This was updated on the IMMB Web Page this morning.
The attachments including the SYNEXA letter wee not attached.
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
December 1, 2014
____________________________________
In The Matter Of :
:
Bravo Enterprises, Ltd. :
Immunotech Laboratories, Inc. :
Myriad Interactive Media, Inc. :
Wholehealth Products, Inc. :
:
File No. 500-1 :
____________________________________:
THE PETITION OF IMMUNOTECH LABORATORIES, INC. FOR
TERMINATION OF TRADING SUSPENSION
NOW COMES, Immunotech Laboratories, Inc. (the “Issuer”) by and through its attorney, Adam S. Tracy, and petitions the Securities and Exchange Commission (the “Commission”) pursuant to 17 C.F.R. § 201.550 for termination of the November 20, 2014 Order of Suspension of Trading (the “Suspension Order”). In support thereof, the Issuer states:
Background
The Suspension Order was issued pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”) temporarily suspending trading of the Issuer’s equity securities through December 4, 2014.[1] The Suspension Order referenced the alleged inadequacy of publicly disseminated information related to the Issuer’s business prospects as they related to the current global outbreak of the Ebola virus.[2]
The Issuer
The Issuer is a Nevada corporation with its principal business location in Monrovia, California. The Issuer’s common equity securities are traded on the OTC Link (“Pink Sheets”) under the ticker “IMMB”. The Issuer is not subject to reporting obligations found under Section 13 of the Exchange Act[3]. However, the Issuer discloses “current public information” as provided for by Rule 10b-5 promulgated under the Exchange Act, and Rule 144(c)(2) promulgated under the Securities Act of 1933 (the “Act”)[4]. Accordingly, the Issuer publishes periodic reports via the “alternative reporting standard” provided by OTC Link. The Issuer is remained current with regards to its periodic reports filed with OTC Link.
The Issuer is actively engaged in the development and commercialization of proprietary proteins for use in treating infectious diseases such as Human Immunodeficiency Virus (“HIV”), Acquired Immune Deficiency Syndrome (“AIDS”) and Hepatitis. The Issuer’s primary asset is an exclusive license to utilize these pharmaceutical compositions in connection with its HIV/AIDS drug development efforts.[5] A true and accurate copy of the license is attached as Annex A hereto. These proprietary compositions are covered by two (2) patents and three (3) patent applications, to wit:
U.S. Patent No. US 7479538 B2: Improved in Vitro Binding Affinity for HIV-1 gp 120 and gp41 and Human CD4 Cells[6];
PCT/US05/45515: European Union counterpart to US Patent No. US 7479538 B2[7];
U.S. Patent Application No. US 200902857767 A1: Irreversibly-Inactivated Pepsinogen Fragments for Modulating Immune Function[8];
U.S. Patent Application No. US 8067531 B2: Inactivated Pepsin Fragments for Modulating Immune System Activity Against Human Malignant Tumor Cells[9]; and
U.S. Patent Application No. US 8066982 B2: Irreversibly-Inactivated Pepsinogen Fragment and Pharmaceutical Compositions Comprising the Same for Detecting, Preventing and Treating HIV[10].
The underlying technologies covered by the above-referenced patents and patent applications was invented and developed by Mr. Harry Zhabilov, the Issuer’s Chief Scientific Officer and Director. The intellectual property is titularly owned by The Zhabilov Trust, of which Diana Zhabilov is the Trustee and her children beneficiary thereof. Thus, there exists a comity of interest between Mr. Zhabilov, the Trust and the Issuer. The Trust has never sought to license its technology to any other third party other than the Issuer.
Utilizing the licensed technology, the Issuer has developed a platform for immune therapeutic treatment for HIV/AIDS relying upon an “inactive pepsin fraction” or “IPF”, which is unique to the technology. The IPF-based therapy works to prevent the HIV virus from infecting CD4 T-cells, which play a significant role within the body in resisting infection. The Issuer believes that this proprietary technology is the only HIV therapy to achieve this. Four experimental pilot studies held outside of the United States in Tijuana, Mexico tested the effectiveness of the IPF compound showed positive results, particularly in the with regards to latter stage AIDS patients who had developed an immunity to common antiretroviral therapies currently used.
