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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-17999
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ImmunoGen, Inc.
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2726691
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State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
333 Providence Highway
Norwood, MA 02062
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(Address of principal executive offices, including zip code)
(617) 769-4242
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports,) and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
At February 11, 1997 there were 18,390,984 shares of common stock, par
value $.01 per share, of the registrant outstanding.
At February 11, 1997 there were 5,500 shares of convertible preferred
stock, par value $.01 per share, of the registrant outstanding.
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IMMUNOGEN, INC.
TABLE OF CONTENTS
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Page
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PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1996.............................. 3
Consolidated Statements of Operations
for the three months and the six months ended
December 31, 1995 and 1996....................................... 4
Consolidated Statements of Stockholders'
Equity for the year ended June 30, 1996 and for
the six months ended December 31, 1996........................... 5
Consolidated Statements of Cash Flows
for the six months ended December 31, 1995 and 1996.............. 6
Notes to Consolidated Financial Statements....................... 7
Signatures................................................................... 20
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ITEM 1. FINANCIAL STATEMENTS
IMMUNOGEN, INC.
CONSOLIDATED BALANCE SHEETS
As of June 30, 1996 and December 31, 1996
June 30, December 31,
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1996 1996
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ASSETS
Cash and cash equivalents $ 2,796,636 $ 1,828,987
Prepaids and other current assets 163,280 422,299
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Total current assets 2,959,916 2,251,286
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Property and equipment, net of
accumulated depreciation 4,163,416 3,547,561
Note receivable 1,338,929 1,067,633
Other assets 43,700 43,700
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Total assets $ 8,505,961 $ 6,910,180
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable 733,446 985,585
Accrued compensation 233,515 250,181
Other accrued liabilities 832,573 763,534
Current portion of capital lease obligations 141,533 109,157
Current portion of deferred lease -- 152,088
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Total current liabilities 1,941,067 2,260,545
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Capital lease obligations 37,068 --
Deferred lease -- 25,355
Convertible debentures 5,750,443 --
Commitments
Stockholders' equity :
Preferred stock; $.01 par value;
authorized 5,000,000 as of
September 30, 1996:
Convertible preferred stock, Series A,
$.01 par value; issued and outstanding
2,500 shares at October 3, 1996
(liquidation preference - stated value
plus accrued but unpaid dividends per
share; excludes interest) -- 25
Convertible preferred stock, Series B,
$.01 par value; issued and outstanding
3,000 shares at October 16, 1996
(liquidation preference - stated -- 30
value plus accrued but unpaid
dividends per share; excludes interest)
Common stock, $.01 par value; authorized
30,000,000 as of June 30, 1996 and
December 31, 1996, respectively;
Issued and outstanding 16,599,855 and
16,963,161 as of June 30, 1996 and
December 31, 1996, respectively 165,999 169,632
Additional paid-in capital 128,525,884 137,703,973
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128,691,883 137,873,660
Accumulated deficit (127,914,500) (133,249,380)
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Total stockholders' equity 777,383 4,624,280
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Total liabilities and stockholders' equity $ 8,505,961 $ 6,910,180
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The accompanying notes are an integral part of the financial statements.
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IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months and six months ended December 31, 1995 and 1996
Three Months Ended Six Months Ended
December 31, December 31,
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1995 1996 1995 1996
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Revenues:
Development fees $ 86,834 $ 71,076 $ 223,162 $ 153,232
Interest 22,281 15,219 56,614 36,599
Licensing 7,500 929 7,500 6,572
Other 13,929 29,667 27,857 58,704
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Total revenues 130,544 116,891 315,133 255,107
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Expenses:
Research and development 2,721,238 2,031,389 5,645,838 3,977,622
General and administrative 507,693 548,330 961,264 986,249
Interest 228,166 5,862 592,272 72,724
Loss on disposal of assets 1,652,014 -- 1,652,014 --
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Total expenses 5,109,111 2,585,580 8,851,388 5,036,595
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Loss before income taxes (4,978,567) (2,468,689) (8,536,255) (4,781,488)
Income tax expense 294 200 747 483
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Net loss (4,978,861) (2,468,889) (8,537,002) (4,781,971)
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Dividends on convertible preferred stock -- 552,909 -- 552,909
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Net loss to common shareholders $ (4,978,861) $ (3,021,798) $ (8,537,002) $ (5,334,880)
============ ============ ============ ============
Loss per common share $ (0.36) $ (0.18) $ (0.65) (0.31)
============ ============ ============ ============
Shares used in computing loss
per share amounts 13,757,414 16,960,993 13,169,662 16,939,002
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The accompanying notes are an integral part of the financial statements.
