<PAGE> 1
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 June 30, 1998
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission File Number 001-13835
OPHIDIAN PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its Charter)
WISCONSIN 39-1661164
--------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5445 East Cheryl Parkway, Madison, WI 53711
-------------------------------------------
(Address of Principal Executive Offices and Zip Code)
(608) 271-0878
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) 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.
<TABLE>
<CAPTION>
OUTSTANDING
CLASS AUGUST 13, 1998
----- ---------------
<S> <C> <C>
Common Stock, $0.025 par 9,223,018
value
</TABLE>
<PAGE> 2
OPHIDIAN PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED JUNE 30, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets - June 30,
1998 and September 30, 1997 3
Condensed Statements of Operations - Three months ended June
30, 1998 and 1997, nine months ended June 30, 1998 and 1997
and the period from inception (November 11, 1989) to June 4
30, 1998.
Condensed Statements of Cash Flows -
Nine months ended June 30,
1998 and 1997 and the period from
inception (November 11, 1989) to June 5
30, 1998.
Notes to Condensed Financial 6
Statements
Item 2. Management's Discussion 7
and Analysis of Financial
Condition and Results of Operations
PART II OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 13
</TABLE>
2
<PAGE> 3
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1997 1998
------------- --------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................... $ 3,547,036 $10,812,305
Short-term investments....................................... 359,588 -
Accounts receivable.......................................... 214,988 74,670
Prepaid expenses and other................................... 58,975 193,319
----------- -----------
Total current assets....................................... 4,180,587 11,080,294
Other assets................................................... 278,005 114,943
Equipment and leasehold improvements
Furniture and fixtures....................................... 96,692 96,692
Manufacturing equipment...................................... 123,452 264,080
Laboratory equipment......................................... 429,758 493,952
Office equipment............................................. 54,537 54,537
Leasehold improvements....................................... 24,092 24,092
----------- -----------
728,531 933,353
Accumulated depreciation and amortization.................... 406,167 511,869
----------- -----------
Net equipment and leasehold improvements....................... 322,364 421,484
Patent costs, net of accumulated amortization of
$24,935 and $33,196, September 30, 1997, and
June 30, 1998, respectively.................................. 1,194,650 1,334,489
----------- -----------
Total assets............................................... $ 5,975,606 $12,951,210
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................. $ 246,096 $ 520,758
Accrued expenses and other liabilities....................... 105,502 90,917
Current portion of capital lease obligations................. 16,450 9,169
----------- -----------
Total current liabilities.................................. 368,048 620,844
Capital lease obligations, less current portion................ 17,956 12,706
Deferred revenue -- noncurrent................................. 191,646 345,641
Commitments and contingencies
Shareholders' equity:
Common stock, $.0025 par value, 22,400,000 shares authorized,
7,287,315 and 9,223,018 shares issued and outstanding at
September 30, 1997, and June 30, 1998, respectively........ 18,218 23,058
Additional paid-in capital................................... 12,680,394 22,055,434
Deficit accumulated during the
development stage.......................................... (7,299,633) (10,106,675)
Net unrealized loss on available-for-sale
Securities................................................. (1,023) 202
----------- -----------
Total shareholders' equity..................................... 5,397,956 11,972,019
----------- -----------
Total liabilities and shareholders' equity..................... $ 5,975,606 $12,951,210
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(NOVEMBER 11,
THREE MONTHS ENDED NINE MONTHS ENDED 1989) TO
JUNE 30, JUNE 30, JUNE 30,
1997 1998 1997 1998 1998
--------------- --------------- --------------- --------------- ---------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues $ 82,900 $ 51,686 $ 583,504 $ 282,440 $ 4,555,582
Operating expenses:
Research & development..... 736,874 821,209 1,788,339 2,141,452 9,781,467
General & administrative... 238,694 399,912 741,623 1,086,706 5,801,965