The Issuer continues to develop the platform for further testing. The Issuers efforts have included the formation of a Bulgarian subsidiary, Immunotech Laboratories B.G., LLC . The subsidiary’s operations are to conduct pre-clinical testing and clinical trials for the purpose of obtaining European Union approval of “ImmmuneH”, a treatment for Hepatitis C, as well as testing on HIV/AIDS patients. All costs associated with testing are covered by shareholder loans to the subsidiary by its Bulgarian partners. The subsidiary will eventually seek to obtain production rights in Bulgaria.
On the most recent financial statements posted with OTC Markets, the Issuer shows minimal current assets against current liabilities in excess of $3,000,000. However, a substantial majority of such liabilities are owed to related parties. To wit, approximately $1,550,000 is owed to the Zhabilov Trust, $683,000 is owed to Harry Zhabilov as accrued salaries, and $435,382 owed to Harry Zhabilov for various short term loans made to the Issuer. In fact, all but approximately $15,000 of the Issuer’s short term liabilities are owed to Harry Zhabilov. The Issuer is not in default on any of its short term obligations.
The Issuer most recently reported long term liabilities of $1,645,524. Approximately $650,000 can be attributed to additional loans made to the Issuer by Harry Zhabilov. The Issuer has minimal monthly cash expenses as its clinical testing activities are performed by Mr. Zhabilov. The Issuer does foresee the need to sell either its debt or equity securities in the future should it become necessary to begin the mass production of its drug therapies.
Temporary Trading Suspensions & Termination
Section 12(k)(1)(A) of the Exchange Act authorizes the Commission “summarily to suspend trading in any security” if the Commission is of the opinion that the “public interest and the protection of investors so require.”[11] Congress thus conferred upon the Commission the authority to impose time-limited trading restrictions “without any notice, opportunity to be heard, or findings based upon a record.”[12] In imposing a trading suspension, the Commission aims to “alert the investing public that there is insufficient public information about the issuer upon which an informed investment judgment can be made or that the market for the securities may be reacting to manipulative forces or deceptive practices.”[13] However, “factors cited by the Commission in its order as the basis for the [temporary] trading suspension . . . do not constitute an adjudication of fact or law with respect to those matters.”[14]
The lone recourse afforded to issuers facing a temporary trading suspension if Rule 550, which provides for a review of the Commission’s “determin[ation] whether or not a 10-day suspension” is warranted following announcement of the suspension.[15] The Rule, in relevant part, states:
Petition for Termination of Suspension. Any person adversely affected by a suspension pursuant to Section 12(k)(1)(A) of the Exchange Act, 15 U.S.C. 78l(k)(1)(A), who desires to show that such suspension is not necessary in the public interest or for the protection of investors may file a sworn petition with the Secretary, requesting that the suspension be terminated. The petition shall set forth the reasons why the petitioner believes that the suspension of trading should not continue and state with particularity the facts upon which the petitioner relies.[16]
Neither the Code nor its legislative history provide a deadline for the Commission’s review of any petition brought pursuant to Rule 550. Although an accelerated review of any petition would comport with the Issuer’s due process rights in regards to summary administrative action.[17] Moreover, while the Code is similarly silent with regards to review of temporary trading suspensions that have expired, it has long been held that so long as the agency issuing the administrative order retains jurisdiction of the matter, such administrative orders concerning it are subject to revision.[18]
The November 20, 2014 Order of Suspension of Trading
The Suspension Order named four respondents including the Issuer citing a “lack of current and accurate information.”[19] Specifically, the Suspension Order questioned the “accuracy and adequacy of publicly disseminated information, including information about the relationship between the [Immunotech Laboratories’] business prospects and the current Ebola crisis.”[20] The Suspension Order is set to terminate on December 4, 2014.