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IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the year ended June 30, 1996 and for
the six months ended December 31, 1996
Common Stock
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Additional
Paid-in
Shares Amount Capital
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Balance at June 30, 1995 12,578,606 $125,786 $118,988,736
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Stock options exercised 168,500 1,685 120,900
Conversion of convertible debentures 3,852,749 38,528 6,722,763
Issuance of common stock warrants -- -- 2,693,485
Net loss -- -- --
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Balance at June 30, 1996 16,599,855 165,999 128,525,884
========== ======== ============
Stock options exercised 11,644 116 27,290
Conversion of convertible debentures
into common stock 351,662 3,517 1,315,217
Exchange of convertible debentures for
series A preferred stock -- -- --
Issuance of series B convertible preferred stock -- -- --
Dividends payable -- -- --
Net loss for the six months ended December 31, 1996 -- -- --
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Balance at December 31, 1996 16,963,161 $169,632 $129,868,391
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Preferred Stock
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Additional Total
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
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Balance at June 30, 1995 $ $ $(108,991,363) $ 10,123,159
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Stock options exercised -- -- -- -- 122,585
Conversion of convertible debentures -- -- -- -- 6,761,291
Issuance of common stock warrants -- -- -- -- 2,693,485
Net loss -- -- -- (18,923,137) (18,923,137)
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Balance at June 30, 1996 -- -- -- (127,914,500) 777,383
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Stock options exercised -- -- -- -- 27,406
Conversion of convertible debentures
into common stock -- -- -- -- 1,318,734
Exchange of convertible debentures for
series A preferred stock 2,500 25 4,437,475 -- 4,437,500
Issuance of series B convertible preferred stock 3,000 30 3,398,107 -- 3,398,137
Dividends payable -- -- -- (552,909) (552,909)
Net loss for the six months ended December 31, 1996 -- -- -- (4,781,971) (4,781,971)
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Balance at December 31, 1996 5,500 $55 $7,835,582 $(133,249,380) $ 4,624,280
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The accompanying notes are an integral part of the financial statements.
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IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended December 31, 1995 and 1996
December 31,
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1995 1996
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Cash flows from operating activities:
Net loss $(8,537,002) $(5,334,880)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 1,590,150 817,661
Loss on disposal of facility 1,652,014 --
Other 34,199 --
Loss on sale of property and equipment -- 2,934
Accretion of interest on note receivable -- (58,704)
Dividends payable -- 552,909
Amortization of deferred lease -- (38,022)
Changes in operating assets and liabilities:
Other current assets 77,370 70,981
Accounts payable (230,611) 252,139
Accrued compensation 115,838 16,666
Other non-current liabilities (35,659) --
Other accrued liabilities (27,856) (208,020)
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Net cash used for operating activities (5,361,557) (3,926,336)
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Cash flows from investing activities:
Proceeds from sale of property and equipment -- 15,183
Purchase of property and equipment (18,251) (4,458)
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Net cash (used for) provided by
investing activities (18,251) 10,725
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Cash flows from financing activities:
Proceeds from convertible debentures 3,600,000 --
Proceeds from convertible preferred stock -- 2,990,000
Stock issuances, net 7,151 27,406
Principal payments on capital lease obligations (397,173) (69,444)
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Net cash provided by (used for)
financing activities 3,209,978 2,947,962
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Net change in cash and cash equivalents (2,169,830) (967,649)
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Cash and cash equivalents, beginning balance 3,047,236 2,796,636
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Cash and cash equivalents, ending balance $ 877,406 $ 1,828,987
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Supplemental disclosure of cash flow information:
Cash paid for interest $ 592,272 $ 8,582
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Cash paid (refunded) for income taxes $ 5,000 $ 1,197
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Supplemental disclosure of noncash financing activities:
Conversion of convertible debentures including accrued interest $ -- $ 1,318,734
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Converion of convertible debentures to preferred stock $ -- $ 4,437,500
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Deferred lease of leasehold improvements $ -- $ 215,465
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The accompanying notes are an integral part of the financial statements.
