UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 1997
------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-27854
BONE CARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 2830 39-1527471
(State of (Primary Standard Industry (IRS Employer
Incorporation) Classification Code Number Identification No.)
313 West Beltline Highway
Madison, Wisconsin 53713
608-274-7533
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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 / /
As of October 31, 1997, 4,361,191 shares of the registrant's Common Stock, no
par value, were outstanding.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
FORM 10-Q
For the quarterly period ended September 30, 1997
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial statements
Consolidated Balance Sheets
September 30, 1997, and June 30, 1997. . . . . . . . . . . . . . .3
Consolidated Statements of Operations
Three Months Ended September 30, 1997
and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Consolidated Statements of Cash Flows
Three Months Ended September 30, 1997
and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Notes to Consolidated Financial Statements . . . . . . . . . . . .7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . .8
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . .9
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Balance Sheets
- ------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------
September 30, June 30,
1997 1997
(Unaudited) (Audited)
- ------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $7,644,033 $8,531,714
Inventory 52,565 52,565
Other current assets 62,785 -
- ------------------------------------------------------------------------------
Total current assets 7,759,383 8,584,279
Property, plant and equipment--at cost:
Lab improvements 21,092 21,092
Furniture and fixtures 24,625 24,625
Machinery and other equipment 308,752 263,970
- ------------------------------------------------------------------------------
354,469 309,687
Less accumulated depreciation 235,736 226,737
- ------------------------------------------------------------------------------
118,733 82,950
Excess of cost over fair value of net assets
acquired, net of accumulated amortization
of $665,322 at September 30, 1997, and
$642,960 at June 30, 1997 694,595 716,957
Patent fees, net of accumulated amortization
of $392,462 at September 30, 1997, and $359,462
at June 30, 1997 538,664 516,270
- ------------------------------------------------------------------------------
$9,111,375 $9,900,456
==============================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Balance Sheets
- ------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
- ------------------------------------------------------------------------------
September 30, June 30,
1997 1997
(Unaudited) (Audited)
- ------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 92,029 $ 141,445
Accrued liabilities:
Accrued clinical study and
research costs 568,683 291,165
Compensation payable 25,224 15,447
Property, payroll, and other taxes 14,406 8,388
Other - 24,500
- ------------------------------------------------------------------------------
Total current liabilities 700,342 480,945
Shareholders' equity:
Preferred stock--authorized 1,000,000
shares of $.001 par value; none issued - -
Common stock--authorized 14,000,000 shares
of no par value; issued and outstanding
8,722,382 shares at September 30, 1997
and 8,722,382 at June 30, 1997 11,393,883 11,393,883
Additional paid-in capital 3,555,925 3,555,925
- ------------------------------------------------------------------------------
14,949,808 14,949,808
Accumulated deficit (6,538,776) (5,530,297)
- ------------------------------------------------------------------------------
8,411,033 9,419,511
- ------------------------------------------------------------------------------
$9,111,375 $9,900,456
==============================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
- ------------------------------------------------------------------------------
Three months ended
September 30, September 30,
1997 1996
- ------------------------------------------------------------------------------
REVENUES $ - $ 525
- ------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of sales - 3,785
Research and development 1,002,517 369,364
General and administrative 117,300 67,893
- ------------------------------------------------------------------------------
1,119,817 441,042
- ------------------------------------------------------------------------------
Loss from operations (1,119,817) (440,517)
- ------------------------------------------------------------------------------
OTHER INCOME:
Interest income 111,339 144,515
- ------------------------------------------------------------------------------
NET LOSS $ (1,008,478) $ (296,002)
==============================================================================
Net loss per common share $(0.12) $(0.03)
==============================================================================
Weighted average number of
common shares 8,722,382 8,707,382
==============================================================================
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
- ------------------------------------------------------------------------------
Three months ended
September 30, September 30,
1997 1996
- ------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $(1,008,478) $ (296,002)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 64,361 56,322
Changes in assets and liabilities:
Receivables - (378)
Other current assets (62,785) 2,695
Accounts payable (49,416) (9,273)
Accrued liabilities 268,813 7,800
- ------------------------------------------------------------------------------
Net cash used in operating activities (787,505) (238,836)
- ------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property,
plant and equipment (44,782) (10,264)
Patent fees (55,394) (56,131)
- ------------------------------------------------------------------------------
Net cash used in investing activities $(100,176) $ (66,395)
- ------------------------------------------------------------------------------
Net decrease in cash and cash
equivalents (887,681) (305,231)
Cash and cash equivalents at
beginning of period 8,531,714 11,060,843
- ------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 7,644,033 $10,755,612
==============================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The consolidated financial statements of Bone Care International, Inc. (the
"Company") presented herein, without audit except for balance sheet information
at June 30, 1997 have been prepared pursuant to the rules of the Securities and
Exchange Commission for quarterly reports on Form 10-Q and do not include all
of the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction with the
consolidated financial statements and notes thereto for the year ended June 30,
1997, included in the Company's Form 10-K as filed with the Securities and
Exchange Commission on September 26, 1997.
