UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 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: 0-21428
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13 - 3464527
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
790 Turnpike Street, Suite 202
North Andover, MA 01845
(Address of principal executive offices)
(508) 681-1062
(Registrant's telephone number)
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.
Title of Class
Common stock, $.001 par value per share, shares outstanding at
May 9, 1996 : 786,002
The Exhibit Index is included in this Form 10-Q on pages 15-17.
<PAGE>
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
Index
Page
Part I - Financial Information
Item 1. Financial Statements
Balance Sheets at December 31, 1995 and March 31, 1996 3
Statements of Operations for the three months ended
March 31, 1995 and 1996, and for the period from
Inception (April 19, 1988) through March 31, 1996 4
Statements of Cash Flows for the three months
ended March 31, 1995 and 1996 and for the period from
Inception (April 19, 1988) through March 31, 1996 5
Notes to Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-10
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 11
Item 6. Exhibits and Reports on Form 8-K 11-13
SIGNATURES 14
Exhibit Index 15-17
Exhibits 18-19
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
------------------ --------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,304,984 $ 3,716,294
Short-term investments 1,986,893 1,027,800
Interest and other receivables 62,673 27,953
Prepaid expenses and deposits 149,144 53,343
----------------- -------------------
Total current assets 5,503,694 4,825,390
------------------ -------------------
Property and equipment, at cost:
Laboratory equipment 3,213 --
Computer equipment 64,641 62,485
Furniture and fixtures 72,437 60,165
Leasehold improvements 719,792 719,792
Leasehold improvements under capital lease 600,000 600,000
----------------- -------------------
1,460,083 1,442,442
Less --- accumulated depreciation and amortization 1,436,720 1,423,064
----------------- -------------------
23,363 19,378
----------------- -------------------
Restricted cash 360,000 360,000
================= ===================
$ 5,887,057 $ 5,204,768
================= ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, March 31,
1995 1996
----------------- -------------------
Current liabilities:
Accounts payable $ 30,696 $ 2,619
Accrued expenses 714,226 586,892
Current maturities of capital lease obligations 42,884 44,185
----------------- -------------------
Total current liabilities 787,806 633,696
----------------- -------------------
Commitments (Note 4)
Obligations under capital leases, less current maturities 513,064 497,970
Stockholders' equity:
Common stock, $.001 par value ---
Authorized --- 25,000,000 shares; Issued and outstanding ---
785,512 at December 31, 1995
and 785,702 at March 31, 1996 786 786
Additional paid-in capital 35,652,462 35,652,937
Deficit accumulated during the development stage (31,067,061) (31,580,621)
----------------- -------------------
Total stockholders' equity 4,586,187 4,073,102
================= ===================
$ 5,887,057 $ 5,204,768
================= ===================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
April 19, 1988
Three Months Three Months (Inception)
Ended Ended Through
March 31, March 31, March 31,
1995 1996 1996
------------ ------------ -----------
<S> <C> <C> <C>
Revenues -- -- --
Operating expenses:
Research and development 1,458,264 -- 21,524,516
General and administrative 405,335 576,652 8,742,394
Marketing -- -- 730,879
Restructuring charge -- -- 2,609,000
---------- -------- -----------
Total operating expenses 1,863,599 576,652 33,606,789
========== ======== ===========
Interest income, net 143,328 63,092 1,899,984
---------- -------- -----------
Net loss (1,720,271) (513,560) (31,706,805)
========== ======== ===========
Net loss per common share $ (2.22) $ (0.65)
========== ========
Weighted average number of
common shares outstanding 774,163 785,621
========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three months Three months April 19, 1988
ended ended {Inception) Through
March 31, March 31, March 31,
1995 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (1,720,271) $ (513,560) $(31,580,621)
Adjustments to reconcile net loss to net
cash used in operating activities ---
Depreciation and amortization 82,824 -- 698,050
Loss on sale of property and equipment -- -- 209,232
Writedown of property and equipment to
net realizable value -- -- 1,386,216
Amortization of deferred compensation 17,911 -- 291,012
Changes in assets and liabilities ---
Interest and other receivables (6,100) 34,720 (27,953)
Prepaid expenses and deposits (8,320) 95,801 (53,343)
Accounts payable (52,137) (28,077) 2,619
Accrued expenses (192,103) (127,334) 586,892
------------ ------------ ------------
Net cash used in operating activities (1,878,196) (538,450) (28,487,896)
------------ ------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (8,892) -- (1,913,963)
Proceeds from sale of property and equipment -- 3,985 214,929
Purchases of short-term investments -- (987,800) (30,941,074)
Proceeds from sale of short-term investments 2,944,317 1,946,893 29,553,274
Decrease in other assets -- -- --
------------ ------------ ------------
Net cash (used in) provided by
investing activities 2,935,425 963,078 (3,086,834)
