Registration No. 333-69975
As filed with the Securities and Exchange Commission on March 4, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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IMMUNOMEDICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 61-1009366
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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Robert J. DeLuccia
President and Chief Executive Officer
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies of all communications, including all communications
sent to the agent for service, should be sent to:
Michael D. Schwamm, Esq.
Warshaw Burstein Cohen
Schlesinger & Kuh, LLP
555 Fifth Avenue
New York, New York 10017
(212) 984-7700
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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The information in this prospectus is subject to completion and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission (of which this
prospectus is a part) is effective. This prospectus is not an offer to sell
these securities, and is not soliciting an offer to buy these securities, in any
state where such offer or sale is not permitted
PROSPECTUS Subject to Completion, dated March 4, 1999
IMMUNOMEDICS, INC.
10,000,000 Shares of Common Stock
THE ISSUER
Immunomedics. Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
THE SELLING STOCKHOLDERS
The selling stockholders are offering to sell shares of common stock that they
may acquire upon conversion of shares of our Series F Convertible Preferred
Stock that we issued to them on December 9, 1998 pursuant to a Securities
Purchase Agreement. Additional information concerning our agreement with the
selling stockholders is set forth under the caption "Immunomedics - Recent
Financing Arrangement."
TRADING SYMBOL
Nasdaq National Market - "IMMU"
THE OFFERING
The selling stockholders may sell shares of our common stock from time to time
on the Nasdaq National Market at the prevailing market price or in private,
negotiated transactions. The shares will be sold at prices determined by the
selling stockholders. We will not receive any part of the proceeds from the
sale. We are paying the expenses in connection with the registration of the
shares with the SEC. The selling stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with the sale of shares
that they may receive upon conversion of the Series F Stock.
A purchase of shares involves a high degree of risk. You should purchase shares
only if you can afford a complete loss of your investment. See "Risk Factors"
beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
___________, 1999
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TABLE OF CONTENTS
RISK FACTORS...................................................................3
History of Operating Losses...........................................3
Limited Number of Approved Products; Lack of Significant
Product Revenues.....................................................3
Uncertainty of Product Development....................................3
Need for Additional Capital...........................................4
Limited Marketing and Sales Experience and Capability.................4
Dependence on Third Parties for Distribution of Products..............4
Limited Manufacturing Capability......................................5
Dependence on Fluids Produced in Mice ................................5
Dependence on The Center for Molecular Medicine and Immunology........5
Potential Conflicts of Interest with The Center
for Molecular Medicine and Immunology ...............................5
Extensive Government Regulation.......................................6
Uncertainty of Health Care Reimbursement..............................6
Dependence on Key Personnel...........................................7
Possible Inability to Successfully Compete............................7
Impact of Rapid Technological Change..................................7
Limited Protection of Intellectual Property Rights....................7
Specific Patent Issues Involving CEA-Scan.............................8
Product Liability.....................................................8
Control by Existing Principal Stockholder.............................8
Potential Redemption of Series F Stock or Penalty Payments............8
Substantial Dilution; Potential for Issuance of
Significant Number of Shares of Common Stock.................8
Potential Adverse Impact on Market Price of Common Stock..............9
Stock Price Volatility................................................9
Effect of Certain Anti-Takeover Provisions............................9
Potential Loss of Nasdaq National Market Listing ....................10
Year 2000 Compliance.................................................11
No Expectation that We Will Pay Dividends............................11
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............................11
WHERE YOU CAN FIND MORE INFORMATION...........................................12
IMMUNOMEDICS..................................................................13
Description of Our Business..........................................13
Recent Financing Arrangement.........................................15
USE OF PROCEEDS...............................................................18
SELLING STOCKHOLDERS..........................................................19
PLAN OF DISTRIBUTION..........................................................21
Manner of Sales; Broker-Dealer Compensation..........................21
Filing of Supplement to Prospectus In Certain Instances..............22
Certain Persons Deemed to be Underwriters............................22
Regulation M.........................................................22
LEGAL MATTERS.................................................................23
EXPERTS .....................................................................23
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RISK FACTORS
Investing in our common stock involves a high degree of risk. As a
result, you should be able to sustain a complete loss of your investment. In
addition to the other information in this prospectus, you should carefully
consider the following factors before purchasing any of our common stock.
History of Operating Losses
We have had significant operating losses since our formation in 1982
and have not earned a profit since our inception. These operating losses and
failure to be profitable have been due mainly to the significant amount of money
that we have had to spend on research and development. As of December 31, 1998,
we had an accumulated deficit of approximately $93,000,000. We expect to
continue to experience operating losses until such time, if at all, that we are
able to generate sufficient revenues from sales of CEA-Scan(R), LeukoScan(R)
and/or our other potential products.
Limited Number of Approved Products; Lack of Significant Product Revenues
CEA-Scan and LeukoScan are the only products which we are licensed to
market and sell. To date, we have received only limited revenues from the sale
of these products. We cannot assure you that these products will achieve market
acceptance or generate significant sales. Unless we receive substantial revenues
from these products, future revenues will be dependent in large part upon us
receiving payments from corporate partners under licensing and research
agreements or from government grants. However, we cannot assure you that we will
receive such payments in a timely manner, or at all.
While we expect to receive approval from the FDA to market and sell
LeukoScan in the United States, we cannot assure you that such approval will be
received in a timely manner, if at all. In addition, the FDA could impose
conditions on its approval, which could significantly affect the commercial
viability of the product or could require us to undertake significant additional
studies or otherwise expend additional significant funds. If approval to market
and sell LeukoScan in the United States is not received on a timely basis or if
the FDA imposes significant conditions or restrictions, our business and
operations could be significantly and adversely affected.
Uncertainty of Product Development
We have a number of diagnostic and therapeutic products in various
stages of development as well as potential new uses for marketed products.
Before any of our other products can be marketed and sold, we must undertake
substantial research and development. All new products face a high degree of
uncertainty, including the following:
o We may not receive regulatory approval to perform human clinical trials
for the products we currently have planned or we may be unable to
successfully complete our ongoing clinical trials.
o The results from preclinical studies and clinical trials may not be
indicative of results that will be obtained in later-stage testing.
o We may be unable to timely recruit a sufficient number of patients for
our clinical trials. Delays in planned patient enrollment may result in
increased costs and delays.
o We may be unable to obtain approval from the FDA and comparable foreign
authorities because we are unable to demonstrate that the product is
safe and effective for the intended use, or obtaining regulatory
approval may take significantly more time and cost significantly more
money than we currently anticipate.
o We may discover that the product has undesirable or unintended side
effects or other characteristics that make it impossible or
impracticable for us to continue development or which may limit the
product's commercial use.
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o We do not expect that any new product which is currently in research
and development will be commercially available for at least several
years.
o We may be unable to produce the product in commercial quantities at
reasonable cost.
o We may be unable to successfully market the product or to find an
appropriate corporate partner, if necessary, to assist us in the
marketing of the product.
o The product may not gain satisfactory market acceptance.
o The product may be superceded by another product commercialized for the
same indication.
If we are unable to continue to develop products that we can
successfully market, our business, financial condition and results of operations
will be significantly and adversely affected.
Need for Additional Capital
For the foreseeable future, we will require significant financial
resources for us to continue our budgeted levels of expenses and capital
expenditures, including for:
o Ongoing pre-clinical and clinical trials of our existing products.
o Research and development of new products.
o Marketing and sales of CEA-Scan and LeukoScan.
o Marketing and sales for our other products if we receive necessary
regulatory approvals.
o Capital expenditures, including Year 2000 compliance upgrades
Unless our existing products generate significant revenues or we enter
into corporate partnering arrangements, we will require additional financial
resources by the end of calendar 1999 in order to continue our planned levels of
research and development and clinical trials of our proposed products and
regulatory filings for new indications of existing products. Without a
significant increase in product revenues or other infusion of capital, we will
be required to significantly reduce our operating expenses, including the amount
of resources devoted to marketing and sales, product development and clinical
trials, which could have a significant and adverse effect on us. We cannot
assure you that any additional financing will be available to us at all or on
terms we find acceptable or that the terms of such financing will not cause
substantial dilution to our existing stockholders.
Limited Marketing and Sales Experience and Capability
We have only recently established our own sales and marketing
organization to market CEA-Scan and LeukoScan. We cannot assure you that we can
successfully maintain and continue to build such sales force. If we are unable
to continue to build and maintain our sales force, our financial condition and
operating results may be significantly and adversely affected.
