-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NTpT/9v+hBvfD1Xm2LlxOJzVF6Avm8HrL1KJKwkeggAq6WJVvAfipreaKAXwORRk 66HgLP63SGC3c2HMpO1Kuw== 0000352998-96-000004.txt : 19961118 0000352998-96-000004.hdr.sgml : 19961118 ACCESSION NUMBER: 0000352998-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: IGI INC CENTRAL INDEX KEY: 0000352998 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 010355758 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08568 FILM NUMBER: 96665480 BUSINESS ADDRESS: STREET 1: WHEAT ROAD AND LINCOCN AVENUE STREET 2: P O BOX 687 CITY: BUENA STATE: NJ ZIP: 08310 BUSINESS PHONE: 6096971441 MAIL ADDRESS: STREET 1: WHEAT ROAD AND LINCOCN AVE STREET 2: P O BOX 687 CITY: BUENA STATE: NJ ZIP: 08310 FORMER COMPANY: FORMER CONFORMED NAME: IMMUNOGENETICS INC DATE OF NAME CHANGE: 19870814 10-Q 1 IGI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (thousands, except per share information) Three months ended Nine months ended September 30, September 30, 1996 1995 1996 1995 ---- ---- ---- ----
Net sales $ 8,291 $ 7,602 $ 25,929 $ 22,940 Cost of sales 3,769 3,863 11,694 11,189 --------- --------- --------- --------- Gross profit 4,522 3,739 14,235 11,751 Selling, general and administrative expenses 3,465 2,920 10,457 8,506 Research and development expenses 515 309 1,569 1,012 Research revenues (124) (130) (164) (731) --------- --------- --------- --------- Operating profit 666 640 2,373 2,964 Interest expense, net 499 283 1,494 753 Other expense (10) - 155 - --------- --------- --------- --------- Income from continuing operations before provision for income taxes 177 357 724 2,211 Provision for income taxes 60 113 246 669 --------- --------- --------- --------- Income from continuing operations 117 244 478 1,542 Loss from discontinued operations: Spinoff of biotechnology business segment, net of income tax benefits: Loss from operations - (422) - (2,185) Estimated loss on disposal - (1,000) - (1,000) --------- --------- --------- --------- Net income (loss) $ 117 $ (1,178) $ 478 $ (1,643) ========= ========= ========= ========= Income (loss) per common and common equivalent share: From continuing operations $ .01 $ .03 $ .05 $ .16 ========= ========= ========= ========= From discontinued operations $ - $ (.15) $ - $ (.33) ========= ========= ========= ========= Net income (loss) $ .01 $ (.12) $ .05 $ (.17) ========= ========= ========= ========= Average number of common and common equivalent shares 9,406,869 9,771,717 9,613,186 9,798,510 The accompanying notes are an integral part of the consolidated financial statements.
IGI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands) September 30, December 31, ASSETS 1996 1995 ---- ----
Current assets: Cash and equivalents $ 135 $ 169 Accounts receivable, less allowance for doubtful accounts of $306 8,291 8,456 Inventories 9,374 9,000 Current deferred taxes 55 55 Prepaid expenses and other current assets 1,236 763 ------- ------- Total current assets 19,091 18,443 Notes receivable, less current maturities 191 285 ------- ------- Property, plant and equipment - at cost: Land 625 625 Buildings 9,337 9,054 Machinery and equipment 9,181 8,656 ------- ------- 19,143 18,335 Less accumulated depreciation (8,894) (8,225) ------- ------- 10,249 10,110 ------- ------- Deferred income taxes 2,791 2,791 Other assets 1,196 702 ------- ------- $33,518 $32,331 ======= ======= Continued The accompanying notes are an integral part of the consolidated financial statements.
