UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
[ ] 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 0-18231
-------------------
ATRIX LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1043826
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2579 MIDPOINT DRIVE FORT COLLINS, COLORADO 80525
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (970) 482-5868
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.001 par value
----------------------------
(Title of Class)
Series A Preferred Stock Purchase Rights
----------------------------------------
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of
the Registrant as of March 26, 2002 was $446,922,463.
The number of shares outstanding of the Registrant's common stock as
of March 26, 2002 was 20,101,315.
DOCUMENTS INCORPORATED BY REFERENCE:
Part III, Items 10, 11, 12, and 13 are incorporated by reference to
the definitive Proxy Statement for the Registrant's Annual Meeting of
Stockholders scheduled to be held on May 5, 2002.
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A amends the Registrant's Annual
Report on Form 10-K, as filed by the Registrant on April 1, 2002, and is being
filed solely to include under Item 14 the audited financial statements required
by Rule 3-09 of Regulation S-X of the Registrant's joint venture, Transmucosal
Technologies Ltd. Transmucosal Technologies is a Bermuda company owned by the
Registrant and Elan International Services Ltd., a wholly owned subsidiary of
Elan Corporation plc, holding 80.1% and 19.9% (non-voting shares) of the
shares, respectively. Except as otherwise stated herein, all other information
contained in the original Report was current as of the date of filing of the
Report on April 1, 2002 and has not been updated by this Amendment No. 1.
PART IV
ITEM 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(a) Our following documents are filed as part of this Report:
1. Consolidated Financial Statements
Independent Auditors' Report
Consolidated Balance Sheets - December 31, 2001 and 2000
Consolidated Statements of Operations - Years Ended
December 31, 2001, 2000, and 1999
Consolidated Statements of Changes in Shareholders'
Equity - Years Ended December 31, 2001, 2000,
and 1999
Consolidated Statements of Cash Flows - Years Ended
December 31, 2001, 2000, and 1999
Notes to the Consolidated Financial Statements
2. Consolidated Financial Statement Schedules
The following financial statements of Transmucosal
Technologies Ltd., the Registrant's joint venture with Elan
International Services Ltd., a wholly owned subsidiary of
Elan Corporation plc, are filed as part of this Report.
Independent Auditors' Report
Balance Sheets as at December 31, 2001 and 2000
Statements of Loss for the Periods Ended December 31,
2001 and 2000
Statements of Changes in Shareholders' Equity for the
Periods Ended December 31, 2001 and 2000
Statements of Cash Flows for the Periods Ended December 31,
2001 and 2000
Notes to Financial Statements
Other schedules for which provision is made in the
applicable regulations of the Securities and Exchange
Commission have been omitted because they are not required
under the related instructions or the information related is
contained elsewhere in the financial statements.
3. Exhibits
The exhibits are set forth in the Exhibit Index.
(b) Reports on Form 8-K: We filed the following Current Reports
on Form 8-K during the quarter ended December 31, 2001:
- Current Report on Form 8-K dated October 15, 2001, filed with
the Securities and Exchange Commission on October 17, 2001,
under Item 5. Other Events, and Item 7. Exhibits.
- Current Report on Form 8-K dated November 16, 2001, filed
with the Securities and Exchange Commission on November 27,
2001, under Item 5. Other Events, and Item 7. Exhibits.
- Current Report on Form 8-K dated December 7, 2001, filed with
the Securities and Exchange Commission on December 10, 2001,
under Item 5. Other Events, and Item 7. Exhibits.
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on our behalf by the undersigned, thereunto duly authorized.
ATRIX LABORATORIES, INC.
(Registrant)
Date: May 14, 2002 By: /s/ Brian G. Richmond
--------------------------------------
Brian G. Richmond
Chief Financial Officer, Secretary
and Treasurer
[KPMG Letterhead]
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders of
Transmucosal Technologies Ltd.
We have audited the accompanying balance sheets of Transmucosal Technologies
Ltd. as at December 31, 2001 and 2000 and the related statement of loss,
changes in shareholders' equity and cash flows for the year ended December 31,
2001 and the period from July 14, 2000 (date of incorporation) to December 31,
2000. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of Transmucosal Technologies Ltd.
as at December 31, 2001 and the results of its operations and its cash flows
for the periods then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/KPMG
Chartered Accountants
Hamilton, Bermuda
March 7, 2002
TRANSMUCOSAL TECHNOLOGIES LTD.
