<PAGE> 1
As filed with the Securities and Exchange Commission on May 10, 1996.
Registration No. 33-86000
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
---------------------
NEOPROBE CORPORATION
(Name of Small Business Issuer in Its Charter)
DELAWARE 31-1080091
(State or Jurisdiction of (I.R.S. Employer
Incorporation or Other Organization) Identification Number)
425 Metro Place North
Dublin, Ohio 43017-1367
(614) 793-7500
(Address and Telephone Number of Principal Executive Offices)
Robert S. Schwartz, Esq. with a copy to: Mr. David C. Bupp
Schwartz, Warren & Ramirez Neoprobe Corporation
A Limited Liability Company 425 Metro Place North
41 South High Street Dublin, Ohio 43017-1367
Columbus, Ohio 43215 (614) 793-7500
(614) 222-3050
(Name, Address and Telephone Number of Agent for Service)
Approximate date of commencement of proposed sale to the public: as
soon as possible after the effective date of this registration statement.
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, check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
Proposed Proposed Amount of
Title of Each Class of Securities Amount to be Maximum Offering Maximum Aggregate Registration
to be Registered Registered Price Per Unit Offering Price Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share(1)(10).. 100,000 shares $6.00(2) $ 600,000 (10)
- ---------------------------------------------------------------------------------------------------------------
Class F Warrants................................ 100,000 N/A N/A (4)
- ---------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share(5)(6)... 300,000 shares $2.724(2) $ 817,200 (6)
- ---------------------------------------------------------------------------------------------------------------
Class G Warrants(6)............................. 300,000 N/A N/A (6)
- ---------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share(7)(10).. 100,000 shares $4.625(2) $ 462,500 (10)
- ---------------------------------------------------------------------------------------------------------------
Class I Warrants................................ 100,000 N/A N/A (6)
- ---------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share(8)...... 50,000 shares $6.30(2) $ 315,000 $108.62(3)
- ---------------------------------------------------------------------------------------------------------------
Class K Warrants................................ 50,000 N/A N/A (4)
- ---------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share(9)...... 100,000 shares $12.60(2) $1,260,000 $435.48(3)
- ---------------------------------------------------------------------------------------------------------------
Class L Warrants................................ 100,000 N/A N/A (4)
===============================================================================================================
</TABLE>
(1) Issuable upon exercise of Class F Warrants.
(2) Pursuant to Rule 457(g).
(3) $4,017.28 was paid on November 4, 1994 when this Registration Statement was
initially filed. Of that amount, $2,896.55 was credited to Amendment No. 1
on January 26, 1995, and $366.38 was credited to Post-Effective Amendment
No. 1 on December 21, 1995 leaving $754.35 unused.
(4) Pursuant to Rule 457(g), no separate registration fee is required.
(5) Issuable upon exercise of Class G Warrants.
(6) Registered under Amendment No. 1.
(7) Issuable upon exercise of Class I Warrants.
(8) Issuable upon exercise of Class K Warrants.
(9) Issuable upon exercise of Class L Warrants.
(10) Registered under Post-Effective Amendment No. 1.
================================================================================
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
<PAGE> 2
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
PURSUANT TO RULE 429(B), THE PROSPECTUS CONTAINED HEREIN ALSO RELATES TO
REGISTRATION NO. 33-93438 AND REGISTRATION NO. 33-93858.
================================================================================
<PAGE> 3
PROSPECTUS
[NEOPROBE LOGO]
749,000 SHARES OF COMMON STOCK
52,905 CLASS G WARRANTS
99,000 CLASS H WARRANTS
50,000 CLASS K WARRANTS
100,000 CLASS L WARRANTS
This Prospectus relates to 52,905 Class G Warrants to purchase one
share of common stock, par value $.001 per share ("Common Stock") of Neoprobe
Corporation ("Neoprobe" or the "Company") (the "Class G Warrants"); 99,000 Class
H Warrants to purchase one share of Common Stock (the "Class H Warrants");
50,000 Class K Warrants to purchase one share of Common Stock (the "Class K
Warrants"); and 100,000 Class L Warrants to purchase one share of Common Stock
(the "Class L Warrants" and together with the Class G, Class H and Class K
Warrants, the "Warrants"); and 301,905 shares of Common Stock issuable
(Continued on overleaf.)
-------------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 2.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=====================================================================================================================
PRICE UNDERWRITING PROCEEDS TO
TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS THE COMPANY(5) SHAREHOLDERS
------ ----------- -------------- ------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
52,905 shares of Common Stock(1) .................. $ 2.724 -- $ 144,113 -0-
- --------------------------------------------------------------------------------------------------------------------
99,000 shares of Common Stock(2) .................. $ 6.05 -- $ 598,950 -0-
- --------------------------------------------------------------------------------------------------------------------
50,000 shares of Common Stock(3) .................. $ 6.30 -- $ 315,000 -0-
- --------------------------------------------------------------------------------------------------------------------
100,000 shares of Common Stock(4) ................. $ 12.60 -- $1,260,000 -0-
- --------------------------------------------------------------------------------------------------------------------
749,000 shares of Common Stock(6) ................. $17.625 (7) -- $13,201,125
- --------------------------------------------------------------------------------------------------------------------
52,905 Class G Warrants ........................... $14.901(10) (7) -- $ 788,337
- --------------------------------------------------------------------------------------------------------------------
99,000 Class H Warrants ........................... $11.575(10) (7) -- $ 1,145,925
- --------------------------------------------------------------------------------------------------------------------
50,000 Class K Warrants ........................... $11.325(10) (7) -- $ 566,250
- --------------------------------------------------------------------------------------------------------------------
100,000 Class L Warrants .......................... $ 5.025(10) (7) -- $ 502,500
- --------------------------------------------------------------------------------------------------------------------
Total Minimum(8) .................................. -0- -0- -0- -0-
- --------------------------------------------------------------------------------------------------------------------
Total Maximum(6)(9)(10) .......................... (7) $2,318,063 $16,204,137
====================================================================================================================
</TABLE>
(1) Issuable upon exercise of Class G Warrants.
(2) Issuable upon exercise of Class H Warrants.
(3) Issuable upon exercise of Class K Warrants.
(4) Issuable upon exercise of Class L Warrants.
(5) Before deducting expenses payable by the Company, estimated at $10,000.00.
(6) To be offered at market related prices prevailing at the time of sale.
These amounts are based on the closing price of the Common Stock on Nasdaq
given above.
(7) The Selling Shareholders, when selling securities under this Prospectus,
may sell such securities from time to time with or through broker/dealers
selected by them individually; see "Plan of Distribution." Such
broker/dealers may be compensated by receiving discounts from market price
on the securities sold to them or by the payment of commissions and fees in
amounts to be determined by negotiations between the Selling Shareholders
and their respective broker/dealers from time to time. In connection with
the sale of securities under this Prospectus, the broker/dealers selected
by the Selling Shareholders may be deemed to be underwriters within the
meaning of the Securities Act of 1933, in which event brokerage commissions
or discounts received by such broker/dealers may be deemed to be
underwriting compensation. The Selling Shareholders may agree to indemnify
their respective broker/dealers against certain liabilities, including
liabilities under the Securities Act of 1933.
(8) This assumes that none of the Warrants is exercised.
(9) This assumes that all of the Warrants are exercised and all of the shares
issued upon exercise thereof are sold by the Selling Shareholders.
(10) Represents the difference between the closing price of the Common Stock on
Nasdaq given above and the exercise price of the Warrants.
The date of this Prospectus is ________________, 1996
<PAGE> 4
upon exercise of the Warrants, 100,000 shares of Common Stock issued upon
exercise of the Class F Warrants of the Company, 247,095 shares of Common Stock
issued upon exercise of certain Class G Warrants and 100,000 shares of Common
Stock issued upon exercise of Class I Warrants of the Company which may be sold
by the Selling Shareholders hereunder from time to time. See "Selling
Shareholders." The Company will not receive any of the proceeds from the sale of
the Warrants or the Common Stock hereunder. Each Class G Warrant entitles the
holder to purchase, during the period ending February 17, 2000, one share of
Common Stock at $2.724 per share; each Class H Warrant entitles the holder to
purchase, during the period ending June 30, 2000, one share of Common Stock at
$6.05 per share; each Class K Warrant entitles the holder to purchase, during
the period ending November 11, 1996, one share of Common Stock at $6.30 per
share; and each Class L Warrant entitles the holder to purchase, during the
period ending November 11, 1996, one share of Common Stock at $12.60 per share.
The number of shares of Common Stock issuable upon the exercise of the Class L
Warrants may be reduced by a formula dependent on the market price of the Common
Stock provided that a minimum of 25,000 shares will be issued upon expiration of
the Class L Warrants. The exercise price of the Warrants and the number of
shares issuable upon exercise of the Warrants are subject to adjustment in the
event of stock dividends, stock splits, combinations, subdivisions and
reclassifications. The Warrants provide that the Company must register under the
Securities Act of 1933 (the "Act"), the sales of the Warrants, their exercise,
and sales of the Common Stock issuable upon exercise thereof, and maintain such
registration statement in effect until the fifth anniversary of the issuance of
the Class F, G, H and I Warrants and nine months after the date hereof in the
case of the Class K and L Warrants.
The Common Stock is listed on the Nasdaq National Market ("Nasdaq")
under the symbol "NEOP". On May 6, 1996, the closing price for the Common Stock
was $17-5/8.
<PAGE> 5
RISK FACTORS
The securities offered hereby involve a high degree of risk. Each
prospective investor should carefully consider the following risk factors
inherent in and affecting the business of the Company, together with the other
information in this Prospectus, before making an investment decision. The
discussion in this Prospectus contains forward-looking statements that involve
risks and uncertainties. The Company's actual results may differ significantly
from the prospects discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed in "Risk Factors."
EARLY STAGE OF DEVELOPMENT; NO COMMERCIALIZED PRODUCTS
The Company is still in the development stage and has not received
approval to market any of its products. To date, the Company has completed
testing in a pivotal Phase III clinical trial with the Company's lead product,
RIGScan(R) CR49, for the surgical detection of metastatic colorectal cancer in
both the United States and Europe. In addition, the Company has completed
testing in a separate Phase III clinical study for primary colorectal cancer in
the United States. Substantial clinical and statistical analysis of the data
collected from the clinical trials of this product and substantial clinical
trials of the Company's other products must be completed before submissions can
be made to appropriate regulatory authorities. Such analysis and trials require
substantial financial and management resources and could require more time than
is currently estimated. There can be no assurance that the Company will be able
to conclude successfully the clinical tests or development of any of its
proposed products within the Company's expected time frame and budget, if at
all, or that the Company's products will prove to be safe and effective in
clinical trials. There also can be no assurance that the Company will be able to
obtain governmental approval for the commercial marketing and sale of any of its
proposed products. If the Company is unable to conclude successfully the
clinical tests or if the RIGS(R) system does not prove to be safe and effective,
or if the Company does not obtain governmental approval or is otherwise unable
to commercialize the RIGS system successfully, the Company's business, financial
condition and results of operations will be materially adversely affected and
could result in the cessation of the Company's business.
LIMITED REVENUES; CONTINUING NET LOSSES; ACCUMULATED DEFICIT
The Company has a limited history of operations that makes the
prediction of future operating results difficult, if not impossible. The
Company's business, therefore, must be evaluated in light of the risks,
expenses, delays and complications normally encountered by development-stage
companies in the highly competitive biomedical industry, which is characterized
by a high rate of failure. Since its inception in 1983, the Company has been
primarily engaged in research and development of the RIGS technology. The
Company has experienced significant operating losses in each year since
inception, and had an accumulated deficit of $43.1 million as of December 31,
1995. For the years ended December 31, 1993, 1994 and 1995, the Company's net
losses were $8.0 million, $10.6 million, and $10.8 million, respectively. The
Company expects operating losses to increase as research and development and
clinical trial efforts expand. The Company's ability to achieve profitable
operations is dependent on obtaining regulatory approval of its products and
making the transition to a manufacturing and marketing company. There can be no
assurance that the Company will ever achieve a profitable level of operations.
DEPENDENCE UPON PRINCIPAL PRODUCT LINE; UNCERTAINTY OF MARKET ACCEPTANCE
The Company's future success is dependent upon obtaining regulatory
approvals to market, and achieving market acceptance of, the Company's proposed
RIGS products, which represent the Company's principal proposed product line.
There can be no assurance that the Company will receive approval from the United
States Food and Drug Administration ("FDA") to market any of its RIGS products.
Moreover, achieving market acceptance for the RIGS products, if approved, will
require significant efforts and expenditures to create awareness and demand for
the RIGS products by surgeons, nuclear medicine departments of hospitals,
oncologists and, possibly, cancer patients. Widespread use of the Company's RIGS
products would require the training of numerous physicians, and the time
required to complete such training could result in a delay or dampening of
market acceptance. There can be no assurance that the Company's initial proposed
commercial products, RIGS products for colorectal cancer, or any other proposed
products will become standard surgical procedure or even generally accepted
medical practice,
-2-
<PAGE> 6
or that the Company will achieve any market penetration. In addition, purchase
decisions are greatly influenced by health care administrators who are subject
to increasing pressures to reduce costs. Healthcare administrators must
determine that the Company's products are cost-effective alternatives to current
means of tumor detection. The failure to obtain governmental approvals or
achieve significant market acceptance for such products would have a materially
adverse effect on the Company's business, financial condition and results of
operations.
GOVERNMENT REGULATION
The Company's biologic products will require a regulatory license to
market by the FDA and by comparable agencies in foreign countries. In addition,
various federal, state and foreign statutes also govern or influence the
manufacture, safety, labeling, storage, record keeping and marketing of such
products. The process of obtaining regulatory licenses and approvals is costly
and time consuming, and the Company has encountered and may continue to
encounter delays in the completion of testing for certain proposed products.
Future delays could result from, among other things, slower than expected
patient enrollment rates, difficulties in analyzing data from clinical trials or
in validating manufacturing processes, changes in regulatory requirements, a
longer than expected FDA review process and possible additional analysis and
reconciliation of any perceived differences between data generated in Phase I/II
and Phase II clinical trials and data generated in Phase III clinical trials. In
addition, although certain members of management and significant employees and
consultants have had substantial experience in conducting and supervising
clinical trials for pharmaceutical and biomedical products, the Company has not
previously submitted a Product License Application ("PLA") to the FDA or a
dossier to European regulatory agencies for approval of a license to market its
products. There can be no assurance that clinical data collected in the
Company's pivotal Phase III trials will be sufficient to support FDA approval of
licenses for the Company's products or that the FDA will not require additional
information and data, including additional clinical studies, or refuse to file
the application for substantive review. Failure to obtain these licenses and to
commence commercial marketing on a timely basis could jeopardize the Company's
rights under certain of its current or contemplated contractual arrangements for
the supply of necessary components of its RIGS products and would have a
material adverse effect on the Company's business, financial condition and
results of operations. Moreover, foreign and domestic approvals, if granted, may
include significant limitations on uses of the products. Further, even if such
regulatory approval is obtained, use of the Company's products could reveal side
effects that, if serious, could result in suspension of existing licenses and
delays in obtaining licenses in other jurisdictions. A marketed product,
manufacturer and manufacturing facilities are subject to continual review and
periodic inspections, and later discovery of previously unknown problems with a
product, manufacturer or facility may result in restrictions on such product or
manufacturer, including withdrawal of the product from the market. Noncompliance
with applicable governmental requirements can result in import detentions,
fines, civil penalties, injunctions, suspensions or loss of regulatory
approvals, recall or seizure of the Company's products, operating restrictions,
government refusal to approve product export applications or to allow the
Company to enter into supply contracts, and criminal prosecution. Additional
governmental regulation may be established which could prevent or delay
regulatory approval of the Company's products. Any delays or failure to receive
required approvals or limiting conditions on approvals could materially
adversely affect the Company's business, operating results and financial
condition.
In addition to regulations enforced by the FDA, the manufacture,
distribution and use of Neoprobe's products are also subject to regulation by
the Nuclear Regulatory Commission, the Department of Transportation and other
federal, state and local government authorities. Neoprobe and/or its
manufacturer of the radiolabeled antibodies must obtain a specific license from
the Nuclear Regulatory Commission to manufacture and distribute radiolabeled
antibodies as well as comply with all applicable regulations. Neoprobe must also
comply with Department of Transportation regulations on the labeling and
packaging requirements for shipment of radiolabeled antibodies to licensed
clinics, and must comply with federal, state and local governmental laws
regarding the disposal of radioactive waste. There can be no assurance that the
Company will obtain all necessary licenses and permits and be able to comply
with all applicable laws, the failure of which would have a materially adverse
effect on the Company's business, financial condition and results of operations.
-3-
<PAGE> 7
NO ASSURANCE OF CONTINUED RIGHTS TO TARGETING AGENTS; ROYALTY PAYMENTS
Targeting agents, such as monoclonal antibodies or peptides which are
able to bind specifically to tumor antigens or receptors, are essential to the
Company's technology and the Company's ultimate success. The targeting agents
used by the Company in its research and clinical studies and as components of
its proposed RIGS products are the patented or proprietary technology of others.
The Company must purchase the rights to those targeting agents or must obtain
rights to use them through license agreements with their owners. There can be no
assurance that such arrangements will continue or that they will continue on
terms acceptable to the Company. Furthermore, license agreements typically
impose obligations to diligently develop commercial products and to pay
royalties on those products. Failure to perform such obligations may lead to the
termination of such license agreements. Loss of the Company's rights to
targeting agents for any reason (including, in the case where the Company is a
sublicensee of the targeting agents, a breach by a sublicensor under its
agreement with the owner of a targeting agent) or the inability to obtain
necessary rights on acceptable terms could have a material adverse effect on the
Company's business, financial condition and results of operations. Moreover,
there can be no assurance that improved targeting agents will not be developed
by other entities for which the Company will be required to seek satisfactory
additional license arrangements. If such licenses cannot be readily obtained,
the Company could encounter delays in product market introductions or could find
that the development, manufacture or sale of products requiring such licenses
could be foreclosed, which could have a material adverse impact on the Company's
business, operating results and financial condition. Upon commercialization of
the Company's products, the Company will be required to make royalty payments
pursuant to its existing and contemplated license agreements which could
adversely impact the Company's operating results.
PATENTS, PROPRIETARY TECHNOLOGY AND TRADE SECRETS
The Company's success depends, in part, on its ability to secure patent
protection and maintain trade secret protection, and on its ability to operate
without infringing on the patents of third parties. The Company has received 10
United States patents, including U.S. Patent No. 4,782,840, which relates to the
RIGS system surgical method and holds one additional patent jointly with The
Ohio State University Research Foundation ("OSURF"). The Company has filed
applications for certain additional United States and foreign patents. There can
be no assurance, however, that the patents for which the Company has applied
will be issued to the Company. Moreover, the Company believes that some of the
technology it develops will not be patentable in certain foreign markets. The
patent positions of biotechnology firms, including the Company, are highly
uncertain and involve complex legal and factual questions. To date, a consistent
and predictable application of United States patent laws regarding the grant and
interpretation of patent claims in the area of biotechnology has not evolved.
There can be no assurance that any of the Company's patents or patent
applications will not be challenged, invalidated, or circumvented in the future.
In addition, there can be no assurance that competitors, many of which have
substantially more resources than the Company and have made substantial
investments in competing technologies, will not seek to apply for and obtain
patents that will prevent, limit, or interfere with the Company's ability to
make, use, or sell its products either in the United States or internationally.
Patent applications in the United States are maintained in secrecy
until patents issue, and patent applications in foreign countries are maintained
in secrecy for a period after filing. Publications of discoveries in the
scientific or patent literature tend to lag behind actual discoveries and the
filing of related patent applications. Patents issued and patent applications
filed relating to medical devices are numerous and there can be no assurance
that current and potential competitors and other third parties have not filed or
will not file in the future applications for, or have not received or in the
future will not receive, patents or obtain additional proprietary rights
relating to products or processes used or proposed to be used by the Company.
The Company's U.S. Patent No. 4,782,840 includes claims to surgical
procedures having a number of steps, including, for example, the step of
administering an effective amount of an antibody specific for cancer tissue,
labeled with a radioactive isotope. The claims also include the step of delaying
surgery for a time interval following the administration step to permit the
radiolabeled antibody to concentrate preferentially in any cancer tissue that is
present and for the unbound radiolabeled antibody in the blood pool to be
cleared to a blood pool background level, so as to increase the ratio of
radiation from cancer tissue to background radiation. There can be no assurance
that
-4-
<PAGE> 8
potential competitors will not promote surgical procedures that do not include
one or more of the steps recited in the claims of U.S. Patent No. 4,782,840,
including the aforementioned steps.
The Company also relies upon trade secrets, technical know-how, and
continuing technological innovation to develop and maintain its competitive
position. The Company typically requires its employees, consultants, and
advisors to execute confidentiality and assignment of inventions agreements in
connection with their employment, consulting, or advisory relationships with the
Company. There can be no assurance, however, that these agreements will not be
breached or that the Company will have adequate remedies for any breach.
Further, there also can be no assurance that others will not gain access to the
Company's trade secret information or independently develop or acquire the same
or equivalent trade secret information. Certain of the research activities
relating to the development of antibody technology that may be components of the
Company's proposed RIGS products were conducted by agencies of the United States
government. When the United States government participates in research
activities, it retains certain rights that include the right to use the
technologies for governmental purposes under a royalty-free license, as well as
rights to use and disclose technical data and computer software that could
preclude the Company from asserting trade secret rights in that data and
software.
The Company has not been notified by any third party that the Company's
products and procedures infringe any valid, enforceable claim of any patent
owned by others. Any such claim, however, whether with or without merit, could
be time-consuming and expensive to respond to and could divert the Company's
technical and management personnel. The Company may become involved in
litigation to defend against claims of infringement made by others, to enforce
patents issued to the Company, or to protect trade secrets of the Company. If
any relevant claims of third-party patents are upheld as valid and enforceable
in any litigation or administrative proceeding against the Company, the Company
could be prevented from practicing the subject matter claimed in such patents,
or would be required to obtain licenses from such patent owners, or to redesign
its products and processes to avoid infringement. There can be no assurance that
the Company will be able to obtain acceptable licenses or rights, if at all, to
other patents which the Company deems necessary for its operations. Accordingly,
an adverse determination in a judicial or administrative proceeding or failure
to obtain necessary licenses could prevent the Company from manufacturing and
selling its products, which would have a material adverse effect on the
Company's business, financial condition, and results of operations. The Company
intends to vigorously protect and defend its intellectual property. Costly and
time-consuming litigation brought by the Company may be necessary to enforce
patents issued to the Company, to protect trade secrets or know-how owned by the
Company, or to determine the enforceability, scope, and validity of the
proprietary rights of others.
LIMITED THIRD PARTY REIMBURSEMENT
The Company's products will be marketed to hospitals and other users
that bill various third-party payors, including government programs, such as
federal Medicare and state Medicaid, and private insurance plans, for the health
care services provided to their patients. Third-party payors carefully review
and are increasingly challenging the prices charged for medical products and
services. Although the Company intends to establish the prices for its products
according to criteria believed to be acceptable to third-party payors, there can
be no assurance that such payors will not deny reimbursement on the basis that
the Company's products are not in accordance with established payor policies
regarding cost-effective treatment methods. There can be no assurance that the
Company would be able to provide economic and medical data to overcome any
third-party payor objections.
In foreign markets, reimbursement is obtained from a variety of sources,
including governmental authorities, private health insurance plans, and labor
unions. In most foreign countries, there are also private insurance systems that
may offer payments for alternative therapies. Although not as prevalent as in
the United States, health maintenance organizations are emerging in certain
European countries. The Company may need to seek international reimbursement
approvals, although there can be no assurance that any such approvals will be
obtained in a timely manner or at all. Failure to receive international
reimbursement approvals could have an adverse effect on market acceptance of the
Company's products in the international markets in which such approvals are
sought.
There can be no assurance, with respect to either United States or foreign
markets, that third-party reimbursement and coverage on newly approved products
will be available or adequate, that current reimbursement policies
-5-
<PAGE> 9
of third-party payors will not be decreased in the future or that future
legislation, regulation, or reimbursement policies of third-party payors will
not otherwise adversely affect the demand for the Company's products or its
ability to sell its products on a profitable basis. If third-party payor
coverage or reimbursement is unavailable or inadequate, the Company's business,
financial condition, and results of operations could be materially adversely
affected.
COMPETITION
The biotechnology industry is characterized by intense competition.
Many companies, research institutes and universities are working in a number of
pharmaceutical or biotechnology disciplines similar to the Company's field of
interest. In addition, many companies are engaged in the development of or
currently offer products which may be or are competitive with the Company's
proposed products. Most of these entities have substantially greater financial,
technical, manufacturing, marketing, distribution or other resources than the
Company. Competing tumor detection technologies include computed tomography
("CT"), magnetic resonance imaging ("MRI") and, more recently,
immunoscintigraphy. The Company may compete against a number of these companies
including: Cytogen Corp., Immunomedics Inc. and NeoRx Corp. One or more of these
or other companies could also design and develop products that compete directly
with the Company's products, in which case the Company would face intense
competition. The Company is aware that other research and testing is being
conducted in Western Europe in connection with the use of radiolabeled targeting
agents and radiation detection probes. There can be no assurance that one or
more of these or other companies will not develop technologies that are more
effective or less costly than the Company's products, or that would otherwise
render the Company's products and technology non-competitive or obsolete. Such
competition could have a material, adverse effect on the Company's business,
financial condition and results of operations.
Any product developed by the Company that gains regulatory approval
will have to compete for market acceptance and market share. An important factor
in such competition may be the timing of market introduction of competitive
products. Accordingly, the relative speed with which the Company can develop
products, complete clinical testing and regulatory approval processes, gain
reimbursement acceptance and supply commercial quantities of the product to the
market are expected to be important competitive factors. In addition, the
Company believes that the primary competitive factors in the market for tumor
detection products are safety, efficacy, ease of delivery, reliability,
innovation and price. The Company also believes that physician relationships and
customer support are important competitive factors. There can be no assurance
that the Company's competitive position will be maintained or that the Company's
intraoperative detection products for the treatment of cancer will be introduced
or marketed in a timely fashion or that any such products will achieve
significant market acceptance. In such event, the Company's business, operating
results and financial condition could be materially adversely affected.
RISK OF TECHNOLOGICAL OBSOLESCENCE
The medical device industry is characterized by rapid and significant
technological change. There can be no assurance that third parties will not
succeed in developing or marketing technologies and products that are more
effective than those developed or marketed by the Company or that would render
the Company's technology and products obsolete or noncompetitive. Additionally,
new surgical procedures and medications could be developed that replace or
reduce the importance of current procedures that use the Company's products.
Accordingly, the Company's success will depend in part on its ability to respond
quickly to medical and technological changes through the development and
introduction of new products. Product development involves a high degree of risk
and there can be no assurance that the Company's new product development efforts
will result in any commercially successful products. In such event, the
Company's business, operating results and financial condition could be
materially adversely affected.
LIMITED MARKETING EXPERIENCE
The Company has limited experience in sales, marketing or distribution
of any of its products. In order to commercialize its products, the Company may
need to enter into one or more agreements providing for the marketing of the
RIGS products by third parties. Although the Company has engaged in discussions
with third parties, no
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<PAGE> 10
agreements have been executed for marketing of RIGS products in North America or
Europe and there can be no assurance that the Company will be able to enter into
marketing agreements on terms favorable to the Company. If the Company is unable
to secure one or more agreements with third parties for the marketing of its
proposed products, the Company will have to perform such marketing function
itself, a function which the Company has not undertaken in the past. There can
be no assurance that the Company could market its products successfully in the
future. In such event, the Company's business, operating results and financial
condition could be materially adversely affected.
LIMITED MANUFACTURING CAPACITY AND EXPERIENCE
To date, the Company's manufacturing activities have consisted
primarily of manufacturing limited quantities of products for use in laboratory
testing and clinical trials. In the event that sales of the Company's products
increase substantially, the Company must manufacture or have others manufacture
its RIGS products, including targeting agents, in commercial quantities at an
acceptable cost. If the Company scales up manufacturing its products, there can
be no assurance that the Company will not encounter difficulties such as
problems involving product yields, quality control and assurance, supplies of
components, and shortages of qualified personnel. Moreover, in order to
assemble, complete, package and distribute its RIGS products in commercial
quantities, the Company will have to maintain a current Good Manufacturing
Practices ("GMP") facility to manufacture its products or engage independent
contractors to manufacture such products. The GMP facility will have to adhere
to GMP regulations and to guidelines enforced by the FDA and other regulatory
agencies through their facilities inspection programs. If such an inspection by
the FDA or another regulatory agency results in a requirement for additional
modifications to the facility, the Company's ability to manufacture its products
could be adversely affected. There can be no assurance that the Company will be
able to develop and maintain a GMP facility or engage independent contractors at
a cost acceptable to the Company.
The Company uses or relies on certain components and services used in
its devices that are provided by sole source suppliers. Although the Company has
identified primary and alternative vendors, the qualification of additional or
replacement vendors for certain components or services is a lengthy process. Any
significant supply interruption would have a material adverse effect on the
Company's ability to manufacture its products and, therefore, would have a
material adverse effect on its business, financial condition, and results of
operations.
The Company expects to manufacture its products based on forecasted
product orders. Lead times for materials and components used by the Company vary
significantly, and depend on factors such as the business practices of the
specific supplier, contract terms, and general demand for a component at a given
time. As a result, there is a risk of excess or inadequate inventory if orders
do not match forecasts.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the shares of Common Stock of the Company, like
that of the securities of many other biotechnology companies, has been and is
likely to continue to be highly volatile. For example, the closing price for
shares of the Company's Common Stock for the last 18 months has been as high as
$22.00 and as low as $1.19. Factors such as the results of preclinical and
clinical trials by the Company or its competitors, other evidence of the safety
and efficacy of the Company's or competitors' products, announcements of
technological innovations or new commercial products by the Company or its
competitors, changes in securities analysts' estimates or recommendations,
governmental regulation, developments in patent or other proprietary rights of
the Company or its competitors, and fluctuations in the Company's operating
results may have a significant effect on the market price of the Common Stock.
