-----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, EDZ5C/8ITtwvxDu91lcNuA95ib9YbrZ/3WVI/BDHbn/hhlOKTQa5HiS8vzfEBHhM 8HVmcSljEo0Av8yQS4OiNA== 0000950170-96-000193.txt : 19960515 0000950170-96-000193.hdr.sgml : 19960515 ACCESSION NUMBER: 0000950170-96-000193 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA LABORATORIES INC CENTRAL INDEX KEY: 0000821995 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 592758596 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10352 FILM NUMBER: 96563160 BUSINESS ADDRESS: STREET 1: 2665 S BAYSHORE DR PH 11-B CITY: MIAMI STATE: FL ZIP: 33133 BUSINESS PHONE: 305-860-16 MAIL ADDRESS: STREET 1: 2665 SOUTH BAYSHORE DRIVE PH 11-B CITY: MIAMI STATE: FL ZIP: 33133 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10 - Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 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 1-10352 COLUMBIA LABORATORIES, INC. (Exact name of Company as specified in its charter) DELAWARE 59-2758596 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2665 SOUTH BAYSHORE DRIVE MIAMI, FLORIDA 33133 (Address of principal executive offices) (Zip Code) Company's telephone number, including area code: (305) 860-1670 Indicate by check mark whether the Company (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 Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No __ Number of shares of the Common Stock of Columbia Laboratories, Inc. issued and outstanding as of April 30, 1996: 27,812,498 COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following unaudited, condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with generally accepted accounting principles. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the financial information for the interim periods reported have been made. Results of operations for the three months ended March 31, 1996 are not necessarily indicative of the results for the year ending December 31, 1996. 2 of 11
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 1996 1995 ---- ---- (Unaudited) ASSETS: Current assets- Cash and cash equivalents $ 13,284,135 $ 1,628,952 Accounts receivable, net 1,431,775 1,266,964 Inventories 836,636 953,913 Prepaid expenses 183,889 213,723 ------------ ------------ Total current assets 15,736,435 4,063,552 Property and equipment, net 875,396 922,093 Intangible assets, net 1,508,302 1,563,817 Other assets 1,066,118 1,137,208 ------------ ------------ $ 19,186,251 $ 7,686,670 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities- Current portion of long-term debt $ 139,510 $ 156,751 Accounts payable 2,343,099 3,423,339 Accrued expenses 953,376 956,647 Deferred revenue 1,069,470 1,081,522 Estimated liability for returns and allowances 406,567 413,899 ------------ ------------ Total current liabilities 4,912,022 6,032,158 ------------ ------------ Other long-term liabilities 100,718 98,079 Stockholders' equity- Preferred stock, $.01 par value; 1,000,000 shares authorized; Series A Convertible Preferred Stock, 1,323 shares issued and outstanding in 1996 and 1995 13 13 Series B Convertible Preferred Stock, 1,750 shares issued and outstanding in 1996 and 1995 18 18 Common stock, $.01 par value; 40,000,000 shares authorized; 27,726,873 and 25,982,373 shares issued and outstanding in 1996 and 1995, respectively 277,269 259,824 Capital in excess of par value 87,307,068 73,067,014 Accumulated deficit (73,453,503) (71,812,828) Cumulative translation adjustment 42,646 42,392 ------------ ------------ Total stockholders' equity 14,173,511 1,556,433 ------------ ------------ $ 19,186,251 $ 7,686,670 ============ ============
See notes to condensed consolidated financial statements 3 of 11 COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 1996 1995 ---- ---- NET SALES $ 1,322,966 $ 3,205,366 COST OF GOODS SOLD 593,395 1,631,813 ------------ ------------ Gross profit 729,571 1,573,553 ------------ ------------ OPERATING EXPENSES: Selling and distribution 626,170 643,775 General and administrative 880,867 652,290 Research and development 2,403,677 1,429,511 ------------ ------------ Total operating expenses 3,910,714 2,725,576 ------------ ------------ Loss from operations (3,181,143) (1,152,023) ------------ ------------ OTHER INCOME (EXPENSE): License fees 1,500,000 -- Interest income 47,041 5,787 Interest expense (3,632) (71,569) Other, net (2,941) 185,027 ------------ ------------ 1,540,468 119,245 ------------ ------------ Net loss $ (1,640,675) $ (1,032,778) ============ ============ NET LOSS PER COMMON SHARE $ (.06) $ (.04) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 26,485,000 24,931,000 ============ ============ See notes to condensed consolidated financial statements 4 of 11