Balance Sheets
December 31, 2001
(Expressed in United States Dollars)
2001 2000
------------ ------------
ASSETS
Cash and cash equivalents $ 2,144 $ --
------------ ------------
Total assets $ 2,144 $ --
============ ============
LIABILITIES
Accounts payable and accrued expenses $ 951,562 $ 269,931
------------ ------------
Total liabilities 951,562 269,931
------------ ------------
SHAREHOLDERS' EQUITY
Share capital (Note 5) 12,000 12,000
Share premium (Note 6) 14,988,000 14,988,000
Contributed surplus (Note 7) 3,436,107 --
Retained deficit (19,385,525) (15,269,931)
------------ ------------
Total shareholders' equity (949,418) (269,931)
------------ ------------
Total liabilities and shareholders' equity $ 2,144 $ --
============ ============
See accompanying notes to financial statements
TRANSMUCOSAL TECHNOLOGIES LTD.
Statements of Loss
Periods Ended December 31, 2001 and 2000
(Expressed in United States Dollars)
2001 2000
----------- ------------
INCOME
Net investment income $ 48 $ --
----------- ------------
Total income 48 --
----------- ------------
EXPENSES
Research and development (Note 3) 4,091,081 251,482
Audit fees 9,776 --
Government fees 9,345 --
License fee (Note 4) -- 15,000,000
General and administrative 5,440 18,449
----------- ------------
Total operating expenses 4,115,642 15,269,931
----------- ------------
Net loss $(4,115,594) $(15,269,931)
=========== ============
See accompanying notes to financial statements
TRANSMUCOSAL TECHNOLOGIES LTD.
Statements of Changes in Shareholders' Equity
Periods Ended December 31, 2001 and 2000
(Expressed in United States Dollars)
2001 2000
------------ ------------
SHARE CAPITAL
Balance at beginning of period $ 12,000 $ --
Shares issued during the period (Note 5) -- 12,000
------------ ------------
Balance at end of period 12,000 12,000
------------ ------------
SHARE PREMIUM
Balance at beginning of period 14,988,000 --
Share premium during the period (Note 6) -- 14,988,000
------------ ------------
Balance at end of period 14,988,000 14,988,000
------------ ------------
CONTRIBUTED SURPLUS
Balance at beginning of period -- --
Contributed surplus during year (Note 7) 3,436,107 --
------------ ------------
3,436,107 --
RETAINED DEFICIT
Balance at beginning of period (15,269,931) --
Net loss for the period (4,115,594) (15,269,931)
------------ ------------
Balance at end of period (19,385,525) (15,269,931)
------------ ------------
Total shareholders' equity $ (949,418) $ (269,931)
============ ============
See accompanying notes to financial statements
TRANSMUCOSAL TECHNOLOGIES LTD.
Statements of Cash Flows
Periods Ended December 31, 2001 and 2000
(Expressed in United States Dollars)
2001 2000
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(4,115,594) $(15,269,931)
Adjustments to reconcile net income to net cash
provided by operating activities
Accounts payable and accrued expenses 681,631 269,931
----------- ------------
Cash used by operating activities (3,433,963) (15,000,000)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of shares -- 15,000,000
Contributed surplus 3,436,107 --
----------- ------------
Cash provided by financing activities 3,436,107 15,000,000
----------- ------------
Net increase in cash and cash equivalents 2,144 --
Cash and cash equivalents at beginning of period -- --
----------- ------------
Cash and cash equivalents at end of period $ 2,144 $ --
=========== ============
See accompanying notes to financial statements
TRANSMUCOSAL TECHNOLOGIES LTD.
Notes to Financial Statements
December 31, 2001 and 2000
1. GENERAL
Transmucosal Technologies Ltd. (the "Company") was incorporated in
Bermuda on July 14, 2000 as Atrix Newco, Ltd. The Company is owned by
Atrix Laboratories, Inc. ("Atrix") and Elan International Services
Ltd. ("EIS"), a wholly-owned subsidiary of Elan Corporation plc,
holding 80.1% and 19.9% (non-voting shares) of the shares
respectively. On December 14, 2000 the Company changed its name to
Transmucosal Technologies Ltd.
