U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[_] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE ACT
For the transition period from __________ to __________
Commission file Number 1-11055
Epigen, Inc.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 04-3120713
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Tower Lodge, North Tower Hill Road, Box L, Millbrook, NY 12545
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(914) 677-5317
-----------------------------------------------
(Issuer's telephone number including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [_]
The number of shares outstanding of the issuer's common Stock, par
value $.001 per share, at August 12, 1999 was 5,082,475.
Traditional Small Business Disclosure Format (check one)
Yes [X] No [_]
<PAGE>
EPIGEN, INC.
(Formerly COD Associates, L.P.)
(A Development Stage Company)
INDEX
Page
Number
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheets
at June 30, 1999 and December 31, 1998 . . . . . . . . . . . . 1
Statements of Operations
for the six month periods ended June 30, 1999
and June 30, 1998, and for the three month periods
ended June 30,1999 and June 30, 1998,and cumulative
from Inception (January 28, 1987)to June 30, 1999 . . . . . . . 2
Statements of Cash Flows
for the six month periods ended June 30, 1999
and June 30, 1998 and cumulative from
Inception (January 28, 1987) to June 30, 1999 . . . . . . . . . 3
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 4 - 5
Item 2 - Management's Discussion and Analysis or
Plan of Operations . . . . . . . . . . . . . . . . . . . . . . . 6 - 7
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports of Form 8-K . . . . . . . . . . . . . . 8
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exhibit 10.2 - Agreement Between Epigen, Inc. and Vacold, LLC . . . . 10 - 13
(i)
<PAGE>
EPIGEN, INC.
(formerly COD Associates, L.P.)
(A Development Stage Company)
BALANCE SHEETS
June 30, December 31,
1999 1998
------------ ------------
Assets
Current Assets:
Cash and cash equivalents .................. $ 95,951 $ 24,215
------------ ------------
Total current assets .................... 95,951 24,215
Office equipment, net of accumulated
depreciation of $42,999 and $41,043 ......... 24,968 28,022
Other assets, net of accumulated
amortization of $3,025 and $3,205 ........... -- --
------------ ------------
$ 120,919 $ 52,237
============ ============
Liabilities and Stockholders' Equity
Current Liabilities:
Note payable demand ......................... 130,805 145,805
Notes payable - 25% interest ................ 200,000 200,000
Notes payable - prime plus 5% ............... 250,000 250,000
Accrued interest-note payable demand ........ 197,616 150,697
Accrued direct research and development
costs ...................................... 451,280 430,973
Accrued professional fees ................... 291,521 357,535
Accrued payroll ............................. 1,415,911 1,173,520
Other accrued expenses ...................... 482,694 368,749
------------ ------------
Total current liabilities ............... 3,419,827 3,077,279
------------ ------------
Stockholders' Equity:
Common stock $.001 par value
5,082,475 shares outstanding at
June 30, 1999 .............................. 5,083 4,787
Additional paid-in capital .................. 15,770,851 15,484,456
Deficit accumulated during development
stage ...................................... (19,074,495) (18,513,938)
Less 5 shares of common stock held in
treasury, at cost .......................... (347) (347)
------------ ------------
Total stockholders' equity .............. (3,298,908) (3,025,042)
------------ ------------
$ 120,919 $ 52,237
============ ============
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
<TABLE>
EPIGEN, INC.
(formerly COD Associates, L.P.)
(A Development State Company)
STATEMENTS OF OPERATIONS
Cumulative
For the Three For the Three For the Six For the Six from
Months Ended Months Ended Months Ended Months Ended Inception to
June 30, June 30, June 30, June 30, June 30,
1999 1998 1999 1998 1999
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Licensing fees ............ $ -- $ -- $ -- $ -- $ 1,600
Interest income ........... -- -- -- -- 219,711
------------ ------------ ------------ ------------ ------------
221,311
------------
Operating Costs & Expenses:
Direct research and
development .............. 13,307 94,948 34,452 184,043 7,525,425
General and administrative 192,538 208,659 406,938 396,811 9,917,239
Fees due to General Partner
of the Predecessor and
affiliates, forgiven and
contributed to capital ... -- -- -- -- 1,188,893
Interest expense, net ..... 61,035 30,097 119,167 59,074 664,249
------------ ------------ ------------ ------------ ------------
Total operating costs
and expenses ......... 266,880 333,704 560,557 639,928 19,295,806
------------ ------------ ------------ ------------ ------------
Net (loss) ................. (266,880) (333,704) (560,557) (639,928) $(19,074,495)
============ ============ ============ ============ ============
Net loss per common share .. $ (0.05) $ (0.09) $ (0.11) $ (0.18)
============ ============ ============ ============
Weighted average
Number of shares of common
stock outstanding ......... 5,082,475 3,620,880 4,992,949 3,478,674
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
2
</TABLE>
<PAGE>
<TABLE>
EPIGEN, INC.
