-----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, FxY2GT/IZoQSO3fd3e7qJ1/C3mCaxM+3BiPTz2twJmURnp1gkay1BR0+U7B6N7UI RmcWvr7cQbPoksDXdhSbdg== 0001169232-03-006598.txt : 20031113 0001169232-03-006598.hdr.sgml : 20031113 20031113143938 ACCESSION NUMBER: 0001169232-03-006598 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REPLIGEN CORP CENTRAL INDEX KEY: 0000730272 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 042729386 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14656 FILM NUMBER: 03997467 BUSINESS ADDRESS: STREET 1: 41 SEYON STREET STREET 2: BUILDING 1, SUITE 100 CITY: WALTHAM STATE: MA ZIP: 02453 BUSINESS PHONE: 7814499560 MAIL ADDRESS: STREET 1: 41 SEYON STREET STREET 2: BUILDING 1, SUITE 100 CITY: WALTHAM STATE: MA ZIP: 02453 10-Q 1 d57460_10q.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number 0-14656 REPLIGEN CORPORATION (exact name of registrant as specified in its charter) Delaware 04-2729386 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 41 Seyon Street, Bldg. 1, Suite 100 Waltham, MA 02453 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 250-0111 (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 |_| Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X| Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of November 12, 2003. Common Stock, par value $.01 per share 29,866,883 Class Number of Shares REPLIGEN CORPORATION INDEX
PART I. FINANCIAL INFORMATION PAGE ---- Item 1. Financial Statements (Unaudited) Balance Sheets as of September 30, 2003 and March 31, 2003 3 Statements of Operations for the Three Months and Six Months Ended September 30, 2003 and 2002 4 Statements of Cash Flows for the Six Months Ended September 30, 2003 and 2002 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk 16 Item 4. Controls and Procedures 17 PART II. OTHER INFORMATION Item 1. Legal Proceedings 17 Item 2. Changes in Securities and Use of Proceeds 18 Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders 18 Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K 19 Signature 20 Exhibit Index 21
2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS REPLIGEN CORPORATION BALANCE SHEETS
ASSETS September 30, 2003 March 31, 2003 ------------------ -------------- Current assets: Cash $ 3,365,718 $ 6,108,004 Marketable securities 11,263,641 9,417,224 Accounts receivable, net 1,008,819 907,501 Inventories 760,849 889,924 Prepaid expenses and other current assets 280,132 522,569 ------------- ------------- Total current assets 16,679,159 17,845,222 ------------- ------------- Property, plant and equipment, at cost: Leasehold improvements 2,626,506 2,585,152 Equipment 1,408,113 1,317,086 Furniture and fixtures 369,995 360,003 ------------- ------------- 4,404,614 4,262,241 Less: accumulated depreciation and amortization (2,205,912) (2,013,828) ------------- ------------- 2,198,702 2,248,413 Long-term marketable securities 12,924,837 3,183,727 Restricted cash 200,000 200,000 Other assets 3,060,829 3,315,894 ------------- ------------- Total assets $ 35,063,527 $ 26,793,256 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 622,618 $ 968,551 Accrued expenses 2,086,882 1,274,837 Unearned revenue 26,964 -- ------------- ------------- Total current liabilities 2,736,464 2,243,388 ------------- ------------- Stockholders' equity: Preferred stock, $.01 par value - authorized, 5,000,000 shares, -- outstanding, none -- -- Common stock, $.01 par value- authorized, 40,000,000 shares, -- outstanding, 29,864,133 shares at September 30, 2003 and 27,338,973 shares at March 31, 2003 298,641 273,390 Additional paid-in capital 181,201,042 169,232,975 Deferred compensation (48,125) -- Accumulated deficit (149,124,495) (144,956,497) ------------- ------------- Total stockholders' equity 32,327,063 24,549,868 ------------- ------------- Total liabilities and stockholders' equity $ 35,063,527 $ 26,793,256 ============= =============
See accompanying notes. 3 REPLIGEN CORPORATION STATEMENTS OF OPERATIONS
Three months ended September 30, Six months ended September 30, 2003 2002 2003 2002 ------------------------------------------------------------------ Revenue Product revenue $ 1,383,395 $ 1,687,490 $ 3,425,923 $ 3,306,932 Research revenue 35,560 -- 53,993 -- ------------ ------------ ------------ ------------ Total revenue 1,418,955 1,687,400 3,479,916 3,306,932 Cost of revenue 740,470 661,797 1,596,059 1,331,443 ------------ ------------ ------------ ------------ Gross profit 678,485 1,025,693 1,883,857 1,975,489 Operating expenses: Research and development 1,901,389 1,254,221 3,330,064 2,481,478 Selling, general and administrative 1,011,117 1,009,734 2,913,794 1,891,991 ------------ ------------ ------------ ------------ Total operating expenses 2,912,506 2,263,955 6,243,858 4,373,469 Loss from operations (2,234,021) (1,238,262) (4,360,001) (2,397,980) ------------ ------------ ------------ ------------ Investment and interest income 93,875 155,614 192,003 324,193 ------------ ------------ ------------ ------------ Net loss $ (2,140,146) $ (1,082,648) $ (4,167,998) $ (2,073,787) ============ ============ ============ ============ Basic and diluted net loss per share $ (.07) $ (.04) $ (.14) $ (.08) ============ ============ ============ ============ Basic and diluted weighted average common shares outstanding 29,859,529 26,642,750 29,423,486 26,642,750 ============ ============ ============ ============
See accompanying notes. 4 REPLIGEN CORPORATION STATEMENTS OF CASH FLOWS
Six Months Ended September 30, 2003 2002 Cash flows from operating activities: Net loss $ (4,167,998) $(2,073,787) Adjustment to reconcile net loss to net cash used in operating activities: Issuance of common stock warrants for payment for services 52,300 -- Amortization of deferred compensation 34,375 -- Depreciation and amortization 447,149 362,097 Changes in assets and liabilities: Accounts receivable (101,318) 12,293 Inventories 129,075 15,088 Prepaid expenses and other current assets 242,437 (22,567) Other assets -- (1,250,000) Accounts payable (345,933) (873,101) Accrued expenses 788,895 (334,826) Unearned revenue 26,964 -- ------------ ----------- Net cash (used in) operating activities (2,894,054) (4,164,803) ------------ ----------- Cash flows from investing activities: Purchases of marketable securities (18,843,561) (1,026,172) Redemptions of marketable securities 7,256,034 7,121,989 Purchases of property, plant and equipment (119,223) (942,663) ------------ ----------- Net cash (used in) provided by investing activities (11,706,750) 5,153,154 ------------ ----------- Cash flows from financing activities: Exercise of stock options 33,483 -- Proceeds from issuance of common stock, net of issuance cost 11,825,035 -- ------------ ----------- Net cash provided by financing activities 11,858,518 -- ------------ ----------- Net (decrease) increase in cash (2,742,286) 988,351 Cash and cash equivalents, beginning of period 6,108,004 8,696,194 ------------ ----------- Cash and cash equivalents, end of period $ 3,365,718 $ 9,684,545 ============ =========== Supplemental disclosure of non cash activities: Non cash purchases of property, plant and equipment 23,150 -- Common stock issued for payment of license -- 2,576,025
See accompanying notes. 5 REPLIGEN CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The financial statements included herein have been prepared by Repligen Corporation (the "Company," "Repligen" or "we"), in accordance with accounting principles generally accepted in the United States and pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States. These financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto included in our Form 10-K for the year ended March 31, 2003. In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting of only normal, recurring adjustments, necessary for a fair presentation of the financial position, results of operations and cash flows. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the entire year. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Revenue Recognition We apply Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition" to our revenue arrangements. We generate product revenues from the sale of our Protein A products to customers in the pharmaceutical and process chromatography industries and from the sale of SecreFloTM, the first synthetic version of the hormone secretin, to hospital-based gastroenterologists. In accordance with SAB No. 101, we recognize revenue related to product sales upon shipment of the product to the customer as long as there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of any related receivable is probable. License and research revenue derived from collaborative arrangements is recognized as earned under cost plus fixed-fee contracts, or on a straight-line basis over the term of contract, which approximates when work is performed and costs are incurred. Research expenses in the accompanying statements of operations include funded and unfunded expenses. In addition, under certain contracts, we recognize research and development milestones as they are achieved, assuming such milestone is deemed to be substantive. 