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 June 30, 2003
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|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Delaware 13-3660391
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(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
767 Fifth Avenue, New York, New York 10153
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (212) 702-4367
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Former Name, Former Address and Former Fiscal Year, if Cadus Pharmaceutical
Changed Since Last Report Corporation
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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 12-b-2 of the Exchange Act).
Yes ___ No _X_
The number of shares of registrant's common stock, $0.01 par value, outstanding as of July 31, 2003 was 13,144,040.
CADUS CORPORATION
INDEX
PAGE NO.
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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS 3
PART I - CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets - June 30, 2003
(unaudited) and December 31, 2002 (audited) 4
Condensed Consolidated Statements of Operations -
Three Months Ended June 30, 2003 and 2002 (unaudited) 5
Condensed Consolidated Statements of Operations -
Six Months Ended June 30, 2003 and 2002 (unaudited) 6
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2003 and 2002 (unaudited) 7
Notes to Condensed Consolidated Financial
Statements (unaudited) 8 - 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11 - 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Item 4. Controls and Procedures 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13 - 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8K 14
SIGNATURES 15
EXHIBIT INDEX 16
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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and stated securities laws, including any projections or expectations of earnings, revenue, financial performance, liquidity and capital resources or other financial items; any statement of our plans, strategies and objectives for our future operations; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumption underlying any of the foregoing. Forward-looking statements may include the words "may," "will," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and other similar words. Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, technological uncertainties regarding the Company's technologies, risks and uncertainties relating to the Company's ability to license its technologies to third parties, the Company's ability to acquire and operate other companies, the Company's capital needs and uncertainty of future funding, the Company's history of operating losses, the Company's dependence on proprietary technology and the unpredictability of patent protection, intense competition in the pharmaceutical and biotechnology industries, rapid technological development that may result in the Company's technologies becoming obsolete, as well as other risks and uncertainties discussed in the Company's other filings with the Securities and Exchange Commission. The forward-looking statements made in this Quarterly Report on Form 10-Q are made only as of the date hereof and the Company does not have or undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances unless otherwise required by law.
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CADUS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
JUNE 30, DECEMBER 31,
2003 2002
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(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $24,519,549 $24,923,071
Prepaid and other current assets 40,780 79,053
Investment in marketable securities 1,213,977 794,603
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Total current assets 25,774,306 25,796,727
Investment in other ventures 162,147 164,922
Other assets, net 868,388 908,841
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Total assets $26,804,841 $26,870,490
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses and other current liabilities $ 79,226 $ 227,810
Deferred gain on exchange of equity interest 282,384 184,833
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Total current liabilities 361,610 412,643
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Stockholders' equity:
Common stock 132,857 132,857
Additional paid-in capital 59,844,355 59,844,355
Accumulated deficit (33,342,309) (33,005,871)
Accumulated other comprehensive income (loss) 108,403 (213,419)
Treasury stock (300,075) (300,075)
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Total stockholders' equity 26,443,231 26,457,847
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Total liabilities and stockholders' equity $26,804,841 $26,870,490
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See accompanying notes to condensed consolidated financial statements.
CADUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
June 30,
2003 2002
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(Unaudited) (Unaudited)
License and maintenance fees $ -- $ --
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Total revenues -- --
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Costs and expenses:
General and administrative expenses 241,152 277,835
Gain from equity in other ventures (361) (725)
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Total costs and expenses 240,791 277,110
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Operating loss (240,791) (277,110)
Other income:
Interest income 46,820 85,619
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Loss before income taxes (193,971) (191,491)
Income taxes -- --
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Net loss ($ 193,971) ($ 191,491)
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Basic and diluted loss per weighted average
share of common stock outstanding ($ 0.01) ($ 0.01)
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Weighted average shares of common stock
outstanding - basic and diluted 13,144,040 13,144,040
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See accompanying notes to condensed consolidated financial statements.
CADUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended
June 30,
2003 2002
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(Unaudited) (Unaudited)
License and maintenance fees $ 100,000 $ 100,000
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Total revenues 100,000 100,000
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Costs and expenses:
General and administrative expenses 534,070 541,545
Loss (gain) of equity in other ventures 2,775 (1,407)
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Total costs and expenses 536,845 540,138
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Operating loss (436,845) (440,138)
Other income:
Interest income 100,407 180,187
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Loss before income taxes (336,438) (259,951)
Income taxes -- --
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Net loss ($ 336,438) ($ 259,951)
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Basic and diluted loss per weighted average
share of common stock outstanding ($ 0.03) ($ 0.02)
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Weighted average shares of common stock
outstanding - basic and diluted 13,144,040 13,144,040
============ ============
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See accompanying notes to condensed consolidated financial statements.
CADUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2003 2002
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(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss ($ 336,438) ($ 259,951)
Adjustments to reconcile net loss
to net cash used in operating activities:
Amortization of patent costs 40,452 40,453
Loss (gain) of equity in other ventures 2,775 (1,407)
Changes in assets and liabilities:
Decrease in license fee receivable -- 500,000
Decrease in prepaid and other current assets 38,273 29,476
Decrease in accrued expenses and other
current liabilities (148,584) (669,636)
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Net cash used in operating activities (403,522) (361,065)
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Net decrease in cash and cash equivalents (403,522) (361,065)
Cash and cash equivalents - beginning of period 24,923,071 24,469,357
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Cash and cash equivalents - end of period $24,519,549 $24,108,292
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See accompanying notes to condensed consolidated financial statements.
CADUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note - 1 ORGANIZATION AND BASIS OF PREPARATION
Cadus Pharmaceutical Corporation changed its name to Cadus Corporation (the "Company") on June 20, 2003. The change in name was approved by the stockholders of the Company at the Company's Annual Meeting of Stockholders held on June 18, 2003.
The information presented as of June 30, 2003 and for the three and six month periods then ended, is unaudited, but includes all adjustments (consisting only of normal recurring accruals) that the Company's management believes to be necessary for the fair presentation of results for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the requirements of the Securities and Exchange Commission, although the Company believes that the disclosures included in these financial statements are adequate to make the information not misleading. The December 31, 2002 balance sheet was derived from audited consolidated financial statements. These financial statements should be read in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 2002.
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Cadus Technologies, Inc., organized in December 2001. All inter- company balances and transactions have been eliminated in consolidation.
The results of operations for the six month period ended June 30, 2003 are not necessarily indicative of the results to be expected for the year ending December 31, 2003.
Note - 2 NET LOSS PER COMMON SHARE
For the three and six-month periods ended June 30, 2003 and 2002 basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per share is the same as basic net loss per share since the inclusion of 495,975 shares of potential common stock equivalents (stock options and warrants) in the computation for the three and six-month periods ending June 30, 2003 would be anti-dilutive. Diluted net loss per share is the same as basic net loss per share since the inclusion of 609,309 shares of potential common stock equivalents in the computation for the three and six-month periods ending June 30, 2002 would be anti- dilutive.
Note - 3 LICENSING AGREEMENTS
In December 2001, the Company licensed its yeast-based drug discovery technologies on a non-exclusive basis to a major pharmaceutical company. Under the licensing agreement, the Company received an up-front non-refundable fee of $500,000 that was recorded as
CADUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
revenue in the December 31, 2001 consolidated statement of operations as the Company has no further involvement with the development of the product. The Company received payment in January 2002. The Company received an additional licensing fee in 2002 of $1,000,000 upon the licensee achieving a research milestone. The licensee is entitled to use the technologies for five years from the date of the agreement. Following the initial five year term, the licensee may renew the license annually upon payment of an annual licensing fee of $250,000.
In February 2000, Cadus licensed to OSI Pharmaceuticals, Inc. ("OSI"), on a non-exclusive basis, its yeast-based drug discovery technologies, including various reagents and its library of over 30,000 yeast strains, and its bioinformatics software. OSI paid to Cadus a license fee of $100,000 and an access fee of $600,000 and in December 2000 a supplemental license fee of $250,000. OSI is also obligated to pay an annual maintenance fee of $100,000 until the earlier of 2010 or the termination of the license. OSI may terminate the license at any time on 30 days prior written notice. During the six-month period ended June 30, 2003 and 2002, Cadus recognized $100,000 of license revenue related to this agreement.
