SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
/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
Commission File Number: 0-25544
PDT, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 77-0222872
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7408 Hollister Avenue, Santa Barbara, California 93117
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(Address of principal executive offices, including zip code)
(805) 685-9880
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(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 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 at April 30, 1996
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Common Stock, $.01 par value 12,328,927
This document contains 18 pages. Exhibit index located on page 14.
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PDT, INC.
FORM 10-Q
TABLE OF CONTENTS
PAGE NO.
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TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
Consolidated balance sheets as of March 31, 1996 and
December 31, 1995 . . . . . . . . . . . . . . . . . . . 3
Consolidated statements of operations for the three months
ended March 31, 1996 and 1995 . . . . . . . . . . . . . 4
Consolidated statements of cash flows for the three months
ended March 31, 1996 and 1995 . . . . . . . . . . . . . 5
Notes to consolidated financial statements . . . . . . . . . 6
ITEM 2. Management's discussion and analysis of financial
condition and results of operations. . . . . . . . 7
PART II. OTHER INFORMATION
ITEM 1. Legal proceedings. . . . . . . . . . . . . . . . . 12
ITEM 6. Exhibits and reports on Form 8-K . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PDT, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1996 1995
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . $ 5,450,000 $ 8,886,000
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . 386,000 11,000
Inventory-finished goods . . . . . . . . . . . . . . . . . . . . . . . . 20,000 10,000
Prepaid expenses and other current assets. . . . . . . . . . . . . . . . 930,000 385,000
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Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,786,000 9,292,000
Property, plant & equipment:
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . 342,000 336,000
Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,606,000 1,630,000
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . 845,000 666,000
Capital lease equipment. . . . . . . . . . . . . . . . . . . . . . . . . 184,000 184,000
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2,977,000 2,816,000
Accumulated depreciation and amortization . . . . . . . . . . . . . . . (1,302,000) (1,210,000)
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1,675,000 1,606,000
Patents and other assets . . . . . . . . . . . . . . . . . . . . . . . . . 314,000 361,000
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Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,775,000 $ 11,259,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -- $ --
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,513,000 2,468,000
Accrued payroll and expenses . . . . . . . . . . . . . . . . . . . . . . 341,000 331,000
Current portion of long term obligations . . . . . . . . . . . . . . . . 52,000 51,000
Current portion of capital lease obligations . . . . . . . . . . . . . . 42,000 39,000
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Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 2,948,000 2,889,000
Long term obligations, less current portion. . . . . . . . . . . . . . . . 33,000 47,000
Capital lease obligations, less current portion. . . . . . . . . . . . . . 52,000 63,000
Convertible notes payable. . . . . . . . . . . . . . . . . . . . . . . . . 93,000 93,000
Shareholders' equity:
Common stock, 50,000,000 shares authorized; 10,788,271 and
10,401,358 shares issued and outstanding at March 31, 1996 and
December 31, 1995, respectively . . . . . . . . . . . . . . . . . . . . 53,282,000 50,188,000
Deferred compensation. . . . . . . . . . . . . . . . . . . . . . . . . . (6,328,000) (7,518,000)
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . . (41,305,000) (34,503,000)
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Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . 5,649,000 8,167,000
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Total liabilities and shareholders' equity . . . . . . . . . . . . . . . . $ 8,775,000 $ 11,259,000
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SEE ACCOMPANYING NOTES.
3
PDT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED MARCH 31,
1996 1995
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Revenues:
Product sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000 $ 8,000
Grants, licensing, and royalty income. . . . . . . . . . . . . . . . . . 628,000 137,000
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629,000 145,000
Costs and expenses:
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 22,000
Research and development . . . . . . . . . . . . . . . . . . . . . . . . 4,666,000 1,176,000
Selling, general and administrative. . . . . . . . . . . . . . . . . . . 2,838,000 504,000
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Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 7,506,000 1,702,000
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,877,000) (1,557,000)
Other income (expense):
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,000 6,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,000) (71,000)
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Total other income (expense) . . . . . . . . . . . . . . . . . . . . . . . 75,000 (65,000)
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Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (6,802,000) $ (1,622,000)
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Net loss per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.65) $ (0.18)
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Shares used in computing net loss per share. . . . . . . . . . . . . . . . 10,424,420 9,130,941
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SEE ACCOMPANYING NOTES.
