PROSPECTUS
IMMUNOMEDICS, INC.
2,575,000 Shares of Common Stock
The Issuer
Immunomedics. Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
The Selling Stockholders
One selling stockholder is offering to sell 75,000 shares of common
stock that it may acquire upon exercise of a warrant that we issued to that
stockholder in its capacity as our financial advisor. The other selling
stockholders are offering to sell 2,500,000 shares of common stock that we
issued to them on December 14, 1999 pursuant to a Common Stock Purchase
Agreement. Additional information concerning our agreements with the selling
stockholders is set forth under the captions "Immunomedics Agreement with
Financial Advisor" and "Immunomedics - December 1999 Financing."
Trading Symbol
Nasdaq National Market - "IMMU"
The closing sale price of a share of our common stock on Nasdaq on
January 26, 2000 was $18.50.
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
of our common 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 4.
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.
The date of this prospectus is January 27, 2000.
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Risk Factors:
We Have a History of Operating Losses and May Never Become
Profitable................................................................................ 4
We May Not Be Able to Successfully Develop a Market for Our Approved
Products.................................................................................. 4
We May Not Receive Approval to Sell LeukoScan in the United States
in a Timely Manner........................................................................ 4
We May Not Be Able to Bring to Market the Products We Are Currently
Developing or Sustain Their Sales After Approval.......................................... 4
If We Do Not Obtain Additional Capital, We May Be Required to Curtail
Our Operations............................................................................ 5
Our Limited Marketing and Sales Experience and Capability Could Impact
Our Ability to Successfully Sell Our Current Products..................................... 5
We May Have to Rely on Partners to Help Us Market and Sell Our
Products Under Development................................................................ 5
We Could Be Temporarily Unable to Sell Our Products If Our Agreements
with our Distributors Were Terminated..................................................... 5
We Could Be Temporarily Unable to Sell Our Products If Our Agreement
with our End Stage Manufacturer Was Terminated............................................ 6
Our Internal Manufacturing Capability May Limit What We Can Sell............................. 6
We May Be Unable to Continue to Use Mouse Fluids for Future Products
Which Could Require Us to Make Expensive and Time Consuming Changes
to Our Products in Development............................................................ 6
Our Product Development Is Dependent Upon Our Continued Relationship
with The Center for Molecular Medicine and Immunology..................................... 6
Certain Potential Conflicts of Interest Exist with The Center for Molecular
Medicine and Immunology Which Could Affect Our Operations................................. 6
We May Not Be Able to Obtain Government Regulatory Approval in a
Timely Manner to Market and Sell Our Products or Approval May Be Withdrawn................ 7
Our Business Involves the Use of Hazardous Materials......................................... 7
We Must Maintain Our Manufacturing Facilities in Accordance With
Government Regulatory Requirements........................................................ 7
We Have Agreed to Certain Covenants in our 1999 Financing Which Place Restrictions
on the Operation of our Business.......................................................... 7
Changes to Health Care Reimbursement Could Adversely Affect Our
Operations................................................................................ 8
The Loss of Key Employees Could Adversely Affect our Operations.............................. 8
We Face Substantial Competition in the Biotechnology Field and
May Not Be Able to Successfully Compete................................................... 8
Our Products May Be Rendered Obsolete By Rapid Technological Change.......................... 8
If We Are Unable to Protect Our Intellectual Property Rights, We
Could Lose Our Competitive Advantage...................................................... 9
Our Products May Infringe Third Party Intellectual Property Rights........................... 9
Our Operations Could Suffer If We Are Unsuccessful in Our Pending
Infringement Claims Concerning Our CEA Antibodies......................................... 9
Product Liability Claims in Excess of the Amount of Our Insurance
Would Adversely Affect Our Financial Condition............................................ 9
Our Principal Stockholder Can Influence Most Matters Requiring
Approval By Our Stockholders.............................................................. 9
Resales of Shares Held By Our Directors and Executive Officers May
Lower the Market Price of Our Common Stock................................................ 10
Our Stock Price Has Been Volatile............................................................ 10
Potential Loss of Our Nasdaq Listing Could Make it More Difficult to Sell our Shares
and Affect Our Liquidity.................................................................. 10
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Stockholders Could Be Adversely Affected By Our Anti-Takeover
Provisions................................................................................ 10
Our Operations Could Be Affected By Year 2000 Issues......................................... 11