In addition, the stock market has experienced and continues to experience
extreme price and volume fluctuations which have affected the market price of
many biotechnology companies and which have often been unrelated to the
operating performance of these companies. These broad market fluctuations, as
well as general economic and political conditions, may adversely affect the
market price of the Common Stock. On April 12, 1996, the Company had 19,625,405
shares of Common Stock outstanding almost all of which are freely tradeable. As
of March 31, 1996, the Company had 2,661,573 warrants to purchase Common Stock,
including 2,299,304 Class E Redeemable Common Stock Purchase Warrants
outstanding. The Class E warrants are exercisable at $6.50 per share and it is
expected that they will be exercised on or before their expiration date of
November 10, 1996. The remaining outstanding warrants to purchase 512,269 shares
of Common Stock have a
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<PAGE> 11
weighted average exercise price of $6.30 per share. In addition, the Company has
100,000 shares of Common Stock held in escrow issuable upon conversion of
outstanding convertible debentures. The expiration dates of these warrants range
from November 10, 1996 to January 2001. The exercise of these warrants and the
sale of the shares so purchased could have a material adverse effect on the
market price of the Common Stock. At March 31, 1996, Neoprobe had outstanding
options to purchase 1,970,237 shares of Common Stock to its employees, directors
and consultants under the Company's Incentive Stock Option and Restricted Stock
Purchase Plan.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF CAPITAL FUNDING
To date, the Company's capital requirements have been significant. The
Company is dependent on the proceeds of sales of its securities and other
financing vehicles to continue clinical testing of its proposed products and to
fund its working capital requirements. The Company believes that the funds it
has on hand will satisfy its cash needs during 1996 and 1997. Obtaining
approvals to market is costly and time consuming and the Company may require
significant funds in addition to the proceeds of the sale of Common Stock and
its current cash resources to sustain its operations and to obtain regulatory
approval to commercialize any of its proposed products. No assurance can be
given that the necessary additional financing will be available to the Company
on acceptable terms, if at all, or that such financing would not result in
further dilution to the holders of the Company's equity securities. The
Company's ability to raise additional financing may be dependent on many factors
beyond the Company's control, including the state of capital markets and the
rate of progress of the Company's clinical trials. If additional funding is
unavailable to the Company when needed, the Company will be required to curtail
significantly one or more of its research and development programs and the
Company's business and financial condition will be materially adversely
affected.
PRODUCT LIABILITY
The testing, marketing and sale of the Company's proposed products
could expose the Company to liability claims. The Company currently has $5
million of liability insurance, which the Company believes is adequate for its
current clinical activities. The Company intends to increase such coverage prior
to commercialization of its proposed products. There can be no assurance,
however, that the Company will be able to obtain such additional insurance at a
reasonable cost, if at all, or that such insurance, in combination with the
Company's existing insurance, would be sufficient to cover any liabilities
resulting from any product liability claims or that the Company would have funds
available to pay any claims over the limits of its insurance. Either an
underinsured or an uninsured claim could have a material adverse effect on the
Company's business, operating results and financial condition.
DEPENDENCE ON KEY PERSONNEL; ABILITY TO ATTRACT NEW PERSONNEL; POSSIBLE
CONFLICTS OF INTEREST
John L. Ridihalgh and David C. Bupp are key employees of the Company
and the loss of the services of either one of them could substantially delay the
achievement of the Company's goals. The Company carries "key man" life insurance
with a death benefit of $1.0 million on each of them. The Company has entered
into employment agreements with each of these individuals pursuant to which,
among other things, these individuals have agreed not to compete with the
Company for specified periods. The Company's success is dependent on its ability
to attract and retain additional technical and management personnel with
expertise in several technical and scientific disciplines and experience in the
regulatory approval process. The competition for qualified personnel in the
biomedical industry is intense and, accordingly, there can be no assurance that
the Company will be successful in hiring or retaining the requisite personnel.
In addition, the Company will rely on certain of its non-employee directors and
members of its Scientific Advisory Board to assist the Company in formulating
and pursuing its research and commercialization strategy. These directors and
members of the Scientific Advisory Board are and will be employed by entities
other than the Company and may serve as directors of or have a commitment to or
consulting or advisory contracts with other entities, including potential
competitors of the Company. Although the Company has confidentiality agreements
with these directors and with each member of its Scientific Advisory Board,
conflicts of interest may arise between those persons and the Company, which
conflicts may not necessarily be resolved in favor of the Company.
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<PAGE> 12
NEED TO MANAGE A CHANGING BUSINESS
In order to compete effectively against current and future competitors,
complete clinical trials in progress, prepare additional products for clinical
trials, and develop future products, the Company believes that it must continue
to expand its operations, particularly in the areas of research and development,
manufacturing and marketing. If the Company were to experience significant
growth in the future, such growth would likely result in new and increased
responsibilities for management personnel and place significant strain upon the
Company's management, operating and financial systems and resources. To
accommodate such growth and compete effectively, the Company must continue to
implement and improve information systems, procedures and controls, and to
expand, train, motivate, and manage its work force. The Company's future success
will depend to a significant extent on the ability of its current and future
management personnel to operate effectively, both independently and as a group.
There can be no assurance that the Company's personnel, systems, procedures and
controls will be adequate to support the Company's future operations. Any
failure to implement and improve the Company's operational, financial, and
management systems or to expand, train, motivate or manage employees could have
a material adverse effect on the Company's business, financial condition and
results of operations.
ANTI-TAKEOVER PROVISIONS; BLANK CHECK PREFERRED STOCK
The Company has adopted a stockholder rights plan. Certain provisions
of the stockholder rights plan and certain of the Company's charter provisions
and applicable corporate laws could be used to hinder or delay a takeover bid
for the Company. Such provisions may inhibit takeover bids and decrease the
chance of stockholders realizing a premium over market price for their Common
Stock as a result of a takeover. The Company's Certificate of Incorporation
authorizes the issuance of "blank check" preferred stock with such designations,
rights, preferences and restrictions as may be determined from time to time by
the Board of Directors, 500,000 shares of which have been designated as Series A
Junior Participating Preferred Stock and reserved for issuance pursuant to the
Company's stockholder rights plan. If the Company issues Preferred Stock, the
issuance could be used to thwart a takeover bid and may have a dilutive effect
upon the Company's common stockholders, including the purchasers of the
securities offered hereby. See "Description of Securities."
NO DIVIDENDS
The Company has never paid dividends on its Common Stock. The Company
intends to retain any future earnings to finance its growth. Accordingly, any
potential investor who anticipates the need for current dividends from its
investment should not purchase any of the Common Stock offered hereby.
LITIGATION
The Company has been named as an additional party defendant in the In
re Blech Securities litigation pending in the United States District Court for
the Southern District of New York before Judge Robert Sweet. The plaintiffs are
eight named individuals who are alleged to be representatives of a class of
securities purchasers. The defendants include David Blech, who was a principal
stockholder of the Company until September 1994, Mark Germain, who was a
director of the Company until September 1994, D. Blech & Co., a registered
broker-dealer owned by Mr. Blech, trustees of certain trusts established by Mr.
Blech, Bear Stearns & Co., Baird Patrick & Co., Parag Saxena and Chancellor
Capital Corp., as well as the Company and 10 other corporations of which Mr.
Blech was a principal stockholder (the "Corporate Defendants"). The complaint
alleges that David Blech and D. Blech & Co. conducted a scheme intended to
artificially inflate the prices of securities issued by corporations Mr. Blech
controlled; that Mr. Blech, D. Blech & Co. and corporations controlled by Mr.
Blech gave or sold cheap stock to fund managers in order to induce them to
participate in this scheme; and that David Blech, his trusts, D. Blech & Co.,
Baird Patrick, Bear Stearns, the Corporate Defendants and unnamed other persons
engaged in sham transactions, including "round trip" sales, for the purpose of
artificially inflating trading volumes and securities of corporations controlled
by Mr. Blech and maintaining their trading prices. The complaint alleges that
David Blech was the controlling person and Mark Germain was a director of the
Corporate Defendants and that the knowledge and participation of Messrs. Blech
and Germain in the alleged scheme are the responsibility of the Corporate
Defendants. The complaint also alleges that the Corporate Defendants actively
engaged in the alleged scheme and benefited from it. The complaint further
alleges that all of the defendants engaged in a conspiracy to manipulate
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<PAGE> 13
the market and failed to disclose truthful information about the true value of
securities issued by corporations controlled by Mr. Blech. The complaint alleges
violations of Securities and Exchange Commission Rule 10b-5 and common law fraud
by all defendants, violations of the Racketeer Influenced Corrupt Organizations
Act (RICO) by defendants other than the Corporate Defendants and liability under
Securities Exchange Act Section 20(a), as the liability of controlling persons,
by Messrs. Blech and Germain and D. Blech & Co., Baird Patrick and Bear Stearns.
The amount of damages requested is not specified in the complaint. The Company
has rejected the allegations of the complaint that apply to it and intends to
vigorously defend itself against this action. The Company believes that the
allegations of the complaint that apply to it are without merit. There can be no
assurance that this litigation will be concluded in a manner that is favorable
to the Company. Even if the litigation is determined favorably to the Company,
the expenses of, and executive time consumed in, defending the litigation may
have a material adverse effect on the Company's ability to complete its research
and development efforts.
THE COMPANY
Neoprobe was incorporated in the State of Ohio in 1983 and
reincorporated in the State of Delaware in 1988. The Company's executive offices
are located at 425 Metro Place North, Dublin, Ohio 43017-1367. Its telephone
number at that address is (614) 793-7500.
USE OF PROCEEDS
The Company expects to allocate the proceeds of the exercise of the
Warrants to conduct clinical trials, to provide regulatory, scientific and other
support to its product development program, and for general working capital
purposes including general and administrative expenses and equipment purchases.
The Company also may use portions of such proceeds to acquire, by license,
purchase or other arrangement, business, technologies or products which
complement the Company's business. The Company does not have any such
arrangement or understanding at the present time, and is not currently engaged
in any discussions or negotiations with respect to any such acquisitions, nor
can there be any assurances that any such acquisition will or will not be made.
The allocation of the net proceeds of the exercise of the Warrants and
the Company's other capital resources among its various product development
programs and other projects is based on certain assumptions, including the
expected progress of the Company's clinical trials and the FDA approval of its
RIGScan CR49 product, and is subject to change at the Company's discretion. The
foregoing represents the Company's best estimate of its allocation of the net
proceeds of the exercise of the Warrants based on the current state of its
business operations and current business plan and current economic and industry
conditions, and such estimate is subject to a reapportionment of proceeds among
categories listed above or a reapportionment to new categories. The amount and
timing of expenditures will vary depending on a number of factors, including the
progress of development of the Company's products, the availability of other
funding from third parties, governmental regulation, technological advances and
changing competitive conditions, and determinations with respect to the
commercial potential of the Company's products. In particular, proceeds
allocated to research and development may be reallocated depending on the
progress of the research efforts and the presently unknowable results of
scientific investigations. Pending such uses, the net proceeds of the exercise
of the Warrants will be invested in interest-bearing deposit accounts,
certificates of deposit or similar short-term, investment-grade financial
instruments.
In light of the uncertainties associated with obtaining FDA approval of
the Company's RIGScan CR49 product and other products, among other things, there
can be no assurance that the proceeds from the exercise of Warrants and other
capital resources will satisfy the Company's funding requirements during the FDA
review period. There can be no assurance that any additional financing, if
required, will be obtainable at the times, in the amounts, or on terms that meet
the Company's needs or are acceptable to the Company.
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<PAGE> 14
SELLING SHAREHOLDERS
The Selling Shareholders are offering certain Warrants or the
shares of Common Stock issued upon exercise thereof for sale hereby. The names
of the Selling Shareholders, the number of Warrants owned, and the number of
shares of Common Stock issuable upon exercise of Warrants owned by each of them
and the number of shares of Common Stock or Warrants offered hereunder is set
forth in the table below. The shares of Common Stock offered hereunder will be
sold from time to time at the Selling Shareholder's discretion and the number of
shares of Common Stock and Warrants to be owned by the Selling Shareholders
after sale hereunder and the percent of class at that time cannot be determined
currently by the Company.
<TABLE>
<CAPTION>
Amount Owned
---------------------------------------------------------
No. of
Shares No. of
Issuable Shares or
Percent No. of No. of No. of No. of Upon Warrants
No. of of Class G Class H Class K Class L Exercise of Saleable
Name Shares Class Warrants Warrants Warrants Warrants Warrants Hereunder
---- ------ ----- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Preston K. Tsao.......... 2,000 * 52,905 16,650 69,555 69,555
Paul A. Scharfer......... 28,275 28,275 28,275
Derek Caldwell........... 5,000 * 5,000
Nathan A. Low............ 364,745 * 54,075 54,075 418,820
Enzon, Inc............... 50,000 100,000 150,000 150,000
</TABLE>
* less than 1%
Nathan Low is an affiliate of Sunrise Securities Corp. (f/k/a SFG
Brokerage, Inc.) ("Sunrise"), which acted as a selected dealer for the Company
in a private placement of Common Stock and Warrants in November 1993, and as a
participating broker in public offerings of Common Stock in February 1995, June
1995, and September 1995. Sunrise Financial Group, Inc., an affiliate of Nathan
Low, provides the Company with public relations and consulting services in which
capacity it received $192,500 in fees plus expenses during 1993 and 1994.
Pursuant to an agreement entered into in September 1993, such affiliate was paid
at the rate of $5,000 per month plus expenses and received five-year warrants to
purchase 100,000 shares of Common Stock (Class F Warrants). This agreement was
renewed in April 1995, and such affiliate, commencing June 1995, has been paid
at the rate of $8,000 per month and received additional three year warrants to
purchase 100,000 shares of Common Stock (Class I Warrants). In addition to such
warrants, affiliates of Sunrise own 371,745 shares of Common Stock and warrants
to purchase 151,905 shares of Common Stock. Messrs. Low, Tsao, Scharfer and
Caldwell are registered representatives of Sunrise.
The Company issued a promissory note to Enzon, Inc. ("Enzon") in the
principal amount of $400,000 as part of the consideration for a license to the
Company of certain of Enzon's proprietary technology. Enzon had the right to
convert the note into five year warrants to purchase 50,000 shares of Common
Stock at an exercise price of $6.30 per share and 100,000 shares of Common Stock
at an exercise price of $12.60 per share. The Company had the right to terminate
the license agreement under certain circumstances, in which event the note would
have been cancelled and Enzon would have received warrants to purchase 50,000
shares of Common Stock for $6.30 per share at any time within four years of the
date of termination.
In order to settle disputes about the performance of the license
agreement and the related product development agreement, Enzon and Neoprobe
entered into an amendment to the license agreement on March 28, 1996 under which
Enzon returned the promissory note to Neoprobe and Neoprobe issued the Class K
and L Warrants to Enzon. The product development agreement was cancelled, but
the license agreement continues in effect.
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<PAGE> 15
PLAN OF DISTRIBUTION
The securities sold hereunder may be sold from time to time by the
Selling Shareholders or by their pledgees, donees, executors, trustees or other
successors or personal representatives. The Selling Shareholders, when selling
securities under this Prospectus, will sell such securities from time to time
with or through broker/dealers selected by them individually, through ordinary
transactions on Nasdaq, or other markets on which the Company's securities are
traded from time to time, secondary distributions, exchange distributions or
special offerings in accordance with the rules of the National Association of
Securities Dealers in which such broker/dealers may act as principal or agent,
block trades in accordance with the rules of the National Association of
Securities Dealers in which such broker/dealers may attempt to sell such
securities as agent and may position and resell all or a portion of the block as
principal to facilitate the transactions or a combination of such methods of
sale. Securities sold hereunder may also be sold in privately negotiated
transactions off of Nasdaq, which need not be consummated through
broker/dealers. The shares are expected to be sold at market related prices
prevailing at the time of sale. Broker/dealers will be compensated by the
payment of commissions and fees in amounts to be determined by negotiations
between the Selling Shareholders and their respective broker/dealers from time
to time.
In connection with the sale of securities under this Prospectus, the
broker/dealers selected by the Selling Shareholders may be deemed to be
underwriters within the meaning of the Act, in which event brokerage commissions
or discounts received by such broker/dealers may be deemed to be underwriting
compensation. The Selling Shareholders may agree to indemnify their respective
broker/dealers against certain liabilities, including liabilities under the Act.
The Selling Shareholders may, if they so choose, sell their securities under
this Prospectus or may sell their securities under Rule 144 if such securities
and such sale meet the conditions of such Rule.
