UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý |
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
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period ended
Commission File Number 0-23553
PHOTOGEN TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| NEVADA (State or other jurisdiction of incorporation or organization) |
36-4010347 (I.R.S. Employer Identification No.) |
|
140 Union Square Drive New Hope, Pennsylvania (Address of principal executive offices) |
18938 (Zip Code) |
(215) 862-6860
(Registrant's telephone number, including area code)
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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act): Yes o No ý
Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 38,842,298 SHARES OF COMMON STOCK, $.001 PAR VALUE PER SHARE, ISSUED AND OUTSTANDING AT OCTOBER 31, 2002.
| |
|
Page |
|
|---|---|---|---|
| Part I. Financial Information | 3 | ||
Item 1. Financial Statements |
3 |
||
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 9 | ||
| Item 3. Quantitative and Qualitative Disclosures about Market Risk | 14 | ||
| Item 4. Controls and Procedures | 14 | ||
Part II. Other Information |
15 |
||
Item 5. Other Information |
15 |
||
| Item 6. Exhibits and Reports on Form 8-K | 20 | ||
2
Photogen Technologies, Inc.
(A Development Stage Company)
Consolidated Condensed Balance Sheets
All amounts in $
| |
September 30, 2002 |
December 31, 2001 |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| |
(Unaudited) |
(Audited) |
|||||||
| Assets | |||||||||
| Current Assets | |||||||||
| Cash and cash equivalents | $ | 111,830 | $ | 1,352,904 | |||||
| Prepaid expenses | 282,458 | 29,775 | |||||||
| Deposit | 132,193 | 474,580 | |||||||
Total Current Assets |
526,481 |
1,857,259 |
|||||||
Equipment and Leasehold Improvements, less accumulated depreciation of $1,346,273 and $1,059,997, respectively |
595,944 |
882,220 |
|||||||
Patent Costs, net of amortization of $131,942 and $100,693, respectively |
368,058 |
399,307 |
|||||||
Deposits |
14,383 |
69,173 |
|||||||
Investment in and Advances to Affiliate |
10,388,806 |
10,994,680 |
|||||||
Total Assets |
$ |
11,893,672 |
$ |
14,202,639 |
|||||
Liabilities and Stockholders' Equity |
|||||||||
Current Liabilities |
|||||||||
| Accounts payable | $ | 1,278,346 | $ | 373,774 | |||||
| Accrued expenses | 1,050,695 | 394,242 | |||||||
| Accrued restructuring | — | 173,932 | |||||||
| Accrued equipment lease | 393,312 | 374,580 | |||||||
Total Current Liabilities |
2,722,353 |
1,316,528 |
|||||||
Accrued Equipment Lease |
524,382 |
749,160 |
|||||||
Long-Term Debt |
4,371,910 |
2,314,005 |
|||||||
Total Liabilities |
7,618,645 |
4,379,693 |
|||||||
Shares Subject to Rescission |
650,000 |
650,000 |
|||||||
Shareholders' Equity |
|||||||||
| Preferred stock; par value $.01 per share; 5,000,000 shares authorized including: | |||||||||
Series A Preferred Stock; 13,788 and 12,856 shares authorized, issued and outstanding at September 30, 2002 and December 31, 2001, respectively, liquidation preference $1,000 per share (in aggregate $13,788,000 at September 30, 2002 and $12,856,000 at December 31, 2001 |
137 |
128 |
|||||||
Series B Preferred Stock; 402,000 shares authorized; 378,716 and 357,280 shares issued and outstanding, at September 30, 2002 and December 31, 2001, respectively, liquidation preference $16.88 per share (in aggregate $6,392,726 at September 30, 2002 and $6,030,886 at December 31, 2001) |
3,786 |
3,572 |
|||||||
Common stock; par value $.001 per share; 150,000,000 shares authorized; 9,585,948 shares issued and outstanding |
9,586 |
9,586 |
|||||||
| Additional paid-in capital | 38,746,451 | 38,252,973 | |||||||
| Deficit accumulated during the development stage | (35,134,933 | ) | (29,093,313 | ) | |||||
Total Shareholders' Equity |
3,625,027 |
9,172,946 |
|||||||
Total Liabilities and Shareholders' Equity |
$ |
11,893,672 |
$ |
$14,202,639 |
|||||
3
Photogen Technologies, Inc.
