<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
(Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission file number 1-10615
EMISPHERE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3306985
-------- (I.R.S. Employer
(State or jurisdiction of Identification Number)
incorporation or organization)
765 Old Saw Mill River Road 10591
Tarrytown, New York -----
------------------- (Zip Code)
(Address of principal executive offices)
(914) 347-2220
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be files by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
at least the past 90 days. Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the Registrant's common stock, $.01 par value,
outstanding as of March 10, 2000 was 14,566,503.
Page 1 of 14
<PAGE>
EMISPHERE TECHNOLOGIES, INC.
Index
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements:
Condensed Balance Sheets as of January 31, 2000
and July 31, 1999 4
Condensed Statements of Operations for the three and six
months ended January 31, 2000 and 1999 5
Condensed Statements of Cash Flows for the six
months ended January 31, 2000 and 1999 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3 Quantitative and Qualitative Disclosures About Market Risk 12
PART II. OTHER INFORMATION
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
All other schedules and compliance information called for by the instructions to
Form 10-Q have been omitted because the required information is not applicable
or not present in amounts sufficient to require submission.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the captions "Management's Discussion and Analysis of
Financial Conditions and Results of Operations" (Item 2) and the notes to the
Company's unaudited financial statements (Item 1) as well as certain oral
statements made from time to time by representatives of the Company constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward looking statements include (without
limitation) statements regarding: planned or expected studies and trials of oral
formulations that utilize the Company's technology; the timing of the
development and commercialization of the Company's products; potential products
that may be developed using the Company's technology; the potential market size,
advantages or therapeutic uses of the Company's liquid oral heparin formulation
or any other product; and the sufficiency of the
2
<PAGE>
Company's available capital resources to meet its funding needs. Such forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the Company's actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
factors include, among others, the following: the success of the Company's oral
heparin product and the Company's ability to find a marketing partner to help
the Company commercialize it; prospects for our salmon calcitnin product
candidate in development with a partner; the viability of the Company's product
candidates, most of which, other than liquid oral heparin, are in the early
stages of development; the need to obtain regulatory approval for the Company's
liquid oral heparin and other product candidates; the Company's dependence on
collaborative partners to develop and commercialize products; the Company's
ability to fund such efforts with or without partners and uncertainty as to the
timing and outcome commercialization decisions made by our collaborative
partners; the Company's absence of profitable operations and need for additional
capital; the Company's dependence on patents and proprietary rights; and other
factors described in this Report and the Company's other SEC filings.
3
<PAGE>
Item 1. Financial Statements
<TABLE>
<CAPTION>
EMISPHERE TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
January 31, 2000 and July 31, 1999
(Unaudited)
January 31, July 31,
2000 1999
-------------------------------------------------
Assets:
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 24,068,107 $ 11,461,126
Marketable securities 6,343,515
Prepaid expenses and other current assets 594,875 694,366
------------- ------------
Total current assets 24,662,982 18,499,007
Equipment and leasehold improvements, net 10,804,017 11,500,767
Purchased technology, net 8,114,005 8,395,415
Other assets 60,164 81,179
------------- ------------
Total assets $ 43,641,168 $ 38,476,368
============= ============
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable and accrued expenses $ 3,269,385 $ 2,491,347
Senior convertible notes, current portion 2,647,603
------------- ------------
Total current liabilities 3,269,385 5,138,950
Note payable 21,768,750 20,000,000
Deferred lease liability 2,119,276 2,050,042
------------- ------------
Total liabilities 27,157,411 27,188,992
------------- ------------
Stockholders' equity:
Preferred stock, $.01 par value; authorized 1,000,000 shares;
none issued and outstanding