------------ ------------ ------------
Cash flows from financing activities:
Payments on capital lease obligations (9,912) (13,793) (71,687)
Net proceeds from sale of preferred stock -- -- 14,459,348
Net proceeds from sale of common stock -- -- 20,789,771
Net proceeds from exercise of stock options 50,772 475 69,698
Net proceeds from employee stock purchase plan -- -- 44,120
Repurchase of common stock -- -- (226)
------------ ------------ ------------
Net cash provided by financing activities 40,860 (13,318) 35,291,024
------------ ------------ ------------
Net (decrease) increase in cash and cash equivalents 1,098,089 411,310 3,716,294
Cash and cash equivalents, beginning of period 3,144,691 3,304,984 --
------------ ------------ ------------
Cash and cash equivalents, end of period $ 4,242,780 $ 3,716,294 $ 3,716,294
============ ============ ============
Cash paid for interest $ 13,942 $ 16,610 $ 80,450
============ ============ ============
Supplemental disclosures of noncash transactions:
Leasehold improvements under capital lease -- -- 600,000
Equipment acquired (disposed of) under capital lease -- -- --
------------ ------------ ------------
$ -- $ -- $ 600,000
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission for quarterly reports on Form 10-Q and do not include
all of the information and footnote disclosures required by generally
accepted accounting principles. The Company believes, however, that the
disclosures made are adequate to ensure that the information presented is
not misleading. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
latest audited financial statements, which are contained in the Company's
Form 10-K report for the year ended December 31, 1995.
This financial information includes all adjustments (consisting solely of
normal, recurring adjustments) which the Company considers necessary for a
fair statement of the results for the interim periods presented. The
results of operations for the interim periods presented are not necessarily
indicative of results for the entire year.
(2) Summary of Significant Accounting Policies
The accompanying financial statements reflect the application of certain
accounting policies described below and elsewhere in these notes to
financial statements.
(a) Depreciation and Amortization
The Company provides for depreciation and amortization using the
straight-line method by charges to operations in amounts estimated to
allocate the cost of the assets over their estimated useful lives
ranging from three to seven years. Amortization of capital lease
expenditures and leasehold improvements is charged in amounts estimated
to allocate the cost of the asset over the life of the original lease.
As part of the restructuring announced August 30, 1995, the Company
wrote down its fixed assets to net realizable value. Leasehold
improvements have been written down to zero, as the Company is
currently seeking to sublease its facility and does not expect to
recover any portion of the cost of its leasehold improvements.
Substantially all of the fixed assets, other than leasehold
improvements, have been sold.
(b) Research and Development Expenses
The Company charges research and development expenses to operations as
incurred. None were incurred in the three months ended March 31, 1996.
(3) Cash, Cash Equivalents, Short-Term Investments and Restricted Cash
(a) Cash and Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. As of
December 31, 1995 and March 31, 1996, cash and cash equivalents
consisted of money market accounts, commercial paper securities and
bank certificates of deposit.
(b) Short-term Investments
Short-term investments are securities with original maturities greater
than three months but less than one year. During 1994, the Company
adopted SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities. Accordingly the Company's investments are classified
as held to maturity (recorded at cost) and available for sale (recorded
at fair market value). As of December 31, 1995 and March 31, 1996,
short-term investments consisted of commercial paper and U.S. Treasury
Bills with an average maturity of less than six months.
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(c) Restricted Cash
The Company had $360,000 restricted cash in connection with its
facility lease at both December 31, 1995 and March 31, 1996 (see note
4).
(4) Commitments
(a) Capital and Operating Leases
The Company conducts its operations in an office facility in North
Andover, Massachusetts, and has the right to terminate the lease for
this facility by giving thirty days notice, without payment of any
fees.
In July 1994, the Company entered into a ten-year lease agreement for a
facility in Wilmington, Massachusetts. The Company is conducting no
operations in this facility, but is responsible for its share of
operating costs of the facility, including taxes, insurance,
maintenance and, subject to certain limitations, repairs. The Company
has the right to terminate the lease after five years and payment of a
fee of approximately $60,000. In connection with the lease, the
Landlord financed $600,000 of leasehold improvements, which the Company
has accounted for as a capital lease. The lease is payable in monthly
payments of principal and interest of $7,601 through October 31, 2004.
If the Company terminates the lease at the end of five years the unpaid
balance is due on the lease termination date.