Our commercial sale of our proposed products may be dependent upon
entering our into arrangements with corporate partners and we cannot assure you
that we will be successful in forming such relationships or that such
relationships, even if formed, will be successful.
Dependence on Third Parties for Distribution of Products
We currently do not have the resources to internally develop and
maintain the operating procedures required by the FDA and comparable foreign
regulatory authorities to oversee distribution of our products. As a result, we
have entered into arrangements with third parties to perform such function for
the foreseeable future. If these agreements are terminated, we will be required
to enter into arrangements with other government approved third parties in order
to be able to distribute our products.
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We will be unable to continue to distribute our products until an acceptable
alternative is identified. If we were even only temporarily unable to distribute
our products, our business could be significantly and adversely effected.
Limited Manufacturing Capability
While we have the capacity to manufacture all of our current
requirements for CEA-Scan and LeukoScan, if demand for these product increases
significantly, we cannot assure you that we will continue to have the capacity
to manufacture commercial quantities successfully. In addition, if any of our
other products are approved for marketing and sale, we cannot assure you that we
will continue to have the capacity and expertise to manufacture commercial
quantities of multiple products successfully or with acceptable profit margins.
We rely on a single third party to perform certain end-stage portions
of the manufacturing process for CEA-Scan and LeukoScan. While we have qualified
a second entity in the event a second end-stage manufacturer is required, we
cannot assure that we will be able to negotiate an agreement with such entity on
terms we consider acceptable, if at all.
Dependence on Fluids Produced in Mice
CEA-Scan and certain of our other imaging agents are derived from
ascites fluid produced in mice, which are provided by a third-party supplier.
Regulatory authorities, particularly in Europe, have expressed concerns about
the use of mice fluid for the production of monoclonal antibodies. While we
believe that our current quality control procedures ensure the purity of the
fluid we use, we cannot assure you that regulatory authorities will agree that
these procedures will be adequate for future products. While we are continuing
our development efforts to produce certain of our monoclonal antibodies using
cell culture methods, this process constitutes a substantial production change,
which will require additional manufacturing equipment and new regulatory
approval. We cannot assure you that we will have the resources to acquire the
additional manufacturing equipment and resources or that we will receive the
required regulatory approval on a timely basis, if at all. We have also
contracted with a third party for the development and production of certain
humanized antibodies, however we cannot assure that such efforts will be
successful.
Dependence on The Center for Molecular Medicine and Immunology
Our product development has involved, to varying degrees, The Center
for Molecular Medicine and Immunology, a not-for-profit cancer research center.
CMMI performs pilot and pre-clinical trials in product areas of importance to
us. CMMI also conducts basic research and patient evaluations in a number of
areas of potential interest to us, the results of which are made available to us
pursuant to a collaborative research and license agreement. We cannot assure you
that CMMI will be successful in its research activities or that it will develop
any potential products which can be licensed by us.
In addition, if CMMI were no longer to conduct such research and
patient evaluations, we would have to make arrangements with third parties for
the performance of this aspect of our clinical research, which may prolong and
increase expenses associated with pre-clinical testing and initial clinical
trials.
Potential Conflicts of Interest with The Center
for Molecular Medicine and Immunology
Dr. David M. Goldenberg, our Chairman of the Board and former Chief
Executive Officer, is the founder, President and a member of the Board of
Trustees of CMMI. Dr. Goldenberg devotes more of his time working for CMMI than
for us. In addition, other key personnel currently have responsibilities both to
CMMI and us. While we have put in place certain procedural safeguards and
mechanisms relating to the allocation of research projects and licensing of
proprietary rights between CMMI and us, due to Dr. Goldenberg's and other of our
key employees relationships with both entities, the potential for conflict of
interest exists.
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Extensive Government Regulation
Regulation by governmental authorities in the United States and foreign
countries is a significant factor in the manufacture and marketing of our
presently marketed and proposed products as well as our research and development
activities. All of our proposed products will require regulatory approval by
governmental agencies prior to commercialization and our products must undergo
rigorous preclinical and clinical testing and other premarket approval
procedures by the FDA and similar authorities in foreign countries. In addition,
since certain of our potential products involve the application of new
technologies, regulatory approvals may take longer than for products produced
using more conventional methods. Once we begin clinical trials for a new
diagnostic or therapeutic product, it may take five to ten years (or more) to
receive the required regulatory approval to commercialize that product and begin
to market it to the public. Various federal and, in some cases, state statutes
and regulations also govern or influence the manufacturing, safety, labeling,
storage, record keeping and marketing of such products. The lengthy process of
seeking these approvals, and the subsequent compliance with applicable statutes
and regulations, will require us to expend substantial resources. If we fail to
obtain or are otherwise substantially delayed in obtaining, regulatory
approvals, our business and operations could be significantly and adversely
affected.
In responding to a new drug application, or a biologic license
application, the FDA may grant marketing approvals, request additional
information or further research, or deny the application if it determines that
the application does not satisfy its regulatory approval criteria. Approvals may
not be granted on a timely basis, if at all, or if granted may not cover all the
clinical indications for which we are seeking approval or may contain
significant limitations in the form of warnings, precautions or
contraindications with respect to conditions of use.
In addition to laws and regulations enforced by the FDA, we are also
subject to regulation under the various other federal, state or local laws and
regulations. Our research and development involves the controlled use of
hazardous materials, chemicals, viruses and various radioactive compounds.
Although we believe our safety procedures for handling and disposing of such
materials comply with the standards prescribed by state and federal regulations,
the risk of accidental contamination or injury from these materials cannot be
completely eliminated. If an accident occurs, we could be held liable for any
damages that result and any such liability could exceed our resources.
Our facilities are subject to inspection by the FDA. A separate license
from the FDA is required for commercial manufacture of any product. Failure to
maintain such licenses or to meet the inspection criteria of the FDA would
result in disruption to our manufacturing processes and could have a significant
and adverse affect on our business and operations.
For marketing outside the United States, we are subject to foreign
regulatory requirements governing human clinical trials and marketing approval
for drugs and devices. The requirements governing the conduct of clinical
trials, product licensing, pricing and reimbursement vary greatly from country
to country. Failure to comply with such regulatory requirements or obtain such
approvals could impair our ability to develop these markets and could have a
significant and adverse affect on our business and operations.
Uncertainty of Health Care Reimbursement
Our ability to successfully commercialize our products will depend in
part on the extent to which reimbursement for the cost of such products and
related treatment will be available from government health administration
authorities, private health insurers and other organizations. Such third-party
payers are increasingly challenging the price of medical products and services.
Several proposals have been made that may lead to a government-directed national
health care system. Adoption of such a system could further limit reimbursement
for medical products, and we cannot assure you that adequate third-party
coverage will be available to enable us to maintain price levels sufficient to
realize an appropriate return on our investment in product development. In
addition, we also cannot assure you that the U.S. government will not implement
a system of price controls. Any such system might significantly and adversely
affect our ability to market our products profitably.
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Dependence on Key Personnel
The continued development of our business and operations is highly
dependent upon the talents of Dr. Goldenberg and certain key executive officers
and scientific personnel. If Dr. Goldenberg or any of our other key personnel
leave our employ, our operations could be significantly and adversely affected.
In addition, we have an ongoing need to expand our management personnel and
support staff. Competition for qualified personnel in the biotechnology and
pharmaceutical industries is intense and we cannot assure you that we will be
successful in our recruitment efforts. If we are unable to attract and retain
additional qualified personnel, our operations also could be significantly and
adversely affected.
Possible Inability to Successfully Compete
The biotechnology industry is highly competitive, particularly in the
area of cancer diagnostic and therapeutic products. We are likely to encounter
significant competition with respect to our existing products as well as our
products currently under development. A number of companies, including IDEC
Pharmaceuticals, Genentech, SmithKline Beecham, Nycomed Amersham, and Coulter
Pharmaceutical, are engaged in the biotechnology field, and in particular the
development of cancer diagnostic and therapeutic products. Many of these
companies have significantly greater financial, technical and marketing
resources than us. In addition, many of these companies may have more
established positions in the pharmaceutical industry and may be better equipped
than us to develop, refine and market their products.