3. Net Loss Per Share We apply Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings per Share." SFAS No. 128 establishes standards for computing and presenting earnings per share. Basic net loss per share represents net loss divided by the weighted average number of common shares outstanding during the period. The dilutive effect of potential common shares, consisting of outstanding stock options and warrants, is determined using the treasury stock method in 6 accordance with SFAS No. 128. Diluted weighted average shares outstanding for the periods presented in the accompanying financial statements do not include the potential common shares from warrants and stock options because to do so would have been antidilutive for the periods presented as the additional common shares from warrants and stock options would lower our diluted net loss per share. Accordingly, basic and diluted net loss per share is the same. At September 30, 2003, there were outstanding options to purchase 2,197,790 shares of our common stock at a weighted average exercise price of $2.64 per share and warrants to purchase 379,946 shares of our common stock at a weighted average exercise price of $4.84 per share not included in the calculation of earnings per share. At September 30, 2002, there were outstanding options to purchase 1,839,900 shares of our common stock at a weighted average exercise price of $2.55 per share and warrants to purchase 404,946 shares of our common stock at a weighted average exercise price of $5.24 per share not included in the calculation of earnings per share. 4. Recent Accounting Pronouncements In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities. We do not expect that the adoption of this Statement will have a significant impact on our financial position or results of operations because we do not have such financial instruments. In November 2002, the FASB's Emerging Issues Task Force ("EITF") published Issue No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables," or EITF Issue No. 00-21, which addresses how to determine whether a revenue arrangement involving multiple deliverables contains more than one unit of accounting for the purposes of revenue recognition and how the revenue arrangement consideration should be measured and allocated to the separate units of accounting. EITF Issue No. 00-21 applies to arrangements that we enter into after June 30, 2003. We do not expect EITF Issue No. 00-21 to have a material impact on our financial condition or results of operations because we typically do not have revenue contracts providing for multiple deliverables. 5. Stock Based Compensation We account for stock-based compensation under SFAS No. 123 "Accounting for Stock-Based Compensation." We continue to apply APB No. 25 for employee stock option awards and elected the disclosure-only alternative for the same under SFAS No. 123. We have computed the pro forma disclosures required under SFAS Nos. 123 and 148 for all stock options granted to employees using the Black-Scholes option-pricing model prescribed by SFAS No. 123. 7 If compensation expense for our stock option plan had been determined in a manner consistent with SFAS No. 123, the pro forma net loss and net loss per share would have been as follows:
Three months ended Three months ended Six months ended Six months ended September 30, September 30, September 30, September 30, 2003 2002 2003 2002 Net Loss as reported ........... $(2,140,146) $(1,082,648) $(4,167,998) $(2,073,787) Add: Stock-based employee compensation expense included in reported net loss ........................ 20,625 -- 34,375 -- Deduct: Stock-based employee compensation expense determined under fair value based method for all employee awards ...................... (226,918) (150,017) (420,480) (298,004) Pro forma net loss ............. $(2,346,439) $(1,232,665) $(4,554,103) $(2,371,791) =========== =========== =========== =========== Basic and diluted net loss per share: As reported .................... $ (.07) $ (.04) $ (.14) $ (.08) Pro forma ...................... $ (.08) $ (.05) $ (.15) $ (.09)
6. Cash, Cash Equivalents and Marketable Securities We apply SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." At September 30, 2003, our cash equivalents and marketable securities are classified as held-to-maturity, as we have the positive intent and ability to hold to maturity. As a result, these investments are recorded at amortized cost. Cash equivalents are short-term, highly liquid instruments with original maturities of 90 days or less. As of September 30, 2003 we do not have any cash equivalents. Marketable securities are investments with original maturities of greater than 90 days. Long-term marketable securities are investment grade securities with maturities of greater than one year. We have not realized any gains or losses on our marketable securities for the three-month periods ending September 30, 2003 and 2002. Cash and marketable securities consist of the following:
September 30, March 31, 2003 2003 ---- ---- Cash $ 3,365,718 $6,108,004 =========== ========== Marketable securities Corporate and other debt securities $10,022,771 $8,701,765 U.S. Government and agency securities 1,240,870 715,459 ----------- ---------- (Average remaining maturity, 4.5 months at September 30, 2003) $11,263,641 $9,417,224 =========== ========== Long-term marketable securities Corporate and other debt securities $ 8,809,793 $2,082,463 U.S. Government and agency securities 4,115,044 1,101,264 ----------- ---------- (Average remaining maturity, 19.75 months at September 30, 2003) $12,924,837 $3,183,727 =========== ==========
8 Restricted cash of $200,000 is related to our facility lease obligation. 7. Inventories Inventories are stated at the lower of cost (first in, first out) or market and consist of the following: September 30, March 31, 2003 2003 ---- ---- Raw materials $ 95,515 $114,130 Work-in-process 326,125 303,631 Finished goods 339,209 472,163 -------- -------- Total $760,849 $889,924 ======== ======== Raw materials, work in process and finished goods inventories consist of material, labor, outside processing costs and manufacturing overhead. 8. Comprehensive Income We apply SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 requires disclosure of all components of comprehensive income on an annual and interim basis. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Our comprehensive loss is equal to our reported net loss for all periods presented. 9. Segment Reporting We apply SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS No. 131 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS No. 131 also establishes standards for related disclosures about products and services and geographic areas. When deciding on how to allocate resources and assess performance, the chief operating decision maker, or decision-making group, identifies operating segments as components of an enterprise about which separate discrete financial information is available for evaluation. To date, we have viewed our operations and manage our business as principally one operating segment. As a result, the financial information disclosed herein represents all of the material financial information related to our principal operating segment. The following table represents percentage of total revenue classified by geographic area: 9 Three months ended Six months ended September 30, September 30, 2003 2002 2003 2002 ---- ---- ---- ---- US 64% 55% 59% 40% Europe 34% 42% 39% 58% Other 2% 3% 2% 2% --- --- --- --- Total 100% 100% 100% 100% During the three months ended September 30, 2003 there were three customers who accounted for approximately 31%, 22% and 10% of revenues, respectively. During the three months ended September 30, 2002, there were two customers who accounted for approximately 39% and 36% of revenues. During the six months ended September 30, 2003 there were two customers who accounted for approximately 31% and 19% of revenues. During the six months ended September 30, 2002, there were two customers who accounted for approximately 39% and 26% of revenues. Two customers accounted for 48% and 34% of our accounts receivable at September 30, 2003. Two customers accounted for 72% and 13% of our accounts receivable at September 30, 2002, respectively. 