The Company is actively seeking to obtain one or more sublessees for
its facility in Wilmington, Massachusetts, or to terminate the lease
by securing one or more replacement lessees. The Company currently
anticipates that a lease with one sublessee will be signed on or about
May 15, 1996, subject to obtaining written consent to the sublease
from the landlord. The Company is currently conducting no operations
at the Wilmington facility, but is responsible for its share of
operating costs of the facility, including taxes, insurance,
maintenance and, subject to certain limitations, repairs.
The Company is required to have secured letters of credit for a portion
of the unpaid capital lease. The cash which secures the letters of
credit was classified as restricted cash on the accompanying balance
sheets.
The future minimum lease payments under these leases are as follows:
Operating Capital
Lease Lease
$ $
1996 148,451 71,108
1997 193,140 91,207
1998 191,250 91,207
1999 195,500 91,207
2000 216,750 91,207
Thereafter 830,875 353,417
---------- ----------
1,775,966 789,353
----------
Less amount representing interest 247,198
----------
Present value of minimum lease payments 542,155
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(b) Commitments
On January 31, 1995 the Board of Directors adopted a severance program
under which all then current employees would receive three months
severance upon termination, under certain circumstances. All severance
payable under the program has been paid as of March 31, 1996.
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Dollar amounts rounded to nearest thousands)
Since its inception in April 1988, the Company has been engaged in research and
development of products for use in ophthalmic surgery and age-related diseases
of the eye.
On August 9, 1995, the Company announced that its preliminary analysis of Phase
III clinical trials of its lead product candidate, XARANO(TM), indicated that
the trials did not support continuation of the XARANO development program.
Separately, the Company also announced positive results of its Phase I/II trial
of a compound to reduce surgical miosis, a problem associated with cataract
surgery. On August 30, 1995, the Company announced a restructuring with a
workforce reduction designed to substantially reduce Telor's rate of cash use
for operations. The Company also announced its intention to find and evaluate
business opportunities, potentially including identifying a merger candidate,
seeking corporate partners to support the clinical program for surgical miosis,
or exploring a new business direction. The Company also terminated its research
and development activity.
On December 7, 1995, the Company announced the signing of a letter of intent to
merge with Occupational Health + Rehabilitation Inc ("OH+R") (the "Merger").
Subsequently, on February 23, 1996, the Company announced the signing of an
Agreement and Plan of Merger with OH+R. A stockholders meeting to approve the
Merger has been called for June 5, 1996. Also, the Company is continuing to seek
a corporate partner to support the clinical program for the development of
EY-128 for the treatment of surgical miosis.
The Company is actively seeking to obtain one or more sublessees for its
facility in Wilmington, Massachusetts, or to terminate the lease by securing one
or more replacement lessees. The Company currently anticipates that a lease with
one sublessee will be signed on or about May 15, 1996, subject to obtaining
written consent to the sublease from the landlord. The Company is currently
conducting no operations at the Wilmington facility, but is responsible for its
share of operating costs of the facility, including taxes, insurance,
maintenance and, subject to certain limitations, repairs.
At March 31, 1996, the Company retained no full-time employees. Certain former
full-time employees and the Company's Acting Chief Executive Officer continue to
serve the Company on a consulting basis.
The Company has not derived revenues from the sale of any products and does not
expect to derive revenues from the sale of any products in the absence of the
Merger or a similar transaction, or sale of rights to the clinical program for
surgical miosis. As of March 31, 1996, the Company's accumulated deficit was
$31,581,000.
Results of Operations
The loss during the first quarter of 1996 was $514,000, compared to a loss of
$1,720,000 for the same period in 1995. The termination of research and
development operations in August, 1995, the restructuring initiated in the same
month, and the termination of all full time employees by February 29, 1996,
caused the substantial decline in expenses.
There were no research and development expenses in the first quarter of 1996,
compared to $1,458,000 for the same period in 1995. Expenses in the first
quarter of 1995 were chiefly for the XARANO Phase III clinical trials. The
Company terminated its research and development activities in August 1995.
General and administrative expenses were $577,000 in the first quarter of 1996
compared to $405,000 in the same period in 1995. During 1995, certain expenses
such as those associated with the Company's Wilmington, Massachusetts facility
were allocated in part to the research and development activities being
conducted at that time. In 1996, all expenses were general and administrative.
General and administrative expenses for the first quarter of 1996 consisted
primarily of consulting fees, principally legal fees, and expenses associated
with the Company's Wilmington facility.
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
Net interest income was $63,000 in the first quarter of 1996 compared to
$143,000 for the first quarter of 1995. Lower average cash and short-term
investment balances caused this decline. In the absence of revenues or other
sources of funds, future levels of net interest income will continue to decline
month by month as cash is utilized.
