UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
For the period ended September 30, 1995
Commission File Number: 0-12104
IMMUNOMEDICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 61-1009366
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 American Road, Morris Plains, New Jersey 07950
(Address of principal executive offices) (Zip code)
(201) 605-8200
(Registrant's telephone number, including area code)
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.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of November 8, 1995, there were 32,776,919 shares of the registrant's
common stock outstanding.
<PAGE>
<TABLE>
IMMUNOMEDICS, INC.
Balance Sheets
(Unaudited)
<CAPTION>
September 30, June 30,
1995 1995
________________________________________________________________ _____________ _____________
<S> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents 12,197,373 7,162,837
Marketable Securities 17,184,117 15,651,369
Other Current Assets 1,039,750 687,674
_____________ _____________
Total Current Assets 30,421,240 23,501,880
Property and Equipment, net of accumulated
depreciation of $4,661,000 and $4,427,000 at
September 30, 1995 and June 30, 1995, respectively 4,671,104 4,722,604
_____________ _____________
35,092,344 28,224,484
_____________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable 1,696,163 1,932,908
Other Current Liabilities 2,716,886 2,662,401
_____________ _____________
Total Current Liabilities 4,413,049 4,595,309
_____________ _____________
Commitments and Contingencies
Stockholders' Equity:
Preferred stock; $.01 par value, authorized 10,000,000 shares;
Series B convertible, authorized 200,000 shares;
issued and outstanding 5,271 and 124,527 shares at
September 30, 1995 and June 30, 1995, respectively 53 1,245
Series C convertible, authorized 200,000 shares;
issued and outstanding 200,000 shares at September 30,1995 2,000 0
Common stock; $.01 par value, authorized 50,000,000 shares;
issued and outstanding 32,727,749 and 30,624,585 shares
at September 30, 1995 and June 30, 1995, respectively 327,277 306,246
Capital contributed in excess of par 82,431,369 72,098,771
Accumulated deficit (52,089,715) (48,781,384)
Accumulated net unrealized gain on securities 8,311 4,297
_____________ _____________
Total Stockholders' Equity 30,679,295 23,629,175
_____________ _____________
$ 35,092,344 28,224,484
_____________ _____________
<FN>
See accompanying notes to unaudited condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
IMMUNOMEDICS, INC.
Condensed Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended
September 30,
1995 1994
_____________________________________ ___________ ___________
<S> <C> <C>
REVENUES:
Product sales and royalties $ 51,842 42,524
Research and development 67,500 593,576
Interest 324,384 227,692
___________ ___________
443,726 863,792
COSTS AND EXPENSES:
Cost of goods sold 7,000 16,861
Research and development 3,062,954 3,164,422
General and administrative 682,103 629,130
___________ ___________
3,752,057 3,810,413
___________ ___________
Net loss $ (3,308,331) (2,946,621)
___________ ___________
Net loss per share $ (0.11) (0.10)
___________ ___________
Weighted average number of
shares outstanding 31,434,581 30,055,469
___________ ___________
<FN>
See accompanying notes to unaudited condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
IMMUNOMEDICS, INC.
Condensed Statements of Cash Flows
(Unaudited)
<CAPTION>
Three Months Ended
September 30,
1995 1994
______________________________________________________ _____________ _____________
<S> <C> <C>
Net cash used in operating activities $ (3,591,874) (341,897)
Cash flows provided by/(used in) investing activities:
Purchase of marketable securities (4,029,956) 0
Proceeds from maturities of marketable securities 2,484,609 4,340,151
Additions to property and equipment (182,680) (103,536)
_____________ _____________
Net cash provided by/(used in) investing activities (1,728,027) (4,236,615)
_____________ _____________
Cash flows provided by financing activities:
Issuance of convertible preferred stock, net 9,982,500 0
Exercise of stock options 371,937 0
_____________ _____________
Net cash provided by financing activities 10,354,437 0
_____________ _____________
Increase in cash and cash equivalents 5,034,536 817,644
Cash and cash equivalents at beginning of period 7,162,837 6,371,245
_____________ _____________
Cash and cash equivalents at end of period $ 12,197,373 7,188,889
_____________ _____________
<FN>
See accompanying notes to unaudited condensed financial statements.
</TABLE>
<PAGE>
IMMUNOMEDICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(1) Basis of Presentation
The accompanying unaudited condensed financial statements of
Immunomedics, Inc. (the "Company") have been prepared in
accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q
and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. The balance sheet at June 30,
1995 has been derived from the audited financial statements at that
date. Operating results for the three-month period ended
September 30, 1995 are not necessarily indicative of the results
that may be expected for the fiscal year ending June 30, 1996.
For further information, refer to the annual financial statements
and footnotes thereto included in the Company's Form 10-K for
the year ended June 30, 1995.
(2) Cash Equivalents and Marketable Securities
The Company considers all highly liquid investments with
maturities of three months or less, at the time of purchase, to be
cash equivalents. Included in other current assets at September 30,
1995 and June 30, 1995 is accrued interest earned on cash
equivalents and marketable securities of $228,000 and $231,000,
respectively.
(3) Income Taxes
The Company has never made payments of Federal or state income
taxes and does not anticipate generating book income in fiscal 1996;
therefore, no income taxes have been reflected for the three-month
period ended September 30, 1995.
(4) Net Loss Per Share
Net loss per share is based upon the weighted average number of
common shares outstanding. Common share equivalents,
consisting of outstanding stock options and convertible preferred
stock, are not included in the computations since the effect would
be antidilutive.
<PAGE>
IMMUNOMEDICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(5) Stockholders' Equity
On September 29, 1995, the Company completed an equity financing
in accordance with Regulation S under the Securities Act of
1933, pursuant to which a group of investors purchased 200,000
shares of non-dividend paying Series C Convertible Preferred
Stock for $10,000,000. The terms of the transaction allow the
investors, at their discretion, to convert the Preferred Stock into
shares of the Company's Common Stock during a pre-determined
period subject to extension. The conversion price will be based on
pre-determined discounts of up to 9 3/4% from the average market
price per common share over a 30-day trading period surrounding
the dates conversion notices are received.
(6) License and Distribution Agreements
On August 2, 1995, the Company announced that its Development
and License Agreement with Pharmacia, Inc. ("Pharmacia" -
formerly Adria Laboratories Division of Erbamont, Inc.) was
terminated, as a result of which the Company regained the North
American marketing and selling rights for CEA-Scan . The
Company is discussing with Pharmacia the amount of payments to
be made by Pharmacia to the Company to satisfy Pharmacia's
remaining obligations; however, no agreement has been reached on such
amounts.
(7) Commitments and Contingencies
On February 1, 1994, the Company entered into a master lease
agreement, which was subsequently amended, pursuant to which
the Company may lease equipment for research, development and
manufacturing purposes having an aggregate acquisition cost of up
to $2,200,000. The basic lease payments under the master lease
agreement will be determined on the basis of current market rates
of interest at the inception of each equipment schedule take-down,
and payable in monthly installments over a four-year period. The
lease agreement contains an early purchase option, at an amount
which is deemed to be fair value, exercisable no later than ninety
days before the thirty-sixth installment is due. Under the lease
agreement, continued compliance with certain financial ratios is
required and, in the event of default, the Company will be required
to provide an irrevocable letter of credit which is generally equal
to the outstanding balance of lease payments due at the time of
default. As of November 8, 1995, the Company has leased
equipment aggregating $1,355,000 under the master lease
agreement and recorded lease expense for the three months ended
September 30, 1995 of $95,000.
<PAGE>
Part I - Item 2.