Note - 4 INVESTMENT IN MARKETABLE SECURITIES
The Company had an equity interest in Axiom Biotechnologies, Inc. ("Axiom"). Due to Axiom's operating losses, the Company's investment was written down to $0 at December 31, 2001. On August 30, 2002, Axiom entered into a merger agreement with a wholly- owned subsidiary of Sequenom, Inc. which is publicly traded on the Nasdaq National Market. The Company received 441,446 common shares of Sequenom, Inc. in exchange for its shares in Axiom.
Pursuant to the merger, 102,685 of the Company's 441,446 common shares of Sequenom, Inc. are held in escrow (the "Escrow Shares") for a one-year period. The Escrow Shares are held to secure rights to indemnification, compensation and reimbursement of Sequenom, Inc. and other indemnities as defined in the merger agreement. The value of the Escrow Shares received was recorded as a deferred gain on exchange of equity interest in the accompanying condensed consolidated balance sheet.
Pursuant to the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Debt and Equity Securities" management deems its investment in Sequenom, Inc. to be available for sale and reports its investment at fair value with net unrealized gains or losses reported in accumulated other comprehensive income (loss) within stockholders' equity. The Company's unrealized gain of $108,403 as of June 30, 2003 on shares received is reflected in accumulated other comprehensive income. The Company's unrealized gain of $32,859 as of June 30, 2003 for Escrow Shares is included in the deferred gain on exchange of equity interest.
CADUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note - 5 ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT
In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" ("SFAS 148"). SFAS 148 provides alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation as originally provided by SFAS No. 123 "Accounting for Stock-Based Compensation". Additionally, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosure in both the annual and interim financial statements about the method of accounting for stock-based compensation and the effect of the method used on reported results. Pro forma net (loss) would be the same as the reported net (loss) for the three and six months ended June 30, 2003 and 2002 had the fair-value-based method been applied to all outstanding awards, which were fully vested as of December 31, 1999. Therefore, the application of the disclosure portion of this standard had no impact on our consolidated financial statements as of June 30, 2003 and for the three and six months ended June 30, 2003.
On April 22, 2003, the FASB determined that stock-based compensation should be recognized as a cost in the financial statements and that such cost be measured according to the fair value of the stock options. The FASB has not as yet determined the methodology for calculating fair value and plans to issue an exposure draft later this year that could become effective in 2004. We will continue to monitor communications on this subject from the FASB in order to determine the impact on the Company's consolidated financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company was incorporated in 1992 and until July 30, 1999, devoted substantially all of its resources to the development and application of novel yeast-based and other drug discovery technologies. On July 30, 1999, the Company sold its drug discovery assets and ceased its internal drug discovery operations and research efforts for collaborative partners.
At June 30, 2003, the Company had an accumulated deficit of approximately $33.3 million. The Company's losses have resulted principally from costs incurred in connection with its research and development activities and from general and administrative costs associated with the Company's operations. These costs have exceeded the Company's revenues and interest income. As a result of the sale of its drug discovery assets and the cessation of its internal drug discovery operations and research efforts for collaborative partners, the Company ceased to have research funding revenues and substantially reduced its operating expenses. The Company expects to generate revenues in the future only if it is able to license its technologies.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002
REVENUES
There were no revenues for the three months ended June 30, 2003 and 2002.
COSTS AND EXPENSES
General and administrative expenses decreased to $241,152 for the three months ended June 30, 2003 from $277,835 for the same period in 2002. The decrease can be attributed primarily to a decrease in professional and license fees.
For the three months ended June 30, 2003, the Company recognized a gain of $361 in its investment in Laurel Partners Limited Partnership ("Laurel"). The gain for the same period in 2002 was $725.
INTEREST INCOME
Interest income for the three months ended June 30, 2003 was $46,820 compared to interest income of $85,619 for the same period in 2002. This decrease is attributable primarily to lower interest rates earned on invested funds.
