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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
MARCH 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number:
SYMYX TECHNOLOGIES, INC.
(Exact name of Registrant issuer as specified in its charter)
DELAWARE 77-0397908
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3100 CENTRAL EXPRESSWAY, SANTA CLARA, CALIFORNIA 95051
(Address of principal executive offices) (Zip code)
(408) 764-2000
(Registrant's telephone number, including area code)
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 April 17, 2000, Registrant had outstanding 29,734,925 Common Stock, $.001
par value.
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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PAGE
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PART I: FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements (unaudited):
Condensed Statements of Operations - three months ended March 31, 2000 and
1999......................................................................... 2
Condensed Balance Sheets - March 31, 2000 and December 31, 1999.............. 3
Condensed Statements of Cash Flows - three months ended March 31, 2000 and
1999......................................................................... 4
Notes to Condensed Financial Statements...................................... 5
Item 2 Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................... 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk...................17
PART II: OTHER INFORMATION
Item 1. Legal Proceedings............................................................18
Item 2. Changes in Securities and Use of Proceeds....................................18
Item 3. Defaults Upon Senior Securities..............................................18
Item 4. Submission of Matters to a Vote of Security Holders..........................18
Item 5. Other Information............................................................18
Item 6. Exhibits and Reports on Form 8-K.............................................18
Signatures...................................................................19
</TABLE>
1
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SYMYX TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
--------------------
2000 1999
------- -------
<S> <C> <C>
Revenues:
Revenue from collaborations and grants ..................... $ 9,091 $ 7,041
Product and license revenue ................................ 2,960 --
------- -------
Total revenues ....................................... 12,051 7,041
Operating costs and expenses:
Cost of products sold ...................................... 196 --
Research and development ................................... 8,581 5,447
Sales, general and administrative .......................... 3,093 1,843
------- -------
Total operating expenses ............................. 11,870 7,290
------- -------
Income (loss) from operations ................................ 181 (249)
Interest income (expense), net ............................... 1,493 177
------- -------
Net income (loss) ............................................ $ 1,674 $ (72)
======= =======
Net income (loss) per share (Basic) .......................... $ 0.06 $ (0.01)
======= =======
Net income (loss) per share (Diluted)......................... $ 0.05 $ (0.01)
======= =======
Shares used in computing basic net income (loss) per share.... 28,351 5,063
======= =======
Shares used in computing diluted net income (loss) per share.. 30,726 5,063
======= =======
</TABLE>
See accompanying notes to condensed financial statements
2
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SYMYX TECHNOLOGIES, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- -----------
(UNAUDITED) (NOTE 1)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ..................................... $ 44,224 $ 28,943
Short-term investments ........................................ 2,481 21,533
Accounts receivable ........................................... 1,102 962
Prepaid expenses .............................................. 1,341 1,555
Inventories ................................................... 1,395 462
Other current assets .......................................... 1,652 1,477
-------- --------
Total current assets ............................................ 52,195 54,932
Property and equipment, net ..................................... 25,928 23,879
Long-term investments ........................................... 68,164 68,794
Other assets .................................................... 2,117 700
-------- --------
$148,404 $148,305
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities ................ $ 3,449 $ 4,951
Accrued compensation and employee benefits .................... 1,024 711
Deferred rent ................................................. 486 478
Deferred revenue .............................................. 11,523 12,189
Current portion of equipment and facility loans ............... 3,399 3,304
-------- --------
Total current liabilities ....................................... 19,881 21,633
Equipment and facility loans .................................... 5,843 6,729
Stockholders' equity:
Preferred stock, 10,000,00 shares authorized, issuable in
series; no shares issued and outstanding ...................... -- --
Common stock, $0.001 par value, 100,000,000 shares authorized and
29,701,338 and 29,638,562 shares issued and outstanding at
March 31, 2000 and December 31, 1999, respectively ............ 30 30
Additional paid-in capital ...................................... 142,921 142,048
Stockholder notes receivable .................................... (731) (731)
Deferred stock compensation ..................................... (1,782) (2,128)
Unrealized gain (loss) on investments ........................... (345) (189)
Accumulated deficit ............................................. (17,413) (19,087)
-------- --------
Total stockholders' equity ...................................... 122,680 119,943
-------- --------
Total liabilities and stockholders' equity ...................... $148,404 $148,305
======== ========
</TABLE>
See accompanying notes to condensed financial statements.
3
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SYMYX TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------------
2000 1999
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<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) .................................................. $ 1,674 $ (72)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization ................................... 1,506 987
Deferred compensation amortization .............................. 323 954
Changes in assets and liabilities:
Accounts receivable ............................................. (140) (909)
Inventories ..................................................... (933) --
Prepaid expenses ................................................ 214 (98)
Other current assets ............................................ (175) (300)
Accounts payable and other current liabilities .................. (1,502) (505)
Deferred revenue ................................................ (666) 3,479
Accrued compensation and employee benefits ..................... 313 37
Deferred rent ................................................... 8 8
Other long-term assets .......................................... (4) (128)
------- --------
Net cash provided by operating activities .......................... 618 3,453
INVESTING ACTIVITIES
Purchase of property and equipment, net ............................ (3,371) (1,232)
Purchase of investments ............................................ (2,961) (11,731)
Proceeds from maturities of investments ............................ 22,355 2,000
Acquisition of technology ......................................... (650) --
------- --------
Net cash provided by (used in) investing activities ................ 15,373 (10,963)
FINANCING ACTIVITIES
Proceeds from issuance of common stock, net of repurchases ......... 81 100
Principal payments on equipment and facility loans ................. (791) (582)
------- --------
Net cash used in financing activities .............................. (710) (482)
------- --------
Net increase (decrease) in cash and cash equivalents ............... 15,281 (7,992)
Cash and cash equivalents at beginning of period ................... 28,943 14,043
------- --------
Cash and cash equivalents at end of period ......................... $44,224 $ 6,051
======= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid ...................................................... $ 256 $ 336
======= ========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Common shares issued and contribution of capital in consideration of
technology acquisition .......................................... $ 815 $ --
======= ========
</TABLE>
See accompanying notes to condensed financial statements
4
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SYMYX TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BUSINESS AND BASIS OF PRESENTATION
Symyx Technologies, Inc. (the "Company") was incorporated on September 20,
1994 in the state of California to research, develop, manufacture and market
products through the application of combinatorial technologies in the area of
materials science. In February 1999, the Company completed a re-incorporation in
the State of Delaware. To date, the Company's operations have involved research
and development activities, a significant portion of which has been funded by
collaborative partners and in the three months ended March 31, 2000 the Company
generated its first product and license revenue.