IGI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS, Continued (Unaudited) (Amounts in thousands) September 30, December 31, LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
Current liabilities: Note payable to bank $ 9,394 $ 8,048 Current maturities of long-term debt 3,446 2,415 Accounts payable 2,288 2,447 Accrued payroll 244 460 Other accrued expenses 453 772 Income taxes payable 222 17 ------- ------- Total current liabilities 16,047 14,159 ------- ------- Long-term debt, less current maturities 7,723 9,624 ------- ------- Commitments and contingencies Stockholders' equity: Common stock, $.01 par value, 30,000,000 shares authorized; 9,522,681 and 9,440,681 shares issued in 1996 and 1995, respectively 95 95 Stock subscribed 175 - Additional paid-in capital 18,648 18,130 Deficit (6,401) (6,879) ------- ------- 12,517 11,346 Less treasury stock; 171,096 and 176,356 shares, at cost, in 1996 and 1995, respectively (2,580) (2,609) Stockholders' notes receivable (189) (189) ------- ------- Total stockholders' equity 9,748 8,548 ------- ------- $33,518 $32,331 ======= ======= The accompanying notes are an integral part of the consolidated financial statements.
IGI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Nine months ended September 30, 1996 1995 ---- ----
Cash flows from operating activities: Net income (loss) $ 478 $(1,643) Reconciliation of net income to net cash provided (used) by operating activities: Depreciation and amortization 669 677 Provision for loss on accounts receivable and inventories 90 165 Accrual for estimated loss on disposal - 1,000 Issuance of stock to 401(k) plan 28 43 Stock subscribed 175 - Change in deferred income taxes - (82) Changes in operating assets and liabilities: Accounts receivable 165 (248) Inventories (464) (1,111) Prepaid and other assets (474) (48) Accounts payable and accrued expenses (694) (163) Income taxes payable (refundable) 205 (2) ------- ------- Net cash provided (used) by operating activities 178 (1,412) ------- ------- Cash flows from investing activities: Capital expenditures (808) (1,961) Decrease in notes receivable from officer 94 147 Increase in other assets (492) (72) Increase in net assets of biotechnology segment - (912) ------- ------- Net cash used by investing activities (1,206) (2,798) ------- ------- Cash flows from financing activities: Net borrowings under line of credit agreements 1,346 1,060 Payments of long-term debt (871) (5) Proceeds from exercise of common stock options 519 595 Proceeds from sale of common stock - 2,500 ------- ------- Net cash provided by financing activities 994 4,150 ------- ------- Net decrease in cash and equivalents (34) (62) Cash and equivalents at beginning of year 169 954 ------- ------- Cash and equivalents at September 30, 1996 and 1995 $ 135 $ 892 ======= ======= The accompanying notes are an integral part of the consolidated financial statements.
IGI, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation --------------------- The accompanying consolidated financial statements have been prepared by IGI, Inc. without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. Certain information in footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. Net Income Per Common Share ---------------------------- Net income per share of common stock is computed by dividing net income by the weighted average number of shares of common stock and common stock equivalents, if dilutive, outstanding during the three and nine month periods ended September 30, 1996 and 1995. Common stock equivalents include shares issuable upon the exercise of dilutive common stock options. Fully diluted earnings per share approximate primary earnings per share. 3. Inventories ----------- Inventories are valued at the lower of cost or market using the last-in, first-out (LIFO) method and consist of the following: (amounts in thousands) September 30, 1996 December 31, 1995 ------------------ -----------------
Finished Goods $3,648 $3,103 Work-in-process 2,949 2,851 Raw Materials 2,777 3,046 ------ ------ Total $9,374 $9,000 ====== =======
Inventory values computed under the first-in, first-out (FIFO) method approximate the values determined using LIFO. IGI, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 4. Business Segments ----------------- Summary operating results for the Company's Animal Health and Cosmetic and Consumer Products segments for the three and nine month periods ended September 30, 1996 and 1995 appear below: (amounts in thousands) 3 months ended 9 months ended September 30, September 30, 1996 1995 1996 1995 ---- ---- ---- ----
Net Sales: Animal Health $7,327 $7,298 $23,403 $21,682 Consumer Products 964 30 2,526 1,258 ------ ------ ------- ------- Total $8,291 $7,602 $25,929 $22,940 ====== ====== ======= ======= Gross Profit: Animal Health $3,884 $3,868 $12,404 $11,492 Consumer Products 638 (129) 1,831 259 ------ ------ ------- ------- Total $4,522 $3,739 $14,235 $11,751 ====== ====== ======= ======= Operating profit (loss): Animal Health $1,603 $1,766 $ 5,643 $ 5,216 Consumer Products 18 (387) (555) (14) Corporate (955) (739) (2,714) (2,238) ------ ------ ------- ------- Total $ 666 $ 640 $ 2,373 $ 2,964 ====== ====== ======= =======
