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Calypte und die Zeit nach AIDS2004 in Bangkok
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interessant
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witzig
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gut analysiert
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informativ
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und zwar mit recht.
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So wie "Initialzündung". Und dann gehts ab !
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Aber seit fast nem Jahr kommt von Dir immer nur der gleiche Schrott ! Sachliche Fakten kannst Du in diesem Thread von sämtlichen Teilnehmern und auch von mir sehr, sehr viele nachlesen. Nur von Dir immer die gleiche langweillige Aussage. Gääähhhn...
Propagiere Du einfach weiter Deine IFEX = 0,90 bis Ende Mai, Juni, Juli... aber bitte im w.o.-Board !
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ihr könnt noch so víel fakten über aids in das board stellen, dadurch wird caly nicht besser, aber das zählt bei euch nicht. ihr sülzt euch eure wahrheit schön.
dann sage mir mal bitte, wann caly seine neuen rapid-tests auf den markt bringt(der im übrigen blut-basiert ist)?
was sagst du denn zu den anderen bluttests, die schon auf dem markt sind, die eine infektion innerhalb von 10 min. nachweisen, wie z.b. der von trinity?
welche großaufträge hat caly denn bisher mit seinen tollen produkten an alnd gezogen? kooperationen in afrika und asien existieren doch schon seit 1-2 jahren????
warum ist denn calys urintest nicht der absolute renner und verkauft sich millionenfach??? könnte es sein, dass das daran liegt, das er nur HIV-1 feststellen kann?
wenn schon nicht dir mein lieber kade, aber einigen neuen hier sollten diese fakten sehr wohl zu denken geben.
und jetzt komme mir bitte nicht wieder mit polemik oder phrasendrescherei, mit der du deine elende pusherei verteidigtst!!!
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Prost jölölü
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Habe zufällig euren Streit auch im WO Board gelesen.
Kade ist überzeugt von Caly. OK
Joelu warnt vor Caly. OK
Zwei verschiedene Meinungen.
Wo ist das Problem?
Ich denke ,der Eine braucht den Anderen nicht zu
kritisieren und zu belehren.
Jeder soll doch das Tun was er für richtig hält. Ok
Was haltet ihr davon.
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Wenn er schon sehr zufrieden ist mit der präsentation und vom Publikum,wird das schon seinen Grund haben.
"Wir haben eine erfolgreiche Sitzung auf der XV Internationalen AIDS-Konferenz in Bangkok, Thailand in dieser Woche, die Ergebnisse unserer Feldversuche unserer Studien von Thailand präsentierend, die 1,000 Themen überdecken," sagte Dr Richard George, der Präsident von Calypte und Geschaftsführer.
" Ich bin mit der Leistung dieser Feinproben in ihrem anfänglichen praktischen Versuch sehr zufrieden. Die Leistung des Bluts schneller Test ist auf einem Durchschnitt mit den besten schnellen Labor-HIV-Antikörper-Tests zurzeit auf dem Markt. Der Calypte prüft diesen Test nichtangreifende alternative Flüssigkeiten gezeigt Leistung vergleichbar mit oder lieber als andere solche zurzeit vorhandene Feinproben. Wenn auch wir andere Gültigkeitserklärungsstudien entweder im Fortschritt oder während dessen haben und wir fortsetzen, diese Feinproben zu verbessern, macht diese Studie unsere Entscheidung gültig zu beginnen zu verfertigen und Kommerzialisierung dieser Feinproben für den internationalen Markt. Wir glauben die Verfügbarkeit von diesen sichere, genaue und wirtschaftliche Feinproben werden die Annahme der HIV-Prüfung vergrößern und werden zu mehr Menschen führen, die ihren HIV-Status wissen{kennen} und in Behandlungsprogramme eingeschrieben werden. "
Ich bin zuversichtlich was Großaufträge anbelangt .
Gruß
C.O
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Er wird dabei ja nicht beleidigent und ich halte seine Einwände für Informativ!
Abschliessend bleibt zu sagen das ich es gut finde wenn weiterhin sowohl posetive als auch negative Punkte zur Aktie hier gepostet werden!
Gruss Pate
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gruss
forsale
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schön, dass wenigstens einige hier die augen offen halten. das werden die sein, die am ehesten die notbremse ziehen werden.
glückwunsch!
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In diesem Thread sind ALLE Meinungen zu Calypte erwünscht - auch die negativen. Ich habe hier weder und werde auch niemanden blöd antexten, bloß weil er von Calypte nichts hält - joelu ausgenommen. Ich hatte zusammen mit anderen im w.o.-Board vor ca. einem Jahr begonnen viele Infos zu Calypte zu posten- wie hier auch. Und hier sind, wie ihr wisst einige Infos zu Calypte von mir zu finden (von Euch natürlich auch).
Ich schreibe hier nicht den ganzen Tag wie toll doch Calypte sei oder denke mir irgendwelche Push-Geschichten aus, sondern poste hier Infos, die ich im www finde- ich nenne sie mal Daten, Fakten und Analysen. Ebenso Realtime-Kurse aus den USA.
Aber damals im w.o.-board kam dann irgendwann ein gewisser joelu, der allen die was positives zu Calypte schrieben vorwarf elende Pusher zu sein. Mit den immer gleichen Sprüchen provozierte er nicht nur mich. Er will uns alle vor Calypte retten- und das jeden Tag. Ist ja irgendwann dann mal ok und genug. Wir haben alle selbst ein Hirn, dachte ich zumindest.
Früher oder später mußte die Sache eskalieren, was dann ja auch geschah. Neben wenigen sachlichen Infos, gab es fast nur noch dumme Sprüche von allen Seiten (auch von meiner). Irgendwann hat man halt keinen Bock mehr Infos oder News zu posten, wenn man dafür immer angegriffen wird (mit immer gleichen Aussagen). Deshalb entschied ich mich nach fast 4 Jahren w.o.-Mitgliedschaft meine Motivation ins ariva-board einzubringen und habe unteranderem auch joelu geschrieben, dass ich keinen Bock mehr auf ihn und sein Kindergarten-Kram habe (könnt Ihr alles in w.o. fast ein Jahr rückwirkend nachlesen).
So, und nun ?! Er meldet sich hier an, folgt mir also um mich weiter vollzutexten und schreibt hier dann auch noch, dass er sachliche Diskussionen und Antworten von mir ihm gegenüber wünscht ! Was soll ich dazu noch sagen ?!
Ich hoffe, Ihr versteht was ich meine.
Meine Motivation hier täglich zusammen mit Euch zu posten ist ganz einfach "der Spaß an der Freude". Ich habe hier nie versucht jemanden dazu zu bewegen Calypte zu kaufen. Aus Info-Postings sollte jeder seine eigenen Schlüße ziehen ! Mehr nicht. Ich habe auch meine gesunde Vorsicht Calypte gegenüber und sage bestimmt nicht, dass alles toll ist was die machen. Aber ich rechne mir zukünftig trotzdem viel für Caly aus.
Einen Wert wie Calypte kann man in Deutschland definitiv nicht pushen- weshalb wird man hier also regelmäßig von joelu als "elender Pusher" bezeichnet ?!
