UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
/x/ Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1999
or
/ / Transition Report pursuant to Section 13 of 15 (d) of the Securities
Exchange Act of 1934 for the transition period from __________ to __________
Commission File Number 0-9314
ACCESS PHARMACEUTICALS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 83-0221517
- ------------------------- --------------------------
(State of Incorporation) (I.R.S. Employer I.D. No.)
2600 Stemmons Freeway, Suite 176, Dallas, TX 75207
- -------------------------------------------- ------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (214) 905-5100
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, One Cent ($0.01)
Par Value Per Share American Stock Exchange
- ------------------------------ -------------------------
(Title of Class) (Name of each exchange on
which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. Yes /x/ No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. _____
The aggregate market value of the outstanding voting stock held by non-
affiliates of the registrant as of March 28, 2000 was approximately
$68,387,000.
As of March 28, 2000 there were 10,946,433 shares of Access
Pharmaceuticals, Inc. Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: Documents incorporated by reference
are listed in the exhibit list.
This Annual Report on Form 10-K/A ("Form 10-K/A") is being filed as
Amendment No. 1 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1999. This Form 10-K/A is filed
with the Securities and Exchange Commission solely for the purpose of
revising and restating the following items in their entirety.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Officers and Directors
Our directors and executive officers are as follows:
Name Age Title
- ------------------------- ----- ----------------------------------
Herbert H. McDade, Jr. 73 Chairman of the Board of Directors
Kerry P. Gray 47 President, Chief Executive Officer,
Director
J. Michael Flinn 66 Director
Stephen B. Howell, M.D. 55 Director
Max Link, Ph.D. 59 Director
Howard P. Milstein 48 Director
Richard B. Stone 57 Director
Preston Tsao 54 Director
David P. Nowotnik, Ph.D. 51 Vice President Research & Development
Stephen B. Thompson 46 Vice President, Chief Financial
Officer, Treasurer
Members of each class serve a term of three years until the respective
annual meeting of stockholders and election and qualification of their
successors. Dr. Link and Mr. Milstein are members of the Class 1
directors with their terms set to expire upon the annual meeting of
stockholders in 2002. Dr. Howell and Messrs. Stone and Tsao are Class
2 directors with their terms set to expire upon the annual meeting of
stockholders in 2000. Messrs. Gray, McDade and Flinn are Class 3
directors with their terms set to expire upon the annual meeting of
stockholders in 2001. Each of our officers is selected by the board of
directors for a term of one year. There is no family relationship among
any of the directors or executive officers. There is no family relationship
among any of the directors or officers.
Business and Experience of Directors
Mr. Herbert H. McDade, Jr. was elected to be one of our directors in
1988, and presently is Chairman of the board of directors. In February
1989, he was elected Vice-Chairman of the board of directors and our
Chief Executive Officer. In June 1989, he was elected Chairman of the
board of directors and Treasurer in addition to his responsibilities as
Chief Executive Officer, and from 1990 to January 1996 he was our
President. Mr. McDade served in such capacities until January 1996. He
is also a member of the Audit & Finance Committee and Compensation
Committee of the board of directors. He is currently President and Chief
Executive Officer of the Thoma Corporation, a closely-held health care
consulting company. In addition, he also serves on the boards of CytRx
Corporation, Shaman Pharmaceuticals, Inc., Discovery Laboratories,
Inc. and Cell Path, Inc. From 1986 to 1987 he served as Chairman of
the board of directors and President of Armour Pharmaceutical Co., a
wholly-owned subsidiary of Rorer Group, Inc. Prior to 1986 he served
for approximately 13 years in various executive positions at Revlon,
Inc., including from 1979 to 1986, as President of the
1
International Division of the Revlon Health Care Group. He was also previously
associated for twenty years in various executive capacities with The
Upjohn Company. From January 1989 to July 1995 he served on the
board of Access Pharmaceuticals, Inc. of Texas.
Mr. Kerry P. Gray has been our President and a Chief Executive Officer
and a director since January 1996. Prior to such time, from June 1993,
Mr. Gray served as President and Chief Executive Officer of Access
Pharmaceuticals, Inc., a private Texas corporation. Previously, Mr.