10. Other Assets In April 2002, the United States Food and Drug Administration granted approval to market SecreFlo(TM) (synthetic porcine secretin), the first synthetic version of the hormone secretin. SecreFlo(TM) has been approved for stimulation of pancreatic secretions to aid in the diagnosis of pancreatic exocrine dysfunction, or chronic pancreatitis, stimulation of gastrin secretion to aid in the diagnosis of gastrinoma, a gastrointestinal tumor and to aid during a gastrointestinal procedure called Endoscopic Retrograde Cholangiopancreatography or ERCP. Under the terms of our licensing agreement with ChiRhoClin, Inc., we made a milestone payment to ChiRhoClin during April 2002 of $1,250,000 in cash. We also issued 696,223 shares of our unregistered common stock to ChiRhoClin in October 2002 related to the same milestone. During the quarter ended June 30, 2002, we recorded the fair value of these shares, $2,576,025, and the cash of $1,250,000, as a long-term intangible asset. Beginning in April 2002, this amount is being amortized to cost of revenue over the remaining term of the license, approximately seven years. We amortized $127,532 and $255,064 for the three and six-month periods ended September 30, 2003. In addition, under the terms of the licensing agreement with ChiRhoClin, if the FDA approves the new drug application for human secretin diagnostic or approves the reformulation of SecreFlo(TM), we will be required to pay ChiRhoClin future milestones in cash. We will also be required to pay royalties on sales of both synthetic porcine and human products. At March 31, 2003, in accordance with the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," we performed an impairment analysis of our intangible assets related to our licensing agreement with ChiRhoClin in order to determine if an impairment loss existed and should be recognized. The impairment analysis consisted of an evaluation of the expected cash flows from the sale of SecreFlo(TM) over the term of the license and also included various assumptions and estimates concerning selling price, cost and volume of unit sales. We concluded that there was no impairment loss as of March 31, 2003 and no events have occurred since that time that would give rise to an impairment loss. We believe that our assumptions and estimates are reasonable, however, actual results could differ from these estimates. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are engaged in the development of novel therapeutics for profound neuropsychiatric disorders, with particular emphasis on applications for children. Our therapeutic product candidates are secretin for autism and schizophrenia, CTLA4-Ig for autoimmune disorders and uridine for neurologic diseases. These products are synthetic forms of naturally-occurring substances which may correct improperly regulated biological processes with minimal toxicity or side-effects. Our product candidates have the potential to produce clinical benefits not attainable with any existing drug in diseases for which there are few alternative therapies or treatments. Our business strategy is to partially fund the development of our proprietary therapeutic products with the profits derived from the sales of our specialty pharmaceutical products: Protein A and SecreFlo(TM). This will enable us to independently advance our proprietary drug development programs while at the same time minimizing our operating losses. We may also seek corporate partners for development or marketing of our therapeutic product candidates. Critical Accounting Policies and Estimates The Securities and Exchange Commission requires that reporting companies discuss their most "critical accounting policies" in management's discussion and analysis of financial condition and results of operations. The SEC indicated that a "critical accounting policy" is one that is important to the portrayal of a company's financial condition and operating results and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We have identified the policies and estimates below as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations is discussed throughout Management's Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the Notes to Financial Statements of this report. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition We apply Staff Accounting Bulletin No. 101, "Revenue Recognition" ("SAB No. 101") to our revenue arrangements. We generate product revenues from the sale of our Protein A products to customers in the pharmaceutical and process chromatography industries, and from the sale of 11 SecreFlo(TM), the first synthetic version of the hormone secretin, to hospital-based gastroenterologists. In accordance with SAB No. 101, we recognize revenue related to product sales upon shipment of the product to the customer as long as there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the related receivable is probable. Additionally, we generate non-product revenues from sponsored research and development projects under a Small Business Innovation Research ("SBIR") grant. License and research revenue is recognized as earned under cost plus fixed-fee contracts, or on a straight-line basis over the term of contract, which approximates when work is performed and costs are incurred. Research expenses in our Statements of Operations included in Item 1 above include funded and unfunded expenses. In addition, under certain contracts, we recognize research and development milestones as they are achieved, assuming such milestone is deemed to be substantive. Impairment Analysis of Long-lived Assets During 2002, under the terms of a 1999 licensing agreement with ChiRhoClin, Inc. we made a milestone payment to ChiRhoClin that consisted of $1,250,000 in cash and 696,223 shares of our common stock. We have recorded the fair value of the shares issued, $2,576,025, and the cash paid of $1,250,000, as a long-term intangible asset. Beginning in April 2002, we began to amortize this intangible asset to cost of revenue over the remaining term of the license, approximately seven years. In October 2002, we commenced commercial shipment of SecreFlo(TM), our synthetic version of the hormone secretin. We amortized $127,532 and $255,064 for the three and six-month periods ended September 30, 2003. At March 31, 2003, in accordance with the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," we performed an impairment analysis of this intangible asset in order to determine if an impairment loss existed and should be recognized. The impairment analysis consisted of an evaluation of the expected cash flows from the sale of SecreFlo(TM) over the term of the license and also included various assumptions and estimates concerning selling price, cost and volume of unit sales. We concluded that there was no impairment loss as of March 31, 2003 and no events have occurred since that time that would give rise to an impairment loss. We believe that our assumptions and estimates are reasonable, however, actual results could differ from these estimates. Clinical Trial Estimates Our clinical development trials related to our proprietary drug products are primarily performed by outside parties. It is not unusual at the end of each accounting period to estimate both the total cost of the trials and the percent completed as of that accounting date. We then need to adjust our estimates when final invoices are received. To date, these adjustments have not been material to our financial statements, and we believe that the estimates that we made as of September 30, 2003 are reflective of the actual expenses incurred as of that date. However, investors should be cautioned that the possibility exists that the timing or cost of certain trials might be longer or shorter or cost more or less than we have estimated and that the associated financial adjustments would be reflected in future periods. 12 Results of Operations Three months ended September 30, 2003 vs. September 30, 2002 Total revenue Total revenue for the three-month periods ended September 30, 2003 and September 30, 2002, was approximately $1,419,000 and $1,687,000, respectively, a decrease of $268,000 or 16%. During the three-month period ended September 30, 2003, product sales were impacted by manufacturing problems experienced by one of our significant customers of Protein A products. In addition, a delay in the delivery of a new lot of SecreFloTM from the manufacturer to us impacted sales at the end of the quarter. A lot of SecreFloTM is currently undergoing quality control testing. If this lot of material meets all release specifications, shipments of SecreFloTM would be expected to resume in December. Cost of revenue Cost of revenue for the three-month periods ended September 30, 2003 and September 30, 2002, were approximately $741,000 and $662,000, respectively, an increase of $79,000 or 12%. Gross profit for the three-month periods ended September 30, 2003 and 2002 were $678,000 or 48% of total revenue and $1,025,000 or 61% of total revenue, respectively. This increase in costs and decrease in gross profitability is attributable to a change in product mix of Protein A and sales of SecreFlo(TM). Operating expenses Total operating expenses for the three-month periods ended September 30, 2003 and September 30, 2002, were approximately $2,912,000 and $2,264,000, respectively, an increase of $648,000 or 29%. Research