------------- ------------- ------------- ------------- -------------
Total operating expenses 975,568 1,221,121 2,529,962 3,228,158 15,583,432
Operating loss............... (892,668) (1,169,435) (1,946,458) (2,945,718) (11,027,850)
Other income (expense):
Investment income, net..... 57,872 49,409 216,209 140,428 960,148
Interest expense........... (1,479) (488) (2,293) (1,852) (39,838)
Other income............... - - - 100 865
------------- ------------- ------------- ------------- -------------
56,393 48,921 213,916 138,676 921,175
------------- ------------- ------------- ------------- -------------
Net loss................. $ (836,275) $ (1,120,514) $ (1,732,542) $ (2,807,042) $ (10,106,675)
============= ============= ============= ============= =============
Net loss per share........... $ (0.11) $ (0.13) $ (0.24) $ (0.37)
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(NOVEMBER 11,
NINE MONTHS ENDED JUNE 30, 1989) TO JUNE 30,
1997 1998 1998
------------------ ------------------ ------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss....................................... $(1,732,542) $(2,807,042) $(10,106,675)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization................ 83,835 105,702 583,888
Loss on sale of investments.................. 224 - 86,806
Common stock issued for consulting services.. 15,003 14,375 73,476
Provision for Compensation --
consulting stock options................... 85,000
Assignment of intellectual property used in
research and development................... 200,000
Changes in operating assets and
liabilities:
Accounts receivable........................ (177,324) 140,318 (74,670)
Prepaid expenses and other assets.......... (18,800) (134,344) (193,319)
Accounts payable........................... 328,798 274,662 520,758
Accrued expenses and other liabilities..... 1,898 (14,585) 90,917
Deferred revenue........................... (108,342) 153,995 345,642
----------- ----------- -----------
Net cash used in operating activities.......... (1,607,250) (2,266,919) (8,388,178)
INVESTING ACTIVITIES
Purchase of available-for-sale securities.... - - (4,517,181)
Proceeds from available-for-sale securities.. 467,010 359,740 4,416,000
Purchase of equipment and leasehold
improvements, net.......................... (137,892) (204,822) (863,290)
Expenditures for patents and other assets.... (422,242) (253,708) (1,480,244)
----------- ----------- -----------
Net cash used in investing activities.......... (93,124) (98,790) (2,444,715)
FINANCING ACTIVITIES
Proceeds from issuance of common stock......... 3,115,497 11,791,855 24,254,220
Offering costs............................... - (2,148,346) (2,426,351)
Private placement financing costs............ (2,909) - (107,854)
Principal payments of capital lease
obligations................................ (13,537) (12,531) (74,818)
Advances from shareholder.................... - - 330,000
Payments to shareholder...................... - - (330,000)
----------- ----------- -----------
Net cash provided by financing activities...... 3,099,051 9,630,978 21,645,197
Net increase in cash and cash equivalents...... 1,398,677 7,265,269 10,812,305
Cash and cash equivalents at beginning of
period....................................... 3,276,339 3,547,036 -
----------- ----------- -----------
Cash and cash equivalents at end of period..... $ 4,675,016 $10,812,305 $10,812,305
=========== =========== ===========
Supplemental disclosure of cash flows
information--
Cash paid for interest....................... $ 2,293 $ 1,852
Supplemental disclosure of non-cash
transactions--
Common stock issued for consulting services.. $ 15,003 $ 14,375
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE> 6
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and notes required
by generally accepted accounting principles for complete financial statements
and should be read in conjunction with the Company's registration statement
filed on Form S-1, as amended, effective May 7, 1998, containing audited
financial statements for the fiscal year ended September 30, 1997. In the
opinion of management, all adjustments (consisting only of adjustments of a
normal and recurring nature) considered necessary for a fair presentation of the
results of operations have been included. Operating results for the three and
nine month periods ended June 30, 1998, are not necessarily indicative of the
results that might be expected for the year ended September 30, 1998.
NOTE 2. NET LOSS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share." SFAS No.
128 replaced the calculation of primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Earnings per share amounts for all periods have been
presented and, where appropriate, restated to conform to SFAS No. 128
requirements.