Gray served as Vice President and Chief Financial Officer of
PharmaSciences, Inc., a company he co-founded to acquire technologies
in the drug delivery area. From May 1990 to August 1991, Mr. Gray
was Senior Vice President, Americas, Australia and New Zealand of
Rhone-Poulenc Rorer, Inc. Prior to the Rorer/Rhone Poulenc merger, he
had been Area Vice President Americas of Rorer International
Pharmaceuticals. Previously, from January 1986 to May 1988, he was
Vice President, Finance of Rorer International Pharmaceuticals, having
served in that same capacity for the Revlon Health Care Group of
companies before their acquisition by Rorer Group. Between 1975 and
1985, he held various senior financial positions in Revlon Health Care
Group. Mr. Gray's experience in the pharmaceutical industry totals 25 years.
Mr. J. Michael Flinn has served as one of our directors since 1983. Mr.
Flinn is also a member of the Audit & Finance Committee of the board
of directors. Since 1970, he has been an investment counselor. Currently
he is a consultant to the Operations Group of United Asset Management.
Previously from 1970 to 1996 he was a principal with the investment
counseling firm of Sirach Capital Management, Inc. He assisted in the
management of pension, profit sharing, individual, corporate and
foundation accounts totaling over $6.5 billion. He serves as a board
member of Oridigm Corporation, Lonesome Dove Petroleum and Carroll College.
Stephen B. Howell, M.D. has served as one of our directors since 1996.
Dr. Howell is also a member of the Compensation Committee. Dr.
Howell is a medical oncologist who is Professor of Medicine at the
University of California, San Diego, and leader of the Cancer
Pharmacology Program of the UCSD Cancer Center. Dr Howell also
directs the Laboratory of Pharmacology and the Clayton Foundation
Drug Resistance Center at the UCSD Cancer Center. Amongst other
awards and honors, Professor Howell is a recipient of the Milken Family
Medical Foundation Award for Outstanding Work in the Field of Cancer
Research, and has been listed in The Best Doctors in America since
1990. Acknowledged as a leading world expert in the field of cancer
therapeutics, Professor Howell has published over 280 journal articles,
and serves on the editorial boards of numerous medical journals.
Max Link, Ph.D. has been one of our directors since 1996. Dr. Link
is also a member of the Compensation and Audit & Finance
Committees of the board of directors. He has held a number of
executive positions with pharmaceutical and health care companies.
Most recently, he served as Chief Executive Officer of Corange
Limited, from May 1993 until June 1994. Prior to joining Corange,
Dr. Link served in a number of positions with Sandoz Pharma Ltd.,
including Chief Executive Officer, from 1987 until April 1992, and
Chairman, from April 1992 until May 1993. Dr. Link currently
serves on the board of directors of eight other publicly-traded life
science companies: Alexion Pharmaceuticals, Inc., Cell Therapeutics,
Inc., CytRx Corporation, Discovery Laboratories, Inc., Human
Genome Sciences, Inc., Procept, Inc., Protein Design Labs, Inc. and
Sulges Medica, Ltd. Dr. Link received his Ph.D. in Economics from
the University of St. Gallen in 1970.
Mr. Howard P. Milstein was appointed as a director at the October
22, 1999 board meeting. Mr. Milstein is a Managing Partner of
Milstein Properties, an investment builder active in both residential
and commercial development primarily in New York City and a
Managing Partner of Milstein Ventures. Mr. Milstein is Co-Chairman
of the Emigrant Savings Bank and chairs Douglas Elliman-Beitler, a
national commercial leasing and management company. As Chairman
of Milford Hotel Corp., Mr. Milstein owns and operates hotels in
New York. Mr. Milstein chairs the family communication activities,
including cable and telephone activities and The Milford Advertising
Agency. Mr. Milstein has a BA from Cornell University and a JD
and MBA from Harvard University.
Mr. Richard B. Stone was appointed as a director at the October 22,
1999 board meeting. Mr. Stone is a Managing Director of Sunrise
Securities Corp., an investment bank specializing in the life science
and communications industries. Since 1974 Mr. Stone has been the
Wilbur H. Friedman Professor of Tax Law at Columbia University
where his responsibilities include teaching Federal Income Tax,
Partnership Tax, Real Estate Tax and Business Planning. A graduate
of Harvard College and Harvard Law School Mr. Stone served four
years as Assistant Solicitor General of the United States.
2
Mr. Preston Tsao was appointed as a director at the October 22, 1999
board meeting. From January 1, 1995 through the date of this
prospectus, Mr. Tsao has been Managing Director for Corporate
Finance of Sunrise Securities Corp., an investment bank specializing
in the life science and communications industries. From 1993 to 1994,
Mr. Tsao was Managing Director of D. Blech & Company, Inc., a
venture capital and investment bank specializing in the biotech
industry. Mr. Tsao received his BA at Princeton and a JD degree
from Columbia University Law School.