We also expect to face increasing competition from universities and
other non-profit research organizations. These institutions carry out a
significant amount of research and development in the field of antibody-based
technology. These institutions are becoming increasingly more aware of the
commercial value of their findings and more active in seeking patent and other
proprietary rights, as well as licensing revenues.
Impact of Rapid Technological Change
We are pursuing an area of product development in which there is the
potential for extensive technological innovation in relatively short periods of
time. We cannot assure you that our competitors will not succeed in developing
products that are safer or more effective than our products. Rapid technological
change or developments by others may result in our current products as well as
those in development becoming non-competitive or obsolete.
Limited Protection of Intellectual Property Rights
Our commercial success is highly dependent upon patents and other
proprietary rights that we own or license. While we actively seek patent
protection both in the United States and abroad for our proprietary technology,
we cannot assure you that our key patents will not be invalidated or will
provide us protection that has commercial significance. Litigation may be
necessary to protect our patent positions, which could be costly and time
consuming. If any of our key patents that we own or license are invalidated, our
business may be significantly and adversely affected.
While we believe that the protection of patents is important to our
business, we also rely on trade secrets, unpatented know-how and continuing
technological advancement to establish and maintain our competitive position.
Other companies may independently develop similar trade secrets or know-how or
obtain access to our trade secrets, know-how or proprietary technology, which
could significantly and adversely affect our business. Other companies may have
filed applications for or have been issued patents and obtained other
proprietary rights to technology which may be potentially useful to us. If we
determine that the inventions covered by such patents are necessary or useful
for us, we may attempt to license such rights. We cannot assure you that such
rights will be available at all or even upon terms we consider acceptable. If we
are unable to obtain such rights, our business could be significantly and
adversely affected.
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Specific Patent Issues Involving CEA-Scan
We have sued F. Hoffmann-LaRoche and its Roche subsidiary and
affiliates in the Netherlands for what we believe to be infringement of our
European patent covering specific anti-CEA antibodies. They have denied that
they are infringing our patents and counter-sued seeking to nullify our Dutch
and German patents. A trial was held on our infringement claim before the Dutch
Patent Court, resulting in dismissal of the action based in part on the trial
judge's inability to resolve validity issues without a full trial of the nullity
action. While we have appealed the dismissal, we cannot assure you we will be
successful. In addition, while the trial on the Dutch nullity action resulted in
dismissal of that action and maintenance of all our patent claims, Roche has
appealed and we cannot assure you that the appeal court will also rule in our
favor. The trial in the German nullity action has been concluded in our favor
but we do not know if Roche will appeal or, if they do, that the appellate court
also will rule in our favor.
We believe that affirmation of the validity of this patent is important
because its claims also protect the antibody we use in our CEA-Scan cancer
imaging product and our CEA-Cide cancer therapy product, as well as the use of
highly specific anti-CEA antibodies for a number of other uses. While we believe
that our European patents are valid and that Hoffmann-LaRoche has infringed
them, and that an unfavorable outcome in the infringement and nullity actions is
unlikely, if we receive an unfavorable outcome, our business could be
significantly and adversely affected.
Product Liability
The clinical testing, marketing and manufacturing of our products
necessarily involves the risk of product liability. While we currently have
product liability insurance, we cannot assure that we will be able to obtain
such insurance in the future at an acceptable cost, if at all. If we cannot
maintain our existing or comparable liability insurance, our ability to test
clinically and market our products may be significantly impaired. Moreover, the
amount and scope of our insurance coverage or indemnification arrangements with
any distributor or other third party upon which we rely may be inadequate to
protect us in the event of a successful product liability claim.
Control by Existing Principal Stockholder
As of February 26, 1999, Dr. Goldenberg, our founder and Chairman,
controlled the right to vote over approximately 35% of our common stock. Dr.
Goldenberg's voting power includes shares which he is entitled to vote by powers
of attorney or proxy granted to him by his children and his former wife. As a
result of such holdings, Dr. Goldenberg may have the ability to determine the
election of all of our directors, direct policies and control the outcome of
substantially all matters which may be put to a vote of our stockholders.
Potential Redemption of Series F Stock or Penalty Payments
As discussed below in the section "Immunomedics - Recent Financing
Arrangement" upon the occurrence of certain circumstances, we may be required to
redeem the Series F Stock or pay significant penalties. These penalties could be
as much as 15% per year of the stated value of the Series F Stock. We also may
be required to reduce the conversion price of the Series F Stock. If we are
required to redeem the Series F Stock or make the penalty payments, we may not
have the financial ability to make such payments. Even if we have the financial
ability to redeem the Series F Stock or pay the required penalties, such payment
could significantly and adversely affect our financial condition and deplete our
cash resources
Substantial Dilution; Potential for Issuance of Significant Number of Shares of
Common Stock
The Series F Stock that we issued to the selling stockholders generally
will become fully convertible into shares of our common stock beginning on June
8, 1999. Because the conversion price of the Series F Stock is not fixed, we may
be required to issue to them a significant number of shares of our common stock.
However, we are only registering 10,000,000 shares for resale by them at this
time. The conversion price generally will be the lower of the average closing
bid price of our common stock during
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the 20 trading days ending June 6, 1999 and the average closing bid price of our
common stock over the lowest 15 days during the 45-day period immediately prior
to the applicable conversion date. As our stock price decreases, we will be
required to issue an increased number of shares and the greater the decline in
the market price, the greater the number of shares we would be required to issue
upon conversion of our Series F Stock. Had the Series F Stock been immediately
convertible as of February 26, 1999, the conversion price would have been $2.91
per share and we would have been required to issue approximately 4,329,000
shares of our common stock had the holders converted all of their Series F Stock
on such date.
Given that the conversion price is based on the average of the lowest
closing price during a specified period, the market price for our common stock
may be significantly greater than the conversion price for the Series F Stock in
effect at the time of conversion. In such a case, the conversion of a
significant number of Series F Stock into common stock during that period would
dilute the percentage ownership interest of our existing common stockholders.
In addition, the resale by the selling stockholders of the common stock
could depress the market price of our common stock. Moreover, as all the common
stock to be sold to the selling stockholders generally will be available for
immediate resale by them on and after June 8, 1999, the mere prospect of such
sales could further depress the market price for our common stock.
For more information about the Series F Stock, see "Immunomedics -
Recent Financing Arrangement."
Potential Adverse Impact on Market Price of Common Stock
As of February 26, 1999, we had a total of 37,888,090 shares of common
stock issued and outstanding, of which 29,580,102 shares were held by
non-affiliates and are freely tradeable in the public market without restriction
under the Securities Act of 1933. The remaining 8,307,988 shares were held by
our directors and executive officers and are considered "restricted securities"
subject to the resale limitations of Rule 144 under the Securities Act. The
prospect of the ability to publicly resell these restricted shares may adversely
affect prevailing market prices for the common stock.
Stock Price Volatility
We believe that a variety of factors have caused the market price of
our common stock to fluctuate substantially, and that it will continue to
fluctuate in the future. These factors include:
o actual or anticipated fluctuations in our operating results;
o the status of our products in development;
o new products or technical innovations by us or by our existing or
potential competitors;
o the formation or termination of our corporate alliances and
distribution arrangements;
o prolonged periods of regulatory review of new products or new uses for
existing products
o determinations regarding our patent applications and those of others;
o trading strategies occurring in the market place with respect to our
common stock; and
o general market conditions and other factors unrelated to us or outside
our control.
Effect of Certain Anti-Takeover Provisions
Our Board of Directors has the authority, without any further vote by
our stockholders, to issue up to 10,000,000 shares of preferred stock in one or
more series and to determine the designations, powers, preferences and relative,
participating, optional or other rights thereof, including the dividend rate,
whether
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dividends are cumulative, conversion rights, voting rights, rights and terms of
redemption, redemption price and liquidation preference. Issuance of preferred
stock could have the effect of delaying, deterring or preventing a change in
control of our Company, or could impose various procedural and other
requirements that could make it more difficult for holders of our common stock
to effect certain corporate actions, including the ability to replace incumbent
directors and to accomplish transactions opposed by the incumbent Board of
Directors. The rights of the holders of our common stock would be subject to,
and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future.
Further, pursuant to the terms of our stockholder rights plan, we have
distributed as a dividend for each outstanding shares of our common stock, a
preferred stock purchase right. This right will cause substantial dilution to
the ownership of a person or group that attempts to acquire us on terms not
approved in advance by our Board of Directors and may have the effect of
deterring hostile takeover attempts. However, our Board of Directors has taken
appropriate action to ensure that the rights are not triggered by the issuance
of the Series F Stock or upon issuance of our common stock upon conversion
thereof.
