,000) (50,575) (83,000) (231,000) - ----------------------------------------------------------------------------------------------------------------------- Deficit, end of period $(21,219,409) $(16,049,094) $(9,577,462) $(21,219,409) $(16,049,094) $(9,577,462) =======================================================================================================================
See accompanying notes to unaudited consolidated financial statements. F-31 91 NYMOX PHARMACEUTICAL CORPORATION Consolidated Statements of Cash Flows (Unaudited) Periods ended September 30, 1999, 1998 and 1997 (in Canadian dollars)
======================================================================================================================= Three Months Ended September 30, Nine Months Ended September 30, - ----------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1999 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net loss $(1,234,268) $(1,892,043) $(1,449,097) $(3,479,058) $(5,262,929) $(3,873,752) Items not involving cash: Depreciation and amortization 71,013 41,659 40,834 168,138 128,230 119,781 Gain on disposal of capital assets - - - (67,379) - - Net change in non-cash operating working capital items (197,982) (156,387) (119,645) (7,938) (447,270) (286,320) - ----------------------------------------------------------------------------------------------------------------------- (1,361,237) (2,006,771) (1,527,908) (3,386,237) (5,581,969) (4,040,291) Cash flows from financing activities: Issuance of capital stock 642,499 - - 1,398,924 7,474,471 4,549,463 Share issue costs - - (121,000) (50,575) (83,000) (231,000) - ----------------------------------------------------------------------------------------------------------------------- 642,499 - (121,000) 1,348,349 7,391,471 4,318,463 Cash flows from investing activities: Additions to capital assets (87,278) (90,359) (41,119) (137,457) (317,022) (256,155) Proceeds on disposal of capital assets - - - 272,905 - - - ----------------------------------------------------------------------------------------------------------------------- (87,278) (90,359) (41,119) 135,448 (317,022) (256,155) - ----------------------------------------------------------------------------------------------------------------------- (Decrease) increase in cash and short-term investments (806,016) (2,097,130) (1,690,027) (1,902,440) 1,492,480 22,017 Cash and short-term investments, beginning of period 1,731,781 5,876,955 4,218,971 2,828,205 2,287,345 2,506,927 - ----------------------------------------------------------------------------------------------------------------------- Cash and short-term investments, end of period $ 925,765 $ 3,779,825 $ 2,528,944 $ 925,765 $ 3,779,825 $ 2,528,944 ======================================================================================================================= Supplemental disclosure to statement of cash flows: Income taxes paid $ - $ - $ - $ - $ - $ - Interest paid 11,351 18,073 5,310 14,558 22,649 11,070 =======================================================================================================================
See accompanying notes to unaudited consolidated financial statements. F-32 92 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements (Unaudited) Periods ended September 30, 1999, 1998 and 1997 (in Canadian dollars) - -------------------------------------------------------------------------------- Nymox Pharmaceutical Corporation (the "Corporation"), incorporated under the Canada Business Corporations Act, is a development stage biopharmaceutical corporation which specializes in the research and development of neurological therapeutics and diagnostics for the aging population, with an emphasis on Alzheimer's disease. Since inception, the Corporation's activities have been primarily focused on developing certain pharmaceutical technologies and obtaining outside funding to support the continued development of its technologies. The Corporation is subject to a number of risks, including the successful development and marketing of its technologies. In order to achieve its business plan, the Corporation anticipates the need to raise additional capital. The Corporation is listed on the Montreal Exchange and on the NASDAQ Stock Market. 1. BASIS OF PRESENTATION: (a) Consolidation: The consolidated financial statements of the Corporation have been prepared under Canadian generally accepted accounting principles and include the accounts of its wholly-owned US subsidiary. Significant intercompany balances and transactions have been eliminated on consolidation. (b) Interim financial statements: The unaudited consolidated balance sheets as at September 30, 1999 and 1998, and the unaudited consolidated statements of earnings and deficit and cash flows for the periods ended September 30, 1999, 1998 and 1997 reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of the interim periods presented. There are no adjustments in these interim financial statements other than normal recurring adjustments. F-33 93 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued (Unaudited) Periods ended September 30, 1999, 1998 and 1997 (in Canadian dollars) - -------------------------------------------------------------------------------- 2. CANADIAN/U.S. REPORTING DIFFERENCES: (a) Consolidated statements of earnings: The reconciliation of earnings reported in accordance with Canadian GAAP with U.S. GAAP is as follows:
- ----------------------------------------------------------------------------------------------------------------------- Three Months Ended September 30, Nine Months Ended September 30, - ----------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1999 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Net loss, Canadian GAAP $(1,234,268) $(1,892,043) $(1,449,097) $(3,479,058) $(5,262,929) $(3,873,752) Adjustments: Amortization of patents (26,066) (16,429) (12,322) (72,082) (46,418) (36,967) - ----------------------------------------------------------------------------------------------------------------------- Net loss, U.S. GAAP $(1,260,334) $(1,908,472) $(1,461,419) $(3,551,140) $(5,309,347) $(3,910,719) - ----------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------- Loss per share, U.S. GAAP $ (0.06) $ (0.10) $ (0.08) $ (0.18) $ (0.28) $ (0.21) - -----------------------------------------------------------------------------------------------------------------------
F-34 94 NYMOX PHARMACEUTICAL CORPORATION Notes to Consolidated Financial Statements, Continued (Unaudited) Periods ended September 30, 1999, 1998 and 1997 (in Canadian dollars) - -------------------------------------------------------------------------------- 2. CANADIAN/U.S. REPORTING DIFFERENCES (CONTINUED): (b) Consolidated shareholders' equity: The reconciliation of shareholders' equity reported in accordance with Canadian GAAP with U.S. GAAP is as follows:
- ----------------------------------------------------------------------------------------------------------------------- September 30, December 31, - ----------------------------------------------------------------------------------------------------------------------- 1999 1998 1998 - ----------------------------------------------------------------------------------------------------------------------- Shareholders' equity, Canadian GAAP $ 3,191,071 $ 5,782,009 $ 5,321,780 Adjustments: (i) Amortization of patents: Cumulative effect to beginning of the period (255,216) (180,139) (180,139) Current period (72,082) (46,418) (75,077) - ----------------------------------------------------------------------------------------------------------------------- (327,298) (226,557) (255,216) (ii) Stock-based compensation: Cumulative effect to beginning of period (1,148,500) (742,000) (742,000) Current period - - (406,500) - ----------------------------------------------------------------------------------------------------------------------- (1,148,500) (742,000) (1,148,500) - ----------------------------------------------------------------------------------------------------------------------- Increase in deficit (1,475,798) (968,557) (1,403,716) - ----------------------------------------------------------------------------------------------------------------------- Shareholders' equity, U.S. GAAP $ 1,715,273 $ 4,813,452 $ 3,918,064
3. SEGMENT DISCLOSURES: Geographic segment information was as follows:
- ----------------------------------------------------------------------------------------------------------------------- United Canada States - ----------------------------------------------------------------------------------------------------------------------- Revenues: 1999 $ 42,416 $ 178,496 1998 187,464 60,135 1997 46,855 18,927 Net loss: 1999 (2,597,630) (881,428) 1998 (1,958,719) (3,304,210) 1997 (2,049,373) (1,824,379) Identifiable assets: September 30, 1999 2,900,575 566,163 September 30, 1998 5,160,095 711,080 December 31, 1998 4,940,335 815,885 - -----------------------------------------------------------------------------------------------------------------------
F-35 95 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN ________________________ CONNECTION WITH THIS OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. 5,000,000 Common Shares THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE offered by SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY Jaspas Investments Ltd. CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO ________________________ CHANGE IN THE CIRCUMSTANCES OF NYMOX OR THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF. _________________________________________________
NYMOX PHARMACEUTICAL TABLE OF CONTENTS CORPORATION PAGE Note About Currency........................................ 2 The Company................................................ 3 Cautionary Statement Regarding Forward-looking Statements................................................. 5 ________________________ Risk Factors............................................... 6 Trading Market for Common Shares........................... 11 P R O S P E C T U S Selected Consolidated Financial Data....................... 11 ________________________ Information about the Company.............................. 13 Management's Discussion and Analysis of Results of Operations and Financial Condition...................... 20 Recent Developments........................................ 25 Use of Proceeds............................................ 28 The Common Stock Purchase Agreement........................ 29 Selling Security Holder.................................... 37 Directors and Officers of Nymox............................ 38 _________________ , 1999 Compensation............................................... 39 Options.................................................... 40 Interest of Management in Certain Transactions............. 43 Controlling Shareholder.................................... 44 Plan of Distribution....................................... 44 Canadian Federal Income Tax Considerations................. 48 U.S. Federal Income Tax Considerations..................... 51 Description of Nymox's Common Shares....................... 54 Certain Legal Matters...................................... 56 Experts.................................................... 56 Where You Can Find More Information........................ 57 Enforcement of Certain Civil Liabilities and Authorized Representative in the United States............. 57
96 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 13: Other Expenses of Issuance and Distribution The following is a list of the estimated expenses to be incurred by the Registrant in connection with the preparation and filing of this registration statement. SEC Registration Fee $ 3,406 Legal Fees and Expenses $30,000 Accountants Fees $ 5,000 ------- TOTAL $38,406
The estimated expenses reflected herein do not include the reimbursement of $35,000 by Nymox to Jaspas, primarily related to legal fees in preparation of the stock purchase agreement and associated escrow costs. Item 14: Indemnification of Directors and Officers Nymox maintains Directors' and Officers' Liability Insurance (the "Policy") for its own benefit and for the benefit of its subsidiaries and their respective directors and officers. Subject to the limitations therein set forth, the Policy extends coverage to directors and officers for any loss (as defined in the Policy) incurred in connection with the performance of their duties and to Nymox and its subsidiaries for any loss for which they have indemnified their respective directors or officers as permitted by law. Section 124 of the Canada Business Corporations Act ("CBCA") provides, in pertinent part: 124. (1) Indemnification. - Except in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favor, a corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation's request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of such corporation or body corporate, if, (a) he acted honestly and in good faith with a view to the best interests of the corporation; and {b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful. (2) Indemnification in derivative actions. - A corporation may, with the approval of the court, indemnify a person referred to in subsection (1) in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favor, to which he is made a party by reason of being or having been a director or an officer of the corporation or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with such action if he fulfills the conditions set out in clauses (1)(a) and (b). II-1 97 (3) Indemnity as of right. - Notwithstanding anything in this section, a person referred to in subsection (1) is entitled to indemnify from the corporation in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity, (a) was substantially successful on the merits in his defense of the action or proceeding; and (b) fulfills the conditions set out in clauses (1)(a) and (b). (4) Directors' and officers' insurance. - A corporation may purchase and maintain insurance for the benefit of any person referred to in subsection (1) against any liability incurred by him, (a) in his capacity as a director or officer of the corporation, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the corporation; or (b) in his capacity as a director or officer of another body corporate where he acts or acted in that capacity at the corporation's request, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the body corporate. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the United States Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. Item 15. Recent Sales of Unregistered Securities All recent sales of unregistered shares were pursuant to exemptions from registration under applicable Canadian and Quebec securities laws and were not made to persons resident in the United States. - April 1996, 877,300 common shares at a per share price of CAN$6.00 for aggregate net proceeds of CAN$5,263,800 with Prampton Company Ltd. (200,000 shares), Murray Lester Investments (120,000 shares), Gestion 3B+M Inc. (100,000 shares) and a group of individual Canadian and overseas investors (457,300 shares); - May 1997, 696,491 common shares at a price of CAN$6.50 and warrants exercisable at a price of CAN$8.50 per share for a total consideration of CAN$4,527,191 with the Caisse de Depot et Placement du Quebec (307,692 shares), Abrar Corp. (85,538 shares) and a group of individual Canadian and overseas investors (303,261 shares). In 1998, all 696,491 of these warrants were exercised for additional proceeds to Nymox of CAN$5,920,174; II-2 98 - May 1998, 231,630 common shares at a price of CAN$8.50 for total proceeds of CAN$1,968,855 with Dr. Stephan Eschmann (76,500 shares) and a group of individual Canadian and overseas investors (155,130 shares). A total of 110,000 warrants were issued as well, exercisable at prices of CAN$8.50 per share (50,000) and CAN$10.00 per share (60,000). These warrants have since expired; - January, 1999, 190,000 common shares at CAN$8.50 per share, for total proceeds of CAN$1,615,000 with Sparks Inc. (75,000 shares), Dr. Stephan Eschmann (70,000 shares), and a group of individual Canadian and overseas investors (45,000 shares). A total of 95,000 warrants were issued as well, exercisable at the price of CAN$10.00 per share. These warrants have since expired; and - September, 1999, 122,000 common shares at CAN$5.00 per share, for total proceeds of CAN$610,000 with Dr. Stephan Eschmann (82,000 shares) and Mr. Michael Braeuel (40,000 shares). Item 16. Exhibits and Financial Statement Schedules
- ------------------ ------------------------------------------------------------------- ---------------------- Exhibit No. Description - ------------------ ------------------------------------------------------------------- ---------------------- 2.0 Common Stock Purchase Agreement between Nymox Pharmaceutical Filed Herewith Corporation and Jaspas Investments Limited dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 2.1 Registration Rights Agreement between Nymox Pharmaceutical Filed Herewith Corporation and Jaspas Investments Limited dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 2.2 Escrow Agreement among Nymox Pharmaceutical Corporation, Jaspas Filed Herewith Investments Limited and Epstein, Becker & Green, P.C. dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 2.3 Stock Purchase Warrant to purchase common shares issued to Jaspas Filed Herewith Investments Limited dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 3.0 Articles of Incorporation of Nymox Pharmaceutical Corporation Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 3.1 Bylaws of Nymox Pharmaceutical Corporation Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 5.1 Opinion of Foley & Lardner Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 5.2 Opinion of Stikeman, Elliott Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 10.1 Employment Agreement between Nymox Pharmaceutical Corporation and Filed Herewith Dr. Judith Fitzpatrick - ------------------ ------------------------------------------------------------------- ---------------------- 23.1 Consent of KPMG Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 23.2 Consent of Foley & Lardner Included as part of Exhibit 5.1 - ------------------ ------------------------------------------------------------------- ---------------------- 23.3 Consent of Stikeman, Elliott Included as part of Exhibit 5.2 - ------------------ ------------------------------------------------------------------- ---------------------- 24.0 Power of Attorney Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 27.0 Financial Data Schedule Filed Herewith 99.0 Press release by Nymox Pharmaceutical Corporation dated Filed Herewith November 12, 1999 announcing the transaction with Jaspas Investments Limited - ------------------ ------------------------------------------------------------------- ----------------------
II-3 99 Item 17. Undertakings The undersigned Registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended ("Securities Act"). (ii) To reflect in the prospectus included in this registration statement any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in this registration statement. 2. To remove from registration by means of a post-effective amendment any of the securities being registered, which remain unsold at the termination of the offering. 3. To file a post-effective amendment to this registration statement to include any financial statements required by Rule 3-19 of Regulation S-X under the Securities Exchange Act of 1934 throughout the offering. 4. For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4 100 5. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under item 14 above, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Montreal, Country of Canada, on February ___________, 2000. Nymox Pharmaceutical Corporation By: /s/ Paul Averback -------------------------------------- Paul Averback, M.D. President and Chief Executive Officer (Principal Executive Officer) By: /s/ Roy Wolvin --------------------------------------- Roy Wolvin Chief Financial Officer and Secretary-Treasurer (Principal Financing Officer and Accounting Officer) II-5 101 EXHIBIT INDEX
- ------------------ ------------------------------------------------------------------- ---------------------- Exhibit No. Description - ------------------ ------------------------------------------------------------------- ---------------------- 2.0 Common Stock Purchase Agreement between Nymox Pharmaceutical Filed Herewith Corporation and Jaspas Investments Limited dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 2.1 Registration Rights Agreement between Nymox Pharmaceutical Filed Herewith Corporation and Jaspas Investments Limited dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 2.2 Escrow Agreement among Nymox Pharmaceutical Corporation, Jaspas Filed Herewith Investments Limited and Epstein, Becker & Green, P.C. dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 2.3 Stock Purchase Warrant to purchase common shares issued to Filed Herewith Jaspas Investments Limited dated November 1, 1999 - ------------------ ------------------------------------------------------------------- ---------------------- 3.0 Articles of Incorporation of Nymox Pharmaceutical Corporation Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 3.1 Bylaws of Nymox Pharmaceutical Corporation Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 5.1 Opinion of Foley & Lardner Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 5.2 Opinion of Stikeman, Elliott Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 10.1 Employment Agreement between Nymox Pharmaceutical Corporation and Filed Herewith Dr. Judith Fitzpatrick - ------------------ ------------------------------------------------------------------- ---------------------- 23.1 Consent of KPMG Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 23.2 Consent of Foley & Lardner Included as part of Exhibit 5.1 - ------------------ ------------------------------------------------------------------- ---------------------- 23.3 Consent of Stikeman, Elliott Included as part of Exhibit 5.2 - ------------------ ------------------------------------------------------------------- ---------------------- 24.0 Power of Attorney Filed Herewith - ------------------ ------------------------------------------------------------------- ---------------------- 27.0 Financial Data Schedule Filed Herewith 99.0 Press release by Nymox Pharmaceutical Corporation dated Filed Herewith November 12, 1999 announcing the transaction with Jaspas Investments Limited - ------------------ ------------------------------------------------------------------- ----------------------
II-6 EX-2.0 2 COMMON STOCK PURCHASE AGREEMENT 1 EXHIBIT 2.0 COMMON STOCK PURCHASE AGREEMENT This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of November 1, 1999 by and between Nymox Pharmaceutical Corporation, a Canada corporation (the "Company"), and Jaspas Investments Limited (the "Purchaser"). The parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1 Certain Definitions. (a) "Average Daily Price" shall be the price based on the VWAP of the Company on the Nasdaq SmallCap Market or, if the Nasdaq SmallCap Market is not the Principal Market, on the Principal Market. (b) "Draw Down" shall have the meaning assigned to such term in Section 6.1(a) hereof. (c) "Draw Down Exercise Date" shall have the meaning assigned to such term in Section 6.1(b) hereof. (d) "Draw Down Pricing Period" shall mean a period of twenty-two (22) consecutive Trading Days preceding a Draw Down Exercise Date. (e) "Effective Date" shall mean the date the Registration Statement of the Company covering the Shares being subscribed for hereby is declared effective. (f) "Material Adverse Effect" shall mean any adverse effect on the business, operations, properties or financial condition of the Company that materially impairs the ability of the Company and its subsidiaries and affiliates, taken as a whole, to perform any of its material obligations under this Agreement or to carry on its obligations, and shall include the loss for any reason to the Company of the services of Dr. Paul Averback. (g) "Principal Market" shall mean initially the Nasdaq SmallCap Market, and shall include the Nasdaq National Market, the American Stock Exchange or the New York Stock Exchange if the Company is listed and trades on such market or exchange, but shall not include the Montreal Stock Exchange. E-1 2 (h) "Registration Statement" shall mean the registration statement under the Securities Act of 1933, as amended, to be filed with the Securities and Exchange Commission for the registration of the Shares pursuant to the Registration Rights Agreement attached hereto as Exhibit A. (i) "Shares" shall mean, collectively, the shares of Common Stock of the Company being subscribed for hereunder and those shares of Common Stock issuable to the Purchaser upon exercise of the Warrants. (j) "Trading Day" shall mean any day on which the Principal Market is open for business. (k) "VWAP" shall mean the daily volume weighted average price of the Company on the Nasdaq SmallCap Market or on any Principal Market as reported by Bloomberg Financial using the AQR function. ARTICLE II PURCHASE AND SALE OF COMMON STOCK Section 2.1 Purchase and Sale of Stock. Subject to the terms and conditions of this Agreement, the Company shall issue and sell to the Purchaser and the Purchaser shall purchase from the Company up to Twelve Million Dollars ($12,000,000) of the Company's Common Stock, no par value per share (the "Common Stock"), based on up to twenty-four (24) Draw Downs of up to Five Hundred Thousand Dollars ($500,000) per Draw Down, or, subject to satisfaction of the conditions set forth in Section 6.1(d), up to Seven Hundred Fifty Thousand Dollars ($750,000) per Draw Down. Section 2.2 The Shares. The Company has authorized and has reserved and covenants to continue to reserve, free of preemptive rights and other similar contractual rights of stockholders, a sufficient number of its authorized but unissued shares of its Common Stock to cover the Shares to be issued in connection with all Draw Downs requested under this Agreement. At no time will the Company request a Draw Down which would result in the issuance of a number of shares of Common Stock pursuant to this Agreement and the Warrants referred to in Section 5.2(f) which exceeds 19.9% of the number of shares of Common Stock issued and outstanding on the Closing Date without obtaining stockholder approval of such excess issuance. Section 2.3 Purchase Price and Closing. The Company agrees to issue and sell to the Purchaser and, in consideration of and in express reliance upon the representation, warranties, covenants, terms and conditions of this Agreement, the Purchaser agrees to purchase that number of the Shares to be issued in connection with each Draw Down. The closing under this Agreement shall take place at the offices of Epstein Becker & Green, P.C., 250 Park Avenue, New York, New York 10177 (the "Closing") at 10:00 a.m. E.S.T. on (i) November 5, 1999, or (ii) such other time and place or on such date as the Purchaser and the Company may agree upon (the "Closing Date"). Each party shall deliver all documents, instruments and writings required to be delivered by such party pursuant to this Agreement at or prior to the Closing. E-2 3 ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.1 Representation and Warranties of the Company. The Company hereby makes the following representations and warranties to the Purchaser: (a) Organization, Good Standing and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the federal laws of Canada and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. The Company does not have any subsidiaries except as set forth in the Company's Form 20-F for the year ended December 31, 1998, including the accompanying financial statements (together with the Company's Form 6-K for the six month period ended June 30, 1999, the "Form 20-F"), or on Schedule 3.1(a) hereto. The Company and each such subsidiary is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary except for any jurisdiction in which the failure to be so qualified will not have a Material Adverse Effect on the Company's financial condition. (b) Authorization, Enforcement. The Company has the requisite corporate power and authority to enter into and perform this Agreement and to issue and sell the Shares in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company or its Board of Directors or stockholders is required. This Agreement has been duly executed and delivered, and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor's rights and remedies or by other equitable principles of general application. (c) Capitalization. The authorized capital stock of the company and the shares thereof currently issued and outstanding are as set forth in the Form 20-F or on Schedule 3.1(c) hereto. All of the outstanding shares of the Company's Common Stock have been duly and validly authorized and are fully-paid and non-assessable. Except as set forth in this Agreement and the Registration Rights Agreement and as set forth in the Form 20-F, or on Schedule 3.1(c) hereto, no shares of Common Stock are entitled to preemptive rights or registration rights and there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company. Furthermore, except as set forth in this Agreement and as set forth in the Form 20-F or on Schedule 3.1(c), there are no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the capital stock of the Company or options, securities or rights convertible into shares of capital stock of the Company. The Company is not a party to any agreement granting registration rights to any person with respect to any of its equity or debt securities. The Company is not a party to, and it has no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the Company. Except as set forth in the Form 20-F or on Schedule 3.1(c) hereto, the offer and sale of all capital stock, convertible securities, rights, warrants, or options of the Company issued prior to the Closing complied with all applicable Canadian, United States Federal and state securities laws, and no stockholder has a right of rescission or damages with respect thereto which would have a Material Adverse Effect on the Company's financial condition or operating results. The Company has made available to the Purchaser true and correct copies of the Company's Articles of Incorporation as in effect on the date hereof (the "Articles"), and the Company's Bylaws as in effect on the date hereof (the "Bylaws"). The Principal Market for the Common