Common stock, $.01 par value; authorized 40,000,000
shares; issued 14,571,555 shares (14,528,053 outstanding)
as of January 31, 2000, and issued
12,181,468 shares (12,137,968 outstanding) as of
July 31,1999 145,716 121,815
Additional paid-in capital 123,380,050 99,161,980
Accumulated deficit (106,849,196) (87,804,852)
Accumulated other comprehensive income 1,246
------------- ------------
16,676,570 11,480,189
Less, common stock held in treasury, at cost; 43,500 shares (192,813) (192,813)
------------- ------------
Total stockholders' equity 16,483,757 11,287,376
------------- ------------
Total liabilities and stockholders' equity $ 43,641,168 $ 38,476,368
============= ============
The accompanying notes are an integral part of the financial statements
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
EMISPHERE TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the three and six months ended January 31, 2000 and 1999
(Unaudited)
For the three months ended For the six months ended
January 31, January 31,
2000 1999 2000 1999
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contract research revenues $ 466,667 $ 4,452,039 $ 1,091,667 $ 8,031,100
----------- ----------- ------------ -----------
Costs and expenses:
Research and development 7,209,087 6,289,461 15,357,072 10,227,748
General and administrative expenses 1,517,275 1,649,329 2,775,794 3,009,522
Depreciation and amortization 599,594 397,884 1,196,172 758,950
Loss in Ebbisham Ltd. 1,551,924 2,712,692
----------- ----------- ------------ -----------
9,325,956 9,888,598 19,329,038 16,708,912
----------- ----------- ------------ -----------
Operating loss (8,859,289) (5,436,559) (18,237,371) (8,677,812)
----------- ----------- ------------ -----------
Other income and expense:
Other income 468,524 453,678 742,683 950,835
Interest expense (770,753) (161,618) (1,549,656) (397,868)
----------- ----------- ------------ -----------
(302,229) 292,060 (806,973) 552,967
----------- ----------- ------------ -----------
Net loss $(9,161,518) $(5,144,499) $(19,044,344) $(8,124,845)
=========== =========== ============ ===========
Net loss per share, basic and diluted $(0.63) $(0.45) $(1.43) $(0.72)
=========== =========== ============ ===========
Weighted average shares outstanding,
basic and diluted 14,464,533 11,432,220 13,309,758 11,284,507
=========== =========== ============ ===========
The accompanying notes are an integral part of the financial statements
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
EMISPHERE TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the six months ended January 31, 2000 and 1999
(Unaudited)
For the six months ended
January 31,
2000 1999
-----------------------------------------------
Cash flows from operating activities:
<S> <C> <C>
Net loss $(19,044,344) $(8,124,845)
------------ -----------
Adjustments to reconcile net loss to net cash
used in operating activities:
Non-cash interest expense 1,510,417
Depreciation and amortization 914,761 758,950
Amortization of purchased technology 281,410
Increase in deferred lease liability 69,234 1,301,616
Amortization of deferred financing cost 21,015 112,500
Amortization of discount on marketable securities 4,004 41,887
Loss in Ebbisham Ltd. 2,712,692
Changes in assets and liabilities 1,135,862 (2,580,374)
------------ -----------
Total adjustments 3,936,703 2,347,271
------------ -----------
Net cash (used in) operating activities (15,107,641) (5,777,574)
------------ -----------
Cash flows from investing activities:
Proceeds from sales of marketable securities 6,338,265 2,445,589
Capital expenditures (218,011) (2,572,238)
Purchases of marketable securities (2,352,444)
------------ -----------
Net cash provided by (used in) investing activities 6,120,254 (2,479,093)
------------ -----------
Cash flows from financing activities:
Net proceeds from issuance of common stock 23,500,000
Proceeds from exercise of options and employee
stock purchases 741,971 614,138
Redemption of senior convertible notes (2,647,603)
------------ -----------
Net cash provided by financing activities 21,594,368 614,138
------------ -----------
Net increase (decrease) in cash and cash equivalents 12,606,981 (7,642,529)
Cash and cash equivalents, beginning of period 11,461,126 21,358,308
------------ -----------
Cash and cash equivalents, end of period $ 24,068,107 $13,715,779
============ ===========
The accompanying notes are an integral part of the financial statements
</TABLE>
6
<PAGE>
EMISPHERE TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Interim Financial Statements
The accompanying unaudited condensed financial statements of Emisphere
Technologies, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all information and disclosures necessary for a presentation
of the Company's financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles.