Stockholders Should Not Expect that We Will Pay Dividends.................................... 11
Special Note Regarding Forward-Looking Statements............................................ 11
Where You Can Find More Information..................................................................... 12
Immunomedics:
Description of Our Business.................................................................. 13
December 1999 Financing...................................................................... 15
Agreement with Financial Advisor............................................................. 16
Use of Proceeds......................................................................................... 16
Selling Stockholders.................................................................................... 17
Plan of Distribution:
Manner of Sales; Broker-Dealer Compensation.................................................. 18
Filing of a Post-Effective Amendment In Certain Instances.................................... 19
Certain Persons May Be Deemed to Be Underwriters............................................. 19
Regulation M................................................................................. 20
Indemnification and Other Matters............................................................ 20
Legal Matters........................................................................................... 20
Experts................................................................................................. 20
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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. The selling stockholders are
not making an offer of our shares in any state where the offer is not permitted.
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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.
We Have a History of Operating Losses and May Never Become Profitable
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 September 30, 1999,
we had an accumulated deficit of approximately $101,600,000. 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.
We May Not Be Able to Successfully Develop a Market for Our Approved Products
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 or any of our
proposed products will achieve market acceptance or generate significant sales.
We May Not Receive Approval to Sell LeukoScan in the United States in a Timely
Manner
We have not yet received approval from the FDA to market and sell
LeukoScan in the United States and cannot assure you as to when, if ever, that
we will obtain approval. 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 we do not receive approval to
market and sell LeukoScan in the United States in the near future or if the FDA
imposes significant conditions or restrictions, our business and operations
could be significantly and adversely affected.
We May Not Be Able to Bring to Market the Products We Are Currently Developing
or Sustain Their Sales After Approval
Before any of our products that we are currently developing can be
marketed and sold, we must undertake substantial research and development. All
new products face a high degree of uncertainty, including the following:
* 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.
* The results from preclinical studies and clinical trials may not
be indicative of results that will be obtained in later-stage
testing.
* 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.
* 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.
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* 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.
* We do not expect that any new product which is currently in
research and development will be commercially available for at
least several years.
* We may be unable to produce the product in commercial quantities
at reasonable cost.
* 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.
* The product may not gain satisfactory market acceptance.
* The product may be superceded by another product commercialized
for the same indication or may infringe patents issued to others,
which would prevent us from marketing and selling the product.
* After approval, the product may be recalled or withdrawn at any
time as a result of regulatory issues, including those concerning
safety and efficacy.
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.
If We Do Not Obtain Additional Capital, We May Be Required to Curtail Our
Operations
Without a significant increase in product revenues or other infusion of
capital during our current fiscal year which ends June 30, 2000, 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 any financing will not cause
substantial dilution to our existing stockholders.
Our Limited Marketing and Sales Experience and Capability Could Impact Our
Ability to Successfully Sell Our Current Products
We are relying, in substantial part, on our own limited sales and
marketing organization to market CEA- Scan and LeukoScan. We cannot assure you
that we can successfully maintain and continue to build our 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.
We May Have to Rely on Partners to Help Us Market and Sell Our Products Under
Development
The marketing and sale of our proposed products may be dependent upon
our entering into arrangements with corporate partners. We cannot assure you
that we will be successful in forming these relationships or that these
relationships, even if formed, will be successful.
We Could Be Temporarily Unable to Sell Our Products If Our Agreements with our
Distributors Were Terminated
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 this 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. 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.