Stock in the United States is the Nasdaq SmallCap Market, and the Company has not received any notice from such market questioning or threatening the continued inclusion of the Common Stock on such market. E-3 4 (d) Issuance of Shares. The Shares to be issued under this Agreement have been duly authorized by all necessary corporate action and, when paid for or issued in accordance with the terms hereof, the Shares shall be validly issued and outstanding, fully paid and non-assessable, and the Purchaser shall be entitled to all rights accorded to a holder of Common Stock. (e) No Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated herein do not and will not (i) violate any provision of the Company's Articles or Bylaws, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company is a party, (iii) create or impose a lien, charge or encumbrance on any property of the Company under any agreement or any commitment to which the Company is a party or by which the Company is bound or by which any of its respective properties or assets are bound, or (iv) result in a violation of any Canadian, United States Federal, state, local or other foreign statute, rule, regulation, order, judgment or decree (including any Canadian, United States Federal and state or provincial securities laws and regulations) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries are bound or affected, except, in all cases, for such conflicts, defaults, termination, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. The business of the Company and its subsidiaries is not being conducted in violation of any laws, ordinances or regulations of any governmental entity, except for possible violations which singularly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under any Canadian, United States Federal, state or local or provincial law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement, or issue and sell the Shares in accordance with the terms hereof (other than any filings which may be required to be made by the Company with the Securities and Exchange Commission (the "Commission"), the Montreal Stock Exchange or state or provincial securities administrators subsequent to the Closing and any registration statement which may be filed pursuant hereto); provided that, for purpose of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of the Purchaser herein. E-4 5 (f) Commission Documents, Financial Statements. The Common Stock of the Company is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, except as disclosed in the Form 20-F or on Schedule 3.1(f) hereto, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the foregoing including filings incorporated by reference therein being referred to herein as the "Commission Documents"). The Company has delivered or made available to the Purchaser true and complete copies of the Commission Documents filed with the Commission since December 31, 1997. The Company has not provided to the Purchaser any information which, according to applicable law, rule or regulation, should have been disclosed publicly by the Company but which has not been so disclosed, other than with respect to the transactions contemplated by this Agreement. As of its date, the Form 20-F for the year ended December 31, 1998 and the Form 6-K for the period ended June 30, 1999 complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder applicable to such documents, and, as of its date neither the Form 20-F nor the Form 6-K contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Commission Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("GAAP") applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of the Company and its subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). E-5 6 (g) Subsidiaries. The Form 20-F or Schedule 3.1(g) hereto sets forth each subsidiary of the Company, showing the jurisdiction of its incorporation or organization and showing the percentage of each person's ownership of the outstanding stock or other interests of such subsidiary. For the purposes of this Agreement, "subsidiary" shall mean any corporation or other entity of which at least a majority of the securities or other ownership interests having ordinary voting power (absolutely or contingently) for the election of directors or other persons performing similar functions are at the time owned directly or indirectly by the Company and/or any of its other subsidiaries. All of the outstanding shares of capital stock of each subsidiary have been duly authorized and validly issued, and are fully paid and non-assessable. There are no outstanding preemptive, conversion or other rights, options, warrants or agreements granted or issued by or binding upon any subsidiary for the purchase or acquisition of any shares of capital stock of any subsidiary or any other securities convertible into, exchangeable for or evidencing the rights to subscribe for any shares of such capital stock. Neither the Company nor any subsidiary is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of the capital stock of any subsidiary or any convertible securities, rights, warrants or options of the type described in the preceding sentence. Neither the Company nor any subsidiary is a party to, nor has any knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of any subsidiary. (h) No Material Adverse Effect. Since June 30, 1999, the date through which the most recent semiannual report of the Company on Form 6-K has been prepared and filed with the Commission, the Company has not experienced or suffered any Material Adverse Effect, except as disclosed on Schedule 3.1(h) hereof. (i) No Undisclosed Liabilities. Except as disclosed in the Form 20-F or on Schedule 3.1(i) hereto, neither the Company nor any of its subsidiaries has any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) that would be required to be disclosed on a balance sheet of the Company or any subsidiary (including the notes thereto) in conformity with GAAP which are not disclosed in the Commission Documents, other than those incurred in the ordinary course of the Company's or its subsidiaries respective businesses since such date and which, individually or in the aggregate, do not or would not have a Material Adverse Effect on the Company or its subsidiaries. (j) No Undisclosed Events or Circumstances. No event or circumstance has occurred or exists with respect to the Company or its subsidiaries or their respective businesses, properties, prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. E-6 7 (k) Indebtedness. The Form 20-F or Schedule 3.1(k) hereto sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any subsidiary, or for which the Company or any subsidiary has commitments. For the purposes of this Agreement, "Indebtedness" shall mean (a) any liabilities for borrowed money or amounts owed in excess of $250,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company's balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $250,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any subsidiary is in default with respect to any Indebtedness. (l) Title to Assets. Each of the Company and the subsidiaries has good and marketable title to all of its real and personal property reflected in the Commission Documents, free of any mortgages, pledges, charges, liens, security interests or other encumbrances, except for those indicated in the Form 20-F or on Schedule 3.1(1) hereto or such that do not cause a Material Adverse Effect on the Company's financial condition or operating results. All said leases of the Company and each of its subsidiaries are valid and subsisting and in full force and effect. (m) Actions Pending. There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company or any subsidiary which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or to be taken pursuant hereto or thereto. Except as set forth in the Form 20-F or on Schedule 3.1(m) hereto, there is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened, against or involving the Company, any subsidiary or any of their respective properties or assets. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any subsidiary. (n) Compliance with Law. The business of the Company and the subsidiaries has been and is presently being conducted in accordance with all applicable Canadian, United States Federal, state and local governmental laws, rules, regulations and ordinances, except as set forth in the Form 20-F or on Schedule 3.1(n) hereto or such that do not cause a Material Adverse Effect. The Company and each of its subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals necessary for the conduct of their respective businesses as now being conducted by them unless the failure to possess such franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (o) Taxes. Except as set forth in the Form 20-F or on Schedule 3.1(o) hereto, the Company and each of the subsidiaries has accurately prepared and filed all Canadian, United States Federal, state and other tax returns required by law to be filed by it, has paid or made provisions for the payment of all taxes shown to be due and all additional assessments, and adequate provision have been and are reflected in the financial statements of the Company and the subsidiaries for all current taxes and other charges to which the Company or any subsidiary is subject and which are not currently due and payable. Except as disclosed on Schedule 3.1(o) hereto, none of the Canadian or United States federal income tax returns of the Company or any subsidiary for the years subsequent to December 31, 1994 have been audited by the Internal Revenue Service or Canadian fiscal authorities. The Company has no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal or state) pending or threatened against the Company or any subsidiary for any period, nor of any basis for any such assessment, adjustment or contingency. E-7 8 (p) Certain Fees. Except as set forth on Schedule 3.1(p) hereto, no brokers, finders or financial advisory fees or commissions will be payable by the Company or any subsidiary with respect to the transactions contemplated by this Agreement. (q) Disclosure. To the best of the Company's knowledge, neither this Agreement or the Schedules hereto nor any other documents, certificates or instruments furnished to the Purchaser by or on behalf of the Company or any subsidiary in connection with the transactions contemplated by this Agreement contain any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made herein or therein, in the light of the circumstances under which they were made herein or therein, not misleading. (r) Operation of Business. The Company and each of the subsidiaries owns or possesses all patents, trademarks, service marks, trade names, copyrights, licenses and authorizations as set forth in the Form 20-F and on Schedule 3.1(r) hereto, and all rights with respect to the foregoing, which are necessary for the conduct of its business as now conducted without any conflict with the rights of others. (s) Regulatory Compliance. Except as disclosed in the Form 20-F or on Schedule 3.1(s) hereto, the Company and each of its subsidiaries have obtained all material approvals, authorization, certificates, consents, licenses, orders and permits or other similar authorizations of all governmental authorities, or from any other person, that are required under any Food and Drug or Environmental Laws. The Form 20-F or Schedule 3.1(s) hereto sets forth all material permits, licenses and other authorizations (including approved applications for clinical trials or pre-market approvals) issued under any Food and Drug or Environmental Laws to the Company or its subsidiaries. "Environmental Laws" shall mean all applicable laws and regulations in the United States or Canada relating to the protection of the environment including, without limitation, all requirements pertaining to reporting, licensing, permitting, controlling, investigating or remediating emissions, discharges, releases or threatened releases of hazardous substances, chemical substances, pollutants, contaminants or toxic substances, materials or wastes, whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous substances, chemical substances, pollutants, contaminants or toxic substances, material or wastes, whether solid, liquid or gaseous in nature. "Food and Drug Laws" shall mean all applicable laws and regulations in the United States and Canada relating to the development, testing, manufacturing and distribution of pharmaceutical products. Except as set forth in the Form 20-F or on Schedule 3.1(s) hereto, the Company has all necessary governmental approvals required under all Food and Drug and Environmental Laws and used in its business or in the business of any of its subsidiaries. The Company and each of its subsidiaries are also in compliance with all other limitations, restrictions, conditions, standards, requirements, schedules and timetables required or imposed under all Food and Drug and Environmental Laws. Except for such instances as would not individually or in the aggregate have a Material Adverse Effect, there are no past or present events, conditions, circumstances, incidents, actions or omissions relating to or in any way affecting the Company or its subsidiaries that violate or would violate any Food and Drug or Environmental Law after the Closing or that may give rise to any liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, study or investigation under any Environmental Law or Food and Drug Law. E-8 9 (t) Books and Records. The records and documents of the Company and its subsidiaries accurately reflect in all material respects the information relating to the business of the Company and the subsidiaries, the location and collection of their assets, and the nature of all transactions giving rise to the obligations or accounts receivable of the Company or any subsidiary. (u) Material Agreements. Except as set forth in the Form 20-F, or on Schedule 3.1(u) hereto, neither the Company nor any subsidiary is a party to any written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement, a copy of which would be required to be filed with the Commission as an exhibit to a registration statement on Form F-1 or other applicable form (collectively, "Material Agreements") if the Company or any subsidiary were registering securities under the Securities Act of 1933, as amended (the "Securities Act"). The Company and each of its subsidiaries has in all material respects performed all the obligations required to be performed by them to date under the foregoing agreements, have received no notice of default and, to the best of the Company's knowledge are not in default under any Material Agreement now in effect, the result of which could cause a Material Adverse Effect. No written or oral contract, instruments, agreement, commitment, obligation, plan or arrangement of the Company or of any subsidiary limits or shall limit the payment of dividends on the Company's Common Stock. (v) Transactions with Affiliates. Except as set forth in the Form 20-F or on Schedule 3.1(v) hereto, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other continuing transactions exceeding $100,000 between (a) the Company, any subsidiary or any of their respective customers or suppliers on the one hand, and (b) on the other hand, any officer, employee, consultant or director of the Company, or any of its subsidiaries, or any person owning any capital stock of the Company or any subsidiary or any member of the immediate family of such officer, employee, consultant, director or stockholder or any corporation or other entity controlled by such officer, employee, consultant, director or stockholder, or a member of the immediate family of such officer, employee, consultant, director or stockholder. E-9 10 (w) Securities Act of 1933. The Company has complied and will comply with all applicable Canadian and United States Federal and state securities laws in connection with the offer, issuance and sale of the Shares hereunder. Neither the Company nor anyone acting on its behalf, directly or indirectly, has or will sell, offer to sell or solicit offers to buy the Shares or similar securities to, or solicit offers with respect thereto from, or enter into any preliminary conversations or negotiations relating thereto with, any person (other than the Purchaser), so as to bring the issuance and sale of the Shares and/or the Warrants under the registration provisions of the Securities Act and applicable state securities laws. Neither the Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Shares. (x) Governmental Approvals. Except as set forth in the Form 20-F or on Schedule 3.1(x) hereto, and except for the filing of any notice prior or subsequent to the Closing that may be required under applicable Canadian, United States Federal of state securities laws (which if required, shall be filed on a timely basis), including the filing of a registration statement or statements pursuant to this Agreement, no authorization, consent, approval, license, exemption of, filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, is or will be necessary for, or in connection with, the execution or delivery of the Shares, or for the performance by the Company of its obligations under this Agreement. (y) Employees. Neither the Company nor any subsidiary has any collective bargaining arrangements or agreements covering any of its employees, except as set forth in the Form 20-F or on Schedule 3(y) hereto. Except as set forth in the Form 20-F or on Schedule 3(y) hereto, neither the Company nor any subsidiary is in breach of any employment contract, agreement regarding proprietary information, noncompetition agreement, nonsolicitation agreement, confidentiality agreement, or any other similar contract or restrictive covenant, relating to the right of any officer, employee or consultant to be employed or engaged by the Company or such subsidiary. Since the date of the June 30, 1999 Form 6-K, no officer, consultant or key employee of the Company or any subsidiary whose termination, either individually or in the aggregate, could have a Material Adverse Effect, has terminated or, to the knowledge of the Company, has any present intention of terminating his or her employment or engagement with the Company or any subsidiary. (z) Absence of Certain Developments. Except as provided in Form 20-F or the June 30, 1999 Form 6-K, or in Schedule 3.1(z) hereto, since December 31, 1998 neither the Company nor any subsidiary has: E-10 11 (i) issued any stock, bonds or other corporate securities or any rights, options or warrants with respect thereto; (ii) borrowed any amount or incurred or become subject to any liabilities (absolute or contingent) except current liabilities incurred in the ordinary course of business which are comparable in nature and amount to the current liabilities incurred in the ordinary course of business during the comparable portion of its prior fiscal year, as adjusted to reflect the current nature and volume of the Company's or such subsidiary's business; (iii) discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business; (iv) declared or made any payment or distribution of cash or other property to stockholders with respect to its stock, or purchased or redeemed, or made any agreements so to purchase or redeem, any shares of its capital stock; (v) sold, assigned or transferred any other tangible assets, or canceled any debts or claims, except in the ordinary course of business; (vi) sold, assigned or transferred any patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assets or intellectual property rights, or disclosed any proprietary confidential information to any person except to customers in the ordinary course of business or to the Purchaser or its representatives; (vii) suffered any substantial losses or waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of prospective business; (viii) made any changes in employee compensation except in the ordinary course of business and consistent with past practices; (ix) made capital expenditures or commitments therefor that aggregate in excess of $500,000; (x) entered into any other material transaction, whether or not in the ordinary course of business; (xi) suffered any material damage, destruction or casualty loss, whether or not covered by insurance; (xii) experienced any material problems with labor or management in connection with the terms and conditions of their employment; or (xiii) effected any two or more events of the foregoing kind which in the aggregate would be material to the Company or its subsidiaries. E-11 12 (aa) Use of Proceeds. The proceeds from the sale of the Shares will be used by the Company and its subsidiaries for general corporate purposes. (bb) Acknowledgment Regarding Purchaser's Purchase of Shares. Company acknowledges and agrees that Purchaser is acting solely in the capacity of arm's length purchaser with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges that the Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by the Purchaser or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Purchaser's purchase of the Shares. The Company further represents to the Purchaser that the Company's decision to enter into this Agreement has been based solely on the independent evaluation by the Company and its own representatives and counsel. Section 3.2 Representations and Warranties of the Purchaser. The Purchaser hereby makes the following representations and warranties to the Company: (a) Organization and Standing of the Purchaser. The Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the British Virgin Islands. (b) Authorization and Power. The Purchaser has the requisite power and authority to enter into and perform this Agreement and to purchase the Shares being sold to it hereunder. The execution, delivery and performance of this Agreement by Purchaser and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action. (c) No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Purchaser of the transactions contemplated hereby or relating hereto do not and will not (i) result in a violation of such Purchaser's charter documents or bylaws or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument to which the Purchaser is a party, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to the Purchaser or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a Material Adverse Effect on Purchaser). The Purchaser is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or to purchase the Shares in accordance with the terms hereof, provided that for purposes of the representation made in this sentence, the Purchaser is assuming and relying upon the accuracy of the relevant representations and agreements of the Company herein. E-12 13 (d) Financial Risks. The Purchaser acknowledges that it is able to bear the financial risks associated with an investment in the Shares and that it has been given full access to such records of the Company and the subsidiaries and to the officers of the Company and the subsidiaries as it has deemed necessary or appropriate to conduct its due diligence investigation. The Purchaser is capable of evaluating the risks and merits of an investment in the Shares by virtue of its experience as an investor and its knowledge, experience, and sophistication in financial and business matters and the Purchaser is capable of bearing the entire loss of its investment in the Shares. (e) Accredited Investor. The Purchaser is an "accredited investor" as defined in Regulation D promulgated under the Securities Act. (f) Compliance With Law. The Purchaser's trading and distribution activities with respect to the Shares will be in compliance with all applicable state and Federal securities laws, rules and regulations and the rules and regulations of the Principal Market. The Purchaser understands that the Shares will not be saleable by it on the Montreal Stock Exchange without the express prior approval of that stock exchange, which neither the Company nor the Purchaser is under any obligation to obtain. (g) General. The Purchaser understands that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the suitability of the Purchaser to acquire the Shares. ARTICLE IV COVENANTS The Company covenants with the Purchaser as follows: Section 4.1 Securities Compliance. The Company shall notify The Nasdaq Stock Market, Inc., in accordance with their rules and regulations, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Shares and the Warrants to the Purchaser or subsequent holders. Section 4.2 Registration and Listing. The Company will cause its Common Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange Act, will comply in all respects with its reporting and filing obligations under the Exchange Act, will comply with all requirements related to any registration statement filed pursuant to this Agreement, and will not take any action or file any document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act, except as permitted herein. The Company will take all action necessary to continue the listing or trading of its Common Stock on the Nasdaq SmallCap Market or another Principal Market and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the NASD and The Nasdaq Stock Market. E-13 14 Section 4.3 Registration Statement. The Company shall cause to be filed the Registration Statement, which Registration Statement shall provide for the sale of the Shares to the Purchaser and resale by the Purchaser to the public in accordance with this Agreement. The Company shall cause such Registration Statement to be declared effective by the Commission as expeditiously as practicable. Before the Purchaser shall be obligated to accept a Draw Down request from the Company, the Company shall have caused a sufficient number of shares of Common Stock to be registered to cover the Shares to be issued in connection with such Draw Down. Section 4.4 Escrow Arrangement. The Company and the Purchaser shall enter into an escrow arrangement with Epstein Becker & Green, P.C. (the "Escrow Agent") in the Form of Exhibit B hereto respecting payment against delivery of the Shares. Section 4.5 Compliance with Laws. The Company shall comply, and cause each subsidiary to comply, with all applicable laws, rules, regulations and orders, noncompliance with which could have a Material Adverse Effect. Section 4.6 Keeping of Records and Books of Account. The Company shall keep and cause each subsidiary to keep adequate records and books of account, in which complete entries will be made in accordance with Canadian GAAP consistently applied, reflecting all financial transactions of the Company and its subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation, depletion, obsolescence, amortization, taxes, bad debts and other purposes in connection with its business shall be made. Section 4.7 Amendments. The Company shall not amend or waive any provision the Articles of Incorporation, Bylaws of the Company in any way that would adversely affect the dividend rights or voting rights of the holders of the Shares. Section 4.8 Other Agreements. The Company shall not enter into any agreement the terms of which such agreement would restrict or impair the right to perform of the Company or any subsidiary under this Agreement or the Articles of Incorporation of the Company. E-14 15 Section 4.9 Notice of Certain Events Affecting Registration; Suspension of Right to Request a Draw Down. The Company will immediately notify the Purchaser upon the occurrence of any of the following events in respect of the Registration Statement or related prospectus in respect of the Shares: (i) receipt of any request for additional information from the Commission or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement the response to which would require any amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the Commission or any other Federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) the Company's reasonable determination that a post-effective amendment to the Registration Statement would be appropriate; and the Company will promptly make available to the Purchaser any such supplement or amendment to the related prospectus. The Company shall not deliver to the Purchaser any Draw Down Notice during the continuation of any of the foregoing events. Section 4.10 Consolidation; Merger. The Company shall not, at any time after the date hereof, effect any merger or consolidation of the Company with or into, or a transfer of all or substantially all of the assets of the Company to, another entity (a "Consolidation Event") unless the resulting successor or acquiring entity (if not the Company) assumes by written instrument or by operation of law the obligation to deliver to the Purchaser such shares of stock and/or securities as the Purchaser is entitled to receive pursuant to this Agreement. Section 4.11 Limitation on Future Financing. The Company agrees that, except as set forth below, it will not enter into any sale of its securities for cash at a discount to the current market price until the earlier of (i) eighteen (18) months from the effective date of the Registration Statement or, if later, the date the Company has drawn down at least $8,000,000 or (ii) sixty (60) days after the entire $12,000,000 of Shares has been purchased by Purchaser. The foregoing shall not prevent or limit the Company from engaging in any sale of securities (i) in a registered public offering by the Company which is underwritten by one or more established investment banks, (ii) in one or more private placements where the purchasers do not have registration rights, (iii) pursuant to any presently existing or future employee benefit plan which plan has been or is approved by the Company's stockholders, (iv) pursuant to any compensatory plan for a full-time employee or key consultant, (v) in connection with a strategic partnership or other business transaction, the principal purpose of which is not simply to raise money, or (vi) to which Purchaser gives its written approval. E-15 16 ARTICLE V CONDITIONS TO CLOSING AND DRAW DOWNS Section 5.1 Conditions Precedent to the Obligation of the Company to Sell the Shares. The obligation hereunder of the Company to issue and sell the Shares to the Purchaser is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion. (a) Accuracy of the Purchaser's Representations and Warranties. The representations and warranties of the Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing and as of each Draw Down Exercise Date as though made at that time, except for representations and warranties that speak as of a particular date. (b) Performance by the Purchaser. The Purchaser shall have performed, satisfied and complied in all material respects with all material covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Closing and as of each Draw Down Exercise Date. (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement. Section 5.2 Conditions Precedent to the Obligation of the Purchaser to Close. The obligation hereunder of the Purchaser to enter this Agreement is subject to the satisfaction or waiver, at or before the Closing, of each of the conditions set forth below. These conditions are for the Purchaser's sole benefit and may be waived by the Purchaser at any time in its sole discretion. (a) Accuracy of the Company's Representations and Warranties. Each of the representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time (except for representations and warranties that speak as of a particular date). E-16 17 (b) Performance by the Company. The Company shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing. (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement. (d) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been threatened, against the Purchaser or the Company or any subsidiary, or any of the officers, directors or affiliates of the Company or any subsidiary seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions. (e) Opinion of Counsel, Etc. At the Closing, the Purchaser shall have received an opinion of counsel to the Company, dated the date of Closing, in the form of Exhibit C hereto, and such other certificates and documents as the Purchaser or its counsel shall reasonably require incident to the Closing. (f) Warrants. In lieu of a minimum Draw Down commitment by the Company, the Purchaser shall receive warrants to purchase up to Two Hundred Thousand (200,000) shares of Common Stock (the "Warrants") at the Closing. The Warrants will vest as set forth therein and have a five (5) year term from their date of issuance. The Warrant strike price shall be 110% of the VWAP of the Common Stock on the Closing Date. The Common Stock underlying the Warrants will be registered in the Registration Statement referred to in Section 4.3 hereof. The Warrants shall be in the form of Exhibit D hereto. Section 5.3 Conditions Precedent to the Obligation of the Purchaser to Accept a Draw Down and Purchase the Shares. The obligation hereunder of the Purchaser to accept a Draw Down request and to acquire and pay for the Shares is subject to the satisfaction or waiver, at or before each Draw Down Exercise Date, of each of the conditions set forth below. The conditions are for the Purchaser's sole benefit and may be waived by the Purchaser at any time in its sole discretion. (a) Satisfaction of Conditions to Closing. The Company shall have satisfied, or the Purchaser shall have waived, the conditions set forth in Section 5.2 hereof E-17 18 (b) Effective Registration Statement. The Registration Statement registering the Shares shall have been declared effective by the Commission and shall remain effective on each Draw Down Exercise Date. (c) No Suspension. Trading in the Company's Common Stock shall not have been suspended by the Commission or The Nasdaq Stock Market, Inc. (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to each Draw Down request), and, at any time prior to such request, trading in securities generally as reported by Nasdaq shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by Nasdaq. (d) Material Adverse Effect. No Material Adverse Effect and no Consolidation Event shall have occurred. (e) Opinion of Counsel. The Purchaser shall have received a "down-to-date" letter from the Company's counsel, confirming that there is no change from the counsel's previously delivered opinion, or else specifying with particularity the reason for any change. ARTICLE VI DRAW DOWN TERMS Section 6.1 Draw Down Terms. Subject to the satisfaction of the conditions set forth in this Agreement, the parties agree as follows: (a) The Company, may, in its sole discretion, issue and exercise a draw down (a "Draw Down") during each Draw Down Pricing Period, which Draw Down the Purchaser will be obligated to accept. (b) Only one Draw Down shall be allowed in each Draw Down Pricing Period. The price per share paid by the Purchaser shall be based on the Average Daily Price on each separate Trading Day during the Draw Down Pricing Period. The number of shares of Common Stock purchased by the Purchaser with respect to each Draw Down shall be determined on a daily basis during each Draw Down Pricing Period and settled on the Draw Down Exercise Date, which shall be the first Trading Day following the end of the Draw Down Pricing Period. In connection with each Draw Down Pricing Period, the Company may set an Average Daily Price below which the Company will not sell any Shares (the "Threshold Price"). If the Average Daily Price on any day within the Draw Down Pricing Period is less than the Threshold Price, the Company shall not sell and the Purchaser shall not be obligated to purchase the Shares otherwise to be purchased for such day. (c) There shall be a minimum of five (5) Trading Days between the end of a Draw Down Pricing Period and the next Draw Down Notice. There shall be a maximum of twenty four (24) Draw Downs during the terms of this Agreement. E-18 19 (d) The Company shall have the right to issue and exercise a Draw Down of up to $500,000 of the Company's Common Stock per Draw Down, subject to the limitations set forth immediately below. The minimum Draw Down shall be $150,000 unless otherwise agreed by Purchaser. The maximum dollar amount of each Draw Down during any Draw Down Pricing Period shall be limited pursuant to the following formula: Average Stock Price: Average of the Average Daily Prices for the 22 Trading Days prior to the Draw Down Notice date. Average Trading Volume: Average daily trading volume for the 45 Trading Days prior to the Draw Down Notice date. Maximum dollar amount of each Draw Down: 20% of (Average Stock Price*(Average Trading Volume*22))
Notwithstanding the foregoing, the Company shall be permitted to issue a Draw Down Notice for up to Seven Hundred Fifty Thousand ($750,000) if during the thirty Trading Days ending on the Trading Day immediately prior to the date of such Draw Down Notice the average daily trading volume on the Principal Market has been at least 60,000 shares and the average of the Average Daily Prices is at least $4.50 per share. (e) The number of Shares of Common Stock to be issued in connection with each Draw Down shall be equal to the sum of the quotients (for each trading day within the Draw Down Pricing Period) of (x) 1/22nd of the Draw Down amount and (y) 94% of the Average Daily Price of the Common Stock on each Trading Day within the Draw Down Pricing Period. (f) The Company must inform the Purchaser via facsimile transmission as to the amount of the Draw Down the Company wishes to exercise before the first day of the Draw Down Pricing Period (the "Draw Down Notice"). The Company may set the Threshold Price, if any, prior to each Draw Down request. At no time shall the Purchaser be required to purchase more than the scheduled Draw Down amount for a given Draw Down Pricing Period so that if the Company chooses not to exercise the maximum permitted Draw Down in a given Draw Down Pricing Period the Purchaser is not obligated to purchase more than the scheduled maximum amount in a subsequent Draw Down Pricing Period. (g) On or before three Trading Days after each Draw Down Exercise Date, the Shares purchased by the Purchaser shall be delivered to The Depository Trust Company ("DTC") on the Purchaser's behalf. The Shares shall be credited by the Company to the DTC account designated by the Purchaser upon receipt by the Escrow Agent of payment for the Draw Down into the Escrow Agent's trust account as provided in the Escrow Agreement. The Escrow Agent shall be directed to pay 97% of the purchase price to the Company and 3% to the placement agent. The delivery of the Shares into the Purchaser's DTC account in exchange for payment therefor shall be referred to herein as "Settlement". E-19 20 ARTICLE VII TERMINATION Section 7.1 Termination by Mutual Consent. The term of this Agreement shall be thirty (30) months from the initial Draw Down. This Agreement may be terminated at any time by mutual consent of the parties. Section 7.2 Other Termination. The Purchaser may terminate this Agreement upon one (1) Trading Day's notice if (i) an event resulting in a Material Adverse Effect has occurred, (ii) the Common Stock is de-listed from the Nasdaq SmallCap Market unless such de-listing is in connection with the listing of the Common Stock on the Nasdaq National Market, the New York or American Stock Exchanges, (iii) the Company files for protection from creditors under any applicable law, (iv) the Company completes any financing prohibited by Section 4.11 or (v) the Registration Statement is not effective by April 15, 2000. The Company may terminate this Agreement upon one (1) Trading Day's notice if (i) the Company has completed Draw Downs of at least Eight Million Dollars ($8,000,000) or (ii) the Purchaser shall fail to fund more than one properly noticed Draw Down within three (3) Trading Days of the date payment for such Draw Down is due. Section 7.3 Effect of Termination. In the event of termination by the company or the Purchaser, written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated without further action by either party. If this Agreement is terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become void and of no further force and effect, except for Sections 9.1 and 9.2, and Article VIII herein. Nothing in this Section 7.3 shall be deemed to release the Company or the Purchaser from any liability for any breach under this Agreement, or to impair the rights to the Company and the Purchaser to compel specific performance by the other party of its obligations under this Agreement. ARTICLE VIII INDEMNIFICATION Section 8.1 General Indemnity. The Company agrees to indemnify and hold harmless the Purchaser (and its directors, officers, affiliates, agents, successors and assigns) from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorney's fees, charges and disbursements) incurred by the Purchaser as a result of any inaccuracy in or breach of the representations, warranties or covenants made by the Company herein. The Purchaser agrees to indemnify and hold harmless the Company and its directors, officers, affiliates, agents, successors and assigns from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys fees, charges and disbursements) incurred by the Company as result of any inaccuracy in or breach of the representations, warranties or covenants made by the Purchaser herein. E-20 21 Section 8.2 Indemnification Procedure. Any party entitled to indemnification under this Article VIII (an "indemnified party") will give written notice to the indemnifying party of any matters giving rise to a claim for indemnification; provided, that the failure of any party entitled to indemnification hereunder to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Article VIII except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any action, proceeding or claim is brought against an indemnified party in respect of which indemnification is sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the reasonable judgment of counsel to the indemnified party a conflict of interest between it and the indemnifying party may exist with respect of such action, proceeding or claim, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. In the event that the indemnifying party advises an indemnified party that it will contest such a claim for indemnification hereunder, or fails, within thirty (30) days of receipt of any indemnification notice to notify, in writing, such person of its election to defend, settle or compromise, at its sole cost and expense, any action, proceeding or claim (or discontinues its defense at any time after it commences such defense), then the indemnified party may, at its option, defend, settle or otherwise compromise or pay such action or claim. In any event, unless and until the indemnifying party elects in writing to assume and does so assume the defense of any such claim, proceeding or action, the indemnified party's costs and expenses arising out of the defense, settlement or compromise of any such action, claim or proceeding shall be losses subject to indemnification hereunder. The indemnified party shall cooperate fully with the indemnifying party in connection with any settlement negotiations or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the indemnified party which relates to such action or claim. The indemnifying party shall keep the indemnified party fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. If the indemnifying party elects to defend any such action or claim, then the indemnified party shall be entitled to participate in such defense with counsel of its choice at its sole cost and expense. The indemnifying party shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent. Notwithstanding anything in this Article VIII to the contrary, the indemnifying party shall not, without the indemnified party's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the indemnified party or which does not include, as an unconditional term thereof, the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such claim. The indemnification required by this Article VIII shall be made by periodic payments of the amount thereof during the course of investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred, so long as the indemnified party irrevocably agrees to refund such moneys if it is ultimately determined by a court of competent jurisdiction that such party was not entitled to indemnification. The indemnity agreements contained herein shall be in addition to (a) any cause of action or similar rights of the indemnified party against the indemnifying party or others, and (b) any liabilities the indemnifying party may be subject to. E-21 22 ARTICLE IX MISCELLANEOUS Section 9.1 Fees and Expenses. The Company shall pay all fees and expenses related to the transactions contemplated by this Agreement; provided, that the Company shall pay, at the Closing, all attorneys and escrow fees and expenses (exclusive of disbursements and out-of-pocket expenses) incurred by the Purchaser of $35,000 in connection with the preparation, negotiation, execution and delivery of this Agreement and the transactions contemplated hereunder and which will include all ordinary services of the Escrow Agent in connection with each Draw Down. In addition, the Company shall pay all reasonable fees and expenses incurred by the Purchaser in connection with any amendments, modifications or waivers of this Agreement or the Registration Rights Agreement or incurred in connection with the enforcement of this Agreement and the Registration Rights Agreement, including, without limitation, all reasonable attorneys fees and expenses. The Company shall pay all stamp or other similar taxes and duties levied in connection with issuance of the Shares pursuant hereto. Section 9.2 Specific Enforcement, Consent to Jurisdiction. (a) The Company and the Purchaser acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. (b) Each of the Company and the Purchaser (i) hereby irrevocably submits to the jurisdiction of the United States District Court and other courts of the United States sitting in the Southern District of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Purchaser consents to process being served in any such suit, action or proceeding by mailing a copy thereof by certified mail, return receipt requested, to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law. E-22 23 Section 9.3 Entire Agreement; Amendment. This Agreement, together with the Registration Rights Agreement and the Escrow Agreement contains the entire understanding of the parties with respect to the matters covered hereby and, except as specifically set forth herein, neither the Company nor the Purchaser makes any representations, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by a written instrument signed by the party against whom enforcement of any such amendment or waiver is sought. Section 9.4 Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: If to the Company: Nymox Pharmaceutical Corporation 9900 Cavendish Blvd. St. Laurent, Quebec, Canada H4M 2V2 Telephone Number: (800) 936-9669 Fax: (514) 332-9167 Attention: Dr. Paul Averback, President If to Purchaser: Jaspas Investments Limited c/o Dr. Batliner & Partners Aeulestrasse 74 FI-9490 Vaduz, Liechtenstein Telephone Number: 011-41-75-2360 Fax: 011-41-75-2360-405 Attention: Hans Gassner with copies to: Epstein Becker & Green, P.C. 250 Park Avenue New York, New York 10177 Telephone Number: (212) 351-4924 Fax: (212) 661-0989 Attention: Joseph A. Smith Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other party hereto in accordance herewith. Section 9.5 Waivers. No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter. E-23 24 Section 9.6 Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. Section 9.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. The parties hereto may not amend this Agreement or any rights or obligations hereunder without the prior written consent of the Company and each Purchaser to be affected by the amendment. After Closing, the assignment by a party to this Agreement of any rights hereunder shall not affect the obligations of such party under this Agreement. Section 9.8 No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. Section 9.9 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions. Section 9.10 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart. Execution may be made by delivery by facsimile. Section 9.11 Publicity. Prior to the Closing, neither the Company nor the Purchaser shall issue any press release or otherwise make any public statement or announcement with respect to this Agreement or the transactions contemplated hereby or the existence of this Agreement. After the Closing, the Company may issue a press release or otherwise make a public statement or announcement with respect to this Agreement or the transactions contemplated hereby or the existence of this Agreement; provided, that prior to issuing any such press release, making any such public statement or announcement, the Company obtains the prior consent of the Purchaser, which consent shall not be unreasonably withheld or delayed. Section 9.12 Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible. E-24 25 Section 9.13 Further Assurances. From and after the date of this Agreement, upon the request of the Purchaser or the Company, each of the Company and the Purchaser shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. Section 9.14 Currencies. Unless otherwise specified, all references herein to dollars means United States dollars. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorize officer as of the date first above written. NYMOX PHARMACEUTICAL CORPORATION By: /s/ Paul Averback ------------------------------ Name: Dr. Paul Averback Title: President JASPAS INVESTMENTS LIMITED By: /s/ Hans Gassner ------------------------------ Name: Hans Gassner Title: Authorized Signatory E-25 EX-2.1 3 REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 2.1 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT, dated as of November 1, 1999, between Jaspas Investments Limited ("Purchaser"), and Nymox Pharmaceutical Corporation (the "Company"). WHEREAS, simultaneously with the execution and delivery of this Agreement, pursuant to a Common Stock Purchase Agreement dated the date hereof (the "Purchase Agreement") the Purchaser has committed to purchase up to $12,000,000 worth of the Company's Common Stock (terms not defined herein shall have the meanings ascribed to them in the Purchase Agreement); and WHEREAS, the Company desires to grant to the Purchaser the registration rights set forth herein with respect to the Shares and the Shares issuable upon exercise of the Warrants from time to time (the "Warrant Shares") (hereinafter referred to collectively as the "Stock" or "Securities" of the Company). NOW, THEREFORE, the parties hereto mutually agree as follows: Section 1. Registrable Securities. As used herein the term "Registrable Security" means the Securities until (i) all Securities have been disposed of pursuant to the Registration Statement, (ii) all Securities have been sold under circumstances under which all of the applicable conditions of Rule 144 (or any similar provision then in force) under the Securities Act ("Rule 144") are met, (iii) all Securities have been otherwise transferred to persons who may trade such Securities without restriction under the Securities Act, and the Company has delivered a new certificate or other evidence of ownership for such Securities not bearing a restrictive legend or (iv) such time as, in the opinion of counsel to the Company, all Securities may be sold without any time, volume or manner limitations pursuant to Rule 144(k) (or any similar provision then in effect) under the Securities Act. The term "Registrable Securities" means any and/or all of the securities falling within the foregoing definition of a "Registrable Security." In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Stock, such adjustment shall be deemed to be made in the definition of "Registrable Security" as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to this Agreement. Section 2. Restrictions on Transfer. The Purchaser acknowledges and understands that in the absence of an effective Registration Statement authorizing the resale of the Securities as provided herein, the Securities are "restricted securities" as defined in Rule 144 promulgated under the Act. The Purchaser understands that no disposition or transfer of the Securities may be made by Purchaser in the absence of (i) an opinion of counsel to the Purchaser, in form and substance reasonably satisfactory to the Company, that such transfer may be made without registration under the Securities Act or (ii) such registration. E-26 2 With a view to making available to the Purchaser the benefits of Rule 144 under the Securities Act or any other similar rule or regulation of the Commission that may at any time permit the Purchaser to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to: (a) comply with the provisions of paragraph (c)(1) of Rule 144; and (b) file with the Commission in a timely manner all reports and other documents required to be filed by the Company pursuant to Section 13 or 15(d) under the Exchange Act; and, if at any time it is not required to file such reports but in the past had been required to or did file such reports, it will, upon the request of any Purchaser, make available other information as required by, and so long as necessary to permit sales of, its Registrable Securities pursuant to Rule 144. Section 3. Registration Rights With Respect to the Securities. (a) The Company agrees that it will prepare and file with the Securities and Exchange Commission ("Commission"), within forty-five (45) days after the date hereof, a registration statement (on Form F-3 and/or F-1, or other appropriate form of registration statement) under the Securities Act (the "Registration Statement"), at the sole expense of the Company (except as provided in Section 3(c) hereof), in respect of Purchaser, so as to permit a public offering and resale of the Securities under the Act by Purchaser. The Company shall use its best efforts to cause the Registration Statement to become effective within five (5) days of SEC clearance to request acceleration of effectiveness, and in no event later than February 14, 2000. If the Registration Statement is not declared effective by April 15, 2000 this Agreement and the Purchase Agreement shall terminate and the Company shall pay Purchaser the sum of $50,000 as liquidated damages. The Company will notify Purchaser of the effectiveness of the Registration Statement within one Trading Day of such event. (b) The Company will maintain the Registration Statement or post-effective amendment filed under this Section 3 hereof effective under the Securities Act until the earlier of (i) the date that none of the Securities are or may become issued and outstanding, (ii) the date that all of the Securities have been sold pursuant to the Registration Statement, (iii) the date the holders thereof receive an opinion of counsel to the Company, which counsel shall be reasonably acceptable to the Purchaser, that the Securities may be sold under the provisions of Rule 144 without limitation as to volume, (iv) all Securities have been otherwise transferred to persons who may trade such shares without restriction under the Securities Act, and the Company has delivered a new certificate or other evidence of ownership for such securities not bearing a restrictive legend, or (v) all Securities may be sold without any time, volume or manner limitations pursuant to Rule 144(k) or any similar provision then in effect under the Securities Act in the opinion of counsel to the Company, which counsel shall be reasonably acceptable to the Purchaser (the "Effectiveness Period"). E-27 3 (c) All fees, disbursements and out-of-pocket expenses and costs incurred by the Company in connection with the preparation and filing of the Registration Statement under subparagraph 3(a) and in complying with applicable securities and Blue Sky laws (including, without limitation, all attorneys' fees of the Company) shall be borne by the Company. The Purchaser shall bear the cost of underwriting and/or brokerage discounts, fees and commissions, if any, applicable to the Securities being registered and the fees and expenses of its counsel. The Purchaser and its counsel shall have a reasonable period, not to exceed ten (10) Trading Days, to review the proposed Registration Statement or any amendment thereto, prior to filing with the Commission, and the Company shall provide each Purchaser with copies of any comment letters received from the Commission with respect thereto within two (2) Trading Days of receipt thereof. The Company shall make reasonably available for inspection by Purchaser, any underwriter participating in any disposition pursuant to the Registration Statement, and any attorney, accountant or other agent retained by such Purchaser or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the Company's officers, directors and employees to supply all information reasonably requested by such Purchaser or any such underwriter, attorney, accountant or agent in connection with the Registration Statement, in each case, as is customary for similar due diligence examinations; provided, however, that all records, information and documents that are designated in writing by the Company, in good faith, as confidential, proprietary or containing any material non-public information shall be kept confidential by such Purchaser and any such underwriter, attorney, accountant or agent (pursuant to an appropriate confidentiality agreement in the case of any such Purchaser or agent), unless such disclosure is made pursuant to judicial process in a court proceeding (after first giving the Company an opportunity promptly to seek a protective order or otherwise limit the scope of the information sought to be disclosed) or is required by law, or such records, information or documents become available to the public generally or through a third party not in violation of an accompanying obligation of confidentiality; and provided further that, if the foregoing inspection and information gathering would otherwise disrupt the Company's conduct of its business, such inspection and information gathering shall, to the maximum extent possible, be coordinated on behalf of the Purchaser and the other parties entitled thereto by one firm of counsel designed by and on behalf of the majority in interest of Purchaser and other parties. The Company shall qualify any of the securities for sale in such states as such Purchaser reasonably designates and shall furnish indemnification in the manner provided in Section 6 hereof. However, the Company shall not be required to qualify in any state which will require an escrow or other restriction relating to the Company and/or the sellers, or which will require the Company to qualify to do business in such state or require the Company to file therein any general consent to service of process. The Company at its expense will supply the Purchaser with copies of the Registration Statement and the prospectus included therein and other related documents in such quantities as may be reasonably requested by the Purchaser. (d) The Company shall not be required by this Section 3 to include a Purchaser's Securities in any Registration Statement which is to be filed if, in the opinion of counsel for both the Purchaser and the Company (or, should they not agree, in the opinion of another counsel experienced in securities law matters acceptable to counsel for the Purchaser and the Company) the proposed offering or other transfer as to which such registration is requested is exempt from applicable federal and state securities laws and would result in all purchasers or transferees obtaining securities which are not "restricted securities", as defined in Rule 144 under the Securities Act. E-28 4 (e) If at any time or from time to time after the effective date of the Registration Statement, the Company notifies the Purchaser in writing of the existence of a Potential Material Event (as defined in Section 3(f) below), the Purchaser shall not offer or sell any Securities or engage in any other transaction involving or relating to Securities, from the time of the giving of notice with respect to a Potential Material Event until such Purchaser receives written notice from the Company that such Potential Material Event either has been disclosed to the public or no longer constitutes a Potential Material Event; provided, however, that if the Company so suspends the right to such holders of Securities for more than twenty (20) days in the aggregate during any twelve month period, during the periods the Registration Statement is required to be in effect then the Company must compensate the Purchaser for any decline in market value of the Securities held by Purchaser at the beginning of such suspension through the end of such suspension. If a Potential Material Event shall occur prior to the date the Registration Statement is filed, then the Company's obligation to file the Registration Statement shall be delayed without penalty for not more than thirty (30) days. The Company must give Purchaser notice in writing at least two (2) Trading Days prior to the first day of the blackout period, if lawful to do so. (f) "Potential Material Event" means any of the following: (a) the