In the opinion of management, the accompanying Condensed Statements of
Operations for the three and six months ended January 31, 2000 and 1999,
Condensed Statements of Cash Flows for the six months ended January 31, 2000 and
1999, and the Condensed Balance Sheets as of January 31, 2000 and July 31, 1999
reflect all adjustments, consisting only of normal recurring accruals, necessary
for a fair presentation of the Company's financial position, results of
operations, and cash flows for such periods and as of such dates. These
financial statements should be read in conjunction with the financial statements
and notes thereto contained in the Company's Annual Report on Form 10-K for the
fiscal year ended July 31, 1999. The July 31, 1999 Condensed Balance Sheet data
were derived from audited financial statements, but do not include all
disclosures required by generally accepted accounting principles.
Certain prior year amounts have been reclassified to conform to the current year
presentation. The results of operations for any interim period are not
necessarily indicative of the results for the full year.
The Company expects to incur a substantial increase in liquid oral heparin
clinical development expenses during the remainder of fiscal 2000 as the product
progresses through Phase III clinical trials. As a result, the Company expects
to continue to incur increasing operating losses.
2. Net Loss Per Share
Net loss per share, basic and diluted, is computed using the weighted average
number of shares of the Company's common stock outstanding during the period.
Had the Company been in a net income position, diluted earnings per share would
have included the shares used in the computation of basic net loss per share, as
well as an additional 4,928,176 and 3,767,511 shares for the three months ended
January 31, 2000 and 1999, respectively, and 4,829,376 and 2,392,206 for the six
months ended January 31, 2000 and 1999, respectively, relating to outstanding
options (after application of the Treasury Stock Method).
3. Comprehensive Loss
Comprehensive loss of the Company is comprised of net loss adjusted for the
change in net unrealized gain or loss on marketable securities. Comprehensive
loss amounted to approximately $9,160,000 and $5,090,000 for the six months
ended January 31, 2000 and 1999, respectively.
4. Senior Convertible Notes Payable
The remaining balance of approximately $2.6 million, along with interest
thereon, was repaid in September 1999.
7
<PAGE>
5. Ebbisham Ltd.
Ebbisham Ltd., the Company's former oral heparin joint venture with Elan
Corporation plc, was terminated in the fourth quarter of fiscal 1999. Prior to
this termination, the Company recorded its investment in Ebbisham in accordance
with the equity method of accounting.
6. Issuance of Common Stock
On November 2, 1999 , the Company issued 2.3 million shares of common stock for
net proceeds of approximately $23.5. In addition, on March 14, 2000 the Company
completed an offering of 2.8 million common shares in a follow on public
offering for $188 million, net of offering expenses. The proceeds from these
offerings will be used to fund development of preclinical stage programs, Phase
III clinical development of liquid oral heparin, and general corporate purposes.
7. Amendments to Stock Option Plans
On January 18, 2000, the stockholders approved amendments to the Company's 1991
Stock Option Plan and the 1995 Non-Qualified Stock Option Plan, increasing the
number of shares available for grant by 500,000 and 200,000, respectively.
8. Strategic Alliances
Novartis Pharma AG
In connection with the research collaboration between the Company and Novartis
Pharma AG, in February 2000, Novartis agreed to execute its option to acquire an
exclusive license to develop and commercialize oral salmon calcitonin. As a
result, Novartis is required to pay the Company a milestone payment.
In March 2000, Novartis agreed to extend its collaboration with the Company to
investigate the oral delivery of a second Novartis compound. As a result,
Novartis is required to pay the Company a predetermined payment.
Regeneron Pharmaceuticals Inc.
In March 2000, the Company entered into a research collaboration with Regeneron
Pharmaceuticals Inc. to investigate the applicability of the Company's
technology to the development of an oral form of Regeneron's protein compound
candidate for the treatment of obesity, Axokine. In the event Regeneron enters
into a licensing agreement and ultimately develops a commercial product,
Emisphere has the potential to receive approximately $30.0 million in fees,
research funding, and milestone payments, in addition to royalties on sales of
any oral products that may result from the collaboration.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
We are a biopharmaceutical company specializing in the oral delivery of
therapeutic macromolecules and other compounds that are not currently
deliverable by oral means. Since our inception in 1986, we have devoted
substantially all of our efforts and resources to research and development
conducted on our own behalf and through collaborations with corporate partners
and academic research institutions. We have no product sales to date. Our major
sources of working capital have been proceeds from various public and private
equity and debt financings, reimbursement of expenses and other payments from
corporate partners, and income earned on the investment of available funds.