4
PDT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED MARCH 31,
1996 1995
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OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (6,802,000) $ (1,622,000)
Adjustments to reconcile net loss to net cash used by operating
activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . 96,000 132,000
Amortization of deferred compensation. . . . . . . . . . . . . . . . . 3,723,000 107,000
Changes in operating assets and liabilities:
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . (375,000) (75,000)
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,000) 1,000
Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . (502,000) (115,000)
Accounts payable and accrued payroll and expenses. . . . . . . . . . 55,000 548,000
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Net cash used in operating activities. . . . . . . . . . . . . . . . . . (3,815,000) (1,024,000)
INVESTING ACTIVITIES:
Purchases of property, plant, and equipment. . . . . . . . . . . . . . . (161,000) (174,000)
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Net cash used in investing activities. . . . . . . . . . . . . . . . . . (161,000) (174,000)
FINANCING ACTIVITIES:
Proceeds from issuance of Common Stock, less issuance costs. . . . . . . 561,000 27,000
Proceeds from notes payable. . . . . . . . . . . . . . . . . . . . . . . -- 1,230,000
Payments of capital lease obligations. . . . . . . . . . . . . . . . . . (8,000) (13,000)
Payments of long term obligations. . . . . . . . . . . . . . . . . . . . (13,000) (11,000)
Proceeds from line of credit . . . . . . . . . . . . . . . . . . . . . . -- 600,000
Payments of line of credit . . . . . . . . . . . . . . . . . . . . . . . -- (600,000)
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Net cash provided by financing activities. . . . . . . . . . . . . . . . 540,000 1,233,000
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Net increase (decrease) in cash and cash equivalents . . . . . . . . . . (3,436,000) 35,000
Cash and cash equivalents at beginning of period . . . . . . . . . . . . 8,886,000 1,483,000
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Cash and cash equivalents at end of period . . . . . . . . . . . . . . . $ 5,450,000 $ 1,518,000
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SUPPLEMENTAL DISCLOSURES:
State taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000 $ 5,000
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Interest paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,000 $ 80,000
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SEE ACCOMPANYING NOTES.
5
PDT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
1. BASIS OF PRESENTATION
The information contained herein has been prepared in accordance with
Rule 10-01 of Regulation S-X. The information at March 31, 1996, and for
the three-month periods ended March 31, 1996 and 1995, is unaudited. In
the opinion of management, the information reflects all adjustments
necessary to make the results of operations for the interim periods a fair
statement of such operations. All such adjustments are of a normal
recurring nature. Interim results are not necessarily indicative of
results for a full year. For a presentation including all disclosures
required by generally accepted accounting principles, these financial
statements should be read in conjunction with the audited consolidated
financial statements for the year ended December 31, 1995 included in the
PDT, Inc. Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
2. PER SHARE DATA
Net loss per share is computed using the weighted average number of shares
outstanding, during the periods, as adjusted pursuant to the rules of the
Securities and Exchange Commission for certain matters for which
adjustments would not be required to be presented under APB Opinion 15, for
the periods prior to the Company's initial public offering. All stock,
warrant, and option data included in the consolidated financial statements
and footnotes reflect the effect of the three-for-two stock split for all
periods presented.
3. SUBSEQUENT EVENTS
On April 30, 1996, the Company completed a public offering in which it sold
1,500,000 shares of Common Stock with net proceeds to the Company of
approximately $65.4 million. In connection with such offering, the Company
granted the underwriters a 30-day option to purchase up to 225,000
additional shares of Common Stock. Although the Company does not expect
such option to be exercised, if the underwriters' 30-day option is
exercised in full, the Company will receive additional net proceeds of
approximately $10 million.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto. This Quarterly Report on
Form 10-Q may be deemed to include forward looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that involve risk and uncertainty, including financial,
clinical, business environment and trend projections. Although the Company
believes that its expectations are based on reasonable assumptions, it can give
no assurance that its goals will be achieved. The important factors that could
cause actual results to differ materially from those in the forward looking
statements herein include, without limitation, the early stage of development of
both the Company and its products, the timing and uncertainty of results of both
research and regulatory processes, the extensive government regulation
applicable to the Company's business, the unproven safety and efficacy of the
Company's drug and device products, the Company's significant additional
financing requirements, the uncertainty of future capital funding, the highly
competitive environment of the international pharmaceuticals and medical device
industries and the presence of a number of competitors with significantly
greater financial, technical and other resources and extensive operating
histories, the Company's potential exposure to product liability or recall,
uncertainties relating to patents and other intellectual property, including
whether the Company will obtain sufficient protection or competitive advantage
therefrom and the Company's dependence upon a limited number of key personnel
and consultants and its significant reliance upon its collaborative partners for
achieving its goals.
