1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT TO FORM 8-K AMENDMENT NO. 1 CURRENT REPORT FILED ON MAY 12, 1997 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): APRIL 24, 1997 TECHNICLONE CORPORATION (Exact name of Registrant as specified in charter) DELAWARE 0-17085 95-3698422 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 14282 FRANKLIN AVENUE, TUSTIN, CALIFORNIA 92780-7017 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (714) 838-0500 NOT APPLICABLE (Former name or former address, if changed, since last report) Page 1 of 15 Pages Exhibit Index is on Page 6 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On April 24, 1997, Techniclone Corporation, a Delaware corporation (the "Company") entered into a First Amendment to Stock Exchange Agreement (the "Amendment") with the stockholders of Peregrine Pharmaceuticals, Inc., a Delaware corporation ("Peregrine"), pursuant to which the Company agreed to amend certain provisions of the Stock Exchange Agreement ("Stock Exchange Agreement") between the Company and the stockholders of Peregrine and to issue an additional 80,000 shares of its Common Stock in exchange for all of the issued and outstanding capital stock of Peregrine as set forth in the Amendment. The Amendment provides that the major stockholders of Peregrine would agree to a one year lock-up of the Techniclone shares issued to them in the exchange except that during the lock-up period the Sanderling entities would be permitted to sell up to 275,000 shares, the Saunders entities would be permitted to sell up to 275,000 shares, Jennifer Lobo would be permitted to sell up to 90,000 shares and Philip Thorpe would be permitted to sell up to 50,000 shares. The Amendment also provides that the Company would sell Sanderling $550,000 worth of its Common Stock on the Closing Date of the transaction contemplated by the Stock Exchange Agreement and the Amendment at a purchase price per share equal to eighty percent (80%) of the average closing price of Techniclone's Common Stock for the five trading days immediately preceding the Closing Date. As there are no further contingencies, the Agreements have been finalized and all of the preconditions to the closing were met before April 30, 1997, the Company will account for the transaction contemplated by the Stock Exchange Agreement in the year ended April 30, 1997. The consideration to be paid for the outstanding shares of stock of Peregrine, consisting of 5,080,000 shares of the Company's Common Stock will be issued upon a determination by the California Commissioner of Corporations that the terms and conditions of the transaction are fair to Peregrine's stockholders or upon the effectiveness of a registration statement filed by the Company relating to the shares of Common Stock to be issued to the Peregrine stockholders. ITEM 5. OTHER EVENTS On April 25, 1997, Techniclone Corporation, a Delaware corporation (the "Registrant" or the "Company") entered into a 5% Preferred Stock Investment Agreement and a Registration Rights Agreement with eleven (11) investors pursuant to which the Company sold 12,000 shares of 5% Adjustable Convertible Class C Preferred Stock (the "Class C Stock") for an aggregate purchase price of $12,000,000. The Company filed a Certificate of Designation with the Delaware Secretary on April 23, 1997, creating the 5% Adjustable Convertible Class C Preferred Stock. In connection with the issuance of the Class C Stock, the Registrant paid Cappello & Laffer Capital Corp. a non-accountable expense allowance of $100,000 and a $720,000 commission representing six percent of the Purchase Price of the Class C Stock and issued a Warrant to purchase 1,200 shares of Class C Stock at $1,000 per share. The Class C Stock is convertible at the option of the holder, commencing on the day after the fifth month anniversary of the Closing Date, into a number of shares of Common Stock of the Registrant determined by dividing $1,000 plus all accrued but unpaid dividends by the Conversion Price. The Conversion Price is the average of the lowest trading price of Registrant's Common Stock for the five consecutive trading days ending with the trading day prior to the conversion date reduced by 13 percent starting on the 1st day of the 8th 2 3 month after the Closing Date, 20 percent starting on the 1st day of the 10th month after the Closing Date, 22.5 percent starting on the 1st day of the 12th month after the Closing Date, 25 percent starting on the 1st day of the 14th month after the Closing Date, 27 percent starting on the 1st day of the 16th month after the Closing Date and