<PAGE>1
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 December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-11580
PHARMAKINETICS LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 52-1067519
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 West Fayette Street
Baltimore, Maryland 21201
(Address of principal executive offices)
(410) 385-4500
(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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes _X_ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. 2,496,129
common shares were outstanding as of February 8, 1999.
</PAGE>
<PAGE>2
PHARMAKINETICS LABORATORIES, INC.
FORM 10-Q
INDEX
Page No.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheets at December 31, 3
1998 (unaudited) and June 30, 1998
Consolidated statements of operations for 4
the three and six months ended December 31,
1998 and 1997 (unaudited)
Consolidated statements of comprehensive 5
income (loss) for the three and six months
ended December 31, 1998 and 1997 (unaudited)
Consolidated statements of cash flows for 6
the six months ended December 31, 1998
and 1997 (unaudited)
Notes to consolidated financial statements (unaudited) 7
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures 13
About Market Risk
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
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</PAGE>
<PAGE>3 PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1998 1998
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 2,375,765 $ 3,358,506
Accounts receivable, net 1,309,507 1,731,853
Contracts in process 385,410 740,084
Prepaid expenses 204,764 251,023
------------ ------------
Total Current Assets 4,275,446 6,081,466
Property, plant and equipment, net 4,444,764 3,822,373
Other assets 159,798 203,639
------------ ------------
Total Assets $ 8,880,008 $ 10,107,478
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 815,525 $ 916,816
Deposits on contracts in process 846,009 1,082,005
------------ ------------
Total Current Liabilities 1,661,534 1,998,821
Other liabilities 185,574 235,074
------------ ------------
Total Liabilities 1,847,108 2,233,895
------------ ------------
Commitments and Contingencies
Stockholders' Equity:
Class A Convertible Preferred stock, no
par value; authorized 1,500,000 shares;
issued and outstanding 833,300 shares 4,937,500 4,937,500
Common stock, $.005 par value; authorized,
10,000,000 shares; issued and
outstanding, 2,496,129 and 2,456,129
shares, respectively 12,481 12,281
Additional paid-in capital 11,929,886 11,867,086
Accumulated deficit (9,823,251) (8,964,909)
Accumulated comprehensive income (loss) (23,716) 21,625
------------ ------------
Total Stockholders' Equity 7,032,900 7,873,583
------------ ------------
Total Liabilities and Stockholders' Equity $ 8,880,008 $ 10,107,478
============ ============
- -----------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
</PAGE> -3-
<PAGE>4 PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $2,384,987 $3,372,372 $5,191,119 $6,787,020
Cost of contracts 2,181,527 2,388,184 4,629,000 4,711,944
---------- ---------- ---------- ----------
Gross profit 203,460 984,188 562,119 2,075,076
Selling, general and
administrative expenses 613,418 721,240 1,220,490 1,230,780
Research and
development expenses 129,173 124,217 262,730 242,290
---------- ---------- ---------- ----------
Earnings (loss) from operations (539,131) 138,731 (921,101) 602,006
Interest expense 7,573 45,380 15,778 90,787
Interest income 37,106 22,536 78,537 33,154
---------- ---------- ---------- ----------
Earnings (loss)
before income taxes (509,598) 115,887 (858,342) 544,373
Income taxes - - - -
---------- ---------- ---------- ----------
Net earnings (loss) (509,598) 115,887 (858,342) 544,373
Accretion of
preferred stock dividend - (1,020,793) - (1,020,793)
---------- ---------- ---------- ----------
Net loss applicable
to common stockholders $ (509,598)$ (904,906) $ (858,342)$ (476,420)
========== ========== ========== ==========
Basic loss per share ($0.20) ($0.37) ($0.35) ($0.20)
========== ========== ========== ==========
Diluted loss per share ($0.20) ($0.37) ($0.35) ($0.20)
========== ========== ========== ==========
Basic and diluted weighted
average shares outstanding 2,496,089 2,439,129 2,490,654 2,439,129
========== ========== ========== ==========
- -----------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
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</PAGE>
<PAGE>5
PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net earnings (loss) $ (509,598)$ 115,887 $ (858,342)$ 544,373
Other comprehensive income:
Unrealized loss on investment (27,204) - (45,341) -
---------- ---------- ---------- ----------
Comprehensive income (loss) $ (536,802)$ 115,887 $ (903,683)$ 544,373
========== ========== ========== ==========
- ------------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
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</PAGE>
<PAGE>6 PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION> Six Months Ended
December 31,
-------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (858,342) $ 544,373
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization 284,335 266,191
Changes in operating assets and liabilities:
Accounts receivable, net 422,346 (541,590)
Contracts in process 354,674 (108,124)
Prepaid expenses and other assets 44,759 (154,588)
Accounts payable and accrued expenses (98,377) 114,330
Deposits on contracts in process (235,996) 278,794