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1996 1995 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (1,640,675) $(1,032,778) Adjustments to reconcile net loss to net cash used for operating activities- Depreciation and amortization 124,847 127,636 Changes in assets and liabilities- (Increase) decrease in: Accounts receivable (166,432) (759,767) Inventories 117,278 149,499 Prepaid expenses 146,320 91,406 Other assets 63,240 (3,400) Increase (decrease) in: Accounts payable (1,059,689) 1,259,354 Accrued expenses (109,694) (74,764) Deferred revenue (12,052) -- Estimated liability for returns and allowances (7,332) (10,622) ------------ ----------- Net cash used for operating activities (2,544,189) (253,436) ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (26,750) (8,052) ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of notes payable and long-term debt (17,242) -- Proceeds from issuance of common stock 12,205,950 78,147 Proceeds from exercise of options and warrants 2,054,189 -- ------------ ----------- Net cash provided by financing activities 14,242,897 78,147 ------------ -----------
(Continued) 5 of 11 COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued) Three Months Ended March 31, 1996 1995 ---- ---- EFFECT OF EXCHANGE RATE CHANGES ON CASH (16,774) (80,614) ------------ --------- NET DECREASE IN CASH AND CASH EQUIVALENTS 11,655,184 (263,955) CASH AND CASH EQUIVALENTS, beginning of period 1,628,951 689,749 ------------ --------- CASH AND CASH EQUIVALENTS, end of period $ 13,284,135 $ 425,794 ============ ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid during the period $ 7,835 $ 12,435 ============ ========= SUPPLEMENTAL SCHEDULE OF NONCASH OPERATING AND FINANCING ACTIVITIES: During the three months ended March 31, 1995, the Company issued 85,382 shares of Common Stock in payment of accrued interest, which totaled $310,362. In addition, the Company issued 1,188,523 shares of Common Stock in repayment of long-term debt which totaled $4,476,707. As of March 31, 1996, dividends on the Series A Preferred Stock of $100,718 ($2,639 relating to the three months ended March 31, 1996) have been earned but have not been declared and are included in other long-term liabilities in the March 31, 1996 condensed consolidated balance sheet. See notes to condensed consolidated financial statements 6 of 11 COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) SIGNIFICANT ACCOUNTING POLICIES: The accounting policies followed for quarterly financial reporting are the same as those disclosed in Note (1) of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. 7 of 11 COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents increased from approximately $1.6 million at December 31, 1995 to approximately $13 million at March 31, 1996, primarily as a result of a private placement in March 1996 of 1,358,000 shares of Common Stock which raised net proceeds of approximately $12 million, and approximately $2 million received from the exercise of options and warrants offset by approximately $2.5 million of net cash used in operations. In May 1995, the Company entered into a worldwide, except for South Africa, license and supply agreement with American Home Product Corporation ("AHP") under which the Wyeth-Ayerst division of AHP will market Crinone(R). Under the terms of the agreement, to date the Company has received $9.5 million in milestone payments and will continue to receive additional milestone payments and a significant percentage of sales, which sales are expected to commence during late 1996. In December 1993, the Company entered into an Option and License Agreement with a French research group based in Marseille, France, pursuant to which it was granted an option to obtain an exclusive license to the North and South American rights to a potential AIDS treatment. The potential product has been granted a Clinical Trials Exemption ("CTX") in the United Kingdom and clinical trials in humans are now underway. In addition, an Investigational New Drug Application to start U.S. clinical trials has been approved. The purpose of these trials is to determine the optimal dosage in late stage seropositive patients. The option, which must be exercised upon the occurrence of certain events, expires in December 1998. Upon exercise of the option, the Company will be required to pay an additional $5 million. If the Company does not exercise its option upon the occurrence of certain events, the Company's rights to the option are terminated. In connection with the 1989 purchase of the assets of Bio-Mimetics, Inc., which assets