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 June 30, 2003. |
OR
| ¨ | 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: 0-27718
NEOSE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 13-3549286 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| 102 Witmer Road Horsham, Pennsylvania |
19044 (Zip Code) | |
| (Address of principal executive offices) |
(215) 315-9000
(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 the issuer’s classes of common stock, as of the latest practicable date: 17,250,707 shares of common stock, $.01 par value, were outstanding as of August 4, 2003.
(a development-stage company)
INDEX
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NEOSE TECHNOLOGIES, INC.
(a development-stage company)
(unaudited)
(in thousands, except per share amounts)
| Assets | December 31, 2002 |
June 30, 2003 |
||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 31,088 | $ | 31,584 | ||||
| Marketable securities |
9,952 | 10,486 | ||||||
| Restricted funds |
977 | 379 | ||||||
| Prepaid expenses and other current assets |
558 | 1,419 | ||||||
| Total current assets |
42,575 | 43,868 | ||||||
| Property and equipment, net |
36,508 | 35,548 | ||||||
| Acquired intellectual property, net |
2,507 | 2,209 | ||||||
| Other assets |
1,502 | 2,246 | ||||||
| Total assets |
$ | 83,092 | $ | 83,871 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: |
||||||||
| Current portion of long-term debt |
$ | 1,851 | $ | 2,803 | ||||
| Accounts payable |
1,127 | 1,177 | ||||||
| Accrued compensation |
1,339 | 1,602 | ||||||
| Accrued expenses |
1,880 | 1,639 | ||||||
| Deferred revenue |
320 | 70 | ||||||
| Total current liabilities |
6,517 | 7,291 | ||||||
| Long-term debt |
5,560 | 6,278 | ||||||
| Other liabilities |
330 | 641 | ||||||
| Total liabilities |
12,407 | 14,210 | ||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $.01 par value, 5,000 shares authorized, none issued |
— | — | ||||||
| Common stock, $.01 par value, 30,000 shares authorized; 14,330 and 17,248 shares issued; 14,324 and 17,242 shares outstanding |
143 | 172 | ||||||
| Additional paid-in capital |
178,945 | 195,506 | ||||||
| Treasury stock, 6 shares at cost |
(175 | ) | (175 | ) | ||||
| Deferred compensation |
(170 | ) | (137 | ) | ||||
| Deficit accumulated during the development-stage |
(108,058 | ) | (125,705 | ) | ||||
| Total stockholders’ equity |
70,685 | 69,661 | ||||||
| Total liabilities and stockholders’ equity |
$ | 83,092 | $ | 83,871 | ||||
The accompanying notes are an integral part of these financial statements.
3
NEOSE TECHNOLOGIES, INC.
(a development-stage company)
(unaudited)
(in thousands, except per share amounts)
| Three months ended June 30, |
Six months ended June 30, |
Period from June 30, |
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| 2002 |
2003 |
2002 |
2003 |
|||||||||||||||||
| Revenue from collaborative agreements |
$ | 1,561 | $ | 651 | $ | 2,332 | $ | 721 | $ | 18,167 | ||||||||||
| Operating expenses: |
||||||||||||||||||||
| Research and development |
5,139 | 6,664 | 10,974 | 12,284 | 111,961 | |||||||||||||||
| Marketing, general and administrative |
3,289 | 3,197 | 6,209 | 6,201 | 55,274 | |||||||||||||||
| Total operating expenses |
8,428 | 9,861 | 17,183 | 18,485 | 167,235 | |||||||||||||||
| Operating loss |
(6,867 | ) | (9,210 | ) | (14,851 | ) | (17,764 | ) | (149,0680 | |||||||||||
| Other income |
— | — | — | — | 7,773 | |||||||||||||||
| Interest income |
419 | 147 | 848 | 317 | 19,095 | |||||||||||||||
| Interest expense |
(42 | ) | (163 | ) | (82 | ) | (200 | ) | (3,505 | ) | ||||||||||
| Net loss |
$ | (6,490 | ) | $ | (9,226 | ) | $ | (14,085 | ) | $ | (17,647 | ) | $ | (125,705 | ) | |||||
| Basic and diluted net loss per share |
$ | (0.45 | ) | $ | (0.54 | ) | $ | (0.99 | ) | $ | (1.07 | ) | ||||||||
| Weighted-average shares outstanding used in computing basic and diluted net loss per share |
14,281 | 17,229 | 14,201 | 16,519 | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
4
NEOSE TECHNOLOGIES, INC.
(a development-stage company)
(unaudited)
(in thousands)
| Six months ended June 30, |
Period from inception (January 17, 1989) to June 30, 2003 |
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| 2002 |
2003 |
||||||||||
| Cash flows from operating activities: |
|||||||||||
| Net loss |
$ | (14,085 | ) | $ | (17,647 | ) | $(125,705 | ) | |||
| Adjustments to reconcile net loss to cash used in operating activities: |
|||||||||||
| Depreciation and amortization |
1,382 | 2,234 | 15,343 | ||||||||
| Non-cash compensation |
1,162 | 110 | 4,883 | ||||||||
| Common stock issued for non-cash and other charges |
— | — | 35 | ||||||||
| Changes in operating assets and liabilities: |
|||||||||||
| Prepaid expenses and other current and non-current assets |
(768 | ) | (834 | ) | (1,644 | ) | |||||
| Accounts payable |
1,363 | 50 | 1,177 | ||||||||
| Accrued compensation |
588 | (199 | ) | 1,184 | |||||||
| Accrued expenses |
(1,264 | ) | (139 | ) | 1,639 | ||||||
| Deferred revenue |
(208 | ) | (250 | ) | 70 | ||||||
| Other liabilities |
— | (108 | ) | 222 | |||||||
| Net cash used in operating activities |
(11,830 | ) | (16,783 | ) | (102,796 | ) | |||||
| Cash flows from investing activities: |
|||||||||||
| Purchases of property and equipment |
(11,533 | ) | (722 | ) | (47,830 | ) | |||||
| Proceeds from sale-leaseback of equipment |
— | — | 1,382 | ||||||||
| Purchases of marketable securities |
(47,487 | ) | (23,735 | ) | (408,473 | ) | |||||
| Proceeds from sales of marketable securities |
— | 8,328 | 19,795 | ||||||||
| Proceeds from maturities of and other changes in marketable securities |
— | 15,000 | 378,860 | ||||||||
| Purchase of acquired technology |
— | — | (4,550 | ) | |||||||
| Investment in equity securities |
— | — | (1,250 | ) | |||||||
| Net cash used in investing activities |
(59,020 | ) | (1,129 | ) | (62,066 | ) | |||||
| Cash flows from financing activities: |
|||||||||||
| Proceeds from issuance of debt |
— | 2,954 | 17,170 | ||||||||
| Repayment of debt |
— | (1,657 | ) | (9,809 | ) | ||||||
| Restricted cash related to debt |
(556 | ) | 598 | (308 | ) | ||||||
| Proceeds from issuance of preferred stock, net |
— | — | 29,497 | ||||||||
| Proceeds from issuance of common stock, net |
— | 16,435 | |||||||||