Leute, ich will genauso wie Ihr hier meinen Spaß haben und habe keinen Bock auf erneute Dispute mit joelu wie im w.o.-board. Ansonsten spar ich mir zukünftig die Zeit, die ich hier bisher gerne mit Euch verbrachte. Andere kritische Meinungen zu Caly sind hier aber jederzeit erwünscht !
Deshalb joelü: Bitte bleibe bei w.o. Es hat keinen Sinn mit Dir eine weitere Diskussion anzufangen. Ich finde es beinahe lächerlich, dass Du mir hierher folgst. Du mußt niemanden retten - glaub´s mir bitte ! Und denke daran: Wer deinen Tipps bisher folgte, machte bis auf wenige Ausnahmen deutliche Verluste !(auch in w.o.- nachzulesen)
Sorry, aber das mußte ich jetzt einfach mal loswerden...
Grüße an alle (sogar an jeölu)
Kade_I
;-)
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By letter dated July 14, 2004, the SEC Division of Enforcement notified the
Company that the matter has been terminated and that no enforcement action has
been recommended by the Commission at this time.
Na also ;-)
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Ansonsten wird generell eine Markteinführung angestrebt, lt. CEO.
Ob das langfristig zum Erfolg führt, wird sich zeigen. Derzeit würde ich eher nur traden als Caly als Langzeitinvestment anzusehen.
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Übrigens auch die Info, dass die SEC-Untersuchung abgeschlossen ist, stammt aus diesem Filling.
Auch im Raging-Bull-Board wird das filling äußerst positiv aufgenommen.
Grüße
Kade_I
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First Phase of field trials, ... Second Phase ... "we believe that we have finalized our
blood rapid test." (siehe unten)
Testphasen des Blood-Rapid-Tests sind laut Calypte also abgeschlossen, Test ist fertig !
Der Rapid-Urin-Test wird noch weiter entwickelt.
We have already conducted in-house trials of our development stage blood, oral
fluid and urine rapid tests and have conducted field evaluations in Thailand to
validate the performance of these products. Through the validation process, any
enhancements necessary and/or desired in the performance of the rapid tests in
the field are worked on in the laboratory. The reworked rapid tests are then
returned to the field for further evaluation. This process is iterative and
precedes the larger clinical trials that will be required for regulatory
approval in many countries prior to bringing the products to market. In our
first phase of field trials, we tested our development-stage blood and urine
rapid tests. These studies identified certain refinements that we have
implemented. We have subsequently conducted a second phase of field trials that
included our developmental stage blood, oral fluid and urine rapid tests.
We began the second phase of external validation trials of our blood, oral fluid
and urine rapid HIV antibody assays in April 2004 at the Thai Red Cross
Anonymous HIV Clinic in Bangkok, Thailand. We completed this prospective and
random study in June 2004 and provided the results to delegates of the XV
International AIDS Conference held July 11-16, 2004 in Bangkok. This study
tested a total of 1023 subjects, 392 seropositive subjects, including 37
seropositive subjects receiving anti-retroviral therapy, and 631 seronegative
subjects. The true antibody status of these subjects was determined by testing
of a blood sample using the standard testing method routinely used by the
Anonymous Clinic for diagnostic testing. Our blood rapid test was 100%
concordant with the results of the standard blood tests. Our oral fluid test
demonstrated 99.5% sensitivity (390 of 392 subjects). The two false negative
results were from two known positive subjects who were on anti-retroviral
therapy. These patients are known to have diminished antibody levels and would
not normally be seeking HIV diagnostic testing. The specificity of the oral
fluid test was 100%. Our rapid urine assay was found to be 99.0% sensitive (388
of 392 subjects) and 100% specific. Our rapid blood, oral fluid, and urine tests
correctly identified 1023 of 1023 subjects, 1021 of 1023 subjects, and 1019 of
1023 subjects for an overall accuracy of 100%, 99.8%, and 99.6%, respectively.
Based on our field study results to-date, we believe that we have finalized our
blood rapid test. We are making plans to conduct a formal clinical trial in
China using the blood test, as well as our oral fluid and urine rapid tests. We
expect that clinical trial to be completed in the third quarter of 2004. We
believe that we have successfully field tested and are now finalizing our oral
fluid test. We plan to initiate manufacturing of the oral fluid test in Thailand
shortly following the start-up of blood test manufacturing. We are continuing
the development process for our urine rapid test. Urine contains a lesser amount
of antibody than either blood or oral fluid, making the the identification of
those individuals with low levels of antibodies, especially those who are
receiving anti-retroviral therapy, even more difficult. While we believe that
the results to date are acceptable, we are continuing the iterative development
process and are evaluating other alternatives for our urine test, some of which
we may choose to test in new field trials. If the results of those trials
demonstrate improved accuracy versus the current version, we would conduct a
separate clinical trial using the revised test format. While we expect that our
efforts will result in a finalized version of the urine test no later than the
third quarter of 2004, there can be no assurance that we will successfully
manufacture or commercialize a urine rapid test, or our other rapid tests,
within that timeframe, or at all.
Our urine test development efforts have identified certain unique product
properties and processes that we plan to protect. We believe that this
intellectual property is significant as it may result in a blocking patent to
those who may consider urine testing by protecting a key step necessary in
achieving the highest levels of specificity.
As mentioned above, we plan to initially manufacture our rapid tests in
Thailand. In preparation for our first foreign manufacturing technology
transfer, we announced on May 11, 2004 that we have finalized a non-exclusive
contract manufacturing agreement with Thailand-based Pacific Biotech Co., Ltd.
to act as our initial international manufacturer for our HIV-1/2 blood, serum
and plasma rapid tests. Manufacturing will be located at the Pacific Biotech
facility in Phetchaboon, Thailand. We have commenced the technology transfer of
the blood rapid test with the objective of completing our first pilot production
lots in the third quarter of 2004. Further, on May 13, 2004, we announced that
we have selected Beijing Tiantan Biological Products Co, Ltd. ("BTBP") as our
manufacturing partner for the production of our rapid tests in China. On the
basis of a memorandum of understanding between the parties, BTBP has commenced
the construction of a manufacturing site in China where the HIV rapid tests will
be produced.
aus dem am 16.07.04 erschienen Filling !
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Control and Prevention ("CDC") had granted us a worldwide, non-exclusive license
enabling us to use technologies developed by the CDC to manufacture and
commercialize a serum enzyme immunoassay (HIV 1-EIA) that can be used to
estimate the proportion of HIV infections that are recently acquired in a
population (infections occurring in the last 6-8 months). This laboratory assay
can be used to identify those regions and the populations within those regions
where HIV transmission is occurring most recently. Once our production
capabilities are in place, the CDC will no longer supply this product. We expect
to have this product available for international distribution in the second half
of 2004. On April 14, 2004, we announced that we had executed a CRADA - a
Cooperative Research and Development Agreement - with the CDC for the
development of a new HIV rapid blood assay. Like current rapid test assays, the
proposed device will be for diagnostic use to detect HIV antibodies, but it will
also be used to determine the proportion of HIV-1 infections that have occurred
in the last six months. The purpose of the test is to provide a simplified and
rapid format that can be performed in resource poor settings and remote outreach
locations for diagnostic and surveillance purposes.