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We Could Be Temporarily Unable to Sell Our Products If Our Agreement with our
End Stage Manufacturer Was Terminated
We rely on a single third party to perform certain end-stage portions
of the manufacturing process for CEA-Scan and LeukoScan which we are unable or
do not have the resources to perform. If this third party were to become
unavailable, we would be unable to complete the manufacturing process until we
entered into an agreement with another qualified entity. We cannot assure you
that we will be able to negotiate an agreement with another entity on terms we
consider acceptable, if at all. Even if we were able to do so, any substantial
delay in our ability to manufacture our products could significantly and
adversely affect our operations.
Our Internal Manufacturing Capability May Limit What We Can Sell
If demand for our approved 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. If we were even only temporarily
unable to manufacture sufficient quantities of our products to meet demand, our
business could be significantly and adversely effected.
We May Be Unable to Continue to Use Mouse Fluids for Future Products Which Could
Require Us to Make Expensive and Time Consuming Changes to Our Products in
Development
CEA-Scan and certain of our other imaging agents are derived from
ascites fluid produced in mice. Regulatory authorities, particularly in Europe,
have expressed concerns about the use of mice fluid for the production of
monoclonal antibodies. We cannot assure you that regulatory authorities will
agree that our quality control 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 also have contracted with a third party for the development and
production of certain humanized antibodies, but we cannot assure you that these
efforts will be successful.
Our Product Development Is Dependent Upon Our Continued Relationship with The
Center for Molecular Medicine and Immunology
The Center for Molecular Medicine and Immunology, a not-for-profit
cancer research center, 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. If CMMI were no longer to
provide these services, we would have to make alternative arrangements with
third parties which could significantly delay and increase expenses associated
with pre-clinical testing and initial clinical trials.
Certain Potential Conflicts of Interest Exist with The Center for Molecular
Medicine and Immunology Which Could Affect Our Operations
Dr. David M. Goldenberg, our Chairman and 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. As a
result, the potential for conflict of interest exists and disputes could arise
over the allocation of research projects and ownership of intellectual property
rights.
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We May Not Be Able to Obtain Government Regulatory Approval in a Timely Manner
to Market and Sell Our Products or Approval May Be Withdrawn
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 comparable foreign authorities. 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 these 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, government regulators 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. Even after
approval, we may be required to recall or withdraw a product as a result of
subsequently discovered safety or efficacy concerns.
Our Business Involves the Use of Hazardous Materials
In addition to laws and regulations enforced by the FDA, we are also
subject to regulation under various other foreign, federal, state or local laws
and regulations. Our research and development involves the controlled use of
hazardous materials, chemicals, viruses and various radioactive compounds. 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 liability could exceed our resources.
We Must Maintain Our Manufacturing Facilities in Accordance With Government
Regulatory Requirements
Our facilities are subject to inspection by the FDA and comparable
foreign authorities. A separate license is sometimes required for commercial
manufacture of any product. Failure to maintain these licenses or to meet the
regulatory inspection criteria would result in disruption to our manufacturing
processes and could have a significant and adverse effect on our business and
operations.
We Have Agreed to Certain Covenants in our 1999 Financing Which Place
Restrictions on the Operation of our Business
In connection with our December 1999 financing, we have agreed to
certain covenants, including covenants that will apply until such time as the
investors in that offering and their affiliates beneficially own less than 5% of
our common stock. Among other things, we have agreed that without the prior
consent of the investors, we may not sell our business to anyone that is an
affiliate of the company, unless the sale is for consideration at least equal to
(a) the fair market value in the event of a sale of assets (as determined in
good faith by our board of directors) or (b) the then current market price in
the event of a sale of stock. As of December 30, 1999, such investors in the
aggregate beneficially owned 6.2% of our outstanding common stock. For
additional information regarding our December 1999 financing, see "Immunomedics
- - December 1999 Financing."
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Changes to Health Care Reimbursement Could Adversely Affect Our Operations
Our ability to successfully commercialize our products will depend in
part on the extent to which reimbursement for the cost of our products and
related treatment will be available from government health administration
authorities, private health insurers and other organizations. These 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 this type of 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 or
foreign governments will not implement a system of price controls. Any system
might significantly and adversely affect our ability to market our products
profitably.