The following table sets forth the number of basic weighted-average shares used
in the per share calculations for the period. Dilutive earnings per share is not
shown as the impact is antidilutive.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1997 1998 1997 1998
----------------- ---------------------------------- -----------
<S> <C> <C> <C> <C>
Weighted average shares outstanding 7,285,337 8,334,726 7,191,437 7,637,492
Options and warrants that could potentially
dilute basic earnings per share in the
future that are not included in the
computation of diluted earnings per
share as their impact is antidilutive
(treasury stock method) 351,863 358,391 351,863 358,391
</TABLE>
NOTE 3. INITIAL PUBLIC OFFERING ("IPO")
The Company commenced, on May 7, 1998, an initial public offering of 1,750,000
units at a price of $6.10 per unit, each consisting of one share of common
stock, $.0025 par value, and one redeemable common stock purchase warrant. The
Company granted the underwriters an option to purchase up to an additional
262,500 units to cover over-allotments, which option was exercised on June 23,
1998, as to 183,088 units. The net proceeds to the Company from the offering,
after deduction of underwriting discounts and other expenses related to the
offering, were $8,390,500 (or $9,365,504 after exercise of the over-allotment
option). The Company intends to use the net proceeds for technology
development/new product discovery, product development, capital expenditures and
working capital, and general corporate purposes.
NOTE 4. NEW ACCOUNTING PRONOUNCEMENT
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in years beginning after June 15, 1999. Because of the
Company's minimal use of derivatives, management does not anticipate that the
adoption of the new Statement will have a significant effect on earnings or the
financial position of the Company.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the financial statements and the
related notes thereto included in this document. This document contains certain
forward-looking statements that involve risks and uncertainties. These
forward-looking statements are made in reliance upon the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The Company cautions
readers that the Company's actual results may differ significantly from the
results anticipated in these forward-looking statements as a result of various
factors. Such factors include, but are not limited to, those discussed below and
in the section titled "Risk Factors" (pages 7-18) of the Company's Prospectus,
which is part of the Company's registration statement, filed on Form S-1, as
amended, effective May 7, 1998. The Company undertakes no obligation to revise
such forward-looking statements to reflect events or circumstances occurring
after the date hereof.
OVERVIEW
Ophidian is a development stage corporation focused on the research, development
and commercialization of therapeutic products for human and animal use. The
Company's business has been directed to numerous areas of disease but has
focused principally on products for infectious disease prevention and treatment.
The Company has not received any revenues from the sale of Food and Drug
Administration ("FDA") licensed products to date and does not expect to receive
any such revenues during the next two fiscal years. Except for the fiscal year
ended September 30, 1993 ("Fiscal 1993"), the Company has been unprofitable
every year since inception. The Company expects to incur additional losses over
the next several years. At June 30, 1998, the Company had an accumulated deficit
of $10,106,675 and for the nine months ended June 30, 1998, incurred a net loss
of $2,807,042.
The Company intends to continue investing in the further research and
development of its technologies and products in infectious disease and other
therapeutic areas. Depending on a variety of factors, including collaborative
arrangements, availability of personnel and financial resources, the Company
will engage in the development of its products and establish capabilities to
support regulatory submissions. The Company will need to make additional capital
investments in research and development laboratories and manufacturing
facilities, including the construction of facilities for large-scale production
of avian antibodies and supporting testing laboratories. Investments in
manufacturing and associated capabilities would be required to be made before
any regulatory agency would grant approval to market products, however, there
can be no assurance that such approval will be granted. It is expected that the
Company will need to hire additional personnel to support increased research and
development, manufacturing, quality systems, and general business requirements.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1998, Compared to Three Months Ended June 30, 1997
Revenues. Revenues decreased $31,214 or 38% to $51,686 for the three months
ended June 30, 1998, as compared to $82,900 for the three months ended June 30,
1997, due to the completion of a Department of Defense Small Business Innovative
Research Grant, which ended June 1998.