------------ -----------
Net cash provided (used) by operating activities (86,601) 399,386
------------ -----------
Cash flows from investing activities:
Payment for purchases of property and equipment (906,726) (87,267)
------------ -----------
Net cash used by investing activities (906,726) (87,267)
------------ -----------
Cash flows from financing activities:
Payments for capital lease obligations (52,414) (56,945)
Proceeds from exercise of stock options 63,000 -
Proceeds from issuance of preferred stock, net - 4,683,387
Proceeds from issuance of warrants - 62,500
Payments on long-term debt - (72,456)
------------ -----------
Net cash provided by financing activities 10,586 4,616,486
------------ -----------
Increase (decrease) in cash and equivalents (982,741) 4,928,605
Cash and equivalents, beginning of period 3,358,506 556,040
------------ -----------
Cash and equivalents, end of period $ 2,375,765 $ 5,484,645
============ ===========
Supplemental Cash Flow Information:
Non-Cash Transactions:
Fixed assets acquired through capital leases $ - $ 340,165
Accretion of preferred stock dividend $ - $ 1,020,793
Cash Paid for Interest: $ 15,574 $ 90,463
Cash Paid for Income Taxes: $ - $ -
- ------------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
</PAGE> -6-
<PAGE>7
PHARMAKINETICS LABORATORIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The consolidated balance sheet as of December 31, 1998, the
consolidated statements of operations for the three and six months ended
December 31, 1998 and 1997, the consolidated statements of comprehensive
income (loss) for the three and six months ended December 31, 1998 and 1997,
and the consolidated statements of cash flows for the six months
ended December 31, 1998 and 1997, have been prepared by the Company without
audit. In the opinion of management, all adjustments necessary to present
fairly the financial position, results of operations and cash flows at
December 31, 1998, and for all periods presented, have been made. The
consolidated balance sheet at June 30, 1998 has been derived from the
audited financial statements as of that date. Prior period financial
information gives retroactive effect to a change in the number of shares of
authorized Common Stock to 10,000,000, an increase in par value to $0.005
per share, and a five-to-one reverse stock split all of which were
effective by the close of business on April 17, 1998.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended June 30, 1998.
The Company operates principally in one industry segment, the
testing of pharmaceutical products and related services. Revenues
include contract revenue and revenue from license fees under special
agreements whereby the Company receives license fees based upon the
clients' actual product sales.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual amounts could differ from these
estimates.
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share ("EPS") is calculated by dividing net
earnings (loss) by the weighted average common shares outstanding
-7-
</PAGE>
<PAGE>8
during the period. Diluted EPS reflects the potential dilution to EPS
that could occur upon conversion or exercise of securities, options or
other such items, to common shares using the treasury stock method based
upon the weighted average fair value of the Company's common stock during
the period. The Company's Class A Convertible Preferred Stock, warrants to
acquire common stock, outstanding stock options granted under the Company's
stock option plans and other options granted outside of the Company's plans
are considered common stock equivalents for the purpose of the diluted
earnings (loss) per share data; however, they are excluded from the
calculations for the three and six month periods ended December 31, 1998,
because the effect of their inclusion would be anti-dilutive. For the three and
six month periods ended December 31, 1998, dilutive common stock equivalents
totaled 1,678,949, and 1,734,613, respectively, of which 12,349 and 68,013,
respectively, related to options outstanding. For the three and six month
periods ended December 31, 1997, the weighted average shares used in computing
basic earnings per share were 2,439,129 and the dilutive common stock
equivalents totaled 233,293 and 104,684, respectively, all of which related to
outstanding options.
RECENT ACCOUNTING PRONOUNCEMENTS
In the quarter ended September 30, 1998, the Company adopted
the Financial Accounting Standards Board's SFAS No. 130, "Reporting
Comprehensive Income", which requires additional disclosures with respect
to certain changes in assets and liabilities that previously were not
required to be reported as part of results of operations. Additionally,
the Financial Accounting Standards Board has issued SFAS No. 131, "Disclosures
about Segments of the Enterprise and Related Information", which
establishes standards for the way that public business enterprises report
information in annual statements and interim financial reports regarding
operating segments, products and services, geographic areas and major
customers. SFAS 131 will be effective for the Company beginning with its
annual report on Form 10-K for the fiscal year ending June 30, 1999, and
will apply to both annual and interim financial reporting. The Company is
evaluating the impact of SFAS 131 on its required disclosure. For SFAS 130
disclosure see "Consolidated Statements of Comprehensive Income (Loss)".
