-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C2uDKTp14kTwgk9luzMoF3jlUsLuolFp1xod0kKTIpLDuMJec2gJGrDY2+4D0byV dQF8R+JZhkJK70QQ6zo8eA== 0000950133-01-500143.txt : 20010308 0000950133-01-500143.hdr.sgml : 20010308 ACCESSION NUMBER: 0000950133-01-500143 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001215 ITEM INFORMATION: FILED AS OF DATE: 20010306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED THERAPEUTICS CORP CENTRAL INDEX KEY: 0001082554 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 521984749 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-26301 FILM NUMBER: 1562307 BUSINESS ADDRESS: STREET 1: 1110 SPRING ST CITY: SILVER SPRING STATE: MD ZIP: 20910 BUSINESS PHONE: 3016089292 MAIL ADDRESS: STREET 1: 1110 SPRING ST CITY: SILVER SPRING STATE: MD ZIP: 20910 8-K/A 1 w46220e8-ka.txt CURRENT REPORT AMENDMENT NO.2 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM 8-K/A (AMENDMENT NO. 2) CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): December 15, 2000 United Therapeutics Corporation - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-26301 52-1984749 --------- ------- ---------- (State or Other (Commission (I.R.S. Employer Jurisdiction of File Number) Identification Number) Incorporation)
1110 Spring Street Silver Spring, MD 20910 - ---------------------------------------------- ------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (301) 608-9292 -------------------------------------------------- 2 This Amendment to the Current Report on Form 8-K/A filed on February 1, 2001 is being filed to include the financial information required by Item 7 of this Form 8-K relating to the acquisition by the Registrant of all of the assets and certain liabilities of Cooke Pharma, Inc. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Page Number ----------- (a) Financial Statements of Business Acquired. Report of Independent Public Accountants 4 Cooke Pharma, Inc. Balance Sheets as of December 31, 1999 and 1998 5 Cooke Pharma, Inc. Statements of Operations for the Years Ended December 31, 1999 and 1998 6 Cooke Pharma, Inc. Statements of Shareholders' Equity for the Years Ended December 31, 1999 and 1998 7 Cooke Pharma, Inc. Statements of Cash Flows for the Years Ended December 31, 1999 and 1998 8 Notes to the Financial Statements 9 (b) Unaudited Interim Financial Statements of Business Acquired. Cooke Pharma, Inc. Balance Sheet as of September 30, 2000 19 Cooke Pharma, Inc. Statements of Operations for the Nine Month Periods Ended September 30, 2000 and 1999 20 Cooke Pharma, Inc. Statements of Cash Flows for the Nine Month Periods Ended September 30, 2000 and 1999 21 Notes to the Unaudited Interim Financial Statements 22
1 3 (c) Unaudited Pro Forma Combined Financial Statements 23 Unaudited Pro Forma Combined Balance Sheet as of September 30, 2000 24 Unaudited Pro Forma Combined Statement of Operations for the Year Ended December 31, 1999 25 Unaudited Pro Forma Combined Statement of Operations for the Nine Month Period Ended September 30, 2000 26 Notes to Unaudited Pro Forma Combined Financial Statements 27 (d) Exhibits 2.1 Asset Purchase Agreement dated as of December 15, 2000 among UP Sub, the Company and Cooke Pharma.* (Filed previously.) 2.2. Registration Rights Agreement dated as of December 15, 2000 between the Company and Cooke Pharma. (Filed previously.) 2.3 Escrow Agreement dated as of December 15, 2000 among the Company, UP Sub, Cooke Pharma and Mahon, Patusky, Rothblatt & Fisher, Chartered, as escrow agent. (Filed previously.) 23.1 Consent of PricewaterhouseCoopers LLP. * The Registrant hereby undertakes to furnish supplementally a copy of any omitted schedule to this Agreement to the Securities and Exchange Commission upon request.
2 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. United Therapeutics Corporation (Registrant) Date: March 2, 2001 By: /s/ Fred T. Hadeed ------------------------------- Name: Fred T. Hadeed Title: Chief Financial Officer 3 5 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Cooke Pharma, Inc. In our opinion, the accompanying balance sheets and the related statements of operations, of shareholders' equity and of cash flows present fairly, in all material respects, the financial position of Cooke Pharma, Inc. at December 31, 1999 and 1998, and the results of its operations and cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses from operations since inception that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ PricewaterhouseCoopers LLP July 28, 2000 San Jose, California 4 6 COOKE PHARMA, INC. BALANCE SHEETS - --------------------------------------------------------------------------------
DECEMBER 31, ------------ 1999 1998 ---- ---- ASSETS Current assets: Cash and cash equivalents $ 2,942,205 $ 1,994,512 Accounts receivable, net of allowance of $30,702 and $0, respectively 240,657 22,912 Inventory 1,393,842 153,093 Other current assets and receivables 21,065 18,824 ---------------- --------------- Total current assets 4,597,769 2,189,341 Property and equipment, net 358,429 451,662 Other assets 16,250 16,250 Total assets $ 4,972,448 $ 2,657,253 ---------------- --------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,395,277 $ 332,038 Accrued expenses 176,864 63,672 Capital lease obligation 41,130 37,159 ---------------- --------------- Total current liabilities 1,613,271 432,869 Capital lease obligation - less current portion 127,771 168,901 ---------------- --------------- 1,741,042 601,770 ---------------- --------------- Commitments (Note 5) Shareholders' equity Series A Preferred Stock, no par value Authorized: 664,999 shares; Issued and outstanding: 624,999 in 1999 and 1998 (liquidation value: $874,999) 842,204 842,204 Series B Preferred Stock, no par value Authorized: 4,000,000 shares; Issued and outstanding: 3,162,936 and 3,056,372 in 1999 and 1998 respectively, (liquidation value: $4,428,111) 4,428,111 4,291,521 Series C Preferred Stock, no par value Authorized: 2,000,000 shares; Issued and outstanding: 1,205,149 and 0 in 1999 and 1998 respectively, (liquidation value: $2,410,298) 2,410,298 - Series D Preferred Stock, no par value Authorized: 7,000,000; Issued and outstanding: 5,000,000 and 0 in 1999 and 1998 respectively, (liquidation value: $12,500,000) 12,358,587 - Common stock, no par value Authorized: 375,000,000 Issued and outstanding: 3,992,656 and 3,885,989 in 1999 and 1998, respectively 179,909 146,256 Accumulated deficit (16,987,703) (3,224,498) ---------------- --------------- Total shareholders' equity 3,231,406 2,055,483 ---------------- --------------- Total liabilities and shareholders' equity $ 4,972,448 $ 2,657,253 ---------------- ---------------