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Jeder ist seines Glückes Schmied!
Leute wacht auf und lest mal mit klaren Augen die Fillings und PR`S!!!
@Lucky
die Abzocke war da als jede Woche eine PR rauskam und der Kurs getrieben wurde...d.y.o.r.!
Jovi
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American Stock Exchange corporate governance standards (SR-AMEX-2003-65)
approved by the Commission on December 1, 2003
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RISK FACTORS
In addition to the other information in this Prospectus, Calypte has identified
a number of risk factors that the Company faces. These factors, among others,
may cause actual results, events or performance to differ materially from those
expressed in any forward-looking statements made in this Prospectus or in other
filings with the Securities and Exchange Commission or in press releases or
other public disclosures. Investors should be aware of the existence of these
factors and should consider them carefully in evaluating our business before
purchasing the shares offered in this Prospectus.
Risks Related to Our Financial Condition
If We are Unable to Obtain Additional Financing When and If Required We May Have
to Significantly Curtail the Scope of Our Operations and Alter Our Business
Model.
We believe that the aggregate of approximately $10.2 million of net proceeds of
our 2004 private placements and the availability of approximately $3.6 million
of borrowing capability from 9% promissory notes that we may issue through
December 31, 2004 under the terms of the amended Marr Credit Facility will be
adequate to sustain our operations at expected levels through 2004. There can,
however, be no assurance that such resources will be adequate. Further, there
can be no assurance that we will be able to achieve expanded acceptance of or
realize significant revenues from our current or potential new products,
including our rapid tests, or that we will achieve significant improvements in
the efficiency of our manufacturing processes. In addition, there is no
assurance that we will achieve or sustain profitability or positive cash flows
in the future. In the absence of adequate resources from current working capital
and existing financing, we would need to raise additional capital to sustain our
operations. In that case, we would or might be required to consider strategic
opportunities, including merger, consolidation, sale or other comparable
transaction, to sustain our operations. We do not currently have any agreements
in place with respect to any such strategic opportunity, and there can be no
assurance that any such opportunity will be available to us on acceptable terms,
or at all. If additional financing is not available to us when required or is
not available to us on acceptable terms, or we are unable to arrange a suitable
strategic opportunity, we will be in significant financial jeopardy and we may
be unable to continue our operations at current levels, or at all. The terms of
a subsequent financing may involve a change of control, require stockholder
approval, and/or trigger anti-dilution protection clauses contained in existing
financing agreements that would result in substantial dilution to our existing
stockholders or might require us to pledge the rights to our products for
collateral security for the issuance of a convertible debt security.
5
Our Financial Condition has Adversely Affected Our Ability to Pay Suppliers,
Service Providers and Licensors on a Timely Basis Which May Jeopardize Our
Ability to Continue Our Operations and to Maintain License Rights Necessary to
Continue Shipments and Sales of Our Products.
As of March 31, 2004 our accounts payable totaled $2.0 million, of which $1.5
million was over sixty days old. We currently have primarily cash-only
arrangements with suppliers and certain arrangements require that we pay down
certain outstanding amounts due when we make a current payment. These past due
payments vary monthly depending on the items purchased and range from
approximately $50,000 to $200,000 per month. As of March 31, 2004 we have
accrued an aggregate of approximately $551,000 in royalty obligations to our
patent licensors, of which approximately $387,000 were past due. The licenses
attributable to past due royalty payments relate to technology utilized in both
our urine EIA screening test and our supplemental urine and serum tests. Because
of the interdependence of the screening and supplemental tests in our testing
algorithm, the inability to use any one of the patents could result in the
disruption of the revenue stream from all of our products. While at this time we
are current with our payment plans for past-due amounts, if we are unable to
maintain sufficient working capital, our ability to make payments on past due
negotiated royalty obligations, make timely payments to our critical suppliers,
service providers and to licensors of intellectual property used in our products
will be jeopardized and we may be unable to obtain critical supplies and
services and to maintain licenses necessary for us to continue to manufacture,
ship and sell our products. Additionally, certain vendors and service providers
with whom we have not currently arranged payment plans have or may choose to
bring legal action against us to recover amounts they deem due and owing. While
we may dispute these claims, should a creditor prevail, we may be required to
pay all amounts due to the creditor. If the working capital that will enable us
to make the required payment is not available when required, we will be placed
in significant financial jeopardy and we may be unable to continue our
operations at current levels, or at all.
We Have Incurred Losses in the Past and We Expect to Incur Losses in the Future.
We have incurred losses in each year since our inception. Our net loss for the
quarter ended March 31, 2004 was $4.0 million and for the year ended December
31, 2003 was $26.5 million and our accumulated deficit at March 31, 2004 was
$131.9 million. We expect operating losses to continue during 2004 and perhaps
beyond, as we complete the development and begin commercializing our rapid
tests, complete our manufacturing restructuring and consolidation, and conduct
additional research and development for product improvements and clinical trials
on potential new products.
An Economic Downturn or Terrorist Attacks May Adversely Affect Our Business.
Changes in economic conditions could adversely affect our business. For example,
in a difficult economic environment, customers may be unwilling or unable to
invest in new diagnostic products, may elect to reduce the amount of their
purchases or may perform less HIV testing. A weakening business climate could
also cause longer sales cycles and slower growth, and could expose us to
increased business or credit risk in dealing with customers adversely affected
by economic conditions.
Terrorist attacks and subsequent governmental responses to these attacks could
cause further economic instability or lead to further acts of terrorism in the
United States and elsewhere. These actions could adversely affect economic
conditions outside the United States and reduce demand for our products
internationally. Terrorist attacks could also cause regulatory agencies, such as
the FDA or agencies that perform similar functions outside the United States, to
focus their resources on vaccines or other products intended to address the
threat of biological or chemical warfare. This diversion of resources could
delay our ability to obtain regulatory approvals required to manufacture, market
or sell our products in the United States and other countries.
6
Risks Related to the Market for Our Common Stock
The Price of Our Common Stock Has Been Highly Volatile Due to Several Factors
Which Will Continue to Affect the Price of Our Stock.
Our common stock has traded as low as $0.11 per share and as high as $1.799 per
share in the twelve months ended March 31, 2004. We believe that some of the
factors leading to the volatility include:
o price and volume fluctuations in the stock market at large which do not
relate to our operating performance;
o fluctuations in our operating results;
o concerns about our ability to finance our continuing operations;
o financing arrangements which may require the issuance of a significant
number of shares in relation to the number of shares currently outstanding;
o announcements of technological innovations or new products which we or our
competitors make;
o FDA, SEC and international regulatory actions;
o availability of reimbursement for use of our products from private health
insurers, governmental health administration authorities and other
third-party payors;
o developments with respect to patents or proprietary rights;
o public concern as to the safety of products that we or others develop;
o changes in health care policy in the United States or abroad;
o changes in stock market analysts' recommendations regarding Calypte, other
medical products companies or the medical product industry generally;
o fluctuations in market demand for and supply of our products;
o certain world conditions, such as SARS, an economic downturn or terrorist
attacks; and
o anti-American sentiment in certain international markets.