(formerly COD Associates, L.P.)
(A Development State Company)
STATEMENTS OF CASH FLOWS
Cumulative
For the Six For the Six from
Months Ended Months Ended Inception to
June 30, June 30, June 30,
1999 1998 1999
(unaudited) (unaudited) (unaudited)
------------ ------------ ------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss ..................................... $ (560,557) $ (639,928) $(19,074,495)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization expense ....... 4,127 717 106,116
Non-cash expenses paid in equity interest ... -- -- 2,810,878
Non-cash compensation expense associated
with the grant of stock options and warrants -- -- 427,964
Debt converted to equity ..................... 76,680 -- 642,830
Changes in operating assets and liabilities
Increase(decrease) in accrued direct
research and development costs .............. 20,307 83,280 451,280
Increase(decrease) in accrued professional
fees ........................................ (66,014) 3,828 291,521
Increase(decrease) in accrued payroll ........ 242,391 77,753 1,415,911
Increase(decrease) in accrued expenses to
affiliates, printing charges and other
expenses .................................... 160,863 53,503 680,309
------------ ------------ ------------
Net cash used in operating activities .... (122,203) (420,847) (12,247,686)
------------ ------------ ------------
Cash Flows from Investing Activities:
Purchase of office equipment ................. (1,072) (1,403) (74,132)
Purchase of treasury stock ................... -- -- (347)
Decrease(increase) in note receivable from
an officer/shareholder ...................... -- (36,982) --
Decrease(increase) in other assets ........... -- -- (3,025)
Increase in organizational costs ............. -- -- (53,925)
------------ ------------ ------------
Net cash provided by investing
activities .............................. (1,072) (38,385) (131,429)
------------ ------------ ------------
Cash Flows from Financing Activities:
Proceeds from issuance of common stock ....... 296 852 9,147,946
Capital contributions ........................ 209,715 224,748 2,351,315
Proceeds from issuance of preferred stock .... -- -- 395,000
Increase (decrease) in note payable-demand ... (15,000) 175,000 130,805
Net increase in notes payable - demand ....... -- -- 450,000
------------ ------------ ------------
Net cash provided by financing activities 195,011 400,600 12,475,066
------------ ------------ ------------
Net increase(decrease) in cash and cash
equivalents .................................. 71,736 (58,632) 95,951
Cash and cash equivalents, beginning period ... 24,215 64,809 --
------------ ------------ ------------
Cash and cash equivalents, end of period ...... $ 95,951 $ 6,177 $ 95,951
============ ============ ============
The accompanying notes are an integral part of these financial statements.
3
</TABLE>
<PAGE>
EPIGEN, INC.
(formerly COD Associates, L.P.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. Basis of Presentation:
The financial statements as of June 30, 1999 are unaudited, but include
all adjustments (consisting of normal, recurring adjustments) which the
Company considers necessary for a fair presentation of such interim
financial statements. The results of operations for the six month
periods ended June 30, 1999 and June 30, 1998 and the three month
periods ended June 30, 1999 and 1998 are not necessarily indicative of
the results for the entire year. The financial statements and notes are
presented as permitted by Form 10-QSB and do not contain certain
information included in the Company's annual financial statements and
notes.
2. Cash and Cash Equivalents:
Cash and cash equivalents include all funds held in checking and money
market bank accounts.
3. Net Loss per Share:
Net loss per share is based on the weighted average number of shares of
common stock outstanding during the period. All outstanding warrants and
options have been excluded from the calculation as they are
antidilutive.