The accompanying notes are an integral part of these financial statements. 5 7 COOKE PHARMA, INC. STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1999 1998 Revenues $ 1,712,684 $ 56,989 ------------ ------------ Operating expenses: Cost of revenues 1,528,873 20,997 Research and development 1,035,658 462,478 Sales and marketing 11,215,483 637,570 General and administrative 1,794,335 1,394,737 ------------ ------------ Total operating expenses 15,574,349 2,515,782 ------------ ------------ Loss from operations (13,861,665) (2,458,793) Interest income, net 98,460 30,744 ------------ ------------ Net loss $(13,763,205) $ (2,428,049) ============ ============
The accompanying notes are an integral part of these financial statements. 6 8 COOKE PHARMA, INC. STATEMENTS OF SHAREHOLDERS' EQUITY - --------------------------------------------------------------------------------
TOTAL PREFERRED STOCK COMMON STOCK ACCUMULATED SHAREHOLDERS' SHARES AMOUNT SHARES AMOUNT DEFICIT EQUITY Balance at December 31, 1997 350,000 $ 842,204 4,088,450 $ 109,985 $ (796,449) $ 155,740 Issuance of Series A Preferred Stock in exchange for equivalent shares of Common Stock in March 1998 274,999 - (275,000) - - - Issuance of Common Stock at $0.50 per share in June 1998 for services rendered - - 10,150 5,075 - 5,075 Issuance of Common Stock at $0.50 per share in August 1998 for services rendered - - 62,389 31,196 - 31,196 Issuance of Series B Preferred Stock at $1.40 per share in March 1998 through December 1998 for cash 3,011,872 4,216,621 - - - 4,216,621 Issuance of Series B Preferred Stock at $1.40 per share in June through November 1998 for services rendered 53,500 74,900 - - - 74,900 Net loss - - - - (2,428,049) (2,428,049) ----------- ------------ ----------- ------------ ------------ ------------ Balance at December 31, 1998 3,690,371 5,133,725 3,885,989 146,256 (3,224,498) 2,055,483 Issuance of Common Stock at $0.50 per share in March 1999 for services rendered - - 12,000 6,000 - 6,000 Issuance of Common Stock at $0.50 per share in August 1999 for cash - - 30,000 15,000 - 15,000 Issuance of Common Stock upon exercise of stock options - - 44,667 2,653 - 2,653 Issuance of Common Stock at $0.50 per share in March 1999 in exchange for amendment to license agreement - - 20,000 10,000 - 10,000 Issuance of Series B Preferred Stock at $1.40 per share in March 1999 through December 1999 for cash 87,000 121,800 - - - 121,800 Issuance of Series B Preferred Stock at $1.40 per share in March 1999 for services rendered 10,564 14,790 - - - 14,790 Issuance of Series C Preferred Stock at $2.00 per share in February through May 1999 for cash 1,103,500 2,207,000 - - - 2,207,000 Issuance of Series C Preferred Stock at $2.00 per share in March through September 1999 for services rendered 101,649 203,298 - - - 203,298 Issuance of Series D Preferred Stock at $2.50 per share in June through August 1999 for cash, net of issuance costs of $141,414 4,807,344 11,876,946 - - - 11,876,946 Issuance of Series D Preferred Stock at $2.50 per share in September 1999 upon conversion of note 180,071 450,178 - - - 450,178 Issuance of Series D Preferred Stock at $2.50 per share in September 1999 for services rendered 12,585 31,463 - - - 31,463 Net loss - - - - (13,763,205) (13,763,205) ----------- ------------ ----------- ------------ ------------ ------------ Balance at December 31, 1999 9,993,084 $ 20,039,200 3,992,656 $ 179,909 $(16,987,703) $ 3,231,406 =========== ============ =========== ============ ============ ============
The accompanying notes are an integral part of these financial statements. 7 9 COOKE PHARMA, INC. STATEMENTS OF CASH FLOWS - --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(13,763,205) $ (2,428,049) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 100,110 36,520 Reserve for obsolete inventories 511,760 - Issuance of Common Stock in exchange for services rendered 6,000 36,271 Issuance of Preferred Stock in exchange for services rendered 249,551 74,900 Issuance of Common Stock in exchange for amendment to license agreement 10,000 - Changes in assets and liabilities: Accounts receivable (217,745) (22,912) Inventory (1,752,509) (153,093) Other assets (2,241) (16,541) Accounts payable 1,063,239 290,089 Accrued expenses 113,192 59,545 ------------ ------------ Net cash used in operating activities (13,681,848) (2,123,270) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (6,877) (259,150) ------------ ------------ Net cash used in investing activities (6,877) (259,150) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of Common Stock, net 17,653 - Proceeds from issuance of Preferred Stock, net 14,205,746 4,216,621 Proceeds from issuance of notes payable 450,178 - Repayment of capital lease obligations (37,159) (16,275) ------------ ------------ Net cash provided by financing activities 14,636,418 4,200,346 ------------ ------------ Net increase in cash and cash equivalents 947,693 1,817,926 Cash and cash equivalents at beginning of year 1,994,512 176,586 Cash and cash equivalents at end of year $ 2,942,205 $ 1,994,512 ============ ============ SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES: Common Stock issued for services rendered $ 6,000 $ 36,271 ============ ============ Preferred Stock issued for services rendered $ 249,551 $ 74,900 ============ ============ Common Stock issued for amendment to license agreement $ 10,000 $ - ============ ============ Preferred Stock issued upon conversion of notes payable $ 450,178 $ - ============ ============ Acquisition of property and equipment under capital leases $ - $ 222,335 ============ ============