The primary objective of the Company is to carry on the business of
the development, testing, registration, manufacturing,
commercialization, and licensing of "Products" (as defined in the
Subscription, Joint Development and Operating Agreement ("JDOA") dated
July 18, 2000 between EIS, Atrix and the Company. The focus of the
collaborative venture will be to develop the "Products" using the Elan
Intellectual Property, the Atrix Intellectual Property and the Atrix
Technology pursuant to the JDOA.
2. SIGNIFICANT ACCOUNTING POLICY
The accompanying financial statements are prepared in accordance with
accounting principles generally accepted in the United States of
America which require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates. The following are the significant accounting policies
adopted by the Company:
(a) Going concern
These financial statements have been prepared on the basis
that the Company is a going concern. The Company's ability to
continue operating is dependent on achieving profitable
operations and/or receiving additional development funding.
It is the opinion of management that the Company will be a
going concern based on additional development funding as
described in Note 7.
TRANSMUCOSAL TECHNOLOGIES LTD.
Notes to Financial Statements
December 31, 2001 and 2000
(b) Research and development costs
Research costs are charged as an expense of the period in
which they are incurred. Development costs are deferred to
future periods if certain criteria relating to future
benefits are satisfied and if the costs do not exceed the
expected future benefits.
3. RELATED PARTY TRANSACTIONS
The following table summarizes the Company's related party
transactions for the period:
Research and development costs
paid to shareholders $4,091,081
These transactions are in the normal course of operations and are
measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties.
4. LICENSE FEE
During fiscal 2000, the Company paid a license fee to Elan Corporation
plc in the amount of $15,000,000 to acquire rights to certain Elan
intellectual property. This license fee, which is non-refundable, was
expensed in the prior year.
5. SHARE CAPITAL
Voting common shares, of par value US$1.00 per share
6,000 shares authorised;
6,000 shares issued and outstanding $ 6,000
Non-voting convertible preferred shares, of par value US$1.00 per share
6,000 shares authorised;
6,000 shares issued and outstanding 6,000
-------
$12,000
=======
TRANSMUCOSAL TECHNOLOGIES LTD.
Notes to Financial Statements
December 31, 2001 and 2000
At any time after July 18, 2002, each holder of the preferred shares
shall have the right to convert all, or a portion, of such preferred
shares into common shares on a one-to-one basis, as outlined in the
Bye-laws of the Company.
6. SHARE PREMIUM
Share premium represents amounts contributed by shareholders in excess
of the par value of the shares subscribed for.
7. DEVELOPMENT FUNDING
It is estimated that the Company may require an initial research and
development budget of approximately $10 million, within the first 24
to 36 months from the date of incorporation, to commence development
of the Products based upon the Elan Technology, Atrix Technology
and/or Company Technology. The Development Funding shall be applied to
the Company's research and development costs associated with
development of the products. At December 31, 2001, $3,436,107 had been
contributed as development funding.
8. TAXES
Under current Bermuda law, the Company is not required to pay any
taxes in Bermuda on either income or capital gains. The Company has
received an undertaking from the Minister of Finance in Bermuda that
in the event of such taxes being imposed, the Company will be exempted
from taxation until the year 2016.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement and Plan of Reorganization dated November 24, 1998 by and among Atrix Laboratories, Inc., Atrix
Acquisition Corporation and ViroTex Corporation.(1)
2.2 Certificate of Merger of Atrix Acquisition Corporation into ViroTex Corporation dated November 24,
1998.(1)
3.1 Amended and Restated Certificate of Incorporation.(2)
3.2 Certificate of Amendment to Amended and Restated Certificate of Incorporation.(3)
3.3 Certificate of Designation of the Series A Preferred Stock filed with the State of Delaware on September
25, 1998.(4)
3.4 Certificate of Designations of Preferences and Rights of Series A Convertible Exchangeable Preferred Stock
filed with the State of Delaware on July 18, 2000.(5)
3.5 Ninth Amended and Restated Bylaws.*
4.1 Form of Common Stock Certificate.(6)
4.2 Indenture, dated November 15, 1997, by and among the Registrant and State Street Bank and Trust Company
of California, N.A., as trustee thereunder.(7)
