<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 June 30, 1996
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 0-24424
CIMA LABS INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1569769
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10000 Valley View Road, Eden Prairie, Minnesota 55344-9361
(Address of principal executive offices including zip code)
(612) 947-8700
(Registrant's telephone number, including area code)
----------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
COMMON STOCK $.01 PAR VALUE 9,399,733 SHARES
---------------------------------------- ---------------------------
(Class) (Outstanding at August 5, 1996)
<PAGE>
CIMA LABS INC.
TABLE OF CONTENTS
PAGE NUMBER
COVER PAGE 1
TABLE OF CONTENTS 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Condensed Balance Sheets as of June 30, 1996
and December 31, 1995 3
Condensed Statements of Operations for the three- and
six-month periods ended June 30, 1996 and 1995
and the period from December 12, 1986 (inception)
to June 30, 1996 4
Condensed Statements of Cash Flows for the six-month
periods ended June 30, 1996 and 1995 and the period
from December 12, 1986 (inception) to June 30, 1996 5
Notes to Condensed Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. 7
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. 11
ITEM 2. CHANGES IN SECURITIES. 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 11
ITEM 5. OTHER INFORMATION. 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 12
SIGNATURE 13
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CIMA LABS INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS (UNAUDITED)
June 30, December 31,
1996 1995
-------------- ---------------
(Note)
ASSETS
Current assets:
Cash and cash equivalents $13,952,474 $3,558,743
Accounts receivable 356,219 212,971
Inventories -- Note B 304,997 324,610
Prepaid expenses 589,592 287,279
------------ ------------
Total current assets 15,203,282 4,383,603
Property, plant and equipment 13,332,718 13,061,836
Less accumulated depreciation (2,719,862) (2,479,688)
------------ ------------
Other assets: 10,612,856 10,582,148
Lease deposits 290,651 290,650
Patents and trademarks,
net of amortization 246,450 262,244
------------ ------------
537,101 552,894
------------ ------------
Total assets $26,353,239 $15,518,645
------------ ------------
------------ ------------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 803,881 $ 291,868
Accrued expenses 890,284 695,127
Advance royalties 250,000 250,000
----------- -----------
Total current liabilities 1,944,165 1,236,995
Commitments and contingencies
Stockholders' equity
Convertible Preferred Stock,
$.01 par value:
Authorized shares - 5,000,000;
issued and outstanding shares - none
Common Stock, $.01 par value:
Authorized shares - 20,000,000; issued
and outstanding shares -
9,399,588 - June 30, 1996;
7,821,974 - December 31, 1995 93,995 78,201
Additional paid-in capital 56,998,315 43,462,921
Deficit accumulated during
the development stage (32,683,236) (29,259,472)
------------ -------------
Total stockholders' equity 24,409,074 14,281,650
------------ -------------
Total liabilities and stockholders' equity $ 26,353,239 $15,518,645
------------ -------------
------------ -------------
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
CIMA LABS INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED PERIOD FROM
JUNE 30, JUNE 30, DECEMBER 12,
1986 (INCEPTION)
------------------------------- ---------------------------- TO JUNE 30, 1996
1996 1995 1996 1995
-------------- -------------- -------------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $ 0 $ 139,777 $ 0 $ 151,074 $ 13,750,884
Research, development and 275,277 32,000 667,135 246,808 4,541,866
licensing revenues
-------------- ------------ ------------- ------------ -------------
Total Revenues 275,277 171,777 667,135 397,882 18,292,750
Costs and Expenses:
Cost of good sold 0 180,934 0 240,038 17,831,415
Research and
product development 1,298,850 1,935,860 2,674,796 4,228,349 17,795,087
Selling, general
and administrative 797,057 929,286 1,580,759 1,947,969 16,315,793
-------------- ------------ ------------- ------------- -------------
Total costs and expenses 2,095,907 3,046,080 4,255,555 6,416,356 51,942,295
-------------- ------------ ------------- ------------- -------------