GENERAL
Since its inception, PDT, Inc. ("the Company") has been principally engaged
in the research and development of drugs and medical device products for use in
photodynamic therapy. The Company has been unprofitable since its founding and
has incurred a cumulative net loss of approximately $41.3 million as of
March 31, 1996. The Company expects to continue to incur substantial and
increasing operating losses for the next several years due to continued and
increased spending on research and development programs, the funding of
preclinical and clinical testing and regulatory activities and the costs of
manufacturing and administrative activities.
The Company's revenues primarily reflect income earned from device product
sales, grants, contracts and licensing agreements. Product sales represent
limited sales of photodynamic therapy devices (e.g., light producing devices and
light delivery and measurement devices), sold both domestically and
internationally, to researchers and an OEM distributor. To date, the Company
has received no revenue from the sale of drug products, and the Company is not
permitted to engage in commercial sales of drugs or devices until such time, if
ever, as the Company receives requisite regulatory approvals. As a result, the
Company does not expect to record significant product sales until such approvals
are received.
Until the Company commercializes its product(s), the Company expects
revenues to continue to be attributed to grants, contracts, licensing agreements
and device product sales for research use. The Company anticipates that future
revenues and results of operations will continue to fluctuate significantly
depending on, among other factors, the timing and outcome of applications for
regulatory approvals, the Company's ability to successfully manufacture, market
and distribute its drug products and device products and/or the establishment of
7
collaborative arrangements for the manufacturing, marketing and distribution of
some of its products. The Company anticipates its operating activities will
result in substantial net losses for several more years.
The Company has completed Phase I/II clinical trials in the United States
using its drug candidate SnET2 for the local treatment of certain nonmelanoma
skin cancers and AIDS-related Kaposi's Sarcoma ("KS"). The Company has
initiated Phase III clinical trials for KS and metastatic breast cancer
involving the skin and, based on clinical results and after review with the FDA,
plans to begin enrolling patients in Phase III clinical trials for basal cell
carcinoma in the first half of 1996. In May, the Company announced the start of
Phase I/II clinical studies in ophthalmolgy, using SnET2 to treat complications
of advanced age-related macular degeneration (AMD), a leading cause of
blindness. The Company has conducted certain early clinical studies in Europe
related to drug and light dosimetry and in 1995 the Company received permission
in the United Kingdom to begin a Phase III clinical study of SnET2 for KS. The
Company is also in various stages of preclinical testing of SnET2 and other
photoreactive drugs for the treatment of other cancers, certain cardiovascular
conditions, urologic, gynecologic and dermatologic conditions and eye disorders.
The Company has awarded, and may award in the future, stock options that
vest upon the achievement of certain milestones. Under Accounting Principles
Board Opinion No. 25, such options are accounted for as variable stock options.
As such, until the milestone is achieved (but only after it is determined to be
probable), deferred compensation is recorded in an amount equal to the
difference between the fair market value of the Common Stock on the date of
determination less the option exercise price and is adjusted from period to
period to reflect changes in the market value of the Common Stock. Deferred
compensation, as it relates to a particular milestone, is amortized over the
period between when achievement of the milestone becomes probable and when the
milestone is estimated to be achieved. Amortization of deferred compensation
could result in significant additional compensation expense being recorded in
future periods based on the market value of the Common Stock from period to
period.
At March 31, 1996, variable options covering 427,500 shares of Common Stock
were outstanding. Milestone achievements which would result in future vesting of
these stock options include the initiation of Phase III clinical trials
involving the Company's technology, obtaining FDA approval of a new drug
application for the Company's products, executing a collaborative partnering
agreement with one or more corporate partners, entering into a strategic
alliance agreement in the field of ophthalmology and hiring certain executives.
