UNITED STATES 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 MARCH 31, 2003
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 0-14691
SENETEK PLC
(Exact name of registrant as specified in its charter)
| England (State or other jurisdiction of Incorporation or organization) |
77-0039728 (I.R.S. Employer Identification No.) |
| 620 Airpark Road, Napa, California (Address of principal executive offices) |
94558 (Zip Code) |
Registrant’s telephone number including area code: (707) 226-3900
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 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
At May 13, 2003, there were 59,052,153 of the registrant’s Ordinary shares outstanding.
SENETEK PLC AND SUBSIDIARIES
INDEX TO FORM 10-Q
QUARTER ENDED MARCH 31, 2003
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| PART I |
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FINANCIAL INFORMATION |
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| Item 1 |
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3 | |
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Unaudited Consolidated Statements of Operations Three Months Ended March 31, 2003 and March 31, 2002 |
3 |
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Consolidated Balance Sheets March 31, 2003 (unaudited) and December 31, 2002 |
4 |
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5 | |
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Unaudited Consolidated Statements of Cash Flows Three Months Ended March 31, 2003 and March 31, 2002 |
6 |
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7 | |
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| Item 2 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
10 |
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| Item 3 |
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14 | |
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| Item 4 |
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14 | |
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| PART II. |
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14 |
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| Item 1 |
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14 |
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| Item 2 |
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15 |
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| 17 |
2
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
SENETEK PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
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Three Months Ended |
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2003 |
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2002 |
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| Revenues |
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| Product sales |
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$ |
902 |
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$ |
1,067 |
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| Royalties & Licensing |
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1,170 |
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1,425 |
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| Total Revenue |
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2,072 |
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2,492 |
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| Cost of Sales—Products |
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201 |
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243 |
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| Royalties & Licensing |
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125 |
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161 |
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| Total Cost of Sales |
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326 |
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404 |
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| Gross Profit |
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1,746 |
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2,088 |
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| Operating Expenses: |
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| Research & Development |
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348 |
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161 |
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| Administration, Sales and Marketing |
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1,056 |
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1,161 |
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| Total Operating Expenses |
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1,404 |
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1,322 |
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| Operating Income |
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342 |
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766 |
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| Interest income |
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7 |
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8 |
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| Interest expense (including amortization of debt discount) |
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(365 |
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(365 |
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| Other income, net |
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— |
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22 |
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| Income (Loss) from continuing operations before income taxes and discontinued operations: |
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(16 |
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431 |
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| Provision for income taxes |
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(14 |
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(9 |
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| Income (loss) from continuing operations before discontinued operations |
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(30 |
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422 |
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| Discontinued operations: |
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| Royalty and license fee, net |
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(39 |
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82 |
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| Net Income (loss) available to Ordinary Shareholders |
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$ |
(69 |
) |
$ |
504 |
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| Basic and Diluted Income (Loss) from Continuing Operations |
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$ |
(— |
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$ |
0.01 |
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| Basic and Diluted Income (Loss) from Discontinued Operations |
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$ |
(— |
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$ |
— |
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| Basic and Diluted Income (Loss) per Ordinary share outstanding |
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$ |
(— |
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$ |
0.01 |
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| Weighted average Basic Ordinary shares outstanding |
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59,052 |
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59,052 |
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| Weighted average Diluted Ordinary shares Outstanding |
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59,052 |
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59,213 |
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See accompanying notes to unaudited consolidated financial statements.
3
CONSOLIDATED BALANCE SHEETS
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March 31, |
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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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$ |
3,708 |
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$ |
3,572 |
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| Trade Receivables (net of provisions of $10,000 at March 31, 2003 and $0 at December 31, 2002) |
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1,368 |
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1,311 |
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| Receivables related to disposed asset group (net of allowance for doubtful accounts of $0 at March 31, 2003 and $107,000 at December 31, 2002) |
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50 |
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128 |
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| Non-Trade Receivables (net of provisions of $33,000 and $136,000 at March 31, 2003 and December 31, 2002) |
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53 |
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27 |
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| Inventory (net of provisions of $72,000 at March 31, 2003 and December 31, 2002) |
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342 |
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408 |
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| Prepaids and Deposits |
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147 |
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111 |
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| Total Current Assets |
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5,668 |
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5,557 |
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| Property & Equipment, net |
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3,225 |
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3,249 |
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| Goodwill, net |
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1,308 |
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1,308 |
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| Total Assets |
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$ |
10,201 |
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$ |
10,114 |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current Liabilities |
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| Accounts Payable |
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668 |
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573 |
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| Accrued Liabilities |
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1,053 |
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1,172 |
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| Total Current Liabilities |
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1,721 |
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1,745 |
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| Long Term Liabilities |
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| Notes Payable, net of discount of $902,000 and $1,118,000 |
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6,487 |
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6,271 |
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| Other long term liabilities |
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90 |
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98 |
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| Deferred License Fees |
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1,578 |
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1,621 |
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| Commitments and Contingencies |
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| Stockholders’ Equity |
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| Ordinary shares $0.08 (5 pence) par value: |
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| Authorized shares: 100,000,000 Issued and outstanding shares: |
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| March 31, 2003—59,052,153 |
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| December 31, 2002—59,052,153 |
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4,763 |
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4,763 |
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| Share Premium |
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82,135 |
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82,125 |
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| Accumulated Deficit |
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(86,627 |
) |
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(86,558 |
) |
| Equity Adjustment from Foreign Currency Translation |
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54 |
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49 |
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| Total Stockholders’ Equity |
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$ |
325 |
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$ |
379 |
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| Total Liabilities and Stockholders’ Equity |
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$ |
10,201 |
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$ |
10,114 |
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See accompanying notes to unaudited consolidated financial statements.
4
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY AND
COMPREHENSIVE
LOSS FOR THE THREE MONTHS ENDED MARCH 31, 2003
(in thousands, except shares outstanding)
(unaudited)
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Ordinary |
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Shares |
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Share |
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Accumulated |
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Accumulated |
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Net |
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| Balances, January 1, 2003 |
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59,052,153 |
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$ |
4,763 |
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$ |
82,125 |
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$ |
(86,558 |
) |
$ |
49 |
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$ |
379 |
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| Fair value of options issued to consultants |
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10 |
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10 |
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| Comprehensive loss |
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| Net loss |
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(69 |
) |
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(69 |
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| Translation gain, net of tax |
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5 |
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5 |
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| Total Comprehensive Loss |
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(69 |
) |
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5 |
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(64 |
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| Balances, March 31, 2003 |
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59,052,153 |
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$ |
4,763 |
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$ |
82,135 |
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$ |
(86,627 |
) |
$ |
54 |
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$ |
325 |
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For the three months ended March 31, 2002 the translation loss was $2 and total comprehensive income was $502.
See accompanying notes to unaudited consolidated financial statements.
5
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
(unaudited)
|
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Three Months Ended |
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2003 |
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2002 |
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