NET LOSS
Net loss for the three months ended June 30, 2003 was $193,971 compared to a net loss of $191,491 for the same period in 2002. This increase in net loss can be attributed primarily to a decrease in interest income offset in part by the decrease in professional and license fees.
SIX MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002
REVENUES
Revenues for the six months ended June 30, 2003 and 2002 were $100,000 which is the annual maintenance fee from OSI Pharmaceuticals, Inc.
COSTS AND EXPENSES
General and administrative expenses decreased to $534,070 for the six months ended June 30, 2003 from $541,545 for the same period in 2002. This decrease can be attributed primarily to a decrease in license fees offset by an increase in shareholder relations.
For the six months ended June 30, 2003, the Company recognized a loss of $2,775 in its investment in Laurel. The gain for the same period in 2002 was $1,407.
INTEREST INCOME
Interest income for the six months ended June 30, 2003 was $100,407 compared to interest income of $180,187 for the same period in 2002. This decrease is attributable primarily to lower interest rates earned on invested funds.
NET LOSS
Net loss for the six months ended June 30, 2003 was $336,438 compared to a net loss of $259,951 for the same period in 2002. This increase in net loss can be attributed primarily to the decrease in interest income.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2003 the Company held cash and cash equivalents of $24.5 million. The Company's working capital at June 30, 2003 was $25.4 million.
The Company believes that its existing capital resources, together with interest income, will be sufficient to support its operations through the end of 2004. This forecast of the period of time through which the Company's financial resources will be adequate to support its operations is a forward-looking statement that may not prove accurate and, as such, actual results may vary. The Company's capital requirements may vary as a result of a number of factors, including the transactions, if any, arising from the Company's efforts to acquire or invest in companies and income-producing assets and the expenses of pursuing such transactions.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's earnings and cash flows are subject to fluctuations due to changes in interest rates primarily from its investment of available cash balances in money market funds with portfolios of investment grade corporate and U.S. government securities. The Company does not believe it is materially exposed to changes in interest rates. Under its current policies the Company does not use interest rate derivative instruments to manage exposure to interest rate changes.
Item 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Based on the evaluation of the Company's disclosure controls and procedures conducted as of the period covered by this report on Form 10-Q, the Company's President and Chief Executive Officer, who also performs the functions of a principal financial officer, concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) promulgated under the Securities Exchange Act of 1934) are effective.
CHANGES IN INTERNAL CONTROLS
There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, nor were any corrective actions required with regard to significant deficiencies and material weaknesses.
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On June 18, 2003, the Company held its annual meeting of stockholders in New York, New York. The holders of 12,430,173 shares of Common Stock were present or represented by proxy and, accordingly, a quorum was present. The following matters were voted upon and received the votes set forth below:
1. All of the following persons nominated were elected to serve as directors and received the number of votes set opposite their respective names:
VOTES FOR VOTES WITHHELD
James R. Broach 11,997,583 452,590
Russell D. Glass 11,997,583 452,590
Carl C. Icahn 11,997,583 452,590
Peter S. Liebert 11,997,583 452,590
Michele A. Paige 11,997,583 452,590
Jack G. Wasserman 11,997,583 452,590
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2. The Company's proposal to amend the Company's Certificate of Incorporation to change the Company's name to Cadus Corporation received 12,164,065 votes FOR and 245,606 votes AGAINST, with 20,502 abstentions and 0 broker non-votes.
3. A stockholder proposal concerning a request that the Board of Directors of the Company pursue returning the Company's excess cash to its stockholders received 1,822,576 votes FOR and 6,103,824 votes AGAINST, with 27,750 abstentions and 4,476,023 broker non-votes.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) The Exhibits listed in the Exhibit Index are included in this report.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CADUS CORPORATION
(REGISTRANT)
Date: August 14, 2003 By: /s/ Michele A. Paige
-----------------------------------------
Michele A. Paige
President and Chief Executive Officer
(Authorized Officer and
Principal Financial Officer)
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EXHIBIT INDEX
The following exhibit is filed as part of this Quarterly Report on Form 10-Q:
EXHIBIT NO. DESCRIPTION
3.1 Certificate of Amendment of Amended and Restated
Certificate of Incorporation of Cadus
Pharmaceutical Corporation ("Cadus"), as filed
with the Secretary of State of Delaware on June
20, 2003, and Amended and Restated Certificate of
Incorporation of Cadus, as filed with the
Secretary of State of Delaware on July 22, 1996.