thereafter. At any time after March 24, 1998, the Conversion Price will be the lower of the Conversion Price as calculated in the preceding sentence or the average of the Closing Price of the Company's Common Stock for the thirty (30) trading days including and immediately preceding March 24, 1998 (the "Conversion Cap"). In addition to the Common Stock issued upon conversion of the Class C Stock, Warrants to purchase one-fourth of the number of shares of Common Stock issued upon the conversion will be issued to the converting investor. The Warrants are exercisable at 110 percent of the Conversion Cap for a period of five years from the closing date. The Holders of the Class C Stock are entitled to receive dividends at the rate of $50.00 per share per annum commencing September 30, 1997 and thereafter quarterly. The dividends are to be paid in Class C Stock valued at $1,000 per share (fractional shares to be paid in cash) or at the option of the Company in cash. The Class C Stock is subject to mandatory redemption upon certain events which are within the Company's control, and mandatory conversion at any time more than twelve (12) months after the closing date, subject to certain conditions as provided in the Certificate of Designation. Except as provided in the Certificate of Designation or by Delaware law, the Class C Stock does not have voting rights. The Company intends to use the proceeds of the offering to complete the clinical trials of the LYM-1 antibody, to begin clinical trials of the TNT antibody, pre-clinical development of the Company's products, construction of facilities and for general corporate and working capital purposes. 3 4 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. Listed below are the financial statements, pro forma financial information and exhibits, if any filed as part of this report. (a) Financial Statements of Peregrine Pharmaceuticals, Inc. for the years ended December 31, 1995 and 1996 and for the period from September 16, 1993 (date of inception) through December 31, 1996 and Independent Auditors' Report. (b) Unaudited Pro Forma Consolidated Balance Sheet as of January 31, 1997 (as restated) and the Unaudited Pro Forma Consolidated Statements of Operations for the Nine Months Ended January 31, 1997 (as restated) and Fiscal Year ended April 30, 1996 (as restated). (c) EXHIBITS -------- 4
Exhibit No. Description - ----------- ----------- 2.1 First Amendment to Stock Exchange Agreement among the stockholders of Peregrine Pharmaceuticals, Inc. and Registrant. 3.1 Certificate of Designation of 5% Adjustable Convertible Class C Preferred Stock as filed with the Delaware Secretary of State on April 23, 1997. 4.1 5% Preferred Stock Investment Agreement between Registrant and the Investors. 4.2 Registration Rights Agreement between the Registrant and the Investors. 4.3 Form of Stock Purchase Warrant, to be issued to the holders of the Class C Preferred Stock upon conversion of the Class C Preferred Stock. 5 SIGNATURES 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 hereunto duly authorized. TECHNICLONE CORPORATION Date: September 25, 1997 By: /s/ WILLIAM V. MODING --------------------------- William V. Moding Chief Financial Officer 5 6 EXHIBIT INDEX Listed below are the financial statements, pro forma financial information and exhibits filed as part of this report. 6
Sequentially Exhibit No. Description Numbered Page - ---------- ----------- ------------- -- Unaudited Pro Forma Consolidated Balance Sheet as of 8 January 31, 1997 (as restated) and the Unaudited Pro Forma consolidated Statements of Operations for the Nine Months Ended January 31, 1997 (as restated) and the Fiscal Year ended April 30, 1996 (as restated). -- Financial Statements of Peregrine Pharmaceuticals, Inc. for -- the years ended December 31, 1995 and 1996 and for the period from September 16, 1993 (date of inception) through December 31, 1996 and Independent Auditors' Report. (Incorporated by reference to the Exhibit of the same number contained in Registrant's Current Report on Form 8-K as filed with the Commission on May 12, 1997). 2.1 First Amendment to Stock Exchange Agreement among the -- stockholders of Peregrine Pharmaceuticals, Inc. and Registrant. (Incorporated by reference to the Exhibit of the same number contained in Registrant's Current Report on Form 8-K as filed with the Commission on May 12, 1997). 3.1 Certificate of Designation of 5% Adjustable, Convertible -- Class C Preferred Stock as filed with the Delaware Secretary of State on April 23, 1997. (Incorporated by reference to the Exhibit of the same number contained in Registrant's Current Report on Form 8-K as filed with the Commission on May 12, 1997). 4.1 5% Preferred Stock Investment Agreement between Registrant -- and the Investors. (Incorporated by reference to the Exhibit of the same number contained in Registrant's Current Report on Form 8-K as filed with the Commission on May 12, 1997). 7 7