and development expenses for the three-month periods ended September 30, 2003 and September 30, 2002, were approximately $1,901,000 and $1,254,000, respectively, an increase of $647,000 or 52%. This increase is largely attributable to an increase in clinical material expense, clinical trial expense and personnel costs during the three-month period ended September 30, 2003. Selling, general and administrative expenses for the three-month periods ended September 30, 2003 and September 30, 2002, were approximately $1,011,000 and $1,010,000 respectively. Investment and interest income Investment income for the three-month periods ended September 30, 2003 and September 30, 2002, were approximately $94,000 and $156,000, respectively, a decrease of $62,000 or 40%. This decrease is attributable to lower interest rate yields for investments during the three months ended September 30, 2003 as compared to the corresponding three-month period in 2002. We expect investment income to vary based on changes in the amount of funds invested and fluctuation of interest rates. Six months ended September 30, 2003 vs. September 30, 2002 Total revenue Total revenue for the six-month periods ended September 30, 2003 and September 30, 2002, was approximately $3,480,000 and $3,307,000 respectively, an increase of $173,000 or 5%. This increase in total revenue is attributable to the sales of SecreFlo(TM), which we did not sell during the 13 corresponding six-month period in fiscal 2003, offset by the decreased demand for our Protein A products. Our revenues are subject to quarterly fluctuations, based on the timing of large scale production orders of Protein A and sales of SecreFlo(TM). Cost of revenue Cost of revenue for the six-month periods ended September 30, 2003 and September 30, 2002, were approximately $1,596,000 and $1,331,000, respectively, an increase of $265,000 or 20%. Gross profit for the six-month periods ended September 30, 2003 and 2002 were $1,884,000 or 54% of total revenue and $1,976,000 or 60% of total revenue, respectively. This increase in costs and decrease in gross profit is due primarily to the launch of SecreFloTM during fiscal 2004 and the changes in product mix for our Protein A products. Operating expenses Total operating expenses for the six-month periods ended September 30, 2003 and September 30, 2002, were approximately $6,244,000 and $4,374,000, respectively, an increase of $1,870,000 or 43%. Research and development expenses for the six-month periods ended September 30, 2003 and September 30, 2002, were approximately $3,330,000 and $2,482,000, respectively, an increase of $848,000 or 34%. This increase is largely attributable to an increase in clinical material, research and trial expenses, as well as personnel costs during the six-month period ended September 30, 2003. Selling, general and administrative expenses for the six-month periods ended September 30, 2003 and September 30, 2002, were approximately $2,914,000 and $1,892,000 respectively, an increase of $1,022,000 or 54%. This increase is largely attributable to marketing expenses for our SecreFlo(TM) product and increased costs for professional services including those associated with litigation. Investment and interest income Investment income for the six-month periods ended September 30, 2003 and September 30, 2002, were approximately $192,000 and $324,000, respectively, a decrease of $132,000 or 41%. This decrease is attributable to lower interest rate yields for investments during the six months ended September 30, 2003 as compared to the corresponding six-month period in 2002. We expect investment income to vary based on changes in the amount of funds invested and fluctuation of interest rates. Liquidity and capital resources We have financed our operations primarily through private placements of our common stock and revenues derived from product sales, collaborative research agreements, government grants, and payments received pursuant to licensing and royalty agreements. Total cash and marketable securities at September 30, 2003 totaled $27,754,000, an increase of $8,845,000 from $18,909,000 at March 31, 2003. 14 On May 1, 2003, we issued and sold 2,500,000 shares of our common stock to The Riverview Group, LLC for aggregate consideration of $12,500,000. Repligen received net proceeds of approximately $11.8 million after deducting the expenses of the transaction. Our operating activities used approximately $2,894,000 of cash for the six-month period ended September 30, 2003, consisting of a net loss from operations of approximately $4,168,000 and a decrease in accounts payable of $346,000. These uses of cash were offset by non-cash charges of $447,000 for depreciation and amortization, a decrease in inventories of $129,000, a decrease in prepaid expenses of $242,000, and an increase in accrued expenses of $789,000. Our cash was reduced by capital expenditures of $119,000 for the six-month period ended September 30, 2003. Our investing activities used cash of approximately $11,707,000 primarily for purchases of marketable securities. We do not currently use derivative financial instruments. We generally place our marketable security investments in high quality credit instruments, as specified in our investment policy guidelines. Our investment policy also limits the amount of credit exposure to any one issue, issuer, and type of investment. We do not expect any material loss from our investment in marketable securities. In connection with our lease agreement, a letter of credit in the amount of $500,000 was issued to our landlord. In October 2002, this letter of credit was reduced to $200,000. The letter of credit is collateralized by a certificate of deposit held by the bank that issued the letter of credit. The certificate of deposit is included as restricted cash in the accompanying balance sheet as of September 30, 2003. During April 2002 and as required by the terms of our license agreement with ChiRhoClin, we made a milestone payment of $1,250,000 in cash in connection with the FDA's approval of SecreFloTM, our secretin for injection porcine product. Also pursuant to such license agreement, we issued to ChiRhoClin 696,223 shares of our common stock in October 2002. We have not granted registration rights to ChiRhoClin with respect to the shares pursuant to the license agreement. In addition, under the terms of our license agreement with ChiRhoClin, if the FDA approves the new drug application for the human synthetic secretin diagnostic product, we will be required to make additional milestones payments in cash to ChiRhoClin. We are required to pay royalties on sales of both synthetic porcine and human secretin diagnostic products. Working capital decreased to $13,943,000 at September 30, 2003 from $15,602,000 at March 31, 2003 primarily as a result of higher research and development spending. We expect to incur higher operating costs as a result of expanded research and development costs associated with the activities associated with clinical trials and material cost of our proprietary drug candidates. While we anticipate that the cost of operations will increase as we continue to expand our investment in proprietary product development, we believe we have sufficient funding to satisfy our working capital and capital expenditure requirements for the next twenty-four months. Should we need to secure additional financing to meet our future liquidity requirements, there can be no assurances that we will be able to secure such financing, or that such financing, if available, will be on terms favorable to us. Cautionary Statement Regarding Forward-Looking Statements Statements in this Quarterly Report on Form 10-Q, as well as oral statements that may be made by Repligen or by officers, directors or employees of Repligen acting on its behalf, that are 15 not historical facts constitute "forward-looking statements" which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements in this Quarterly Report on Form 10-Q do not constitute guarantees of future performance. Investors are cautioned that statements in this Quarterly Report on Form 10-Q which are not strictly historical statements, including, without limitation, statements regarding current or future financial performance, management's strategy, litigation, plans and objectives for future operations, clinical trials and results, product research and development, manufacturing plans and performance, delays in manufacturing by us or our partners, timing of customer orders, the anticipated growth in the monoclonal antibody market and projected growth in product sales, costs of operations, sufficient funds to meet management objectives and availability of financing and effects of accounting pronouncements constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from the historical results or from any results expressed or implied by such forward-looking statements, including, without