The Loss of Key Employees Could Adversely Affect our Operations
As a small biotechnology company, we are heavily dependent upon the
talents of Dr. Goldenberg and certain key 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, from time to time we
have a need to expand our management and scientific personnel. 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 retain or, when needed, attract additional
qualified personnel, our operations also could be significantly and adversely
affected.
We Face Substantial Competition in the Biotechnology Field and May Not Be Able
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.
Our Products May Be Rendered Obsolete By Rapid Technological Change
We are pursuing an area of product development in which there is the
potential for extensive technological innovations 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 noncompetitive or obsolete.
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If We Are Unable to Protect Our Intellectual Property Rights, We Could Lose Our
Competitive Advantage
Our commercial success is highly dependent upon patents and other
proprietary rights that we own or license. 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. In addition, 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.
Our Products May Infringe Third Party Intellectual Property Rights
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. Since we do not have the resources to maintain a staff
whose primary function is to investigate the level of protection afforded to
third parties on devices and components which we use in our products, it is
possible that a third party could successfully claim that our products infringe
on their intellectual property rights. If this were to occur, we may be subject
to substantial damages, and we may not be able to obtain appropriate licenses at
a cost we could afford and we may not have the ability to timely redesign our
products. If we are required to pay damages or are unable to obtain these
rights, our business could be significantly and adversely affected. Even if we
are successful in defeating any alleged infringement claims, litigation could
result in a substantial diversion of managerial time and resources, which could
be better and more fruitfully utilized on other activities.
Our Operations Could Suffer If We Are Unsuccessful in Our Pending Infringement
Claims Concerning Our CEA Antibodies
We are involved in certain litigation with F. Hoffmann-LaRoche and its
affiliates concerning the validity our European patents covering the antibody we
use in our CEA-Scan cancer imaging product and our CEA-Cide(tm) cancer therapy
product, as well as the use of highly specific anti-CEA antibodies for a number
of other uses. We have claimed that they have infringed our patent and they have
counter-claimed seeking to nullify the patents that were issued. If we receive
an unfavorable outcome in any of these matters, our business could be
significantly and adversely affected.
Product Liability Claims in Excess of the Amount of Our Insurance Would
Adversely Affect Our Financial Condition
The clinical testing, marketing and manufacturing of our products
necessarily involve the risk of product liability. While we currently have
product liability insurance, we cannot assure that we will be able to obtain
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. Any claim in excess of
the amount of any insurance we then had could significantly and adversely affect
our financial condition and operating results.
Our Principal Stockholder Can Influence Most Matters Requiring Approval By Our
Stockholders
As of December 31, 1999, Dr. Goldenberg, our Chairman and Chief
Executive Officer, controlled the right to vote over approximately 26.7% of our
common stock (excluding options to purchase 337,500 shares). As a result of this
voting power, Dr. Goldenberg may have the ability to determine the election of
all of our directors, direct our policies and control the outcome of
substantially all matters which may be put to a vote of our stockholders.
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Resales of Shares Held By Our Directors and Executive Officers May Lower the
Market Price of Our Common Stock
As of December 31, 1999, we had a total of 46,260,121 shares of common
stock outstanding, 12,386,456 of which were held by our directors and executive
officers (excluding options to purchase 940,625 shares). These shares may only
be resold in limited quantities and only within the limitations imposed by Rule
144 under the Securities Act. The mere prospect that these shares may be
publicly resold could lower the market price for our common stock.
Our Stock Price Has Been Volatile
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:
* actual or anticipated fluctuations in our operating results;
* the status of our products in development;
* new products or technical innovations by us or by our existing or
potential competitors;
* the formation or termination of our corporate alliances and
distribution arrangements;
* prolonged periods of regulatory review of new products or new uses for
existing products;
* determinations regarding our patent applications and those of others;
* trading strategies occurring in the market place with respect to our
common stock; and
* general market conditions and other factors unrelated to us or outside
our control.