DESCRIPTION OF SECURITIES
Neoprobe is authorized to issue 50,000,000 shares of Common Stock, par
value $.001 per share, 19,625,405 shares of which were outstanding as of April
12, 1996 and 5,000,000 shares of Preferred Stock, par value $.001 per share,
none of which is outstanding. The following brief description of the capital
stock of Neoprobe is qualified in its entirety by reference to Neoprobe's
Restated Certificate of Incorporation, a copy of which is on file with the
Securities and Exchange Commission.
COMMON STOCK
All outstanding shares of Common Stock are, and the shares of Common
Stock issuable in this offering will be, upon receipt of payment therefor and
delivery thereof, duly authorized, validly issued, fully paid and nonassessable.
Each share of Common Stock entitles the holder thereof to one vote on all
matters submitted to a vote of the stockholders including the election of
directors. Since the holders of Common Stock do not have cumulative voting
rights, the holders of a simple majority of the outstanding shares have the
power to elect all of the directors to be elected at a given meeting and the
holders of the remaining shares by themselves would not be able to elect any
directors at that meeting. See "Risk Factors -- Anti-Takeover Provisions; Blank
Check Preferred Stock." The holders of Common Stock do not have preemptive,
redemption or conversion rights. Holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors, from time
to time, out of funds legally available therefor. See "Risk Factors -- No
Dividends." If Neoprobe is liquidated, dissolved, or wound up, holders of the
Common Stock have the right to receive a ratable portion of the assets remaining
after the payment of creditors and the holders of the shares of any class or
series of Preferred Stock to the extent that the then existing terms of the
Preferred Stock grant them priority over the holders of shares of Common Stock.
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<PAGE> 16
THE WARRANTS
The following table sets forth certain information concerning the
Warrants. Each warrant entitles the holder to purchase one share of Common Stock
at the then current exercise price when exercised after the date it was first
exercisable and on or before the expiration date.
<TABLE>
<CAPTION>
Current
Number of Exercise Expiration
Title Warrants(a) Price(a) Date
- ----- ----------- -------- ----
<S> <C> <C> <C>
Class G 52,905(b) $2.724 2/17/00
Class H 99,000 $ 6.05 6/30/00
Class K 50,000 $ 6.30 11/10/96
Class L 100,000(c) $12.60 11/10/96
</TABLE>
- --------------
(a) Subject to adjustment for splits and combinations of Common Stock.
(b) 300,000 Class G Warrants were originally issued, 247,095 of which have been
exercised.
(c) The number of Class L Warrants which may be exercised will be decreased if
the closing price of Common Stock on the day after Neoprobe notifies Enzon of
the effectiveness of the Registration Statement of which this Prospectus is Part
I is greater than $17.70 so that the total difference between the closing price
and the exercise price of all of the Class K and Class L Warrants will not
exceed $1,080,000 unless the closing price exceeds $22.80 at which price and
above the Class L Warrants will be exercisable for a maximum of 25,000 shares.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance of
"blank check" Preferred Stock in one or more classes or series with such
designations, rights, preferences and restrictions as may be determined from
time to time by the Board of Directors, 500,000 shares of which have been
designated as Series A Junior Participating Preferred Stock ("Series A Preferred
Stock") and reserved for issuance pursuant to the stockholder rights plan
described below. As of the date hereof, there are no shares of Preferred Stock
outstanding. The Board of Directors may, without prior stockholder approval,
issue Preferred Stock with dividend, liquidation, conversion, voting or other
rights which could adversely affect the relative voting power or other rights of
the holders of Common Stock. Preferred Stock could be used, under certain
circumstances, as a method of discouraging, delaying, or preventing a change in
control of Neoprobe. Although Neoprobe has no present intention of issuing any
shares of Preferred Stock, there can be no assurance that it will not do so in
the future. If Neoprobe issues Preferred Stock, such issuance may have a
dilutive effect upon the common stockholders, including the purchasers of the
securities offered hereby. See "Risk Factors -- Anti-Takeover Provisions; Blank
Check Preferred Stock."
OPTIONS AND WARRANTS
As of March 31, 1996, the Company had 2,299,304 Class E Redeemable
Common Stock Purchase Warrants outstanding. The warrants are exercisable at
$6.50 per share and it is expected that they will be exercised on or before
their expiration date of November 10, 1996. At March 31, 1996, Neoprobe had
outstanding options to purchase 1,970,237 shares of Common Stock to its
employees, directors and consultants under the Company's Incentive Stock Option
and Restricted Stock Purchase Plan. At March 31, 1996, the Company had
outstanding warrants (including the Warrants) to purchase 512,269 shares of
Common Stock having a weighted average exercise price of $6.30 per share. In
addition, the Company has 100,000 shares of Common Stock held in escrow issuable
upon conversion of outstanding convertible debentures. The expiration dates of
these warrants range from November 10, 1996 to January 2001. To the extent that
such options and warrants are exercised, the interests of the Company's
stockholders will be diluted.
STOCKHOLDER RIGHTS PLAN
Adoption of the Stockholder Rights Plan. On July 18, 1995, the Board of
Directors adopted a stockholder rights plan for the Company. The purpose of the
stockholder rights plan is to protect the interests of the Company's
stockholders if the Company is confronted with coercive or unfair takeover
tactics by encouraging third parties interested in acquiring the Company to
negotiate with the Board of Directors.
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<PAGE> 17
The stockholder rights plan is a plan by which the Company has
distributed rights ("Rights") to purchase (at the rate of one Right per share of
Common Stock) one hundredth of a share of Series A Preferred Stock at an
exercise price of $35 per Right. The Rights are attached to the Common Stock and
are not exercisable until after 15 percent of the Common Stock has been acquired
or tendered for. At that point, they would be separately traded and exercisable.
Upon certain events, including a third party crossing the 15 percent threshold,
the Rights would "flip-in" (but not the Rights of such substantial stockholder)
and become Rights to acquire, upon payment of the exercise price, Common Stock
(or, in certain circumstances, other consideration) with a value of twice the
exercise price of the Right. If a third party were to take certain action to
acquire the Company, such as a merger, the Rights would "flip-over" and entitle
the holder to acquire stock of the acquiring person with a value of twice the
exercise price. The Rights are redeemable by the Company at any time before they
become exercisable for $.01 per Right and expire on August 28, 2005. The number
of Rights per share of Common Stock will be adjusted in the future to reflect
future splits and combinations of, and Common Stock dividends on, the Common
Stock. The exercise price of the Rights will be adjusted to reflect changes in
the Series A Preferred Stock.
Series A Preferred Stock. The Series A Preferred Stock purchasable upon
exercise of the Rights will be redeemable at a price equal to 100 times the
current per share market price of the Common Stock at the time of redemption,
together with accrued but unpaid dividends. Each share of Series A Preferred
Stock will have a minimum preferential quarterly dividend of $.05 per share and
will be entitled to an aggregate dividend of 100 times the dividend declared on
the Common Stock. In the event of liquidation, the holders of the Series A
Preferred Stock will receive a preferred liquidation payment equal to $.10 per
share and, after the Common Stock has received a proportionate distribution,
will share in the remaining assets on a proportionate basis with the Common
Stock. If dividends on Series A Preferred Stock are in arrears in an amount
equal to six quarterly dividend payments, all holders of Preferred Stock of the
Company (including holders of Series A Preferred Stock) with dividends in
arrears equal to such amount, voting as a class, would have the right to elect
two directors of the Company. Series A Preferred Stock would rank senior to the
Company's Common Stock, but junior to any other outstanding class of Preferred
Stock of the Company as to both the payment of dividends and the distribution of
assets. Each share of Series A Preferred Stock will have 100 votes on all
matters submitted to the stockholders. In the event of any merger, consolidation
or other transaction in which Common Stock is exchanged, each share of Series A
Preferred Stock will be entitled to receive 100 times the amount received per
share of Common Stock. It was the intention of the Company that each share of
Series A Preferred Stock approximate 100 shares of Common Stock as they existed
on the date the Rights were distributed (August 28, 1995); therefore, the
redemption price, dividend, liquidation price and voting rights have been, and
will in the future be, adjusted to reflect splits and combinations of, and
Common Stock dividends on, the Common Stock.
Anti-Takeover Effects. The Company's stockholder rights plan is
designed to deter coercive takeover tactics and otherwise to encourage persons
interested in acquiring the Company to negotiate with the Board of Directors.
The stockholder rights plan will confront a potential acquirer of the Company
with the possibility that the Company's stockholders will be able to
substantially dilute the acquirer's equity interest by exercising Rights to buy
additional stock in the Company or, in certain cases, stock in the acquirer, at
a substantial discount and may have the effect of deterring third parties from
making takeover bids for control of the Company or may be used to hinder or
delay a takeover bid thereby decreasing the chance of the stockholders of the
Company realizing a premium over market price for their shares of Common Stock
as a result of such bids. See "Risk Factors -- Anti-Takeover Provisions; Blank
Check Preferred Stock." The Board of Directors may redeem the Rights at a
nominal consideration if it considers the proposed acquisition of the Company to
be in the best interests of the Company and its stockholders. Accordingly, the
stockholder rights plan should not interfere with any merger or other business
combination which has been approved by the Board of Directors. Any plan or
arrangement which effectively requires an acquiring company to negotiate with
the Company's management may be characterized as increasing such management's
ability to maintain its position with the Company, including the approval of a
transaction which provides less value to the stockholders while providing
benefits to management.
CERTAIN CHARTER PROVISIONS AND LAWS
In addition to the stockholder rights plan and the Preferred Stock
provisions described above, certain features of the Company's Certificate of
Incorporation and By-laws and the General Corporation Law of the State of
Dela-
-14-
<PAGE> 18
ware ("GCL"), which are further described below, may have the effect of
deterring third parties from making takeover bids for control of the Company or
may be used to hinder or delay a takeover bid thereby decreasing the chance of
the stockholders of the Company realizing a premium over market price for their
shares of Common Stock as a result of such bids.
Limitations on Stockholder Actions. The Certificate of Incorporation
provides that stockholder action may only be taken at a meeting of the
stockholders. Thus a holder of a majority of the voting power could not take
action to replace the Board of Directors, or any class thereof, without a
meeting of the stockholders nor could such a holder amend the By-laws without
presenting the amendment to a meeting of the stockholders. Furthermore, under
the provisions of the Certificate of Incorporation and By-laws of the Company,
special meetings of the stockholders may only be called by the Board. Therefore,
a stockholder, even one who holds a majority of the voting power, may neither
replace sitting Board members nor amend the By-laws before the next annual
meeting of stockholders.
Advance Notice Provisions. The Company's By-laws provide for an advance
notice procedure for the nomination, other than by the Board, of candidates for
election as directors as well as for other stockholder proposals to be
considered at annual meetings of stockholders. In general, notice of intent to
nominate a director or raise matters at meetings must be received by the Company
not less than 120 days before the first anniversary of the mailing of the
Company's proxy statement for the previous year's annual meeting, and must
contain certain information concerning the person to be nominated or the matters
to be brought before the meeting and concerning the stockholder submitting the
proposal.
Delaware Law. The Company is subject to Section 203 of the GCL, which
provides that a corporation may not engage in any business combination with an
"interested stockholder" during the three years after he becomes an interested
stockholder unless the corporation's board of directors approved in advance
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder; the interested stockholder owned
at least 85 percent of the voting stock of the corporation outstanding at the
time the transaction commenced; or the business combination is approved by the
corporation's board of directors and the affirmative vote of at least two-thirds
of the outstanding voting stock which is not owned by the interested
stockholder. An interested stockholder is anyone who owns 15 percent or more of
the outstanding voting stock of the corporation, or is an affiliate or associate
of the corporation and was the owner of 15 percent or more of the outstanding
voting stock of the corporation at any time within the previous three years; and
the affiliates and associates of any such person. Under certain circumstances,
Section 203 of the GCL makes it more difficult for an interested stockholder to
effect various business combinations with a corporation for a three-year period,
although the stockholders of a corporation may elect to exclude a corporation
from the section's restrictions.
Classified Board. The Board of Directors has placed proposals to amend
the Certificate of Incorporation and By-laws of the Company to divide the Board
into three classes with staggered three year terms on the agenda for the
Company's annual meeting of stockholders scheduled to be held on May 30, 1996.
Under the current By-laws, the number of directors constituting the entire Board
is nine and they are elected for one year terms. Under the proposed amendments,
the Board will be divided into three classes, of three members each. If the
proposed amendments are adopted, the directors in the first class will be
elected for a term of one year; the directors in the second class will be
elected for a term of two years and the directors in the third class will be
elected for a term of three years. At each subsequent annual meeting of
stockholders, the terms of one class of directors will expire and the newly
nominated directors of that class will be elected for a term of three years.
After the initial adoption of the proposed amendment by the stockholders, the
Board will be able to determine the total number of directors constituting the
full Board and the number of directors in each class, but the total number of
directors may not exceed 17 nor may the number of directors in any class exceed
six. Subject to these rules, the classes of directors need not have equal
numbers of members. No reduction in the total number of directors or in the
number of directors in a given class will have the effect of removing a director
from office or reducing the term of any then sitting director. If the Board
increases the number of directors in a class, it will be able to fill the
vacancies created for the full remaining term of a director in that class even
though the term may extend beyond the next annual meeting. The directors will
also be able to fill any other vacancies for the full remaining term of the
director whose death, resignation or removal caused the vacancy. Currently under
the GCL, any director of the Company or the entire Board may be removed, with or
without cause, by the holders of a majority of the shares then entitled to vote
at an election of directors. However, if the proposed amendment is adopted and
the Board is divided into classes,
-15-
<PAGE> 19
stockholders may only remove directors for cause. If the proposed amendment is
not approved, directors will be elected to one-year terms.
At present, stockholders possessing a majority of the Company's voting
power can replace the entire Board at any annual meeting since the entire Board
is elected at each annual meeting for a one-year term. If the proposed
resolutions are adopted, a person who has a majority of the voting power at a
given meeting will not in any one year be able to replace a majority of the
directors since only one-third of the directors will stand for election in any
one year. As a result, at least two annual meeting elections will be required to
change the majority of the directors by the requisite vote of stockholders. The
purpose of classifying the Board is to provide for a continuing body, even in
the face of a person who accumulates a sufficient amount of voting power,
whether by ownership or proxy or a combination, to have a majority of the voting
power at a given meeting and who may seek to take control of the Company without
paying a fair premium for control to all the holders of Common Stock. This will
allow the Board time to negotiate with such a person and to protect the
interests of the other stockholders who may constitute a majority of the shares
not actually owned by such person. The proposals, if adopted, will affect every
election of directors, will be applicable even when no change of control is
pending or threatened and will make it more difficult for stockholders to change
the majority of directors even when the only reason for the change may be the
performance of the present directors.
TRANSFER AGENT
The transfer agent for the Common Stock and the rights agent for the
stockholder rights plan is Continental Stock Transfer & Trust Company, Two
Broadway, New York, New York 10004.
LEGAL MATTERS
The validity of the securities offered hereunder has been passed upon
for the Company by Schwartz, Warren & Ramirez a Limited Liability Company,
Columbus, Ohio.
EXPERTS
The audited financial statements incorporated in this Prospectus have
been so incorporated in reliance on the report of Coopers & Lybrand, L.L.P., as
independent certified public accountants, for the periods indicated in their
report, given on the authority of such firm as experts in auditing and
accounting.
INDEMNIFICATION
Section 145 of the General Corporation Law of the State of Delaware
("Section 145") provides that directors and officers of Delaware corporations
may, under certain circumstances, be indemnified against expenses (including
attorneys' fees) and other liabilities actually and reasonably incurred by them
as a result of any suit brought against them in their capacity as a director or
officer, if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, if they had no reasonable cause to believe
their conduct was unlawful. Section 145 also provides that directors and
officers may also be indemnified against expenses (including attorneys' fees)
incurred by them in connection with a derivative suit if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made
without court approval if such person was adjudged liable to the corporation.