PART I.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
CERTAIN FORWARD-LOOKING INFORMATION
Certain statements in this Management's Discussion and Analysis and
elsewhere in this Form 10-Q are forward-looking statements based on current
expectations, and entail various risks and uncertainties that could cause
actual results to differ materially from those expressed in
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</PAGE>
<PAGE>9
such forward-looking statements. Such risks and uncertainties include the
fluctuation in quarterly operating results which arise from the timing of
orders and the Company's ability to complete projects in a timely manner
once awarded to the Company, dependence of the Company on the product
development cycles of its clients, dependence of the Company on certain
customers, and dependence of the Company on its key personnel, their
ability to continuously develop new methodology for clinical and analytical
applications and the Company's ability to bring its information technology
and non-information technology systems into compliance with standards for
successful operations as of January 1, 2000. Other more general factors
that could cause or contribute to such differences include, but are not
limited to, general economic conditions, conditions affecting the
pharmaceutical industry, and consolidation resulting in increased
competition within the Company's market.
RESULTS OF OPERATIONS
The Company's total revenue, which includes contract revenue and
license fees based upon clients' actual product sales, decreased 29.3% and
23.5%, to $2,384,987 and $5,191,119, for the three and six month periods ended
December 31, 1998, from $3,372,372 and $6,787,020, respectively, for the same
periods in the prior year. The decrease was the result of lower contract
revenue from a reduced number of contracts and significantly lower license fee
income.
Contract revenues decreased 27.0% and 19.6% to $2,296,131 and $5,043,882,
for the three and six month periods ended December 31, 1998, respectively,
compared to $3,145,495 and $6,272,961, in the same periods in 1997, primarily as
the result of a reduction in revenues of approximately $1,600,000 for Phase I
and bioequivalence studies for the six month period ended December 31, 1998, as
compared with the same period of the prior year. The decrease was offset by an
increase of approximately $500,000 in contract revenue from Clinical Trials
Management studies. The Company believes that the decline in contract revenues
is the result of the cyclical nature of its business and an increasingly
competitive market for its services which has resulted in aggressive price
competition.
License fee income decreased 60.8% and 71.4% to $88,856 and $147,237, for
the three and six month periods ended December 31, 1998, compared to $226,877
and $514,059, respectively, for the same periods in the prior year. This
decrease was the result of the scheduled termination of one license agreement in
October 1997 and reduced pricing for one of the generic products which is a
major contributor to license fee revenues. At December 31, 1998, the Company
had two license fee agreements from which it was receiving income. This license
fee income, based on clients' sales of approved drugs, will continue through the
expiration of these agreements. The most significant agreement is set to
expire in fiscal 2004, with the other expected to expire in fiscal 2000.
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</PAGE>
<PAGE>10
The Company believes it is unlikely that clients will wish to make use of
license fee arrangements in the future. As a result, contract revenues,
rather than license fee income, will continue to be the primary source of
revenues.
The Company's gross profit decreased 79.3% and 72.9%, to $203,460 and
$562,119 for the three and six month periods ended December 31, 1998,
respectively, compared to $984,188 and $2,075,076 for the same periods of the
prior year. Gross profit as a percentage of revenues declined to 8.5% and
10.8%, for the three and six month periods ended December 31, 1998, from 29.2%
and 30.6%, respectively, for the comparable periods of the prior year. The
decrease in gross margin for the three and six month periods ended December 31,
1998, reflects the fact that in the short term the Company's costs are
relatively fixed and, in keeping with its strategic plan, investment in
personnel and instrumentation has been ongoing to improve the Company's long
term competitive position. As a result, staffing remained at levels comparable
to the prior year despite decreases in revenue.
Selling, general and administrative expenses of $613,418 and $1,220,490 for
the three and six month periods ended December 31, 1998, decreased 14.9% and
0.8%, respectively, compared to $721,240 and $1,230,780 for the same periods in
the prior year. During the three and six month periods of the prior year, the
Company had established an allowance for doubtful accounts which had the effect
of increasing selling, general and administrative expenses by $300,000.