No assurance can be given that these milestones can be achieved. Variable stock
options covering 227,500 shares with an exercise price of $34.75 per share are
expected to vest during 1996. Based on the market value of the Common Stock at
March 31, 1996 of $59.00 per share, the Company recorded deferred compensation
expense for the three months ended March 31, 1996 of $3,240,000 associated with
the variable stock options. Deferred compensation expense is expected to be
adjusted in future periods based on the fluctuation of the market value of the
Common Stock compared to the prior period.
8
RESULTS OF OPERATIONS
The following table provides a summary of the Company's revenues for three
months ended March 31, 1996 and 1995:
MARCH 31,
-------------------------
CONSOLIDATED REVENUES 1996 1995
--------------------- ---------- ----------
Product sales . . . . . . . . . . . . . $ 1,000 $ 8,000
Grants and contracts. . . . . . . . . . 256,000 112,000
Royalties . . . . . . . . . . . . . . . -- 25,000
License . . . . . . . . . . . . . . . . 372,000 --
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Total revenue . . . . . . . . . . . . . $ 629,000 $ 145,000
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REVENUES. For the three months ended March 31, 1996, revenues increased to
$629,000 from $145,000 in the three months ended March 31, 1995. License income
increased to $372,000 compared to the prior year due to the first billing for
the reimbursement of clinical costs related to the Pharmacia & Upjohn, Inc.
("Pharmacia & Upjohn") license agreement. Additionally, for the three months
ended March 31, 1996, grant income increased to $256,000 from $112,000 for the
comparable period of the prior year. The Company expects grant income to be a
continuing source of revenue in 1996 and beyond, as the Company will re-submit
or has applied for various government grants totaling approximately $1.0
million; however, there can be no assurance that the Company will be awarded any
grant for which it has applied or may apply.
COST OF GOODS SOLD. Cost of goods sold for the three months ended
March 31, 1996 decreased to $2,000 from $22,000 for the three months ended
March 31, 1995. The decrease was due to the decrease in product sales during
the quarter for 1996 based on the Company's decision to allocate its
manufacturing resources to supporting its preclinical and clinical testing.
RESEARCH AND DEVELOPMENT. The Company's research and development expenses
for the three months ended March 31, 1996 increased to $4.7 million from $1.2
million in the three months ended March 31, 1995. The increase in expense for
the three months ended March 31, 1996 related primarily to the increase of $1.6
million in deferred compensation expense associated with the variable stock
options which vest upon the achievement of milestones related to research and
development. Additionally, there was a significant increase in costs associated
with the development of drug formulation, an increase in the purchase of raw
materials and supplies used in the production of clinical devices and drug
product in connection with clinical trials and an increase in payroll costs due
to the growth of research and development personnel. The Company anticipates
that future research and development expenses, as well as other expenses, to
increase significantly during the remainder of 1996 and beyond as the Company
expands its research and development programs, which include the hiring of
personnel and the continued expansion of preclinical and clinical testing.
SELLING, GENERAL AND ADMINISTRATIVE. Total selling, general and
administrative expenses for the three months ended March 31, 1996 increased to
$2.8 million from $0.5 million in the three months ended March 31, 1995. The
increase relates primarily to the increase of $1.6 million in compensation
expense associated with the variable stock options as well as the increase in
professional services received from financial consultants, attorneys and public
relations and the increase in payroll costs due to the addition of personnel.
The Company expects future selling, general and administrative expenses to
increase in the remainder of 1996 and beyond due
9
to the increased support required for research and development activities,
continuing corporate development and professional services, compensation expense
associated with stock options, and general corporate matters.
INTEREST INCOME. For the three months ended March 31, 1996, interest
income increased to $83,000 compared to interest income of $6,000 for the three
months ended March 31, 1995. The increase in interest income resulted from the
investment of proceeds received from the Company's 1995 initial public offering
and Pharmacia & Upjohn's investment in the Company's Common Stock which had not
been received until after the first quarter of 1995. Interest income will
continue to increase during 1996 due to the investment of net proceeds received
from the Company's 1996 public offering of Common Stock.
INTEREST EXPENSE. Interest expense for the three months ended March 31,
1996 decreased to $8,000 compared to interest expense of $71,000 for the three
months ended March 31, 1995. The decrease resulted primarily from the
conversion of the Company's convertible notes to Common Stock (approximately 79%
were converted in December 1994 with another 18% being converted during 1995).
The Company does not believe that inflation has had a material impact on
its results of operations.