4. Licensing Agreements:
The Company's technology is used under an exclusive license from Boston
Biomedical Research Institute ("BBRI"). Pursuant to the terms of this
license agreement, the Company has been granted an exclusive, worldwide
license to manufacture, use, lease, sell or otherwise transfer (a) any
products utilizing any patents obtained by BBRI, or (b) any products
resulting from the Company-sponsored research at BBRI, or (c)
compositions containing such products. The agreement provides for
royalty payments to BBRI equal to 5% of the net selling price not to
exceed $10,000,000 per year and subject to certain reductions described
below. The agreement expires the later of ten years from the first
commercial sale of any such products or the expiration of any applicable
patent.
During 1992, the Company entered into a contract with the University of
Oslo (the "University") in close collaboration with BBRI for the
characterization of the Human Carcinoma Antigen. The agreement calls for
payment to the University of 1% of net sales of any human therapeutic
product utilizing these patent or biological material rights sold to
third parties. Pursuant to the Company's agreement with BBRI, the
royalty payable to BBRI is reduced to 4.5% of the net selling price of
any covered product for which a royalty is also payable to the
University.
4
<PAGE>
EPIGEN, INC.
(formerly COD Associates, L.P.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
4. Licensing Agreements (cont.):
During 1993, the Company entered into an agreement with Massachusetts
General Hospital ("MGH") to license certain antibodies for use in
developing the in vitro diagnostic test, the in vivo imaging agent and
the therapeutic vaccine. Under the agreement, the Company is required to
pay royalties ranging from 2% to 5% of the net sales price, as defined,
depending on the country in which the product is sold. The term of the
agreement expires, on a country-by-country basis, eight years after the
first commercial sale or for the life of a valid patent in a country,
whichever occurs first. Pursuant to the Company's agreement with BBRI,
if royalties are to be paid to both BBRI and MGH, the royalty otherwise
payable to BBRI will be reduced so that the total royalty paid to BBRI
and MGH does not exceed 6% of the net selling price of any licensed
product or process. On June 12, 1995, MGH agreed to reduce royalty
payments due pursuant to the June 1, 1993 agreement by 50%.
The Company has entered into an Agreement dated March 31, 1999 with
Vacold, LLC for the creation of the first IgG antibody, in lieu of cash,
Vacold is to receive 6% of the Company's Common Stock, plus a 3% royalty
on Epigen's sales that include the IgG developed in Vacold's laboratory.
A second contract with Vacold for ongoing R&D has been negotiated at
standard industry rates. Vacold is to be responsible for the
optimization and demonstration of the new assay to the Company's
prospective strategic partners.
5
<PAGE>
EPIGEN, INC.
(FORMERLY COD ASSOCIATES, L.P.)
(A DEVELOPMENT STAGE COMPANY)
PART I FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis or Plan of Operation
The Company presently is insolvent and unable to pay its debts as they become
due. The officers have agreed temporarily to allow part of their salaries to
accrue. Currently, liabilities exceed assets. Should a sufficient number of the
Company's creditors pursue the obligations owed them, the Company might be
forced into a voluntary or involuntary bankruptcy.
The Company does not presently have the resources to complete the development
of, conduct prospective clinical trials for, manufacture and market, the COD
Test. The Company continues to seek funding for future development and clinical
trials of its products. Certain potential strategic partners and other sources
for such funding are currently reviewing the efficacy of such products.
The Company continues to pursue its business plan to the extent resources
permit. The Company has entered into arrangements with (i) a group of physicians
from several leading hospitals to obtain prostate serum samples in order to
conduct both retrospective and prospective clinical trials on the Company's in
vitro blood test for prostate cancer patents, and (ii) is in discussions with
major biopharmaceutical firms to participate in these retrospective and
prospective clinical trials for prostrate cancer patients. The Company has also
entered into a collaboration to gather additional data to demonstrate the
efficiency of the Company's in vitro blood test for breast cancer patients with
a physician from a leading hospital. If such tests yield sufficiently positive
results, the Company believes that it will be able to enter into a strategic
alliance. There can be no assurance that such test results will yield
sufficiently positive results. The results of such tests and collaborations will
determine to a significant extent the Company's ability to structure potential
strategic alliances.
The Company is currently in preliminary negotiations with several major
biopharmaceutical companies, and in the event positive results are achieved in
either the prostate or breast clinical trials, the Company expects to form a
strategic alliance with one of these companies. There can be no assurance,
however, that the Company will be successful in such endeavor.
