FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File Number 0-23666
TRIPOS, INC.
(Exact Name of Registrant as Specified in its Charter)
Utah 43-1454986
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1699 South Hanley Road
St. Louis, Missouri 63144
(Address of Principal Executive Offices and Zip Code)
(314) 647-1099
(Registrant's Telephone Number, Including Area Code)
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
requirement for the past 90 days.
Yes X No
Number of shares outstanding of the issuer's Common Stock, par
value $.01 per share, as of March 31, 2000: 3,486,352 shares.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION, Page
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets at
March 31, 2000 and December 31, 1999 3
Consolidated Statements of Operations for Three
Months Ended March 31, 2000 and March 31, 1999 4
Consolidated Statements of Cash Flows for Three Months
Ended March 31, 2000 and March 31, 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION 12
SIGNATURES 12
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
CONSOLIDATED BALANCE SHEETS
(In thousands)
Mar. 31, Dec. 31,
2000 1999
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ 6,650 $ 813
Accounts receivable 9,736 14,182
Inventory 2,993 2,595
Prepaid expenses 795 242
Deferred income taxes 1,418 1,418
Total current assets 21,592 19,250
Notes Receivable-trade 1,714 2,448
Notes Receivable-other 1,799 1,764
Property and equipment,
less accumulated depreciation 13,598 13,899
Capitalized development costs, net 500 572
Goodwill, net of amortization 1,065 1,082
Investment in unconsolidated affiliate 2,423 2,423
Other, net 142 144
Total assets $ 42,833 $ 41,582
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt
and capital leases $ 1,238 $ 2,245
Accounts payable 932 1,443
Accrued expenses 2,538 3,187
Deferred revenue 5,579 4,832
Total current liabilities 10,287 11,707
Long-term portion of capital leases 937 1,223
Long-term debt 3,030 7,001
Long-term deferred revenue 1,872 2,485
Deferred income taxes 1,583 1,583
Series-B preferred stock 9,045 --
Shareholders' equity :
Common stock 35 33
Additional paid-in capital 19,317 18,431
Retained deficit (3,211) (1,020)
Other comprehensive income (loss) (62) 139
Total shareholders' equity 16,079 17,583
Total liabilities and shareholders' equity $ 42,833 $ 41,582
See accompanying notes.
Item 1. Financial Statements (continued)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
Mar. 31, Mar. 31,
2000 1999
Net sales:
Software licenses $ 1,548 $ 1,816
Support 1,929 2,057
Discovery services 788 1,363
Hardware 733 919
Total net sales 4,998 6,155
Operating costs and expenses:
Cost of sales 1,189 1,870
Sales and marketing 2,584 2,347
Research and development 2,295 1,747
General and administrative 1,222 1,096
Total costs and expenses 7,290 7,060
Loss from operations (2,292) (905)
Other income, net 167 120
Loss before income taxes
and preferred dividends (2,125) (785)
Income tax benefit -- (299)
Net loss before preferred dividends (2,125) (486)
Preferred dividends 66
Net loss allocable to common shareholders $(2,191) $ (486)
shareholders
Basic and diluted loss per share $ (0.64) $(0.15)
Basic and diluted weighted average
number of shares 3,400 3,257
See accompanying notes.
Item 1. Financial Statements (continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
Mar. 31, Mar. 31,
2000 1999
Operating activities:
Net loss $(2,191) $ (486)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation of property and equipment 473 310
Amortization of capitalized development
costs and goodwill 119 167
Deferred income taxes -- (7)
Accreted dividends on Series B preferred stock 66 --
Change in operating assets and liabilities:
Accounts receivable 4,157 1,928
Notes receivable-trade 532 (235)
Inventories (434) 21
Prepaid expenses and other current assets (559) 474
Accounts payable and accrued expenses (1,034) (508)
Deferred revenue 225 1,013
Net cash provided by operating activities 1,345 2,677
Investing activities:
Notes receivable-other (34) (18)
Purchases of property and equipment (273) (1,878)
Capitalized development costs (23) (143)
Acquisition, including investment in
unconsolidated affiliates -- (385)
Net cash used in investing activities (330) (2,424)
Financing activities:
Stock issuance pursuant to stock plans 872 18
Proceeds from issuance of Series B
preferred stock 8,979 --
Payments on long-term debt and capital leases (4,959) (79)
Issuance of long-term debt -- 924
Net cash provided by financing activities 4,892 863
Effect of foreign exchange rate changes on
cash and cash equivalents (79) (497)
Net increase in cash and cash equivalents 5,837 619
Cash and cash equivalents at beginning of period 813 1,774
Cash and cash equivalents at end of period $ 6,650 $ 2,393
See accompanying notes.