On November 18, 1999, the Company completed an initial public offering of
its shares pursuant to which it issued 6,368,700 common shares for net proceeds
of approximately $81,420,000. Immediately prior to the closing of the initial
public offering, each outstanding share of preferred stock was converted to
common stock on a seven-for-nine share basis.
The accompanying unaudited condensed financial information has been
prepared by management, in accordance with generally accepted accounting
principles for interim financial information and pursuant to instructions to
Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the Securities and Exchange Commission's rules and regulations. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position at March 31,
2000 and results of operations and cash flows for all periods presented have
been made. The condensed balance sheet at December 31, 1999 has been derived
from the audited financial statements at that date.
These condensed financial statements should be read in conjunction with the
Company's audited financial statements as included in the Company's 1999 Annual
Report on Form 10-K as filed with the Securities and Exchange Commission. The
results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for any subsequent quarter
or for the entire fiscal year ending December 31, 2000.
Comprehensive Income (Loss)
The company has adopted Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income". The only component of other comprehensive
income (loss) is unrealized gains and losses on available-for-sale securities.
Comprehensive income amounted to approximately $1,518,000 for the three months
ended March 31, 2000 compared to a comprehensive loss of approximately $84,000
for the three months ended March 31, 1999.
Inventories
Work in process is the only component of inventories for all periods
presented and comprises instruments in the process of being built for customers.
Revenue Recognition
The Company recognizes revenues from research collaboration agreements and
government grants as earned based upon the performance requirements of the
agreements. Payments received prior to performance are deferred and recognized
as revenue when earned over future performance periods. Collaboration agreements
generally specify minimum levels of research effort required to be performed by
the Company. Payments received under research collaboration agreements are not
refundable if the research effort is not successful. Direct costs associated
with these contracts and grants are reported as research and development
expense.
Non-refundable up-front payments received in connection with research and
development collaboration agreements, including technology access fees, are
deferred and recognized on a straight-line basis over the relevant periods
specified in the agreement, generally the research term.
5
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SYMYX TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
1. BUSINESS AND BASIS OF PRESENTATION (CONTINUED)
Revenue Recognition (continued)
Product and license revenues include sales of Discovery Tools hardware,
software and maintenance together with amounts earned for licenses to third
parties licensed under the Company's intellectual property. Product revenues
from the sale of Discovery Tools are recognized when earned, which is generally
upon shipment, transfer of title to and acceptance by the customer. Reserves are
provided for warranty expenses at the time the associated revenue is recognized.
Payments received in advance under these arrangements are recorded as deferred
revenue until earned.
Amounts earned from third parties licensed under the Company's intellectual
property are recognized when earned under the terms of the related agreements.
2. ACQUISITION OF TECHNOLOGY
In February 2000, the Company exercised an option to license certain patent
rights and know-how relating to synthesis and screening of diverse materials in
connection with combinatorial materials science research. Symyx paid an amount
of $750,000 and issued 16,262 shares of common stock to acquire these rights.
The License Agreement also provides for Symyx to pay up to an additional
$1,500,000 subject to the achievement of certain milestones. The exercise of
this option has been accounted for as an acquisition of technology and the
associated costs will be amortized over the expected useful life of the
technology.
3. EARNINGS PER SHARE
Basic earnings per share is computed using net income and the weighted
average number of common shares outstanding during each period. Diluted earnings
per share is computed using net income and the weighted average number of common
and dilutive common equivalent shares outstanding during each period. The
computation of the weighted average number of shares outstanding for the three
month periods ended March 31, 2000 and 1999 is as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-------------------
2000 1999
------ -------
<S> <C> <C>
Weighted average outstanding shares............... 29,689 6,460
Shares subject to a right of repurchase............ (1,338) (1,397)
------ -------
Weighted average outstanding - used for basic...... 28,351 5,063
Options value using treasury stock method.......... 2,375 --
------ -------
Weighted average outstanding and dilutive
equivalents - used for diluted..................... 30,726 5,063
====== ======
</TABLE>
6
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SYMYX TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
4. DEFERRED COMPENSATION
The amortization of deferred stock compensation, combined with the expense
associated with stock options granted to non-employees, has been included in the
following items in the accompanying statements of operations (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------
2000 1999
----- ----
<S> <C> <C>
Research and Development..................... 227 516
Sales, General and Administrative............ 96 438
----- ----
Total........................................ $323 $954
==== ====
</TABLE>
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of
Operations and other parts of this Form 10-Q contain forward-looking statements
that involve risks and uncertainties. All forward-looking statements included in
this document are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such forward-looking
statements. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in "Factors Affecting Future Results".
OVERVIEW
Symyx was founded in September 1994 and began significant operations in
April 1996. To date, our revenues and cash flows from operations have come from
research collaborations with large chemical and electronics companies,
government grants and sale of product and licenses. Our current corporate
collaborators are Agfa-Gavaert N.V., BASF AG, Bayer AG, Celanese Ltd., The Dow
Chemical Company, Osram Opto Semiconductors GmbH & Co. OHG, PE Corporation, Inc.
through its PE Biosystems Group and Unilever UK Central Resources Ltd. These
agreements are generally for a two or three year guaranteed term. Four of our
research contracts commenced in 1999, representing approximately half of our
committed revenue. We expect that our cash flows and revenue for the remainder
of 2000 and 2001 will be comprised in large part of payments to be made and
revenue to be earned under these agreements together with product and license
revenue particularly from our Discovery Tools business. Four of our research
contracts may end by their terms in 2000.