consisted of the patents underlying the Company's Bioadhesive Delivery System, other patent applications and related technology, the Company pays Bio-Mimetics, Inc. a royalty equal to two percent of the net sales of products based on the Bioadhesive Delivery System, to an aggregate of $7.5 million. The Company is required to prepay a portion of the remaining royalty obligation, in cash or stock at the option of the Company, if certain conditions are met. As of March 31, 1996, the Company has outstanding exercisable options and warrants that, if exercised, would result in approximately $15 million of additional capital. However, there can be no assurance that such options or warrants will be exercised. Significant expenditures anticipated by the Company in the near future are concentrated on production commitments and research and development related to new products. The Company has committed to spend an aggregate of approximately $1.3 million on additional molding capacity at its suppliers during 1996 and 1997. As of March 31, 1996, the Company had available net operating loss carryforwards of approximately $39 million to offset its future U.S. taxable income. In accordance with Statement of Financial Accounting Standards No. 109, as of March 31, 1996, other assets in the accompanying consolidated balance sheet includes a deferred tax asset of approximately $14 million (consisting primarily of a net operating loss carryforward) which has been fully reserved as its ultimate realizability is not assured. 8 of 11 RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1996 VERSUS THREE MONTHS ENDED MARCH 31, 1995 Sales have decreased in 1996 as compared to 1995 due to the fact that Warner-Lambert did not order Replens(R) during the first quarter of 1996, combined with the fact that 1995 first quarter sales included the initial stocking of Legatrin PM(R). While the strategic alliance agreements in the United States and abroad have not produced desired unit sales as quickly as planned, the Company believes it has established effective working relationships with its partners which the Company believes form a solid foundation to build sales of Replens and the other products in the development pipeline. However, the Company is exploring alternatives to such strategic alliances where appropriate. In addition, upon granting of the European multistate licenses, Replens should become a reimbursable product in certain countries. The Company believes that sales of Replens in Europe should increase once the licenses are granted. The Company's success is dependent to a great extent on the marketing efforts of its strategic alliance partners, which the Company has limited ability to influence. Gross profit as a percentage of sales increased in 1996 as compared to 1995 primarily as a result of a change in product mix sold. Research and development expenditures have increased in 1996 as compared to 1995 primarily as a result of costs incurred in connection with the pivotal studies required for filing the New Drug Application for Crinone in the United States. License fees represent a milestone payment received in connection with the licensing agreement with AHP. As a result, the net loss for 1996 was $1,640,675 or $.06 per share as compared to a net loss in 1995 of $1,032,778 or $.04 per common share. 9 of 11 COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Certain claims and complaints have been filed or are pending against the Company with respect to various matters. In the opinion of management and counsel, all such matters are adequately reserved for or covered by insurance or, if not so covered, are without any or have little merit or involve such amounts that if disposed of unfavorably would not have a material adverse effect on the Company. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES As of May 13, 1996, dividends on the Series A Preferred Stock of $101,965 have been earned but have not been declared. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K None. 10 of 11 SIGNATURES 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 thereunto duly authorized. COLUMBIA LABORATORIES, INC. /s/ MARGARET J. ROELL ---------------------------------- MARGARET J. ROELL, Vice President- Finance and Administration, Chief Financial Officer DATE: MAY 14, 1996 11 of 11 EX-27 2
5 1 3-MOS DEC-31-1996 MAR-31-1996 13,284,135 0 1,537,212 105,437 836,636 15,736,435 1,798,502 923,106 19,186,251 4,912,022 0 0 31 277,269 13,896,211 19,186,251 1,322,966 1,322,966 593,395 593,395 3,910,714 0 3,632 (1,640,675) 0 (1,640,675) 0 0 0 (1,640,675) (.06) (.06)
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