UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2003
OR
o
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: 000-31135
INSPIRE PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware (State or Other Jurisdiction of Incorporation or Organization) |
04-3209022 (I.R.S. Employer Identification No.) |
| 4222 Emperor Boulevard, Suite 470 Durham, North Carolina (Address of Principal Executive Offices) |
27703-8466 (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (919) 941-9777
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 o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
YES x NO o
Indicate the number of shares outstanding of common stock, as of the latest practical date: 31,711,893 as of May 1, 2003.
INSPIRE PHARMACEUTICALS, INC.
(a development stage company)
INDEX
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| PART I. |
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FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements |
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Condensed Balance Sheets - March 31, 2003 (unaudited) and December 31, 2002 |
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Condensed Statements of Operations - Three months ended March 31, 2003 and 2002 (unaudited) |
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Condensed Statements of Cash Flows - Three months ended March 31, 2003 and 2002 (unaudited) |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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17 | |
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Item 4. |
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18 | |
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| PART II. |
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OTHER INFORMATION |
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Item 2. |
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18 | |
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Item 5. |
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20 | |
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Item 6. |
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31 | |
| 33 | |
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| 34 | |
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| 36 |
2
INSPIRE PHARMACEUTICALS, INC.
(a development stage company)
PART I: FINANCIAL INFORMATION
Item 1.
Financial Statements
Condensed Balance Sheets
(in thousands except share amounts)
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(Unaudited) |
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December 31, |
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| Assets |
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| Current assets: |
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| Cash and cash equivalents |
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$ |
95,728 |
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$ |
27,128 |
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| Short-term investments |
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— |
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4,001 |
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| Other receivables |
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95 |
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61 |
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| Interest receivable |
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21 |
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50 |
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| Prepaid expenses |
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603 |
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725 |
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| Total current assets |
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96,447 |
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31,965 |
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| Property and equipment, net |
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1,326 |
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1,061 |
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| Other assets |
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538 |
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538 |
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| Total assets |
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$ |
98,311 |
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$ |
33,564 |
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| Liabilities and stockholders’ equity |
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| Current liabilities: |
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| Accounts payable |
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$ |
1,052 |
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$ |
924 |
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| Accrued expenses |
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1,617 |
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937 |
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| Capital leases, current portion |
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292 |
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301 |
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| Deferred revenue |
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1,100 |
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2,200 |
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| Total current liabilities |
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4,061 |
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4,362 |
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| Capital leases, excluding current portion |
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135 |
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204 |
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| Total liabilities |
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4,196 |
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4,566 |
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| Stockholders’ equity: |
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| Common stock, $0.001 par value, 60,000,000 shares authorized; |
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| 31,688,893 and 25,854,646 shares issued and outstanding at March 31, 2003 and December 31, |
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| 2002, respectively |
32 | 26 | |||||
| Additional paid-in capital |
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197,782 |
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125,069 |
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| Other comprehensive income (loss) |
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(1 |
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1 |
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| Deferred compensation |
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(252 |
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(399 |
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| Deficit accumulated during the development stage |
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(103,446 |
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(95,699 |
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| Total stockholders’ equity |
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94,115 |
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28,998 |
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| Total liabilities and stockholders’ equity |
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$ |
98,311 |
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$ |
33,564 |
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The accompanying notes are an integral part of these condensed financial statements.
3
INSPIRE PHARMACEUTICALS, INC.
(a development stage company)
Condensed Statements of
Operations
(in thousands except per share amounts)
(Unaudited)
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Three Months Ended |
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Cumulative |
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March 31, |
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March 31, |
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| Revenues: |
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| Collaborative research agreements |
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$ |
1,100 |
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$ |
1,083 |
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$ |
20,100 |
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| Operating expenses: |
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| Research and development (includes $92, $125 and $2,477, of stock-based compensation, respectively) |
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7,116 |
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4,718 |
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102,497 |
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| General and administrative (includes $55, $169 and $2,611, of stock-based compensation, respectively) |
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1,838 |
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1,382 |
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25,709 |
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| Total operating expenses |
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8,954 |
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6,100 |
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128,206 |
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| Operating loss |
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(7,854 |
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(5,017 |
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(108,106 |
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| Interest income (expense): |
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| Interest income |
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120 |
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280 |
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8,014 |
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| Interest expense |
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(13 |
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(22 |
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(1,878 |
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| Interest income (expense), net |
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107 |
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258 |
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6,136 |
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| Loss before provision for income taxes |
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(7,747 |
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(4,759 |
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(101,970 |
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| Provision for income taxes |
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— |
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— |
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820 |
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| Net loss |
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(7,747 |
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(4,759 |
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(102,790 |
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| Preferred stock dividends |
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— |
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— |
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(656 |
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| Net loss available to common stockholders |
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$ |
(7,747 |
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$ |
(4,759 |
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$ |
(103,446 |
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| Net loss per common share-basic and diluted |
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$ |
(0.29 |
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$ |
(0.18 |
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| Weighted average common shares outstanding-basic and diluted |
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26,654 |
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25,775 |
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The accompanying notes are an integral part of these condensed financial statements.
4
INSPIRE PHARMACEUTICALS, INC.
(a development stage company)
Condensed Statements of Cash
Flows
(in thousands)
(Unaudited)
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Three Months Ended |
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Cumulative |
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March 31, |
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March 31, |
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| Cash flows from operating activities: |
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| Net loss |
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$ |
(7,747 |
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$ |
(4,759 |
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$ |
(102,790 |
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| Adjustments to reconcile net loss to net cash used in operating activities: |
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| Stock issued for exclusive licenses |
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— |
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— |
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144 |
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| Stock issued for consulting services |
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— |
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— |
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72 |
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| Depreciation and amortization |
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146 |
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185 |
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6,563 |
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| Amortization of deferred compensation |
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147 |
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294 |
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5,117 |
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| Loss on disposal of property and equipment |
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— |
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4 |
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