Other income (expense):
Interest income, net 128,093 128,606 167,478 298,196 789,344
Other income (expense) 2,555 12,136 (2,824) 8,963 270,944
-------------- ------------ ------------- ------------ -------------
Total other income 130,648 140,742 164,654 307,159 1,060,288
-------------- ------------ ------------- ------------ -------------
Net loss and deficit
accumulated during
the development stage $(1,689,982) $(2,733,561) $(3,423,766) $(5,711,315) $(32,589,257)
-------------- ------------ ------------- ------------ -------------
-------------- ------------ ------------- ------------ -------------
Net loss per share:
Primary $ (.20) $ (.36) $ (0.42) $ (0.76) $ (12.48)
Full diluted (.20) (.36) (0.42) (0.76) (8.15)
Weighted average number
of shares outstanding:
Primary 8,654,230 7,572,503 8,239,311 7,556,891 2,610,294
Fully diluted 8,654,230 7,572,503 8,239,311 7,556,891 3,997,552
</TABLE>
4
<PAGE>
CIMA LABS INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, PERIOD FROM DECEMBER 12,
-------------------------- 1986 (INCEPTION) TO JUNE
1996 1995 30, 1996
------------ ------------ ------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Loss $(3,423,765) $(5,711,315) $ (32,589,256)
Adjustments to reconcile net
loss to net cash used
in operating activities:
Depreciation
and amortization 294,116 268,841 3,708,340
Preferred Stock issued
for accrued interest -- -- 141,448
Gain on sale of property,
plant and equipment -- (287,993) (53,270)
Changes in operating assets
and liabilities:
Account receivable (143,248) 331,359 (356,219)
Inventories 19,613 (42,919) (304,997)
Other current assets (302,313) 30,674 (589,592)
Accounts payable 512,014 (351,119) 803,877
Accrued expenses 195,157 (162,829) 890,284
Advance royalties -- -- 250,000
------------ ------------ ---------------
Net cash used
in operating activities (2,848,426) (5,925,301) (28,099,385)
Investing activities:
Purchase of and deposits
on property, plant
and equipment (270,884) (810,100) (14,416,944)
Purchase of short-term
investments -- (6,819,276) (18,547,140)
Proceeds from sale of
property, plant and equipment -- -- 471,883
Proceeds from maturities
of short-term investments -- 12,500,000 18,547,140
Patents and trademarks (38,147) (23,823) (549,890)
------------ ------------ ---------------
Net cash provided by (used
in) investing activities (309,031) 4,846,801 (14,494,951)
Financing activities:
Proceeds from
issuance of stock:
Common Stock 13,551,189 151,561 31,297,941
Preferred Stock -- -- 25,458,690
Borrowing under line of credit -- -- 450,000
Payment on line of credit -- -- (450,000)
Lease financing of equipment -- -- 2,441,650
Security deposits on leases -- -- (290,650)
Proceeds from issuance of
notes payable and warrants -- -- 1,923,950
Payments on notes payable -- -- (1,823,700)
Payments on capital leases -- -- (2,441,650)
Organization costs -- -- (19,420)
------------ ------------ ---------------
Net cash provided by
financing activities 13,551,189 151,561 56,546,811
------------ ------------ ---------------
Increases (decreases)
in cash equivalents 10,393,732 (926,939) 13,952,475
Cash and cash equivalents
at beginning of period 3,558,743 2,912,150 --
------------ ------------ ---------------
Cash and cash equivalents
at end of period 13,952,475 1,985,211 13,952,475
------------ ------------ ---------------
Supplemental schedule of
noncash investing and
financing activities:
Note payable exchanged
for issuance $ 1,517,500
Common Stock issued
for note receivable 50,000
</TABLE>
See notes to condensed financial statements.
5
<PAGE>
CIMA LABS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three-month and six-month periods ended
June 30, 1996 are not necessarily indicative of the results that may be expected
for the year ended December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1995.
NOTE B - INVENTORIES
June 30, December 31,
1996 1995
-------- ------------
Raw materials $ 304,997 $ 324,610
Work in process -- --
Finished products -- --
--------- ------------
$ 304,997 $ 324,610
NOTE C - INITIAL PUBLIC OFFERING
The Company completed its initial public offering ("IPO") of its Common Stock in
August 1994. The shares of Series A, B, C, D and E Preferred Stock were
automatically converted on a one-for-one basis to shares of Common Stock on the
closing date of August 4, 1994.