Research and Development Expenses. Research and development expenses increased
$84,335 or 11% to $821,209 for the three months ended June 30, 1998, as compared
to $736,874 for the three months ended June 30, 1997. The increase in expenses
in the three months ended June 30, 1998, resulted primarily from additional
laboratory supply expenses and costs associated with the clinical development of
the Clostridium difficile-associated disease ("CDAD") therapeutic antitoxin and
development of certain technologies (transforming growth factor beta) related to
the discovery of new drug targets and drug products in the area of infectious
diseases and other disease areas where the Company believes business
opportunities exist. Furthering Ophidian's position in the avian antibody field,
the Company received two new U.S. patents covering the CDAD product and has
obtained an exclusive license to two U.S. patents covering general methods for
the production of avian antibodies.
7
<PAGE> 8
General and Administrative Expenses. General and administrative expenses
increased $161,218 or 68% to $399,912 for the three months ended June 30, 1998,
as compared to $238,694 for the three months ended June 30, 1997. The increase
in expenses in the three months ended June 30, 1998, resulted primarily from
increased salary expenses to support business development, site selection,
design, planning, and negotiations for the company's first manufacturing
facility, insurance expense and license fees on newly obtained technology. The
Company expects to announce a site for its first manufacturing facility in the
fiscal fourth quarter.
Interest Income and Expenses. Interest income decreased $8,463 or 15% to $49,409
for the three months ended June 30, 1998, as compared to $57,872 for the three
months ended June 30, 1997. The decrease in interest income for the three months
ended June 30, 1998, resulted from lower interest rates offset in part by
slightly higher average balances in the current period. Interest expense for the
periods was negligible.
Net Loss. Net losses increased $284,239 or 34% to $1,120,514 for the three
months ended June 30, 1998, as compared to $836,275 for the three months ended
June 30, 1997. The increased loss in the three months ended June 30, 1998,
resulted primarily from increased research and development and general and
administrative expenses.
Net Operating Loss. The Company generated net operating loss carry-forwards for
federal and state income tax purposes for the three months ended June 30, 1998.
A valuation allowance has been recorded by the Company.
Nine months Ended June 30, 1998, Compared to Nine months Ended June 30, 1997
Revenues. Revenues decreased $301,064 or 52% to $282,440 for the nine months
ended June 30, 1998, as compared to $583,504 for the nine months ended June 30,
1997. Revenues in the nine months ended June 30, 1997, were greater due
primarily to the one-time payment of $300,000 from Eli Lilly and Company
("Lilly") in connection with the achievement of certain product development
milestones.
Research and Development Expenses. Research and development expenses increased
$353,113 or 20% to $2,141,452 for the nine months ended June 30, 1998, as
compared to $1,788,339 for the nine months ended June 30, 1997. The increase in
expenses in the nine months ended June 30, 1998, resulted primarily from
additional personnel and laboratory supply expenses and other costs associated
with preclinical and clinical development of the CDAD therapeutic antitoxin and
development of certain technologies (transforming growth factor beta) related to
the discovery of new drug targets and drug products in the area of infectious
diseases and other disease areas where the company believes business
opportunities exist.
General and Administrative Expenses. General and administrative expenses
increased $345,083 or 47% to $1,086,706 for the nine months ended June 30, 1998,
as compared to $741,623 for the nine months ended June 30, 1997. The increase in
expenses in the nine months ended June 30, 1998, resulted primarily from
increased salary expenses to support business development, site selection,
design, planning, and negotiations for its first manufacturing facility,
insurance expense and license fees on newly obtained technology.
Interest Income and Expenses. Interest income decreased $75,781 or 35% to
$140,428 for the nine months ended June 30, 1998, as compared to $216,209 for
the nine months ended June 30, 1997. The decrease in interest income in the nine
months ended June 30, 1998, resulted from lower interest rates and lower average
balances. The variance in interest expense between the two periods was
negligible.