The accompanying notes are an integral part of these financial statements. 8 10 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Cooke Pharma (the "Company"), was incorporated in California on April 21, 1995 to develop formulations for the treatment of atherosclerosis through an understanding of the role of endothelium-derived nitric oxide in the disease process. In 1998, the Company launched HeartBar(R), the first medical food developed for the dietary management of cardiovascular disease. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The Company's financial statements have been prepared on a basis of accounting which contemplates realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred cumulative losses of $17 million through December 31, 1999. The continued existence of the Company is dependent on the Company's ability to obtain adequate funding and eventually establish profitable operations (see Note 9 - Subsequent Events). The financial statements do not include any adjustments relating to the recoverability of assets and satisfaction and classification of liabilities that might be necessary should the Company be unable to continue in existence. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the time of purchase to be cash equivalents. CONCENTRATION OF CREDIT RISK AND RISKS AND UNCERTAINTIES The Company's cash and cash equivalents are maintained with two financial institutions in the United States. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company operates in one business segment in the United States. To achieve profitable operations, the Company must successfully manufacture and market its product. These can be no assurance that the product can be manufactured at an acceptable cost or that the product will be successfully marketed. These factors could have a material adverse effect upon the Company's financial results. The Company sells primarily to wholesalers and retailers accounting for over 75% of the Company's revenues. For the year ended December 31, 1999, the Company had five primary customers. 9 11 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- REVENUE RECOGNITION Revenues, other than those earned under consignment agreements, are recognized when products are shipped. Revenues under consignment agreements are recognized when product is sold to a third party by the consignee. INVENTORIES Inventories are stated at the lower of cost, determined on a first-in-first out method, or market. PROPERTY AND EQUIPMENT Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives, generally three to ten years. Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful lives or the lease term. RESEARCH AND DEVELOPMENT Research and development costs are charged to operations as incurred. STOCK-BASED COMPENSATION The Company accounts for stock-based employee compensation arrangements in accordance with provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB No. 25") and complies with the disclosure provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123"). The Company accounts for stock issued to non-employees in accordance with the provisions of SFAS No. 123 and Emerging Issue Task Force No. 96-18, "Accounting for Equity Instruments that are issued to other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services." INCOME TAXES The Company accounts for income taxes under the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. RECENT ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board issued ("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes new standards of accounting and reporting for derivative instruments and hedging activities. In July 1999, the Financial Accounting Standards Board issued ("SFAS No. 137"), "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133." SFAS No. 137 deferred the effective date until fiscal years beginning after June 15, 2000. The Company has not engaged in hedging activities or invested in derivative instruments. 10 12 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 3. INVENTORY Inventories consist of the following:
DECEMBER 31, 1999 1998 Finished goods $ 1,905,602 $ 153,093 Less: Reserve for obsolescence (511,760) - ----------- ---------- $ 1,393,842 $ 153,093 =========== ==========
4. PROPERTY AND EQUIPMENT Property and equipment consist of the following:
DECEMBER 31, 1999 1998 Furniture and fixtures $ 92,950 $ 92,169 Computer and equipment 273,863 267,767 Leasehold improvements 136,418 136,418 --------- --------- 503,231 496,354 Less: Accumulated depreciation and amortization (144,802) (44,692) --------- --------- Property and equipment, net $ 358,429 $ 451,662 ========= =========
Property and equipment includes $222,335 of computer equipment under capital leases at December 31, 1999 and 1998. Accumulated amortization of assets under capital leases totaled $62,924 and $18,507 at December 31, 1999 and 1998, respectively. 5. COMMITMENTS In July 1998, the Company entered into a noncancelable operating lease for a facility which expires in June 30, 2003. Rent expense for the years ended December 31, 1999 and 1998 was $68,000 and $54,910, respectively. 11 13 Future minimum lease payments under noncancelable operating and capital leases are as follows:
YEAR ENDED CAPITAL OPERATING DECEMBER 31, LEASES LEASES 2000 $ 56,470 $ 70,020 2001 56,470 72,540 2002 56,470 75,060 2003 32,941 38,160 -------- -------- Total minimum lease payments 202,351 $255,780 Less: Amount representing interest 33,450 ======== -------- Present value of capital lease obligations 168,901 Less: Current portion 41,130 -------- Long-term portion of capital lease obligations $127,771 ========