Article V of the Company's By-laws has provisions requiring the Company
to indemnify its officers, directors, employees and agents which are in
substantially the same wording as Section 145.
Article Nine, section (b), of the Company's Certificate of
Incorporation further provides that no director will be personally liable to the
Company or its stockholders for monetary damages or for any breach of fiduciary
duty except for breach of the director's duty of loyalty to the Company or its
stockholders, for acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, pursuant to section 174 of the
Delaware General Corporation Law (which imposes liability in connection with the
payment of certain unlawful divi-
-16-
<PAGE> 20
dends, stock purchases or redemptions), or any amendment or successor provision
thereto, or for any transaction from which the director derived an improper
personal benefit.
Certain provisions of the Warrants provide for indemnification of the
Company and its directors and officers by such Selling Shareholders for certain
liabilities, including certain liabilities under the Act, under certain
circumstances.
Insofar as indemnification for liabilities arising under 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995 (Commission File Number 0-20676);
2. The Company's Current Report on Form 8-K dated March 22, 1996
(Commission File Number 0-20676);
3. The description of the Registrant's Common Stock, par value $.001 per
share, contained in the Registrant's Registration Statement on Form
8-A, as amended by Amendment No. 3 (Commission File Number 0-20676);
4. The description of Rights to Purchase Series A Preferred Stock
contained in Registrant's Registration Statement on Form 8-A
(Commission File Number 0-20676); and
5. All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior
to the termination of the offering of the securities hereunder.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Copies of such reports, proxy statements and
other information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material may be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request, a copy of any or all of the documents incorporated herein, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). See "Incorporation of Certain Documents by
Reference." Requests should be directed to Neoprobe Corporation, 425 Metro Place
North, Suite 400, Dublin, Ohio 43017; Attention: John Schroepfer, Vice President
- -- Finance and Administration; Telephone (614) 793-7500.
-17-
<PAGE> 21
ADDITIONAL INFORMATION
The Company has filed with the Commission a registration statement
under the Act with respect to the securities described herein. This Prospectus
does not contain all of the information set forth in the registration statement
and the exhibits thereto. For further information regarding the Company and
these securities, reference is made to such registration statement, including
all amendments thereto and the schedules and exhibits filed as part thereof.
Statements contained herein concerning provisions of documents are necessarily
summaries of the documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission. The
Company's executive offices are located at 425 Metro Place North, Suite 400,
Dublin, Ohio 43017. Its telephone number is (614) 793-7500.
-18-
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be borne by the
registrant, other than underwriting discounts and commissions, in connection
with the issuance and distribution of the Common Stock hereunder.
<TABLE>
<CAPTION>
Payable
by the
Registrant
------------
<S> <C>
Accounting fees and expenses $ 1,500.00
Legal fees and expenses 7,500.00
Printing costs 500.00
Miscellaneous 500.00
------------
Total $10,000.00
</TABLE>
The foregoing items are estimated. An SEC registration fee of
$4,017.00, an NASD filing fee of $1,665.00 and a Nasdaq listing fee of
$17,500.00 relating to the offering of securities were previously paid by the
registrant.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
("Section 145") provides that directors and officers of Delaware corporations
may, under certain circumstances, be indemnified against expenses (including
attorneys' fees) and other liabilities actually and reasonably incurred by them
as a result of any suit brought against them in their capacity as a director or
officer, if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, if they had no reasonable cause to believe
their conduct was unlawful. Section 145 also provides that directors and
officers may also be indemnified against expenses (including attorneys' fees)
incurred by them in connection with a derivative suit if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made
without court approval if such person was adjudged liable to the corporation.
Article V of the Company's By-laws has provisions requiring the Company
to indemnify its officers, directors, employees and agents that are in
substantially the same wording as Section 145.
Article Nine, section (b), of the Company's Certificate of
Incorporation further provides that no director will be personally liable to the
Company or its stockholders for monetary damages or for any breach of fiduciary
duty except for breach of the director's duty of loyalty to the Company or its
stockholders, for acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, pursuant to section 174 of the General
Corporation Law of the State of Delaware (which imposes liability in connection
with the payment of certain unlawful dividends, stock purchases or redemptions),
or any amendment or successor provision thereto, or for any transaction from
which the director derived an improper personal benefit.
The Warrants provide for indemnification by the Selling Shareholders of
directors, officers and controlling persons of the registrant for certain
liabilities, including certain liabilities under the Act, under certain
circumstances.
II-1
<PAGE> 23
ITEM 16. EXHIBITS.
The following exhibits are part of this Registration Statement:
<TABLE>
<S> <C>
(1) UNDERWRITING AGREEMENT
1.1. Reserved
1.2. Form of Subscription Agreement.*
1.3. Escrow Agreement.*
1.4. Form of Soliciting Broker/Dealers' Agreement.*
(4) INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS, INCLUDING
INDENTURES
4.1. See Articles FOUR, FIVE, SIX and SEVEN of the Restated
Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 99.2 of registrant's Current Report
on Form 8-K dated July 18, 1995; Commission File No.
0-20676).
4.2. See Articles II and VI and Section 2 of Article III and
Section 4 of Article VII of the Restated By-Laws of the
Registrant (incorporated by reference to Exhibit 99.4 to the
Registrant's Current Report on Form 8-K dated July 18, 1995;
Commission File No. 0-20676).
4.3 Rights Agreement dated as of July 18, 1995 between the
Registrant and Continental Stock Transfer and Trust Company
(incorporated by reference to Exhibit 1 of the registration
statement on Form 8-A; Commission File No. 0-20676).
4.4 Reserved
4.5. Form of Dealers' Warrants (Class G).*
4.6. Reserved
4.7. Form of Broker's Warrant (Class H) (incorporated by
reference to Exhibit 4.3 of registration statement on Form
S-3 (No. 33-93438).
4.8 Reserved
4.9. Form of Class K Warrant.
4.10. Form of Class L Warrant.
4.11. Amendment to License Agreement and Development Agreement,
dated March 28, 1996, between the Registrant and Enzon, Inc.
(5) OPINION REGARDING LEGALITY
5.1. Opinion of Schwartz, Warren & Ramirez a Limited Liability
Company as to the legality of the Common Stock being
registered.
(23) CONSENTS
23.1. Consent of Coopers & Lybrand, L.L.P.
</TABLE>
II-2
<PAGE> 24
<TABLE>
<S> <C>
23.2. Consent of Schwartz, Warren & Ramirez a Limited Liability
Company is set forth as part of Exhibit 5.1 above.
(24) POWERS OF ATTORNEY.
24.1. Powers of Attorney.*
24.2. Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf of the
Company to sign pursuant to a power of attorney.*
</TABLE>
- ---------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The Registrant will:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) For determining liability under the Securities Act, treat each
post-effective 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.
(e) 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 Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant 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 Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant 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
Registrant will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to the 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.
(f) If the Registrant relies on Rule 430A under the Securities Act, it
will:
(1) For determining any liability under the Securities Act, treat the
information omitted from the form of
II-3
<PAGE> 25
prospectus filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant under Rule
424(b)(1), or (4) or 497(h) under the Securities Act as part of this
registration statement as of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
II-4
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
post-effective amendment to registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Columbus, State of
Ohio, on , 1996.
NEOPROBE CORPORATION
By /s/ David C. Bupp
-----------------------------------
David C. Bupp
President and Chief Operating Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed on , 1996, by the following
persons in the capacities stated.
<TABLE>
<CAPTION>
SIGNATURES CAPACITY
---------- --------
<S> <C>
John L. Ridihalgh* Director, Chairman of the
- --------------------------------------- Board, Chief Executive Officer
John L. Ridihalgh (principal executive officer)
/s/ David C. Bupp Director, President, Chief
- --------------------------------------- Operating Officer
David C. Bupp
John Schroepfer* Vice President, Finance and
- --------------------------------------- Administration (principal financial
John Schroepfer and accounting officer)
Zwi Vromen* Director
- ---------------------------------------
Zwi Vromen
Jerry K. Mueller, Jr.* Director
- ---------------------------------------
Jerry K. Mueller, Jr.
James Zid* Director
- ---------------------------------------
James Zid
Julius R. Krevans* Director
- ---------------------------------------
Julius R. Krevans
Michael P. Moore* Director
- ---------------------------------------
Michael P. Moore
J. Frank Whitley, Jr.* Director
- ---------------------------------------
J. Frank Whitley, Jr.
Director
- ---------------------------------------
C. Michael Hazard
</TABLE>
*By:/s/ David C. Bupp
-----------------------------------
David C. Bupp
Attorney-in-Fact
<PAGE> 27
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page Number in
Sequentially
Numbered Copy
<S> <C> <C>
1.1. Reserved
1.2. Form of Subscription Agreement. *
1.3. Escrow Agreement. *
1.4. Form of Soliciting Broker/Dealers' Agreement. *
4.1. See Articles FOUR, FIVE, SIX and SEVEN of the Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit 99.2 of registrant's Current
Report on Form 8-K dated July 18, 1995; Commission File No. 0-20676). **
4.2. See Articles II and VI and Section 2 of Article III and Section 4 of Article VII of the
Restated By-Laws of the Registrant (incorporated by reference to Exhibit 99.4 to the
Registrant's Current Report on Form 8-K dated July 18, 1995; Commission File
No. 0-20676). **
4.3. Rights Agreement dated as of July 18, 1995 between the Registrant and Continental
Stock Transfer and Trust Company (incorporated by reference to Exhibit 1 of the
registration statement on Form 8-A; Commission File No. 0-20676). **
4.4. Reserved
4.5. Form of Dealers' Warrants (Class G). *
4.6. Reserved
4.7. Form of Broker's Warrant (Class H) (incorporated by reference to Exhibit 4.3 of
registration statement on Form S-3 (No. 33-93438). **
4.8. Reserved
4.9. Form of Class K Warrant. 29
4.10. Form of Class L Warrant. 37
4.11. Amendment to License Agreement and Development Agreement, dated March 28, 1996, between
the Registrant and Enzon, Inc. 45
5.1. Opinion of Schwartz, Warren & Ramirez a Limited Liability Company as to the legality of
the Common Stock being registered. 52
23.1. Consent of Coopers & Lybrand, L.L.P. 54
23.2. Consent of Schwartz, Warren & Ramirez a Limited Liability Company is set forth as part
of Exhibit 5.1 above.
24.1. Powers of Attorney. *
</TABLE>
<PAGE> 28
<TABLE>
<S> <C> <C>
24.2. Certified resolution of the Registrant's Board of Directors authorizing officers and
directors signing on behalf of the Company to sign pursuant to a power of attorney. *
- ---------------
<FN>
* Previously filed.
** Incorporated by reference.
</TABLE>
<PAGE> 1
EXHIBIT 4.9
WARRANT
TO
PURCHASE COMMON STOCK
OF
NEOPROBE CORPORATION
THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
UNLESS IT IS REGISTERED UNDER THE SECURITIES ACT OF 1933 OR IT OR SUCH OFFER,
SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION AND THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY IN FORM AND
SUBSTANCE, TO THAT EFFECT.
NO. WK001 WARRANT TO PURCHASE 50,000 SHARES OF
COMMON STOCK, PAR VALUE $.001 PER SHARE
(SUBJECT TO ADJUSTMENT)
For value received, NEOPROBE CORPORATION, a Delaware corporation (the
"Company"), hereby certifies that ENZON, INC., a Delaware corporation, or its
registered assigns (the "Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company Fifty Thousand (50,000) shares of the Common
Stock, par value $.001 per share, of the Company ("Common Stock"), as
constituted on March 28, 1996 (the "Warrant Issue Date"), upon surrender hereof
at the principal office of the Company referred to below, with the Notice of
Exercise attached hereto duly executed, and simultaneous payment therefor in
lawful money of the United States as hereinafter provided at the per share
exercise price of $6.30 (the "Exercise Price"). The number, character and
Exercise Price of such shares of Common Stock are subject to adjustment as
provided below. The term "Warrant" as used herein shall include this Warrant and
any warrants delivered in substitution or exchange therefor as provided herein.
This Warrant is registered and its transfer may be registered upon the books
maintained for that purpose by the Company by delivery of this Warrant duly
endorsed.
ARTICLE 1. Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable during the term commencing on the
Warrant Issue Date and ending at 5:00 p.m., Eastern time, on the later of
November 11, 1996 or 90 days after the effective date of a registration
statement under the Securities Act of 1933 (the "Act") for this Warrant and the
shares of Common Stock issued hereunder, and shall be void thereafter.
ARTICLE 2. Exercise of Warrant.
SECTION 2.1. Method. The purchase rights represented by this Warrant
are exercisable by the Holder, in whole or in part, at any time or from time to
time, during the term hereof by the surrender of this Warrant and the Notice of
Exercise annexed hereto duly completed and executed by the Holder at the
principal executive office of the Company at 425 Metro Place North, Dublin, Ohio
43017-1367 (or such other office or agency of the Company as it may designate by
notice in writing to the Holder), together with the consideration constituting
the Exercise Price of the shares to be purchased in cash or by wire transfer to
a bank account designated by the Company or by a certified check; provided,
however, that if less than all of the purchase rights represented by this
Warrant are exercised, such exercise shall involve the purchase of at least One
Hundred (100) shares of Common Stock.
SECTION 2.2. Effect. This Warrant shall be deemed to have been
exercised at the time of its surrender for exercise together with full payment
as provided above, and the person entitled to receive the shares of Common Stock
issuable upon such exercise shall be treated for all purposes as the holder of
record of such shares at and after
<PAGE> 2
such time. As promptly as practicable on or after such date the Company at its
expense shall issue to the person entitled to receive the same a certificate for
the number of shares of Common Stock issuable upon such exercise. If this
Warrant is exercised in part, the Company at its expense will execute and
deliver a new Warrant exercisable for the number of shares for which this
Warrant may then be exercised.
SECTION 2.3. Holder Not a Shareholder. The Holder shall neither be
entitled to vote nor receive dividends nor be deemed the holder of Common Stock
or any other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose until the Warrant has been exercised as provided
in this Article 2.
SECTION 2.4. No Fractional Shares. No fractional shares of Common Stock
shall be issued upon the exercise of this Warrant. In lieu of any fractional
share to which the Holder would otherwise be entitled, the Company shall make a
cash payment equal to the closing market price of a share of Common Stock on the
date of exercise multiplied by such fraction.
ARTICLE 3. Registered Warrants.
SECTION 3.1. Series. This Warrant is one of a numbered series of
Warrants which are identical except as to the number of shares of Common Stock
purchasable and as to any restriction on the transfer thereof in order to comply
with the Act and the regulations of the Securities and Exchange Commission
promulgated thereunder or state securities or blue sky laws. Such Warrants are
referred to herein collectively as the "Warrants."
SECTION 3.2. Record Ownership. The Company shall maintain a register of
the Holders of the Warrants (the "Register") showing their names and addresses
and the serial numbers and number of shares of Common Stock purchasable issued
to or transferred of record by them from time to time. The Register may be
maintained in electronic, magnetic or other computerized form. The Company may
treat the person named as the Holder of this Warrant in the Register as the sole
owner of this Warrant. The Holder of this Warrant is the person exclusively
entitled to receive notifications with respect to this Warrant, exercise it to
purchase shares of Common Stock and otherwise exercise all of the rights and
powers as the absolute owner hereof.
