SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2004
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 0-32501
MacroPore Biosurgery, Inc.
(Exact name of registrant as specified in its charter.)
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Delaware |
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33-0827593 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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6740 Top Gun Street, San Diego, California |
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92121 |
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(Address of principal executive offices) |
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(Zip code) |
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Registrant’s telephone number, including area code: (858) 458-0900 |
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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 o NO ý
As of October 25, 2004, there were 13,927,184 shares of MacroPore Biosurgery, Inc. common stock outstanding.
MACROPORE BIOSURGERY, INC.
INDEX
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
MacroPore Biosurgery, Inc.:
We have reviewed the accompanying consolidated condensed balance sheet of MacroPore Biosurgery, Inc. and subsidiaries as of September 30, 2004, and the related consolidated condensed statements of operations and comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2004 and 2003, and consolidated condensed statements of cash flows for the nine month periods ended September 30, 2004 and 2003. These consolidated condensed financial statements are the responsibility of the Company’s management.
We conducted our reviews in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the consolidated condensed financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with standards established by the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of MacroPore Biosurgery, Inc. and subsidiaries as of December 31, 2003, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 20, 2004, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated condensed balance sheet as of December 31, 2003 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Note 1 of MacroPore Biosurgery, Inc.’s audited financial statements as of December 31, 2003 and for the year then ended, discloses that the Company derives a substantial portion of its revenues from a related party. Our auditors’ report on those financial statements dated February 20, 2004, includes an explanatory paragraph referring to the matter in note 1 of those financial statements.
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/s/ KPMG LLP |
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San Diego, California |
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October 29, 2004 |
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3
MACROPORE BIOSURGERY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
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As of September 30, |
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As of 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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$ |
2,986,000 |
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$ |
2,820,000 |
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Short-term investments, available-for-sale |
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13,991,000 |
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11,448,000 |
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Accounts receivable, net of allowance for doubtful accounts of $5,000 and $62,000 in 2004 and 2003, respectively |
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178,000 |
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1,291,000 |
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Inventories |
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459,000 |
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831,000 |
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Milestone payment due from distribution agreement |
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1,250,000 |
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— |
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Other current assets |
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940,000 |
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526,000 |
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Total current assets |
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19,804,000 |
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16,916,000 |
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Property and equipment, net |
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3,396,000 |
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3,822,000 |
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Other assets |
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226,000 |
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332,000 |
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Intangibles, net |
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2,189,000 |
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2,392,000 |
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Goodwill |
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4,387,000 |
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4,627,000 |
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Total assets |
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$ |
30,002,000 |
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$ |
28,089,000 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
2,248,000 |
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$ |
3,767,000 |
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Current portion of long-term obligations |
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958,000 |
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717,000 |
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Total current liabilities |
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3,206,000 |
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4,484,000 |
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Deferred gain on sale of assets, related party |
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— |
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7,539,000 |
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Deferred gain on sale of assets |
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5,694,000 |
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— |
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Deferred license fee revenue |
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1,500,000 |
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— |
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Deferred development revenue |
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1,092,000 |
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— |
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Long-term obligations, less current portion |
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1,347,000 |
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1,157,000 |
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Total liabilities |
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12,839,000 |
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13,180,000 |
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Stockholders’ equity: |
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Preferred stock, $0.001 par value; 5,000,000 shares authorized; -0- shares issued and outstanding in 2004 and 2003 |
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— |
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— |
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Common stock, $0.001 par value; 95,000,000 shares authorized; 16,800,018 and 16,777,644 shares issued and 13,927,184 and 14,195,062 shares outstanding in 2004 and 2003, respectively |
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17,000 |
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17,000 |
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Additional paid-in capital |
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74,734,000 |
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74,698,000 |
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Unearned compensation |
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— |
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(109,000 |
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Accumulated deficit |
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(47,159,000 |
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(49,385,000 |
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Treas | |||||||