Item 1. Financial Statements (continued)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(1) Summary of significant accounting policies
Organization
Tripos, Inc. is a leading provider of integrated discovery
software products, software consulting services, and discovery
research services to the pharmaceutical, biotechnology,
agrochemical, and other life sciences industries. We combine
information technology and scientific research to optimize and
accelerate molecular research for the discovery of new products
by our clients.
With a strong foundation in cheminformatics, Tripos provides
its customers with what we believe are distinct competitive
advantages. Our "chemically intelligent" discovery software
tools are able to manage, analyze and share biological and
chemical information. Tripos' software consulting services help
to organize data in a manner that is conducive to discovery
research. Tripos' proprietary chemical compound libraries couple
Tripos' molecular design technology and synthesis capabilities.
Discovery research services leverage Tripos' cheminformatics
expertise in molecular design analysis and medicinal chemistry.
Together, these services allow our customers to take advantage of
recent advances in high throughput screening for biological
activity with a goal of accelerating the development and
commercialization of major new products.
Our customers, a number of which are industry leaders, use
our products and services to reduce product discovery costs and
time, and to accelerate the development of major new products.
To date, Tripos has entered into strategic alliances with
pharmaceutical and biotechnology companies. Certain of these
contracts provide for recurring payments for products and
services over the course of the contract term as well as
milestone payments or royalty arrangements for new product
discoveries. Tripos has a geographically diverse customer base,
with approximately half of its revenues derived from European and
other customers outside the United States. Tripos has a
worldwide sales force with offices throughout the United States,
and in England, France and Germany, representatives throughout
the Pacific Rim, and its Tripos Receptor Research chemistry
laboratories in England.
Basis of Presentation
The accompanying unaudited consolidated 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 accounting principles generally accepted in
the United States for complete financial statements. In the
opinion of management, all normal recurring adjustments necessary
for a fair presentation of such financial statements have been
included. Operating results for the three-month period ended
March 31, 2000 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2000.
(2) Income Taxes
The provision for income taxes is computed using the
liability method. The primary difference between financial
statement and taxable income results from the use of different
methods of computing capitalized development costs, accrued
vacation and customer deposits.
(3) Comprehensive Income
The components of comprehensive income, net of related tax,
for the three-month periods ended March 31, 2000 and 1999 are as
follows:
2000 1999
Net loss allocable to common shareholders $(2,191) $ (486)
Foreign currency translation adjustments (201) (450)
Comprehensive loss $(2,392) $ (936)
The components of accumulated other comprehensive income, net of
related tax, at March 31, 2000 and December 31, 1999 are as
follows:
2000 1999
Foreign currency translation adjustments $ (62) $ 139
Accumulated other comprehensive income (loss) $ (62) $ 139
(4) Earnings Per Share
The following table sets forth the computation of basic and
diluted earnings per share for the quarters ended March 31,
1999 and 1998.
2000 1999
Numerator:
Numerator for basic earnings per share-
net loss allocable to common shareholders $(2,191) $ (486)
Add back preferred dividends (Note A) -- N/A
Numerator for diluted earnings per
share-net loss $(2,191) $ (486)
Denominator:
Denominator for basic earnings per share-
weighted average shares 3,400 3,257
Effect of dilutive securities:
Employee stock options (Note B) -- --
Preferred shares (Note A) -- N/A
Denominator for diluted earnings per share-
adjusted weighted average shares and
assumed conversions 3,400 3,257
Basic loss per share $ (0.64) $ (0.15)
Diluted loss per share $ (0.64) $ (0.15)
Note A: Weighted average shares outstanding were not adjusted
for the conversion of the Series B Preferred Stock as their
inclusion would have been anti-dilutive. Accordingly, the related
preferred dividends were not added back to the numerator for
diluted earnings per share.