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IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. In the opinion of management, the accompanying financial statements include
all adjustments, consisting of only normal recurring accruals, necessary to
present fairly the consolidated financial position, results of operations and
cash flows of ImmunoGen, Inc. (the "Company"), which include those of its
wholly-owned subsidiary, ImmunoGen Securities Corp., and its 72%-owned
subsidiary, Apoptosis Technology, Inc. ("ATI"). The financial disclosures herein
should be read in conjunction with the Company's Annual Report on Form 10-K for
the year ended June 30, 1996.
The Company has been unprofitable since inception and expects to incur net
losses over the next several years, assuming it is able to raise sufficient
working capital to continue operations. The Company's cash resources at December
31, 1996 were $1.8 million. Subsequent to December 31, 1996, an additional $3.0
million was received pursuant to a private placement of convertible preferred
stock. An additional $6.0 million is available to the Company under this
agreement over the period ending December 31, 1997, if certain conditions are
met. The Company continues actively to seek additional capital by pursuing one
or more financing transactions and/or strategic partnering arrangements. While
the Company remains hopeful that it will be able to consummate an additional
financing transaction in the near term, no assurance can be given that such
financing will be available to the Company on acceptable terms, if at all. If
the Company is unable to obtain financing on acceptable terms in order to
maintain operations, it could be forced to curtail further or discontinue
operations.
B. In October 1996, the Company's $2.5 million debenture issued in June 1996 was
converted into 2,500 shares of the Company's Series A Convertible Preferred
Stock, with a stated value of $1,000 per share (the "Series A Stock"). Holders
of the Series A Stock are entitled to receive, when and as declared by the Board
of Directors, cumulative dividends at a rate per share equal to 9% per annum in
cash or, at the Company's option, in shares of the Company's Common Stock in
arrears on the conversion date. The 2,500 shares of Series A Stock are
convertible into the same number of shares of Common Stock as the $2.5 million
debenture. Each share of Series A Stock is convertible into a number of shares
of Common Stock determined by dividing the $1,000 stated value per share by the
lesser of (i) 85% of the average of the closing bid prices for the Common Stock
for the five consecutive trading days prior to the conversion date, and (ii)
$2.50 (subject to certain adjustments).
C. On November 12, 1996 the shareholders of the Company approved the issuance of
12,000 shares of the Company's Convertible Preferred Stock (the "Preferred
Stock") and related common stock purchase warrants (the "Warrants") pursuant to
a financing agreement entered into in October 1996 (the "October 1996 Financing
Agreement"), with the effect that, upon conversion of shares of Preferred Stock
and exercise of Warrants, the holders of the Preferred Stock could own in excess
of 20% of the number of shares of the Company's Common Stock outstanding on the
date of issuance of the Preferred Stock.
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D. The Company sold 3,000 shares of its Series B Convertible Preferred Stock
(the "Series B Stock") for $3.0 million in October 1996 and 3,000 shares of its
Series C Convertible Preferred Stock (the "Series C Stock") for $3.0 million in
January 1997 to an institutional investor pursuant to the October 1996 Financing
Agreement. Pursuant to this agreement, the Company has the right to require the
investor to purchase up to $12.0 million of convertible preferred stock from the
Company in a series of private placements. The Company may require the investor
to make additional investments of up to $3.0 million during each of the quarters
commencing on April 1, 1997 and July 1, 1997, respectively. If the aggregate
investment as of September 30, 1997 is less than $12.0 million, the Company may
require the investor to make an additional investment of up to $3.0 million in
the quarter commencing on October 1, 1997 in an amount which would bring the
total investment to $12.0 million.
Holders of the Series B Stock and Series C Stock are entitled to receive, when
and as declared by the Board of Directors, cumulative dividends at a rate per
share equal to an annual rate of 9% of the stated value in cash, or at the
Company's option, shares of Common Stock, in arrears on the conversion date.