possession by the Company of material information that is not ripe for disclosure in a registration statement, as determined in good faith by the Chief Executive Officer or the Board of Directors of the Company or that disclosure of such information in the Registration Statement would be detrimental to the business and affairs of the Company; or (b) any material engagement or activity by the Company which would, in the good faith determination of the Chief Executive Officer or the Board of Directors of the Company, be adversely affected by disclosure in a registration statement at such time, which determination shall be accompanied by a good faith determination by the Chief Executive Officer or the Board of Directors of the Company that the Registration Statement would be materially misleading absent the inclusion of such information. Section 4. Cooperation with Company. Purchaser will cooperate with the Company in all respects in connection with this Agreement, including timely supplying all information reasonably requested by the Company (which shall include all information regarding the Purchaser and proposed manner of sale of the Registrable Securities required to be disclosed in the Registration Statement) and executing and returning all documents reasonably requested in connection with the registration and sale of the Registrable Securities and entering into and performing its obligations under any underwriting agreement, if the offering is an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering. The Purchaser shall consent to be named as an underwriter in the Registration Statement. Purchaser acknowledges that in accordance with current Commission policy, the Purchaser will be named as the underwriter of the Securities in the Registration Statement. E-29 5 Section 5. Registration Procedures. If and whenever the Company is required by any of the provisions of this Agreement to effect the registration of any of the Registrable Securities under the Act, the Company shall (except as otherwise provided in this Agreement), as expeditiously as possible, subject to the Purchaser's assistance and cooperation as reasonably required: (a) (i) prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Act with respect to the sale or other disposition of all securities covered by such registration statement whenever the Purchaser of such Registrable Securities shall desire to sell or otherwise dispose of the same (including prospectus supplements with respect to the sales of securities from time to time in connection with a registration statement pursuant to Rule 415 promulgated under the Act) and (ii) take all lawful action such that each of (A) the Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, not misleading and (B) the Prospectus forming part of the Registration Statement, and any amendment or supplement thereto, does not at any time during the Registration Period include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (b) (i) prior to the filing with the Commission of any Registration Statement (including any amendments thereto) and the distribution or delivery of any prospectus (including any supplements thereto), provide draft copies thereof to the Purchasers and reflect in such documents all such comments as the Purchasers (and their counsel) reasonably may propose and (ii) furnish to each Purchaser such numbers of copies of a prospectus including a preliminary prospectus or any amendment or supplement to any prospectus, as applicable, in conformity with the requirements of the Act, and such other documents, as such Purchaser may reasonably request in order to facilitate the public sale or other disposition of the securities owned by such Purchaser; (c) (i) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Purchaser shall reasonably request (subject to the limitations set forth in Section 3(d) above), and do any and all other acts and things which may be necessary or advisable to enable each Purchaser to consummate the public sale or other disposition in such jurisdiction of the securities owned by such Purchaser, except that the Company shall not for any such purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified or to file therein any general consent to service of process; (d) list such Registrable Securities on the Principal Market, and any other exchange on which the Common Stock of the Company is then listed, if the listing of such Registrable Securities is then permitted under the rules of such exchange or the Nasdaq Stock Market; E-30 6 (e) notify each Purchaser at any time when a prospectus relating thereto covered by the Registration Statement is required to be delivered under the Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and the Company shall prepare and file a curative amendment under Section 5(a) as quickly as commercially possible; (f) as promptly as practicable after becoming aware of such event, notify each Purchaser who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the Commission or any state authority of any stop order or other suspension of the effectiveness of the Registration Statement at the earliest possible time and take all lawful action to effect the withdrawal, recession or removal of such stop order or other suspension; (g) cooperate with the Purchasers to facilitate the timely preparation and delivery of certificates for the Registrable Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registrable Securities to be in such denominations or amounts, as the case may be, as the Purchasers reasonably may request and registered in such names as the Purchaser may request; and, within three (3) Trading Days after a Registration Statement which includes Registrable Securities is declared effective by the Commission, deliver and cause legal counsel selected by the Company to deliver to the transfer agent for the Registrable Securities (with copies to the Purchasers whose Registrable Securities are included in such Registration Statement) an appropriate instruction and, to the extent necessary, an opinion of such counsel; (h) take all such other lawful actions reasonably necessary to expedite and facilitate the disposition by the Purchasers of their Registrable Securities in accordance with the intended methods therefor provided in the prospectus which are customary for issuers to perform under the circumstances; (i) in the event of an underwritten offering, promptly include or incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the managers reasonably agree should be included therein and to which the Company does not reasonably object and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after it is notified of the matters to be included or incorporated in such Prospectus supplement or post-effective amendment; and (j) maintain a transfer agent and registrar for its Common Stock. E-31 7 Section 6. Indemnification. (a) The Company agrees to indemnify and hold harmless the Purchaser and each person, if any, who controls the Purchaser within the meaning of the Securities Act ("Distributing Purchaser") against any losses, claims, damages or liabilities, joint or several (which shall, for all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable attorneys' fees), to which the Distributing Purchaser may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, or any related preliminary prospectus, final prospectus or amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, preliminary prospectus, final prospectus or amendment or supplement thereto in reliance upon, and in conformity with, written information furnished to the Company by the Distributing Purchaser, specifically for use in the preparation thereof. This Section 6(a) shall not inure to the benefit of any Distributing Purchaser with respect to any person asserting such loss, claim, damage or liability who purchased the Registrable Securities which are the subject thereof if the Distributing Purchaser failed to send or give (in violation of the Securities Act or the rules and regulations promulgated thereunder) a copy of the prospectus contained in such Registration Statement to such person at or prior to the written confirmation to such person of the sale of such Registrable Securities, where the Distributing Purchaser was obligated to do so under the Securities Act or the rules and regulations promulgated thereunder. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Distributing Purchaser agrees that it will indemnify and hold harmless the Company, and each officer, director of the Company or person, if any, who controls the Company within the meaning of the Securities Act, against any losses, claims, damages or liabilities (which shall, for all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable attorneys' fees) to which the Company or any such officer, director or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, or any related preliminary prospectus, final prospectus or amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, preliminary prospectus, final prospectus or amendment or supplement thereto in reliance upon, and in conformity with, written information furnished to the Company by such Distributing Purchaser, specifically for use in the preparation thereof. This indemnity agreement will be in addition to any liability which the Distributing Purchaser may otherwise have. E-32 8 (c) Promptly after receipt by an indemnified party under this Section 6 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 6, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party except to the extent of actual prejudice demonstrated by the indemnifying party. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, assume the defense thereof, subject to the provisions herein stated and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 6 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, unless the indemnifying party shall not pursue the action to its final conclusion. The indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the indemnifying party if the indemnifying party has assumed the defense of the action with counsel reasonably satisfactory to the indemnified party; provided that if the indemnified party is the Distributing Purchaser, the fees and expenses of such counsel shall be at the expense of the indemnifying party if (i) the employment of such counsel has been specifically authorized in writing by the indemnifying party, or (ii) the named parties to any such action (including any impleaded parties) include both the Distributing Purchaser and the indemnifying party and the Distributing Purchaser shall have been advised by such counsel that there may be one or more legal defenses available to the indemnifying party different from or in conflict with any legal defenses which may be available to the Distributing Purchaser (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the Distributing Purchaser, it being understood, however, that the indemnifying party shall, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable only for the reasonable fees and expenses of one separate firm of attorneys for the Distributing Purchaser, which firm shall be designated in writing by the Distributing Purchaser). No settlement of any action against an indemnified party shall be made without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld. Section 7. Contribution. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) the indemnified party makes a claim for indemnification pursuant to Section 6 hereof but is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that the express provisions of Section 6 hereof provide for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party, then the Company and the applicable Distributing Purchaser shall contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (which shall, for all purposes of this Agreement, include, but not be limited to, all reasonable costs of defense and investigation and all reasonable attorneys' fees), in either such case (after contribution from others) on the basis of relative fault as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the applicable Distributing Purchaser on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Distributing Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 7. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. E-33 9 Notwithstanding any other provision of this Section 7, in no event shall any (i) Purchaser be required to undertake liability to any person under this Section 7 for any amounts in excess of the dollar amount of the net proceeds to be received by such Purchaser from the sale of such Purchaser's Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) pursuant to any Registration Statement under which such Registrable Securities are to be registered under the Securities Act and (ii) underwriter be required to undertake liability to any person hereunder for any amounts in excess of the aggregate discount, commission or other compensation payable to such underwriter with respect to the Registrable Securities underwritten by it and distributed pursuant to the Registration Statement. Section 8. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be delivered as set forth in the Purchase Agreement. Section 9. Assignment. Neither this Agreement nor any rights of the Purchaser or the Company hereunder may be assigned by either party to any other person. Notwithstanding the foregoing, (a) the provisions of this Agreement shall inure to the benefit of, and be enforceable by, any transferee of any of the Common Stock purchased by the Purchaser pursuant to the Purchase Agreement other than through open-market sales, and (b) upon the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed in the case of an assignment to an affiliate of the Purchaser, the Purchaser's interest in this Agreement may be assigned at any time, in whole or in part, to any other person or entity (including any affiliate of the Purchaser) who agrees to be bound hereby. Section 10. Counterparts/Facsimile. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when together shall constitute but one and the same instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other party. In lieu of the original, a facsimile transmission or copy of the original shall be as effective and enforceable as the original. E-34 10 Section 11. Remedies. The remedies provided in this Agreement are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. Section 12. Conflicting Agreements. The Company shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the holders of Registrable Securities in this Agreement or otherwise prevents the Company from complying with all of its obligations hereunder. Section 13. Headings. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Section 14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made in New York by persons domiciled in New York City and without regard to its principles of conflicts of laws. Any action may be brought as set forth in the Purchase Agreement. Any party shall have the right to seek injunctive relief from any court of competent jurisdiction in any case where such relief is available. Section 15. Severability. If any provision of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceablity shall not affect any other provision hereof and this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. Terms not otherwise defined herein shall be defined in accordance with the Agreement. E-35 11 IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed, on the day and year first above written. NYMOX PHARMACEUTICAL CORPORATION By: /s/ Paul Averback --------------------------------- Dr. Paul Averback, President Jaspas Investments Limited By: /s/ Hans Gassner ---------------------------------- Hans Gassner, Authorized Signatory E-36 EX-2.2 4 ESCROW AGREEMENT 1 EXHIBIT 2.2 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Agreement") is made as of November 1, 1999, by and among Nymox Pharmaceutical Corporation, a corporation incorporated under the laws of Canada, (the "Company"), Jaspas Investments Limited ("Purchaser"), and Epstein Becker & Green, P.C., having an address at 250 Park Avenue, New York, NY 10177 (the "Escrow Agent"). Capitalized terms used but not defined herein shall have the meanings set forth in the Common Stock Purchase Agreement referred to in the first recital. WHEREAS, the Purchaser will from time to time as requested by the Company, purchase shares of the Company's Common Stock from the Company as set forth in that certain Common Stock Purchase Agreement (the "Purchase Agreement") dated the date hereof between the Purchaser and the Company, which will be issued as per the terms and conditions contained herein and in the Purchase Agreement; and WHEREAS, the Company and the Purchaser have requested that the Escrow Agent hold in escrow and then distribute the initial documents and certain funds which are conditions precedent to the effectiveness of the Purchase Agreement, and have further requested that upon each exercise of a Draw Down, the Escrow Agent hold the relevant documents and the applicable purchase price pending receipt by Purchaser of certificates representing the securities issuable upon such Draw Down; NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows: ARTICLE I TERMS OF THE ESCROW FOR THE INITIAL CLOSING 1.1 The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the funds and documents which are referenced in Section 5.2 of the Purchase Agreement. 1.2 At the Closing, the Company shall deliver to the Escrow Agent: (i) the original executed Registration Rights Agreement in the form of Exhibit A to the Purchase Agreement; (ii) the original executed opinion of Foley & Lardner, in the form of Exhibit C to the Purchase Agreement; E-37 2 (iii) the sum of $35,000; (iv) the original executed Company counterpart of this Escrow Agreement; (v) the original executed Company counterpart of the Purchase Agreement; and (vi) the certificate representing the Warrants. 1.3 Upon receipt of the foregoing, and receipt of executed counterparts from Purchaser of the Purchase Agreement, the Registration Rights Agreement and this Escrow Agreement, the Escrow Agent shall immediately transfer the sum of thirty-five thousand dollars ($35,000) to Epstein Becker & Green, P.C. ("EB&G"), 250 Park Avenue, New York, New York 10177 for the Purchaser's legal, administrative and escrow costs, and which sum shall also encompass the ordinary services of the Escrow Agent for each closing of a Draw Down, and the Escrow Agent shall then arrange to have the Purchase Agreement, this Escrow Agreement, the Registration Rights Agreement, the Warrants and the opinion of counsel delivered to the appropriate parties. ARTICLE II TERMS OF THE ESCROW FOR EACH DRAW DOWN 2.1 Each time the Company shall send a Draw Down Notice to the Purchaser as provided in the Purchase Agreement, it shall send a copy, by facsimile, to the Escrow Agent. 2.2 Each time the Purchaser shall purchase Shares pursuant to a Draw Down, the Purchaser shall send the applicable purchase price of the Draw Down Shares to the Escrow Agent, which shall advise the Company in writing that it has received the purchase price for such Draw Down Shares. The Company shall promptly, but no later than three (3) Trading Days after receipt of such funding notice from the Escrow Agent, cause its transfer agent to issue the Draw Down Shares to the Purchaser via DTC deposit to the account specified by the Purchaser from time to time. Upon receipt of written confirmation from the transfer agent or from the Purchaser that such Draw Down Shares have been so deposited, the Escrow Agent shall within one (1) Trading Day wire 97% of the purchase price per the written instructions of the Company and the remaining 3% of the purchase price as directed by the placement agent identified to the Escrow Agent by the Purchaser. E-38 3 ARTICLE III MISCELLANEOUS 3.1 No waiver or any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act. 3.2 All notices or other communications required or permitted hereunder shall be in writing, and shall be sent by fax, overnight courier, registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received upon receipt thereof, as set forth in the Purchase Agreement. 3.3 This Escrow Agreement shall be binding upon and shall inure to the benefit of the permitted successors and permitted assigns of the parties hereto. 3.4 This Escrow Agreement is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Escrow Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the parties to be charged or by their respective agents duly authorized in writing or as otherwise expressly permitted herein. 3.5 Whenever required by the context of this Escrow Agreement, the singular shall include the plural and masculine shall include the feminine. This Escrow Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to Articles are to this Escrow Agreement. 3.6 The parties hereto expressly agree that this Escrow Agreement shall be governed by, interpreted under and construed and enforced in accordance with the laws of the State of New York. Except as expressly set forth herein, any action to enforce, arising out of, or relating in any way to, any provisions of this Escrow Agreement shall brought in the Federal or state courts of New York, New York as is more fully set forth in the Purchase Agreement. 3.7 The Escrow Agent's duties hereunder may be altered, amended, modified or revoked only by a writing signed by the Company, Purchaser and the Escrow Agent. 3.8 The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith, excepting only its own gross negligence or willful misconduct, and any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow Agent's attorneys-at-law (other than Escrow Agent itself) shall be conclusive evidence of such good faith. E-39 4 3.9 The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case the Escrow Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 3.10 The Escrow Agent shall not be liable in any respect on account of the identity, authorization or rights of the parties executing or delivering or purporting to execute or deliver the Purchase Agreement or any documents or papers deposited or called for thereunder or hereunder. 3.11 The Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary properly to advise the Escrow Agent in connection with the Escrow Agent's duties hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. THE ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR THE PURCHASER, AND MAY CONTINUE TO ACT AS LEGAL COUNSEL FOR THE PURCHASER, FROM TIME TO TIME, NOTWITHSTANDING ITS DUTIES AS THE ESCROW AGENT HEREUNDER. THE COMPANY CONSENTS TO THE ESCROW AGENT IN SUCH CAPACITY AS LEGAL COUNSEL FOR THE PURCHASER AND WAIVES ANY CLAIM THAT SUCH REPRESENTATION REPRESENTS A CONFLICT OF INTEREST ON THE PART OF THE ESCROW AGENT. THE COMPANY UNDERSTANDS THAT THE PURCHASER AND THE ESCROW AGENT ARE RELYING EXPLICITLY ON THE FOREGOING PROVISION IN ENTERING INTO THIS ESCROW AGREEMENT. 3.12 The Escrow Agent's responsibilities as escrow agent hereunder shall terminate if the Escrow Agent shall resign by written notice to the Company and the Purchaser. In the event of any such resignation, the Purchaser and the Company shall appoint a successor Escrow Agent. 3.13 If the Escrow Agent reasonably requires other or further instruments in connection with this Escrow Agreement or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments. 3.14 It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the documents or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent's sole discretion (1) to retain in the Escrow Agent's possession without liability to anyone all or any part of said documents or the escrow funds until such disputes shall have been settled either by mutual written agreement of the parties concerned by a final order, decree or judgment or a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings or (2) to deliver the escrow funds and any other property and documents held by the Escrow Agent hereunder to a state or Federal court having competent subject matter jurisdiction and located in the State and City of New York in accordance with the applicable procedure therefor. E-40 5 3.15 The Company and the Purchaser agree jointly and severally to indemnify and hold harmless the Escrow Agent and its partners, employees, agents and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to the duties or performance of the Escrow Agent hereunder or the transactions contemplated hereby or by the Purchase Agreement other than any such claim, liability, cost or expense to the extent the same shall have been determined by final, unappealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Escrow Agent. IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set forth above. Nymox Pharmaceutical Corporation By: /s/ Paul Averback ----------------------------------- Dr. Paul Averback, President Jaspas Investments Limited By: /s/ Hans Gassner ----------------------------------- Hans Gassner, Authorized Signatory Escrow Agent Epstein Becker & Green, P.C. By: /s/ Joseph A. Smith ------------------------------------ Joseph A. Smith, Authorized Signatory E-41 EX-2.3 5 STOCK PURCHASE WARRANT 1 EXHIBIT 2.3 NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY OTHER APPLICABLE UNITED STATES OR CANADIAN SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT OR ANY APPLICABLE CANADIAN LAWS. STOCK PURCHASE WARRANT To Purchase 200,000 Shares of Common Stock of Nymox Pharmaceutical Corporation THIS CERTIFIES that, for value received, Jaspas Investments Limited (the "Holder"), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after November 30, 1999 (the "Initial Exercise Date") and on or prior to the close of business on November 30, 2004 (the "Termination Date") but not thereafter, to subscribe for and purchase from Nymox Pharmaceutical Corporation, a corporation incorporated in Canada (the "Company"), up to Two Hundred Thousand (200,000) shares (the "Warrant Shares") of Common Stock, no par value, of the Company (the "Common Stock"). The purchase price of one share of Common Stock (the "Exercise Price") under this Warrant shall be $4.5315. The Exercise Price and the number of shares for which the Warrant is exercisable shall be subject to adjustment as provided herein. In the event of any conflict between the terms of this Warrant and the Common Stock Purchase Agreement dated as of November 1, 1999 pursuant to which this Warrant has been issued (the "Purchase Agreement"), the Purchase Agreement shall control. Capitalized terms used and not otherwise defined herein shall have the meanings set forth for such terms in the Purchase Agreement. E-42 2 1. Title to Warrant. Prior to the Termination Date and subject to compliance with applicable laws, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the holder hereof in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. 2. Authorization of Shares. The Company covenants that all shares of Common Stock which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). 3. Exercise of Warrant. (a) Except as provided in Section 4 herein, exercise of the purchase rights represented by this Warrant may be made at any time or times on or after the Initial Exercise Date, and before the close of business on the Termination Date as to One Hundred Thousand (100,000) shares by the surrender of this Warrant and the Notice of Exercise Form annexed hereto duly executed, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered holder hereof at the address of such holder appearing on the books of the Company) and upon payment of the Exercise Price of the shares thereby purchased by wire transfer or cashier's check drawn on a United States or Canadian bank, the holder of this Warrant shall be entitled to receive a certificate for the number of shares of Common Stock so purchased. Certificates for shares purchased hereunder shall be delivered to the holder hereof within three (3) Trading Days after the date on which this Warrant shall have been exercised as aforesaid. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have been paid. This Warrant may be exercised a to the remaining One Hundred Thousand (100,000) shares if and only if the Company shall not have properly issued Draw Down Notices pursuant to the Purchase Agreement aggregating Seven Million Dollars ($7,000,000) on or before the date which is eighteen months from the Effective Date. (b) If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased shares of Common Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. (c) If no registration statement is effective permitting the resale of the shares of Common Stock issued upon exercise of this Warrant at any time commencing one year after the issuance date hereof, then this Warrant shall also be exercisable by means of a "cashless exercise" in which the holder shall be entitled to receive a certificate for the number of shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: E-43 3 (A) = the average of the high and low trading prices per share of Common Stock on the Trading Day preceding the date of such election on the Nasdaq Stock Market, or if the Common Stock is not traded on the Nasdaq Stock Market, then the principal market in terms of volume, and converted into US Dollars; (B) = the Exercise Price of the Warrants; and (X) = the number of shares issuable upon exercise of the Warrants in accordance with the terms of this Warrant. 4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to the Exercise Price. 5. Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made without charge to the holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the holder of this Warrant or in such name or names as may be directed by the holder of this Warrant; provided, however, that in the event certificates for shares of Common Stock are to be issued in a name other than the name of the holder of this Warrant, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the holder hereof; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. 6. Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant. 7. Transfer, Division and Combination. (a) Subject to compliance with any applicable securities laws, transfer of this Warrant and all rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of shares of Common Stock without having a new Warrant issued. (b) This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by Holder or its agent or attorney. Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. E-44 4 (c) The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this Section 7. (d) The Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants. 8. No Rights as Shareholder until Exercise. This Warrant does not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be deemed to be issued to such holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment. 9. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant certificate or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday. 11. Adjustments of Exercise Price and Number of Warrant Shares. (a) Stock Splits, etc. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so that the holder of this Warrant shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which he would have owned or have been entitled to receive had such Warrant been exercised in advance thereof. Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable hereunder, the holder of this Warrant shall thereafter be entitled to purchase the number of Warrant Shares or other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company resulting from such adjustment. An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. E-45 5 (b) Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Company, then Holder shall have the right thereafter to receive, upon exercise of this Warrant, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments of shares of Common Stock for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 11. For purposes of this Section 11, "common stock of the successor or acquiring corporation" shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this Section 11 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 12. Voluntary Adjustment by the Company. The Company may at any time during the term of this Warrant, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company. E-46 6 13. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of securities or other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as herein provided, the Company shall promptly mail by registered or certified mail, return receipt requested, to the holder of this Warrant notice of such adjustment or adjustments setting forth the number of Warrant Shares (and other securities or property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the computation by which such adjustment was made. Such notice, in the absence of manifest error, shall be conclusive evidence of the correctness of such adjustment. 14. Notice of Corporate Action. If at any time: (a) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or (b) there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation or, (c) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of such cases, the Company shall give to Holder (i) at least 30 days' prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 30 days' prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to Holder at the last address of Holder appearing on the books of the Company and delivered in accordance with Section 16(d). E-47 7 15. Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Principal Market upon which the Common Stock may be listed. The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. Before taking any action which would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 16. Miscellaneous. (a) Jurisdiction. This Warrant shall be binding upon any successors or assigns of the Company. This Warrant shall constitute a contract under the laws of New York, without regard to its conflict of law, principles or rules, and be subject to arbitration pursuant to the terms set forth in the Purchase Agreement. (b) Restrictions. The holder hereof acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws. (c) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder's rights, powers or remedies, notwithstanding all rights hereunder terminate on the Termination Date. If the Company fails to comply with any provision of this Warrant, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. E-48 8 (d) Notices. Any notice, request or other document required or permitted to be given or delivered to the holder hereof by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement. (e) Limitation of Liability. No provision hereof, in the absence of affirmative action by Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of Holder hereof, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. (f) Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. (g) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares. (h) Indemnification. The Company agrees to indemnify and hold harmless Holder from and against any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses and disbursements of any kind which may be imposed upon, incurred by or asserted against Holder in any manner relating to or arising out of any failure by the Company to perform or observe in any material respect any of its covenants, agreements, undertakings or obligations set forth in this Warrant; provided, however, that the Company will not be liable hereunder to the extent that any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses or disbursements are found in a final non-appealable judgment by a court to have resulted from Holder's negligence, bad faith or willful misconduct in its capacity as a stockholder or warrantholder of the Company. (i) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder. E-49 9 (j) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. (k) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized. Dated: November 4, 1999 Nymox Pharmaceutical Corporation By: /s/ Paul Averback ------------------------------ Dr. Paul Averback, President E-50 10 NOTICE OF EXERCISE To: Nymox Pharmaceutical Corporation (1) The undersigned hereby elects to purchase ________ shares of Common Stock (the "Common Stock"), of Nymox Pharmaceutical Corporation pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. (2) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: ------------------------------- (Name) ------------------------------- (Address) ------------------------------- Dated: ------------------------------ Signature E-51 11 ASSIGNMENT FORM (To assign the foregoing warrant, execute this form and supply required information. Do not use this form to exercise the warrant.) FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to ______________________________________________ whose address is _______________________________________________________________. _______________________________________________________________ Dated: __________________, _______ Holder's Signature: ___________________________ Holder's Address: ___________________________ ___________________________ Signature Guaranteed: ___________________________________________ NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in an fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. E-52 EX-3.0 6 ARTICLES OF INCORPORATION 1 EXHIBIT 3.0 Industry Canada Industrie Canada CERTIFICATE OF AMENDMENT CERTIFICAT DE MODIFICATION CANADA BUSINESS LOI CANADIENNE SUR LES CORPORATIONS ACT SOCIETES PAR ACTIONS - ------------------------------------------------------------------------------------------------- NYMOX PHARMACEUTICAL CORPORATION/ 315235-9 CORPORATION PHARMACEUTIQUE NYMOX - -------------------------------------- ------------------------------------ NAME OF CORPORATION / DENOMINATION DE LA SOCIETE CORPORATION NUMBER / NUMERO DE LA SOCIETE I hereby certify that the articles of the above- Je certifie que les status de la societe named corporation were amended susmentionee ont ete modifies: (a) under section 13 of the Canada Business ____ (a) en vertu de l'article 13 de la Loi Canadienne Corporations Act in accordance with the attached sur les societes par actions, conformement a notice; l'avis ci-joint; (b) under section 27 of the Canada Business ____ (b) en vertu del'article 27 de la Loi Canadienne Corporations Act as set out in the attached sur les societes par actions, tel qu'il est indique articles of amendment designating a series dans les clauses modificatrices ci-jointes designant une of shares; serie d'actions; (c) under section 179 of the Canada Business X (c) en vertu de l'article 179 de la Loi Canadienne Corporations Act as set out in the attached sur les societes par actions, tel qu'il est indique articles of amendment; dans les clauses modificatrices ci-jointes; (d) under section 191 of the Canada Business ____ (d) en vertu de l'article 191 de la Loi Canadienne Corporations Act as set out in the attached sur les societes par actions, tel qu'il est indique articles of reorganization. dans les clauses de reorganisation ci-jointes. SEPTEMBER 20, 1995 / LE 20 SEPTEMBRE 1995 Director - Directeur Date of Amendment - Date de modification - -------------------------------------------------------------------------------------------------
Canada IC3411(10-94)(cca2140) E-53 2 Consumer and Corporate Consommation et Affaires Affairs Canada Commerciales Canada
FORM 4 FORMULE 4 Canada Business Loi regissant les societes ARTICLES OF AMENDMENT/CLAUSES MODIFICATRICES Corporations Act par actions de regime federal (SECTION 27 OR 177) (ARTICLES 27 OU 177)
- ---------------------------------------------------------------------------------------------------------- 1 - Name of Corporation / Denomination de la societe 2 - Corporation No. / No de la societe 3152359 CANADA INC. 315235-9 - ---------------------------------------------------------------------------------------------------------- 3 - The articles of the above-named corporation Les statuts de la societe mentionnee ci-dessus sont are amended as follows: modifies de la facon suivante:
Section 1 of the articles of incorporation dated May 30, 1995 is hereby replaced with: NYMOX PHARMACEUTICAL CORPORATION / CORPORATION PHARMACEUTIQUE NYMOX - - Section 3 of the articles of incorporation dated May 30, 1995 is hereby replaced with: An unlimited number of Common shares. - - Section 4 of the articles of incorporation dated May 30, 1995 is hereby replaced with: N/A - - Section 5 of the articles of incorporation dated May 30, 1995 is hereby replaced with: Minimum: 5 Maximum: 15 - - Section 7 of the articles of incorporation dated May 30, 1995 is hereby replaced with: The attached Schedule I. - ---------------------------------------------------------------------------------------------------------------------- Date Signature Title / Titre September 19, 1995 Director - ----------------------------------------------------------------------------------------------------------------------- Pierre Barnard FOR DEPARTMENTAL USE ONLY / A LUSAGE DU MINISTERE SEULEMENT Filed / Deposee SEPTEMBER 25, 1995 - -----------------------------------------------------------------------------------------------------------------------
7530-21-936-1387 (01-93)46 E-54 3 Industry Canada CERTIFICATE OF INCORPORATION CERTIFICAT DE CONSTITUTION Canada Business Loi canadienne sur les societes Corporations Act par actions 3152359 CANADA INC. 315235-9 - ----------------------------------------------------------------------------------------------------------------------- Name of corporation-Denomination de la societe Corporation number-Numero de la societe I hereby certify that the above-named Je certifie que la societe corporation, the articles of susmentionnee, don't les statuts incorporation of which are attached, constitutifs sont joints, a ete was incorporated under the constituee en societe en vertu de la Canada Business Corporations Act. Loi canadienne sur les societes par actions. MAY 30, 1995 / LE 30 MAI 1995 DIRECTOR - DIRECTEUR DATE OF INCORPORATION - DATE DE CONSTITUTION
CANADA E-55 4 FORM 1 - ARTICLES OF INCORPORATION (SECTION 6) FORMULE 1 - STATUTS CONSTITUTIFS (ARTICLE 6) CANADA BUSINESS CORPORATIONS ACT 1.2.1.1 Loi regissant les societes par actions de regime federal - -------------------------------------------------------------------------------- 1 - Name of Corporation / Denomination de la societe 3152359 CANADA INC. - -------------------------------------------------------------------------------- 2 - The place in Canada where the registered office is to be situated Lieu au Canada ou doit etre situe le siege social Metropolitan Region of Montreal, Province of Quebec - -------------------------------------------------------------------------------- 3 - The classes and any maximum number of shares that the corporation is authorized to issue / Categories et tout nombre maximal d'actions que la societe est autorisee a emettre See schedule 1 annexed hereto and forming and integral part of these articles. - -------------------------------------------------------------------------------- 4 - Restrictions if any on share transfers / Restrictions sur le transfert des actions, s'il y a lieu Subject to the provisions of any unanimous shareholders agreement, no transfer of shares in the capital of the Corporation shall be valid unless approved by a resolution of the directors adopted according to the Canada Business Corporations Act and the Corporation's by-laws. However, the effective date of a transfer of shares shall be the date on which such transfer occurred, even though such approval may have been granted after the said transfer. - -------------------------------------------------------------------------------- 5 - Number (or minimum and maximum number) of directors Nombre (ou nombre minimum et maximum) d'administrateurs Minimum: 1 -- Maximum: 9 - -------------------------------------------------------------------------------- 6 - Restrictions if any on business the corporation may carry on Limites imposees quant aux activites commerciales que la societe peut exploiter, s'il y a lieu N/A - -------------------------------------------------------------------------------- 7 - Other provinces if any / Autres dispositions s'il y a lieu See schedule 2 annexed hereto and forming an integral part of these articles. - -------------------------------------------------------------------------------- 7 - Incorporators / Fondateurs - -------------------------------------------------------------------------------- Address (include postal code) Name / Nom Adresse (inclure la code postal) Signature - -------------------------------------------------------------------------------- GIROUX, Diane 1010 Sherbrooke Street West Suite 1100 Montreal, Quebec, H3A 2R7 - -------------------------------------------------------------------------------- FOR DEPARTMENT USE ONLY / A L'USAGE DU FILED / DEPOSEEE MINISTERE SEULEMENT Corporation No. / No. de la societe 315235-9 JUNE 01, 1995 - -------------------------------------------------------------------------------- E-56 5 SCHEDULE 1 THE CORPORATION IS AUTHORIZED TO ISSUE AN UNLIMITED NUMBER OF CLASS "A", CLASS "B", CLASS "C", CLASS "D", CLASS "E" AND CLASS "F" SHARES. THE SAID SHARES SHALL HAVE THE FOLLOWING RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS. 1. VOTING RIGHTS 1.1 The holders of the Class "A", Class "B", Class "C" and Class "E" shares shall be entitled to one (1) vote for each Class "A", Class "B", Class "C" and Class "E" share held by them at all meetings of shareholders. 1.2 Except as hereinafter provided for, the holders of the Class "D" and Class "F" shares shall not be entitled to vote for the election of directors or for any other purpose nor shall they be entitled to attend shareholders' meetings. 2. LIQUIDATION, DISSOLUTION OR OTHER DISTRIBUTION OF ASSETS 2.1 In the event of the voluntary or involuntary liquidation, dissolution, winding-up or other distribution of assets of the Corporation: 2.1.1 the holders of the Class "A" shares shall be entitled to receive the remaining property of the Corporation to the exclusion of the holders of shares of any other class; 2.1.2 the holders of the Class "E" shares shall be entitled to receive for each Class "E" share, pro rata, before any distribution of any part of the assets of the Corporation among the holders of shares of any other class, an amount equal to its Redemption Value and any dividends declared thereon and unpaid and nothing more; 2.1.3 the holders of the Class "D" shares shall be entitled to receive for each Class "D" share, pro rata, before any distribution of any part of the assets of the Corporation among the holders of shares of any other class, except Class "E" shares, an amount equal to its Redemption Value and any dividends declared thereon and unpaid and nothing more; 2.1.4 the holders of the Class "F" shares shall be entitled to receive for each Class "F" share, pro rata, before any distribution of any part of the assets of the Corporation among the holders of Class "A", Class "B" and Class "C" shares an amount equal to its Redemption Value and any dividends declared thereon and unpaid and nothing more; 2.1.5 the holders of the Class "C" shares shall be entitled to receive for each Class "C" share, pro rata, before any distribution of any part of the assets of the Corporation among the holders of Class "A" and Class "B" shares an amount equal to its Redemption Value and any dividends declared thereon and unpaid and nothing more; E-57 6 2.1.6 the holders of the Class "B" shares shall be entitled to receive for each Class "B" share, pro rata, before any distribution of any part of the assets of the Corporation among the holders of Class "A" shares, an amount equal to one hundred percent (100%) of the amount paid up thereon and nothing more. 3. DECLARATION OF DIVIDENDS AND RANKING AS TO DIVIDENDS 3.1 The holders of the Class "B" shares shall not be entitled to any dividend. 3.2 The holders of the Class "A" shares shall be entitled, subject to the following provisions, to receive such dividends as are declared by the directors of the Corporation. 3.3 The holders of the Class "E" shares shall, in each fiscal year of the Corporation, in the discretion of the director or directors, but always in preference and priority to any payment of dividends on shares of any other class for such year, be entitled, out of any or all profits or surplus available for dividends, to non-cumulative dividends at the rate of ten percent (10%) per annum on the Redemption Value of the Class "E" shares held by them. If in any such year, after providing for the dividend on the Class "E" shares, there shall remain any profits or surplus available for dividends, such profits or surplus or any part thereof may, in the discretion of the director or directors, be applied to the dividends on shares of other classes. The holders of the Class "E" shares shall not be entitled to any dividend in excess of the non-cumulative dividends at the rate hereinabove provided for. 3.4 The holders of the Class "D" shares shall, in each fiscal year of the Corporation, in the discretion of the director or directors, but always in preference and priority to any payment of dividends on shares of any other class except Class "E" shares for such year, be entitled, out of any or all profits or surplus available for dividends, to noncumulative dividends at the rate of ten percent (10%) per annum on the Redemption Value of the Class "D" shares held by them. If in any such year, after providing for the dividend on the Class "D" shares, there shall remain any profits or surplus available for dividends, such profits or surplus or any part thereof may, in the discretion of the director or directors, be applied to the dividends on shares of other classes. The holders of the Class "D" shares shall not be entitled to any dividend in excess of the non-cumulative dividends at the rate hereinabove provided for. 3.5 The holders of the Class "F" shares shall, in each fiscal year of the Corporation, in the discretion of the director or directors, but always in preference and priority to any payment of dividends on Class "A" and Class "C" shares for such year, be entitled, out of any or all profits or surplus available for dividends, to non-cumulative dividends at the rate of ten percent (10%) per annum on the Redemption Value of the Class "F" shares held by them. If in any such year, after providing for the dividend on the Class "F" shares, there shall remain any profits or surplus available for dividends, such profits or surplus or any part thereof may, in the discretion of the director or directors, be applied to the dividends on shares of other classes. The holders of the Class "F" shares shall not be entitled to any dividend in excess of the non-cumulative dividends at the rate hereinabove provided for. E-58 7 3.6 The holders of the Class "C" shares shall, in each fiscal year of the Corporation, in the discretion of the director or directors, but always in preference and priority to any payment of dividends on Class "A" shares for such year, be entitled, out of any or all profits or surplus available for dividends, to non-cumulative dividends at the rate of ten percent (10%) per annum on the Redemption Value of the Class "C" shares held by them. If in any such year, after providing for the dividend on the Class "C" shares, there shall remain any profits or surplus available for dividends, such profits or surplus or any part thereof may, in the discretion of the director or directors, be applied to the dividends on shares of other classes. The holders of the Class "C" shares shall not be entitled to any dividend in excess of the non-cumulative dividends at the rate hereinabove provided for. 3.7 Notwithstanding the foregoing, the Corporation shall not be entitled to declare any dividend on shares of any class unless it shall have, after the payment of such dividend, sufficient assets to be legally entitled to acquire all of its Class "D" and Class "E" shares pursuant to section 5 hereof. 4. REDEMPTION OF SHARES AT THE OPTION OF THE CORPORATION 4.1 Subject to the provisions of the Canada Business Corporations Act (the "Act"), the Corporation may redeem, upon giving notice as hereinafter provided, the whole or any part of the Class "C", Class "D", Class "E" and Class "F" shares without preference or distinction, on payment for each share to be redeemed of an amount equal to its Redemption Value together with all dividends declared thereon and unpaid. If only part of the then outstanding Class "C", Class "D", Class "E" and Class "F" shares are, at any time, to be redeemed, the shares so to be redeemed shall be selected in such manner as the director or directors in their discretion shall decide and the director or directors may choose to redeem shares of one class only or of several classes or, if the director or directors so determine, the shares to be redeemed may be redeemed pro rata, disregarding fractions, and the director or directors may make such adjustments as may be necessary to avoid the redemption of fractions of shares. Not less than thirty (30) days' notice in writing of such redemption shall be given by mailing such notice to the registered holders of the shares to be redeemed, specifying the date and place or places of redemption. If notice of any such redemption be given by the Corporation in the manner aforesaid and an amount sufficient to redeem the shares be deposited with any trust company of chartered bank in Canada as specified in the notice on or before the date fixed for redemption, dividends on the shares to be redeemed shall cease after the date so fixed for redemption and the holders thereof shall thereafter have no rights against the Corporation in respect thereof except, upon the surrender of certificates for such shares, to receive payment thereof out of the money so deposited. After the redemption price of such shares has been deposited with any trust company or chartered bank in Canada as aforesaid, notice shall be given to the holders of any share called for redemption who have failed to present certificates representing shares to be redeemed within two (2) months of the date specified for redemption that the money has been so deposited and may be obtained by the holders of the said shares upon presentation of the certificates representing such shares called for redemption at the said trust company or chartered bank. Notwithstanding the foregoing, the Corporation shall not be entitled to redeem shares of any class unless it shall have, after such redemption, sufficient assets to be legally entitled to acquire all of its Class "D" and Class "E" shares pursuant to section 5 hereof. E-59 8 5. REDEMPTION OF SHARES AT THE OPTION OF THE HOLDER 5.1 The holders of the Class "D" and Class "E" shares shall be entitled to require the Corporation to redeem, at any time and from time to time after the date of issue of any Class "D" or Class "E" share upon giving notice as hereinafter provided, all or any number of Class "D" and Class "E" shares registered in the name of such holders in the books of the Corporation for a price equal to their Redemption Value together with all dividends declared thereon and unpaid. 5.2 The holder of the Class "D" and Class "E" shares exercising his option to have the Corporation redeem his shares, shall give notice to the Corporation, which notice shall set out the date on which the Corporation is to redeem the said shares, which date shall not be earlier than ten (10) days nor later than thirty (30) days from the date of the notice and if the holder desires to have less than all of the Class "D" and Class "E" shares registered in his name redeemed by the Corporation, the number of the holder's shares to be redeemed. The date on which the redemption, at the option of the holder, is to occur is hereinafter referred to as the "Optional Redemption Date". 5.3 Upon delivery to the Corporation of a share certificate or of share certificates representing the Class "D" and Class "E" shares which the holder desires to have the Corporation redeem, the Corporation shall, on the Optional Redemption Date, to the extent permitted by the applicable law, redeem such shares by paying to the registered holder thereof the redemption price therefor. 5.4 Upon payment of the redemption price of the Class "D" and Class "E" shares so redeemed by the Corporation, the holders thereof shall cease to be entitled to dividends or to exercise any rights of the holders in respect thereof. 5.5 Should the redemption by the Corporation on any Optional Redemption Date of any Class "D" and Class "E" shares to be redeemed on such date be contrary to applicable law, the Corporation shall not redeem more than the maximum number of Class "D" and Class "E" shares, rounded to the next lower multiple of one, which the Corporation determines it is then permitted to redeem, such redemptions to be made, disregarding fractions of shares and in proportion to the Redemption Value of the Class "D" and Class "E" shares required to be redeemed, and the Corporation shall issue new certificates representing the Class "D" and Class "E" shares not redeemed by the Corporation and the Corporation shall redeem in the manner contemplated by paragraph 4.1 hereof on each redemption date thereafter the maximum number of such Class "D" and Class "E" shares as would then not be contrary to applicable law. 6. PURCHASE OF SHARES 6.1 The Corporation shall have the right, at its option at any time and from time to time, subject to the provisions of the Act, to purchase for cancellation out of surplus or subject to the Act to purchase otherwise, the whole or any part of the Class "C", Class "D", Class "E" and Class "F" shares then outstanding pursuant to tenders received by the Corporation upon request for tenders addressed to all holders of Class "C", Class "D", Class "E" and Class "F" shares at the lowest price at which, in the opinion of the director or directors, such shares are obtainable but not exceeding their Redemption Value together with all dividends declared thereon and unpaid. If, in response to an invitation for tenders, two (2) or more shareholders submit tenders for shares of the same class at the same price and if such tenders are accepted by the Corporation in whole or in part, then, unless the Corporation accepts all such tenders in whole, the Corporation shall accept such tenders in proportion as near as may be to the number of shares of the same class offered in each such tender. The director or directors may choose to purchase for cancellation or purchase otherwise shares of one class only or of several classes. Notwithstanding the foregoing, the Corporation shall not be entitled to purchase for cancellation or purchase otherwise shares of any class, unless it shall have, after such purchase, sufficient assets to be legally entitled to acquire all of its Class "D" and Class "E" shares pursuant to section 5 hereof. E-60 9 7. REDEMPTION VALUE 7.1 For purposes of application of the provisions hereof, the Redemption Value of each Class "C", Class "D", Class "E" and Class "F" share shall be equal to: 7.1.1 in the case of a share issued for a consideration in money, the amount of the consideration for which it was issued; 7.1.2 in the case of a share issued for a consideration other than money, the fair market value of the consideration for which the share was issued. The fair market value of the consideration for which the share was issued shall be determined by the director or directors of the Corporation by resolution upon the issuance of the share ("Determined Redemption Value"). The said determination shall be final and binding provided that, if at any time the Minister of National Revenue or the Minister of Revenue of any province of Canada makes or proposes to make any tax assessment or reassessment based on the assumption that the fair market value of the consideration for which the share was issued was higher or lower than the Determined Redemption Value, then the Redemption Value of such share shall be increased or decreased so that it shall be equal to the amount finally determined to be the fair market value of the consideration for which the share was issued. Any such determination shall be deemed to be a final determination if it is made pursuant to an assessment or reassessment by the Minister of National Revenue or the Minister of Revenue of any province of Canada and no appeal is taken therefrom or if any agreement is reached between any holder of the share and any such taxing authority in settlement of a dispute regarding such determination or if determined by a court or tribunal of competent jurisdiction and no appeal is taken therefrom. 