Potential Loss of Nasdaq National Market Listing
Potential Loss of Nasdaq Listing due to Failure to Meet Listing Criteria.
Our common stock is quoted on the Nasdaq National Market and pursuant
to the terms of the Series F Stock, we are required to list the common stock
issuable upon conversion of the Series F Preferred Stock on the Nasdaq National
Market. However, in order to continue to be included in the Nasdaq National
Market, a company must meet certain maintenance criteria. The maintenance
criteria most applicable to us requires a minimum bid price of $1.00 per share,
$4,000,000 in net tangible assets (total assets less total liabilities and
goodwill) and $5,000,000 market value of the public float . The public float
excludes shares held directly or indirectly by any officer or director of our
company. As of December 31, 1998, we had approximately $18,112,000 of net
tangible assets and approximately $79,174,000 market value of our public float
and the lowest bid price of our common stock since January 1, 1997 was $2.625.
However, we cannot assure you that we will continue to meet these listing
criteria. Failure to meet these maintenance criteria may result in the delisting
of our common stock from the Nasdaq National Market. In order to have our common
stock relisted on the Nasdaq National Market, we would be required to meet the
criteria for initial listing, which are more stringent that the maintenance
criteria. Accordingly, we cannot assure you that if we were delisted we would be
able to have our common stock relisted on the Nasdaq National Market. If our
common stock were delisted from the Nasdaq National Market, we would seek to
have our common stock quoted on the Nasdaq SmallCap Market, if we would then
meet the requirements for inclusion on the Nasdaq SmallCap Market. As securities
traded on the Nasdaq SmallCap Market tend to have less liquidity, an investor
may find it more difficult to dispose of our common stock. A company must have
$4,000,000 in net tangible assets or $50,000,000 market capitalization or
$750,000 net income in two of the last three years, a minimum bid price of $4.00
per share and a public float of $5,000,000 for inclusion in the Nasdaq SmallCap
Market, subject to certain exceptions.
Potential Loss of Nasdaq Listing as a Result of Issuance of Series F Stock.
The Nasdaq Stock Market has recently issued an interpretive release
regarding the issuance of convertible securities with below-market, floating
rate conversion features, such as is the case with our Series F Stock. The
Nasdaq release includes the following items:
o a requirement that stockholder approval be obtained prior to issuance
of a floating rate below-market convertible security if the maximum
number of shares of common stock which could be
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issued without stockholder approval could equal or exceed 20% or more
of the outstanding common stock.
o a requirement that the voting rights of the common stockholders are not
disparately reduced or restricted by granting the holders of the Series
F Stock the special voting rights, such as voting on an "As converted
basis" or board representation that is disproportionate to their
relative contribution to the Company's market or book value.
o a requirement that the bid price be at least $1.
o a requirement that an issuer re-apply for initial inclusion if a
sufficient number of shares are issued such that it may be viewed as a
change of control or change in financial structure.
If The Nasdaq Stock Market determines that we have failed to comply
with these rules, our common stock could be delisted from the Nasdaq Stock
Market.
In addition, the Nasdaq Stock Market could delist our common stock if
it determines that the issuance of the Series F Stock raises public interest
concerns. In making such a determination, it will consider, among other factors:
o the business purpose of the transaction.
o the amount raised relative to our existing capital structure.
o the dilutive efect of the transation on our existing stockholders.
o the risk undertaken by the holders of the holders of the Series F
Stock.
o the relationship between Immunomedics and the holders of the Series F
Stock.
o whether this transaction was preceded by other similar transactions.
o whether this transaction is consistant with just and equitable
principle of trade.
Trading if any, in our common stock would thereafter be conducted in the
over-the-counter market. As a result of such delisting, an investor may find it
more difficult to dispose of, or to obtain accurate quotations for, our common
stock.
Finally, as discussed elsewhere in this prospectus, a delisting of our
common stock would give the holders of the Series F Stock certain redemption
rights. Additionally, if our common stock is removed from listing on the Nasdaq
National Market, it may become more difficult for us to raise funds through the
sale of our common stock or securities convertible into our common stock.
Year 2000 Compliance
Computer systems may experience problems handling dates beyond the year
1999 because many computer programs use only two digits to identify a year in a
date field. We are in the process of conducting a review of our business
systems, including our computer systems and manufacturing equipment. We also
have sent written inquiries to our customers, distributors and vendors as to
their progress in identifying and addressing problems that their systems may
face in correctly interpreting and processing date information as the year 2000
approaches and is reached. We expect that our review will be completed by March
1999. Based on this review, we intend to implement a plan to achieve year 2000
compliance. However, we cannot assure that our review will be completed as
scheduled or that our compliance program will be implemented on a timely basis.
While we believe that we will achieve year 2000 compliance in a manner which
will be non-disruptive to our operations, unforeseen complications could arise
that could disrupt our operations. In addition, while we have commenced work on
various types of contingency planning to address potential problem areas with
internal systems, suppliers and other third parties, we cannot assure you that
we will be able to implement our contingency plan in a timely manner, if at all.
While we do not believe that Year 2000 compliance will have a
significant affect on our business or operations, we could encounter problems
with third party suppliers and revenue sources which could adversely affect us.
We cannot accurately predict the occurrence and or outcome of any such problems,
nor can we currently estimate the dollar amount of such problem , which may or
may not be significant. In addition, we cannot assure you that the failure to
ensure year 2000 compliance by a third party would not have a significant and
adverse affect on our business and operations.
No Expectation that We Will Pay Dividends
We have never paid any dividends on our common stock. For the
foreseeable future, we expect to retain earnings, if any, to finance the
expansion and development of our business. Any future payment of dividends will
be within the discretion of our Board of Directors and will depend upon a
variety of factors, including our earnings, capital requirements, and operating
and financial condition. In addition, we
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are required to obtain the approval of the holders of the Series F Stock prior
to the payment of any dividends on our common stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
We have made statements in this prospectus, and in the documents we
incorporate by reference, that are considered by the SEC to be "forward-looking
statements" within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Sometimes these statements contain words such as "may,"
"believe," "expect," "continue," "intend," "anticipate" or other similar words.
These statements are not guarantees of our future performance and are subject to
risks, uncertainties and other factors that could cause our actual performance
or achievements to be materially different from those which we project. We have
no obligation to release publicly the result of any revisions to any of our
"forward-looking statements" to reflect events or circumstances that occur after
the date of this prospectus or to reflect the occurrence of other unanticipated
events.
The following factors, among others, discussed above under "Risk
Factors" or in the documents which we incorporate by reference, could cause
materially different results from those anticipated or projected:
o inherent uncertainties accompanying the marketing of CEA-Scan
and LeukoScan
o inherent uncertainties involving new product development and
marketing
o inability to obtain capital for continued product development
and commercialization
o actions of regulatory authorities concerning product approval
o actions of government and private organizations concerning
reimbursement of medical expenses
o impact of competitive products and pricing
o results of clinical trials
o loss of key employees
o changes in general economic and business conditions
o changes in industry trends
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document which we file
at the SEC's Public Reference Rooms in Washington, D.C., New York City and
Chicago. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC maintains a internet website at
http://www.sec.gov where certain of our publicly filed information may be found.
This prospectus is part of a registration statement we filed with the
SEC. The registration statement contains more information than this prospectus
regarding us and our common stock, including supplemental exhibits and
schedules. You can get a copy of the registration statement from the SEC at the
address listed above or from its internet website.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it. This means that we are deemed to be disclosing
such information to you by referring you to those documents. This information is
important and should be reviewed. The information incorporated by
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reference is considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supercede the
information in this prospectus.
We incorporate by reference into this prospectus the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934:
o Annual Report on Form 10-K for the fiscal year ended June 30,
1998;
o Quarterly Reports on Form 10-Q for the fiscal quarter ended
September 30, 1998 and December 31, 1998;
o Current Report on Form 8-K, filed on December 15, 1998;
o Proxy Statement, dated October 2, 1998, with respect to our
1998 annual meeting of stockholders; and
o Description of the common stock contained in Item 1 of our
Registration Statement on Form 8-A, dated May 7, 1984.