limitation, risks associated with: the success of current and future collaborative relationships, the success of our clinical trials and our ability to develop and commercialize products, our ability to obtain required regulatory approvals, our compliance with all Food and Drug Administration regulations, our ability to obtain, maintain and protect intellectual property rights for our products, the risk of current and future litigation regarding our patent and other intellectual property rights, the risk of litigation with collaborative partners, our limited sales and marketing experience and capabilities, our limited manufacturing capabilities and our dependence on third-party manufacturers and value-added resellers, our ability to hire and retain skilled personnel, the market acceptance of our products, our ability to compete with larger, better financed pharmaceutical and biotechnology companies that may develop new approaches to the treatment of our targeted diseases, our history of losses and expectation of incurring continued losses, our ability to generate future revenues, our ability to raise additional capital to continue our drug development programs, our volatile stock price, the effects of our anti-takeover provisions. Further information on potential risk factors that could affect our financial results are included in the filings made by us from time to time with the Securities and Exchange Commission including under the section entitled "Certain Factors That May Affect Future Results" in our Annual Report on Form 10-K for the year ended March 31, 2003. ITEM 3. Quantitative and Qualitative Disclosure About Market Risk Interest Rate Risk We have investments in commercial paper, U.S. Government and agency securities as well as corporate bonds and other debt securities. As a result, we are exposed to potential loss from market risks that may occur as a result of changes in interest rates, changes in credit quality of the issuer or otherwise. We generally place our marketable security investments in high quality credit instruments, as specified in our investment policy guidelines. Our investment policy also limits the amount of credit exposure to any one issue, issuer (with the exception of US treasury obligations), and type of investment. We intend to hold these investments to maturity, in accordance with our business plans. As of September 30, 2003, we did not have any debt arrangements that were not reflected in our balance sheet. 16 ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Based on an evaluation of our disclosure controls and procedures as of the end of this fiscal quarter (the "Evaluation Date"), the President, Chief Executive Officer and Principal Executive Financial and Accounting Officer, Walter C. Herlihy, has concluded that, as of the Evaluation Date, the disclosure controls and procedures are effective. Changes in Internal Controls There were no significant changes in our internal controls over financial reporting or in other factors that could significantly affect such controls subsequent to the Evaluation Date. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Bristol-Myers Squibb Repligen is the exclusive licensee of all CTLA4-Ig patent rights owned by the University of Michigan (the "University"). Repligen and the University believe that the University has a rightful claim to ownership of certain patents of Bristol-Myers Squibb Corporation ("Bristol") which relate to compositions and uses of CTLA4, arising out of the inventive contributions by one of the University's scientists. Repligen and the University filed a complaint against Bristol in the United States District Court for the Eastern District of Michigan (the "District Court") seeking a correction of inventorship. The suit asserts that Dr. Craig Thompson, the scientist from the University, made inventive contributions as part of a collaboration with Bristol scientists and is therefore a rightful inventor on patents issued to Bristol. The District Court found that Repligen and the University had not proven by clear, convincing, and corroborative evidence that Dr. Thompson is a sole or joint inventor of any of the patents in suit. In October 2003, Repligen filed a Notice of Appeal with the United States Court of Appeals for the Federal Circuit to the ruling of the District Court. It is anticipated that both Repligen and Bristol will file written briefs to the United States Court of Appeals for the Federal Circuit that, may be followed by oral arguments in 2004. The Federal Circuit may decide to uphold the District Court's decision, overturn the District Court's decision or remand it back to the District Court for further consideration. Repligen's failure to obtain ownership rights to the Bristol patents may restrict Repligen's ability to commercialize CTLA4-Ig. Separately, in September 2003, Repligen announced it had received a Notice of Allowance from the United States Patent and Trademark Office for a patent covering the use of CTLA4-Ig for the treatment of rheumatoid arthritis. The patent, which will remain in force until 2020, also covers a method of treating multiple sclerosis, systemic lupus erythematosis and scleroderma with CTLA4-Ig and the use of CTLA4-Ig in combination with other immunosuppressants. Repligen owns the exclusive rights to this patent through a license agreement with The University of Michigan (the "University") and through a Cooperative Research and Development Agreement with the United States Navy. This allowed patent is independent from the patents on CTLA4-Ig which are the subject of a lawsuit that Repligen and the University are prosecuting against Bristol. 17 From time to time, we may be subject to other legal proceedings and claims in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations. Item 2. Changes in Securities and Use of Proceeds On September 10, 2003, Repligen's By-laws were amended by a requisite vote of stockholders to provide that the size of the Board of Directors of the Company could be fixed by a resolution of the Board of Directors, and that vacancies on the Board of Directors could be filled by resolution of the Board of Directors until the next annual meeting of stockholders. Previously, the size of the Board of Directors could only be changed by the stockholders, and any vacancies on the Board of Directors could only be filled by a resolution of the stockholders. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company's Annual Meeting of Stockholders (the "Annual Meeting") was held on September 10, 2003. At the Annual Meeting, the stockholders of the Company considered and acted upon proposals to: (i) elect a Board of Directors for the ensuing year (ii) to increase the size of the Board of Directors to eight members (iii) to elect Thomas F. Ryan, Jr. to fill one of the vacancies on the Board of Directors if Proposal 2 is approved by the Stockholders (iv) to amend the Company's by-laws to allow the Board of Directors to set the size of the Company's Board of Directors and to appoint Directors to fill any vacancy until the next Annual Meeting (v) to amend the 2001 Repligen Corporation Stock Option Plan, to increase both the number of options the company automatically grants per year and the aggregate number of options granted to its non-employee directors (vi) to amend and restate the 2001 Repligen Corporation Stock Option Plan, to allow shares of restricted stock to be awarded under such plan; and (vii) to ratify the selection of Ernst & Young LLP as the independent auditors of Repligen for the fiscal year ending March 31, 2004. Proposal 1. Election of Directors: The stockholders elected all of the Company's nominees for directors. Directors Shares Voting In Favor Withhold Robert J. Hennessey* 24,747,070 138,652 Walter C. Herlihy, Ph.D.* 24,747,070 138,652 G. William Miller* 24,747,070 148,682 Alexander Rich, M.D.* 24,747,070 138,652 Paul Schimmel, Ph.D.* 24,436,304 449,418 *Incumbent Proposal 2. Proposal to increase the size of the Board of Directors to eight members. This proposal was adopted. Shares Voting In Favor Shares Voting Against Abstain 24,587,436 254,951 43,335 Proposal 3. Elect Thomas F. Ryan, Jr. to fill one of the vacancies on the Board of Directors. 18 The stockholders approved the election of Thomas F. Ryan, Jr. Shares Voting In Favor Shares Voting Against Abstain 24,634,110 178,012 73,600 Proposal 4. Amendment of the Company's by-laws to allow the Board of Directors to set the size of the Company's Board of Directors and to appoint Directors to fill any vacancy until the next Annual Meeting. This proposal was adopted. Shares Voting In Favor Shares Voting Against Abstain 24,137,859 680,173 67,690 Proposal 5. Amendment of the 2001 Repligen Corporation Stock Option Plan, to increase both the number of options the Company automatically grants per year and the aggregate number of options granted to its non-employee directors. This proposal was adopted.