Potential Loss of Our Nasdaq Listing Could Make it More Difficult to Sell our
Shares and Affect Our Liquidity
If the bid price of our common stock were to fall below $1.00 per
share, if we were to have less than $4,000,000 in net tangible assets (total
assets less total liabilities and goodwill), or if the value of our common stock
held by our stockholders (other than our directors and executive officers) were
to be less than $5,000,000, our common stock could be delisted from The Nasdaq
Stock Market. If our common stock were delisted from Nasdaq, trading, if any,
would thereafter be conducted in the over-the-counter market. This would make it
more difficult for an investor to dispose of, or to obtain accurate quotations
for, our common stock. Additionally, it may become more difficult for us to
raise funds through the sale of our securities.
Stockholders Could Be Adversely Affected By Our 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 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.
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Our Operations Could Be Affected By Year 2000 Issues
Prior to December 31, 1999, we completed a review of our business
systems, including our computer systems and manufacturing equipment, and 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 relating to Year 2000
issues. While we have not yet experienced significant difficulties relating to
Year 2000 issues, we still could encounter problems with supplier and/or revenue
sources which could affect us. We cannot accurately predict the occurrence or
outcome of any these problems, nor can we estimate the dollar amount of these
problems. In addition, we cannot assure you that a failure by a third party to
ensure year 2000 compliance will not significantly and adversely effect us.
Stockholders Should Not Expect 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.
Special Note Regarding Forward-Looking Statements
We have made statements in this prospectus, and in the documents we
incorporate by reference, that are "forward-looking statements" within the
meaning of the Securities Act and the Securities Exchange Act. Sometimes these
statements contain words like "may," "believe," "expect," "continue," "intend,"
"anticipate" or other similar words. These statements could involve known and
unknown risks, uncertainties and other factors that might significantly alter
the actual results suggested by the statements. In other words, our performance
might be quite different from what the forward-looking statements imply. The
following factors, as well as those discussed above in this "Risk Factors"
section and in the documents which we incorporate by reference, could cause our
performance to differ from the implied results:
* inherent uncertainties accompanying the marketing of CEA-Scan and
LeukoScan.
* inherent uncertainties involving new product development and marketing.
* inability to obtain capital for continued product development and
commercialization.
* actions of regulatory authorities concerning product approval.
* actions of government and private organizations concerning
reimbursement of medical expenses.
* impact of competitive products and pricing.
* results of clinical trials.
* loss of key employees.
* changes in general economic and business conditions.
* changes in industry trends.
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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.
WHERE YOU CAN FIND MORE INFORMATION
We publicly file annual, quarterly and current reports, proxy statements
and other documents with the SEC. You may read and copy any of these documents
at the SEC's public reference rooms, which are located at:
450 Fifth Street, N.W.
Washington, D.C. 20549
7 World Trade Center, Suite 1300
New York, New York 10048
500 West Madison Street, Suite 1400
Chicago, Illinois 60661-2511
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC maintains an Internet website at
http://www.sec.gov where our publicly filed documents may be obtained.
This prospectus is part of a registration statement filed with the SEC.
Our registration statement contains more information than this prospectus
regarding us and our common stock and includes supplemental exhibits and
schedules. You can obtain 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 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:
* Annual Report on Form 10-K for the fiscal year ended
June 30, 1999;
* Proxy Statement, dated October 18, 1999, with respect to our
1999 annual meeting of stockholders;
* Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1999;
* Current Report on Form 8-K, dated November 24, 1999; and
* Description of our common stock contained in Item 1 of our
Registration Statement on Form 8-A, dated May 7, 1984.
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You may request a copy of these filings, at no cost, by calling or
writing us at the following address:
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
Attention: Investor Relations
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 the imaging of infection in osteomyelitis as well as for
the imaging of infection in acute, atypical appendicitis. We have been advised
by the FDA that there are still deficiencies with our application relating to
the adequacy of our data necessary to support final approval for these
indications. Despite our confidence that we were making progress with FDA and
had adhered to all agreements and guidelines, it is now clear to us that we need
to take whatever steps are available to us to gain a more receptive audience in
order to gain marketing approval for this product. We can not assure you that we
will receive FDA approval for this product in a timely manner, or at all.