Net Operating Loss. The Company generated net operating loss carry-forwards for
federal and state income tax purposes for the nine months ended June 30, 1998. A
valuation allowance has been recorded by the Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through the
sale of equity and revenues consisting of payments received under collaborative
agreements and federal research grants. As of June 30, 1998, the Company had
received $24,612,697 in gross proceeds from the sale of equity. The Company's
principal sales of
8
<PAGE> 9
equity have occurred through its IPO in May 1998, private placement stock
offering activities and sales of equity to Lilly.
The Company expects to achieve CDAD program milestones within the next six
months resulting in an equity investment of $3,500,000 by Lilly.
Net cash used in operating activities was $2,266,919 for the nine months ended
June 30, 1998, as compared with net cash used in operating activities of
$1,607,250 for the nine months ended June 30, 1997. The increase in cash used in
operating activities is primarily attributable to increased research and
development funding activities and increased general and administrative
expenses. Net cash used in investing activities was $98,790 for the nine months
ended June 30, 1998, as compared to $93,124 for the equivalent period a year
earlier. The decrease is principally attributable to decreases in expenditures
for patents offset in part by an increase in purchases of equipment and a
decrease in net proceeds received from available-for-sale investment activities.
Net cash provided by financing activities was $9,630,977 for the nine months
ended June 30, 1998, as compared to $3,099,051 for the equivalent period a year
earlier. The change is primarily attributable to the following two events:
first, receipt of $10,675,000 (less expenses of $2,284,500 yielding a net
receipt of $8,390,500) from the sale of 1,750,000 units (consisting of one share
of common stock, par value of $0.0025 per share, and one redeemable common stock
purchase warrant) on the public market which commenced May 7, 1998, and; second,
receipt of $1,116,837 (less expenses of $141,833, yielding a net receipt of
$975,004) from partial exercise of the over-allotment (183,088 units of the
262,500 units granted) was received June 23, 1998.
The Company believes that with the net proceeds from its IPO and its existing
capital resources (cash and short term investments of $10,812,305 as of June 30,
1998), combined with interest income and future revenues and equity investments,
if any, due under collaborative agreements, will be sufficient to satisfy its
funding requirements for at least the twelve months following the date of this
document. The Company is seeking long-term debt financing of up to approximately
$7,500,000 (secured by the facility assets plus approximately 30% in cash or
cash equivalents) to complete construction of its first manufacturing facility.
This amount may increase based on site selection. In addition, these funding
requirements include continued expenditures for research and development
programs, as well as expenditures related to expanded laboratory and general
corporate facilities.
Furthermore, the Company anticipates that the following material changes will
occur in the next twelve months: hiring of additional manufacturing personnel;
purchase of capital equipment; and, increased operating expenses in connection
with bulk manufacturing. The Company anticipates that its expenses incurred in
bulk manufacturing of the CDAD product will increase and will contribute to
future increases in net operating losses. These future increases in operating
losses will result from the hiring of additional manufacturing and quality
control personnel and the operation of a facility. If CDAD fails to secure FDA
approval, the Company's success or lack thereof in securing other business in
addition to the CDAD product for its facility will have a material effect on
future profitability and cash flows. The Company, as a normal part of its
strategy and business practice, is actively soliciting additional collaborative
agreements and considering other alternatives to enhance its capital resources.
NET OPERATING LOSSES
The Company has not generated taxable income to date. At June 30, 1998, the net
operating losses available to offset future taxable income for federal income
tax purposes were approximately $10,398,000. These carry-forwards expire
beginning in 2007 if not utilized. At June 30, 1998, the Company has research
and other federal tax credit carry-forwards of approximately $575,000 and
Wisconsin carry-forwards of approximately $238,000. The Company has recorded a
full valuation allowance against any deferred tax assets established for the
carry-forwards.
Utilization of the net operating losses and credits may be subject to annual
limitations due to the ownership change limitations provided by the Internal
Revenue Code and similar state provisions. The annual limitations may result in
the expiration of net operating losses and credits before full utilization.