You may request a copy of these filings (excluding all exhibits unless
we have specifically incorporated an exhibit by reference), at no cost, by
writing or telephoning us at:
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
Attention: Investor Relations
You should rely on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone to
provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of such document. We are not making an offer of
our shares in any state where the offer is not permitted.
IMMUNOMEDICS
Description of Our Business
We are a biopharmaceutical company, which develops, manufactures and
markets products for the detection and treatment of cancers and other diseases.
These products, which are based on our monoclonal antibody technology, are
designed to deliver radioisotopes, chemotherapeutic agents, toxins, dyes or
other substances to a specific disease site or organ system.
We have received approval from the respective regulatory agencies in
the United States, the 15 member countries of the European Union, Canada and
certain other countries to market and sell CEA-Scan (arcitumomab), our imaging
product for the detection of recurrent and/or metastatic colorectal cancer.
We also have received approval to market and sell LeukoScan
(sulesomab), our imaging product for detection and diagnosis of osteomyelitis
(bone infection) in long bones and in diabetic foot ulcer patients, in the 15
member countries of the European Union. We have filed an application with the
FDA in the U.S. and the comparable regulatory agency in Canada for approval to
market LeukoScan for imaging of infection in osteomyelitis as well as for the
imaging of infection in acute, atypical appendicitis. The review of the
LeukoScan submission to the FDA continues to progress. As part of the review
process, we are in discussions with the FDA to address their comments regarding
the adequacy of our data to support final approval for these indications . We
are confident that we can bring these discussions with the FDA to
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successful and timely closure. In the meantime, we are continuing to implement
our plans for market introduction, and are working diligently on preparation to
bring this new product to the U.S. market place.
Marketing, Sales and Distribution
CEA-Scan is marketed and sold in the U.S. directly by our sales force
of approximately 20 sales representatives and 3 regional managers, who are
deployed in major metropolitan areas. Our skilled nuclear medicine technicians
work with this sales force and provide technical support directly to our
customers. We have entered into a distribution arrangement in the U.S. with
Integrated Commercialization Solutions, a division of Bergen Brunswig
Corporation, to provide product support services including customer service,
order management, distribution, invoicing and collection.
Our European operations, headquartered in Hillegom, The Netherlands,
include European management, sales and marketing, medical/regulatory, customer
service and invoicing, collection and other administrative functions. We also
have established sales representation in most major European markets, including
Germany, France, Italy and The United Kingdom. We service other markets through
the appointment of local distributors who provide sales and marketing support as
well as local product distribution. We have an agreement with Eli Lilly
Deutschland GmbH to package and distribute our products throughout the 15 member
countries of the European Union and other countries.
Imaging Products
Our imaging products involve injecting a patient with a radioisotope
attached to an antibody fragment. An antibody is a protein that can find and
attach itself to a specific substance called an antigen. Such antigens are
present on tumor cells, white blood cells that accumulate at the sites of
infections, and other disease entities. A radioisotope attached to a
disease-targeting antibody is delivered to a disease site for imaging. A
standard nuclear medicine imaging camera is then used to detect and display
radioisotope concentrations at various sites of disease.
The antibody fragment in CEA-Scan is directed against carcinoembryonic
antigen (CEA), which is abundant at the site of virtually all cancers of the
colon or rectum, whether they are primary tumors of which have spread
(metastases) to other organs. CEA also is associated with many other cancers. We
are conducting phase IV clinical trials to evaluate the product following
repeated administration. We also are performing clinical trials using CEA-Scan
for imaging lung cancer and breast cancer. We are discussing the results of
these clinical trials with the FDA and comparable European regulatory
authorities to determine whether such data will support the submission of
applications for marketing approval. On January 26, 1999, we submitted an
application with the European Union regulatory authorities for approval of
CEA-Scan for breast cancer imaging. In addition, we are continuing our efforts
in developing cancer detection applications with CEA-Scan utilizing hand-held
radiation-detecting probes for use in colorectal cancer surgery.
LeukoScan is a monoclonal antibody fragment, which seeks out, and binds
to white blood cells (granulocytes) associated with a potentially wide range of
infectious and inflammatory diseases.
We are studying the following three other imaging products pursuant to
Investigational New Drug applications that we have filed or plan to file with
the FDA and we have ongoing clinical trials in Europe:
o LymphoScan(R), for non-Hodgkin's B-cell lymphomas.
o AFP-Scan(R), for liver cancer and germ-cell tumors of the ovaries and
testes.
o MyeloScan(TM), for imaging of bone marrow for detection of metastatic
marrow disease.
Therapeutic Products
We are applying our expertise in antibody selection, modification and
chemistry to cancer therapeutics, using monoclonal antibodies labeled with
therapeutic radioisotopes or conjugated with drugs. We are engaged in developing
anti-cancer products, principally with a technique called
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radioimmunotherapy. This technique may deliver radiolabeled therapeutic agents
to tumor sites more selectively than current radiation therapy technologies,
while minimizing debilitating side effects.
Research Programs
In addition to concentrating on our products in clinical development,
we conduct ongoing research in many related areas. We conduct research in-house
and in collaboration with The Center for Molecular Medicine and Immunology also
known as the Garden State Cancer Center and other academic and research centers.
During 1998, we executed a letter of intent to form a joint venture with Beckman
Coulter to develop the next generation of cancer therapeutics using bi-specific
antibodies. We believe our ongoing research efforts will identify new and
improved products and techniques for diagnosing and treating various cancers and
infectious diseases.
Our research efforts are focused in various areas related to our core
technology, including antibody engineering and the identification of other
antibody-directed approaches to cancer therapy. We have made significant
progress in humanizing certain mouse antibodies and have reengineered the
humanized antibodies with improved characteristics. We are continuing our work
on selective coupling of therapeutic site specific agents onto antibody
fragments which will offer the advantage of loading multiple therapeutic
compounds onto antibodies at a particular disease site. We also continue to
investigate pre-targeting whereby an antibody is administered first, followed by
a radionuclide administration.
We also are continuing our research into the use of alternative
radioisotopes, such as Yttrium-90 in place of Iodine-131. Our research indicates
that Yttrium-90 is retained by lymphoma cells for longer periods after antibody
metabolism, and shows greater efficacy against larger tumors. We also have
developed a proprietary technology using a compound called "DOTA" to tightly
bind Yttrium-90 to antibodies.
In addition, we are continuing our efforts to scale-up our proprietary
method for technetium-99m radiolabeling of peptides, using single-vial kits.
Recent Financing Arrangement
On December 9, 1998, we completed a private placement of 1,250 shares
of Series F Convertible Preferred Stock to the selling stockholders and received
gross proceeds of $12,500,000.
Each share of Series F Stock has an initial stated value of $10,000,
which increases at the rate of 4% per annum. The Series F Stock is convertible
at the option of the selling stockholders, in whole or in part, beginning on
June 8, 1999, subject to acceleration in certain instances. The number of shares
of common stock issuable upon conversion of each share of Series F Stock will be
determined by dividing the stated value of $10,000 plus an accretion of 4% per
annum, by the conversion price then in effect.
The conversion price is equal to:
o the Variable Price, if such Variable Price is less than the Trigger
Price; except that prior to December 9, 1999, subject to acceleration
in certain instances, if the Variable Price is greater than 90% of the
Initial Fixed Price and less than the Trigger Price, the conversion
price will equal the Trigger Price;
o the Trigger Price, if prior to June 9, 1999 or earlier in certain
circumstances, the Variable Price is greater than 90% of the Initial
Fixed Price and less than the Trigger Price; or
o the Trigger Price, if the Variable Price is equal to or greater than
the Trigger Price and less than 150% of the Trigger Price; or
o the Trigger Price plus one-half of the amount, if any, by which the
Variable Price exceeds 150% of the Trigger Price, if the Variable Price
is greater that 150% of the Trigger Price.
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The "Trigger Price" will be equal to 125% of the Initial Fixed Price.
The "Initial Fixed Price" will be equal to the average closing bid price of our
common stock during the 20 trading days ending June 6, 1999. The "Variable
Price" will be equal to the average of the 15 lowest closing bid prices for our
common stock during the 45 trading days immediately preceding a conversion date.
During the first several months after the Series F Stock would
otherwise be convertible and to the extent that the Series F Stock would be
convertible at a conversion price less than 90% of the Initial Fixed Price, the
selling stockholders have agreed to certain restrictions on the amount of Series
F Stock that can be converted.