Sequentially Exhibit No. Description Numbered Page - ----------- ----------- ------------- 4.2 Registration Rights Agreement between the Registrant and -- the Investors. (Incorporated by reference to the Exhibit of the same number contained in Registrant's Current Report on Form 8-K as filed with the Commission on May 12, 1997). 4.3 Form of Stock Purchase Warrant, to be issued to the holders -- of the Class C Preferred Stock upon conversion of the Class C Preferred Stock. (Incorporated by reference to the Exhibit of the same number contained in Registrant's Current Report on Form 8-K as filed with the Commission on May 12, 1997). 8 The following unaudited pro forma consolidated statements of operations for the nine month period ended January 31, 1997 and the fiscal year ended April 30, 1996 and the Unaudited Pro Forma Consolidated Balance Sheet as of January 31, 1997 have been prepared assuming that the acquisition of Peregrine Pharmaceuticals, Inc. (Peregrine) and the issuance of the Series C Preferred Stock had occurred as of May 1, 1995, for the consolidated statements of operations presentation and as of January 31, 1997, for the consolidated balance sheet presentation. The unaudited pro forma consolidated financial statements are provided for information purposes only and do not purport to present the financial position or results of operations of Techniclone Corporation (Techniclone or the Company) had the acquisition or the issuance of the Series C preferred stock assumed therein occurred on the dates specified. The unaudited pro forma consolidated financial statements (as restated) are not necessarily indicative of the results of operations that may be expected in the future. Peregrine is a developmental stage enterprise and is engaged in research and development of new technologies for use in the production of therapeutic agents for treatment of cancerous tumors. Therefore, the excess of the purchase price paid by Techniclone over the net tangible assets acquired will be recorded as in-process research and development in the Company's consolidated financial statements for the fiscal year ended April 30, 1997. 8 9 TECHNICLONE CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED JANUARY 31, 1997 RESTATED 9
TECHNICLONE PEREGRINE PROFORMA NINE MONTHS NINE MONTHS TOTALS ENDED ENDED PRIOR TO JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING 1997 1996 ADJUSTMENTS(8) ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED ------------- ------------- -------------- ------------- -------------- ------------- REVENUES: Interest income $ 198,200 $ -- $ -- $ 198,200 $ -- $ 198,200 Rental income 34,107 34,107 34,107 ------------- ------------- ------------- ------------- ----------- ------------- Total revenues 232,307 232,307 232,307 COSTS AND EXPENSES: Research and development 2,023,381 664,191 2,687,572 2,687,572 General and administrative: Unrelated entities 1,387,826 368,165 1,755,991 1,755,991 Affiliates 216,012 9,014 225,026 225,026 Stock based compensation 395,832 395,832 395,832 Interest 100,417 36,241 136,658 136,658 ------------- ------------- ------------- ------------- ----------- ------------- Net loss before preferred stock accretion and dividends $ (3,891,161) $ (1,077,611) $ -- $ (4,968,772) $ -- $ (4,968,772) Preferred stock accretion and dividends: Accretion of discount on 5% Cumulative Class C Preferred stock (1,109,589) (1,109,589) Imputed dividends for Class B Convertible Preferred Stock (434,450) (434,450) (434,450) Imputed dividends for Class C Convertible Preferred Stock (644,298) (844,298) ------------- ------------- ------------- ------------- ----------- ------------- Net Loss Applicable to Common Stock (Note 10) $ (4,325,611) $ (1,077,611) $ -- $ (5,403,222) $(1,753,887) $ (7,157,109) ============= ============= ============= ============= =========== ============= Weighted Average Shares Outstanding (Note 10) 26,392,912 Net Loss per Share (Note 10) $ (0.27) ============= 10 TECHNICLONE CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED APRIL 30, 1996 RESTATED 10