Marketing, Sales and Distribution
CEA-Scan is marketed and sold in the U.S. directly by our limited
internal sales force, who are focused on new customers in major medical centers.
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. We
also have an agreement with Syncor International, a leading provider of
radiopharmacy services, under which Syncor makes CEA-Scan available to its
hospital and clinic accounts throughout the U.S., supported by our sales and
technical support specialists.
Our European operations, headquartered in Hillegom, The Netherlands,
include European management, sales and marketing, customer service and
invoicing, collection and other administrative functions. We also have
established sales representation in most major European markets. 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.
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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. These 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. CEA also is associated with many other cancers. We are
conducting phase IV clinical trials to evaluate the product following repeated
administration. We also have been performing clinical trials using CEA- Scan for
imaging lung cancer and breast cancer. We are discussing the results of our
breast cancer trials with European regulatory authorities to determine whether
the data will support the submission of applications for marketing approval. 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 two other imaging products pursuant to
Investigational New Drug applications that we have filed or plan to file with
the FDA and for which we have ongoing clinical trials:
* LymphoScan(r), for non-Hodgkin's B-cell lymphomas.
* AFP-Scan(r), for liver cancer and germ-cell tumors of the ovaries and
testes.
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
radioimmunotherapy. This technique may deliver radiolabeled therapeutic agents
to tumor sites more selectively than current radiation therapy technologies,
while minimizing debilitating side effects. In addition, we are evaluating in
clinical trials the effects of our non-radioactive lymphoma antibody in
non-Hodgkin's lymphoma patients.
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. In March 1999, we entered into a joint venture with Beckman Coulter to
develop the next generation of cancer radiotherapeutics 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. However, we cannot assure you that such efforts will be
successful, given the complex issues involved in such diagnosis and treatment.
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 or drug administration.
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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 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.
December 1999 Financing
On December 14, 1999, we entered into a Common Stock Purchase Agreement
with a small group of private investors, each of whom is described below as a
selling stockholder. Under the Common Stock Purchase Agreement, we sold the
investors a total of 2,500,000 shares of our common stock at a price of $3.00
per share, for gross proceeds of $7,500,000. We used substantially all of the
net proceeds from this sale to redeem a total of 595 shares of our Series F
Preferred Stock, representing all of the shares of Series F Preferred Stock that
had not been converted into common stock. As a result, we no longer have any
shares of Series F Preferred Stock outstanding.
Under the Common Stock Purchase Agreement, we were required to make
certain promises to the investors. These covenants included the following:
* We agreed to register with the SEC the shares that we sold to the
investors. We promised to file a preliminary prospectus by January 13, 2000
and thereafter to use our best efforts to have our registration statement
declared effective by the SEC as expeditiously as possible. We were
successful in filing our preliminary prospectus prior to the January 13th
deadline.
* We agreed to use the net proceeds to purchase the outstanding shares of our
Series F Preferred Stock, as we have described above.
* We agreed to refrain from entering into certain transactions with persons
closely related to our company, including our executive officers and
directors, without the prior approval of the investors. The investors
agreed not to withhold their approval unreasonably.
* We agreed that without the prior consent of the investors, we may not sell
our business to anyone that is an affiliate of the company, unless the sale
is for consideration at least equal to (a) the fair market value in the
event of a sale of assets (as determined in good faith by our board of
directors) or (b) the then current market price in the event of a sale of
stock.
* We agreed that we would not amend our certificate of incorporation or
by-laws in a manner that would adversely affect the investors, without the
prior approval of the investors. The investors agreed not to withhold their
approval unreasonably.
* We agreed that if, during a six month period specified in our Common Stock
Purchase Agreement, we issue shares of our common stock at a price of less
than $3.00, we will issue additional shares of common stock to the
investors to protect them against dilution without requiring any additional
payment from the investors. This covenant is subject to certain exceptions;
among other things, no such adjustment will be required if shares are
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issued below that price upon exercise or conversion of options, warrants or
convertible securities outstanding on December 14, 1999 or in connection
with corporate partnering transactions, including mergers. Furthermore, the
calculation of the adjustment is to be made on a weighted average basis.
