UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended: September 30, 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:
0-30365
Icoria, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 56-2047837 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
108 T.W. Alexander Drive, Research Triangle Park, North Carolina 27709
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (919) 425-3000
Former name, former address, and former year, if changed since last report: Paradigm Genetics, Inc.
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 ¨ No x
Indicate the number of shares outstanding of each of the Issuer’s classes of Common Stock, as of the latest practicable date.
| Title of each class |
Shares outstanding on November 3, 2004 | |
| Common stock $.01 par value | 36,323,274 |
INDEX
2
CONDENSED BALANCE SHEETS
| September 30, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 4,084,897 | $ | 7,157,308 | ||||
| Short-term investments |
3,001,890 | 9,127,200 | ||||||
| Accounts receivable |
2,943,627 | 2,975,800 | ||||||
| Interest receivable |
49,844 | 116,493 | ||||||
| Prepaid expenses |
714,265 | 784,350 | ||||||
| Inventory |
321,345 | 128,621 | ||||||
| Total current assets |
11,115,868 | 20,289,772 | ||||||
| Restricted cash |
1,404,543 | 1,404,543 | ||||||
| Property and equipment, net |
15,637,719 | 17,337,042 | ||||||
| Other assets, net |
3,663,975 | 422,357 | ||||||
| Total assets |
$ | 31,822,105 | $ | 39,453,714 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 2,580,695 | $ | 1,131,946 | ||||
| Accrued liabilities |
3,118,302 | 2,141,000 | ||||||
| Deferred revenue |
6,645,165 | 8,200,970 | ||||||
| Long-term debt—current portion |
1,669,828 | 2,152,663 | ||||||
| Capital lease obligation—current portion |
62,025 | 109,991 | ||||||
| Revolving line of credit |
— | 2,331,514 | ||||||
| Other current liabilities |
25,609 | 25,724 | ||||||
| Total current liabilities |
14,101,624 | 16,093,808 | ||||||
| Long-term debt, less current portion |
2,502,289 | 3,807,173 | ||||||
| Capital lease obligation, less current portion |
78,090 | 39,055 | ||||||
| Contingent purchase consideration |
1,108,453 | — | ||||||
| Total liabilities |
17,790,456 | 19,940,036 | ||||||
| Commitments |
||||||||
| Stockholders’ equity: |
||||||||
| Convertible preferred stock, $0.01 par value; 5,000,000 shares authorized, none issued or outstanding |
— | — | ||||||
| Common stock, $0.01 par value; 100,000,000 and 50,000,000 shares authorized; 36,323,274 and 32,605,493 shares issued and outstanding as of September 30, 2004 and December 31, 2003, respectively |
363,233 | 326,055 | ||||||
| Additional paid-in capital |
108,556,986 | 103,647,048 | ||||||
| Deferred compensation |
— | (1,806 | ) | |||||
| Accumulated deficit |
(94,902,219 | ) | (84,559,208 | ) | ||||
| Accumulated other comprehensive income |
13,649 | 101,589 | ||||||
| Total stockholders’ equity |
14,031,649 | 19,513,678 | ||||||
| Total liabilities and stockholders’ equity |
$ | 31,822,105 | $ | 39,453,714 | ||||
The accompanying notes are an integral part of these condensed financial statements.
3
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Commercial and government contracts |
$ | 6,797,792 | $ | 5,135,108 | $ | 17,072,935 | $ | 14,255,947 | ||||||||
| Grant revenues |
322,122 | 866,536 | 1,189,484 | 1,409,659 | ||||||||||||
| Total revenues |
7,119,914 | 6,001,644 | 18,262,419 | 15,665,606 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
7,523,946 | 6,171,838 | 20,555,039 | 18,516,350 | ||||||||||||
| Selling, general and administrative |
2,609,625 | 1,882,042 | 7,909,653 | 6,579,992 | ||||||||||||
| Total operating expenses |
10,133,571 | 8,053,880 | 28,464,692 | 25,096,342 | ||||||||||||
| Loss from operations |
(3,013,657 | ) | (2,052,236 | ) | (10,202,273 | ) | (9,430,736 | ) | ||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
50,298 | 82,399 | 163,605 | 285,960 | ||||||||||||
| Interest expense |
(96,589 | ) | (309,846 | ) | (336,505 | ) | (741,721 | ) | ||||||||
| Other income (expense), net |
(46,291 | ) | (227,447 | ) | (172,900 | ) | (455,761 | ) | ||||||||
| Loss from continuing operations |
(3,059,948 | ) | (2,279,683 | ) | (10,375,173 | ) | (9,886,497 | ) | ||||||||
| Discontinued operations: |
||||||||||||||||
| Gain (loss) from discontinued operations |
6,208 | 36,807 | 32,159 | (59,838 | ) | |||||||||||
| Net loss |
$ | (3,053,740 | ) | $ | (2,242,876 | ) | $ | (10,343,014 | ) | $ | (9,946,335 | ) | ||||
| Per common share—basic and diluted: |
||||||||||||||||
| Loss from continuing operations |
$ | (0.08 | ) | $ | (0.07 | ) | $ | (0.29 | ) | $ | (0.31 | ) | ||||
| Gain (loss) from discontinued operations |
— | — | — | — | ||||||||||||
| Net loss |
$ | (0.08 | ) | $ | (0.07 | ) | $ | (0.29 | ) | $ | (0.31 | ) | ||||
| Weighted average common shares outstanding – basic and diluted |
36,299,871 | 32,564,260 | 35,325,423 | 32,225,900 | ||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
4
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (10,343,014 | ) | $ | (9,946,335 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
4,108,026 | 3,926,989 | ||||||
| Stock-based compensation |
1,806 | 812,351 | ||||||
| (Gain) loss on sale of property and equipment |
(34,671 | ) | 167,636 | |||||
| Changes in operating assets and liabilities excluding impact of acquisition: |
||||||||
| Accounts receivable |
32,707 | 1,399,309 | ||||||
| Interest receivable |
66,649 | 152,318 | ||||||
| Prepaid expenses and other assets |
(1,696 | ) | 500,173 | |||||
| Inventory |
(192,724 | ) | (309,256 | ) | ||||
| Accounts payable |
1,395,445 | (357,505 | ) | |||||
| Accrued and other current liabilities |
616,991 | 1,085,611 | ||||||
| Deferred revenue |
(1,562,622 | ) | (2,935,949 | ) | ||||
| Net cash used in operating activities |
(5,913,103 | ) | (5,504,658 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Purchase of property and equipment |
(982,187 | ) | (521,516 | ) | ||||
| Proceeds from sale of property and equipment |
220,000 | 337,738 | ||||||
| Acquisition costs |
(465,834 | ) | — | |||||
| Cash from acquisition |
2,521,982 | — | ||||||
| Purchase of investments |
— | (3,013,444 | ) | |||||
| Maturities of investments |
6,037,371 | 9,109,009 | ||||||
| Net cash provided by investing activities |
7,331,332 | 5,911,787 | ||||||
| Cash flows from financing activities: |
||||||||
| Repayments of capital lease obligations |
(1,256,046 | ) | (218,607 | ) | ||||
| (Repayments) borrowings under the revolving line of credit |
(2,331,514 | ) | 1,500,000 | |||||
| Repayments of debt |
(980,638 | ) | ||||||