TECHNICLONE PEREGRINE PROFORMA FISCAL YEAR FISCAL YEAR TOTALS ENDED ENDED PRIOR TO APRIL 30, MARCH 31, ACQUISITION FINANCING FINANCING 1996 1996 ADJUSTMENTS(8) ADJUSTMENTS(7) ADJUSTMENTS(9) CONSOLIDATED ----------- ----------- -------------- -------------- -------------- ------------ REVENUES: Product sales $ 2,580 $ -- $ -- $ 2,580 $ -- $ 2,580 License agreements 3,002,244 3,002,244 3,002,244 Interest income 138,499 138,499 138,499 ----------- ----------- ---- ---------- ---------- ------------ Total revenues 3,143,323 3,143,323 3,143,323 COSTS AND EXPENSES: Cost of sales 2,580 2,580 2,580 Research and development 1,679,558 799,921 2,479,479 2,479,479 General and administrative: Unrelated entitles 947,816 369,964 1,317,780 1,317,780 Affiliates 170,659 88,914 259,573 259,573 Stock based compensation Interest 17,412 22,099 39,511 39,511 ----------- ----------- ---- ----------- ------------ ------------ Total costs and expenses 2,818,025 1,280,898 4,098,923 4,098,923 ----------- ----------- ---- ----------- ----------- ------------ Net loss before preferred stock accretion and dividends $ 325,298 $(1,280,898) $ $ (955,600) $ $ (955,600) Preferred Stock accretion and dividends: Accretion of discount on Class B Preferred Stock (5,327,495) (5,327,495) (5,327,495) Accretion of discount on 5% Cumulative Class C Preferred Stock (3,328,767) (3,328,767) Imputed dividends for Class B Convertible Preferred Stock (560,467) (560,467) (560,467) Imputed dividends for Class C Convertible Preferred Stock (859,064) (859,064) ----------- ----------- ---- ----------- ----------- ------------ Net Loss Applicable to Common Stock (Note 10) $ 5,562,664 $(1,280,896) $ $(6,843,562) $(4,187,831) $(11,031,893) ----------- ----------- ---- ----------- ----------- ------------ Weighted Average Shares Outstanding (Note 10) 23,695,008 Net Loss Per Share (Note 10) $ (0.47) 11 TECHNICLONE CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET JANUARY 31, 1997 RESTATED 11
PRO FORMA TOTALS TECHNICLONE PEREGRINE PRIOR TO JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING 1997 1996 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED ----------- ------------ ----------- ----------- -------------- ------------ CURRENT ASSETS: Cash and cash equivalents $2,065,587 $15,636 $ 550,000 (7) $ 3,153,599 $11,180,000(9) $14,333,599 (27,624)(2) 550,000 (2) Investments 997,118 997,118 997,118 Accounts receivable, net 31,947 31,947 31,947 Inventory 275,351 275,351 275,351 Prepaid expenses and other current assets 5,383 6,000 326,700 (2) 338,083 338,083 ---------- ------- ---------- ----------- ----------- ----------- Total current assets 3,375,386 21,636 1,399,076 4,796,098 11,180,000 15,976,098 PROPERTY: Land 1,050,510 1,050,510 1,050,510 Building and improvements 3,038,994 3,038,994 3,038,994 Laboratory equipment 1,353,135 1,353,135 1,353,135 Office furniture and equipment 219,588 219,588 219,588 ---------- ------- ---------- ----------- ----------- ----------- Total 5,662,227 5,662,227 5,662,227 Less accumulated depreciation (953,725) (953,725) (953,725) ---------- ------- ---------- ----------- ----------- ----------- Property, net 4,708,502 4,708,502 4,708,502 OTHER ASSETS: Note receivable from shareholder 350,000 350,000 350,000 Patents, net 182,150 182,150 182,150 ---------- ------- ---------- ----------- ----------- ----------- Total other assets 532,150 532,150 532,150 ---------- ------- ---------- ----------- ----------- ----------- TOTAL $8,616,038 $21,636 $1,399,076 $10,036,750 $11,180,000 $21,216,750 ========== ======= ========== =========== =========== =========== 12 TECHNICLONE CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (Continued) JANUARY 31, 1997 RESTATED LIABILITIES AND STOCKHOLDERS' EQUITY 12
PRO FORMA TOTALS TECHNICLONE PEREGRINE PRIOR TO JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING 1997 1996 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED ----------- ------------ ----------- ----------- --------------- ------------ CURRENT LIABILITIES: Accounts payable $ 205,685 $ 38,370 $ -- $ 244,055 $ -- $ 244,055 Accrued legal and accounting fees 85,000 249,304 334,304 334,304 Accrued payroll and related costs 99,005 41,181 140,186 140,186 Accrued license termination fee 100,000 100,000 100,000 Accrued license and royalties 81,667 273,211 354,878 354,878 Accrued interest 16,476 36,242 52,718 52,718 Reserve for contract losses 207,714 207,714 207,714 Current portion of long-term debt 72,609 72,609 72,609 Other current liabilities 68,663 45,913 114,576 114,576 ---------- -------- --------- ---------- ---- ---------- Total current liabilities 936,819 684,221 1,621,040 1,621,040 LONG-TERM DEBT 1,941,271 750,000 876,700 (2) 1,941,271 1,941,271 (876,700)(3) (750,000)(6) COMMITMENTS STOCKHOLDERS' EQUITY: Preferred Stock, Class A 294,109 (294,109)(5) -- Preferred Stock, Class B 2 444,108 (444,108)(5) 2 2 Preferred Stock, Class C 926,071 (926,071)(5) -- 12(9) 12 Common Stock 22,164 62 5,080 (1) 27,392 27,392 (137)(1) 10 (3) 8 (4) 43 (5) 14 (6) 148 (7) 13 TECHNICLONE CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (Continued) JANUARY 31, 1997 RESTATED 13