Neither inflation nor seasonality significantly affect our operations.
Results of Operations
Three Months Ended January 31, 2000 Compared to Three Months Ended January 31,
1999
Contract research revenues were $0.5 million in the second quarter of fiscal
2000, a decrease of $4.0 million compared to $4.5 million in the same period of
fiscal 1999. Revenue for the second quarters of fiscal 2000 and 1999 were
comprised of reimbursed research and development expenses. Contract research
revenues in fiscal 2000 were from the Novartis Pharma AG salmon calcitonin
research collaboration, which expired in December 1999. Contract research
revenues in fiscal 1999 also included $3.6 million from our former heparin joint
venture, from our collaboration with Eli Lilly & Co, and other feasibility
agreements. The research and development funding portion of the ongoing Lilly
collaboration was completed in the third quarter of fiscal 1999. The heparin
joint venture was discontinued in the fourth quarter of fiscal 1999. Costs of
contract research revenue approximate contract research revenue and are included
in research and development expenses.
Total operating expenses were $9.3 million in the second quarter of fiscal 2000,
a decrease of $0.6 million, or 6.0%, compared to the same period of fiscal 1999.
The details of this increase are as follows:
Research and development costs were $7.2 million in the second quarter of fiscal
2000, an increase of $0.9 million, or 15%, compared to the same period of fiscal
1999. The increase was primarily related to liquid oral heparin clinical
development and continuing Novartis development efforts. The largest component
of the increase in research and development expenses was for clinical research
services related to the liquid oral heparin Phase III clinical trials. In
addition, we increased our scientific and development personnel in the areas of
parallel synthesis, solid dosage formulation, quality control and regulatory
affairs in order to accommodate increased efforts related to oral heparin
development and the Novartis collaboration.
General and administrative expenses were $1.5 million in the second quarter of
fiscal 2000, a decrease of $0.1 million, or 8%, compared to the same period of
fiscal 1999. This decrease is primarily the result of a decrease in outside
services related to an information technology project the company completed in
the last fiscal year and a decrease in recruiting cost.
Depreciation and amortization were $0.6 million in the second quarter of fiscal
2000, an increase of $0.2 million, or 51%, compared to the same period of fiscal
1999. The increase was primarily due to amortization of purchased technology
from the Company's fiscal 1999 acquisition of its joint venture partner's
interest in Ebbisham, Ltd. (our former joint venture with Elan Corporation plc).
The loss in Ebbisham Ltd decreased to zero in the second quarter of fiscal 2000
from $1.6 million in the same period of fiscal 1999 due to the discontinuation
of the joint venture in the fourth quarter of fiscal 1999.
As a result of the above, our operating loss was $8.9 million in the second
quarter of fiscal 2000, an increase of $3.5 million compared to $5.4 million for
the same period of fiscal 1999.
9
<PAGE>
Other income and expense decreased to approximately $0.3 million of net expense
in the second quarter of fiscal 2000 compared to $0.3 million of net income in
the second quarter of fiscal 1999. The change is primarily the result of an
increase in interest expense and decreased investment income. The increase in
interest expense is primarily attributable to non-cash interest expense accrued
on the $21.0 million note payable, which was recorded in conjunction with our
fiscal 1999 fourth quarter acquisition of Elan plc's interest in the former
heparin joint venture. Interest was earned on lower cash and investment balances
in the second fiscal quarter of 2000 compared to the same period of fiscal 1999.
Based on the above, we sustained a net loss of $9.2 million in the second
quarter of fiscal 2000 compared to a net loss of $5.1 million in the same period
of fiscal 1999.