Shares Voting In Favor Shares Voting Against Abstain Broker Non-Vote 21,974,745 2,810,691 100,285 1
Proposal 6. Amendment and restatement of the 2001 Repligen Corporation Stock Option Plan, to allow shares of restricted stock to be awarded under such plan. This proposal was adopted. Shares Voting In Favor Shares Voting Against Abstain 21,930,199 2,846,976 108,547 Proposal 7. Ratification of selection of Ernst & Young LLP as the independent auditors. Selection of Ernst & Young LLP as the Company's independent auditors for fiscal year 2004. This proposal was adopted. Shares Voting In Favor Shares Voting Against Abstain 24,764,442 66,745 54,535 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits EXHIBIT DESCRIPTION ------- ----------- 3.1 Restated Certificate of Incorporation, dated June 30, 1992 and amended September 17, 1999 (filed as Exhibit 3.1 to Repligen Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by reference). 3.2* Amended and Restated By-laws (filed herewith). 4.1 The Amended and Restated 2001 Repligen Corporation Stock Plan, adopted by the Stockholders on September 10, 2003 (filed as 19 Appendix B to Repligen Corporation's Definitive Proxy Statement on Schedule 14A dated July 22, 2003 and incorporated herein by reference). 31.1 Rule 13a-14(a)/15d-14(a) Certification. 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K 1) Current Report on Form 8-K, filed on July 22, 2003 reporting the completion of the CTLA4-Ig Trial against Bristol-Myers Squibb. 2) Current Report on Form 8-K, filed on July 31, 2003, furnishing Repligen's earnings release for the first quarter ended June 30, 2003. 3) Current Report on Form 8-K, filed on September 17, 2003 reporting the Notice of Allowance to Repligen for a patent covering the use of CTLA4-Ig for treatment of Rheumatoid Arthritis. 4) Current Report on Form 8-K, filed on September 17, 2003 reporting the announcement of a ruling in the lawsuit between Repligen and Bristol-Myers Squibb. SIGNATURE 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. REPLIGEN CORPORATION (Registrant) Date: November 13, 2003 By: /s/ Walter C. Herlihy --------------------------------------------- Chief Executive Officer and President, (Principal Executive Financial and Accounting Officer) Repligen Corporation 20 Exhibit Index EXHIBIT DESCRIPTION ------- ----------- 3.1 Restated Certificate of Incorporation, dated June 30, 1992 and amended September 17, 1999 (filed as Exhibit 3.1 to Repligen Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by reference). 3.2* Amended and Restated By-laws (filed herewith). 4.1 The Amended and Restated 2001 Repligen Corporation Stock Plan, adopted by the Stockholders on September 10, 2003 (filed as Appendix B to Repligen Corporation's Definitive Proxy Statement on Schedule 14A dated July 22, 2003 and incorporated herein by reference). 31.1 Rule 13a-14(a)/15d-14(a) Certification. 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 21 EX-3.2 3 d57460_ex3-2.txt AMEND./RESTATED BY-LAWS EXHIBIT 3.2 AMENDED AND RESTATED BY-LAWS OF REPLIGEN CORPORATION ARTICLE I STOCKHOLDERS SECTION 1. Place of Meetings. All meetings of stockholders shall be held at such place within or without the State of Delaware as may be designated from time to time by the Board of Directors or, if not so designated, at the principal office of the corporation. SECTION 2. Annual Meeting. The annual meeting of stockholders of the election of directors and the transaction of such other business as may properly come before the meeting shall be held at 10 a.m. on the last Thursday in July of each year or on such other date or at such hour as may be specified by resolution of the Board of Directors. If the date of the annual meeting shall fall upon a legal holiday at the place of the meeting, the meeting shall be held at the same hour on the next succeeding business day. If the annual meeting is not held on the date designated therefor, the directors shall cause the meeting to be held as soon thereafter as convenient. SECTION 3. Special Meetings. Special meetings of the stockholders may be called at any time by the President, the Chairman, or the Board of Directors, or by the Secretary or any other officer upon the written request of one or more stockholders holding of record at least a majority of the outstanding shares of stock of the corporation entitled to vote at such meeting. Such written request shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. SECTION 4. Notice of Meetings. Except where some other notice is required by law, written notice of each meeting of stockholders, stating the place, date and hour thereof and the purposes for which the meeting is called, shall be given by or under the direction of the Secretary, not less than ten nor more than sixty days before the date fixed for such meeting, to each stockholder entitled to vote at such meeting of record at the close of business on the day fixed by the Board of Directors as a record date for the determination of the stockholders entitled to vote at such meeting or, if not such date has been fixed, of record at the close of business on the day before the day on which notice is given. Notice shall be given personally to each stockholder or left at his or her residence or usual place of business or mailed postage prepaid and addressed to the stockholder at his or her address as it appears upon the records of the corporation. In case of the death, absence, incapacity or refusal of the Secretary, such notice may be given by a person designated either by a Secretary or by the person or persons calling the meeting or by the Board of Directors. A waiver of such notice in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such notice. Attendance of a person at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice. Notice of any meeting of the stockholders shall be deemed to have been given to any person who may become a stockholder of record after the mailing of such notice and prior to such meeting. Except as required by statute, notice of any adjourned meeting of the stockholders shall not be required. SECTION 5. Voting List. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city or other municipality or community where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by an stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section or the books of the corporation, or to vote at any meeting of stockholders. SECTION 6. Quorum of Stockholders. At any meeting of the stockholders, the holders of a majority in interest of all stock issued and outstanding and entitled to vote upon a question to be considered at the meeting, present in person or represented by proxy, shall constitute a quorum for the consideration of such question, but a smaller group may adjourn any meeting from time to time. When a quorum is present at any meeting, a majority of the stock represented thereat and entitled to vote shall, except where a larger vote is required by law, by the certificate of incorporation, or by these by-laws, decide any question brought before such meeting. Any election by stockholders shall be determined by a plurality of the vote cast by the stockholders entitled to vote at the election. SECTION 7. Proxies and Voting. Each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock held of record by such stockholder, but no proxy shall be voted on after three years from its date, unless said proxy provides for a longer period. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held, and persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the corporation the pledgee shall have been expressly empowered to vote thereon, in which case only the pledgee or the pledgee's proxy may represent said stock and vote thereon. Shares of the capital stock of the corporation belonging to the corporation or to another corporation, a majority of whose shares entitled to vote in the election of directors is owned by the corporation, shall not be entitled to vote nor counted for quorum purposes. SECTION 8. Conduct of Meeting. Meetings of the stockholders shall be presided over by one of the following officers in the order of seniority and in present and acting: the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, the President, a Vice-President, or, if none of the foregoing is in office and present and acting, a chairman to be chosen by the stockholders. The Secretary of the corporation, if present, or an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present the chairman of the meeting shall appoint a secretary of the meeting. SECTION 9. Action Without Meeting. Any action required or permitted to be taken at any annual or special meeting of stockholders of the corporation may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders or by proxy for the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote on such action were present and voted. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE II DIRECTORS SECTION 1. General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation which are not by law required to be exercised by the stockholders. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled. SECTION 2. Number; Election; Tenure and Qualification. The initial Board of Directors shall consist of three persons and shall be elected by the incorporator. Thereafter, the number of directors which shall constitute the whole Board shall be fixed by resolution of the stockholders or the Board of Directors, but in no event shall be less than one. Each director shall be elected by the stockholders at the annual meeting and all directors shall hold office until the next annual meeting and until their successors are elected and qualified, or until their earlier death, resignation or removal. The number of directors may be increased or decreased by action of the stockholders or the Board of Directors. Directors need not be stockholders of the corporation. SECTION 3. Enlargement of the Board. The number of the Board of Directors may be increased at any time, such increase to be effective immediately, by resolution of the stockholders or the Board of Directors. SECTION 4. Vacancies. Any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an enlargement of the Board and an unfilled vacancy resulting from an enlargement of the Board and an unfilled vacancy resulting from the removal of any director for cause or without cause, may be filled by resolution of the Board. A director elected to fill a vacancy shall hold office until the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier death, resignation or removal. When one or more directors shall resign from the Board, effective at a future date, the Board, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective. If at any time there are no directors in office, then an election of directors may be held in accordance with the General Corporation Law of the State of Delaware. SECTION 5. Resignation. Any director may resign at any time upon written notice to the corporation. Such resignation shall take effect at the time specified therein, or if no time is specified, at the time of its receipt by the President or Secretary. SECTION 6. Removal. Except as may otherwise be provided by the General Corporation Law, any director or the entire Board of Directors may be removed, with or without cause, at an annual meeting or at a special meeting called for that purpose, by the holders of a majority of the shares then entitled to vote at an election of directors. The vacancy or vacancies thus created may be filled by the stockholders at the meeting held for the purpose of removal. SECTION 7. Committees. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of two or more directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of such absent or disqualified member. A majority of all the members of any such committee may fix its rules of procedure, determine its action and fix the time and place, whether within or without the State of Delaware, of its meetings and specify what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise by resolution provide. The Board of Directors shall have the power to change the members of any such committee at any time, to fill vacancies therein and to discharge any such committee, either with or without cause, at any time. Any such committee, unless otherwise provided in the resolution of the Board of Directors, or in these by-laws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have such power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending a dissolution of the corporation or a revocation of a dissolution, or amending the by-laws of the corporation, and, unless the resolution or these by-laws expressly so provide, no such committee shall have the power or the authority to declare a dividend or to authorize the issuance of stock. Each committee shall keep regular minutes of its meetings and make such reports as the Board of Directors may from time to time request. SECTION 8. Meetings of the Board of Directors. Regular meetings of the Board of Directors may be held without call or formal notice at such places either within or without the State of Delaware and at such times as the Board may by vote form time to time determine. A regular meeting of the Board of Directors may be held without call or formal notice immediately after and at the same place as the annual meeting of the stockholders, or any special meeting of the stockholders at which a Board of Directors is elected. Special meetings of the Board of Directors may be held at any place either within or without the State of Delaware at any time when called by the Chairman of the Board of Directors, the President, Treasurer, Secretary, or two or more directors. Reasonable notice of the time and place of a special meeting shall be given to each director unless such notice is waived by attendance or by written waiver in the manner provided in these by-laws for waiver of notice of stockholders. No notice of any adjourned meeting of the Board of Directors shall be required. In any case it shall be deemed sufficient notice to a director to send notice by mail at least seventy-two hours, or by telegram at least forty-eight hours, before the meeting, addressed to such director at his or her usual or last known business or home address. Directors or members of any committee designated by the directors may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting. SECTION 9. Quorum and Voting. A majority of the total number of directors shall constitute a quorum, except that when a vacancy or vacancies exist in the Board, a majority of the directors then in office (but not less than one-third of the total number of the directors) shall constitute a quorum, and except that a lesser number of directors consisting of a majority of the directors then in office who are not officers (but not less than one-third of the total number of directors) may constitute a quorum for the purpose of acting on any matter relating to the compensation (including fringe benefits) of an officer of the corporation. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting from time to time. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors, except where a different vote is required or permitted by law, by the certificate of incorporation, or by these by-laws. SECTION 10. Compensation. The Board of Directors may fix fees for their services and for their membership on committees, and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent or otherwise, and receiving compensation therefor. SECTION 11. Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting, and without notice, if a written consent thereto is signed by all members of the Board of Directors, or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or such committee. ARTICLE III OFFICERS SECTION 1. Titles. The officers of the corporation shall consist of a President, a Secretary, a Treasurer, and such other officers with such other titles as the Board of Directors shall determine, including without limitation a Chairman of the Board, a Vice-Chairman of the Board, and one or more Vice-Presidents, Assistant Treasurers, or Assistant Secretaries. SECTION 2. Election and Term of Office. The officers of the corporation shall be elected annually by the Board of Directors at its first meeting following the annual meeting of the stockholders. Each officer shall hold office until his or her successor is elected and qualified, unless a different term is specified in the vote electing such officer, or until his or her earlier death, resignation or removal. SECTION 3. Qualification. Unless otherwise provided by resolution of the Board of Directors, no officer, other than the Chairman or Vice-Chairman of the Board, need be a director. No officer need be a stockholder. Any number of offices may be held by the same person, as the directors shall determine, but no person may hold the offices of President and Secretary simultaneously. SECTION 4. Removal. Any officer may be removed, with or without cause, at any time, by resolution adopted by the Board of Directors. SECTION 5. Resignation. Any officer may resign by delivering a written resignation to the corporation at its principal office or to the President or Secretary. Such resignation shall be effective upon receipt or at such later time as shall be specified therein. SECTION 6. Vacancies. The Board of Directors may at any time fill any vacancy occurring in any office for the unexpired portion of the term and may leave unfilled for such period as it may determine any office other than those of President, Treasurer and Secretary. SECTION 7. Powers and Duties. The officers of the corporation shall have such powers and perform such duties as are specified herein and as may be conferred upon or assigned to them by the Board of Directors, and shall have such additional powers and duties as are incident to their office except to the extent that resolutions of the Board of Directors are inconsistent therewith. SECTION 8. President and Vice-Presidents. The President shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the Board of Directors unless a Chairman or Vice-Chairman of the Board is elected by the Board, empowered to preside, and present at such meeting, shall have general and active management of the business of the corporation and general supervision of its officers, agents and employees, and shall see that all orders and resolutions of the Board of Directors are carried into effect. In the absence of the President or in the event of his or her inability or refusal to act, the Vice-President if any (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice-President the title of Executive Vice-President, Senior Vice-President or any other title selected by the Board of Directors. SECTION 9. Secretary and Assistant Secretaries. The Secretary shall attend all meetings of the Board of Directors and of the stockholders and record all the proceedings of such meetings in a book to be kept for that purpose, shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, shall maintain a stock ledger and prepare lists of stockholders and their addresses as required and shall have custody of the corporate seal which the Secretary or any Assistant Secretary shall have authority to affix to any instrument requiring it and attest by any of their signatures. The Board of Directors may give general authority to any other officer