We have invested heavily in establishing the technology, instrumentation
and informatics necessary to pursue high throughput discovery for proprietary
materials. These materials include:
- catalysts to manufacture commodity chemicals and polyolefins;
- catalysts and polymers for life science applications; and
- new electronic materials.
We expect to continue to make significant investments in research and
development, including the development of new instruments and software, to
enhance our technologies. In addition, an important part of our strategy is to
expand our operations and employee base, and to build our resources for research
and development, business development and marketing.
We have incurred significant losses since our inception. As of March 31,
2000, our accumulated deficit was approximately $17.4 million. We expect to
incur additional operating losses over at least the next year as we continue to
expand staffing, equipment and facilities. See "Factors Affecting Future
Results."
SOURCE OF REVENUES AND REVENUE RECOGNITION POLICY
We recognize revenues from research collaboration agreements and government
grants as earned upon achievement of the performance requirements of the
agreements and grants. Payments received that are related to future performance
are deferred and recognized as revenue as the performance requirements are
achieved. As of March 31, 2000, we have deferred revenues of approximately $11.5
million. The terms of our collaboration agreements generally require us to
perform minimum levels of research. Our sources of potential revenue for the
next several years are likely to be:
- payments under existing and possible future collaborative
arrangements;
- government research grants;
- royalties from our partners based on revenues received from any
products commercialized under those agreements;
- sales of Discovery Tools and other instruments; and
- sales of products or license of technologies discovered in our
internal research programs.
We recognize revenues from the sale of products and from licenses when earned
under the terms of the related agreements.
8
<PAGE> 10
DEFERRED COMPENSATION
Deferred compensation for options granted to employees has been determined
as the difference between the deemed fair market value of our common stock on
the date options were granted and the exercise price. Deferred compensation for
options granted to consultants has been determined in accordance with Statement
of Financial Accounting Standards No. 123 as the fair value of the equity
instruments issued. Deferred compensation for options granted to consultants is
periodically remeasured as the underlying options vest.
In connection with the grant of stock options to employees and consultants,
we recorded deferred stock compensation of approximately $5.4 million in the
year ended December 31, 1999 and $760,000 in the year ended December 31, 1998.
These amounts were initially recorded as a component of stockholders' equity and
are being amortized by charges to operations over the vesting period of the
options. We recorded amortization of deferred compensation of approximately
$323,000 and $954,000 during the 3 month periods ended March 31, 2000 and 1999,
respectively.
RESULTS OF OPERATIONS
Revenues
Our total revenues increased to $12.1 million for the three months ended
March 31, 2000, up 71% from $7.0 million in the same period in 1999. For the
first time, the company generated product and license revenue, with $3.0 million
in revenue from the delivery of Symyx Proprietary Materials to PE Biosystems and
the delivery of a Discovery Tools(TM) system to the Instituto Mexicano Del
Petroleo. Service revenue from Industry Collaborations also increased 29% to
$9.1 million, up from $7.0 million for the quarter ended March 31, 1999, due to
increased funding under current collaborations and the addition of three new
agreements. Bayer, Celanese and The Dow Chemical Company accounted for 23%, 9%
and 12% of total revenue for the three months ended March 31, 2000, and 32%, 12%
and 20% of revenue for the same period in 1999.
Revenue from research collaborations exceeded research and development
expense for the three month periods ended March 31, 2000 and 1999. The excess of
revenue over research and development costs was primarily due to Technology
Access Fees, which are being recognized over the term of the agreements, and
higher reimbursement rates under certain collaboration agreements.
Research and Development Expenses
Our research and development expenses consist primarily of:
- salaries and other personnel-related expenses;
- facility costs;
- supplies; and
- depreciation of facilities and laboratory equipment.
Research and development expenses increased 58% to $8.6 million in the
three months ended March 31, 2000 compared to $5.4 million for the same period
in 1999. The increase was due primarily to increases in salaries and other
personnel related costs, facilities costs, collaborative research and consultant
costs and chemical and scientific supplies costs to support our additional
collaborative and internal research efforts. These increases were partially
offset by a decrease in the deferred compensation charge.
Research and development expenses represented 71% of total revenues in the
three months ended March 31, 2000 and 77% of total revenues for the same
period in 1999. The decrease as a percentage of total revenues was due primarily
to revenue increases associated with the addition of significant contracts in
2000. Our core business is research and development. Accordingly, we expect to
continue to devote substantial resources to research and development, and we
expect that research and development expenses will continue to increase in
absolute dollars.
9
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Sales, General and Administrative Expenses
Our sales, general and administrative expenses consist primarily of
personnel costs for finance, human resources, business development, legal and
general management, as well as professional expenses, such as legal and
accounting. Sales, general and administrative expenses increased 68% to $3.1
million in the three months ended March 31, 2000, from $1.8 million for the same
period in 1999. Expenses increased primarily due to increased salaries,
consultant and other personnel related costs due to additional staffing
necessary to manage and support our growth. Expenses also increased due to an
increase in travel costs related mainly to business development and sales
efforts, an increase in public relations costs associated with being a public
company, an increase in insurance and license costs and expenses related to a
proposed stock offering which was withdrawn during the three months ended March
31, 2000. These increases were partially offset by a decrease in the deferred
compensation charge.
Sales, general and administrative expenses represented 26% of total revenues
for the 3 months ended March 31, 2000 and 26% of total revenues for the same
period in 1999. We expect that our general and administrative expenses will
increase in absolute dollar amounts as we:
- expand our business development and administrative staff;
- add facilities; and
- incur additional costs related to being a public company, including
directors' and officers' insurance, investor relations programs and
increased professional fees.
Net Interest Income (Expense)
Net interest income (expense) represents interest income earned on our cash
and cash equivalents net of interest expense on equipment financing loans.