9
<PAGE> 10
YEAR 2000 IMPACT
The Company anticipates a complete conversion of its computer hardware,
software operating systems and application systems concurrent with the planned
commencement of manufacturing operations to meet the more sophisticated
requirements of a biopharmaceutical manufacturer. The Company has inventoried
and evaluated the software application systems presently employed and does not
believe that testing and remediation of this software will entail significant
costs nor materially impact the Company's operations. However, the Company is
unable to control whether the firms and vendors it does business with
currently, and in the future, will have systems that are Year 2000 compliant.
The Company's operations could be affected to the extent that these firms and
vendors would not be able to provide services or ship products. Nonetheless,
management does not believe the Year 2000 changes will have a material effect
on its business, financial condition, or results of operations.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings--None
ITEM 2. Changes in Securities and Use of Proceeds
(a) None
(b) None
(c) None
(d) Use of Proceeds
The information in this paragraph 2(d) relates to the
Registrant's Registration Statement on Form S-1, as amended,
effective May 7, 1998, Registration No. 333-33219 (the
"Registration Statement"). The managing underwriters for the
offering of the securities sold pursuant to the Registration
Statement (the "Offering") were Dirks & Company, Inc. and
Security Capital Trading, Inc. (the "Underwriters"). The
Offering commenced on May 7, 1998, and was completed on June
23, 1998, following the Underwriters' exercise of their
options to purchase additional units to cover over allotments
(the "Over-Allotment Option"). The following chart sets forth
the securities registered pursuant to the Offering, the
offering price, the amount sold, and the aggregate offering
price of the amount sold.
<TABLE>
<CAPTION>
OFFERING PRICE AGGREGATE OFFERING
SECURITY AMOUNT PER UNIT AMOUNT SOLD PRICE OF AMOUNT
-------- REGISTERED -------- ----------- SOLD
---------- ------------------
<S> <C> <C> <C> <C>
Unit consisting of 2,012,500(1) $6.10 1,933,088(2) $11,791,855
one share of Common
Stock, par value
$.0025 per share
("Common Stock") and
one redeemable Common
Stock Purchase
Warrant ("Warrant")
(1)Includes 262,500 additional units registered pursuant to an over-allotment option (the "Over-Allotment
Option") granted to the Underwriters. Excludes (i) additional shares of Common Stock issuable upon exercise
of the Warrants, (ii) additional shares of Common Stock issuable upon exercise of certain Representatives'
Warrants, as defined in the Registration Statement, and (iii) additional shares of Common Stock issuable upon
exercise of Warrants issuable upon exercise of the Representatives' Warrant.
(2)Includes 183,088 additional units purchased by the Underwriters on June 23, 1998, when they partially
exercised their Over-Allotment Option by purchasing 183,088 units of the 262,500 units originally granted in
the option.
Total underwriting discounts and commissions: $1,061,265
Other expenses: 1,365,086
----------
Total expenses: $2,426,351
All such expenses were direct or indirect payments to others.
The net offering proceeds to the Company, after deducting the total expenses above, were $9,365,504. From
May 7, 1998 to June 30, 1998, the Company has placed the net proceeds in temporary investments. The Company
expects to use the net proceeds in direct or indirect payments to others as follows:
Construction of plant, building and facilities $1,100,000
Purchase and installation of machinery and equipment $1,750,000
Purchase of real estate -
Acquisition of other business(es) -
Repayment of indebtedness -
Research & development and business operations $5,500,000
Working capital $1,016,000
Temporary investments -
Each of the foregoing amounts is a reasonable estimate of the application of the net offering proceeds. This
use of proceeds does not represent a material change in the use of the proceeds described in the Prospectus of
the Registration Statement.
</TABLE>
ITEM 3. Defaults upon Senior Securities - None
ITEM 4. Submission of Matters to a vote of Security Holders - None
ITEM 5. Other Information - None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits (see exhibit list)
(b) Reports on Form 8-K - None
11
<PAGE> 12
ITEM 6(a) EXHIBIT LIST
NUMBER DESCRIPTION
------ -----------
3.1 Amended and Restated Articles of Incorporation of the
Registrant, filed as Exhibit 3.1 to the Registration Statement,
and hereby incorporated by reference.
