<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT TO FORM 8-K
AMENDMENT NO. 1
CURRENT REPORT
FILED ON MAY 12, 1997
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): APRIL 24, 1997
TECHNICLONE CORPORATION
(Exact name of Registrant as specified in charter)
DELAWARE 0-17085 95-3698422
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
14282 FRANKLIN AVENUE, TUSTIN, CALIFORNIA 92780-7017
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (714) 838-0500
NOT APPLICABLE
(Former name or former address, if changed, since last report)
Page 1 of 15 Pages
Exhibit Index is on Page 6
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 24, 1997, Techniclone Corporation, a Delaware corporation (the
"Company") entered into a First Amendment to Stock Exchange Agreement (the
"Amendment") with the stockholders of Peregrine Pharmaceuticals, Inc., a
Delaware corporation ("Peregrine"), pursuant to which the Company agreed to
amend certain provisions of the Stock Exchange Agreement ("Stock Exchange
Agreement") between the Company and the stockholders of Peregrine and to issue
an additional 80,000 shares of its Common Stock in exchange for all of the
issued and outstanding capital stock of Peregrine as set forth in the Amendment.
The Amendment provides that the major stockholders of Peregrine would agree to a
one year lock-up of the Techniclone shares issued to them in the exchange except
that during the lock-up period the Sanderling entities would be permitted to
sell up to 275,000 shares, the Saunders entities would be permitted to sell up
to 275,000 shares, Jennifer Lobo would be permitted to sell up to 90,000 shares
and Philip Thorpe would be permitted to sell up to 50,000 shares. The Amendment
also provides that the Company would sell Sanderling $550,000 worth of its
Common Stock on the Closing Date of the transaction contemplated by the Stock
Exchange Agreement and the Amendment at a purchase price per share equal to
eighty percent (80%) of the average closing price of Techniclone's Common Stock
for the five trading days immediately preceding the Closing Date.
As there are no further contingencies, the Agreements have been
finalized and all of the preconditions to the closing were met before April 30,
1997, the Company will account for the transaction contemplated by the Stock
Exchange Agreement in the year ended April 30, 1997.
The consideration to be paid for the outstanding shares of stock of
Peregrine, consisting of 5,080,000 shares of the Company's Common Stock will be
issued upon a determination by the California Commissioner of Corporations that
the terms and conditions of the transaction are fair to Peregrine's stockholders
or upon the effectiveness of a registration statement filed by the Company
relating to the shares of Common Stock to be issued to the Peregrine
stockholders.
ITEM 5. OTHER EVENTS
On April 25, 1997, Techniclone Corporation, a Delaware corporation (the
"Registrant" or the "Company") entered into a 5% Preferred Stock Investment
Agreement and a Registration Rights Agreement with eleven (11) investors
pursuant to which the Company sold 12,000 shares of 5% Adjustable Convertible
Class C Preferred Stock (the "Class C Stock") for an aggregate purchase price of
$12,000,000. The Company filed a Certificate of Designation with the Delaware
Secretary on April 23, 1997, creating the 5% Adjustable Convertible Class C
Preferred Stock. In connection with the issuance of the Class C Stock, the
Registrant paid Cappello & Laffer Capital Corp. a non-accountable expense
allowance of $100,000 and a $720,000 commission representing six percent of the
Purchase Price of the Class C Stock and issued a Warrant to purchase 1,200
shares of Class C Stock at $1,000 per share.
The Class C Stock is convertible at the option of the holder,
commencing on the day after the fifth month anniversary of the Closing Date,
into a number of shares of Common Stock of the Registrant determined by dividing
$1,000 plus all accrued but unpaid dividends by the Conversion Price. The
Conversion Price is the average of the lowest trading price of Registrant's
Common Stock for the five consecutive trading days ending with the trading day
prior to the conversion date reduced by 13 percent starting on the 1st day of
the 8th
2
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month after the Closing Date, 20 percent starting on the 1st day of the 10th
month after the Closing Date, 22.5 percent starting on the 1st day of the 12th
month after the Closing Date, 25 percent starting on the 1st day of the 14th
month after the Closing Date, 27 percent starting on the 1st day of the 16th
month after the Closing Date and thereafter. At any time after March 24, 1998,
the Conversion Price will be the lower of the Conversion Price as calculated in
the preceding sentence or the average of the Closing Price of the Company's
Common Stock for the thirty (30) trading days including and immediately
preceding March 24, 1998 (the "Conversion Cap"). In addition to the Common Stock
issued upon conversion of the Class C Stock, Warrants to purchase one-fourth of
the number of shares of Common Stock issued upon the conversion will be issued
to the converting investor. The Warrants are exercisable at 110 percent of the
Conversion Cap for a period of five years from the closing date.