Liquidity and Capital Resources
At March 31, 1996, the Company had cash, cash equivalents and short-term
investments of $4,744,000, a decrease of $548,000 from $5,292,000 at December
31, 1995. Working capital was $4,192,000 at March 31, 1996 compared to
$4,716,000 at December 31, 1995, a decrease of $524,000. These decreases were
due to the utilization of cash for the Company's operations during the first
three months of 1996. The Company has financed its operations to date from its
initial public offering receipts in May and June of 1993, prior private
placements of equity securities and convertible debt securities, and investment
income. From inception through March 31, 1996, the Company's paid-in capital
amounted to approximately $35,653,000, consisting primarily of proceeds from
these financing sources.
There were no capital expenditures for the quarter ended March 31, 1996,
compared to $9,000 for the first quarter of 1995.
The Company has terminated the majority of consulting and research agreements it
had with third parties. Remaining obligations have been accrued as of March 31,
1996.
Substantial additional funds may be required to support continuing operations
subsequent to completion of the Merger with OH+R. The availability of funds to
support the surviving corporation's operations thereafter cannot be predicted.
The surviving corporation may choose to continue seeking additional funds
through collaborative arrangements or joint ventures or from other sources,
including, as market conditions permit, equity or debt financing. It may seek to
raise funds when conditions are favorable, even if it does not have an immediate
need for such additional capital at such time. There can be no assurance that
such funds will be available on favorable terms, if at all. Failure to obtain
such funds in the future may require the Surviving Corporation to delay its
plans to expand or to scale back or eliminate some or all of its future
operations.
In the absence of the Merger, the Company's capital resources and interest
earned on invested capital will be sufficient to fund operations throughout 1996
and an evaluation of other alternatives.
Certain of the statements set forth above regarding the Company's plans,
including regarding the proposed merger with OH+R and seeking a corporate
partner for EY-128, are forward looking and based upon current expectations and
plans. Such statements are subject to certain risks and uncertainties, among
them market, regulatory and competitive conditions, which could cause actual
events to differ materially from those projected. Many important factors affect
the Company's ability to achieve the stated outcomes, including with respect to
the Merger and the timing thereof, the satisfaction of the closing conditions
and timing thereof.
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
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
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K (a)Exhibits furnished as Exhibits
hereto:
<TABLE>
<C> <S>
The following documents are filed as Exhibits hereto:
3.1 --Restated Certificate of Incorporation of the Registrant
3.2 --By-Laws of the Registrant
4.1 --Article 4 of the Registrant's Restated Certificate of Incorporation
4.2 --Form of Common Stock Certificate
4.3 --Restated By-Laws of the Registrant
10.1 --License Agreement between the Registrant and The Bowman Gray School
of Medicine of Wake Forest University, dated July 13, 1992
10.2 --Termination of License Agreement between the Registrant and The Bowman Gray School
of Medicine of Wake Forest University, dated January 20, 1995
10.3 --License Agreement between the Registrant and Massachusetts
Eye and Ear Infirmary, dated December 20, 1989, as amended by
letter agreement, dated March 12, 1993
10.4 --License Agreement between the Registrant and the University of Alicante, Spain, dated
January 1, 1994
10.5 --Research Agreement between the Registrant and the University of Alicante, Spain, dated
January 1, 1994
10.6 --Extension to Research Agreement between the Registrant and the University of Alicante
Spain, dated December 14, 1994
10.7 --Commercial Lease Agreement between the Registrant and
Cummings Properties Management, dated December 21, 1990, as
amended February 5, 1991 and February 28, 1992
10.8 --Commercial Lease Agreement between the Registrant and Cummings Properties
Management, dated June 1, 1993
10.9 --Amendment to Commercial Lease Agreement between the Registrant and
Cummings Properties Management, dated November 9, 1993
10.10 --Commercial Lease Agreement between the Registrant and WRC Properties,
dated July 12, 1994
10.11 --Telor Ophthalmic Pharmaceuticals, Inc. 1988 Stock Plan, as amended ++
10.12 --Telor Ophthalmic Pharmaceuticals, Inc. 1993 Stock Plan, as amended ++
10.13 --Telor Ophthalmic Pharmaceuticals, Inc. Employee Stock Purchase Plan ++
</TABLE>
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
<TABLE>
<C> <S>
10.14 --Series C Convertible Preferred Stock Purchase Agreement
among the Registrant and certain purchasers and certain prior