Note B: Employee stock options to purchase shares of the
Company's common stock were not included in the March 31, 1999 or
2000 computation of diluted earnings per share because the effect
would have been anti-dilutive. For additional disclosures
regarding earnings per share, see the notes to the Company's 1999
consolidated financial statements in its Form 10-K.
(5) Inventory
Tripos maintains a physical inventory of chemical compound
libraries in various states of completion. Costs associated with
the manufacture of compounds are calculated using the standard
cost method and are carried at the lower of cost or market.
Compounds that are acquired from third parties are also carried
at the lower of cost or market. Finished Goods inventory may
periodically contain costs of computer hardware that has been
acquired for resale to the Company's customers.
Mar. 31, Dec. 31,
2000 1999
Raw materials $ 255 $ 256
Work in process 408 533
Finished goods 2,330 1,806
$ 2,993 $ 2,595
(6) Long Term Debt
On March 22, 1999, Tripos received a credit commitment from
LaSalle Bank that refinanced a prior $12,000 Credit Agreement and
mortgage note. The credit commitment was for a total of $15,333
which was broken into three separate secured credit facilities: a
$3,333 real estate mortgage for property with a carrying value of
$4,476, $4,000 three-year term loan, and an $8,000 three-year
revolving line of credit. The credit commitment is
collateralized by substantially all of Tripos' U.S. assets and
stock pledges for each of the U.S. and foreign subsidiaries. The
commitment also required Tripos to meet certain financial
covenants, including various coverage ratios and a debt to
capitalization ratio. During 1999, Tripos violated the terms of
the covenants, however, the bank waived the violations and later
amended the terms of the credit facility.
The mortgage note under the current credit commitment calls
for even quarterly principal payments based on a twenty-year
amortization schedule that began June 30, 1999. Borrowings under
the mortgage are subject to a variable interest rate at LIBOR
plus 2.25%. An interest rate swap agreement was entered into
which fixed the interest rate at 7.81%. The $4,000 term note
under the credit commitment was repaid in its entirety in three
installments; $3,000 during the fourth quarter of 1999 and the
balance on February 10, 2000. The revolving line of credit under
the credit commitment requires quarterly interest-only payments
with any remaining borrowings due at the end of the three-year
commitment period. The original $8,000 line of credit was
reduced to $4,000 effective September 30, 1999. Availability
under the revolving line of credit is based on eligible U.S.
accounts receivable. Borrowings under the term loan and the
revolving line of credit bear interest at variable rates tied to
LIBOR or the bank's prime rate. At March 31, 2000, no borrowings
were outstanding. For the quarter ending March 31, 2000, Tripos
was in violation of one covenant that the bank immediately
waived.
(7) Series B Preferred Stock
On February 4, 2000, Tripos issued 409 shares of Series B
Preferred Stock for an aggregate purchase price of $9,000.
Cumulative dividends of $1.10 per share per annum are payable
upon the earlier of the conversion or redemption of such share.
Each share of preferred stock may be converted, at the option of
the holder, into one share of Tripos' common stock. The
preferred stock is mandatorily redeemable at the option of the
holder at a price of $22 per share plus accreted dividends on
February 4, 2005 provided that the holder has provided notice of
its intention to have its shares redeemed on or prior to February
4, 2004.
(8) Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board
issued Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("FAS 133"), which is required to be
adopted in years beginning after June 15, 1999. The FASB has
since delayed the effective date until years beginning after June
15, 2000, with the issuance of FAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FAS No. 133". FAS 133 permits early adoption
as of the beginning of any fiscal quarter after its issuance.
Tripos expects to adopt the new Statement effective January 1,
2001. FAS 133 will require us to recognize all derivatives on
the balance sheet at fair value. We have not yet determined what
the effect FAS 133 will be on earnings and financial position.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Forward-looking Statements
The remainder of this report may contain certain statements
that are forward-looking and involve risks and uncertainties.
Words such as "expects", "anticipates", "projects", "estimates",
"intends", "plans", "believes", variations of such words and
similar expressions are intended to identify such forward looking
statements. These statements are based on current expectations
and projections made by management and are not guarantees of
future performance. Therefore, actual events, outcomes and
results may differ materially from what is expressed or forecast
in such forward-looking statements. Among the factors that could
cause actual results to differ materially from the forward-
looking statements are set forth under the caption "Cautionary
Statements - Additional Important Factors to be Considered" in
Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") in Tripos' Form 10-K
for 1999. Tripos undertakes no obligation to update any forward-
looking statements in this Form 10-Q.