7.2 Should a redemption, either pursuant to section 4 or to section 5 hereof, of Class "C", Class "D", Class "E" or Class "F" shares have occurred or should the Corporation have paid dividends calculated on the Determined Redemption Value of the Class "C", Class "D", Class "E" or Class "F" shares before an increase or decrease in the Redemption Value of the Class "C", Class "D", Class "E" or Class "F" shares resulting from the application of paragraph 7.1.2 hereof, then: 7.2.1 in case of an increase in the Redemption Value of shares of any such class, the Corporation shall pay to any person whose shares were redeemed at the Determined Redemption Value for shares of such class an amount equal to the difference between the increased Redemption Value for shares of such class and the Determined Redemption Value for shares of such class and shall pay to any person who received dividends based on the Determined Redemption Value for shares of such class the difference between such dividends and dividends as calculated on the increased Redemption Value for shares of such class, which amount shall bear interest at the annual prime rate of the Royal Bank of Canada, running from the date of the redemption or the date of the payment of the dividend, whichever may be the case; E-61 10 7.2.2 in case of a decrease in the Redemption Value for shares of such class, the person whose shares were redeemed either pursuant to section 4 or to section 5 hereof at the Determined Redemption Value for shares of such class or who received dividends calculated on the Determined Redemption Value for shares of such class shall reimburse to the Corporation an amount equal to the difference between the Determined Redemption Value for shares of such class and the decreased Redemption Value for shares of such class in the case of a redemption and the difference between the dividend calculated on the Determined Redemption Value for shares of such class and the dividend calculated on the decreased Redemption Value for shares of such class in the case of the payment of a dividend, which amount shall bear interest at the annual prime rate of the Royal Bank of Canada, running from the date of the redemption or the date of the payment of the dividend, whichever may be the case. 8. AMENDMENTS SUBJECT TO CONFIRMATION BY ARTICLES OF AMENDMENT 8.1 Subject to confirmation by articles of amendment and the issue of a Certificate of Amendment, the director or directors of the Corporation may, at any time or times or from time to time, adopt a resolution or resolutions whereby the terms hereof and of the foregoing paragraphs may be altered, amended or repealed or the application thereof suspended in any particular case and changes made in the rights, privileges, restrictions and conditions attached to the shares of the Corporation, but no such resolution shall have any force or effect until after it has been sanctioned by the vote of the holders of at least seventy-five percent (75%) in value of the voting shares then outstanding and of at least seventy-five percent (75 %) in value of shares of each class affected by such amendment, in each case voting separately as a class at a meeting or meetings specially called for such purpose. SCHEDULE 2 CLOSED COMPANY 1. The Corporation will be a "closed company" as defined in the Securities Act (Quebec) and accordingly: 1.1 the free transfer of shares of its capital stock will be restricted according to its articles; 1.2 the distribution to the public of securities issued by the Corporation will be prohibited; and 1.3 the number of its shareholders, exclusive of present or former employees of the Corporation or of a subsidiary, will be limited to fifty (50). E-62 11 APPOINTMENT OF DIRECTORS 2. The directors shall have the right to appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders, the whole in accordance with section 106(8) of the Canada Business Corporations Act. E-63 EX-3.1 7 BYLAWS OF NYMOX PHARMACEUTICAL CORPORATION 1 EXHIBIT 3.1 NYMOX PHARMACEUTICAL CORPORATION LIST OF BY-LAWS No. 1 Relating generally to the conduct of the affairs of the Corporation. May 30, 1995 BY LAW NO. I A by-law relating generally to the transaction of the business and affairs of NYMOX PHARMACEUTICAL CORPORATION CONTENTS SECTION I --- INTERPRETATION SECTION II --- BUSINESS OF THE CORPORATION SECTION III --- BORROWING AND SECURITIES SECTION IV --- DIRECTORS SECTION V --- COMMITTEES SECTION VI --- OFFICERS SECTION VII --- PROTECTION OF DIRECTORS, OFFICERS AND OTHERS SECTION VIII --- SHARES SECTION IX --- MEETINGS OF SHAREHOLDERS SECTION X --- NOTICES SECTION XI --- EFFECTIVE DATE BE IT ENACTED as a by-law of the Corporation as follows: SECTION I INTERPRETATION 1.1 DEFINITIONS - In the by-laws of the Corporation, unless the context otherwise requires: "Act" means the Canada Business Corporations Act and any statute that may be substituted therefor, as from time to time amended; "Appoint" includes "elect" and vice versa; "Articles" means the articles attached to the certificate of incorporation dated May 30, 1995 of the Corporation as from time to time amended or restated; "Board" means the board of directors of the Corporation; "By-laws" means this by-law and all other by-laws of the Corporation from time to time in force and effect; E-64 2 "Meeting of shareholders" means an annual meeting of shareholders and a special meeting of shareholders; "special meeting of shareholders" means a special meeting of all shareholders entitled to vote at an annual meeting of shareholders; "Non-business day" means Saturday, Sunday and any other day that is a holiday as defined in the Interpretation Act (Canada); "Recorded address" means in the case of a shareholder his address as recorded in the securities register; and in the case of joint shareholders the address appearing in the securities register in respect of such joint holding or the first address so appearing if there are more than one; and in the case of a director, officer, auditor or member of a committee of the board, his latest address as recorded in the records of the Corporation; "address" includes in all cases a telex number; "Signing officer" means, in relation to any instrument, any person authorized to sign the same on behalf of the Corporation by subsection 2.4 or by a resolution passed pursuant thereto; "Unanimous shareholder agreement" means a written agreement among all the shareholders of the Corporation; or among all such shareholders and a person who is not a shareholder, that restricts in whole or in part, the powers of the directors to manage the business and affairs of the Corporation, as from time to time amended. Save as aforesaid, words and expressions defined in the Act have the same meanings when used herein; and words importing the singular number include the plural and vice versa; words importing gender include the masculine, feminine and neuter genders; and words importing persons include individuals, bodies corporate, partnerships, trusts and unincorporated organizations. SECTION II BUSINESS OF THE CORPORATION 2.1 REGISTERED OFFICE - Until changed in accordance with the Act, the registered office of the Corporation shall be located in the limits of the judicial district stipulated in the articles and at such address in the same district as the board may choose from time to time. 2.2 CORPORATE SEAL - Unless the Corporation adopts one by resolution of the board, the Corporation shall have no corporate seal. 2.3 FINANCIAL YEAR - Until changed by the boars, the financial year of the Corporation shall end on the last day of July in each year. 2.4 EXECUTION OF INSTRUMENTS - Deeds, transfers, assignments, contracts, obligations, certificates and other instruments may be signed on behalf of the Corporation by the chairman of the board president, managing director, director, secretary or as the directors may otherwise authorize, from time to time, by resolution. Any such authorization may be general or confined to specific instances. In addition, the board may from time to time direct the manner in which the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal to any instrument requiring the same. E-65 3 2.5 DECLARATIONS - The president, any vice-president, treasurer, secretary, secretary-treasurer general manager, chairman of the board, managing-director, or any other officer or person nominated for the purpose by the president or any vice-president are, and any one of them is authorized and empowered to appear and make answer for, on behalf and in the name of the Corporation to all writs, orders and interrogatories upon articulated facts issued out of any court and to declare for, on behalf and in the name of the Corporation any answer to writs of attachment by way of garnishment in which the Corporation is garnishee and to make all affidavits and sworn declarations in connection therewith or in connection with any and all judicial proceedings to which the Corporation is a party and to make demands of abandonment or petitions for winding-up or bankruptcy orders upon any debtor of the Corporation and to attend and vote at all meetings of creditors of the Corporation's debtors and grant proxies in connection therewith, and may generally do all such things in respect thereof as they deem to be in the best interests of the Corporation. 2.6 BANKING ARRANGEMENTS - The banking business of the Corporation including, without limitation, the borrowing of money and the giving of security therefor, shall be transacted with such banks, trust companies or other bodies corporate or organizations as may from time to time be designated by or under the authority of the board. Such banking business or any part thereof shall be transacted under such agreements, instructions and delegations of power as the board may from time to time prescribe or authorize. 2.7 VOTING RIGHTS IN OTHER BODIES CORPORATE - The signing officers of the Corporation may execute and deliver proxies and arrange for the issuance of voting certificates or other evidence of the right to exercise the voting rights attaching to any securities held by the Corporation. Such instruments, certificates or other evidence shall be in favour of such person or persons as may be determined by the officers executing such proxies or arranging for the issuance of voting certificates or such other evidence of the right to exercise such voting rights. In addition, the board may from time to time, direct the manner in which and the person or persons by whom any particular voting rights or class of voting rights may or shall be exercised. SECTION III BORROWING AND SECURITIES 3.1 BORROWING POWER - The Board of Directors has the borrowing powers provided by the Law. E-66 4 SECTION IV DIRECTORS 4.1 NUMBER OF DIRECTORS AND QUORUM - Until changed in accordance with the Act, the board shall consist of not fewer than five (5) and not more than fifteen (15) directors. The directors may from time to time, fix by resolution the quorum for meetings of the board of directors and, until otherwise decided by resolution of the board, and under reserve of any unanimous shareholders agreement, a quorum for all meetings of the board shall consist of a majority of the number of directors then in office. 4.2 QUALIFICATION - No person shall be qualified for election as a director if he is less than eighteen (18) years of age; if he is of unsound mind and has been so found by a court in Canada or elsewhere; if he is not an individual; or if he has the status of a bankrupt. A director need not be a shareholder. A majority of the directors shall be resident Canadians. 4.3 ELECTION, NUMBER AND TERM - The election of directors shall take place at the first meeting of shareholders and at each annual meeting of shareholders and all the directors then in office shall retire but, if qualified, shall be eligible for re-election. The number of directors to be elected at any such meeting shall be the number of directors then in office unless the directors or the shareholders otherwise determine. The election shall be by resolution. If an election of directors is not held at the proper time, the incumbent directors shall continue in office until their successors are elected. 4.4 REMOVAL OF DIRECTORS - Subject to the provisions of the Act and to the provisions of any unanimous shareholders agreement, the shareholders may by ordinary resolution passed at a special meeting remove any director from office and the vacancy created by such removal may be filled at the same meeting, failing which it may be filled by the directors. 4.5 VACATION OF OFFICE - A director ceases to hold office when: he dies; he is removed from office by the shareholders; he ceases to be qualified for election as a director; or his written resignation is sent or delivered to the Corporation, or if a time is specified in such resignation, at the time so specified, whichever is later. 4.6 VACANCIES - Subject to the Act, a quorum of the board may fill a vacancy in the board except a vacancy resulting from an increase in the minimum number of directors or from a failure of the shareholders to elect the minimum number of directors. In the absence of a quorum of the board, or if the vacancy has arisen from a failure of the shareholders to elect the minimum number of directors, the board shall forthwith call a special meeting of shareholders to fill the vacancy. If the board fails to call such meeting or if there are no such directors then in office, any shareholder may call the meeting. 4.7 ACTION BY THE BOARD - Subject to any unanimous shareholder agreement, the board shall manage the business and affairs of the Corporation. Subject to subsection 4.8, the powers of the board may be exercised by resolution passed at a meeting at which a quorum is present or by resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of the board. Where there is a vacancy in the board, the remaining directors may exercise all the powers of the board so long as a quorum remains in office. E-67 5 4.8 MEETINGS BY TELEPHONE - If all the directors consent, a director may participate in a meeting of the board or of a committee of the board by means of such telephone or other communication facilities as permit all persons participating in the meeting to hear each other, and a director participating in such a meeting by such means is deemed to be present at the meeting Any such consent shall be effective whether given before or after the meeting to which it relates and may be given with respect to all meetings of the board and of committees of the board held while a director holds office. 4.9 PLACE OF MEETINGS - Meetings of the board may be held at any place in or outside Canada unless the directors decide otherwise by unanimous resolution. 4.10 CALLING OF MEETINGS - Meetings of the board shall be held from time to time and at such place as the board, the chairman of the board, the managing director, the president or any two directors may determine. 4.11 NOTICE OF MEETING - Notice of the time and place of each meeting of the board shall be given in the manner provided in subsection 10.1 to each director not less than forty-eight (48) hours before the time when the meeting is to be held. A notice of a meeting of directors need not specify the purpose of, or the business to be transacted at the meeting except where the Act requires such purpose or business to be specified, including any proposal to: (a) submit to the shareholders any question or matter requiring approval of the shareholders; (b) fill a vacancy among the directors or in the office of auditor; (e) issue securities; (f) declare dividends; (g) purchase, redeem or otherwise acquire shares of the Corporation; (h) pay a commission for the sale of shares; (g) approve a management proxy circular; (h) approve a take-over bid circular or directors' circular; (i) approve any annual financial statements; or (j) adopt, amend or repeal by-laws. A director may in any manner waive notice of or otherwise consent to a meeting of the board and attendance of a director at a meeting of directors is a waiver of notice of the meeting except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. E-68 6 4.12 FIRST MEETING OF NEW BOARD - Provided a quorum of directors is present, each newly elected board may without notice hold its first meeting immediately following the meeting of shareholders at which such board is elected. 4.13 ADJOURNED MEETING - Notice of an adjourned meeting of the board is not required if the time and place of the adjourned meeting is announced at the original meeting. 4.14 REGULAR MEETINGS - The board may appoint a day or days in any month or months for regular meetings of the board at a place and hour to be named. A copy of any resolution of the board fixing the place and time of such regular meetings shall be sent to each director forthwith after being passed, but no other notice shall be required for any such regular meeting except where the Act requires the purpose thereof or the business to be transacted thereat to be specified. 4.15 CHAIRMAN - The chairman of any meeting of the board shall be the first mentioned of such of the following officers as have been appointed and who is a director and is present at the meeting: chairman of the board, managing director, president, or a vice-president who is a director. If no such officer is present, the directors present shall choose one from amongst them to be chairman. 4.16 VOTES TO GOVERN - At all meetings of the board every question shall be decided by a majority of the votes cast on the question. In the event of a tie the chairman of the meeting shall not be entitled to a second or casting vote. 4.17 CONFLICT OF INTEREST - A director or officer who is a party to, or who is a director or officer of or has a material interest in any person who is a party to, a material contract or proposed material contract with the Corporation, shall disclose the nature and extent of his interest at the time and in the manner provided by the Act. 4.18 REMUNERATION AND EXPENSES - Subject to any unanimous shareholder agreement, the directors shall be paid such remuneration for their services as the board may from time to time determine. The directors shall also be entitled to be reimbursed for travelling and other expenses properly incurred by them in attending meetings of the board or any committee thereof. Nothing herein contained shall preclude any director from serving the Corporation in any other capacity and receiving remuneration therefor. 4.19 ONLY ONE DIRECTOR - Where the Corporation has only one (1) director, that director shall constitute the board and a meeting. SECTION V COMMITTEES 5.1 COMMITTEE OF DIRECTORS - The board may appoint a committee of directors, however designated, and delegate to such committee any of the powers of the board except those which, under the Act, a committee of directors has no authority to exercise. A majority of the members of such committee shall be resident Canadians. 5.2 TRANSACTION OF BUSINESS - Subject to the provisions of subsection 4.8, the powers of a committee of directors may be exercised by a meeting at which a quorum is present or by resolution in writing signed by all the members of such committee who would have been entitled to vote on that resolution at a meeting of the committee. Meetings of such committee may be held at any place in or outside Canada. E-69 7 SECTION VI OFFICERS 6.1 APPOINTMENT - Subject to any unanimous shareholder agreement, the board may, from time to time, appoint a president, one or more vice-presidents (to which title may be added words indicating seniority or function), a secretary, a treasurer and such other officers as the board may determine, including one or more assistants to any of the officers so appointed. The board may specify the duties of and, in accordance with this by-law and subject to the provisions of the Act, delegate to such officers powers to manage the business and affairs of the Corporation. Subject to subsections 6.2 and 6.3, an officer may but need not be a director and one person may hold more than one office. 6.2 CHAIRMAN OF THE BOARD - The board may, from time to time, also appoint a chairman of the board who shall be a director. If appointed, the board may assign to him any of the powers and duties that are by any provisions of this by-law assigned to the managing director or to the president; and he shall, subject to the provisions of the Act, have such other powers and duties as the board may specify. During the absence or disability of the chairman of the board, his duties shall be performed and his powers exercised by the managing director, if any, or by the president. 6.3 MANAGING DIRECTOR - The board may, from time to time, appoint a managing director who shall be a resident Canadian and a director. If appointed, he shall be the chief executive officer and, subject to the authority of the board, shall have general supervision of the business and affairs of the Corporation; and he shall, subject to the provisions of the Act, have such other powers and duties as the board may specify. During the absence or disability of the president, or if no president has been appointed, the managing director shall also have the powers and duties of that office. 6.4 PRESIDENT - If appointed, the president shall be the chief operating officer and, subject to the authority of the board, shall have general supervision of the business of the Corporation; and he shall have such other powers and duties as the board may specify. During the absence or disability of the managing director, or if no managing director has been appointed, the president shall also have the powers and duties of that office. 6.5 VICE-PRESIDENT - A vice-president shall have such powers and duties as the board or the chief executive officer may specify. 6.6 SECRETARY - The secretary shall attend and be the secretary of all meetings of the board shareholders and committees of the board and shall enter or cause to be entered in records kept for that purpose minutes of all proceedings thereat; he shall give or cause to be given, as and when instructed, all notices to shareholders, directors, officers, auditors and members of committees of the board; he shall be the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Corporation and of all books, papers, records, documents and instruments belonging to the Corporation, except when some other officer or agent has been appointed for that purpose; and he shall have such other powers and duties as the board or the chief executive officer may specify. E-70 8 6.7 TREASURER - The treasurer shall keep proper accounting records in compliance with the Act and shall be responsible for the deposit of money, the safekeeping of securities and the disbursement of the funds of the Corporation; he shall render to the board whenever required an account of all his transactions as treasurer and of the financial position of the Corporation; and he shall have such other powers and duties as the board or the chief executive officer may specify. 6.8 POWERS AND DUTIES OF OTHER OFFICERS - The powers and duties of all other officers shall be such as the terms of their engagement call for or as the board or the chief executive officer may specify. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the board or the chief executive officer otherwise directs. 6.9 VARIATION OF POWERS AND DUTIES - The board may, from time to time and subject to the provisions of the Act, vary, add to or limit the powers and duties of any officer. 6.10 TERM OF OFFICE - The board, in its discretion, but subject to the provisions of any unanimous shareholders agreement may remove any officer of the Corporation, without prejudice to such officer's rights under any employment contract. Otherwise each officer appointed by the board shall hold office until his successor is appointed. 6.11 TERMS OF EMPLOYMENT AND REMUNERATION - The terms of employment and the remuneration of officers appointed by the board shall be settled by it from time to time. 6.12 CONFLICT OF INTEREST - An officer shall disclose his interest in any material contract or proposed material contract with the Corporation in accordance with subsection 4.18. 6.13 AGENTS AND ATTORNEYS - The board shall have power from time to time to appoint agents or attorneys for the Corporation in or outside Canada with such powers of management or otherwise including the power to sub-delegate as may be thought fit. 6.14 FIDELITY BONDS - The board may require such officers, employees and agents of the Corporation as the board deems advisable to furnish bonds for the faithful discharge of their powers and duties, in such form and with such surety as the board may from time to time determine. SECTION VII PROTECTION OF DIRECTORS, OFFICERS AND OTHERS 7.1 LIMITATION OF LIABILITY - No director or officer shall be liable for the acts, receipts, neglects or defaults, of any other director or officer or employee, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired for or on behalf of the Corporation or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Corporation shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortuous acts of any person with whom any of the moneys, securities or effects of the Corporation shall be deposited, or for any loss occasioned by any error of judgment or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto, unless the same are occasioned by his own willful neglect or default; provided that nothing herein shall relieve any director or officer from the duty to act in accordance with the Act and the regulations thereunder or from liability for any breach thereof. E-71 9 7.2 INDEMNITY - Subject to the limitations contained in the Act, the Corporation shall indemnify a director or officer, a former director or officer, or a person who acts or acted at the Corporation's request as a director or officer of a body corporate of which the Corporation is or was a shareholder or creditor (or a person who undertakes or has undertaken any liability on behalf of the Corporation or any such body corporate) and his heirs and legal representatives against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Corporation or such body corporate, if (a) he acted honestly and in good faith with a view to the best interests of the Corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful. SECTION VIII SHARES 8.1 ALLOTMENT - The board may, from time to time, allot or grant options to purchase the whole or any part of the authorized and unissued shares of the Corporation at such times and to such persons and for such consideration as the board shall determine, provided that no share shall be issued until it is fully paid as prescribed by the Act. 8.2 COMMISSIONS - The board may from time to time authorize the Corporation to pay a commission to any person in consideration of his purchasing or agreeing to purchase shares of the Corporation, whether from the Corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares. 8.3 REGISTRATION OF TRANSFER - Subject to the provisions of the Act, no transfer of shares shall be registered in a securities register except upon presentation of the certificate representing such shares with a transfer endorsed thereon or delivery therewith duly executed by the registered holder or by his attorney or successor duly appointed, together with such reasonable assurance or evidence of signature, identification and authority to transfer as the board may from time to time prescribe, upon payment of all applicable taxes and any fees prescribed by the board, upon compliance with such restrictions on transfer as are authorized by the articles and the by-laws. E-72 10 8.4 LIEN FOR INDEBTEDNESS - If the articles provide that the Corporation shall have a lien on shares registered in the name of a shareholder indebted to the Corporation, such lien may be enforced, subject to any other provision of the articles and to any unanimous shareholder agreement, by the sale of the shares thereby affected or by any other action, suit, remedy or proceeding authorized or permitted by law or by equity and, pending such enforcement, may refuse to register a transfer of the whole or any part of such shares. 8.5 SHARE CERTIFICATES - Every holder of one or more shares of the Corporation shall be entitled, at his option, to a share certificate, or to a non-transferable written acknowledgment of his right to obtain a share certificate, stating the number and class or series of shares held by him as shown on the securities register. Share certificates and acknowledgments of a shareholder's right to a share certificate, respectively, shall be in such form as the board shall from time to time approve. Any share certificate shall be signed in accordance with subsection 2.4 and need not be under the corporate seal; unless the board otherwise determines that certificates representing shares in respect of which a transfer agent and/or registrar has been appointed shall not be valid unless countersigned by or on behalf of such transfer agent and/or registrar. The signature of one of the signing officers or, in the case of share certificates which are not valid unless countersigned by or on behalf of a transfer agent and/or registrar, the signatures of both signing officers, may be printed or mechanically reproduced in facsimile upon share certificates and every such facsimile signature shall for all purposes be deemed to be the signature of the officer whose signature it reproduces and shall be binding upon the Corporation. 8.6 REPLACEMENT OF SHARE CERTIFICATES - The board or any officer or agent designated by the board may in its or his discretion direct the issue of a new share certificate in lieu of and upon cancellation of a share certificate that has been mutilated or in substitution for a share certificate claimed to have been lost, destroyed or wrongfully taken, upon payment of such fee, not exceeding three dollars, upon providing for the indemnification and reimbursement of expenses and upon proof of loss of said share certificate as the board may from time to time prescribe, whether generally or in any particular case. 8.7 JOINT SHAREHOLDERS - If two or more persons are registered as joint holders of any share the Corporation shall not be bound to issue more than one certificate in respect thereof, and delivery of such certificate to one of such persons shall be sufficient delivery to all of them. Any one of such persons may give effectual receipts for the certificate issued in respect thereof or for any dividend, bonus, return of capital or other money payable or warrant issuable in respect of such share. 8.8 DECEASED SHAREHOLDERS - In the event of the death of a holder, or of one of the joint holders, of any share, the Corporation shall not be required to make any entry in the securities register in respect thereof or to make payment of any dividends thereon except upon production of all such documents as may be required by law and upon compliance with the reasonable requirements of the Corporation and its transfer agents. E-73 11 SECTION IX MEETINGS OF SHAREHOLDERS 9.1 ANNUAL MEETINGS - The annual meeting of shareholders shall be held at such time in each year and, subject to subsection 9.3, at such place as the board, the chairman of the board, the managing director or the president may from time to time determine, for the purpose of considering the financial statements and reports required by the Act to be placed before the annual meeting, electing directors, appointing auditors and for the transaction of such other business as may properly be brought before the meeting. 