The consolidated balance sheet as of September 30, 1997, the consolidated
statements of income for the three months ended September 30, 1997 and 1996,
and the consolidated statements of cash flows for the three months ended
September 30, 1997 and 1996 are unaudited but, in the opinion of management,
include all adjustments (consisting of normal, recurring adjustments) necessary
for a fair presentation of results for these interim periods. The Company has
reclassified the presentation of certain prior year information to conform with
the current presentation format.
The results of operations for the three months ended September 30, 1997, are
not necessarily indicative of the results to be expected for the entire fiscal
year ending June 30, 1998.
(2) CAPITAL STRUCTURE
On October 10, 1997, the Company declared a 2-for-1 stock split in the form
of a stock dividend to shareholders of record on October 27, 1997. The
dividend is payable November 14, 1997. Accordingly, all common share and per
share data in the accompanying financial statement have been adjusted to give
effect to the stock split.
Item 2. Management Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
- ---------------------
Research and development expenses increased to $1,002,517 in the three
months ended September 30, 1997 from $369,364 in the three months ended
September 30, 1996. The increase is primarily due to higher expenditures for
clinical trials of one-alpha D(subscript2) for treating secondary
hyperparathyroidism associated with end-stage renal disease.
General and administrative expenses increased by $49,407 to $117,300 in
the three months ended September 30 1997 from $67,893 in the three months
ended September 30, 1996. Such increases were incurred to support expanded
research and development activities.
The Company expects total costs and expenses to continue to increase in
the future due principally to the advancement of the Company's clinical
development programs and, if successful, the cost of commercializing its
first product.
Interest income decreased to $111,339 in the three months ended
September 30, 1997 from $144,515 in the three months ended September 30,
1996. This decrease is due to lower invested cash balances.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents decreased $887,681 to $7,644,033 in the three
months ended September 30, 1997. The decrease is primarily due to increased
research and development activities, including clinical trials of one-alpha
D2 as a therapy for secondary hyperparathyroidism in end-stage renal disease,
and for general corporate purposes.
Management believes current levels of cash and cash equivalents are
adequate to finance the Company's operations through the end of calendar
1998. After that time, the Company may require additional funds for research
and development activities and, potentially, costs associated with
commercializing its first product. Additional funds also could be required
before that time if the Company were to expand the scope of its activities.
There is no assurance additional financing will be available on acceptable
terms.
PART II - OTHER INFORMATION
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
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
None
Item 5. Other Information
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995: Certain statements in this
filing, and elsewhere (such as in other filings by the Company
with the Securities and Exchange Commission, press releases,
presentations by the Company or its management and oral
statements) constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual
results, performance, or achievements of the Company to be
materially different from any future results, performance, or
achievements expressed or implied by such forward-looking
statements. Such factors include, among other things, no
assurance of successful product development, technological
risks, uncertainty of regulatory approvals, regulatory policies
in the United States and other countries, availability of
additional financing, reimbursement policies of public and
private health care payors, developments in patents and other
proprietary rights, competition from existing therapies and from
new therapies, and market and general economic factors.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits furnished:
(11) Statement Re: Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended September 30, 1997.
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.
BONE CARE INTERNATIONAL, INC.
(Registrant)
Date: November 13, 1997 /s/ Charles W. Bishop
- ------------------------ ---------------------
Charles W. Bishop
President
(Principal Executive Officer)
Date: November 13, 1997 /s/ Dale W. Gutman
- ------------------------ ------------------
Dale W. Gutman
Vice President of Finance
Principal Financial and
Accounting Officer)
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Exhibit Index
For the Quarterly Period Ended September 30, 1997
No. Description Page
- --- ----------- ----
11 Statement Regarding Computation of Earnings Per Share . . . . . . .12
27 Financial Data Schedule . . . . . . . . . . . . . . . . . . . . . .13
Exhibit 11
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Statement Regarding Computation of Earnings Per Share
(Unaudited)
Three months ended
September 30, September 30,
1997 1996
-------------- -------------
Net loss $ (1,008,478) $ (296,002)
============== =============
Weighted average number of
common shares 8,722,382 8,707,382
============== =============
Net loss per common share $ (0.12) $ (0.03)
============== =============
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from Form 10-Q for the three months ended
September 30, 1997, and is qualified in its entirety by
reference to such financial statements.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 7,644
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 53
<CURRENT-ASSETS> 7,759
<PP&E> 354
<DEPRECIATION> 236
<TOTAL-ASSETS> 9,111
<CURRENT-LIABILITIES> 700
<BONDS> 0
<COMMON> 11,394
0
0
<OTHER-SE> (2,983)
<TOTAL-LIABILITY-AND-EQUITY> 9,111
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,120
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,008)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,008)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,008)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