Overview
Tripos, Inc. is a leading provider of an integrated array of
discovery software, software consulting services, and discovery
research services to the pharmaceutical, biotechnology,
agrochemical, and other life sciences industries. Tripos
combines information technology and scientific research to
optimize and accelerate molecular research for the discovery of
new products by its clients.
Tripos generates its revenues from a diversified offering of
products and services. Our foundation is the software license
and support products we sell to the life sciences industries.
Over 80% of software license revenues are sold to the
pharmaceutical and biotechnology industries; however, no single
customer represents more than 10% of revenues to Tripos. Tripos
licenses its software and support in the form of one to three
year renewable contracts for any of its more than 50 software
modules available for sale.
Tripos' integration of chemistry and biological data in the
life sciences industries creates a revenue stream for software
consulting services. Tripos maintains a staff of specialists who
use its proprietary data integration framework to configure
customized solutions for data management. Revenue is generated
on a billable rate per day and is recognized as services are
performed.
Tripos leverages its expertise in chemical compound library
design technology to develop and manufacture general screening
libraries for sale to the life sciences industries. Its current
library of over 58,000 highly pure and diverse compounds, is
marketed under the name LeadQuestT.
Tripos' sale and manufacture of chemical compound libraries
has created the opportunity to offer follow-up contract research
services to customers for design and synthesis of focused
libraries for lead optimization. A contract of this nature may
be derived from the follow-up of positive biological activity in
a LeadQuest compound sold to a customer or may come from
compounds originated by the customer.
In 2000, Tripos plans to market a comprehensive research
process to its life sciences customers for rapid and cost
effective discovery. The process combines advanced informatics,
chemistry and biology products and services, and proprietary
discovery technologies for efficient lead development,
refinement, and optimization. Tripos will also work with its
collaborators to achieve the milestones associated with this type
of contract. These would be multi-million dollar contracts and
may include royalties and milestones.
In February 2000, Tripos entered into a strategic alliance
with LION Biosciences AG to integrate LION's bioinformatics with
Tripos' cheminformatics expertise. The companies intend to
jointly market their products and services to the life sciences
industry. As part of this alliance, LION made a $9.0 million
investment in convertible preferred stock of Tripos. These funds
are being used for general corporate purposes.
Late in 1999, Tripos created a strategic alliance with
Cyprotex, a newly formed company whose focus is development of in-
vitro screens and data modeling capabilities to predict
biological reactions of new chemical entities. These reactions
are essential in determining the survival of new drug candidates.
Tripos and Cyprotex will jointly market their services to the
drug discovery market.
Tripos also acts as a reseller of computer hardware in
conjunction with software sales. Hardware sales are generally
made to facilitate integration of Tripos' software into customer
research activities and are not a focus of Tripos' sales
activities. Tripos acts merely as an authorized reseller for a
single vendor and does not maintain any inventory. Accordingly,
margins on these sales are relatively modest.
Tripos licenses its discovery software tools to customers,
provides ongoing support, including upgrades selected by
customers, and provides consulting services to its customers that
enable integration of Tripos' discovery tools to customers'
discovery operations. Certain long-term software licenses may,
subject to certain rules of SOP 97-2 and SOP 98-4, be recognized
over the life of the contract. Tripos generally expenses its
research and development costs associated with software
enhancements and new software tools. Thus, a significant portion
of the costs associated with development and enhancement of
software is accounted for as research and development and not as
a cost of software sales.
Tripos has staffed its worldwide operations to efficiently
execute its current business plan. The quarterly expenses
include the fixed costs of research and development for software
development, software consulting services, and contract research.
Tripos believes that its selling and administrative costs will
remain constant on a quarterly basis. Variability in quarterly
expenses primarily occurs in relation to the level of revenues
for sales compensation and bonuses.
Over the past two years Tripos has used its capital
resources to fund investments in the building of chemistry
production facilities, chemical compound library inventories,
collaborative drug discovery programs, staffing new business
segments, and investments in Arena Pharmaceuticals. In the
future, Tripos expects to dedicate available cash to maintain
capital infrastructure and conduct operations.
