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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 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 0-22332

INSITE VISION INCORPORATED
(Exact name of registrant as specified in its charter)

 

 Delaware

  94-3015807

 (State or other jurisdiction of incorporation or organization)

  (IRS Employer Identification No.)

 

 

 965 Atlantic Avenue, Alameda, California

  94501

 (Address of principal executive offices)

   (Zip Code)


Registrant's telephone number, including area code (510) 865-8800

Former name, former address and former fiscal year, if changed since last report.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of Registrant’s common stock, $0.01 par value, outstanding as of October 29, 2004: 62,371,069.


     
QUARTERLY REPORT ON FORM 10-Q
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004

TABLE OF CONTENTS


    
PART I. FINANCIAL INFORMATION
                  
Item 1.    Financial Statements    Page 
       
    Condensed Consolidated Balance Sheets at September 30, 2004 and December 31, 2003  1 
       
    Condensed Consolidated Statements of Operations For the three and nine months ended September 30, 2004  2 
       
    Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2004 and 2003  3 
       
    Notes to Condensed Consolidated Financial Statements  4 
       
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations  8 
       
Item 3.    Quantitative and Qualitative Disclosures About Market Risk  25 
       
Item 4.     Controls and Procedures  25 
       
PART II. OTHER INFORMATION 
       
Item 1.    Legal Proceedings      26 
       
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds  26 
       
Item 3.    Defaults Upon Senior Securities  26 
       
Item 4.    Submission of Matters to a Vote of Security Holders  26 
       
Item 5.    Other Information      27 
       
Item 6.    Exhibits  27 
       
Signatures  27 

 
     
 
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
InSite Vision Incorporated
Condensed Consolidated Balance Sheets
(Unaudited)
 
(in thousands, except share and per share amounts)      
September 30, 2004 
December 31, 2003 
 
Assets 
              
Current assets:
              
    Cash and cash equivalents
  
$
7,860
  
$
1,045
  
    Inventories, net
    
18
    
19
 
    Prepaid expenses and other current assets
    
63
    
91
  
Total current assets
    
7,941
    
1,155
  
               
Property and equipment, at cost:
              
    Laboratory and other equipment
    
354
    
837
  
    Leasehold improvements
    
73
    
73
  
    Furniture and fixtures
    
-
    
3
 
     
427
    
913
  
Accumulated depreciation
    
319
    
664
  
     
108
    
249
  
Deferred debt issuance cost
    
-
    
1
  
Total assets
  
$
8,049
  
$
1,405
  
       
Liabilities and stockholders' equity (deficit)
              
Current liabilities:
              
    Short-term notes payable to related parties, unsecured
  
$
90
  
$
326
  
    Short-term notes payable to related parties, secured
    
254
    
682
  
    Accounts payable
    
357
    
972
  
    Accrued liabilities
    
477
   
650
 
    Accrued compensation and related expense
    
156
    
160
 
    Deferred gain on sale of assets
    
-
    
4,616
  
    Deferred rent
    
74
    
183
  
Total current liabilities
    
1,408
   
7,589
  
Convertible note payable (net of beneficial conversion feature of $1 as of December 31, 2003)
    
-
    
16
  
Total liabilities
    
1,408
    
7,605
  
Commitments
              
               
Stockholders’ equity (deficit)
              
 
              
Common stock, $0.01 par value, 120,000,000 shares authorized; 62,371,069 issued
and outstanding at Sept 30, 2004; 29,253,294 issued and outstanding at December 31, 2003
    
624
    
293
  
Additional paid-in capital
    
124,365
    
109,437
  
Notes receivable from stockholder
    
(187
)
  
(208
)
Accumulated deficit
    
(118,161
)
  
(115,722
)
Stockholders’ equity (deficit)
    
6,641
    
(6,200
)
Total liabilities and stockholders' equity (deficit)
 
$
8,049
  
$
1,405
  

See accompanying notes to condensed consolidated financial statement.

 
  1   
 
InSite Vision Incorporated
Condensed Consolidated Statements of Operations
(Unaudited)
 
     

Three months ended Sept. 30,  

Nine months ended Sept.30, 
(in thousands, except per share amounts)
2004 
2003 
2004 
2003 
  
 
Revenues
  
$
49
  
$
4
  
$
541
  
$
8
  
                           
Cost of goods
    
3
    
5
    
11
    
17
 
                           
Operating expenses:
                          
    Research and development
    
2,605
    
793
    
4,956
    
3,461
  
    Selling, general and administrative
    
781
    
599
    
2,586
    
2,025
  
        Total
    
3,386
    
1,392
    
7,542
    
5,486
  
                           
Loss from operations
    
(3,340
)
  
(1,393
)
  
(7,012
)
  
(5,495
)
                           
Gain on sale of assets
    
-
    
-
    
4,616
    
-
  
Interest (expense) and other income, net
    
-
    
(9
)
  
(43
)
  
(7
)
Net loss
    
(3,340
)
  
(1,402
)
  
(2,439
)
  
(5,502
)
Preferred dividends
    
-
    
(60
)
  
-
    
(161
)
                           
Net loss applicable to common stockholders
  
$
(3,340
)
$
(1,462
)
$
(2,439
)
$
(5,663
)
                           
Net loss per share applicable to common stockholders, basic and diluted
  
$
(0.05
)
$
(0.06
)
$
(0.06
)
$
(0.23
)
                           
Shares used to calculate net loss per share applicable:
                          
to common stockholders, basic and diluted
    
62,371
    
25,137
    
43,667
    
25,136
  
 
No cash dividends were declared or paid during the periods.
 
__________________________________________________________
See accompanying notes to condensed consolidated financial statements.

 
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