PRO FORMA TOTALS TECHNICLONE PEREGRINE PRIOR TO JANUARY 31, DECEMBER 31, ACQUISITION FINANCING FINANCING 1997 1996 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS(9) CONSOLIDATED ----------- ------------ ----------- ------------ -------------- ------------ Additional paid-in capital $34,166,617 $ 142,146 $ (3,821,416)(1) $ 61,529,898 $11,179,988(9) $ 72,709,886 26,813,429 (1) 876,690 (3) 388,349 (4) 1,664,245 (5) 749,986 (6) 549,852 (7) Accumulated Deficit (27,974,253) (3,219,081) (26,632,018)(1) (54,606,271) (54,606,271) 3,635,062 (1) (27,624)(2) (388,357)(4) ----------- ----------- ------------ ------------ ----------- ------------ 6,214,530 (1,412,585) 2,149,076 6,951,021 11,180,000 18,131,021 Less notes receivable from sale of common stock (476,582) (476,582) (476,582) ----------- ----------- ------------ ------------ ----------- ------------ Net stockholders' equity 5,737,948 (1,412,585) 2,149,076 6,474,439 11,180,000 17,654,439 ----------- ----------- ------------ ------------ ----------- ------------ TOTAL $ 8,616,038 $ 21,636 $ 1,399,076 $ 10,036,750 $11,180,000 $ 21,216,750 =========== =========== ============ ============ =========== ============ 14 TECHNICLONE CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS RESTATED (1) Pro forma adjustments to reflect the purchase of net assets of Peregrine ($186,491) through the issuance of the Company's common stock. The excess purchase price over the fair market value of net assets acquired ($26,632,018) has been allocated to in-process research and development (accumulated deficit). (2) Pro forma adjustment to reflect the issuance of convertible notes payable to Peregrine for cash of $550,000, plus accrued interest of $27,624 and advances receivable of $326,700 effective with the acquisition. (3) Pro forma adjustment to reflect the conversion of the notes payable due to Peregrine for $876,700 into common stock of Peregrine effective immediately prior to the acquisition. (4) To reflect the issuance of common stock to both a key employee and an advisor of Peregrine for prior services valued at $388,357, effective with the acquisition. (5) To reflect the conversion of preferred stock of Peregrine into common stock of Peregrine effective with the acquisition. (6) To reflect the conversion of the $750,000 note payable to Peregrine into common stock effective with the acquisition. (7) In conjunction with the acquisition of Peregrine, the Company agreed to sell one of the Peregrine's major shareholders additional common stock at a 20% discount from the Company's trading price on a specified date ($3.82 per share). Indicated amount represents the sale of such common stock. The Company has accounted for the sale of the common stock as an equity transaction, without compensation expense, as the stock sold represents restricted stock and the discount from the market value of 20% is considered reasonable in light of the restriction features. 14 15 TECHNICLONE CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Continued) RESTATED (8) Pro forma acquisition adjustments related primarily to the purchase of in-process research and development, issuance of stock for prior services to an employee and a consultant of Peregrine and the accrual of interest on the notes payable to Peregrine shareholders. As these adjustments have no continuing impact on the future combined operations of Techniclone and Peregrine, the amounts have been excluded from the acquisition adjustments in the accompanying pro forma consolidated statements of operations. (9) Pro forma adjustments to record the issuance of $12,000,000 in Class C Preferred Stock, net of issuance costs of $820,000. As the financing was the sale of an equity security with dividends payable in preferred stock, there is no effect on the pro forma statement of operations for the nine month period ended January 31, 1997 or the fiscal year ended April 30, 1996. (10) Pro forma net loss per common share has been calculated by taking the sum of the net income (loss) for the respective period and deducting the Class B and Class C Preferred Stock discounts and dividends of $10,075,793 for the fiscal year ended April 30, 1996 and $2,188,337 for the nine month period ended January 31, 1997 and dividing the sum by the weighted average shares outstanding during the period. 15