PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(5)
To prospectus dated January 26, 2001 Registration Statement No. 333-53108
and prospectus supplement dated
November 18, 2002)
UP TO 1,000,000 SHARES OF COMMON STOCK
AND WARRANTS TO PURCHASE UP TO 230,000 SHARES OF COMMON STOCK
OF
NEOTHERAPEUTICS, INC.
This prospectus supplement relates to an offering by us on a "best
efforts" basis of up to 1,000,000 shares of our common stock at a purchase price
of $2.00 per share, and warrants to purchase up to 230,000 shares of our common
stock at an exercise price of $3.00 per share, to certain individual and
institutional investors for aggregate proceeds of approximately $2,000,000. In
connection with this offering, we will pay fees or commissions and/or issue
warrants to one or more placement agents and/or finders. See "Plan of
Distribution" on page S-4 of the prospectus supplement dated November 18, 2002
for more information regarding these potential arrangements.
You should read this prospectus supplement, the prospectus supplement
dated November 18, 2002, the accompanying prospectus, and the documents
incorporated by reference herein and therein, carefully before you invest. Such
documents contain information you should consider when making your investment
decision. The information included in the registration statement on Form S-3, as
amended (No. 333-53108) filed with the Securities and Exchange Commission on
January 2, 2001, is hereby incorporated by reference into this prospectus
supplement.
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "NEOT." On November 20, 2002, the last sale price of our common stock on
the Nasdaq SmallCap Market was $1.99 per share. As of November 21, 2002, we had
1,972,019 shares of our common stock outstanding.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" on page S-3 of thE prospectus supplement DATED nOVEMBER 18, 2002 as
well as ON PAGE 19 OF OUR ANNUAL REPORT ON FORM 10-K AND ON PAGE 30 OF OUR
QUARTERLY REPORT ON FORM 10-Q, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON APRIL 2, 2002 AND NOVEMBER 13, 2002, RESPECTIVELY, AND THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN AND THEREIN TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus supplement, the prospectus supplement
dated November 18, 2002, or the accompanying prospectus. Any representation to
the contrary is a criminal offense.
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The date of this prospectus supplement is November 21, 2002.
RECENT DEVELOPMENTS
On November 21, 2002, we issued 356,926 shares of our common stock at a
price of $1.76 per share to 5 vendors to settle approximately $628,190 in
payables. The shares were issued without registration under the Securities Act
of 1933, as amended, and the shares issued may not be offered or sold in the
United States absent registration under the Securities Act or an applicable
exemption from registration requirements. In connection with the settlements, we
granted registration rights to the parties that will require us to file a
registration statement within 60 days with the SEC in order to permit the
parties to resell their shares of common stock to the public.
DILUTION
The net tangible book value of our common stock on September 30, 2002
was $2,081,409, or approximately $1.31 per share. Net tangible book value per
share represents the amount of our total tangible assets, less our total
liabilities, divided by the total number of shares of our common stock
outstanding. Dilution in net tangible book value per share to new investors
represents the difference between the amount per share paid by purchasers of
shares of our common stock in this offering and the net tangible book value per
share of our common stock immediately afterwards. Without taking into account
any other changes in net tangible book value after September 30, 2002, other
than to give effect to the issuance of 356,926 shares of our common stock at
$1.76 per share pursuant to settlement agreements as discussed above and the
sale of 1,000,000 shares of common stock offered by us at a price of $2.00 per
share and after deducting the estimated finders fees and estimated offering
expenses payable by us, our net tangible book value would have been $ 4,609,599
or approximately $1.55 per share. This represents an immediate accretion in net
tangible book value of approximately $0.24 per share to existing stockholders
and an immediate dilution in net tangible book value of $0.45 per share to new
investors.
Offering price per share................................................. $2.00
Net tangible book value per share as of September 30, 2002............... $1.31
Increase per share attributable to new investors......................... 0.24
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As adjusted net tangible book value per share after the offering......... 1.55
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Decrease in net tangible book value per share to new investors........... 0.45
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This table excludes shares of common stock issuable upon exercise of
options, warrants and other rights, and the effect of shares of common stock
issued, except as indicated above, since September 30, 2002.
You should rely only on the information contained in this prospectus
supplement, the prospectus supplement dated November 18, 2002, the accompanying
prospectus, and the documents incorporated by reference herein and therein. We
have not authorized anyone else to provide you with different information. We
will not make an offer of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus
supplement, the prospectus supplement dated November 18, 2002, the accompanying
prospectus or any other supplement or in the documents incorporated by reference
herein and therein is accurate on any date other than the date on the front of
those documents.
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