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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 17, 1999
PROTEIN POLYMER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 0-19724 33-0311631
(State or other jurisdiction of (Commission (IRS Employer Identification No.)
incorporation or organization) File Number)
10655 Sorrento Valley Road
San Diego, California 92121
(Address of Principal Executive Offices) (Zip Code)
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(619) 558-6064
(Registrant's telephone number, including area code)
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Item 5. Other Events.
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On August 17, 1999 Protein Polymer Technologies, Inc. (the
"Company"), (NASDAQ-PPTI) had an initial closing on a private placement with a
small group of institutional and accredited investors 17,750 shares of the
Company's Series G Convertible Preferred Stock ("Series G Preferred Stock") and
warrants to purchase an aggregate of 3,550,000 shares of common stock. The
Series G Preferred Stock was priced at $100 per share, and the Company received
approximately $1.8 million, less approximately $120,000 in estimated expenses.
The total offering of up to 35,000 shares of Series G Preferred
Stock provides for additional closings until the middle of September 1999. Each
share of Series G Preferred Stock is convertible at any time at the election of
the holder into 200 shares of common stock at a conversion price of $0.50 per
share, subject to certain antidilution adjustments. No underwriters were engaged
by the Company in connection with such issuance and, accordingly, no
underwriting discounts were paid. The offering is exempt from registration under
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"),
and met the requirements of Rule 506 of Regulation D promulgated under the
Securities Act. The Series G Preferred Stock, warrants and underlying common
stock have not been registered under the Securities Act and may not be offered
or sold in the United States absent registration or an applicable exemption from
registration requirements. The Company has agreed to use its best efforts to
nominate for election a person approved by the holders of the Series G Preferred
Stock to its Board of Directors.
Each share of Series G Preferred Stock also received a common
stock warrant exercisable at any time for 200 shares of common stock at an
exercise price of $0.50 per share, and expires approximately 12 months after the
close of the offering.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 17, 1999 PROTEIN POLYMER TECHNOLOGIES, INC.
By: /s/ J. Thomas Parmeter
---------------------------------
J. Thomas Parmeter
Chief Executive Officer
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INDEX TO EXHIBITS
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Exhibit Number Description of Document Page Number
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99.1 Press Release of the Registrant dated August 17, 1999. 4
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[Logo of Protein Polymer]
FOR IMMEDIATE RELEASE
CONTACTS:
J. Thomas Parmeter
President
Janis Neves
Director of Finance
(619) 558-6064
[email protected]
PROTEIN POLYMER REPORTS 2nd QUARTER 1999 FINANCIAL RESULTS
AND INITIAL CLOSING OF A NEW PREFERRED STOCK OFFERING
SAN DIEGO, AUGUST 17, 1999 - Protein Polymer Technologies, Inc. (NASDAQ-
PPTI) reports today its financial results for the second quarter ended June 30,
1999. In addition, the Company today completed an initial closing of a private
placement of its Series G Convertible Preferred Stock with a small group of
accredited and institutional investors. PPTI received approximately $1.8 million
at the initial closing. The proceeds will enable the Company to begin human
clinical testing scheduled to begin this fall of the Company's lead product, an
injectable treatment for female stress urinary incontinence.
2nd Quarter 1999 Financial Results. In the second quarter of 1999, PPTI had
----------------------------------
a net loss applicable to common shareholders of $1,241,000 ($.10 a share),
versus a net loss of $4,786,000 ($.46 a share) for the comparable period a
year ago. For the six months ended June 30, 1999, the Company had a net loss
applicable to common shareholders of $1,415,000 ($.21 a share), versus a net
loss of $6,133,000 ($.59 a share) for the comparable period a year ago. The
net loss and loss per share include imputed, accumulated and distributed
dividends related to the Company's preferred stock. As of June 30, 1999, PPTI
had cash and cash equivalents of $141,000. On a proforma basis, including the
proceeds of the initial closing of the Series G preferred stock, the Company had
cash and cash equivalents of approximately $1,900,000, net of offering expenses.
Contract revenues, interest and product income totaled $20,424 for the second
quarter, compared to $45,000 for the same period last year, the decrease being
due to
(continued)
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Protein Polymer Technologies, Inc. Q2 and Six Months Results
Page 2
reduced contract revenues. For the six months ended June 30, 1999, these
revenues totaled $56,075, compared to $133,000 for the same period last year.