Executive Officers
In addition to our executive officers who are also directors, set forth
below is the business experience of our other executive officers.
David P. Nowotnik, Ph.D. has been Vice President Research and
Development since November 1998. From 1994 until 1998, Dr.
Nowotnik had been with Guilford Pharmaceuticals, Inc. in the
position of Senior Director, Product Development and was responsible
for a team of scientists developing polymeric controlled-release drug
delivery systems. From 1988 to 1994 he was with Bristol-Myers
Squibb researching and developing technetium radiopharmaceuticals
and MRI contrast agents. From 1977 to 1988 he was with Amersham
International leading the project which resulted in the discovery and
development of Ceretec.
Mr. Stephen B. Thompson has been Vice President since April 2000
and our Chief Financial Officer since January 1996. From 1990 to
1996, he was Controller and Administration Manager of Access
Pharmaceuticals, Inc. Previously, from 1989 to 1990, Mr. Thompson
was Controller of Robert E. Woolley, Inc. a hotel real estate company
where he was responsible for accounting, finances and investor
relations. From 1985 to 1989, he was Controller of OKC Limited
Partnership, an oil and gas company where he was responsible for
accounting, finances and SEC reporting. Between 1975 and 1985 he
held various accounting and finance positions with Santa Fe
International Corporation.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and persons who own more than ten
percent of a registered class of our equity securities to file with the
Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of our common stock and other
equity securities. Directors, officers and 10% holders are required by
SEC regulation to furnish us with copies of all of the Section 16(a)
reports they file.
Based solely on a review of reports furnished to us or written
representatives from our directors and executive officers during the
fiscal year ended December 31, 1999, all Section 16(a) filing
requirements applicable to our directors, executive officers and 10%
holders for such year were complied with except for: Messrs.
Milstein, Stone and Tsao, each filed a late Form 3.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Directors
Each director who is not also our employee receives a quarterly fee of
$1,250, plus $1,000 for each board meeting which he attends and
$500 for each committee meeting he attends as member of the Audit
and Finance and/or Compensation Committees. Each committee
Chairman also receives $250 for each meeting he attends. In addition,
we reimbursed each director, whether an employee or not, the
expenses of attending board and committee meetings. Each non-
employee director will also be entitled to receive stock options to
purchase 5,000 shares of our common stock on the date of each
annual meeting of stockholders and 20,000 shares of common stock
when he/she is first appointed as a director.
3
Executive Compensation
The following table sets forth the aggregate compensation paid to our
CEO and each of our executive officers whose aggregate salary and
bonus exceeded $100,000 for services rendered in all capacities for
the years ended December 31, 1999, 1998 and 1997.
Summary Compensation Table
------------------------------
Long-term
Annual Compensation Compensation Awards
--------------------------- -------------------
Name and Securities Underlying All Other
Principal Position Year Salary(1) Bonus(2) Options (#) Compens.(3)
- ------------------------------ ------ --------- -------- ------------------- -----------
Kerry P. Gray 1999 $255,107 $ 0 160,000 $ 4,150
President and CEO 1998 236,497 0 160,000 1,200
1997 221,025 0 0 573
David P. Nowotnik, Ph.D. 1999 $171,155 $ 1,800 50,000 $ 2,287
Vice President Research 1998 21,359 0 50,000 0
and Development (4)
Stephen B. Thompson 1999 $ 98,367 $ 5,960 20,000 $ 1,333
Vice President, Chief 1998 92,360 0 20,000 0
Financial Officer 1997 87,750 4,000 0 0
(1) Includes amounts deferred under our 401(k) Plan.
(2) Includes bonuses paid in the indicated year and earned in the
preceding year.
(3) Amounts reported for fiscal year 1999 consist of: (i) amounts we
contributed to our 401(k) Plan with respect to each named Executive
Officer and (ii) premiums paid for life insurance and long-term
disability for Mr. Gray only. Amounts reported for fiscal year 1998
and 1997 consist of premiums paid for life insurance and long-term
disability for Mr. Gray only.
(4) Dr. Nowotnik joined us on November 16, 1998.