4.3 Form of Note (included in Indenture, see Exhibit 4.2).
4.4 Amended and Restated Rights Agreement (including form of Right Certificate, as Exhibit A, and form of
Summary of Rights, as Exhibit B).(8)
4.5 Warrant to purchase 6,750 shares of Atrix Common Stock issued to Gulfstar Investments, Limited.(2)
4.6 Registration Rights Agreement, dated as of July 18, 2000, between Registrant and Elan International
Services, Ltd., or EIS.(5)
4.7 Warrant dated as of July 18, 2000, issued by Registrant to EIS.(5)
4.8 Convertible Promissory Note, dated as of July 18, 2000, issued by Registrant to EIS.(5)
4.9 Warrant, dated as of April 4, 2001, issued by Atrix Laboratories, Inc. to Ferghana Partners, Inc.(9)
10.1 Lease Agreement dated May 11, 1991 between the Registrant and GB Ventures.(6) 10.2 Agreement dated
December 16, 1996 between the Registrant and Block Drug Corporation ("Block Agreement").(10)
10.2A First Amendment to Block Agreement dated June 10, 1997.(2)**
10.2B Second Amendment to Block Agreement dated July 31, 1997.(2)**
10.2C Third Amendment to Block Agreement dated February 4, 1998.(2)**
10.2D Fourth Amendment to Block Agreement dated January 12, 1999.(2)**
10.2E Fifth Amendment to Block Agreement dated January 27, 1999.(2)**
10.2F Sixth Amendment to Block Agreement dated September 24, 1999.(11)**
10.2G Eighth Amendment to Block Agreement dated as of August 24, 2001.(12)**
10.3 Registration Rights Agreement, dated as of November 15, 1997, by and among Registrant and NationsBanc
Montgomery Securities, Inc. and SBC Warburg Dillon Read, Inc.(7)
10.4 Amended and Restated Performance Stock Option Plan, as amended.(2)
10.5 Non-Qualified Stock Option Plan, as amended.(2)
10.6 Non-Employee Director Stock Incentive Plan.(13)
10.7 Employment Agreement between Registrant and Dr. J. Steven Garrett dated April 17, 1995.(2)
10.8 Employment Agreement between Registrant and Dr. David W. Osborne dated November 24, 1998.(2)
10.9 Employment Agreement between Registrant and Dr. Richard L. Jackson dated November 1, 1998.(2)
10.10 Personal Services Agreement between Registrant and David R. Bethune dated August 10, 1999.(13)
10.11 Stock Purchase Agreement, dated as of August 8, 2000, by and between Registrant and Pfizer Inc.(14)
10.12 Collaborative Research Agreement, dated as of August 8, 2000, by and between Registrant and Pfizer
Inc.(14)**
10.13 License and Royalty Agreement, dated as of August 8, 2000, by and between Registrant and Pfizer Inc.(14)**
10.14 Collaboration, Development and Supply Agreement dated as of August 28, 2000 between Registrant and Geneva
Pharmaceuticals, Inc.(15)**
10.15 Securities Purchase Agreement, dated as of July 18, 2000, between Registrant and EIS.(5)**
10.16 Newco Registration Rights Agreement, dated as of July 18, 2000, among Registrant, Atrix Newco Ltd., or
Newco, and EIS.(5)
10.17 Subscription, Joint Development and Operating Agreement, dated as of July 18, 2000, among EIS, Registrant,
Newco and Elan Pharma International Limited, or EPIL.(5)**
10.18 Company License Agreement, dated as of July 18, 2000, among Registrant, Newco and Elan Corporation plc,
or Elan.(5)**
10.19 EPIL License Agreement, dated as of July 18, 2000 among Elan, EPIL, Newco and Registrant.(5)**
10.20 Collaboration, License and Supply Agreement, dated as of December 8, 2000, by and between Registrant and
Sanofi-Synthelabo Inc.(16)**
10.21 Stock Purchase Agreement, dated as of December 29, 2000, by and between Registrant and
Sanofi-Synthelabo.(16)
10.22 2000 Stock Incentive Plan.(17)