At any time during the 90-day period commencing on December 1, 1999, we
may, require the selling stockholders to purchase up to an additional $7,500,000
million (750 shares) our of Series F Stock. Our right to require the selling
stockholders to purchase this additional amount is subject to certain conditions
and limitations, including that the Variable Price has been at least equal to
the Initial Fixed Price for a specified period of time. Under certain
circumstances and at certain prices, we may elect to redeem any shares of Series
F Stock. Under certain circumstances, we may require the selling stockholders to
convert their Series F Stock. We have granted the selling stockholders certain
participation rights if we issue any future floating rate convertible
securities.
The holders of the Series F Stock generally do not have the right to
vote for the election of directors or on other matters, except to the extent
their rights would be adversely affected.
Upon the occurrence of certain events, we may be required to redeem the
Series F Stock, pay certain penalties and/or adjust the conversion price. These
events include the following:
o If we consolidate, merge or otherwise combine with another entity and
as a result the stockholders of our company immediately prior to such
transaction do not retain sufficient voting power to elect a majority
of the board of directors of the new or combined entity, then the
holders of the Series F Stock may require us to redeem their shares at
a price per share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the
accretion of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if the consolidation, merger or other business
combination occurs as a result of a proxy solicitation which was not
approved or recommended by our Board of Directors, then, if the holders
exercise their redemption rights, we may, in lieu of redemption, either
(y) readjust the Initial Fixed Price to 80% of the lower of (A)
the lowest Variable Price during the period beginning on the
date such solicitation is announced and ending on the date
such solicitation is consummated, abandoned or terminated or
(B) the Initial Fixed Price then in effect, or
(z) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 10
days in any 365-day period.
o If at least a specified percentage of the holders of our common stock
accept a purchase, tender or exchange offer, then the holders of the
Series F Stock may require us to redeem their shares at a price per
share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the
accretion of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
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However, if such purchase, tender or exchange offer was not
approved or recommended by our Board of Directors; then, if the holders
exercise their redemption rights, we may, in lieu of redemption, either
(y) readjust the Initial Fixed Price to 80% of the lower of (A)
the lowest Variable Price during the period beginning on the
date such offer is announced and ending on the date such offer
is consummated, abandoned or terminated or (B) the Initial
Fixed Price then in effect, or
(z) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 10
days in any 365-day period.
o If we complete a sale of all or substantially all of our assets, then
the holders of the Series F Stock may require us to redeem their shares
at a price per share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the
accretion of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
o If the registration statement (of which this prospectus is a part) does
not become effective by May 8, 1999, then the holders of the Series F
Stock may require us to redeem their shares at a price per share equal
to the greater of
(1) 125% of the stated value of $10,000 per share plus the
accretion of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if the failure to obtain effectiveness of the
registration statement is not the result of our failure to use our best
efforts, then, if the holders exercise their redemption rights, we may,
in lieu of redemption,
(y) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 15
days in any 365-day period, and
(z) adjust the Initial Fixed Price to 80% of the lowest Variable
Price during the period commencing May 8, 1999 and ending on
the day such registration statement is declared effective.
o If after the registration statement becomes effective, it ceases to be
available to the selling stockholders for the resale of their shares
for more than 10 consecutive days, then the holder of the Series F
Stock may require us to redeem their shares at a price per share equal
to the greater of
(1) 125% of the stated value of $10,000 per share plus the
accretion of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if the unavailability of the registration statement
is not the result of our failure to use our best efforts, then, if the
holders exercise their redemption rights, we may, in lieu of
redemption,
(y) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 15
days in any 365-day period, and
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(z) readjust the Initial Fixed Price to 80% of the lowest Variable
Price during the period commencing on the day the registration
statement became unavailable and ending on the day the
registration statement is again available for use.
o If our common stock is delisted or suspended from the Nasdaq National
Market for a period of more than five consecutive days, then the holder
of the Series F Stock may require us to redeem their shares at a price
per share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the
accretion of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if our common stock is delisted from the Nasdaq
National Market (other than as a result of a voluntary delisting by us
as a result of the Nasdaq Stock Market limitations discussed below)
then, if the holders exercise their redemption rights, we may, in lieu
of redemption,
(y) readjust the Initial Fixed Price to 68.5% of the lowest
Variable Price during the period commencing on the date of
delisting and continuing for 45 days thereafter, or
(z) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 15
days in any 365-day period.
We also have agreed to hold a Special Meeting of Stockholders on or
before March 24, 1999, to seek approval of the issuance of any shares upon
conversion of the Series F Stock in excess of 20% of the number of shares of
common stock we had outstanding December 9, 1998 (i.e., 7,577,617 in accordance
with the rules and The Nasdaq Market, Inc. Approval of the proposal will only
require a majority of the shares voting in person or by proxy at the Special
Meeting of Stockholders. Dr. Goldenberg, certain members of his family and
certain of our executive officers holding in the aggregate approximately 30% of
our currently outstanding common stock have agreed to vote their shares in favor
of such proposal. Such persons also have agreed not to dispose of shares
constituting approximately 27% of the currently outstanding shares of our common
stock prior to such stockholders meeting. We have agreed, among other things, to
pay a penalty of $6.67 per each share of Series F Stock for each day after March
23, 1999 until the Special Meeting is held.
Each selling stockholder has agreed that if it engages in short sales
transactions or other hedging activities during the 45 trading days immediately
preceding a conversion date which involve, among other things, sales of shares
of our common stock, the selling stockholder will place its sale orders for
common stock in the course of such activities so as not to complete or effect
any such sale on any trading day during such period at a price which is lower
than the lowest sale effected on such day by persons other than such selling
stockholder and its affiliates. Each selling stockholder also has agreed not to
enter into any short sales or other hedging activities which involve, among
other things, sales of shares of our common stock, during the 25 trading days
ending June 8, 1999.
Because the market price of our common stock is subject to fluctuation,
we have agreed, pursuant to the terms of the registration rights agreement, to
register for resale at least 200% of the number of shares of common stock that
would be issuable if all the Series F Stock were converted as of the date of
this prospectus and, thereafter, to maintain the registration of at least 150%
of the number of shares of common stock that would be issuable if all the Series
F Stock were then converted. Accordingly, this prospectus covers 10,000,000
shares, which was our good faith estimate of this obligation as of the date we
originally filed the registration statement. If we fail to register or maintain
the registration of a sufficient number of shares, we will be required to pay
the selling stockholders the following penalties. These penalties are in
addition to the redemption rights and/or penalties discussed above.
o $150 per share of Series F Stock if the registration statement is not
declared effective by April 8, 1999.
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o $5 per share of Series F Stock for each day after April 8, 1999 that
the registration statement is not declared effective.
o $5 per share of Series F Stock for each day that sales cannot be made
pursuant to the registration statement.
In connection with our agreements with the selling stockholders, we
have agreed to reimburse them for their legal expenses in an amount not to
exceed $50,000.
For more information concerning this transaction and the terms of the
Series F Stock, we direct you to our Current Report on Form 8-K which we filed
with the SEC on December 15, 1998, which provides more details and contains
copies of the documents discussed above.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock by
the selling stockholders. However, we did receive net proceeds of approximately
$12,330,000 from the issuance of the Series F Stock to the selling stockholders.
We will use the net proceeds we received from the sales of our
preferred securities for general corporate purposes, including research and
development, clinical trials, regulatory filings, manufacturing, marketing and
sales, general and administrative and other expenses, acquisitions of products
and technologies, license, milestone, royalty and similar payments, and
strategic and other acquisitions.
SELLING STOCKHOLDERS
The table below presents the following information: (1) the number of
shares of Series F Stock owned by each selling stockholder as of the date of
this prospectus, (2) the number of shares of common stock beneficially owned by
each selling stockholder as of the date of this prospectus, (3) the number of
shares that such selling stockholder is offering under this prospectus, and (4)
the number of shares that such selling stockholder will beneficially own after
the completion of this offering.
Except as otherwise noted in the table, the number and percentage of
shares beneficially owned by each selling stockholder is determined as of the
date of this prospectus in accordance with Rule 13d-3 of the Securities Exchange
Act, and the information is not necessarily indicative of beneficial ownership
for any other purpose. Under such rule, beneficial ownership includes any shares
as to which the selling stockholder has sole or shared voting power or
investment power and also any shares which the selling stockholder has the right
to acquire within 60 days of the date of this prospectus through the conversion
of the Series F Stock or the exercise of any stock option or other right. Unless
otherwise indicated in the footnotes, each person has sole voting and investment
power with respect to the shares shown as beneficially owned.