Interest income increased to approximately $1.8 million for the three months
ended March 31, 2000 from $451,000 for the same period in 1999. This increase
was due to higher average cash balances. Interest expense decreased to $265,000
from $274,000 for the same period in 1999. This decrease was due to a reduction
in the outstanding balances of equipment financing loans used to partially fund
our acquisition of equipment.
Provision for Income Taxes
Due to operating losses and the inability to recognize the benefits
therefrom, there is no provision for income taxes for the three month periods
ended March 31, 2000 and 1999.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations to date, primarily through net proceeds from
our initial public offering of $81.4 million and, prior to the initial public
offering, private placements of preferred stock, totaling $52.2 million,
research and development funding from collaborative partners and, to a lesser
extent, equipment financing loans. As of March 31, 2000, we had $114.9 million
in cash, cash equivalents and investments and $3.7 million available under an
equipment financing line of credit.
Our operating activities provided $618,000 of cash for the three months
ended March 31, 2000 and $3.5 million for the three months ended March 31, 1999.
The source of cash was primarily the receipt of research and development funding
from collaborative partners and revenue from product sales, partially offset by
operating expenses.
Net cash provided by investing activities was $15.4 million for the three
months ended March 31, 2000. Investing activities used cash totaling $11.0
million for the same period in 1999. The fluctuations from period to period are
due primarily to the timing of purchases, sales and maturity of investment
securities and the purchase of property and equipment. Purchases of property and
equipment were $3.4 million for the three months ended March 31, 2000 and $1.2
million for the same period in 1999. We expect to continue to make significant
investments in the purchase of property and equipment to support our expanding
operations.
Financing activities used cash totaling $710,000 for the three months ended
March 31, 2000 and $482,000 for the same period in 1999. These amounts are
primarily repayment of equipment and leasehold improvement loan financings
partially offset by the proceeds from the exercise of stock options.
10
<PAGE> 12
Accounts receivable and other current assets increased at March 31, 2000 as
compared to December 31, 1999. The increase in accounts receivable was due
primarily to the timing of receipts from government sponsored research funding.
The increase in other current assets was primarily due to an increase in
interest receivable from investments resulting from the timing of interest
payments. Deferred revenue decreased at March 31, 2000 as compared to December
31, 1999. This decrease was due to the timing of the receipt of advance payments
under collaborative research programs.
As of March 31, 2000, our principal commitments were $29.1 million.
Principal commitments consisted of our obligations under operating leases. These
obligations are due over the next ten years.
We believe that our current cash balances and the cash flows generated by
operations will be sufficient to satisfy our anticipated cash needs for working
capital and capital expenditures for at least the next two years. However, we
may seek additional financing within this time frame. We may raise additional
funds through public or private financing, collaborative relationships or other
arrangements. We cannot assure you that additional funding, if sought, will be
available on terms favorable to us. Further, any additional equity financing may
be dilutive to stockholders, and debt financing, if available, may involve
restrictive covenants. Collaborative arrangements may require us to relinquish
our rights to some of our technologies or products. Our failure to raise capital
when needed may harm our business and operating results.
A portion of our cash may be used to acquire or invest in complementary
businesses or products or to obtain the right to use complementary technologies.
From time to time, in the ordinary course of business, we may evaluate potential
acquisitions of such businesses, products or technologies.
FACTORS AFFECTING FUTURE RESULTS
WE ARE DEPLOYING NEW TECHNOLOGY IN A NEW BUSINESS AND, AS A RESULT, WE MAY NOT
BE ABLE TO ACHIEVE PROFITABILITY
Our combinatorial materials discovery technologies and processes are new. To
date, our partners have not successfully commercialized as products any
materials that we have discovered using these technologies and processes.
Discovery and development of new materials is a highly uncertain process.
Accordingly, because of these uncertainties, our discovery process may not
result in the identification of development candidates we or our partners will
commercialize. If we are not able to use our technologies to discover new
materials with significant commercial potential, we will be unable to achieve
our objectives or build a sustainable or profitable business.
WE ARE DEPENDENT ON THE RESEARCH AND DEVELOPMENT ACTIVITIES OF COMPANIES IN THE
LIFE SCIENCE AND CHEMICAL INDUSTRIES, AND DECLINES OR REDUCTIONS IN RESEARCH AND
DEVELOPMENT ACTIVITIES IN THESE INDUSTRIES COULD HARM OUR BUSINESS
The market for our discovery services and instrumentation within the life
science and chemical industries depends on our customers' ability and
willingness to invest in research and development. Substantially all of our
revenues are attributable to our research collaborations. Our future revenues
will also be dependent on sales of Discovery Tools and other instrumentation
primarily to chemical companies.
In particular, many companies in the chemical industry have, in the past
several years, experienced declining profitability. In addition, many chemical
products have become commodity products which compete primarily on the basis of
price. As a result, some chemical companies have reduced their research and
development activities. If commoditization of chemical products and other
pressures affecting the industry continue in the future, more companies could
adopt strategies that involve significant reductions in their research and
development programs. Although we believe that our approach can help life
science and chemical companies increase the efficiency of their research and
development activities, our efforts to convince them of this value may be
unsuccessful. To the extent that life science and chemical companies reduce
their research and development activities, they would be less likely to do
business with us. Decisions by these companies to reduce their research and
development activities could therefore reduce our revenues and harm our business
and operating results.
11
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WE ARE DEPENDENT UPON ACCEPTANCE OF OUR TECHNOLOGY AND APPROACH BY CUSTOMERS,
AND IF WE CANNOT ACHIEVE MARKET ACCEPTANCE FROM POTENTIAL CUSTOMERS, WE WILL BE
UNABLE TO BUILD A SUSTAINABLE OR PROFITABLE BUSINESS
Our ability to succeed is also dependent upon the acceptance by potential
customers of our high throughput screening technology as an effective tool in
the discovery of new materials. Historically, life science and chemical
companies have conducted materials research and discovery activities internally
using traditional manual discovery methods. In order for us to achieve our
business objectives, we must convince these companies that our technology and
capabilities justify outsourcing part of their basic research and discovery
programs. If we cannot convince companies in the chemical industry of the
effectiveness of our automated discovery methods, we may be unable to keep our
existing customers or attract additional customers on acceptable terms or
develop a sustainable, profitable business.