NOTE D - LOSS PER SHARE
The primary loss per share is based on the weighted average Common shares
outstanding during the period. The fully diluted loss per share assumes the
conversion of the preferred shares to common shares as of the beginning of the
period, or from the date of issuance if later. The loss per share for periods
prior to August 4, 1994, the closing date of the IPO, also gives effect to the
requirements of Staff Accounting Bulletin No. 83 (SAB 83).
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE FOLLOWING
DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
DISCUSSED HEREIN. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THIS SECTION AS WELL AS
THOSE DISCUSSED IN THE COMPANY'S PROSPECTUS, DATED MAY 10, 1996, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
GENERAL
CIMA LABS INC. ("CIMA" or the "Company") was founded in 1986 to develop
effervescent drug delivery technologies and focused initially on contract
manufacturing of liquid effervescents. CIMA continues to be a development stage
company. CIMA's business focus has evolved over the last several years with the
development and patenting of OraSolv-R-, an oral dosage form
which incorporate microencapsulated drug ingredients into a tablet that
dissolves quickly in the mouth without chewing or water and which effectively
masks the taste of the medication being delivered. In 1993, following issuance
of the U.S. patent covering OraSolv-R-, the Company began to
emphasize and focus on the development of OraSolv-R- products
and currently focuses primarily on such products.
At June 30, 1996, the Company had accumulated net losses of approximately
$32,683,000. The Company's revenues have been from product sales using the
Company's AutoLution-R- (a liquid effervescent) technology,
license fees paid by corporate partners in consideration of the transfer of
rights under collaboration agreements, and research and development fees paid by
corporate partners to fund the Company's research and development efforts for
products developed under such agreements. To date, such revenues have been
derived primarily from manufacturing agreements with third parties for liquid
effervescent and other products, and to a lesser extent from research and
development fees and licensing arrangements, the latter generated primarily in
the last five years. Revenues from manufacturing liquid effervescent products
under agreements with third parties have decreased as a result of the Company's
decision to discontinue manufacturing those products and focus on developing its
OraSolv-R- technology. The last revenues for manufacturing
liquid effervescent products were recognized in 1995. In addition to revenues
from such manufacturing, research and development and licensing, the Company has
funded operations from private sales of equity securities, realizing net
proceeds of approximately $25,963,000. In July 1994 the Company completed an
initial public offering of shares of its Common Stock realizing net proceeds of
approximately $16,379,000, and in May 1996 completed an additional public
offering of its Common Stock realizing net proceeds of approximately
$12,145,000.
The Company expects that losses will continue at least through 1997. Costs
and expenses are expected to remain relatively stable as the majority of the
necessary research and development personnel have already been hired. It is
expected that additional manufacturing personnel will be added and operating
expenses will increase at such time as the Company initiates the commercial
production of OraSolv-R- products.
7
<PAGE>
The Company's ability to generate revenues is dependent upon its ability to
enter into and be successful in collaborative arrangements with pharmaceutical
and other healthcare companies for the development and manufacture of
OraSolv-Registered Trademark- products to be marketed by these corporate
partners. The Company is highly dependent upon the efforts of the corporate
partners to successfully market OraSolv-Registered Trademark- products.
Although the Company believes these partners will have an economic motivation to
market these products vigorously, the amount and timing of resources to be
devoted to marketing are not within the control of the Company. These partners
independently could make material marketing and other commercialization
decisions which could adversely affect the Company's future revenues. Moreover,
certain of the Company's products are seasonal in nature and the Company's
revenues could vary materially from quarter to quarter depending on which of
such products, if any, are then being marketed.
Since the Company's initial public offering in 1994, the Company has put in
place a substantially new management team. This new management team was
responsible for the build out and validation of the Company's Eden Prairie
manufacturing facility.
RESULTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1996
The Company's results of operations for the three-and six-month periods
ended June 30, 1996 reflect increased emphasis on development of
OraSolv-Registered Trademark- products. Product sales declined from $139,777
and $151,074 in the three- and six-month periods ended June 30, 1995
respectively, to no product sales in the first six months of 1996 as the
Company ceased to manufacture liquid effervescent and other products. The
Company does not intend to manufacture liquid effervescent products in the
future. Research and development fees and licensing revenues were $32,000
and $246,808 for the three- and six-month periods ended June 30, 1995,
respectively, compared to $275,277 and $667,135, respectively, in the
comparable periods of 1996. These increased research and development fees
and licensing revenues reflect the signing of license option and development
agreements with multinational pharmaceutical companies that provide for
licensing fees, milestone payments, royalties and manufacturing fees.