Tripos' revenues and expenses vary from quarter to quarter
depending upon, among other things, the timing of customers
budget processes, the success of our sales efforts, the lengthy
sales cycle and Tripos' ability to influence customers and
prospective customers to make decisions to outsource portions of
their discovery process, the size of the customers' capital
expenditure budgets, the ability to produce compound libraries in
a timely manner, market acceptance of new products and enhanced
versions of existing products, the timing of new product
introductions by Tripos and other vendors, changes in pricing
policies by Tripos, partners and other vendors, consolidation in
customer base, and changes in general economic and competitive
conditions. In addition, Tripos may choose to negotiate a long-
term software license contract that may, subject to certain rules
of SOP 97-2 and SOP 98-4, be recognized ratably over the life of
the contract. See Note 1 of the Notes to Consolidated Financial
Statements for the year ended December 31, 1999 for a further
discussion of revenue recognition policies. A substantial
portion of revenues for each quarter is attributable to a limited
number of orders and tends to be realized toward the end of each
quarter. Thus, even short delays or deferrals of sales near the
end of a quarter can cause quarterly results to fluctuate
substantially. Tripos' quarterly results can be effected by the
mix of its revenue components.
Year 2000 compliance
In prior years, Tripos discussed the nature and progress of
its plans to become Year 2000 ready. In late 1999, we completed
our remediation and testing of systems. As a result of those
planning and implementation efforts, we experienced no
significant disruptions in mission critical information
technology systems and believe those systems successfully
responded to the Year 2000 date change. The cost of remediating
our systems was included in the capital and expense budgets for
1999 and did not materially differ from prior years. We are not
aware of any material problems resulting from Year 2000 issues,
either with products, internal systems, or the products and
services of third parties. Tripos will continue to monitor
mission critical systems throughout the Year 2000 to ensure that
any latent Year 2000 matters that may arise are addressed
promptly.
Results of Operations
Net sales for the first quarter of 2000 were $4,998 compared
to $6,155 in 1999. The Company experienced decreases primarily
in software licenses and discovery services revenues in the
quarter.
For the three months ended March 31, 2000, software licenses
sales decreased 14.7% to $1,548. Software license sales are
historically volatile in the first quarter as customer capital
budgets are finalized and apportioned. Support revenues
decreased 6.2% to $1,929 compared to the first three-month period
in 1999. Discovery Services sales accounted for $788 in the
first quarter of 2000 and $1,363 in the same period in 1999.
This decrease in Discovery Service business was attributed to
multiple large orders of promotionally priced compounds in the
first quarter of 1999. Hardware sales decreased by 20.1% to $733
for the first quarter 2000. Sales to existing customers
represent 89% of total net sales for the three-month period
ending March 31, 2000.
Net sales for the Company's activities outside of North
America represented approximately 53.4% for the first three
months of 2000 compared to 58.5% for the same period in 1999.
Net sales in Europe decreased 30.8% for the first three months of
2000 compared to 1999 and accounted for 41.2% and 48.4% of net
sales for the three-month periods in 2000 and 1999, respectively.
Sales in first quarter 2000 were adversely affected by the timing
of several large orders that are under continuing negotiation.
Net sales in the Pacific Rim, principally Japan, decreased 2.0%
compared to the first three months of 1999 and accounted for
12.2% and 10.1% of net sales for the respective periods.
Cost of sales for the three-month period ending March 31,
2000 decreased 36.4% compared to the same period in 1999. Cost
of sales was $1,189 and $1,870 for the first quarter of 2000 and
1999, respectively. This change was due to decreased costs
directly related to lower sales of hardware and discovery
services compared to the prior year. Cost of sales as a percent
of net sales was 23.8% and 30.4% for the three-month periods in
2000 and 1999, respectively.
Gross profit margin percentage for the first quarter 2000
increased to 76.2% from 69.6% of total net sales in the first
quarter of 1999. This increase in gross profit percentage is due
to the decreases in cost of sales described above.
Sales and marketing expenses increased 10.1% to $2,584
compared to $2,347 for the three-month period in 1999. Sales and
marketing expenses as a percentage of net sales were 51.7% and
38.1% for the three-month periods in 2000 and 1999, respectively.
The increase in percent to sales is primarily due to lower net
sales in the first quarter of 2000.