The Holders of the Class C Stock are entitled to receive dividends at
the rate of $50.00 per share per annum commencing September 30, 1997 and
thereafter quarterly. The dividends are to be paid in Class C Stock valued at
$1,000 per share (fractional shares to be paid in cash) or at the option of the
Company in cash. The Class C Stock is subject to mandatory redemption upon
certain events which are within the Company's control, and mandatory conversion
at any time more than twelve (12) months after the closing date, subject to
certain conditions as provided in the Certificate of Designation. Except as
provided in the Certificate of Designation or by Delaware law, the Class C Stock
does not have voting rights.
The Company intends to use the proceeds of the offering to complete the
clinical trials of the LYM-1 antibody, to begin clinical trials of the TNT
antibody, pre-clinical development of the Company's products, construction of
facilities and for general corporate and working capital purposes.
3
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Listed below are the financial statements, pro forma financial
information and exhibits, if any filed as part of this report.
(a) Financial Statements of Peregrine Pharmaceuticals, Inc.
for the years ended December 31, 1995 and 1996 and for the
period from September 16, 1993 (date of inception) through
December 31, 1996 and Independent Auditors' Report.
(b) Unaudited Pro Forma Consolidated Balance Sheet as of January
31, 1997 (as restated) and the Unaudited Pro Forma
Consolidated Statements of Operations for the Nine Months
Ended January 31, 1997 (as restated) and Fiscal Year ended
April 30, 1996 (as restated).
(c) EXHIBITS
--------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 First Amendment to Stock Exchange Agreement among the stockholders of
Peregrine Pharmaceuticals, Inc. and Registrant.
3.1 Certificate of Designation of 5% Adjustable Convertible Class C Preferred
Stock as filed with the Delaware Secretary of State on April 23, 1997.
4.1 5% Preferred Stock Investment Agreement between Registrant and the Investors.
4.2 Registration Rights Agreement between the Registrant and the Investors.
4.3 Form of Stock Purchase Warrant, to be issued to the holders of the Class C
Preferred Stock upon conversion of the Class C Preferred Stock.
</TABLE>
4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECHNICLONE CORPORATION
Date: September 25, 1997 By: /s/ WILLIAM V. MODING
---------------------------
William V. Moding
Chief Financial Officer
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EXHIBIT INDEX
Listed below are the financial statements, pro forma financial
information and exhibits filed as part of this report.
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ---------- ----------- -------------
<S> <C> <C>
-- Unaudited Pro Forma Consolidated Balance Sheet as of 8
January 31, 1997 (as restated) and the Unaudited Pro Forma
consolidated Statements of Operations for the Nine Months
Ended January 31, 1997 (as restated) and the Fiscal
Year ended April 30, 1996 (as restated).
-- Financial Statements of Peregrine Pharmaceuticals, Inc. for --
the years ended December 31, 1995 and 1996 and for the
period from September 16, 1993 (date of inception) through
December 31, 1996 and Independent Auditors' Report.
(Incorporated by reference to the Exhibit of the same
number contained in Registrant's Current Report on Form 8-K
as filed with the Commission on May 12, 1997).
2.1 First Amendment to Stock Exchange Agreement among the --
stockholders of Peregrine Pharmaceuticals, Inc. and
Registrant. (Incorporated by reference to the Exhibit of the
same number contained in Registrant's Current Report on
Form 8-K as filed with the Commission on May 12, 1997).
3.1 Certificate of Designation of 5% Adjustable, Convertible --
Class C Preferred Stock as filed with the Delaware Secretary
of State on April 23, 1997. (Incorporated by reference to the
Exhibit of the same number contained in Registrant's Current
Report on Form 8-K as filed with the Commission on
May 12, 1997).
4.1 5% Preferred Stock Investment Agreement between Registrant --
and the Investors. (Incorporated by reference to the Exhibit
of the same number contained in Registrant's Current Report
on Form 8-K as filed with the Commission on May 12, 1997).
</TABLE>
6
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<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
<S> <C> <C>
4.2 Registration Rights Agreement between the Registrant and --
the Investors. (Incorporated by reference to the Exhibit
of the same number contained in Registrant's Current Report
on Form 8-K as filed with the Commission on May 12, 1997).