9.2 SPECIAL MEETINGS - The board, the chairman of the board, the managing director or the president shall have power to call a special meeting of shareholders at any time. The president or the secretary of the Corporation shall, upon receipt of a request signed by the registered holders of at least fifty-one percent (51%) of the issued voting shares of the Corporation, call a special general meeting of the shareholders of the Corporation by way of written notice given in accordance with subsection 10.1 accompanied by an agenda specifying the date, time, place and purpose of the meeting, to be addressed to each shareholder having the right to vote at such meeting. 9.3 PLACE OF MEETINGS - Meetings of shareholders shall be held at the registered office of the Corporation or elsewhere in the municipality in which the registered office is situated or, if the board shall so determine, at some other place in Canada or, if all the shareholders entitled to vote at the meeting so agree, at some place outside Canada. 9.4 NOTICE OF MEETINGS - Notice of the time and place of each meeting of shareholders shall be given in the manner provided in subsection 10.1 not less than twenty-one (21) nor more than fifty (50) days before the date of the meeting to each director, to the auditor and to each shareholder who at the close of business on the record date for notice, if any, is entered in the securities register as the holder of one or more shares carrying the right to vote at the meeting. Notice of a meeting of shareholders called for any purpose other than consideration of the financial statements and auditor's report, election of directors and re-appointment of the incumbent auditor shall state the nature of such business in sufficient detail to permit the shareholder to form a reasoned judgement thereon and shall state the text of any special resolution to be submitted to the meeting. A shareholder and any other person entitled to attend a meeting of shareholders may in any manner waive notice of or otherwise consent to a meeting of shareholders, and attendance of any such person at a meeting of shareholders is a waiver of notice of the meeting, except when he attends a meeting for the express purpose of objecting to the trans-action of any business on the grounds that the meeting is not lawfully called. 9.5 MEETINGS WITHOUT NOTICE - A meeting of shareholders may be held without notice at any time and place permitted by the Act (a) if all the shareholders entitled to vote thereat are present in person or represented by proxy or if those not present or represented by proxy waive notice of or otherwise consent to such meeting being held, and (b) if the auditors and the directors are present or waive notice of or otherwise consent to such meeting being held. At such a meeting any business may be transacted which the Corporation at a meeting of shareholders may transact If the meeting is held at a place outside Canada, shareholders not present or represented by proxy but who have waived notice of or otherwise consented to such meeting, shall also be deemed to have consented to the meeting being held at such place. E-74 12 9.6 CHAIRMAN, SECRETARY AND SCRUTINEERS - The chairman of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: president, managing director, chairman of the board, or a vice-president who is a shareholder. If no such officer is present within fifteen (15) minutes from the time fixed for holding the meeting, the persons present and entitled to vote shall choose one from amongst them to be chairman. If the secretary of the Corporation is absent, the chairman shall appoint some person, who need not be a shareholder, to act as secretary of the meeting. If desired, one or more scrutineers, who need not be shareholders, may be appointed by a resolution or by the chairman with the consent of those present at the meeting. 9.7 PERSONS ENTITLED TO BE PRESENT - The only persons entitled to be present at a meeting of shareholders shall be those entitled to vote thereat, the directors and auditors of the Corporation and others who, although not entitled to vote, are entitled to or required under any provision of the Act or the articles or by-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with the consent of those present at the meeting. 9.8 QUORUM - A quorum for the transaction of business at any meeting of shareholders shall be composed of those persons who are shareholders entitled to vote thereat or a duly appointed proxyholder for an absent shareholder so entitled, and together holding or representing by proxy more than thirty three and one third percent (33 1/3%) of the outstanding shares of the Corporation entitled to vote at the meeting. If a quorum is present at the opening of any meeting of shareholders, the shareholders present or represented by proxy may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of shareholders, the shareholders present or represented by proxy may adjourn the meeting to a fixed time and place but may not transact any other business. 9.9 RIGHT TO VOTE - Every person shall be entitled to vote at the meeting who at the time is entered in the securities register as the holder of one or more shares carrying the right to vote at such meeting. 9.10 PROXIES - Every shareholder entitled to vote at a meeting of shareholders may appoint a proxyholder, or one or more alternate proxyholders, who need not be shareholders, to attend and act at the meeting in the manner and to the extent authorized and with the authority conferred by the proxy. A proxy shall be in writing executed by the shareholder or his attorney and shall conform with the requirements of the Act. 9.11 TIME FOR DEPOSIT OF PROXIES - The board may specify in a notice calling a meeting of shareholders a time, preceding the time of such meeting by not more than forty-eight (48) hours excluding non-business days, before which time proxies to be used at such meaning must be deposited. A proxy shall be acted upon only if, prior to the time so specified, it shall have been deposited with the Corporation or an agent thereof specified in such notice or, if no such time is specified in such notice, unless it has been received by the secretary of the Corporation or by the chairman of the meeting or any adjournment thereof prior to the time of voting. E-75 13 9.12 JOINT SHAREHOLDERS - If two or more persons hold shares jointly, any one of them present in person or represented by proxy at a meeting of shareholders may, in the absence of the other or others, vote the shares; but if two or more of those persons are present, in person or by proxy vote, they shall vote as one on the shares jointly held by them. 9.13 VOTES TO GOVERN - At any meeting of shareholders every question shall, unless otherwise required by the articles or by-laws or by-law, be determined by the majority of the votes cast on the question. In the event of a tie, either upon a show of hands or upon a poll, the chairman of the meeting shall not be entitled to a second or casting vote. 9.14 SHOW OF HANDS - Subject to the provisions of the Act, any question at a meeting of shareholders shall be decided by a show of hands unless a ballot thereon is required or demanded as hereinafter provided. Upon a show of hands every person who is present and entitled to vote shall have one vote. Whenever a vote by show of hands shall have been taken upon a question unless a ballot thereon is so required or demanded, a declaration by the chairman of the meeting that the vote upon the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the shareholders upon the said question. 9.15 BALLOTS - On any question proposed for consideration at a meeting of shareholders, and whether or not a show of hands has been taken thereon, any shareholder or proxyholder entitled to vote at the meeting may require or demand a ballot. A ballot so required or demanded shall be taken in such manner as the chairman shall direct. A requirement or demand for a ballot may be withdrawn at any time prior to the taking of the ballot. If a ballot is taken each person present shall be entitled, in respect of the shares which he is entitled to vote, to that number of votes provided by the Act or the articles, and the result of the ballot so taken shall be the decision of the shareholders upon the said question. 9.16 ADJOURNMENT - If a meeting of shareholders is adjourned for less than thirty (30) days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty (30) days or more, notice of the adjourned meeting shall be given as for an original meeting. 9.17 RESOLUTION IN WRITING - A resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders unless a written statement with respect to the subject matter of the resolution is submitted by a director or the auditors in accordance with the Act. E-76 14 9.18 ONLY ONE SHAREHOLDER - Where the Corporation has only one shareholder or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting. SECTION X NOTICES 10.1 METHOD OF GIVING NOTICES - Any notice (which term includes any communication or document) to be given (which term includes sent, delivered or served) pursuant to the Act, the regulations thereunder, the articles, the by-laws or otherwise to a shareholder, director, officer auditor or member of a committee of the board shall be sufficiently given if delivered personally to the person to whom it is to be given or if delivered to his recorded address or if mailed to him at his recorded address by prepaid ordinary or air mail or if sent to him at his recorded address by any means of prepaid transmitted or recorded communication. A notice so delivered shall be deemed to have been given when it is delivered personally or to the recorded address as aforesaid a notice so mailed shall be deemed to have been given when deposited in a post office or public letter box; and a notice so sent by any means of transmitted or recorded communication shall be deemed to have been given when dispatched or delivered to the appropriate communication company or agency or its representative for dispatch. The secretary may change or cause to be changed the recorded address of any shareholder, director, officer, auditor or member of a committee of the board in accordance with any information believed by him to be reliable. 10.2 NOTICE TO JOINT SHAREHOLDERS - If two or more persons are registered as joint holders of any share, any notice shall be addressed to all of such joint holders but notice to one of such persons shall be sufficient notice to all of them. 10.3 COMPUTATION OF TIME - In computing the date when notice must be given under any provision requiring a specified number of days' notice of any meeting or other event, the date of giving the notice shall be excluded and the date of the meeting or other event shall be included. 10.4 UNDELIVERED NOTICES - If any notice given to a shareholder pursuant to subsection 10.1 is returned on three (3) consecutive occasions because he cannot be found, the Corporation shall not be required to give any further notices to such shareholder until he informs the Corporation in writing of his new address. 10.5 OMISSIONS AND ERRORS - The accidental omission to give any notice to any shareholder director, officer, auditor or member of a committee of the board or the non-receipt of any notice by any such person or any error in any notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise founded thereon. 10.6 PERSONS ENTITLED BY DEATH OR OPERATION OF LAW - Every person who, by operation of law, transfer, death of a shareholder or any other means whatsoever, shall become entitled to any share shall be bound by every notice in respect of such share which shall have been duly given to the shareholder from whom he derives his title to such share prior to his name and address being entered on the securities register (whether such notice was given before or after the happening of the event upon which he became so entitled) and prior to his furnishing to the Corporation the proof of authority or evidence of his entitlement prescribed by the Act. E-77 15 10.7 WAIVER OF NOTICE- Any shareholder (or his duly appointed proxyholder), director, officer auditor or member of a committee of the boars may at any time waive notice, or waive or abridge the time for any notice, required to be given to him under any provision of this Act, the regulations thereunder, the articles, the by-laws or otherwise and such waiver or abridgement shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of shareholders or of the board which may be given in any manner. SECTION XI EFFECTIVE DATE 1.19 EFFECTIVE DATE - This by-law shall come into force when confirmed by the shareholders in accordance with the Act. ENACTED by the board the 30th day of May 1995. The President, The Secretary. /s/ Paul Averback /s/ Pierre Barnard - ----------------------------- ------------------------------ CONFIRMED by the shareholders in accordance with the Act the 30th day of May 1995. The Secretary, /s/ Pierre Barnard ------------------------------ E-78 EX-5.1 8 OPINION OF FOLEY & LARDNER 1 EXHIBITS 5.1 & 23.2 FOLEY & LARDNER ATTORNEYS AT LAW CHICAGO FIRSTAR CENTER SACRAMENTO DENVER 777 EAST WISCONSIN AVENUE SAN DIEGO JACKSONVILLE MILWAUKEE, WISCONSIN 53202-5367 SAN FRANCISCO LOS ANGELES TELEPHONE (414) 271-2400 TALLAHASSEE MADISON FACSIMILE (414) 297-4900 TAMPA MILWAUKEE WASHINGTON, D.C. ORLANDO WEST PALM BEACH WRITER'S DIRECT LINE 414/297-5658 EMAIL ADDRESS CLIENT/MATTER NUMBER Mmarotta@foleylaw.com 018792/0101 February 10, 2000
Nymox Pharmaceutical Corporation 9900 Cavendish Boulevard, Suite 306 St. Laurent, QC, Canada H4M 2V2 Re: Registration Statement on Form F-3 Under the Securities Act of 1933 Ladies and Gentlemen: We have acted as United States counsel for Nymox Pharmaceutical Corporation, a Canadian corporation ("Nymox"), in connection with the preparation and filing of a Registration Statement with the Securities and Exchange Commission on Form F-3 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), registering the resale of shares of Nymox common shares (the "Shares") which may be issued to Jaspas Investment Ltd. ("Jaspas") pursuant to (i) a Common Stock Purchase Agreement (the "Agreement") between Nymox and Jaspas, and (ii) a warrant held by Jaspas to purchase 200,000 Shares. We have examined copies of the Agreement together with the exhibits and schedules attached as a part thereof (collectively, the "Transaction Documents"). We have examined such certificates of public officials, such certificates of officers of Nymox and originals or copies certified to our satisfaction as being true copies of such other documents as we have deemed relevant and necessary as a basis for this opinion, including the Certificate of Incorporation and Bylaws of Nymox, resolutions of its Board of Directors and such other documents as we have deemed relevant and necessary as a basis for our opinions hereinafter set forth. We have relied, to the extent we deem such reliance proper, upon such certificates of public officials and of officers of Nymox, and other statements and information furnished by officers of Nymox with respect to the accuracy of material factual matters contained therein. Specifically, we have assumed the accuracy, validity and completeness of all corporate records and information made available to us by Nymox, and upon which we rely. E-79 2 In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such latter documents. As to matters of fact relevant to this opinion, we have relied solely upon and assume the current accuracy of (a) our examination of the documents referred to above, and our actual knowledge, (b) the information obtained from public officials and records included in the documents referred to above, and (c) the representations and warranties of Nymox and Jaspas set forth in the Agreement and the Transaction Documents, and any certificates delivered to us by officers of Nymox or Jaspas. We have made no independent investigations or other attempts to verify the accuracy of any such information, representations or warranties, or to determine the existence or non-existence of any other factual matters; however, we are not aware of any facts that would lead us to believe that any of the opinions expressed herein are not accurate. In rendering the opinions contained herein, we have relied on the opinions of Stikeman Elliot on all matters which are affected by Canadian laws or regulations, a copy of which opinion is attached hereto. All of the above assumptions and reliances are made with your consent. Based on the foregoing and subject to the qualifications hereinafter set forth, it is our opinion that all necessary corporate action has been taken by Nymox to validly issue the Shares. Upon their issuance in accordance with the terms of the Agreement and Transaction Documents, the Shares will be validly issued and outstanding and fully paid and non-assessable shares in the share capital of Nymox. The opinions set forth herein are given as of the date hereof and we disclaim any obligation or undertaking to advise you of any change in law or fact affecting or bearing upon the opinions rendered herein occurring after the date hereof which may come, or be brought, to our attention. We consent to the filing of this opinion letter as an exhibit to the Registration Statement and the reference to this firm under the caption "Certain Legal Matters" in the Prospectus included as part of the Registration Statement. Yours truly, FOLEY & LARDNER By /s/ Foley & Lardner ----------------------------------------- E-80 EX-5.2 9 OPINION OF STIKMAN, ELLIOTT 1 EXHIBIT 5.2 & 23.3 STIKEMAN, ELLIOTT BARRISTERS & SOLLICITORS 40TH FLOOR 1155 RENE-LEVESQUE BOUL. W. MONTREAL, QC, CANADA H3B 3V2 Foley & Lardner 777 East Wisconsin Avenue February 10, 2000 Milwaukee, Wisconsin 53202 USA Re: Nymox Pharmaceutical Corporation ----------------------------------------- Dear Sirs: We have acted as Canadian counsel to Nymox Pharmaceutical Corporation, a Canadian corporation ("NYMOX"), in connection with (i) the Common Stock Purchase Agreement dated as of November 1, 1999 (the "PURCHASE AGREEMENT") by and between Nymox and Jaspas Investments Limited ("JASPAS") pursuant to which Jaspas (a) has committed to purchase common shares of Nymox (the "SHARES"), over a period of time, upon periodic requests of Nymox, and (b) has been granted a warrant (the "WARRANT") to purchase up to 200,000 common shares (the "WARRANT SHARES") of Nymox (collectively, the "TRANSACTION"), and (ii) the preparation of a registration statement on Form F-1 (the "REGISTRATION STATEMENT") under the Securities Act of 1933, as amended (the "SECURITIES ACT"), registering the resale of the Shares and the Warrant Shares to be issued to Jaspas in the Transaction. For the purposes of rendering this opinion, we have reviewed the following agreements and instruments: (a) the Purchase Agreement; (b) the Warrant; (c) the Registration Rights Agreement between Jaspas and Nymox, dated as of November 1, 1999 (the "REGISTRATION RIGHTS AGREEMENT"); and (d) the Escrow Agreement between Jaspas, Nymox and Epstein Becker & Green, P.C., dated as of November 1, 1999 (the "ESCROW AGREEMENT") (the Purchase Agreement, the Warrant, the Registration Rights Agreement and the Escrow Agreement are referred to collectively herein as the "TRANSACTION DOCUMENTS"). We have not participated in the preparation of the Transaction Documents, nor of any other document or agreement related thereto. We have examined originals or copies, certified or otherwise identified to our satisfaction, of the Transaction Documents, the certificate and articles of incorporation of Nymox, the by-laws of Nymox, resolutions of the directors of Nymox relating to the Transaction Documents and related documents and such public and corporate records, certificates, instruments and other documents and papers, and have made such examinations and investigations of law as we have considered necessary or desirable as a basis for the opinions hereinafter expressed. E-81 2 For the purposes of the opinion as to the existence of the Purchaser set forth in paragraph 1 hereunder, we have relied exclusively upon a Certificate of Compliance dated February 8, 2000 provided pursuant to subsection 263(2) of the Canada Business Corporations Act (the "CBCA"), a copy of which certificate is attached hereto as Schedule "A". For the purposes of certain questions of fact material to our opinion, and without any independent investigation or inquiry, we have relied upon a certificate of an officer of Nymox as at the date hereof, an original copy of which is attached hereto as Schedule "B" (the "OFFICER'S CERTIFICATE"). In our examination of such documents, we have assumed: the genuineness of all signatures on, and the authenticity and completeness of, all documents submitted to us, and the conformity to authentic original documents of all documents submitted to us as certified, photostat or similarly reproduced copies of such original documents; the completeness, truth and accuracy of all facts set forth in the official public records, certificates and documents supplied by public officials or otherwise conveyed to us by public officials; the completeness, truth and accuracy of all facts set forth in the certificates supplied by the respective officers and directors of Nymox including, without limitation, the Officer's Certificate; that each of the parties or signatories to any of the Transaction Documents, other than Nymox, has the necessary power, capacity and authority to execute, deliver and perform each such Transaction Document, has taken all necessary actions to authorize the execution, delivery and performance by it of each such Transaction Document and has duly executed and delivered each such Transaction Document and that each such Transaction Document constitutes legal, valid and binding obligations of such parties enforceable against them in accordance with its terms. Our opinions expressed herein are limited to matters governed by the laws of the Province of Quebec and the laws of Canada applicable therein. We do not express any opinion with respect to the laws of any other jurisdiction. Based and relying upon the foregoing, and subject to the qualification set forth below, we are of the opinion that: 1. Nymox is a corporation incorporated and validly existing under the CBCA and has all necessary corporate power and authority to enter into the Transaction Documents and to perform its obligations thereunder; E-82 3 2. The execution and delivery of and performance by Nymox of the Transaction Documents and the consummation of the transactions contemplated thereby, including the issuance of the Shares and the Warrant Shares, have been authorized by all necessary corporate action on the part of Nymox, and no further consent or authorization of Nymox or its Board of Directors or shareholders is required. 3. Each of the Transaction Documents has been duly executed and, to the extent delivery thereof is a matter of the laws of Quebec, delivered by Nymox. 4. The Shares and Warrant Shares to be issued pursuant to the Purchase Agreement or the Warrant, when the amounts payable under the Purchase Agreement or the Warrant, as the case may be, is paid and such Shares or Warrant Shares, as the case may be, are issued as provided therein, will be validly issued by Nymox and will be outstanding as fully paid and non-assessable common share in the share capital of Nymox. 5. All necessary documents have been filed, all requisite proceedings have been taken and all approvals, permits, exemptions, consents, orders and authorizations of the Quebec Securities Commission required under the securities laws of Quebec have been obtained in order to qualify the Shares and the Warrant Shares for issuance to Jaspas. The opinions set forth above are qualified as follows: (a) the Quebec Securities Commission has the authority under the Securities Act (Quebec) to deny the benefit of an exemption otherwise provided in that Act where it considers it necessary to do so to protect investors; and (b) the report required to be filed with the Quebec Securities Commission with respect to the Purchase Agreement was filed beyond the ten-day period of time within which such report was required to be filed, and we express no opinion as to the effect of such delay on the availability of the statutory exemption relied upon. This opinion is solely for the benefit of the addressee and not for the benefit of any other person. It is rendered solely in connection with the transactions to which it relates. It may not be quoted, in whole or in part, or otherwise referred to or used for any purpose without our prior written consent. The addressee may annex this opinion to its own opinion to be delivered in connection with the completion of the arrangements contemplated in the Purchase Agreement. We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm name under the caption "Certain Legal Matters" in the prospectus included as part of the Registration Statement. Yours truly, /s/ Stikeman Elliott -------------------- Stikeman Elliott E-83 4 ================================================================================ NYMOX PHARMACEUTICAL CORPORATION OFFICER'S CERTIFICATE ================================================================================ TO: Stikeman, Elliott The undersigned, Roy Wolvin, secretary of Nymox Pharmaceutical Corporation (the "CORPORATION"), hereby certifies as follows, intending that the same may be relied upon by you in connection with your opinion of even date herewith without further inquiry: 1. The minute books and corporate records of the Corporation relating to the proceedings of the shareholders and directors of the Corporation, which have been made available to Stikeman, Elliott, are the original minute books and corporate records of the Corporation and contain all minutes of meetings, resolutions, by-laws and proceedings of the shareholders and directors of the Corporation to the date hereof and there have been no meetings, resolutions, by-laws or proceedings authorized or passed by the shareholders or directors of the Corporation to the date hereof not reflected in such minute books and corporate records. Such minute books and corporate records are true, complete and correct in all respects and there are no changes, additions or alterations necessary to be made thereto to make such books and corporate records true, complete and correct. The Corporation is not insolvent and has not been dissolved and no acts or proceedings have been taken by or against the Corporation or are pending in connection with, and the Corporation has not received notice in respect of and is not in the course of or contemplating, any liquidation, winding-up, dissolution, bankruptcy, insolvency or reorganization. The Corporation has not taken any steps to terminate its existence, amalgamate, to continue in any other jurisdiction or to change its corporate existence in any way. The Corporation has not received any notice of any proceedings to cancel its certificate of incorporation or otherwise to terminate its existence. The Corporation has not received any notice or other communication from any person or governmental authority indicating that there exists any situation which, unless remedied, could result in the termination of its existence. IN WITNESS WHEREOF, I have signed this 10th day of February, 2000. /s/ Roy Wolvin -------------------------------------------- Roy Wolvin E-84 EX-10.1 10 EMPLOYMENT AGREEMENT 1 EXHIBIT 10.1 EMPLOYMENT AGREEMENT THIS AGREEMENT made as of the 8th day of January, 2000 by and between Nymox Pharmaceutical Corporation, a Canadian corporation (the "Company"), and Judith Fitzpatrick (the "Executive"). W I T N E S S E T H : WHEREAS the Company is this day purchasing from the Executive all of her common shares of Serex, Inc., a New Jersey corporation, and thereby acquiring a controlling interest in Serex, Inc.; WHEREAS, the Executive is this day receiving 187,951 shares of the common stock of the Company and a warrant to purchase 115,662 shares of the common stock of the Company as consideration for the purchase of her Serex common stock, subject to the terms of the Share Purchase Agreement between the Company and the Executive; WHEREAS, the Company wishes to retain the services of the Executive as a Vice-President of the Company to continue her development work on the Company's 7C Gold test and to continue to direct the scientific endeavors of Serex Inc. and to act as President of Serex, Inc.; WHEREAS, the Executive wishes to provide her services to the Company on the terms set out below in this Employment Agreement and acknowledges that the Company is reasonably relying upon Executive's execution of this Agreement as part of its decision to purchase her shares of Serex, Inc.; NOW, THEREFORE, in consideration of the covenants and agreements of the parties herein contained, and as an inducement to the Company to close the purchase of the Executive's shares of Serex, Inc., the Company and the Executive agree as follows: 1. Employment. The Company hereby employs the Executive and the Executive hereby accepts appointment as Vice-President of the Company. The Executive agrees to remain in the employment of the Company on the terms and conditions set out below in this Agreement. Paragraph 6 of this Agreement sets out the Executive's duties. 