LETTER TO EXEGENICS' STOCKHOLDERS
Published on June 12, 2003
EXHIBIT 1
[LETTERHEAD OF eXegenics INC.]
June 12, 2003
Dear Fellow Stockholders:
As you know, on May 29, 2003, Foundation Growth Investments LLC and its
wholly owned subsidiary, EI Acquisition Inc., commenced an unsolicited cash
offer for all the outstanding shares of eXegenics at $0.40 per common share and
Series A Convertible Preferred share, subject to various terms and conditions.
You should understand that your Board of Directors takes its fiduciary
duty to act in the best interests of eXegenics and its stockholders very
seriously and is committed to enhancing stockholder value. After careful
consideration, including a thorough review of the offer with independent
financial and legal advisors, your Board of Directors unanimously determined
that Foundation's offer is inadequate and not in the best interests of
eXegenics' stockholders.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU REJECT THE FOUNDATION
OFFER AND NOT TENDER YOUR SHARES.
The Board believes that the Foundation tender offer is inadequate and not
in the best interests of eXegenics or its stockholders. The factors relied upon
by the Board in making its recommendation include the following:
o the tender offer represents an opportunistic attempt by
Foundation to acquire eXegenics at a time when the Common
Stock price is artificially and temporarily depressed;
o the tender offer is inconsistent with the Board's objective of
enhancing and maximizing stockholder value;
o eXegenics' stockholders should be aware that the Offer price
is $0.40 per share, the market price of eXegenics' Common
Stock as of June 11, 2003 was $0.66 per share, and the cash
per share as of June 11, 2003 was approximately $0.85. In
connection with their evaluation of the foregoing data,
eXegenics stockholders should note the following information:
(i) the approximate cash per share as of June 11, 2003
presented above is based on the estimate of eXegenics'
management, does not purport to constitute audited financial
information, and consequently should not be relied upon; (ii)
the cash per share as of March 31, 2003, the last date for
which audited financial statements are available, was $0.91;
(iii) the amount of cash per share does not necessarily
reflect the amount that stockholders would receive if
eXegenics were to be liquidated, and does not take into
account transaction costs relating to the Offer, which would
reduce the amounts available for distribution; and (iv) a
liquidating distribution of cash would be a taxable
transaction to eXegenics stockholders for United States income
tax purposes to the extent that their adjusted tax basis in
the eXegenics shares is less than the amount of cash
distributed (and also may be a taxable transaction under
applicable state, local, foreign and other income tax laws);
o eXegenics believes there is a reasonable chance of obtaining
an alternative offer with terms that are superior to the
Offer, based on current discussions with several potential
acquirers;
o the receipt of cash for Shares pursuant to the Offer, and
pursuant to the second step merger transaction proposed by
Foundation, will be a taxable transaction to eXegenics
stockholders for United States income tax purposes to the
extent that their adjusted tax basis in the eXegenics shares
is less than the Offer price (and also may be a taxable
transaction under applicable state, local, foreign and other
income tax laws); and
o the opinion of eXegenics' independent financial advisor,
Petkevich & Partners, LLC, that as of June 10, 2003 the Offer
was inadequate to the eXegenics stockholders from a financial
point of view.
A complete discussion of these and the other significant factors
contributing to the Board of Directors' recommendation are described in the
enclosed Schedule 14D-9. We urge you to read the Schedule 14D-9 carefully and in
its entirety so that you will be fully informed as to the Board of Directors'
recommendation.
IF YOU HAVE ANY QUESTIONS REGARDING THE ENCLOSED SCHEDULE 14D-9, PLEASE
CONTACT GEORGESON SHAREHOLDER COMMUNICATIONS INC., THE INFORMATION AGENT, AT:
GEORGESON SHAREHOLDER, 17 STATE STREET - 10TH FLOOR, NEW YORK, NY 10004; BANKS
AND BROKERS CALL: (212) 440-9800; ALL OTHERS CALL TOLL-FREE: (800) 964-0733.
We greatly appreciate your continued support and encouragement.
Sincerely,
Ronald L. Goode
Chairman, Chief Executive Officer
and President