5. Equity Transaction ------------------ In August 1993, the Company entered into an agreement with an industry partner for the testing of the Novasome technology as a microcarrier and adjuvant for various human vaccines. This agreement was amended in December 1995 in connection with the Spinoff of Novavax. Under the terms of the amended agreement, the industry partner had the option to purchase up to approximately $6.8 million of IGI Common Stock and $3.7 million of Novavax Common Stock, concurrently. The agreement was terminated in 1996. IGI, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- Three months ended September 30, 1996 compared to September 1995 - ---------------------------------------------------------------- Sales increased $689,000 or 9%. This increase was due principally to the cosmetic and consumer products segment, which had sales of $964,000, an increase of $660,000 or 217% over the third quarter of 1995. Sales in this segment consisted primarily of products manufactured for Estee Lauder and the Company's Nova Skin Care products. International sales of the Company's animal health products increased $376,000 or 14% and accounted for $3,113,000 or 42% of animal health products sales and 38% of the Company's total sales, compared to 38% and 36%, respectively, for the same period a year ago. These increases were offset, in part, by a domestic decline in sales of the Company's animal health products. Gross profit increased $783,000 or 21% due principally to the higher sales volume. As a percentage of sales, gross profit was 55%, up from 49% for the third quarter of 1995. This improvement was due to increased sales of higher margin cosmetic products. Selling, general and administrative costs increased $545,000 or 19%. Selling and marketing expenses related to the Nova Skin Care product line accounted for $454,000 of the increase. Research and development expenses increased $206,000 or 66%. This increase was the result of stepped-up product development in both of the Company's business segments. The Company had $124,000 of research revenues during the third quarter of 1996, compared to $130,000 during the same period in 1995. Net interest expense increased $216,000 or 76% due to higher borrowings which were incurred in 1995 to fund the operations of the Company's former biotechnology business segment (Novavax) and to fund the $5,000,000 license payment that was made in connection with the spinoff of Novavax in December 1995. During the third quarter of 1995, the Company incurred expenses of $1,422,000 for the operations of Novavax, which was reported as a discontinued operation. Nine months ended September 30, 1996 compared to September 30, 1995 - ------------------------------------------------------------- The Company's Animal Health segment had operating profits of $5,643,000, an increase of $427,000 or 8% over the first nine months of 1995. This increase was offset by a $541,000 increase in operating losses of the Company's Cosmetic and Consumer Products segment and increased corporate expenses of $476,000 or 21% over 1995. The operating loss of the Cosmetic and Consumer Products segment was due to costs associated with the market introduction of the Company's Nova Skin Care product line. These costs offset profits generated from the increased sales of cosmetic products to Estee Lauder. Consolidated operating profit decreased $591,000 or 20% compared to the same period a year ago. (See Note 4 of Notes to Consolidated Financial Statements). IGI, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales increased $2,989,000 or 13%. Sales of animal health products increased in both domestic and international markets. International sales of these products increased $1,394,000 or 16% and accounted for $10,258,000 or 44% of animal health product sales and 40% of the Company's total sales, compared to 41% and 39% respectively, for the same period a year ago. Sales of cosmetic and consumer products were $2,526,000, an increase of $1,268,000 or 101% compared to 1995. Sales in this segment consisted principally of products manufactured for Estee Lauder and the Company's Nova Skin Care products, which were introduced during the first quarter of 1996. Gross profit increased $2,484,000 or 21% due principally to the higher sales volume. As a percentage of sales, gross profit was 55%, up from 51% for the first nine months of 1995. This improvement was due to the increased sales of higher margin cosmetic products. Selling, general and administrative costs increased $1,951,000 or 23%. Selling and marketing expenses related to the Nova Skin Care product line accounted for $1,190,000 of the increase. Variable costs associated with the higher sales volume