Research and development fees and licensing revenues will tend to fluctuate
on a quarter to quarter basis.
Cost of goods sold decreased from $180,934 and $240,038 in the three-
and six-month periods ended June 30, 1995, respectively, to zero in the first
six months of 1996. Costs of goods sold will increase when the Company
begins commercial production and sales of OraSolv-Registered Trademark-
products. Research and product development expenses decreased from $1,935,860
and $4,228,349 in the three- and six-month periods ended June 30, 1995,
respectively, to $1,298,850 and $2,674,796 in the three- and six-month
periods ended June 30, 1996, respectively. This decrease primarily was the
result of a product development/optimization charge in the first two quarters
of 1995 of approxiamtely $1,659,000, of which approximately $591,000 was
taken in the second quarter of 1995, from an independent consultant for
improving product taste and packaging of OraSolv-Registered Trademark-
products. Selling, general and administrative expenses decreased due to
downsizing from $929,286 and $1,947,969 in the three- and six-month periods
ended June 30, 1995, respectively to $797,057 and $1,580,759 in the three-
and six-month periods ended June 30, 1996, respectively. Net interest income
decreased slightly from $128,606 and $298,196, respectively, in the three-
and six-month periods ended June 30, 1995 to $128,093 and $167,478,
respectively, in the three- and six-month periods ended June 30, 1996 due to
slightly lower cash balances. Other income (expense) decreased from $12,136
and $8,963, respectively, in the three- and six-month periods ended June 30,
1995 to $2,555 and $(2,824), respectively, in the three- and six-month
periods ended June 30, 1996.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations to date primarily through private
and public sales of its equity securities and revenues from manufacturing
agreements. Through June 30, 1996, CIMA had received net offering proceeds from
such private and public sales of approximately $54,500,000 and had net sales
from manufacturing agreements of approximately $13,800,000. Among other things,
these funds were used to purchase approximately $14,417,000 of capital
equipment, including approximately $7,500,000 in the last two quarters of 1994
in connection with completing the Company's new Eden Prairie manufacturing
facility. In July 1994 the Company completed an initial public offering of
shares of its Common Stock, realizing net proceeds of approximately $16,400,000,
and in May 1996 the Company completed another public offering of shares of its
Common Stock, realizing net proceeds of approximately $12,145,000. The funds
raised in CIMA's initial public offering have been used to build out the
manufacturing facility, purchase and validate the appropriate production
equipment, complete the research and development facilities and purchase the
necessary equipment for that facility. The Company expects to use the funds
raised in its May 1996 public offering primarily to begin commercial production
in its new manufacturing facility and to fund research and development
(including preclinical and clinical testing) for the application of the
OraSolv-Registered Trademark- technology to pharmaceutical products, and that
the balance of such funds will be used for working capital and other general
corporate purposes.
The Company's long-term capital requirements will depend upon numerous
factors, including the status of the Company's collaborative arrangements, the
progress of the Company's research and development programs and receipt of
revenues from sales of the Company's products. Cash and cash equivalents, were
approximately $13,952,000 at June 30, 1996. The Company believes that its
currently available funds, excluding any license fees that may be received in
the future, will meet its needs at least through the first quarter of 1997.
Prior to such time the Company will need to raise additional funds through
public or private financings, including equity financing which may be
dilutive to stockholders. There can be no assurance that the Company will be
able to raise additional funds if its capital resources are exhausted, or
that funds will be available on terms attractive to the Company.
The Company has not generated taxable income through June 1996. At June
30, 1996, the net operating losses available to offset future taxable income
were approximately $32,589,000. Because the Company has experienced ownership
changes, pursuant to Internal Revenue Code regulations, future utilization of
the operating loss carryforwards will be limited in any one fiscal year. The
carryforwards expire beginning in 2001. As a result of the annual limitation, a
portion of these carryforwards may expire before ultimately becoming available
to reduce potential federal income tax liabilities.