2. Term. The initial term of this Employment Agreement shall be four years, commencing on January 8th, 2000 and expiring on January 8th, 2004 unless terminated earlier pursuant to paragraph 13 below or extended as provided in this paragraph. At the end of the initial term of the Agreement (or the end of the term of any automatic renewal of this Agreement), the term of this Agreement shall be automatically renewed for an additional term of one year unless either the Company or the Executive gives the other party notice at least 30 days prior to the end of the term of its/her intention not to renew the Agreement. E-86 2 3. Salary and Other Compensation. (a) As part of the Executive's compensation for services to be rendered under this Agreement, the Company shall pay the Executive an annual salary at the rate of One Hundred and Twenty-five Thousand Dollars ($125,000) (as adjusted upward at the discretion of the Compensation Committee of the Board of Directors of the Company from time to time) payable, as nearly as practicable, in equal semimonthly installments. The Company agrees to review the Executive's salary at least once in every year during the term of this Agreement and adjust it upward accordingly in order to ensure that the Executive's salary is always more than any other employee under her supervision. The Executive's salary, once increased, shall not be later reduced. (b) [Confidential] 4. Options. Further as part of the Executive's compensation, the Company shall grant the Executive an option to purchase at any time or from time to time after their vesting dates and on or before December 23, 2009 (the "Expiry Date") 40,000 common shares of the Company in accordance with the Nymox Share Option Plan, a copy of which is attached to and forms part of this Agreement as Schedule A (the "Option Plan"). At the Expiry Date, the option hereby granted and still in effect shall expire and terminate and be of no further force or effect as to the optioned shares in respect of which the option hereby granted has not been exercised. The exercise price of each option shall be $3.70 per share, vesting as follows: - 10,000 on the first anniversary of the date of this Employment Agreement; - 10,000 on the second anniversary of the date of this Employment Agreement; - 10,000 on the third anniversary of the date of this Employment Agreement; and - 10,000 on the fourth anniversary of the date of this Employment Agreement. In the event that options granted to other executives or officers of the Company are repriced or otherwise adjusted downward in the future, the options granted the Executive under this Agreement shall be afforded the same proportionate treatment on a percentage-wise basis as those treated most favorably pursuant to the repricing or other adjustments. E-87 3 5. Additional Benefits and Reimbursement of Expenses. 5.1 The Company shall provide the following additional benefits to the Executive during the term of this Agreement: (i) 20 working days of paid vacation per year (non-cumulative); (ii) up to 10 paid sick days per year (non-cumulative); (iii) 5 paid days per year for attendance at scientific conferences, professional, industry and investigator conferences and studies of the Executive's choice (non-cumulative); (iv) health care benefits, either in the form of a $5,000 health care allowance or coverage under the Company's health care plan; and (v) such other benefits as the Company's Board shall lawfully adopt and approve for the Executive. 5.2 The Company shall pay or reimburse the Executive for all reasonable expenses actually incurred by the Executive or paid by the Executive during the term of the Agreement for expenses in connection with Company business, including: - travel expenses, including air and rail fare and, when overnight stay is required, hotel accommodation and personal meals (meals not exceeding $50.00 per day); - telephone expenses, including long distance calls from personal phones; and - office supplies including stationary but not including office equipment. Expense claims are payable upon timely presentation of an expense report together with such bills, expenses, statements, vouchers or such other supporting information as the Company may reasonably require. 6. Duties. The duties of the Executive shall include: - participation on a scientific basis with the Company's research and development work on drugs for the prevention, treatment and delay of onset of Alzheimer's disease, antimicrobial treatments and other therapeutic and scientific projects; - continuing scientific, regulatory and commercial development of the Company's 7C Gold Test for Alzheimer's disease; - scientific, regulatory and commercial development of the diagnostic projects of the Company and of Serex, Inc.; - acting as the President of Serex, Inc.; E-88 4 - directing the scientific endeavors of Serex, Inc.; - the management and development of Serex, Inc.'s ongoing research, product development, intellectual property, and technologies, including its proprietary SARA technology and its ongoing development of diagnostic assays; and - attendance at scientific conferences, professional, industry and investigator conferences and studies at the Company's request. The Executive shall report to the President and C.E.O. of the Company and/or a delegate to be appointed from time to time. The President and C.E.O. of the Company may change these duties or assign new duties to the Executive from time to time not inconsistent with the terms of this Agreement. The Executive agrees to devote her full business time and effort to the diligent and faithful performance of such duties. 7. Place of Employment. The Executive's principal place of employment shall be in the Maywood, New Jersey area and the Company shall not relocate her principal place of employment to a new location more than 50 miles from Maywood, New Jersey without her prior written approval. The Executive acknowledges that her duties may require her traveling to Montreal on a regular basis and other traveling as a necessary incident of her employment. 8. Confidentiality. (a) The Executive acknowledges that during the course of her employment with the Company she may have access to confidential and/or proprietary technical, scientific or business information relating to the Company's research, product development, marketing, sales, services, financing and other business or scientifically related activities and that it is vital to the Company to preserve the confidentiality of its technical, scientific and business affairs and to maintain its intellectual properties, including trade secrets, know-how and patent applications. (b) Accordingly, as a condition of the Executive's employment, the Company and the Executive agree as follows: 1. In this Agreement, "Confidential Information" means any information or data relating to, arising out of or in connection with the research, technology, intellectual property, know-how, improvements, equipment, formulas, designs, processes, product development, packaging, products, distribution methods, marketing, customers, financing and/or business of the Company; E-89 5 "Company" means Nymox Pharmaceutical Corporation, Nymox Corporation and their affiliates and includes their successors and assigns; "Company Property" means any property owned by the Company and includes (but not limited to): (a) laboratory equipment, reagents, samples, specimens, standards, protocols, requisitions, test results, drug candidates, cell lines, notebooks, papers, presentations and publications; (b) computer equipment, software, files, disks, cd-roms, tapes and all other electronic means of storing data or information; (c) cell phones, pagers, answering machines, telephones and other telecommunication equipment; (d) office equipment, office furniture, correspondence, memoranda, reports, faxes, files, books, magazines, stationary, messages, e-mails, contracts, patent documents, customer lists, supplier lists, brochures, marketing material, displays, posters and financial reports; and (e) credit cards, calling cards, bank cards, checkbooks, deposit books, bank statements, financial records, canceled checks, receipts, invoices, bills and accounts. 2. The Executive shall keep in strict confidence any Confidential Information and not to disclose it to any third party except as required by law, regulation, legal process or other governmental authority, as permitted this Agreement or with the written consent of the President of the Company. 3. The Executive shall take reasonable care to maintain all Confidential Information in confidence and shall inform the Company immediately upon the discovery of any unauthorized disclosure or use of any Confidential Information and take reasonable steps to prevent any further unauthorized disclosure or use. 4. The Executive shall not use any Confidential Information for any purpose other than the performance of her/his duties as an officer and employee of the Company. 5. Confidential Information shall not include information which: (i) was known to the Executive prior to receipt by Executive of any Confidential Information hereunder; (ii) was known or has become known to the public through lawful disclosure; or (iii) a third party having the right to disclose such information has lawfully disclosed such information to the Executive. E-90 6 9. Company Property. (a) The Executive acknowledges and agrees that the Company owns completely (i) all past, present and future patent rights, trade secrets, know-how, copyright, trademarks, industrial designs and other intellectual property rights related to, connected with or arising out of scientific projects undertaken at or by the Company or funded by the Company, and (ii) all patent, trademark, copyright, trade secrets, know-how, industrial designs and other intellectual property rights to scientific, research and development or commercial work already performed, being performed or to be performed in the future by the Executive in the course of or during the term of her employment at the Company. (b) The Executive agrees to disclose to the Company in a timely manner any inventions, discoveries, ideas or research findings, whether patentable or not, relating to, connected with or arising out of her employment with the Company or related to or connected with the business of the Company. (c) The Executive agrees to assign completely, exclusively and irrevocably to the Company any and all rights, interests and title to any inventions, discoveries and ideas, whether patentable or not, (including, but not limited to patent applications, patents, trademarks, copyrights, trade secrets, know-how, industrial designs, or other intellectual property rights) relating to, connected with or arising out of her employment with the Company, related to or connected with the business of the Company, or conceived or reduced to practice at any time during the Executive's employment by the Company, either solely or jointly with others and whether or not developed on the Executive's own time or with the resources of the Company. The Executive further agrees, on request by the Company, both during the term of her employment with the Company and after termination of that employment, to execute any patent, copyright, trademark, trade secrets or industrial design assignments, applications, certificates, affidavits or other documents that, in the opinion of the Company, are necessary to secure, protect or evidence the Company's intellectual property rights. (d) The Executive shall not use Company Property except for the purposes of employment or as otherwise authorized. The Executive shall not, except for the Company's use, copy or duplicate any Company documents or property, nor remove them from the Company's facilities, nor use any information concerning them except for the Company's benefit, either during her employment or thereafter. (e) Upon the Company's request or upon termination of employment, the Executive shall promptly: (i) return any Confidential Information that is in tangible form and any Company Property in her possession or under her control without making or retaining any copies; and E-91 7 (ii) provide any passwords to computer files, systems or networks or codes for any research or clinical trials used by the Executive in the course of her employment. (f) Nothing in this Employment Agreement shall be construed as transferring, assigning or conveying to the Company any rights, interests and title to any inventions, discoveries, patent applications, patents, trademarks, copyrights, trade secrets, know-how, industrial designs, or other intellectual property rights that the Executive and/or Serex, Inc. had prior to the date of this Agreement, other than those intellectual property rights and interests relating to the Company's AD7C(TM) test. 10. Conflicts of Interest. (a) During the term of her employment with the Company, the Executive agrees: (i) not to engage in any other employment or business or act as an officer or director of or consult with any other company, business or person, other than a non-profit corporation or organization, except with the prior approval of the President of the Company, which approval will not be unreasonably withheld; (ii) to promptly disclose to the President of the Company any business opportunities that come to the attention of the Executive and that relate to the pharmaceutical or diagnostic business, including (but not limited to) research proposals, licensing opportunities, patent applications and assignments, co-marketing ventures, technology transfers and employment opportunities. (b) The Executive agrees that, during the term of her employment and for one year after the date of termination of employment unless such termination is pursuant to paragraphs 13(a)(iv) or 13(a)(v), she will not, directly or indirectly, own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, executive, partner, director or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any business that markets a diagnostic for Alzheimer's disease or that is substantially similar to or competitive with the Company's present business or any other business at which the Company may substantially engage during the term of the Executive's employment, provided, however, that the Executive may own not more than 4.9% of the equity securities of a corporation, trading on a public stock exchange . (c) The Executive further agrees that, during the term of her employment and for one year after the date of termination of employment, she will not solicit or assist, directly or indirectly, any employee of the Company to terminate his or her employment with the Company or to divert any intellectual property, trade secrets, business or customers from the Company. (d) The Executive agrees that all restrictions in this article are reasonable, valid and do not go beyond what is necessary to protect the interests of the Company, and waives all defenses to their strict enforcement. The Executive acknowledges that the market for diagnostic tests and kits and for therapeutic drugs that the Company is presently marketing and/or developing is worldwide and that any specific geographic restriction in this article would be unenforceable. E-92 8 (e) The provisions of this article are only intended to safeguard against the Executive participating in competitive endeavors against the Company and shall not in any way restrict or limit the Executive from engaging in, employment by or consulting with subsequent businesses which are not in direct competition with the Company. In particular, the Executive may engage in the development of immunoassays, strip assays and diagnostic kits that are not designed to detect a unique or proprietary marker for any condition for which the Company was developing diagnostic tests, kits or assays during the term of her employment. (f) The parties agree that if any covenant or provision in this article is determined to be void or unenforceable at law due to period of time, geographical area, or otherwise, then such covenant or provision shall be reduced in scope or amended, as to term, geographical area or otherwise, to the extent required so that the covenant or provision, as so reduced or amended, is enforceable at law and the unenforceable part shall be deemed to be severed from the balance, which balance shall survive and be of full force and effect. 11. Communications. (a) The Executive agrees that the Company may treat any communications (including, but not limited to, mail, telephone messages, e-mail messages and voice mail) or item (including, but not limited to, reagents, specimens, and samples) addressed to the Executive and received at one of the Company's offices, laboratories or research facilities or through its e-mail, voice mail or other telecommunication systems as a communication or item relating to, arising out of or in connection with the Company's business and may open, review and/or inspect the communication or item in order to determine, in its sole discretion, whether the communication or item relates to, arises out of or is connected with Nymox's business. If the Company so determines, then the Company may retain and use the communication or item as it sees fit. (b) The Executive agrees not to release or disclose to any third party any publications, presentations or press releases relating to, arising out of or in connection with the Company's business, research and development, technology or collaborations with other researchers, institutions or businesses without the prior approval of the President of the Company. 12. Provisions Which Survive the Termination of this Agreement. The provisions of this Agreement contained in Articles 8 (Confidentiality), 9 (Company Property), 10 (Conflicts of Interest) and 11 (Communications) shall survive the termination of the Executive's employment. E-93 9 13. Termination of Employment. (a) The Executive's employment shall terminate, or be subject to termination, prior to the term specified in Article 2 hereof, as follows: (i) The Executive's employment shall terminate upon death. (ii) If, during the term of this Agreement, the Executive has a Disability, the Company may, at any time after the Executive has a Disability, terminate the Executive's employment by written notice to her. In the event that the Executive's employment is terminated, this Agreement shall terminate except that the Company shall continue to pay the Executive's salary for a period of six (6) months from the date of termination of her employment and maintain her health care benefits for the balance of the term of this Agreement, as if the Executive had not been terminated for Disability. As used in this Agreement, "Disability" shall mean the inability of the Executive to perform the Executive's duties of employment for the Company, pursuant to the terms of this Agreement, because of physical or mental disability, where such disability shall have existed for a period of more than 90 consecutive days or an aggregate of 120 days in any 365-day period. The existence of a Disability means that the Executive's mental or physical disability substantially interferes with the performance of her substantive duties for the Company as specified in this Agreement. The fact of whether or not a Disability exists hereunder shall be determined by professionally qualified medical experts selected by the Board and reasonably acceptable to the Executive or her agent. (iii) The Company may, at any time, terminate the Executive's employment for cause. For the purposes of this Agreement, the Company shall have cause to terminate the Executive's employment hereunder upon: (A) the Executive engaging in misconduct which is injurious to the Company; (B) any material breach of this Agreement by the Executive that is not cured by the Executive within thirty (30) days after the Company has given the Executive written notice specifying the particulars of the breach of the Agreement and its intent to terminate her employment if the breach is not cured; or (C) the Executive's conviction of a felony or a plea by the Executive of nolo contendere to a felony. (iv) The Company may terminate the Executive's employment without cause upon forty-five (45) days prior written notice to the Executive or upon payment of forty-five days salary in lieu of notice. Termination of the Executive's employment by the Company for any reason, other than specified in paragraphs 13(a)(i), (ii) or (iii) shall constitute termination of this Agreement without cause. (v) The Executive may terminate her employment for Good Reason upon forty-five (45) days prior written notice to the Company. If the Executive's employment is terminated pursuant to this Section, 13(a)(v), the Executive shall be entitled to receive those severance payments and other benefits as if the Executive was terminated pursuant to Section 13(a)(iv) of this Agreement. Good Reason means: E-94 10 (A) the assignment by the Company to the Executive of duties which are materially different than those of the Vice President of the Company as described in Article 6 of this Agreement, where the Company has not resolved the Executive's objections to the assignment within sixty (60) days after written notice from the Executive specifying her objections to the assignment and her intent to terminate her employment on that ground if not resolved to her reasonable satisfaction; and (B) any material breach of this Agreement by the Company that is not cured by the Company within thirty (30) days after the Executive has given the Company written notice specifying the particulars of the breach of the Agreement and her intent to terminate her employment if the breach is not cured. (b) In the event of the termination of the Executive's employment pursuant to paragraphs 13(a)(iv) or 13(a)(v), the Executive shall be entitled to receive, in lieu of any other compensation or payment as a result of such termination, severance payments in an amount equal to the lesser of twelve months of the Executive's salary and all other benefits provided to the Executive under this Agreement at the time of termination or the balance of that salary remaining on the term of this Agreement and all other benefits provided to the Executive under this Agreement. The severance payments will be payable, as nearly as practicable, in equal semimonthly installments and shall cease in the event the Executive finds new employment in the pharmaceutical or diagnostic industry. During the severance payment period, the Executive agrees to comply with the provisions of paragraph 10(b). (c) In the event of the termination of the Executive's employment, all payments of salary and benefits under Articles 3 and 5 of this Agreement, other than payments of salary or benefits owed or accruing to the Executive prior to the termination, shall cease, and the Executive shall not be entitled to receive any compensation, benefits or payment on account of such termination, except as otherwise provided in paragraphs 13(a)(ii) and 13(b). The Executive shall be entitled to receive those benefits which by their terms continue after termination of employment in accordance with the terms of such benefits applicable after termination of employment as required by applicable law. 14. Miscellaneous. (a) Notices Any notice or other communication required by this Agreement shall be in writing and shall be effective if hand delivered or if sent by certified or registered mail or by facsimile transmission to the following locations until notified otherwise in writing. Nymox Pharmaceutical Corporation Attention: President Nymox Pharmaceutical Corporation 9900 Boul. Cavendish, Suite 306 Saint Laurent, Quebec, Canada, H4M 2V2 FAX: (514) 332-2227 E-95 11 The Executive: Judith Fitzpatrick Davis c/o Serex, Inc. 230 West Passaic Street Maywood, New Jersey FAX: 201-368-7850 A notice is effective on the date of delivery to the Party. Delivery is deemed to have occurred on the day of delivery by courier, or upon facsimile transmission with confirmation, or on the fifth day after the date of sending the notice by registered mail. (b) Governing Law This Agreement shall be interpreted and enforced in accordance with the substantive laws of the State of New Jersey. The Executive acknowledges that her violation, or threatened violation, of the provisions of Articles 8 (Confidentiality), 9 (Company Property), 10 (Conflicts of Interest) and 11 (Communications) would cause the Company irreparable injury and, in addition to any other remedies to which the Company may be entitled, the Company shall be entitled to immediate injunctive relief in addition to any remedy available through the arbitration procedures set out below in paragraph 14(c). (c) Dispute Resolution In the event of any controversy or claim arising out of or relating to any provisions of this Agreement or the breach thereof, the Parties shall try to settle those conflicts amicably between themselves. Should they fail to agree, the matter in dispute shall be settled through arbitration conducted by and in accordance with the rules of the American Arbitration Association ("A.A.A."). Either Party may furnish the other party with a dated, written notice (the "Arbitration Notice") indicating (i) intent to commence arbitration proceedings, (ii) the nature, with reasonable detail, of the dispute, (iii) the amount involved, if any, and (iv) the remedy sought. The arbitration shall be held at a neutral place mutually agreeable to the parties. Within thirty (30) days of the date of the Arbitration Notice, each party shall select one (1) Arbitrator, who shall not be a current or former employee, agent, consultant or other representative of either party; the two selected Arbitrators shall appoint a third, neutral, Arbitrator. The arbitration award shall be final and binding. Either party may enter any such award in a court of the State of New Jersey having jurisdiction or may make application to such court for judicial acceptance of the award and an order of enforcement, as the case may be. (d) Currency All references to money in the Agreement refer to U.S. dollars and all payments made under this Agreement shall be in that currency. E-96 12 (e) Partial Invalidity If any provision of this Agreement be held invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and the Parties shall use reasonable efforts to substitute a valid, legal and enforceable provision which, as far as practicable, implements the purposes and intent of the provision held invalid, illegal or unenforceable. If the Parties are unable to arrive at such a substitute, this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained in it, provided that the performance required under this Agreement with such a provision deleted remains substantially consistent with the intent of the Parties. (f) Waiver Failure to require performance of any provision of this Agreement does not waive a Party's right to demand compliance with that provision at a later time. Waiver of any default shall not waive any other default. (g) Entire Agreement This Agreement contains the entire agreement between the Parties with respect to the subject matter covered by this Agreement. No representations, whether oral or written, made before this Agreement is executed shall amend this Agreement. Any modification or amendment to this Agreement shall be in writing and signed by an authorized officer of each Party. (h) Inurement This Agreement shall be binding upon and shall inure to the benefit of the Company and the Executive and their respective heirs, successors, assigns, permitted receivers and legal representatives. (i) Language The Company and the Executive have expressly requested that this Agreement and any agreement, proceedings or documents thereto or referred to therein be drafted and executed in the English language. Nymox et le Consultant ont expressement exige que ce contrat ainsi que tous contrats, procedures ou documents s'y rapportant ou qui y sont mentionnes soient rediges et signe en langue anglaise. IN WITNESS THEREOF, the undersigned have executed this Agreement as of the dates set forth below: ACCEPTED AND AGREED TO: Nymox Pharmaceutical Corporation The Executive /s/ Paul Averback /s/ Judith Fitzpatrick - -------------------------------- --------------------------- Paul Averback Judith Fitzpatrick President E-97 EX-23.1 11 CONSENT OF KPMG 1 EXHIBIT 23.1 KPMG 2000 McGill College Ave. Suite 1900 Montreal, QC, Canada H3A 3H8 The Board of Directors NYMOX PHARMACEUTICAL CORPORATION 9900 Cavendish Blvd. Suite 306 Saint-Laurent QC H4M 2V2 We consent to the use of our reports included herein and to the reference to our firm under the heading "Experts" in the prospectus. KPMG Chartered Accountants Montreal, Canada February 25, 2000 E-85 EX-24.0 12 POWER OF ATTORNEY 1 EXHIBIT 24.0 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below under the heading "Signatures" constitutes and appoints Paul Averback and Roy Wolvin, or either of them with full power to each to act alone, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign any or all amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/ W. David Angus Chairman and Director - --------------------------------- W. David Angus, QC /s/ Paul Averback President and CEO - --------------------------------- Paul Averback, M.D. /s/ Colin Bier Director - --------------------------------- Colin Bier, Ph.D. /s/ Hans Black Director - --------------------------------- Hans Black, M.D. /s/ Martin Barnes Director - --------------------------------- Martin Barnes /s/ J. Kenneth Harrington Director - --------------------------------- J. Kenneth Harrington, Ph.D.
Nymox Corporation (Authorized Representative in the United States) By: /s/ Roy Wolvin ---------------------------- Roy Wolvin Secretary-Treasurer E-98 EX-27.0 13 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF NYMOX PHARMACEUTICAL CORPORATION AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 925,765 0 60,822 0 0 1,855,966 1,891,640 280,868 3,466,738 275,667 0 0 0 24,410,480 (21,219,409) 3,191,071 178,496 220,912 0 252,977 3,514,372 0 0 (3,767,349) 0 0 0 67,379 0 (3,479,058) (0.17) (0.16)
EX-99.0 14 PRESS RELEASE 1 EXHIBIT 99.0 CONTACT: -OR- NYMOX's INVESTOR RELATIONS COUNSEL Nymox Corporation The Equity Group Inc. Michael Munzar, M.D. www.theequitygroup.com Medical Director Devin Sullivan (800) 93NYMOX (212) 836-9608 FOR IMMEDIATE RELEASE NYMOX RAISES $12 MILLION IN FINANCING COMMITMENT Kensington, MD - November 12, 1999 - NYMOX PHARMACEUTICAL CORP. (NASDAQ:NYMX) today announced that it has secured U.S. $12.0 million in new equity financing. The common stock equity line financing was placed privately with institutional investors by Ladenburg Thalmann & Co. in New York. "This financing reinforces Nymox's business objectives and will allow the Company to accelerate its exciting developments in drugs and diagnostics," said Paul Averback, President and CEO of Nymox. "We are very pleased to be working with Ladenburg Thalmann & Co. and believe that the terms of this financing will provide maximal value to our shareholders. We now have the additional resources needed to realize more fully the value and potential of our technologies." Nymox Pharmaceutical Corp. pioneers in the research and development of products for the diagnosis and treatment of Alzheimer's Disease, an affliction for more than 20 million people around the world. Nymox offers the world's only accurate, non-invasive test to aid in the diagnosis of the disease, and is developing proprietary Spheron-based drug therapies that could lead to effective treatment of Alzheimer's Disease. Nymox also is developing unique drug therapies to treat E. COLI infections and urinary tract infections, which have become highly resistant to conventional antibiotic treatments. Nymox Pharmaceutical Corp. is headquartered in Montreal, with a facility in Kensington, MD. Its stock is traded on NASDAQ with the symbol NYMX. More information is available at http://www.nymox.com This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors are detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. E-99 -----END PRIVACY-ENHANCED MESSAGE-----