WE CANNOT PREDICT THE PACE, QUALITY OR NUMBER OF DISCOVERIES WE MAY GENERATE,
AND ANY INABILITY OF OURS TO GENERATE A SIGNIFICANT NUMBER OF DISCOVERIES WOULD
REDUCE OUR REVENUES AND HARM OUR BUSINESS
Our future revenues and profitability are dependent upon our ability to
achieve discoveries. Because of the inherently uncertain nature of research
activities, we cannot predict with a high level of precision the pace with which
we may generate discoveries or the quality of any discoveries that we may
generate. Due to the uncertain nature of materials discovery, in which several
hundred thousand compounds must often be screened to identify a single
development candidate, we may not generate the number of discoveries that we
would expect to generate from a given number of experiments. In addition, our
development candidates may not result in products having the commercial
potential we or our collaborators anticipate. In either case, our future
revenues from our research collaborations and from commercialization of products
would likely decline. In addition, our existing and potential new customers may
become reluctant to renew or enter into new agreements with us. As a result, our
failure to generate discoveries and development candidates would reduce our
revenues and harm our business and operating results.
WE INTEND TO CONDUCT PROPRIETARY RESEARCH PROGRAMS, AND ANY CONFLICTS WITH OUR
COLLABORATORS OR ANY INABILITY TO COMMERCIALIZE DEVELOPMENT CANDIDATES RESULTING
FROM THIS RESEARCH WOULD HARM OUR BUSINESS
Our strategy involves conducting proprietary research programs. These
programs are focused on discovery of products for specialty markets that have
fewer barriers to entry for an emerging company. In general, our collaborative
research programs are focused on commodity chemical markets, which are larger
than fine chemical and specialty chemical markets that are the focus of our
proprietary programs. We believe that this differentiation of focus will enable
us to minimize conflicts with our collaborators relating to rights to
potentially overlapping leads developed through our proprietary programs and
through programs funded by a collaborator. However, conflicts between us and a
collaborator could potentially arise, particularly if we were to discover a
material in one of our proprietary programs that was a potential target of one
of our collaborative programs. In this event, we may become involved in a
dispute with our collaborator regarding the material. Disputes of this nature
could harm the relationship between us and our collaborator, and concerns
regarding our proprietary research programs could also affect our ability to
enter into new collaborative relationships. If circumstances surrounding our
proprietary research programs were to affect our existing collaborative
relationships or our ability to enter into new relationships, our revenues and
operating results would decline.
In addition, we will either commercialize development candidates resulting
from our proprietary programs directly or through licensing to other companies.
In order for us to commercialize these development candidates directly, we would
need to develop, or obtain through outsourcing arrangements, the capability to
manufacture, market and sell chemical products. We do not have this capability,
and we may not be able to develop or otherwise obtain the requisite
manufacturing, marketing and sales capabilities. If we are unable to
successfully commercialize products resulting from our proprietary research
efforts, our revenues and operating results would decline.
12
<PAGE> 14
WE ARE DEPENDENT ON OUR COLLABORATIONS WITH MAJOR COMPANIES, AND THE FAILURE OF
OUR COLLABORATIVE PARTNERS TO SUCCESSFULLY COMMERCIALIZE PRODUCTS WOULD REDUCE
OUR REVENUES AND HARM OUR BUSINESS
To date, substantially all of our revenues have come from collaborative
arrangements with chemical, electronics and life science companies. These
contracts generally expire after a fixed period of time. If they are not renewed
or if we do not enter into new collaborative arrangements, our business and
operating results may be harmed. For example, our contracts with the B.F.
Goodrich Company and Hoechst AG were terminated by mutual agreement as these
companies shifted their business away from chemicals.
For us to achieve and sustain a significant level of profitability, we must
achieve discoveries with significant commercial potential, and our collaborators
must successfully commercialize products based on our discoveries. We will not
receive royalties on sales of products by our collaborators until the
collaborator has commenced commercial sales of a product resulting from the
collaboration. We are dependent upon our collaborative partners to successfully
commercialize products resulting from our collaborations. The failure of our
partners to commercialize development candidates resulting from our research
efforts would reduce our revenues and would harm our business and operating
results.
WE HAVE CONTRACTS FOR ONLY TWO DISCOVERY TOOLS SYSTEMS, AND WE CANNOT ASSURE YOU
THAT WE WILL BE ABLE TO BUILD A SUSTAINABLE BUSINESS RELATED TO THE SALE OF
ADDITIONAL SYSTEMS
We have contracts for only two of our Discovery Tools systems. Because of the
high cost and complexity of these systems, the sales cycle for them is likely to
be long. Sales of these systems will require us to educate our potential
customers about the full benefits of these systems, which may require
significant time. Due to these factors, sales of Discovery Tools systems will be
subject to a number of significant risks over which we have little or no
control, including:
- customers' budgetary constraints and internal acceptance review procedures;
and
- potential downturns in general or in industry specific economic
conditions.
If the cycle for Discovery Tools systems lengthens unexpectedly, it could
adversely affect the timing of our revenues.
WE WILL NEED TO DEVELOP MANUFACTURING, SALES AND MARKETING CAPABILITIES FOR
DISCOVERY TOOLS, AND IF WE ARE UNABLE TO DO SO, WE WILL BE UNABLE TO BUILD OUR
DISCOVERY TOOLS BUSINESS
In order to successfully market and sell these systems, we will need to
develop the capability to manufacture, market and sell large capital equipment
items. Although we have several business development professionals with
experience in this area, we may need to hire additional personnel. We may not be
able to develop the necessary manufacturing capability or to sell additional
systems and we may not be able to build a sustainable business related to the
sale of these systems. Factors that could impact our ability to manufacture and
commercialize our Discovery Tools include:
- manufacturing difficulties involving quality control, quality
assurance and shortage of qualified personnel;
- complexity of our systems and difficulties we may encounter in meeting
individual customer specifications and commitments on a timely basis;
- the fact that there may be only a limited number of customers that are
willing to pay several million dollars for our systems; and
- a long sales cycle that involves substantial human and capital
resources.