BUSINESS RISKS
The Company is a development stage company and must be evaluated in light
of the uncertainties and complications present for any such company and, in
particular, a company in the pharmaceutical industry. The Company has
accumulated aggregate net losses from inception in December 1986 through June
30, 1996 of approximately $32,683,000. Losses have resulted principally from
costs incurred in research and development of the Company's technologies and
from general and administrative costs. These costs have exceeded the Company's
revenues, which
9
<PAGE>
have been derived primarily from the manufacturing of AutoLution-Registered
Trademark- (a liquid effervescent) and other non-OraSolv-Registered Trademark-
products under agreements with third parties. The Company no longer
manufactures such products and no longer derives revenues from their
manufacture. The Company expects to continue to incur losses at least through
1997. Many of the Company's expenditures to date have been non-recurring costs
for plant, equipment and product optimization and validation. There can be no
assurance, however, that the Company will ever generate substantial revenues or
achieve profitability.
The Company may need to raise additional funds to operate prior to the end
of the first half of 1997 and will need to raise such funds prior to the end of
1997, and is subject to the risks inherent in raising such additional funds.
See "-Liquidity and Capital Resources." In addition, the Company is dependent
upon its ability to enter into and perform under collaborative arrangements with
pharmaceutical companies for the development and commercialization of its
products. See "-General."
The success of the Company and of its business strategy is also dependent
in large part on the ability of the Company to attract and retain key management
and operating personnel. Such individuals are in high demand and are often
subject to competing offers. In particular, the Company's success will depend,
in part, on its ability to attract and retain the services of its executive
officers and scientific and technical personnel. The loss of the services of
one or more members of management or key employees or the inability to hire
additional personnel as needed or replace personnel who have left the Company
may have a material adverse affect on the Company. The Company currently has no
full-time chief financial officer, but is actively recruiting to fill this
position.
To date no commercial sales of OraSolv-Registered Trademark- products have
been made, and the Company has not derived any revenues from sales of
OraSolv-Registered Trademark- products. Further, the Company does not expect to
derive any such revenues until at least 1997. The Company has not yet
manufactured OraSolv-Registered Trademark- products in commercial quantities.
To achieve desired levels of production, the Company will be required to
increase substantially its manufacturing capabilities. There can be no
assurance that manufacturing can be scaled-up in a timely manner to allow
production in sufficient quantities to meet the needs of the Company's corporate
partners.
The foregoing risks reflect the Company's stage of development and the
nature of the Company's industry and products. Also inherent in the Company's
stage of development is a range of additional risks, including competition,
uncertainties regarding the effects of health care reform on the pharmaceutical
industry, including pressures exerted on the prices charged for pharmaceutical
products, uncertainties regarding protection of patents and proprietary rights,
uncertainties relating to government regulation and risks associated with having
only one manufacturing facility.
10
<PAGE>
CIMA LABS INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 23, 1996, the Company held its annual meeting of stockholders, at
which time the stockholders took the following actions:
(i) elected John M. Siebert, Ph.D., Terrence W. Glarner, David B. Musket,
Steven B. Ratoff, Joseph R. Robinson, Ph. D., and Jerry A. Weisbach, Ph.D., to
serve as directors of the Company to serve for the ensuing year and until their
successors are elected;
(ii) approved the amendment and restatement of the Company's CIMA LABS INC.
Amended and Restated Stock Option and Stock Award Plan, including an increase of
the aggregate number of shares of Common Stock authorized for issuance under
such plan from 1,750,000 shares to 2,000,000 shares; and
(iii) ratified the selection of Ernst & Young LLP as independent auditors
of the Company for its fiscal year ending December 31, 1996.
Such actions were taken by the following votes:
VOTES FOR VOTES WITHHELD
--------- --------------
Election of
Directors:
John M. Siebert Ph.D. 5,785,930 12,913
Terrence W. Glarner 5,785,930 12,913
David B. Musket 5,785,430 13,413
Steven B. Ratoff 5,785,930 12,913
Joseph R. Robinson, Ph.D. 4,261,757 1,537,086
Jerry A. Weisbach, Ph.D 5,785,430 13,413
11
<PAGE>
Broker
VOTES FOR VOTES AGAINST ABSTENTIONS NON-VOTES
--------- ------------- ----------- ---------
Amendment of
Stock Plan 3,308,195 2,466,627 12,847 11,197
Ratification of
Auditors 5,786,193 6,650 6,000 0
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
Item Description
---- -----------
3.1 Fifth Restated Certificate of Incorporation of the
Company. (1)
3.2 Second Restated Bylaws of the Company. (1)
10.28 License Agreement, dated April 22, 1996, between the
Company and SmithKline Beecham. (2)
11.1 Statement re Computation of Net Loss Per Share
27 Financial Data Schedule
---------
(1) Incorporated by reference to the correspondingly numbered
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.