Thus, if the number of shares that we issue in a non-exempt transaction is
not significant , or if the per share price in a non-exempt transaction is
only slightly below the trigger price, we would not be required to issue a
substantial number of additional shares to the investors.
* We agreed that if, during the twelve months ending December 31, 2000, we
desire to conduct a private placement of our securities through a placement
agent, broker-dealer or finder, we will give an entity associated with the
investors a right of first refusal to serve as the placement agent in that
transaction.
These covenants will cease to apply at such time as the investors and their
affiliates beneficially own less than 5% of our common stock. As of December 30,
1999, such investors in the aggregate beneficially owned 6.2% of our outstanding
common stock. Prior to the time, if any, when the investors' equity interest
falls below 5%, the investors may waive any one or more of the covenants set
forth in our Common Stock Purchase Agreement.
In connection with the execution of our Common Stock Purchase
Agreement, our executive officers and directors have agreed that, subject to a
limited carve-out, they will not sell any shares of their common stock until the
later of June 14, 2000 or the date on which the SEC declares effective the
registration statement of which this prospectus is a part. We also agreed to
refrain from publicly offering or selling our shares for a period of 60 days
after the SEC declares such registration statement effective.
The investors may waive these restrictions at any time.
Agreement with Financial Advisor
We have entered into an agreement with Sutro & Co. Incorporated
pursuant to which Sutro may serve as our financial advisor with respect to
various corporate finance and corporate partnering transactions. As part of the
consideration payable to Sutro for its services, we have issued to Sutro a
Warrant entitling Sutro to purchase up to 75,000 shares of our common stock.
This Warrant has an exercise price of $6.50 per share and expires in December
2004. The Warrant grants Sutro certain registration rights, including the right
to include in this prospectus the 75,000 shares of common stock issuable upon
exercise of the Warrant.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock by
the selling stockholders. However, we did receive gross proceeds of $7,500,000
from the issuance of our common stock to the investors in the December 1999
financing. We used substantially all of those proceeds to redeem all of the
remaining outstanding shares of Series F Preferred Stock and to cover expenses
relating to this financing.
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SELLING STOCKHOLDERS
The table below presents the following information: (1) the number of
shares of common stock beneficially owned by each selling stockholder as of
December 31, 1999; (2) the number of shares that the selling stockholder is
offering under this prospectus, and (3) the number of shares that the selling
stockholder will beneficially own after the completion of this offering,
assuming that the selling stockholder does not acquire any other shares of our
common stock subsequent to December 31, 1999. The number of shares shown as
being beneficially owned by each selling stockholder after the offering assumes
that the selling stockholder has sold all the shares of our common stock which
may be sold pursuant to this prospectus.
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 this
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 exercise of any stock option, warrant 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.
None of the selling stockholders has had a material relationship with
us within the past three years, other than as described above under
"Immunomedics - December 1999 Financing" and "Immunomedics - Agreement with
Financial Advisor."
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selling Stockholder Shares of Common Shares of Common Shares of Common
Stock Beneficially Stock Being Stock Beneficially
Owned as of Offered Owned After the
December 31, 1999 Offering
Sutro & Company, Inc. 75,000 75,000 --
Investors Under the Common
Stock Purchase Agreement
The Aries Master Fund 1,814,053 1,557,645 256,408
The Aries Domestic Fund, L.P. 727,965 626,820 101,145
The Aries Domestic Fund II, L.P. 56,814 48,867 7,947
Lindsay A. Rosenwald, M.D. 2,765,499(1) 166,667 365,500(3)
Mark C. Rogers, M.D. 2,632,166(2) 33,334 365,500(3)
Wayne Rothbaum 66,667 66,667 --
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1 Includes 1,814,053 shares of common stock owned by The Aries Master Fund,
727,965 shares of common stock owned by The Aries Domestic Fund, L.P. and
56,814 shares of common stock owned by The Aries Domestic Fund II, L.P. Dr.