Our Registration of a Significant Amount of Our Outstanding Stock and the
Availability of a Significant Number of Shares Eligible for Future Sale May Have
a Negative Effect on the Trading Price of Our Stock.
At June 30, 2004, investors in our common stock held approximately 71 million
shares of restricted stock, of which approximately 41.0 million shares related
to acquisitions of our common stock by Marr Technologies BV ("Marr" or "MTBV"),
the provider of our 9% promissory note credit facility and our largest
stockholder, through their participation in private placements in 2003 and 2004
and conversion of debentures. Approximately 15.75 million additional shares were
related to issuances of restricted shares of our common stock to other
participants in our May 2004 private placement; another 11.6 million restricted
shares were related to issuances pursuant to our convertible notes and
debentures and an additional 2.6 million shares were related to issuances under
contracts and agreements under which we have received goods and services.
Further, in the May 2004 private placement we issued warrants that are
immediately exercisable or exercisable on 61 days' notice that could result in
the issuance of an additional 8.8 million shares. Additionally, we could be
required to issue approximately 2.9 million additional shares of our common
stock if the holders of currently outstanding convertible debentures or various
warrant holders elected to convert the remaining principal and accrued interest
of their debentures or exercise their outstanding warrants. We registered
essentially all of the outstanding restricted shares as of June 30, 2004 and the
shares underlying the outstanding convertible debentures and warrants in a
registration statement that became effective on July 8, 2004. Although certain
of the Marr agreements require that Marr hold approximately 28.2 million of its
its shares for one year following their purchase, essentially all of the other
shares are now freely tradable or would be so upon the conversion of the
debentures or exercise of the warrants. Futhermore, investors in our July 2004
private placement currently hold approximately 3.7 million shares of our
restricted stock and immediately exercisable warrants to purchase an additional
2.6 million shares. We are including the outstanding shares and the shares
underlying the warrants in this registration statement. If investors holding a
significant number of freely tradable shares decided to sell them in a short
period of time, such sales could contribute significant downward pressure on the
trading price of our stock. Such sales might also inhibit our ability to obtain
future equity or equity-related financing on acceptable terms.
7
From inception through July 14, 2004, we have issued approximately 168.0 million
shares of our common stock and raised approximately $140 million. At a Special
Meeting of Stockholders on February 14, 2003, our stockholders approved an
increase in the number of authorized shares of the Company's common stock from
200 million to 800 million. Although we have no plans to do so, at July 15,
2004, we have the ability, without further stockholder approval, to issue in
excess of 500 million shares of our common stock for financing or for other
purposes. The perceived risk of dilution from this amount of authorized but
unissued stock may cause our existing stockholders and other holders to sell
their shares of stock, which would contribute to a decrease in our stock price.
In this regard, significant downward pressure on the trading price of our stock
may also cause investors to engage in short sales, which would further
contribute to significant downward pressure on the trading price of our stock.
Our Issuance of Warrants, Options and Stock Grants to Consultants for Services
and the Granting of Registration Rights for the Underlying Shares of Common
Stock May Have a Negative Effect on the Trading Price of Our Common Stock.
As we continue to look for ways to minimize our use of cash while obtaining
required services, we have issued and may continue to issue warrants and options
at or below the current market price or make additional stock bonus grants.
During 2003, we issued warrants, options and stock bonuses for nearly 19.8
million shares, including approximately 10.0 million shares from employee
benefit plans and the 2003 Non-Qualified Stock Option Plan, in payment for
consulting services. In the first quarter of 2004, we issued approximately
596,000 additional shares in payment for consulting services. In addition to the
potential dilutive effect of a large number of shares and a low exercise price
for the warrants and options, there is the potential that a large number of the
underlying shares may be sold on the open market at any given time, which could
place downward pressure on the trading price of our common stock.
Our Stockholders May Experience Substantial Dilution as a Result of Our Recent
PIPE Financings and the Anti-Dilution Provisions Contained Therein or as a
Result of Future Financings.
The current market price of our common stock and the price at which investors in
the May 2004 PIPE and the July 2004 PIPE purchased shares of our common stock is
significantly higher than the book value of our common stock. Had the 2004 PIPE
transactions occurred in aggregate as of March 31, 2004, the investors would
have invested, net of fees, an amount equal to approximately $12.3 million in
excess of our total stockholders' equity as of that date, but would own only
approximately 16% of our outstanding common stock.
Although we believe that we have sufficient funds to continue our operations
through 2004, we may need to arrange additional financing to fund our operations
in 2005 or thereafter. There can be no assurance that additional financing would
be available, or it if is available, that it would be on acceptable terms.
Additionally, the shares issued pursuant to the May 2004 PIPE and the July 2004
PIPE and the related warrants for each have an anti-dilution feature that will
require us to issue additional shares to the PIPE investors and modify their
outstanding warrants if we subsequently issue additional equity at a per share
price of less than $0.40 for a period of one year from the respective closing
dates, except under the provisions of previously outstanding convertible debt,
option plans, or option or warrant agreements. If we find it necessary to issue
additional common stock to fund our operations in the year following the May
2004 PIPE and the July 2004 PIPE, all of our stockholders will experience
dilution; if the terms of the potential future financing require that we issue
shares of our common stock at a price of less than $0.40 per share, holders of
our common stock prior to the 2004 PIPEs will experience even greater
proportional dilution.
Our Common Stock is Subject to the "Penny Stock" Rules of the SEC and the
Trading Market In Our Securities is Limited, Which Makes Transactions in Our
Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.
8
Shares of our common stock are "penny stocks" as defined in the Exchange Act,
which are traded in the Over-The-Counter Market on the OTC Bulletin Board. As a
result, investors may find it more difficult to dispose of or obtain accurate
quotations as to the price of the shares of the common stock being registered
hereby. In addition, the "penny stock" rules adopted by the Commission under the
Exchange Act subject the sale of the shares of our common stock to certain
regulations which impose sales practice requirements on broker/dealers. For
example, brokers/dealers selling such securities must, prior to effecting the
transaction, provide their customers with a document that discloses the risks of
investing in such securities. Included in this documents are the following:
o the bid and offer price quotes in and for the "penny stock", and the number
of shares to which the quoted prices apply.
o the brokerage firm's compensation for the trade.
o the compensation received by the brokerage firm's sales person for the
trade.
In addition, the brokerage firm must send the investor:
o a monthly account statement that gives an estimate of the value of each
"penny stock" in the investor's account.
o a written statement of the investor's financial situation and investment
goals.
Legal remedies, which may be available to you as an investor in "penny stocks",
are as follows:
o if "penny stock" is sold to you in violation of your rights listed above,
or other federal or states securities laws, you may be able to cancel your
purchase and get your money back.
o if the stocks are sold in a fraudulent manner, you may be able to sue the
persons and firms that caused the fraud for damages.
o if you have signed an arbitration agreement, however, you may have to
pursue your claim through arbitration.