LIQUIDITY AND CAPITAL RESOURCES
Since inception through March 31, 1996, the Company has accumulated a
deficit of approximately $41.3 million and expects to continue to incur
substantial and increasing operating losses for the next several years. The
Company has financed its operations primarily through private placements of
common and preferred stock, private placements of convertible notes and short
term notes, its initial public offering and Pharmacia & Upjohn's purchase of
Common Stock. As of March 31, 1996, the Company had received net proceeds from
the sale of equity securities and convertible notes of approximately $38.0
million. In addition, the Company has financed a substantial portion of its
leasehold improvements and certain equipment through capital lease obligations,
a leasehold improvement loan and a bank line of credit. The Company has
available a $1.0 million bank line of credit which has a variable rate of
interest based on the bank's lending rate (7.8% as of March 31, 1996), which
expires on January 31, 1997, and is collateralized by the Company's cash
balances. The credit agreement subjects the Company to certain customary
restrictions, including a prohibition on the payment of dividends. The Company
presently has no outstanding borrowings under the bank line of credit.
In April 1996, the Company completed a public offering of 1,500,000 shares
of Common Stock which provided net proceeds to the Company of approximately
$65.4 million. These proceeds are anticipated to be used to fund approximately
$31.0 million for preclinical and clinical testing, approximately $27.0 million
for research and development and the balance for general corporate purposes.
Pending such uses, the Company has invested the net proceeds for 30-days in
short-term, interest-bearing obligations, and intends to invest the funds in the
future in interest-bearing obligations which may primarily consist of those
issued by the U.S. Government, its agencies and instrumentalities.
In connection with the licensing agreement with Pharmacia & Upjohn, the
Company has recorded as license income in the first quarter of 1996 $372,000 for
the reimbursement of clinical costs. The Company anticipates recording license
income for the reimbursement of clinical costs throughout the remainder of 1996
and beyond.
10
For the three months ended March 31, 1996, the Company required cash for
operations of approximately $3.8 million compared to $1.0 million for the same
period in 1995. The increase in cash used in operations was primarily due to an
increase in operating activities associated with the continued expansion of
preclinical and clinical testing, the increase in research and development
activities, the growth of research and development and support personnel and the
increase in general corporate matters. For the first three months of 1996, the
Company received net cash from its financing activities of approximately
$539,000 as compared to $1.2 million for the same period in 1995. The decrease
results from the Company's need for short-term loans in the first quarter of
1995 whereas in the first quarter of 1996 the Company did not require additional
financing.
The Company invested a total of $161,000 in property, plant and equipment
during the first three months of 1996 as compared to $174,000 during the same
period in 1995. The Company expects to purchase property, plant and equipment
during 1996 as the Company expands its preclinical, clinical and research and
development activities. The Company currently anticipates it will expand its
facilities through the leasing of additional facilities or a relocation to a new
facility in 1996. This expansion or move will also require additional costs for
the construction of the laboratories and office space. Since inception, the
Company has entered into capital lease agreements for approximately $184,000 of
equipment, consisting primarily of laboratory equipment. The Company expects to
continue to lease equipment from time to time as needed.
The Company's capital requirements will depend on numerous factors,
including the progress and magnitude of the Company's research and development
programs and preclinical and clinical testing, the time involved in obtaining
regulatory approvals, the cost involved in filing and maintaining patent claims,
technological advances, competitor and market conditions, the ability of the
Company to establish and maintain collaborative arrangements, the cost of
manufacturing scale-up and the cost and effectiveness of commercialization
activities and arrangements.
The Company has raised funds in the past through public and private
placement offerings. In April 1996, the Company completed a public offering of
Common Stock which provided net proceeds to the Company of approximately $65.4
million. The Company believes that these funds should satisfy its capital
requirements for the next few years. The Company may contemplate raising funds
in the future through public or private financings, collaborative arrangements
or from other sources. The success of such efforts in the future will depend in
large part upon continuing developments in the Company's preclinical and
clinical testing and the success of photodynamic therapy in general. The
Company is also in discussion with other companies regarding the potential for
equity investment, collaborative arrangements, license agreements, or
development or other funding programs in exchange for marketing, distribution or
other rights to products developed by the Company. However, there can be no
assurance that discussions with other companies will result in any investments,
collaborative arrangements, agreements or funding.