Options Grants in 1999
Individual Option Grants In Last Fiscal Year
----------------------------------------------
Number of Percent of Potential Realizable
Securities Total Options Value at Assumed
Underlying Granted to Exercise Annual Rates of
Options Employees in Price Expiration Stock Appreciation
Name Granted # Fiscal Year(1) $/Sh(2) Date For Option Term(2)
- ----------------------- ---------- -------------- ------- ---------- ------------------
5% 10%
------- -------
Kerry P. Gray (3) 160,000 52% $2.00 07/20/09 $201,000 $510,000
David P. Nowotnik (4) 50,000 15% $2.00 07/20/09 $ 63,000 $159,000
Stephen B. Thompson (4) 20,000 6% $2.00 07/20/09 $ 25,000 $ 64,000
(1) Based on an aggregate of 333,000 options granted to employees and
non-employee board members in the fiscal year ended December 31,
1999, including options granted to the Named Executive.
(2) The exercise price of each grant is equal to the value of our common
stock received in the private placement on the date of the grant which
was determined by the Board of Directors to be the fair market value
on such date.
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(3) Mr. Gray had 100,000 options vest on the date of grant. The
remaining 60,000 options vest 2.083% monthly commencing twelve
months from the date of grant and are cumulatively exercisable 48
months after the date of grant.
(4) Dr. Nowotnik and Mr. Thompson's options vest 25% after twelve
months and the remaining 75% vest 2.083% monthly commencing
twelve months from the date of grant and are cumulatively exercisable
48 months after the date of grant.
(5) Potential realizable value is based on the assumption that the price per
share of our common stock appreciates at the assumed annual rate of
stock appreciation for the option term. There is no assurance that the
assumed 5% and 10% annual rates of appreciation (compounded
annually) will actually be realized over the term of the option. The
assumed 5% and 10% annual rates are set forth in accordance with
the rules and regulations adopted by the Securities and Exchange
Commission and do not represent our estimate of stock price
appreciation.
Option Exercises and Year-End Value Table
This table includes the number of shares covered by both exercisable
and non-exercisable stock options as of December 31, 1999. Also
reported are the values of "in-the-money" stock options which
represent the positive spread between the exercise price of any such
existing stock options and the year-end price of our common stock.
Aggregated Option Exercises In Last Fiscal Year And
Fiscal Year-End Option Values
-----------------------------------------------------
Number of Securities Value of Unexercised
Underlying In-The-Money Options
Unexercised Options ($)
Number of At Fiscal Year End At Fiscal Year End
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise # Realized ($) Unexercisable Unexercisable
- ------------------- ------------- ------------ ----------------- ------------------
Kerry P. Gray - - 222,500 / 97,500 $0 / $0
David P. Nowotnik - - 13,542 / 36,458 $0 / $0
Stephen B. Thompson - - 7,500 / 12,500 $0 / $0
(1) On December 31, 1999, the exercise price of all outstanding
options held by such executive was greater than $2.00, the closing
price of our stock on the OTC Bulletin Board.
Compensation Pursuant to Agreements and Plans
Employment Agreements
We are party to an employment agreement with Kerry P. Gray which
expires March 31, 2001 and thereafter may be automatically renewed
for successive one-year periods. Under this agreement, Mr. Gray is
currently entitled to receive an annual base salary of $286,000 subject
to adjustment by the board of directors. Mr. Gray is eligible to
participate in all of our employee benefit programs available to
executives. Mr. Gray is also eligible to receive:
* a bonus payable in cash and common stock related to the attainment
of reasonable performance goals specified by the board of directors;
* stock options at the discretion of the board of directors;
* long-term disability insurance to provide compensation equal to at
least 60% of his annual base salary; and
* term life insurance coverage of $400,000.
Mr. Gray is entitled to certain severance benefits in the event that we
terminate his employment without cause or that Mr. Gray terminates
his employment following a change of control. In the event that we
terminate the employment agreement for any reason, other than for
cause, Mr. Gray would receive the salary due for the remaining term of the
5
agreement or 18 months, whichever is longer. We will also
continue benefits for such period. In the event that Mr. Gray's
employment is terminated within six months following a change in
control or by Mr. Gray upon the occurrence of certain events
following a change in control, Mr. Gray would receive two years
salary and his target bonus. We will also continue payment of benefits
for such period. The employment agreement contains a covenant not
to compete with us for up to 18 months following the termination
date. In the employment agreement, the term change of control is
defined to mean when:
* persons who were Directors of the Company on April 1, 1998 no
longer constitute a majority of the Board of Directors of the
Company, or
* a person or group "beneficially owns" in the aggregate 50% or more
of the outstanding shares of capital stock entitled to vote generally in
the election of the Board of Directors, or
* there occurs a sale of all or substantially all of the business and/or
assets of the Company.