Selling, general and administrative expenses, excluding the effect of the
allowance for doubtful accounts in the prior periods, would have increased by
45.6% and 31.1% in the three and six month periods ended December 31, 1998,
compared to the comparable periods of the prior year. As a percentage of
revenues, selling, general and administrative expenses increased from 21.4% and
18.1% in the three and six month periods ended December 31, 1997, to 25.7% and
23.5%, respectively, in the three and six month periods ended December 31, 1998.
This increase is due to reduced revenues and the implementation of the Company's
plan to enhance its sales and marketing efforts through the development and
introduction of new marketing materials, the addition of new business
development personnel and the resulting increase in travel expenditures
necessary to have these people visit existing and potential clients in the U.S.
and Europe. The Company continues to focus its business development efforts
on generating revenues from existing and potential clients.
Research and development expenses increased 4.0% and 8.4% to $129,173 and
$262,730 for the three and six month periods ended December 31, 1998,
respectively, from $124,217 and $242,290 for the comparable periods of the prior
year. This was the result of increased efforts by the Company's laboratory
research and development group to develop methods for utilization in current and
future studies related primarily to its LC/MS/MS instrumentation. In October
1998, the Company acquired the fourth of these instruments. The Company
believes that these investments will result in the generation of new business
and improvement in its competitive position.
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</PAGE>
<PAGE>11
No provision for income taxes has been recorded. The Company has
available unused operating loss and business tax credit carryforwards,
the benefit of which is reduced by a full valuation allowance.
YEAR 2000
As reported in the Company's annual report on Form 10-K for the year
ended June 30, 1998, the Company has initiated its Year 2000 compliance
program, the purpose of which is to identify those systems that are not yet
Year 2000 compliant, and to initiate replacement or other remedial action
to assure that systems will continue to operate in the Year 2000. The
Company completed its assessment by December 31, 1998, which included third
party confirmations from the Company's key suppliers, vendors and business
partners, with respect to their computers, software and systems, and their
ability to maintain normal operations in the Year 2000, and a listing of all
equipment subject to Year 2000 concerns. The Company is currently evaluating
the confirmations it has received. To the extent that the Company is not
satisfied with the status of a vendor's Year 2000 compliance or remediation
plans, the Company expects to develop and implement appropriate contingency
plans. Such contingency plans will include the development of alternative
sources for the product or service provided by any non-compliant vendor. The
Company expects to have such contingency plans defined by June 30, 1999.
The Company has already initiated the removal and exchange of some
non-compliant systems, at a total cost to date of approximately $110,000,
and expects to continue such replacement or other remedial action to ensure
that its computers, software and systems, and other systems will continue
to operate in the Year 2000. These activities are intended to encompass
all major categories of systems used by the Company, including laboratory
instrumentation, clinical systems, building systems, and sales and
financial systems, among others. In some instances, the installation of
new software and hardware in the normal course of business is being
accelerated to also afford a solution to Year 2000 issues. The Company has
planned for the investment of approximately $350,000, of which
approximately $58,000 has been spent to date, in a new Laboratory
Information Management System ("LIMS") in fiscal 1999, which it expects will
streamline data collection and reporting ability and allow for customized
report formats, as well as provide the laboratory with a system that is
Year 2000 compliant. As of December 31, 1998, the Company had initiated
the purchase of the LIMS, deployed the new hardware to system users, installed
the software, and was in the process of validating the system. User training
was expected to take place in December 1998, but was delayed until early
February 1999, due to scheduling conflicts and on-going LIMS validation
efforts. Expenses not related to the Laboratory Information Management
System are expected to total less than $150,000, of which the Company had
spent approximately $52,000 as of December 31, 1998. The total cost estimate
is based on the Company's assessment as of December 31, 1998, and is subject
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</PAGE>
<PAGE>12
to change as the compliance program progresses. Of the Company's corporate
information systems personnel resources (three full-time individuals),
approximately 50% are focused full-time on the Year 2000 issues.
The capital improvements and expenses required for the Year 2000
effort have been included as part of the Company's annual budgets. The
Company does not expect that the capital spending or period expense
associated with the Year 2000 issues will have a material effect on its
financial position or results of operations. The Company's policy is to
expense all costs related to its Year 2000 compliance program unless the
useful life of the technological asset is extended or increased. It is
expected that assessment, remediation and contingency planning will be on-
going throughout fiscal 1999 with the goals of appropriately resolving all
material internal systems and third party issues. There can be no
assurances, however, that the Company's computer systems and the
applications of other companies on which the Company's operations rely will
be timely converted or that any such failure to convert by another company
will not have a material adverse effect on the Company's operations. If
the Company's Year 2000 issues are not successfully resolved, the Company
could continue its operations by collecting and reporting data manually,
consequently delaying project completion on the affected contracted
studies.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of funds is cash flow from operations,
which decreased by $485,987 in the six months ended December 31, 1998,
compared to the same period of the prior year, principally as a result of
the Company's net loss from operations in the six month period ended December
31, 1998, and reduced working capital requirements, as compared to the same
period in the prior year.