Six Months Ended January 31, 2000 Compared to Six Months Ended January 31, 1999
Contract research revenues were $1.1 million for the six months ended January
31, 2000, a decrease of $6.9 million, compared to the same period of 1999. The
decrease was the result of discontinuing our joint venture with Elan for the
development of oral heparin and the completion of the research and development
funding portion of the ongoing Lilly and Novartis collaborations.
Total operating expenses were $19.3 million for the six months ended January 31,
2000, an increase of $2.6 million, or 16%, compared to the first six months
ended January 31, 1999. The details of the increase are as follows:
Research and development costs were $15.4 million for the six months ended
January 31, 2000, an increase of $5.1 million, or 50%, compared to the six
months ended January 31, 2000. This increase is mainly attributable to increased
costs related to initiating Phase III clinical trials for liquid oral heparin.
We expect our research and development spending will continue to increase over
prior year levels as our liquid oral heparin Phase III clinical trials continue.
General and administrative expenses were $2.8 million in the first six months
ended January 31, 2000, a decrease of $0.2 million, or 8%, compared to the six
months ended January 31, 1999. This decrease is primarily the result of a
decrease in outside services related to an information technology project the
Company completed in the last fiscal year and a decrease in recruiting cost.
Depreciation and amortization were $1.2 million in the first half of fiscal
2000, an increase of $0.4 million, or 58%, compared to the same period of fiscal
1999. The increase was primarily due to amortization of purchased technology.
The loss in Ebbisham Ltd. decreased by $2.7 million in the first half of fiscal
2000 from the same period of fiscal 1999 due to the discontinuation of the joint
venture in the fourth quarter of fiscal 1999.
As a result of these factors, our operating loss was $18.2 million in the six
months ended January 31, 2000, an increase of $9.6 million compared to an
operating loss of $8.7 million in the first six months ended January 31, 1999.
Our other income and expenses were $0.8 million of net expense in the six months
ended January 31, 2000, a decrease of $1.4 million from the first six months
ended January 31, 1999. This decrease is primarily the result of non-cash
interest expense on the $22.0 million note payable.
Based on the above factors, we sustained a net loss of $19.0 million in the six
months ended January 31, 2000, an increase of $10.9 million compared to a net
loss of $8.1 million in the six months ended January 31, 1999.
10
<PAGE>
Liquidity and Capital Resources
As of January 31, 2000, we had working capital of $21.4 million. Total cash,
cash equivalents, and marketable securities were $24.1 million, an increase of
$6.3 million compared to July 31, 1999.
Net cash used in operations was $15.1 million in the first half of fiscal 2000
as compared to $5.8 million in the first half of fiscal 1999. The increase in
cash used in operations was primarily due to the increased rate of spending on
liquid oral heparin clinical development.
Capital expenditures were approximately $0.2 million in the first half of fiscal
2000 compared to $2.6 million for the first half of fiscal 1999. The decrease in
capital expenditures is primarily due to the fiscal 1999 build-out of the
Company's leased laboratory and office space, which is now complete.
Net cash generated from financing activities was approximately $21.6 million in
the first half of fiscal 2000 compared to $0.6 million in the first half of
fiscal 1999. The change was due primarily to the proceeds received from the
November 2, 1999 follow-on public offering of common stock, partially offset by
the repayment of approximately $2.6 million of the remaining balance of the
senior convertible note payable.
In connection with the research collaboration between us and Norvartis, during
the first quarter of fiscal 2000, Novartis initiated and completed a Phase I
clinical study of a capsule form of salmon calcitonin which incorporates our
oral delivery technology. In February 2000, Novartis agreed to execute its
option to acquire an exclusive license to develop and commercialize this
product. As a result, Novartis will be required to make a predetermined
milestone payment to us. This decision also triggered a $5.0 million purchase of
common stock by Novartis. This purchase was subject to our approval, and we did
not approve the purchase since the previously negotiated price was below current
market prices. The research and development phase of our Novartis collaboration,
which led to Novartis' decision to execute the license described above, expired
in December 1999, at which time its quarterly research and development funding
obligations ended.
In March 2000, Novartis agreed to extend its collaboration with Emisphere for a
second Novartis compound. As a result, Novartis will be required to make a
predetermined payment to us.
