UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934 |
| For Quarterly Period Ended June 30, 2003 |
| ¨ | 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 000-29959
PAIN THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 91-1911336 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
416 Browning Way, South San Francisco, CA 94080
(Address of principal executive offices) (Zip Code)
(650) 624-8200
(Registrant’s telephone number, including area code)
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 Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of issuer’s classes of common stock, as of the latest practicable date.
| Common Stock, $0.001 par value |
27,565,505 Shares | |
| Class | Outstanding at July 15, 2003 |
PAIN THERAPEUTICS, INC.
| Page No. | ||||||
| PART I. FINANCIAL INFORMATION | ||||||
| Item 1. |
Financial Statements (unaudited) |
|||||
| Condensed Balance Sheets—June 30, 2003 and December 31, 2002 |
3 | |||||
| 4 | ||||||
| 5 | ||||||
| 6 | ||||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 | ||||
| Item 3. |
26 | |||||
| Item 4. |
26 | |||||
| PART II. OTHER INFORMATION | ||||||
| Item 1. |
27 | |||||
| Item 2. |
27 | |||||
| Item 3. |
27 | |||||
| Item 4. |
27 | |||||
| Item 5. |
27 | |||||
| Item 6. |
28 | |||||
| 29 | ||||||
2
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements |
PAIN THERAPEUTICS, INC.
(A Development Stage Enterprise)
(Unaudited)
(in thousands)
| June 30, 2003 |
December 31, 2002 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 42,546 | $ | 50,091 | ||||
| Interest receivable |
38 | 55 | ||||||
| Prepaid expenses |
41 | 1,101 | ||||||
| Total current assets |
42,625 | 51,247 | ||||||
| Property and equipment, net |
1,831 | 2,003 | ||||||
| Other assets |
75 | 75 | ||||||
| Total assets |
$ | 44,531 | $ | 53,325 | ||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,731 | $ | 2,648 | ||||
| Accrued compensation and benefits |
541 | 273 | ||||||
| Other accrued liabilities |
123 | 180 | ||||||
| Total current liabilities |
2,395 | 3,101 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock |
— | — | ||||||
| Common stock |
27 | 27 | ||||||
| Additional paid-in-capital |
103,770 | 103,254 | ||||||
| Deferred compensation |
(58 | ) | (304 | ) | ||||
| Notes receivable from stockholders |
(10 | ) | (122 | ) | ||||
| Deficit accumulated during the development stage |
(61,593 | ) | (52,631 | ) | ||||
| Total stockholders’ equity |
42,136 | 50,224 | ||||||
| Total liabilities and stockholders’ equity |
$ | 44,531 | $ | 53,325 | ||||
See accompanying notes to condensed financial statements.
3
PAIN THERAPEUTICS, INC.
(A Development Stage Enterprise)
Condensed Statements of Operations
(Unaudited)
(in thousands except per share data)
| Three months ended June 30, |
Six months ended June 30, |
May 4, 1998 (inception) through 2003 |
||||||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||||||
| Operating expenses(1): |
||||||||||||||||||||
| Research and development |
$ | 3,715 | $ | 2,674 | $ | 7,503 | $ | 5,490 | $ | 47,430 | ||||||||||
| General and administrative |
751 | 1,307 | 1,720 | 2,812 | 21,417 | |||||||||||||||
| Total operating expenses |
4,466 | 3,981 | 9,223 | 8,302 | 68,847 | |||||||||||||||
| Operating loss |
(4,466 | ) | (3,981 | ) | (9,223 | ) | (8,302 | ) | (68,847 | ) | ||||||||||
| Other income: |
||||||||||||||||||||
| Interest income |
120 | 266 | 261 | 561 | 7,254 | |||||||||||||||
| Net loss |
(4,346 | ) | (3,715 | ) | (8,962 | ) | (7,741 | ) | (61,593 | ) | ||||||||||
| Return to series C preferred stockholder for beneficial conversion feature |
— | — | — | — | (14,231 | ) | ||||||||||||||
| Loss available to common stockholders |
$ | (4,346 | ) | $ | (3,715 | ) | $ | (8,962 | ) | $ | (7,741 | ) | $ | (75,824 | ) | |||||
| Basic and diluted loss per common share |
$ | (0.16 | ) | $ | (0.14 | ) | $ | (0.33 | ) | $ | (0.29 | ) | ||||||||
| Weighted-average shares used in computing basic and diluted loss per common share |
27,334 | 27,037 | 27,250 | 26,973 | ||||||||||||||||
| (1) | Included in research and development and general and administrative expenses are stock-based compensation expenses (reduction in expenses) of ($16) and $191 for the three months ended June 30, 2003 and 2002, respectively, $87 and $533 for the six months ended June 30, 2003 and 2002, respectively and $11,877 for the period from May 4, 1998 (inception) through June 30, 2003. |
See accompanying notes to condensed financial statements.
4
PAIN THERAPEUTICS, INC.
(A Development Stage Enterprise)
Condensed Statements of Cash Flows
(Unaudited)
(in thousands)
| Six months ended June 30, |
May 4, 1998 (inception) through June 30, |
|||||||||||
| 2003 |
2002 |
2003 |
||||||||||
| Cash flows from operating activities: |
||||||||||||
| Net loss |
$ | (8,962 | ) | $ | (7,741 | ) | $ | (61,593 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
| Depreciation and amortization |
172 | 176 | 870 | |||||||||
| Non-cash stock based compensation expense and other |
87 | 534 | 11,911 | |||||||||
| Changes in operating assets and liabilities: |
||||||||||||
| Interest receivable |
17 | 34 | (38 | ) | ||||||||
| Prepaid expenses |
1,060 | (177 | ) | (41 | ) | |||||||
| Other assets |
— | — | (75 | ) | ||||||||
| Accounts payable |
(917 | ) | (764 | ) | 1,731 | |||||||
| Accrued compensation and benefits |
268 | 173 | 541 | |||||||||
| Other accrued liabilities |
31 | 75 | 211 | |||||||||
| Net cash used in operating activities |
(8,244 | ) | (7,690 | ) | (46,483 | ) | ||||||
| Cash flows used in investing activities: |
||||||||||||
| Purchase of property and equipment |
— | (5 | ) | (2,701 | ) | |||||||
| Cash flows from financing activities: |
||||||||||||
| Proceeds from issuance of various preferred stock, net |
— | — | 27,539 | |||||||||
| Proceeds from initial public offering, net |
— | — | 62,939 | |||||||||
| Stock subscription note payments received |
24 | 20 | 138 | |||||||||
| Proceeds from issuance of common stock, net |
675 | 207 | 1,114 | |||||||||
| Net cash provided by financing activities |
699 | 227 | 91,730 | |||||||||
| Net increase (decrease) in cash and cash equivalents |
(7,545 | ) | (7,468 | ) | 42,546 | |||||||
| Cash and cash equivalents at beginning of period |
50,091 | 65,274 | — | |||||||||
| Cash and cash equivalents at end of period |
$ | 42,546 | $ | 57,806 | $ | 42,546 | ||||||