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Since its inception, the Company has been engaged primarily in the
research and development of proprietary products relating to the detection,
diagnosis and treatment of cancer, and more recently infectious diseases.
In April 1991, the Company filed a Product License Application ("PLA")
with the U.S. Food and Drug Administration ("FDA") seeking approval to
manufacture and market, in the United States, CEA-Scan , an in vivo
colorectal cancer imaging product. In May 1994, the Company received
a letter from the FDA indicating that the PLA for CEA-Scan for
colorectal cancer imaging was not approvable at that time. In July 1994,
the Company met with FDA officials to review the status of CEA-Scan
and believed that it had reached at that time an understanding with the
FDA that the results of the Phase III pivotal clinical trial would be further
analyzed to ascertain potentially approvable claims for the product and
what additional steps would need to be taken to achieve approvability. In
March 1995, the Company submitted a response to the FDA's questions,
including an analysis suggesting that CEA-Scan will be useful in the
pre-surgical evaluation of recurrent colorectal cancer patients, particularly
in the assessment of tumor resectability for these patients. In September
1995, the FDA scheduled the Company to present clinical trial data on
CEA-Scan to the Oncologic Drugs Advisory Committee ("ODAC") on
October 17, 1995. At the same time, the FDA sent an action letter to the
Company requesting clarification of the data, additional information, and
additional analyses which the Company had provided in response to the
FDA's May 1994 letter. Accordingly, the status of the Company's PLA
remained not-yet-approvable at the time of its notification of the ODAC
presentation. On October 17, 1995, the Company presented data to the
ODAC supporting the use of CEA-Scan to better define the spread of
colorectal cancer and to provide the surgeon with more complete
diagnostic information, thereby helping to avoid unnecessary surgery in
patients who would not benefit from the procedure. At the conclusion of
the meeting, the ODAC deferred a decision on the approvability of CEA-Scan
and recommended that the product may be more suitable for
review by the Medical Imaging Drugs Advisory Committee ("MIDAC")
and select oncology consultants. The Company is now working with the
FDA to resolve certain differences in data and imaging interpretation
with the ultimate objective of preparing a cohesive presentation to MIDAC.
In February 1992, the Company filed with the Health Protection Branch
("HPB") to market CEA-Scan in Canada. In March 1992, the Company
filed with the Committee for Proprietary Medicinal Products ("CPMP") to
market the product in Europe. In December 1994, the Company received
notification from the Department of Health Medicines Control Agency
("MCA") in the United Kingdom that the Company's manufacturing
operations are in general compliance with the guidelines of Good
Manufacturing Principles ("cGMP").
<PAGE>
Overview (Continued)
The Company continues to work diligently with the U.S. and foreign
regulatory authorities and remains fully committed to the eventual
approval of CEA-Scan in the U.S., Europe and Canada. However, no
assurance can be given as to if or when any such approvals could be
forthcoming.
The Company has not achieved profitable operations and does not
anticipate achieving profitable operations during fiscal year 1996. The
Company will continue to experience operating losses until such time as
the Company is able to generate sufficient revenues from sales of its
proposed in vivo products. Further, the Company's working capital will
continue to decrease until such time as the Company is able to generate
positive cash flow from operations or until such time, if at all, as the
Company receives an infusion of cash from the sale of the Company's
securities or from corporate alliances to finance the Company's operating
expenses and capital expenditures.
Results of Operations
Revenues for the three-month period ended September 30, 1995 were
$444,000 as compared to $864,000 for the same period in 1994,
representing a decrease of $420,000, which was due to a decrease in
research and development revenue. On August 2, 1995, the Company
announced that its Development and License Agreement with Pharmacia
had been terminate and that it had regained the North American marketing
and selling rights to CEA-Scan (see Note 6 to unaudited condensed
financial statements). Accordingly, research and development revenues
for the three months ended September 30, 1995 were significantly lower
than the $594,000 recorded for the same period in 1994, of which $500,000
was received from Pharmacia. Interest income for the three-month period
ended September 30, 1995 increased by $97,000 as compared to the same
period in 1994. This was due to an increase in cash, cash equivalents
and marketable securities resulting from the financing transaction
completed in January 1995.
Total operating expenses for the three-month period ended September 30,
1995 were $3,752,000 as compared to $3,810,000 for the same period in
1994, representing a decrease of $58,000. Research and development costs
during the three-month period ended September 30, 1995 decreased by
$101,000 as compared to the same period in 1994, principally due to lower
salary expense partially offset by an increase in costs associated with
regulatory filings.
General and administrative costs for the three-month period ended
September 30, 1995 increased by $53,000 as compared to the same period
in 1994, due to higher marketing and consulting expenses, partially offset
by lower legal expenses.
Net loss for the three-month period ended September 30, 1995 was
$3,308,000, or $0.11 per share, as compared to a loss of $2,947,000, or
$0.10 per share, for the same period in 1994, representing an increased loss
of $361,000, or $0.01 per share. The change principally resulted from
decreased revenues as noted above.
<PAGE>
Liquidity and Capital Resources
At September 30, 1995, the Company had working capital of $26,008,000,
representing an increase of $7,101,000 from June 30, 1995, and had
virtually no long-term debt. The increase in working capital resulted
principally from a September 1995 financing transaction, pursuant to which
several foreign investors purchased 200,000 shares of non-dividend paying
Series C Convertible Preferred Stock for $10,000,000. The terms of the
transaction allow the investors, at their discretion, to convert the
Preferred Stock into shares of the Company's Common Stock during a
pre-determined period subject to extension. The conversion price will
be based on pre-determined discounts of up to 9 3/4% from the average
market price per share over a 30-day trading period surrounding the dates
conversion notices are received.
On February 1, 1994, the Company entered into a master lease agreement
which was subsequently amended, pursuant to which the Company may
lease equipment for research, development and manufacturing purposes
having an aggregate acquisition cost of up to $2,200,000. The basic lease
payments under the master lease agreement will be determined on the basis
of current market rates of interest at the inception of each equipment
schedule take-down, and payable in monthly installments over a four-year
period. The lease agreement contains an early purchase option, at an
amount which is deemed to be fair value, exercisable no later than ninety
days before the thirty-sixth installment is due. Under the lease agreement,
continued compliance with certain financial ratios is required and, in the
event of default, the Company will be required to provide an irrevocable
letter of credit which is generally equal to the outstanding balance of lease
payments due at the time of default. As of November 8, 1995, the
Company has leased equipment aggregating $1,355,000 under the master
lease agreement (see Note 7 to unaudited condensed financial statements).
The Company's liquid asset position, measured by its cash, cash
equivalents and marketable securities, was $29,381,000 at September 30,
1995, representing an increase of $6,567,000 from June 30, 1995. This
increase was principally attributable to the financing transaction discussed
above. It is anticipated that working capital and cash, cash equivalents and
marketable securities will continue to decrease during fiscal year 1996 as
a result of planned operating expenses and capital expenditures. At
present, the Company believes that its financial resources will be sufficient
to fund anticipated operating expenses and capital expenditures through
calendar year 1997. The Company intends to supplement its financial
resources from time to time, as market conditions permit, through
additional financing and through collaborative marketing and distribution
agreements. In addition, the Company continues to evaluate various
programs to raise additional capital and to seek additional revenues from
the licensing of its proprietary technology. At the present time, the
Company is unable to determine whether any of these activities will be
successful and, if so, the terms and timing of any definitive agreements.
There can be no assurance that the Company will be able to obtain
additional funds.
<PAGE>
PART II - Other Information:
Items 1-3. Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
(a) On November 8, 1995, the Annual Meeting of
Stockholders of the Company was held.