Phase 1 and 2 clinical trials will commence on its therapeutic vaccine at
Columbia Presbyterian Hospital under the auspices of Dr. Carl Olsson as soon as
funds are available. Work on the Company's in vivo imaging agent is being
delayed until sufficient funds are available to continue such work. The Company
does not anticipate using any significant funds for work on its other products
over the next 12 months.
6
<PAGE>
EPIGEN, INC.
(FORMERLY COD ASSOCIATES, L.P.)
(A DEVELOPMENT STAGE COMPANY)
The Company has entered into an Agreement dated March 31, 1999 with Vacold, LLC
for the creation of the first IgG antibody, in lieu of cash, Vacold is to
receive 6% of the Company's Common Stock, plus a 3% royalty on Epigen's sales
that include the IgG developed in Vacold's laboratory. A second contract with
Vacold for ongoing R&D has been negotiated at standard industry rates. Vacold is
to be responsible for the optimization and demonstration of the new assay to our
prospective strategic partners.
7
<PAGE>
EPIGEN, INC.
(FORMERLY COD ASSOCIATES, L.P.)
(A DEVELOPMENT STAGE COMPANY)
PART II OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
10.1 Letter agreement dated May 4, 1999 between Registrant and
W. James Tozer, Jr., for the investment in Common Stock of
the Company which shall be a minimum of ten percent (10%) of
the Registrant's issued and outstanding Common Stock on a
fully diluted basis, filed as an exhibit to Form 8-K dated
June 14, 1999, incorporated herein by reference.
10.2 Agreement Between Epigen, Inc. and Vacold, LLC regarding the
development of antibodies.
(b) REPORTS ON FORM 8-K
The Company filed one report on Form 8-K dated June 14, 1999
for the three month period ended June 30, 1999 regarding the
sale of certain securities to W. James Tozer, Jr., which
report is incorporated herein by reference.
8
<PAGE>
EPIGEN, INC.
(FORMERLY COD ASSOCIATES, L.P.)
(A DEVELOPMENT STAGE COMPANY)
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: August 12, 1999
EPIGEN, INC.
By: /s/: Donald C. Fresne
-------------------------------
Donald C. Fresne, Chief
Executive Officer, Chairman
of the Board of Directors and
President
By: /s/: L. Courtney Schroder
-------------------------------
L. Courtney Schroder, Treasurer
and Chief Financial Officer
9
Exhibit 10.2
AGREEMENT BETWEEN EPIGEN, INC.
AND VACOLD, LLC.
Epigen, Inc, a Delaware Corporation with an office at North Tower Hill
Road, PO Box L, Milbrook, NY 12545 ("Epigen"), is engaged in the development and
commercialization of products for the diagnosis of cancer. Epigen desires to
obtain an IgG antibody with similar antigen binding and diagnostic potential as
its AE3 antibody.
Vacold, LLC, a New York limited liability company with an office at 360
Lexington Avenue, 21st Floor, New York, NY 10017 ("Vacold"), a wholly owned
subsidiary of Immunotherapy, Inc., a Delaware Corporation with offices at 360
Lexington Avenue, 21st Floor, New York, NY 10017, believes it has the
capability, directly or indirectly, to develop such an antibody (such IgG, when,
as and if developed by Vacold, being hereinafter referred to as the "AE-IgG").
Epigen desires to have Vacold, as soon as possible, devote its efforts to
developing the AE-IgG.
In consideration of the premises, and the mutual agreements hereinafter set
forth, the parties hereto agree as follows:
1. Epigen represents that it is a Delaware corporation in good standing in
such state and that it has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, and this
Agreement has been duly authorized by all appropriate Corporate action.
Execution or performance of this Agreement will not result in a breach or
default under any of the contractual obligations, bylaws, or certificate of
incorporation of Epigen. This Agreement, when executed by Epigen, shall
constitute the valid and binding obligation of Epigen, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency and
other laws affecting creditors' rights generally. The shares of Epigen
stock issued to Vacold pursuant to Paragraph 6 of this Agreement will be
validly issued, fully paid, and non-assessable.
2. Vacold represents that it is a New York limited liability company in good
standing in such state and that it has full power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby,
and this Agreement has been duly authorized by all appropriate Corporate
action. Execution or performance of this Agreement will not result in a
breach or default under any of the contractual obligations, bylaws, or
certificate of incorporation of Vacold. This Agreement, when executed by
Vacold, shall constitute the valid and binding obligation of Vacold,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and other laws affecting creditors' rights generally.