Decreases in the Company's account balances at December 31, 1998, for
accounts receivable and contracts in process accounts, as compared to June
30, 1998, are primarily attributable to overall decreases in the levels of
business for the six month period ended December 31, 1998. Prepaid expenses
have decreased at December 31, 1998, compared to June 30, 1998, due to the
timing of payments on certain expense items related to future periods.
At December 31, 1998, the Company reported a decrease in its
contracts in process account which represents costs incurred for studies
for which revenues have not been recognized and which are currently
underway. Deposits on contracts in process have also decreased indicating
a decrease in the number of contracted studies. Changes in these account
balances affect the Company's operating cash flow.
In addition, other assets have decreased based on a decline of $45,341
in the market value of the Company's holdings of 44,642 shares of common
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<PAGE>13
stock and warrants to acquire 11,161 shares of common stock, at an exercise
price of $2.40 per share, of Hybridon, Inc. (OTCBB:HYBN). The carrying
value of the stock was determined by the average of the bid and ask prices
of the stock as reported by the National Quotation Bureau on
December 31, 1998, which was $1.47 per share. The Company received the
stock and warrants in fiscal year 1998 in exchange for an account receivable in
the amount of $89,284. The warrants expire on May 5, 2003 and are not subject
to a call provision.
At December 31, 1998, the market value of the Hybridon stock was
less than the adjusted cost basis of $89,284. The difference of $23,716
was recorded as an unrealized loss on investment (a non-cash transaction)
and was reflected in the Stockholders' Equity section of the balance sheet.
At December 31, 1998, the Company had available $2,375,765 in
cash to meet the needs of its business. In September 1998 the Company
negotiated a new $500,000 credit facility with The First National Bank of
Maryland to replace its $500,000 credit facility with NationsBank
N.A. which expired November 30, 1998.
As of December 31, 1998, the Company's stockholders' equity totaled
$7,032,900 compared to $7,873,583 at June 30, 1998. The Company had
working capital of $2,613,912 at December 31, 1998, compared to $4,082,645
at June 30, 1998.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security-Holders
The Annual Meeting of Stockholders of PharmaKinetics Laboratories, Inc., a
Maryland Corporation, was held November 30, 1998, at 2:00 p.m., local prevailing
time, at PharmaKinetics Laboratories, Inc., 302 W. Fayette Street, Baltimore,
Maryland 21201, to consider and vote upon:
1. The election of eight directors to serve until the next Annual Meeting of
Stockholders, and until their successors are duly elected and qualified.
Election by holders of Common Stock
and Preferred Stock voting together:
Broker Non-votes
Name For Against or Abstentions
James K. Leslie 3,169,334 21,067
Roger C. Thies 3,169,334 21,067
Thomas F. Kearns, Jr. 3,169,334 21,067
Grover C. Wrenn 3,169,334 21,067
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</PAGE>
<PAGE>14
Election by holders of Preferred Stock
voting alone:
Broker Non-votes
Name For Against or Abstentions
Leslie B. Daniels 1,103,288
David von Kauffmann 1,103,288
Kamal K. Midha, C.M., Ph.D., D.Sc. 1,103,288
John J. Thebault, M.D. 1,103,288
2. A proposal to ratify the selection of PricewaterhouseCoopers LLP, as the
Company's independent auditors for the fiscal year ending June 30, 1999.
Broker Non-votes
For Against or Abstentions
3,175,591 8,804 6,006
All proposals presented were approved by the Stockholders of the Company.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
December 31, 1998.
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</PAGE>
<PAGE>15
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHARMAKINETICS LABORATORIES, INC.
Registrant
February 16, 1999 /s/James K. Leslie
- ----------------- ------------------
Date James K. Leslie
Chief Executive Officer
and President
February 16, 1999 /s/Taryn L. Kunkel
- ----------------- ------------------
Date Taryn L. Kunkel
Vice-President and
Chief Financial Officer
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</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
SEC Form 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 2,375,765
<SECURITIES> 65,568
<RECEIVABLES> 1,459,507
<ALLOWANCES> 150,000
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0
4,937,500
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</TABLE>