The number of shares of our common stock shown as beneficially owned by
each selling stockholder prior to the offering and the number of shares offered
by each selling stockholder represents shares of our common stock issuable to it
assuming conversion, as of February 26, 1999, of all shares of Series F Stock
owned by such selling stockholder with respect to the $10,000 stated value of
the Series F Stock plus an accretion of 4% per year. The number of shares was
calculated using an assumed conversion price of $2.91, which represents the
average of the 15 lowest closing bid prices for our common stock during the 45
consecutive trading days ending on February 26, 1999. As described in the
section "Immunomedics - Recent Financing Arrangement" above, the actual number
of shares of our common stock issuable upon conversion of the Series F Stock is
based upon the market price of common stock at the time of conversion. In
accordance with the provisions of the Series F Stock, the conversion price will
fluctuate from time to time based on changes in the market price of our common
stock. Therefore, the actual number of shares of common stock may be less or
greater than the number of shares shown as beneficially owned by the selling
stockholders or the number of shares offered by this prospectus.
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Pursuant to the regulations of The National Association of Securities
Dealers, Inc., in the absence of stockholder approval, the aggregate number of
shares of our common stock issuable to the holders of the Series F Stock at a
discount from market price upon conversion of the Series F Stock may not equal
or exceed 20% of the outstanding shares of our common stock on December 9, 1998
(i.e., 7,577,617 shares). If stockholder approval is not obtained to issue
shares of our common stock to the holders of the Series F Stock in excess of
such amount, none of the holders will be entitled to acquire by conversion more
than its proportionate share of such maximum amount.
The number of shares that will ultimately be issued upon conversion of
the Series F Stock is dependent, subject to certain limitations, upon the
average of certain closing bid prices of our common stock prior to conversion as
discussed above, such number of shares (and therefore the number of shares
offered hereby) cannot be determined at this time. As a result, we have agreed,
pursuant to the terms of the registration rights agreement with the selling
stockholders to register for resale at least 200% of the number of shares of
common stock that would be issuable if all the Series F Stock were converted as
of the date of this prospectus. Had the Series F Stock been immediately
convertible as of February 26, 1999, the conversion price would have been $2.91
per share and we would have been required to issue approximately 4,329,000
shares of our common stock had the holders converted all of their Series F Stock
on such date. As discuss above, we have agreed to registering 10,000,000 shares
of our common stock. Accordingly, the selling stockholders may be entitled to
sell approximately 5,671,000 additional shares pursuant to this prospectus, if
such shares are issued to them in accordance wit the terms of the Series F Stock
as assuming we receive the required stockholder approval (as discussed above).
The number of shares shown as being beneficially owned by each selling
stockholder after the offering assumes that such selling stockholder has sold
all the shares of our common stock which may be sold pursuant to this
prospectus.
None of the selling stockholders has had a material relationship with
us within the past three years, other than as a result of their purchase of
shares of our Series F Stock. As of the date hereof, no selling stockholder owns
any shares of our common stock other than the shares they may acquire upon
conversion of the Series F Stock.
<TABLE>
<CAPTION>
Shares of Shares of
Shares of Common Stock Common Stock
Preferred Beneficially Shares of Beneficially
Stock Owned Prior to Common Stock Owned After
Selling Stockholder Owned the Offering Being Offered Offering
- -------------------- ----- ------------ ------------- --------
<S> <C> <C> <C> <C>
AG Super Fund International Partners, L.P.(1) 20 69,263 69,263 0
Fisher Capital Ltd.(2) 195 675,317 675,317 0
GAM Arbitrage investments, Inc.(1) 20 69,263 69,263 0
HFTP Investment L.L.C.(3) 650 2,251,055 2,251,055 0
Leonardo, L.P.(1) 200 692,632 692,632 0
Ramius Fund, Ltd.(1) 40 138,526 138,526 0
Raphael, L.P.(1) 20 69,263 69,263 0
Wingate Capital Ltd.(2) 105 363,632 363,362 0
- ----------------
</TABLE>
(1) Angelo, Gordon & Co., L.P. is a general partner of Leonardo, L.P., AG
Super Fund International Partners, L.P. and Raphael, L.P., and is
investment advisor to GAM Arbitrage Investments, Inc. and Ramius Fund,
Ltd. and consequently has voting control and investment discretion over
securities held by such entities. The ownership for each of these
entities does not include the ownership information for the other
entities. Angelo, Gordon & Co., L.P. and each of the referenced
entities disclaims beneficial ownership of any of our securities held
by the other referenced entities. Mr. John M. Angelo, the Chief
Executive Officer of Angelo, Gordon & Co., L.P., and Mr. Michael R.
Gordon, the Chief Operating Officer of Angelo, Gordon & Co., L.P., are
the sole general partners of AG Partners, L.P., which is the sole
general partner of Angelo, Gordon & Co., L.P. In such capacity, Messrs.
Angelo and Gordon may be deemed to be the beneficial owner of any our
securities deemed to be beneficially owned by Angelo, Gordon & Co.,
L.P. However, Messrs. Angelo and Gordon disclaim beneficial ownership
of such securities.
(2) Citadel Limited Partnership is the trading manager of Wingate Capital
Ltd. and Fisher Capital Ltd. and consequently has voting control and
investment discretion over securities held by such entities. Citadel
Limited Partnership is indirectly controlled by Mr. Kenneth C. Griffin.
The ownership for each referenced entity does not include the ownership
information for the other referenced entity. Citadel Limited
Partnership and each of the referenced entities disclaims beneficial
ownership of any of our securities held by the other entities. Mr.
Griffin may be deemed to be the beneficial ownership of any of our
securities beneficially owned by Citadel Limited Partnership or the
referenced entities. However, Mr. Griffin disclaims beneficial
ownership of such securities.
(3) Promethean Investment Group L.L.C. is the investment advisor for HFTP
Investment L.L.C. and consequently has voting control and investment
discretion over securities held by such entity. Promethean Investment
Group L.L.C. is indirectly controlled by Mr. James F. O'Brien, Jr.
Promethean Investment Group L.L.C. disclaims beneficial ownership of
any of our securities held by HFTP Investment L.L.C. Mr. O'Brien may be
deemed to be the beneficial ownership of any of our securities
beneficially owned by Promethean Investment Group L.L.C. or HFTP
Investments L.L.C. However, Mr. O'Brien disclaims beneficial ownership
of such securities.
PLAN OF DISTRIBUTION
Manner of Sales; Broker-Dealer Compensation.
The selling stockholders, or any successors in interest to the selling
stockholders, may sell any shares of common stock that they acquire when they
convert shares of Series F Stock. The sale of our common stock may be effected
in one or more of the following methods:
o ordinary brokers' transactions;
o transactions involving cross or block trades or otherwise on the Nasdaq
National Market;
o purchases by brokers, dealers or underwriters as principal and resale
by such purchasers for their own accounts pursuant to this prospectus;
o "at the market" to or through market makers or into an existing market
for our common stock;
o in other ways not involving market makers or established trading
markets, including direct sales to purchases or sales effected through
agents;
o through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);
o in privately negotiated transactions;
20
<PAGE>
o to cover short sales; or
o any combination of the foregoing.
The selling stockholders also may sell the shares in reliance upon Rule
144 under the Securities Act at such times as they are eligible to do so. We
have been advised by the selling stockholders that they have not made any
arrangements for the distribution of the shares of common stock. Brokers,
dealers or underwriters who effect sales for the selling stockholders may
arrange for other brokers, dealers or underwriters to participate. Brokers,
dealers or underwriters engaged by the selling stockholders will receive
commissions or discounts from them in amounts to be negotiated prior to the
sale. Such brokers, dealers or underwriters may act as agent or as principals.
From time to time, one or more of the selling stockholders may pledge,
hypothecate or grant a security interest in some or all of the shares of common
stock acquired by them upon conversion of the Series F Stock, and the pledgees,
secured parties or persons to whom such securities have been pledged shall, upon
foreclosure in the event of default, be considered a selling stockholders
hereunder. In addition, such to the limitations discussed above, a selling
stockholder may, from time to time, sell short our common stock. In such
instances, this prospectus may be delivered in connection with such short sales
and the shares of our common stock issued upon conversion of Series F Stock may
be used to cover such short sales.