The Issuer’s Ebola Product and Business Prospects
On September 22, 2014, the license between the Zhabilov Trust and the Issuer was amended to cover “all infectious diseases”. A true and accurate copy of the amendment is attached as Annex B hereto. Shortly thereafter, on or about October 1, 2014, the Issuer entered into an agreement with Uldic Investment Pvt., Ltd. (“Uldic”) pursuant to which Uldic is to: (a) to identify suitable government or university-sponsored research laboratories willing to conduct human clinical trials of the Issuer’s HIV and Hepatitis C therapies; and (b) develop market opportunities for the Issuer’s ebola therapies. Uldic’ activities are limited to various nations in Africa, Australia and New Zealand. A true and accurate copy of the agreement is attached as Annex C hereto.
Uldic is owned and managed by Mr. Borislav Boynov, also of Bulgarian descent, who has been living in Zimbabwe for nearly twenty (20) years. Since his relocation to Zimbabwe, he has acted as a local representative to a number of drug companies and has forged strong relationships with medical control authorities in South Africa, Zambia and Zimbabwe, to name a few. The Issuer’s objective in engaging Mr. Boynov and his firm was to leverage his experience and connectivity to obtain regulatory approval for its HIV therapies in a continent where AIDS is at a near pandemic levels. To date, Mr. Boynov has made high-level inquiries on behalf of the Issuer to public health officials of South Africa, Tanzania, Mauritius, Gaborone, Botswana, Zambia and Zimbabwe
The Issuer believes that its IPF-based therapies may have applicability to infectious diseases other than HIV and Hepatitis C. The Issuer’s research has indicated that IPF can be used as a fusion inhibitor – e.g., a class of antiretroviral drug that impedes the binding of the viros to healthy cells in the body, and thus limits the spread of the infection. Previous tests have shown that IPF has bound with glycoproteins on the surface of the HIV virus to slow the spread of the virus. The Ebola virus also has glycoproteins on its surface and the Issuer thus believes that IPF would work in the same manner.
The Issuer caused a press release to be issued on October 19, 2014 announcing the execution of the agreement with Uldic and describing the business opportunities that the Issuer seeks to explore. A true and accurate copy of the press release is attached as Annex D hereto. The press release, in all material respects, was accurate in both its description of the relationship between Uldic and the Issuer, as well as the detailed description of the methodology of the IDF therapies as a treatment for HIV/AIDS.
The press release is notable insomuch that it does not allege, claim or insinuate that the Issuer’s technology was a bona fide treatment for Ebola. Rather, the press release in rather painstaking detail, discusses the Issuer’s treatment for HIV and Hepatitis, such discussion being grounded in the results of years of clinical trials. The press release merely references the Issuer’s desire to “pursue the development of market opportunities related to the deadly Ebola virus” – which is both an accurate statement and a bona fide market opportunity given the Ebola crisis in Africa and the lack of treatment for it. Moreover, the release does not make any reference or inference as to any potential impact on the Issuer’s performance or profitability.
To such end, the Issuer, through the efforts of Uldic, has entered into preliminary discussions with the World Health Organization in Harare, Zimbabwe regarding clinical testing for the IPF therapy specifically on the Ebola virus. Moreover, the company has reached a preliminary agreement with Synexa Laboratories based in Cape Town, South Africa following a meeting there in which the Issuer has reached an agreement for Synexa to conducts trials using IPF as an immunomodulator on viral diseases. A true and accurate copy of the Memorandum of Understanding by and between the Issuer and Synexa is attached as Annex E hereto.
Termination of the Trading Suspension
“The power to summarily suspend trading in a security even for 10 days, without any notice, opportunity to be heard, or findings based upon a record, is an awesome power with a potentially devastating impact on the issuer, its shareholders, or other investors.”[21] Here, the trading suspension imposed upon the Issuer unfairly punishes both the company and its shareholders for accurately disclosing information concerning bona fide business opportunities. The Issuer’s disclosure was a far cry from the often-employed manipulation scheme involving a brazen business achievement coupled with artificially driven volume increases. Rather, the Commission has apparently taken a position as to the perceived inapplicability of the Issuer’s technology to Ebola – when the Issuer itself has never stated that the IPF therapy can definitively be used to treat the virus. Therefore, to mitigate the damage already incurred by the Issuer and its shareholders, the Commission must terminate the suspension immediately.
