-----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, POPB/9CrJZ/xDWpqqmsoJ6I4C3EHPfxifEtszR6MUMU5csnDrK/h7hYbCerS57EJ uwtyiB2o8qAnt5Qx1yBaOg== 0000912057-96-017253.txt : 19960814 0000912057-96-017253.hdr.sgml : 19960814 ACCESSION NUMBER: 0000912057-96-017253 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIMA LABS INC CENTRAL INDEX KEY: 0000833298 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 411569769 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24424 FILM NUMBER: 96609224 BUSINESS ADDRESS: STREET 1: 10000 VALLEY VIEW ROAD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344-9361 BUSINESS PHONE: 6129478700 MAIL ADDRESS: STREET 1: 10000 VALLEY VIEW ROAD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344-9361 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 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 0-24424 CIMA LABS INC. (Exact name of registrant as specified in its charter) Delaware 41-1569769 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 10000 Valley View Road, Eden Prairie, Minnesota 55344-9361 (Address of principal executive offices including zip code) (612) 947-8700 (Registrant's telephone number, including area code) ---------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. COMMON STOCK $.01 PAR VALUE 9,399,733 SHARES ---------------------------------------- --------------------------- (Class) (Outstanding at August 5, 1996) CIMA LABS INC. TABLE OF CONTENTS PAGE NUMBER COVER PAGE 1 TABLE OF CONTENTS 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. Condensed Balance Sheets as of June 30, 1996 and December 31, 1995 3 Condensed Statements of Operations for the three- and six-month periods ended June 30, 1996 and 1995 and the period from December 12, 1986 (inception) to June 30, 1996 4 Condensed Statements of Cash Flows for the six-month periods ended June 30, 1996 and 1995 and the period from December 12, 1986 (inception) to June 30, 1996 5 Notes to Condensed Financial Statements 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 7 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. 11 ITEM 2. CHANGES IN SECURITIES. 11 ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 11 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 11 ITEM 5. OTHER INFORMATION. 12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 12 SIGNATURE 13 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CIMA LABS INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED BALANCE SHEETS (UNAUDITED) June 30, December 31, 1996 1995 -------------- --------------- (Note) ASSETS Current assets: Cash and cash equivalents $13,952,474 $3,558,743 Accounts receivable 356,219 212,971 Inventories -- Note B 304,997 324,610 Prepaid expenses 589,592 287,279 ------------ ------------ Total current assets 15,203,282 4,383,603 Property, plant and equipment 13,332,718 13,061,836 Less accumulated depreciation (2,719,862) (2,479,688) ------------ ------------ Other assets: 10,612,856 10,582,148 Lease deposits 290,651 290,650 Patents and trademarks, net of amortization 246,450 262,244 ------------ ------------ 537,101 552,894 ------------ ------------ Total assets $26,353,239 $15,518,645 ------------ ------------ ------------ ------------ Liabilities and stockholders' equity Current liabilities: Accounts payable $ 803,881 $ 291,868 Accrued expenses 890,284 695,127 Advance royalties 250,000 250,000 ----------- ----------- Total current liabilities 1,944,165 1,236,995 Commitments and contingencies Stockholders' equity Convertible Preferred Stock, $.01 par value: Authorized shares - 5,000,000; issued and outstanding shares - none Common Stock, $.01 par value: Authorized shares - 20,000,000; issued and outstanding shares - 9,399,588 - June 30, 1996; 7,821,974 - December 31, 1995 93,995 78,201 Additional paid-in capital 56,998,315 43,462,921 Deficit accumulated during the development stage (32,683,236) (29,259,472) ------------ ------------- Total stockholders' equity 24,409,074 14,281,650 ------------ ------------- Total liabilities and stockholders' equity $ 26,353,239 $15,518,645 ------------ ------------- ------------ ------------- Note: The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See notes to condensed financial statements. 3
CIMA LABS INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SIX MONTHS ENDED PERIOD FROM JUNE 30, JUNE 30, DECEMBER 12, 1986 (INCEPTION) ------------------------------- ---------------------------- TO JUNE 30, 1996 1996 1995 1996 1995 -------------- -------------- -------------- ------------ ---------------- Revenues: Net sales $ 0 $ 139,777 $ 0 $ 151,074 $ 13,750,884 Research, development and 275,277 32,000 667,135 246,808 4,541,866 licensing revenues -------------- ------------ ------------- ------------ ------------- Total Revenues 275,277 171,777 667,135 397,882 18,292,750 Costs and Expenses: Cost of good sold 0 180,934 0 240,038 17,831,415 Research and product development 1,298,850 1,935,860 2,674,796 4,228,349 17,795,087 Selling, general and administrative 797,057 929,286 1,580,759 1,947,969 16,315,793 -------------- ------------ ------------- ------------- ------------- Total costs and expenses 2,095,907 3,046,080 4,255,555 6,416,356 51,942,295 -------------- ------------ ------------- ------------- ------------- Other income (expense): Interest income, net 128,093 128,606 167,478 298,196 789,344 Other income (expense) 2,555 12,136 (2,824) 8,963 270,944 -------------- ------------ ------------- ------------ ------------- Total other income 130,648 140,742 164,654 307,159 1,060,288 -------------- ------------ ------------- ------------ ------------- Net loss and deficit accumulated during the development stage $(1,689,982) $(2,733,561) $(3,423,766) $(5,711,315) $(32,589,257) -------------- ------------ ------------- ------------ ------------- -------------- ------------ ------------- ------------ ------------- Net loss per share: Primary $ (.20) $ (.36) $ (0.42) $ (0.76) $ (12.48) Full diluted (.20) (.36) (0.42) (0.76) (8.15) Weighted average number of shares outstanding: Primary 8,654,230 7,572,503 8,239,311 7,556,891 2,610,294 Fully diluted 8,654,230 7,572,503 8,239,311 7,556,891 3,997,552
4 CIMA LABS INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, PERIOD FROM DECEMBER 12, -------------------------- 1986 (INCEPTION) TO JUNE 1996 1995 30, 1996 ------------ ------------ ------------------------ OPERATING ACTIVITIES Net Loss $(3,423,765) $(5,711,315) $ (32,589,256) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 294,116 268,841 3,708,340 Preferred Stock issued for accrued interest -- -- 141,448 Gain on sale of property, plant and equipment -- (287,993) (53,270) Changes in operating assets and liabilities: Account receivable (143,248) 331,359 (356,219) Inventories 19,613 (42,919) (304,997) Other current assets (302,313) 30,674 (589,592) Accounts payable 512,014 (351,119) 803,877 Accrued expenses 195,157 (162,829) 890,284 Advance royalties -- -- 250,000 ------------ ------------ --------------- Net cash used in operating activities (2,848,426) (5,925,301) (28,099,385) Investing activities: Purchase of and deposits on property, plant and equipment (270,884) (810,100) (14,416,944) Purchase of short-term investments -- (6,819,276) (18,547,140) Proceeds from sale of property, plant and equipment -- -- 471,883 Proceeds from maturities of short-term investments -- 12,500,000 18,547,140 Patents and trademarks (38,147) (23,823) (549,890) ------------ ------------ --------------- Net cash provided by (used in) investing activities (309,031) 4,846,801 (14,494,951) Financing activities: Proceeds from issuance of stock: Common Stock 13,551,189 151,561 31,297,941 Preferred Stock -- -- 25,458,690 Borrowing under line of credit -- -- 450,000 Payment on line of credit -- -- (450,000) Lease financing of equipment -- -- 2,441,650 Security deposits on leases -- -- (290,650) Proceeds from issuance of notes payable and warrants -- -- 1,923,950 Payments on notes payable -- -- (1,823,700) Payments on capital leases -- -- (2,441,650) Organization costs -- -- (19,420) ------------ ------------ --------------- Net cash provided by financing activities 13,551,189 151,561 56,546,811 ------------ ------------ --------------- Increases (decreases) in cash equivalents 10,393,732 (926,939) 13,952,475 Cash and cash equivalents at beginning of period 3,558,743 2,912,150 -- ------------ ------------ --------------- Cash and cash equivalents at end of period 13,952,475 1,985,211 13,952,475 ------------ ------------ --------------- Supplemental schedule of noncash investing and financing activities: Note payable exchanged for issuance $ 1,517,500 Common Stock issued for note receivable 50,000
See notes to condensed financial statements. 5 CIMA LABS INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONDENSED FINANCIAL STATEMENTS JUNE 30, 1996 (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month and six-month periods ended June 30, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1995. NOTE B - INVENTORIES June 30, December 31, 1996 1995 -------- ------------ Raw materials $ 304,997 $ 324,610 Work in process -- -- Finished products -- -- --------- ------------ $ 304,997 $ 324,610 NOTE C - INITIAL PUBLIC OFFERING The Company completed its initial public offering ("IPO") of its Common Stock in August 1994. The shares of Series A, B, C, D and E Preferred Stock were automatically converted on a one-for-one basis to shares of Common Stock on the closing date of August 4, 1994. NOTE D - LOSS PER SHARE The primary loss per share is based on the weighted average Common shares outstanding during the period. The fully diluted loss per share assumes the conversion of the preferred shares to common shares as of the beginning of the period, or from the date of issuance if later. The loss per share for periods prior to August 4, 1994, the closing date of the IPO, also gives effect to the requirements of Staff Accounting Bulletin No. 83 (SAB 83). 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HEREIN. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THIS SECTION AS WELL AS THOSE DISCUSSED IN THE COMPANY'S PROSPECTUS, DATED MAY 10, 1996, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. GENERAL CIMA LABS INC. ("CIMA" or the "Company") was founded in 1986 to develop effervescent drug delivery technologies and focused initially on contract manufacturing of liquid effervescents. CIMA continues to be a development stage company. CIMA's business focus has evolved over the last several years with the development and patenting of OraSolv-R-, an oral dosage form which incorporate microencapsulated drug ingredients into a tablet that dissolves quickly in the mouth without chewing or water and which effectively masks the taste of the medication being delivered. In 1993, following issuance of the U.S. patent covering OraSolv-R-, the Company began to emphasize and focus on the development of OraSolv-R- products and currently focuses primarily on such products. At June 30, 1996, the Company had accumulated net losses of approximately $32,683,000. The Company's revenues have been from product sales using the Company's AutoLution-R- (a liquid effervescent) technology, license fees paid by corporate partners in consideration of the transfer of rights under collaboration agreements, and research and development fees paid by corporate partners to fund the Company's research and development efforts for products developed under such agreements. To date, such revenues have been derived primarily from manufacturing agreements with third parties for liquid effervescent and other products, and to a lesser extent from research and development fees and licensing arrangements, the latter generated primarily in the last five years. Revenues from manufacturing liquid effervescent products under agreements with third parties have decreased as a result of the Company's decision to discontinue manufacturing those products and focus on developing its OraSolv-R- technology. The last revenues for manufacturing liquid effervescent products were recognized in 1995. In addition to revenues from such manufacturing, research and development and licensing, the Company has funded operations from private sales of equity securities, realizing net proceeds of approximately $25,963,000. In July 1994 the Company completed an initial public offering of shares of its Common Stock realizing net proceeds of approximately $16,379,000, and in May 1996 completed an additional public offering of its Common Stock realizing net proceeds of approximately $12,145,000. The Company expects that losses will continue at least through 1997. Costs and expenses are expected to remain relatively stable as the majority of the necessary research and development personnel have already been hired. It is expected that additional manufacturing personnel will be added and operating expenses will increase at such time as the Company initiates the commercial production of OraSolv-R- products. 7 The Company's ability to generate revenues is dependent upon its ability to enter into and be successful in collaborative arrangements with pharmaceutical and other healthcare companies for the development and manufacture of OraSolv-Registered Trademark- products to be marketed by these corporate partners. The Company is highly dependent upon the efforts of the corporate partners to successfully market OraSolv-Registered Trademark- products. Although the Company believes these partners will have an economic motivation to market these products vigorously, the amount and timing of resources to be devoted to marketing are not within the control of the Company. These partners independently could make material marketing and other commercialization decisions which could adversely affect the Company's future revenues. Moreover, certain of the Company's products are seasonal in nature and the Company's revenues could vary materially from quarter to quarter depending on which of such products, if any, are then being marketed. Since the Company's initial public offering in 1994, the Company has put in place a substantially new management team. This new management team was responsible for the build out and validation of the Company's Eden Prairie manufacturing facility. RESULTS OF OPERATIONS THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1996 The Company's results of operations for the three-and six-month periods ended June 30, 1996 reflect increased emphasis on development of OraSolv-Registered Trademark- products. Product sales declined from $139,777 and $151,074 in the three- and six-month periods ended June 30, 1995 respectively, to no product sales in the first six months of 1996 as the Company ceased to manufacture liquid effervescent and other products. The Company does not intend to manufacture liquid effervescent products in the future. Research and development fees and licensing revenues were $32,000 and $246,808 for the three- and six-month periods ended June 30, 1995, respectively, compared to $275,277 and $667,135, respectively, in the comparable periods of 1996. These increased research and development fees and licensing revenues reflect the signing of license option and development agreements with multinational pharmaceutical companies that provide for licensing fees, milestone payments, royalties and manufacturing fees. Research and development fees and licensing revenues will tend to fluctuate on a quarter to quarter basis. Cost of goods sold decreased from $180,934 and $240,038 in the three- and six-month periods ended June 30, 1995, respectively, to zero in the first six months of 1996. Costs of goods sold will increase when the Company begins commercial production and sales of OraSolv-Registered Trademark- products. Research and product development expenses decreased from $1,935,860 and $4,228,349 in the three- and six-month periods ended June 30, 1995, respectively, to $1,298,850 and $2,674,796 in the three- and six-month periods ended June 30, 1996, respectively. This decrease primarily was the result of a product development/optimization charge in the first two quarters of 1995 of approxiamtely $1,659,000, of which approximately $591,000 was taken in the second quarter of 1995, from an independent consultant for improving product taste and packaging of OraSolv-Registered Trademark- products. Selling, general and administrative expenses decreased due to downsizing from $929,286 and $1,947,969 in the three- and six-month periods ended June 30, 1995, respectively to $797,057 and $1,580,759 in the three- and six-month periods ended June 30, 1996, respectively. Net interest income decreased slightly from $128,606 and $298,196, respectively, in the three- and six-month periods ended June 30, 1995 to $128,093 and $167,478, respectively, in the three- and six-month periods ended June 30, 1996 due to slightly lower cash balances. Other income (expense) decreased from $12,136 and $8,963, respectively, in the three- and six-month periods ended June 30, 1995 to $2,555 and $(2,824), respectively, in the three- and six-month periods ended June 30, 1996. 8 LIQUIDITY AND CAPITAL RESOURCES The Company has financed its operations to date primarily through private and public sales of its equity securities and revenues from manufacturing agreements. Through June 30, 1996, CIMA had received net offering proceeds from such private and public sales of approximately $54,500,000 and had net sales from manufacturing agreements of approximately $13,800,000. Among other things, these funds were used to purchase approximately $14,417,000 of capital equipment, including approximately $7,500,000 in the last two quarters of 1994 in connection with completing the Company's new Eden Prairie manufacturing facility. In July 1994 the Company completed an initial public offering of shares of its Common Stock, realizing net proceeds of approximately $16,400,000, and in May 1996 the Company completed another public offering of shares of its Common Stock, realizing net proceeds of approximately $12,145,000. The funds raised in CIMA's initial public offering have been used to build out the manufacturing facility, purchase and validate the appropriate production equipment, complete the research and development facilities and purchase the necessary equipment for that facility. The Company expects to use the funds raised in its May 1996 public offering primarily to begin commercial production in its new manufacturing facility and to fund research and development (including preclinical and clinical testing) for the application of the OraSolv-Registered Trademark- technology to pharmaceutical products, and that the balance of such funds will be used for working capital and other general corporate purposes. The Company's long-term capital requirements will depend upon numerous factors, including the status of the Company's collaborative arrangements, the progress of the Company's research and development programs and receipt of revenues from sales of the Company's products. Cash and cash equivalents, were approximately $13,952,000 at June 30, 1996. The Company believes that its currently available funds, excluding any license fees that may be received in the future, will meet its needs at least through the first quarter of 1997. Prior to such time the Company will need to raise additional funds through public or private financings, including equity financing which may be dilutive to stockholders. There can be no assurance that the Company will be able to raise additional funds if its capital resources are exhausted, or that funds will be available on terms attractive to the Company. The Company has not generated taxable income through June 1996. At June 30, 1996, the net operating losses available to offset future taxable income were approximately $32,589,000. Because the Company has experienced ownership changes, pursuant to Internal Revenue Code regulations, future utilization of the operating loss carryforwards will be limited in any one fiscal year. The carryforwards expire beginning in 2001. As a result of the annual limitation, a portion of these carryforwards may expire before ultimately becoming available to reduce potential federal income tax liabilities. BUSINESS RISKS The Company is a development stage company and must be evaluated in light of the uncertainties and complications present for any such company and, in particular, a company in the pharmaceutical industry. The Company has accumulated aggregate net losses from inception in December 1986 through June 30, 1996 of approximately $32,683,000. Losses have resulted principally from costs incurred in research and development of the Company's technologies and from general and administrative costs. These costs have exceeded the Company's revenues, which 9 have been derived primarily from the manufacturing of AutoLution-Registered Trademark- (a liquid effervescent) and other non-OraSolv-Registered Trademark- products under agreements with third parties. The Company no longer manufactures such products and no longer derives revenues from their manufacture. The Company expects to continue to incur losses at least through 1997. Many of the Company's expenditures to date have been non-recurring costs for plant, equipment and product optimization and validation. There can be no assurance, however, that the Company will ever generate substantial revenues or achieve profitability. The Company may need to raise additional funds to operate prior to the end of the first half of 1997 and will need to raise such funds prior to the end of 1997, and is subject to the risks inherent in raising such additional funds. See "-Liquidity and Capital Resources." In addition, the Company is dependent upon its ability to enter into and perform under collaborative arrangements with pharmaceutical companies for the development and commercialization of its products. See "-General." The success of the Company and of its business strategy is also dependent in large part on the ability of the Company to attract and retain key management and operating personnel. Such individuals are in high demand and are often subject to competing offers. In particular, the Company's success will depend, in part, on its ability to attract and retain the services of its executive officers and scientific and technical personnel. The loss of the services of one or more members of management or key employees or the inability to hire additional personnel as needed or replace personnel who have left the Company may have a material adverse affect on the Company. The Company currently has no full-time chief financial officer, but is actively recruiting to fill this position. To date no commercial sales of OraSolv-Registered Trademark- products have been made, and the Company has not derived any revenues from sales of OraSolv-Registered Trademark- products. Further, the Company does not expect to derive any such revenues until at least 1997. The Company has not yet manufactured OraSolv-Registered Trademark- products in commercial quantities. To achieve desired levels of production, the Company will be required to increase substantially its manufacturing capabilities. There can be no assurance that manufacturing can be scaled-up in a timely manner to allow production in sufficient quantities to meet the needs of the Company's corporate partners. The foregoing risks reflect the Company's stage of development and the nature of the Company's industry and products. Also inherent in the Company's stage of development is a range of additional risks, including competition, uncertainties regarding the effects of health care reform on the pharmaceutical industry, including pressures exerted on the prices charged for pharmaceutical products, uncertainties regarding protection of patents and proprietary rights, uncertainties relating to government regulation and risks associated with having only one manufacturing facility. 10 CIMA LABS INC. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. None ITEM 2. CHANGES IN SECURITIES. None ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. On May 23, 1996, the Company held its annual meeting of stockholders, at which time the stockholders took the following actions: (i) elected John M. Siebert, Ph.D., Terrence W. Glarner, David B. Musket, Steven B. Ratoff, Joseph R. Robinson, Ph. D., and Jerry A. Weisbach, Ph.D., to serve as directors of the Company to serve for the ensuing year and until their successors are elected; (ii) approved the amendment and restatement of the Company's CIMA LABS INC. Amended and Restated Stock Option and Stock Award Plan, including an increase of the aggregate number of shares of Common Stock authorized for issuance under such plan from 1,750,000 shares to 2,000,000 shares; and (iii) ratified the selection of Ernst & Young LLP as independent auditors of the Company for its fiscal year ending December 31, 1996. Such actions were taken by the following votes: VOTES FOR VOTES WITHHELD --------- -------------- Election of Directors: John M. Siebert Ph.D. 5,785,930 12,913 Terrence W. Glarner 5,785,930 12,913 David B. Musket 5,785,430 13,413 Steven B. Ratoff 5,785,930 12,913 Joseph R. Robinson, Ph.D. 4,261,757 1,537,086 Jerry A. Weisbach, Ph.D 5,785,430 13,413 11 Broker VOTES FOR VOTES AGAINST ABSTENTIONS NON-VOTES --------- ------------- ----------- --------- Amendment of Stock Plan 3,308,195 2,466,627 12,847 11,197 Ratification of Auditors 5,786,193 6,650 6,000 0 ITEM 5. OTHER INFORMATION. None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) EXHIBITS Item Description ---- ----------- 3.1 Fifth Restated Certificate of Incorporation of the Company. (1) 3.2 Second Restated Bylaws of the Company. (1) 10.28 License Agreement, dated April 22, 1996, between the Company and SmithKline Beecham. (2) 11.1 Statement re Computation of Net Loss Per Share 27 Financial Data Schedule --------- (1) Incorporated by reference to the correspondingly numbered exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. (2) Incorporated by reference to the correspondingly numbered exhibit to the Company's Registration Statement on Form S-1, Registration No. 333-4174, filed with the Securities and Exchange Commission on April 26, 1996. (b) REPORTS ON FORM 8-K The Company filed no reports on Form 8-K during the quarter ended June 30, 1996. 12 CIMA LABS INC. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed in its behalf by the undersigned thereunto duly authorized. CIMA LABS INC. Date: AUGUST 12, 1996 By: /S/ JOHN M. SIEBERT -------------------- ------------------------------ John M. Siebert President, Chief Executive Officer and Chief Financial Officer (Principal Financial and Accounting Officer) 13 EXHIBIT INDEX NO. OF EXHIBIT DESCRIPTION - -------------- ----------- 3.1 Fifth Restated Certificate of Incorporation of the Company. (1) 3.2 Second Restated Bylaws of the Company. (1) 10.28 License Agreement, dated April 22, 1996, between the Company and SmithKline Beecham. (2) 11.1 Statement re Computation of Net Loss Per Share 27 Financial Data Schedule - ----------- (1) Incorporated by reference to the correspondingly numbered exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. (2) Incorporated by reference to the correspondingly numbered exhibit to the Company's Registration Statement on Form S-1, Registration No. 333-4174, filed with the Securities and Exchange Commission on April 26, 1996. 14 EX-11.1 2 EXHIBIT 11.1 Exhibit 11.1 - Statement Re: Computation of Net Loss Per Share
Period from December 12, 1986 Three Months Ended Six Months Ended (Inception) to June 30 June 30 June 30, --------------------------- -------------------------- -------------- 1996 1995 1996 1995 1996 ----------- ----------- ----------- ----------- -------------- Primary: 8,654,230 7,572,503 8,239,311 7,556,891 2,140,770 Average shares outstanding Net effect of dilutive stock options -- based on the treasury stock method using average market price (See Note A Below) 469,524 ------------ Totals 2,610,294 Net loss $(1,689,982) $(2,733,561) $(3,423,766) $(5,711,315) $(32,589,257) Per share amount $(.20) $(0.36) (0.42) (0.76) $ (12.48) ------------ ------------ Fully diluted: Average shares outstanding 8,654,230 7,572,503 8,239,311 7,556,891 3,528,028 Net effect of dilutive stock options -- based on the treasury stock method using average market price or the ending market price if higher (See Note A Below) 469,524 ------------ Totals 3,997,552 ------------ ------------ Net loss $(1,689,982) $(2,733,561) $(3,423,766) $(5,711,315) $(32,589,257) ------------ ------------ Per share amount $(0.20) $(0.36) $(0.42) $(0.76) $ (8.15) ------------ ------------
NOTE A: Represents shares required by the provisions of Staff Accounting Bulletin No. 83 for "cheap stock" issued prior to the Company's initial public offering in August 1994. 15 EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS, STATEMENTS OF OPERATIONS AND STATEMENTS OF CASH FLOWS INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND NOTES THERETO. 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 13,952,474 0 356,219 0 304,997 15,203,282 13,332,718 (2,719,862) 26,353,239 1,944,165 0 0 0 93,995 24,315,079 26,353,239 0 667,135 0 4,255,555 0 0 164,654 0 0 0 0 0 0 (3,423,766) (0.42) (0.42)
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