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Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 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, 2002
 
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: 0-29975
 
 
ACLARA BioSciences, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
     
94-3222727
(State of incorporation)
     
(IRS Employer Identification Number)
 
1288 Pear Avenue
Mountain View, California 94043
(Address of principal executive offices and zip code)
 
650-210-1200
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether 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 ¨.
 
The number of shares outstanding of the registrant’s common stock as of October 31, 2002 was 36,193,512.
 

Table of Contents
 
ACLARA BIOSCIENCES, INC.
 
TABLE OF CONTENTS
 
         
PAGE
Part I:
   
Financial Information
     
Item 1.
   
Financial Statements (Unaudited)
     
       
3
       
4
       
5
       
6
Item 2.
      
9
Item 3.
      
16
Item 4.
      
17
Part II:
   
Other Information
     
Item 1.
      
17
Item 2.
      
17
Item 3.
      
17
Item 4.
      
17
Item 5.
      
17
Item 6.
      
17
       
21
       
21

2

Table of Contents
 
PART I — FINANCIAL INFORMATION
 
ITEM 1.    Financial Statements
 
ACLARA BIOSCIENCES, INC.
(A Company in the Development Stage)
 
CONDENSED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
 
    
September 30,
2002
     
December 31,
2001
  
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
   
$
69,561
 
   
$
30,970
 
Restricted cash
   
 
34,125
 
   
 
34,125
 
Short-term marketable investments
   
 
15,626
 
   
 
45,883
 
Accounts receivable
   
 
173
 
   
 
1,540
 
Prepaid expenses and other current assets
   
 
608
 
   
 
546
 
Inventories
   
 
10
 
   
 
14
 
    
  
Total current assets
   
 
120,103
 
   
 
113,078
 
Long-term marketable investments
   
 
32,954
 
   
 
60,598
 
Restricted cash
   
 
—  
 
   
 
500
 
Property and equipment, net
   
 
7,094
 
   
 
8,887
 
Other assets, net
   
 
100
 
   
 
119
 
    
  
Total assets
   
$
160,251
 
   
$
183,182
 
LIABILITIES & STOCKHOLDERS’ EQUITY
                  
Current liabilities:
                  
Accounts payable
   
$
722
 
   
$
974
 
Accrued payroll and related expenses
   
 
1,233
 
   
 
1,077
 
Accrued expenses and other current liabilities
   
 
3,294
 
   
 
1,987
 
Deferred revenue
   
 
331
 
   
 
596
 
Litigation settlements accrual
   
 
30,937
 
   
 
27,197
 
Accrued restructuring charges
   
 
839
 
   
 
—  
 
Current portion of loans payable
   
 
198
 
   
 
55
 
    
  
Total current liabilities
   
 
37,554
 
   
 
31,886
 
Loans payable, net of current portion
   
 
594
 
   
 
507
 
Deferred rent
   
 
396
 
   
 
322
 
    
  
Total liabilities
   
 
38,544
 
   
 
32,715
 
Contingencies (Note 3)
                  
Stockholders’ equity:
                  
Common stock, $0.001 par value:
                  
Authorized 150,000,000 shares; Issued and outstanding: 36,193,512 shares at September 30, 2002 and 35,871,066 shares at December 31, 2001
   
 
36
 
   
 
36
 
Additional paid-in capital
   
 
259,147
 
   
 
259,327
 
Deferred stock-based compensation
   
 
(1,344
)
   
 
(2,785
)
Stockholder notes receivable for common stock
   
 
(587
)
   
 
(571
)
Accumulated other comprehensive income
   
 
414
 
   
 
281
 
Deficit accumulated during development stage
   
 
(135,959
)
   
 
(105,821
)
    
  
Total stockholders’ equity
   
 
121,707
 
   
 
150,467
 
    
  
Total liabilities and stockholders’ equity
   
$
160,251
 
   
$
183,182
 
 
The accompanying notes are an integral part of these condensed financial statements.

3

Table of Contents
 
ACLARA BIOSCIENCES, INC.
(A Company in the Development Stage)
 
CONDENSED STATEMENTS OF OPERATIONS
(In Thousands, Except per Share Data)
(Unaudited)
 
    
Three Months Ended September 30,
     
Nine Months Ended September 30,
     
Cumulative
Period from
May 5, 1995
(Inception) to
September 30,
  
    
2002
     
2001
     
2002
     
2001
     
2002
  
Revenues
   
$
505
 
   
$
507
 
   
$
1,768
 
   
$
2,290
 
   
$
17,136
 
    
  
  
  
  
Costs and operating expenses:
                                             
Research and development
   
 
5,516
 
   
 
6,126
 
   
 
18,576
 
   
 
17,802
 
   
 
81,821
 
Selling, general and administrative
   
 
3,318
 
   
 
2,365
 
   
 
9,229
 
   
 
7,781
 
   
 
43,439
 
Litigation settlement
   
 
396
 
   
 
2,839
 
   
 
3,740
 
   
 
5,227
 
   
 
43,787
 
Restructuring
   
 
3,327
 
   
 
—  
 
   
 
3,327
 
   
 
—  
 
   
 
3,327
 
    
  
  
  
  
Total costs and operating expenses
   
 
12,557
 
   
 
11,330
 
   
 
34,872
 
   
 
30,810
 
   
 
172,374
 
    
  
  
  
  
Loss from operations
   
 
(12,052
)
   
 
(10,823
)
   
 
(33,104
)
   
 
(28,520
)
   
 
(155,238
)
Interest income
   
 
873
 
   
 
1,749
 
   
 
3,004
 
   
 
6,438
 
   
 
22,103
 
Interest expense
   
 
(13
)
   
 
(12
)
   
 
(38
)
   
 
(38
)
   
 
(1,238
)
    
  
  
  
  
Net loss before extraordinary loss
   
 
(11,192
)
   
 
(9,086
)
   
 
(30,138
)
   
 
(22,120
)
   
 
(134,373
)
Extraordinary loss on early retirement of debt
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(1,103
)
    
  
  
  
  
Net loss
   
$
(11,192
)
   
$
(9,086
)
   
$
(30,138
)
   
$
(22,120
)
   
$
(135,476
)
    
  
  
  
  
Dividends related to beneficial conversion feature of preferred stock
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(5,000
)
Accretion to redemption value and accrued dividends on mandatory redeemable convertible preferred stock
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(6,292
)
    
  
  
  
  
Net loss attributable to common stockholders
   
$
(11,192
)
   
$
(9,086
)
   
$
(30,138
)
   
$
(22,120
)
   
$
(146,768
)
    
  
  
  
  
Net loss per common share, basic and diluted
   
$
(0.31
)
   
$
(0.26
)
   
$
(0.84
)
   
$
(0.63
)
         
Shares used in net loss per common share calculation, basic and diluted
   
 
36,148
 
   
 
35,525
 
   
 
36,020
 
   
 
35,111
 
         
 
The accompanying notes are an integral part of these condensed financial statements.

4

Table of Contents
 
ACLARA BIOSCIENCES, INC.
(A Company in the Development Stage)
 
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
 
    
Nine Months Ended September 30,
     
Cumulative Period from May 5, 1995 (Inception) to September 30,
  
    
2002
     
2001
     
2002
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                           
Net loss
   
$
(30,138
)
   
$
(22,120
)
   
$
(135,476
)
Adjustments to reconcile net loss to net cash used in operating activities:
                           
Depreciation and amortization
   
 
1,413
 
   
 
1,154
 
   
 
5,294
 
Amortization of discount on marketable investments
   
 
(309
)
   
 
(488
)<