If the person purchasing the securities is someone other than an accredited
investor or an established customer of the broker/dealer, the broker/dealer must
also approve the potential customer's account by obtaining information
concerning the customer's financial situation, investment experience and
investment objectives. The broker/dealer must also make a determination whether
the transaction is suitable for the customer and whether the customer has
sufficient knowledge and experience in financial matters to be reasonably
expected to be capable of evaluating the risk of transactions in such
securities. Accordingly, the Commission's rules may limit the number of
potential purchasers of the shares of our common stock.
Resale restrictions on transferring "penny stocks" are sometimes imposed by some
states, which may make transaction in our stock more difficult and may reduce
the value of the investment. Various state securities laws pose restrictions on
transferring "penny stocks" and as a result, investors in our common stock may
have the ability to sell their shares of our common stock impaired.
Risks Related to Our Business
We May Be Unsuccessful in Implementing Our Consolidation, Development and
Marketing Plans as Anticipated.
We are in the process of consolidating our manufacturing facilities in a single
facility at our Rockville, Maryland location. In addition to internal validation
and comparability studies that we conduct in conjunction with our manufacturing
consolidation, the FDA must approve our facility changes and urine EIA
manufacturing operations in Rockville before we will be permitted to sell urine
EIA tests manufactured at that facility in the US. If the consolidation does not
proceed as planned, or if the FDA does not approve the facility changes on the
timeline anticipated, the anticipated cost reductions as well as increased
efficiencies may not occur. There can be no assurance that we will successfully
complete the development and commercialization of our rapid tests currently
under development, or that our international marketing efforts with respect to
these tests will result in significant additional sales. Additionally, there can
be no assurance that we will be able to successfully negotiate government or
private-sector contracts for mass-testing applications. Consequently, our
current financial resources and available financing may be inadequate, and we
may have to seek additional financing, which may not be available on the
timetable required or on acceptable terms, or we may have to curtail our
operations, or both.
9
In conjunction with our manufacturing consolidation, we expect that we will be
unable to produce our HIV-1 Urine EIA product for sale in the US until we
complete the required validation and comparability studies at our Rockville
facility that will be necessary for FDA review and approval. We expect FDA
review and approval of our Rockville facility to be completed during the first
quarter of 2005. We believe we have manufactured sufficient inventories of our
HIV 1 Urine EIA test to continue to satisfy expected customer orders during the
transition period. We have considered historical sales levels and the length of
time required to complete the consolidation and obtain FDA approval in
determining the amount of inventory required to bridge the transition period.
Demand could significantly exceed historical levels, and consolidation of
operations or FDA approval could take longer than expected. If one or more of
these events occur, then our transition inventory may not be sufficient to
supply customer orders and we may lose business that we may find difficult, or
impossible, to replace. Alternatively, demand could fall significantly below
historical levels, in which case we will have built excess inventory that we may
have to dispose of at additional cost, or at a loss.
Our Customers May Not Be Able to Satisfy Their Contractual Obligations and We
May Not Be Able to Deliver Our Products as a Result of the Impact of Conditions
Such as Severe Acute Respiratory Syndrome ("SARS") or Other World Events.
Our expected first quarter 2003 shipment of urine HIV screening tests to our
distributor in the People's Republic Of China was delayed until the third
quarter of 2003 in part as a result of the impact of the SARS outbreak in that
country. Our distributor has reported that both potential patients and medical
personnel were reluctant to visit or report for work at hospitals, clinics and
other sites for fear of contracting or spreading SARS and, consequently, both
diagnostic and therapeutic procedures were postponed. Additionally,
governmentally-imposed facility closures and quarantine restrictions disrupted
the ability of the distributor to receive and distribute our HIV tests. This
situation may recur.
Our business model and future revenue forecasts call for a significant expansion
of sales in the People's Republic of China as well as in Russia and Africa upon
successful completion of the rapid product evaluation and regulatory approval.
Should conditions beyond our control, such as SARS, redirect attention from the
worldwide HIV/AIDS epidemic, our customers' ability to meet their contractual
purchase obligations or our ability to supply product internationally for either
evaluation or commercial use may prevent us from achieving the revenues we have
projected. As a result, we may have to seek additional financing beyond that
which we have projected, which may not be available on the timetable required or
on acceptable terms that are not substantially dilutive to our stockholders, or
we may have to curtail our operations, or both.
Our Quarterly Results May Fluctuate Due to Certain Regulatory, Marketing and
Competitive Factors Over Which We Have Little or No Control.
The factors listed below, some of which we cannot control, may cause our
revenues and results of operations to fluctuate significantly:
o actions taken by the FDA or foreign regulatory bodies relating to our
existing products or products we are currently developing or seeking to
develop;
o the extent to which our current or proposed new products gain market
acceptance;
o the timing and size of purchases by our laboratory customers, distributors
or joint venture partners;
o introductions of alternative means for testing for HIV by competitors;
o changes in the way requlatory authorities evaluate HIV testing, including
supplemental testing of the domestic blood supply; and
o customer concerns about the stability of our business which could cause
them to seek alternatives to our product.
Our Research, Development and Commercialization Efforts May Not Succeed or Our
Competitors May Develop and Commercialize More Effective or Successful
Diagnostic Products.
In order to remain competitive, we must regularly commit substantial resources
to research and development and the commercialization of new products.
10
The research and development process generally takes a significant amount of
time and money from inception to commercial product launch. This process is
conducted in various stages. During each stage there is a substantial risk that
we will not achieve our goals on a timely basis, or at all, and we may have to
abandon a product in which we have invested substantial amounts of money.
During the year ended December 31, 2003 and in the first quarter of 2004, we
incurred $1.5 million and $0.5 million, respectively, in research and
development expenses. We expect to incur even more significant costs from our
research and development activities in the future.
A primary focus of our efforts has been, and is expected to continue to be,
rapid HIV tests, which are currently under development. However, there can be no
assurance that we will succeed in our research and development efforts with
respect to rapid tests or other technologies or products.
Successful products require significant development and investment, including
testing, to demonstrate their cost-effectiveness or other benefits prior to
commercialization. In addition, regulatory approval must be obtained before most
products may be sold. Additional development efforts on these products will be
required before any regulatory authority will review them. Regulatory
authorities may not approve these products for commercial sale. In addition,
even if a product is developed and all applicable regulatory approvals are
obtained, there may be little or no market for the product, or we may be unable
to obtain the requisite licenses to sell the product or to qualify for a
government tender, which are often requirements in third world countries where
the greatest need and largest market for HIV diagnostic testing exists.
Accordingly, if we fail to develop commercially successful products, or if
competitors develop more effective products or a greater number of successful
new products, or there are governmental limitations affecting our ability to
sell our products, customers may decide to use products developed by our
competitors. This would result in a loss of revenues and adversely affect our
results of operations, cash flows and business.
We Have Limited Experience Selling and Marketing Our HIV-1 Urine ELISA Tests and
No Experience Marketing a Rapid Test.