(b) All seven Directors were re-elected: David M.
Goldenberg, Albert D. Angel, A. E. Cohen, Marvin
E. Jaffe, Richard R. Pivirotto, Warren W.
Rosenthal and Richard C. Williams. The selection
of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending June
30, 1996 was ratified.
(c)1. The votes for re-election of the seven Directors were
as follows:
For David M. Goldenberg were 31,024,696 for and 87,004 withheld
For Marvin E. Jaffe were 31,024,896 for and 86,804 withheld
For Albert D. Angel were 31,024,696 for and 87,004 withheld
For A. E. Cohen were 31,024,896 for and 86,804 withheld
For Richard R. Pivirotto were 31,024,696 for and 87,004 withheld
For Warren W. Rosenthal were 31,023,796 for and 87,904 withheld
For Richard C. Williams 31,024,896 for and 86,804 withheld
2. The votes for ratification of the selection of KPMG Peat
Marwick LLP as the Company's independent auditors for the
fiscal year ending June 30, 1996 were 31,023,055 for and
45,360 against, with 43,285 shares abstaining.
(d) Not applicable.
Item 5. Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.3 Certificate of Designation of the
Registrant's Series C Convertible Preferred
Stock.
10.21 Convertible Stock Purchase Agreement
dated as of September 29, 1995, between
the Registrant and the purchasers named
therein.
(b) The Registrant filed a current report on Form 8-K,
dated October 2, 1995 with respect to Item 5 -
Other Events.
<PAGE>
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, thereunto duly authorized.
IMMUNOMEDICS, INC.
(Registrant)
DATE: November 13, 1995 /s/ David M. Goldenberg
David M. Goldenberg,
Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
DATE: November 13, 1995 /s/ Amy Factor
Amy Factor,
Executive Vice President
(Principal Accounting Officer)
CERTIFICATE OF DESIGNATION
SETTING FORTH THE PREFERENCES, RIGHTS
AND LIMITATIONS OF SERIES C CONVERTIBLE PREFERRED
STOCK OF IMMUNOMEDICS, INC.
IMMUNOMEDICS, INC. , a Delaware corporation
(the "Company") certifies that pursuant to the authority contained
in Article IV of its Certificate of Incorporation, and in accordance
with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the
following resolution creating a series of its preferred stock to be
designated Series C Convertible Preferred Stock:
RESOLVED, that a series of the class of authorized
preferred stock of the Company be hereby created, and that the
designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations
and restrictions thereof are as follows:
Section 1. Designation, Amount, Ranking and Par
Value. The designation of the series of Preferred Stock shall
be "Series C Convertible Preferred Stock" (this "Series") and
the number of shares constituting this Series shall be
200,000. The par value of each share of this Series shall be
$0.01. Shares of this Series shall have a stated value of $50
per share (the "Stated Value"). The shares of this Series shall
rank prior to the Junior Stock (as defined below) as to
distribution of assets (upon liquidation or otherwise) and
payment of dividends.
Section 2. Dividends.
(a) The Holders shall not be entitled to receive
dividends unless a dividend is declared on any Junior Stock.
(b) No dividend or distribution in cash or
other property on the Junior Stock (other than a dividend or
distribution described in Section 6) shall be declared or paid
or set apart for payment unless, at the same time, the same
dividend or distribution is declared or paid or set apart, as
the case may be, on each share of this Series in the amount
equal to the product of (i) the declared dividend on the
Junior Stock and (ii) the Conversion Ratio (defined below) in
effect on the Record Date (as defined below).
(c) Any record date (the "Record Date") and
the payment date for this Series shall be the same as the
respective record date and payment date for dividends or
distributions on any Junior Stock.
Section 3. Redemption. Prior to the expiration of the
Conversion Term (as defined below), the shares of this
Series shall not be redeemable at the option of the
Company, except by agreement between the Company and
the Holder. After expiration of the Conversion Term, the
Company may redeem any shares of this Series at a price
equal to the Stated Value.
<PAGE>
Section 4. Voting Rights. The holders shall not be
entitled to vote on matters submitted to the vote of the
holders of Common Stock. However, so long as any shares
of this Series are outstanding, the Company shall not,
without the affirmative vote of the Holders of two-thirds of
the outstanding shares of this Series, (i) alter or change the
powers, preferences or rights given to this Series adversely
or (ii) authorize or create any series or class of capital stock
or issue any shares of capital stock ranking as to dividends
or distribution of assets (upon liquidation or otherwise) prior
to or pari passu with this Series.
Section 5. Liquidation. In the event of any complete
liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary, the Holders shall be
entitled to receive out of the assets of the Company,
whether such assets are capital or surplus, for each share of
this Series an amount equal to $50.00 per share before any
distribution shall be made to the holders of Junior Stock of
the Company, and if the assets of the Company shall be
insufficient to pay in full such amounts, then such assets
shall be distributed among such Holders ratably in
accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were
paid in full.
Section 6. Conversion.
(a) Each share of this Series shall be
convertible into shares of Common Stock at the Conversion
Ratio, at the option of the Holder in whole or in part at any
time prior to the expiration of the Conversion Term. The
Company shall give to each Holder 30 days prior written
notice of the expiration of the Conversion Term. The
Holders shall effect conversions by delivering to the
Company a written notice substantially in the form of
conversion notice set forth on the reverse of the certificate
evidencing shares of this Series (the "Conversion Notice"),
which Conversion Notice, once given, shall be irrevocable.
(b) No later than five (5) Trading Days
following the last day of the applicable Pricing Period, each
Holder, who is converting shares, shall deliver to the
Company the certificate or certificates representing the
shares of the Series to be converted and within five (5)
Trading days thereafter the Company will deliver to such
Holder (i) a certificate or certificates which shall be free of
restrictive legends and "stop transfer" restrictions
representing the number of shares of Common Stock being
acquired upon the conversion of shares of this Series and (ii)
if the Holder is converting less than all shares of this Series,
a certificate for such number of shares of this Series as have
not been converted.
(c)(i) The Conversion Price (the "Conversion
Price") in effect on any Conversion Date or Record Date
shall equal 90 1/4% of the Pricing Period Average Price;
provided, however, that if the Average Price during the last
fifteen (15) Trading Days of a relevant Pricing Period
<PAGE>
exceeds the Average Price during the first fifteen (15)
Trading Days of such Pricing Period by at least 30% but less
than 40%, then the Conversion Price shall equal 95 1/2% of
the Pricing Period Average Price; and provided, further, that
if the Average Price during the last fifteen (15) Trading Days
of a Pricing Period exceeds the Average Price during the
first fifteen (15) Trading Days of such Pricing Period by at
least 40%, then the Conversion Price shall equal the Pricing
Period Average Price.