investors, dated April 27, 1992
10.15 --Amendment to Series C Convertible Preferred Stock Purchase
Agreement and Waiver among the Registrant and certain
purchasers and certain prior investors, dated March 5, 1993
10.16 --First Amended and Restated Voting Agreement, among the Registrant, Stephen J. Riggi
and Arthur H. Neufeld, and certain investors, dated April 27, 1992
10.17 --Consent to Termination of First Amended and Restated Voting Agreement,
dated March 25, 1993
10.18 --Registration Rights Agreement between the Registrant and
certain investors, dated November 16, 1988, as amended
February 5, 1990, June 22, 1990 and October 31, 1990
10.19 --Amendment No. 4 to Registration Rights Agreement between the Registrant
and certain investors, dated April 27, 1992
10.20 --Registration Rights Agreement among the Registrant and Stephen J. Riggi and
Arthur H. Neufeld, dated October 31, 1990, as amended April 27, 1992
10.21 --Stock Restriction Agreement among the Registrant, Arthur H. Neufeld and
certain investors, dated November 16, 1988, as amended December 5, 1989,
October 31, 1990 and April 27, 1992
10.22 --Amendment No. 4 to Stock Restriction Agreement among the Registrant,
Arthur H. Neufeld and certain investors, dated March 5, 1993
10.23 --Amendment to Stock Option Agreements between the Registrant and Arthur H. Neufeld,
dated May 9, 1995
10.24 --Registrar, Transfer Agency and Service Agreement for Corporate Equity Issues
between the Registrant and State Street Bank and Trust Company, dated May 18, 1993
10.25 --Consulting Agreement between the Registrant and John K. Herdklotz
dated November 14, 1994 ++
10.26 --Extension to Consulting Agreement between the Registrant and John K. Herdklotz
dated June 30, 1995 ++
10.27 --Employment Agreement between the Registrant and Arthur H. Neufeld, dated
October 26, 1992 ++
10.28 --Employment Agreement between the Registrant and Michael R.N. Thomas, dated
May 6, 1991 ++
10.29 --Employment Agreement between the Registrant and Frederick H. Garber, dated
June 5, 1992 ++
10.30 --Employment Agreement between the Registrant and Bobby R. Owen, dated
March 8, 1994 ++
10.31 --Executive Employment Severance Agreement between the Registrant and Stephen
J. Riggi, dated February 27, 1995 ++
10.32 --Executive Employment Severance Agreement between the Registrant and Arthur
H. Neufeld dated October 17, 1995
10.33 --Employee Non-Disclosure and Developments Agreement between the Registrant and
Stephen J. Riggi, dated November 21, 1989 ++
10.34 --Consultant Non-Disclosure and Developments Agreement between the Registrant
and Arthur H. Neufeld, dated November 16, 1988 ++
10.35 --Employee Non-Disclosure and Developments Agreement between the Registrant
and Michael R.N. Thomas, dated May 6, 1991 ++
10.36 --Employee Non-Disclosure and Developments Agreement between the Registrant
and Frederick H. Garber, dated June 5, 1992 ++
10.37 --Employee Non-Disclosure and Developments Agreement between the Registrant
and Bobby R. Owen, dated March 8, 1994 ++
10.38 --Consultant Non-Disclosure Agreement between the Registrant and
John K. Herdklotz, dated November 14, 1994 ++
</TABLE>
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
<TABLE>
<C> <S>
10.39 --Disability Income Policy between Stephen J. Riggi and New England Mutual Life
Insurance Company, issued January 3, 1991 ++
10.40 --Disability Income Policy between Arthur H. Neufeld and New England Mutual
Life Insurance Company, issued February 1, 1992 ++
10.41 --Disability Income Policy between Michael R.N. Thomas and New England Mutual
Life Insurance Company, issued August 1, 1991 ++
10.42 --Disability Income Policy between Frederick H. Garber and New England Mutual
Life Insurance Company, issued August 14, 1992 ++
10.43 --Disability Income Policy between Walter P. Rahn II and New England Mutual
Life Insurance Company, issued September 9, 1992 ++
10.44 --Employee Non-Competition Agreement between the Registrant
and Stephen J. Riggi, Ph.D., dated November 21, 1989 ++
10.45 --Employee Non-Competition Agreement between the Registrant
and Arthur H. Neufeld, Ph.D., dated November 16, 1988 ++
10.46 --Employee Non-Competition Agreement between the Registrant
and Michael R.N. Thomas, dated May 6, 1991 ++
10.47 --Employee Non-Competition Agreement between the Registrant
and Frederick H. Garber, dated June 5, 1992 ++
10.48 --Employee Non-Competition Agreement between the Registrant
and Walter P. Rahn II, dated May 29, 1992 ++
10.49 --Employee Non-Competition Agreement between the Registrant
and Bobby R. Owen, dated March 8, 1994 ++
10.50 -- Agreement and Plan of Merger between Telor Ophthalmic Pharmaceuticals, Inc. and
Occupational Health + Rehabilitation Inc
11 --Statement Regarding: Computation of Net Loss per Common and Common Equivalent
Share
27.1 --Financial Data Schedule
</TABLE>
++ The symbol "++" after an exhibit description indicates that the
exhibit is a management contract or compensatory plan or
arrangement required to be filed as an exhibit to this Form 10-Q
pursuant to Item 14(c).