We are party to an employment agreement with David P. Nowotnik,
PhD which expires November 16, 2000 and thereafter may be
automatically renewed for successive one-year periods. Under this
agreement, Dr. Nowotnik is currently entitled to receive an annual
base salary of $185,000 subject to adjustment by the board of
directors. Dr. Nowotnik is eligible to participate in all of our
employee benefit programs available to executives. Dr. Nowotnik is
also eligible to receive:
* a bonus payable in cash and common stock related to the attainment
of reasonable performance goals specified by the board of directors;
* stock options at the discretion of the board of directors;
* long-term disability insurance to provide compensation equal to at
least 60,000; and
* term life insurance coverage of $25,000.
Dr. Nowotnik is entitled to certain severance benefits in the event that
we terminate his employment without cause or that Dr. Nowotnik
terminates his employment following a change of control. In the event
that we terminate the employment agreement for any reason, other
than for cause, Dr. Nowotnik would receive the salary due for 12
months. We will also continue benefits for such period. In the event
that Dr. Nowotnik's employment is terminated within six months
following a change in control or by Dr. Nowotnik upon the
occurrence of certain events following a change in control, Dr.
Nowotnik would receive twelve months salary. We will also continue
payment of benefits for such period. In the employment agreement,
the term change of control is defined to mean when:
* a person or group "beneficially owns" in the aggregate 50% or more
of the outstanding shares of capital stock entitled to vote generally in
the election of the Board of Directors, or
* there occurs a sale of all or substantially all of the business and/or
assets of the Company.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Based solely upon information made available to us the following
table sets forth certain information with respect to the beneficial
ownership of our Common Stock as of April 27, 2000 by (i) each
person who is known by us to beneficially own more than five percent
of our common stock; (ii) each of our directors; (iii) each of our
executive officers; and (iv) all our executive officers and directors as
a group. Except as otherwise indicated, the holders listed below have
sole voting and investment power with respect to all shares of our
common stock beneficially owned by them.
Common Stock Beneficially Owned
-------------------------------
Number
Name of Shares (1) % of Class
- ------------------------------------- ------------- ----------
Herbert H. McDade. Jr. (2) 81,707 *
Kerry P. Gray (3) 301,040 2.6%
J. Michael Flinn (4) 97,475 *
Stephen B. Howell (5) 103,250 *
Max Link (6) 22,000 *
Howard P. Milstein (7) 750,140 6.5%
Richard B. Stone (8) 743,639 6.4%
Preston Tsao (9) 27,761 *
David P. Nowotnik (10) 19,791 *
Stephen B. Thompson (11) 12,023 *
Larry Feinberg (12) 2,000,000 17.4%
All Directors and Executive Officers
as a group (consisting of 10 persons) 2,158,826 17.8%
* Less than 1%
(1) Includes our Common Stock held plus all options and warrants
exercisable within 60 days after April 27, 2000. Unless otherwise
indicated, the persons listed have sole voting and investment powers
with respect to all such shares.
(2) Including presently exercisable options for the purchase of 12,000
shares of our Common Stock and 7,591 exercisable SARs pursuant to
the 1987 Stock Option Plan and presently exercisable options for the
purchase of 25,000 shares of our Common Stock pursuant to the 1995
Stock Option Plan. Also includes 1,000 shares of our Common Stock
owned by Thoma Corporation of which Mr. McDade is the beneficial
owner.
(3) Including presently exercisable options for the purchase of 230,000
shares of our Common Stock pursuant to the 1995 Stock Option Plan.
(4) Including presently exercisable options for the purchase of 22,500
shares of our Common Stock pursuant to the 1995 Stock Option Plan.
(5) Including presently exercisable options for the purchase of 750
and 20,500 shares of our Common Stock pursuant to the 1987 Stock
Option Plan and 1995 Stock Option Plan, respectively, and warrants
to purchase 30,000 shares of our Common Stock at an exercise price
of $3.00 per share and warrants to purchase 30,000 shares of our
Common Stock at an exercise price of $2.50 per share.
(6) Including presently exercisable options for the purchase of 20,000
shares of our Common Stock pursuant to the 1995 Stock Option Plan.
(7) Mr. Howard P. Milstein, c/o Douglas Elliman, 575 Madison
Avenue, New York, NY 10022, beneficially owns 738,588 shares of
our Common Stock and has warrants to purchase 11,552 shares of our
Common Stock at $12.98 per share with expiration of April 30, 2002,
is known to be the beneficial owner of more than five percent of our
Common Stock. The information set forth in this footnote is based on
a Schedule 13D filed by Mr. Milstein on October 5, 1999.