(2) Incorporated by reference to the correspondingly numbered
exhibit to the Company's Registration Statement on Form S-1,
Registration No. 333-4174, filed with the Securities and
Exchange Commission on April 26, 1996.
(b) REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the quarter ended
June 30, 1996.
12
<PAGE>
CIMA LABS INC.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
CIMA LABS INC.
Date: AUGUST 12, 1996 By: /S/ JOHN M. SIEBERT
-------------------- ------------------------------
John M. Siebert
President, Chief Executive
Officer and Chief Financial
Officer
(Principal Financial and
Accounting Officer)
13
<PAGE>
EXHIBIT INDEX
NO. OF EXHIBIT DESCRIPTION
- -------------- -----------
3.1 Fifth Restated Certificate of Incorporation
of the Company. (1)
3.2 Second Restated Bylaws of the Company. (1)
10.28 License Agreement, dated April 22, 1996, between the Company
and SmithKline Beecham. (2)
11.1 Statement re Computation of Net Loss Per Share
27 Financial Data Schedule
- -----------
(1) Incorporated by reference to the correspondingly numbered exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994.
(2) Incorporated by reference to the correspondingly numbered exhibit to the
Company's Registration Statement on Form S-1, Registration No. 333-4174,
filed with the Securities and Exchange Commission on April 26, 1996.
14
<PAGE>
Exhibit 11.1 - Statement Re: Computation of Net Loss Per Share
<TABLE>
<CAPTION>
Period from
December 12,
1986
Three Months Ended Six Months Ended (Inception) to
June 30 June 30 June 30,
--------------------------- -------------------------- --------------
1996 1995 1996 1995 1996
----------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Primary: 8,654,230 7,572,503 8,239,311 7,556,891 2,140,770
Average shares outstanding
Net effect of dilutive stock
options -- based on the treasury
stock method using average
market price (See Note A Below) 469,524
------------
Totals 2,610,294
Net loss $(1,689,982) $(2,733,561) $(3,423,766) $(5,711,315) $(32,589,257)
Per share amount $(.20) $(0.36) (0.42) (0.76) $ (12.48)
------------
------------
Fully diluted:
Average shares outstanding 8,654,230 7,572,503 8,239,311 7,556,891 3,528,028
Net effect of dilutive stock
options -- based on the treasury
stock method using average
market price or the ending market
price if higher (See Note A Below) 469,524
------------
Totals 3,997,552
------------
------------
Net loss $(1,689,982) $(2,733,561) $(3,423,766) $(5,711,315) $(32,589,257)
------------
------------
Per share amount $(0.20) $(0.36) $(0.42) $(0.76) $ (8.15)
------------
------------
</TABLE>
NOTE A: Represents shares required by the provisions of Staff Accounting
Bulletin No. 83 for "cheap stock" issued prior to the Company's initial public
offering in August 1994.
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, STATEMENTS OF OPERATIONS AND STATEMENTS OF CASH
FLOWS INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1996,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
NOTES THERETO.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 13,952,474
<SECURITIES> 0
<RECEIVABLES> 356,219
<ALLOWANCES> 0
<INVENTORY> 304,997
<CURRENT-ASSETS> 15,203,282
<PP&E> 13,332,718
<DEPRECIATION> (2,719,862)
<TOTAL-ASSETS> 26,353,239
<CURRENT-LIABILITIES> 1,944,165
<BONDS> 0
0
0
<COMMON> 93,995
<OTHER-SE> 24,315,079
<TOTAL-LIABILITY-AND-EQUITY> 26,353,239
<SALES> 0
<TOTAL-REVENUES> 667,135
<CGS> 0
<TOTAL-COSTS> 4,255,555
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 164,654
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,423,766)
<EPS-PRIMARY> (0.42)
<EPS-DILUTED> (0.42)
</TABLE>