If we are not able to build the business infrastructure to support our
Discovery Tools business, we will be unable to expand this business. Because we
expect future revenue growth from the sale of Discovery Tools, our revenues may
decline or not grow as anticipated if we are unable build the infrastructure to
support this business.
13
<PAGE> 15
WE INTEND TO COMMERCIALIZE OUR MANUAL LABORATORY INSTRUMENTS THROUGH A THIRD
PARTY ARRANGEMENT, AND IF THIS THIRD PARTY DOES NOT PERFORM EFFECTIVELY, OUR
ABILITY TO GENERATE REVENUE FROM THE SALE OF THESE PRODUCTS WILL BE HARMED
We intend to commercialize our manual laboratory instruments through our
relationship with Argonaut Technologies. The commercial success of these
instruments will depend in large part on their features and price as compared to
competing products and on their ability to achieve market acceptance. In
addition, our ability to realize significant commercial sales of these
instruments will also depend on the efforts of Argonaut in promoting, marketing
and selling these instruments. Argonaut's efforts in this regard will be outside
of our control. Accordingly, to the extent that Argonaut fails to effectively
promote, market and sell our manual instruments, our revenues from the sales of
these instruments, and therefore our operating results, would be harmed.
WE EXPECT THAT OUR QUARTERLY RESULTS OF OPERATIONS WILL FLUCTUATE, AND THIS
FLUCTUATION COULD CAUSE OUR STOCK PRICE TO DECLINE, CAUSING INVESTOR LOSSES
Our quarterly operating results have fluctuated in the past and are likely to
do so in the future. These fluctuations could cause our stock price to fluctuate
significantly or decline. Revenues in future fiscal periods may be greater or
less than revenues in the immediately preceding period or in the comparable
period of the prior year. Some of the factors which could cause our operating
results to fluctuate include:
- expiration of research contracts with major chemical companies, which may
not be renewed or replaced with contracts with other companies;
- the success rate of our discovery efforts associated with milestones and
royalties;
- the timing and willingness of partners to commercialize our
discoveries which would result in royalties;
- the size and timing of customer orders for, and shipments of, Discovery
Tools instrumentation;
- the size and timing of late stage licensing agreements we may enter into;
and
- general and industry specific economic conditions, which may affect our
customers' capital investment levels.
A large portion of our expenses, including expenses for facilities, equipment
and personnel, are relatively fixed in nature. Accordingly, in the event
revenues decline or do not grow as anticipated due to expiration of research
contracts, failure to obtain new contracts or other factors, we may not be able
to correspondingly reduce our operating expenses. In addition, we plan to
significantly increase operating expenses in 2000. Failure to achieve
anticipated levels of revenues could therefore significantly harm our operating
results for a particular fiscal period.
Due to the possibility of fluctuations in our revenues and expenses, we
believe that quarter-to-quarter comparisons of our operating results are not a
good indication of our future performance. Our operating results in some
quarters may not meet the expectations of stock market analysts and investors.
In that case, our stock price would probably decline, and investors would
experience a decline in the value of their investment.
THE LOSS OF KEY PERSONNEL OR THE INABILITY TO ATTRACT AND RETAIN ADDITIONAL
PERSONNEL COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS
We believe our future success will depend upon our ability to attract and
retain highly skilled personnel, including W. Henry Weinberg, our Senior Vice
President and Chief Technical Officer, and other key scientific and managerial
personnel. We do not have any key-person life insurance relating to our key
personnel. These employees are at-will and not subject to employment contracts.
We may not be successful in attracting and retaining key personnel in the
future.
As we seek to expand our operations, the hiring of qualified scientific and
technical personnel will be difficult due to the limited availability of
qualified professionals. The number of people with experience in the fields of
combinatorial materials science and combinatorial chemistry is limited, and we
face intense competition for these types of employees. We have in the past
experienced difficulty in recruiting qualified personnel. Failure to attract and
retain personnel, particularly scientific and technical personnel, would impair
our ability to grow our business and pursue new discovery initiatives and
collaborative arrangements.
14
<PAGE> 16
COMPETITION COULD INCREASE, AND COMPETITIVE DEVELOPMENTS COULD RENDER OUR
TECHNOLOGIES OBSOLETE OR NONCOMPETITIVE, WHICH WOULD REDUCE OUR REVENUES AND
HARM OUR BUSINESS
The field of combinatorial materials science is increasingly competitive. We
are aware of several companies that are applying their expertise in
combinatorial chemistry to materials research and development. We are also aware
of some chemical companies that have internal combinatorial programs. For
example, Shell Chemicals is participating in a consortium in The Netherlands and
BASF is funding a new start-up company in Heidelberg, Germany named HTE. BASF is
also one of our collaborative partners. In addition, academic and research
institutions may seek to develop technologies that would be competitive with our
systems for materials discovery. Because combinatorial materials science is an
emerging field, competition from additional entrants may increase.
Many of our current and potential competitors have greater financial,
manufacturing, marketing and sales resources than we do. In addition, some of
our existing competitors may, individually or together with companies affiliated
with them, have greater human and scientific resources than we do. Our
competitors could develop technologies and methods for materials research and
discovery that render our technologies and systems obsolete or less competitive.
Any competitive developments of this nature would make our technologies and
methodologies less competitive. Accordingly, if competitors introduce new
materials discovery technologies that are faster or more cost-effective than our
technologies, customers may switch to these new technologies. We would then
experience a decline in our revenues and operating results.