SECTION 3.3. Registration of Transfer. Transfers of this Warrant may be
registered on the Register. Transfers shall be registered when this Warrant is
presented to the Company duly endorsed with a request to register the transfer
hereof. When this Warrant is presented for transfer and duly transferred
hereunder, it shall be canceled and a new Warrant showing the name of the
transferee as the Holder thereof shall be issued in lieu hereof, provided,
however, that no transfer of less than all of this Warrant shall be made if the
portion to be transferred is less than One Hundred (100) shares of Common Stock.
When this Warrant is presented to the Company with a reasonable request to
exchange it for Warrants of other denominations of at least One Hundred (100)
shares of Common Stock, the Company shall make such exchange and shall cancel
this Warrant and issue in lieu thereof Warrants exercisable for an equal number
of shares of Common Stock in the denominations requested by the Holder. Such
Warrants shall bear the legend set forth in the face hereof, unless the Company
receives an opinion of counsel, reasonably satisfactory to the Company in form
and substance, stating that any Warrants to be issued upon any transfer or
exchange pursuant to this Section 3.3 are no longer required to bear such
legend.
SECTION 3.4. Worn and Lost Warrants. If this Warrant becomes worn,
defaced or mutilated but is still substantially intact and recognizable, the
Company or its agent may issue a new Warrant in lieu hereof upon its surrender.
If this Warrant is lost, destroyed or wrongfully taken, the Company shall issue
a new Warrant in place of the original Warrant if the Holder so requests by
written notice to the Company and the Holder has delivered to the Company an
indemnity agreement reasonably satisfactory to the Company with an affidavit of
the Holder that this Warrant has been lost, destroyed or wrongfully taken. Such
Warrants shall bear the legend set forth on the face hereof, unless the Company
receives an opinion of counsel, reasonably satisfactory to the Company in form
and substance, stating that any Warrants to be issued in place of any Warrants
pursuant to this Section 3.4 are not required to bear such legend under the Act.
-2-
<PAGE> 3
SECTION 3.5. Restrictions on Transfer and Exercise. This Warrant and
the Common Stock issuable upon the exercise of this Warrant may not be offered
for sale, sold or otherwise transferred unless such offer, sale or other
transfer is registered under the Act or such securities or such transfer is
exempt from such registration and the Company has received an opinion of
counsel, reasonably satisfactory to the Company in form and substance, stating
that such securities or such offer, sale or transfer is exempt from registration
under the Act. This Warrant may not be exercised unless the exercise hereof is
registered under the Act or the securities issuable hereunder are exempt from
registration or such exercise is exempt from registration under the Act and the
Company has received an opinion of counsel or other evidence of such exemption,
reasonably satisfactory to the Company in form and substance, stating that such
securities or such exercise is exempt from registration under the Act.
SECTION 3.6. Legend. Upon any exercise of this Warrant, the
certificates representing the securities purchased thereby shall bear the
following legend, unless (a) such securities shall have been registered under
the Act or (b) the purchaser shall have provided to the Company an opinion of
counsel, reasonably satisfactory to the Company in form and substance, stating
that such is not required by the Act:
THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE
APPROPRIATE SECURITIES LAWS OR THEY OR SUCH OFFER, SALE OR
OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION AND THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THAT EFFECT,
REASONABLY SATISFACTORY TO THE COMPANY IN FORM AND SUBSTANCE.
SECTION 3.7. Warrant Agent. The Company may, by written notice to the
Holder, appoint an agent for the purpose of maintaining the Register, issuing
Common Stock or other securities then issuable upon the exercise of this
Warrant, exchanging or transferring this Warrant, or any or all of the
foregoing. Thereafter, any such registration, issuance, exchange, or transfer,
as the case may be, shall be made at the office of such agent.
ARTICLE 4. Amendment to License and Development Agreement. Sections 3, 4, 5, 6,
7, 8, 9, 10, and 11 of an Amendment To License and Development Agreement dated
March 28, 1996 between the Holder and the Company (the "Agreement") are
incorporated into this Warrant and made a part of this Warrant and the terms of
such sections of the Agreement shall govern in the event there is any
inconsistency between this Warrant and such sections of the Agreement.
ARTICLE 5. Reservation of Stock. The Company covenants that, during the term
this Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock or Common Stock held in treasury a sufficient number of
shares to provide for the issuance of Common Stock upon the exercise of this
Warrant. The Company further covenants that all shares that may be issued upon
the exercise of rights represented by this Warrant, upon exercise of the rights
represented by this Warrant and payment of the Exercise Price, all as set forth
herein, will be duly authorized, validly issued, fully paid, non-assessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein). The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the exercise of this Warrant.
ARTICLE 6. Adjustments. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from time to time as follows:
SECTION 6.1. Merger, Sale of Assets, etc. If, at any time while this
Warrant or any portion thereof is outstanding and unexpired, there shall be (a)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (b) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the
-3-
<PAGE> 4
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash, or otherwise, or (c) a sale or transfer of the
Company's properties and assets as, or substantially as, an entirety to any
other person, then, as a part of such reorganization, merger, consolidation,
sale or transfer, lawful provision shall be made so that the holder of this
Warrant shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified herein and upon payment of the Exercise Price then
in effect, the number of shares of stock or other securities or property of the
successor corporation resulting from such reorganization, merger, consolidation,
sale or transfer that a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer,
all subject to further adjustment as provided in this Article 6. The foregoing
provisions of this Section 6.1 shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per share consideration payable to the Holder
hereof for shares in connection with any such transaction is in a form other
than cash or marketable securities, then the value of such consideration shall
be determined in good faith by the Company's Board of Directors, which
determination shall be conclusive in the absence of manifest error. In all
events, appropriate adjustment (as determined in good faith by the Company's
Board of Directors, which determination shall be conclusive in the absence of
manifest error) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.
SECTION 6.2. Reclassification, etc. If the Company, at any time while
this Warrant or any portion thereof remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
Warrant immediately prior to such reclassification or other change and the
Exercise Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Article 6.
SECTION 6.3. Split, Subdivision or Combination of Shares. If the
Company, at any time while this Warrant or any portion thereof remains
outstanding and unexpired, shall split, subdivide or combine the securities as
to which purchase rights under this Warrant exist, into a different number of
securities of the same class, the Exercise Price of such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination, and the number of shares
of Common Stock for which this Warrant is exercisable shall be proportionately
increased in the case of a split or subdivision or proportionately decreased in
the case of a combination.
SECTION 6.4. Adjustments for Dividends in Stock or Other Securities or
Property. If, while this Warrant or any portion hereof remains outstanding and
unexpired, the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible shareholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend,
then, and in each case, this Warrant shall represent the right to acquire, in
addition to the number of shares of the security receivable upon exercise of
this Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other security or property (other
than cash) of the Company that such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Article 6.
SECTION 6.5. Certificate as to Adjustments. Upon the occurrence of each
adjustment pursuant to this Article 6, the Company at its expense shall promptly
compute such adjustment in accordance with the terms hereof and furnish to the
Holder a certificate setting forth such adjustment and showing in detail the
facts upon which
-4-
<PAGE> 5
such adjustment is based, and the Exercise Price before and after the
adjustment. The Company shall, at any time upon the written request of any
Holder, furnish to such Holder a certificate setting forth: (a) such
adjustments; (b) the Exercise Price then in effect; and (c) the number of shares
and the amount, if any, of other property that at the time would be received
upon the exercise of the Warrant.
SECTION 6.6. No Impairment. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Article 6
and in the taking of all such actions as may be necessary or appropriate in
order to protect the rights of the Holder of this Warrant against impairment.
ARTICLE 7. Distributions. If: (a) the Company sets a record date for the holders
of its Common Stock (or other stock or securities at the time receivable upon
the exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution other than cash dividends out of retained
earnings, or any right to subscribe for or purchase any shares of stock of any
class or any other securities, or to receive any other right, or (b) there is
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company with or into
another entity, or any conveyance of all or substantially all of the assets of
the Company, or (c) there is any voluntary dissolution, liquidation or
winding-up of the Company, the Company will mail to the Holder a notice
specifying, as the case may be, (i) the record date for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, that is to be fixed, as of
which the holders of record of Common Stock (or such stock or securities at the
time receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such
notice shall be mailed at least fourteen (14) days prior to the date therein
specified.
ARTICLE 8. Amendments. This Warrant may not be amended without the prior written
consent of the Holder.
ARTICLE 9. Notices. Any notice, certificate or other communication which is
required or convenient under the terms of this Warrant shall be duly given if it
is in writing and delivered in person or mailed by first class mail, postage
prepaid, and directed to the Holder of the Warrant at its address as it appears
on the Register or if to the Company to its principal executive offices. The
time when such notice is sent shall be the time of the giving of the notice.
ARTICLE 10. Time. Where this Warrant provides for a payment or performance on a
Saturday or Sunday or a public holiday in the State of Ohio, such payment or
performance may be made on the next succeeding business day, without liability
of the Company for interest on any such payment.
ARTICLE 11. Rules of Construction. In this Warrant, unless the context otherwise
requires, words in the singular number include the plural, and in the plural
include the singular, and words of the masculine gender include the feminine and
the neuter, and when the sense so indicates, words of the neuter gender may
refer to any gender. The numbers and titles of sections contained in this
Warrant are inserted for convenience of reference only, and they neither form a
part of this Warrant nor are to be used in the construction or interpretation
hereof.
ARTICLE 12. Governing Law. The validity, terms, performance and enforcement of
this Warrant shall be governed by those laws of the State of Ohio that are
applicable to agreements that are negotiated, executed, delivered and performed
solely in the State of Ohio.
-5-
<PAGE> 6
IN WITNESS WHEREOF, NEOPROBE CORPORATION has caused this Warrant to be
executed by its officer thereto duly authorized.
NEOPROBE CORPORATION
By
----------------------------------
Name: David C. Bupp
Title: President
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<PAGE> 7
ASSIGNMENT OF WARRANT
The undersigned hereby sell(s) and assign(s) and transfer(s) unto_______________
________________________________________________________________________________
(name, address and SSN or EIN of assignee)
_______________________________________________________of this Warrant.
(portion of Warrant)
Date:________________________________ Sign:__________________________________
(Signature must conform in all
respects to name of Holder shown
on face of Warrant)
Signature Guaranteed:
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<PAGE> 8
NOTICE OF EXERCISE
[TO BE COMPLETED AND SIGNED ONLY UPON EXERCISE OF WARRANT]
The undersigned, the Holder of this Warrant, hereby irrevocably elects
to exercise the right to purchase Common Stock, par value $.001 per share, of
Neoprobe Corporation.
<TABLE>
<S> <C>
------------------------------------------------------------
(whole number of Warrants exercised)
[Signature must be guaranteed if name of ------------------------------------------------------------
holder of shares differs from registered (name of holder of shares if different than
Holder of Warrant] Holder of Warrant)
------------------------------------------------------------
(address of holder of shares if different than
Holder of Warrant)
------------------------------------------------------------
(Social Security or EIN of holder of shares if
different than Holder of Warrant)
Date: Sign:
----------------------------------- ------------------------------------------------------
(Signature must conform in all respects to name of
Holder shown on face of Warrant)
</TABLE>
Signature Guaranteed:
-8-
<PAGE> 1
EXHIBIT 4.10
WARRANT
TO
PURCHASE COMMON STOCK
OF
NEOPROBE CORPORATION
THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
UNLESS IT IS REGISTERED UNDER THE SECURITIES ACT OF 1933 OR IT OR SUCH OFFER,
SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION AND THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY IN FORM AND
SUBSTANCE, TO THAT EFFECT.
NO. WL001 WARRANT TO PURCHASE 100,000 SHARES OF
COMMON STOCK, PAR VALUE $.001 PER SHARE
(SUBJECT TO ADJUSTMENT)
For value received, NEOPROBE CORPORATION, a Delaware corporation (the
"Company"), hereby certifies that ENZON, INC., a Delaware corporation, or its
registered assigns (the "Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company One Hundred Thousand (100,000) shares of the
Common Stock, par value $.001 per share, of the Company ("Common Stock"), as
constituted on March 28, 1996 (the "Warrant Issue Date"), upon surrender hereof
at the principal office of the Company referred to below, with the Notice of
Exercise attached hereto duly executed, and simultaneous payment therefor in
lawful money of the United States as hereinafter provided at the per share
exercise price of $12.60 (the "Exercise Price"). The number, character and
Exercise Price of such shares of Common Stock are subject to adjustment as
provided below. The term "Warrant" as used herein shall include this Warrant and
any warrants delivered in substitution or exchange therefor as provided herein.
This Warrant is registered and its transfer may be registered upon the books
maintained for that purpose by the Company by delivery of this Warrant duly
endorsed.
ARTICLE 1. Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable during the term commencing on the
Warrant Issue Date and ending at 5:00 p.m., Eastern time, on the later of
November 11, 1996 or 90 days after the effective date of a registration
statement under the Securities Act of 1933 (the "Act") for this Warrant and the
shares of Common Stock issued hereunder, and shall be void thereafter.
ARTICLE 2. Exercise of Warrant.
SECTION 2.1. Method. The purchase rights represented by this Warrant
are exercisable by the Holder, in whole or in part, at any time or from time to
time, during the term hereof by the surrender of this Warrant and the Notice of
Exercise annexed hereto duly completed and executed by the Holder at the
principal executive office of the Company at 425 Metro Place North, Dublin, Ohio
43017-1367 (or such other office or agency of the Company as it may designate by
notice in writing to the Holder), together with the consideration constituting
the Exercise Price of the shares to be purchased in cash or by wire transfer to
a bank account designated by the Company or by a certified check; provided,
however, that if less than all of the purchase rights represented by this
Warrant are exercised, such exercise shall involve the purchase of at least One
Hundred (100) shares of Common Stock.
SECTION 2.2. Effect. This Warrant shall be deemed to have been
exercised at the time of its surrender for exercise together with full payment
as provided above, and the person entitled to receive the shares of Common Stock
issuable upon such exercise shall be treated for all purposes as the holder of
record of such shares at and after
<PAGE> 2
such time. As promptly as practicable on or after such date the Company at its
expense shall issue to the person entitled to receive the same a certificate for
the number of shares of Common Stock issuable upon such exercise. If this
Warrant is exercised in part, the Company at its expense will execute and
deliver a new Warrant exercisable for the number of shares for which this
Warrant may then be exercised.
SECTION 2.3. Holder Not a Shareholder. The Holder shall neither be
entitled to vote nor receive dividends nor be deemed the holder of Common Stock
or any other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose until the Warrant has been exercised as provided
in this Article 2.
SECTION 2.4. No Fractional Shares. No fractional shares of Common Stock
shall be issued upon the exercise of this Warrant. In lieu of any fractional
share to which the Holder would otherwise be entitled, the Company shall make a
cash payment equal to the closing market price of a share of Common Stock on the
date of exercise multiplied by such fraction.
ARTICLE 3. Registered Warrants.
SECTION 3.1. Series. This Warrant is one of a numbered series of
Warrants which are identical except as to the number of shares of Common Stock
purchasable and as to any restriction on the transfer thereof in order to comply
with the Act and the regulations of the Securities and Exchange Commission
promulgated thereunder or state securities or blue sky laws. Such Warrants are
referred to herein collectively as the "Warrants."
SECTION 3.2. Record Ownership. The Company shall maintain a register of
the Holders of the Warrants (the "Register") showing their names and addresses
and the serial numbers and number of shares of Common Stock purchasable issued
to or transferred of record by them from time to time. The Register may be
maintained in electronic, magnetic or other computerized form. The Company may
treat the person named as the Holder of this Warrant in the Register as the sole
owner of this Warrant. The Holder of this Warrant is the person exclusively
entitled to receive notifications with respect to this Warrant, exercise it to
purchase shares of Common Stock and otherwise exercise all of the rights and
powers as the absolute owner hereof.