of animal health products and corporate expenses accounted for the remainder of the increase. Research and development expenses increased $557,000 or 55%. This increase was the result of stepped-up product development in both the Company's business segments. The Company had $164,000 of research revenues during the first nine months of 1996, compared to $731,000 during the same period in 1995. Net interest expense increased $741,000 or 98% due to higher borrowings incurred in 1995 to fund the operations of the Company's former biotechnology business segment (Novavax) and to fund the $5,000,000 license payment that was made in connection with the spinoff of Novavax in December 1995. In connection with the settlement of a lawsuit brought against the Company related to employment contracts of certain IGI employees with their former employer, the Company incurred charges of $175,000, for which the Company will issue shares of IGI common stock. Such charges are reported as other expense. As a result of this payment, the Company will have the right to continue to use these employees for the selling, marketing and product development of its Nova Skin Care product line. The Company is seeking reimbursement for these charges under its insurance policy. During the first nine months of 1995, the Company incurred expenses of $3,185,000 for the operations of Novavax, which was reported as a discontinued operation. Liquidity and Capital Resources - ------------------------------- The Company's operating activities provided $178,000 of cash for the first nine months of 1996. Accounts receivable turnover ratio was 4.13 compared to 3.89 for the year ended December 31, 1995. Accounts receivable balances due from Mexico and Latin America were 28% of the total receivable balance compared to 30% at December 31, 1995 and the Company believes the net amounts are fully collectible. Mexico and certain Latin American countries are important markets for the Company's poultry vaccines and other products. These countries have historically experienced varying degrees of political unrest and economic and currency instability. IGI, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Because of the volume of business transacted by the Company in those countries, continuation or the recurrence of such unrest or instability could adversely affect the businesses of its customers in those countries or the Company's ability to collect its receivables from such customers, which in either case would have a material adverse effect on the Company's future operating results. The inventory turnover ratio for 1996 was 1.77, compared to 1.81 for the year ended December 31, 1995. The Company believes its reserves for inventory obsolescence and accounts receivable are adequate. The Company used $1,206,000 in investing activities principally for capital expenditures and other deferred costs associated with the Nova Skin Care division. Funding for the Company's investing activities were provided by operating activities and borrowings under the Company's working capital line of credit. In June and August of 1996, the Company's Loan Agreement was amended to provide that the amount available for borrowing under its $12 million revolving credit facility shall be reduced by $857,000 per quarter (formerly $800,000 per quarter). At September 30, 1996, the Company had outstanding borrowings under its revolving credit facility of approximately $11.1 million, the maximum amount available under that facility at that date. In addition, the Company failed to comply, at September 30, 1996, with the covenant in the Loan Agreement which required quarterly net income of at least $250,000 at September 30, 1996. The Company's lenders have agreed to reduce the net income requirement for September 30, 1996 so that the Company will be in compliance with such covenant. Also, at September 30, 1996, the Company had $606,000 of available borrowing capacity under its $10 million working capital line of credit, and at November 12, 1996 had $1,060,000 available under this line of credit. This line of credit expires June 30, 1997. The Company believes that cash generated from operations will be sufficient to meet its obligations to reduce its bank borrowings at the rate of $857,000 per quarter and to meet its short-term obligations. However, over the long term the Company will require additional funds to finance its business operations. The Company currently is seeking to obtain such funds from additional borrowing arrangements and/or a sale of debt or equity securities. There can be no assurance that funds required by the Company in the future will be available to the Company on terms satisfactory to the Company, if at all. The inability to obtain needed funding on satisfactory terms may require the Company to reduce certain of its planned expenditures, scale back its operations or enter into financing arrangements on terms which it would not otherwise accept and would have