Research and development expenses increased to $2,295 from
$1,747 and represented 45.9% and 28.4% of net sales for the three-
month periods in 2000 and 1999, respectively. The increase in
expenses as a percentage of net sales reflects increases in
chemistry staff and research work at Tripos Receptor Research.
General and administrative expenses increased 11.5% to
$1,222 for the first quarter of 2000 compared to $1,096 in 1999,
and represent 24.4% and 17.8% of net sales for the respective
periods. The increase in G & A expenses in the period is due to
the addition of administrative staff in Europe.
Other income (expense) increased from $120 of income for the
first quarter in 1999 to $167 of income for the comparable period
in 2000. This change was due to foreign currency transaction
gains in the current period partially offset by a net increase in
interest expense.
Income tax benefit was $299,000 for the three-month period
in 1999, which represented an effective tax rate of 38%. No
income tax benefit was recorded in the first quarter of 2000 due
to the recognition of a valuation allowance on the future tax
benefits of net operating losses in the U.K. Management believes
that the net operating loss carryforwards will be utilized in
future periods. The effective tax rate utilized for the quarter
ended March 31, 2000 reflects management's estimate of such rate
for the fiscal year ending December 31, 2000.
Liquidity, Capital Resources and Capital Commitments
For the three-month in period ending March 31, 2000, net
cash provided by operations was $1,345 primarily due to decreases
in trade accounts and notes receivable of $4,689 along with
depreciation, amortization and increases in deferred revenue of
$473, $119, and $225 respectively, which were offset by a
decrease in accounts payable and accrued expenses of $1,034 and
increases in prepaid expenses of $559 and inventory of $434
coupled with the net loss of $2,191. Notes receivable-trade
represent the long-term portion of revenue generated from the
Company's sales of extended access contracts to its software
technologies. For the same period in 1999, a decrease in
accounts receivable of $1,928, along with depreciation and
amortization and an increase in deferred revenue of $310, $167
and $1,013, respectively, were offset by a decrease in accounts
payable and accrued expenses of $508, an increase in prepaid
expenses of $474 and a net loss of $486 resulting in net cash
provided by operations of $2,677.
Cash used by investing activities was principally related to
property and equipment needed throughout the company.
The Company anticipates that current working capital of
$11,305, together with continued cash flow from operations,
payments to be received under current and contemplated strategic
partnership contracts, the $4,000 line of credit and access to
equipment lease financing, will be sufficient to fund its
operations for at least the next twelve months. For a
description of certain factors that could adversely affect the
Company's future capital requirements and the adequacy of its
available funds, including factors that are beyond the Company's
control, see the discussion under the caption "Cautionary
Statements-Additional Important Factors to be Considered" in the
Company's Annual Report on Form 10-K for the year ended December
31, 1999.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any material litigation
and is not aware of any threatened material litigation.
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) List of Exhibits
27 Financial Data Schedule
(b) A Form 8-K was filed on February 11, 2000 reporting
that Tripos, Inc. announced that it had entered into an
agreement to sell 409,091 shares of Series B
Convertible Preferred Stock to Lion Bioscience AG at a
price of $22 per share in a private placement. The
proceeds of $9.0 million were to be used for general
corporate purposes.
TRIPOS, INC.
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 hereunto duly authorized.
TRIPOS, INC.
Date: May 12, 2000 /s/ John P. McAlister
President and
Chief Executive Officer
Date: May 12, 2000 /s/ Colleen A. Martin
Chief Financial Officer, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 6650
<SECURITIES> 0
<RECEIVABLES> 9859
<ALLOWANCES> 123
<INVENTORY> 2993
<CURRENT-ASSETS> 21592
<PP&E> 21907
<DEPRECIATION> 8309
<TOTAL-ASSETS> 42833
<CURRENT-LIABILITIES> 10287
<BONDS> 0
9045
0
<COMMON> 35
<OTHER-SE> 16044
<TOTAL-LIABILITY-AND-EQUITY> 42833
<SALES> 4998
<TOTAL-REVENUES> 4998
<CGS> 1189
<TOTAL-COSTS> 1189
<OTHER-EXPENSES> 6101
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28
<INCOME-PRETAX> (2125)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2125)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2191)
<EPS-BASIC> (0.64)
<EPS-DILUTED> (0.64)
</TABLE>