SECTION 3.3. Registration of Transfer. Transfers of this Warrant may be
registered on the Register. Transfers shall be registered when this Warrant is
presented to the Company duly endorsed with a request to register the transfer
hereof. When this Warrant is presented for transfer and duly transferred
hereunder, it shall be canceled and a new Warrant showing the name of the
transferee as the Holder thereof shall be issued in lieu hereof, provided,
however, that no transfer of less than all of this Warrant shall be made if the
portion to be transferred is less than One Hundred (100) shares of Common Stock.
When this Warrant is presented to the Company with a reasonable request to
exchange it for Warrants of other denominations of at least One Hundred (100)
shares of Common Stock, the Company shall make such exchange and shall cancel
this Warrant and issue in lieu thereof Warrants exercisable for an equal number
of shares of Common Stock in the denominations requested by the Holder. Such
Warrants shall bear the legend set forth in the face hereof, unless the Company
receives an opinion of counsel, reasonably satisfactory to the Company in form
and substance, stating that any Warrants to be issued upon any transfer or
exchange pursuant to this Section 3.3 are no longer required to bear such
legend.
SECTION 3.4. Worn and Lost Warrants. If this Warrant becomes worn,
defaced or mutilated but is still substantially intact and recognizable, the
Company or its agent may issue a new Warrant in lieu hereof upon its surrender.
If this Warrant is lost, destroyed or wrongfully taken, the Company shall issue
a new Warrant in place of the original Warrant if the Holder so requests by
written notice to the Company and the Holder has delivered to the Company an
indemnity agreement reasonably satisfactory to the Company with an affidavit of
the Holder that this Warrant has been lost, destroyed or wrongfully taken. Such
Warrants shall bear the legend set forth on the face hereof, unless the Company
receives an opinion of counsel, reasonably satisfactory to the Company in form
and substance, stating that any Warrants to be issued in place of any Warrants
pursuant to this Section 3.4 are not required to bear such legend under the Act.
-2-
<PAGE> 3
SECTION 3.5. Restrictions on Transfer and Exercise. This Warrant and
the Common Stock issuable upon the exercise of this Warrant may not be offered
for sale, sold or otherwise transferred unless such offer, sale or other
transfer is registered under the Act or such securities or such transfer is
exempt from such registration and the Company has received an opinion of
counsel, reasonably satisfactory to the Company in form and substance, stating
that such securities or such offer, sale or transfer is exempt from registration
under the Act. This Warrant may not be exercised unless the exercise hereof is
registered under the Act or the securities issuable hereunder are exempt from
registration or such exercise is exempt from registration under the Act and the
Company has received an opinion of counsel or other evidence of such exemption,
reasonably satisfactory to the Company in form and substance, stating that such
securities or such exercise is exempt from registration under the Act.
SECTION 3.6. Legend. Upon any exercise of this Warrant, the
certificates representing the securities purchased thereby shall bear the
following legend, unless (a) such securities shall have been registered under
the Act or (b) the purchaser shall have provided to the Company an opinion of
counsel, reasonably satisfactory to the Company in form and substance, stating
that such is not required by the Act:
THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE
APPROPRIATE SECURITIES LAWS OR THEY OR SUCH OFFER, SALE OR
OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION AND THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THAT EFFECT,
REASONABLY SATISFACTORY TO THE COMPANY IN FORM AND SUBSTANCE.
SECTION 3.7. Warrant Agent. The Company may, by written notice to the
Holder, appoint an agent for the purpose of maintaining the Register, issuing
Common Stock or other securities then issuable upon the exercise of this
Warrant, exchanging or transferring this Warrant, or any or all of the
foregoing. Thereafter, any such registration, issuance, exchange, or transfer,
as the case may be, shall be made at the office of such agent.
ARTICLE 4. Amendment to License and Development Agreement. Sections 3, 4, 5, 6,
7, 8, 9, 10, and 11 of an Amendment To License and Development Agreement dated
March 28, 1996 between the Holder and the Company (the "Agreement") are
incorporated into this Warrant and made a part of this Warrant and the terms of
such sections of the Agreement shall govern in the event there is any
inconsistency between this Warrant and such sections of the Agreement.
ARTICLE 5. Reservation of Stock. The Company covenants that, during the term
this Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock or Common Stock held in treasury a sufficient number of
shares to provide for the issuance of Common Stock upon the exercise of this
Warrant. The Company further covenants that all shares that may be issued upon
the exercise of rights represented by this Warrant, upon exercise of the rights
represented by this Warrant and payment of the Exercise Price, all as set forth
herein, will be duly authorized, validly issued, fully paid, non-assessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein). The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the exercise of this Warrant.
ARTICLE 6. Adjustments. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from time to time as follows:
SECTION 6.1. Merger, Sale of Assets, etc. If, at any time while this
Warrant or any portion thereof is outstanding and unexpired, there shall be (a)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (b) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the
-3-
<PAGE> 4
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash, or otherwise, or (c) a sale or transfer of the
Company's properties and assets as, or substantially as, an entirety to any
other person, then, as a part of such reorganization, merger, consolidation,
sale or transfer, lawful provision shall be made so that the holder of this
Warrant shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified herein and upon payment of the Exercise Price then
in effect, the number of shares of stock or other securities or property of the
successor corporation resulting from such reorganization, merger, consolidation,
sale or transfer that a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer,
all subject to further adjustment as provided in this Article 6. The foregoing
provisions of this Section 6.1 shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per share consideration payable to the Holder
hereof for shares in connection with any such transaction is in a form other
than cash or marketable securities, then the value of such consideration shall
be determined in good faith by the Company's Board of Directors, which
determination shall be conclusive in the absence of manifest error. In all
events, appropriate adjustment (as determined in good faith by the Company's
Board of Directors, which determination shall be conclusive in the absence of
manifest error) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.
SECTION 6.2. Reclassification, etc. If the Company, at any time while
this Warrant or any portion thereof remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
Warrant immediately prior to such reclassification or other change and the
Exercise Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Article 6.
SECTION 6.3. Split, Subdivision or Combination of Shares. If the
Company, at any time while this Warrant or any portion thereof remains
outstanding and unexpired, shall split, subdivide or combine the securities as
to which purchase rights under this Warrant exist, into a different number of
securities of the same class, the Exercise Price of such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination, and the number of shares
of Common Stock for which this Warrant is exercisable shall be proportionately
increased in the case of a split or subdivision or proportionately decreased in
the case of a combination.
SECTION 6.4. Adjustments for Dividends in Stock or Other Securities or
Property. If, while this Warrant or any portion hereof remains outstanding and
unexpired, the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible shareholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend,
then, and in each case, this Warrant shall represent the right to acquire, in
addition to the number of shares of the security receivable upon exercise of
this Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other security or property (other
than cash) of the Company that such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Article 6.
SECTION 6.5. Certificate as to Adjustments. Upon the occurrence of each
adjustment pursuant to this Article 6, the Company at its expense shall promptly
compute such adjustment in accordance with the terms hereof and furnish to the
Holder a certificate setting forth such adjustment and showing in detail the
facts upon which
-4-
<PAGE> 5
such adjustment is based, and the Exercise Price before and after the
adjustment. The Company shall, at any time upon the written request of any
Holder, furnish to such Holder a certificate setting forth: (a) such
adjustments; (b) the Exercise Price then in effect; and (c) the number of shares
and the amount, if any, of other property that at the time would be received
upon the exercise of the Warrant.
SECTION 6.6. No Impairment. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Article 6
and in the taking of all such actions as may be necessary or appropriate in
order to protect the rights of the Holder of this Warrant against impairment.
ARTICLE 7. Distributions. If: (a) the Company sets a record date for the holders
of its Common Stock (or other stock or securities at the time receivable upon
the exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution other than cash dividends out of retained
earnings, or any right to subscribe for or purchase any shares of stock of any
class or any other securities, or to receive any other right, or (b) there is
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company with or into
another entity, or any conveyance of all or substantially all of the assets of
the Company, or (c) there is any voluntary dissolution, liquidation or
winding-up of the Company, the Company will mail to the Holder a notice
specifying, as the case may be, (i) the record date for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, that is to be fixed, as of
which the holders of record of Common Stock (or such stock or securities at the
time receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such
notice shall be mailed at least fourteen (14) days prior to the date therein
specified.
ARTICLE 8. Amendments. This Warrant may not be amended without the prior written
consent of the Holder.
ARTICLE 9. Notices. Any notice, certificate or other communication which is
required or convenient under the terms of this Warrant shall be duly given if it
is in writing and delivered in person or mailed by first class mail, postage
prepaid, and directed to the Holder of the Warrant at its address as it appears
on the Register or if to the Company to its principal executive offices. The
time when such notice is sent shall be the time of the giving of the notice.
ARTICLE 10. Time. Where this Warrant provides for a payment or performance on a
Saturday or Sunday or a public holiday in the State of Ohio, such payment or
performance may be made on the next succeeding business day, without liability
of the Company for interest on any such payment.
ARTICLE 11. Rules of Construction. In this Warrant, unless the context otherwise
requires, words in the singular number include the plural, and in the plural
include the singular, and words of the masculine gender include the feminine and
the neuter, and when the sense so indicates, words of the neuter gender may
refer to any gender. The numbers and titles of sections contained in this
Warrant are inserted for convenience of reference only, and they neither form a
part of this Warrant nor are to be used in the construction or interpretation
hereof.
ARTICLE 12. Governing Law. The validity, terms, performance and enforcement of
this Warrant shall be governed by those laws of the State of Ohio that are
applicable to agreements that are negotiated, executed, delivered and performed
solely in the State of Ohio.
-5-
<PAGE> 6
IN WITNESS WHEREOF, NEOPROBE CORPORATION has caused this Warrant to be
executed by its officer thereto duly authorized.
NEOPROBE CORPORATION
By
-----------------------------------
Name: David C. Bupp
Title: President
-6-
<PAGE> 7
ASSIGNMENT OF WARRANT
The undersigned hereby sell(s) and assign(s) and transfer(s) unto__________
________________________________________________________________________________
(name, address and SSN or EIN of assignee)
________________________________of this Warrant.
(portion of Warrant)
Date:______________________________ Sign:_____________________________________
(Signature must conform in all
respects to name of Holder shown
on face of Warrant)
Signature Guaranteed:
-7-
<PAGE> 8
NOTICE OF EXERCISE
[TO BE COMPLETED AND SIGNED ONLY UPON EXERCISE OF WARRANT]
The undersigned, the Holder of this Warrant, hereby irrevocably elects
to exercise the right to purchase Common Stock, par value $.001 per share, of
Neoprobe Corporation.
<TABLE>
<S> <C>
------------------------------------------------------------
(whole number of Warrants exercised)
[Signature must be guaranteed if name of ------------------------------------------------------------
holder of shares differs from registered (name of holder of shares if different than
Holder of Warrant] Holder of Warrant)
------------------------------------------------------------
(address of holder of shares if different than
Holder of Warrant)
------------------------------------------------------------
(Social Security or EIN of holder of shares if
different than Holder of Warrant)
Date: Sign:
---------------------------- -------------------------------------------------------
(Signature must conform in all respects to name of
Holder shown on face of Warrant)
</TABLE>
Signature Guaranteed:
-8-
<PAGE> 1
EXHIBIT 4.11
AMENDMENT TO LICENSE AGREEMENT AND DEVELOPMENT AGREEMENT
AGREEMENT made this 28th day of March 1996, between ENZON, INC., a
Delaware corporation with an office at 20 Kingsbridge Road, Piscataway, New
Jersey 08854 ("Enzon"), and NEOPROBE CORPORATION, a Delaware corporation with an
office at 425 Metro Place North, Dublin, Ohio 43017 ("Neoprobe").
WHEREAS:
A) Enzon and Neoprobe have entered into a License Agreement, dated as
of August 15, 1992, and amended from time to time ("License Agreement") and an
SCA Protein Development Agreement, dated as of August 15, 1992, and amended from
time to time ("Development Agreement");
B) Disagreements have arisen between Enzon and Neoprobe concerning the
terms of the License Agreement and the Development Agreement and the parties'
performance or actions thereunder; and
C) The parties desire to settle all their differences with regard to
these Agreements;
NOW, THEREFORE, in consideration of their mutual undertakings as set
forth herein, the parties intending to be bound agree as follows:
1. The Development Agreement is terminated in all respects. Neither
Enzon nor Neoprobe shall have any further obligation or liability to the other
under the Development Agreement and any claims either party has against the
other with respect to the Development Agreement are forever waived, released and
discharged.
2. Enzon acknowledges that it received in full the cash payment
required under section 4.1 of the License Agreement.
3. The License Agreement is modified and amended as follows:
a. The Note referred to in section 4.2 of the License Agreement is
cancelled. Neither party shall have any obligation or liability to the other
with respect to the Note. Promptly after the execution of this Agreement, Enzon
shall return the original Note to Neoprobe.
b. Section 4.3 of the License Agreement is deleted and replaced in
its entirety with the following:
"Neoprobe hereby grants Enzon warrants to purchase (i) 50,000 shares
of the common stock of Neoprobe (the "Common Stock") at an exercise price of
$6.30 per share and (ii) an additional 100,000 shares of Common Stock at an
exercise price of $12.60 per share, (collectively, the "Warrants"). The Warrants
will be exercisable until the later of November 11, 1996 or ninety (90) days
after the effective date of the Enzon Registration Statement, as defined below.
The number of Warrants and shares of Common Stock issuable under the Warrants
(the "Warrant Shares") and the exercise prices of the Warrants shall not be
affected by any common stock distribution or dividend, stock split or stock
combination effected by Neoprobe prior to March 8, 1996."
c. Subsections (a), (b) and (d) of section 4.4 of the License
Agreement are deleted in their entirety.
<PAGE> 2
d. In Section 12.1 of the License Agreement, the language beginning
with "PROVIDED HOWEVER that" and continuing to the end of the paragraph is
deleted.
e. Sections 13.1 and 13.2 of the License Agreement are deleted in
their entirety.
4. Neoprobe shall file a registration statement for the Warrants and
the Warrant Shares (the "Enzon Registration Statement") with the SEC on the
earliest of the following events or dates:
a. ten days after the closing of the public offering described in
the Form S-3 registration statement (File-No. 33-32146) filed by Neoprobe with
the SEC on March 8, 1996 (the "Current Primary Offering");
b. the filing by or on behalf of Neoprobe with the SEC of any
registration statement after March 8, 1996, other than the registration
statement for the Current Primary Offering; or
c. May 10, 1996.
5. Neoprobe shall
a. furnish to Enzon and to any underwriter or broker designated by
Enzon such number of copies of the Enzon Registration Statement as declared
effective and, if required, a prospectus, in conformity with the requirements of
the federal securities laws, in order to facilitate the public sale or other
disposition of the Warrants or Warrant Shares;
b. use its best efforts to register or qualify the Warrants and
Warrant Shares under the blue sky laws of New Jersey, New York and Ohio;
c. before filing the Enzon Registration Statement, furnish to
Enzon's counsel copies of the documents proposed to be filed which shall be
subject to the reasonable approval of such counsel;
d. furnish to Enzon's counsel a copy of the Enzon Registration
Statement as filed, and a copy of the final, effective version of the
registration statement for the Current Primary Offering and any amendments
thereto.
6. In connection with the Enzon Registration Statement, Neoprobe hereby
indemnifies and holds Enzon harmless in accordance with the terms of the
indemnification set forth in Schedule 1 to this Agreement.
7. Neoprobe shall pay all expenses incurred in effecting the
registration of the Warrants and the Warrant Shares, including, without
limitation, all federal and state registration, qualification and filing fees,
printing expenses, fees and disbursements of Neoprobe's counsel, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration, but not including underwriting discounts, commissions and
expenses.
