UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO.1
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
_____ Exchange Act of 1934. For the quarterly period ended December 31,
1998.
_____ 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
0-27410
INTERCARDIA, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 56-1924222
-------- ----------
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification Number)
P.O. Box 14287
3200 East Highway 54
Cape Fear Building, Suite 300
Research Triangle Park, NC 27709
- -------------------------- -----
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code 919-558-8688
---------------
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 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.
Class Outstanding as of February 10, 1999
------------ -----------------------------------
Common Stock, par value $.001 7,304,453 Shares
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INTERCARDIA, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
December 31, September 30,
1998 1998
------------ ------------
<S> <C> <C>
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 8,241 $ 10,647
Marketable securities 7,690 9,314
Accounts receivable 333 1,096
Prepaids and other current assets 98 117
------------ ------------
Total current assets 16,362 21,174
Marketable securities 2,042 3,601
Property and equipment, net 3,050 2,976
Other assets 84 85
----------- -----------
$ 21,538 $ 27,836
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,436 $ 752
Accrued expenses 2,178 3,191
Current portion of capital lease obligations 383 565
Current portion of notes payable 200 194
Accounts payable to Interneuron 1,751 1,865
------------ ------------
Total current liabilities 5,948 6,567
Long-term portion of capital lease obligations 919 816
Long-term portion of notes payable 738 777
Stockholders' equity:
Common stock, $.001 par value per share, 40,000,000
shares authorized, 7,304,453 and 7,289,153
shares issued and outstanding at December 31,
1998 and September 30, 1998, respectively 7 7
Additional paid-in capital 78,569 78,399
Deferred compensation (878) (1,086)
Accumulated deficit (63,765) (57,644)
------------ ------------
Total stockholders' equity 13,933 19,676
------------ ------------
$ 21,538 $ 27,836
============ ============
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
financial statements.
2
<PAGE>
INTERCARDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
------------------------
1998 1997
---------- -----------
<S> <C> <C>
Revenue:
Contract and license fee revenue $ 191 $ 534
---------- -----------
Costs and expenses:
Research and development 5,818 2,656
General and administrative 647 1,005
---------- -----------
Total costs and expenses 6,465 3,661
---------- -----------
Loss from operations (6,274) (3,127)
Investment income, net 153 141
---------- -----------
Net loss $ (6,121) $ (2,986)
========== ===========
Net loss per common share:
Basic $ (0.84) $ (0.43)
========== ===========
Diluted $ (0.84) $ (0.43)
========== ===========
Weighted average common shares
outstanding 7,297 6,998
========== ===========
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
financial statements.
3
<PAGE>
INTERCARDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
--------------------
1998 1997
-------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (6,121) $ (2,986)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 191 264
Noncash compensation 329 88
Interest expense on notes payable to
Interneuron - 311
Change in assets and liabilities:
Accounts receivable 763 45
Prepaids and other assets 20 (4)
Accounts payable and accrued expenses (329) (8,367)
Deferred revenue - (167)
-------- ---------
Net cash used in operating activities (5,147) (10,816)
-------- ---------
Cash flows from investing activities:
Proceeds from sales and maturities of
marketable securities 4,227 7,915
Purchases of marketable securities (1,044) (10,211)
Purchases of property and equipment (265) (448)
-------- ---------
Net cash provided by (used in) investing
activities 2,918 (2,744)
-------- ---------
Cash flows from financing activities:
Net proceeds from exercise of stock options 49 53
Proceeds from notes payable - 2
Principal payments on notes payable (33) (7)
Principal payments on capital lease obligations (79) (196)
Advances from (payments to) Interneuron, net (114) 1,559
-------- ---------
Net cash provided by (used in) financing
activities (177) 1,411
-------- ---------
Net decrease in cash and cash equivalents (2,406) (12,149)
Cash and cash equivalents at beginning of period 10,647 18,186
------- --------
Cash and cash equivalents at end of period $ 8,241 $ 6,037
======== =========
</TABLE>
The accompanying notes are integral part of these unaudited consolidated
financial statements.