3.2 Amended and Restated Bylaws of the Registrant, filed as Exhibit
3.2 to the Registration Statement, and hereby incorporated by
reference.
4.1 Specimen Common Stock Certificate, filed as Exhibit 4.1 to the
Registration Statement, and hereby incorporated by reference.
4.2 Specimen Warrant Certificate, filed as Exhibit 4.2 to the
Registration Statement, and hereby incorporated by reference.
4.3 Form of Representatives' Warrant Agreement, including Specimen
Representatives' Warrant, filed as Exhibit 4.3 to the
Registration Statement, and hereby incorporated by reference.
4.4 Form of Warrant Agreement, filed as Exhibit 4.4 to the
Registration Statement and hereby incorporated by reference.
4.5 Specimen Unit Certificate, filed as Exhibit 4.5 to the
Registration Statement, and hereby incorporated by reference.
10.1 Lease dated February 12, 1994, between the Company and Promega
Corporation, filed as Exhibit 10.1 to the Registration
Statement, and hereby incorporated by reference.
10.2 1997 Incentive Stock Option Plan, filed as Exhibit 10.2 to the
Registration Statement, and hereby incorporated by reference.
10.3 1990 Incentive Stock Option Plan, filed as Exhibit 10.3 to the
Registration Statement, and hereby incorporated by reference.
10.4 1992 Employee Stock Option Plan, filed as Exhibit 10.4 to the
Registration Statement, and hereby incorporated by reference.
10.5 Agreement dated June 3, 1996, between the Company and Eli Lilly
and Company, filed as Exhibit 10.5 to the Registration
Statement, and hereby incorporated by reference.
10.6 Employment Agreement dated June 1, 1997, between the Company and
Douglas C. Stafford, filed as Exhibit 10.6 to the Registration
Statement, and hereby incorporated by reference.
10.7 Employment Agreement dated June 1, 1997, between the Company and
Joseph Firca, filed as Exhibit 10.7 to the Registration
Statement, and hereby incorporated by reference.
10.8 Employment Agreement dated August 1, 1997, between the Company
and F. Michael Hoffmann, filed as Exhibit 10.8 to the
Registration Statement, and hereby incorporated by reference.
10.9 Employment Agreement dated November 6, 1997, between the Company
and Donald L. Nevins, filed as Exhibit 10.9 to the Registration
Statement, and hereby incorporated by reference.
27.0 Financial Data Schedule
12
<PAGE> 13
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.
Ophidian Pharmaceuticals, Inc.
(Registrant)
August 13, 1998 By: /s/ Douglas C. Stafford
-----------------------
Douglas C. Stafford
President and Chief Executive Officer
August 13, 1998 By: /s/ Donald L. Nevins
--------------------
Donald L. Nevins
Chief Financial Officer
August 13, 1998 By: /s/ Margaret B. van Boldrik
---------------------------
Margaret B. van Boldrik
Secretary
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> SEP-30-1998 SEP-30-1998
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 10,812,305 4,675,016
<SECURITIES> 0 478,950
<RECEIVABLES> 74,670 205,878
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 11,080,294 5,390,980
<PP&E> 933,353 709,076
<DEPRECIATION> 511,869 375,138
<TOTAL-ASSETS> 12,951,210 6,859,358
<CURRENT-LIABILITIES> 620,844 509,263
<BONDS> 0 0
0 0
0 0
<COMMON> 23,058 18,215
<OTHER-SE> 11,948,961 6,127,825
<TOTAL-LIABILITY-AND-EQUITY> 12,951,210 6,859,358
<SALES> 0 0
<TOTAL-REVENUES> 282,440 583,504
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,852 2,293
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,807,042) (1,732,542)
<EPS-PRIMARY> (0.37) (0.24)
<EPS-DILUTED> (0.37) (0.24)
</TABLE>