(b) No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1996.
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
SIGNATURES
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 thereunto duly authorized.
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
Date: May 14, 1996 /s/ John K. Herdklotz
-----------------------------------------
John K. Herdklotz Ph.D.
Chairman of the Board
Acting Chief Executive Officer and President
(principal executive officer), Director
Date: May 14, 1996 /s/ Mark J. Gabrielson
-----------------------------------------
Mark J. Gabrielson
Acting Chief Financial Officer, Treasurer,
(principal financial officer) and Director
<PAGE>
FORM 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<C> <S> <C>
3.1 --Restated Certificate of Incorporation of the Registrant* (a) (filed as Exhibit 3)
3.2 --By-Laws of the Registrant* (a) (filed as Exhibit 4)
4.1 --Article 4 of the Registrant's Restated Certificate of Incorporation* (a)
(see Article 4 of document filed as Exhibit (3))
4.2 --Form of Common Stock Certificate* (b) (filed as Exhibit 4.2)
4.3 --Restated By-Laws of the Registrant * (a) (filed as Exhibit (4))
10.1 --License Agreement between the Registrant and The Bowman Gray
School of Medicine of Wake Forest University, dated July 13,
1992* (b) (filed as Exhibit 10.1)++
10.2 --Termination of License Agreement between the Registrant and
The Bowman Gray School of Medicine of Wake Forest University,
dated January 20, 1995 (k) filed as Exhibit 10.2
10.3 --License Agreement between the Registrant and Massachusetts
Eye and Ear Infirmary, dated December 20, 1989, as amended by
letter agreement, dated March 12, 1993* (b) (filed as Exhibit
10.2)++
10.4 --License Agreement between the Registrant and the University of Alicante, Spain, dated
January 1, 1994* (g) (filed as Exhibit 10.3)++
10.5 --Research Agreement between the Registrant and the University of Alicante, Spain, dated
January 1, 1994* (g) (filed as Exhibit 10.4)++
10.6 --Extension to Research Agreement between the Registrant and the University of Alicante Spain,
dated December 14, 1994* (j) (filed as Exhibit 10.5)
10.7 --Commercial Lease Agreement between the Registrant and
Cummings Properties Management, dated December 21, 1990, as
amended February 5, 1991 and February 28, 1992* (b) (filed as
Exhibit 10.3)
10.8 --Commercial Lease Agreement between the Registrant and Cummings Properties
Management, dated June 1, 1993* (e) (filed as Exhibit 10.4)
10.9 --Amendment to Commercial Lease Agreement between the
Registrant and Cummings Properties Management, dated November
9, 1993* (g) (filed as Exhibit 10.6b)
10.10 --Commercial Lease Agreement between the Registrant and WRC Properties,
dated July 12, 1994 * (i) (filed as Exhibit 10.7)
10.11 --Telor Ophthalmic Pharmaceuticals, Inc. 1988 Stock Plan, as amended * (f)
(filed as Exhibit 10.1)
10.12 --Telor Ophthalmic Pharmaceuticals, Inc. 1993 Stock Plan, as amended* (l)
(filed as Exhibit 10.12)
10.13 --Telor Ophthalmic Pharmaceuticals, Inc. Employee Stock Purchase Plan* (b)
(filed as Exhibit 10.6)
10.14 --Series C Convertible Preferred Stock Purchase Agreement
among the Registrant and certain purchasers and certain prior
investors, dated April 27, 1992* (b) (filed as Exhibit 10.7)
10.15 --Amendment to Series C Convertible Preferred Stock Purchase
Agreement and Waiver among the Registrant and certain
purchasers and certain prior investors, dated March 5, 1993*
(d) (filed as Exhibit 10.7(a))
10.16 --First Amended and Restated Voting Agreement, among the Registrant,
Stephen J. Riggi and Arthur H. Neufeld, and certain investors, dated
April 27, 1992* (b) (filed as Exhibit 10.8)
10.17 --Consent to Termination of First Amended and Restated Voting Agreement,
dated March 25, 1993* (d) (filed as Exhibit 10.8(a))
10.18 --Registration Rights Agreement between the Registrant and
certain investors, dated November 16, 1988, as amended
February 5, 1990, June 22, 1990 and October 31, 1990* (b)
(filed as Exhibit 10.9)
10.19 --Amendment No. 4 to Registration Rights Agreement between the Registrant
and certain investors, dated April 27, 1992* (d) (filed as Exhibit 10.9(a))
</TABLE>
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<C> <S> <C>