4
<PAGE>
INTERCARDIA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation
The "Company" refers collectively to Intercardia, Inc. ("Intercardia") and
its majority-owned subsidiaries, CPEC, Inc., a Nevada corporation ("CPEC"),
Aeolus Pharmaceuticals, Inc., a Delaware corporation ("Aeolus"), and Renaissance
Cell Technologies, Inc., a Delaware corporation ("Renaissance"). As of December
31, 1998, Intercardia owned 80.1% of the outstanding stock of CPEC, 65.8% of the
outstanding stock of Aeolus and 79.6% of the outstanding stock of Renaissance.
Intercardia is a majority-owned subsidiary of Interneuron Pharmaceuticals, Inc.
("Interneuron"). As of December 31, 1998, Interneuron owned 61.8% of the
outstanding capital stock of Intercardia and the 19.9% of the outstanding stock
of CPEC not owned by Intercardia.
All significant intercompany activity has been eliminated in the
preparation of the consolidated financial statements. The consolidated financial
statements included herein have been prepared by the Company without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC"). Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, the accompanying unaudited
consolidated financial statements include all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the consolidated
financial position, results of operations and cash flows of the Company. The
consolidated balance sheet at September 30, 1998 was derived from the Company's
audited financial statements included in the Company's Annual Report on Form
10-K. The unaudited consolidated financial statements included herein should be
read in conjunction with the audited consolidated financial statements and the
notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1998 and in the Company's other SEC filings.
Results for the interim period are not necessarily indicative of the results for
any other interim period or for the full fiscal year. The Company's financial
statements for the three-month period ended December 31, 1997 have been restated
to reflect the merger (the "Transcell Merger") of Transcell Technologies, Inc.
("Transcell") and the Company in May 1998. The former Transcell operation, which
is now a division of Intercardia, is referred to as Intercardia Research
Laboratories ("IRL").
The Company focuses on development of therapeutics for the treatment of
cardiovascular, infectious and other diseases. The Company's most advanced
product is BEXTRA(R), a compound currently in Phase III clinical trials for the
treatment of congestive
5
<PAGE>
heart failure ("CHF"). The Company's other programs are in the early stages of
development.
B. Recent Accounting Pronouncements
The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income," effective October
1, 1998. The Company had no items of comprehensive income for the three months
ended December 31, 1998 and 1997.
The Company will adopt SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information," for the fiscal year ending September 30,
1999. SFAS No. 131 specifies revised guidelines for determining an entity's
operating segments and the type and level of financial information to be
disclosed. Management believes its current disclosures will not be materially
affected by the adoption of SFAS No. 131.
6
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.12* Intercardia, Inc. 1995 Employee Stock Purchase Plan, as amended.
10.38* Employment Agreement between Michael J. Sofia and Intercardia,
Inc., dated December 10, 1998.
11.1 Statement re computation of net loss per share
27 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not
filed.
*Previously filed.
(b) No reports on Form 8-K were filed by the Company during the three months
ended December 31, 1998.
7
<PAGE>
SIGNATURE
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.
INTERCARDIA, INC.
Date: February 17, 1999 By: /s/ Richard W. Reichow
----------------------------------------
Richard W. Reichow, Executive Vice
President, Chief Financial Officer
and Treasurer (Principal Financial
and Accounting Officer)
8
EXHIBIT 11.1
INTERCARDIA, INC.
STATEMENT RE COMPUTATION OF NET LOSS PER SHARE
(In thousands, except per share data)
Three Months Ended
December 31,
--------------------
1998 1997
--------- ---------
Net loss per Unaudited Consolidated
Statements of Operations $(6,121) $(2,986)
========= =========
Weighted average of common shares
and common share equivalents outstanding
- basic and diluted 7,297 6,998
========= =========
Net loss per common share:
- basic $(0.84) $(0.43)
========= =========
- diluted $(0.84) $(0.43)
========= =========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED AS
PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 8,241
<SECURITIES> 9,732
<RECEIVABLES> 333
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,362
<PP&E> 3,050
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,538
<CURRENT-LIABILITIES> 5,948
<BONDS> 1,657
0
0
<COMMON> 7
<OTHER-SE> 13,926
<TOTAL-LIABILITY-AND-EQUITY> 21,538
<SALES> 0
<TOTAL-REVENUES> 191
<CGS> 0
<TOTAL-COSTS> 6,465
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,121)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,121)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,121)
<EPS-PRIMARY> (0.84)<F1>
<EPS-DILUTED> (0.84)
<FN>
<F1> EPS BASIC
</FN>
</TABLE>