Our urine-based ELISA products incorporate a unique method of determining the
presence of HIV antibodies and we have limited experience marketing and selling
them either domestically or internationally. Further, we have no experience
marketing and selling blood or oral fluid products. Our company's success
depends upon alliances with third-party international distributors and joint
venture partners and upon our ability to penetrate expanded markets. There can
be no assurance that:
o our international distributors and joint ventures will successfully market
our products;
o our domestic selling efforts will be effective;
o we will obtain any expanded degree of market acceptance among physicians,
patients or health care payors; or others in the medical or public health
community, including governments and humanitarian funding sources critical
in may international markets, which are essential for acceptance of our
products; or
o if our relationships with distributors terminate, we will be able to
establish relationships with other distributors on satisfactory terms, if
at all.
We have had FDA approval to market our current urine HIV-1 screening and
supplemental tests in the United States and have been marketing these products
since 1998. We have not yet introduced either an HIV-1/2 product or a rapid
point of care test, both of which are necessary in many areas of the world.
Further, we have not achieved significant market penetration with our current
ELISA tests within domestic or international markets. A disruption in our
distribution, sales or marketing network could reduce our sales revenues and
cause us to either cease operations or expend more resources on market
penetration efforts than are available to us without affecting other parts of
our business.
We Currently Depend Upon the Viability of Three Primary Products -- Our HIV-1
Urine-Based Screening Test and Our Urine and Blood Based Supplemental Tests.
11
Our HIV-1 urine-based screening test and urine and blood-based supplemental
tests are our current products. Our sales of these products for the quarter
ended March, 2004 increased by 24% compared to the comparable period in 2003.
There can be no assurance, however, that such a trend will continue and, even
with the increase, we still incurred a loss from operations for the quarter. If
we cannot profitably introduce new products on a timely basis and if these
products and our screening and supplemental tests fail to achieve market
acceptance or generate significant revenues, we may have to cease operations.
We May Not be Able to Successfully Develop and Market New Products That We Plan
to Introduce.
We plan to develop other urine-based diagnostic products including rapid HIV-1/2
screening tests, tests for other infectious diseases or health conditions and
serum-based and oral-fluid based rapid HIV-1/2 screening tests. We are also
transfering technology from the Centers for Disease Control and Prevention
("CDC") for an HIV ELISA incidence test and plan to develop, along with the CDC,
a blood-based rapid HIV test for diagnostic and surveillance purposes. There are
numerous developmental and regulatory issues that may preclude the introduction
of these products into commercial sale. If we are unable to demonstrate the
feasibility of these products, successfully transfer the technology for
commercial-scale manufacturing to either internal, joint venture or outsourced
manufacturers or meet regulatory requirements or resolve potential patent
licensing or government distribution licensing requirements with respect to
their marketing, we may have to abandon them and alter our business plan. Such
modifications to our business plan will likely delay achievement of sustainable
cash flow from product sales and profitability. As a result, we may have to seek
additional financing, which may not be available on the timetable required or on
acceptable terms, or we may have to curtail our operations, or both.
A Market for Our Products May Not Develop.
Our future success will depend, in part, on the market acceptance, and the
timing of such acceptance, of new products such as our developmental stage rapid
HIV tests and other new products or technologies that may be developed or
acquired. To achieve market acceptance, we must make substantial marketing
efforts and spend significant funds to inform potential customers and the public
of the perceived benefits of these products. We currently have limited evidence
on which to evaluate the market reaction to products that may be developed, and
there can be no assurance that any products will obtain market acceptance and
fill the market need that is perceived to exist.
Our Success Depends on Our Ability to Protect Our Proprietary Technology.
The diagnostics test industry places considerable importance on obtaining
patent, trademark, and trade secret protection, as well as other intellectual
property rights, for new technologies, products and processes. Our success
depends, in part, on our ability to develop and maintain a strong intellectual
property portfolio or obtain licenses to patents for products and technologies
both in the United States and in other countries.
As appropriate, we intend to file patent applications and obtain patent
protection for our proprietary technology. These patent applications and patents
will cover, as applicable, compositions of matter for our products, methods of
making those products, methods of using those products, and apparatus relating
to the use or manufacture of those products. We will also rely on trade secrets,
know-how, and continuing technological advancements to protect our proprietary
technology. There is, however, no assurance that we will be successful in
obtaining any patent protection.
We have entered, and will continue to enter, into confidentiality agreements
with our employees, consultants, advisors and collaborators. However, these
parties may not honor these agreements and we may not be able to successfully
protect our rights to unpatented trade secrets and know-how. Others may
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to our trade secrets and know-how.
Many of our employees, including scientific and management personnel, were
previously employed by competing companies. Although we encourage and expect all
of our employees to abide by any confidentiality agreement with a prior
employer, competing companies may allege trade secret violations and similar
claims against us.
We may collaborate with universities and governmental research organizations
which, as a result, may acquire part of the rights to any inventions or
technical information derived from collaboration with them.
12
We may incur substantial costs and be required to expend substantial resources
in asserting or protecting our intellectual property rights, or in defending
suits against us related to intellectual property rights. Disputes regarding
intellectual property rights could substantially delay product development or
commercialization activities. Disputes regarding intellectual property rights
might include state, federal or foreign court litigation as well as patent
interference, patent reexamination, patent reissue, or trademark opposition
proceedings in the United States Patent and Trademark Office. Opposition or
revocation proceedings could be instituted in a foreign patent office. An
adverse decision in any proceeding regarding intellectual property rights could
result in the loss or limitation of our rights to a patent, an invention or
trademark.
We are Dependent Upon Patents, Licenses and Other Proprietary Rights From Third
Parties.
To facilitate development and commercialization of a proprietary technology
base, we may need to obtain licenses to patents or other proprietary rights from
other parties. Obtaining and maintaining such licenses may require the payment
of substantial amounts. In addition, we currently have the right to use patent
and proprietary rights which are material to the manufacture and sale of our
HIV-1 urine-based screening test under licensing agreements with New York
University, Cambridge Biotech Corporation and the Texas A&M University System.
We also have the right to use patent and proprietary rights material to the
manufacture and sale of our HIV-1 serum- and urine-based supplemental tests
under a licensing agreement with National Institutes of Health. We will require
license agreements from certain of these parties or other patent holders for
technologies used in our rapid tests and other potential new products. As of
March 31, 2004 we had accrued an aggregate of approximately $387,000 in past due
royalty obligations to our patent licensors. In the event our financial
condition inhibits our ability to pay royalty payments due under our license
agreements, our rights to use those licenses could be jeopardized in the event
of a default in payment of royalties. Specifically, during the 2003 calendar
year and the first quarter of 2004, revenues subject to the New York University,
Cambridge Biotech and Texas A&M license agreements were $2.0 million and $0.6
million, respectively, and revenues subject to the National Institutes of Health
agreement were $1.3 million and $0.4 million in calendar 2003 and in the first
quarter of 2004, respectively. The loss of any of the foregoing licenses could
have a materially adverse effect on our ability to continue to produce our
products since the license agreements provide necessary proprietary processes or
components for the manufacture of our products.
The Sales Potential for the Rapid Test Products We Are Developing Will be
Affected by Our Ability to Obtain Certain Licenses.
