INKINE PHARMACEUTICAL COMPANY,
INC.
(Exact name of
Registrant as specified in its charter)
| New York | 13-3754005 |
| (State or other jurisdiction of | (I.R.S. Employer Identification No.) |
| incorporation or organization) |
1787 Sentry Parkway
West
Building 18, Suite 440
Blue Bell, PA 19422
(Address of principal
executive offices)
215-283-6850
(Registrant’s
telephone number)
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 X No
Indicate by check mark whether
the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes X No
At November 8, 2004, the registrant had outstanding 48,765,361 shares of common stock, par value $.0001 per share.
(in thousands, except share and per share amounts)
| September 30, 2004 | December 31, 2004 | ||||||
| ASSETS | (unaudited) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 6,771 | $ | 10,442 | |||
| Short term investments | 4,969 | -- | |||||
| Accounts receivable | 2,878 | 1,170 | |||||
| Inventory | 1,297 | 780 | |||||
| Prepaid expenses and other current assets | 376 | 727 | |||||
| Total current assets | 16,291 | 13,119 | |||||
| Fixed assets | 321 | 124 | |||||
| Deposits | 57 | 54 | |||||
| Total assets | $ | 16,669 | $ | 13,297 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,822 | $ | 805 | |||
| Accrued expenses | 1,500 | 1,863 | |||||
| Total current liabilities | 3,322 | 2,668 | |||||
| Shareholders' equity: | |||||||
| Preferred stock, $0.0001 par value; authorized 5,000,000 | |||||||
| shares; none issued and outstanding | -- | -- | |||||
| Common stock, $0.0001 par value; authorized 75,000,000 | |||||||
| shares; issued 48,776,001 shares | 5 | 5 | |||||
| Less common stock held in treasury (16,515 shares) | (37 | ) | (37 | ) | |||
| Additional paid-in capital | 82,946 | 82,587 | |||||
| Deferred compensation | (8 | ) | -- | ||||
| Unrealized loss on investments | (5 | ) | -- | ||||
| Accumulated deficit | (69,554 | ) | (71,926 | ) | |||
| Total shareholders' equity | 13,347 | 10,629 | |||||
| Total liabilities and shareholders' equity | $ | 16,669 | $ | 13,297 | |||
See accompanying notes to unaudited financial statements.
3
(unaudited)
(in thousands, except per share amounts)
| Three-Months Ended September 30, | Nine-Months Ended September 30, | ||||||||||||||
| 2004 | 2003 | 2004 | 2003 | ||||||||||||
| Product revenue | $ | 5,683 | $ | 4,333 | $ | 14,924 | $ | 10,208 | |||||||
| Other revenue | 375 | -- | 1,033 | 49 | |||||||||||
| Revenue | 6,058 | 4,333 | 15,957 | 10,257 | |||||||||||
| Cost of goods sold | (892 | ) | (604 | ) | (2,035 | ) | (1,465 | ) | |||||||
| Gross profit | 5,166 | 3,729 | 13,922 | 8,792 | |||||||||||
| Cost and expenses: | |||||||||||||||
| Research and development | 1,365 | 464 | 3,323 | 1,253 | |||||||||||
| Sales and marketing | 1,785 | 1,443 | 5,894 | 4,338 | |||||||||||
| General and administrative | 701 | 634 | 2,178 | 1,882 | |||||||||||
| Withdrawn public offering and litigation | (29 | ) | -- | 200 | -- | ||||||||||
| Operating expenses | 3,822 | 2,541 | 11,595 | 7,473 | |||||||||||
| Income from operations | 1,344 | 1,188 | 2,327 | 1,319 | |||||||||||
| Interest income | 36 | 9 | 72 | 39 | |||||||||||
| Interest expense | (9 | ) | (19 | ) | (27 | ) | (663 | ) | |||||||
| Debt conversion inducement, non-cash accretion and | |||||||||||||||
| non-cash premium | -- | -- | -- | (2,822 | ) | ||||||||||
| Net income (loss) | $ | 1,371 | $ | 1,178 | $ | 2,372 | $ | (2,127 | ) | ||||||
| Earnings (loss) per share: | |||||||||||||||
| Basic | $ | 0.03 | $ | 0.03 | $ | 0.05 | $ | (0.05 | ) | ||||||
| Diluted | $ | 0.03 | $ | 0.02 | $ | 0.04 | $ | (0.05 | ) | ||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 48,727 | 46,703 | 48,647 | 40,966 | |||||||||||
| Diluted | 53,317 | 51,170 | 53,723 | 40,966 | |||||||||||
See accompanying notes to unaudited financial statements.
4
(unaudited)
(in thousands)
| Nine-Months Ended September 30, | ||||||||
| 2004 | 2003 | |||||||
| Operating activities: | ||||||||
| Net income (loss) | $ | 2,372 | $ | (2,127 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by | ||||||||
| (used in) operating activities: | ||||||||
| Depreciation | 111 | 118 | ||||||
| Amortization of deferred compensation | 24 | 83 | ||||||
| Non-cash accretion and premium | -- | 2,047 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) in accounts receivable | (1,708 | ) | (264 | ) | ||||
| (Increase) in inventory | (517 | ) | (351 | ) | ||||
| (Increase) decrease in prepaid expenses and other assets | 348 | (129 | ) | |||||
| Increase (decrease) in accounts payable and accrued expenses | 654 | (1,441 | ) | |||||
| Net cash provided by (used in) operating activities | 1,284 | (2,064 | ) | |||||
| Investing activities: | ||||||||
| Purchase of short-term investments | (4,974 | ) | -- | |||||
| Capital expenditures | (308 | ) | (2 | ) | ||||
| Net cash used in investing activities | (5,282 | ) | (2 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from exercise of options and warrants - net of expenses | 327 | 4,369 | ||||||
| Repayments, net of borrowings on line of credit | -- | (2,944 | ) | |||||
| Net cash provided by financing activities | 327 | 1,425 | ||||||
| Net (decrease) in cash and cash equivalents | (3,671 | ) | (641 | ) | ||||
| Cash and cash equivalents - beginning of period | 10,442 | 12,151 | ||||||
| Cash and cash equivalents - end of period | $ | 6,771 | $ | |||||