8. Neoprobe shall use its best efforts to cause the Enzon Registration
Statement to become effective as soon as practicable after the date it is
initially filed with the SEC. Neoprobe shall notify Enzon of the effective date
of the Enzon Registration Statement immediately after receiving notice of same
from the SEC. In the event that the Enzon Registration Statement does not become
effective for any reason on or before December 31, 1996 or does not remain
effective until the earlier of (i) sixty (60) days after it becomes effective or
(ii) Enzon has sold all of the Warrants and Warrant Shares, Enzon may, at its
sole
<PAGE> 3
option and discretion, as liquidated damages for the failure of the Enzon
Registration Statement to become or remain effective, exchange the Warrants for
100,000 shares of Neoprobe Common Stock, without payment to Neoprobe. Neoprobe
shall issue such shares to Enzon or its designee no later than three (3)
business days after demand therefor from Enzon. Unless Enzon's counsel provides
an opinion to Neoprobe which is reasonably satisfactory to Neoprobe's counsel
that such a legend is not required, such shares shall contain a legend in the
customary language stating that the shares are unregistered and subject to the
restrictions of Rule 144 of the SEC.
9. Neoprobe shall cause the Enzon Registration Statement to remain
effective until the earlier of (i) nine months after it becomes effective or
(ii) Enzon has sold all of the Warrants and Warrant Shares.
10. Neoprobe shall cooperate with Enzon in connection with the transfer
or sale by Enzon of the Warrants and Warrant Shares and shall promptly and
without delay or compensation provide Enzon or its designee any documents
reasonably required by Enzon or its designee to effectuate the sale or transfer
of the Warrants and Warrant Shares in the shortest time practicable.
11. Any provision in this Agreement, the License Agreement or the
Warrants to the contrary notwithstanding, Enzon agrees that after the effective
date of the Enzon Registration Statement it will exercise no more than the
number of Warrants calculated according to the formula set forth in this section
11, and agrees that its rights to the remainder of the Warrants, if any, will be
then extinguished. If the closing price of Neoprobe's Common Stock as reported
on the NASDAQ National Market System on the next business day following the date
Neoprobe gives Enzon notice of the Enzon Registration Statement becoming
effective (the "Base Line Closing Price") is $20.25 Enzon may exercise all of
the Warrants at the exercise price of $6.30 a share and 50,000 of the Warrants
at the exercise price of $12.60 a share. If the Base Line Closing Price is other
than $20.25, Enzon agrees to exercise only so many Warrants as to create a
spread or difference between the Total Exercise Price (that is, the exercise
price or prices times the total number of Warrants exercised) and the Total Base
Line Closing Price (that is, the Base Line Closing Price times the total number
of Warrants exercised) which shall be equal to One Million Eighty Thousand
($1,080,000) Dollars. The foregoing notwithstanding, regardless of the Base Line
Closing Price, the total number of Warrants Enzon may exercise shall not exceed
150,000 and shall not be less than 75,000. Examples of the calculation at
different Base Line Closing Prices are contained in the spread sheet attached as
Schedule 2 to this Agreement.
12. If Neoprobe defaults under any provision of this Agreement for any
reason and fails to cure such default within fourteen (14) days of notification
thereof by facsimile from Enzon or its counsel, Enzon may in its sole discretion
and in addition to any other remedies it may have at law or in equity take any
one or more of the following actions:
a. terminate the License Agreement effective immediately;
b. obtain in any court of law or equity with jurisdiction over the
parties an injunction or other court order requiring immediate specific
performance by Neoprobe of its obligations hereunder with respect to the
Warrants and Additional Warrants. In this regard, Neoprobe acknowledges and
agrees not to contest or dispute in any court action that (i) there is no
adequate remedy at law for a further delay in the issuance and/or registration
of the Warrants, Additional Warrants or Warrant Shares and (ii) Enzon will
suffer irreparable injury if there is further delay in the registration or
issuance of the Warrants, Additional Warrants or Warrant Shares. In the event
any court action is brought by Enzon under this paragraph of this Agreement,
Neoprobe will pay for Enzon's reasonable attorneys' fees and disbursements and
consents to the entry of an order determining the amount by the court in which
the action is brought.
<PAGE> 4
13. The provisions of this Agreement shall be deemed to modify and
amend the License Agreement as necessary and shall govern in the event there is
any inconsistency between this Agreement and the License Agreement; as so
modified and amended, the terms of the License Agreement are incorporated into
and made a part of this Agreement. As modified and amended herein, the License
Agreement is continued in full force and effect and any notices of termination
heretofore sent are hereby withdrawn and cancelled.
14. Any notices or demands sent under this Agreement or the License
Agreement shall be in writing and shall be sent by facsimile or by certified
mail, return receipt requested, as follows:
To ENZON: John A. Caruso
Vice President, Business Development and
General Counsel
Enzon, Inc.
20 Kingsbridge Road
Piscataway, NJ 08854-3969
fax: 908/980-5911
with a copy to Kevin T. Collins, Esq.
Ross & Hardies
65 East 55th Street
New York, NY 10022
fax: 212/715-2305
To NEOPROBE: David C. Bupp
President and Chief Operating Officer
Neoprobe Corporation
425 Metro Place North
Dublin, OH 43017-1367
fax: 614/793-7522
with copy to Robert S. Schwartz, Esq.
Schwartz, Warren & Ramirez
A Limited Liability Company
41 South High Street
Columbus, OH 443215
fax: 614/224-0360
or such other address as the parties may designate in writing from time to time.
Notices sent by facsimile shall be deemed received as of the date sent.
15. Neoprobe acknowledges that the courts located in the States of
Delaware, Ohio and New Jersey have jurisdiction over Neoprobe in connection with
any legal action against Neoprobe that may be brought by Enzon to enforce this
Agreement or the License Agreement and hereby consents and submits to the
jurisdiction of the courts of any of those States in connection with any such
action.
16. This Agreement and the License Agreement, as modified herein,
constitute the entire agreement between the parties as to the subject matter
hereof, and supersedes and replaces all prior agreements, understandings,
writings or discussions between the parties relating to such subject matter.
<PAGE> 5
17. Neither party shall make any public disclosure concerning this
agreement without the consent of the other party, which consent will not be
unreasonably withheld, taking into account the disclosure obligations of the
parties under applicable securities laws.
18. This Agreement may be executed in counterparts. Signatures obtained
by facsimile shall be the equivalent of original signatures.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ENZON, INC.
By:
-----------------------------------
NEOPROBE CORPORATION
By:
-----------------------------------
David Bupp, President and COO
<PAGE> 6
SCHEDULE 1
Indemnification. The Company shall indemnify and hold harmless Enzon,
Inc. (the "Warrantholder") for Warrants and Warrant Shares that are registered
pursuant to the Registration Statement and each underwriter, within the meaning
of the Act, who may purchase from or sell for the Warrantholder any such
Warrants and Warrant Shares, and each person, if any, who controls the
Warrantholder or underwriter within the meaning of the Act, from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
of a material fact contained in any registration statement or any post-effective
amendment thereto or any prospectus included therein required to be filed or
furnished in connection therewith or caused by any omission to state therein a
material fact required to be stated therein in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission based upon information furnished
or required to be furnished in writing to the Company by the Warrantholder or
underwriter expressly for use therein.
The Warrantholder agrees to indemnify and hold harmless the Company and
its directors, officers, employees and agents against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or any prospectus
contained therein, or in any amendment thereof or supplement thereto, or arose
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or an omission or an
alleged untrue statement or an alleged omission made in reliance upon or in
conformity with written information furnished to the Company by the
Warrantholder or on behalf of the Warrantholder expressly for use in the
Registration Statement or any amendment thereof or any prospectus contained
therein or in any amendment thereof or supplement thereto.
Contribution. If the indemnification provided for herein from either
the Warrantholder or the Company is unavailable to an indemnified party (the
"Indemnitee") hereunder in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to herein, then the party responsible
for such indemnification (the "Indemnitor"), in lieu of indemnifying the
Indemnitee, shall contribute to the amount paid or payable by the Indemnitee as
a result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnitor and Indemnitee in
connection with the actions which resulted in such losses, claims, damages or
liabilities (including legal or other fees and expenses reasonably incurred in
connection with any investigation or proceeding) as well as any other equitable
considerations.
If indemnification is available, the Indemnitor shall indemnify each
Indemnitee to the full extent provided for herein without regard to the relative
fault of the Indemnitor, the Indemnitee or any other equitable consideration
provided for hereunder.
<PAGE> 7
SCHEDULE 2
ENZON WARRANT ANALYSIS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Price No Shares @ $6.30 Value No Shares @ $12.60 Value Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
25.00 50,000.00 935,000.00 25,000.00 310,000.00 1,245,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
24.00 50,000.00 885,000.00 25,000.00 285,000.00 1,170,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
23.25 50,000.00 847,500.00 25,000.00 266,250.00 1,113,750.00
- -----------------------------------------------------------------------------------------------------------------------------------
23.00 50,000.00 835,000.00 25,000.00 260,000.00 1,095,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
22.88 50,000.00 828,750.00 25,000.00 256,875.00 1,085,625.00
- -----------------------------------------------------------------------------------------------------------------------------------
22.80 50,000.00 825,000.00 25,000.00 255,000.00 1,080,000.00 Floor
- -----------------------------------------------------------------------------------------------------------------------------------
22.75 50,000.00 822,500.00 25,369.46 257,500.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
22.63 50,000.00 816,250.00 26,309.23 263,750.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
22.50 50,000.00 810,000.00 27,272.73 270,000.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
22.38 50,000.00 803,750.00 28,260.87 276,250.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
22.25 50,000.00 797,500.00 29,274.61 282,500.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
21.25 50,000.00 747,500.00 38,439.31 332,500.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
20.25 50,000.00 697,500.00 50,000.00 382,500.00 1,080,000.00 Base Case
- -----------------------------------------------------------------------------------------------------------------------------------
19.25 50,000.00 647,500.00 65,037.59 432,500.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
18.25 50,000.00 597,500.00 85,398.23 482,500.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
18.13 50,000.00 591,250.00 88,461.54 488,750.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
18.00 50,000.00 585,000.00 91,666.67 495,000.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
17.88 50,000.00 578,750.00 95,023.70 501,250.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
17.75 50,000.00 572,500.00 98,543.69 507,500.00 1,080,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
17.70 50,000.00 570,000.00 100,000.00 510,000.00 1,080,000.00 Cap
- -----------------------------------------------------------------------------------------------------------------------------------
17.63 50,000.00 566,250.00 100,000.00 502,500.00 1,068,750.00
- -----------------------------------------------------------------------------------------------------------------------------------
17.50 50,000.00 560,000.00 100,000.00 490,000.00 1,050,000.00
- -----------------------------------------------------------------------------------------------------------------------------------
17.25 50,000.00 547,500.00 100,000.00 465,000.00 1,012,500.00
- -----------------------------------------------------------------------------------------------------------------------------------
16.25 50,000.00 497,500.00 100,000.00 365,000.00 862,500.00
- -----------------------------------------------------------------------------------------------------------------------------------
15.25 50,000.00 447,500.00 100,000.00 265,000.00 712,500.00
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-7-
<PAGE> 1
Exhibit 5.1
SCHWARTZ, WARREN & RAMIREZ
A LIMITED LIABILITY COMPANY O ATTORNEYS AT LAW
41 SOUTH HIGH STREET o COLUMBUS, OHIO 43215-6188
(614) 222-3000 o FAX (614) 224-0360 ROBERT S. SCHWARTZ
DAYTON, OHIO (513) 228-0144 (614) 222-3050
http://www.swrlaw.com [email protected]
May 8, 1996
Neoprobe Corporation
425 Metro Place North
Dublin, Ohio 43017
Re: Offering of Common Stock
Gentlemen:
You have requested our opinion in connection with the offering (the
"Offering") of Class K and Class L Warrants and 150,000 shares of Common Stock,
par value $.001 per share (the "Common Stock"), of Neoprobe Corporation, a
Delaware corporation (the "Company") issuable upon exercise of Class K and Class
L Warrants (the "Warrants"), which securities are registered on Post-Effective
Amendment No. 2 to Registration Statement on Form S-3 (No. 33-86000), filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933
(the "Registration Statement").
Although we have acted as counsel to the Company in connection with the
Offering and various other matters in the past, our advice to and representation
of the Company have been limited to the specific matters referred to us from
time to time by the Company; accordingly, we may be unaware of certain matters
of a legal nature concerning the Company.
We have examined and relied upon the following documents and instruments
for the purpose of giving this opinion which, to our knowledge and in our
judgment, are all of the documents and instruments that are necessary for us to
examine for such purpose:
i. The Registration Statement, the prospectus filed therewith (the
"Prospectus") and all amendments and exhibits thereto;
ii. The forms of Warrants;
iii. The corporate minute books of the Company, including copies of the
Company's Restated Certificate of Incorporation, as amended, and Amended and
Restated Bylaws;
iv. An officer's certificate executed by an officer of the Company
certifying certain factual information; and
v. A secretary's certificate executed by the secretary of the Company
certifying certain corporate information.
In giving our opinion, we have assumed, without investigation, the
authenticity of any document or instrument submitted to us as an original, the
conformity to the authentic original of any document or instrument submitted to
us as a certified, conformed or photostatic copy, the genuineness of all
signatures on such originals or copies and the authority and capacity of each
signatory.
<PAGE> 2
Neoprobe Corporation
May 8, 1996
Page 2
Based upon the foregoing, we are of the opinion that the Warrants
constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their respective terms. The shares of
Common Stock issuable upon the exercise of the Warrants have been duly
authorized and reserved for issuance upon the exercise of the Warrants and, upon
issuance, delivery and payment therefor pursuant to the terms of the Warrants,
will be validly issued, fully paid and nonassessable.
The opinion set forth above is subject to the following qualifications:
A. The legality, validity and enforceability of the Warrants are subject to
the effect of any applicable bankruptcy, insolvency or similar law affecting
creditors' rights in general.
B. The legality, validity and enforceability of the Warrants are subject to
general principles of equity, whether considered in actions at law or suits in
equity, including, without limitation, good faith, unconscionability,
reasonableness and the possible unavailability of specific performance and
injunctive relief.
C. No opinion is expressed herein as to the application of any state
securities or blue sky laws to the offer, sale and issuance of the Warrants or
the shares of Common Stock issuable upon the exercise thereof.
D. Members of our firm are qualified to practice law in the State of Ohio
and nothing contained herein shall be deemed to be an opinion as to any other
law other than the General Corporation Law of the State of Delaware and the
federal law of the United States.
E. The opinions set forth herein are expressed as of the date hereof and we
do not have any obligation to advise you of any changes, after the date hereof,
in the facts or the law upon which these opinions are based.
F. This opinion is furnished by us solely for your benefit and is intended
to be used as an exhibit to the Registration Statement and filings with various
state securities authorities in connection with the Offering, and such entities
may rely on this opinion as if it were addressed to and had been delivered to
them on the date hereof. Except for such use, neither this opinion nor copies
hereof may be relied upon by, delivered to any person or entity, or quoted in
whole or in part without our prior written consent.
G. We consent to the reference to our firm name under the caption LEGAL
MATTERS in the Prospectus and to the use of our opinion as an exhibit to the
Registration Statement. In giving these consents, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
SCHWARTZ, WARREN & RAMIREZ
A LIMITED LIABILITY COMPANY
By: /s/Robert S. Schwartz
----------------------------------------
Robert S. Schwartz, a member of the firm
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated February 16, 1996, on our audits of the
consolidated financial statements of Neoprobe Corporation and Subsidiaries. We
also consent to the reference to our Firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
May 9, 1996