Each share of Series B Stock is convertible into a number of shares of the
Company's Common Stock determined by dividing the $1,000 stated value per share
by the lesser of (i) $3.60 (the average closing bid price of the Company's
Common Stock on the NASDAQ National Market for the five consecutive trading days
prior to the October 16, 1996 original issuance date of the Preferred Stock),
and (ii) 85% of the average closing bid price for the Common Stock for the five
consecutive trading days prior to the conversion date. Each share of Series C
Stock is convertible into a number of shares of the Company's Common Stock
determined by dividing the $1,000 stated value per share by the lesser of (i)
$2.61 (the average closing bid price of the Company's Common Stock on the NASDAQ
National Market for the five consecutive trading days prior to the January 24,
1997 original issuance date of the Series C Preferred Stock), and (ii) the
Applicable Percentage (defined below) of the average closing bid price of the
Company's Common Stock for the five consecutive trading days prior to the
conversion date (subject to certain adjustments). The Applicable Percentage will
be (i) 100%, if the conversion date is on or before March 4, 1997, (ii) 90%, if
the conversion date is after March 4, 1997 but on or before April 13, 1997, and
(iii) 85%, if the conversion date is after April 13, 1997.
As of January 27, 1997, 1,950 shares of the Series B Stock plus accrued
dividends thereon had been converted into 927,167 shares of the Company's Common
Stock.
Pursuant to the October 1996 Financing Agreement, the Company has issued
warrants to the investor to purchase 187,500 shares of the Company's Common
Stock. Warrants to purchase 62,500 shares of the Company's Common Stock were
also issued to a third party pursuant to an arrangement between the investor and
that party. These warrants have an exercise price of $5.49 and expire in October
2001. Additionally, because conversion of the Series B Stock into shares of the
Company's Common Stock did not occur until after the eightieth day following
issuance of the Series B Stock, warrants to acquire an additional 250,000 shares
of the Company's Common
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Stock were issued to the investor in January 1997 with an exercise price of
$3.68 per share and an expiration date in January 2002. Similarly, if conversion
of the preferred stock issued in any subsequent investment, including the Series
C Stock, occurs after the eightieth day following its respective issue date,
warrants to purchase a number of shares of the Company's Common Stock equal to
50% of the number of shares issuable upon conversion of such preferred stock
will also be issued, with an exercise price equal to 150% of the closing sale
price of the Common Stock on the date of issuance of the warrants.
E. In September 1995, the Company subleased approximately 82% of one of its
Cambridge, Massachusetts facilities for a term which initially was to expire in
February 1998. In July 1996, the Company signed an amendment to this sublease
agreement, increasing the subleased space from 82% to 100% of the facility and
extending the term of the sublease to February 1999 with options to further
extend the sublease term to February 2000. This amendment became effective in
late September 1996. In connection with the amendment, the sublessor agreed to
fund certain construction costs at the Company's Norwood, Massachusetts
facility, totaling approximately $215,500. At December 31, 1996, this amount is
reflected in the Company's consolidated balance sheets as a Deferred Lease and
is being credited against rental expenses over the remaining term of the current
sublease period.
F. In March 1997, the Securities and Exchange Commission issued a new
interpretation for the accounting for convertible preferred stock and
convertible debt instruments issued with provisions providing for
conversion into common stock at a discount from the market price of the
common stock. Accordingly, the Company has restated its financial statements
for the quarter ended December 31, 1996.
The new interpretation provides that assured incremental yield embedded in the
conversion terms' discount from fair market value should be accounted for as an
additional interest expense in the case of convertible debt and as a dividend
to preferred shareholders in the case of convertible preferred stock.
At December 31, 1996, compliance with this new ruling resulted in changes to
additional paid-in capital and accumulated deficit carried forward from the
balance sheet for the year ended June 30, 1996, a non-cash dividend to preferred
shareholders of approximately $441,000, and accounted for a $.03 per share
increase in the Company's loss per share.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IMMUNOGEN, INC.
Date: April 7, 1997 By: /s/Frank J. Pocher
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Frank J. Pocher
Executive Vice President-Operations
and Chief Financial Officer
(principal financial officer)
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