a material adverse effect on the Company's business and financial results. IGI, INC. AND SUBSIDIARIES Part II OTHER INFORMATION Item 1 - Legal Proceedings - -------------------------- There were no material developments in the litigation previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. Item 2 - Changes in Securities - ------------------------------ The constituent instruments defining the rights of the holders of any class of securities were not modified nor were the rights evidenced by any class of registered securities materially limited or qualified during the period covered by this report. Item 3 - Defaults Upon Senior Securities - ---------------------------------------- At September 30, 1996, the Company was not in compliance with its quarterly net income covenant of its loan agreement, which required the Company to have net income of $250,000. The Company's lenders have agreed to reduce the net income requirement for September 30, 1996 so that the Company will be in compliance with such covenant. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources". Item 4 - Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None Item 5 - Other Information - -------------------------- None Item 6 - Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits: -------- Exhibit 10.1 - Second Amendment to Second Amended and Restated Loan Agreement, dated June 26, 1996. Exhibit 10.2 - Third Amendment to Second Amended and Restated Loan Agreement, dated August 13, 1996. Exhibit 11 - Computation of Net Income Per Common Share Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K ------------------- None IGI, INC. AND SUBSIDIARIES 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 thereunto duly authorized. IGI, INC. (Registrant) Date: November 14, 1996 By: --------------------- Donald J. MacPhee Vice President (Principal Financial and Accounting Officer) EX-10 2 EXHIBIT 10.1 SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT AGREEMENT (this "Agreement"), made as of this 26th day of June, 1996, by and among FLEET BANK-NH, a trust company organized under the laws of New Hampshire ("Fleet"); MELLON BANK, N.A., a national banking association ("Mellon"); and IGI, INC., a Delaware corporation ("IGI"), IGEN, INC., a Delaware corporation ("IGEN"), IMMUNOGENETICS, INC., a Delaware corporation ("ImmunoGen"), and BLOOD CELLS, INC., a Delaware corporation ("BCI"). Fleet and Mellon are hereinafter sometimes individually referred to as a "Lender" and collectively referred to as the "Lenders", and IGI, IGEN, ImmunoGen and BCI are hereinafter sometimes individually referred to as a "Borrower" and collectively referred to as the "Borrowers". WITNESSETH: WHEREAS, the Lenders and the Borrowers are parties to a Second Amended and Restated Loan Agreement between them dated as of December 13, 1995 (the "Original Agreement"), as amended by First Amendment to Second Amended and Restated Loan Agreement dated as of March 27, 1996 (the "First Amendment", and collectively with the Original Agreement, the "Loan Agreement"), the terms and conditions of which are hereby incorporated herein by reference; and WHEREAS, the Borrowers have requested certain amendments with respect to the terms and conditions of the Loans under the Loan Agreement; and WHEREAS, the Lenders are willing to grant such amendments upon the terms and conditions contained in this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows: 1. Definitions. Except as otherwise defined herein, all capitalized terms used in this Agreement have the respective meanings ascribed to them in the Loan Agreement. 2. Modification of Revolving Credit Commitment. Section 2.01 (a) of the Loan Agreement is hereby amended so as to read in full as follows: "(a) Subject at all times to all of the terms and conditions of this Agreement, the Lenders hereby severally (and not jointly and severally) agree to extend to the Borrowers (jointly and severally) a secured revolving credit facility, to December 31, 1999 (the "Revolving Credit Termination Date"), in an aggregate principal amount not to exceed, at any time outstanding, the maximum amount available at such time as set forth below (the "Revolving Credit Commitment"): Time Period Maximum Amount
12/31/95 - 9/29/96 $12,000,000 9/30/96 - 12/30/96 $11,142,857 12/31/96 - 3/30/97 $10,285,714 3/31/97 - 6/29/97 $ 9,428,571 6/30/97 - 9/29/97 $ 8,571,428 9/30/97 - 12/30/97 $ 7,714,285 12/31/97 - 3/30/98 $ 6,857,142 3/31/98 - 6/29/98 $ 5,999,999 6/30/98 - 9/29/98 $ 5,142,856 9/30/98 - 12/30/98 $ 4,285,713 12/31/98 - 3/30/99 $ 3,428,570 3/31/99 - 6/29/99 $ 2,571,427 6/30/99 - 9/30/99 $ 1,714,284 9/30/99 - 12/30/99 $ 857,141 12/31/99 and thereafter - 0 -