From time to time one or more of the selling stockholders may transfer,
pledge, donate or assign shares of our common stock that it acquired upon
conversion of Series F Stock to lenders or others and each of such persons will
be considered a selling stockholder for purposes of this prospectus. The number
of shares of our common stock beneficially owned by those selling stockholders
who so transfer, pledge, donate or assign shares of our common stock will
decrease as and when they take such actions. The plan of distribution for our
common stock by the selling stockholders' set forth herein will otherwise remain
unchanged, except that the transferees, pledgees, donees or other successors
will be considered selling stockholders hereunder.
Subject to the limitations discussed above, a selling stockholder may
enter into hedging transactions with broker-dealers and the broker-dealers may
engage in short sales of our common stock in the course of hedging the positions
they assume with such selling stockholder, including in connection with
distributions of our common stock by such broker-dealers. A selling stockholder
may also enter into option or other transactions with broker-dealers that
involve the delivery of our common stock to the broker-dealers, who may then
resell or otherwise transfer such common stock. A selling stockholder may also
loan or pledge our common stock to a broker-dealer and the broker-dealer may
sell our common stock so loaned or upon a default may sell or otherwise transfer
the pledged common stock.
Filing of Supplement to Prospectus In Certain Instances.
If any selling stockholder notifies us that it has entered into a
material arrangement (other than a customary brokerage account agreement) with a
broker or dealer for the sale of shares of common stock under this prospectus
through a block trade, purchase by a broker or dealer or similar transaction, we
will file a supplement to this prospectus under Rule 424(c) under the Securities
Act. Such a supplement will disclose:
o The name of each such broker-dealer.
o The number of shares of common stock involved.
o The price at which those shares of common stock were sold.
o The commissions paid or discounts or concessions allowed to such broker
-dealer(s).
o If applicable, that such broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated by
reference in this prospectus, as supplemented.
21
<PAGE>
o Any other facts material to the transaction.
Certain Persons Deemed to be Underwriters
The selling stockholders and any broker-dealers who execute sales for
them may be deemed to be "underwriters" within the meaning of the Securities Act
because of the number of shares of common stock to be sold or resold by such
persons or entities or the manner of sale of such shares, or both. If a selling
stockholder or any broker-dealer or other holders were determined to be
underwriters, any discounts, concessions or commissions received by them or by
brokers or dealers acting on their behalf and any profits received by them on
the resale of their shares of common stock might be deemed to be underwriting
discounts and commissions under the Securities Act.
Regulation M
We have informed the selling stockholders that Regulation M promulgated
under the Securities Exchange Act may be applicable to them with respect to any
purchase or sale of shares of common stock. In general, Rule 102 under
Regulation M prohibits any person connected with a distribution of our common
stock (a "Distribution") from directly or indirectly bidding for, or purchasing
for any account in which it has a beneficial interest, any of our common stock
or any right to purchase our common stock, for a period of one business day
before and after completion of its participation in the distribution (we refer
to that time period as the "Distribution Period").
During the Distribution Period, Regulation M prohibits the selling
stockholders and any other persons engaged in the Distribution from engaging in
any stabilizing bid or purchasing our common stock except for the purpose of
preventing or retarding a decline in the open market price of our common stock.
No such person may effect any stabilizing transaction to facilitate any offering
at the market. Inasmuch as the selling stockholders will be reoffering and
reselling our common stock at the market, Regulation M prohibits them from
effecting any stabilizing transaction in contravention of Regulation M with
respect to our common stock.
Indemnification and Other Matters
We will pay substantially all of the expenses incident to the
registration, offering and sale of our common stock by the selling stockholders
to the public other than commissions or discounts of underwriters,
broker-dealers or agents. We also have agreed to indemnify certain of the
selling stockholders and certain related persons against certain liabilities,
including liabilities under the Securities Act. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to our directors,
officers and controlling persons, we have been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Because it is possible that a significant number of shares of our
common stock could be sold at the same time hereunder, such sales, or the
possibility thereof, may have a significant depressive effect on the market
price of our common stock.
This offering will terminate on the earlier of (a) the date on which
the shares are eligible for resale without restriction pursuant to Rule 144(k)
under the Securities Act or (b) the date on which all shares offered hereby have
been sold by the selling stockholders.
LEGAL MATTERS
Warshaw Burstein Cohen Schlesinger & Kuh, LLP will give its opinion on
the validity of the common stock. As of the date of this prospectus, certain
partners of such firm beneficially own an aggregate of 1,200 shares of common
stock.
22
<PAGE>
EXPERTS
Our consolidated financial statements as of June 30, 1998 and 1997 and
for each of the years in the three-year period ended June 30, 1998 have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
23
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemized statement of the estimated amounts of all
expenses payable by the Company in connection with the registration of the
Shares:
SEC registration fee..................................................$ 8,601
Nasdaq National Market listing fee.................................... 17,500
Legal fees and expenses............................................... 115,000
Accounting fees and expenses.......................................... 25,000
Miscellaneous expenses................................................ 3,899
----------
Total ...................................................... $170,000
Item 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law provides, in substance,
that Delaware corporations shall have the power, under specified circumstances,
to indemnify their directors, officers, employees and agents in connection with
actions or suits by or in the right of the corporation, by reason of the fact
that they were or are such directors, officers, employees and agents, against
expenses (including attorneys' fees) and, in the case of actions, suits or
proceedings brought by third parties, against judgment, fines and amounts paid
in settlement actually and reasonably incurred in any such action, suit or
proceeding.
The Company's Certificate of Incorporation provides that a
director shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director except for liability
(i) for breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. The Company's Bylaws also provide
that the Company may indemnify its directors, officers and legal representatives
to the fullest extent permitted by Delaware law against all awards and expenses
(including attorneys' fees).
Item 16. Exhibits.
Item 16. Exhibits.
Exhibit No. Description
4.1 - Securities Purchase Agreement, dated as of December 9 1998, by and
among the Company and the investors named therein (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K, filed
by the Company on December 15, 1998).
4.2 - Registration Rights Agreement, dated as of December 9, 1998, by
and among the Company and the investors named therein
(incorporated by reference to Exhibit 10.2 to the Current Report
on Form 8-K, filed by the Company on December 15, 1998).
4.3 - Certificate of Designations, Preferences and Rights of Series F
Convertible Preferred Stock (incorporated by reference to Exhibit
3.1 to the Current Report on Form 8-K, filed by the Company on
December 15, 1998).
5 - Opinion of Warshaw Burstein Cohen Schlesinger & Kuh, LLP.
(previously filed)
23.1 - Consent of KPMG LLP.
23.2 - Consent of Warshaw Burstein Cohen Schlesinger & Kuh, LLP (included
in their opinion previously filed as Exhibit 5).
II-1
<PAGE>
24 - Power of Attorney. (previously filed)
Item 17. Undertakings.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The Company undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a fundamental
change in the information in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) Include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material changes to such
information in the registration statement.
provided, however, that the Company does not need to give the
statements in paragraph (a)(1)(i) and (a)(1)(ii) if the information
required in a post-effective amendment is incorporated by reference
from periodic reports filed by the Company under the Exchange Act.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Morris Plains, State of New Jersey, on
March 4, 1999.
IMMUNOMEDICS, INC.
By: /s/ Robert J. DeLuccia
Robert J. DeLuccia
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Dated:
March 4, 1999 *
-------------------------------------
David M. Goldenberg, Chairman of the
Board and a Director
March 4, 1999 /s/ Robert J. DeLuccia
-------------------------------------
Robert J. DeLuccia, President, Chief
Executive Officer and Director
(Principal Executive Officer)
March 4, 1999 *
-------------------------------------
W. Robert Friedman, Jr., Director
March 4, 1999 *
-------------------------------------
Marvin E. Jaffe, Director
March 4, 1999 *
-------------------------------------
Richard R. Pivirotto, Director
March 4, 1999 *
-------------------------------------
Richard C. Williams, Director
March 4, 1999 *
-------------------------------------
Kevin F.X. Brophy, Vice President,
Finance and Administration and Chief
Financial Officer (Principal
Financial and Accounting Officer)
*By: /s/ Robert J. DeLuccia
Robert J. DeLuccia, as
attorney-in-fact
II-3
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Immunomedics, Inc.
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Prospectus.
KPMG LLP
Short Hills, New Jersey
March 4, 1999
E-1
<PAGE>