(A Development Stage Company)
Consolidated Condensed Statements of Operations
(Unaudited)
All amounts in $
| |
Three Months Ended September 30, 2002 |
Three Months Ended September 30, 2001 |
Nine Months Ended September 30, 3002 |
Nine Months Ended September 30, 2001 |
Cumulative Amounts From November 3, 1996 (Inception) |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Expenses | |||||||||||||||||
| Research and development | $ | 620,998 | $ | 1,056,338 | $ | 2,007,641 | $ | 2,301,793 | $ | 14,319,052 | |||||||
| General and administrative | 841,804 | 613,512 | 2,166,441 | 2,695,167 | 14,783,880 | ||||||||||||
| Provision for future lease payments | — | — | — | 696,070 | 1,264,208 | ||||||||||||
| Restructuring charges | — | — | 451,068 | — | 1,048,093 | ||||||||||||
Total Operating Expenses |
1,462,802 |
1,669,850 |
4,625,150 |
5,693,030 |
31,415,233 |
||||||||||||
Loss from Joint Venture |
(305,400 |
) |
(352,236 |
) |
(1,245,845 |
) |
(1,514,080 |
) |
(4,708,024 |
) |
|||||||
Investment Income |
30 |
18,711 |
1,532 |
102,626 |
1,208,910 |
||||||||||||
Interest Expense |
(71,444 |
) |
— |
(172,157 |
) |
— |
(220,586 |
) |
|||||||||
Net Loss |
$ |
(1,839,616 |
) |
$ |
(2,003,375 |
) |
$ |
(6,041,620 |
) |
$ |
(7,104,484 |
) |
$ |
(35,134,933 |
) |
||
Dividends on Preferred Stock |
(345,622 |
) |
(758,493 |
) |
(1,024,300 |
) |
(2,243,832 |
) |
|||||||||
Net Loss Applicable to Common Shareholders |
$ |
(2,185,238 |
) |
$ |
(2,761,868 |
) |
$ |
(7,065,920 |
) |
$ |
(9,348,316 |
) |
|||||
Basic and Diluted Loss per Common Share |
$ |
(.23 |
) |
$ |
(.29 |
) |
$ |
(.73 |
) |
$ |
(.99 |
) |
|||||
Weighted Average Number of Common Shares Outstanding—Basic and Diluted |
9,710,575 |
9,526,080 |
9,710,575 |
9,440,362 |
|||||||||||||
4
Photogen Technologies, Inc.
(A Development Stage Company)
Consolidated Condensed Statements of Shareholders' Equity
(Unaudited)
All amounts in $
| |
Preferred Stock Series A |
Preferred Stock Series B |
|
|
|
|
Deficit Accumulated During the Development Stage |
|
|||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Common Stock |
|
|
|
|||||||||||||||||||||||||
| |
Members' Capital |
Additional Paid-in Capital |
|
||||||||||||||||||||||||||
| |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Total |
||||||||||||||||||||||
| Contribution of capital | — | $ | — | — | $ | — | — | $ | — | $ | 7,268 | $ | — | $ | — | $ | 7,268 | ||||||||||||
| Net loss for the period ended December 31, 1996 | — | — | — | — | — | — | (1,779 | ) | — | — | (1,779 | ) | |||||||||||||||||
Balance, at December 31, 1996 |
— |
— |
— |
— |
— |
— |
5,489 |
— |
— |
5,489 |
|||||||||||||||||||
Net loss and capital contributions for the period January 1, 1997 to May 15, 1997 |
— |
— |
— |
— |
— |
— |
— |
— |
(3,511 |
) |
(3,511 |
) |
|||||||||||||||||
| Capital contribution | — | — | — | — | — | — | 3,511 | — | — | 3,511 | |||||||||||||||||||
Balance, at May 15, 1997 |
— |
— |
— |
— |
— |
— |
9,000 |
— |
(3,511 |
) |
5,489 |
||||||||||||||||||
Issuance of common stock |
— |
— |
— |
— |
1,578,208 |
1,578 |
— |
1,801,872 |
— |
1,803,450 |
|||||||||||||||||||
| Effect of recapitalization and merger | — | — | — | — | 7,421,792 | 7,422 | (9,000 | ) | 1,203,765 | 1,732 | 1,203,919 | ||||||||||||||||||
| Cost associated with recapitalization and merger | — | — | — | — | — | — | — | (371,111 | ) | — | (371,111 | ) | |||||||||||||||||
| Net loss for the period May 16, 1997 to December 31, 1997 | — | — | — | — | — | — | — | — | (554,702 | ) | (554,702 | ) | |||||||||||||||||
Balance, at December 31, 1997 |
— |
— |
— |
— |
9,000,000 |
9,000 |
— |
2,634,526 |
(556,481 |
) |
2,087,045 |
