UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended June 30, 2003 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission file number: 0-24469 |
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GenVec Inc. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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23-2705690 |
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(State or other jurisdiction of |
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(IRS Employer Identification |
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65 West Watkins Mill Road, Gaithersburg, Maryland |
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20878 |
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(Address of principal executive offices) |
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(Zip Code) |
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240-632-0740 |
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(Registrant’s telephone number including area code) |
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(Former name former address and former fiscal year if changed since last report.) |
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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 ý No o
APPLICABLE ONLY TO CORPORATE ISSUERS:
At July 31, 2003, the Registrant had outstanding 22,964,708 shares of common stock, $.001 par value.
GENVEC, INC.
FORM 10-Q
TABLE OF CONTENTS
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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2
GENVEC, INC.
FORM 10-Q
FORWARD LOOKING STATEMENTS
This report includes statements that reflect projections or expectations of future financial condition, results of operations and business of GenVec, Inc. These statements are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements also may be included in other statements that we make. All statements that are not descriptions of historical facts are forward-looking statements, based on management’s estimates, assumptions and projections that are subject to risks and uncertainties. These statements can generally be identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “will,” “should,” or “anticipates” or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the date thereof, actual results could differ materially from those currently anticipated due to a number of factors, including risks relating to the early stage of product candidates under development; risks relating to GenVec’s ability to identify and enter into agreements with potential collaborative partners; uncertainties relating to clinical trials; dependence on third parties; risks that anticipated reductions in expenses from our reduction in workforce and other cost-cutting efforts will not materialize; uncertainties as to whether our anticipated merger with Diacrin, Inc. will be consummated and the risk that anticipated economies of scale and other benefits of the merger will not materialize; future capital needs; risks relating to the commercialization, if any, of our product candidates (such as marketing, regulatory, patent, product liability, supply, competition and other risks) and delays in completing the Diacrin merger. Additional important factors that could cause actual results to differ materially from our current expectations are identified in other filings with the Securities and Exchange Commission. We will not update any forward-looking statements to reflect new, changing or unanticipated events or circumstances that occur after the date, on which the statement is made, except as may be required by applicable law or regulation.
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ITEM 1. CONDENSED FINANCIAL STATEMENTS
GENVEC, INC.
(in thousands, except share and per share amounts)
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June 30, |
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December 31, |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,738 |
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$ |
4,597 |
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Short-term investments |
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3,954 |
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13,055 |
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Accounts receivable |
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2,027 |
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924 |
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Prepaid expenses and other current assets |
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920 |
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1,229 |
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Bond sinking fund |
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482 |
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241 |
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Total current assets |
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9,121 |
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20,046 |
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Property and equipment, net |
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7,725 |
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7,886 |
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Long-term investments |
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2,439 |
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2,708 |
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Deferred acquisition costs |
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1,348 |
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— |
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Other assets |
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88 |
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445 |
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Total assets |
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$ |
20,721 |
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$ |
31,085 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
801 |
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$ |
2,298 |
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Accrued expenses |
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3,723 |
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3,310 |
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Unearned revenue |
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348 |
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481 |
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Current portion of long-term debt |
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1,362 |
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1,486 |
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Total current liabilities |
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6,234 |
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7,575 |
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Long-term debt |
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5,497 |
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5,921 |
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Deferred credit |
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1,057 |
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1,104 |
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Other liabilities |
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772 |
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856 |
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Total liabilities |
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13,560 |
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15,456 |
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Stockholders’ equity: |
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Preferred stock, $.001 par value; 4,400,000 shares authorized, no shares issued or outstanding |
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— |
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— |
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Series A junior participating preferred stock, $0.001 par value, 600,000 shares authorized, no shares issued or outstanding |
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— |
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— |
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Common stock, $.001 par value; 60,000,000 shares authorized, 23,028,798 and 21,979,195 shares issued at June 30, 2003 and December 31, 2002; and 22,957,848 and 21,908,245 shares outstanding at June 30, 2003 and December 31, 2002 |
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23 |
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22 |
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Additional paid-in capital |
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114,889 |
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112,975 |
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Accumulated deficit |
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(106,594 |
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(95,439 |
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Deferred compensation |
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(910 |
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(1,590 |
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Accumulated other comprehensive income (loss) |
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(247 |
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(339 |
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Treasury stock, 70,950 common shares |
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— |
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— |
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Total stockholders’ equity |
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7,161 |
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15,629 |
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Total liabilities and stockholders’ equity |
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$ |
20,721 |
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$ |
31,085 |
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See accompanying notes to condensed financial statements.
4
GENVEC, INC.
(UNAUDITED)
(in thousands, except per share amounts)
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Three Months |
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Six Months |
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2003 |
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2002 |
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2003 |
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2002 |
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Revenues |
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R & D support |
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$ |
2,493 |
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$ |
1,139 |
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$ |
5,678 |
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$ |
1,767 |
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R & D support — related party |
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— |
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436 |
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436 |
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Royalties, licenses and other revenue |
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21 |
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— |
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21 |
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— |
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Total revenues |
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2,514 |
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1,575 |
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5,699 |
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2,203 |
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Operating expenses |
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