UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended April 2, 2003
Commission File Number 0-24320
NAPRO BIOTHERAPEUTICS, INC.
(Exact name of Registrant as specified in its charter)
| Incorporated in Delaware |
IRS ID No. 84-1187753 |
6304 Spine Road, Unit A
Boulder, Colorado 80301
(303) 516-8500
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 Act). Yes ¨ No x
As of May 2, 2003, the registrant had 29,939,486 shares of common stock, $0.0075 par value, outstanding.
NaPro BioTherapeutics, Inc. and Subsidiaries
Table of Contents
| Page | ||||||
| Part I |
Financial Information |
|||||
| Item 1 |
3 | |||||
| Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
10 | ||||
| Item 3 |
18 | |||||
| Item 4 |
18 | |||||
| Part II |
Other Information |
|||||
| Item 1 |
19 | |||||
| Item 6 |
19 | |||||
| 20 | ||||||
| 21 | ||||||
| 22 | ||||||
| Exhibits |
||||||
| Exhibit 99.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). |
|||||
| Exhibit 99.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). |
|||||
2
NaPro BioTherapeutics, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(In thousands, except per share data)
| April 2, 2003 |
December 31, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
6,594 |
|
$ |
6,762 |
| ||
| Accounts receivable, net of allowance for doubtful accounts |
|
7,026 |
|
|
9,340 |
| ||
| Inventory |
|
7,723 |
|
|
9,397 |
| ||
| Prepaid expense and other current assets |
|
1,209 |
|
|
977 |
| ||
| Total current assets |
|
22,552 |
|
|
26,476 |
| ||
| Property, plant and equipment, net |
|
13,294 |
|
|
13,731 |
| ||
| Inventory – raw materials |
|
5,891 |
|
|
3,781 |
| ||
| Other assets |
|
1,633 |
|
|
1,340 |
| ||
| Total assets |
$ |
43,370 |
|
$ |
45,328 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued liabilities |
$ |
5,074 |
|
$ |
5,234 |
| ||
| Accrued payroll and payroll taxes |
|
1,916 |
|
|
1,147 |
| ||
| Notes payable – current portion |
|
374 |
|
|
102 |
| ||
| Deferred income |
|
1,120 |
|
|
1,150 |
| ||
| Total current liabilities |
|
8,484 |
|
|
7,633 |
| ||
| Notes payable – long term |
|
19,901 |
|
|
19,861 |
| ||
| Deferred income – long term |
|
5,607 |
|
|
5,887 |
| ||
| Convertible debentures |
|
5,283 |
|
|
5,151 |
| ||
| Stockholders’ equity: |
||||||||
| Preferred stock, $.001 par value; 2,000,000 shares authorized; none issued |
|
— |
|
|
— |
| ||
| Common stock, $.0075 par value; 66,000,000 shares authorized; 29,993,792 and 29,964,292 shares issued at April 2, 2003 and December 31, 2002, respectively |
|
225 |
|
|
225 |
| ||
| Additional paid-in capital |
|
110,479 |
|
|
110,430 |
| ||
| Accumulated deficit |
|
(106,428 |
) |
|
(103,678 |
) | ||
| Treasury stock, 54,306 shares at cost at April 2, 2003 and December 31, 2002 |
|
(181 |
) |
|
(181 |
) | ||
| Total stockholders’ equity |
|
4,095 |
|
|
6,796 |
| ||
| Total liabilities and stockholders’ equity |
$ |
43,370 |
|
$ |
45,328 |
| ||
See accompanying notes to Consolidated Condensed Financial Statements.
3
NaPro BioTherapeutics, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Quarter Ended |
||||||||
| April 2, 2003 |
March 31, 2002 |
|||||||
| Product sales |
$ |
6,888 |
|
$ |
6,736 |
| ||
| Expenses: |
||||||||
| Cost of sales |
|
3,334 |
|
|
7,100 |
| ||
| Research and development |
|
2,637 |
|
|
3,761 |
| ||
| General and administrative |
|
3,422 |
|
|
2,576 |
| ||
|
|
9,393 |
|
|
13,437 |
| |||
| Operating loss |
|
(2,505 |
) |
|
(6,701 |
) | ||
| Other income (expense): |
||||||||
| License fee income |
|
280 |
|
|
350 |
| ||
| Interest income |
|
29 |
|
|
69 |
| ||
| Interest expense |
|
(554 |
) |
|
(381 |
) | ||
| Net loss |
$ |
(2,750 |
) |
$ |
(6,663 |
) | ||
| Basic and diluted loss per share |
$ |
(0.09 |
) |
$ |
(0.23 |
) | ||
| Weighted average shares outstanding |
|
29,937 |
|
|
29,088 |
| ||
See accompanying notes to Consolidated Condensed Financial Statements.
4
NaPro BioTherapeutics, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
| Quarter Ended |
||||||||
| April 2, 2003 |
March 31, 2002 |
|||||||
| Operating activities: |
||||||||
| Net loss |
$ |
(2,750 |
) |
$ |
(6,663 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
|
792 |
|
|
485 |
| ||
| Accretion of debt issue cost |
|
21 |
|
|
11 |
| ||
| Amortization of debt discount |
|
121 |
|
|
— |
| ||
| Accretion of license fee income |
|
(280 |
) |
|
(350 |
) | ||
| Compensation paid with common stock, options and warrants |
|
49 |
|
|
488 |
| ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
2,314 |
|
|
(533 |
) | ||
| Inventory |
|
(436 |
) |
|
(532 |
) | ||
| Prepaid expense and other assets |
|
(155 |
) |
|
157 |
| ||
| Accounts payable and accrued liabilities |
|
(160 |
) |
|
819 |
| ||
| Accrued payroll and payroll taxes |
|
769 |
|
|
(74 |
) | ||
| Deferred income |
|
(30 |
) |
|
— |
| ||
| Net cash provided by (used in) operating activities |
|
255 |
|
|
(6,192 |
) | ||
| Investing activities: |
||||||||
| Additions to property and equipment |
|
(324 |
) |
|
(1,941 |
) | ||
| Acquisition of patents |
|
(400 |
) |
|
— |
| ||
| Net cash used in investing activities |
|
(724 |
) |
|
(1,941 |
) | ||
| Financing activities: |
||||||||
| Proceeds from convertible debentures, net of issuance cost |
|
— |
|
|
7,833 |
| ||
| Proceeds from notes payable |
|
393 |
|
|
302 |
| ||
| Payments of notes payable |
|
(92 |
) |
|
(165 |
) | ||
| Proceeds from the sale of common stock, net of issuance cost |
|
— |
|
|
7,850 |
| ||
| Proceeds from the exercise of common stock options and warrants |
|
— |
|
|
122 |
| ||
| Net cash provided by financing activities |
|
301 |
|
|
15,942 |
| ||
| Net (decrease) increase in cash and cash equivalents |
|
(168 |
) |
|
7,809 |
| ||
| Cash and cash equivalents at beginning of period |
|
6,762 |
|
|
10,144 |
| ||
| Cash and cash equivalents at end of period |
$ |
6,594 |
|
$ |
17,953 |
| ||
See accompanying notes to Consolidated Condensed Financial Statements.
5
NaPro BioTherapeutics, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows (continued)
(In thousands)
(Unaudited)
| Quarter Ended | ||||||
| April 2, 2003 |
March 31, 2002 | |||||
| Supplemental disclosure of cash flow information: |
||||||
| Interest paid |
$ |
489 |
$ |
338 | ||
| Non-cash investing and financing activities: |
||||||
| Issuance of common stock to prepay retirement plan contributions |
||||||