UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For Quarterly Period Ended March 31, 2004 |
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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 33-90516 |
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NEOPHARM, INC.
(Exact name of Registrant as specified in its charter)
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Delaware |
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51-0327886 |
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(State or other jurisdiction of |
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(I.R.S. Employer Identification Number) |
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150
Field Drive |
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(Address of principal executive offices) (Zip Code) |
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(847) 295-8678 |
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(Registrant’s telephone number, including area code) |
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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
As of April 30, 2004 the number of shares outstanding of each of the issuer’s classes of common stock was as follows:
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Title of each class |
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Number of shares outstanding |
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Common Stock ($.0002145 par value) |
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23,218,579 |
NEOPHARM, INC.
FORM
10-Q
INDEX
2
PART I - FINANCIAL INFORMATION
Item 1 - - Financial Statements
NEOPHARM, INC.
Balance Sheets
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March 31, 2004 |
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December 31, 2003 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
101,725,081 |
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$ |
36,958,941 |
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Investments in marketable securities |
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911,189 |
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4,166,351 |
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Trade accounts receivable |
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8,000 |
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— |
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Inventories |
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3,864 |
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— |
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Prepaid expenses |
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515,218 |
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909,833 |
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Other receivables |
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304,990 |
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284,750 |
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Total current assets |
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103,468,342 |
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43,219,875 |
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Fixed assets, net of accumulated depreciation |
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3,570,236 |
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3,760,705 |
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Total assets |
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$ |
107,038,578 |
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$ |
46,080,580 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
554,372 |
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$ |
499,682 |
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Accrued clinical trial expense |
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4,016,011 |
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1,658,293 |
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Accrued legal expenses |
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576,045 |
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1,076,228 |
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Accrued compensation |
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1,143,860 |
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2,144,163 |
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Other accrued expenses |
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915,468 |
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684,859 |
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Unearned revenue |
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5,800 |
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— |
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Total current liabilities |
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7,211,556 |
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6,063,225 |
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Stockholders’ equity: |
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Preferred stock, $0.01 par value; 15,000,000 shares authorized: 0 shares issued and outstanding |
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— |
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— |
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Common stock, $0.0002145 par value; 50,000,000 shares authorized: 23,214,986 and 18,862,906 shares issued and outstanding, respectively |
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4,981 |
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4,046 |
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Additional paid-in capital |
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245,760,550 |
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171,704,628 |
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Accumulated deficit |
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(145,938,509 |
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(131,691,319 |
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Total stockholders’ equity |
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99,827,022 |
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40,017,355 |
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Total liabilities and stockholders’ equity |
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$ |
107,038,578 |
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$ |
46,080,580 |
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The accompanying notes are an integral part of these financial statements.
3
NEOPHARM, INC.
Statements of Operations
Three Months Ended March 31, 2004 and 2003
(Unaudited)
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Three Months Ended |
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March 31, 2004 |
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March 31, 2003 |
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Revenues |
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$ |
12,200 |
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$ |
— |
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Cost of revenues |
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244 |
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— |
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Gross margin |
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11,956 |
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— |
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Expenses: |
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Research and development |
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11,249,227 |
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7,108,556 |
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Selling, general and administrative |
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3,200,069 |
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4,404,384 |
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Related party expenses |
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35,364 |
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39,192 |
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Total expenses |
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14,484,660 |
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11,552,132 |
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Loss from operations |
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(14,472,704 |
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(11,552,132 |
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Interest income |
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225,514 |
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284,892 |
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Net loss |
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$ |
(14,247,190 |
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(11,267,240 |
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Net loss per share — |
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Basic and diluted |
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$ |
(0.65 |
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(0.60 |
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Weighted average shares outstanding — |
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Basic and diluted |
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21,911,987 |
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18,809,625 |
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The accompanying notes are an integral part of these financial statements.
4
NEOPHARM, INC.
Statements of Cash Flows
Three Months Ended March 31, 2004 and 2003
(Unaudited)
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Three Months Ended |
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March 31, 2004 |
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March 31, 2003 |
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Cash flows from operating activities: |
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Net loss |
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$ |
(14,247,190 |
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(11,267,240 |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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329,671 |
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250,124 |
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Stock-based compensation expense |
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147,814 |
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34,000 |
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Changes in assets and liabilities: |
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(Increase)/decrease in current assets |
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362,511 |
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(87,347 |
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Increase in current liabilities |
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1,148,331 |
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819,389 |
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Net cash and cash equivalents used in operating activities |
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(12,258,863 |
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(10,251,074 |
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Cash flows from investing activities: |
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Proceeds from maturities of marketable securities |
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892,749 |
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2,008,485 |
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Proceeds from sales of marketable securities |
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2,362,413 |
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— |
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Purchase of marketable securities |
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— |
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(378,263 |
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Purchase of equipment and furniture |
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(139,202 |
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(255,146 |
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Net cash and cash equivalents provided by investing activities |
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3,115,960 |
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1,375,076 |
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Cash flows from financing activities: |
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Net proceeds from issuance of common stock |
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73,909,043 |
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— |
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Net cash and cash equivalents provided by financing activities |
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73,909,043 |
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— |
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Net increase/(decrease) in cash and cash equivalents |
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64,766,140 |
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(8,875,998 |
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Cash and cash equivalents, beginning of period |
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36,958,941 |
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87,591,975 |
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Cash and cash equivalents, end of period |
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$ |
101,725,081 |
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$ |
78,715,977 |
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Supplemental disclosure of cash paid for: |
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Interest |
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$ |
— |
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$ |
— |
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Income taxes |
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$ |
— |
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$ |
— |
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The accompanying notes are an integral part of these financial statements.
5
NEOPHARM, INC.
Note 1 Basis of Presentation
The financial information herein is unaudited. The balance sheet as of December 31, 2003 is derived from audited financial statements.
The accompanying unaudited financial statements of NeoPharm, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not contain all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position as of March 31, 2004, and the results of its operations and its cash flows for the three months ended March 31, 2004 and 2003.
While the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested