-----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, SAsm1KDhbTD+SPMXvve/VUvIspPHlo0ZSRBro4+7mMzspcLfwa8NezjlINIpktha rqF0Mu0S90RrC8jvhu4XlA== 0000936392-97-001474.txt : 19971111 0000936392-97-001474.hdr.sgml : 19971111 ACCESSION NUMBER: 0000936392-97-001474 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19971110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLERGAN LIGAND RETINOID THERAPEUTICS INC CENTRAL INDEX KEY: 0000934592 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 330642614 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-25962 FILM NUMBER: 97711700 BUSINESS ADDRESS: STREET 1: 9393 TOWNE CENTER DR CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6195353900 MAIL ADDRESS: STREET 1: 2525 DUPONT DR CITY: IRVINE STATE: CA ZIP: 92715 10-K/A 1 FORM 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A#1 X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) ____ OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For fiscal year ended December 31, 1996 OR _____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from ________ to _______. Commission File Number: 0-25970 ALLERGAN LIGAND RETINOID THERAPEUTICS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 33-0642614 (State or other jurisdiction (I.R.S. Employer or incorporation or organization) Identification No.) 2525 Dupont Drive, Irvine, California 92612 (Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (714) 246-4500 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Callable Common Stock, $.001 par value(1) 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 --- --- 2 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant as of February 28, 1997 was approximately $58,200,000 based on the last sale price as reported by the Nasdaq National Market.(2) For the purposes of this calculation, securities owned by officers, directors and 10% securityholders known to the registrant have been excluded. Such exclusion is not intended, nor shall it be deemed, to be an admission that such persons are affiliates of the registrant. The number of shares outstanding of the registrant's callable common stock, $.001 par value (the "Callable Common Stock") as of February 28, 1997 was 3,250,000. Documents Incorporated by Reference Portions of Registrant's Proxy Statement for the Annual Meeting of Shareholders scheduled to be held on June 2, 1997, referred to herein as the "Proxy Statement", are incorporated by reference into Part III of this Annual Report on Form 10-K. Trademark Claims Panretin(TM) is a trademark of the Company and Targretin(TM) is a trademark of Ligand Pharmaceuticals Incorporated. Zorac(R) and Tazorac(TM) (tazarotene) are trademarks of Allergan, Inc. _________________________________ (1) The Callable Common Stock is registered pursuant to Section 12(g) of the Act separately and as part of Units, each Unit consisting of one share of Callable Common Stock of Allergan Ligand Retinoid Therapeutics, Inc. and two warrants (each a "Warrant" and collectively, the "Warrants"), each to purchase one share of Ligand Pharmaceuticals Incorporated common stock. The Callable Common Stock is not separately tradeable apart from the Units prior to June 3, 1997 or upon the earlier occurrence of certain events. (2) Market value is the market value of the Units, each Unit consisting of one share of Callable Common Stock of Allergan Ligand Retinoid Therapeutics, Inc. and two Warrants. There is no quoted market value for the shares of Callable Common Stock apart from the Units. -2- 3 PART II Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS Report of Ernst & Young LLP, Independent Auditors 4 Balance Sheets at December 31, 1996 and 1995 5 Statements of Operations for the year ended December 31, 1996 and for the period June 3, 1995 (date operations commenced) to December 31, 1995 6 Statements of Stockholders' Equity for the period December 16, 1994 (date of incorporation) to December 31, 1995 and the year ended December 31, 1996 7 Statements of Cash Flows for the period December 16, 1994 (date of incorporation) to December 31, 1995 and the year ended December 31, 1996 8 Notes to Financial Statements 9-14
-3- 4 Report of Independent Auditors The Board of Directors and Shareholders Allergan Ligand Retinoid Therapeutics, Inc. We have audited the accompanying balance sheets of Allergan Ligand Retinoid Therapeutics, Inc. as of December 31, 1996 and 1995, the related statement of operations for the period June 3, 1995 (date operations commenced) through December 31, 1995 and the year ended December 31, 1996, and the statements of stockholders' equity, and cash flows for the period December 16, 1994 (date of incorporation) through December 31, 1995 and the year ended December 31, 1996. 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 in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Allergan Ligand Retinoid Therapeutics, Inc. at December 31, 1996 and 1995, and the results of its operations for the period June 3, 1995 (date operations commenced) through December 31, 1995 and the year ended December 31, 1996, and its cash flows for the period December 16, 1994 (date of incorporation) through December 31, 1995 and the year ended December 31, 1996, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Orange County, California March 26, 1997 -4- 5 Allergan Ligand Retinoid Therapeutics, Inc. Balance Sheets
December 31, 1996 1995 ---- ---- ASSETS Current assets: Cash and cash equivalents $ 29,897,327 $ 79,792,554 Marketable securities 20,394,182 -- Interest receivable and other current assets 720,009 335,001 ------------ ------------ Total current assets $ 51,011,518 $ 80,127,555 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable to Allergan, Inc. $ 812,710 $ 1,038,409 Accounts payable to Ligand Pharmaceuticals Incorporated 3,076,478 1,847,825 Accrued offering costs -- 434,759 Other accounts payable and accrued liabilities 260,733 330,611 ------------ ------------ Total current liabilities 4,149,921 3,651,604 Stockholders' equity: Callable Common Stock, $.001 par value, 3,250,000 shares authorized, issued and outstanding 3,250 3,250 Special Common Stock, $1 par value, 1,000 shares authorized, 200 shares issued and outstanding 200 200 Additional paid-in capital 94,256,046 94,256,046 Unrealized holding loss on marketable securities (169,753) -- Accumulated deficit (47,228,146) (17,783,545) ------------ ------------ Total stockholders' equity 46,861,597 76,475,951 ------------ ------------ $ 51,011,518 $ 80,127,555 ============ ============
See accompanying notes. -5- 6 Allergan Ligand Retinoid Therapeutics, Inc. Statements of Operations
June 3, 1995 (date operations commenced) 1996 to December 31, 1995 ---- -------------------- Interest income $ 3,626,713 $ 2,863,989 Costs and expenses: Research and development expenses 31,726,438 19,495,346 General and administrative expenses 1,344,876 1,152,188 ------------- -------------- Total costs and expenses 33,071,314 20,647,534 ------------ ------------- Net loss $(29,444,601) $(17,783,545) ============ ============ Net loss per callable common share $(9.06) $(5.47) ====== ====== Weighted average callable common shares outstanding 3,250,000 3,250,000 ============ ============
See accompanying notes. -6- 7 Allergan Ligand Retinoid Therapeutics, Inc. Statements of Stockholders' Equity December 16, 1994 (date of incorporation) to December 31, 1996
UNREALIZED CALLABLE SPECIAL HOLDING COMMON STOCK COMMON STOCK ADDITIONAL LOSS ON TOTAL ---------------- --------------- PAID-IN MARKETABLE ACCUMULATED STOCKHOLDERS' SHARES AMOUNT SHARES AMOUNT CAPITAL SECURITIES DEFICIT EQUITY ----------------------------------------------------------------------------------------------- Shares issued upon incorporation - December 16, 1994 (date of incorporation) -- $ -- 200 $200 $ -- $ -- $ -- $ 200 ---------------------------------------------------------------------------------------------- Balance at December 31, 1994 -- -- 200 200 -- -- -- 200 Issuance of callable common stock in initial public offering, net of offering costs of $5,740,704 3,250,000 3,250 -- -- 26,756,046 -- -- 26,759,296 Contribution from Allergan, Inc. -- -- -- -- 50,000,000 -- -- 50,000,000 Contribution from Ligand Pharmaceuticals Incorporated -- -- -- -- 17,500,000 -- -- 17,500,000 Net loss -- -- -- -- -- -- (17,783,545) (17,783,545) ---------------------------------------------------------------------------------------------- Balance at December 31, 1995 3,250,000 3,250 200 200 94,256,046 -- (17,783,545) 76,475,951 Net loss -- -- -- -- -- -- (29,444,601) (29,444,601) Unrealized holding loss on marketable securities -- -- -- -- -- (169,753) -- (169,753) ---------------------------------------------------------------------------------------------- Balance at December 31, 1996 3,250,000 $3,250 200 $200 $94,256,046 $(169,753) $(47,228,146) $46,861,597 ==============================================================================================
See accompanying notes. -7- 8 Allergan Ligand Retinoid Therapeutics, Inc. Statements of Cash Flows December 16, 1994 (date of incorporation) to December 31, 1996
1996 1995 ---- ---- Operating activities: Net loss $(29,444,601) $(17,783,545) Adjustments to reconcile net loss to net cash used in operating activities: Changes in operating assets and liabilities: Interest receivable and other current assets (385,008) (335,001) Accounts payable to Allergan, Inc. (225,699) 1,038,409 Accounts payable to Ligand Pharmaceuticals Incorporated 1,228,653 1,847,825 Accrued offering costs (434,759) 434,759 Other accounts payable and accrued liabilities (69,878) 330,611 ------------ ------------ Net cash used in operating activities (29,331,292) (14,466,942) Investing activities: Purchase of marketable securities (20,563,935) -- Financing activities: Proceeds from issuance of callable common stock in initial public offering, net -- 26,759,296 Proceeds from issuance of special common stock -- 200 Contribution from Allergan, Inc. -- 50,000,000 Contribution from Ligand Pharmaceuticals Incorporated -- 17,500,000 ------------ ------------ Net cash provided by financing activities -- 94,259,496 ------------ ------------ Net increase (decrease) in cash and cash equivalents (49,895,227) 79,792,554 Cash and cash equivalents at beginning of period 79,792,554 -- ------------ ------------ Cash and cash equivalents at end of period $ 29,897,327 $ 79,792,554 ============ ============
See accompanying notes. -8- 9 Allergan Ligand Retinoid Therapeutics, Inc. Notes to Financial Statements December 31, 1996 1. ORGANIZATION AND BUSINESS OPERATIONS BUSINESS Allergan Ligand Retinoid Therapeutics, Inc. (the Company) was incorporated in Delaware in 1994 and commenced operations on June 3, 1995 to continue the efforts of the Allergan Ligand Joint Venture (Joint Venture), established by Allergan, Inc. (Allergan) and Ligand Pharmaceuticals Incorporated (Ligand) in June 1992, to discover, develop and commercialize drugs based on retinoids (the Products). On June 3, 1995, the Company and Ligand completed a public offering (the Offering) of 3.25 million units, each unit consisting of one share of the Company's callable common stock and two warrants, each to purchase one share of Ligand common stock. The Offering raised net proceeds for the Company of $26.8 million. At the completion of the Offering, Ligand contributed $17.5 million in cash, as well as warrants in exchange for (i) a right to acquire all of the Callable Common Stock at specified future dates and amounts and (ii) a right to acquire all rights to the Panretin (ALRT1057) products, jointly with Allergan, currently under development by the Company. At the same time, Allergan contributed $50.0 million in cash to the Company in exchange for (i) the right to acquire one-half of all technologies and other assets in the event Ligand exercises its right to acquire all of the Callable Common Stock, (ii) a similar right to acquire all of the Callable Common Stock if Ligand does not exercise its right and (iii) a right to acquire all rights to the Panretin (ALRT1057) products, jointly with Ligand. ALRT's Board of Directors recently approved a research and development plan for the year ending December 31, 1997 which represents an acceleration in spending on ALRT's retinoid programs. The accelerated spending is the result of more rapid discovery and development of a significantly larger library of viable retinoid compounds than anticipated at the time of formation of ALRT. ALRT anticipates the acceleration in spending could result in the use of substantially all of the funds available for research and development remaining in ALRT in late 1997 or early 1998. Ligand and Allergan have certain purchase options over the Callable Common Stock and the assets of ALRT which could be triggered by the use of substantially all of ALRT's funds. There can be no assurance that Ligand or Allergan will exercise these options. 2. SIGNIFICANT ACCOUNTING POLICIES 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 amounts reported in the accompanying financial statements. Actual results could differ from those estimates. -9- 10 Allergan Ligand Retinoid Therapeutics, Inc. Notes to Financial Statements (continued) 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CONCENTRATIONS OF BUSINESS RISK The Company conducts research and development for the purpose of identifying and developing retinoid drugs for therapeutic uses and is subject to intense competition and technological changes in the biotechnology industry. The Company is also dependent upon Allergan and Ligand who are primarily responsible for research, development, marketing and manufacturing on behalf of the Company. CASH AND CASH EQUIVALENTS Cash and cash equivalents consists of demand deposits and bank certificates of deposit carried at cost which approximates fair value. MARKETABLE SECURITIES Marketable securities consist of United States Treasury Bills and debt instruments of financial institutions and corporations with strong credit ratings. The Company determines the fair value of marketable securities based upon quoted market values. At December 31, 1996, the fair value of marketable securities was $169,753 less than cost. Such reduction in value was recorded as a charge in stockholders' equity as the marketable securities are available for sale. CONCENTRATION OF CREDIT RISKS The Company invests its excess cash in certificates of deposit and marketable securities. The Company has established guidelines with respect to diversification and maturities designed to maintain safety and liquidity. RESEARCH AND DEVELOPMENT EXPENSES The Company contracts with Allergan and Ligand to conduct research, development and initial clinical testing. The costs of such work are expensed as incurred. INCOME TAXES The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. -10- 11 Allergan Ligand Retinoid Therapeutics, Inc. Notes to Financial Statements (continued) 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) NET LOSS PER CALLABLE COMMON SHARE Net loss per callable common share is calculated by dividing the net loss by the number of callable common shares outstanding, which was 3,250,000 at all times during the period from commencement of operations following the closing of the initial public offering on June 3, 1995 to December 31, 1996. 3. RELATIONSHIP WITH ALLERGAN AND LIGAND TECHNOLOGY LICENSE AGREEMENT Under a technology license agreement (the License), the Company has an exclusive license to use the retinoid technologies developed first by Allergan and Ligand and subsequently by the Joint Venture. The License granted is subject to certain exceptions that allow Allergan and Ligand to pursue limited research activities and development and commercialization of certain products. In consideration for the License, the Company will pay to Allergan and Ligand a royalty aggregating 3% of net sales of Products under the License during the life of applicable patents or, in certain circumstances, for 10 years. RESEARCH AND DEVELOPMENT AGREEMENT The Company entered into a research and development agreement (the Development Agreement) under which Allergan and Ligand perform research and development for the Company on retinoid compounds and products in accordance with annual budgets and development plans jointly proposed by Allergan and Ligand and approved by the Company's Board of Directors. Under the Development Agreement, the Company has agreed to reimburse Allergan and Ligand for their internal costs plus 10% and the cost of services performed by third parties. Total amounts charged to the Company during 1996 and 1995 by Allergan and Ligand under the Development Agreement were (in millions):
1996 1995 ---- ---- Allergan $10.6 $ 6.6 Ligand 21.8 12.7
If the Company discontinues development of compounds meeting certain criteria, Allergan and Ligand are entitled to develop and commercialize such compounds using their own funds. The Company is entitled to receive a royalty equal to 6% of net sales of any such independently developed products. The Company also has the right to reacquire any such product prior to the earlier of the commencement of Phase III clinical trials for such product or the exercise or expiration of the Stock Purchase Option, for an amount equal to costs incurred by Allergan and/or Ligand plus interest at 25% per year. Additionally, with respect to any reacquired product, the Company will pay a royalty equal to 4% of net sales to the developing party. -11- 12 Allergan Ligand Retinoid Therapeutics, Inc. Notes to Financial Statements (continued) 3. RELATIONSHIP WITH ALLERGAN AND LIGAND (CONTINUED) COMMERCIALIZATION AGREEMENT The Company also entered into a commercialization agreement (the Commercialization Agreement) which provides for the marketing, manufacture and sale by Allergan and/or Ligand of the Products developed under the Development Agreement which have received regulatory approval for commercial sale. SERVICES AGREEMENT The Company also entered into a services agreement (the Services Agreement) under which Allergan and Ligand provide management and administrative services to the Company at 110% of direct and indirect costs for services performed internally by Allergan and Ligand and on a cost reimbursement basis for services performed by third parties. Total amounts charged to the Company during 1996 and 1995 by Allergan and Ligand for these services under the Services Agreement were (in millions):
1996 1995 ---- ---- Allergan $0.1 $0.1 Ligand 0.1 0.1
PANRETIN (ALRT1057) PURCHASE OPTION The Company has granted Allergan and Ligand an option (the Panretin (ALRT1057) Purchase Option) to acquire the Company's Panretin (ALRT1057) Products. Unless the Panretin (ALRT1057) Purchase Option has been terminated as to either Allergan or Ligand as a result of default under the agreement (in which case the Panretin (ALRT1057) Purchase Option will only be exercisable by the party for which such option has not been terminated), Allergan and Ligand, jointly, may exercise the Panretin (ALRT1057) Purchase Option beginning on the earlier of (i) June 3, 1997 or (ii) the receipt of regulatory approval for commercial sale of any Panretin (ALRT1057) Product in the United States or in certain other major countries and ending on the earlier of (a) 90 days after receipt of such regulatory approval or (b) June 3, 2000. Additionally, the Panretin (ALRT1057) Purchase Option will terminate on the date the Stock Purchase Option is exercised or expires. The Panretin (ALRT1057) Purchase Option exercise price is $21.4 million prior to June 3, 1998 and increases in equal amounts on a quarterly basis to $27.8 million on March 3, 1999 and to $36.2 million on March 3, 2000. The exercise price may be paid in cash, shares of Allergan or Ligand, or any combination thereof. -12- 13 Allergan Ligand Retinoid Therapeutics, Inc. Notes to Financial Statements (continued) 3. RELATIONSHIP WITH ALLERGAN AND LIGAND (CONTINUED) The Company may not distribute or otherwise expend any proceeds received upon the exercise of the Panretin (ALRT1057) Purchase Option until the earlier of the exercise or expiration of the Stock Purchase Option. 4. STOCKHOLDERS' EQUITY STOCK PURCHASE OPTION The Company's Callable Common Stock is subject to a Stock Purchase Option agreement pursuant to which Ligand and, in the event not exercised by Ligand, Allergan may purchase all, but not less than all, of the Callable Common Stock outstanding at specified prices, subject to adjustment. The option becomes exercisable on the earlier of (i) June 3, 1997 or (ii) the quarter in which the Company's available funds, as defined, decline below $10 million and expires on the earlier of (a) June 3, 2000 or (b) 90 days subsequent to such a decline in cash. The option is not exercisable prior to June 3, 1998 unless the available funds are less than $60 million at the date of exercise. The Stock Purchase Option exercise price is $21.97 per share prior to June 3, 1998 and increases in equal amounts on a quarterly basis to $28.56 per share on March 3, 1999 and to $37.13 per share on March 3, 2000. The exercise price may be paid in cash, shares of Allergan or Ligand, or any combination thereof. The Company may not, until the expiration of the Stock Purchase Option, pay any dividends, issue additional shares of capital stock, borrow money in excess of $1 million, merge, liquidate or sell all or substantially all of its assets. WARRANTS Each unit sold by the Company in its initial public offering includes two warrants, each warrant giving the holder the right to purchase one share of Ligand common stock at a price of $7.12 per share. The warrants are exercisable at any time from June 3, 1997 through June 2, 2000, subject to certain acceleration provisions including the exercise or expiration of the Stock Purchase Option. The warrants will trade with the Company's Callable Common Stock as units until they become exerciseable on June 3, 1997. After such date, the warrants will separate from the Company's common stock and become independently tradable. -13- 14 Allergan Ligand Retinoid Therapeutics, Inc. Notes to Financial Statements (continued) 4. STOCKHOLDERS' EQUITY (CONTINUED) SPECIAL STOCK The Company has issued 200 shares of Special Stock to Allergan and Ligand. The holders of shares of Special Stock are not entitled to vote, except: (i) as required by law and (ii) to elect two directors of ALRT, voting as a separate class. ALRT's Board of Directors consists of a total of five directors. When entitled to vote, each holder of Special Stock has one vote for each share standing in his or her name. The holders of shares of Special Stock do not have the right to any profits of ALRT as a result of the ownership of such shares. In the event of the liquidation, dissolution or winding up of ALRT, holders of the Callable Common Stock shall have a priority over the holders of the Special Stock with respect to return of capital, and the holders of the shares of Special Stock shall not otherwise be entitled to participate in any way in the profits or assets of ALRT. In addition, until the Stock Purchase Option is exercised or terminates unexercised, ALRT cannot, without the affirmative vote of the holders of a majority of the issued and outstanding shares of Special Stock, voting separately and as a class: (i) issue any additional shares of capital stock through a stock split, sale, reorganization or otherwise, (ii) alter, change or amend the rights, powers, preferences and restrictions of the Special Stock, (iii) alter or change the provisions of ALRT's Certificate of Incorporation relating to ALRT's capital stock and the Stock Purchase Option, (iv) merge, consolidate or reorganize ALRT with or into any other corporation, (v) sell, liquidate or otherwise dispose of all or substantially all of the assets of ALRT, (vi) borrow an aggregate of in excess of $1 million outstanding at any one time, (vii) declare or pay dividends or make any other distributions to stockholders or (viii) adopt, amend or repeal the Bylaws of ALRT. 5. INCOME TAXES Valuation allowances of $21 million at December 31, 1996 and $7.6 million at December 31, 1995 have been recognized as offsets to the deferred tax assets as realization of such assets is uncertain. Significant components of the Company's deferred tax assets as of December 31, 1996 and 1995 are (in thousands):
DECEMBER 31, 1996 DECEMBER 31, 1995 ----------------- ----------------- Deferred tax assets: Net operating loss carryforwards $16,076 $ 6,777 Research and development credits 2,440 327 Capitalized costs and other 2,470 482 ------- ------- Total deferred tax assets 20,986 7,586 Valuation allowance for deferred tax assets (20,986) (7,586) ------- ------- Net deferred tax assets $ -- $ -- ======= =======
At December 31, 1996, the Company had federal and California net operating loss carryforwards of approximately $45.5 million and $2.4 million, respectively. The federal and California tax loss carryforwards will expire in 2010 and 2003, respectively, unless previously utilized. The Company also has federal and California research and development tax credit carryforwards totaling $1.5 million and $1.3 million, respectively, which will begin to expire in 2010 unless previously utilized. -14- 15 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. ALLERGAN LIGAND RETINOID THERAPEUTICS, INC. Date: November 10, 1997 By: /s/ Marvin E. Rosenthale ------------------ ----------------------------------- Marvin E. Rosenthale, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Marvin E. Rosenthale President and Chief Executive November 10, 1997 - -------------------------- Officer (Principal Executive ------------------------- Marvin E. Rosenthale Officer) /s/ Dwight J. Yoder Chief Financial Officer November 10, 1997 - ---------------------------------- (Principal Financial and ------------------------ Dwight J. Yoder Accounting Officer) * Director November 10, 1997 - ---------------------------------- ----------------------- Harry F. Hixson * Director November 10, 1997 - ---------------------------------- ------------------------- Glenn F. Kiplinger * Director November 10, 1997 - ---------------------------------- ------------------------ Gary L. Neil * Director November 10, 1997 - ---------------------------------- ------------------------- David E. Robinson * Director November 10, 1997 - -------------------------- ------------------------- William C. Shepherd *By: /s/ Marvin E. Rosenthale ------------------------------ Attorney-in-fact
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