(ii) If the Company, during any Pricing
Period, shall (A) pay a stock dividend or otherwise make a
distribution or distributions on shares of its Junior Stock
payable in shares of its capital stock (whether payable in
shares of its Common Stock or of capital stock of any class),
(B) subdivide outstanding shares of Common Stock into a
larger number of shares, (C) combine outstanding shares of
Common Stock into a smaller number of shares, (D) issue
by reclassification of shares of Common Stock any shares of
capital stock of the Company, (E) issue rights or warrants to
all holders of Common Stock (but not to the Holders)
entitling them (for a period expiring within 45 days after the
record date mentioned below) to subscribe for or purchase
shares of Common Stock at a price per share less than the
Per Share Market Value of Common Stock at the record date
for determining holders entitled to receive such rights, (F)
distribute to all holders of Common Stock (and not to the
Holders) rights or warrants to subscribe for or purchase any
security (excluding those referred to in subsection 6(c)(ii)(E)
above), or (G) take any other action similar to the above
which materially and adversely affects the rights of the
Holders different than or distinguished from the effects
generally on the rights of the holders of any other class of
the Company's capital stock), the Company shall make an
appropriate adjustment to the Average Price for each
Trading Day in the Pricing Period prior to the record date or
effective date of such event so as to continue to give to each
Holder, the economic value of the Conversion Price
formula set forth in Section 6(c)(i), as determined by the
Board of Directors of the Company in good faith; provided,
however that if the Holders of a majority in interest of the
shares of this Series ("Majority in Interest") disagree with the
determination of the Board of Directors, then the Holders of
a Majority in Interest and the Company shall each in good
faith select a national or regional investment banking firm or
firm of independent certified public accountants of
recognized standing (which may be the firm that regularly
examines the financial statements of the Company) (an
"Appraiser") who shall mutually agree on the amount, if any
of the adjustment required by this section and provided,
further that if the Appraisers are unable to agree, the amount
of the adjustment be equal to the average of the
determinations by each such Appraiser.
(iii) Whenever an adjustment is
required pursuant to Section 6(c)(ii), the Company shall
promptly mail to each Holder a notice setting forth the
Average Prices after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.
<PAGE>
(iv) In case of any reclassification of
the Common Stock, any consolidation or merger of the
Company with or into another person, sale or transfer of all
or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which share
exchange the Common Stock is converted into other
securities, cash or property, then the Holders shall have the
right thereafter to convert such shares only into the kind and
amount of shares of stock and other securities and property
receivable upon or deemed be held following such
reclassification, consolidation, merger, sale, transfer or share
exchange by a Holder of a number of shares of the
Common Stock of the Company into which such shares this
Series could have been converted immediately prior to such
reclassification, consolidation, merger, sale, transfer or share
exchange. The terms of any such consolidation, merger,
sale, transfer or share exchange shall include such terms so
as to continue to give to each Holder, the economic value
of the Conversion Price formula set forth in Section 6(c)(i)
following such consolidation, merger, sale, transfer or share
exchange. This provision shall similarly apply to successive
reclassifications, consolidation, mergers, sales, transfers or
share exchanges.
(v) All calculations under this Section
6 shall be made to the nearest cent or the nearest 1/l00th of
a share, as the case may be.
(d) The Company shall at all times reserve
and keep available, out of its authorized and unissued
Common Stock solely for the purpose of issuance upon
conversion of this Series as herein provided, free from
preemptive rights or any other actual or contingent purchase
rights of Persons other than the Holders, such number of
shares of Common Stock as shall be issuable upon the
conversion of all outstanding shares of this Series. All
shares of Common Stock that shall be so issued upon
conversion of shares of this Series shall be duly and validly
issued and fully paid and nonassessable.
(e) The Company shall not be required to
issue stock certificates representing fractions of shares of
Common Stock, but may if otherwise permitted, make a
cash payment in respect of any final fraction of a share
based on the Per Share Market Value at such time. If the
Company elects not, or is unable, to make such a cash
payment, each Holder shall be entitled to receive, in lieu of
the final fraction of a share, one whole share of Common
Stock.
(f) The issuance of certificates for shares of
Common Stock on conversion of this Series shall be made
without charge to the Holders for any documentary stamp
or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided, that the Company
shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery
of any such certificate in a name other than that of the
Holder converted and the Company shall not be required to
<PAGE>
issue or deliver such certificates unless or until the person
or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax
has been paid.
(g) The Company shall have no right to
require any Holder to convert any or all of this Series into
Common Stock.
(h) Shares of this Series converted into
Common Stock shall be canceled and shall have the status
of authorized but unissued shares of Preferred Stock but
may not be reissued as shares of this Series.
(i) If the Company should make an
authorization or declaration of any event pursuant to this
Section 6 during a Pricing Period, the Holders of a Majority
in Interest may in their sole discretion, elect by written
notice to the Company to reduce the term of the Pricing
Period to the Trading Day immediately preceding the date
of such authorization or declaration and to accelerate the
delivery of the shares to a date which is five (5) business
days after the date of the notice given by such Holders.
(k) If Company intends to initiate a public
offering of its securities during the Conversion Term, in an
amount exceeding $12 million in the aggregate and the
Company reasonably believes that the conversion of any
shares of this Series may have an adverse effect on the
ability of the Company to complete such offering or the
price at which such securities could be sold therein, the
Company, upon at least 30 days' prior written notice to all
Holders, may suspend the right of all Holders to convert
such shares pursuant to Section 6 for the period
commencing on the date the Company files with the
Securities and Exchange Commission a registration
statement under the Securities Act of 1933 and terminating
30 days after the closing of the public offering relating
thereto; provided, however, that such period shall not
exceed four months and provided, further, that the last day
of the Conversion Term shall be extended for 120% of such
number of days as the conversion right was suspended.
Section 7. Definitions. For the purposes hereof, the
following terms shall have the following meanings:
"Average Price" means, with respect to any
Trading Day, (a) if the Common Stock is then listed or
quoted on a principal stock exchange or The Nasdaq Stock
Market, the average (rounded to the nearest thousandth of a
dollar) of the high and low sales price on such day of the
Pricing Period or (b) if the Common Stock is not listed or
quoted on a principal stock exchange or The Nasdaq Stock
Market but is quoted in the over-the-counter market, the
average (rounded to the nearest thousandth of a dollar) of
the average of the daily closing bid and ask price on such
day.
<PAGE>
"Common Stock" means shares now or
hereafter authorized of the class of Common Stock, $0.01
par value, of the Company presently authorized and stock
of any other class into which such shares may hereafter
have been reclassified or changed.
"Conversion Date" means the last day of the
relevant Pricing Period.
"Conversion Ratio" means a fraction, of which
the numerator is Stated Value, and of which the
denominator is the Conversion Price.
"Conversion Term" means the period
commencing on the date that the shares of this Series are
issued and ending on the date that is 180 calendar days
after the date of initial issuance of shares of this Series, or
such later date as the Company and the Holder may agree,
and provided that (a) if the Average Price during the 60
Trading Day period ending on the expiration date of such
initial 180-day period is greater than $7.00 but less than
$10.00 the Conversion Term shall be extended to the date
that is 300 calendar days after the date of initial issuance of
shares of this Series, (b) if the Average Price during the 60
Trading Day period ending on the expiration date of such
initial 180-day period is greater than $5.00 but less than
$7.00, then the Conversion Term shall be extended to the
date that is 360 calendar days after the date of the initial
issuance of shares of this Series, and (c) if the Average Price
during the 60 Trading Day period ending on the expiration
date of such initial 180-day period is less than $5.00, then
the Conversion Term shall be extended to the date that is
600 calendar days after the date of initial issuance of shares
of this Series. If there occurs an event of the type listed in
Section 6(c)(ii), the Company shall make appropriate
adjustment to the dollar amount set forth in this paragraph.
"Junior Stock" means the Common Stock of
the Company and any other capital stock of the Company,
except as to shares of capital stock of any series or class
which, by its terms, is prior in right of distribution to the
shares of this Series.
"Holder" means a holder of record of
outstanding shares of this Series. Any notice required or
permitted to be given to a Holder shall be given to such
Holder at its last address as it shall appear upon the stock
books of the Company.