4.3 Form of Stock Purchase Warrant, to be issued to the holders --
of the Class C Preferred Stock upon conversion of the Class C
Preferred Stock. (Incorporated by reference to the Exhibit of
the same number contained in Registrant's Current Report on
Form 8-K as filed with the Commission on May 12, 1997).
</TABLE>
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The following unaudited pro forma consolidated statements of operations
for the nine month period ended January 31, 1997 and the fiscal year ended April
30, 1996 and the Unaudited Pro Forma Consolidated Balance Sheet as of January
31, 1997 have been prepared assuming that the acquisition of Peregrine
Pharmaceuticals, Inc. (Peregrine) and the issuance of the Series C Preferred
Stock had occurred as of May 1, 1995, for the consolidated statements of
operations presentation and as of January 31, 1997, for the consolidated balance
sheet presentation.
The unaudited pro forma consolidated financial statements are provided
for information purposes only and do not purport to present the financial
position or results of operations of Techniclone Corporation (Techniclone or the
Company) had the acquisition or the issuance of the Series C preferred stock
assumed therein occurred on the dates specified. The unaudited pro forma
consolidated financial statements (as restated) are not necessarily indicative
of the results of operations that may be expected in the future.
Peregrine is a developmental stage enterprise and is engaged in
research and development of new technologies for use in the production of
therapeutic agents for treatment of cancerous tumors. Therefore, the excess of
the purchase price paid by Techniclone over the net tangible assets acquired
will be recorded as in-process research and development in the Company's
consolidated financial statements for the fiscal year ended April 30, 1997.
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<PAGE> 9
TECHNICLONE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JANUARY 31, 1997
RESTATED
<TABLE>
<CAPTION>
TECHNICLONE PEREGRINE PROFORMA
NINE MONTHS NINE MONTHS TOTALS
ENDED ENDED PRIOR TO
JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING
1997 1996 ADJUSTMENTS(8) ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED
------------- ------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Interest income $ 198,200 $ -- $ -- $ 198,200 $ -- $ 198,200
Rental income 34,107 34,107 34,107
------------- ------------- ------------- ------------- ----------- -------------
Total revenues 232,307 232,307 232,307
COSTS AND EXPENSES:
Research and development 2,023,381 664,191 2,687,572 2,687,572
General and administrative:
Unrelated entities 1,387,826 368,165 1,755,991 1,755,991
Affiliates 216,012 9,014 225,026 225,026
Stock based compensation 395,832 395,832 395,832
Interest 100,417 36,241 136,658 136,658
------------- ------------- ------------- ------------- ----------- -------------
Net loss before preferred
stock accretion
and dividends $ (3,891,161) $ (1,077,611) $ -- $ (4,968,772) $ -- $ (4,968,772)
Preferred stock accretion
and dividends:
Accretion of discount on
5% Cumulative Class C
Preferred stock (1,109,589) (1,109,589)
Imputed dividends for
Class B Convertible
Preferred Stock (434,450) (434,450) (434,450)
Imputed dividends for
Class C Convertible
Preferred Stock (644,298) (844,298)
------------- ------------- ------------- ------------- ----------- -------------
Net Loss Applicable to
Common Stock (Note 10) $ (4,325,611) $ (1,077,611) $ -- $ (5,403,222) $(1,753,887) $ (7,157,109)
============= ============= ============= ============= =========== =============
Weighted Average Shares
Outstanding (Note 10) 26,392,912
Net Loss per Share (Note 10) $ (0.27)
=============
</TABLE>
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TECHNICLONE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED APRIL 30, 1996
RESTATED
<TABLE>
<CAPTION>
TECHNICLONE PEREGRINE PROFORMA
FISCAL YEAR FISCAL YEAR TOTALS
ENDED ENDED PRIOR TO
APRIL 30, MARCH 31, ACQUISITION FINANCING FINANCING
1996 1996 ADJUSTMENTS(8) ADJUSTMENTS(7) ADJUSTMENTS(9) CONSOLIDATED
----------- ----------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Product sales $ 2,580 $ -- $ -- $ 2,580 $ -- $ 2,580
License agreements 3,002,244 3,002,244 3,002,244
Interest income 138,499 138,499 138,499
----------- ----------- ---- ---------- ---------- ------------
Total revenues 3,143,323 3,143,323 3,143,323
COSTS AND EXPENSES:
Cost of sales 2,580 2,580 2,580
Research and development 1,679,558 799,921 2,479,479 2,479,479