In May 1999, the Company entered into an Accounts Receivable Purchase Line (the "Line") with a Bank. Under the Line, the Company was able to sell to the Bank receivables up to a limit of $2,000,000. The Line expired in May 2000. At December 31, 1999, no amounts were due to the Bank under the line. 12 14 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- In March 1997, the Company entered into a license agreement with Leland Stanford Junior University. Under this agreement the Company paid an upfront license fee of $50,000 and issued the licensor 50,000 shares of Common Stock. The Company is also obliged to pay a $10,000 annual royalty and an additional royalty on net sales of its products. The agreement expires 10 years from the date of the first commercial sale of the Company's product. In April 1999, the Company entered into a license agreement with New York Medical College. Under this agreement the Company paid an upfront license fee of $25,000 and issued the licensor 35,000 shares of Series C Preferred Stock. A further $25,000 is payable by the Company in April 2000 as well as a $10,000 annual royalty on net sales of its products. The agreement expires at the end of the term for which the Patent rights are granted. 6. STOCKHOLDERS' EQUITY In June 1999, the Company issued convertible promissory notes for gross proceeds of $450,178. These notes were converted to Series D Preferred Stock in September 1999. Convertible Preferred Stock at December 31, 1999 consists of the following:
PROCEEDS NET OF SHARES LIQUIDATION ISSUANCE SERIES AUTHORIZED OUTSTANDING AMOUNT COSTS A 664,999 624,999 $ 874,999 $ 842,204 B 4,000,000 3,162,936 4,428,111 4,428,111 C 2,000,000 1,205,149 2,410,298 2,410,298 D 7,000,000 5,000,000 12,500,000 12,358,587 ---------- --------- ----------- ----------- 13,664,999 9,993,084 $20,213,408 $20,039,200 ========== ========= =========== ===========
The holders of Preferred Stock have various rights and preferences as follows: PREFERRED STOCK VOTING RIGHTS Holders of Series A, Series B, Series C, and Series D preferred stock ("Preferred Stock"), are entitled to the number of votes equal to the number of shares of common stock into which such shares of preferred stock could be converted. 13 15 Each Series of Preferred Stock shall be convertible into such a number of duly paid and non-assessable shares of common stock as is determined by dividing $1.40, $1.40, $2.00, and $2.50 for Series A, B, C and D, respectively, by the conversion price of that series, in effect at the time of the conversion. The initial conversion price shall be subject to adjustment, in order to adjust the number of shares of common stock into which each series of preferred stock is convertible. Each share of Preferred Stock shall automatically be converted into shares of common stock at the then effective conversion price upon the closing of the offer and sale of capital stock to the public involving a pre-sale capitalization of at least $100,000,000 with gross proceeds of at least $30,000,000 for the account of the Company. 14 16 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- DIVIDENDS The holders of outstanding shares of Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, non-cumulative dividends at the annual rate of $0.11, $0.11, and $0.16 for Series A, B, and C, respectively, and cumulative dividends at an annual rate of $0.25 for Series D, payable in preference and priority to any payment of any dividend on common stock of the Company. No dividends or other distributions shall be made with respect to common stock, until all declared dividends on the Preferred Stock have been paid. No dividends on Preferred Stock or common stock have been declared by the Board from inception through December 31, 1999. LIQUIDATION PREFERENCES In the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, holders of Preferred Stock shall be entitled to be paid, before any payment shall be made in respect of the Company's common stock, an amount equal to $1.40, $1.40, $2.00, and $2.50, for series A, B, C and D Preferred Stock, respectively, plus all declared and unpaid dividends thereon. After payment has been made to the holders of Preferred Stock under the aforementioned liquidation preferences, the remaining assets and funds of the Corporation legally available for distribution to shareholders, if any, shall be distributed ratably among the holders of Preferred Stock and the holders of Common Stock based upon the relative number of shares of Common Stock then outstanding assuming conversion into Common Stock of the total number of shares of Preferred Stock outstanding, provided however, that at such time as the distribution of liquidation of preferences equals $2.80, $2.80, $4.00 and $5.00, for series A, B, C and D, respectively, the holders of Preferred Stock will not be entitled to any further distributions. In March 1998, the Company issued warrants to purchase 519,363 shares of Common Stock to selected Series B Preferred shareholders at an exercise price of $1.40. The warrants expire in March 2003. In July and August 1999, the Company issued warrants to purchase 357,398,436 shares of Common Stock to selected Series D Preferred shareholders at an exercise price of $2.50. The warrants expire in March 2000. The warrants were valued using the Black-Scholes pricing model. The resulting fair value was not material. 7. STOCK OPTION PLAN In 1995, the Company authorized the 1995 Stock Option Plan (the "Plan") under which the Board of Directors may issue incentive stock options to employees, including officers and members of the Board of Directors, who are also employees, and nonqualified stock options to employees, officers, directors and consultants and advisors of the Company. Under the Plan, incentive options to purchase the Company's common shares may be granted to employees at prices not lower than fair market value at the date of grant, as determined by the Board of Directors. Nonstatutory options (options which do not qualify as incentive options) may be granted to key employees, including directors and consultants, at prices not lower than 85% of fair market value at the date of grant (110% in certain cases), as determined by the Board of Directors. 15 17 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- Activity under the plan is as follows:
OPTIONS OUTSTANDING ---------------------------- WEIGHTED AVERAGE SHARES EXERCISE AVAILABLE NUMBER PRICE FOR GRANT OF SHARES PER SHARE Balances at December 31, 1997 658,400 2,328,600 $0.01-$2.50 Additional shares authorized 1,500,000 - - Options granted (1,041,600) 1,041,600 0.50 Options exercised - (72,539) 0.57 Options canceled 1,530,007 (1,530,007) 1.15 ----------- ----------- Balances at December 31, 1998 2,646,807 1,767,654 - Reduction in shares authorized (272,000) - - Options granted (1,262,528) 1,262,528 0.53 Options exercised - (44,667) 0.01 Options canceled 128,800 (128,800) 0.40 ----------- ----------- Balances at December 31, 1999 1,241,079 2,856,715 $ 0.40 =========== ===========
The options outstanding and currently exercisable by exercise price at December 31, 1999 are as follows:
OPTIONS CURRENTLY OPTIONS OUTSTANDING EXERCISABLE - -------------------------------------------------------------------- ---------------------------- WEIGHTED AVERAGE WEIGHTED WEIGHTED REMAINING AVERAGE AVERAGE EXERCISE NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE PRICE OUTSTANDING LIFE (YEARS) PRICE OUTSTANDING PRICE $0.01-$0.03 725,137 6.5 $0.03 731,250 $0.02 $0.10 140,000 6.8 $0.10 105,000 $0.10 $0.50 1,759,683 8.8 $0.50 302,066 $0.50 $0.75 201,895 9.8 $0.75 - - $2.50 30,000 7.5 $2.50 15,000 $2.50 --------- --------- 2,856,715 8.2 $0.40 1,153,316 $0.19 ========= =========
16 18 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- FAIR VALUE DISCLOSURES Had compensation cost for the Company's stock-based compensation plan been determined based on the fair value at the grant dates for the awards under a method prescribed by SFAS No. 123, there would have been no material impact on the Company's net loss for 1999 and 1998. The fair value of each employee option grant is estimated on the date of grant using the minimum value method assuming an expected life of five years, risk-free interest rate of 4.73% to 6.18% and expected dividend yield of zero percent. The weighted-average per share fair value of options granted to employees during 1999 and 1998 was $0.121 and $0.119, respectively. For options granted to consultants and other third-parties, the Company determined the fair value of the options using the Black-Scholes option pricing model with the following assumptions: expected life of five years; risk-free interest rates of 4.73% to 6.18%, expected dividend yield of zero percent and volatility of 60%. The resulting compensation cost was not material. 8. INCOME TAXES The tax effects of temporary differences that give rise to significant components of the net deferred tax asset are as follows:
DECEMBER 31, 1999 1998 DEFERRED TAX ASSETS: Net operating loss carryforwards $ 5,853,000 $ 926,000 Capitalized start-up costs 15,000 15,000 Capitalized research and development costs 326,000 326,000 Other 239,000 26,000 ----------- ----------- 6,433,000 1,293,000 Less: Valuation allowance (6,433,000) (1,293,000) ----------- ----------- $ - $ - =========== ===========
At December 31, 1999, the Company had federal and state net operating loss carryforwards of approximately $15,671,000 and $8,996,000, respectively, and federal and state credits of approximately $57,000 and $60,000, respectively, available to offset future regular and alternative minimum taxable income. The Company's federal and state net operating loss carryforwards expire between 2005 and 2019, if not used before such time to offset future taxable income or tax liabilities. The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. In the event the Company has a change in ownership, utilization of the carryforwards could be restricted. The Company has established a 100% valuation allowance because at this time it appears more likely than not that no benefit will be realized for its deferred tax assets. 17 19 COOKE PHARMA, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 9. SUBSEQUENT EVENTS In April 2000, the Company issued 1,220,000 shares of Series D Preferred Stock at $2.50 per share for gross proceeds of $3,050,000. On November 4, 2000, the Company signed a letter of intent with a third party for the third party to acquire all the assets of the Company. 10. SUBSEQUENT EVENT TO DATE OF THE REPORT OF INDEPENDENT ACCOUNTANTS (UNAUDITED) On December 28, 2000, the Company completed the sale of all its assets and certain liabilities to United Therapeutics Corporation (United Therapeutics). The Company received 294,635 shares of common stock of United Therapeutics valued at approximately $15.7 million, subject to adjustment. In addition, the Company will receive cash royalties on future product sales of up to $49 million. The sale will be accounted for as a purchase. 18 20 COOKE PHARMA, INC. BALANCE SHEET AS OF SEPTEMBER 30, 2000 (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 608,082 Accounts receivable, net of allowance of $997,982 525,537 Inventory 339,660 Other current assets and receivables 566,961 ------------ Total current assets 2,040,240 Property and equipment, net 320,314 Other assets 16,250 ------------ Total assets $ 2,376,804 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 877,070 Accrued expenses 122,952 Capital lease obligation 44,385 ------------ Total current liabilities 1,044,407 Capital lease obligation - less current portion 94,063 ------------ 1,138,470 ------------ Shareholders' equity: Series A Preferred Stock, no par value Authorized: 664,999 shares; Issued and outstanding: 624,999 in 2000 (liquidation value: $874,999) 842,204 Series B Preferred Stock, no par value Authorized: 4,000,000 shares: Issued and outstanding: 3,162,936 in 2000 (liquidation value: $4,428,111) 4,428,111 Series C Preferred Stock, no par value Authorized: 2,000,000 shares; Issued and outstanding, 1,205,149 in 2000 (liquidation value: $2,410,298) 2,410,298 Series D Preferred Stock, no par value Authorized: 7,000,000; Issued and Outstanding, 6,220,000 in 2000 (liquidation value: $12,500,000) 15,374,082 Common stock, no par value Authorized; 375,000,000 Issued and outstanding: 4,084,747 in 2000 respectively 214,741 Accumulated deficit (22,031,102) ------------ Total shareholders' equity 1,238,334 ------------ Total liabilities and shareholders' equity $ 2,376,804 ============