10.23 License Agreement by and between Registrant and CollaGenex Pharmaceuticals, Inc. dated as of August 24,
2001. (12)**
10.24 Stock Purchase Agreement by and between Registrant and CollaGenex Pharmaceuticals, Inc. dated as of
August 24, 2001.(12)**
10.25 Collaboration, License and Supply Agreement by and between Registrant and Fujisawa Healthcare, Inc.,
dated October 15, 2001.(12)**
10.26 Collaboration, License and Supply Agreement, dated as of April 4, 2001, by and between Registrant and
MediGene.(18)**
10.27 Stock Purchase Agreement, dated as of April 4, 2001, by and between Registrant and MediGene.(18)**
10.28 2001 Executive Long Term Incentive Compensation Program.*
21 Subsidiaries of the Registrant. (17)
23 Consent of Deloitte & Touche LLP.*
23.1 Consent of KPMG.
---------------
* Previously filed with, and incorporated by reference to, the
Registrant's original Annual Report on Form 10-K for the year ended
December 31, 2001, as filed with the Securities and Exchange
Commission on April 1, 2002 (File No. 000-18321).
** We have omitted certain portions of this Exhibit and have requested
confidential treatment with respect to such portions.
(1) Incorporated by reference to Registrant's Current Report on Form 8-K
dated November 24, 1998, as filed with the Securities and Exchange
Commission (File No. 000-18321).
(2) Incorporated by reference to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, as filed with the
Securities and Exchange Commission (File No. 000-18321).
(3) Incorporated by reference to Registrant's Registration Statement on
Form S-3, filed with the Securities and Exchange Commission on June 5,
2001 (File No. 333-55634).
(4) Incorporated by reference to Registrant's Registration Statement on
Form 8-A, as filed with the Securities and Exchange Commission on
October 1, 1998 (File No. 000-18231).
(5) Incorporated by reference to Registrant's Current Report on Form 8-K
dated July 18, 2000, as filed with the Securities and Exchange
Commission on August 4, 2000 (File No. 000-18321).
(6) Incorporated by reference to Registrant's Annual Report on Form 10-K
for the fiscal year ended September 30, 1993, as filed with the
Securities and Exchange Commission (File No. 000-18321).
(7) Incorporated by reference to Registrant's Current Report on Form 8-K
dated November 6, 1997, as filed with the Securities and Exchange
Commission on December 9, 1997 (File No. 000-18321).
(8) Incorporated by reference to Registrant's Current Report on Form 8-K
dated November 16, 2001, as filed with the Securities and Exchange
Commission on November 27, 2001 (File No. 000-18231).
(9) Incorporated by reference to Registrant's Registration Statement on
Form S-3, filed with the Securities and Exchange Commission on
February 6, 2002 (File No. 333-82250).
(10) Incorporated by reference to Registrant's Current Report on Form 8-K
dated December 16, 1996, as amended on May 20, 1998, as filed with the
Securities and Exchange Commission (File No. 000-18321).
(11) Incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999, as filed with the
Securities and Exchange Commission (File No. 000-18321).
(12) Incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 2001 (File No. 000-18231).
(13) Incorporated by reference to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1999, as filed with the Securities and
Exchange Commission (File No. 000-18321).
(14) Incorporated by reference to Registrant's Current Report on Form 8-K
dated August 8, 2000, as filed with the Securities and Exchange
Commission on September 7, 2000 (File No. 000-18321).
(15) Incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 2000, as filed with the
Securities and Exchange Commission (File No. 000-18321).
(16) Incorporated by reference to Registrant's Current Report on Form 8-K
dated December 29, 2000, as filed with the Securities and Exchange
Commission on February 23, 2001 (File No. 000-18231).
(17) Incorporated by reference to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2000, as filed with the Securities and
Exchange Commission (File No. 000-18231).
(18) Incorporated by reference to Registrant's Current Report on Form 8-K
dated April 4, 2001, filed with the Securities and Exchange Commission
on June 20, 2001 (File No. 000-18231).