There are two primary factors that will affect the specific countries in which
we will be able to sell our rapid HIV tests that are under development and
therefore the overall sales potential of the tests. One factor is whether we can
arrange a sublicense or distribution agreement related to patents for detection
of the HIV-2 virus. HIV-2 is a type of the HIV virus estimated to represent a
small fraction of the known HIV cases worldwide. Nevertheless, HIV-2 is
considered to be an important component in the testing regimen for HIV in many
markets. Access to a license for one or more HIV-2 patents may be necessary to
sell HIV-2 tests in countries where such patents are in force, or to manufacture
in countries where such patents are in force and then sell into non-patent
markets.
Another factor that may affect the specific countries in which we will be able
to sell our rapid HIV-1 or HIV-2 tests, and therefore the overall sales
potential, concerns whether we can arrange a sublicense or distribution
agreement related to any patents which claim lateral flow assay methods and
devices covering the our rapid HIV tests or their use. Our developmental stage
tests are lateral flow assay devices that test for specific antibodies or other
substances. There are numerous patents in the United States and other countries
which claim lateral flow assay methods and devices. Some of these patents may
broadly cover the technology used in our rapid test products and are in force in
the United States and other countries. We may not be able to make or sell our
rapid test products in countries where these patents are in force.
In the event that it is determined that a license is required and it is not
possible to negotiate a license agreement under a necessary patent, our ability
to manufacture and sell our rapid products may be delayed or limited. In such
case, we may be able to modify our rapid tests such that a license would not be
necessary. However, this alternative may not be possible, or, if feasible, it
could delay or limit our ability to sell our rapid test products, which would
adversely affect our results of operations, cash flows and business.
13
We Rely on Sole Source Suppliers that We Cannot Quickly Replace for Certain
Components Critical to the Manufacture of Our Products.
Among the critical items we purchase from qualified sole source suppliers are
various conjugates, fetal bovine serum, and HIV-positive and HIV-negative urine
samples. Any delay or interruption in the supply of these or other sole source
components could have a material adverse effect on us by significantly impairing
our ability to manufacture products in sufficient quantities, particularly as we
increase our manufacturing activities in support of commercial sales. In
addition, if our financial condition reduces our ability to pay for critical
components on a timely basis, our suppliers may delay or cease selling critical
components to us, which could also impair our ability to manufacture. We
typically do not have long-term supply agreements with these suppliers, instead
using purchase orders to arrange for our purchases of materials, so that
suppliers could delay or decline to ship components until payment is made in
advance or on a COD basis.
We Have Limited Experience in Manufacturing Our Products and Little Experience
in Manufacturing Our Products In Commercial Quantities.
Turnover among our manufacturing personnel as a result of our consolidation of
the operations into our Rockville facility has necessitated the hiring of new
manufacturing personnel. Such turnover has, in the past, resulted in material
production difficulties including problems involving:
o scaling up production of new products;
o developing market acceptance for new product;
o production yields;
o quality control and assurance;
o raw material supply; and
o shortages of qualified personnel.
The current consolidation of manufacturing operations to our Rockville facility,
technology transfer and manufacturing transitions and scale-ups in which we may
engage in the future could affect our ability to meet increases in demand should
our products gain market acceptance and could impede the growth of our sales
revenues.
In an Effort to Scale Up Our Manufacturing Capacity Quickly, We May Engage
Contract Manufacturers to Produce Some of Our Products, Including Our Rapid
Tests Currently Under Development.
Outsourcing some of our manufacturing processes to contract manufacturers may
permit us to expand our manufacturing capacity more quickly, but it may also
subject us to problems in such areas as:
o lack of technical knowledge regarding regulated procedures;
o uncertain or unreliable production yields;
o maintaining quality control and assurance;
o regulatory compliance, since most rapid test manufacturers do not produce
products that are as stringently controlled as HIV diagnostics; and
o Misappropriation of intellectual property, particularly in foreign
countries where patent protection is less stringent, and depending on the
extent of manufacturing processes that are outsourced.
The Success of Our Plans to Enter International Markets May Be Limited or
Disrupted Due to Risks Related to International Trade and Marketing and the
Capabilities of Our Distributors, Manufacturers and Joint Venture Partners.
Following the anticipated completion of the development of our rapid tests, we
believe that sales to international distributors and/or joint ventures will
generate a significant portion of our revenues for the next several years. We
believe that our urine and oral fluid-based tests can provide significant
benefits in countries that do not have the facilities or personnel to safely and
effectively collect and test blood samples. However, sales to international
14
customers accounted for only 5% of our revenue in our fiscal year ended December
31, 2003 and less than 1% of our revenue in the first quarter of 2004. A
majority of the companies with which we compete in the sale of HIV screening
tests actively market their diagnostic products outside of the U.S. In addition,
as regulatory requirements for HIV screening tests outside the United States are
less demanding than those of the FDA, we compete with our EIA products against a
much wider range of competitors that may not be FDA approved. Manufacturers from
Japan, Canada, Europe, and Australia offer a number of HIV screening tests in
those markets including HIV-1/2 tests, rapid tests and other non-EIA format
tests, which are not approved for sale in the U.S. market. There can be no
assurance that our products will compete effectively against these products in
foreign markets, or that these competing products will not achieve FDA approval.
The following risks may limit or disrupt our international sales:
o the imposition of government controls (regulatory approval);
o export license requirements;
o domestic license requirements;
o political instability;
o trade restrictions;
o changes in tariffs;
o difficulties in managing international operations (difficulty in
establishing a relationship with a foreign distributor, joint venture
partner, or contract manufacturer with the financial and logistical ability
to maintain quality control of product);
o the ability to secure licenses for intellectual property or technology that
are necessary to manufacture or sell our products in the selected
countries;
o fluctuations in foreign currency exchanges rates;
o the financial stability of our distributors and/or their expertise in
obtaining local country regulatory approvals;
o the financial capabilities of potential customers in lesser-developed
countries or, alternatively, our inability to obtain approvals which would
enable such countries access to outside financing, such as the World Bank;
o the ability of our distributors to successfully sell into their contractual
market territory or to successfully cover their entire territory;
o the possibility that a distributor may be unable to meet minimum
contractual commitments;
o establishing market awareness; and
o external conditions such as regional conflicts or health crises resulting
from SARS.
Some of our distributors have limited international marketing experience. There
can be no assurance that these distributors will be able to successfully market
our products in foreign markets. Any such failure will delay or disrupt our
plans to expand the Company's business.
The Chinese Government Could Change Its Policies Toward Private Enterprises or
Even Nationalize or Expropoiate Them, Which Could Result in the Total Loss of
Business in That Country.
We have established a joint venture in China and are currently planning to sell
both our existing products and our rapid products currently under development
through it. Our business in China is subject to political or economic
uncertainties and may be adversely affected by political, economic and social
developments in China. Over the past decade, the Chinese government has pursued
economic reform policies, including the encouragement of private economic
activity and greater economic decentralization. The Chinese government may
choose to end these policies or alter them significantly to our detriment with
little, if any, prior notice.