10.20 --Registration Rights Agreement among the Registrant and Stephen J. Riggi and
Arthur H. Neufeld, dated October 31, 1990, as amended April 27, 1992* (b)
(filed as Exhibit 10.10)
10.21 --Stock Restriction Agreement among the Registrant, Arthur H. Neufeld and
certain investors, dated November 16, 1988, as amended December 5, 1989,
October 31, 1990 and April 27, 1992* (b) (filed as Exhibit 10.11)
10.22 --Amendment No. 4 to Stock Restriction Agreement among the Registrant,
Arthur H. Neufeld and certain investors, dated March 5, 1993* (d) (filed as Exhibit 10.11(a))
10.23 --Amendment to Stock Option Agreements between the Registrant and Arthur H. Neufeld,
dated May 9, 1995* (l) (filed as Exhibit 10.23)
10.24 --Registrar, Transfer Agency and Service Agreement for Corporate Equity Issues
between the Registrant and State Street Bank and Trust Company, dated May 18, 1993*
(e) (filed as Exhibit 10.17)
10.25 --Consulting Agreement between the Registrant and John K. Herdklotz
dated November 14, 1994* (j) (filed as Exhibit 10.23)
10.26 --Extension to Consulting Agreement between the Registrant and John K. Herdklotz
dated June 30, 1995* (l) (filed as Exhibit 10.26)
10.27 --Employment Agreement between the Registrant and Arthur H. Neufeld, dated
October 26, 1992* (b) (filed as Exhibit 10.14)
10.28 --Employment Agreement between the Registrant and Michael R.N. Thomas, dated
May 6, 1991* (b) (filed as Exhibit 10.15)
10.29 --Employment Agreement between the Registrant and Frederick H. Garber, dated
June 5, 1992* (b) (filed as Exhibit 10.16)
10.30 --Employment Agreement between the Registrant and Bobby R. Owen, dated
March 8, 1994* (h) (filed as Exhibit 10.24)
10.31 --Executive Employment Severance Agreement between the Registrant and Stephen
J. Riggi, dated February 27, 1995* (j) (filed as Exhibit 10.28)
10.32 --Executive Employment Severance Agreement between the Registrant and Arthur
H. Neufeld dated October 17, 1995 (m) (files as Exhibit 10.32)
10.33 --Employee Non-Disclosure and Developments Agreement between the Registrant and
Stephen J. Riggi, dated November 21, 1989* (b) (filed as Exhibit 10.18)
10.34 --Consultant Non-Disclosure and Developments Agreement between the Registrant
and Arthur H. Neufeld, dated November 16, 1988* (b) (filed as Exhibit 10.19)
10.35 --Employee Non-Disclosure and Developments Agreement between the Registrant
and Michael R.N. Thomas, dated May 6, 1991* (b) (filed as Exhibit 10.20)
10.36 --Employee Non-Disclosure and Developments Agreement between the Registrant
and Frederick H. Garber, dated June 5, 1992* (b) (filed as Exhibit 10.21)
10.37 --Employee Non-Disclosure and Developments Agreement between the Registrant
and Bobby R. Owen, dated March 8, 1994* (h) (filed as Exhibit 10.29)
10.38 --Consultant Non-Disclosure Agreement between the Registrant and
John K. Herdklotz, dated November 14, 1994* (l) (filed as Exhibit 10.37)
10.39 --Disability Income Policy between Stephen J. Riggi and New England Mutual Life
Insurance Company, issued January 3, 1991* (b) (filed as Exhibit 10.24)
10.40 --Disability Income Policy between Arthur H. Neufeld and New England Mutual
Life Insurance Company, issued February 1, 1992* (b) (filed as Exhibit 10.25)
10.41 --Disability Income Policy between Michael R.N. Thomas and New England Mutual
Life Insurance Company, issued August 1, 1991* (b) (filed as Exhibit 10.26)
10.42 --Disability Income Policy between Frederick H. Garber and New England Mutual
Life Insurance Company, issued August 14, 1992* (b) (filed as Exhibit 10.27)
10.43 --Disability Income Policy between Walter P. Rahn II and New England Mutual
Life Insurance Company, issued September 9, 1992* (b) (filed as Exhibit 10.29)
</TABLE>
<PAGE>
Form 10-Q
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<C> <S> <C>
10.44 --Employee Non-Competition Agreement between the Registrant
and Stephen J. Riggi, Ph.D., dated November 21, 1989* (d) (filed as Exhibit 10.30)
10.45 --Employee Non-Competition Agreement between the Registrant
and Arthur H. Neufeld, Ph.D., dated November 16, 1988* (d) (filed as Exhibit 10.31)
10.46 --Employee Non-Competition Agreement between the Registrant
and Michael R.N. Thomas, dated May 6, 1991* (d) (filed as Exhibit 10.32)