The accompanying notes are an integral part of these financial statements. 19 21 COOKE PHARMA, INC. STATEMENTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999 (UNAUDITED)
2000 1999 Revenues $ 1,925,972 $ 1,370,725 ------------ ------------ Operating expenses: Cost of revenues 1,388,766 1,410,476 Research and development 398,293 844,884 Sales and marketing 4,333,122 8,390,081 General and administrative 893,827 1,470,010 ------------ ------------ Total operating expenses 7,014,008 12,115,451 ------------ ------------ Loss from operations (5,088,036) (10,744,726) Interest income, net 44,637 69,160 ------------ ------------ Net loss $ (5,043,399) $(10,675,566) ------------ ------------
The accompanying notes are an integral part of these financial statements. 20 22 COOKE PHARMA, INC. STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999 (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2000 1999 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (5,043,399) $(10,675,566) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 38,115 75,082 Reserve for obsolete inventories 21,961 511,760 Issuance of Common Stock in exchange for services rendered - 6,000 Issuance of Preferred Stock in exchange for services rendered - 249,551 Issuance of Common Stock in exchange for amendment to license agreement - 10,000 Changes in assets and liabilities: Accounts receivable (284,880) (510,325) Inventory 1,032,221 (1,935,338) Other assets (545,896) (31,498) Accounts payable (518,207) 319,698 Accrued expenses (53,912) 384,835 ------------ ------------ Net cash used in operating activities (5,353,997) (11,595,801) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment - (5,865) ------------ ------------ Net cash used in investing activities - (5,865) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of Common Stock, net 34,832 17,653 Proceeds from issuance of Preferred Stock, net 3,015,495 14,205,746 Proceeds from issuance of notes payable - 450,178 Repayment of capital lease obligations (30,453) (28,458) ------------ ------------ Net cash provided by financing activities 3,019,874 14,645,119 ------------ ------------ Net increase in cash and cash equivalents (2,334,123) 3,043,453 Cash and cash equivalents at beginning of period 2,942,205 1,994,512 ------------ ------------ Cash and cash equivalents at end of period $ 608,082 $ 5,037,965 ============ ============ SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES: Common Stock issued for services rendered $ - $ 6,000 ============ ============ Preferred Stock issued for services rendered $ - $ 249,551 ============ ============ Common Stock issued for amendment to license agreement $ - $ 10,000 ============ ============ Preferred Stock issued upon conversion of notes payable $ - $ 450,178 ============ ============
The accompanying notes are an integral part of these financial statements. 21 23 COOKE PHARMA INC. NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS (UNAUDITED) 1. Interim Financial Statements The accompanying unaudited financial statements of Cooke Pharma, Inc. (the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information. In the opinion of the Company's management, the financial statements reflect all adjustments necessary to present fairly the results of the Company's financial position as of September 30, 2000 and its operations and cash flows for the nine month periods ended September 30, 2000 and 1999. These adjustments are of a normal recurring nature. The results of operations for the nine months ended September 30, 2000 are not necessarily indicative of future financial results. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Form 8-K/A. 2. Barter Transactions The Company values barter exchanges of its inventory at the cost of the inventory. Profit is not recognized on these transactions. During the nine month period ended September 30, 2000, the Company exchanged inventory for credits to be used in the future. The barter credits are classified as other current assets and totaled approximately $307,000 at September 30, 2000. 3. Subsequent Event On December 28, 2000, the Company completed the sale of all its assets and certain liabilities to United Therapeutics Corporation (United Therapeutics). The Company received 294,635 shares of common stock of United Therapeutics valued at approximately $15.7 million, which number of shares is subject to adjustment within one year of the closing of the transaction. In addition, the Company will receive cash royalties on future product sales of up to $49 million. The sale will be accounted for as a purchase. 