3. At the closing of this Agreement Epigen will deliver to Vacold the
certified minutes of its Board of directors and Vacold will deliver to
Epigen the Written Consent of Manager in Lieu of Meeting, duly authorizing
the respective parties to enter into and execute this Agreement.
4. Epigen shall deliver to Vacold; (i) purified epiglycanin; (ii) AE3
anti-idiotypic and anti anti-idiotypic antibody; and (iii) AE3 antibody to
enable Vacold to conduct or cause to be conducted research to develop the
AE-IgG. The transfer of the foregoing items is subject to the Materials
Transfer Agreement between the parties attached hereto.
5. Vacold's affiliate, Immunotherapy, Inc., has since January 1999 engaged in
research to develop the AE-IgG (the "Research"), as outlined in the
research plan attached hereto (titled "Generation of IgG monoclonal
antibody against the AE3 cancer-specific epitope in epiglycanin"), and will
devote itself to such research through May 1999.
10
Page 1 of 2
<PAGE>
6. Upon the execution of this agreement, Epigen will issue to Vacold that
number of shares of Epigen Common Stock, $.001 par value per share, which,
upon issuance and delivery, shall be duly authorized, fully paid and
non-assessable, and shall represent six percent (6%) of the fully diluted
capital stock of Epigen as of March 31, 1999. Vacold shall have the right
to receive from Epigen, upon reasonable request by Vacold, information such
as a Director of Epigen would be entitled to receive, including but not
limited to minutes of all meetings of the board of directors of Epigen
(hereinafter "Information Rights"). Vacold shall be subject to the same
confidentiality requirements with respect to such information as directors
of Epigen. The Information Rights shall expire upon the occurrence of
either one of the following events: (i) relisting on NASDAQ, or (ii) an
investment in Epigen of not less than three million U.S. dollars
($3,000,000) where one of the participants is a financial institution which
places a director on the Board of Directors of Epigen.
7. Promptly following the execution of this Agreement, Vacold and Epigen will
negotiate and enter into a royalty agreement (the "Royalty Agreement")
providing for, among other things:
a) the transfer to Epigen of any patent or patent rights resulting from
the Research. Epigen shall file, maintain and prosecute at its expense
all patent applications and patents resulting from the Research. In
absence of a patent, Vacold will transfer all ownership underlying the
technology (i.e., antibodies) and patent rights;
b) payment by Epigen to Vacold, its successors and assigns, of a
perpetual three percent (3%) royalty to Vacold on net end-product
sales by Epigen of products which incorporate the AE-IgG developed by
Vacold (the "Royalty"). The Royalty to increase to seven percent (7%)
in the event that any proceeding in bankruptcy, assignment for the
benefit of creditors, or similar insolvency proceeding is commenced by
or against Epigen, and such proceedings are not discontinued within
sixty (60) days (hereinafter "Insolvency").
c) a perpetual payment by Epigen to Vacold, its successors and assigns,
of three percent (3%) of all royalties and all other payments received
by Epigen from its sublicensees, distributors, partners, joint
venturers or others receiving rights to manufacture, use and/or sell
the AE-IgG, such payment to increase to seven percent (7%) in the
event of an Insolvency;
d) any person who shall be a licensee of Epigen shall agree in writing to
be bound and abide by all of the terms and provisions of the Royalty
Agreement and must promptly provide Vacold with a true copy of such
license and written agreement to be so bound;
e) other provisions customarily found in such royalty agreements.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the 31st day of March, 1999.
EPIGEN, INC. VACOLD, LLC
By: /s/: Donald C. Fresne By: /s/: David Dove
------------------------- --------------------------
Name: Donald C. Fresne Name: David Dove
------------------------- --------------------------
Title: Chairman & CEO Title: President
------------------------- --------------------------
11
Page 2 of 2
<PAGE>
GENERATION OF IgG MONOCLONAL ANTIBODY AGAINST THE AE3 CANCER-SPECIFIC EPITOPE IN
EPIGLYCANIN
Day 1- Immunize C57B1/6, C3HeJ and DBA/2 mice with epiglycanin
(native and modified with PDC) or with AE3 anti-idiotypic
antibody.