(8) Mr. Richard B. Stone, 44 West 77th Street, New York, New
York, 10024, owns 574,174 shares of our Common Stock and has
warrants to purchase 98,473 shares of our Common Stock at $3.00
per share with expiration dates between April 1 and July 20, 2004 and
has warrants to purchase 70,992 shares of our Common Stock at
$2.00 per share with an expiration date of July 20, 2004. Mr. Stone is
known to be the beneficial owner of more than five percent of our
Common Stock. The information set forth in this footnote is based on
a Schedule 13D filed by Mr. Stone on November 2, 1999 and from
our shareholder records.
(9) Including presently exercisable warrants for the purchase of
11,015 shares of our Common Stock at $3.00 per share with
expiration dates between April 1 and July 30, 2003 and presently
exercisable warrants for the purchase of 15,310 shares of Common
Stock at $2.00 per share with the expiration date of July 20, 2004.
(10) Including presently exercisable options for the purchase of
19,791 shares of our Common Stock pursuant to the 1995 Stock
Option Plan.
(11) Including presently exercisable options for the purchase of
10,000 shares of our Common Stock pursuant to the 1995 Stock
Option Plan.
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(12) Larry N. Feinberg and affiliates, Oracle Partners, L.P., Oracle
Institutional Partners, L.P. and Oracle Investment Management, Inc.,
712 Fifth Avenue, 45th Floor, New York, NY 10019 is known to be
the beneficial owner of more than five percent of our Common Stock.
The information set forth in this footnote is based on a Schedule 13G
filed by Mr. Feinberg on April 12, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Herbert H. McDade, Jr. In consideration for the termination of his
employment with the pre-merger Access, Mr. McDade and Access
entered into an agreement on October 4, 1995, pursuant to which,
among other things:
* Mr. McDade became a consultant to Access, providing consulting
services to Access at least four days each month;
* Mr. McDade is paid a base of $1,500 per day of consulting; and
* the period for exercise of all options owned by Mr. McDade was
extended from three months after the termination of his employment
with Access to the expiration of the option.
During 1999, 1998 and 1997, Thoma Corporation, of which Mr.
McDade is a principal, was paid an aggregate amount of $216,000 in
consulting fees.
Richard B. Stone. Mr. Stone is a managing director of Sunrise
Securities Corp., which acted as a placement agent in the private
placements of our common stock in 1999 and 1998 in connection with
such private placements. Mr. Stone received the following:
Exercise
Year Shares Warrants Price
------ --------- --------- -------
1999 101,225 165,722 $2.00
1998 109,904 98,474 $3.00
Until August 1, 2001, Sunrise has the right to designate one
individual for election to our board of directors and, if Sunrise
exercises such right, we are required to use our best efforts to cause
their nominee to be elected. In addition, if Sunrise does not exercise
their right, we shall permit a representative of Sunrise to attend and
observe all board of directors meetings.
Preston Tsao. Mr. Tsao is Managing Director for Corporate Finance
of Sunrise Securities Corp., which acted as a placement agent in the
private placements of our common stock in 1999 and 1998 in
connection with such private placements. Mr. Tsao received the
following:
Exercise
Year Shares Warrants Price
------ --------- ----------- --------
1999 - 15,310 $2.00
1998 - 11,015 $3.00
Until August 1, 2001, Sunrise has the right to designate one
individual for election to our board of directors and, if Sunrise
exercises their right, we are required to use our best efforts to cause
their nominee to be elected. In addition, if Sunrise does not exercise
their right, we shall permit a representative of Sunrise to attend and
observe all board of directors meetings.
Stephen B. Howell, MD. Dr. Howell, one of our directors, also
serves as a scientific consultant. The consulting agreement provides
for a minimum of two days consulting per month at a rate of $5,417
per month plus expenses. Dr. Howell has also received warrants to
purchase 30,000 shares of our common stock at $3.00 per share that
can be exercised until January 1, 2003. During 1999, 1998 and 1997,
Dr. Howell was paid an aggregate amount of $72,000 in consulting fees.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
ACCESS PHARMACEUTICALS, INC.
Date April 28, 2000 By: /s/ Kerry P. Gray
------------------
Kerry P. Gray
President and Chief Executive Officer
Date April 28, 2000 By: /s/ Stephen B. Thompson
------------------------
Stephen B. Thompson
Vice President, Chief Financial Officer,
Treasurer
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