11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not currently party to any material litigation or proceeding
and is not aware of any material litigation or proceeding threatened against it.
The Company and certain of its executive officers have received subpoenas
from the Securities and Exchange Commission (the "Commission") to provide
certain information and to testify IN THE MATTER OF TRADING IN THE SECURITIES OF
UPJOHN COMPANY. Although the breadth and nature of this investigation is not
known, the Company does not believe that it or any of its executive officers or
directors has engaged in any inappropriate activity, and the Company intends to
continue to cooperate with the investigation, and to continue its own internal
inquiries.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
See Exhibit Index on page 14.
(b) Reports on Form 8-K.
None.
12
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
PDT, INC.
Date: May 14, 1996 By: /s/ Gary S. Kledzik
---------------------------------------------
Gary S. Kledzik, Chairman of the Board,
Director, President, and Chief Executive
Officer (Principal Executive Officer)
Date: May 14, 1996 By: /s/ John M. Philpott
---------------------------------------------
John M. Philpott
Chief Financial Officer and Controller
(Principal Financial Officer and
Principal Accounting Officer)
13
INDEX TO EXHIBITS
Incorporating
Exhibit Reference
Number Description (if applicable)
- ------- ----------- ---------------
3.1 Certificate of Amendment of the Restated Certificate
of Incorporation of the Registrant filed with the
Delaware Secretary of State on July 24, 1995. [C][3.11]
3.2 Restated Certificate of Incorporation of the
Registrant filed with the Delaware Secretary of
State on December 14, 1994. [B][3.1]
3.3 Certificate of Amendment of the Certificate of
Incorporation of the Registrant filed with the
Delaware Secretary of State on March 17, 1994. [A][3.2]
3.4 Certificate of Amendment of the Certificate of
Incorporation of the Registrant filed with the
Delaware Secretary of State on October 7, 1992. [A][3.3]
3.5 Certificate of Amendment of the Certificate of
Incorporation of the Registrant filed with the
Delaware Secretary of State on November 21, 1991. [A][3.4]
3.6 Certificate of Amendment of the Certificate of
Incorporation of the Registrant filed with the
Delaware Secretary of State on September 27, 1991. [A][3.5]
3.7 Certificate of Amendment of the Certificate of
Incorporation of the Registrant filed with the
Delaware Secretary of State on December 20, 1989. [A][3.6]
3.8 Certificate of Amendment of the Certificate of
Incorporation of the Registrant filed with the
Delaware Secretary of State on August 11, 1989. [A][3.7]
3.9 Certificate of Amendment of the Certificate of
Incorporation of the Registrant filed with the
Delaware Secretary of State on July 13, 1989. [A][3.8]
3.10 Certificate of Incorporation of the Registrant filed
with the Delaware Secretary of State on June 16,
1989. [A][3.9]
3.11 Bylaws of the Registrant. [A][3.10]
4.1 Specimen Certificate of Common Stock. [B][4.1]
4.2 Form of Convertible Promissory Note. [A][4.3]
4.3 Form of Indenture. [A][4.4]
4.4 Special Registration Rights Undertaking. [A][4.5]
4.5 Undertaking Agreement dated August 31, 1994. [A][4.6]
4.6 Letter Agreement dated March 10, 1994. [A][4.7]
4.7 Form of $10,000,000 Common Stock and Warrants
Offering Investment Agreement. [A][4.8]
10.1(+) Amendment dated as of March 20, 1996 to Development
and License Agreement, Product Supply Agreement and
Device Supply Agreement between Registrant and
Pharmacia, S.p.A.
11.1 Statement regarding computation of net loss per share.
27.1 Financial Data Schedule.
___________________________
[A] Incorporated by reference from the exhibit referred to in brackets
contained in the Registrant's Registration Statement on Form S-1 (File No.
33-87138).
[B] Incorporated by reference from the exhibit referred to in brackets
contained in Amendment No. 2 to the Registrant's Registration Statement on
Form S-1 (File No. 33-87138).
[C] Incorporated by reference from the exhibit referred to in brackets
contained in the Registrant's Form 10-Q for the quarter ended June 30,
1995, as amended on Form 10-Q/A dated December 6, 1995 (File No. 0-25544).
(+) Filed subject to confidential treatment. Confidential portions of this
Exhibit have been omitted. The material has been filed separately with the
Commission pursuant to an application for confidential treatment.
14