WHEREFORE, the Petitioner Immunotech Laboratories, Inc. respectfully requests that the summary trading suspension be terminated nunc pro tunc to November 20, 2014
Dated: December 1, 2014 Respectfully submitted,
IMMUNOTECH LABORATORIES, INC.
___________________
By Its Attorney
Adam S. Tracy
Securities Compliance Group Ltd
520 W. Roosevelt Road
Suite 201
Wheaton, IL 60187
(888) 978-9901 Tel.
(630) 689-9471
at@ibankattorneys.com
VERIFICATION
Under penalties of perjury, the undersigned, being duly sworn on oath, hereby deposes and states that he has read the foregoing Petition of Immunotech Laboratories for Termination of Trading Suspensionand is familiar with the facts and circumstances contained therein; and that the allegations contained therein are true and correct to the best of his knowledge and belief.
Dated: December 1, 2014
___________________________
By: Harry Zhabilov
CERTIFICATE OF SERVICE
I, Adam S. Tracy, an attorney, certify that I served the attached Petition of Immunotech Laboratories, Inc for Termination of Trading Suspension by causing a copy of the same to be delivered by overnight courier and hand delivery, to the parties listed below at their respective addresses from 520 W. Roosevelt Road, Wheaton, Illinois, with proper postage prepaid, at or before the hour of 5:00 p.m. on December 1, 2014
Mr. J. Lauchlan Wash Office of the Secretary
Securities and Exchange Commission Securities and Exchange Commission
33 Arch Street, 23rd Floor 100 F. Street, NE
Boston, MA 02110 Washington, DC 20549
washj@sec.gov
___________________________
Adam S. Tracy
[1] Immunotech Laboratories, Inc., Securities Exchange Act Release No. 34-73650
[2] Id.
[3] 15 U.S.C. §78m(a),
[4] 17 C.F.R. §240.10b-5, 17 C.F.R. §230.144(c)(2)
[5] Immunotech Laboratories, Inc. (2009) Annual Report on Form 10-K 2009. Retrieved from SEC EDGAR website http:///www.sec.gov/edgar/shtml
[6] Zhabilov, H. (2009). Improved In Vitro Binding Affinity for HIV-1 gp 120 and gp 41, and Human CD$ Cells. US 7479538 B2.
[7] Zhabilov, H. (2011). Fragments de pepsine inactives pour moduler l’activit`e du systeme immune contre des celluled tumorales malignes. WO 2010065157 A2
[8] Zhabliov, H. (2009). Irreversibly-Inactivated Pepsinogen Fragments for Modulating Immune Function. US 20090285776 A1
[9] Zhabilov, H. (2011). Inactivated Pepsin Fragments for Modulating Immune System Activity Against Human Malignant Tumor Cells, US 8067531 B2
[10] Zhabliov, H (2011). Irreversibly-Inactivated Pepsinogen Fragment and Pharmaceutical Compositions Comprising the Same for Detecting, Preventing and Treating HIV. US 8066982 B2.
[11] 15 U.S.C. § 78(k)(1)
[12] SEC v. Sloan, 436 U.S. 103, 112 (1978); see also, Sloan v. SEC, 547 F.2d 152, 159 (2d Cir. 1976)
[13] Adopting Release: Rules of Practice, 60 Fed. Reg. at 32787
[14] Propose Rule: Initiation or Resumption of Quotations Without Specified Information, 54 Fed. Reg. 39194, 39198 (Sep. 25, 1989)
[15] Id.
[16] 17 C.F.R. § 201.550
[17] Talamantes – Penalver v. INS, 51 F.3d 133, 135 (8th Cir. 1995)
[18] Tokyo Kikai Seisakusho Ltd. V. United States, 529 F.3d 1352, 1360 (Fed. Cir. 2008)
[19] Immunotech Laboratories, Inc., Securities Exchange Act Release No. 34-73650
[20] Id.
[21] SEC v. Sloan, 436 U.S. 103, 112 (1978
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