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, 2004
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 0-23280
NEUROBIOLOGICAL TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
| Delaware | 94-3049219 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
3260 Blume Drive, Suite 500
Richmond, California 94806
(Address of principal executive offices)
(510) 262-1730
(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 the common stock, as of the latest practical date:
Common Stock, $.001 Par Value: 23,878,550 shares outstanding as of April 30, 2004.
NEUROBIOLOGICAL TECHNOLOGIES, INC.
FORM 10-Q
TABLE OF CONTENTS
2
NEUROBIOLOGICAL TECHNOLOGIES, INC.
(A development stage company)
CONDENSED BALANCE SHEETS
| March 31, 2004 |
June 30, 2003 |
|||||||
| (unaudited) | (Note 1) | |||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 13,509,558 | $ | 66,138 | ||||
| Short-term investments |
6,804,145 | 4,336,127 | ||||||
| Interest receivable |
42,153 | 50,339 | ||||||
| Prepaid expenses and other |
156,865 | 350,533 | ||||||
| Total current assets |
20,512,721 | 4,803,137 | ||||||
| Long-term investments |
1,886,185 | — | ||||||
| Property and equipment, net |
7,718 | 10,073 | ||||||
| TOTAL ASSETS |
$ | 22,406,624 | $ | 4,813,210 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued expenses |
$ | 593,645 | $ | 565,595 | ||||
| Warrant liability |
1,804,200 | — | ||||||
| Total current liabilities |
2,397,845 | 565,595 | ||||||
| Stockholders’ equity: |
||||||||
| Convertible Series A Preferred stock, $.001 par value, 5,000,000 shares authorized, 2,332,000 issued, 634,000 and 1,154,000 outstanding at March 31, 2004 and June 30, 2003, respectively |
317,000 | 577,000 | ||||||
| Common stock, $.001 par value, 35,000,000 shares authorized, 23,822,550 and 18,755,553 outstanding at March 31, 2004 and June 30, 2003, respectively |
61,042,233 | 44,259,534 | ||||||
| Deferred compensation |
(41,063 | ) | (82,126 | ) | ||||
| Deficit accumulated during development stage |
(41,309,997 | ) | (40,516,524 | ) | ||||
| Accumulated other comprehensive income |
606 | 9,731 | ||||||
| Total stockholders’ equity |
20,008,779 | 4,247,615 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 22,406,624 | $ | 4,813,210 | ||||
See accompanying notes.
3
NEUROBIOLOGICAL TECHNOLOGIES, INC.
(A development stage company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended March 31, |
Nine months ended March 31, |
Period from August 27, 1987 (inception) through March 31, 2004 |
|||||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
||||||||||||||||
| REVENUES | |||||||||||||||||||
| License |
$ | 2,249,980 | $ | 281,230 | $ | 2,531,210 | $ | 1,687,460 | $ | 11,381,150 | |||||||||
| Royalty |
51,674 | — | 80,117 | — | 91,066 | ||||||||||||||
| Grant |
— | — | — | — | 149,444 | ||||||||||||||
| Total revenue |
2,301,654 | 281,230 | 2,611,327 | 1,687,460 | 11,621,660 | ||||||||||||||
| EXPENSES | |||||||||||||||||||
| Research and development |
725,151 | 434,675 | 1,566,441 | 2,020,199 | 34,055,262 | ||||||||||||||
| General and administrative |
889,818 | 623,550 | 2,320,899 | 1,799,765 | 22,783,754 | ||||||||||||||
| Total expenses |
1,614,969 | 1,058,225 | 3,887,340 | 3,819,964 | 56,839,016 | ||||||||||||||
| Operating income (loss) |
686,685 | (776,995 | ) | (1,276,013 | ) | (2,132,504 | ) | (45,217,356 | ) | ||||||||||
| Interest income |
21,327 | 30,072 | 51,860 | 116,306 | 3,476,679 | ||||||||||||||
| Other non-cash income |
430,680 | — | 430,680 | — | 430,680 | ||||||||||||||
| NET INCOME (LOSS) | $ | 1,138,692 | $ | (746,923 | ) | $ | (793,473 | ) | $ | (2,016,198 | ) | $ | (41,309,997 | ) | |||||
| BASIC NET INCOME (LOSS) PER SHARE |
$ | 0.05 | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.11 | ) | ||||||||
| Shares used in basic net income (loss) per share calculation |
20,794,541 | 17,984,938 | 19,607,037 | 17,846,434 | |||||||||||||||
| DILUTED NET INCOME (LOSS) PER SHARE |
$ | 0.05 | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.11 | ) | ||||||||
| Shares used in diluted net income (loss) per share calculation |
23,608,871 | 17,984,938 | 19,607,037 | 17,846,434 | |||||||||||||||
See accompanying notes.