ANY INABILITY OF OURS TO KEEP PACE WITH TECHNOLOGICAL ADVANCES AND EVOLVING
INDUSTRY STANDARDS WOULD HARM OUR BUSINESS
The market for our products is characterized by continuing technological
development, evolving industry standards and changing customer requirements. Due
to increasing competition in our field, it is likely that the pace of innovation
and technological change will increase. The introduction of products by our
direct competitors or others embodying new technologies, the emergence of new
industry standards or changes in customer requirements could render our existing
products obsolete, unmarketable or less competitive. Our success depends upon
our ability to enhance existing products and services and to respond to changing
customer requirements. Failure to develop and introduce new products and
services, or enhancements to existing products, in a timely manner in response
to changing market conditions or customer requirements will harm our future
revenues and our business and operating results.
OUR INABILITY TO ADEQUATELY PROTECT OUR PROPRIETARY TECHNOLOGY COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS
The success of our business depends on our ability to protect our
intellectual property portfolio and obtain patents without infringing the
proprietary rights of others. If we do not effectively protect our intellectual
property, our business and operating results could be harmed.
Patents may not issue from our applications. Even if we are able to obtain
patents covering our technology, the patents may be challenged, circumvented,
invalidated or unenforceable. Competitors may develop similar technology or
design around any patents issued to us or our other intellectual property
rights. Our competitors would then be able to offer research services and
develop, manufacture and sell products which compete directly with our research
services and products. In that case, our revenues and operating results would
decline.
We also seek to protect our technology and processes in part by
confidentiality agreements with our collaborators, employees and consultants. We
also do not provide broad access to our proprietary technologies and processes
to collaborators. However, confidentiality agreements might be breached by
collaborators, former employees or others, and in that event, we might not have
adequate remedies for the breach. Further, our trade secrets might otherwise
become known or be independently discovered by competitors. Unauthorized
disclosure of our trade secrets could enable competitors to use some of our
proprietary technologies. This would harm our competitive position and could
cause our revenues and operating results to decline.
15
<PAGE> 17
LITIGATION OR OTHER PROCEEDINGS OR THIRD PARTY CLAIMS OF INFRINGEMENT COULD
REQUIRE US TO SPEND TIME AND MONEY AND COULD SHUT DOWN SOME OF OUR OPERATIONS
We may receive communications from others in the future asserting that our
business or technologies infringe their intellectual property rights. If we
became involved in litigation or interference proceedings declared by the United
States Patent and Trademark Office, or oppositions or other intellectual
property proceedings outside of the United States, to defend our intellectual
property rights or as the result of alleged infringement of the rights of
others, we might have to spend significant amounts of money. The litigation or
proceedings could divert our management's time and efforts. An adverse ruling,
including an adverse decision as to the priority of our inventions, would
undercut or invalidate our intellectual property position. An adverse ruling
could also subject us to significant liability for damages or prevent us from
using or marketing systems, processes or products. Any of these events would
have a negative impact on our business and operating results. Even unsuccessful
claims could result in significant legal fees and other expenses, diversion of
management's time and disruptions in our business. Uncertainties resulting from
the initiation and continuation of any patent or related litigation could harm
our ability to compete, pending resolution of the disputed matter.
We believe we have taken adequate measures to assess the validity of our
intellectual property rights. We are not currently involved in any disputes with
third parties regarding intellectual property rights. However, we may become
involved in intellectual property disputes or receive communications from others
in the future asserting that our business or technologies infringe their
intellectual property rights. To settle these disputes, we may need to obtain
licenses to patents or other proprietary rights held by others. However, these
licenses might not be available on acceptable terms, or at all. In that event,
we could encounter delays in system, process or product introductions while we
attempt to design around the patents. Our redesigned systems, processes or
products may be inferior to our original designs or we may be unable to continue
system, process or product development in the particular field. In either case,
our competitive position, business, revenues and operating results would likely
suffer.
WE USE HAZARDOUS MATERIALS IN OUR BUSINESS, AND ANY CLAIMS RELATING TO IMPROPER
HANDLING, STORAGE OR DISPOSAL OF THESE MATERIALS COULD SUBJECT US TO SIGNIFICANT
LIABILITIES
Our business involves the use of a broad range of hazardous chemicals and
materials. Environmental laws impose stringent civil and criminal penalties for
improper handling, disposal and storage of these materials. In addition, in the
event of an improper or unauthorized release of, or exposure of individuals to,
hazardous materials, we could be subject to civil damages due to personal injury
or property damage caused by the release or exposure. A failure to comply with
environmental laws could result in fines and the revocation of environmental
permits, which could prevent us from conducting our business. Accordingly, any
violation of environmental laws or failure to properly handle, store or dispose
of hazardous materials could result in restrictions on our ability to operate
our business and could require us to incur potentially significant costs for
personal injuries, property damage and environmental cleanup and remediation.
OUR FACILITIES ARE LOCATED NEAR KNOWN EARTHQUAKE FAULT ZONES, AND THE OCCURRENCE
OF AN EARTHQUAKE OR OTHER CATASTROPHIC DISASTER COULD CAUSE DAMAGE TO OUR
FACILITIES AND EQUIPMENT AND HARM OUR BUSINESS
Our facilities are located in the Silicon Valley near known earthquake fault
zones and are vulnerable to damage from earthquakes. In October 1989, a major
earthquake that caused significant property damage and a number of fatalities
struck this area. We are also vulnerable to damage from other types of
disasters, including fire, floods, power loss, communications failures and
similar events. If any disaster were to occur, our ability to operate our
business at our facilities would be seriously, or potentially completely,
impaired. In addition, the unique nature of our research activities and of much
of our equipment could make it difficult for us to recover from a disaster. The
insurance we maintain may not be adequate to cover our losses resulting from
disasters or other business interruptions. Accordingly, an earthquake or other
disaster could harm our business and operating results.