General and administrative:
Unrelated entitles 947,816 369,964 1,317,780 1,317,780
Affiliates 170,659 88,914 259,573 259,573
Stock based compensation
Interest 17,412 22,099 39,511 39,511
----------- ----------- ---- ----------- ------------ ------------
Total costs and expenses 2,818,025 1,280,898 4,098,923 4,098,923
----------- ----------- ---- ----------- ----------- ------------
Net loss before preferred stock
accretion and dividends $ 325,298 $(1,280,898) $ $ (955,600) $ $ (955,600)
Preferred Stock accretion and
dividends:
Accretion of discount on Class
B Preferred Stock (5,327,495) (5,327,495) (5,327,495)
Accretion of discount on 5%
Cumulative Class C Preferred
Stock (3,328,767) (3,328,767)
Imputed dividends for Class B
Convertible Preferred Stock (560,467) (560,467) (560,467)
Imputed dividends for Class C
Convertible Preferred Stock (859,064) (859,064)
----------- ----------- ---- ----------- ----------- ------------
Net Loss Applicable to
Common Stock (Note 10) $ 5,562,664 $(1,280,896) $ $(6,843,562) $(4,187,831) $(11,031,893)
----------- ----------- ---- ----------- ----------- ------------
Weighted Average Shares
Outstanding (Note 10) 23,695,008
Net Loss Per Share (Note 10) $ (0.47)
</TABLE>
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TECHNICLONE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JANUARY 31, 1997
RESTATED
<TABLE>
<CAPTION>
PRO FORMA
TOTALS
TECHNICLONE PEREGRINE PRIOR TO
JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING
1997 1996 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED
----------- ------------ ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $2,065,587 $15,636 $ 550,000 (7) $ 3,153,599 $11,180,000(9) $14,333,599
(27,624)(2)
550,000 (2)
Investments 997,118 997,118 997,118
Accounts receivable, net 31,947 31,947 31,947
Inventory 275,351 275,351 275,351
Prepaid expenses and other current
assets 5,383 6,000 326,700 (2) 338,083 338,083
---------- ------- ---------- ----------- ----------- -----------
Total current assets 3,375,386 21,636 1,399,076 4,796,098 11,180,000 15,976,098
PROPERTY:
Land 1,050,510 1,050,510 1,050,510
Building and improvements 3,038,994 3,038,994 3,038,994
Laboratory equipment 1,353,135 1,353,135 1,353,135
Office furniture and equipment 219,588 219,588 219,588
---------- ------- ---------- ----------- ----------- -----------
Total 5,662,227 5,662,227 5,662,227
Less accumulated depreciation (953,725) (953,725) (953,725)
---------- ------- ---------- ----------- ----------- -----------
Property, net 4,708,502 4,708,502 4,708,502
OTHER ASSETS:
Note receivable from shareholder 350,000 350,000 350,000
Patents, net 182,150 182,150 182,150
---------- ------- ---------- ----------- ----------- -----------
Total other assets 532,150 532,150 532,150
---------- ------- ---------- ----------- ----------- -----------
TOTAL $8,616,038 $21,636 $1,399,076 $10,036,750 $11,180,000 $21,216,750
========== ======= ========== =========== =========== ===========
</TABLE>
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TECHNICLONE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (Continued)
JANUARY 31, 1997
RESTATED
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
PRO FORMA
TOTALS
TECHNICLONE PEREGRINE PRIOR TO
JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING
1997 1996 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED
----------- ------------ ----------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 205,685 $ 38,370 $ -- $ 244,055 $ -- $ 244,055
Accrued legal and accounting fees 85,000 249,304 334,304 334,304
Accrued payroll and related costs 99,005 41,181 140,186 140,186
Accrued license termination fee 100,000 100,000 100,000
Accrued license and royalties 81,667 273,211 354,878 354,878
Accrued interest 16,476 36,242 52,718 52,718
Reserve for contract losses 207,714 207,714 207,714
Current portion of long-term debt 72,609 72,609 72,609
Other current liabilities 68,663 45,913 114,576 114,576
---------- -------- --------- ---------- ---- ----------
Total current liabilities 936,819 684,221 1,621,040 1,621,040
LONG-TERM DEBT 1,941,271 750,000 876,700 (2) 1,941,271 1,941,271
(876,700)(3)
(750,000)(6)
COMMITMENTS
STOCKHOLDERS' EQUITY:
Preferred Stock, Class A 294,109 (294,109)(5) --
Preferred Stock, Class B 2 444,108 (444,108)(5) 2 2
Preferred Stock, Class C 926,071 (926,071)(5) -- 12(9) 12
Common Stock 22,164 62 5,080 (1) 27,392 27,392
(137)(1)
10 (3)
8 (4)
43 (5)
14 (6)
148 (7)
</TABLE>