4
NEUROBIOLOGICAL TECHNOLOGIES, INC.
(A development stage company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine months ended March 31, |
Period from August 27, 1987 (inception) through March 31, 2004 |
|||||||||||
| 2004 |
2003 |
|||||||||||
| OPERATING ACTIVITIES: | ||||||||||||
| Net loss |
$ | (793,473 | ) | $ | (2,016,198 | ) | $ | (41,309,997 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
| Depreciation and amortization |
4,459 | 7,256 | 703,243 | |||||||||
| (Gain) loss on sale of property and equipment |
2,849 | — | 1,349 | |||||||||
| Amortization of deferred stock compensation |
41,063 | 41,063 | 232,687 | |||||||||
| Derivative revaluation |
(430,680 | ) | — | (430,680 | ) | |||||||
| Issuance of common stock, options and warrants for license rights and services |
28,200 | — | 238,175 | |||||||||
| Changes in assets and liabilities: |
||||||||||||
| Interest receivable |
8,186 | 131,197 | (42,153 | ) | ||||||||
| Prepaid expenses and other current assets |
193,668 | (50,798 | ) | (156,865 | ) | |||||||
| Accounts payable and accrued expenses |
28,049 | (452,101 | ) | 593,644 | ||||||||
| Net cash used in operating activities |
(917,679 | ) | (2,339,581 | ) | (40,170,597 | ) | ||||||
| INVESTING ACTIVITIES: | ||||||||||||
| Purchase of investments |
(27,317,933 | ) | (6,719,831 | ) | (82,093,418 | ) | ||||||
| Maturity of investments |
22,954,605 | 9,855,604 | 73,403,694 | |||||||||
| Purchases of property and equipment, net |
(4,953 | ) | (13,332 | ) | (430,748 | ) | ||||||
| Proceeds from sale of property and equipment |
— | — | 1,500 | |||||||||
| Additions to patents and licenses |
— | — | (283,062 | ) | ||||||||
| Net cash provided by (used in) investing activities |
(4,368,281 | ) | 3,122,441 | (9,402,034 | ) | |||||||
| FINANCING ACTIVITIES: | ||||||||||||
| Payment of note payable |
— | — | (200,000 | ) | ||||||||
| Proceeds from short-term borrowings |
— | — | 435,000 | |||||||||
| Issuance of common stock, net |
18,729,380 | 289,782 | 54,776,057 | |||||||||
| Repurchase of common stock |
— | (86,950 | ) | (86,950 | ) | |||||||
| Issuance of preferred stock, net |
— | — | 8,158,082 | |||||||||
| Net cash provided by financing activities |
18,729,380 | 202,832 | 63,082,189 | |||||||||
| Increase in cash and cash equivalents |
13,443,420 | 985,692 | 13,509,558 | |||||||||
| Cash and equivalents at beginning of period |
66,138 | 277,062 | — | |||||||||
| Cash and equivalents at end of period |
$ | 13,509,558 | $ | 1,262,754 | $ | 13,509,558 | ||||||
| SUPPLEMENTAL DISCLOSURES: | ||||||||||||
| Conversion of short-term borrowings to Series A preferred stock |
$ | — | ||||||||||