WE HAVE EXPERIENCED SIGNIFICANT GROWTH, AND WE MUST IMPROVE OUR OPERATIONAL,
FINANCIAL AND MANAGEMENT CONTROLS AND SYSTEMS TO KEEP PACE WITH OUR GROWTH
We have experienced a period of rapid and substantial growth that has placed
and, if such growth continues, will continue to place a strain on our human and
capital resources. If we are unable to manage this growth effectively, our
business, results of operations or financial condition may be materially
adversely affected. Our ability to manage our operations and growth effectively
requires us to continue to improve our operational, financial and management
controls, reporting systems and procedures and hiring programs. Due to the pace
of our growth, we may be unable to successfully implement improvements to our
management information and control systems in an efficient or timely manner and
may discover deficiencies in existing systems and controls.
16
<PAGE> 18
OTHER RISK FACTORS
SOME OF OUR EXISTING STOCKHOLDERS CAN EXERT CONTROL OVER US, AND MAY NOT MAKE
DECISIONS THAT ARE IN THE BEST INTERESTS OF ALL STOCKHOLDERS
Our officers, directors and principal stockholders (greater than 5%
stockholders) together control approximately 33.1% of our outstanding common
stock. As a result, these stockholders, if they act together, will be able to
exert a significant degree of influence over our management and affairs and over
matters requiring stockholder approval, including the election of directors and
approval of significant corporate transactions. This concentration of ownership
may have the effect of delaying or preventing a change in control of Symyx and
might affect the market price of our common stock, even when such a change may
be in the best interests of all stockholders.
OUR STOCK PRICE HAS BEEN AND MAY CONTINUE TO BE VOLATILE
The market price of our common stock since our initial public offering has
increased dramatically and has been highly volatile. Volatility in the market
price for our common stock will be affected by a number of factors, including
the following:
- the announcement of new products or services by us or our competitors;
- quarterly variations in our or our competitors' results of operations;
- failure to achieve operating results projected by securities analysts;
- changes in earnings estimates or recommendations by securities analysts;
- developments in our industry; and
- general market conditions and other factors, including factors unrelated
to our operating performance or the operating performance of our
competitors.
These factors and fluctuations, as well as general economic, political and
market conditions, may materially adversely affect the market price of our
common stock.
POTENTIAL SALES OF SHARES ELIGIBLE FOR FUTURE SALE COULD CAUSE OUR STOCK PRICE
TO DECLINE
If our stockholders sell substantial amounts of our common stock (including
shares issued upon the exercise of outstanding options and warrants) in the
public market, the market price of our common stock could fall. These sales also
might make it more difficult for us to sell equity or equity-related securities
in the future at a time and price that we deem appropriate. On May 17, 2000,
approximately 23.0 million shares of our common stock held by existing
stockholders will become freely tradable, subject in some instances to the
volume and other limitations of Rule 144. Sales of these shares and other shares
of common stock held by existing stockholders could cause the market price of
our common stock to decline.
PROVISIONS OF OUR CHARTER DOCUMENTS MAY HAVE ANTI-TAKEOVER EFFECTS THAT COULD
PREVENT A CHANGE IN OUR CONTROL, EVEN IF THIS WOULD BE BENEFICIAL TO
STOCKHOLDERS
Provisions of our amended and restated certificate of incorporation, bylaws
and Delaware law could make it more difficult for a third party to acquire us,
even if doing so would be beneficial to our stockholders. These provisions
include:
- a classified board of directors, in which our board is divided into three
classes with three year terms with only one class elected at each annual
meeting of stockholders, which means that a holder of a majority of our
common stock will need two annual meetings of stockholders to gain control
of the board;
- a provision which prohibits our stockholders from acting by written
consent without a meeting;
- a provision which permits only the board of directors, the president or
the chairman to call special meetings of stockholders; and
- a provision which requires advance notice of items of business to be
brought before stockholders meetings.
These provisions can be amended only with the vote of the holders of 66 2/3%
of our outstanding capital stock.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the reported market risks since December
31, 1999.
17
<PAGE> 19
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any material pending legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
Report of Use of Proceeds from Initial Public Offering date
November 18, 1999
Aggregate offering price $89,161,800
Expenses incurred in connection with offering 7, 741,326
-----------
Net offering proceeds to issuer 81,420,474
Purchase of equipment 9,031,936
Temporary investment in marketable securities 55,282,253
Working capital 17,106,285
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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
(a) Exhibits
27.01 Financial Data Schedule
(b) Reports on Forms 8-K.
The Company did not file any reports on Form 8-K during the period covered
by this report.
18
<PAGE> 20
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.
SYMYX TECHNOLOGIES,INC.
(Registrant)
Date: May 9, 2000
/s/ Steven D.Goldby
Steven D. Goldby
Chairman of the Board,
Chief Executive Officer
(Principle Executive Officer)
Date: May 9, 2000
/s/ Jeryl L. Hilleman
Jeryl L. Hilleman
Senior Vice President,
Chief Financial Officer
(Principle Financial and Accounting Officer)
19
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
27.01 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
BALANCE SHEETS, CONDENSED STATEMENTS OF OPERATIONS AND NOTES TO CONDENSED
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-START> JAN-01-2000 JAN-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-1999
<CASH> 44,224 6,051
<SECURITIES> 2,481 8,575
<RECEIVABLES> 1,102 1,535
<ALLOWANCES> 0 0
<INVENTORY> 1,395 0
<CURRENT-ASSETS> 52,195 17,398
<PP&E> 34,506 21,050
<DEPRECIATION> 8,578 4,622
<TOTAL-ASSETS> 148,404 56,310
<CURRENT-LIABILITIES> 19,881 12,236
<BONDS> 0 0
0 0
0 21
<COMMON> 30 7
<OTHER-SE> 122,650 37,108
<TOTAL-LIABILITY-AND-EQUITY> 148,404 56,310
<SALES> 2,960 0
<TOTAL-REVENUES> 12,051 7,041
<CGS> 196 0
<TOTAL-COSTS> 196 0
<OTHER-EXPENSES> 11,674 7,290
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 265 274
<INCOME-PRETAX> 1,674 (72)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 1,674 (72)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,674 (72)
<EPS-BASIC> (0.06) (0.01)
<EPS-DILUTED> (0.05) (0.01)
</TABLE>