to affix and attest the seal of the corporation. The Assistant Secretary if any (or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors of if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of the Secretary's inability or refusal to act, perform the duties and exercise the powers of the Secretary. SECTION 10. Treasurer and Assistant Treasurers. The Treasurer shall have the custody of the corporate funds and securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the corporation as may be ordered by the Board of Directors or the President, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or whenever they may require it, an account of all transactions and of the financial condition of the corporation. The Assistant Treasurer if any (or if there be more than one, the Assistant Treasurers in the order determined by the Board of Directors or if there be no such determination, then in the order of their election) shall, in the absence of the Treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Treasurer. SECTION 11. Bonded Officers. The Board of Directors may require any officer to give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors upon such terms and conditions as the Board of Directors may specify, including without limitation a bond for the faithful performance of the duties of such officer and for the restoration to the corporation of all property in his or her possession or control belonging to the corporation. SECTION 12. Salaries. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors. ARTICLE IV STOCK SECTION 1. Certificates of Stock. One or more certificates of stock, signed by the Chairman or Vice-Chairman of the Board of Directors or by the President or Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, shall be issued to each stockholder certifying, in the aggregate, the number of shares owned by the stockholder in the corporation. Any or all signatures on any such certificate may be facsimile. In case any officer who shall have signed or whose facsimile signature shall have been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue. Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the certificate of incorporation, the by-laws, applicable securities laws, or any agreement among any number of shareholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction. SECTION 2. Transfer of Share of Stock. Subject to the restrictions, if any, stated or noted on the stock certificates, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. The corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to that stock, regardless of any transfer, pledge or other disposition of that stock, until the shares have been transferred on the books of the corporation in accordance with the requirements of these by-laws. SECTION 3. Lost Certificates. A new certificate of stock may be issued in the place of any certificate theretofore issued by the corporation and alleged to have been lost, stolen, destroyed, or mutilated, upon such terms in conformity with law as the Board of Directors shall prescribe. The directors may, in their discretion, require the owner of the lost, stolen, destroyed or mutilated certificate, or the owner's legal representatives, to give the corporation a bond, in such sum as they may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft, destruction or mutilation of any such certificate, or the issuance of any such new certificate. SECTION 4. Record Date. The Board of Directors may fix in advance a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates. If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived at the close of business on the day before the day on which the meeting is held. The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. SECTION 5. Fractional Share Interests. The corporation may, but shall not be required to, issue fractions of a share. If the corporation does not issue fractions of a share, it shall (1) arrange for the disposition of fractional interests by those entitled thereto, (2) pay in cash the fair value of fractions are determined, or (3) issue scrip or warrants in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip or warrants aggregating a full share. A certificate for a fractional share shall, but scrip or warrants shall not unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the corporation in the event of liquidation. The Board of Directors may cause scrip or warrants to be issued subject to the conditions that they shall become void if not exchanged for certificates representing full shares before a specified date, or subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board of Directors may impose. SECTION 6. Dividends. Subject to the provisions of the certificate of incorporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting, declare dividends upon the common stock of the corporation as and when they deem expedient. ARTICLE V INDEMNIFICATION AND INSURANCE SECTION 1. Indemnification. The corporation shall, to the full extent permitted by the General Corporation Law of the State of Delaware, as amended from time to time, and the certificate of incorporation, indemnify each person whom it may indemnify pursuant thereto. SECTION 2. Insurance. The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any capacity or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of the General Corporation Law of the State of Delaware. ARTICLE VI GENERAL PROVISIONS SECTION 1. Fiscal Year. Except as otherwise designated from time to time by the Board of Directors, the fiscal year of the corporation shall begin on the first day of April and end on the last day of March. SECTION 2. Corporate Seal. The corporate seal shall be in such form as shall be approved by the Board of Directors. The Secretary shall be the custodian of the seal. The Board of Directors may authorize a duplicate seal to be kept and used by any other officer. SECTION 3. Certificate of Incorporation. All references in these by-laws to the certificate of incorporation shall be deemed to refer to the certificate of incorporation of the corporation, as in effect from time to time. SECTION 4. Execution of Instruments. The President, any Vice-President, or the Treasurer shall have power to execute and deliver on behalf and in the name of the corporation any instrument requiring the signature of an officer of the corporation, including deeds, contracts, mortgages, bonds, notes, debentures, checks, drafts, and other orders for the payment of money. In addition, the Board of Directors may expressly delegate such powers to any other officer or agent of the corporation. SECTION 5. Voting of Securities. Except as the directors may otherwise designate, the President or Treasurer may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at any meeting of stockholders or shareholders of any other corporation or organization the securities of which may be held by this corporation. SECTION 6. Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall, as to all persons who rely on the certificate in good faith, be conclusive evidence of that action. SECTION 7. Transactions with Interested Parties. No contract or transaction between the corporation and one or more of the directors or officers, or between the corporation and any other corporation, partnership, association, or other organization in which one or more of the directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for that reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or a committee of the Board of Directors which authorizes the contract or transaction or solely because the vote of any such director is counted for such purpose, if: (1) The material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) The material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote therein, and the contract or transaction is approved by the stockholders; or (3) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee of the Board of Directors, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. SECTION 8. Books and Records. The books and records of the corporation shall be kept at such places within or without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE VII AMENDMENTS SECTION 1. By the Stockholders. These by-laws may be altered, amended or repealed or new by-laws may be adopted by the affirmative vote of the holders of a majority of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at any regular meeting of stockholders, or at any special meeting of stockholders provided notice of such alteration, amendment, repeal or adoption of new by-laws shall have been stated in the notice of such special meeting. EX-31.1 4 d57460_ex31-1.txt CERTIFICATION (SEC. 302) CEO & PRES. Exhibit 31.1 RULE 13a-14(a)/15d-14(a) CERTIFICATION I, Walter C. Herlihy, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Repligen Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [Paragraph omitted in accordance with SEC transition instructions contained in SEC Release 34-47986.] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 13, 2003 By: /s/ Walter C. Herlihy -------------------------------------------- Chief Executive Officer and President, (Principal Executive Financial and Accounting Officer) EX-32.1 5 d57460_ex32-1.txt CERTIFICATION (SEC. 906) CEO & PRES. Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Repligen Corporation (the "Company") on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Walter C. Herlihy, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: November 13, 2003 By: /s/ Walter C. Herlihy ------------------------------------------ Chief Executive Officer and President, (Principal Executive Financial and Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----