Rosenwald is the Chairman and sole stockholder of Paramount Capital Asset
Management, Inc. ("PCAM"), which serves as the general partner to each of
The Aries Domestic Fund, L.P., and The Aries Domestic Fund II, L.P., and as
the investment manager to The Aries Master Fund. As such, Dr. Rosenwald and
PCAM may be deemed to beneficially own the securities held by each of The
Aries Domestic Fund, L.P., The Aries Domestic Fund II, L.P. and The Aries
Master Fund. Dr. Rosenwald and PCAM disclaim beneficial ownership of such
shares except to the extent of their pecuniary interest therein, if any.
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2 Includes 1,814,053 shares of common stock owned by The Aries Master Fund,
727,965 shares of common stock owned by the Aries Domestic Fund, L.P. and
56,814 shares of common stock owned by the Aries Domestic Fund II, L.P. Dr.
Rogers is the President of PCAM. As such, Dr. Rogers and PCAM may be deemed
to beneficially own the securities held by each of Aries Domestic Fund,
L.P., Aries Domestic Fund II, L.P. and The Aries Master Fund. Dr. Rogers
and PCAM disclaim beneficial ownership of such shares except to the extent
of their pecuniary interest therein, if any.
3 Represents 256,408 shares of common stock owned by The Aries Master Fund,
101,145 shares of common stock owned by The Aries Domestic Fund, L.P. and
7,947 shares of common stock owned by The Aries Domestic Fund II, L.P.
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 our common stock that they acquired
pursuant to our Common stock Purchase Agreement or that Sutro may acquire upon
exercise of its Warrant. The sale of our common stock may be effected in one or
more of the following methods:
* ordinary brokers' transactions;
* transactions involving cross or block trades or otherwise on the
Nasdaq National Market;
* purchases by brokers, dealers or underwriters as principal and resale
by these purchasers for their own accounts pursuant to this
prospectus;
* "at the market" to or through market makers or into an existing market
for our common stock;
* in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents;
* through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);
* in privately negotiated transactions;
* to cover short sales, except to the extent that they are restricted
contractually from doing so; or
* any combination of the foregoing.
The selling stockholders also may sell their 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. These brokers, dealers or underwriters may act as agent or as principals.
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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, and the pledgees, secured parties or persons to whom
these securities have been pledged shall, upon foreclosure in the event of
default, be considered a selling stockholders hereunder. In addition, subject to
contractual limitations, a selling stockholder may, from time to time, sell
short our common stock. In these instances, this prospectus may be delivered in
connection with these 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 to lenders
or others and each of these 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 these
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 contractual limitations, 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 this selling stockholder, including in connection with distributions
of our common stock by these 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 these shares. A selling stockholder also may 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 a Post-Effective Amendment 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 post- effective amendment to the registration statement under the
Securities Act. The post-effective amendment will disclose:
* The name of each broker-dealer involved in the transaction.
* The number of shares of common stock involved.
* The price at which those shares of common stock were sold.
* The commissions paid or discounts or concessions allowed to the
broker-dealer(s).
* If applicable, that these broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated by
reference in this prospectus, as supplemented.
* Any other facts material to the transaction.
Certain Persons May Be 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 these
persons or entities or the manner of sale of these 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.
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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 our common stock. In general, Rule 102 under Regulation M
prohibits any person connected with a distribution of our common stock 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.
During any 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.
None of these persons may effect any stabilizing transaction to facilitate any
offering at the market. As the selling stockholders will be reoffering and
reselling our common stock at the market, Regulation M will prohibit them from
effecting any stabilizing transaction in contravention of Regulation M with
respect to our common stock.
Indemnification and Other Matters
We paid 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 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 this indemnification agreement is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
This offering will terminate on the date on which all shares offered
hereby have been sold by the selling stockholders.
LEGAL MATTERS
Lowenstein Sandler PC will give its opinion on the validity of the
common stock
EXPERTS
Our consolidated financial statements as of June 30, 1999 and 1998, and
for each of the years in the three-year period ended June 30, 1999 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.