3. Modification of Line of Credit Commitment. The Line of Credit Termination Date is hereby extended to June 30, 1997, and the reference to "June 30, 1996" currently contained in Section 2.02 (a) of the Loan Agreement is hereby amended to refer to "June 30, 1997." 4. Modification of Financial Covenant. Section 5.09 of the Loan Agreement is hereby amended so as to read in full as follows: "Section 5.09. Indebtedness to Capital Base Ratio. As at the end of each quarter of each Fiscal Year, maintain an Indebtedness to Capital Base Ratio of not more than (a) 3.00 to 1 from September 30, 1995 through June 30, 1996, (b) 2.75 to 1 from July 1, 1996 through September 30, 1996, (c) 2.50 to 1 from October 1, 1996 through December 31 1996, (d) 2.00 to 1 from January 1, 1997 through June 30, 1997, and (e) 1.50 to 1 from and after July 1, 1997." 5. Clarification of Prior Waiver. The waiver contained in paragraph 1 of the First Amendment, although permanent with respect to compliance with Section 5.09A of the Loan Agreement as of December 31, 1995, shall only apply with respect to compliance as of such date, and shall not constitute a waiver with respect to compliance as of any other date. 6. No Novation; Confirmation and Reaffirmation. (a) Each of the Borrowers hereby reaffirms all of its representations and warranties in the Loan Agreement (as amended hereby) and the Security Documents on and as of the date hereof, as if expressly made on and as of the date hereof. (b) Each of the Borrowers hereby confirms the ongoing validity of all of the Obligations outstanding on the date hereof (including but not limited to Obligations under the Notes), and further acknowledges, confirms and agrees that none of the amendments effected by this Agreement constitutes a novation of any of the Obligations outstanding on the date hereof. (c) Each of the Borrowers hereby reaffirms the validity of all of the liens and security interests heretofore granted to the Agent as collateral security for the Obligations, and acknowledges that all of such liens and security interest, and all collateral heretofore pledged as security for the Obligations, continue to be and remain collateral for the Obligations from and after the effectiveness of this Agreement. 7. Ongoing Force and Effect. Except as and to the extent expressly provided in this Agreement, all covenants, terms and conditions of the Loan Agreement shall remain unchanged and in full force and effect. All referenced to the Loan Agreement contained in the Notes and the Security Documents shall hereafter mean and refer to the Loan Agreement as amended by this Agreement. 8. Miscellaneous. (a) The Borrowers will jointly and severally reimburse the Lenders and the Agent upon demand for all out-of-pocket costs, charges and expenses of the Lenders and the Agent (including, without limitation, the reasonable fees and disbursements of counsel to the Lenders and the Agent) in connection with the preparation, execution and delivery of this Agreement, any and all further agreements and instruments in connection herewith, and any amendments, modifications, consents, waivers or enforcement action in connection herewith. (b) This Agreement shall be governed by and construed in accordance with the laws of the State of New Hampshire (without giving effect to principles of conflicts of laws). (c) Neither this Agreement nor any provision hereof may be waived, amended or modified except by means of a written agreement signed by the party to be charged therewith, and then only in the specific instance and for the specific purposes stated therein. (d) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns, except that none of the Borrowers shall have any right to assign any of its rights or obligations hereunder or any interest herein without the prior written consent of the Lenders. (e) Each of the Borrowers hereby consents to the jurisdiction of all courts (state and federal) sitting in the State of New Hampshire, and of all courts from which appeal may be taken from any of such courts, for the purpose of any suit, action or other proceeding arising out of any of its obligations hereunder or with respect to the transactions contemplated hereby. Each of the Borrowers hereby expressly waives any and all objections which it may have as to venue in any of such courts, and also hereby knowingly WAIVES TRIAL BY JURY in any such suit, action or other proceeding. (f) The paragraph headings in this Agreement are included for convenience of reference only, and shall not affect the construction or interpretation of any of the provisions hereof. (g) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. (h) The parties acknowledge and agree that each of them and its counsel have reviewed and negotiated the terms and provisions of this Agreement, and have contributed to its final form; accordingly, any rules of construction to the effect of construing ambiguities against the drafting party shall not be employed in the interpretation of this Agreement, which shall be construed fairly as to all parties hereto and not in favor of or against any particular party who might generally have been responsible for the preparation hereof. (i) This Agreement is intended for the sole and exclusive benefit of the parties hereto and their respective successors and permitted assigns, and no other person or entity shall have any right to rely on this Agreement or to derive any benefit herefrom absent the express written consent of the party to be charged with such reliance or benefit. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first set forth above. FLEET BANK-NH By:_____________________________________ MELLON BANK, N.A. By:_____________________________________ IGI, INC. By:_____________________________________ IGEN, INC. By:_____________________________________ IMMUNOGENETICS, INC. By:_____________________________________ BLOOD CELLS, INC. By:_____________________________________ STATE OF NEW HAMPSHIRE ) ) ss: COUNTY OF _____________) On the _____ day of June, 1996, personally appeared before me ______________________________, of Fleet Bank-NH, who acknowledged that he is the SVP of Fleet Bank-NH, and that said instrument was signed by him on behalf of said corporation by due authority. ________________________________________ Notary Public My Commission Expires: _____________________ EXHIBIT 10.2 August 13, 1996 IGI, Inc. and Subsidiaries Wheat Road and Lincoln Avenue Buena, New Jersey 08310 Re: Third Amendment to Second Amended and Restated Loan Agreement Dear Sirs: Reference is made to the Second Amended and Restated Loan Agreement, dated as of December 13, 1995, by and among Fleet Bank-NH, Mellon Bank, N.A., and IGI, Inc. and certain of its subsidiaries (as heretofore amended, the "Loan Agreement"). All capitalized terms used herein without definition have the respective meanings ascribed to them in the Loan Agreement. This will confirm our agreement to grant a one-time covenant waiver under the Loan Agreement, and to amend the Loan Agreement, as follows: 1. Certain Waiver. By their execution and delivery hereof, the Lenders hereby irrevocably waive compliance as of June 30, 1996 with the minimum Capital Base covenant pursuant to Section 5.08 of the Loan Agreement. Such waiver shall only be applicable in this specific instance and for the specific date, and shall not be deemed a waiver (or an agreement to grant a waiver) with respect to any other covenant or for any other time period. 2. Certain Amendment. Section 5.08 of the Loan Agreement is hereby amended so as to read in full as follows: "Section 5.08. Net Income. In each quarter of each Fiscal Year as set forth below, achieve Net Income of not less than the minimum amount set forth below for such fiscal quarter. Quarter Ending Minimum Net Income
September 30, 1996 $250,000 December 31, 1996 $300,000 March 31, 1997 $500,000 June 30, 1997 $500,000 September 30, 1997 $500,000 December 31, 1997 $500,000 March 31, 1998 $625,000 and each quarter thereafter"
Except as expressly set forth herein, all of the terms and conditions of the Loan Agreement shall remain unmodified and in full force and effect. Kindly confirm the Borrowers' agreement to the foregoing by countersigning a counterpart copy of this letter in the spaces provided below. Very truly yours, FLEET BANK-NH By:_____________________________________ MELLON BANK, N.A. By:_____________________________________ Acknowledged, Confirmed and Agreed to: IGI, INC. By:______________________________________ IGEN, INC. By:______________________________________ IMMUNOGENETICS, INC. By:______________________________________ BLOOD CELLS, INC. By:______________________________________ EX-11 3 EXHIBIT 11 IGI, INC. AND SUBSIDIARIES COMPUTATION OF NET INCOME PER COMMON SHARE (Unaudited) (thousands, except per share information)
Three months ended Nine months ended September 30, September 30, 1996 1995 1996 1995 ---- ---- ---- ---- Income from continuing operations $ 117 $ 244 $ 478 $ 1,542 Loss from discontinued operations - (1,422) - (3,185) --------- -------- --------- --------- Net income (loss) for primary earnings per share $ 117 $ (1,178) $ 478 $ (1,643) ========= ========== ========= ========= Weighed average shares outstanding 9,353,602 9,193,643 9,307,127 9,155,431 Common stock equivalents (net of common stock deemed reacquired) based on average market price 53,267 578,074 306,059 643,079 --------- --------- --------- --------- Total equivalent shares for primary computation 9,406,869 9,771,717 9,613,186 9,798,510 ========= ========= ========= ========= Per share amounts: Primary: Income from continuing operations $ .01 $ .03 $ .05 $ .16 ========= ========= ========= ========= Loss from discontinued operations $ - $ (.15) $ - $ (.33) ========= ========== ========= ========= Net income (loss) $ .01 $ (.12) $ .05 $ (.17) ========= ========== ========= ========= Fully diluted earnings per share have been omitted as they approximate primary earnings per share.
EX-27 4
5 1000 9-MOS DEC-31-1996 SEP-30-1996 135 0 8,291 306 9,374 19,091 19,143 8,894 33,518 16,047 0 95 0 0 0 33,518 25,929 25,929 11,694 11,862 155 0 1,494 724 264 478 0 0 0 478 .05 .05
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