Also in March 2000, we entered into a collaboration with Regeneron
Pharmaceuticals, Inc. Under the terms of the agreement, Regeneron will make
quarterly payments to us for work we perform in connection with the
collaboration. Regeneron will also make additional payments upon the exercise of
its right to receive the option to acquire exclusive worldwide commercialization
rights for oral products that result from our collaboration, the exercise of
that option, as well as other milestones. Should a product be successfully
commercialized, we could receive fees, research funding, and milestone payments
totaling approximately $30.0 million. Additionally, we would be entitled to a
royalty on sales of the commercialized product.
We expect to incur a substantial increase in liquid oral heparin clinical
development expenses in fiscal 2000 as the product continues through its Phase
III clinical trials, the most expensive phase of the clinical development
process. As a result, we expect to continue to incur increasing operating losses
over the prior year.
On March 14, 2000, we completed an offering of 2.8 million shares of common
stock for net proceeds of approximately $188 million. Following completion of
this offering, we expect that cash, cash equivalents and marketable securities
on-hand will be adequate to meet our liquidity requirements for at least the
next two years.
Impact of the Future Adoption of Recently Issued Accounting Standards
Management believes that future adoption of recently issued accounting standards
will not have a material
11
<PAGE>
impact on our financial statements, except that the Company is currently
evaluating the future impact that Staff Accounting Bulletin 101 "Revenue
Recognition", issued in December 1999 by the Securities and Exchange Commission,
will have on its financial statements.
12
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company's cash is invested in money market accounts. The Company's debt
approximates fair value and has a fixed interest rate.
Part II. OTHER INFORMATION
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held on January 18, 2000. The
matters voted upon at the meeting were (i) the election of one director of the
Company, (ii) to approve and adopt an amendment to the Company's 1991 Stock
Option Plan providing for an increase in the maximum number of shares of the
Company's Common Stock available for issuance thereunder by 500,000, (iii) to
approve and adopt an amendment to the Company's 1995 Non-Qualified Stock Option
Plan providing for an increase in the maximum number of shares of the Company's
Common Stock available for issuance thereunder by 200,000 and (iv) to ratify the
Board of Directors' selection of PricewaterhouseCoopers LLP to serve as the
Company's independent accountants for the fiscal year ending July 31, 2000. The
number of votes cast for and against or withheld with respect to each matter
voted upon at the meeting and the number of abstentions and broker non-votes are
as follows:
Votes
Withheld or
Votes For Against Abstentions
--------- ----------- -----------
Election of Directors:
Jere E. Goyan, Ph.D. 10,530,141 721,428
Amendment of the Company's
1991 Stock Option Plan as
amended 9,372,627 1,802,233 76,709
Amendment of the Company's
1995 Non-Qualified Stock
Option Plan 9,385,357 1,790,978 75,234
Ratification of the selection
of PricewaterhouseCoopers
LLP 11,157,841 13,848 79,879
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
Emisphere Technologies, Inc.
March 16, 2000
/S/Charles H. Abdalian, Jr.
---------------------------
Charles H. Abdalian, Jr.
Chief Financial Officer
(Principal Financial Officer)
/S/Joseph D.Poveromo
--------------------
Joseph D. Poveromo
Controller and Chief Accounting Officer
(Principal Accounting Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF EMISPHERE TECHNOLOGIES, INC. AT JANUARY 31, 2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 24,068,107
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,662,982
<PP&E> 17,518,436
<DEPRECIATION> 6,714,419
<TOTAL-ASSETS> 43,641,168
<CURRENT-LIABILITIES> 3,269,385
<BONDS> 0
0
0
<COMMON> 145,716
<OTHER-SE> 16,388,041
<TOTAL-LIABILITY-AND-EQUITY> 43,641,168
<SALES> 0
<TOTAL-REVENUES> 466,667
<CGS> 0
<TOTAL-COSTS> 9,325,956
<OTHER-EXPENSES> 468,524
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 770,753
<INCOME-PRETAX> (9,161,518)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,161,518)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (9,161,518)
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<EPS-DILUTED> (0.63)
</TABLE>