22 24 UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The unaudited pro forma combined balance sheet gives effect to the acquisition of Cooke Pharma, Inc., completed by United Therapeutics Corporation on December 28, 2000, as if it had occurred on September 30, 2000. The unaudited pro forma combined statement of operations for the year ended December 31, 1999 gives effect to the acquisition of Cooke Pharma, Inc. as if it had occurred on January 1, 1999. The unaudited pro forma combined statement of operations for the nine months ended September 30, 2000 gives effect to the acquisition of Cooke Pharma, Inc. as if it had occurred on January 1, 2000. The unaudited pro forma combined balance sheet and statements of operations are based on available information and on certain assumptions and adjustments described in the accompanying notes which United Therapeutics believes are reasonable. The unaudited pro forma combined statements of operations are provided for informational purposes only and do not purport to present the results of operations of United Therapeutics had the transaction assumed therein occurred on or as of the date indicated, nor is it necessarily indicative of the results of operations which may be achieved in the future. The unaudited pro forma combined balance sheet, statements of operations and related notes should be read in conjunction with the consolidated financial statements of United Therapeutics and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 31, 1999 and the financial statements of Cooke Pharma, Inc. and notes thereto included in this Current Report on Form 8-K. 23 25 UNITED THERAPEUTICS CORPORATION UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 2000 (DOLLARS IN THOUSANDS)
HISTORICAL HISTORICAL ACQUISITION UNITED COOKE PHARMA,INC. ADJUSTMENTS COMBINED THERAPEUTICS ----------------- ----------- -------- CORPORATION ----------- Assets (a) (b) (c) - ------ Current assets: Cash and cash equivalents $ 224,287,827 $ 608,082 $ - $ 224,895,909 Investments 14,256,455 - - 14,256,455 Accounts receivable 581,969 525,537 - 1,107,506 Inventories 1,207,272 339,660 - 1,546,932 Prepaid expense 46,996 - - 46,996 Other current assets 454,859 566,961 - 1,021,820 ------------- ------------ ------------ -------------- Total current assets 240,835,378 2,040,240 - 242,875,618 ------------- ------------ ------------ -------------- Property, plant and equipment, net 3,918,618 320,314 - 4,238,932 Certificate of deposit 563,253 - - 563,253 Goodwill and other intangible assets, net 2,094,339 - 7,533,330 (d) 9,627,669 Investment in affiliate 4,782,635 - - 4,782,635 Other 247,022 16,250 - 263,272 ------------- ------------ ------------ -------------- Total assets $ 252,441,245 $ 2,376,804 $ 7,533,330 $ 262,351,379 ============= ============ ============ ============== Liabilities and Stockholders' Equity - ------------------------------------ Current liabilities: Accounts payable $ 3,328,785 $ 877,070 $ 203,434 (e) $ 4,409,289 Accrued expenses 4,533,305 122,952 - 4,656,257 Current portion of notes and leases payable 29,247 44,385 - 73,632 ------------- ------------ ------------ -------------- Total current liabilities 7,891,337 1,044,407 203,434 9,139,178 Notes and leases payable, excluding current portion 1,762,778 94,063 - 1,856,841 Other liabilities 13,823 - - 13,823 ------------- ------------ ------------ -------------- Total liabilities 9,667,938 1,138,470 203,434 11,009,842 Stockholders' equity: Preferred stock - 23,054,695 (23,054,695) (f) - Common stock 201,846 214,741 (211,795) (f) 204,792 Additional paid-in capital 335,580,796 - 15,668,984 (f) 351,249,780 Accumulated deficit (93,009,335) (22,031,102) 14,927,402 (g) (100,113,035) ------------- ------------ ------------ -------------- Total stockholders' equity 242,773,307 1,238,334 7,329,896 251,341,537 ------------- ------------ ------------ -------------- Total liabilities and stockholders' equity $ 252,441,245 $ 2,376,804 $ 7,533,330 $ 262,351,379 ============= ============ ============ ==============
See notes to unaudited pro forma combined financial statements. 24 26 UNITED THERAPEUTICS CORPORATION UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
HISTORICAL HISTORICAL ACQUISITION UNITED COOKE PHARMA, INC. ADJUSTMENTS COMBINED THERAPEUTICS ------------------ ----------- -------- CORPORATION ----------- Revenues: (h) (i) (c) Sales $ 225,245 $ 1,712,684 - $ 1,937,929 Grant revenue (note 3) 211,250 - - 211,250 ------------ ------------ ------------ ------------ Total revenues 436,495 1,712,684 - 2,149,179 ------------ ------------ ------------ ------------ Operating expenses: Research and development 30,715,255 1,035,658 349,035 (j) 32,099,948 Sales and marketing - 11,215,483 - 11,215,483 General and administrative 4,977,983 1,794,335 198,863 (j) 6,971,181 Cost of sales 164,147 1,528,873 85,634 (k) 1,778,654 ------------ ------------ ------------ ------------ Total operating expenses 35,857,385 15,574,349 633,532 52,065,266 ------------ ------------ ------------ ------------ Loss from operations (35,420,890) (13,861,665) (633,532) (49,916,087) Other income (expense): Interest income 1,925,326 117,773 - 2,043,099 Interest expense (57,744) (19,313) - (77,057) Other - net 50,064 - - 50,064 ------------ ------------ ------------ ------------ Total other income 1,917,646 98,460 - 2,016,106 ------------ ------------ ------------ ------------ Net loss before income tax (33,503,244) (13,763,205) (633,532) (47,899,981) Income tax (note 7) (3,454) - - (3,454) ------------ ------------ ------------ ------------ Net loss $(33,506,698) $(13,763,205) $ (633,532) $(47,903,435) ============ ============ ============ ============ Net loss per common share - basic and diluted (l) $ (2.51) $ (3.50) ============ ============ Weighted average number of common shares outstanding - basic and diluted (l) 13,374,294 294,635 13,668,929 ============ ============ ============
See notes to unaudited pro forma combined financial statements. 25 27 UNITED THERAPEUTICS CORPORATION UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000