"Per Share Market Value" means on any
particular date (a) the last sale price per share of the
Common Stock on such date on the principal stock
exchange or The Nasdaq Stock Market, as the case may be,
on which the Common Stock is then traded or, if there is no
such price on such date, then the last price on such
exchange on the date nearest preceding such date, or (b) if
the Common Stock is not listed on any stock exchange or
The Nasdaq Stock Market, the average of the bid and asked
price for a share of Common Stock in the over-the-counter
<PAGE>
market as reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding
to its functions of reporting prices), or (c) if the Common
Stock is no longer publicly traded the fair market value of a
share of Common Stock as determined by an Appraiser
selected in good faith by the Holders of a Majority in
Interest; provided, however, that if the Company, after
receipt of the determination by such Appraiser shall have
the right to select an additional Appraiser, in which case,
the fair market value shall be equal to the average of the
determinations by each such Appraiser; provided further
that none of the transactions related to the foregoing
determination shall include purchases by any "affiliate" (as
such term is defined in the General Rules and Regulations
under the Securities Act of 1933) of the Company.
"Person" means a corporation, an association,
a partnership, organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.
"Pricing Period" means the fifteen (15)
Trading Days immediately preceding the date of the related
Conversion Notice (or Record Date for distributions) and the
fifteen (15) Trading Days commencing on the date of the
related Conversion Notice (or Record Date for distributions).
"Pricing Period Average Price" means the
average of the Average Price during each day of the relevant
Pricing Period.
"Trading Day" means (a) a day on which the
Common Stock is traded on the principal stock exchange or
The Nasdaq Stock Market, as the case may be, as reported
by such stock exchange or The Nasdaq Stock Market, or (b)
if the Common Stock is not traded on a principal stock
exchange or The Nasdaq Stock Market, a day on which the
Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or
any similar organization or agency succeeding to its
functions of reporting prices).
<PAGE>
IN WITNESS WHEREOF, IMMUNOMEDICS, INC.
has caused this Certificate of Designation to be executed by its
Chairman of the Board and Chief Executive Officer and attested to
by its Secretary this 25th day of September, 1995.
IMMUNOMEDICS, INC.
By /s/ David M. Goldenberg
David M. Goldenberg
Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Amy Factor
Amy Factor
Secretary
CONFORMED COPY
CONVERTIBLE PREFERRED STOCK PURCHASE
AGREEMENT (the "Agreement") dated as of September 29, 1995
between Immunomedics, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company") and the
persons listed on the signature page hereto (each, a "Purchaser" and
collectively, the "Purchasers").
WHEREAS, the Company desires to issue and sell to the
Purchasers and the Purchasers desire to acquire 200,000 shares of the
Company's Series C Convertible Preferred Stock, par value $0.01 per
share (the "Series C Preferred").
IN CONSIDERATION of the mutual covenants
contained in this Agreement, the Company and the Purchasers agree
as follows:
ARTICLE I
Purchase and Sale of Series C Preferred
1.1 Purchase and Sale of Series C Preferred. Upon the terms
and conditions set forth herein, the Company shall issue and sell to
each of the Purchasers, and each of the Purchasers shall purchase,
such number of shares (the "Shares") of Series C Preferred as is set
forth opposite such Purchaser's name on Schedule 1 hereto. The
Series C Preferred shall contain the terms and provisions set forth in
the Certificate of Designation (the "Certificate of Designation"), a
copy of which is attached hereto as Exhibit A.
1.2 Purchase Price. The aggregate purchase price for the
Shares purchased by each Purchaser (the "Aggregate Purchase Price")
shall equal the product of the number of Shares purchased by such
Purchaser and $50.00 (the "Purchase Price Per Share").
1.3 The Closing.
(a) The closing of the purchase and sale of the Shares
(the "Closing") shall take place at the offices of Warshaw Burstein
Cohen Schlesinger & Kuh, LLP, 555 Fifth Avenue, New York, New
York 10017 at 10:00 a.m., New York City on September 29, 1995 or
on such other earlier date as the Purchasers and the Company may
agree or as provided in Section 1.3(b). The date of the Closing is
hereinafter referred to as the Closing Date.
(b) At the Closing, (i) the Company shall deliver to
each Purchaser or its representative one or more stock certificates
representing the Shares, which shall be free of restrictive legends or
"stop transfer" restrictions, registered in the name of the Purchaser
and (ii) each Purchaser shall deliver to the Company the Aggregate
Purchase Price as determined pursuant to this Article I in immediately
available funds by wire transfer to such account as shall be
designated in writing by the Company. In addition, each of the
Company and the Purchasers shall deliver all documents, instruments
and writings required to be delivered by any of them pursuant to this
Agreement at or prior to Closing.
<PAGE>
ARTICLE II
Representations and Warranties
2.1 Representations, Warranties and Agreements of the
Company. The Company hereby makes the following representations,
warranties and agreements with and to the Purchasers:
(a) Organization and Qualification. The Company is
a corporation duly and validly existing and in good standing under
the laws of the State of Delaware and has the requisite corporate
power to own its properties and to carry on its business as now being
conducted. Except as set forth on Schedule 2.1(a), as of the date
hereof, the Company does not have any subsidiaries. The Company
is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification
necessary and where the failure so to qualify would have a Material
Adverse Effect. "Material Adverse Effect" means any material adverse
effect on the operations, properties, prospects, or financial condition
of the Company.
(b) Authorization; Enforcement. (i) The Company has
the requisite corporate power and authority to enter into and perform
this Agreement and to issue the Shares and the shares of Common
Stock issuable upon conversion of the Shares (the "Underlying
Shares" and with the Shares, the "Securities") in accordance with the
terms hereof and the Certificate of Designation, (ii) the execution and
delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby has been duly
authorized by the Company's Board of Directors and no further
consent or authorization of the Company or its Board of Directors or
stockholders is required, (iii) this Agreement has been duly executed
and delivered by the Company and (iv) this Agreement constitutes a
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
(c) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in Schedule
2.1 (c). No shares of Common Stock are entitled to preemptive rights.
Except as disclosed in Schedule 2.1 (c), as of the date of this
Agreement there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of
capital stock of the Company, or contracts, commitments,
understandings, or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional shares of
Common Stock, or options, warrants, scrip, rights to subscribe to, or
commitments to purchase or acquire, any shares, or securities or
rights convertible into shares, of capital stock of the Company. The
Company has furnished to the Purchasers true and correct copies of
the Company's Certificate of Incorporation, as amended, in effect on
the date hereof (the "Certificate of Incorporation") and, the
Company's Amended and Restated By-Laws, as in effect on the date
hereof (the "By-Laws").
<PAGE>
(d) Issuance of Shares. The Shares are duly authorized,
and when paid for in accordance with the terms hereof shall be
validly issued, fully paid and nonassessable and free and clear of all
liens, claims and encumbrances. The Underlying Shares are duly
authorized, and when issued upon conversion in accordance with the
terms of the Certificate of Designation shall be validly issued, fully
paid and nonassessable and free and clear of all liens, claims and
encumbrances. The Company has and will maintain an adequate
reserve of shares of Common Stock to enable it to perform its
obligations under this Agreement.
(e) No Conflicts. The execution, delivery and
performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby or relating hereto do not and will not (i) result in the violation
of the Company's Certificate of Incorporation or By-laws or (ii)
conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company is a party, or to the actual knowledge of the Company,
result in a violation of any law, rule, regulation, order, judgment or
decree (including Federal and state securities laws and regulations)
applicable to the Company, or by which any property or asset of the
Company is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material
Adverse Effect). The business of the Company is not being conducted
in violation of any law, ordinance or regulation of any governmental
entity, except for possible violations which either singly or in the
aggregate do not have a Material Adverse Effect. The Company is not
required to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under
this Agreement or issue and sell the Securities in accordance with the
terms hereof and the Certificate of Designation, except for the filing
of the Certificate of Designation with the Secretary of State of the
State of Delaware, which filing shall be effected prior to the Closing
Date.