Day 21- Boost
Day 24- Perform B cell fusion
Day 38- Screen all hybridomas for IgG and select positive clones
Day 48- Screen IgG positive hybridomas for specificity to epiglycanin
Day 58- Identify IgG positive hybridoma reactive with AE3 epitope
(perform inhibition assay with AE3 moab)
Day 68- Expand positive hybridomas
Day 78- Induce ascites to generate large amounts of specific IgG moabs
Day 85- Purify IgG moabs
Day 90- Aliquot and cryopreserve IgG moabs
Day 90-120 Establish a capture assay using IGG and lectin
Perform Recovery Studies
12
<PAGE>
VACOLD, LLC
and
EPIGEN, INC.
BIOLOGICAL MATERIAL TRANSFER AGREEMENT
WHEREAS, Epigen, Inc., a Delaware corporation with offices at North
Tower Hill Road, PO Box L, Millbrook, NY 12545 ("Epigen") possesses certain
biological material consisting of purified epiglycanin, AE3 antibody, and AE3
anti idiotypic antibody, (hereinafter referred to as "Biological Material") and
related confidential information (hereinafter "Information") and,
WHEREAS, Vacold, LLC, a Delaware corporation with offices at 360
Lexington Avenue, 21st Floor, New York, NY 10017 (hereinafter "Vacold"), desires
to obtain from Epigen such Biological Material and Information to be used for
purposes of the research described in the letter agreement attached hereto (the
"Research").
NOW THEREOF, Epigen is willing to make available to Vacold the
Biological Material and certain Information for the aforesaid purpose subject to
the following terms and conditions:
1. OWNERSHIP. Epigen retains all right and title in and to the Biological
Material and Information, subject to the rights of the United States
government. Nothing contained within this Agreement shall restrict
Epigen's rights to use or distribute the Biological Material and
Information to other commercial or noncommercial entities.
2. USE. Vacold agrees that the Biological Material and Information shall
be used only by Vacold and only for purposes of the Research, and shall
not be used in humans.
3. DISTRIBUTION AND CONTROL. Vacold agrees not to transfer or disclose the
Biological Material and Information to any third party without the
prior permission of Epigen. In addition, Vacold shall obtain acceptance
of the terms of this Agreement of all persons who have access to the
Biological Material and Information.
4. CONFIDENTIALITY. Vacold agrees to use the Biological Material only in
connection with the Research and to hold the Information in confidence
and not transfer in any manner the Biological Material or disclose the
Information received from Epigen under this Agreement, except that
Information may be disclosed which: i) was in Vacold's possession or
control prior to the date of disclosure by Epigen; ii) was in the
public domain or enters into the public domain through no improper act
on Vacold's part or on the part of any of Vacold's employees; or iii)
rightfully given to Vacold from sources independent of Epigen.
5. GOVERNING LAW. The terms and provision of this Agreement and any
dispute or controversy arising hereunder shall be governed by the laws
of the State of New York applicable to contract made and to be
performed therein, without giving effect to the principles of conflicts
of laws thereof. Any dispute or controversy arising out of this
Agreement shall be submitted to binding arbitration to be held in the
City of New York in accordance with the rules of the American
Arbitration Association then in effect.
6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute on agreement.
IN WITNESS WHEREOF, Epigen and Vacold have caused this Agreement to be
executed by their respective duly authorized officers. This agreement shall be
effective as of the date last set forth below.
VACOLD, LLC EPIGEN, INC.
By: /s/: David Dove, MD By: /s/: Donald C. Fresne
----------------------------- -----------------------------
David Dove, M.D. Donald C. Fresne
Chairman of the Board and CEO
Date: May 26, 1999 Date: February 9, 1999
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Jun-30-1999
<CASH> 95,951
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 70,138
<DEPRECIATION> 45,170
<TOTAL-ASSETS> 120,919
<CURRENT-LIABILITIES> 3,419,827
<BONDS> 0
0
0
<COMMON> 5,083
<OTHER-SE> (3,303,991)
<TOTAL-LIABILITY-AND-EQUITY> 120,919
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 441,390
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 119,167
<INCOME-PRETAX> (560,557)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (560,557)
<EPS-BASIC> (0.11)
<EPS-DILUTED> 0
</TABLE>