HISTORICAL HISTORICAL ACQUISITION UNITED COOKE PHARMA, INC. ADJUSTMENTS COMBINED THERAPEUTICS ------------------ ----------- -------- CORPORATION ----------- (m) (n) (c) Revenues: Sales $ 1,109,591 $ 1,925,972 $ - $ 3,035,563 Grant revenue 150,000 - - 150,000 ------------ ----------- ------------ ------------ Total revenues 1,259,591 1,925,972 - 3,185,563 ------------ ----------- ------------ ------------ Operating expenses: Research and development 42,848,352 398,293 261,776 (o) 43,508,421 Sales and marketing - 4,333,122 - 4,333,122 General and administrative 7,924,105 893,827 149,147 (o) 8,967,079 Cost of sales 918,417 1,388,766 96,299 (p) 2,403,482 ------------ ----------- ------------ ------------ Total operating expenses 51,690,874 7,014,008 507,222 59,212,104 ------------ ----------- ------------ ------------ Loss from operations (50,431,283) (5,088,036) (507,222) (56,026,541) Other income (expense): Interest income 6,709,370 78,903 - 6,788,273 Interest expense (90,201) (34,266) - (124,467) Other - net 76,178 - - 76,178 ------------ ----------- ------------ ------------ Total other income 6,695,347 44,637 - 6,739,984 ------------ ----------- ------------ ------------ Net loss before income tax (43,735,936) (5,043,399) (507,222) (49,286,557) Income tax - - - - ------------ ----------- ------------ ------------ Net loss $(43,735,936) $(5,043,399) $ (507,222) $(49,286,557) ============ =========== ============ ============ Net loss per common share - basic and diluted (l) $ (2.32) $ (2.57) ============ ============ Weighted average number of common shares outstanding - basic and diluted (l) 18,871,366 294,635 19,166,001 ============ ============ ============
See notes to unaudited pro forma combined financial statements. 26 28 UNITED THERAPEUTICS CORPORATION NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS Note 1 - Pro Forma Adjustments for Acquisition of Cooke Pharma, Inc. a. Balance sheet of United Therapeutics Corporation as of September 30, 2000. b. Balance sheet of Cooke Pharma, Inc. as of September 30, 2000. c. Represents adjustments for the Cooke Pharma, Inc. acquisition based on a purchase price of approximately $15.7 million through the issuance of 294,635 shares of United Therapeutics' common stock. Cooke Pharma may receive additional shares from the Company on the first anniversary of the closing if the average closing price of the Company's common stock over the 90 calendar days prior to the anniversary is less than $90.00 per share, in order that the value of all shares issued to Cooke Pharma equals the value of the shares issued to Cooke Pharma at the closing at $90.00 per share. If, however, such average closing price is less than $51.65 per share, the additional shares to be issued to Cooke Pharma shall not exceed a value equal to the difference between $90.00 and $51.65 per share. If the average anniversary closing price is greater than $99.00 per share, the number of shares of the Company's common stock issued as of the date of closing shall be adjusted as if it had a value of $99.00 at closing (for a total value not to exceed approximately $29.2 million), and the Company shall receive the remaining shares following the adjustment. The 294,635 shares of United Therapeutics' common stock were valued at the fair value of the 294,635 shares of stock issued using an average NASDAQ closing price of $14.84 which totalled approximately $4.4 million, plus the value of the potential additional shares that may be issued which totalled approximately $11.3 million (equivalent to the minimum guaranteed share price of $90.00 per share less the floor established in the agreement of $51.65 multiplied by 294,635 shares). Additionally, the Company agreed to pay a royalty ranging from 5.0% to 6.0% of net sales up to a maximum of $49.0 million in royalty payments. d. Represents the amount of purchase price allocated to the Cooke Pharma assembled workforce, core technology, patents, and the HeartBar(R) trade name. These intangibles totaled approximately $7.5 million and will be amortized in a straight line manner over terms of three to eighteen years. e. Represents the estimated legal and other costs related to the Cooke Pharma acquisition. f. Represents the elimination of Cooke Pharma's stockholder equity accounts, and the issuance of 294,635 shares of United Therapeutics' common stock valued as described above in note c. g. Represents the charge for acquired in-process research & development of $7.1 million and the elimination of Cooke Pharma's accumulated deficit. The charge is nonrecurring and therefore not included in the pro forma statements of operations. h. Statement of operations for United Therapeutics for the year ended December 31, 1999. i. Statement of operations for Cooke Pharma for the year ended December 31, 1999. 27 29 j. Represents amortization expense totaling approximately $548,000 related to the intangibles acquired in the Cooke Pharma acquisition. k. Represents royalty expenses totaling approximately $86,000. l. For the pro forma combined net loss per share (basic and diluted) and the weighted average share outstanding calculation, 294,635 shares of United Therapeutics common stock have been included as if the acquisition occurred on January 1, 1999 and January 1, 2000 for the pro forma unaudited financial statements for the year ended December 31, 1999 and for the nine months ended September 30, 2000, respectively. m. Statement of operations for United Therapeutics for the nine months ended September 30, 2000. n. Statement of operations for Cooke Pharma for the nine months ended September 30, 2000. o. Represents amortization expense totaling approximately $411,000 related to the intangibles acquired in the Cooke Pharma acquisition. p. Represents royalty expenses totaling approximately $96,000. 28 30 UNITED THERAPEUTICS CORPORATION EXHIBIT INDEX Exhibit No. Description 23.1 Consent of PricewaterhouseCoopers LLP EX-23.1 2 w46220ex23-1.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Forms S-3 (Nos. 333-41866, 333-40598, and 333-93853) and on Form S-8 (No. 333-95419) of United Therapeutics Corporation of our report dated July 28, 2000 relating to the financial statements of Cooke Pharma, Inc., which appears in the Current Report on Form 8-K of United Therapeutics Corporation dated March 2, 2001. /s/ PricewaterhouseCoopers LLP San Jose, California March 2, 2001 -----END PRIVACY-ENHANCED MESSAGE-----