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TECHNICLONE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (Continued)
JANUARY 31, 1997
RESTATED
<TABLE>
<CAPTION>
PRO FORMA
TOTALS
TECHNICLONE PEREGRINE PRIOR TO
JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING
1997 1996 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED
----------- ------------ ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additional paid-in capital $34,166,617 $ 142,146 $ (3,821,416)(1) $ 61,529,898 $11,179,988(9) $ 72,709,886
26,813,429 (1)
876,690 (3)
388,349 (4)
1,664,245 (5)
749,986 (6)
549,852 (7)
Accumulated Deficit (27,974,253) (3,219,081) (26,632,018)(1) (54,606,271) (54,606,271)
3,635,062 (1)
(27,624)(2)
(388,357)(4)
----------- ----------- ------------ ------------ ----------- ------------
6,214,530 (1,412,585) 2,149,076 6,951,021 11,180,000 18,131,021
Less notes receivable from sale of
common stock (476,582) (476,582) (476,582)
----------- ----------- ------------ ------------ ----------- ------------
Net stockholders' equity 5,737,948 (1,412,585) 2,149,076 6,474,439 11,180,000 17,654,439
----------- ----------- ------------ ------------ ----------- ------------
TOTAL $ 8,616,038 $ 21,636 $ 1,399,076 $ 10,036,750 $11,180,000 $ 21,216,750
=========== =========== ============ ============ =========== ============
</TABLE>
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TECHNICLONE CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
RESTATED
(1) Pro forma adjustments to reflect the purchase of net assets of
Peregrine ($186,491) through the issuance of the Company's common
stock. The excess purchase price over the fair market value of net
assets acquired ($26,632,018) has been allocated to in-process
research and development (accumulated deficit).
(2) Pro forma adjustment to reflect the issuance of convertible notes
payable to Peregrine for cash of $550,000, plus accrued interest of
$27,624 and advances receivable of $326,700 effective with the
acquisition.
(3) Pro forma adjustment to reflect the conversion of the notes payable
due to Peregrine for $876,700 into common stock of Peregrine
effective immediately prior to the acquisition.
(4) To reflect the issuance of common stock to both a key employee and
an advisor of Peregrine for prior services valued at $388,357,
effective with the acquisition.
(5) To reflect the conversion of preferred stock of Peregrine into common
stock of Peregrine effective with the acquisition.
(6) To reflect the conversion of the $750,000 note payable to Peregrine
into common stock effective with the acquisition.
(7) In conjunction with the acquisition of Peregrine, the Company agreed
to sell one of the Peregrine's major shareholders additional common
stock at a 20% discount from the Company's trading price on a
specified date ($3.82 per share). Indicated amount represents the sale
of such common stock. The Company has accounted for the sale of the
common stock as an equity transaction, without compensation expense,
as the stock sold represents restricted stock and the discount from
the market value of 20% is considered reasonable in light of the
restriction features.
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TECHNICLONE CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Continued)
RESTATED
(8) Pro forma acquisition adjustments related primarily to the purchase of
in-process research and development, issuance of stock for prior
services to an employee and a consultant of Peregrine and the accrual
of interest on the notes payable to Peregrine shareholders. As these
adjustments have no continuing impact on the future combined
operations of Techniclone and Peregrine, the amounts have been
excluded from the acquisition adjustments in the accompanying pro
forma consolidated statements of operations.
(9) Pro forma adjustments to record the issuance of $12,000,000 in Class C
Preferred Stock, net of issuance costs of $820,000. As the financing
was the sale of an equity security with dividends payable in preferred
stock, there is no effect on the pro forma statement of operations for
the nine month period ended January 31, 1997 or the fiscal year ended
April 30, 1996.
(10) Pro forma net loss per common share has been calculated by taking the
sum of the net income (loss) for the respective period and deducting
the Class B and Class C Preferred Stock discounts and dividends of
$10,075,793 for the fiscal year ended April 30, 1996 and $2,188,337
for the nine month period ended January 31, 1997 and dividing the
sum by the weighted average shares outstanding during the period.
15