(f) SEC Documents Financial Statements. The
Common Stock of the Company is registered pursuant to section 12(g)
of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act") and through and including the date hereof, the
Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange
Commission (the "SEC") pursuant to the reporting requirements of the
Exchange Act, including material filed pursuant to section 13(a) or
15(d) (all of the foregoing filed prior to the date hereof being
hereinafter referred to herein as the "SEC Documents"). The
Company has delivered to the Purchasers true and complete copies
of the SEC Documents (other than documents incorporated by
reference therein but not filed therewith) filed with the SEC since June
30, 1994. The Company has not provided any non-public
information to the Purchasers. As of their respective dates, the SEC
Documents complied in all material respects with the requirements
of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and
none of the SEC Documents, when filed, contained any untrue statement
<PAGE>
of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in
the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statement, to normal
year-end audit adjustments).
(g) Absence of Material Changes. Except as otherwise
publicly disclosed, since June 30, 1995, there has been no event,
occurrence or development that has a Material Adverse Effect. Except
as otherwise publicly disclosed, since June 30, 1995, no event has
occurred which the Company would be required to disclose pursuant
to applicable statue, law, rule or regulation but which has not so been
disclosed.
(h) No Undisclosed Liabilities. Except as set forth in the
SEC Documents or otherwise publicly disclosed, the Company has no
liabilities or obligations (whether direct, indirect, contingent or
otherwise) which have had or in the Company's reasonable judgment
could have a Material Adverse Effect if the Company were required
to perform such obligations.
2.2 Representations and Warranties of the Purchasers. Each
Purchaser,as applicable, hereby makes the following representations
and warranties to the Company as to itself, but not as to any other
Purchaser:
(a) Organization; Authorization; Enforcement. (i) The
Purchaser is a corporation or partnership duly and validly existing and
in good standing under the laws of the jurisdiction of its incorporation
or organization and has the requisite power to own its properties and
to carry on its business as now being conducted, (ii) the Purchaser has
the requisite power and authority to enter into and perform this
Agreement, (iii) the execution and delivery of this Agreement by the
Purchaser and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary
action, and no further consent or authorization of the Purchaser or its
Board of Directors or stockholders or partners is required, (iv) this
Agreement has been duly executed and delivered by the Purchaser
(or on Purchaser's behalf by its investment manager duly authorized
to act on its behalf) and (v) this Agreement constitutes a valid and
binding obligation of the Purchaser enforceable against the Purchaser
in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
<PAGE>
(b) No Conflicts. The execution, delivery and
performance of this Agreement by the Purchaser and the
consummation by the Purchaser of the transactions contemplated
hereby or relating hereto do not and will not (i) result in the violation
of the Purchaser's charter documents or By-Laws or other
organizational documents, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become
a default) under, any agreement, indenture or instrument to which the
Purchaser is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree of any court of governmental
agency applicable to the Purchaser or its properties (except for such
conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on the Purchaser). The
Purchaser is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any
of its obligations under this Agreement or purchase the Shares in
accordance with the terms hereof.
(c) Non U.S. Ownership. The Purchaser is not a U.S.
Person as defined within Regulation S ("Regulation S") promulgated
under the Securities Act of 1933 (the "Securities Act") and is not
purchasing the Shares for the account or benefit of a U.S. Person. If
the Shares are being purchased on Purchaser's behalf by its
investment manager, such investment manager is a dealer or other
professional fiduciary in accordance with Rule 902(o)(2) of Regulation
S. The Purchaser has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and
risks of the investments contemplated by this Agreement. The
Purchaser has been afforded, to the satisfaction of the Purchaser, the
opportunity to review the SEC Documents and obtain such additional
publicly available information concerning the Company and its
business, and to ask such questions and receive such answers (based
upon publicly available information), as the Purchaser deems
necessary to make an informed investment decision.
(d) Investment Intent. The Purchaser is purchasing the
Securities for investment purposes and not with a view towards
distribution. The Purchaser has no present intention to sell the
Securities and has no present arrangement (whether or not legally
binding) to sell the Securities to or through any person or entity;
provided, however, that by making the foregoing representation and
warranty, the Purchaser does not agree to hold the Securities for any
minimum or other specific term and reserves the right to dispose of
the Securities at any time in accordance with the Securities Act and
any other applicable securities laws.
ARTICLE III
Covenants
3.1 Regulation S. (a) The Company shall take all necessary
reasonable corporate action and proceedings as may be required by
applicable law, rule or regulation for the legal and valid issuance of
the Shares to the Purchasers at the Closing in accordance with this
Agreement, for the legal and valid issuance of the Underlying Shares
upon conversion of the Shares in accordance with this Agreement and
<PAGE>
the Certificate of Designation, and for any transfer or other disposition
or financing thereof, when and as permitted under Regulation S
without registration under the Securities Act or other applicable law.
Neither the Company nor any of its affiliates have engaged or will
engage in any "directed selling efforts" (as such term is defined under
Regulation S) with respect to the Shares or the Underlying Shares and
have complied and will comply with the "offering restrictions"
requirements of Regulation S.
(b) Each Purchaser acknowledges as to itself, but not
as to any other Purchaser, that the Shares and the Underlying Shares
have not been nor, except as otherwise provided in this Agreement,
will be registered under the Securities Act. Such Purchaser covenants
(i) that it is not, and does not intend to be a "distributor" (as such term
is defined by Regulation S) of the Shares or the Underlying Shares,
but if it so acts then such Purchaser will comply with all applicable
requirements under Regulation S in connection therewith, (ii) that it
will not offer or sell the Shares or the Underlying Shares within the
United States or to, or for the account or benefit of, any "U.S. person"
(as each such term is defined in Regulation S) except in accordance
with the provisions of Rule 903 or Rule 904 of Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act and (iii) that neither the Purchaser, its affiliates, nor
persons acting on their behalf, have engaged or will engage in
"directed selling efforts" (as such term is defined by Regulation S)
with respect to the Shares and the Underlying Shares and that, if a
distributor, each of them has complied and will comply with the
"offering restrictions" requirements of Regulation S.
(c) The Company acknowledges that the Purchasers
may from time to time engage in purchases, sales, financings or
transactions in the Common Stock separate and apart from the
Securities acquired pursuant to this Agreement.
3.2 Common Stock. From the date hereof through the Closing
Date, the Company shall not (i) amend its Certificate of Incorporation
or By-laws so as to adversely affect any rights of the Purchasers; (ii)
split, combine or reclassify its outstanding capital stock; (iii) declare
or set aside or pay any dividend or other distribution with respect to
the Common Stock; (iv) repurchase or offer to repurchase shares of its
stock; (v) sell equity or equity related securities (except shares issued
upon exercise of options granted under the Company's stock option
plan) or (vi) enter into any agreement with respect to the foregoing.