31 Certifications
32 Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CADUS PHARMACEUTICAL CORPORATION
(PURSUANT TO SECTION 242 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE)
Cadus Pharmaceutical Corporation (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the Corporation resolutions were duly adopted setting forth a proposed amendment to the Amended and Restated Certificate of Incorporation of the Corporation to change the name of the Corporation to Cadus Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration thereof.
SECOND: That thereafter, pursuant to resolutions of its Board of Directors, an annual meeting of the stockholders of the Corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.
THIRD: That, in accordance with the foregoing, Article FIRST of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:
"FIRST: The name of the Corporation is CADUS CORPORATION (the "Corporation")."
FOURTH: That this amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by Michele A. Paige, its President, this 20th day of June, 2003.
CADUS PHARMACEUTICAL CORPORATION
By: /s/ Michele A. Paige ----------------------------- Michele A. Paige, President |
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CADUS PHARMACEUTICAL CORPORATION
(formerly Cadus Therapeutics Corp.)
CADUS PHARMACEUTICAL CORPORATION, a Delaware corporation (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is CADUS PHARMACEUTICAL CORPORATION.
2. The Corporation's original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on January 23, 1992, under the name Cadus Therapeutics Corp.
3. This Restated Certificate of Incorporation (the "Restated Certificate") which was duly adopted in accordance with Sections 242 and 245, with prompt written notice thereof having been given to the stockholders of the Corporation pursuant to Section 228(d), of the General Corporation Law of the State of Delaware, amends and restates the provisions of the present certificate of incorporation, as amended, of the Corporation.
4. Immediately upon filing this Restated Certificate, the text of the present certificate of incorporation, as amended, is hereby amended and restated to read in full as set forth herein:
FIRST: The name of the Corporation is CADUS PHARMACEUTICAL CORPORATION (the "Corporation").
SECOND: The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of capital stock which the Corporation shall have authority to issue is 35,000,000, all of which shall be Common Stock having a par value of $.01 per share.
FIFTH: The Board of Directors of the Corporation is expressly authorized and empowered to adopt, amend or repeal the by-laws of the Corporation, without any action on the part of the stockholders of the Corporation, but the stockholders of the Corporation may make additional by-laws and may amend or repeal any by-law whether adopted by them or otherwise.
SIXTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.
SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by subsection 102(b)(7) of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.
EIGHTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person. The Corporation shall advance expenses for the defense of any director, officer, employee or agent prior to a final disposition of a claim provided such party executes an undertaking to repay advances from the Corporation if it is ultimately determined that such party is not entitled to indemnification. Any repeal or modification of this Article shall not adversely affect any right or protection existing hereunder immediately prior to such repeal or modification.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Jeremy M. Levin, its President, and attested by James S. Rielly, its Secretary, on July 18, 1996.
CADUS PHARMACEUTICAL CORPORATION
By: /s/Jeremy M. Levin
-------------------------
Jeremy M. Levin,
President
Attest:
/s/ James S. Reilly
----------------------
James S. Rielly,
Secretary
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EXHIBIT 31
CERTIFICATIONS
I, Michele A. Paige, President and Chief Executive Officer of Cadus Corporation, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Cadus 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 officer(s) 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 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) 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
(c) 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; and
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 function):
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: August 14, 2003
/s/ Michele A. Paige
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Michele A. Paige
President and Chief Executive Officer (Chief
Executive Officer and Chief Financial Officer)
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EXHIBIT 32
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 Cadus Corporation (the "Company") on Form 10-Q for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michele A. Paige, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, 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.
A signed original of this written statement required by Section 906 has been provided to Cadus Corporation and will be retained by Cadus Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
/s/ Michele A. Paige ---------------------------------------------- Michele A. Paige President and Chief Executive Officer (Chief Executive Officer and Chief Financial Officer) August 14, 2003 |
The foregoing certification is furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.