Changes in policies, laws and regulations or in their interpretation or the
imposition of taxation, restrictions on currency conversion, restrictions or
devaluations of currency, nationalization or other expropriation of private
enterprises could have a material adverse effect on our business in China.
Nationalization or expropriation could result in the total loss of business in
China.
15
We Face Intense Competition in the Medical Diagnostic Products Market and Rapid
Technological Advances by Competitors.
Competition in our diagnostic market is intense and we expect it to increase.
The marketplace where we sell our products is divided into two categories: (i)
screening, and (ii) supplemental testing. Within the United States, our
competitors for screening tests include a number of well-established
manufacturers of HIV tests using blood samples, plus at least one system for the
detection of HIV antibodies using oral fluid samples. In the supplemental
testing category of the market, we offer the only FDA approved urine-based test
as well as a blood-based test. One other company offers an FDA approved
supplemental blood test. In addition to our urine and blood-based confirmation
test, there is also an oral mucosal transidate (saliva) based supplemental test
to complement the oral-fluid screening test. Many of our competitors have
significantly greater financial, marketing and distribution resources than we
do. Our competitors may succeed in developing or marketing technologies and
products that are more effective than ours, including several recently-FDA
approved rapid blood tests. In addition, as the anticipated acceptance for urine
testing grows, we may experience competition from companies in areas where
intellectual property rights may not be as stringent as in the US. These
developments could render our technologies or products obsolete or
noncompetitive or otherwise affect our ability to increase or maintain our
products' market share.
Our Research and Development of HIV Urine Tests Involves the Controlled Use of
Hazardous Materials.
There can be no assurance that the Company's safety procedures for handling and
disposing of hazardous materials such as azide will comply with applicable
regulations. For example, azide, when present in high concentrations and not
diluted with water, can have an explosive reaction. Azide is a chemical used as
a preservative in our kits. In addition, we cannot eliminate the risk of
accidental contamination or injury from these materials. We may be held liable
for damages from such an accident and that liability could have a material
adverse effect on the Company.
We May Not Be Able to Retain Our Key Executives and Research and Development
Personnel.
As a small company, our success depends on the services of key employees in
executive and research and development positions. The loss of the services of
one or more of such employees could have a material adverse effect on us.
As a Small Manufacturer of Medical Diagnostic Products, We Are Exposed to
Product Liability and Recall Risks For Which Insurance Coverage is Expensive,
Limited and Potentially Inadequate.
We manufacture medical diagnostic products, which subjects us to risks of
product liability claims or product recalls, particularly in the event of false
positive or false negative reports. A product recall or a successful product
liability claim or claims that exceed our insurance coverage could have a
material adverse effect on us. We maintain a $10,000,000 claims made policy of
product liability insurance. However, product liability insurance is expensive.
In the future we may not be able to obtain coverage on acceptable terms, if at
all. Moreover, our insurance coverage may not adequately protect us from
liability that we incur in connection with clinical trials or sales of our
products.
Our Charter Documents May Inhibit a Takeover.
Certain provisions of our Certificate of Incorporation and Bylaws could:
o discourage potential acquisition proposals (i.e. shareholder rights plan
also known as a "poison pill");
o delay or prevent a change in control of Calypte;
o diminish stockholders' opportunities to participate in tender offers for
our common stock, including tender offers at prices above the then-current
market price;
o inhibit increases in the market price of our common stock that could result
from takeover attempts; or
o grant to the Board of Directors the discretionary right to designate
specific rights and preferences of preferred stock greater than those of
our common stock.
We Have Adopted a Stockholder Rights Plan That Has Certain Anti-takeover
Effects.
16
On December 15, 1998, the Board of Directors of Calypte declared a dividend
distribution of one preferred share purchase right ("Right") for each
outstanding share of common stock of the Company. The dividend was payable to
the stockholders of record on January 5, 1999 with respect to each share of
common stock issued thereafter until a subsequent "distribution date" defined in
a Rights Agreement and, in certain circumstances, with respect to shares of
common stock issued after the Distribution Date.
The Rights have certain anti-takeover effects. The Rights will cause substantial
dilution to a person or group that attempts to acquire the Company without
conditioning the offer on the Rights being redeemed or a substantial number of
Rights being acquired. However, the Rights should not interfere with any tender
offer, or merger, which is approved by the Company because the Rights do not
become exercisable in the event of an offer or other acquisition exempted by
Calypte's Board of Directors.
Our Board of Directors has Certain Discretionary Rights With Respect to Our
Preferred Shares That May Adversely Effect the Rights of our Common
Stockholders.
Our Board may, without shareholder approval, designate and issue our preferred
stock in one or more series. Additionally, our Board may designate the rights
and preferences of each series of preferred stock it designates which may be
greater than the rights of our common stock. Potential effects on our common
stock may include among other things:
o restricting dividends;
o dilution of voting power;
o impairment of liquidation rights; and
o delay or preventing a change in control of the Company.
Additionally, following the 1:30 reverse split of our common stock that became
effective in May 2003, we currently have over 500 million shares of common stock
that could be issued without further stockholder approval. Although there are no
current plans to issue such a large number of shares, the dilution resulting
from such issuance could also adversely affect the rights of our current common
stockholders.
Risks Related to Regulatory Approvals and Clearances
The Time Needed to Obtain Regulatory Approvals and Respond to Changes in
Regulatory Requirements Could Adversely Affect Our Business.
Our proposed and existing products are subject to regulation by the FDA and
other governmental or public health agencies. In particular, we are subject to
strict governmental controls on the development, manufacture, labeling,
distribution and marketing of our products. In addition, we are often required
to obtain approval or registration with foreign governments or regulatory bodies
before we can import and sell our products in foreign countries.
The process of obtaining required approvals or clearances from governmental or
public health agencies can involve lengthy and detailed laboratory testing,
human clinical trials, sampling activities and other costly, time-consuming
procedures. The submission of an application to the FDA or other regulatory
authority does not guarantee that an approval or clearance to market a product
will be received. Each authority may impose its own requirements and delay or
refuse to grant approval or clearance, even though a product has been approved
in another country or by another agency.
Moreover, the approval or clearance process for a new product can be complex and
lengthy. This time span increases our costs to develop new products as well as
the risk that we will not succeed in introducing or selling them in the United
States or other countries.
Newly promulgated or changed regulations could also require us to undergo
additional trials or procedures, or could make it impractical or impossible for
us to market our products for certain uses, in certain markets, or at all.
17
Failure to Comply With FDA or Similar International Regulatory Bodies or Other
Requirements May Require Us to Suspend Production of Our Products Which Could
Result in a Loss of Revenues.
We can manufacture and sell products, both in the United States and abroad, only
if we comply with regulations of government agencies such as the FDA. We have
implemented quality assurance and other systems that are intended to comply with
applicable regulations in the United States.
Although we believe that we have adequate processes in place to ensure
compliance with these requirements, the FDA could force us to stop manufacturing
our products if it concludes that we are out of compliance with applicable
regulations. The FDA could also require us to recall products if we fail to
comply with applicable regulations, which could force us to stop manufacturing
such products. We will face similar risks when we establish our international
manufacturing operations.
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