3.3 Purchasers' Rights if Regulation S is Amended. In the
event that at any time on or after the Closing Date and prior to the
expiration of the Conversion Term (as defined in the Certificate of
Designation), the Purchasers and the Company jointly agree (or in the
event they are unable to so agree upon receipt by the Company of an
opinion of a third party, mutually acceptable to the Company and the
Purchasers, who is experienced in transactions of this type) that
Regulation S has been amended or interpreted in a manner so as to
adversely effect the marketability of the Shares or the shares of
Common Stock underlying the Shares, other than as a result of the
actions taken by the Purchasers, then, at the Company's option, the
Company shall promptly (i) file a registration statement under the
Securities Act of 1933, as amended, to register for sale the Underlying
Shares and to use its reasonable efforts to cause such registration
statement to be declared effective or (ii) redeem the Shares and the
<PAGE>
Underlying Shares, at an aggregate purchase price, in the case of the
Shares, equal to the Stated Value of the Shares to be redeemed plus
interest from the date of issuance at a rate equal to the monthly
LIBOR, and in the case of the Underlying Shares, the Market Value
(as defined below) of the Underlying Shares to be redeemed. For
purposes of this Article III, the Market Value shall equal the average
of the Per Share Market Value (as defined in the Certificate of
Designation) for the 15 Trading Days (as defined in the Certificate of
Designation) ending 5 Trading Days prior to the date the Underlying
Shares are to be redeemed.
3.4 Purchasers' Rights if Trading in Common Stock is
Suspended. In the event that at any time on or after the Closing Date
and prior to the expiration of the Conversion Term, trading in the
shares of the Company's Common Stock is suspended on the
principal market or exchange for such shares (including The Nasdaq
Stock Market), for a period of five consecutive Trading Days, other
than as a result of the suspension of trading in securities generally,
then, at each Purchaser's option, the Company shall redeem the
Shares at an aggregate purchase price, in the case of the Shares, equal
to the Stated Value of the Shares to be redeemed and in the case of
the Underlying Shares, the Market Value of the Underlying Shares to
be redeemed.
3.5 Limitations on Purchasers' Right to Convert.
Notwithstanding anything to the contrary contained herein or in the
Certificate of Designation, no Purchaser, shall be entitled to convert
any Shares if the number of shares of Common Stock that the holder
of Shares is then entitled to receive upon the conversion of such
number of Shares as is then being submitted for conversion, together
with any other shares of Common Stock then held will equal or
exceed 5% of the issued and outstanding shares of Common Stock,
after giving effect to the shares of Common Stock to be issued
pursuant to such Conversion Notice. Each Conversion Notice (as
defined in the Certificate of Designation) shall contain a
representation as to the foregoing. If at the expiration of the
Conversion Term, a Purchaser, as a result of the provisions of this
Section 3.5, shall be unable to exercise its right to convert Shares, the
Conversion Term shall be extended for such additional time, not to
exceed three months, to permit such Purchaser to convert, at its
option, such remaining Shares as it shall then own giving effect to (i)
an increase in the Conversion Price (as defined in the Certificate of
Designation), (ii) an increase in the number of outstanding shares of
Common Stock, or (iii) a decrease in the number of shares of
Common Stock owned by such Purchaser.
3.6 Limitations on Purchaser's Right to Sell Common Stock.
Each Purchaser agrees that during the period commencing on the
Closing Date and ending 40 days thereafter, it will not engage in any
short selling or other hedging transaction in the Securities including,
without limitation, option writing equity swaps or other types of
derivative transactions, the intent of which is to transfer incidence of
ownership into the United States during such period. Each Purchaser
hereby further agrees that during the period commencing on the date
that a Conversion Notice is delivered to the Company until the end
of the relevant Pricing Period (as such term is defined in the
Certificate of Designation), such Purchaser will not, nor direct any
affiliate or broker acting on its behalf to, enter into (i) a sale of the
Common Stock at a price which is then below the then low daily
<PAGE>
trading price of the Common Stock or (ii) any "market open" or
"market close" transaction which would result in establishing a new
low daily trading price for the Common Stock on such day.
3.7 Adjustment to Conversion Price. In the event that at any
time on or after the Closing Date and prior to the expiration of the
Conversion Term but not later than the first anniversary of the Closing
Date (the "Adjustment Period"), the Company shall issue, in a private
placement or an offering under Regulation S, Common Stock or any
securities convertible into or exercisable for Common Stock, which
the Company determines, in its reasonable judgment, has a sales
price (in the case of Common Stock) or a conversion or exercise price
(in the case of securities convertible into or exercisable for Common
Stock), as the case may be (the "Adjusted Conversion Price"), as a
percentage of the Average Price on the date of issuance, that is less
than the Conversion Price of the Series C Preferred Stock, as a
percentage of the Pricing Period Average Price, then, upon the
request of the holders of a Majority in Interest (as defined in the
Certificate of Designation) of the then outstanding Shares, the
Company shall promptly file a certificate of amendment to the
Certificate of Designation to permit the then outstanding Shares to
thereafter be converted into Common Stock at the Adjusted
Conversion Price. During the Adjustment Period, the Company
agrees to promptly notified each holder of Shares of any issuance of
securities in a private placement or offering under Regulation S.
ARTICLE IV
Conditions
4.1 Conditions Precedent to the Obligation of the Company
to Sell the Shares. The Obligation hereunder of the Company to sell
the Shares to the Purchasers is further subject to the satisfaction, at or
before the Closing, of each of the following conditions set forth
below. These conditions are for the Company's sole benefit and may
be waived by the Company at any time in its sole discretion.
(a) Accuracy of the Purchasers' Representations and
Warranties. The representations and warranties of the Purchaser shall
be true and correct in all material respects as of the date when made
and as of the Closing Date as though made at that time.
(b) Performance by the Purchasers. The Purchasers
shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the
Purchasers at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court of governmental
authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this
Agreement.
<PAGE>
(d) No Change in Regulation S. Regulation S shall not
have been, nor proposed to be, amended or interpreted in a manner,
which, in the reasonable judgment of the Company, would materially
adversely effect the issuance or sale of the Securities by the
Company.
(e) Filing of the Certificate of Designation. The
Certificate of Designation shall have been duly filed with the
Secretary of State of the State of Delaware and a certified copy thereof
shall have been returned to the Company.
4.2 Conditions Precedent to the Obligation of the Purchasers
to Purchase the Shares. The obligation of each Purchaser hereunder
to acquire and pay for the Shares is subject to the satisfaction, at or
before the Closing, of each of the following conditions set forth
below. These conditions are for each Purchaser's sole benefit and
may be waived by such Purchaser at any time in its sole discretion.
(a) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the Company shall
be true and correct in all material respects as of the date when made
and as of the Closing Date as though made at that time (except for
representations and warranties set forth in Section 2.1(f) that speak as
of a particular date).
(b) Performance by the Company. The Company shall
have performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Company at or
prior to the Closing.
(c) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court of governmental
authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this
Agreement.
(d) Adverse Changes. Since June 30, 1995, no event
which had a Material Adverse Effect on the Company has occurred.
(e) No Change in Regulation S. Regulation S shall not
have been, nor proposed to be, amended or interpreted in a manner,
which, in the reasonable judgment of the Purchaser, would materially
adversely effect the purchase of the Securities by the Purchaser.
(f) No Suspension of Trading in Common Stock. The
trading in the Common Stock shall not have been suspended by the
SEC or the National Association of Securities Dealers, Inc. (the
"NASD") (except for any suspension of trading of limited duration
solely to permit dissemination of material information regarding the
Company).
(g) Legal Opinion. The Company shall have delivered
to the Purchaser the opinion of Warshaw Burstein Cohen Schlesinger
& Kuh, LLP, counsel to the Company, in form and substance
reasonably satisfactory to the Purchaser.
<PAGE>
(h) Officer's Certificate. The Company shall have
delivered to the Purchaser a certificate, executed by an executive
officer of the Company, to the effect all the conditions to the closing
shall have been satisfied.
(i) Filing of the Certificate of Designation. The
Certificate of Designation shall have been duly filed with the
Secretary of State of the State of Delaware and a certified copy thereof
shall have been returned to the Company.
