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Biotech / Medical : ARIAD Pharmaceuticals -- Ignore unavailable to you. Want to Upgrade?

To: mike head who wrote (661)	8/21/1999 10:54:00 PM
From: Mike McFarland	Read Replies (1) \| Respond to of 4474

Chock full O' Nuts: Finances, lawsuits...the game of chicken continues for shareholders...and I would expect a few more to veer away now. What might be interesting to see, is if financing is secured AND THEN an ARGENT deal goes through. But 10M isn't exactly enough to put Ariad in a position of strength as far as dealmaking--it's do or die fellas, do a deal for crying out loud. One thing for sure, I'm not going to be looking at the quotes on Monday, I suspect the stock will dip again, and why watch--I'm so emotionally dug in now, I might as well see this to the end. Geeze, what a lame report. Is it normal to say nothing about the research &science in a quarterly report, no reference to the pnas paper? Maybe that's normal and I have to wait for mid year shareholder letter. And I didn't read the whole thing yet, but geeze, it's all about money and other crapola. Not the kind of quarterly a person would read and then go out and buy shares, that's for sure. Here are the nasty bits: ____________________________________________________ The Company has not been in compliance with certain financial covenants of its loan agreement with its principal bank relating to tangible net worth, ratio of debt to tangible net worth, working capital and current ratio. The Company has received a waiver from the bank through June 30, 1999 of various events of default relating to such non-compliance. While the Company has not received any notification of default, subsequent to June 30, 1999, the Company may be held in default under its loan agreement and, as a result, the debt could be subject to future acceleration in the absence of refinancing, additional equity, additional covenant waivers or loan modifications. In an attempt to address its funding requirements, the Company has engaged in negotiations for a financing with a group of institutional investors. As presently contemplated, such financing is expected to consist of an aggregate principal amount of up to $5,000,000 of 10% secured debentures with a two year maturity and five year warrants to purchase up to 3,500,000 shares of the Company's common stock at an exercise price of 110% of the market price at closing. In addition, the debentures are expected to be secured by all of the Company's assets, redeemable under certain circumstances and convertible into shares of common stock if not redeemed within one year of the date of issuance. (snip) If the financing is completed, the funds will be used to repay existing bank debt ($4,239,000) and fund operations. -------------------------------------------------------------- On May 19, 1999, the Company filed suit in the Massachusetts Superior Court against Michael Z. Gilman, Ph.D. ("Dr. Gilman"), the Company's former Chief Scientific Officer seeking equitable relief for breach of his employment agreements in accepting a position as the research director of molecular biology at Biogen, Inc. ("Biogen"). The Superior Court issued a temporary injunction on May 19, 1999 restraining Dr. Gilman from using any of the Company's confidential information in his new employment. On June 21, 1999, Dr. Gilman filed a counterclaim against the Company seeking an order awarding damages for breach of contract and barring the Company from enforcing any provisions of its employment agreements with Dr. Gilman. On May 26, 1999 Biogen filed a motion to intervene as a defendant in the action which the Superior Court granted on August 2, 1999. While the Company intends to seek a permanent injunction and other relief as appropriate, the ultimate outcome of the litigation with Dr. Gilman is not determinable at this time. _______________________________________________________________ You know, if this all ends badly, Berger is going to be sued.