||||||||||||||||||
Issuance of common stock |
— |
— |
— |
— |
218,755 |
219 |
— |
6,999,781 |
— |
7,000,000 |
|||||||||||||||||||
| Costs associated with common stock issuance | — | — | — | — | — | — | — | (50,000 | ) | — | (50,000 | ) | |||||||||||||||||
| Options issued to consultants | — | — | — | — | — | — | — | 45,446 | — | 45,446 | |||||||||||||||||||
| Net loss for the year ended December 31, 1998 | — | — | — | — | — | — | — | — | (1,973,913 | ) | (1,973,913 | ) | |||||||||||||||||
Balance, at December 31, 1998 |
— |
$ |
— |
— |
$ |
— |
9,218,755 |
$ |
9,219 |
— |
$ |
9,629,753 |
$ |
(2,530,394 |
) |
$ |
7,108,578 |
||||||||||||
Exercise of stock options |
— |
— |
— |
— |
1,125 |
1 |
— |
50,062 |
— |
50,063 |
|||||||||||||||||||
| Issuance of warrants and options | — | — | — | — | — | — | — | 3,664,749 | — | 3,664,749 | |||||||||||||||||||
| Issuance of common stock | — | — | — | — | 125,967 | 126 | — | 6,082,528 | — | 6,082,654 | |||||||||||||||||||
| Issuance of preferred stock | 12,015 | 120 | — | — | — | — | — | 11,578,839 | — | 11,578,959 | |||||||||||||||||||
| Net loss for the year ended December 31, 1999 | — | — | — | — | — | — | — | — | (6,052,841 | ) | (6,052,841 | ) | |||||||||||||||||
Balance, at December 31, 1999 |
12,015 |
120 |
— |
— |
9,345,847 |
9,346 |
— |
31,005,931 |
(8,583,235 |
) |
22,432,162 |
||||||||||||||||||
Stock option compensation |
— |
— |
— |
— |
— |
— |
— |
125,020 |
— |
125,020 |
|||||||||||||||||||
| Issuance of warrants and options | — | — | — | — | — | — | — | 1,366,050 | — | 1,366,050 | |||||||||||||||||||
| Issuance of preferred stock dividend | 841 | 8 | — | — | — | — | — | (8 | ) | — | — | ||||||||||||||||||
| Issuance of preferred stock | — | — | 337,056 | 3,370 | — | — | — | 5,272,970 | — | 5,276,340 | |||||||||||||||||||
| Net loss for the year ended December 31, 2000 | — | — | — | — | — | — | — | — | (10,787,062 | ) | (10,787,062 | ) | |||||||||||||||||
Balance, at December 31, 2000 |
12,856 |
128 |
337,056 |
3,370 |
9,345,847 |
9,346 |
— |
37,769,963 |
(19,370,297 |
) |
18,412,510 |
||||||||||||||||||
Stock option compensation |
— |
— |
— |
— |
— |
— |
— |
64,729 |
— |
64,729 |
|||||||||||||||||||
| Issuance of common stock for cash | — | — | — | — | 49,245 | 49 | — | 418,674 | — | 418,723 | |||||||||||||||||||
| Issuance of common stock in satisfaction of anti-dilution provision | 190,856 | 191 | (191 | ) | — | ||||||||||||||||||||||||
| Issuance of preferred stock dividend | — | — | 20,224 | 202 | — | — | — | (202 | ) | — | — | ||||||||||||||||||
| Net loss for the year ended December 31, 2001 | — | — | — | — | — | — | — | — | (9,723,016 | ) | (9,723,016 | ) | |||||||||||||||||
Balance, at December 31, 2001 |
12,856 |
$ |
128 |
357,280 |
$ |
3,572 |
9,585,948 |
$ |
9,586 |
— |
$ |
38,252,973 |
$ |
(29,093,313 |
) |
$ |
9,172,946 |
||||||||||||
Stock option compensation |
— |
— |
— |
— |
— |
— |
— |
43,701 |
— |
43,701 |
|||||||||||||||||||
| Issuance of preferred stock dividend | 932 | 9 | 21,436 | 214 | — | — | — | (223 | ) | — | — | ||||||||||||||||||
| Issuance of options in settlement of lawsuit | — | — | — | — | — | — | — | 450,000 | — | 450,000 | |||||||||||||||||||
| Net loss for the nine months ended September 30 2002 | — | — | — | — | — | — | — | — | (6,041,620 | ) | (6,041,620 | ) | |||||||||||||||||
Balance, at September 30 2002 |
13,788 |
$ |
137 |
378,716 |
$ |
3,786 |
9,585,948 |
$ |
9,586 |
— |
$ |
38,746,451 |
$ |
(35,134,933 |
) |
$ |
3,625,027 |
||||||||||||
5
Photogen Technologies, Inc.
(A Development Stage Company)
Consolidated Condensed Statements of Operations
(Unaudited)
All amounts in $
| |
|||
|---|---|---|---|