10.47 --Employee Non-Competition Agreement between the Registrant
and Frederick H. Garber, dated June 5, 1992* (d) (filed as Exhibit 10.33)
10.48 --Employee Non-Competition Agreement between the Registrant
and Walter P. Rahn II, dated May 29, 1992* (d) (filed as Exhibit 10.35)
10.49 --Employee Non-Competition Agreement between the Registrant
and Bobby R. Owen, dated March 8, 1994* (h) (filed as Exhibit 10.40)
10.50 --Agreement and Plan of Merger between Telor Ophthalmic Pharmaceuticals, Inc. and
Occupational Health + Rehabilitation Inc* (n) (filed as Exhibit 10.50)
11 --Statement Regarding: Computation of Net Loss per Common and Common Equivalent Share 18
27.1 --Financial Data Schedule 19
* All exhibit descriptions followed by an asterisk (*) refer to exhibits
previously filed with the Securities and Exchange Commission as exhibits to,
and are hereby incorporated by reference from, the document to which the
letter in parentheses corresponds, as set forth below:
(a) Registrant's Form 8-A/A, Amendment No. 1 to Registrant's Registration Statement on Form 8-A,
File No. 0-21428.
(b) Registrant's Registration Statement on Form S-1, as amended, Registration No. 33-60030.
(c) Registrant's Report on Form 10-Q for the period ended March 31, 1993, File No. 0-21428.
(d) Registrant's Report on Form 10-Q for the period ended June 30, 1993, File No. 0-21428.
(e) Registrant's Report on Form 10-Q for the period ended September 30, 1993, File No. 0-21428.
(f) Registrant's Registration Statement on Form S-8, filed with the Securities and Exchange
Commission on November 9, 1993, File No. 33-71462.
(g) Registrant's Report on Form 10-K/A for the year ended December 31, 1993, File No. 0-21428.
(h) Registrant's Report on Form 10-Q for the period ended March 31, 1994, File No. 0-21428
(i) Registrant's Report on Form 10-Q for the period ended June 30, 1994, File No. 0-21428
(j) Registrant's Report on Form 10-K for the year ended December 31, 1994, File No. 0-21428
(k) Registrant's Report on Form 10-Q for the period ended March 31, 1995, File No. 01-21428
(l) Registrant's Report on Form 10-Q for the period ended June 30, 1995, File No. 01-21428
(m) Registrant's Report on Form 10-Q for the period ended September 30, 1995, File No. 01-21428
(n) Registrant's Report on Form 10-K for the year ended December 31, 1995, as amended, File No. 01-21428
Where a document is incorporated by reference from a previous filing, the
Exhibit number of that document in that previous filing is indicated in
parenthesis after the incorporation by reference code.
++ This symbol following an exhibit description indicates that portions of
the document described have been granted confidential treatment by the
Securities and Exchange Commission.
</TABLE>
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
(A Development Stage Company)
Statement Re: Computation of Net Loss per Common Share (note 1)
(Unaudited)
Three Months Three Months
Ended Ended
March 31 March 31
1995 1996
----------- -----------
Net loss $(1,720,271) $ (513,560)
=========== ===========
Weighted average shares
of common stock outstanding 774,163 785,621
Dilutive effect of common stock equivalents:
Effect of common stock options (note 2) -- --
----------- -----------
Weighted average number of common shares
outstanding 774,163 785,621
=========== ===========
Net loss per common share $ (2.22) $ (.65)
=========== ===========
Notes:
1. All information shown is the same on both a primary and fully diluted
basis.
2. The impact of common stock options has not been included as inclusion would
be antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,716,294
<SECURITIES> 1,027,800
<RECEIVABLES> 27,953
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,827,390
<PP&E> 1,442,442
<DEPRECIATION> 1,423,064
<TOTAL-ASSETS> 5,204,768
<CURRENT-LIABILITIES> 633,696
<BONDS> 0
0
0
<COMMON> 786
<OTHER-SE> 4,072,316
<TOTAL-LIABILITY-AND-EQUITY> 5,204,768
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 576,652
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,610
<INCOME-PRETAX> (513,560)
<INCOME-TAX> 0
<INCOME-CONTINUING> (513,560)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (513,560)
<EPS-PRIMARY> (.65)
<EPS-DILUTED> (.65)
</TABLE>