Operating expenses for the quarter were $1,192,000, as compared to $1,496,000
for the same period in 1998. For the six months ended June 30, 1999, operating
expenses totaled $2,333,000, compared to $2,860,000 for the same period last
year. The decrease in both periods is due primarily to reduced research and
development expenses and the completion of non-reoccurring preclinical studies
required by the U.S. Food & Drug Administration (FDA) prior to beginning
human clinical testing. The Company's product for the relief of female stress
urinary incontinence was approved to begin human clinical testing on May
20/th/. The Company's expenses are anticipated to rise when the human clinical
trials are initiated, currently scheduled for the fourth quarter of 1999.
For both the 2nd quarter and six month period, the Company continued research
and development efforts in its surgical adhesives and sealants program, with
particular emphasis on the development of an adhesive spinal disc repair product
for the treatment of lower back pain, in addition to expanding its program in
hydrogel-based polymers targeted for use in cosmetic, plastic and
reconstructive, urological soft tissue augmentation surgical procedures.
Series G Preferred Stock Offering. Each share of Series G Convertible
---------------------------------
Preferred Stock is priced at $100 per share, and the total offering of up to
35,000 shares provides for additional closings between now and the middle of
September. Each share can be converted at any time by the holder into common
stock at a price of $0.50 per share, subject to certain antidilution
adjustments. Each share of Preferred Stock also receives a common stock warrant,
exercisable for 12 months, that allows the holder to acquire 200 shares of PPTI
common stock at a price of $0.50 per share. The Preferred Stock, warrants and
underlying common stock have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
Protein Polymer Technologies, Inc., a San Diego-based biotechnology company,
has developed a protein-based technology platform that allows creation of
(continued)
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Protein Polymer Technologies, Inc. Q2 and Six Months Results
Page 3
new biomaterials which target multiple applications in biomedical markets. The
different classes of biocompatible polymers developed by PPTI have been
genetically engineered to enable cell growth, promote the regeneration of
tissue, bond to synthetic surfaces and resorb into tissue at controlled rates.
Targeted applications include tissue adhesives and sealants, tissue
augmentation, would healing, and drug delivery vehicles.
This press release may contain forward-looking statements that are based on
management's expectations. Actual results could differ materially from those
expressed here; further, the Company is not obligated to comment specifically on
those differences. Risks associated with the Company's activities include
raising adequate capital to continue operations, scientific and product
development uncertainties, competitive products and approaches, continuing
collaborative partnership interest and funding, regulatory testing and
approvals, and manufacturing scale-up. The reader is encouraged to refer to the
Company's 1998 Annual Report and 10-KSB, and recent filings with the Securities
and Exchange Commission, copies of which are available from the Company, to
further ascertain the risks associated with the above statements.
PPTI's press releases are on the internet at www.ppti.com or on PR
Newswire's Company News On Call at http://www.prnewswire.com and can be received
via Fax on Demand at (800) 758-5804 extension 721876.
(Financial Data Follows)
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Protein Polymer Technologies, Inc. Q2 and Six Months Results
Page 4
Protein Polymer Technologies, Inc.
Condensed Financial Statements
(unaudited)
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Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
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Contract revenue $ - $ - $ - $ 50,000
Interest income 6,556 39,909 19,559 48,565
Product and other income 13,867 5,506 36,516 34,295
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Total revenues 20,424 45,415 56,075 132,860
Total expenses 1,191,746 1,495,632 2,333,496 2,860,314
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Net loss $(1,171,322) $(1,450,217) $(2,277,421) $(2,727,454)
Undeclared and/or paid accumulated
dividends on Preferred Stock 69,220 3,335,686 137,678 3,405,253
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Net loss applicable to common
shareholders $(1,240,542) $(4,785,903) $(2,415,099) $(6,132,707)
=========== =========== =========== ===========
Loss per share $ (0.10) $ (0.46) $ (0.21) $ (0.59)
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Weighted average shares used
in computing loss per share 12,499,570 10,471,922 11,724,113 10,450,627
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As of As of
June 30, 1999 Dec. 31, 1998
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(audited)
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BALANCE SHEET INFORMATION
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Cash, cash equivalents and
short-term investments $ 141,000 $ 1,383,000
Working capital (597,000) 600,000
Total assets 846,000 2,225,000
Total capital invested 35,315,000 34,258,000
Accumulated deficit (35,265,000) (32,988,000)
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