ARTICLE V
Termination
5.1 Termination by Mutual Consent. This Agreement may be
terminated at any time by the mutual consent of the Company and
the Purchasers.
ARTICLE VI
Miscellaneous
6.1 Fees and Expenses: No Brokers. Each party shall pay the
fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Securities
pursuant hereto. Each party represents that it has not used the services
of any broker in connection with this transaction, other than a broker
as to which such party shall be solely responsible for the payment of
any fees and expenses incurred in connection herewith.
6.2 Entire Agreement; Amendments. This Agreement,
together with the Exhibit and Schedules attached hereto, contains the
entire understanding of the parties with respect to the matters covered
hereby and, except as specifically set forth herein, neither the
Company nor the Purchasers makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision
of this Agreement may be waived or amended other than by a written
instrument signed by the party against whom enforcement of any
such amendment or waiver is sought.
6.3 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be
deemed to have been received (a) upon hand delivery (receipt
acknowledged) or delivery by telex (with correct
answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if
delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the
second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual
<PAGE>
receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
to the Company: Immunomedics, Inc.
300 American Road
Morris Plains, NJ 07950
Facsimile No.: (201) 605-8282
Attn: Chief Executive Officer
With copies to: Howard M. Cohen, Esq.
Warshaw Burstein Cohen Schlesinger & Kuh, LLP
555 Fifth Avenue - 11th Floor
New York, NY 10017
Facsimile No.: (212) 972-9150
If to a Purchaser: At the Address set forth on Schedule 1
hereto.
Either party hereto may from time to time change its address for
notices under this Section 6.3 by giving at least 10 days' written
notice of such changed address to the other party hereto.
6.4 Waivers. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver
of any other provision, condition or requirement hereof; nor shall any
delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right accruing to it
thereafter. Any waiver must be in writing.
6.5 Headings. The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
6.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
permitted assigns. Neither the Company nor any Purchaser shall
assign this Agreement or any rights or obligations hereunder without
the prior written consent of the other (which consent may be
withheld for any reason in the sole discretion of the party from whom
consent is sought). The assignment by a party of this Agreement or
any rights hereunder shall not affect the obligations of such party
under this Agreement.
6.7 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
6.8 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the
State of New York without regard to the principles of conflicts of law.
6.9 Availability of Equitable Remedies; Consent to
Jurisdiction. (a) The Company and the Purchasers agree that since a
breach of the provisions of this Agreement could not adequately be
compensated by money damages, any party shall be entitled, either
before or after the Closing, in addition to any other right or remedy
<PAGE>
available to it, to an injunction restraining such breach or a
threatened breach and to specific performance of any such provision
of this Agreement and the parties hereby consent to the issuance of
such injunction and to the ordering of specific performance.
(b) Each of the Company and the Purchasers hereby (i)
irrevocably consents to the jurisdiction of the federal courts located
in the State of New York (or the courts of the State of New York if the
federal court decline to accept jurisdiction) in connection with any
action or proceeding arising out of or relating to this Agreement, any
document or instrument delivered pursuant to, in connection with, or
simultaneously with this Agreement, or a breach of this Agreement or
any such document or instrument and (ii) in any such action or
proceeding, waives personal service of any summons, complaint, or
other process and agrees that service thereof may be made in
accordance with Section 6.3 and shall constitute good and sufficient
service of process and notice thereof.
6.10 Survival. The agreements and covenants of the Company
and the Purchasers contained in Article III and this Article VI shall
survive the termination of this Agreement or the consummation of the
transactions contemplated hereby. The representations and
warranties of the Company and the Purchasers contained in Article II
shall survive until a date that is one year after the Closing.
6.10 Execution. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original for all
purposes and any one of which may be introduced into evidence or
used for any other purpose without the production of its duplicate
counterpart, and all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In
the event any signature is delivered by facsimile transmission, the
party using such means of delivery shall cause four additional
executed signature pages to be physically delivered to the other party
within five days of the execution and delivery hereof.
6.11 Publicity. The Company and the Purchasers shall consult
with each other in issuing any press releases or otherwise making
public statements with respect to the transactions contemplated
hereby. Neither party shall issue any press release or otherwise make
any public statement without the prior written consent of the other,
which consent shall not be unreasonably withheld or delayed.
6.12 Severability. In case any one or more of the provisions
of this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affecting or impaired
thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefor,
in light of the tenor of this Agreement, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers
as of the date hereof.
IMMUNOMEDICS, INC.
By /s/ Amy Factor
Amy Factor
Executiver Vice President
<PAGE>
PURCHASERS:
GERSHON PARTNERS, L.P.
By: The Palladin Group, L.P., its investment manager
By: Palladin Capital Management, LLC, its General Parnter
By /s/ Andy Kaplan
Andy Kaplan
Vice President
SP INVESTORS INTERNATIONAL, N.V.,
By /s/ Lisa Addeo
Lisa Addeo, as authorized oficer of Steinhardt
Management Co., Inc.,
as agent for SP Investors International N.V.
STEINHARDT OVERSEAS FUND, LTD.
By /s/ Lisa Addeo
Lisa Addeo, as Attorney-n-fact of Michael H.
Steinhardt, General Partner,
of Steinhardt Overseas Management,
L.P., as agent for Steinhardt
Overseads Fund, Ltd.
Title: MIDLAND WALWYN CAPITAL, INC.
By /s/ David Rarvis
David Jarvisame: Vice President & Manager
- Equity Derivatives
<PAGE>
Schedule 1
Name and Address of Purchaser Shares Aggregate Purchase Price
Gershon Partners, L.P. 30,000 $1,500,000
c/o CITCO Fund Services Ltd.
Corporate Centre
West Bay Road
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
SP Investors International, N.V. 60,000 $3,000,000
c/o WW Asset Management
129 Front Street
Hamilton, Bermuda 5-31
Steinhardt Overseas Fund, Ltd. 60,000 $3,000,000
c/o WW Asset Management
129 Front Street
Hamilton, Bermuda 5-31
Midland Walwyn Capital Inc. 50,000 $2,500,000
BCE Place 181 Bay Street, Suite 500
Toronto, Ontario
Canada M5J2V8
<PAGE>
Schedule 2.1(a)
Name of Subsidiary Jurisdiction of Incorporation
Immunomedics Ltd. Israel
(inactive corporation)
Immunomedics, B.V. Netherlands
(in process of formation)
<PAGE>
Schedule 2.1(c)
Capitalization of the Company
Issued and Class Authorized Outstanding
Preferred Stock, $.01 par value 10,000,000
Series B convertible 200,000 5,267
Series C convertible 200,000 0
Common Stock, $.01 par value 50,000,000 32,727,749
par value
Outstanding Options Warrants and Rights
The Company has outstanding options to purchase 2,157,750
shares of Common Stock, at prices ranging from $2.25 to $10.75.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Jun-30-1996
<PERIOD-START> Jul-01-1995
<PERIOD-END> Sep-30-1995
<CASH> 12,197,373
<SECURITIES> 17,184,117
<RECEIVABLES> 8,370
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,421,240
<PP&E> 9,332,104
<DEPRECIATION> 4,661,000
<TOTAL-ASSETS> 35,092,344
<CURRENT-LIABILITIES> 4,413,049
<BONDS> 0
<COMMON> 327,277
0
2,053
<OTHER-SE> 30,349,965
<TOTAL-LIABILITY-AND-EQUITY> 35,092,344
<SALES> 51,842
<TOTAL-REVENUES> 443,726
<CGS> 7,000
<TOTAL-COSTS> 3,752,057
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,308,331)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,308,331)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,308,331)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
