UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2004 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from ________ to ________ |
Commission File Number 1-10615
EMISPHERE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE |
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13-3306985 |
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(State or jurisdiction of |
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(I.R.S. Employer |
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765 Old Saw Mill River Road |
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10591 |
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(Address of principal executive offices) |
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(Zip Code) |
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(914) 347-2220 |
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(Registrant’s telephone number, including area code) |
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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 Registrant was required to file such reports) and (2) has been subject to such filing requirements for at least 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
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the Registrant’s common stock, $.01 par value, outstanding as of November 2, 2004 was 18,474,731.
EMISPHERE TECHNOLOGIES, INC.
Index
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PART I. |
FINANCIAL INFORMATION |
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Item 1. |
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Condensed Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003 |
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4 |
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5 |
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6 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
17 |
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Item 4. |
18 |
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PART II. |
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Item 1. |
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Item 4. |
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Item 6. |
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CERTIFICATIONS |
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All other schedules called for by the instructions to Form 10-Q have been omitted because the schedules are not applicable or the relevant information is not material.
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Item 1. |
EMISPHERE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2004 and December 31, 2003
(in thousands, except share data)
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September 30, |
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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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$ |
12,697 |
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$ |
31,287 |
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Investments |
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11,633 |
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3,900 |
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Accounts receivable |
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1,047 |
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326 |
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Prepaid expenses and other current assets |
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860 |
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1,098 |
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Total current assets |
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26,237 |
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36,611 |
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Equipment and leasehold improvements, net |
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11,011 |
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14,005 |
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Land, building and equipment held for sale, net |
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3,589 |
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3,618 |
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Purchased technology, net |
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2,333 |
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2,512 |
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Investments |
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— |
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7,821 |
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Other assets |
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1,444 |
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1,482 |
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Total assets |
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$ |
44,614 |
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$ |
66,049 |
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Liabilities and Stockholders’ (Deficit) Equity: |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
3,292 |
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$ |
2,638 |
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Deferred revenue |
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1,000 |
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125 |
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Current portion of capital lease obligation |
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202 |
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211 |
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Current portion of deferred lease liability |
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397 |
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397 |
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Total current liabilities |
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4,891 |
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3,371 |
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Note payable, including accrued interest |
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42,766 |
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38,345 |
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Capital lease obligation, net of current portion |
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302 |
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469 |
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Deferred lease liability, net of current portion |
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760 |
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1,057 |
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Total liabilities |
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48,719 |
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43,242 |
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Stockholders’ (deficit) equity: |
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Preferred stock, $.01 par value; authorized 1,000,000 shares; none issued and outstanding |
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Common stock, $.01 par value; authorized 40,000,000 shares; issued 18,696,945 shares (18,453,345 outstanding) as of September 30, 2004, and 18,447,088 shares (18,203,488 outstanding) as of December 31, 2003 |
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187 |
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184 |
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Additional paid-in capital |
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324,168 |
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322,257 |
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Note receivable from officer and director |
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(804 |
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(804 |
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Accumulated deficit |
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(323,849 |
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(295,033 |
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Accumulated other comprehensive loss |
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(20 |
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(10 |
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Common stock held in treasury, at cost; 243,600 shares |
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(3,787 |
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(3,787 |
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Total stockholders’ (deficit) equity |
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(4,105 |
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22,807 |
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Total liabilities and stockholders’ (deficit) equity |
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$ |
44,614 |
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$ |
66,049 |
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The accompanying notes are an integral part of the financial statements
3
EMISPHERE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months and nine months ended September 30, 2004 and 2003
(in thousands, except share and per share data)
(Unaudited)
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For the three
months ended |
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For the nine
months ended |
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2004 |
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2003 |
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2004 |
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2003 |
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Revenue |
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$ |
33 |
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$ |
100 |
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$ |
180 |
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$ |
372 |
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Costs and expenses: |
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Research and development |
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4,650 |
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5,833 |
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13,281 |
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16,227 |
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General and administrative expenses |
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2,773 |
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2,269 |
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8,131 |
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7,680 |
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Restructuring |
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— |
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— |
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— |
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(73 |
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Loss on impairment of long-lived assets |
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— |
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4,299 |
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— |
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5,339 |
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Depreciation and amortization |
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1,343 |
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1,511 |
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3,793 |
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4,590 |
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Total costs and expenses |
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8,766 |
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13,912 |
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25,205 |
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33,763 |
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Operating loss |
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(8,733 |
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(13,812 |
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(25,025 |
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(33,391 |
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Other (expense) income: |
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Investment and other income |
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170 |
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772 |
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668 |
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1,530 |
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Interest expense |
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(1,557 |
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(1,337 |
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(4,459 |
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(3,826 |
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Total other (expense) income |
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(1,387 |
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(565 |
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(3,791 |
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(2,296 |
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Net loss |
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$ |
(10,120 |
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$ |
(14,377 |
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$ |
(28,816 |
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$ |
(35,687 |
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Net loss per share, basic and diluted |
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$ |
(0.55 |
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$ |
(0.80 |
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$ |
(1.57 |
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$ |
(1.98 |
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Weighted average shares outstanding, basic and diluted |
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18,436,044 |
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18,069,574 |
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18,369,031 |
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18,045,836 |
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The accompanying notes are an integral part of the financial statements
4
EMISPHERE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2004 and 2003
(in thousands)
(Unaudited)
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For the Nine Months Ended |
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2004 |
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2003 |
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Cash flows from operating activities: |
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Net loss |
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$ |
(28,816 |
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(35,687 |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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3,614 |
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4,410 |
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Amortization of purchased technology |
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179 |
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180 |
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Impairment of fixed assets |
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— |
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5,339 |
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Amortization of discount on investments |
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(48 |
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(72 |
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Non-cash interest and other non-cash charges |
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5,107 |
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4,735 |
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Loss on sale of fixed assets |
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1 |
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53 |
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Changes in assets and liabilities excluding non-cash charges: |
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(Increase) decrease in accounts receivable |
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(721 |
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690 |
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Decrease in prepaid expenses and other current assets |
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138 |
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579 |
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Decrease (increase) in other assets |
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— |
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(30 |
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Increase (decrease) in accounts payable and accrued expenses |
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897 |
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(1,331 |
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Increase in other liabilities |
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— |
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343 |
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Increase in deferred revenue |
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875 |
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28 |
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Decrease in deferred lease liability |
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(297 |
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(307 |
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Total adjustments |
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9,745 |
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14,617 |
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Net cash used in operating activities |
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(19,071 |
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(21,070 |
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Cash flows from investing activities: |
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Proceeds from maturity of investments |
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5,126 |
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37,582 |
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Purchases of investments |
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(4,911 |
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(14,609 |
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Proceeds from sale of fixed assets |
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